Registration No. 33-52281
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
THE TRAVELERS INC.
(Exact name of registrant as specified in its charter)
--------------------
Delaware 52-1568099
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
65 East 55th Street
New York, NY 10022
(212) 891-8900
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
--------------------
Charles O. Prince, III
The Travelers Inc.
Senior Vice President and General Counsel
65 East 55th Street
New York, NY 10022
(212) 891-8854
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
--------------------
Approximate date of commencement of proposed sale to the public:
From time to time on or after the effective date of this Registration Statement.
--------------------
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than the securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
--------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 1, 1994
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH , 1994)
THE TRAVELERS INC.
3,749,466 WARRANTS TO PURCHASE SHARES OF COMMON STOCK
---------------------------
All of the 3,749,466 Warrants (the "Warrants") to purchase shares of Common
Stock, $.01 par value per share (the "Common Stock"), of The Travelers Inc., a
Delaware corporation (the "Company"), are being offered by American Express
Company (the "Selling Stockholder"). Each Warrant entitles its holder to
purchase from the Company, at any time on or prior to July 31, 1998, one share
of Common Stock at a purchase price of $39.00, subject to adjustment in certain
circumstances. The Selling Stockholder is offering all of the Warrants it owns
and upon completion of this offering will no longer be a holder of any Warrants.
This Prospectus Supplement also covers the offering from time to time of shares
of Common Stock that may be issued upon exercise of the Warrants. The Warrants
and the shares of Common Stock issuable upon the exercise of the Warrants are
collectively referred to as the "Securities."
The Company will not receive any proceeds from the sale of the Warrants. If
the Warrants are exercised, the Company will, however, receive $39.00 (subject
to adjustment in certain circumstances) for each share of Common Stock issued
upon exercise of the Warrants.
Prior to this offering, there has been no public market for the Warrants
and there can be no assurance that any active trading market will develop for
the Warrants subsequent to the completion of this offering. For information
relating to the factors to be considered in determining the initial public
offering price of the Warrants, see "Plan of Distribution" in the Prospectus.
The Company intends to apply for listing of the Warrants on the New York Stock
Exchange, Inc. (the "NYSE"). The Common Stock is currently traded on the NYSE
and The Pacific Stock Exchange Incorporated under the symbol "TRV."
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE> <CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDER
<S> <C> <C> <C> <C>
Warrants, Per Warrant................................. $ $ $0 $
Common Stock underlying Warrants, Per Share........... $ $ $39.00 $0
Total................................................. $ $ $
</TABLE>
(1) The Company and the Selling Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) The Company has agreed to pay certain expenses in connection with the
offering estimated at $ .
---------------------------
The Warrants offered by this Prospectus Supplement are offered by the
Underwriters subject to prior sale, to withdrawal, cancellation or modification
of the offer without notice, to delivery to and acceptance by the Underwriters
and to certain further conditions. It is expected that delivery of the Warrants
will be made at the offices of Lehman Brothers Inc., New York, New York on or
about , 1994.
---------------------------
SMITH BARNEY SHEARSON INC. LEHMAN BROTHERS
, 1994
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
IN CONNECTION WITH THE OFFERING OF CERTAIN OF THE SECURITIES, THE
UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICES OF SUCH SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK
STOCK EXCHANGE, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF WARRANTS
The following description of the terms of the Warrants offered hereby
(described in the Prospectus under the heading "Description of Offered
Securities--Warrants") supplements the description set forth in the Prospectus,
to which description reference is hereby made.
The First National Bank of Boston will act as warrant agent for the
Warrants.
UNDERWRITING
The underwriters named below (the "Underwriters"), for whom Smith Barney
Shearson Inc. ("SBS") and Lehman Brothers Inc. ("Lehman") are acting as
representatives (the "Representatives"), have severally agreed, subject to the
terms and conditions of an Underwriting Agreement with the Selling Stockholder
and the Company (the "Underwriting Agreement"), to purchase from the Selling
Stockholder the aggregate number of Warrants set forth opposite their names
below:
<TABLE> <CAPTION>
NUMBER OF
UNDERWRITERS WARRANTS
<S> <C>
- -------------------------------------------------------------------------------- -----------
Smith Barney Shearson Inc. .....................................................
Lehman Brothers Inc. ...........................................................
-----------
Total................................................................. 3,749,466
-----------
-----------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to purchase the Warrants are subject to certain conditions and
that, if any of the Warrants are purchased by the Underwriters pursuant to the
Underwriting Agreement, all such Warrants must be so purchased.
The Selling Stockholder has been advised by the Representatives that the
Underwriters propose to offer the Warrants offered hereby initially at the
public offering price set forth on the cover page of this Prospectus Supplement
and to certain selected dealers (who may include Underwriters) at such public
offering price less a concession not to exceed $ per Warrant. The
Underwriters or such selected dealers may reallow a commission to certain other
dealers not to exceed $ per Warrant. After such initial offering,
such public offering price, concession to selected dealers and reallowance to
other dealers may be changed.
The Company has agreed that it will not, subject to certain limited
exceptions, directly or indirectly, sell or otherwise dispose of any Common
Stock of the Company or any securities convertible into or exercisable or
exchangeable for Common Stock of the Company for a period of days
from the date of this Prospectus Supplement without the prior written consent of
the Representatives.
S-2
<PAGE>
The Company intends to apply for listing of the Warrants on the NYSE. In
connection with such application, the Underwriters have undertaken to sell the
Warrants to at least 400 beneficial holders.
The Company and the Selling Stockholder have agreed in the Underwriting
Agreement to indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1993, as amended, or to contribute to
payments which the Underwriters may be required to make in respect thereof.
LEGAL MATTERS
Certain legal matters are being passed upon for the Underwriters by Simpson
Thacher & Bartlett (a partnership which includes professional corporations), New
York, New York. Simpson Thacher & Bartlett has provided from time to time, and
may provide in the future, legal services to the Company and its affiliates.
S-3
<PAGE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, NOT CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY,
THE SELLING STOCKHOLDER OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS
SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY
JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE SUCH DATE.
---------------------------
TABLE OF CONTENTS
PAGE
---------
PROSPECTUS SUPPLEMENT
DESCRIPTION OF WARRANTS....................... S-2
UNDERWRITING.................................. S-2
LEGAL MATTERS................................. S-3
PROSPECTUS
AVAILABLE INFORMATION......................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE..................................... 2
THE COMPANY................................... 3
RECENT OPERATING RESULTS...................... 5
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED
STOCK DIVIDENDS............................. 5
USE OF PROCEEDS............................... 5
SELLING STOCKHOLDER........................... 6
DESCRIPTION OF CAPITAL STOCK.................. 7
DESCRIPTION OF OFFERED SECURITIES............. 9
PLAN OF DISTRIBUTION.......................... 18
ERISA MATTERS................................. 20
LEGAL MATTERS................................. 20
EXPERTS....................................... 20
- ------------------------------------------------------
- ------------------------------------------------------
THE TRAVELERS INC.
3,749,466 WARRANTS TO PURCHASE
SHARES OF COMMON STOCK
------------------------
PROSPECTUS SUPPLEMENT
MARCH , 1994
(INCLUDING PROSPECTUS
DATED MARCH , 1994)
---------------------------
SMITH BARNEY SHEARSON INC.
LEHMAN BROTHERS
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 1, 1994
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH , 1994)
2,500,000 SHARES
THE TRAVELERS INC.
5.50% CONVERTIBLE PREFERRED STOCK, SERIES B
---------------------------
All of the 2,500,000 shares of 5.50% Convertible Preferred Stock, Series B,
$1.00 par value per share (the "Series B Preferred Stock"), of The Travelers
Inc., a Delaware Corporation (the "Company"), are being offered by American
Express Company (the "Selling Stockholder"). The Selling Stockholder is offering
all of the shares of Series B Preferred Stock it owns and upon completion of
this offering will no longer be a holder of any Series B Preferred Stock. This
Prospectus Supplement also covers the offering of shares of Common Stock, $.01
par value per share, of the Company (the "Common Stock"), that may be issued
upon conversion of the Series B Preferred Stock. The shares of Series B
Preferred Stock and the shares of Common Stock issuable upon the conversion of
the shares of Series B Preferred Stock are collectively referred to as the
"Securities."
Each share of Series B Preferred Stock has a liquidation preference of
$50.00 per share, plus accrued and unpaid dividends thereon. Cash dividends on
the Series B Preferred Stock are payable quarterly in arrears at an annual rate
of $2.75 per share. See "Description of Offered Securities--Series B Preferred
Stock--Dividends" in the Prospectus. Shares of Series B Preferred Stock are
convertible at any time at the option of the holder into shares of Common Stock
at a conversion price of $36.75 per share of Common Stock, which is equivalent
to a conversion rate of approximately 1.36 shares of Common Stock for each share
of Series B Preferred Stock, subject to adjustment in certain circumstances. See
"Description of Offered Securities-- Series B Preferred Stock-- Conversion
Rights" in the Prospectus.
The Series B Preferred Stock is not redeemable prior to July 30, 1996, but
will be redeemable on such date and thereafter for cash at the option of the
Company, in whole or in part, at $51.925 per share if redeemed prior to July 29,
1997 and at decreasing prices thereafter to $50.00 from and after July 30, 2003,
plus, in each case, accrued and unpaid dividends to the redemption date. The
Series B Preferred Stock will not be entitled to the benefit of any sinking
fund. See "Description of Series B Preferred Stock--Redemption" in the
Prospectus.
The Company will not receive any proceeds from the sale of the Series B
Preferred Stock or the conversion of the shares of Series B Preferred Stock into
shares of Common Stock.
Prior to this offering, there has been no public market for the Series B
Preferred Stock and there can be no assurance that any active trading market
will develop for the Series B Preferred Stock subsequent to the completion of
this offering. For information relating to the factors to be considered in
determining the initial public offering price of the Series B Preferred Stock,
see "Plan of Distribution" in the Prospectus. The Company intends to apply for
listing of the Series B Preferred Stock on the New York Stock Exchange, Inc.
(the "NYSE"). The Common Stock is currently traded on the NYSE and The Pacific
Stock Exchange Incorporated under the symbol "TRV."
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE> <CAPTION>
PROCEEDS TO
PRICE TO UNDERWRITING SELLING
PUBLIC DISCOUNT(1) STOCKHOLDER
<S> <C> <C> <C>
Series B Preferred Stock, Per Share........................... $ $ $
Total......................................................... $ $ $
</TABLE>
(1) The Company and the Selling Stockholder have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
The Company has agreed to pay certain expenses in connection with the
offering estimated at $ .
---------------------------
The shares of Series B Preferred Stock offered by this Prospectus
Supplement are offered by the Underwriters subject to prior sale, to withdrawal,
cancellation or modification of the offer without notice, to delivery to and
acceptance by the Underwriters and to certain further conditions. It is expected
that delivery of the shares of Series B Preferred Stock will be made at the
offices of Lehman Brothers Inc., New York, New York on or about ,
1994.
---------------------------
SMITH BARNEY SHEARSON INC. LEHMAN BROTHERS
, 1994
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
2
<PAGE>
IN CONNECTION WITH THE OFFERING OF CERTAIN OF THE SECURITIES, THE
UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN
THE MARKET PRICES OF SUCH SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK
STOCK EXCHANGE, IN THE OVER-THE-COUNTER-MARKET OR OTHERWISE. SUCH STABILIZING,
IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF SERIES B PREFERRED STOCK
The following description of the terms of the shares of Series B Preferred
Stock offered hereby (described in the Prospectus under the heading "Description
of Offered Securities--Series B Preferred Stock") supplements the description
set forth in the Prospectus, to which description reference is hereby made.
The First National Bank of Boston will act as transfer agent and registrar
for the Series B Preferred Stock.
UNDERWRITING
The underwriters named below (the "Underwriters"), for whom Smith Barney
Shearson Inc. ("SBS") and Lehman Brothers Inc. ("Lehman") are acting as
representatives (the "Representatives"), have severally agreed, subject to the
terms and conditions of an Underwriting Agreement with the Selling Stockholder
and the Company (the "Underwriting Agreement"), to purchase from the Selling
Stockholder the aggregate number of shares of Series B Preferred Stock set
forth opposite their names below:
<TABLE> <CAPTION>
NUMBER OF
UNDERWRITERS SHARES
<S> <C>
- ------------------------------------------------------------------------------ -------------
Smith Barney Shearson Inc. ...................................................
Lehman Brothers Inc. .........................................................
-------------
Total............................................................... 2,500,000
-------------
-------------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to purchase the shares of Series B Preferred Stock are subject to
certain conditions and that, if any of the shares of Series B Preferred Stock
are purchased by the Underwriters pursuant to the Underwriting Agreement, all
such shares of Series B Preferred Stock must be so purchased.
The Selling Stockholder has been advised by the Representatives that the
Underwriters propose to offer the shares of Series B Preferred Stock offered
hereby initially at the public offering price set forth on the cover page of
this Prospectus Supplement and to certain selected dealers (who may include
Underwriters) at such public offering price less a concession not to exceed
$ per share. The Underwriters or such selected dealers may reallow a
commission to certain other dealers not to exceed $ per share. After such
initial offering, such public offering price, concession to selected dealers and
reallowance to other dealers may be changed.
The Company has agreed that it will not, subject to certain limited
exceptions, directly or indirectly, sell or otherwise dispose of any Common
Stock of the Company or any securities convertible
S-2
<PAGE>
into or exercisable or exchangeable for Common Stock of the Company for a period
of days from the date of this Prospectus Supplement without the
prior written consent of the Representatives.
The Company intends to apply for listing of the Series B Preferred Stock on
the NYSE. In connection with such application, the Underwriters have undertaken
to sell the Series B Preferred Stock to at least 100 beneficial holders.
The Company and the Selling Stockholder have agreed in the Underwriting
Agreement to indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or to contribute to
payments which the Underwriters may be required to make in respect thereof.
LEGAL MATTERS
Certain legal matters are being passed upon for the Underwriters by Simpson
Thacher & Bartlett (a partnership which includes professional corporations), New
York, New York. Simpson Thacher & Bartlett has provided from time to time, and
may provide in the future, legal services to the Company and its affiliates.
S-3
<PAGE>
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDER OR THE UNDERWRITERS. NEITHER THE DELIVERY
OF THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS
SHALL CONSTITUTE AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE SUCH DATE.
---------------------------
TABLE OF CONTENTS
PAGE
---------
PROSPECTUS SUPPLEMENT
DESCRIPTION OF SERIES B PREFERRED
STOCK....................................... S-2
UNDERWRITING.................................. S-2
LEGAL MATTERS................................. S-3
PROSPECTUS
AVAILABLE INFORMATION......................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE..................................... 2
THE COMPANY................................... 3
RECENT OPERATING RESULTS...................... 5
RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED
STOCK DIVIDENDS............................. 5
USE OF PROCEEDS............................... 5
SELLING STOCKHOLDER........................... 6
DESCRIPTION OF CAPITAL STOCK.................. 7
DESCRIPTION OF OFFERED SECURITIES............. 9
PLAN OF DISTRIBUTION.......................... 18
ERISA MATTERS................................. 20
LEGAL MATTERS................................. 20
EXPERTS....................................... 20
2,500,000 SHARES
THE TRAVELERS INC.
5.50% CONVERTIBLE
PREFERRED STOCK, SERIES B
---------------------------
PROSPECTUS SUPPLEMENT
MARCH , 1994
(INCLUDING PROSPECTUS
DATED MARCH , 1994)
---------------------------
SMITH BARNEY SHEARSON INC.
LEHMAN BROTHERS
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE>
Subject To Completion, Dated March 1, 1994
PROSPECTUS
THE TRAVELERS INC.
2,500,000 Shares of Series B Convertible Preferred Stock
3,749,466 Warrants to Purchase Shares of Common Stock
and 7,150,826 Shares of Common Stock
Issuable upon Conversion or Exercise Thereof
-------------------------------------
The 2,500,000 shares of 5.50% Convertible Preferred Stock, Series B,
$1.00 par value per share (the "Series B Preferred Stock"), of The Travelers
Inc., a Delaware corporation (the "Company") and 3,749,466 Warrants (the
"Warrants") to purchase shares of Common Stock, $.01 par value per share (the
"Common Stock"), of the Company may be offered from time to time by American
Express Company (the "Selling Stockholder"). The shares of Series B Preferred
Stock, the Warrants and the shares of Common Stock issuable upon the conversion
of the shares of Series B Preferred Stock or exercise of the Warrants are
collectively referred to as the "Offered Securities." When an offering of all
or part of the Offered Securities is made, a supplement to this Prospectus
(the "Prospectus Supplement") will be delivered with this Prospectus, setting
forth the specific Offered Securities being offered, the purchase price, any
listing on a securities exchange and any other variable terms.
Each share of Series B Preferred Stock has a liquidation preference of
$50.00 per share, plus accrued and unpaid dividends thereon. Cash dividends on
the Series B Preferred Stock are payable quarterly in arrears at an annual rate
of $2.75 per share. Shares of Series B Preferred Stock are convertible at
any time at the option of the holder into shares of Common Stock at a conversion
price of $36.75 per share of Common Stock, which is equivalent to a conversion
rate of approximately 1.36 shares of Common Stock for each share of Series B
Preferred Stock, subject to adjustment in certain circumstances. The Series B
Preferred Stock is not redeemable prior to July 30, 1996, but will be redeemable
on such date and thereafter for cash at the option of the Company, in whole or
in part, at $51.925 per share if redeemed prior to July 29, 1997 and at
decreasing prices thereafter to $50.00 from and after July 30, 2003, plus
accrued and unpaid dividends to the redemption date. The Series B Preferred
Stock will not be entitled to the benefit of any sinking fund. See
"Description of Offered Securities- Series B Preferred Stock."
Each Warrant entitles its holder to purchase from the Company, at any
time on or prior to July 31, 1998, one share of Common Stock at a purchase price
of $39.00, subject to adjustment in certain circumstances. Upon completion of
this offering the Selling Stockholder will no longer be a holder of any
Offered Securities.
In addition, this Prospectus, when delivered with an applicable
Prospectus Supplement, covers the issuance of the shares of Common Stock
underlying the shares of Series B Preferred Stock and the Warrants. The
Prospectus Supplement will specify the number of shares of Common Stock offered
thereby. Of the 7,150,826 shares of Common Stock that may be offered, 3,401,360
shares are issuable upon the conversion of shares of the Series B Preferred
Stock and 3,749,466 shares are issuable upon the exercise of the Warrants,
subject to adjustment in certain circumstances.
<PAGE>
The Common Stock is currently traded on the New York Stock Exchange,
Inc. (the "NYSE") and The Pacific Stock Exchange Incorporated (the "Pacific
Stock Exchange") under the symbol "TRV."
-------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-------------------------------------
The Selling Stockholder may sell the Series B Preferred Stock and the
Warrants through agents designated from time to time, through underwriters or
through dealers. The names of such agents, underwriters or dealers and any
applicable fee, commission, purchase price or discount arrangements with them
will be set forth, or will be calculable from the information set forth, in a
Prospectus Supplement. The net proceeds to the Selling Stockholder from such
sale will be set forth in the Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement (i) such underwriters will include Smith Barney
Shearson Inc. ("SBS") and Lehman Brothers Inc. ("Lehman"), acting alone or as
representatives of a group of underwriters, and (ii) such agents or dealers will
include SBS and Lehman.
This Prospectus may also be used by SBS, a subsidiary of the Company,
in connection with offers and sales of the Offered Securities in market-making
transactions at negotiated prices related to prevailing market prices at the
time of sale. SBS may act as principal or agent in such transactions. See
"Plan of Distribution."
-------------------------------------
, 1994
- -----------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any State.
2
<PAGE>
For North Carolina purchasers: These securities have not been
approved or disapproved by the Commissioner of Insurance for the State of North
Carolina, nor has the Commissioner ruled upon the accuracy or adequacy of this
Prospectus.
-----------------------------------
AVAILABLE INFORMATION
The Company (formerly Primerica Corporation) is subject to the
informational requirements of the Securities Exchange Act of 1934 (the "Exchange
Act"), and in accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at: Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549; Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Seven World Trade
Center, New York, New York 10048. Copies of such material can also be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is
listed on the NYSE and the Pacific Stock Exchange, and such reports, proxy
statements and other information can also be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005, and the Pacific Stock Exchange,
301 Pine Street, San Francisco, California 94104, and 233 South Beaudry Avenue,
Los Angeles, California 90012.
-------------------------------------
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, as amended (the "Act") with respect
to the Offered Securities. For further information with respect to the Offered
Securities, reference is made to the Registration Statement and exhibits
thereto. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and in each instance
reference is made to the copy of such contract or document filed as an exhibit
to the Company's Registration Statement, each such statement being qualified in
all respects by such reference.
-------------------------------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates by reference the following documents
heretofore filed with the Commission pursuant to the Exchange Act:
1. Annual Report of the Company on Form 10-K for the fiscal year
ended December 31, 1992, as amended.
2. Quarterly Reports of the Company on Form 10-Q for the fiscal
quarters ended March 31, 1993, June 30, 1993 and September 30, 1993.
3
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3. Current Reports of the Company on Form 8-K dated December 23,
1992, as amended, March 1, 1993, March 12, 1993, April 8, 1993, April 19,
1993, April 28, 1993, June 10, 1993, July 19, 1993, September 23, 1993,
October 18, 1993, November 29, 1993, December 31, 1993, January 24, 1994
and March 1, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the later of (i) the termination of the offering of Offered Securities
hereby and (ii) the date on which SBS ceases offering and selling Offered
Securities pursuant to this Prospectus shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
in an accompanying Prospectus Supplement or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus except as
so modified or superseded.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference in the
Registration Statement of which this Prospectus forms a part other than exhibits
to such documents unless such exhibits are specifically incorporated by
reference into such documents. Requests should be directed to Corporate
Communications and Investor Relations, The Travelers Inc., 65 East 55th Street,
New York, New York 10022; telephone (212) 891-8900.
4
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THE COMPANY
The Company is a financial services holding company engaged, through
its subsidiaries, principally in four business segments: Investment Services,
Insurance Services - Property and Casualty, Insurance Services - Life, and
Consumer Finance Services. The predecessor of the Company was founded in 1912.
In December 1988, the Company (then known as Commercial Credit Group, Inc.)
acquired Primerica Corporation, a New Jersey corporation ("old Primerica"). At
the time of the acquisition, the name of the Company was changed to Primerica
Corporation and old Primerica was merged into a newly formed, wholly owned
subsidiary of the Company, Primerica Holdings, Inc. ("Primerica Holdings"). The
acquisition of old Primerica was accounted for as a purchase, with an effective
accounting date of December 31, 1988. Accordingly, the Company's results of
operations for the year ended on December 31, 1988 incorporated by reference in
this Prospectus do not include the results of old Primerica and its
subsidiaries. On December 17, 1992, Primerica Holdings was merged into the
Company.
In December 1992 the Company acquired approximately 27% of the common
stock of The Travelers Corporation, a Connecticut corporation ("old Travelers"),
in a series of related transactions. The Company and certain of its
subsidiaries paid $550 million in cash and issued to old Travelers 50% of the
equity in Commercial Insurance Resources, Inc. (the parent of Gulf Insurance
Company) and transferred to old Travelers 100% of the preferred provider
organization and third party administrator network of Transport Life Insurance
Company. In September 1993 the Company and old Travelers announced a definitive
agreement for the Company to acquire the remaining approximately 73% of old
Travelers common stock it did not already own. On December 31, 1993, pursuant
to such agreement, each share of old Travelers common stock (other than shares
held by the Company, old Travelers or shareholders who properly exercised
dissenters' rights) was exchanged for .80423 of a share of Common Stock, old
Travelers was merged into the Company (then known as Primerica Corporation) and
the Company, as the surviving corporation of the merger, changed its name to The
Travelers Inc.
The Company's Investment Services segment consists of investment
banking, brokerage, asset management and other financial services provided
through Smith Barney Shearson Holdings Inc. ("SBSHI"), a subsidiary of the
Company, and its subsidiaries, mutual fund management and distribution services
provided through American Capital Management & Research, Inc. and its
subsidiaries, and investment management services provided by RCM Capital
Management.
In July 1993 the Company and certain of its subsidiaries acquired
substantially all of the assets and assumed certain of the liabilities of the
domestic retail brokerage business and the asset management business of Shearson
Lehman Brothers Inc. (now known as Lehman) (the "Shearson Transaction"). As a
result of this acquisition, SBSHI became one of the largest retail brokerage
firms in the United States.
The Company's Insurance Services - Property and Casualty segment
provides insurance products including workers' compensation, liability,
automobile, property and multiple-peril to businesses and other institutions and
automobile and homeowners insurance to individuals. Property and casualty
insurance policies are issued primarily by The Travelers Indemnity Company and
its subsidiary and affiliated property-casualty insurance companies, which now
include Gulf Insurance Company.
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The Company's Insurance Services - Life segment includes individual
life insurance, accident and health insurance, annuities and investment products
which are offered primarily through The Travelers Insurance Company and its
subsidiary and affiliated life insurance companies. Such affiliated companies
now include Primerica Financial Services and its affiliates, Primerica Life
Insurance Company and National Benefit Life Insurance Company, which primarily
issue individual term life insurance, and Transport Life Insurance Company.
Primerica Financial Services and its affiliates are also engaged in securities
brokerage consisting primarily of mutual fund sales.
The Company's Consumer Finance Services segment includes consumer
lending (including secured and unsecured personal loans, real estate-secured
loans and consumer goods financing), and credit card and credit-related
insurance services provided through Commercial Credit Company and its
subsidiaries.
In addition to its four business segments, the Company's Corporate and
Other segment consists of corporate staff and treasury operations, certain
corporate income and expenses that have not been allocated to the operating
subsidiaries and, through 1992, the Company's interest in Fingerhut Companies,
Inc. ("Fingerhut"), a direct marketing business. The Company has since sold its
remaining interest in Fingerhut. During 1993, this segment also included the
Company's approximately 27% interest in old Travelers common stock.
The principal offices of the Company are located at 65 East 55th
Street, New York, New York 10022, telephone (212) 891-8900. The Company was
incorporated in Delaware in 1988.
RECENT OPERATING RESULTS
The net income of the Company for the year ended December 31, 1993,
was $915.6 million, or $3.74 per share, compared to $728.1 million, or $3.22
per share, for the year ended December 31, 1992. The Company's revenues for
the year ended December 31, 1993, were $6,796.9 million, compared to $5,125.0
million for the corresponding 1992 period. Net income for 1993 included
reported investment portfolio gains of $109.2 million and an $8.1 million gain
from the sale of subsidiaries and affiliates, and also reflected a charge of
$16.7 million related to the cumulative effect of FAS 106, a charge of $17.7
million related to the cumulative effect of FAS 112, and a $65.0 million
provision for one-time expenses related to the Shearson Transaction. Net
income for the comparable 1992 period included reported investment portfolio
gains and net gains from the sale of subsidiaries and affiliates of $163.2
million and a one-time charge of $28.1 million from the cumulative effect of
FAS 109. At year end 1993, the Company had assets of approximately $100 billion.
For the year ended December 31, 1993, operating earnings were $899.5
million or $3.67 per share, an increase of 41% over operating results for the
year ended December 31, 1992. Operating results for the year ended December 31,
1992 were $593.0 million and earnings per share during such period were $2.61.
Earnings per share were based on weighted average common shares outstanding and
common equivalent shares of 237.8 million in 1993 and 222.8 million in 1992.
6
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
Year Ended December 31,(1)
Nine Months Ended --------------------------------
September 30, 1993 1992 1991 1990 1989 1988
------------------ ---- ---- ---- ---- ----
Ratio of earnings to
combined fixed charges
and preferred stock
dividends . . . . . . . . . 2.67x 2.57x 1.85x 1.56x 1.49x 1.95x
- --------------------------------
(1) The Company (formerly Primerica Corporation) is the successor to Commercial
Credit Group, Inc. Results of operations and dividends per common share
for 1988 reflect only those of Commercial Credit Group, Inc.
The ratio of earnings to combined fixed charges and preferred stock
dividends has been computed by dividing earnings available for fixed charges by
fixed charges and preferred stock dividends. For the purpose of this ratio,
earnings available for fixed charges consist of pre-tax income from continuing
operations adjusted for undistributed equity earnings and minority interest and
fixed charges; and fixed charges consist of interest expense and that portion of
rentals deemed representative of the appropriate interest factor. Prior to July
1992 the Company had no preferred stock outstanding.
USE OF PROCEEDS
All of the shares of Series B Preferred Stock and the Warrants to be
offered will be sold by the Selling Stockholder. The Company will not receive
any of the proceeds from the sale of such Series B Preferred Stock or Warrants
by the Selling Stockholder. The Common Stock being offered is issuable only
upon conversion of the Series B Preferred Stock or the exercise of the Warrants.
The Company will not receive any proceeds from issuance of Common Stock in
connection with the conversion of the Series B Preferred Stock. However, the
Company will receive $39.00 (subject to adjustment) for each share of Common
Stock issued upon exercise of a Warrant. The Company will receive such
consideration only in the event of the exercise of any Warrant. In the event
that all of the Warrants are exercised, the Company will receive an aggregate
exercise price of $146,229,174. Unless otherwise set forth in the applicable
Prospectus Supplement, the Company intends to apply the net proceeds from the
exercise of the Warrants for general corporate purposes, which may include
capital contributions to subsidiaries of the Company and/or the reduction or
refinancing of borrowings of the Company or its subsidiaries.
SELLING STOCKHOLDER
All of the Series B Preferred Stock and the Warrants being offered
will be offered by the Selling Stockholder. The Selling Stockholder acquired
the Series B Preferred Stock and the Warrants in connection with the Shearson
Transaction. In connection with such acquisition, the Company issued to the
Selling Stockholder 2,500,000 shares of Series B Preferred Stock and Warrants to
purchase 3,749,466 shares of Common Stock, as adjusted. The shares of Series
B Preferred Stock and the Warrants issued to the Selling Stockholder are the
only issued and outstanding shares of Series B Preferred Stock and Warrants.
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<PAGE>
Lehman is a majority-owned subsidiary of the Selling Stockholder.
In connection with the Shearson Transaction, Lehman and SBS have entered
into agreements with respect to various relationships between them
which continue for a period of time after consummation of the Shearson
Transaction, including a securities clearing agreement pursuant to which
SBS has agreed to carry and clear on a fully disclosed basis all customer
accounts introduced by Lehman and on a correspondent basis with respect to
Lehman's proprietary accounts. In connection with the clearing arrangement,
SBS has issued 100 shares of its Series A Cumulative Preferred Stock to Lehman
for $1 million. Subject to certain conditions, these shares are redeemable by
SBS after the termination of the clearing arrangement. SBS also agreed to
provide to Lehman certain data processing and other operational services. In
addition, SBS has agreed to pay future contingent amounts to Lehman based
upon the combined performance of SBS and the acquired businesses, consisting of
up to $50 million per year for three years based on net revenues, plus 10% of
after-tax consolidated net income in excess of $250 million per year over a
five-year period.
Following the offerings contemplated hereby, the Selling Stockholder
will no longer be a holder of any shares of Series B Preferred Stock or
Warrants. A subsidiary of the Selling Stockholder beneficially owns
approximately 4.5 million shares of the Company's Common Stock, which was
acquired in the ordinary course of such subsidiary's investment management
business. Subsidiaries of the Selling Stockholder may acquire additional shares
of the Company's Common Stock from time to time and may determine to sell such
shares in connection with their trading and investment management businesses.
8
<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
As of the date of this Prospectus, the Company's authorized capital
stock consists of 500,000,000 shares of Common Stock and 30,000,000 shares of
preferred stock, par value $1.00 per share (the "Preferred Stock"). Under the
Company's Certificate of Incorporation (as amended, the "Certificate of
Incorporation"), the Board of Directors of the Company is authorized to issue
shares of the Preferred Stock in one or more series, with or without voting
powers, and with such designations, preferences and relative, participating,
optional or other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issuance thereof adopted by the Board of Directors
of the Company and as are not stated and expressed in the Certificate of
Incorporation. Prior to the issuance of each series of Preferred Stock, the
Board of Directors will adopt resolutions creating and designating such series
as a series of Preferred Stock. As used herein the term "Board of Directors of
the Company" means the Board of Directors of the Company and includes any duly
authorized committee thereof.
The rights of holders of the Series B Preferred Stock being offered,
or other equity securities of the Company, will be subject to, and may be
adversely affected by, the rights of holders of any Preferred Stock that may be
issued in the future. The Board of Dir!ectors of the Company may cause shares
of Preferred Stock to be issued in public or private transactions for any proper
corporate purposes, which may include issuance to obtain additional financing in
connection with acquisitions or otherwise, and issuance to officers, directors
and employees of the Company and its subsidiaries pursuant to benefit plans or
otherwise. Shares of Preferred Stock issued by the Company may have the effect,
under certain circumstances, alone or in combination with certain other
provisions of the Certificate of Incorporation described below, of rendering
more difficult or discouraging an acquisition of the Company deemed undesirable
by the Board of Directors of the Company.
Preferred Stock
As of the date of this Prospectus, the Company had outstanding
1,200,000 shares of its 8.125% Cumulative Preferred Stock, Series A (the "Series
A Preferred Stock"), 2,500,000 shares of its Series B Preferred Stock, 4,406,431
shares of its $4.53 ESOP Convertible Preferred Stock, Series C (the "Series C
Preferred Stock"), 7,500,000 shares of its 9.25% Preferred Stock, Series D (the
"Series D Preferred Stock") and 2,222 shares of its $45,000 Cumulative
Redeemable Preferred Stock, Series Z (the "Series Z Preferred Stock"), all of
which shares are fully paid and nonassessable.
Series A Preferred Stock. The Series A Preferred Stock is not
redeemable prior to July 28, 1997, and is redeemable on such date and thereafter
at the Company's option at a redemption price equal to $250 per share (the
liquidation preference), plus accrued and unpaid dividends. The Series A
Preferred Stock ranks on a parity as to dividends and upon liquidation with the
currently outstanding series of Preferred Stock. There are no preemptive or
other subscription rights with respect to the Series A Preferred Stock. The
Series A Preferred Stock provides for cumulative quarterly dividends at the rate
of 8.125% per annum, calculated as a percentage of the $250 per share stated
value. The holder of Series A Preferred Stock does not have voting rights
except as provided by law or if six quarterly dividends are in arrears and
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<PAGE>
except that a two-thirds vote of all shares of Preferred Stock voting as a class
is required for the Company to create any class of stock having a preference as
to dividends or distribution of assets over the Series A Preferred Stock.
Depositary shares, each representing one-tenth of a share of Series A Preferred
Stock, are traded on the NYSE.
Series C Preferred Stock. Shares of Series C Preferred Stock have a
stated value of $53.25 per share. The Series C Preferred Stock ranks on a
parity as to dividends and upon liquidation with the currently outstanding
series of Preferred Stock. There are no preemptive or other subscription rights
with respect to the Series C Preferred Stock. Shares of Series C Preferred
Stock are entitled to vote for the election of directors and on all other
matters submitted to a vote of stockholders of the Company. Each share of
Series C Preferred Stock is entitled to 1.3 votes per share, subject to
adjustment as the conversion price is adjusted as described below, and 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 Delaware General
Corporation Law, as amended (the "DGCL"). However, whether or not the DGCL so
provides, the affirmative vote of the holders of at least two-thirds of the
outstanding shares of 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, is required for the Company 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 Company 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. If the Series C Preferred Stock
is entitled to vote together with any other series of Preferred Stock, it will
be entitled to one vote per share. The holder of shares of Series C Preferred
Stock is entitled to receive dividends in the amount of $4.53 per annum per
share. Generally, the shares of Series C Preferred Stock will be redeemable, in
whole or in part at the option of the Company, on or after January 1, 1998, at a
redemption price (payable in cash or shares of Common Stock) of $53.25 per share
plus accrued and unpaid dividends thereon to the date fixed for redemption.
Series D Preferred Stock. Shares of Series D Preferred Stock have a
stated value of $50.00 per share. The Series D Preferred Stock ranks on a
parity as to dividends, other distributions and upon liquidation with the
currently outstanding series of Preferred Stock. The Series D Preferred Stock
has no preemptive or other subscription rights. The holder of Series D
Preferred Stock does not have voting rights except as provided by law or if six
quarterly dividends are in arrears and except that a two-thirds vote of all
shares of Preferred Stock voting as a class is required for the Company to
create any class of stock having a preference as to dividends or distribution of
assets over the Series D Preferred Stock. The holder of shares of Series D
Preferred Stock is entitled to receive dividends at the rate of 9.25% per annum
per share applied to the stated value of such share. The shares of Series D
Preferred Stock are redeemable, in whole or in part, at the option of the
Company, on or after July 1, 1997 at a redemption price of $50.00 per share
plus accrued and unpaid dividends thereon to the date fixed for redemption.
Depositary shares, each representing one-half of a share of Series D Preferred
Stock, are traded on the NYSE.
Series Z Preferred Stock. The holder of the Series Z Preferred Stock
is entitled to a cumulative quarterly dividend at an annual rate of 85% of the
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<PAGE>
daily average of the Dealer Offer Rates for 30-day commercial paper placed by
dealers whose firm's bond ratings are AA or equivalent, multiplied by the
stock's $45,000 per share liquidation value. The Series Z Preferred Stock is
owned by a subsidiary of the Company, is redeemable without premium at the
Company's option at any time, and is subject to repurchase at the holder's
request at its liquidation value of $45,000 per share, plus accrued dividends,
if not redeemed on or prior to September 15, 1998. The holder of the Series Z
Preferred Stock does not have voting rights except as required by law or if six
quarterly dividends are in arrears and except that a two-thirds vote of all
shares of Preferred Stock voting as a class is required for the Company to
create any class of stock having a preference as to dividends or distribution of
assets over the Series Z Preferred Stock.
DESCRIPTION OF OFFERED SECURITIES
The following description of the Offered Securities sets forth certain
terms and provisions of the Offered Securities. The particular terms of each
offering will be more fully described in the applicable Prospectus Supplement.
Series B Preferred Stock
General. The following summary of the terms and provisions of the
Series B Preferred Stock does not purport to be complete and is qualified in its
entirety by reference to the Company's Certificate of Incorporation and the
Certificate of Designation of the Series B Preferred Stock (the "Certificate of
Designation").
The Series B Preferred Stock is convertible into shares of Common
Stock. Shares of Series B Preferred Stock have no preemptive rights. Any
shares of Series B Preferred Stock redeemed or otherwise acquired by the Company
will assume the status of authorized but unissued shares of Preferred Stock and
may thereafter be reissued in the same manner as other authorized but unissued
shares of Preferred Stock.
The registrar, transfer agent and dividend disbursing agent for the
shares of Series B Preferred Stock will be named in the applicable Prospectus
Supplement.
Voting Rights. Holders of Series B Preferred Stock will not have any
voting rights except as set forth below or as otherwise from time to time
required by law. If six quarterly dividends (whether or not consecutive)
payable on shares of Series B Preferred Stock are in arrears at the time of the
record date to determine stockholders for any annual meeting of stockholders of
the Company, the number of directors of the Company will be increased by two,
and the holders of shares of Series B 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)
will be entitled at such annual meeting of stockholders to elect two directors
of the Company, with the remaining directors of the Company to be elected by the
holders of shares of any other class or classes or series of stock entitled to
vote therefor. Any director who has been so elected 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
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<PAGE>
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 pursuant to such
special voting right, other than by removal from office, such vacancy may be
filled by the remaining director so elected, or his successor in office. Such
voting rights will continue until all dividend arrearages on the Series B
Preferred Stock have been paid or declared and set apart for payment. Upon the
termination of each such special voting right, the terms of office of all
persons who may have been elected pursuant to such special voting right shall
immediately terminate, and the number of directors of the Company will be
decreased by two. Holders of shares of Series B Preferred Stock will have one
vote for each share held.
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 Preferred Stock
being entitled to cast one vote per share, the Company may not: (a) create any
class of stock that will have preference as to dividends or distributions of
assets over the Series B Preferred Stock or (b) alter or change the provisions
of the Certificate of Incorporation (including any Certificate of Amendment or
Certificate of Designation relating to the Series B Preferred Stock) so as to
adversely affect the powers, preferences or rights of the holders of shares of
Series B 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 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 all of the shares of all such series so affected, voting as a class.
Dividends. Holders of shares of Series B Preferred Stock are entitled
to receive, when and as declared by the Board of Directors out of funds legally
available therefor, cash dividends payable quarterly at the rate of 5.5% per
annum of the Liquidation Preference (as defined below) for shares of the Series
B Preferred Stock. Dividends on shares of Series B Preferred Stock will be
payable quarterly on March 1, June 1, September 1 and December 1 of each year,
for each of the quarterly periods beginning on the preceding November 15,
February 15, May 15 and August 15, respectively, and ending on and including the
day next preceding the first day of the next such quarterly period. Dividends
on each share of the Series B Preferred Stock will be cumulative, and will be
payable to holders of record as they appear on the stock register of the Company
on the record date for each such payment which will be fixed in advance by the
Board of Directors and will be not more than 60 days nor less than 10 days
preceding the payment date thereof. Dividends payable on the Series B Preferred
Stock for any period less than a full dividend period shall be computed on the
basis of the actual number of days elapsed in the period. No interest will be
payable in respect of any dividend payment that is in arrears. If there are
outstanding shares of any other class or series of Preferred Stock ranking on a
parity as to dividends with the shares of Series B Preferred Stock, then in
making any dividend payment on account of arrears on the Series B Preferred
Stock or such other class or series of Preferred Stock, the Company will make
payments ratably upon all outstanding shares of Series B Preferred Stock and
such other class or series in proportion to the respective amounts of dividends
in arrears upon all such outstanding shares of Series B Preferred Stock and such
other class or series of Preferred Stock to the date of such dividend payment.
So long as any shares of Series B Preferred Stock are outstanding,
unless (i) full cumulative dividends have been paid or declared and set apart
for payment on all outstanding shares of Preferred Stock (other than Junior
Stock, as defined below) and (ii) the Company is not 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), the Company may not declare any dividends on any shares of
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<PAGE>
Common Stock or any other stock of the Company ranking as to dividends or
distributions of assets junior to the Series B 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, other
than a distribution of Junior Stock. In the event that there are outstanding
shares of any other class or series of Preferred Stock ranking on a parity as to
dividends with the Series B Preferred Stock, and dividends on such shares are in
arrears, the Company, in making any dividend payment on account of such
arrearage, is required to make payments ratably on all outstanding shares of
Series B Preferred Stock and such other class or series of Preferred Stock in
proportion to the respective amounts of dividends in arrears on all such
outstanding shares. Holders of shares of Series B 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.
The ability of the Company, as a holding company, to pay dividends on
the Series B Preferred Stock will be dependent upon, among other factors, the
Company's earnings, financial condition and cash requirements at the time such
payment is considered, and payment to it of dividends or principal and interest
by, or the availability of other funds from, its subsidiaries. Dividends, loans
and advances from certain subsidiaries to the Company are subject to certain
restrictions, including limitations imposed by borrowing arrangements of certain
of such subsidiaries, applicable insurance holding company laws, the net capital
requirements under the Exchange Act, and the rules of certain securities
exchanges and various domestic and foreign regulatory bodies. Such
restrictions, as well as additional restrictions that the Company may become
subject to in the future, may limit the ability of the Company to pay dividends
on the Series B Preferred Stock.
Optional Redemption. The Series B Preferred Stock is not subject to
any mandatory redemption, pursuant to a sinking fund or otherwise. The Series B
Preferred Stock is not redeemable prior to July 30, 1996. On or after such date
the Series B Preferred Stock will be redeemable at the option of the Company, in
whole or in part, upon not less than 30 days' and no more than 90 days' notice,
at the following redemption prices per share (expressed as a percentage of the
Liquidation Preference (as defined below)), 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 dated fixed for
redemption. Dividends will cease to accrue from and after the redemption date
on shares of Series B Preferred Stock so called for redemption, and all rights
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of holders thereof as stockholders of the Company (except the right to receive
the redemption price) will cease as of such date. If full cumulative dividends
on all outstanding shares of the Series B Preferred Stock have not been paid or
declared and set apart for payment for all past dividend periods, or if any
matured obligations of the Company with respect to any sinking funds, retirement
funds or purchase funds for all series of Preferred Stock then outstanding have
not been met, the Series B Preferred Stock may not be redeemed in part and the
Company may not purchase or acquire any shares of Series B Preferred Stock
otherwise than pursuant to a purchase or exchange offer made on the same terms
to all holders of the Series B Preferred Stock. If fewer than all the
outstanding shares of Series B Preferred Stock are to be redeemed, the Company
will select those shares to be redeemed by lot or pro rata (as nearly as may be)
or by any other method as may be reasonably determined by the Board of Directors
in good faith to be equitable.
The right to convert shares of Series B Preferred Stock will terminate
at the close of business on the date fixed for redemption unless the Company
defaults in its payment of the Redemption Price.
Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of shares of
Series B Preferred Stock will be entitled to receive out of the assets of the
Company available for distribution to stockholders, after provision has been
made for payment of any liquidation preference of any other class of stock of
the Company ranking senior to the Series B Preferred Stock as to rights upon
liquidation, dissolution or winding up and before any distribution of assets is
made in respect of (i) any other shares of Preferred Stock that may be issued in
the future and that rank junior to the Series B Preferred Stock as to rights
upon liquidation, dissolution or winding up or (ii) shares of Common Stock,
liquidating distributions in the amount of $50.00 per share (the "Liquidation
Preference"), plus accrued and accumulated but unpaid dividends to the date of
final distribution. After payment of the full preferential amount to which they
are entitled, the holders of shares of Series B Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Company. If the assets available for distribution are insufficient to pay
holders of shares of Series B Preferred Stock and of any other shares of stock
of the Company ranking as to any such distribution on a parity with the Series B
Preferred Stock the full preferential amount to which they are entitled, then
such assets shall be distributed ratably among the shares of all Series B
Preferred Stock and of such other shares in accordance with the respective
preferential amounts (including unpaid cumulative dividends, if any) payable
with respect thereto.
Conversion Rights. Each share of Series B Preferred Stock is
convertible, in whole or in part, at the option of the holder thereof, into that
number of shares which is equal to $50.00 divided by the conversion price per
share applicable to Common Stock at the time of such conversion (the "Conversion
Price"). The Conversion Price is currently $36.75 but will be adjusted under
certain circumstances.
Shares of Series B Preferred Stock surrendered for conversion in
accordance with the requirements set forth below will be deemed converted
immediately prior to the close of business on the date of such surrender and the
holder of the shares of Common Stock issued upon such conversion will be treated
as a record holder of Common Stock at such time. However, the Company will not
make any payments or adjustments with respect to dividends accrued on shares of
Series B Preferred Stock surrendered for conversion or the shares of Common
Stock issued upon such conversion.
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Conversion of shares of Series B Preferred Stock may be effected by
surrender of the certificate(s) evidencing such shares at the office of the
transfer agent for the Series B Preferred Stock, properly endorsed, together
with a written notice of election to convert such shares and the name(s) in
which certificates representing the shares of Common Stock issued upon
conversion are to be issued, and in the event certificates are to be issued in a
name other than that in which the shares of Series B Preferred Stock were
registered, payment to the Company or evidence that such payment has been made,
of any taxes payable in respect of such transfer.
If the Company pays or makes a dividend or distribution on any class
of its capital stock in shares of Common Stock, the Conversion Price will be
reduced, effective at the opening of business on the date following the
Determination Date (as hereinafter defined), to an amount equal to the
Conversion Price multiplied by a fraction, the numerator of which shall be the
number of shares of Common Stock (not including treasury shares but including
shares issuable in respect of scrip certificates) outstanding on the
Determination Date (the "Outstanding Shares"), and the denominator of which
shall be the sum of the Outstanding Shares and the shares to be issued in
connection with the dividend or distribution. For the purposes of this
Prospectus, the "Determination Date" means any date fixed by the Company for
determining which stockholders are entitled to receive payments, dividends,
warrants or other distributions, as applicable. In the event that such dividend
or distribution is not so paid or made, the Conversion Price shall be
readjusted.
In the event that the Company issues rights or warrants entitling
holders of Common Stock to subscribe for or purchase shares of Common Stock (the
"Offered Shares") at a price per share (the "Offered Price") less than the
Average Market Price (as defined below) on the Determination Date, the
Conversion Price will be reduced, effective at the opening of business on the
day following the Determination Date, to an amount equal to the Conversion Price
multiplied by a fraction, the numerator of which shall be the sum of the number
of Outstanding Shares plus the number of shares of Common Stock which could be
purchased at the Average Market Price with the proceeds of the sale of the
Offered Shares at the Offered Price, and the denominator of which shall be the
sum of the number of Outstanding Shares plus the number of Offered Shares. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, or to the extent that such rights or warrants are not
so issued, the Conversion Price shall be readjusted. As used herein, the term
"Average Market Price" of the Common Stock means the average of the daily
reported closing sales prices, regular way, per share of the Common Stock on 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 Determination Date.
Effective at the opening of business on the date following any
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock, the Conversion Price shall be proportionately reduced.
Conversely, at the opening of business on the date following the combination of
the outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Conversion Price shall be proportionately increased.
If the Company makes a distribution to all holders of its Common Stock
of evidences of indebtedness or assets (other than any dividend or distribution
paid in cash or other property out of the retained earnings of the Company and
other than any such distributions of Common Stock, warrants or rights described
above) then the Company may, at its option, either: (i) include the holders of
Series B Preferred Stock in such distribution, with such distribution being made
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to such holders assuming the full conversion of their shares of Series B
Preferred Stock into shares of Common Stock at the current Conversion Price on
the Determination Date or, (ii) effective at the opening of business on the date
following the Determination Date, reduce the Conversion Price to an amount equal
to the Conversion Price on the Determination Date multiplied by a fraction, the
numerator of which shall be the Average Market Price on the Determination Date
less the then fair market value (as reasonably determined in good faith by the
Board of Directors of the Company) on such date of the assets or evidences of
indebtedness to be distributed on one share of Common Stock and the denominator
of which shall be the Average Market Price. In the event that such distribution
is not so paid or made, the Conversion Price shall be readjusted. If the
Company determines to make a distribution in accordance with (i) above, the
Company may elect to pay cash to such holders in an amount equal to the fair
market value (determined as provided above) of the distribution to which such
holders would otherwise have been entitled.
The Company may make such other reductions in the Conversion Price as
it deems advisable to prevent any event treated for Federal income tax purposes
as a dividend of stock or stock rights from being taxable to the recipients.
In the event of any merger or consolidation involving the Company
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 Company (an "Event"), then each
share of Series B Preferred Stock shall be convertible only into the kind and
amount of securities, cash or other property receivable upon such Event by a
holder of the number of shares of Common Stock into which such share of Series B
Preferred Stock was convertible immediately prior to such Event. A
reclassification of Common Stock into other securities shall be deemed to
involve both a distribution of such other securities to all holders of Common
Stock, and a subdivision or combination, as the case may be, of Common Stock.
No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price, but any adjustments not made because of this limitation shall
be carried forward and taken into account in determining whether subsequent
adjustments shall be required. In no event shall the Conversion Price be
reduced below the then par value of the Common Stock and any such adjustment
which would cause the Conversion Price to be reduced below such par value shall
instead reduce the Conversion Price to such par value.
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
Company shall pay a cash adjustment 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 of the Company or in any manner prescribed by the Board of
Directors of the Company) at the close of business on the day of conversion.
Notices. Holders of Series B Preferred Stock will be entitled to
notice in the event of (a) the declaration of a dividend on Common Stock by the
Company payable otherwise than in cash out of its retained earnings, (b) the
granting to the holders of Common Stock of rights or warrants to subscribe for
or purchase any shares of capital stock of any class or of any other rights, (c)
any reclassification of Common Stock or, under certain circumstances, of a
consolidation or merger to which the Company is a party, or of the sale or
transfer of all or substantially all of the assets of the Company, or (d) the
voluntary or involuntary dissolution, liquidation or winding up of the Company.
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Additional Provisions of the Company's Certificate of Incorporation and By-laws
Business Combinations. The Certificate of Incorporation requires the
affirmative vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the then outstanding shares of Voting Stock (as defined therein),
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 defined therein, generally, as a 25% stockholder), to
approve any merger or other Business Combination (as defined therein, which term
includes a merger, sale of $25,000,000 of assets, and similar extraordinary
corporate transactions) between, or otherwise involving, the Company and any
Interested Stockholder, unless the transaction has been approved by a majority
of the Continuing Directors (as defined therein) in the manner described
therein, or under some circumstances, unless certain minimum price, form of
consideration and procedural requirements are satisfied.
Amendments to Certificate of Incorporation and By-laws. Under the
Certificate of Incorporation, the alteration, amendment or repeal of, or
adoption of any provision inconsistent with the provisions of the Certificate of
Incorporation relating to the issuance of Preferred Stock or Common Stock, the
classified board of directors and amendments to the By-laws will require the
affirmative vote of the holders of at least 75% of the voting power! of the
shares entitled to vote for the election of directors. Amendments of provisions
of the Certificate of Incorporation relating to Business Combinations require a
vote of the holders of 66 2/3% of the then outstanding shares of Voting Stock,
excluding Voting Stock held by Interested Stockholders, unless 75% of the Board
of Directors recommend such amendment and the directors comprising such 75%
would qualify as Continuing Directors.
Classified Board of Directors. The Certificate of Incorporation
provides for the Board of Directors to be divided into three classes, with the
term of one such class expiring each year. If holders of Preferred Stock shall
have the right, voting separately by class or series, to elect directors, the
directors so elected shall not be divided into classes unless expressly provided
in the Certificate of Incorporation or the applicable Certificate of
Designation. The Company's Board of Directors currently consists of 22 members.
Removal of Directors; Vacancies. Under the DGCL, unless the
certificate of incorporation provides otherwise, directors of a corporation with
a classified board, such as the Company, may be removed only for cause by the
holders of a majority of the shares then entitled to vote at an election of
directors. The Certificate of Incorporation does not provide for removal for
reasons other than cause. The term "cause" is not defined under the DGCL.
Consequently, any question concerning the legal standard for "cause" would have
to be judicially determined, and such a determination could be difficult,
expensive and time-consuming.
Vacancies on the Board of Directors resulting 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 additional director
elected to fill such a vacancy shall hold office for a term coinciding with the
remaining term of the class to which he was elected. Any other vacancies on the
Board of Directors may be filled by a majority of the directors then in office,
even if less than a quorum, and the director so elected shall have the same
remaining term as that of his predecessor.
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Warrants
General. The Company currently has issued and outstanding Warrants
for the purchase of 3,749,466 shares of Common Stock. All of such Warrants were
originally issued to the Selling Stockholder. The Warrants being offered are
being sold for the account of the Selling Stockholder.
Each Warrant represents the right to purchase one share of Common
Stock at an initial purchase price of $39.00. The purchase price and the number
of shares issuable upon exercise of the warrants are subject to adjustment in
certain events as more fully set forth below (the purchase price, as so
adjusted, is hereinafter referred to as the "Warrant Price").
The Company has reserved from its authorized but unissued shares a
sufficient number of shares of Common Stock for issuance on exercise of the
Warrants. During the period in which a Warrant is exercisable, exercise of such
Warrant may be effected by presentation and surrender of such Warrant to the
warrant agent at the office or agency of the warrant agent maintained for that
purpose pursuant to the terms of the Warrant with the form of election to
purchase on the reverse thereof duly completed and signed by the registered
holder or holders thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney, such signature to be guaranteed by a bank or
trust company, by a broker or dealer which is a member of the NASD or by a
member of a national securities exchange, and accompanied by payment to the
warrant agent for the account of the Company, of the Warrant Price for the
number of shares of Common Stock specified in such form. All shares of Common
Stock issued upon the exercise of a Warrant shall be duly authorized and validly
issued, fully paid and nonassessable. Until the exercise of their Warrants, the
holders thereof will have no rights as stockholders of the Company.
The warrant agent for the Warrants will be named in the applicable
Prospectus Supplement.
The Warrants are exercisable at any time on or prior to July 31, 1998.
The outstanding Warrants are not subject to redemption.
Anti-Dilution Provisions. If the Company pays or makes a dividend or
distribution on any class of its capital stock in shares of Common Stock, the
Warrant Price will be reduced, effective at the opening of business on the date
following the Determination Date, to an amount equal to the Warrant Price
multiplied by a fraction, the numerator of which shall be the number of
Outstanding Shares, and the denominator of which shall be the sum of the
Outstanding Shares and the shares to be issued in connection with the dividend
or distribution. In the event that such dividend or distribution is not so paid
or made, the Warrant Price shall be readjusted.
In the event that the Company issues rights or warrants entitling
holders of Common Stock to subscribe for or purchase Offered Shares at an
Offered Price less than the Average Market Price on the Determination Date, the
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Warrant Price will be reduced, effective at the opening of business on the date
following the Determination Date, to an amount equal to the Warrant Price
multiplied by a fraction, the numerator of which shall be the sum of the number
of Outstanding Shares plus the number of shares of Common Stock which could be
purchased at the Average Market Price with the proceeds of the sale of the
Offered Shares at the Offered Price, and the denominator of which shall be the
sum of the Outstanding Shares plus the Offered Shares. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, or to the extent that such rights or warrants are not issued, the
Warrant Price shall be readjusted.
Effective at the opening of business on the date following any
subdivision of the outstanding shares of Common Stock into a greater number of
shares of Common Stock, the Warrant Price shall be proportionately reduced.
Conversely, at the opening of business on the date following the combination of
the outstanding shares of Common Stock into a smaller number of shares of Common
Stock, the Warrant Price shall be proportionately increased.
If the Company makes a distribution to all holders of its Common Stock
of evidences of indebtedness or assets (other than any dividend or distribution
paid in cash or other property out of the retained earnings of the Company and
other than any such distributions described above) then the Company may, at its
option, either: (i) include the holders of Warrants in such distribution with
such distribution being made to such holders assuming the exercise of their
Warrants into shares of Common Stock at the current Warrant Price on the
Determination Date or, (ii) effective on the opening of business on the date
following the Determination Date, reduce the Warrant Price to an amount equal to
the Warrant Price on the Determination Date multiplied by a fraction, the
numerator of which shall be the Average Market Price on the Determination Date
less the then fair market value (as reasonably determined in good faith by the
Board of Directors of the Company) on such date of the assets or evidences of
indebtedness to be distributed on one share of Common Stock and the denominator
of which shall be the Average Market Price. In the event that such distribution
is not so paid or made, the Warrant Price shall be readjusted. If the Company
determines to make a distribution in accordance with (i) above, the Company may
elect to pay cash to such holders in an amount equal to the fair market value
(determined as provided above) of the distribution to which such holders would
otherwise have been entitled.
The Company may make such other reductions in the Warrant Price as it
deems advisable to prevent any event treated for Federal income tax purposes as
a dividend of stock or stock rights from being taxable to the recipients.
In case of any Event, then each Warrant shall be convertible only into
the kind and amount of securities, cash or other property receivable upon such
Event by a holder of the number of shares of Common Stock for which such Warrant
was exercisable immediately prior to such Event. A reclassification of Common
Stock into other securities shall be deemed to involve both a distribution of
such other securities to all holders of Common Stock, and a subdivision or
combination, as the case may be, of Common Stock.
No adjustment in the Warrant Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Warrant
Price, but any adjustments not made because of this limitation shall be carried
forward and taken into account in determining whether subsequent adjustments
shall be required. In no event shall the Warrant Price be reduced below the
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then par value of the Common Stock and any such adjustment which would cause the
Warrant Price to be reduced below such par value shall instead reduce the
Warrant Price to such par value.
No fractions of Warrants shall be issued on any distribution of
Warrants to holders of Warrants, but, instead of any fraction of a Warrant which
would otherwise be issuable, the Company shall pay a cash adjustment in an
amount equal to the same fraction of the current market value per Warrant (as
determined in accordance with the terms of the Warrant Agreement) for the
trading day immediately prior to the date of such exercise.
No fractional shares of Common Stock shall be issued upon exercise of
a Warrant, but, instead of any fraction of a share which would otherwise be
issuable, the Company shall pay a cash adjustment in an amount equal to the same
fraction of the current market value per share of Common Stock (as determined in
accordance with the terms of the Warrant Agreement) for the trading day
immediately prior to the date of such exercise.
Notices. Holders of Warrants will be entitled to notice in the event
of (a) the declaration of a dividend on Common Stock by the Company payable
otherwise than in cash out of its retained earnings, (b) the granting to the
holders of Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock or any class or of any other rights, (c) any
reclassification of Common Stock or, under certain circumstances, of a
consolidation or merger to which the Company is a party, or of the sale or
transfer of all or substantially all of the assets of the Company, or (d) the
voluntary or involuntary dissolution, liquidation or winding up of the Company.
Common Stock
As of December 31, 1993 the Company had outstanding approximately
334 million shares of its Common Stock. Each holder of Common Stock is
entitled to one vote per share for the election of directors and for all other
matters to be voted on by stockholders. Except as otherwise provided by law,
the holders of shares of Common Stock vote as one class, together with the
shares of Series C Preferred Stock. Holders of Common Stock may not cumulate
their votes in the election of directors, and are entitled to share equally in
such dividends as may be declared by the Board of Directors out of funds
legally available therefor, but only after payment of dividends required to be
paid on outstanding shares of Preferred Stock. Upon voluntary or involuntary
liquidation, dissolution or winding up of the Company, the holders of Common
Stock share pro rata in the assets remaining after payments to creditors and
provision for the preference of any Preferred Stock. There are no preemptive
or other subscription rights, conversion rights or redemption or sinking fund
provisions with respect to shares of Common Stock. All of the outstanding
shares of Common Stock are fully paid and nonassessable. The transfer agent
and registrar for the Common Stock is The First National Bank of Boston. The
Common Stock is listed on the NYSE and the Pacific Stock Exchange.
PLAN OF DISTRIBUTION
The Selling Stockholder may sell the Series B Preferred Stock and
Warrants on a negotiated or competitive bid basis to or through underwriters or
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dealers, and also may sell the Series B Preferred Stock and Warrants through
agents. The Prospectus Supplement will describe the method of distribution of
the Series B Preferred Stock and Warrants.
The distribution of the Series B Preferred Stock and Warrants may be
effected from time to time in one or more transactions at a fixed price or
prices, which may be changed, at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at negotiated prices.
If underwriters are used in the offering of the Series B Preferred
Stock and Warrants, the terms of the transaction, including compensation of the
underwriters and dealers, if any, will be set forth in the Prospectus Supplement
relating to such offering. Unless otherwise set forth in the Prospectus
Supplement, such underwriters will include SBS and Lehman. Only underwriters
named in a Prospectus Supplement will be deemed to be underwriters in connection
with the Series B Preferred Stock and Warrants described therein. Firms not so
named will have no direct or indirect participation in the underwriting of such
securities, although such a firm may participate in the distribution of such
securities under circumstances entitling it to a dealer's commission. It is
anticipated that any underwriting agreement pertaining to any offering of the
Series B Preferred Stock or the Warrants will (1) entitle the underwriters to
indemnification by the Company and the Selling Stockholder against certain civil
liabilities, including liabilities under the Act, or to contribution for
payments which the underwriters may be required to make in respect thereof, (2)
provide that the obligations of the underwriters will be subject to certain
conditions precedent, and (3) provide that the underwriters generally will be
obligated to purchase all securities subject to such agreement if any are
purchased.
The Selling Stockholder also may sell the Series B Preferred Stock and
Warrants to a dealer as principal. In such event, the dealer may then resell
the Series B Preferred Stock and Warrants to the public at varying prices to be
determined by such dealer at the time of resale. Unless otherwise set forth in
the Prospectus Supplement, such dealers will include SBS and Lehman. The names
of the dealers and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
The Series B Preferred Stock and the Warrants also may be offered
through agents designated by the Selling Stockholder from time to time. Unless
otherwise set forth in the Prospectus Supplement, such agents will include SBS
and Lehman. Any such agent will be named, and the terms of any such agency will
be set forth, in the Prospectus Supplement relating thereto. Unless otherwise
indicated in such Prospectus Supplement, any such agent will act on a best
efforts basis for the period of its appointment.
Dealers and agents named in a Prospectus Supplement may be deemed to
be underwriters (within the meaning of the Act) of the Series B Preferred Stock
and Warrants described therein and, under agreements which may be entered into
with the Company and the Selling Stockholder, may be entitled to indemnification
by the Company and the Selling Stockholder against certain civil liabilities,
including liabilities under the Act, or to contribution for payments which they
may be required to make in respect thereof.
Prior to the offering of the Series B Preferred Stock and Warrants
there has been no public market for the Series B Preferred Stock or the
Warrants. The initial offering prices for such securities will be determined by
the Selling Stockholder and the underwriters, dealers or agents, as the case may
be. Among the factors that will be considered in determining the initial
offering prices, in addition to prevailing market conditions, are the
Company's financial and operating history and condition, markets for similar
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securities of comparable companies, the market price of the Common Stock, the
conversion price of the Series B Preferred Stock, the exercise price of the
Warrants, the dividend yield of the Series B Preferred Stock and similar
securities, of comparable companies, and the premium on warrants or similar
securities of comparable companies.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, the Company and the Selling Stockholder in the ordinary
course of business.
The anticipated place and time of delivery for the Series B Preferred
Stock and Warrants will be set forth in the Prospectus Supplement.
This Prospectus may be used by SBS in connection with offers and sales
of the Offered Securities in market-making transactions, subject to obtaining
any necessary approvals of the NYSE, at negotiated prices related to prevailing
market prices at the time of sale. SBS may act as principal or agent in such
transactions. SBS has no obligation to make a market in any of the Offered
Securities and may discontinue its market-making activities at any time
without notice, at its sole discretion.
SBS, a member of the National Association of Securities Dealers, Inc.
(the "NASD") and an affiliate of the Company, and Lehman, a member of the NASD
and a majority-owned subsidiary of the Selling Stockholder, may underwrite the
offerings of the Offered Securities covered by this Prospectus and participate
in offers and sales of such Offered Securities. Accordingly, the underwriting
arrangements for the offering and such offers and sales will conform with the
requirements set forth in Schedule E to the By-Laws of the NASD regarding an
NASD member firm's participation in distributing its affiliate's securities. In
particular, the public offering price of the Warrants can be no higher than
that recommended by a "qualified independent underwriter" meeting certain
standards. In accordance with this requirement, Lehman, unless otherwise set
forth in a Prospectus Supplement, will serve in such role and will recommend
prices in compliance with the requirements of Schedule E. Lehman, in its role
as qualified independent underwriter, has performed due diligence investigations
and reviewed and participated in the preparation of this Prospectus and the
Registration Statement of which this Prospectus forms a part. For a description
of certain arrangements and relationships among the Selling Stockholder, the
Company, and the Representatives, see "Selling Stockholder."
ERISA MATTERS
By virtue of the Company's affiliation with certain of its
subsidiaries, including SBS, that are involved in investment advisory and asset
management activities, the Company and any direct or indirect subsidiary of the
Company may each be considered a "party in interest" within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and a
"disqualified person" under corresponding provisions of the Internal Revenue
Code of 1986 (the "Code"), with respect to many employee benefit plans.
"Prohibited transactions" within the meaning of ERISA and the Code may result if
the Offered Securities are acquired by an employee benefit plan with respect to
which the Company or any direct or indirect subsidiary of the Company is a party
in interest, unless such securities are acquired pursuant to an applicable
exemption. Any employee benefit plan or other entity subject to such provisions
of ERISA or the Code proposing to acquire the Offered Securities should consult
with its legal counsel.
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LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the
Company by Charles O. Prince, III, Esq., General Counsel of the Company, The
Travelers Inc., 65 East 55th Street, New York, New York 10022 or by counsel to
be identified in the Prospectus Supplement. Mr. Prince, Senior Vice President,
General Counsel and Secretary of the Company, beneficially owns, or has rights
to acquire under the Company's employee benefit plans, an aggregate of less than
1% of the Company's Common Stock. Certain legal matters will be passed upon for
the Selling Stockholder by Louise M. Parent, General Counsel of the Selling
Stockholder, or counsel to be identified in the Prospectus Supplement, and for
the Underwriters by counsel to be identified in the Prospectus Supplement.
EXPERTS
The consolidated financial statements and schedules of the Company
(formerly Primerica Corporation) as of December 31, 1992 and 1991, and for each
of the years in the three-year period ended December 31, 1992, included in the
Company's Annual Report on Form 10-K for the year 1992, have been incorporated
by reference herein, in reliance upon the reports (also incorporated by
reference herein) of KPMG Peat Marwick, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing. The report of KPMG Peat Marwick covering the December 31, 1992
consolidated financial statements refers to a change in accounting for income
taxes. The consolidated financial statements of The Travelers Corporation as of
December 31, 1992 and 1991, and for each of the years in the three-year period
ended December 31, 1992, included in the Company's Annual Report on Form 10-K
for the year 1992, have been incorporated by reference herein, in reliance upon
the report which includes an explanatory paragraph referring to changes in the
method of accounting for postretirement benefits other than pensions, accounting
for income taxes and accounting for foreclosed assets in 1992 (also incorporated
by reference herein) of Coopers & Lybrand, independent accountants, and upon the
authority of said firm as experts in accounting and auditing. The combined
statement of assets acquired and liabilities assumed of the Shearson Lehman
Brothers and SLB Asset Management Divisions ("SLBD") of Shearson Lehman Brothers
Holdings Inc. as of December 31, 1992 and 1991, the related combined statement
of operations of SLBD for the years then ended and the combined statement of
cash provided by net income, as adjusted for non cash expenses and changes in
assets acquired and liabilities assumed, exclusive of investing and financing
activities for the year ended December 31, 1992, included in the Company's
Current Report on Form 8-K dated April 28, 1993, have been incorporated by
reference herein, in reliance upon the report (also incorporated by reference
herein) of Ernst & Young, independent auditors, given upon the authority of said
firm as experts in accounting and auditing.
23
<PAGE>
PART II
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee . . . . . . . . $ 67,455.26
NASD registration fee . . . . . . . 20,062
Blue Sky fees and expenses . . . . . 25,000
Printing . . . . . . . . . . . . . . 100,000
Fees of Independent Certified
Public Accountants . . . . . . . . 25,000
Miscellaneous expenses . . . . . . . 15,000
Total expenses . . . . . . . . . $252,523.26
===========
Except for the SEC and NASD registration fees, all of the foregoing are
estimates.
Item 15. Indemnification of Directors and Officers.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
II-1
<PAGE>
Section 145 further provides that to the extent a director or officer
of a corporation has been successful on the merits or otherwise in the defense
of any action, suit or proceeding referred to in subsections (a) and (b) of
Section 145, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; that indemnification provided for by
Section 145 shall not be deemed exclusive of any other rights to which the
indemnified party may be entitled; that indemnification provided for by Section
145 shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of such person's heirs, executors and administrators; and
empowers the corporation to purchase and maintain insurance on behalf of a
director or officer of the corporation against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liabilities under Section 145. Section 3 of Article V of the
Company's By-laws provides that the Company shall indemnify its directors and
officers to the fullest extent permitted by the DGCL.
The Company also provides liability insurance for its directors and
officers which provides for coverage against loss from claims made against
directors and officers in their capacity as such, including liabilities under
the Securities Act of 1933, as amended. In certain employment agreements, the
Company or its subsidiaries have also agreed to indemnify certain officers
against loss from claims made against such officers in connection with the
performance of their duties under their employment agreements. Such
indemnification is generally to the same extent as provided in the Company's By-
laws.
Section 102(b)(7) of the DGCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper personal benefit.
Article ELEVENTH of the Company's Certificate of Incorporation limits the
liability of directors to the fullest extent permitted by Section 102(b)(7).
Item 16. Exhibits.
Exhibit
Number Description
- ------- -----------
1.01 Form of Underwriting Agreement for Series B Preferred Stock.*
1.02 Form of Underwriting Agreement for Warrants.*
4.01 Certificate of Designation of Series B Preferred Stock of the Company.*
4.02 Form of Series B Preferred Stock Certificate.
- ----------------------
* Filed herewith. Unless otherwise indicated all other exhibits were
previously filed.
II-2
<PAGE>
Exhibit No. Description
- ----------- -----------
4.03 Form of Warrant Agreement.*
4.04 Form of Warrant.*
4.05 Form of Common Stock Certificate.
5.01 Opinion of Charles O. Prince, III, General Counsel of the
Company, as to the legality of securities being registered.
12.01 Computation of ratio of earnings to fixed charges,
incorporated by reference to Exhibit 12.01 to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1992 (File No. 1-9924) and to Exhibit 12.01 to the
Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1993.
23.01 Consent of KPMG Peat Marwick, Independent Certified Public
Accountants.*
23.02 Consent of Coopers & Lybrand, Independent Accountants.*
23.03 Consent of Ernst & Young, Independent Auditors.*
23.04 Consent of Counsel (included in Exhibit 5.01).
24.01 Powers of Attorney of certain directors of the Company.
28.01 Information from Reports Furnished to State Insurance
Regulatory Authorities. Schedule P to the Consolidated
Annual Statement of Gulf Insurance Company and its affiliated
fire and casualty insurers, incorporated by reference to
Exhibit 29.01 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (File No. 1-9924).
The information included in Schedule P of Annual Statements
of The Travelers Corporation, a Connecticut corporation ("old
Travelers"), or its affiliates is omitted. During 1993, old
Travelers was a registrant under the Securities Exchange Act
of 1934, and filed such 1992 information with the Securities and
Exchange Commission in its own right. During such time the
Company owned approximately 27% of the common stock of old
Travelers. The information included in Schedule P of Annual
Statements of the Company's unconsolidated subsidiaries is
omitted in accordance with paragraph 28, clause (iv) of Item
601 of Regulation S-K.
- -----------------------------------
* Filed herewith. Unless otherwise indicated all other exhibits were
previously filed.
II-3
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.
II-4
<PAGE>
(6) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment to this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, State of New York, this 1st day of
March, 1994.
THE TRAVELERS INC.
(Registrant)
By: /s/ James Dimon
--------------------------------
James Dimon
President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to this Registration Statement has been signed by the following persons in the
capacities indicated on this 1st day of March, 1994.
Signature Capacity
--------- --------
Chairman of the Board, Chief
/s/ Sanford I. Weill Executive Officer and Director
........................................ (Principal Executive Officer)
Sanford I. Weill
President, Chief Operating Officer,
/s/ James Dimon Chief Financial Officer and
........................................ Director (Principal Financial
James Dimon Officer)
/s/ Irwin R. Ettinger Senior Vice President and Chief
........................................ Accounting Officer (Principal
Irwin R. Ettinger Accounting Officer)
........................................ Director
C. Michael Armstrong
*
........................................ Director
Kenneth J. Bialkin
........................................ Director
Richard H. Booth
II-6
<PAGE>
Signature Capacity
--------- --------
........................................ Director
Edward H. Budd
*
........................................ Director
Joseph A. Califano, Jr.
*
........................................ Director
Robert W. Crispin
*
........................................ Director
Douglas D. Danforth
*
........................................ Director
Robert F. Daniell
*
........................................ Director
Leslie B. Disharoon
*
........................................ Director
Gerald R. Ford
*
........................................ Director
Robert F. Greenhill
*
........................................ Director
Ann D. Jordan
*
........................................ Director
Robert I. Lipp
*
........................................ Director
Dudley C. Mecum
II-7
<PAGE>
Signature Capacity
--------- --------
* Director
........................................
Andrall E. Pearson
* Director
........................................
Frank J. Tasco
* Director
........................................
Linda J. Wachner
* Director
........................................
Joseph R. Wright, Jr.
* Director
........................................
Arthur Zankel
* Director
........................................
Frank G. Zarb
* By: /s/ James Dimon
.................................
James Dimon
Attorney-in-fact
II-8
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------
1.01 Form of Underwriting Agreement for Series B Preferred Stock.*
1.02 Form of Underwriting Agreement for Warrants.*
4.01 Certificate of Designation of Series B Preferred Stock of the Company.*
4.02 Form of Series B Preferred Stock Certificate.
4.03 Form of Warrant Agreement.*
4.04 Form of Warrant.*
4.05 Form of Common Stock Certificate.
5.01 Opinion of Charles O. Prince, III, General Counsel of the
Company, as to the legality of securities being registered.
12.01 Computation of ratio of earnings to fixed charges,
incorporated by reference to Exhibit 12.01 to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1992 (File No. 1-9924) and to Exhibit 12.01 to the
Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1993.
23.01 Consent of KPMG Peat Marwick, Independent Certified Public
Accountants.*
23.02 Consent of Coopers & Lybrand, Independent Accountants.*
23.03 Consent of Ernst & Young, Independent Auditors.*
23.04 Consent of Counsel (included in Exhibit 5.01).
24.01 Powers of Attorney of certain directors of the Company.
28.01 Information from Reports Furnished to State Insurance
Regulatory Authorities. Schedule P to the Consolidated
Annual Statement of Gulf Insurance Company and its affiliated
fire and casualty insurers, incorporated by reference to
Exhibit 29.01 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992 (File No. 1-9924).
The information included in Schedule P of Annual Statements
of The Travelers Corporation, a Connecticut corporation ("old
Travelers"), or its affiliates is omitted. During 1993, old
Travelers was a registrant under the Securities Exchange Act
of 1934, and filed such 1992 information with the Securities and
Exchange Commission in its own right. During such time the
Company owned approximately 27% of the common stock of old
Travelers. The information included in Schedule P of Annual
Statements of the Company's unconsolidated subsidiaries is
omitted in accordance with paragraph 28, clause (iv) of Item
601 of Regulation S-K.
- -----------------------------------
* Filed herewith. Unless otherwise indicated all other exhibits were
previously filed.
EXHIBIT 1.01
Preferred
THE TRAVELERS INC.
Series B Convertible Preferred Stock
UNDERWRITING AGREEMENT
----------------------
_____________ __, 1994
SMITH BARNEY SHEARSON INC.
LEHMAN BROTHERS INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/o LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285
Dear Sirs:
American Express Company, a New York corporation and a
stockholder (the "Selling Stockholder") of The Travelers Inc., a
Delaware corporation (the "Company"), proposes to sell to the
several Underwriters (the "Underwriters") named in Schedule 1
hereto an aggregate of 2,500,000 shares of the Company's 5.50%
Convertible Preferred Stock, Series B, par value $1.00 per share
(the "Preferred Stock"). The Preferred Stock is convertible into
shares of the Company's common stock, par value $.01 per share
(the "Common Stock"), upon the terms and subject to the
conditions and adjustments set forth in the Certificate of
Designation relating thereto filed with the Secretary of State of
the State of Delaware on July 30, 1993 (the "Certificate of
Designation"), at a conversion price of $36.75 per share. The
shares of Common Stock issuable upon the conversion of the
Preferred Stock are hereinafter called the "Conversion Stock."
This is to confirm the agreement concerning the purchase by the
Underwriters of the Preferred Stock and the other matters
contained herein.
1. Representations, Warranties and Agreements of the
Company. The Company represents, warrants and agrees, for the
benefit of the Underwriters and the Selling Stockholder, that:
(a) A registration statement on Form S-3 (File No. 33-
52281), and each amendment thereto, with respect to the
Preferred Stock have been prepared by the Company in
conformity in all material respects with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")
thereunder and have been filed with the Commission under the
Act, and such registration statement, as so amended, has
become effective under the Act. Copies of such registration
statement and each amendment thereto have been delivered by
the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as
of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date
of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or
amendments thereof, before it became effective under the Act
and any prospectus supplement filed with the Commission by
the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Registration
<PAGE>
Statement" means such registration statement as amended at
the Effective Time, including any documents incorporated by
reference therein at such time and all information contained
in the prospectus supplement to be filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 7(a) hereof and deemed to be a part
of the registration statement as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations (the "Prospectus Supplement"); and "Prospectus"
means such final prospectus as first filed with the
Commission pursuant to paragraph (1) or (4) of Rule 424(b)
of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed
to refer to and include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the
Act, as of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
document filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), after the date of such
Preliminary Prospectus or the Prospectus, as the case may
be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be. The
Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements thereto will, when
they become effective or, in the case of further amendments
or supplements to the Prospectus as of the date thereof, as
the case may be, conform, in all material respects to the
requirements of the Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to
the Registration Statement and any amendment thereto) and as
of the date thereof (as to the Prospectus and any amendment
or supplement thereto), contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided that the Company makes
no representation or warranty as to information contained in
or omitted from the Registration Statement or the Prospectus
or any amendments or supplements thereto in reliance upon
and in conformity with written information furnished to the
Company by the Selling Stockholder or through the
Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of
the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents contained
any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by
reference in the Prospectus at any time during the period
after the Effective Date when the Underwriters are required
to deliver a Prospectus in connection with the offering and
sale of the Preferred Stock, when such documents are filed
with the Commission, will conform in all material respects
to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and will not
-2-
<PAGE>
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
(d) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and perform
its obligations hereunder; all corporate action required to
be taken by the Company for the due and proper
authorization, and reservation for the issuance of the
Conversion Stock upon conversion of the Preferred Stock has
been duly and validly taken; and this Agreement has been
duly authorized, executed and delivered by the Company and
constitutes the valid and legally binding agreement of the
Company enforceable against the Company in accordance with
its terms, except as may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally.
(e) Neither the Company nor any of its Significant
Subsidiaries (as defined in Section 1(i) below) is in
violation of its corporate charter or by-laws or in default
under any agreement, indenture or instrument, the effect of
which violation or default would be material to the Company
or the Company and its subsidiaries taken as a whole; the
execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions
contemplated hereby will not conflict with, result in the
creation or imposition of any lien, charge or encumbrance
upon any of the assets of the Company or any of its
Significant Subsidiaries pursuant to the terms of, or
constitute a default under, any agreement, indenture or
instrument to which the Company or any of its Significant
Subsidiaries is a party, or by which the Company or any of
its Significant Subsidiaries is bound or result in a
violation of the corporate charter or by-laws of the Company
or any of its Significant Subsidiaries or any statute or any
order, rule or regulation of any court or governmental
agency having jurisdiction over the Company, any of its
subsidiaries or their property, the effect of which
conflict, lien, default or violation, individually or in the
aggregate, is reasonably likely to have a material adverse
effect on the business, properties, financial condition or
results of operations of the Company or the Company and its
subsidiaries taken as a whole; and except as required by the
Act, the Exchange Act, applicable state securities laws, and
the New York Stock Exchange and such consents, approvals,
authorizations or filings as have been obtained or made
under all applicable insurance laws and regulations, no
other consent, authorization or order of, or filing or
registration with, any court or governmental agency is
required for the execution, delivery and performance of this
Agreement.
(f) Except as described in or contemplated by the
Registration Statement and the Prospectus, there has not
been any material adverse change in, or any development
which materially and adversely affects, the business,
properties, financial condition or results of operations of
the Company or of the Company and its subsidiaries taken as
a whole, from the dates as of which information is given in
the Registration Statement and the Prospectus.
(g) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of
-3-
<PAGE>
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and nonassessable and
conform in all material respects to the description thereof
contained in the Prospectus.
(h) The shares of the Preferred Stock have been duly and
validly authorized, and are duly and validly issued, fully
paid and non-assessable; all of the shares of Conversion
Stock have been duly and validly authorized and reserved for
issuance upon conversion of the Preferred Stock and, when
issued and delivered upon conversion in accordance with the
terms of the Certificate of Designation, will be duly and
validly issued, fully paid and non-assessable; and the
Conversion Stock and the Preferred Stock conform to the
descriptions thereof contained in the Prospectus.
(i) The Company and each of its Significant Subsidiaries
have been duly incorporated, are validly existing and in
good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective
businesses requires such qualification (other than any such
jurisdictions in which the failure to so qualify would not
have a material adverse effect on the Company or the Company
and its subsidiaries taken as a whole), and have all power
and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are
engaged and none of the subsidiaries of the Company other
than the subsidiaries listed on Schedule 3 hereto
(collectively, the "Significant Subsidiaries") is a
"significant subsidiary" (as defined in Section 15).
(j) Except as disclosed in the Registration Statement or
the Prospectus, there are no litigation or governmental
proceedings or investigations pending or, to the knowledge
of the Company, threatened against the Company or any of its
subsidiaries or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, is reasonably likely to have a material
adverse effect on the consolidated financial position,
stockholders' equity, business, or results of operations of
the Company and its subsidiaries.
(k) The consolidated financial statements of the Company,
including the related notes and supporting schedules,
incorporated by reference in the Registration Statement, in
any Preliminary Prospectus or the Prospectus present fairly
in all material respects the consolidated financial
condition and results of operations of the Company at the
dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved (except as disclosed therein). The pro forma
financial information incorporated by reference in the
Registration Statement and in any Preliminary Prospectus or
the Prospectus has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements and the assumptions used in the
preparation thereof were, at the time such pro forma
financial information was filed with the Commission, in the
Company's opinion, reasonable.
(l) There are no contracts or other documents which are
required to be filed as exhibits to the Registration
-4-
<PAGE>
Statement by the Act or by the Rules and Regulations which
have not been filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted
by the Rules and Regulations, or that are required to be
summarized in the Prospectus that are not so summarized.
(m) Except for rights pursuant to the Registration Rights
Agreement (as defined in Section 7(d) and except for rights
under any contract, agreement or understanding which have
been waived prior to the date hereof, there are no
contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be
owned by such person or to require the Company to include
such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act.
(n) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company
Act"), and the rules and regulations of the Commission
thereunder.
(o) The Company has not taken, and will not take, directly
or indirectly, any action, other than any stabilization
activity in connection with the offering of the Preferred
Stock that may be conducted by Smith Barney Shearson Inc.,
which is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization
or manipulation of the price of any security to facilitate
the sale or resale of the Preferred Stock.
2. Representations, Warranties and Agreements of the
Selling Stockholder. The Selling Stockholder represents,
warrants and agrees that:
(a) The Selling Stockholder has been duly incorporated and
is validly existing and in good standing under the laws of
the jurisdiction of its organization; the Selling
Stockholder has full right, power and authority necessary to
execute and deliver this Agreement and perform its
obligations under this Agreement; this Agreement has been
duly authorized and executed and delivered by or on behalf
of the Selling Stockholder; the execution, delivery and
performance of this Agreement by the Selling Stockholder
will not conflict with or result in a breach or violation in
any material respect of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other material agreement or
instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound, or result in any
material violation of any statute or any order, rule or
regulation of any court or governmental agency or body
having jurisdiction over the Selling Stockholder, the effect
of which conflict, lien, default or violation, individually
or in the aggregate, is reasonably likely to have a material
adverse effect on the business, properties, financial
condition or results of operations of the Selling
Stockholder; and, except for the registration of the
Preferred Stock and the Conversion Stock under the Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act,
applicable state securities laws and the New York Stock
Exchange in connection with the purchase of the Preferred
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Stock and distribution of the Preferred Stock by the
Underwriters, no consent, authorization or order of, or
filing or registration with, any court or governmental
agency is required to be made or obtained or filed by the
Selling Stockholder for the execution, delivery and
performance of this Agreement by the Selling Stockholder and
the consummation by the Selling Stockholder of the
transactions contemplated hereby.
(b) On the Delivery Date, the Selling Stockholder will have
good and valid title to the Preferred Stock, free and clear
of any and all liens, encumbrances, equities or claims, with
full right and authority to sell and deliver the Preferred
Stock against payment as contemplated herein; upon the
delivery of and payment for the Preferred Stock as
contemplated herein, the Underwriters will receive good
title to the Preferred Stock purchased by them,
respectively, from the Selling Stockholder, free and clear
of any and all liens, encumbrances, equities or claims.
(c) The Selling Stockholder has not taken, and will not
take, directly or indirectly, any action other than any
stabilization activity in connection with the offering of
Preferred Stock that may be conducted by Lehman Brothers
Inc. which is designed to or which has constituted or which
might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Common
Stock to facilitate the sale or resale of the Preferred
Stock.
(d) The information pertaining to the Selling Stockholder
under the caption "Selling Stockholder" in the Prospectus is
complete and accurate in all material respects.
3. Purchase of the Securities by the Underwriters. On the
basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this Agreement,
the Selling Stockholder agrees to sell the Preferred Stock to the
several Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase the number of shares of Preferred
Stock set opposite that Underwriter's name in Schedule 1 hereto.
The price to be paid by the Underwriters to the Selling
Stockholder for the Preferred Stock shall be $_____ per share.
The Selling Stockholder shall not be obligated to deliver
any of the shares of Preferred Stock to be delivered on the
Delivery Date (as defined below) except upon payment for all the
shares of Preferred Stock to be purchased on such date as
hereinafter provided.
4. Defaulting Underwriters. If, on the Delivery Date, any
Underwriter defaults in the performance of its obligations under
this Agreement, the remaining non-defaulting Underwriters shall
be obligated to purchase the shares of Preferred Stock which the
defaulting Underwriter agreed but failed to purchase on such date
in the respective proportions which the number of shares of
Preferred Stock set forth opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the
total number of shares of the Preferred Stock set forth opposite
the names of all the remaining non-defaulting Underwriters in
Schedule 1 hereto; provided, however, that the remaining non-
defaulting Underwriters shall not be obligated to purchase any
shares of Preferred Stock on the Delivery Date if the total
number of shares of Preferred Stock which the defaulting
Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of Preferred
Stock to be purchased on the Delivery Date, and any remaining
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non-defaulting Underwriter shall not be obligated to purchase
more than 110% of the number of shares of Preferred Stock which
it agreed to purchase on the Delivery Date pursuant to the terms
of Section 3. If the foregoing maximums are exceeded, the
remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representatives who so agree,
shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the shares
of Preferred Stock to be purchased on the Delivery Date. If the
remaining Underwriters or other underwriters satisfactory to the
Representatives do not elect to purchase the shares of Preferred
Stock which the defaulting Underwriter or Underwriters agreed but
failed to purchase, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or the
Company or the Selling Stockholder except that the Company will
continue to be liable for the payment of expenses to the extent
set forth in Sections 7(l) and 11 hereof.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company or the
Selling Stockholder for damages caused by its default. If other
underwriters are obligated or agree to purchase the shares of
Preferred Stock of a defaulting or withdrawing Underwriter, the
Representatives, the Selling Stockholder or the Company may
postpone the Delivery Date for up to seven full business days in
order to effect any changes that in the opinion of counsel for
the Company, counsel for the Selling Stockholder or counsel for
the Underwriters may be necessary in the Registration Statement,
the Prospectus or in any other document or arrangement.
5. Delivery of and Payment for the Securities. Delivery of
and payment for the Preferred Stock shall be made at the office
of Lehman Brothers Inc., 3 World Financial Center, New York, New
York, at 10:00 A.M., New York City time, on the fifth full
business day following the date of this Agreement or at such
other date, time or place as shall be determined by agreement
among the Representatives, the Company and the Selling
Stockholder. This date and time are sometimes referred to as the
"Delivery Date." On the Delivery Date, the Selling Stockholder
shall deliver or cause to be delivered certificates representing
the Preferred Stock, registered in the name of the Selling
Stockholder and endorsed in blank by the Selling Stockholder, to
the Representatives for the account of each Underwriter against
payment to or upon the order of the Selling Stockholder of the
purchase price by certified or official bank check or checks
payable in New York Clearing House (next-day) funds. Time shall
be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the
Preferred Stock shall be registered by the Company or its agent
in such names and in such denominations as the Representatives
shall request in writing not less than two full business days
prior to the Delivery Date. For the purpose of expediting the
checking and packaging of the certificates for the shares of
Preferred Stock, the Company shall make the certificates
available for inspection by the Representatives in New York, New
York, not later than 2:00 P.M., New York City time, on the
business day prior to the Delivery Date.
6. Schedule E Requirements. The Company and the
Underwriters agree to comply in all material respects with all of
the requirements of Schedule E of the By-laws of the National
Association of Securities Dealers, Inc. ("Schedule E") applicable
to them in connection with the offering and sale of the Preferred
Stock. The Company agrees to cooperate with the Underwriters to
enable the Underwriters to comply with Schedule E.
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<PAGE>
7. Further Agreements of the Company. The Company agrees,
for the benefit of the Underwriters and the Selling Stockholder:
(a) To prepare the Prospectus Supplement in a form approved
by the Representatives and the Selling Stockholder and, if
required by applicable law, to file such Prospectus
Supplement pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second
business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus prior to the
Delivery Date except in accordance herewith; and to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus by the
Underwriters is required in connection with the offering or
sale of the Preferred Stock contemplated hereby;
(b) To furnish promptly to the Representatives and to the
Selling Stockholder, a signed copy of the Registration
Statement as originally filed, and each amendment thereto
filed with the Commission, including all consents and
exhibits filed therewith;
(c) To deliver promptly to the Representatives and to the
Selling Stockholder such number of the following documents
as the Representatives and the Selling Stockholder shall
reasonably request: (i) conformed copies of the
Registration Statement as originally filed with the
Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement); (ii) each
Preliminary Prospectus, the Prospectus Supplement and any
amended or supplemented Prospectus and (iii) any document
incorporated by reference in the Prospectus (excluding
exhibits thereto); and, for so long as the Underwriters are
required to deliver a prospectus in connection with the
offering or sale of the Preferred Stock contemplated hereby,
if during such time any events shall have occurred as a
result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made when such
Prospectus is delivered, not misleading, or if for any other
reason it shall be necessary during such same period to
amend or supplement the Prospectus or to file under the
Exchange Act any document which, upon filing, will become
incorporated by reference in the Prospectus in order to
comply with the Act or the Exchange Act (other than filings
by the Company of its Annual and Quarterly Reports on Forms
10-K and 10-Q, respectively), to notify the Representatives
and upon their request promptly (or, if in effect, upon
completion of any Information Blackout Period (as
hereinafter defined)) to file such document and to prepare
and furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representatives
may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such
compliance, if required by applicable law;
(d) For so long as the Underwriters are required to deliver
a prospectus in connection with the offering or sale of the
Preferred Stock contemplated hereby, to file with the
Commission any amendment to the Registration Statement or
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<PAGE>
the Prospectus or any supplement to the Prospectus that may
be required by the Act or requested by the Commission and
approved by the Representatives; provided, however, that the
Company shall not be required to comply with this Section
7(d) during any period in which the Company has notified the
Selling Stockholder and the Representatives that, pursuant
to and in accordance with the Registration Rights Agreement
between the Company and the Selling Stockholder, dated as of
July 31, 1993 and amended as of February __, 1994 (the
"Registration Rights Agreement"), the Company is imposing an
Information Blackout (as defined in the Registration Rights
Agreement) (such period, an "Information Blackout Period");
and provided, further, that the Underwriters shall not offer
and sell any shares of Preferred Stock until they shall have
received (i) notification from the Company of the expiration
of such Information Blackout Period (which Information
Blackout Period shall expire as provided in the Registration
Rights Agreement) and (ii) any such amendment or supplement
has been prepared and filed with the Commission;
(e) Prior to filing with the Commission (i) for so long as
the Underwriters are required to deliver a prospectus in
connection with the offering or sale of the Preferred Stock
contemplated hereby, any post-effective amendment to the
Registration Statement or supplement to the Prospectus
(other than documents incorporated by reference therein),
(ii) prior to the Delivery Date, any document which, upon
filing, will become incorporated by reference in the
Prospectus or (iii) for so long as the Underwriters are
required to deliver a prospectus in connection with the
offering or sale of the Preferred Stock contemplated hereby,
any Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the
Representatives, the Selling Stockholder, counsel for the
Underwriters and counsel for the Selling Stockholder and
obtain the consent of the Representatives to the filing
(which consent shall not be unreasonably withheld);
(f) For so long as the Underwriters are required to deliver
a prospectus in connection with the offering or sale of the
Preferred Stock contemplated hereby, to advise the Selling
Stockholder and the Representatives promptly (i) when the
Registration Statement, or any amendment thereto, has been
filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to
furnish the Representatives with copies thereof, (ii) of any
request or proposed request by the Commission for an
amendment to the Registration Statement, a supplement to the
Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus or the initiation or threat of any stop order
proceeding, (iv) of receipt by the Company of any
notification with respect to the suspension of the
qualification of the Preferred Stock for sale in any
jurisdiction or the initiation or threat of any proceeding
for that purpose, and (v) of the happening of any event
which makes untrue any statement of a material fact made in
the Registration Statement or the Prospectus, or which
requires the making of a change in the Registration
Statement or the Prospectus in order to make any material
statement therein not misleading;
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<PAGE>
(g) If the Commission shall issue a stop order suspending
the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the qualification
of the Preferred Stock or Conversion Stock for offering or
sale in any jurisdiction, to use its reasonable efforts to
obtain the lifting of any such order at the earliest
possible time;
(h) As soon as practicable after the Effective Date, to
make generally available to its security holders an earnings
statement (which need not be audited), conforming with the
requirements of Section 11(a) of the Act, covering a period
of at least twelve months beginning after the Effective
Date;
(i) Prior to the Effective Date, to apply for the listing
of the Preferred Stock on the New York Stock Exchange and to
use its best efforts to (i) complete that listing, subject
only to official notice of issuance, prior to the Delivery
Date and (ii) complete the listing of the Conversion Stock
on the New York Stock Exchange, prior to the issuance of
such Stock;
(j) To use its best efforts to qualify the Preferred Stock
for offer and sale under the securities laws of such
jurisdictions as the Representatives may reasonably request
and to endeavor to comply with such laws as to permit the
continuance of sales and dealings therein in such
jurisdictions for as long as may be reasonably necessary to
complete the distribution of the Preferred Stock; provided
that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(k) For a period of 60 days from the date of this Agreement
not to offer for sale, sell or otherwise dispose of (or
enter into any transaction which is designed to, or could be
expected to, result in the disposition by any person of),
directly or indirectly, any shares of Common Stock (other
than the shares which may be issuable upon exercise of the
Warrants covered by the Registration Statement, the shares
issuable upon conversion of any outstanding convertible
debt, the Conversion Stock, shares issued pursuant to
employee benefit plans, deferred share plans, qualified
stock option plans or other employee compensation plans
existing on the date hereof or pursuant to currently
outstanding options or warrants), or sell or grant options,
rights or warrants with respect to any shares of Common
Stock (other than the grant of options pursuant to employee
benefit plans or other agreements between the Company and
any employees of the Company consistent with the past
practice of the Company), without the prior written consent
of the Representatives, which consent shall not be
unreasonably withheld (for purposes of this paragraph 7(k),
sales of securities by affiliates of the Company in their
capacity as agent or in the ordinary course of such
affiliate's business shall not be deemed to be sales by the
Company);
(l) To pay the costs incident to the sale and delivery of
the Preferred Stock and any taxes payable in that
connection; the costs incident to the preparation, printing
and filing under the Act of the Registration Statement and
any amendments and exhibits thereto; the costs of
distributing the Registration Statement as originally filed
and each amendment thereto and any post-effective amendments
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<PAGE>
thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement
to the Prospectus, and any document incorporated by
reference therein, all as provided in this Agreement; the
costs of producing and copying this Agreement; the costs of
distributing the terms of agreement relating to the
organization of the underwriting syndicate and the selling
group to the members thereof by mail, telex or other means
of communication; the filing fees incident to securing any
required review by the National Association of Securities
Dealers, Inc. of the terms of sale of the Preferred Stock;
any applicable listing or other fees; the fees and expenses
of qualifying the Preferred Stock under the securities laws
of the several jurisdictions as provided in Section 7(j) and
of preparing, printing and distributing a Blue Sky
Memorandum (including related fees and expenses of counsel
to the Underwriters); and all other costs and expenses
incident to the performance of the obligations of the
Company under this Agreement; provided that, except as
provided in this Section 7 and Section 11, the Underwriters
shall pay their own costs and expenses, including the fees
and expenses of their counsel, any transfer taxes on the
Preferred Stock which they may sell and the expenses of
advertising any offering of the Preferred Stock made by the
Underwriters; nothing herein contained is intended as shall
be construed to limit the obligation of the Company to pay
expenses incurred by the Selling Stockholder not enumerated
herein if and to the extent required to be paid by the
Company pursuant to the terms of the Registration Rights
Agreement.
8. Indemnification and Contribution. (a) The Company
shall indemnify and hold harmless each Underwriter and the
Selling Stockholder and each director or officer of the Selling
Stockholder and each person, if any, who controls any Underwriter
or the Selling Stockholder within the meaning of the Act, from
and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which such
Underwriter, the Selling Stockholder, such director or officer of
the Selling Stockholder or such controlling person may become
subject, under the Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse
each Underwriter, the Selling Stockholder, each such director or
officer of the Selling Stockholder and each such controlling
person for any legal or other expenses reasonably incurred by
that Underwriter, Selling Stockholder, director or officer of the
Selling Stockholder or controlling person in connection with
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company shall not be
liable to any Underwriter in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in
any such amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by
the Selling Stockholder or through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein; and
provided, further, that the Company shall not be liable to any
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<PAGE>
Underwriter in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any such
amendment or supplement thereto in connection with any sale of
Preferred Stock by such Underwriter during an Information
Blackout Period; and provided further that as to any Preliminary
Prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter or any person controlling that
Underwriter on account of any loss, claim, damage, liability or
action arising from the sale of Preferred Stock to any person by
that Underwriter if that Underwriter failed to send or give a
copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act,
and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by
the Company with Section 7(c). For purposes of the last proviso
to the immediately preceding sentence, the term "Prospectus"
shall not be deemed to include the documents incorporated therein
by reference, and no Underwriter shall be obligated to send or
give any supplement or amendment to any document incorporated by
reference in any Preliminary Prospectus or the Prospectus to any
person other than a person to whom such Underwriter had delivered
such incorporated document or documents in response to a written
request therefor. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to
any Underwriter, the Selling Stockholder, directors or officers
of the Selling Stockholder or to any controlling person of that
Underwriter or the Selling Stockholder.
(b) The Selling Stockholder will indemnify and hold
harmless the Company, each director of the Company and each
officer of the Company who signed the Registration Statement,
each Underwriter and each person, if any, who controls any
Underwriter or the Company within the meaning of the Act, from
and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof to which such
Underwriter, the Company, such director or officer of the Company
or such controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage or liability
arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
therein not misleading, but in each case only to the extent that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished by the Selling Stockholder to the
Company specifically for inclusion therein, and shall reimburse
each Underwriter, the Company, each director of the Company, each
officer of the Company who signs the Registration Statement and
each such controlling person for any legal or other expenses
reasonably incurred by such Underwriter, the Company, each
director of the Company, each such officer of the Company or such
controlling person in connection with investigating or defending
or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred.
Notwithstanding the provisions of this Section 8(b), the
aggregate liability of the Selling Stockholder under this Section
8(b) shall not exceed the proceeds received by the Selling
Stockholder from the sale of Preferred Stock under this
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<PAGE>
Agreement. The foregoing indemnity agreement is in addition to
any liability which the Selling Stockholder may otherwise have to
any Underwriter, the Company, each director of the Company, each
officer of the Company who signs the Registration Statement or to
any controlling person of that Underwriter or the Company.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company and the Selling
Stockholder, each director of the Company, each officer of the
Company who signed the Registration Statement and each person, if
any, who controls the Company or the Selling Stockholder within
the meaning of the Act, from and against any loss, claim, damage
or liability, joint or several, or any action in respect thereof,
to which the Company or the Selling Stockholder or any such
director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein, and shall
reimburse the Company, the Selling Stockholder and any such
director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company, the Selling
Stockholder or any such director, officer or controlling person
in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action
as such expenses are incurred. The foregoing indemnity agreement
is in addition to any liability which any Underwriter may
otherwise have to the Company, the Selling Stockholder or any
such director, officer or controlling person.
(d) Promptly after receipt by an indemnified party under
this Section 8 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the claim
or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action
shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however,
that each indemnified party shall have the right to employ
separate counsel to represent it (and, in the case of the
Underwriters, such separate counsel shall represent jointly the
Representatives and those other Underwriters and their respective
controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the
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<PAGE>
Underwriters against an indemnifying party under this Section 8)
if, in the reasonable judgment of such indemnified party, it is
advisable for such indemnified party and its directors, officers
and controlling persons to be represented by separate counsel,
and in that event the fees and expenses of such separate counsel
shall be paid by the indemnifying party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying
party shall be liable for any settlement effected without its
written consent (which consent shall not be unreasonably
withheld), but if settled with such consent or if there be a
final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by
reason of such settlement or judgment to the extent provided in
the preceding paragraphs.
(e) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 8(a), (b) or (c) in
respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be
appropriate to reflect the relative fault of the Company, the
Selling Stockholder and the Underwriters with respect to the
statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative fault
shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or
the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 8 were to
be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to
above in this Section 8(e) shall be deemed to include, for
purposes of this Section 8(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(e), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Preferred
Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this
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<PAGE>
Section 8(e) are several in proportion to their respective
underwriting obligations and not joint. Promptly after receipt
by an indemnified party under this Section 8(e) of the notice of
the commencement of any action against such party in respect of
which a claim for contribution may be made against an
indemnifying party under this Section 8(e), such indemnified
party shall notify the indemnifying party in writing of the
commencement thereof if the notice specified in Section 8(d)
above has not been given with respect to such action; but the
omission so to notify the indemnifying party shall not relieve it
from any liability which it may have to any indemnified party
otherwise than under this Section 8(e).
(f) The Underwriters severally confirm that the statements
with respect to the public offering of the Preferred Stock set
forth on the cover page of the Prospectus Supplement and under
the captions "Plan of Distribution" in the Prospectus and
"Underwriting" in the Prospectus Supplement are correct and were
furnished in writing to the Company by or on behalf of the
Underwriters severally for inclusion in the Registration
Statement and the Prospectus, and the Company and the Selling
Stockholder acknowledge that such statements are the only
statements so furnished by the Underwriters.
(g) The Selling Stockholder confirms that the statements
under the caption "Selling Stockholder" in the Prospectus are
correct and were furnished in writing to the Company by or on
behalf of the Selling Stockholder for inclusion in the
Registration Statement and the Prospectus, and the Underwriters
and the Company acknowledge that such statements are the only
statements so furnished by the Selling Stockholder.
9. Termination. (a) The obligations of the Underwriters
hereunder may be terminated by the Representatives, in their
absolute discretion, by notice given to and received by the
Company and the Selling Stockholder prior to delivery of and
payment for the Preferred Stock, if prior to that time any of the
events described in Section 10(i) or 10(j) shall have occurred or
if the Underwriters shall decline to purchase the Preferred Stock
for any reason permitted under this Agreement;
(b) The obligations of the Selling Stockholder hereunder
may be terminated by the Selling Stockholder by notice given to
and received by the Company and the Underwriters prior to
delivery and payment for the Preferred Stock, if prior to that
time any of the events described in Section 10(i) shall have
occurred or if the Selling Stockholder shall decline to sell the
Preferred Stock for any reason permitted under this Agreement;
and
(c) If the Company shall impose an Information Blackout
Period to begin at any time between the date hereof and the
Delivery Date, this Agreement shall terminate without liability
to any of the Company, the Selling Stockholder or the
Underwriters, and the Selling Stockholder may exercise its
registration rights under the Registration Rights Agreement at
any time following the expiration of such Information Blackout
Period.
10. Conditions of Underwriters' and Selling Stockholder's
Obligations. The respective obligations of the Underwriters and
the Selling Stockholder hereunder are subject to the accuracy,
when made and on the Delivery Date, of the representations and
warranties of the Company and the Selling Stockholder contained
herein, to the performance by the Company and the Selling
Stockholder of their respective obligations hereunder, and to
each of the following additional terms and conditions.
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<PAGE>
(a) The Prospectus Supplement shall have been timely filed
with the Commission in accordance with Section 7(a) of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request
of the Commission for inclusion of additional information in
the Registration Statement or the Prospectus or otherwise
shall have been complied with.
(b) Neither any Underwriter nor the Selling Stockholder
shall have discovered after the date hereof and disclosed to
the Company on or prior to the Delivery Date that the
Registration Statement or the Prospectus or any amendment or
supplement thereto contains an untrue statement of a fact
which is material or omits to state a fact which is material
and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) Simpson Thacher & Bartlett, counsel for the
Underwriters, shall have furnished to the Underwriters their
opinion, reasonably satisfactory in all respects to the
Underwriters, with respect to this Agreement, the Preferred
Stock, the Conversion Stock, the Registration Statement, the
Prospectus, the Certificate of Designations and all such
other related legal matters as the Representatives shall
reasonably request and the Company and the Selling
Stockholder shall have furnished to such counsel all
documents and information that they may reasonably request
to enable them to pass upon such matters.
(d) Charles O. Prince, III, General Counsel of the Company,
shall have furnished to the Representatives and to the
Selling Stockholder his opinion addressed to the
Underwriters and to the Selling Stockholder and dated the
Delivery Date to the effect that:
(i) The Company and each of its Significant
Subsidiaries have been duly incorporated, are validly
existing and in good standing under the laws of their
respective jurisdictions of incorporation, are duly
qualified to do business and in good standing as
foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the
conduct of their respective businesses requires such
qualification (other than the jurisdictions in which
the failure to so qualify would not have a material
adverse effect on the Company or the Company and its
subsidiaries taken as a whole); the Company and each of
its Significant Subsidiaries have all power and
authority necessary to own or hold their respective
properties and to conduct their respective businesses
as described in the Prospectus;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued
shares of capital stock of the Company (including the
shares of Preferred Stock being delivered on the
Delivery Date) have been duly and validly authorized
and issued, are fully paid and non-assessable and
conform to the description thereof contained in the
Prospectus; all of the shares of Conversion Stock have
been duly and validly authorized and reserved for
issuance upon conversion of the Preferred Stock, and,
when issued and delivered in accordance with the terms
of the Certificate of Designation upon conversion will
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<PAGE>
be duly and validly issued, fully paid and non-
assessable;
(iii) The Common Stock (including the Conversion Stock)
conforms in all material respects as to legal matters
to the description of the Common Stock of the Company,
and the Preferred Stock conforms in all material
respects as to legal matters to the description of the
Preferred Stock contained in the Prospectus under the
caption "Description of Offered Securities"; and the
statements made in the Prospectus under the captions
"Description of Capital Stock" and "Description of
Offered Securities" insofar as they purport to
summarize the terms of the Company's capital stock
(including the Preferred Stock and the Conversion
Stock), fairly present in all material respects the
information called for with respect thereto by the
Rules and Regulations;
(iv) To the best of such counsel's knowledge, except
for rights pursuant to the Registration Rights
Agreement and except for rights under any contract,
agreement or understanding which have been waived prior
to the date hereof, there are no contracts, agreements
or understandings between the Company and any person
granting such person the right to require the Company
to file a registration statement under the Act with
respect to any securities of the Company owned or to be
owned by such person or to require the Company to
include such securities in the securities registered
pursuant to the Registration Statement or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Act;
(v) The Registration Statement was declared effective
under the Act as of the date and time specified in such
opinion, the Prospectus Supplement was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
of the Rules and Regulations specified in such opinion
on the date specified therein and, to the knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or
threatened by the Commission;
(vi) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by
the Company prior to the Delivery Date (except that no
opinion need be expressed as to the financial
statements and other financial and statistical
information contained therein) comply as to form in all
material respects with the requirements of the Act and
the Rules and Regulations; and the documents
incorporated by reference in the Prospectus and any
further amendments or supplements thereto made by the
Company prior to the Delivery Date (except that no
opinion need be expressed as to the financial
statements and other financial and statistical
information contained therein), when they were filed
with the Commission, complied as to form in all
material respects with the requirements of the Exchange
Act and the rules and regulations of the Commission
thereunder;
(vii) To the best of such counsel's knowledge, except as
disclosed in the Registration Statement or the
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<PAGE>
Prospectus there are no legal or governmental
proceedings or investigations pending or threatened
against the Company or any of its subsidiaries or of
which any property or assets of the Company or any of
its subsidiaries are the subject which, if determined
adversely to the Company or any of its subsidiaries, is
reasonably likely to have a material adverse effect on
the consolidated financial position, stockholders'
equity, results of operations or business of the
Company and its subsidiaries;
(viii) To the best of such counsel's knowledge, there are
no contracts or other documents which are required to
be filed as exhibits to the Registration Statement by
the Act or by the Rules and Regulations which have not
been filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the
Rules and Regulations;
(ix) To the best of such counsel's knowledge, neither
the Company nor any of its Significant Subsidiaries is
in violation of its corporate charter or by-laws, or in
default under any material agreement, indenture or
instrument (except, in the case of any such material
agreement, indenture or instrument, for any such
violation or default which would not have a material
adverse effect on the Company and its subsidiaries
taken as a whole);
(x) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and to
perform its obligations hereunder; and all corporate
action required to be taken by the Company for the due
and proper authorization and issuance of the Conversion
Stock has been duly and validly taken;
(xi) This Agreement has been duly authorized, executed
and delivered by the Company; the execution, delivery
and performance of this Agreement and the consummation
of the transactions contemplated hereby by the Company,
do not conflict with and will not result in the
creation or imposition of any lien, charge or
encumbrance upon or preemptive rights with respect to
any of the assets of the Company or any of its
Significant Subsidiaries pursuant to the terms of, or
constitute a material default under, any agreement,
indenture or instrument listed as an exhibit to the
Registration Statement to which the Company or any of
its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is
bound, except where such conflict, lien, charge,
encumbrance, preemptive right or default would not have
a material adverse effect on the Company and its
Significant Subsidiaries taken as a whole, and will not
result in a violation of the corporate charter or
by-laws of the Company or any of its Significant
Subsidiaries or, to such counsel's knowledge, any
material statute or any material order, rule or
regulation of any court or governmental agency having
jurisdiction over the Company, any of its subsidiaries
or their property, the effect of which conflict, lien,
charge, encumbrance, default or violation, individually
or in the aggregate, is reasonably likely to have a
material adverse effect on the business, properties,
financial condition or results of operations of the
Company or the Company and its subsidiaries taken as a
whole; and except for such consents, approvals,
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<PAGE>
authorizations or filings as may be required under all
applicable insurance laws and regulations, no other
consent, authorization or order of, or filing or
registration with, any court or governmental agency is
required for the execution, delivery and performance of
this Agreement by the Company and the consummation by
the Company of the transaction contemplated hereby,
except such as may be required by the Act, the Exchange
Act or state securities laws, or the New York Stock
Exchange or except where the failure to obtain such
consent, authorization or order, or to effect such
filing or registration, would not have a material
adverse effect on the Company and its subsidiaries
taken as a whole; and
(xii) The Company is not an "investment company" within
the meaning of the Investment Company Act and the rules
and regulations of the Commission thereunder.
In rendering such opinion, such counsel may state that
his opinion is limited to matters governed by the Federal laws of
the United States of America, the laws of the State of New York
and the General Corporation Law of the State of Delaware. Such
counsel shall also have furnished to the Representatives and to
the Selling Stockholder a written statement (which may be
included in such opinion), addressed to the Underwriters and to
the Selling Stockholder and dated the Delivery Date, in form and
substance satisfactory to the Representatives and to the Selling
Stockholder to the effect that (x) such counsel is general
counsel to the Company, has acted as counsel to the Company in
connection with previous financing transactions and has acted as
counsel to the Company in connection with the preparation of the
Registration Statement, and (y) based on the foregoing, no facts
have come to the attention of such counsel which lead him to
believe that (I) the Registration Statement, as of the Effective
Date, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading,
or that the Prospectus contains any untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading or (II) any document incorporated by
reference in the Prospectus, when it was filed with the
Commission, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. The foregoing opinion and
statement may be qualified by a statement to the effect that such
counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except for the
statements made in the Prospectus under the captions "Description
of Capital Stock" and " Description of Offered Securities,"
insofar as such statements relate to the Preferred Stock, the
Conversion Stock or the Common Stock, and concern legal matters.
(e) The Selling Stockholder shall have furnished to the
Representatives and, with respect only to paragraphs (i) and
(ii) below, to the Company, a written opinion of Louise M.
Parent, its general counsel, addressed to the Underwriters
and to the Company, with respect only to paragraphs (i) and
(ii) below, and dated the Delivery Date, in form and
substance satisfactory to the Representatives, to the effect
that:
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<PAGE>
(i) The Selling Stockholder has been duly organized
and is validly existing and in good standing under the
laws of New York; the Selling Stockholder has all
necessary power and authority to execute and deliver
this Agreement; the execution, delivery and performance
of this Agreement by the Selling Stockholder will not
conflict with or result in a breach or violation in any
material respect of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which
the Selling Stockholder is a party or by which the
Selling Stockholder is bound, or result in a violation
of any material statute or a violation of any material
order, rule or regulation known to such counsel of any
court or governmental agency having jurisdiction over
the Selling Stockholder, the effect of which conflict,
lien, default or violation, individually or in the
aggregate, is reasonably likely to have a material
adverse effect on the business, properties, financial
condition or results of operations of the Selling
Stockholder; and, except for the registration of the
Preferred Stock and the Conversion Stock under the
Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may
be required under the Exchange Act, applicable state
securities laws and the New York Stock Exchange and no
consent, approval, authorization or order of, or filing
or registration with, any such court or governmental
agency or body is required to be made, obtained or
filed by the Selling Stockholder for the execution,
delivery and performance of this Agreement by the
Selling Stockholder and the consummation of the
transactions contemplated hereby;
(ii) This Agreement has been duly authorized and
executed and delivered by or on behalf of the Selling
Stockholder;
(iii) Immediately prior to the Delivery Date, (i) to
such counsel's knowledge, the Preferred Stock to be
sold by the Selling Stockholder under this Agreement
was owned by the Selling Stockholder free and clear of
all liens, encumbrances, equities or claims (other than
those arising pursuant to this Agreement), and (ii) the
Selling Stockholder had full right, power and authority
to sell, assign, transfer and deliver such Preferred
Stock to be sold by the Selling Stockholder hereunder;
and
(iv) Upon delivery to the Underwriters of the Preferred
Stock registered in the name of the Selling Stockholder
and endorsed in blank by the Selling Stockholder, the
Underwriters have acquired all of the Selling
Stockholder's rights in the Preferred Stock to be sold
by the Selling Stockholder on the Delivery Date under
this Agreement, free of any adverse claims, assuming
that each of the several Underwriters has purchased
such Preferred Stock in good faith and without notice
of any such adverse claims within the meaning of the
Uniform Commercial Code as in effect in the State of
New York.
In rendering such opinion, such counsel may (i) state
that her opinion is limited to matters governed by the Federal
laws of the United States of America, the laws of the State of
New York and the Business Corporation Law of the State of New
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<PAGE>
York and (ii) in rendering the opinions in Sections 11(e)(iii)
and (iv) above, rely upon a certificate of the Selling
Stockholder in respect of matters of fact as to ownership of and
liens, encumbrances, equities or claims on the Preferred Stock
sold by the Selling Stockholder, provided that such counsel shall
furnish copies thereof to the Representatives and state that she
believes that both the Underwriters and she are justified in
relying upon such certificate. In rendering the opinion in
Sections 11(e)(iii) and (iv) above, such counsel may assume that
the Preferred Stock has been duly and validly authorized and
issued by the Company, is fully paid and non-assessable, is not
subject to any preemptive rights or other rights to subscribe for
or purchase the Preferred Stock granted to any holder on the date
thereof of any outstanding shares of capital stock of the Company
and is subject to no liens, encumbrances, equities or claims
created by the Company or the Underwriters. Such counsel shall
also have furnished to the Representatives a written statement,
addressed to the Underwriters and dated the Delivery Date, in
form and substance satisfactory to the Representatives, to the
effect that (x) such counsel is general counsel to the Selling
Stockholder and has acted as counsel to the Selling Stockholder
in connection with the preparation of the Registration Statement,
and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead her to believe that the
Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact relating to the Selling
Stockholder or omitted to state such a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus contains any
untrue statement of a material fact relating to the Selling
Stockholder or omits to state such a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may be
qualified by a statement to the effect that such counsel does not
assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement or the Prospectus.
(f) The Company shall have furnished to the Selling
Stockholder and the Representatives a letter (used in this
paragraph, the "comfort letter") of KPMG Peat Marwick,
addressed to the Selling Stockholder and the Underwriters
and dated the Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Act
and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission and (ii) stating, as of
the date thereof, the conclusions and findings of such firm
with respect to the financial information and other matters
as have been requested by the Representatives to be included
in such comfort letter.
(g) The Company shall have furnished to the Selling
Stockholder and to the Representatives a certificate, dated
the Delivery Date, of its Chairman of the Board, any Vice
Chairman, its President or a Vice President and its chief
financial officer or treasurer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct in all
material respects as of such date; the Company has
complied in all material respects with all its
agreements contained herein and the conditions set
forth in Section 10(a) have been fulfilled; and
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<PAGE>
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion,
(A) as of the Effective Date, the Registration
Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state
a material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading, and (B) since the Effective Date, no event
has occurred which should have been set forth in a
supplement to or amendment of the Prospectus which has
not been set forth in such a supplement or amendment.
(h) The Selling Stockholder shall have furnished to the
Representatives and to the Company a certificate, dated the
Delivery Date, signed on its behalf by its Chairman,
President or a Vice President and its Treasurer or an
Assistant Treasurer or its Secretary, stating that the
representations, warranties and agreements of the Selling
Stockholder in Section 2 and, with respect to the Company,
in paragraphs (a) and (d) of Section 2, are true and correct
as of the Delivery Date and the Selling Stockholder has
complied with all its agreements contained herein to be
performed at or prior to the Delivery Date.
(i) Since the respective dates as of which information is
given in the Prospectus there shall not have been any
material adverse change in or affecting the business,
properties, financial condition, results or operations of
the Company or the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case, is, in
the judgment of Lehman Brothers Inc., so material and
adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the
Preferred Stock being delivered on the Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the
following: (i) trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum
prices shall have been established on either of such
exchanges or such market by the Commission, by such exchange
or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or New York state authorities,
(iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority
in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery
of the Preferred Stock being delivered on the Delivery Date
on the terms and in the manner contemplated in the
Prospectus.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to Simpson Thacher &
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Bartlett, counsel for the Underwriters and to counsel for the
Selling Stockholder and, to the extent delivered to the Company
pursuant to paragraphs (e) and (h) of Section 10, to counsel for
the Company.
11. Reimbursement of Underwriters' Expenses. If (a) notice
shall have been given pursuant to Section 12(a) preventing this
Agreement from becoming effective, (b) the Selling Stockholder
shall fail to tender the Preferred Stock for delivery to the
Underwriters for any reason permitted under this Agreement or (c)
the Underwriters shall decline to purchase the Preferred Stock
for any reason permitted under this Agreement (including the
termination of this Agreement pursuant to Section 9(a)), the
Company and the Selling Stockholder shall reimburse the
Underwriters for the fees and expenses of their counsel and for
such other out-of-pocket expenses as shall have been incurred by
them in connection with this Agreement and the proposed purchase
of the Preferred Stock, and upon demand the Company and the
Selling Stockholder shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to
Section 4 by reason of the default of one or more Underwriters,
neither the Company nor the Selling Stockholder shall be
obligated, to reimburse any defaulting Underwriter on account of
those expenses. If this Agreement is terminated pursuant to
Section 9(c), neither the Company nor the Selling Stockholder
shall be obligated to reimburse the expenses of any Underwriter.
Nothing herein shall affect the rights of the Selling Stockholder
or the Company under the Registration Rights Agreement including,
without limitation, with respect to obligations of reimbursement
of Underwriters' expenses.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Lehman Brothers
Inc., Three World Financial Center, New York, New York
10285, Attention: Syndicate Department (Fax: 212-528-8822);
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention:
President; and
(c) if to the Selling Stockholder, shall be delivered or
sent by mail, telex or facsimile transmission to American
Express Company, American Express Tower, World Financial
Center, New York, New York 10285, Attention: General
Counsel;
provided, however, that any notice to an Underwriter pursuant to
Section 8(d) shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set
forth in its acceptance telex to the Representatives, which
address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests,
notices or agreements shall take effect at the time of receipt
thereof. The Company and the Selling Stockholder shall be
entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by Lehman
Brothers Inc. on behalf of the Representatives, and the Company
and the Underwriters shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of
the Selling Stockholder.
13. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the
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Underwriters, the Company, the Selling Stockholder and their
respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any,
who control any Underwriter (as used herein, "control" and
"controlling" shall be within the meaning of Section 15 of the
Act) and for the benefit of the person or persons, if any,
controlling the Selling Stockholder; (b) the indemnity agreement
of the Underwriters contained in Section 8 of this Agreement
shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration
Statement, the Selling Stockholder, and any person or persons
controlling the Company or the Selling Stockholder; (c) the
representations, warranties, indemnities and agreements of the
Selling Stockholder contained in this Agreement shall be deemed
to be for the benefit of the person or persons, if any,
controlling the Underwriters; and (d) the indemnities of the
Selling Stockholder and the representations of the Selling
Stockholder contained in Section 2(a) and 2(d) of this Agreement
shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration
Statement and any person or persons controlling the Company.
Nothing in this Agreement is intended or shall be construed to
give any person other than the persons referred to in this
paragraph any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholder
and the Underwriters contained in this Agreement or on behalf of
them respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Preferred Stock and shall remain
in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of
them.
15. Certain Definitions. For purposes of this Agreement,
(a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" and
"significant subsidiary" have the respective meanings set forth
in Regulation S-X of the Rules and Regulations.
16. Governing Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York. This Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart, the
executed counterparts shall together constitute a single
instrument.
17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of,
or to affect the meaning or interpretation of, this Agreement.
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<PAGE>
If the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholder and the Underwriters, please
indicate your acceptance in the space provided for that purpose
below.
Very truly yours,
THE TRAVELERS INC.
By
------------------------------------
Title:
THE SELLING STOCKHOLDER:
AMERICAN EXPRESS COMPANY
By
------------------------------------
Title:
Accepted:
SMITH BARNEY SHEARSON INC.
LEHMAN BROTHERS INC.
As Representatives of the several
Underwriters named in Schedule 1
By: LEHMAN BROTHERS INC.
By
--------------------------------------
Authorized Representative
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SCHEDULE 1
Number of
Underwriter Shares
----------- ------
Smith Barney Shearson Inc. . . . . . . . .
Lehman Brothers Inc. . . . . . . . . . . .
---------
Total . . . . . . . . . =========
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SCHEDULE 2
Significant Subsidiaries of the Company
---------------------------------------
CC Holdings, Inc.
Commercial Credit Company
Associated Madison Companies, Inc.
The Travelers Insurance Group, Inc.
The Travelers Insurance Company
Primerica Insurance Holdings, Inc.
Primerica Life Insurance Company
The Travelers Indemnity Company
Smith Barney Shearson Holdings Inc.
Smith Barney Shearson Inc.
EXHIBIT 1.02
THE TRAVELERS INC.
Warrants to Purchase Common Stock
UNDERWRITING AGREEMENT
----------------------
_____________ __, 1994
SMITH BARNEY SHEARSON INC.
LEHMAN BROTHERS INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/o LEHMAN BROTHERS INC.
Three World Financial Center
New York, New York 10285
Dear Sirs:
American Express Company, a New York corporation and a
stockholder (the "Selling Stockholder") of The Travelers Inc., a
Delaware corporation (the "Company"), proposes to sell to the
several Underwriters (the "Underwriters") named in Schedule 1
hereto warrants (the "Warrants") for the purchase of an aggregate
of 3,749,466 shares of Common Stock. The Warrants will be subject
to the provisions of a Warrant Agreement (the "Warrant
Agreement") to be dated as of March 1, 1994, between the Company
and The First National Bank of Boston, as warrant agent (the
"Warrant Agent"). The shares of Common Stock issuable upon the
exercise of the Warrants are hereinafter called the "Warrant
Stock." This is to confirm the agreement concerning the purchase
by the Underwriters of the Warrants and the other matters
contained herein.
1. Representations, Warranties and Agreements of the
Company. The Company represents, warrants and agrees, for the
benefit of the Underwriters and the Selling Stockholder, that:
(a) A registration statement on Form S-3 (File No. 33-
52281), and each amendment thereto, with respect to the
Warrants have been prepared by the Company in conformity in
all material respects with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission")
thereunder and have been filed with the Commission under the
Act, and such registration statement, as so amended, has
<PAGE>
become effective under the Act. Copies of such registration
statement and each amendment thereto have been delivered by
the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this
Agreement, "Effective Time" means the date and the time as
of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared
effective by the Commission; "Effective Date" means the date
of the Effective Time; "Preliminary Prospectus" means each
prospectus included in such registration statement, or
amendments thereof, before it became effective under the Act
and any prospectus supplement filed with the Commission by
the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Registration
Statement" means such registration statement as amended at
the Effective Time, including any documents incorporated by
reference therein at such time and all information contained
in the prospectus supplement to be filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in
accordance with Section 7(a) hereof and deemed to be a part
of the registration statement as of the Effective Time
pursuant to paragraph (b) of Rule 430A of the Rules and
Regulations (the "Prospectus Supplement"); and "Prospectus"
means such final prospectus as first filed with the
Commission pursuant to Rule 424(b) of the Rules and
Regulations. Reference made herein to any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Act, as of the
date of such Preliminary Prospectus or the Prospectus, as
the case may be, and any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any document filed
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or
the Prospectus, as the case may be. The Commission has not
issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus
and any further amendments or supplements thereto will, when
they become effective or, in the case of further amendments
or supplements to the Prospectus as of the date thereof, as
the case may be, conform, in all material respects to the
requirements of the Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to
the Registration Statement and any amendment thereto) and as
of the date thereof (as to the Prospectus and any amendment
or supplement thereto), contain any untrue statement of a
material fact or omit to state any material fact required to
be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; provided that the Company makes
no representation or warranty as to information contained in
or omitted from the Registration Statement or the Prospectus
or any amendments or supplements thereto in reliance upon
and in conformity with written information furnished to the
Company by the Selling Stockholder or through the
Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The documents incorporated by reference in the
Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of
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the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents contained
any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary
to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by
reference in the Prospectus at any time during the period
after the Effective Date when the Underwriters are required
to deliver a Prospectus in connection with the offering and
sale of the Warrants, when such documents are filed with the
Commission, will conform in all material respects to the
requirements of the Exchange Act and the rules and
regulations of the Commission thereunder and will not
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
(d) The Company has all necessary corporate power and
authority to exchange for the Warrants the warrant dated
July 31, 1993 to purchase 3,749,466 shares of Common Stock
held by the Selling Stockholder (the "Selling Stockholder
Warrant") and to execute and deliver the Warrants, this
Agreement and the Warrant Agreement and perform its
obligations hereunder and thereunder; all corporate action
required to be taken by the Company for the due and proper
authorization, and reservation for the issuance of Warrant
Stock upon exercise of the Warrants has been duly and
validly taken; and this Agreement and the Warrant Agreement
have been duly authorized, executed and delivered by the
Company and constitute the valid and legally binding
agreements of the Company enforceable against the Company in
accordance with their terms, except as may be limited by
bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally.
(e) Neither the Company nor any of its Significant
Subsidiaries (as defined in Section 1(i) below) is in
violation of its corporate charter or by-laws or in default
under any agreement, indenture or instrument, the effect of
which violation or default would be material to the Company
or the Company and its significant subsidiaries taken as a
whole; the execution, delivery and performance of this
Agreement and the Warrant Agreement by the Company and the
consummation of the transactions contemplated hereby and
thereby will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon any of
the assets of the Company or any of its Significant
Subsidiaries pursuant to the terms of, or constitute a
default under, any agreement, indenture or instrument to
which the Company or any of its Significant Subsidiaries is
a party, or by which the Company or any of its Significant
Subsidiaries is bound or result in a violation of the
corporate charter or by-laws of the Company or any of its
Significant Subsidiaries or any statute or any order, rule
or regulation of any court or governmental agency having
jurisdiction over the Company, any of its subsidiaries or
their property, the effect of which conflict, lien, default
or violation, individually or in the aggregate, is
reasonably likely to have a material adverse effect on the
business, properties, financial condition or results of
operations of the Company or the Company and its
subsidiaries taken as a whole; and except as required by the
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Act, the Exchange Act, applicable state securities laws and
the New York Stock Exchange, and such consents, approvals,
authorizations or filings as have been obtained or made
under all applicable insurance laws and regulations, no
other consent, authorization or order of, or filing or
registration with, any court or governmental agency is
required for the execution, delivery and performance of this
Agreement and the Warrant Agreement.
(f) Except as described in or contemplated by the
Registration Statement and the Prospectus, there has not
been any material adverse change in, or any development
which materially and adversely affects, the business,
properties, financial condition or results of operations of
the Company or of the Company and its subsidiaries taken as
a whole, from the dates as of which information is given in
the Registration Statement and the Prospectus.
(g) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued, are fully paid and nonassessable and
conform in all material respects to the description thereof
contained in the Prospectus.
(h) The Warrants have been duly and validly authorized and
issued by the Company and constitute validly issued and
outstanding warrants of the Company entitling the holders
thereof to purchase shares of the Common Stock upon the
terms and in the manner set forth therein and in the Warrant
Agreement; the Warrant Stock has been validly reserved for
issuance upon exercise of the Warrants and payment of the
exercise price therefor, and when certificates for such
shares of Warrant Stock are issued and delivered by the
Company to the Warrant Agent upon exercise of Warrants, the
Warrant Stock will be validly authorized, issued and
outstanding, fully paid and nonassessable and the Warrant
Stock and the Warrants conform to the descriptions thereof
contained in the Prospectus.
(i) The Company and each of its Significant Subsidiaries
have been duly incorporated, are validly existing and in
good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do
business and are in good standing as foreign corporations in
each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective
businesses requires such qualification (other than any such
jurisdictions in which the failure to so qualify would not
have a material adverse effect on the Company or the Company
and its subsidiaries taken as a whole), and have all power
and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are
engaged and none of the subsidiaries of the Company other
than the subsidiaries listed on Schedule 3 hereto
(collectively, the "Significant Subsidiaries") is a
"significant subsidiary" (as defined in Section 15).
(j) Except as disclosed in the Registration Statement or
the Prospectus, there are no litigation or governmental
proceedings or investigations pending or, to the knowledge
of the Company, threatened against the Company or any of its
subsidiaries or of which any property or assets of the
Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its
subsidiaries, is reasonably likely to have a material
adverse effect on the consolidated financial position,
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stockholders' equity, business or results of operations of
the Company and its subsidiaries.
(k) The consolidated financial statements of the Company,
including the related notes and supporting schedules,
incorporated by reference in the Registration Statement, in
any Preliminary Prospectus or the Prospectus present fairly
in all material respects the consolidated financial
condition and results of operations of the Company at the
dates and for the periods indicated, and have been prepared
in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved (except as disclosed therein). The pro forma
financial information incorporated by reference in the
Registration Statement and in any Preliminary Prospectus or
the Prospectus has been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma
financial statements and the assumptions used in the
preparation thereof were, at the time such pro forma
financial information was filed with the Commission, in the
Company's opinion, reasonable.
(l) There are no contracts or other documents which are
required to be filed as exhibits to the Registration
Statement by the Act or by the Rules and Regulations which
have not been filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted
by the Rules and Regulations, or that are required to be
summarized in the Prospectus that are not so summarized.
(m) Except for rights pursuant to the Registration Rights
Agreement (as defined in Section 7(d)) and except for rights
under any contract, agreement or understanding which have
been waived prior to the date hereof, there are no
contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be
owned by such person or to require the Company to include
such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the
Company under the Act.
(n) Neither the Company nor any of its subsidiaries is an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company
Act"), and the rules and regulations of the Commission
thereunder.
(o) The Company has not taken, and will not take, directly
or indirectly, any action, other than any stabilization
activity in connection with the offering of the Warrants
that may be conducted by Smith Barney Shearson Inc., which
is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization
or manipulation of the price of any security to facilitate
the sale or resale of the Warrants.
2. Representations, Warranties and Agreements of the
Selling Stockholder. The Selling Stockholder represents,
warrants and agrees that:
(a) The Selling Stockholder has been duly incorporated and
is validly existing and in good standing under the laws of
the jurisdiction of its organization; the Selling
Stockholder has full right, power and authority necessary to
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execute and deliver this Agreement and perform its
obligations under this Agreement; this Agreement has been
duly authorized and executed and delivered by or on behalf
of the Selling Stockholder; the execution, delivery and
performance of this Agreement by the Selling Stockholder
will not conflict with or result in a breach or violation in
any material respect of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other material agreement or
instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or result in any
material violation of any statute or any order, rule or
regulation of any court or governmental agency or body
having jurisdiction over the Selling Stockholder the effect
of which conflict, lien, default or violation, individually
or in the aggregate, is reasonably likely to have a material
adverse effect on the business, properties, financial
condition or results of operations of the Selling
Stockholder; and, except for the registration of the
Warrants and the Warrant Stock under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act,
applicable state securities laws and the New York Stock
Exchange and under applicable insurance laws and regulations
in connection with the purchase of the Warrants and
distribution of the Warrants by the Underwriters, no
consent, authorization or order of, or filing or
registration with, any court or governmental agency is
required to be made, obtained or filed by the Selling
Stockholder for the execution, delivery and performance of
this Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.
(b) On the Delivery Date, the Selling Stockholder will have
good and valid title to the Warrants, free and clear of any
and all liens, encumbrances, equities or claims, with full
right and authority to sell and deliver the Warrants against
payment as contemplated herein; upon the delivery of and
payment for the Warrants as contemplated herein, the
Underwriters will receive good title to the Warrants
purchased by them, respectively, from the Selling
Stockholder, free and clear of any and all liens,
encumbrances, equities or claims.
(c) The Selling Stockholder has not taken, and will not
take, directly or indirectly, any action other than any
stabilization activity in connection with the offering of
Warrants that may be conducted by Lehman Brothers Inc. which
is designed to or which has constituted or which might
reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Warrants.
(d) The information pertaining to the Selling Stockholder
under the caption "Selling Stockholder" in the Prospectus is
complete and accurate in all material respects.
3. Purchase of the Securities by the Underwriters. On the
basis of the representations, warranties and agreements contained
in, and subject to the terms and conditions of, this Agreement,
the Selling Stockholder agrees to sell the Warrants to the
several Underwriters and each of the Underwriters, severally and
not jointly, agrees to purchase the number of Warrants set
opposite that Underwriter's name in Schedule 1 hereto. The price
to be paid by the Underwriters to the Selling Stockholder for the
Warrants shall be $____ per Warrant.
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The Selling Stockholder shall not be obligated to deliver
any of the Warrants to be delivered on the Delivery Date (as
defined below) except upon payment for all the Warrants to be
purchased on such date as hereinafter provided.
4. Defaulting Underwriters. If, on the Delivery Date, any
Underwriter defaults in the performance of its obligations under
this Agreement, the remaining non-defaulting Underwriters shall
be obligated to purchase the Warrants which the defaulting
Underwriter agreed but failed to purchase on such date in the
respective proportions which the number of Warrants set forth
opposite the name of each remaining non-defaulting Underwriter in
Schedule 1 hereto bears to the total number of Warrants set forth
opposite the names of all the remaining non-defaulting
Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to
purchase any Warrants on the Delivery Date if the total number of
Warrants which the defaulting Underwriter or Underwriters agreed
but failed to purchase on such date exceeds 9.09% of the total
number of Warrants to be purchased on the Delivery Date, and any
remaining non-defaulting Underwriter shall not be obligated to
purchase more than 110% of the number of Warrants which it agreed
to purchase on the Delivery Date pursuant to the terms of Section
3. If the foregoing maximums are exceeded, the remaining non-
defaulting Underwriters, or those other underwriters satisfactory
to the Representatives who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Warrants to be purchased on the
Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to
purchase the Warrants which the defaulting Underwriter or
Underwriters agreed but failed to purchase, this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholder except that
the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 7(l) and 11 hereof.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company or the
Selling Stockholder for damages caused by its default. If other
underwriters are obligated or agree to purchase the Warrants of a
defaulting or withdrawing Underwriter, the Representatives, the
Selling Stockholder or the Company may postpone the Delivery Date
for up to seven full business days in order to effect any changes
that in the opinion of counsel for the Company, counsel for the
Selling Stockholder or counsel for the Underwriters may be
necessary in the Registration Statement, the Prospectus or in any
other document or arrangement.
5. Delivery of and Payment for the Securities. Delivery of
and payment for the Warrants shall be made at the office of
Lehman Brothers Inc., 3 World Financial Center, New York, New
York, at 10:00 A.M., New York City time, on the fifth full
business day following the date of this Agreement or at such
other date, time or place as shall be determined by agreement
among the Representatives, the Company and the Selling
Stockholder. This date and time are sometimes referred to as the
"Delivery Date." On the Delivery Date, the Selling Stockholder
shall deliver the Selling Stockholder Warrant to the Company and
the Company shall issue to the Selling Stockholder certificates
representing the Warrants, registered in the name of the Selling
Stockholder. On the Delivery Date, the Selling Stockholder shall
deliver or cause to be delivered such certificates representing
the Warrants, registered in the name of the Selling Stockholder
and endorsed in blank by the Selling Stockholder to the
Representatives for the account of each Underwriter against
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payment to or upon the order of the Selling Stockholder of the
purchase price by certified or official bank check or checks
payable in New York Clearing House (next-day) funds. Time shall
be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the
Warrants shall be registered by the Company or its agent in such
names and in such denominations as the Representatives shall
request in writing not less than two full business days prior to
the Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Warrants, the Company shall
make the certificates available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M.,
New York City time, on the business day prior to the Delivery
Date.
6. Independent Underwriter. (a) The Company hereby
confirms its engagement of the services of Lehman Brothers Inc.
(the "Independent Underwriter") as, and the Independent
Underwriter hereby confirms its agreement with the Company to
render services as, a "qualified independent underwriter" within
the meaning of Section 2(l) of Schedule E of the By-laws of the
National Association of Securities Dealers, Inc. ("Schedule E")
with respect to the offering and sale of the Warrants.
(b) The independent Underwriter hereby represents and
warrants to, and agrees with, the Company and the other
Underwriters that with respect to the offering and sale of
the Warrants as described in the Prospectus:
(i) The Independent Underwriter constitutes a
"qualified independent underwriter" within the meaning
of Section 2(l) of Schedule E;
(ii) The Independent Underwriter has participated in
the preparation of the Registration Statement and the
Prospectus and has exercised the usual standards of
"due diligence" with respect thereto;
(iii) The Independent Underwriter has undertaken the
legal responsibilities and liabilities of an
underwriter under the Act, including those inherent in
Section 11 thereof;
(iv) Based upon, among other factors, the information
set forth in the Prospectus and its review of such
other documents and the taking of such other actions as
the Independent Underwriter, in its sole discretion,
has deemed necessary or appropriate for the purposes of
delivering its recommendation hereunder, the
Independent Underwriter recommends, as of the date of
the execution and delivery of this Agreement, that the
public offering price for the Warrants not exceed the
amount set forth in Schedule 2 hereto, which price
should in no way be considered or relied upon as an
indication of the value of Warrants; and
(v) The Independent Underwriter will furnish to the
other Underwriters on the date hereof a letter, dated
the date hereof, substantially to the effect of clauses
(i) through (iv) above.
(c) The Company, the Independent Underwriter and the
other Underwriters agree to comply in all material respects
with all of the requirements of Schedule E applicable to
them in connection with the offering and sale of the
Warrants. The Company agrees to cooperate with the
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Underwriter, including the Independent Underwriter, to
enable the Underwriters to comply with Schedule E and the
Independent Underwriter to perform the services contemplated
by this Agreement.
(d) The Independent Underwriter hereby consents to the
references to it as set forth under the captions "Plan of
Distribution" and "Underwriting" in the Prospectus.
7. Further Agreements of the Company. The Company agrees,
for the benefit of the Underwriters and the Selling Stockholder:
(a) To prepare the Prospectus Supplement in a form approved
by the Representatives and the Selling Stockholder and, if
required by applicable law, to file such Prospectus
Supplement pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second
business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus prior to the
Delivery Date except in accordance herewith; to file
promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus by the
Underwriters is required in connection with the offering or
sale of the Warrants contemplated hereby; and to maintain
the effectiveness of the Registration Statement with the
Commission until such time as all shares of Warrant Stock
issuable upon the exercise of the Warrants shall have been
issued;
(b) To furnish promptly to the Representatives and to the
Selling Stockholder a signed copy of the Registration
Statement as originally filed, and each amendment thereto
filed with the Commission, including all consents and
exhibits filed therewith;
(c) To deliver promptly to the Representatives and to the
Selling Stockholder such number of the following documents
as the Representatives and the Selling Stockholder shall
reasonably request: (i) conformed copies of the
Registration Statement as originally filed with the
Commission and each amendment thereto (in each case
excluding exhibits other than this Agreement); (ii) each
Preliminary Prospectus, the Prospectus Supplement and any
amended or supplemented Prospectus and (iii) any document
incorporated by reference in the Prospectus (excluding
exhibits thereto); and, for so long as the Underwriters are
required to deliver a prospectus in connection with the
offering or sale of the Warrants contemplated hereby, if
during such time any events shall have occurred as a result
of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or if for any other reason it shall be necessary
during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document
which, upon filing, will become incorporated by reference in
the Prospectus in order to comply with the Act or the
Exchange Act (other than filings by the Company of its
Annual and Quarterly reports on Forms 10-K and 10-Q,
respectively), to notify the Representatives and upon their
request promptly (or, if in effect, upon completion of any
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Information Blackout Period (as hereinafter defined)) to
file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement
to the Prospectus which will correct such statement or
omission or effect such compliance, if required by
applicable law;
(d) For so long as the Underwriters are required to deliver
a prospectus in connection with the offering and sale of the
Warrants contemplated hereby, to file with the Commission
any amendment to the Registration Statement or the
Prospectus or any supplement to the Prospectus that may be
required by the Act or requested by the Commission and
approved by the Representatives; provided, however, that the
Company shall not be required to comply with this Section
7(d) during any period in which the Company has notified the
Selling Stockholder and the Representatives that, pursuant
to and in accordance with the Registration Rights Agreement
between the Company and the Selling Stockholder, dated as of
July 31, 1993 and amended as of February __, 1994 (the
"Registration Rights Agreement"), the Company is imposing an
Information Blackout (as defined in the Registration Rights
Agreement) (such period, an "Information Blackout Period");
and provided, further, that the Underwriters shall not offer
and sell any Warrants until they shall have received (i)
notification from the Company of the expiration of such
Information Blackout Period (which Information Blackout
Period shall expire as provided in the Registration Rights
Agreement) and (ii) any such amendment or supplement has
been prepared and filed with the Commission;
(e) Prior to filing with the Commission (i) for so long as
the Underwriters are required to deliver a prospectus in
connection with the offering or sale of the Warrants
contemplated hereby, any post-effective amendment to the
Registration Statement or supplement to the Prospectus
(other than documents incorporated by reference therein),
(ii) prior to the Delivery Date, any document which, upon
filing, will become incorporated by reference in the
Prospectus or (iii) for so long as the Underwriters are
required to deliver a prospectus in connection with the
offering or sale of the Warrants contemplated hereby, any
Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the
Representatives, the Selling Stockholder, counsel for the
Underwriters and counsel for the Selling Stockholder and
obtain the consent of the Representatives to the filing
(which consent shall not be unreasonably withheld);
(f) For so long as the Underwriters are required to deliver
a prospectus in connection with the offering and sale of the
Warrants contemplated hereby, to advise the Selling
Stockholder and the Representatives promptly (i) when the
Registration Statement, or any amendment thereto, has been
filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to
furnish the Representatives with copies thereof, (ii) of any
request or proposed request by the Commission for an
amendment to the Registration Statement, a supplement to the
Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or preventing or
suspending the use of any Preliminary Prospectus or the
Prospectus or the initiation or threat of any stop order
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<PAGE>
proceeding, (iv) of receipt by the Company of any
notification with respect to the suspension of the
qualification of the Warrants for sale in any jurisdiction
or the initiation or threat of any proceeding for that
purpose, and (v) of the happening of any event which makes
untrue any statement of a material fact made in the
Registration Statement or the Prospectus, or which requires
the making of a change in the Registration Statement or the
Prospectus in order to make any material statement therein
not misleading;
(g) If the Commission shall issue a stop order suspending
the effectiveness of the Registration Statement or any order
preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the qualification
of the Warrants or the Warrant Stock for offering or sale in
any jurisdiction, to use its reasonable efforts to obtain
the lifting of any such order at the earliest possible time;
(h) As soon as practicable after the Effective Date, to
make generally available to its security holders an earnings
statement (which need not be audited), conforming with the
requirements of Section 11(a) of the Act, covering a period
of at least twelve months beginning after the Effective
Date;
(i) Prior to the Effective Date, to apply for the listing
of the Warrants on the New York Stock Exchange and to use
its best efforts to (i) complete that listing, subject only
to official notice of issuance, prior to the Delivery Date
and (ii) complete the listing of the Warrant Stock on the
New York Stock Exchange, prior to the issuance of such
Stock;
(j) To use its best efforts to qualify the Warrants for
offer and sale under the securities laws of such
jurisdictions as the Representatives may reasonably request
and to endeavor to comply with such laws as to permit the
continuance of sales and dealings therein in such
jurisdictions for as long as may be reasonably necessary to
complete the distribution of the Warrants; provided that in
connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(k) For a period of 60 days from the date of this
Agreement, not to offer for sale, sell or otherwise dispose
of (or enter into any transaction which is designed to, or
could be expected to, result in the disposition by any
person of), directly or indirectly, any shares of Common
Stock (other than the shares which may be issuable upon
conversion of the Series B Preferred Stock covered by the
Registration Statement, the shares issuable upon conversion
of any outstanding convertible debt, the Warrant Stock,
shares issued pursuant to employee benefit plans, deferred
share plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or pursuant
to currently outstanding options or warrants), or sell or
grant options, rights or warrants with respect to any shares
of Common Stock (other than the grant of options pursuant to
employee benefit plans or other agreements between the
Company and any employees of the Company consistent with the
past practice of the Company), without the prior written
consent of the Representatives, which consent shall not be
unreasonably withheld (for purposes of this paragraph 7(k),
sales of securities by affiliates of the Company in their
capacity as agent [^] or in the ordinary course of such
--
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<PAGE>
affiliate's business shall not be deemed to be sales by the
Company);
(l) To pay the costs incident to the sale, delivery and
exercise of the Warrants, and any taxes payable in that
connection; the costs incident to the preparation, printing
and filing under the Act of the Registration Statement and
any amendments and exhibits thereto; the costs of
distributing the Registration Statement as originally filed
and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement
to the Prospectus, and any document incorporated by
reference therein, all as provided in this Agreement; the
costs of producing and copying this Agreement; the costs of
distributing the terms of agreement relating to the
organization of the underwriting syndicate and the selling
group to the members thereof by mail, telex or other means
of communication; the filing fees incident to securing any
required review by the National Association of Securities
Dealers, Inc. of the terms of sale of the Warrants, any
applicable listing or other fees; the fees and expenses of
qualifying the Warrants under the securities laws of the
several jurisdictions as provided in Section 7(j) and of
preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the
Underwriters); and all other costs and expenses incident to
the performance of the obligations of the Company under this
Agreement; provided that, except as provided in this Section
7 and Section 11, the Underwriters shall pay their own costs
and expenses, including the fees and expenses of their
counsel, any transfer taxes on the Warrants which they may
sell and the expenses of advertising any offering of the
Warrants made by the Underwriters; nothing herein contained
is intended as shall be construed to limit the obligation of
the Company to pay expenses incurred by the Selling
Stockholder not enumerated herein if and to the extent
required to be paid by the Company pursuant to the terms of
the Registration Rights Agreement.
8. Indemnification and Contribution. (a) The Company
shall indemnify and hold harmless each Underwriter and the
Selling Stockholder and each director or officer of the Selling
Stockholder and each person, if any, who controls any Underwriter
or the Selling Stockholder within the meaning of the Act, from
and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof to which such
Underwriter, the Selling Stockholder, such director or officer of
the Selling Stockholder or such controlling person may become
subject, under the Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse
each Underwriter, the Selling Stockholder, each such director or
officer of the Selling Stockholder and each such controlling
person for any legal or other expenses reasonably incurred by
that Underwriter, Selling Stockholder, director or officer of the
Selling Stockholder or controlling person in connection with
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company shall not be
liable to any Underwriter in any such case to the extent that any
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<PAGE>
such loss, claim, damage, liability or action arises out of, or
is based upon, any untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in
any such amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by
the Selling Stockholder or through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein; and
provided, further, that the Company shall not be liable to any
Underwriter in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus or in any such
amendment or supplement thereto in connection with any sale of
Preferred Stock by such Underwriter during an Information
Blackout Period; and provided further that as to any Preliminary
Prospectus this indemnity agreement shall not inure to the
benefit of any Underwriter or any person controlling that
Underwriter on account of any loss, claim, damage, liability or
action arising from the sale of Preferred Stock to any person by
that Underwriter if that Underwriter failed to send or give a
copy of the Prospectus, as the same may be amended or
supplemented, to that person within the time required by the Act,
and the untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material
fact in such Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by
the Company with Section 7(c). For purposes of the last proviso
to the immediately preceding sentence, the term "Prospectus"
shall not be deemed to include the documents incorporated therein
by reference, and no Underwriter shall be obligated to send or
give any supplement or amendment to any document incorporated by
reference in any Preliminary Prospectus or the Prospectus to any
person other than a person to whom such Underwriter had delivered
such incorporated document or documents in response to a written
request therefor. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to
any Underwriter, the Selling Stockholder, directors or officers
of the Selling Stockholder or to any controlling person of that
Underwriter or the Selling Stockholder.
(b) The Selling Stockholder will indemnify and hold
harmless the Company, each director of the Company and each
officer of the Company who signed the Registration Statement,
each Underwriter and each person, if any, who controls any
Underwriter or the Company within the meaning of the Act, from
and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof to which such
Underwriter, the Company, such director or officer of the Company
or such controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage or liability
arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto or (ii) the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement
therein not misleading, but in each case only to the extent that
such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with
written information furnished by the Selling Stockholder to the
Company specifically for inclusion therein, and shall reimburse
each Underwriter, the Company, each director of the Company, each
officer of the Company who signs the Registration Statement and
each such controlling person for any legal or other expenses
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<PAGE>
reasonably incurred by such Underwriter, the Company, each
director of the Company, each such officer of the Company or such
controlling person in connection with investigating or defending
or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred.
Notwithstanding the provisions of this Section 8(b), the
aggregate liability of the Selling Stockholder under this Section
8(b) shall not exceed the proceeds received by the Selling
Stockholder from the sale of Warrants under this Agreement. The
foregoing indemnity agreement is in addition to any liability
which the Selling Stockholder may otherwise have to any
Underwriter, the Company, each director of the Company, each
officer of the Company who signs the Registration Statement or to
any controlling person of that Underwriter or the Company.
(c) Each Underwriter, severally and not jointly, shall
indemnify and hold harmless the Company and the Selling
Stockholder, each director of the Company, each officer of the
Company who signed the Registration Statement and each person, if
any, who controls the Company or the Selling Stockholder within
the meaning of the Act, from and against any loss, claim, damage
or liability, joint or several, or any action in respect thereof,
to which the Company or the Selling Stockholder or any such
director, officer or controlling person may become subject, under
the Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the
Company through the Representatives by or on behalf of that
Underwriter specifically for inclusion therein, and shall
reimburse the Company, the Selling Stockholder and any such
director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company, the Selling
Stockholder or any such director, officer or controlling person
in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action
as such expenses are incurred. The foregoing indemnity agreement
is in addition to any liability which any Underwriter may
otherwise have to the Company, the Selling Stockholder or any
such director, officer or controlling person.
(d) Promptly after receipt by an indemnified party under
this Section 8 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the claim
or the commencement of that action; provided, however, that the
failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party
otherwise than under this Section 8. If any such claim or action
shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
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<PAGE>
Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however,
that each indemnified party shall have the right to employ
separate counsel to represent it (and in the case of the
Underwriters, such separate counsel shall represent jointly the
Representatives and those other Underwriters and their respective
controlling persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the
Underwriters against the Company under this Section 8) if, in the
reasonable judgment of such indemnified party, it is advisable
for such indemnified party and its directors, officers and
controlling persons to be represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall
be paid by the indemnifying party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation. No indemnifying
party shall be liable for any settlement effected without its
written consent (which consent shall not be unreasonably
withheld), but if settled with such consent or if there be a
final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by
reason of such settlement or judgment to the extent provided in
the preceding paragraphs.
(e) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 8(a), (b) or (c) in
respect of any loss, claim, damage or liability, or any action in
respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be
appropriate to reflect the relative fault of the Company, the
Selling Stockholder and the Underwriters with respect to the
statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative fault shall
be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to
information supplied by the Company, the Selling Stockholder or
the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company, the Selling
Stockholder and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this Section 8 were to
be determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to
above in this Section 8(e) shall be deemed to include, for
purposes of this Section 8(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8(e), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Warrants
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<PAGE>
underwritten by it and distributed to the public was offered to
the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason
of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 8(e) are several in
proportion to their respective underwriting obligations and not
joint. Promptly after receipt by an indemnified party under this
Section 8(e) of the notice of the commencement of any action
against such party in respect of which a claim for contribution
may be made against an indemnifying party under this Section
8(e), such indemnified party shall notify the indemnifying party
in writing of the commencement thereof if the notice specified in
Section 8(d) above has not been given with respect to such
action; but the omission so to notify the indemnifying party
shall not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 8(e).
(f) The Underwriters severally confirm that the statements
with respect to the public offering of the Warrants set forth on
the cover page of the Prospectus Supplement and under the
captions "Plan of Distribution" in the Prospectus and
"Underwriting" in the Prospectus Supplement are correct and were
furnished in writing to the Company by or on behalf of the
Underwriters severally for inclusion in the Registration
Statement and the Prospectus, and the Company and the Selling
Stockholder acknowledge that such statements are the only
statements so furnished by the Underwriters.
(g) The Selling Stockholder confirms that the statements
under the caption "Selling Stockholder" in the Prospectus are
correct and were furnished in writing to the Company by or on
behalf of the Selling Stockholder for inclusion in the
Registration Statement and the Prospectus, and the Underwriters
and the Company acknowledge that such statements are the only
statements so furnished by the Selling Stockholder.
9. Termination. (a) The obligations of the Underwriters
hereunder may be terminated by the Representatives, in their
absolute discretion, by notice given to and received by the
Company and the Selling Stockholder prior to delivery of and
payment for the Warrants, if prior to that time any of the events
described in Section 10(i) or 10(j) shall have occurred or if the
Underwriters shall decline to purchase the Warrants for any
reason permitted under this Agreement;
(b) The obligations of the Selling Stockholder hereunder
may be terminated by the Selling Stockholder by notice given to
and received by the Company and the Underwriters prior to
delivery and payment for the Warrants, if prior to that time any
of the events described in Section 10(i) shall have occurred or
if the Selling Stockholder shall decline to sell the Warrants for
any reason permitted under this Agreement; and
(c) If the Company shall impose an Information Blackout
Period to begin at any time between the date hereof and the
Delivery Date, this Agreement shall terminate without liability
to any of the Company, the Selling Stockholder or the
Underwriters, and the Selling Stockholder may exercise its
registration rights under the Registration Rights Agreement at
any time following the expiration of such Information Blackout
Period.
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<PAGE>
10. Conditions of Underwriters' and Selling Stockholder's
Obligations. The respective obligations of the Underwriters and
the Selling Stockholder hereunder are subject to the accuracy,
when made and on the Delivery Date, of the representations and
warranties of the Company and the Selling Stockholder contained
herein, to the performance by the Company and the Selling
Stockholder of their respective obligations hereunder, and to
each of the following additional terms and conditions:
(a) The Prospectus Supplement shall have been timely filed
with the Commission in accordance with Section 7(a) of this
Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request
of the Commission for inclusion of additional information in
the Registration Statement or the Prospectus or otherwise
shall have been complied with.
(b) Neither any Underwriter nor the Selling Stockholder
shall have discovered after the date hereof and disclosed to
the Company on or prior to the Delivery Date that the
Registration Statement or the Prospectus or any amendment or
supplement thereto contains an untrue statement of a fact
which is material or omits to state a fact which is material
and is required to be stated therein or is necessary to make
the statements therein not misleading.
(c) Simpson Thacher & Bartlett, counsel for the
Underwriters, shall have furnished to the Underwriters their
opinion, reasonably satisfactory in all respects to the
Underwriters, with respect to this Agreement, the Warrant
Agreement, the Warrants, the Warrant Stock, the Registration
Statement and the Prospectus, and all other legal matters as
the Representatives shall reasonably request and the Company
and the Selling Stockholder shall have furnished to such
counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Charles O. Prince, III, General Counsel of the Company,
shall have furnished to the Representatives and to the
Selling Stockholder his opinion addressed to the
Underwriters and to the Selling Stockholder and dated the
Delivery Date to the effect that:
(i) The Company and each of its Significant
Subsidiaries have been duly incorporated, are validly
existing and in good standing under the laws of their
respective jurisdictions of incorporation, are duly
qualified to do business and in good standing as
foreign corporations in each jurisdiction in which
their respective ownership or lease of property or the
conduct of their respective businesses requires such
qualification (other than the jurisdictions in which
the failure to so qualify would not have a material
adverse effect on the Company or the Company and its
subsidiaries taken as a whole); the Company and each of
its Significant Subsidiaries have all power and
authority necessary to own or hold their respective
properties and to conduct their respective businesses
as described in the Prospectus;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus, and all of the issued
shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
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<PAGE>
contained in the Prospectus; all of the shares of
Warrant Stock have been duly and validly authorized and
reserved for issuance upon the exercise of the
Warrants, and, when issued and delivered in accordance
with the terms of the Warrant Agreement and upon
exercise will be duly and validly issued, fully paid
and non-assessable;
(iii) The Common Stock (including the Warrant Stock)
conforms in all material respects as to legal matters
to the description of the Common Stock of the Company
contained in the Prospectus under the caption
"Description of Offered Securities"; the Warrants
conform in all material respects as to legal matters to
the description of the Warrants under the caption
"Description of Offered Securities"; and the statements
made in the Prospectus under the captions "Description
of Capital Stock" and "Description of Offered
Securities" insofar as they purport to summarize the
terms of the Company's capital stock (including the
Warrants), fairly present in all material respects the
information called for with respect thereto by the
Rules and Regulations;
(iv) To the best of such counsel's knowledge, except
for rights pursuant to the Registration Rights
Agreement and except for rights under any contract,
agreement or understanding which have been waived prior
to the date hereof, there are no contracts, agreements
or understandings between the Company and any person
granting such person the right to require the Company
to file a registration statement under the Act with
respect to any securities of the Company owned or to be
owned by such person or to require the Company to
include such securities in the securities registered
pursuant to the Registration Statement or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Act;
(v) The Registration Statement was declared effective
under the Act as of the date and time specified in such
opinion, the Prospectus Supplement was filed with the
Commission pursuant to the subparagraph of Rule 424(b)
of the Rules and Regulations specified in such opinion
on the date specified therein and, to the knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceeding for that purpose is pending or
threatened by the Commission;
(vi) The Registration Statement and the Prospectus and
any further amendments or supplements thereto made by
the Company prior to the Delivery Date (except that no
opinion need be expressed as to the financial
statements and other financial and statistical
information contained therein) comply as to form in all
material respects with the requirements of the Act and
the Rules and Regulations; and the documents
incorporated by reference in the Prospectus and any
further amendments or supplements thereto made by the
Company prior to the Delivery Date (except that no
opinion need be expressed as to the financial
statements and other financial and statistical
information contained therein), when they were filed
with the Commission, complied as to form in all
material respects with the requirements of the Exchange
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<PAGE>
Act and the rules and regulations of the Commission
thereunder;
(vii) To the best of such counsel's knowledge, except as
disclosed in the Registration Statement or the
Prospectus, there are no legal or governmental
proceedings or investigations pending or threatened
against the Company or any of its subsidiaries or of
which any property or assets of the Company or any of
its is the subject which, if determined adversely to
the Company or any of its subsidiaries, is reasonably
likely to have a material adverse effect on the
consolidated financial position, stockholders' equity,
results of operations or business of the Company and
its subsidiaries;
(viii) To the best of such counsel's knowledge, there are
no contracts or other documents which are required to
be filed as exhibits to the Registration Statement by
the Act or by the Rules and Regulations which have not
been filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the
Rules and Regulations;
(ix) To the best of such counsel's knowledge, neither
the Company nor any of its Significant Subsidiaries is
in violation of its corporate charter or by-laws, or in
default under any material agreement, indenture or
instrument (except, in the case of any such material
agreement, indenture or instrument, for any such
violation or default which would not have a material
adverse effect on the Company and its subsidiaries
taken as a whole);
(x) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and the
Warrant Agreement and to perform its obligations
hereunder and thereunder; and all corporate action
required to be taken by the Company for the due and
proper authorization and issuance of the Warrant Stock
has been duly and validly taken;
(xi) This Agreement and the Warrant Agreement have each
been duly authorized, executed and delivered by the
Company; the execution, delivery and performance of
this Agreement and the Warrant Agreement, the exchange
of the Selling Stockholder Warrant for the Warrants,
and the issuance and delivery of the Warrants and the
Warrant Stock and the consummation of the transactions
contemplated hereby and thereby by the Company do not
conflict with, and will not result in the creation or
imposition of any lien, charge or encumbrance upon or
preemptive rights with respect to any of the assets of
the Company or any of its Significant Subsidiaries
pursuant to the terms of, or constitute a material
default under, any agreement, indenture or instrument
listed as an exhibit to the Registration Statement to
which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any
of its Significant Subsidiaries is bound, except where
such conflict, lien, charge, encumbrance, preemptive
right or default would not have a material adverse
effect on the Company and its Significant Subsidiaries
taken as a whole, and will not result in a violation of
the corporate charter or by-laws of the Company or any
of its Significant Subsidiaries or, to such counsel's
knowledge, any material statute or any material order,
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<PAGE>
rule or regulation of any court or governmental agency
having jurisdiction over the Company, any of its
subsidiaries or their property the effect of which
conflict, lien, charge, encumbrance, default or
violation, individually or in the aggregate, is
reasonably likely to have a material adverse effect on
the business, properties, financial condition or
results of operations of the Company or the Company and
its subsidiaries taken as a whole; and except for such
consents, approvals, authorizations or filings as may
be required under all applicable insurance laws and
regulations, no other consent, authorization or order
of, or filing or registration with, any court or
governmental agency is required for the execution,
delivery and performance of this Agreement and the
Warrant Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby
and thereby, except such as may be required by the Act,
the Exchange Act, applicable state securities laws, or
the New York Stock Exchange or except where the failure
to obtain such consent, authorization or order, or to
effect such filing or registration, would not have a
material adverse effect on the Company and its
subsidiaries taken as a whole; and
(xii) The Company is not an "investment company" within
the meaning of the Investment Company Act and the rules
and regulations of the Commission thereunder.
In rendering such opinion, such counsel may (i) state
that his opinion is limited to matters governed by the Federal
laws of the United States of America, the laws of the State of
New York and the General Corporation Law of the State of
Delaware. Such counsel shall also have furnished to the
Representatives and to the Selling Stockholder a written
statement (which may be included in such opinion), addressed to
the Underwriters and to the Selling Stockholder and dated the
Delivery Date, in form and substance satisfactory to the
Representatives and to the Selling Stockholder to the effect that
(x) such counsel is general counsel to the Company, has acted as
counsel to the Company in connection with previous financing
transactions and has acted as counsel to the Company in
connection with the preparation of the Registration Statement,
and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead him to believe that (I) the
Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the
Prospectus contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or
(II) any document incorporated by reference in the Prospectus,
when it was filed with the Commission, contained any untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus except for the statements made in the Prospectus under
the captions "Description of Capital Stock" and " Description of
Offered Securities", insofar as such statements relate to the
-20-
<PAGE>
Warrants, the Warrant Stock or the Common Stock and concern legal
matters.
(e) The Selling Stockholder shall have furnished to the
Representatives and, with respect only to paragraphs (i) and
(ii) below, to the Company, a written opinion of Louise M.
Parent, its general counsel, addressed to the Underwriters
and to the Company, with respect only to paragraphs (i) and
(ii) below, and dated the Delivery Date, in form and
substance satisfactory to the Representatives, to the effect
that:
(i) The Selling Stockholder has been duly organized
and is validly existing and in good standing under the
laws of New York; the Selling Stockholder has all
necessary, power and authority to execute and deliver
this Agreement; the execution, delivery and performance
of this Agreement by the Selling Stockholder will not
conflict with or result in a breach or violation in any
material respect of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which
the Selling Stockholder is a party or by which the
Selling Stockholder is bound, or result in a violation
of any material statute or a violation of any material
order, rule or regulation known to such counsel of any
court or governmental agency having jurisdiction over
the Selling Stockholder, the effect of which conflict,
lien, charge, encumbrance, default or violation,
individually or in the aggregate, is reasonably likely
to have a material adverse effect on the business,
properties, financial condition or results of
operations of the Selling Stockholder; and, except for
the registration of the Warrants and the Warrant Stock
under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may
be required under the Exchange Act, applicable state
securities laws, and the New York Stock Exchange in
connection with the purchase of the Warrants by the
Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such
court or governmental agency or body is required to be
made, obtained or filed by the Selling Stockholder for
the execution, delivery and performance of this
Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the
transactions contemplated hereby and thereby;
(ii) This Agreement has been duly authorized and
executed and delivered by or on behalf of the Selling
Stockholder;
(iii) Immediately prior to the Delivery Date, (i) to
such counsel's knowledge, the Warrants to be sold by
the Selling Stockholder under this Agreement were owned
by the Selling Stockholder free and clear of all liens,
encumbrances, equities or claims (other than those
arising pursuant to this Agreement), and (ii) the
Selling Stockholder had full right, power and authority
to sell, assign, transfer and deliver such Warrants to
be sold by the Selling Stockholder hereunder; and
(iv) Upon delivery to the Underwriters of the Warrants
registered in the name of the Selling Stockholder and
endorsed in blank by the Selling Stockholder, the
Underwriters have acquired all of the Selling
-21-
<PAGE>
Stockholder's rights in the Warrants to be sold by the
Selling Stockholder on the Delivery Date under this
Agreement, free and clear of any adverse claims,
assuming that each of the several Underwriters has
purchased such Warrants in good faith and without
notice of any such adverse claims within the meaning of
the Uniform Commercial Code as in effect in the State
of New York.
In rendering such opinion, such counsel may (i) state
that her opinion is limited to matters governed by the Federal
laws of the United States of America, the laws of the State of
New York and the Business Corporation Law of the State of New
York and (ii) in rendering the opinions in Sections 11(e)(iii)
and (iv) above, rely upon a certificate of the Selling
Stockholder in respect of matters of fact as to ownership of and
liens, encumbrances, equities or claims on the Warrants sold by
the Selling Stockholder, provided that such counsel shall furnish
copies thereof to the Representatives and state that she believes
that both the Underwriters and she are justified in relying upon
such certificate. In rendering the opinion in Sections 11(e)(iii)
and (iv) above, such counsel may assume that the Warrants have
been duly and validly authorized and issued by the Company, are
fully paid and non-assessable, are not subject to any preemptive
rights or other rights to subscribe for or purchase the Warrants
granted to any holder on the date thereof of any outstanding
shares of capital stock of the Company and are subject to no
liens, encumbrances, equities or claims created by the Company or
the Underwriters. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the
Underwriters and dated the Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that (x) such
counsel is general counsel to the Selling Stockholder and has
acted as counsel to the Selling Stockholder in connection with
the preparation of the Registration Statement, and (y) based on
the foregoing, no facts have come to the attention of such
counsel which lead her to believe that the Registration
Statement, as of the Effective Date, contained any untrue
statement of a material fact relating to the Selling Stockholder
or omitted to state such a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement
of a material fact relating to the Selling Stockholder or omits
to state such a material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
foregoing opinion and statement may be qualified by a statement
to the effect that such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the
Prospectus.
(f) The Company shall have furnished to the Selling
Stockholder and the Representatives a letter (used in this
paragraph, the "comfort letter") of KPMG Peat Marwick
addressed to the Selling Stockholder and the Underwriters
and dated the Delivery Date (i) confirming that they are
independent public accountants within the meaning of the Act
and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission and (ii) stating, as of
the date thereof, the conclusions and findings of such firm
with respect to the financial information and other matters
as have been reasonably requested by the Representatives to
be included in such comfort letter.
-22-
<PAGE>
(g) The Company shall have furnished to the Selling
Stockholder and to the Representatives a certificate, dated
the Delivery Date, of its Chairman of the Board, any Vice
Chairman, its President or a Vice President and its chief
financial officer or treasurer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct in all
material respects as of such date; the Company has
complied in all material respects with all its
agreements contained herein and the conditions set
forth in Section 10(a) have been fulfilled; and
(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion,
(A) as of the Effective Date, the Registration
Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state
a material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading, and (B) since the Effective Date, no event
has occurred which should have been set forth in a
supplement to or amendment of the Prospectus which has
not been set forth in such a supplement or amendment.
(h) The Selling Stockholder shall have furnished to the
Representatives and to the Company a certificate, dated the
Delivery Date, signed on its behalf by its Chairman,
President or a Vice President and its Treasurer or an
Assistant Treasurer or its Secretary, stating that the
representations, warranties and agreements of the Selling
Stockholder in Section 2 and, with respect to the Company,
in paragraph (a) and (d) of Section 2 are true and correct
as of the Delivery Date and the Selling Stockholder has
complied with all its agreements contained herein to be
performed at or prior to the Delivery Date.
(i) Since the respective dates as of which information is
given in the Prospectus there shall not have been any
material adverse change, or any development involving a
prospective change, in or affecting the business,
properties, financial condition, results or operations of
the Company or the Company and its subsidiaries taken as a
whole, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case, is, in
the judgment of Lehman Brothers Inc., so material and
adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the
Warrants being delivered on the Delivery Date on the terms
and in the manner contemplated in the Prospectus.
(j) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the
following: (i) trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum
prices shall have been established on either of such
exchanges or such market by the Commission, by such exchange
or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have
been declared by Federal or New York state authorities,
(iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a
-23-
<PAGE>
material adverse change in general economic, political or
financial conditions (or the effect of international
conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of a majority
in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery
of the Warrants being delivered on the Delivery Date on the
terms and in the manner contemplated in the Prospectus.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in
compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to Simpson Thacher &
Bartlett, counsel for the Underwriters and to counsel for the
Selling Stockholder and, to the extent delivered to the Company
pursuant to paragraphs (e) and (h) of Section 10, to counsel for
the Company.
11. Reimbursement of Underwriters' Expenses. If (a) notice
shall have been given pursuant to Section 12(a) preventing this
Agreement from becoming effective, (b) the Selling Stockholder
shall fail to tender the Warrants for delivery to the
Underwriters for any reason permitted under this Agreement or (c)
the Underwriters shall decline to purchase the Warrants for any
reason permitted under this Agreement (including the termination
of this Agreement pursuant to Section 9(a)), the Company and the
Selling Stockholder shall reimburse the Underwriters for the fees
and expenses of their counsel and for such other out-of-pocket
expenses as shall have been incurred by them in connection with
this Agreement and the proposed purchase of the Warrants, and
upon demand the Company and the Selling Stockholder shall pay the
full amount thereof to the Representatives. If this Agreement is
terminated pursuant to Section 4 by reason of the default of one
or more Underwriters, neither the Company nor the Selling
Stockholder shall be obligated to reimburse any defaulting
Underwriter on account of those expenses. If this Agreement is
terminated pursuant to Section 9(c), neither the Company nor the
Selling Stockholder shall be obligated to reimburse the expenses
of any Underwriter. Nothing herein shall affect the rights of the
Selling Stockholder or the Company under the Registration Rights
Agreement including, without limitation, with respect to
obligations of reimbursement of Underwriters' expenses.
12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by
mail, telex or facsimile transmission to Lehman Brothers
Inc., Three World Financial Center, New York, New York
10285, Attention: Syndicate Department (Fax: 212-528-8822);
(b) if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention:
President; and
(c) if to the Selling Stockholder, shall be delivered or
sent by mail, telex or facsimile transmission to American
Express Company, American Express Tower, World Financial
Center, New York, New York 10285, Attention: General
Counsel;
provided, however, that any notice to an Underwriter pursuant to
Section 8(d) shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set
forth in its acceptance telex to the Representatives, which
address will be supplied to any other party hereto by the
-24-
<PAGE>
Representatives upon request. Any such statements, requests,
notices or agreements shall take effect at the time of receipt
thereof. The Company and the Selling Stockholder shall be
entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by Lehman
Brothers Inc. on behalf of the Representatives, and the Company
and the Underwriters shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of
the Selling Stockholder.
13. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Company, the Selling Stockholder and their
respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also
be deemed to be for the benefit of the person or persons, if any,
who control any Underwriter (as used herein "control" and
"controlling" shall be within the meaning of Section 15 of the
Act) and for the benefit of the person or persons, if any,
controlling the Selling Stockholder; (b) the indemnity agreement
of the Underwriters contained in Section 8 of this Agreement
shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration
Statement, the Selling Stockholder and any person or persons
controlling the Company or the Selling Stockholder; (c) the
representations, warranties, indemnities and agreements of the
Selling Stockholder contained in this Agreement shall be deemed
to be for the benefit of the person or persons, if any,
controlling the Underwriters; and (d) the indemnities of the
Selling Stockholder and the representations of the Selling
Stockholder contained in Section 2(a) and 2(d) of this Agreement
shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration
Statement and any person or persons controlling the Company.
Nothing in this Agreement is intended or shall be construed to
give any person other than the persons referred to in this
paragraph any legal or equitable right, remedy or claim under or
in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Selling Stockholder
and the Underwriters contained in this Agreement or on behalf of
them respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Warrants and shall remain in full
force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
15. Certain Definitions. For purposes of this Agreement,
(a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" and
"significant subsidiary" have the respective meanings set forth
in Regulation S-X of the Rules and Regulations.
16. Governing Law; Counterparts. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York. This Agreement may be executed in one or more
counterparts, and if executed in more than one counterpart, the
executed counterparts shall together constitute a single
instrument.
17. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of,
or to affect the meaning or interpretation of, this Agreement.
-25-
<PAGE>
If the foregoing correctly sets forth the agreement among
the Company, the Selling Stockholder and the Underwriters, please
indicate your acceptance in the space provided for that purpose
below.
Very truly yours,
THE TRAVELERS INC.
By
--------------------------------------
Title:
THE SELLING STOCKHOLDER:
AMERICAN EXPRESS COMPANY
By
--------------------------------------
Title:
Accepted:
SMITH BARNEY SHEARSON INC.
LEHMAN BROTHERS INC.
As Representatives of the several
Underwriters named in Schedule 1
By: LEHMAN BROTHERS INC.
By
--------------------------------------
Authorized Representative
-26-
<PAGE>
SCHEDULE 1
Number of
Underwriter Warrants
----------- --------
Smith Barney Shearson Inc. . . . . . . . .
Lehman Brothers Inc. . . . . . . . . . .
---------
Total . . . . . . . . . =========
<PAGE>
SCHEDULE 2
Significant Subsidiaries of the Company
---------------------------------------
CC Holdings, Inc.
Commercial Credit Company
Associated Madison Companies, Inc.
The Travelers Insurance Group, Inc.
The Travelers Insurance Company
Primerica Insurance Holdings, Inc.
Primerica Life Insurance Company
The Travelers Indemnity Company
Smith Barney Shearson Holdings Inc.
Smith Barney Shearson Inc.
EXHIBIT 4.01
Certificate of Designation
of
5.50% Convertible Preferred Stock, Series B
of
Primerica Corporation
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Primerica Corporation, a Delaware corporation (the
"Corporation"), hereby certifies that:
1. The Certificate of Incorporation, as amended, 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 ten million (10,000,000) 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 July 28, 1993,
adopted resolutions that provide for a series of 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 re-
strictions thereof, of such series are fixed, hereby as follows:
1. Designation and Number of Shares. The des-
ignation of such series shall be 5.50% Convertible
Preferred Stock, Series B (the "Series B Convertible
Preferred Stock"), and the number of shares constitut-
<PAGE>
ing such series shall be 2,500,000. The number of au-
thorized 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 Execu-
tive 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 reduc-
tion has been so authorized, but the number of autho-
rized shares of Series B Convertible Preferred Stock
shall not be increased.
2. Dividends. Dividends on each share of Se-
ries 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 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 Divi-
dend 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 Convert-
ible Preferred Stock shall be paid to the holders of
record of shares of Series B Convertible Preferred
Stock as they appear on the stock register of the
Corporation on such record date, not more than 60 days
2
<PAGE>
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 mak-
ing 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 pay-
ments ratably upon all outstanding shares of Series B
Convertible Preferred Stock and such other class or
series of preferred stock in proportion to the respec-
tive 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 Pre-
ferred 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 in-
terest, 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 Pre-
ferred Stock is not subject to any mandatory redemp-
tion pursuant to a sinking fund or otherwise. The
Corporation, at its option, may redeem shares of Se-
ries B Convertible Preferred Stock, as a whole or in
part, at any time or from 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 re-
deemed during the 12-month period beginning July 30 of
the year indicated:
3
<PAGE>
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 divi-
dends 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 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 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
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 re-
quire 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 B Con-
4
<PAGE>
vertible Preferred Stock are to be redeemed, the Cor-
poration 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 Pre-
ferred Stock pursuant to this Section 3, or purchase
or acquire any shares of Series B Convertible Pre-
ferred Stock 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 out-
standing 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 Corpora-
tion shall be retired and canceled and shall be re-
stored 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 con-
secutive) 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 entitled
5
<PAGE>
at such annual meeting of stockholders to elect two
directors of the Corporation, with the remaining di-
rectors of the Corporation to be elected by the hold-
ers of shares of any other class or classes or series
of stock entitled to vote therefor. In any such elec-
tion, holders of shares of Series B Convertible Pre-
ferred 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 Di-
rectors 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 consti-
tute a quorum, whether present in person or by proxy,
for the election by such single class of its designat-
ed Directors. In any election of Directors by stock-
holders 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 stock-
holders voting as one or more classes may not be pres-
ent 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 con-
ferred 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 Direc-
tors 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 stock-
holders for the election of Directors.
6
<PAGE>
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 arreara-
ges 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 pursu-
ant 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 Pre-
ferred 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 Cer-
tificate of Incorporation (including any Certificate
of Amendment or Certificate of Designation relating to
the Series B Convertible Preferred Stock) so as to ad-
versely affect the powers, preferences or rights of
the holders of shares of Series B Convertible Pref-
erred Stock;
provided, however, that if such creation or such al-
--------
teration 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 Corpora-
tion, 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
7
<PAGE>
for distribution to stockholders, before any distribu-
tion 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 Convertible Preferred Stock, a liquidat-
ing distribution in an amount equal to $50.00 per
share (the "Liquidation Preference") plus an amount
equal to any accrued and accumulated but unpaid divi-
dends thereon to the date of final distribution. The
holders of the Series B Convertible Preferred Stock
shall not be entitled to receive the Liquidation Pref-
erence 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 liquida-
tion, 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 liquida-
tion, 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 Con-
vertible Preferred Stock, the holders of the Series B
Convertible 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 B
Convertible Preferred 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 distribu-
tion 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 prop-
erties, 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 hold-
8
<PAGE>
ers 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 distribu-
tions 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, pay-
ments, 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 out-
standing 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 deposit-
--------
ed 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 redemp-
tion 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 outstand!ing to the last
9
<PAGE>
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 Preferred 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 Pre-
ferred 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 nonassessable
shares (calculated as to each conversion to the near-
est 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 Conversion Price appli-
cable per share of Common Stock at the time of conver-
sion (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 Con-
vertible 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 Corpo-
ration or in blank, or accompanied by proper instru-
ments of transfer to the Corporation 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 specifying 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) of this
Section 8, an amount sufficient to pay any transfer or
similar tax (or evidence reasonably satisfactory to
the Corporation demonstrating that such taxes have
been paid).
10
<PAGE>
A payment or adjustment shall not be made by
the Corporation upon any conversion on account of any
dividends accrued on the shares of Series B Convert-
ible 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 immedi-
ately 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 per-
sons 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 certifi-
cates 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 redemp-
tion, 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 distribu-
tion shall be reduced to a price determined by multi-
plying 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 determination. In the event that such
dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the
11
<PAGE>
Conversion Price which would then be in effect if such
date fixed for the determination of stockholders enti-
tled 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 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 Aver-
age 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 Con-
version Price in effect at the close of business on
the date fixed for such determination 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 de-
termination 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 sub-
scription 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 fol-
lowing 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 adjust-
ments made upon the issuance of such rights or war-
rants 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 Conversion Price shall again be adjusted
12
<PAGE>
to be the Conversion Price which would then be in
effect if the date fixed for the determination of
stockholders entitled to receive such rights or war-
rants had not been fixed, but such subsequent adjust-
ment shall not affect the number of shares of Common
Stock issued upon any conversion of the Series B Con-
vertible Preferred Stock prior to the date such subse-
quent 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 is-
sued 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 re-
ported 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 pr!incipally
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 de-
termination.
(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 proportionately
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 becomes effective shall be
proportionately increased, such reduction 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 divi-
dend or otherwise, 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
13
<PAGE>
either (at the option of the Corporation) (A) the
Corporation shall elect to include in such distribu-
tion 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 immedi-
ately prior to such record date (such conversion as-
sumed to be made at the Conversion Price in effect
without regard to the adjustment provided in the fol-
lowing 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 denom-
inator 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 enti-
tled 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 enti-
tled 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 elec-
tion under clause (A) of this paragraph (f) with re-
spect to any such distribution payable on the Series B
Convertible Preferred Stock (an "Elected Corporation
Dividend"), the Corporation may in lieu of such dis-
tribution 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 re-
classification upon a consolidation or merger in which
14
<PAGE>
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 securi-
ties 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 determi-
nation of stockholders entitled to receive such dis-
tribution" 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 outstand-
ing immediately prior to such reclassification into
the number of shares of Common Stock outstanding imme-
diately 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 combination becomes effective" within the meaning
of paragraph (e) of this Section 8).
(h) The Corporation may make such reduc-
tions in the Conversion 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, partnership, joint venture,
association or other entity (a "Person"), 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
15
<PAGE>
such consolidation, merger, sale or transfer. The
above provisions of this paragraph (i) shall similarly
apply to successive consolidations, mergers, sales or
transfers.
(j) No adjustment in the Conversion Price
shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Conver-
sion Price; provided, however, that any adjustments
-------- -------
which by reason of this subparagraph (j) are not re-
quired 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 Conversion Price below the then par
value per share of the Common Stock, and any such
purported adjustment shall instead reduce the Conver-
sion Price to such par value.
(l) Whenever the Conversion Price is ad-
justed as herein provided the Corporation shall com-
pute 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 practica-
ble 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 grant-
ing 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
16
<PAGE>
(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 dissolu-
tion, 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 Convertible Pre-
ferred Stock, at least 30 days (or 15 days in any case
specified in clause (i) or (ii) above) prior to the
applicable record or effective date hereinafter speci-
fied, a notice stating (x) the date on which a record
is to be taken for the purpose of such dividend, dis-
tribution, rights or warrants, or, if a record is not
to be taken, the date as of which the holders of Com-
mon 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, con-
solidation, merger, sale, transfer, dissolution, liq-
uidation or winding up is expected to become effec-
tive, 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 reclassi-
fication, consolidation, merger, sale, transfer, dis-
solution, liquidation or winding up (but no failure to
mail such notice or any defect therein or in the mail-
ing thereof shall affect the validity of the corporate
action required to be specified in such notice).
(n) The Corporation shall at all times re-
serve and keep available, free from pre-emptive
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 Convert-
ible Preferred Stock then outstanding.
17
<PAGE>
(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 frac-
tion 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 pursu-
ant hereto. The Corporation shall not, however, be
required to pay any tax which may be payable in re-
spect of any transfer involved in the issue and deliv-
ery of shares of Common Stock in a name other than
that in which the shares of Series B Convertible Pre-
ferred 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 Corpora-
tion 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 payable in the
event of any voluntary or involuntary liquidation,
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 Preferred Stock shall include
only shares of the class designated as Common Stock of
the Corporation as of [Closing Date], or shares of any
class or classes resulting from any reclassification
or reclassifications thereof and which have no prefer-
ence 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
18
<PAGE>
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 effec-
tive 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 occur-
rence of such event, the additional Common Stock (and
associated Elected Corporation Dividend or Cash Equiv-
alent, if any) issuable upon such conversion by reason
of the adjustment required by such event over and
above Common Stock (and associated Elected Corporation
Dividend or Cash Equivalent, if any) issuable upon
such conversion before giving effect to such adjust-
ment and (ii) paying 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 Corporation
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 ad-
justment.
9. Sinking Fund. The Series B Convertible Pre-
ferred Stock shall not be subject to any right of
mandatory payment or prepayment (except for liquida-
tion, dissolution or winding up of the Corporation) or
to any sinking fund.
10. Ranking. The Series B Convertible Pre-
ferred Stock shall rank on a parity with the
Corporation's 8.125% Cumulative Preferred Stock, Se-
ries A and $45,000 Cumulative Redeemable Preferred
Stock, Series Z with respect to dividends and distri-
butions 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 denominations repre-
19
<PAGE>
senting in the aggregate the same number of shares of
Series B Convertible Preferred Stock.
Primerica Corporation has caused this Certificate to be
duly executed by its Senior Vice President, and attested by
its Assistant Secretary this July 30, 1993.
Primerica Corporation
By /s/ Charles O. Prince, III
__________________________
Charles O. Prince, III
Senior Vice President
Attest:
/s/ Mark J. Amrhein
____________________
Mark J. Amrhein
Assistant Secretary
20
EXHIBIT 4.03
WARRANT AGREEMENT
Between
THE TRAVELERS INC.
And
THE FIRST NATIONAL BANK OF BOSTON,
Warrant Agent
Warrants to Purchase Common Stock
Dated as of March 1, 1994
<PAGE>
This WARRANT AGREEMENT (the "Agreement") is dated as of
March 1, 1994, between THE TRAVELERS INC., a Delaware
corporation (the "Company"), and THE FIRST NATIONAL BANK OF
BOSTON, a national banking association, as warrant agent (the
"Warrant Agent").
WHEREAS, the Company proposes to issue 3,749,466 Warrants
(the "Warrants"), each entitling the holder thereof to
purchase one share (each a "Share") of the Company's Common
Stock, $.01 par value (the "Common Stock"); and
WHEREAS, the Warrant Agent, at the request of the
Company, has agreed to act as the agent of the Company in
connection with the issuance, registration, transfer,
exchange, exercise and conversion of Warrants;
NOW, THEREFORE, in consideration of the premises and
mutual agreements herein set forth, the parties hereto agree
as follows:
SECTION 1. Appointment of Warrant Agent. The Company
hereby appoints the Warrant Agent to act as agent for the
Company in accordance with the instructions hereinafter in
this Agreement set forth; and the Warrant Agent hereby accepts
such appointment, upon the terms and conditions hereinafter
set forth.
SECTION 2. Amount Issued. Subject to the provisions of
this Agreement, Warrants to purchase no more than 3,749,466
Shares may be issued and delivered by the Company hereunder.
SECTION 3. Form of Warrant Certificates. The
certificates evidencing the Warrants (the "Warrant
Certificates") to be delivered pursuant to this Agreement
shall be in registered form only. The Warrant Certificates
and the forms of election to purchase Shares and of assignment
to be printed on the reverse thereof shall be in substantially
the form set forth in Exhibit A hereto together with such
appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Agreement, and
may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon
as may be required to comply with any law or with any rules
made pursuant thereto or with any rules of any securities
exchange or as may, consistently herewith, be determined by
the officers executing such Warrants, as evidenced by their
execution of the Warrants.
SECTION 4. Execution of Warrant Certificates. Warrant
Certificates shall be signed on behalf of the Company by its
Chairman of the Board of Directors, its Chief Executive
Officer, its President, a Vice President or its Treasurer and
attested by its Secretary or Assistant Secretary, under its
corporate seal. Each such signature upon the Warrant
Certificates may be in the form of a facsimile signature of
the current or any future Chairman of the Board, Chief
Executive Officer, President, Vice President, Treasurer,
Secretary or Assistant Secretary and may be imprinted or
otherwise reproduced on the Warrant Certificates and for that
purpose the Company may adopt and use the facsimile signature
of any person who shall have been Chairman of the Board, Chief
Executive Officer, President, Vice President, Treasurer,
Secretary or Assistant Secretary, notwithstanding the fact
that at the time the Warrant Certificates shall be
countersigned and delivered or disposed of such person shall
have ceased to hold such office. The seal of the Company may
be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Warrant
Certificates.
If any officer of the Company who shall have signed any
of the Warrant Certificates shall cease to be such officer
<PAGE>
before the Warrant Certificates so signed shall have been
countersigned by the Warrant Agent or disposed of by the
Company, such Warrant Certificates nevertheless may be
countersigned and delivered or disposed of as though such
person had not ceased to be such officer of the Company; and
any Warrant Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the Company
to sign such Warrant Certificates, although at the date of the
execution of this Agreement any such person was not such
officer.
SECTION 5. Registration and Countersignature. Warrant
Certificates shall be manually countersigned and dated the
date of countersignature by the Warrant Agent and shall not be
valid for any purpose unless so countersigned. The Warrants
shall be numbered and shall be registered in a register (the
"Warrant Register") to be maintained by the Warrant Agent.
The Warrant Agent's countersignature on all Warrants
shall be in substantially the form set forth in Exhibit A
hereto.
The Company and the Warrant Agent may deem and treat the
registered holder of a Warrant Certificate as the absolute
owner thereof (notwithstanding any notation of ownership or
other writing thereon made by anyone), for the purpose of any
exercise thereof or any distribution to the holder thereof and
for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
SECTION 6. Registration of Transfers and Exchanges. The
Warrant Agent shall from time to time register the transfer of
any outstanding Warrant Certificates in the Warrant Register,
upon surrender of such Warrant Certificates, duly endorsed,
and accompanied by a written instrument or instruments of
transfer in form satisfactory to the Warrant Agent, duly
signed by the registered holder or holders thereof or by the
duly appointed legal representative thereof or by a duly
authorized attorney, such signature to be guaranteed by a
participant in a recognized signature guarantee medallion
program. Upon any such registration of transfer, a new
Warrant Certificate shall be issued to the transferee.
Warrant Certificates may be exchanged at the option of
the holder or holders thereof, when surrendered to the Warrant
Agent at its offices or agency maintained in New York, New
York or Boston, Massachusetts (or at such other offices or
agencies as may be designated by the Agent) for the purpose of
exchanging, transferring and exercising the Warrants (a
"Warrant Agent Office"), or at the offices of any successor
Warrant Agent as provided in Section 18 hereof, for another
Warrant Certificate or other Warrant Certificates of like
tenor and representing in the aggregate a like number of
Warrants.
The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 6 and Section
5, and deliver the new Warrant Certificates required pursuant
to the provisions of this Section, and for the purpose of any
distribution of Warrant Certificates contemplated by Section
13.
SECTION 7. Duration and Exercise of Warrants. The
Warrants shall expire at (a) 5:00 p.m. New York City time (the
"Close of Business") on July 31, 1998 or (b) the Close of
Business on such later date as shall be determined in the sole
discretion of the Company, in a written statement to the
Warrant Agent and with notice to registered holders of
Warrants in the manner provided for in Section 15 (such date
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<PAGE>
of expiration being herein referred to as the "Expiration
Date"). On and after the date of issuance of the Warrant,
each Warrant may be exercised on any business day on or prior
to the Close of Business on the Expiration Date. After the
close of Business on the Expiration Date, the Warrants will
become void and of no value.
Subject to the provisions of this Agreement, including
Section 13, each Warrant shall entitle the holder thereof to
purchase from the Company (and the Company shall issue and
sell to such holder of the Warrant) one fully paid and
nonassessable Share at $39.00 (the "Exercise Price"), subject,
in each case, to adjustment as set forth herein. The holder
of a Warrant shall exercise such holder's right to purchase
Shares by depositing with the Warrant Agent at a Warrant Agent
Office the Warrant Certificate evidencing such Warrant with
the form of election to purchase on the reverse thereof duly
completed and signed by the registered holder or holders
thereof or by the duly appointed legal representative thereof
or by a duly authorized attorney, such signature to be
guaranteed by a participant in a recognized signature
guarantee medallion program, and upon payment of the Exercise
Price for the number of Shares in respect of which such
Warrants are being exercised in lawful money of the United
States of America.
Subject to Section 9, upon such surrender of a Warrant
Certificate and payment of the Exercise Price, the Warrant
Agent shall requisition from the transfer agent for the Common
Stock (the "Transfer Agent") for issuance and delivery to or
upon the written order of the registered holder or holders of
such Warrant Certificate and in such name or names as such
registered holder may designate, a certificate or certificates
for the Share or Shares issuable upon the exercise of the
Warrant or Warrants evidenced by such Warrant Certificate.
Such certificate or certificates shall be deemed to have been
issued and any person so designated to be named therein shall
be deemed to have become the holder of record of such Share or
Shares as of the date of the surrender of such Warrant
Certificate duly executed and payment of the Exercise Price.
The Warrants evidenced by a Warrant Certificate shall be
exercisable, at the election of the registered holder thereof,
either as an entirety or from time to time for a portion of
the number of Warrants specified in the Warrant Certificate.
If less than all of the Warrants evidenced by a Warrant
Certificate surrendered upon the exercise of Warrants are
exercised at any time prior to the Expiration Date, a new
Warrant Certificate or Certificates shall be issued for the
remaining number of Warrants evidenced by the Warrant
Certificate so surrendered, and the Warrant Agent is hereby
authorized to countersign the required new Warrant Certificate
or Certificates pursuant to the provisions of Section 6 and
this Section 7.
The Warrant Agent shall account promptly to the Company
with respect to Warrants exercised and concurrently pay or
deliver to the Company all moneys and other consideration
received by it on the purchase of Shares through the exercise
of Warrants.
SECTION 8. Cancellation of Warrants. If the Company
shall purchase or otherwise acquire Warrants, the Warrant
Certificates representing such Warrants shall thereupon be
delivered to the Warrant Agent and be cancelled by it and
retired. The Warrant Agent shall cancel all Warrant
Certificates surrendered for exchange, substitution, transfer
or exercise in whole or in part. Such cancelled Warrant
Certificates shall thereafter be disposed of in a manner
satisfactory to the Company.
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<PAGE>
SECTION 9. Payment of Taxes. The Company will pay all
documentary stamp taxes attributable to the initial issuance
of Warrants and of Shares upon the exercise of Warrants;
provided, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer
involved in the issue of any Warrant Certificates or any
certificates for Shares in a name other than the registered
holder of a Warrant Certificate surrendered upon the exercise
of a Warrant, and the Company shall not be required to issue
or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the
Company the amount of such tax or shall have established to
the satisfaction of the Company that such tax has been paid.
SECTION 10. Mutilated or Missing Warrant Certificates.
If any of the Warrant Certificates shall be mutilated, lost,
stolen or destroyed, the Company shall in its discretion
issue, and the Warrant Agent shall countersign and deliver, in
exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and in
substitution for the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants, but only upon
receipt of evidence of such mutilation, loss, theft or
destruction, and, if required by the Company, of an indemnity
or bond by such holder, in each case satisfactory to the
Company and the Warrant Agent. Applicants for such substitute
Warrant Certificates shall also comply with such other
reasonable regulations and pay such other reasonable charges
as the Company or the Warrant Agent may prescribe.
SECTION 11. Reservation of Shares. For the purpose of
enabling it to satisfy any obligation to issue Shares upon
exercise of Warrants, the Company will at all times through
the Close of Business on the Expiration Date, reserve and keep
available, free from preemptive rights and out of its
aggregate authorized but unissued or treasury shares of Common
Stock, or such other stock or securities deliverable pursuant
to paragraph (g) of Section 13, the number of Shares
deliverable upon the exercise of all outstanding Warrants, and
the Transfer Agent is hereby irrevocably authorized and
directed at all times to reserve such number of authorized and
unissued or treasury shares of Common Stock as shall be
required for such purpose. The Company will keep a copy of
this Agreement on file with such Transfer Agent and with every
transfer agent for any shares of the Company's capital stock
issuable upon the exercise of Warrants pursuant to Section 13.
The Warrant Agent is hereby irrevocably authorized to
requisition from time to time from such Transfer Agent stock
certificates issuable upon exercise of outstanding Warrants,
and the Company will supply such Transfer Agent with duly
executed stock certificates for such purpose.
Before taking any action that would cause an adjustment
pursuant to Section 13 reducing the Exercise Price below the
then par value (if any) of the Shares issuable upon exercise
of the Warrants, the Company will take all corporate action
that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and
nonassessable Shares at the Exercise Price as so adjusted.
The Company covenants that all Shares issued upon
exercise of the Warrants will, upon issuance in accordance
with the terms of this Agreement, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes,
liens, charges and security interests created by or imposed
upon the Company with respect to the issuance and holding
thereof.
SECTION 12. Obtaining of Governmental Approvals and
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<PAGE>
Stock Exchange Listings; Prospectus Delivery. So long as any
Warrants remain outstanding, the Company will take all
necessary action (a) to obtain and keep effective any and all
permits, consents and approvals of governmental agencies and
authorities and to make and keep in effect all filings under
federal and state securities acts and laws, that may be or
become requisite in connection with the issuance, sale,
transfer and delivery of the Warrant Certificates, the
exercise of the Warrants and the issuance, sale, transfer and
delivery of the Shares issued upon exercise of Warrants, and
(b) to have the shares of Common Stock, immediately upon their
issuance upon exercise of Warrants, (i) listed on each
national securities exchange on which the Common Stock is then
listed or (ii) if the Common Stock is not then listed on any
national securities exchange, listed for quotation on the NASD
Automated Quotations system ("NASDAQ") National Market System
("NASDAQ/NMS") or such other over-the-counter quotation system
on which the Common Stock may then listed. So long as any
unexpired Warrants remain outstanding and if required in order
to comply with the Securities Act of 1933, as amended (the
"Act"), the Company agrees that it will file such post-
effective amendments to the registration statement filed
pursuant to the Act with respect to the Warrants (or such
other registration statements or post-effective amendments or
supplements) as may be necessary to permit the Company to
deliver to each person exercising a Warrant a prospectus
meeting the requirements of Section 10(a)(3) of the Act and
otherwise complying therewith, and will deliver such a
prospectus to each such person.
SECTION 13. Antidilution Provisions. The Exercise Price
and the number of shares issuable upon exercise of each
Warrant shall be subject to adjustment from time to time as
provided in this Section 13.
(a) In case the Company shall pay or make a
dividend or other distribution on any class of capital stock
of the Company in Common Stock, the Exercise Price in effect
at the close of business on the date fixed for the
determination of stockholders entitled to receive such
dividend or other distribution shall be reduced to a price
determined by multiplying such Exercise 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 determination. In
the event that such dividend or distribution is not so paid or
made, the Exercise Price shall again be adjusted to be the
Exercise Price that 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 exercise of the Warrant prior to
the date such subsequent adjustment is made. For the purposes
of this paragraph (a), the number of shares of Common Stock at
any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of
shares of Common Stock.
(b) In case the Company 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 of Common Stock
(as defined below) on the date fixed for the determination of
stockholders entitled to receive such rights or warrants, the
Exercise Price in effect at the close of business on the date
5
<PAGE>
fixed for such determination shall be reduced to a price
determined by multiplying such Exercise 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 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 Exercise Price
shall be readjusted to the Exercise 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
Exercise Price shall again be adjusted to be the Exercise
Price which would then be in effect if the date fixed for the
determination of stockholders entitled to receive such rights
or warrants had not been fixed, but such subsequent adjustment
shall not affect the number of shares of Common Stock issued
upon any exercise of the Warrant prior to the date such
subsequent adjustment is made. For the purposes of this
paragraph (b), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury
of the Company 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.
(c) In case outstanding shares of Common Stock
shall be subdivided into a greater number of shares of Common
Stock, the Exercise Price in effect at the close of business
on the date upon which such subdivision becomes effective
shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall each be combined into
a smaller number of shares of Common Stock, the Exercise Price
in effect at the close of business on the date upon which such
combination becomes effective shall be proportionately
increased, such reduction 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.
(d) In case the Company shall, by dividend or
otherwise, 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 (b) of this Section 13, (ii) any dividend or
distribution paid in cash or other property out of the
retained earnings of the Company and (iii) any dividend or
distribution referred to in paragraph (a) of this Section 13),
then either (at the option of the Company) (A) the Company
shall elect to include in such distribution each holder (as of
the record date for such distribution) as if such holder had
exercised the Warrant for Common Stock immediately prior to
such record date (such exercise assumed to be made at the
Exercise Price in effect without regard to the adjustment
provided in the following clause (B)), or (B) the Exercise
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<PAGE>
Price shall be reduced to a price determined by multiplying
the Exercise 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 Common Stock on
the date fixed for such determination less the fair market
value (as reasonably determined in good faith by the Board of
Directors of the Company (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 the Average Market Price of
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 Exercise Price shall again be
adjusted to be the Exercise 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 exercise of the Warrant prior to the
date such subsequent adjustment is made. If the Company makes
an election under clause (A) of this paragraph (d) with
respect to any such distribution payable on the Warrant (an
"Elected Company Dividend"), the Company may in lieu of such
distribution elect to pay to each holder the fair market value
(determined as provided above) of such Elected Company
Dividend in cash (the "Cash Equivalent").
(e) The reclassification (including any
reclassification upon a consolidation or merger in which the
Company is the continuing corporation, but not including any
transactions for which an adjustment is provided in paragraph
(g) 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 (d) of this Section 13), 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 date upon
which such combination becomes effective, as the case may be,
and the date upon which such subdivision or combination
becomes effective within the meaning of paragraph (c) of this
Section 13).
(f) The Company may make such reductions in the
Exercise Price, in addition to those required by paragraphs
(a), (b), (c), (d) and (e) of this Section 13, 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.
(g) In case of any consolidation of the Company
with, or merger of the Company into, any other Person, any
merger of another Person into the Company (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 Company, each holder shall have the right
thereafter, during the period such Warrant shall be
outstanding, to exercise such Warrant only into the kind and
amount (if any) of securities, cash or other property
7
<PAGE>
receivable upon such consolidation, merger, sale or transfer
by a holder of the number of shares of Common Stock which
would have been issuable if such Warrant had been exercised
immediately prior to such consolidation, merger, sale or
transfer (and the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as
the case may be, shall execute and deliver to each holder a
new Warrant satisfactory in form and substance to each holder,
providing for the foregoing). If the holders of the Common
Stock may elect from choices the kind or amount of securities,
cash or other property receivable upon such consolidation,
merger, sale or transfer, then for the purpose of this Section
13 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer
shall be deemed to be the choice specified by each holder,
which specification shall be made by each holder by the later
of (i) 20 business days after the holder is provided with a
final version of all information required by law or regulation
to be furnished to holders of Common Stock concerning such
choice, or if no such information is required, 20 business
days after the Company notifies the holder of all material
facts concerning such specification and (ii) the last time at
which holders of Common Stock are permitted to make their
specification known to the Company. If the holder fails to
make any specification, the holder's choice shall be deemed to
be whatever choice is made by a plurality of holders of Common
Stock not affiliated with the Company or the other Person to
the merger or consolidation or, if no such holders exist, as
specified by the Board of Directors in good faith. The new
Warrant referred to above shall provide for adjustments which,
for events subsequent to the effective date of such new
Warrant, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 13. The above
provisions of this paragraph (g) shall similarly apply to
successive consolidations, mergers, sales or transfers.
(h) Whenever there shall be any change in the
Exercise Price hereunder, then there shall be an adjustment
(to the nearest hundredth of a Share) in the number of Shares
of Common Stock issuable upon exercise of the Warrant, which
adjustment shall become effective at the time such change in
the Exercise Price becomes effective and shall be made by
multiplying the number of shares of Common Stock issuable upon
exercise of the Warrant immediately before such change in the
Exercise Price by a fraction of which the numerator is the
Exercise Price immediately before such change and the
denominator is the Exercise Price immediately after such
change.
(i) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that
any adjustments which by reason of this paragraph (i) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. Notwithstanding the
foregoing, any adjustment required by this paragraph (i) shall
be made no later than the expiration of the right to exercise
the Warrant or a portion thereof.
(j) In any case in which this Section 13 shall
require that an adjustment shall become effective on the day
following a record date for an event, the Company may defer
until the occurrence of such event (i) issuing to the holder,
if the Warrant is exercised after such record date and before
the occurrence of such event, the additional Common Stock (and
associated Elected Company Dividend or Cash Equivalent, if
any) issuable upon exercise by reason of the adjustment
required by such event over and above Common Stock (and
associated Elected Company Dividend or Cash Equivalent, if
any) issuable upon such exercise before giving effect to such
8
<PAGE>
adjustment and (ii) paying to the holder any amount in cash in
lieu of a fractional share of Common Stock pursuant to Section
4 above; provided, that, upon request of the holder, the
Company shall deliver to the holder a due bill or other
appropriate instrument evidencing holder's right to receive
such additional Common Stock and such cash, upon the
occurrence of the event requiring such adjustment.
SECTION 14. Fractional Warrants and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Warrants or to issue Warrant Certificates that evidence
fractional Warrants. In lieu of such fractional Warrants
there shall be paid to the registered holders of the Warrant
Certificates with regard to which such fractional Warrants
would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a full Warrant.
For purposes of this Section 14(a), the current market value
of a Warrant shall be the closing price of one Warrant (as
determined pursuant to paragraph (c) below) for the trading
day immediately prior to the date on which such fractional
Warrant would have been otherwise issuable.
(b) Notwithstanding any adjustment pursuant to Section 13
in the number of Shares issuable upon the exercise of a
Warrant, the Company shall not be required to issue fractions
of Shares upon exercise of the Warrants or to distribute
certificates which evidence fractional Shares. In lieu of
fractional Shares, there shall be paid to the registered
holders of Warrant Certificates at the time such Warrant
Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of
a share of Common Stock. For purposes of this Section 14(b),
the current market value of a share of Common Stock shall be
the closing price of a share of Common Stock (as determined
pursuant to paragraph (c) below) for the trading day
immediately prior to the date of such exercise.
(c) The closing price for each day shall be the last
sale price, regular day, or, if no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, for such day, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the
NYSE or, if the Warrants or Common Stock, as the case may be,
is not listed or admitted to trading on such exchange, as
reported on the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Warrants or Common
Stock, respectively, is listed or admitted to trading, or if
the Warrants or Common Stock, as the case may be, is not
listed or admitted to trading on any national securities
exchange, as reported on NASDAQ/NMS or, if the Warrants or
Common Stock, as the case may be, is not listed or admitted to
trading on NASDAQ/NMS, as reported on NASDAQ.
SECTION 15. Notices to Warrantholders. Upon any
adjustment of the number of Shares issuable upon exercise of
each Warrant, the Exercise Price or the number of Shares
issuable upon exercise of each Warrant pursuant to Section 13,
the Company within 20 calendar days thereafter shall (i) cause
to be filed with the Warrant Agent a certificate of a firm of
independent public accountants of recognized standing selected
by the Company (who may be the regular auditors of the
Company) setting forth the Exercise Price and either the
number of Shares issuable upon the exercise of each Warrant or
the additional number of Warrants to be issued for each
previously outstanding Warrant, as the case may be, after such
adjustment and setting forth in reasonable detail the method
of calculation and the facts upon which such adjustment was
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<PAGE>
made, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause
to be given to each of the registered holders of the Warrant
Certificates at such holder's address appearing on the Warrant
Register written notice of such adjustments by first-class
mail, postage prepaid. Where appropriate, such notice may be
given in advance and included as a part of the notice required
to be mailed under the other provisions of this Section 15.
In case:
(a) the Company shall declare a dividend (or any
other distribution) on Common Stock payable otherwise than in
cash out of its retained earnings; or
(b) the Company shall authorize the granting to the
holders of 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
(c) of any reclassification of Common Stock (other
than a subdivision or combination of its outstanding shares of
Common Stock), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders
of the Company is required, or of the sale or transfer of all
or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall (i) cause written notice of such event
to be filed with the Warrant Agent and shall cause written
notice of such event to be given to each of the registered
holders of the Warrant Certificates at such holder's address
appearing on the Warrant Register, by first-class mail,
postage prepaid, and (ii) make a public announcement in a
daily newspaper of general circulation in New York City of
such event, such giving of notice and publication to be
completed at least 10 calendar days (or 20 calendar days in
any case specified in clause (d) above) prior to the date
fixed as a record date or the date of closing the transfer
books for the determination of the stockholders entitled to
such dividend, distribution or subscription rights or for the
determination of stockholders entitled to vote on such
proposed dissolution, liquidation or winding up. Such notice
shall specify such record date or the date of closing the
transfer books, as the case may be. The failure to give the
notice required by this Section 15 or any defect therein shall
not affect the legality or validity of any distribution,
right, warrant, dissolution, liquidation or winding up or the
vote upon or any other action taken in connection therewith.
SECTION 16. Merger, Consolidation or Change of Name of
Warrant Agent. Any corporation into which the Warrant Agent
may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Warrant Agent shall
be a party, or any corporation succeeding to the shareholder
services business of the Warrant Agent, shall be the successor
to the Warrant Agent hereunder without the execution or filing
of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be
eligible for appointment as a successor Warrant Agent under
the provisions of Section 18. If at the time such successor
to the Warrant Agent shall succeed under this Agreement, any
of the Warrant Certificates shall have been countersigned but
not delivered, any such successor to the Warrant Agent may
adopt the countersignature of the original Warrant Agent; and
if at that time any of the Warrant Certificates shall not have
been countersigned, any successor to the Warrant Agent may
10
<PAGE>
countersign such Warrant Certificates either in the name of
the predecessor Warrant Agent or in the name of the successor
Warrant Agent; and in all such cases such Warrant Certificates
shall have the full force provided in the Warrant Certificates
and in this Agreement.
If at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall
have been countersigned but not delivered, the Warrant Agent
whose name has changed may adopt the countersignature under
its prior name; and if at that time any of the Warrant
Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its
prior name or in its changed name; and in all such cases such
Warrant Certificates shall have the full force provided in the
Warrant Certificates and in this Agreement.
SECTION 17. Warrant Agent. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company
and the holders of Warrants, by their acceptance thereof,
shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statement of the Company, and
the Warrant Agent assumes no responsibility for the
correctness of any of the same except such as describe the
Warrant Agent or action taken or to be taken by it. Except as
herein otherwise provided, the Warrant Agent assumes no
responsibility with respect to the execution, delivery or
distribution of the Warrant Certificates.
(b) The Warrant Agent shall not be responsible for any
failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrant Certificates to
be complied with by the Company nor shall it at any time be
under any duty or responsibility to any holder of a Warrant to
make or cause to be made any adjustment in the Exercise Price
or in the number of Shares issuable upon exercise of any
Warrant (except as instructed by the Company), or to determine
whether any facts exist which may require any such
adjustments, or with respect to the nature or extent of or
method employed in making any such adjustments when made.
(c) The Warrant Agent may consult at any time with
counsel satisfactory to it (who may be counsel for the
Company) and the Warrant Agent shall incur no liability or
responsibility to the Company or any holder of any Warrant
Certificate in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with
the opinion or the advice of such counsel.
(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant
Certificate for any action taken in reliance on any notice,
resolution, waiver, consent, order, certificate or other
paper, document or instrument believed by it to be genuine and
to have been signed, sent or presented by the proper party or
parties.
(e) The Company agrees to pay to the Warrant Agent
reasonable compensation for all services rendered by the
Warrant Agent under this Agreement, to reimburse the Warrant
Agent upon demand for all expenses, taxes and governmental
charges and other charges of any kind and nature incurred by
the Warrant Agent in the performance of its duties under this
Agreement and to indemnify the Warrant Agent and save it
harmless against any and all losses, liabilities and expenses,
including judgments, costs and reasonable counsel fees and
expenses, for anything done or omitted by the Warrant Agent
11
<PAGE>
arising out of or in connection with this Agreement except as
a result of its negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or
one or more registered holders of Warrant Certificates shall
furnish the Warrant Agent with reasonable security and
indemnity for any costs or expenses which may be incurred.
All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrant Certificates or the
production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by
the Warrant Agent shall be brought in its name as Warrant
Agent, and any recovery or judgment shall be for the ratable
benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director,
officer or employee thereof, may buy, sell or deal in any of
the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested or contract with or lend money to the
Company or otherwise act as fully and freely as though they
were not the Warrant Agent under this Agreement, or a
stockholder, director, officer or employee of the Warrant
Agent, as the case may be. Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the
Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent
for the Company, and its duties shall be determined solely by
the provisions hereof. the Warrant Agent shall not be liable
for anything which it may do or refrain from doing in
connection with this Agreement except for its own negligence
or bad faith.
(i) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Warrant Agent for the carrying out or performing of the
provisions of this Agreement.
(j) The Warrant Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Warrant Agent) or in respect of the validity or
execution of any Warrant Certificate (except its
countersignature thereof), nor shall the Warrant Agent by any
act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of the Shares to be
issued pursuant to this Agreement or any Warrant Certificate
or as to whether the Shares will when issued be validly
issued, fully paid and nonassessable or as to the Exercise
Price or the number of Shares issuable upon exercise of any
Warrant.
(k) The Warrant Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the Chief
Executive officer, the President, any Vice President, the
Treasurer, the Secretary or an Assistant Secretary of the
Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be
liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer
or in good faith reliance upon any statement signed by any one
of such officers of the Company with respect to any fact or
12
<PAGE>
matter (unless other evidence in respect thereof is herein
specifically prescribed) which may be deemed to be
conclusively proved and established by such signed statement.
SECTION 18. Change of Warrant Agent. If the Warrant
Agent shall resign (such resignation to become effective not
earlier than 60 days after the giving of written notice
thereof to the Company and the registered holders of Warrant
Certificates) or shall become incapable of acting as Warrant
Agent or if the Board of Directors shall by resolution remove
the Warrant Agent (such removal to become effective not
earlier than 30 days after the filing of a certified copy of
such resolution with the Warrant Agent and the giving of
written notice of such removal to the registered holders of
Warrant Certificates), the Company shall appoint a successor
to the Warrant Agent. If the Company shall fail to make such
appointment within a period of 30 days after such removal or
after it has been so notified in writing of such resignation
or incapacity by the Warrant Agent or by the registered holder
of any Warrant Certificate, then any registered holder of a
Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant
Agent. Pending appointment of a successor to the Warrant
Agent, either by the Company or by such a court, the duties of
the Warrant Agent shall be carried out by the Company. Any
successor Warrant Agent, whether appointed by the Company or
by such a court, shall be a bank or trust company, in good
standing, incorporated under the laws of any state or of the
United States of America. As soon as practicable after
appointment of the successor Warrant Agent, the Company shall
cause written notice of the change in the Warrant Agent to be
given to each of the registered holders of the Warrant
Certificates at such holder's address appearing on the Warrant
Register. After appointment, the successor Warrant Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Warrant
Agent without further act or deed. The former Warrant Agent
shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder and execute and
deliver, at the expense of the Company, any further assurance,
conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section 18 or any defect
therein, shall not affect the legality or validity of the
removal of the Warrant Agent or the appointment of a successor
Warrant Agent, as the case may be.
SECTION 19. Warrantholder Not Deemed a Stockholder.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders
thereof the right to vote or to receive dividends or to
consent or to receive notice as stockholders in respect of the
meetings of stockholders or for the election of directors of
the Company or any other matter, or any rights whatsoever as
stockholders of the Company.
SECTION 20. Delivery of Prospectus. If the Company is
required under applicable federal or state securities laws to
deliver a prospectus upon exercise of Warrants, the Company
will furnish to the Warrant Agent sufficient copies of a
prospectus, and the Warrant Agent agrees that upon the
exercise of any Warrant Certificate by the holder thereof, the
Warrant Agent will deliver to such holder, prior to or
concurrently with the delivery of the certificate or
certificates for the Shares issued upon such exercise, a copy
of the prospectus.
SECTION 21. Notices to Company and Warrant Agent. Any
notice or demand authorized by this Agreement to be given or
made by the Warrant Agent or by any registered holder of any
Warrant Certificate to or on the Company shall be sufficiently
13
<PAGE>
given or made if sent by mail, first-class or registered,
postage prepaid, addressed (until another address is filed in
writing by the Company with the Warrant Agent), as follows:
The Travelers Inc.
65 East 55th Street
New York, NY 10022
Attention: General Counsel
If the Company shall fail to maintain such office or
agency or shall fail to give such notice of any change in the
location thereof, presentation may be made and notices and
demands may be served at the principal office of the Warrant
Agent.
Any notice pursuant to this Agreement to be given by the
Company or by any registered holder of any Warrant Certificate
to the Warrant Agent shall be sufficiently given if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Warrant Agent with the
Company), as follows:
The First National Bank of Boston
P.O. Box 1889 (M/S 45-01-19)
Boston, MA 02105
Attention: Shareholder Services Division
The Warrant Agent maintains a Warrant Agent Office at
BancBoston Clearance Corporation, 55 Broadway, Third Floor,
New York, New York and at The First National Bank of Boston,
100 Federal Street, Boston, Massachusetts.
SECTION 22. Supplements and Amendments. The Company and
the Warrant Agent may from time to time supplement or amend
this Agreement without the approval of any holders of Warrant
Certificates in order to cure any ambiguity, manifest error or
other mistake in this Agreement, or to correct or supplement
any provision contained herein that may be defective or
inconsistent with any other provision hereto, or to make any
other provisions in regard to matters or questions arising
hereunder that the Company and the Warrant Agent may deem
necessary or desirable and that shall not adversely affect,
alter or change the interests of the holders of the Warrants.
SECTION 23. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 24. Termination. This Agreement shall terminate
at the Close of Business on the Expiration Date.
Notwithstanding the foregoing, this Agreement will terminate
on any earlier date when all Warrants have been exercised.
The provisions of Section 17 shall survive such termination.
SECTION 25. Governing Law. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for
all purposes shall be construed in accordance with the laws of
such State.
SECTION 26. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or
corporation other than the Company, the Warrant Agent and the
registered holders of the Warrant Certificates any legal or
equitable right, remedy or claim under this Agreement, and
this Agreement shall be for the sole and exclusive benefit of
the Company, the Warrant Agent and the registered holders of
the Warrant Certificates.
14
<PAGE>
SECTION 27. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and such counterparts shall together constitute but
one and the same instrument.
SECTION 28. Headings. The headings of sections of this
Agreement have been inserted for convenience of reference
only, are not to be considered a part hereof and shall in no
way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Warrant Agreement to be executed and delivered as of the day
and year first above written.
THE TRAVELERS INC.
By:
------------------------
------------------------
[Title]
ATTEST:
------------------------------------------------------
THE FIRST NATIONAL BANK OF BOSTON
By:
------------------------
------------------------
[Title]
ATTEST:
------------------------------------------------------
15
EXHIBIT 4.04
[FORM OF FACE OF WARRANT CERTIFICATE]
VOID AFTER JULY 31, 1998
NO. W- WARRANT TO PURCHASE __________
SHARES OF COMMON STOCK
THE TRAVELERS INC.
1998 WARRANT TO PURCHASE COMMON STOCK
This Warrant Certificate certifies that ______________________ or
registered assigns, is the registered holder of a 1998 Warrant (the "Warrant")
of The Travelers Inc., a Delaware corporation (the "Company"), to purchase the
number of shares (the "Shares") of Common Stock, $0.01 par value per share (the
"Common Stock"), of the Company set forth above. This Warrant expires at the
Close of Business on July 31, 1998, unless such date is extended at the option
of the Company, and entitles the holder to purchase from the Company the number
of fully paid and nonassessable Shares set forth above at the initial exercise
price (the "Exercise Price"), payable in lawful money of the United States of
America, of $39.00 per share.
Subject to the terms and conditions set forth herein and in the
Warrant Agreement referred to on the reverse hereof, this Warrant may be
exercised upon surrender of this Warrant Certificate and payment of the
aggregate Exercise Price at the office or agency of the Warrant Agent in New
York, New York or in Boston, Massachusetts (each such office, a "Warrant Agent
Office").
The Exercise Price and the number of Shares issuable upon exercise of
this Warrant are subject to adjustment upon the occurrence of certain events as
set forth in the Warrant Agreement.
No Warrant may be exercised after the Close of Business on July 31,
1998 (the "Expiration Date"), unless the Company exercises its option to extend
such date. After the Close of Business on the Expiration Date, the Warrants
will become wholly void and of no value.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THE WARRANT
CERTIFICATE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
This Warrant Certificate shall not be valid unless countersigned by
the Warrant Agent.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Certificate to be
executed by its duly authorized officers, and the corporate seal hereunto
affixed.
Dated:__________________________,
THE TRAVELERS INC.
By:___________________________________
[Corporate Seal of The Travelers Inc.]
ATTEST:
By:______________________________
Countersigned:
THE FIRST NATIONAL BANK OF BOSTON,
AS WARRANT AGENT
By:______________________________
<PAGE>
[FORM OF REVERSE OF WARRANT CERTIFICATE]
THE TRAVELERS INC.
The Warrant evidenced by this Warrant Certificate is a part of a duly
authorized issue of 1998 Warrants to purchase a maximum of 3,749,466 shares of
Common Stock issued pursuant to a Warrant Agreement, dated as of March 1,
1994 (the "Warrant Agreement"), duly executed and delivered by the Company to
The First National Bank of Boston, as Warrant Agent (the "Warrant Agent"). The
Warrant Agreement hereby is incorporated by reference in and made a part of
this instrument and is hereby referenced to for a description of the rights,
limitation of rights, obligations, duties and immunities thereunder of the
Warrant Agent, the Company and the holders (the words "holders" or "holder"
meaning the registered holders or registered holder) of the Warrants. A copy
of the Warrant Agreement may be inspected at the Warrant Agent Office and is
available upon written request addressed to the Company. All terms used herein
that are defined in the Warrant Agreement have the meanings assigned to them
therein.
Warrants may be exercised to purchase Shares from the Company before
the Close of Business on the Expiration Date, at the Exercise Price set forth
on the face hereof, subject to adjustment as described in the Warrant
Agreement. The holder of the Warrant evidenced by this Warrant Certificate may
exercise such Warrant by surrendering the Warrant Certificate, with the form of
election to purchase set forth hereon properly completed and executed, together
with payment of the aggregate Exercise Price, in lawful money of the United
States of America, and any applicable transfer taxes, at a Warrant Agent
Office.
In the event that upon any exercise of the Warrant evidenced hereby
the number of Shares actually purchased shall be less than the total number of
Shares issuable upon exercise of the Warrant evidenced hereby, there shall be
issued to the holder hereof, or such holder's assignee, a new Warrant
Certificate evidencing a Warrant to purchase the Shares not so purchased. No
adjustment shall be made for any cash dividends on any Shares issuable upon
exercise of this Warrant. After the Close of Business on the Expiration Date,
unexercised Warrants shall become wholly void and of no value.
The Company shall not be required to issue fractions of Shares or any
certificates that evidence fractional Shares. In lieu of such fractional
Shares, there shall be paid to holders of the Warrant Certificates with regard
to which such fractional Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value (as determined pursuant
to the Warrant Agreement) of a full Share.
Warrant Certificates, when surrendered at the Warrant Agent Office by
the registered holder thereof in person or by a legal representative or
attorney duly authorized in writing, may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing a Warrant to purchase in the aggregate a
like number of Shares.
Upon due presentment for registration of transfer of this Warrant
Certificate at the Warrant Agent Office, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing a Warrant or Warrants to purchase in
the aggregate a like number of Shares shall be issued to the transferee in
<PAGE>
exchange for this Warrant Certificate, subject to the limitations provided in
the Warrant Agreement, without charge, except for any tax or other governmental
charge imposed in connection therewith.
The Company and Warrant Agent may deem and treat the registered
holder hereof as the absolute owner of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon made by
anyone) for the purpose of any exercise hereof and for all other purposes, and
neither the Company nor the Warrant Agent shall be affected by any notice to
the contrary.
<PAGE>
ELECTION TO EXERCISE
(TO BE EXECUTED UPON EXERCISE OF THE WARRANT)
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ________ Shares and
herewith tenders in payment for such Shares $________ in lawful money of the
United States of America, in accordance with the terms hereof. The undersigned
requests that a certificate representing the Shares by registered and delivered
as follows:
_______________________________________________________
Name
_______________________________________________________
Address
_______________________________________________________
Delivery Address (if different)
If such number of Shares is less than the aggregate number of Shares
purchasable hereunder, the undersigned requests that a new Warrant Certificate
representing the balance of such Shares be registered and delivered as follows:
_______________________________________________________
Name (and Social Security or other taxpayer
identification number if different from Holder)
_______________________________________________________
Address
_______________________________________________________
Delivery Address (if different)
___________________________________
______________________________________________
Social Security or Other Taxpayer Signature
Identification Number of Holder
Note: The above signature must correspond
with the name as written upon the face of
this Warrant Certificate in every
particular, without alteration or
enlargement or any change whatsoever. If
the certificate representing the Shares or
any Warrant Certificate representing
Warrants not exercised is to be registered
in a name other than that in which this
Warrant Certificate is registered, the
signature of the holder hereof must be
<PAGE>
guaranteed.
SIGNATURE GUARANTEED:
___________________________________
<PAGE>
ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THIS WARRANT CERTIFICATE)
FOR VALUE RECEIVED, the undersigned registered holder hereby sells,
assigns and transfers unto
_____________________________________________________
Name of Assignee
_____________________________________________________
Address of Assignee
this Warrant Certificate, together with all right, title and interest therein,
and does irrevocably constitute and appoint ____________________ attorney, to
transfer the within Warrant Certificate on the books of the Warrant Agent, with
full power of substitution.
___________________________________
_____________________________________________
Dated Signature
Note: The above signature must correspond
with the name or written upon the face of
this Warrant Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
___________________________________
Social Security or Other Taxpayer
Identification Number of Assignee
SIGNATURE GUARANTEED:
___________________________________
EXHIBIT 23.01
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
The Travelers Inc.:
We consent to the use of our reports on the consolidated financial statements
and schedules dated January 18, 1993, except as to Note 21, which is as of March
12, 1993, that are incorporated by reference or appear in the 1992 Annual Report
on Form 10-K of Primerica Corporation (now known as The Travelers Inc.),
incorporated herein by reference and to the reference to our firm under the
heading "Experts" in Amendment No. 1 to the Registration Statement
(No. 33-52281). Our report on the December 31, 1992 consolidated financial
statements refers to a change in accounting for income taxes.
KPMG PEAT MARWICK
New York, New York
March 1, 1994
EXHIBIT 23.02
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
The Board of Directors of
The Travelers Inc. (formerly Primerica Corporation):
We consent to the incorporation by reference in Amendment No. 1 to the
Registration Statement on Form S-3 (the "Amendment") of The
Travelers Inc. (formerly Primerica Corporation) (to be filed on or about
March 1, 1994), of our report dated February 9, 1993, relating to our
audit of the consolidated balance sheets of The Travelers Corporation and
Subsidiaries as of December 31, 1992 and 1991, and the related consolidated
statements of operations and retained earnings and cash flows for each of the
three years in the period ending December 31, 1992, which report is included
in the Annual Report on Form 10-K for the fiscal year ended December 31, 1992,
of Primerica Corporation and includes an explanatory paragraph referring to
changes in the method of accounting for post retirement benefits other than
pensions, accounting for income taxes and accounting for foreclosed assets in
1992, and the reference to our firm under the heading "Experts" in the
Amendment.
COOPERS & LYBRAND
Hartford, Connecticut
February 28, 1994
EXHIBIT 23.03
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Amendment No. 1 to Registration Statement on Form S-3 of The Travelers Inc.
(formerly Primerica Corporation file no. 33-52281) and to the incorporation
by reference therein of our report dated April 26, 1993, with respect to the
combined statement of assets acquired and liabilities assumed of the Shearson
Lehman Brothers and SLB Asset Management Divisions ("SLBD") of Lehman Brothers
Holdings Inc. (formerly Shearson Lehman Brothers Holdings Inc.) as of December
31, 1992 and 1991, the related combined statement of operations of SLBD for the
years then ended and the combined statement of cash provided by net income, as
adjusted for non cash expenses and changes in assets acquired and liabilities
assumed, exclusive of investing and financing activities for the year ended
December 31, 1992 included in Primerica Corporation's Current Report on
Form 8-K dated April 28, 1993, filed with the Securities and Exchange
Commission.
ERNST & YOUNG
New York, New York
March 1, 1994
