<PAGE>
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 22, 1997)
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-27155
8,000,000 SHARES
TRAVELERS GROUP INC.
DEPOSITARY SHARES
EACH REPRESENTING 1/5TH OF A SHARE OF
6.365% CUMULATIVE PREFERRED STOCK, SERIES F
---------------
Each Depositary Share (a "Depositary Share") represents ownership of 1/5th
of a share of 6.365% Cumulative Preferred Stock, Series F, $1.00 par value per
share (the "Series F Preferred Stock"), of Travelers Group Inc., a Delaware
corporation (the "Company"), to be deposited with BankBoston N.A. as Depositary
and, through the Depositary, entitles the holder, proportionately, to all
rights, preferences and privileges of the Series F Preferred Stock represented
thereby. The proportionate stated value of each Depositary Share is $50.00. See
"Description of Depositary Shares."
The Series F Preferred Stock will not be redeemable prior to June 16, 2007.
On or after such date the Series F Preferred Stock will be redeemable at the
option of the Company, in whole or in part, upon not less than 30 days' notice,
at a redemption price equal to $250.00 per share of Series F Preferred Stock
(equivalent to $50.00 per Depositary Share) plus dividends accrued and unpaid to
the redemption date.
Dividends on the Series F Preferred Stock will be cumulative from the date
of issuance and are payable quarterly, commencing September 1, 1997. The amount
of dividends payable in respect of the Series F Preferred Stock will be adjusted
in the event of certain amendments to the Internal Revenue Code of 1986, as
amended, in respect of the dividends-received deduction. See "Description of
Series F Preferred Stock--Dividends."
Application will be made to list the Depositary Shares on the New York Stock
Exchange. The shares of Series F Preferred Stock represented by the Depositary
Shares will not be so listed, and the Company does not expect that there will be
any public trading market for the Series F Preferred Stock except as represented
by the Depositary Shares.
Depositary receipts representing Depositary Shares ("Depositary Receipts")
will be represented by one or more global certificates registered in the name of
The Depository Trust Company ("DTC") or its nominee. Beneficial interests in the
Depositary Receipts will be shown on, and transfers thereof will be effected
only through, records maintained by participants in DTC. Except as described in
this Prospectus Supplement, Depositary Receipts in certificated form will not be
issued in exchange for global certificates. See "Book-Entry Procedures."
--------------------------
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 SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
<S> <C> <C> <C>
Per Depositary Share $50.00 $1.00 $49.00
Total $400,000,000 $8,000,000 $392,000,000
</TABLE>
(1) Plus accrued dividends, if any, from the date of issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated to be $150,000.
------------------------------
The Depositary Shares are offered by the several Underwriters named herein,
subject to prior sale, when, as and if accepted by them and subject to certain
conditions. It is expected that delivery of Depositary Receipts will be made
only in book-entry form through the facilities of DTC on or about June 16, 1997
against payment therefor in immediately available funds.
--------------------------
SMITH BARNEY INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
June 11, 1997
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE DEPOSITARY
SHARES, INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE COVERING
TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES,
SEE "UNDERWRITING."
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS.
------------------------
THE COMPANY
The Company is a financial services holding company engaged, through its
subsidiaries, principally in four business segments: Investment Services,
Consumer Finance Services, Property & Casualty Insurance Services and Life
Insurance Services.
The Company's Investment Services segment consists of investment banking,
asset management, brokerage and other financial services provided through Smith
Barney Holdings Inc. and its subsidiaries. The Company's Consumer Finance
Services segment includes consumer lending services conducted primarily under
the name "Commercial Credit" and credit-related insurance and credit card
services. The Company's Property & Casualty Insurance Services segment includes
the operations of Travelers Property Casualty Corp. ("TAP"), an 82% owned
subsidiary of the Company, and its subsidiary and affiliated property-casualty
insurance companies, which provide a wide range of commercial and personal
property and casualty insurance products and services to businesses, government
units, associations and individuals. The Company's Life Insurance Services
segment includes individual life insurance, annuities and pension programs which
are offered primarily through The Travelers Insurance Company, The Travelers
Life and Annuity Company and Primerica Life Insurance Company.
In addition to its four business segments, the Company's Corporate and Other
segment consists of unallocated expenses and earnings primarily related to
interest, corporate administration, and certain corporate investments.
The principal offices of the Company are located at 388 Greenwich Street,
New York, New York 10013 and its telephone number is (212) 816-8000.
S-2
<PAGE>
USE OF PROCEEDS
The net proceeds from the sale of the Depositary Shares offered hereby will
be used for general corporate purposes, which may include capital contributions
to subsidiaries of the Company, the redemption of shares of the Company's
preferred stock, and/or the reduction or refinancing of subsidiary borrowings.
CAPITALIZATION
The following table sets forth the capitalization of the Company at March
31, 1997, and as adjusted to give effect to (i) the issuance and sale of
additional long-term debt of certain subsidiaries of the Company after March 31,
1997 through the date hereof, (ii) the issuance and sale of the Series F
Preferred Stock represented by the Depositary Shares offered hereby, (iii) the
redemption, on July 1, 1997, of all of the outstanding shares of the 9.25%
Preferred Stock, Series D, of the Company, (the "Series D Preferred Stock"), and
(iv) the application of the proceeds from the issuance of such long-term debt
and the Series F Preferred Stock to the repayment of investment banking and
brokerage borrowings, short-term borrowings and the redemption of the Series D
Preferred Stock, as if such transactions had occurred on March 31, 1997.
<TABLE>
<CAPTION>
AT MARCH 31, 1997
------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
<S> <C> <C>
(DOLLARS IN MILLIONS)
Debt:
Investment banking and brokerage borrowings.......................................... $ 3,752 $ 3,527
Short-term borrowings................................................................ 2,112 2,112
Long-term debt....................................................................... 10,882 11,107
----------- -----------
Total debt......................................................................... $ 16,746 $ 16,746
TRV-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trusts holding
solely Junior Subordinated Debt Securities of TRV(1).................................. 1,000 1,000
----------- -----------
TAP-Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trusts holding
solely Junior Subordinated Debt Securities of TAP(2).................................. 900 900
----------- -----------
Stockholders' equity:
Preferred stock at aggregate liquidation value....................................... 675 700
Common stock ($.01 par value; authorized shares: 1,500,000,000; issued shares:
743,142,534 outstanding and as adjusted)........................................... 7 7
Additional paid-in capital........................................................... 7,433 7,433
Retained earnings.................................................................... 7,977 7,977
Treasury stock at cost (102,127,812 shares outstanding and as adjusted).............. (2,614) (2,614)
Unrealized gain (loss) on investment securities...................................... (131) (131)
Other, principally unearned compensation............................................. (489) (489)
----------- -----------
Total stockholders' equity......................................................... 12,858 12,883
----------- -----------
Total capitalization............................................................... $ 31,504 $ 31,529
----------- -----------
----------- -----------
</TABLE>
- ------------------------
(1) The sole asset of Travelers Capital I is $412,372,000 aggregate principal
amount of 8% junior subordinated deferrable interest debentures of the
Company due September 30, 2036. The sole asset of Travelers Capital II is
$412,372,000 aggregate principal amount of 7 3/4% junior subordinated
deferrable interest debentures due December 1, 2036. The sole asset of
Travelers Capital III is $206,186,000 aggregate principal amount of 7 5/8%
junior subordinated deferrable interest debentures due December 1, 2036.
(2) The sole asset of TAP Capital I is $824,743,000 aggregate principal amount
of 8.08% junior subordinated deferrable interest debentures of TAP due April
30, 2036. The sole asset of TAP Capital II is $103,093,000 aggregate
principal amount of 8% junior subordinated deferrable interest debentures of
TAP due May 15, 2036.
S-3
<PAGE>
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED ----------------------------
MARCH 31, 1997 1996 1995 1994 1993 1992
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges
and preferred stock dividends................................................... 2.45 2.30 2.09 2.12 2.64 2.57
</TABLE>
The ratio of earnings to combined fixed charges and preferred stock
dividends has been computed by dividing earnings from continuing operations
before income taxes and fixed charges by the combined fixed charges and
preferred stock dividends. For purposes of these ratios, fixed charges consist
of interest expense and that portion of rentals deemed representative of the
appropriate interest factor.
DESCRIPTION OF SERIES F PREFERRED STOCK
GENERAL
The following description of the Series F Preferred Stock offered hereby
supplements, and to the extent inconsistent therewith replaces, the description
of the general terms and provisions of the Preferred Stock set forth in the
Prospectus, to which reference is hereby made. The following summary of the
terms and provisions of the Series F Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to the Company's Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation")
and the Certificate of Designation of the Series F Preferred Stock (the
"Certificate of Designation").
Pursuant to action of the Board of Directors of the Company, the shares of
Series F Preferred Stock represented by the Depositary Shares constitute a
single series of Preferred Stock. As used herein the term "Board of Directors"
means the Board of Directors of the Company and includes any duly authorized
committee thereof. The Series F Preferred Stock is not convertible into shares
of any other class or series of stock of the Company. Shares of Series F
Preferred Stock have no preemptive rights. Any shares of Series F Preferred
Stock that are surrendered for redemption will be returned to the status of
authorized and unissued Preferred Stock.
BankBoston N.A. is the registrar, transfer agent and dividend disbursing
agent for the shares of Series F Preferred Stock and also serves as the
Depositary for the Series F Preferred Stock.
VOTING RIGHTS
Holders of Series F 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 F
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 F 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 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 F 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 F Preferred Stock will have one vote for each share held.
S-4
<PAGE>
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 F 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 F 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 F Preferred Stock) so as to
adversely affect the powers, preferences or rights of the holders of shares of
Series F Preferred Stock; provided, however, that if such creation or such
alteration or change would adversely affect the powers, preferences or rights of
one or more, but not all, series of Preferred Stock at the time outstanding,
such alteration or change shall require consent of the holders of shares
entitled to cast at least two-thirds of the votes entitled to be cast by the
holders of all of the shares of all such series so affected, voting as a class.
DIVIDENDS
Holders of shares of Series F 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 6.365% per annum.
Dividends on shares of Series F Preferred Stock will be payable quarterly on
March 1, June 1, September 1 and December 1 of each year, commencing September
1, 1997, for each of the quarterly periods beginning February 15, May 15, August
15 and November 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 F Preferred Stock will be cumulative from the date of
initial issuance of shares of Series F Preferred Stock. Dividends 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 F 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 of the
Company ranking on a parity as to dividends with the shares of Series F
Preferred Stock, then in making any dividend payment on account of arrears on
the Series F Preferred Stock or such other class or series of Preferred Stock,
the Company will make payments ratably upon all outstanding shares of Series F
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 F
Preferred Stock and such other class or series of preferred stock to the date of
such dividend payment.
Tax law proposals have been released that may affect holders of the Series F
Preferred Stock that are corporations owning less than 20% (by vote and value)
of the stock of the Company. Such proposals would reduce the dividends-received
deduction applicable to the Series F Preferred Stock held by such holders from
70% to 50%. On June 9, 1997, House Ways and Means Committee chairman Bill Archer
proposed certain amendments (the "Archer Bill") to the Internal Revenue Code of
1986, as amended (the "Code"), that did not contain a provision to reduce such
dividends-received deduction. The Company cannot predict, however, whether the
Archer Bill will be enacted in its current form or whether other legislation
will be enacted which could reduce such dividends-received deduction.
If, prior to 18 months after the date of the original issuance of the Series
F Preferred Stock, one or more amendments to the Code are enacted that reduce
the percentage of the dividends-received deduction (currently 70%) as specified
in section 243(a)(1) of the Code or any successor provision (the
"Dividends-Received Percentage"), certain adjustments may be made in respect of
the dividends payable by the Company, and Post Declaration Date Dividends and
Retroactive Dividends (as such terms are defined below) may become payable, as
described below.
S-5
<PAGE>
The amount of each dividend payable (if declared) per share of Series F
Preferred Stock for dividend payments made on or after the effective date of
such change in the Code will be adjusted by multiplying the amount of the
dividend payable described above (before adjustment) by the following fraction
(the "DRD Formula"), and rounding the result to the nearest cent (with one-half
cent rounded up):
1- .35(1- .70)
--------------------------------------------------
1- .35(1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends-Received
Percentage (expressed as a decimal) applicable to the dividend in question;
provided, however, that if the Dividends-Received Percentage applicable to the
dividend in question shall be less than 50%, then the DRP shall equal .50. No
amendment to the Code, other than a change in the percentage of the
dividends-received deduction set forth in section 243(a)(1) of the Code or any
successor provision thereto, will give rise to an adjustment. Notwithstanding
the foregoing provisions, if, with respect to any such amendment, the Company
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by the Company or a private letter ruling or similar form of
authorization from the Internal Revenue Service ("IRS") to the effect that such
amendment does not apply to a dividend payable on the Series F Preferred Stock,
then such amendment will not result in the adjustment provided for pursuant to
the DRD Formula with respect to such dividend. The opinion referenced in the
previous sentence shall be based upon the legislation amending or establishing
the DRP or upon a published pronouncement of the IRS addressing such
legislation. Unless the context otherwise requires, references to dividends in
this Prospectus Supplement and the accompanying Prospectus mean dividends as
adjusted by the DRD Formula. The Company's calculation of the dividends payable,
as so adjusted and as certified accurate as to calculation and reasonable as to
method by the independent certified public accountants then regularly engaged by
the Company, shall be final and not subject to review absent manifest error.
Notwithstanding the foregoing, if any such amendment to the Code is enacted
after the dividend payable on a dividend payment date has been declared, the
amount of the dividend payable on such dividend payment date will not be
increased; instead, additional dividends (the "Post Declaration Date Dividends")
equal to the excess, if any, of (x) the product of the dividend paid by the
Company on such dividend payment date and the DRD Formula (where the DRP used in
the DRD Formula would be equal to the greater of the Dividend-Received
Percentage applicable to the dividend in question and .50) over (y) the dividend
paid by the Company on such dividend payment date, will be payable (if declared)
to holders of Series F Preferred Stock on the record date applicable to the next
succeeding dividend payment date or, if the Series F Preferred Stock is called
for redemption prior to such record date, to holders of Series F Preferred Stock
on the applicable redemption date, as the case may be, in addition to any other
amounts payable on such date.
If any such amendment to the Code is enacted and the reduction in the
Dividends-Received Percentage retroactively applies to a dividend payment date
as to which the Company previously paid dividends on the Series F Preferred
Stock (each, an "Affected Dividend Payment Date"), the Company will pay (if
declared) additional dividends (the "Retroactive Dividends") to holders of
Series F Preferred Stock on the record date applicable to the next succeeding
dividend payment date (or, if such amendment is enacted after the dividend
payable on such dividend payment date has been declared, to holders of Series F
Preferred Stock on the record date following the date of enactment) or, if the
Series F Preferred Stock is called for redemption prior to such record date, to
holders of Series F Preferred Stock on the applicable redemption date, as the
case may be, in an amount equal to the excess of (x) the product of the dividend
paid by the Company on each Affected Dividend Payment Date and the DRD Formula
(where the DRP used in the DRD Formula would be equal to the greater of the
Dividends-Received Percentage and .50 applied to each Affected Dividend Payment
Date) over (y) the sum of the dividend paid by the Company on each Affected
Dividend Payment Date. The Company will only make one payment of Retroactive
Dividends for any such amendment. Notwithstanding the foregoing provisions, if,
with respect to any such amendment, the Company receives either an unqualified
opinion of nationally recognized
S-6
<PAGE>
independent tax counsel selected by the Company or a private letter ruling or
similar form of authorization from the IRS to the effect that such amendment
does not apply to a dividend payable on an Affected Dividend Payment Date for
the Series F Preferred Stock, then such amendment will not result in the payment
of Retroactive Dividends with respect to such Affected Dividend Payment Date.
The opinion referenced in the previous sentence shall be based upon the
legislation amending or establishing the DRP or upon a published pronouncement
of the IRS addressing such legislation.
Notwithstanding the foregoing, no adjustment in the dividends payable by the
Company shall be made, and no Post Declaration Date Dividends or Retroactive
Dividends shall be payable by the Company, in respect of the enactment of any
amendment to the Code 18 months or more after the date of original issuance of
the Series F Preferred Stock that reduces the Dividends-Received Percentage.
In the event that the amount of dividends payable per share of the Series F
Preferred Stock is adjusted pursuant to the DRD Formula and/or Post Declaration
Date Dividends or Retroactive Dividends are to be paid, the Company will give
notice of each such adjustment and, if applicable, any Post Declaration Date
Dividends and Retroactive Dividends to the holders of Series F Preferred Stock.
OPTIONAL REDEMPTION
The Series F Preferred Stock is not subject to any mandatory redemption,
pursuant to a sinking fund or otherwise. The Series F Preferred Stock is not
redeemable prior to June 16, 2007. On or after such date the Series F 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 a redemption price
equal to $250.00 per share (equivalent to $50 per Depositary Share), plus
accrued and accumulated but unpaid dividends to but excluding the date fixed for
redemption. Dividends will cease to accrue from and after the redemption date on
shares of Series F Preferred Stock so called for redemption, and all rights 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
the Series F Preferred Stock have not been paid or declared and set apart for
payment, 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 F Preferred Stock may not
be redeemed in part and the Company may not purchase or acquire any shares of
Series F Preferred Stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Series F Preferred Stock. If fewer
than all the outstanding shares of Series F Preferred Stock are to be redeemed,
the Company will select those to be redeemed by lot or PRO RATA or by any other
method as may be determined by the Board of Directors to be equitable.
LIQUIDATION PREFERENCE
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of shares of Series F 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 F 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 F Preferred Stock as to rights upon liquidation,
dissolution or winding up or (ii) shares of Common Stock, liquidating
distributions in the amount of $250.00 per share (equivalent to $50.00 per
Depositary Share), 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 F 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 F Preferred Stock and of any other shares of stock
of the Company ranking as to any such distribution on a parity with the Series F
Preferred Stock the full preferential amount to which they are entitled, then
such assets shall be distributed ratably among the shares of all Series F
Preferred Stock and of such other shares in accordance with the respective
preferential amounts (including unpaid cumulative dividends, if any) payable
with respect thereto.
S-7
<PAGE>
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The Company will issue receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent one-fifth ( 1/5th) of a share of Series F
Preferred Stock. The shares of Series F Preferred Stock represented by
Depositary Shares will be deposited under the Deposit Agreement (the "Deposit
Agreement") among the Company, BankBoston N.A. (the "Depositary") and the
holders from time to time of the Depositary Receipts. Subject to the terms of
the Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Series F Preferred Stock
represented by such Depositary Share, to all the rights and preferences of the
Series F Preferred Stock represented thereby (including dividend, voting,
redemption and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement. Immediately following the issuance and
delivery of the Series F Preferred Stock by the Company to the Depositary as
contemplated in the Deposit Agreement, the Depositary will issue the Depositary
Receipts representing the Depositary Shares to the Underwriters. A copy of the
form of Deposit Agreement, including the form of Depositary Receipt, is filed as
an exhibit to the Registration Statement of which the Prospectus is a part, and
the following summary is qualified in its entirety by reference thereto.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all dividends and other cash distributions
received in respect of the Series F Preferred Stock to the record holders of
Depositary Shares in proportion to the number of such Depositary Shares owned by
such holders, subject to certain obligations of holders to file proofs,
certificates and other information and to pay certain charges and expenses to
the Depositary.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, as nearly as practicable in proportion to the number of such
Depositary Shares held by them, subject to certain obligations of holders to
file proofs, certificates and other information and to pay certain charges and
expenses to the Depositary, unless the Depositary in consultation with the
Company determines that it is not feasible to make such distribution in which
case the Depositary may, with the approval of the Company, adopt such method as
it deems practicable including sale of such property and distribution of the net
proceeds from such sale to the holders of Depositary Shares.
TAXES AND OTHER GOVERNMENTAL CHARGES
The amount paid as dividends or otherwise distributable by the Depositary
with respect to the Depositary Shares or the underlying shares of Series F
Preferred Stock will be reduced by any amounts required to be withheld by the
Company or the Depositary on account of taxes or other governmental charges. The
Depositary may refuse to make any such payment or distribution, or any transfer,
exchange or withdrawal of any Depositary Shares or shares of Series F Preferred
Stock, until such taxes or other governmental charges are paid.
REDEMPTION OF DEPOSITARY SHARES
If the Company redeems the Series F Preferred Stock represented by the
Depositary Shares in whole or in part, the Depositary will redeem as of the same
redemption date the number of Depositary Shares representing shares of the
Series F Preferred Stock so redeemed, upon payment by the Company to the
Depositary of the redemption price of such shares of Series F Preferred Stock to
be redeemed plus an amount equal to any accrued and unpaid dividends thereon to
the date fixed for redemption. See "Description of Series F Preferred
Stock--Optional Redemption" above. The redemption price per
S-8
<PAGE>
Depositary Share will be equal to 1/5th of the redemption price per share
payable with respect to the Series F Preferred Stock. If fewer than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot, PRO RATA (subject to rounding to avoid fractions of
Depositary Shares) or by any other equitable method determined by the Company.
WITHDRAWAL OF SERIES F PREFERRED STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Depositary and upon payment of the taxes, charges and fees provided for in
the Deposit Agreement and subject to the terms thereof, the holder of the
Depositary Shares evidenced thereby is entitled to delivery of the number of
whole shares of the Series F Preferred Stock and any money or property
represented by such Depositary Shares. Holders of Depositary Shares will be
entitled to receive whole shares of Series F Preferred Stock, but holders of
such whole shares of Series F Preferred Stock will not thereafter be entitled to
deposit such shares with the Depositary or to receive Depositary Shares
therefor. Any shares of Series F Preferred Stock withdrawn upon surrender of
Depositary Receipts by a holder thereof will be represented by a global
certificate in book-entry form deposited with DTC. See "Book-Entry Procedures."
If the Depositary Receipts delivered by the holder evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
number of whole shares of Series F Preferred Stock to be withdrawn, the
Depositary will deliver to such holder, or upon his or her order, at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares. The Company will apply to list the Depositary Shares on the New York
Stock Exchange, but does not expect that there will be any public trading market
for the shares of Series F Preferred Stock, except as represented by the
Depositary Shares.
VOTING THE SERIES F PREFERRED STOCK
Because each Depositary Share represents ownership of 1/5th of a share of
Series F Preferred Stock, holders of Depositary Shares will be entitled to
1/5th of a vote per Depositary Share under the limited circumstances in which
the holders of Series F Preferred Stock are entitled to vote.
Upon receipt of notice of any meeting at which the holders of shares of
Series F Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to the Series F Preferred Stock. Each record holder
of such Depositary Shares on the record date (which will be the same date as the
record date for the Series F Preferred Stock) will be entitled to instruct the
Depositary as to the exercise of the voting rights pertaining to the number of
shares of Series F Preferred Stock represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the number
of shares (including fractional shares) of Series F Preferred Stock represented
by such Depositary Shares in accordance with such instructions, and the Company
will agree to take all actions reasonably deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will vote all shares of
Series F Preferred Stock held by it proportionately with instructions received,
to the extent it does not receive specific instructions from the holders of
Depositary Shares representing shares of the Series F Preferred Stock.
BOOK-ENTRY PROCEDURES
Depositary Shares will be issued in book-entry form in the form of a single
global Depositary Receipt deposited with, or on behalf of, DTC and registered in
the name of DTC or its nominee. Except as set forth below, the global Depositary
Receipt may not be transferred except as a whole by DTC to a nominee of DTC or
by a nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee to
a successor of DTC or a nominee of such successor.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a
S-9
<PAGE>
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). DTC holds
securities that its participants ("Participants") deposit with DTC. DTC also
facilitates the settlement among Participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations ("Direct Participants"). DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. (the "NASD"). Access to the DTC system is also available to
others, such as securities brokers and dealers, banks and trust companies that
clear transactions through or maintain a direct or indirect custodial
relationship with a Direct Participant either directly or indirectly. The rules
applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
DTC's nominee for all purposes will be considered the sole owner or holder
of the Depositary Shares held in book-entry form. Owners of beneficial interests
in the global Depositary Receipt will not be entitled to have Depositary Shares
registered in their names, will not receive or be entitled to receive physical
delivery of Depositiary Shares in definitive form, and will not be considered
the holders thereof under the Certificate of Incorporation or the Deposit
Agreement.
Neither the Company nor the Depositary will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the global Depositary Receipt, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interest.
A holder's ownership of Depositary Shares issued in book-entry form will be
recorded on or through the records of the brokerage firm or other entity that
maintains that holder's account. In turn, the total number of Depositary Shares
held by an individual brokerage firm or other entity for its clients will be
maintained on the records of DTC in the name of that brokerage firm or other
entity (or in the name of a Participant that acts as agent for the holder's
brokerage firm or other entity if it is not a Participant). Therefore, a holder
must rely upon the records of the holder's brokerage firm or other entity to
evidence the holder's ownership of Depositary Shares and transfer of ownership
of Depositary Shares may be effected only through the brokerage firm or other
entity that maintains the holder's account.
Dividends or other distributions payable in respect of Depositary Shares
will be paid by the Depositary to DTC. DTC will be responsible for crediting the
amount of payments that it receives to the accounts of the Participants in
accordance with their respective standard procedures, which currently provide
for payment in same-day funds. Each Participant will be responsible for
disbursing the payment for which it is so credited to the holders that it
represents and to each brokerage firm or other entity for which it acts as
agent. Each such brokerage firm or other entity will be responsible for
disbursing funds to the holders that it represents.
If DTC is at any time unwilling or unable to continue as depository in
respect of a global Depositary Receipt and a successor depository is not
appointed within 90 days, the Company will issue Depositary Receipts in
definitive form in exchange for the global Depositary Receipt. In addition, the
Company may determine at any time not to have Depositary Shares represented by a
global Depositary Receipt and, in such event, will issue Depositary Shares in
definitive form in exchange for such global Depositary Receipt. In such
instance, an owner of a beneficial interest in the global Depositary Receipt
will be entitled to have Depositary Shares equal in aggregate amount to that
beneficial interest registered in its name and will be entitled to physical
delivery of a definitive certificate evidencing such Depositary Shares. The
registered holder of Depositary Shares will be entitled to receive the dividends
or other distributions or, if applicable, the redemption price payable in
respect of such Depositary Shares, upon surrender of the Depositary Receipt
evidencing such Depositary Shares to the Depositary in accordance with the
procedures set forth in the Deposit Agreement.
S-10
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
each of the Underwriters named below has severally agreed to purchase, and the
Company has agreed to sell to each Underwriter, the number of Depositary Shares
set forth opposite its name:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER DEPOSITARY SHARES
- -------------------------------------------------- ---------------------------
<S> <C>
Smith Barney Inc.................................. 2,000,000
Lehman Brothers Inc............................... 2,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................ 2,000,000
Morgan Stanley & Co. Incorporated................. 2,000,000
----------
Total........................................... 8,000,000
----------
----------
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Depositary Shares are subject
to the approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters are committed to take and pay for all of the
Depositary Shares if any are taken.
The Underwriters propose to offer part of the Depositary Shares directly to
the public at the public offering price set forth on the cover page hereof and
to certain dealers at such price less a concession not in excess of $.60 per
Depositary Share. The Underwriters may allow, and such dealers may reallow, a
concession, not in excess of $.30 per Depositary Share, on sales to certain
other dealers. After the initial public offering, the public offering price and
the concessions may be changed by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, or to
contribute to payments the Underwriters may be required to make in respect
thereof.
In connection with the offering of the Depositary Shares and in accordance
with applicable law and industry practice, the Underwriters may over-allot or
effect transactions which stabilize, maintain or otherwise affect the market
price of the Depositary Shares at levels above those which might otherwise
prevail in the open market, including by entering stabilizing bids, effecting
syndicate covering transactions or imposing penalty bids. A stabilizing bid
means the placing of any bid, or the effecting of any purchase, for the purpose
of pegging, fixing or maintaining the price of a security. A syndicate covering
transaction means the placing of any bid on behalf of the underwriting syndicate
or the effecting of any purchase to reduce a short position created in
connection with the offering. A penalty bid means an arrangement that permits
the managing underwriter to reclaim a selling concession from a syndicate member
in connection with the offering when Depositary Shares originally sold by the
syndicate member are purchased in syndicate covering transactions. Such
transactions may be effected on the New York Stock Exchange, in the
over-the-counter market or otherwise. The Underwriters are not required to
engage in any of these activities. Any such activities, if commenced, may be
discontinued at any time.
Smith Barney Inc. ("Smith Barney") is an indirect, wholly owned subsidiary
of the Company. The offering of Depositary Shares will comply with the
requirements of Rule 2720 of the Conduct Rules of the NASD regarding a NASD
member firm's underwriting securities of an affiliate. Certain of the
Underwriters and their affiliates have in the past provided, and may in the
future provide, investment and/or commercial banking services to the Company and
its subsidiaries in the ordinary course of business.
Following the initial distribution of the Depositary Shares, Smith Barney
may offer and sell Depositary Shares in the course of its business as a
broker-dealer (subject to obtaining any necessary approval of the New York Stock
Exchange for any such offers and sales). Smith Barney may act as principal or
agent in such transactions. This Prospectus Supplement and the Prospectus may be
used by Smith Barney in
S-11
<PAGE>
connection with such transactions. Such sales, if any, will be made at varying
prices related to prevailing market prices at the time of sale. Smith Barney is
not obligated to make a market in the Depositary Shares and may discontinue any
market-making activities at any time without notice.
Following the initial distribution of the Depositary Shares, application
will be made to list the Depositary Shares on the New York Stock Exchange.
LEGAL MATTERS
The validity of the Preferred Stock and the Depositary Shares and certain
matters relating thereto will be passed upon for the Company by Charles O.
Prince, III. Certain legal matters will be passed upon for the Underwriters by
Dewey Ballantine, New York, New York. Mr. Prince, Executive 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 common stock of the Company.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1996 and 1995, and for each of the years in the three-year period
ended December 31, 1996, incorporated by reference or included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, have been
incorporated by reference herein, in reliance upon the reports (also
incorporated by reference herein) of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing. The combined financial statements as of and for the
year ended December 31, 1995 and 1994 of The Aetna Casualty and Surety Company
and The Standard Fire Insurance Company and their subsidiaries included in the
Company's Current Report on Form 8-K dated April 2, 1996, as amended, have been
incorporated by reference herein, in reliance upon the report (also incorporated
by reference herein) of KPMG Peat Marwick LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
S-12
<PAGE>
PROSPECTUS
TRAVELERS GROUP INC.
PREFERRED STOCK
DEPOSITARY SHARES
JUNIOR SUBORDINATED DEBT SECURITIES
------------------
TRAVELERS CAPITAL IV
TRAVELERS CAPITAL V
TRAVELERS CAPITAL VI
TRAVELERS CAPITAL VII
TRUST PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
TRAVELERS GROUP INC.
----------------
Travelers Group Inc., a Delaware corporation (the "Company"), may offer,
from time to time, (i) its unsecured junior subordinated debt securities (the
"Junior Subordinated Debt Securities"), consisting of debentures, notes or other
evidences of indebtedness, in one or more series, and (ii) shares of its
preferred stock, $1.00 par value (the "Preferred Stock"), which may be issued in
the form of depositary shares (the "Depositary Shares") evidenced by depositary
receipts, in amounts, at prices and on terms to be determined at or prior to the
time of any such offering. The Company's obligations under the Junior
Subordinated Debt Securities will be subordinate and junior in right of payment
to certain other indebtedness of the Company as described herein or as may be
described in an accompanying Prospectus Supplement (the "Prospectus
Supplement").
Travelers Capital IV, Travelers Capital V, Travelers Capital VI and
Travelers Capital VII (each, a "TRV Trust" and, together, the "TRV Trusts"),
each a statutory business trust formed under the laws of the State of Delaware,
may offer, from time to time, trust preferred securities, representing undivided
beneficial interests in the assets of the respective TRV Trust ("Preferred
Securities") with the payment of periodic cash distributions ("distributions")
and payments on liquidation, redemption or otherwise of such Preferred
Securities guaranteed (each, a "Guarantee") on a subordinated basis by the
Company to the extent described herein. See "Description of Guarantees." The
Company's obligations under the Guarantees will rank PARI PASSU with the most
senior preferred or preference stock now or hereafter issued by the Company. See
"Description of Guarantees--Status of Guarantees." Junior Subordinated Debt
Securities may be issued and sold from time to time in one or more series by the
Company to a TRV Trust, or a trustee of such trust, in connection with the
investment of the proceeds from the offering of Preferred Securities and Common
Securities (as defined herein) of such TRV Trust, but the Company does not
intend to issue and sell the Junior Subordinated Debt Securities directly to
other purchasers, including the general public. The Junior Subordinated Debt
Securities purchased by a TRV Trust may be subsequently distributed PRO RATA to
holders of Preferred Securities and Common Securities in connection with the
dissolution of such TRV Trust upon the occurrence of certain events as may be
described in an accompanying Prospectus Supplement. The Guarantees, when taken
together with the Company's obligations under the Junior Subordinated Debt
Securities, the Indenture (as defined herein) and the Declaration (as defined
herein), including its obligations to pay costs, expenses, debts and liabilities
of such TRV Trust (other than with respect to the Preferred Securities and the
Common Securities), will provide a full and unconditional guarantee on a
subordinated basis by the Company of payments due on Preferred Securities.
(CONTINUED ON NEXT PAGE)
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.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------------
SMITH BARNEY INC.
May 22, 1997
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Specific terms of the Junior Subordinated Debt Securities of any series, the
Preferred Securities of any TRV Trust, the Preferred Stock of any series or the
Depositary Shares in respect of which this Prospectus is being delivered (the
"Offered Securities") will be set forth in a Prospectus Supplement with respect
to such Offered Securities, which will describe, without limitation and where
applicable, the following: (i) in the case of Junior Subordinated Debt
Securities, the specific designation, aggregate principal amount, denomination,
maturity, premium, if any, redemption or sinking fund provisions, if any,
interest rate (which may be fixed or variable), if any, the time and method of
calculating interest payments, if any, dates on which premium, if any, and
interest, if any, will be payable, the right of the Company, if any, to defer
payment of interest on the Junior Subordinated Debt Securities and the maximum
length of such deferral period, the initial public offering price, subordination
terms, and any listing on a securities exchange and other specific terms of the
offering of Junior Subordinated Debt Securities, (ii) in the case of Preferred
Securities, the designation, number of securities, liquidation preference per
security, initial public offering price, any listing on a securities exchange,
distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall accrue,
any voting rights, any redemption or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Junior Subordinated
Debt Securities, and (iii) in the case of Preferred Stock and Depositary Shares,
the specific designation, the number of shares, any dividend (including the
method of calculating payment of dividends), seniority, liquidation, redemption,
voting and other rights, any terms for any conversion or exchange into shares of
the common stock, $.01 par value, of the Company (the "Common Stock"), any
listing on a securities exchange, the initial public offering price and any
other terms.
If as set forth in the applicable Prospectus Supplement, the Company has the
right to defer payments of interest on a series of Junior Subordinated Debt
Securities by extending the interest payment period of such series of Junior
Subordinated Debt Securities (each, an "Extension Period"), distributions on the
corresponding series of Preferred Securities will also be deferred.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; PROVIDED, HOWEVER, that the aggregate
initial public offering price of all Offered Securities shall not exceed
$1,000,000,000. Any Prospectus Supplement relating to any series of Offered
Securities will contain information concerning certain United States federal
income tax considerations, if applicable, to the Offered Securities.
The Company or any of the TRV Trusts may sell the Offered Securities
directly, through agents designated from time to time or through underwriters or
dealers. See "Plan of Distribution." If any agents of the Company, any of the
TRV Trusts or any underwriters or dealers are involved in the sale of the
Offered Securities, the names of such agents, underwriters or dealers and any
applicable commissions and discounts will be set forth in any related Prospectus
Supplement.
This Prospectus, together with an appropriate Prospectus Supplement, may be
used by Smith Barney Inc. ("Smith Barney"), an indirect wholly owned subsidiary
of the Company and an affiliate of the TRV Trusts, 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. Smith Barney may
act as principal or agent in such transactions.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE
COVERING TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
2
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE TRV
TRUSTS, OR ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE DELIVERY OF THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE THEREUNDER SHALL,
UNDER ANY CIRCUMSTANCE, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY OR ANY OF THE TRV TRUSTS SINCE THE DATE HEREOF OR
THEREOF. THIS PROSPECTUS AND ANY RELATED PROSPECTUS SUPPLEMENT DO NOT 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.
FOR NORTH CAROLINA INVESTORS: THE COMMISSIONER OF INSURANCE OF THE STATE OF
NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS SUCH
COMMISSIONER RULED UPON THE ACCURACY OR THE ADEQUACY OF THIS PROSPECTUS.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports 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;
Citicorp 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 Commission also maintains a site on the World Wide Web, the address
of which is http://www.sec.gov, that contains reports, proxy and information
statements and other information regarding issuers, such as the Company, that
file electronically with the Commission. The Company's common stock is listed on
the New York Stock Exchange, Inc. (the "NYSE") and The Pacific Exchange, Inc.
(the "PCX"), and such reports, proxy statements, and other information can also
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005, and The Pacific Exchange, Inc., 301 Pine
Street, San Francisco, California 94104, and 233 South Beaudry Avenue, Los
Angeles, California 90012.
The Company and the TRV Trusts have filed with the Commission a Registration
Statement on Form S-3 (the "Registration Statement," which term shall include
all amendments, exhibits, annexes and schedules thereto) pursuant to the
Securities Act of 1933, as amended (the "Act"), with respect to the Offered
Securities. This Prospectus does not contain all the information set forth in
the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company, the TRV Trusts and 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.
No separate financial statements of the TRV Trusts have been included or
incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the Preferred Securities
because (i) all of the voting securities of the TRV Trusts will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) the TRV Trusts have no independent operations but exist for the sole
purpose of issuing securities representing undivided beneficial interests in
their respective assets and investing the proceeds thereof in Junior
Subordinated Debt Securities issued by the Company, and (iii) the obligations of
the TRV Trusts under the Preferred Securities are fully and unconditionally
guaranteed by the Company to the extent that the respective TRV Trust has funds
available to meet such obligations. See "Description of Junior Subordinated Debt
Securities" and "Description of Guarantees."
3
<PAGE>
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 on Form 10-K of the Company for the fiscal year ended
December 31, 1996;
2. Quarterly Report on Form 10-Q of the Company for the quarter ended
March 31, 1997;
3. Current Reports on Form 8-K of the Company, dated January 19, 1996,
as amended, April 2, 1996, as amended, and June 7, 1996; and
4. The Company's Registration Statement on Form 8-B, dated May 10, 1988,
describing the Common Stock, including any amendments or reports filed for
the purpose of updating such description.
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 Smith Barney 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
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 Travelers Group
Inc., 388 Greenwich Street, New York, New York 10013; Attention: Treasurer;
telephone (212) 816-8000.
4
<PAGE>
THE COMPANY
The Company is a financial services holding company engaged, through its
subsidiaries, principally in four business segments: Investment Services,
Consumer Finance Services, Property & Casualty Insurance Services and Life
Insurance Services.
The Company's Investment Services segment consists of investment banking,
asset management, brokerage and other financial services provided through Smith
Barney Holdings Inc. and its subsidiaries. The Company's Consumer Finance
Services segment includes consumer lending services conducted primarily under
the name "Commercial Credit" and credit-related insurance and credit card
services. The Company's Property & Casualty Insurance Services segment includes
the operations of Travelers Property Casualty Corp., an 82% owned subsidiary of
the Company, and its subsidiary and affiliated property-casualty insurance
companies, which provide a wide range of commercial and personal property and
casualty insurance products and services to businesses, government units,
associations and individuals. The Company's Life Insurance Services segment
includes individual life insurance, annuities and pension programs which are
offered primarily through The Travelers Insurance Company, The Travelers Life
and Annuity Company and Primerica Life Insurance Company.
In addition to its four business segments, the Company's Corporate and Other
segment consists of unallocated expenses and earnings primarily related to
interest, corporate administration, and certain corporate investments.
The principal offices of the Company are located at 388 Greenwich Street,
New York, New York 10013 and its telephone number is (212) 816-8000.
TRV TRUSTS
Each of the TRV Trusts is a statutory business trust formed under Delaware
law pursuant to (i) a declaration of trust executed by the Company, as sponsor
for such trust (the "Sponsor"), and the trustees of such trust dated (x) with
respect to Travelers Capital IV and Travelers Capital V, as of September 19,
1996, and (y) with respect to Travelers Capital VI and Travelers Capital VII, as
of May 14, 1997, and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware on (x) with respect to Travelers
Capital IV and Travelers Capital V, September 19, 1996 and (y) with respect to
Travelers Capital VI and Travelers Capital VII, May 14, 1997. Each such
declaration will be amended and restated in its entirety (as so amended and
restated, each a "Declaration") substantially in the form filed as an exhibit to
the Registration Statement of which this Prospectus forms a part. Each of the
TRV Trusts exists for the exclusive purposes of (i) issuing the Preferred
Securities and common securities representing undivided beneficial interests in
the assets of the Trust (the "Common Securities" and, together with the
Preferred Securities, the "Trust Securities"), (ii) investing the gross proceeds
from the sale of the Trust Securities in the Junior Subordinated Debt Securities
and (iii) engaging in only those other activities necessary or incidental
thereto. All of the Common Securities will be directly or indirectly owned by
the Company. The Common Securities will rank PARI PASSU, and payments will be
made thereon PRO RATA, with the Preferred Securities, except that, upon an event
of default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Company will directly or indirectly acquire Common
Securities in an aggregate liquidation amount equal to 3% or more of the total
capital of each TRV Trust.
Each TRV Trust has a term of approximately 55 years but may terminate
earlier, as provided in each Declaration. Each TRV Trust's business and affairs
will be conducted by the trustees of each applicable Trust (the "TRV Trustees")
appointed by the Company as the direct or indirect holder of all the Common
Securities. The holder of the Common Securities will be entitled to appoint,
remove or replace any of, or increase or reduce the number of, the TRV Trustees
of the TRV Trusts, except in certain limited circumstances. The duties and
obligations of the TRV Trustees shall be governed by the Declaration of such TRV
Trust. Each TRV Trust will have two TRV Trustees (the "Regular Trustees") who
are employees or officers of or who are affiliated with the Company. One TRV
Trustee of each TRV Trust will be a financial institution that is not affiliated
with the Company and that has a specified minimum amount of aggregate capital,
surplus, and undivided profits of not less than $50,000,000, which shall act as
property trustee and as indenture trustee for the purposes of compliance with
the provisions of Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"), pursuant to the terms set forth in a Prospectus Supplement (the
"Institutional Trustee"). In addition, unless the Institutional Trustee
maintains a principal place of business in the State of Delaware and otherwise
meets the requirements of applicable law, one TRV Trustee of each TRV Trust will
have a principal place of business or
5
<PAGE>
reside in the State of Delaware (the "Delaware Trustee"). The Company will pay
all fees and expenses related to the TRV Trusts and the offering of the Trust
Securities.
The office of the Delaware Trustee for each of the TRV Trusts is Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware 19801. The
address for each TRV Trust is c/o the Company, the Sponsor of the TRV Trusts, at
the Company's corporate headquarters located at 388 Greenwich Street, New York,
New York 10013, telephone (212) 816-8000.
USE OF PROCEEDS
All of the net proceeds from the sale of any Preferred Securities offered
hereby will be invested by the TRV Trust in Junior Subordinated Debt Securities.
The Company will use the proceeds from the sale of the Junior Subordinated Debt
Securities to the TRV Trusts, and the proceeds from the sale of any Preferred
Stock or Depositary Shares offered hereby, for general corporate purposes, which
may include capital contributions to subsidiaries of the Company, the redemption
of shares of the Company's preferred stock, and/or the reduction or refinancing
of borrowings of the Company or its subsidiaries.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED YEAR ENDED DECEMBER 31,
MARCH 31, ----------------------------
1997 1996 1995 1994 1993 1992
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges
and preferred stock dividends 2.45 2.30 2.09 2.12 2.64 2.57
</TABLE>
The ratio of earnings to combined fixed charges and preferred stock
dividends has been computed by dividing earnings from continuing operations
before income taxes and fixed charges by the combined fixed charges and
preferred stock dividends. For purposes of these ratios, fixed charges consist
of interest expense and that portion of rentals deemed representative of the
appropriate interest factor.
6
<PAGE>
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Junior Subordinated Debt Securities to which any Prospectus Supplement may
relate. The particular terms of the Junior Subordinated Debt Securities offered
by any Prospectus Supplement and the extent, if any, to which such general
provisions may apply to the Junior Subordinated Debt Securities so offered will
be described in the Prospectus Supplement relating to such Junior Subordinated
Debt Securities.
The Junior Subordinated Debt Securities may be issued, from time to time, in
one or more series, under an Indenture, dated as of October 7, 1996 (the
"Indenture"), between the Company and The Chase Manhattan Bank, as trustee (the
"Indenture Trustee"), the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The following summary of certain provisions of the Junior Subordinated Debt
Securities and the Indenture does not purport to be complete and is subject to,
and is qualified in its entirety by express reference to, all of the provisions
of the Indenture, including the definitions therein of certain terms. All
article and section references appearing herein are to articles and sections of
the Indenture, unless otherwise indicated, and capitalized terms which are not
otherwise defined in this Prospectus shall have the meanings specified in the
Indenture.
GENERAL. The Junior Subordinated Debt Securities will be direct, unsecured
obligations of the Company. The Indenture does not limit the amount of Junior
Subordinated Debt Securities which may be issued thereunder, and provides that
Junior Subordinated Debt Securities may be issued thereunder in series up to the
aggregate principal amount which may be authorized from time to time by the
Board of Directors of the Company. (Section 3.1)
Reference is made to the Prospectus Supplement relating to the particular
series of Junior Subordinated Debt Securities being offered thereby for the
following terms and other information: (i) the designation, priority, aggregate
principal amount and authorized denominations; (ii) the percentage of their
principal amount at which such Junior Subordinated Debt Securities will be
issued; (iii) the date on which such Junior Subordinated Debt Securities will
mature; (iv) the rate per annum at which such Junior Subordinated Debt
Securities will bear interest or the method of determination of such rate; (v)
the dates on which such interest will be payable; (vi) the rights, if any, to
defer payments of interest on the Junior Subordinated Debt Securities by
extending the interest payment period, and the maximum duration of such
extensions; (vii) the place or places where payments on such Junior Subordinated
Debt Securities shall be made; (viii) any redemption terms or sinking fund
provisions; (ix) the terms of subordination of Junior Subordinated Debt
Securities; (x) whether Debt Securities issued in fully registered form will be
represented by either a global security delivered to a depositary and recorded
in a book-entry system maintained by such depositary or by a certificate
delivered to the Holder; (xi) the restrictions, if any, applicable to the
exchange of Junior Subordinated Debt Securities of a series of one form for
another of such series and to the offer, sale and delivery of the Junior
Subordinated Debt Securities; (xii) whether and under what circumstances the
Company will pay additional amounts in the event of certain developments with
respect to United States withholding tax or information reporting laws; or
(xiii) other specific terms.
Unless otherwise specified in the applicable Prospectus Supplement, Junior
Subordinated Debt Securities will be issued in fully registered form without
coupons, will be exchangeable for other Junior Subordinated Debt Securities of
the same series, registered in the same name, for a like aggregate principal
amount in authorized denominations, and will be transferable at any time or from
time to time at the Corporate Trust Office of the Indenture Trustee or at any
other office or agency of the Company maintained for that purpose. No charge
will be made to the Holder for any such exchange or transfer except for any tax
or governmental charge incidental thereto.
Unless otherwise described in the applicable Prospectus Supplement, there
are no covenants or provisions contained in the Indenture which afford the
Holders of the Junior Subordinated Debt Securities protection in the event of a
highly leveraged transaction involving the Company.
CONSOLIDATION, MERGER AND SALE OF ASSETS. The Indenture provides that the
Company will not consolidate with or merge into any other corporation or convey,
transfer or lease its assets substantially as an entirety unless (a) the
successor is a corporation organized in the United States and expressly assumes
the due and punctual payment of the principal of (and premium, if any) and
interest on all Junior Subordinated Debt Securities issued thereunder and the
performance of every other covenant of the Indenture on the part of the Company
and (b) immediately thereafter no Event of Default and no event which, after
notice or lapse of time, or both, would become an Event of Default, shall have
happened and be continuing. Upon any such consolidation, merger, conveyance or
transfer, the successor
7
<PAGE>
corporation shall succeed to and be substituted for the Company under the
Indenture and thereafter the predecessor corporation shall be relieved of all
obligations and covenants under the Indenture and the Junior Subordinated Debt
Securities. (Article Eight)
EVENTS OF DEFAULT. The Indenture provides that the following are Events of
Default thereunder with respect to any series of the Junior Subordinated Debt
Securities: (a) default in the payment of the principal of (or premium, if any,
on) any Junior Subordinated Debt Security of such series at its maturity; (b)
default in making a sinking fund payment, if any, when and as the same shall be
due and payable by the terms of the Junior Subordinated Debt Securities of such
series; (c) default for 30 days in the payment of any installment of interest on
any Junior Subordinated Debt Security of such series; (d) default for 90 days
after written notice in the performance of any other covenant in respect of the
Junior Subordinated Debt Securities of such series contained in the Indenture;
(e) certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of the Company; (f) any other
Event of Default provided in the applicable resolution of the Board of Directors
or supplemental indenture under which the Junior Subordinated Debt Securities
are issued; and (g) in the event Junior Subordinated Debt Securities of a series
are issued and sold to a TRV Trust or a trustee of such trust in connection with
the issuance of Trust Securities by such TRV Trust, such TRV Trust shall have
voluntarily or involuntarily dissolved, wound-up its business or otherwise
terminated its existence, except in connection with (i) the distribution of
Junior Subordinated Debt Securities to holders of Trust Securities in
liquidation or redemption of their interests in such TRV Trust upon a Special
Event, (ii) the redemption of all of the outstanding Trust Securities of such
TRV Trust or (iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such TRV Trust. (Section 5.1) The Indenture
Trustee may withhold notice to the Holders of the Junior Subordinated Debt
Securities of any default with respect thereto (except in the payment of
principal, premium or interest) if it considers such withholding to be in the
interests of such Holders. (Section 6.2)
If an Event of Default with respect to the Junior Subordinated Debt
Securities shall have occurred and be continuing, the Indenture Trustee or the
Holders of 25% in aggregate principal amount of the Junior Subordinated Debt
Securities may declare the principal of all the Junior Subordinated Debt
Securities to be due and payable immediately. (Section 5.2)
The Indenture contains a provision entitling the Indenture Trustee to be
indemnified by the Holders before proceeding to exercise any right or power
under the Indenture at the request of any of the Holders. (Section 6.3). The
Indenture provides that the Holders of a majority in principal amount of the
outstanding Junior Subordinated Debt Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the Indenture Trustee,
with respect to the Junior Subordinated Debt Securities. (Section 5.12) The
right of a Holder to institute a proceeding with respect to the Indenture is
subject to certain conditions precedent including notice and indemnity to the
Indenture Trustee, but the Holder has an absolute right to receipt of principal,
premium, if any, and interest on the Junior Subordinated Debt Securities at the
Stated Maturity (or, in the case of redemption, on the Redemption Date) or to
institute suit for the enforcement thereof. (Sections 5.7 and 5.8)
The Holders of not less than a majority in principal amount of the
Outstanding Junior Subordinated Debt Securities may on behalf of the Holders of
all the Junior Subordinated Debt Securities waive any past defaults except (a) a
default in payment of the principal of (or premium, if any) or interest on any
Junior Subordinated Debt Security and (b) a default in respect of a covenant or
provision of the Indenture which cannot be amended or modified without the
consent of the Holder of each affected Junior Subordinated Debt Security;
PROVIDED, HOWEVER, that if the Junior Subordinated Debt Securities are held by a
TRV Trust or a trustee of such trust, such waiver or modification to such waiver
shall not be effective until the holders of a majority in liquidation preference
of Trust Securities of the applicable TRV Trust shall have consented to such
waiver or modification to such waiver; PROVIDED FURTHER, that if the consent of
the Holder of each outstanding Junior Subordinated Debt Security is required,
such waiver shall not be effective until each holder of the Trust Securities of
the applicable TRV Trust shall have consented to such waiver. (Section 5.13)
The Indenture requires the Company to furnish to the Indenture Trustee an
annual statement as to defaults, if any, by the Company under the Indenture.
(Section 10.4)
MODIFICATIONS AND AMENDMENTS. Modifications and amendments to the Indenture
may be made by the Company and the Indenture Trustee with the consent of the
Holders of a majority in principal amount of the Junior Subordinated Debt
Securities at the time outstanding of each series which is affected thereby,
PROVIDED, that no such
8
<PAGE>
modification or amendment may, without the consent of the Holder of each Junior
Subordinated Debt Security affected thereby: (i) modify the terms of payment of
principal, premium, if any, or interest or; or (ii) reduce the percentage of
Holders of Junior Subordinated Debt Securities necessary to modify or amend the
Indenture or waive compliance by the Company with any covenant or past default,
PROVIDED, FURTHER, that if the Junior Subordinated Debt Securities of such
series are held by a TRV Trust or a trustee of such trust, such supplemental
indenture shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the applicable TRV Trust shall have consented
to such supplemental indenture; PROVIDED FURTHER, that if the consent of the
Holder of each outstanding Junior Subordinated Debt Security is required, such
supplemental indenture shall not be effective until each holder of the Trust
Securities of the applicable TRV Trust shall have consented to such supplemental
indenture. (Section 9.2)
DISCHARGE AND DEFEASANCE. The Company may discharge all of its obligations
(except those set forth below) to holders of any series of Junior Subordinated
Debt Securities issued under the Indenture, which Junior Subordinated Debt
Securities have not already been delivered to the Indenture Trustee for
cancellation and which either have become due and payable or are by their terms
due and payable within one year (or are to be called for redemption within one
year) by depositing with the Indenture Trustee an amount certified to be
sufficient to pay when due the principal of and premium, if any, and interest on
all outstanding Junior Subordinated Debt Securities of such series and to make
any mandatory sinking fund payments thereon when due. (Section 4.1)
Unless otherwise specified in the applicable Prospectus Supplement with
respect to the Junior Subordinated Debt Securities of a series, the Company, at
its option, (i) will be discharged from any and all obligations in respect of
the Junior Subordinated Debt Securities of such series (except for certain
obligations to pay all expenses of the applicable TRV Trust, to register the
transfer or exchange of Junior Subordinated Debt Securities of such series, to
replace mutilated, defaced, destroyed, lost or stolen Junior Subordinated Debt
Securities of such series, and to maintain Paying Agents and hold monies for
payment in trust), or (ii) need not comply with certain covenants specified in
the applicable Prospectus Supplement with respect to the Junior Subordinated
Debt Securities of that series, and the occurrence of an event described in
clause (d) under "Events of Default" above with respect to any defeased covenant
and clause (f) of the "Events of Default" above shall no longer be an Event of
Default if, in either case, the Company deposits with the Indenture Trustee, in
trust, money or U.S. Government Obligations that through the payment of interest
thereon and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay all the principal of (and premium, if any) and
any interest on the Junior Subordinated Debt Securities of such series on the
dates such payments are due (which may include one or more redemption dates
designated by the Company) in accordance with the terms of such Junior
Subordinated Debt Securities. Such a trust may only be established, if, among
other things, the Company shall have delivered an Opinion of Counsel, which, in
the case of a discharge pursuant to clause (i), must be based upon a ruling or
administrative pronouncement of the Internal Revenue Service, to the effect that
the Holders of the Junior Subordinated Debt Securities will not recognize gain
or loss for federal income tax purposes as a result of such deposit or
defeasance and will be subject to federal income tax in the same manner as if
such defeasance had not occurred. (Sections 4.2, 4.3 and 4.4) In the event the
Company omits to comply with its remaining obligations under the Indenture after
a defeasance of the Indenture with respect to the Junior Subordinated Debt
Securities of any series as described under clause (ii) above and the Junior
Subordinated Debt Securities of such series are declared due and payable because
of the occurrence of any undefeased Event of Default, the amount of money and
U.S. Government Obligations on deposit with the Indenture Trustee may be
insufficient to pay amounts due on the Junior Subordinated Debt Securities of
such series at the time of the acceleration resulting from such Event of
Default. However, the Company will remain liable in respect of such payments.
CONCERNING THE INDENTURE TRUSTEE. The Indenture Trustee has extended
substantial credit facilities (the borrowings under which constitute Senior
Indebtedness) to the Company. The Company and certain of its subsidiaries also
maintain bank accounts, borrow money and have other customary commercial banking
or investment banking relationships with the Indenture Trustee in the ordinary
course of business.
GLOBAL SECURITIES. The Indenture provides that the registered Junior
Subordinated Debt Securities of a series may be issued in the form of one or
more fully registered Global Securities (a "Registered Global Security") that
will be deposited with a depositary (a "Depositary") or with a nominee for a
Depositary identified in the Prospectus Supplement relating to such series and
registered in the name of the Depositary or a nominee thereof. (Section 3.1) In
such case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding registered Junior Subordinated Debt Securities
9
<PAGE>
to be represented by such Registered Global Security or Securities. Unless and
until it is exchanged in whole for Junior Subordinated Debt Securities in
definitive registered form, a Registered Global Security may not be transferred
except as a whole by the Depositary for such Registered Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor. The Depositary
currently accepts only debt securities that are payable in U.S. dollars.
The specific terms of the depositary arrangement with respect to any portion
of a series of Junior Subordinated Debt Securities to be represented by a
Registered Global Security will be described in the Prospectus Supplement
relating to such series.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Debt Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited shall be
designated by any dealers, underwriters or agents participating in the
distribution of such Junior Subordinated Debt Securities. Ownership of
beneficial interests in such Registered Global Security will be shown on, and
the transfer of such ownership interests will be effected only through, records
maintained by the Depositary for such Registered Global Security (with respect
to interests of participants) and on the records of participants (with respect
to interests of persons holding through participants). The laws of some states
may require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, transfer or pledge beneficial interests in Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Junior Subordinated Debt Securities represented by such Registered Global
Security for all purposes under the Indenture. Except as set forth below, owners
of beneficial interests in a Registered Global Security will not be entitled to
have the Junior Subordinated Debt Securities represented by such Registered
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of such Junior Subordinated Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the Indenture. Accordingly, each person owning a beneficial interest in a
Registered Global Security must rely on the procedures of the Depositary for
such Registered Global Security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture. The Company understands
that under existing industry practices, if the Company requests any action of
holders or if an owner of a beneficial interest in a Registered Global Security
desires to give or take any action which a holder is entitled to give or take
under the Indenture, the Depositary for such Registered Global Security would
authorize the participants holding the relevant beneficial interests to give or
take such action, and such participants would authorize beneficial owners owning
through such participants to give or take such action or would otherwise act
upon the instructions of beneficial owners holding through them.
Principal, premium, if any, and interest payments on Junior Subordinated
Debt Securities represented by a Registered Global Security registered in the
name of a Depositary or its nominee will be made to such Depositary or its
nominee, as the case may be, as the registered owner of such Registered Global
Security. None of the Company, the Indenture Trustee or any other agent of the
Company or agent of the Indenture Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in such Registered Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for any Junior Subordinated Debt
Securities represented by a Registered Global Security, upon receipt of any
payment of principal, premium or interest in respect of such Registered Global
Security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in such
Registered Global Security as shown on the records of such Depositary. The
Company also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants will
be governed by standing customer instructions and customary practices, as is now
the case with the securities held for the accounts of customers in bearer form
or registered in "street name," and will be the responsibility of such
participants.
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<PAGE>
If the Depositary for any Junior Subordinated Debt Securities represented by
a Registered Global Security is at any time unwilling or unable to continue as
Depositary or ceases to be a clearing agency registered under the Exchange Act,
and a successor Depositary registered as a clearing agency under the Exchange
Act is not appointed by the Company within 90 days, the Company will issue such
Junior Subordinated Debt Securities in definitive form in exchange for such
Registered Global Security. In addition, the Company may at any time and in its
sole discretion determine not to have any of the Junior Subordinated Debt
Securities of a series represented by one or more Registered Global Securities
and, in such event, will issue Junior Subordinated Debt Securities of such
series in definitive form in exchange for all of the Registered Global Security
or Securities representing such Junior Subordinated Debt Securities. Any Junior
Subordinated Debt Securities issued in definitive form in exchange for a
Registered Global Security will be registered in such name or names as the
Depositary shall instruct the relevant Trustee. It is expected that such
instructions will be based upon directions received by the Depositary from
participants with respect to ownership of beneficial interests in such
Registered Global Security.
The Junior Subordinated Debt Securities of a series may also be issued in
the form of one or more bearer global Securities (a "Bearer Global Security")
that will be deposited with a common depositary for Euroclear and Cedel Bank,
societe anonyme, or with a nominee for such depositary identified in the
Prospectus Supplement relating to such series. The specific terms and
procedures, including the specific terms of the depositary arrangement, with
respect to any portion of a series of Junior Subordinated Debt Securities to be
represented by a Bearer Global Security will be described in the Prospectus
Supplement relating to such series.
RANKING OF JUNIOR SUBORDINATED DEBT SECURITIES. The Junior Subordinated
Debt Securities will be subordinated and junior in right of payment to certain
indebtedness of the Company to the extent set forth in the Prospectus Supplement
that will accompany this Prospectus.
CERTAIN PROVISIONS APPLICABLE TO TRV TRUSTS. In the event Junior
Subordinated Debt Securities of a series are issued and sold to a TRV Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such TRV Trust, such Junior Subordinated Debt Securities subsequently may be
distributed PRO RATA to the holders of such Trust Securities in connection with
the dissolution of such TRV Trust upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. Only
one series of Junior Subordinated Debt Securities will be issued to a TRV Trust,
or a trustee of such trust, in connection with the issuance of Trust Securities
by such TRV Trust. If Junior Subordinated Debt Securities are issued to a TRV
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by such TRV Trust and (i) there shall have occurred and be continuing
an Event of Default, (ii) the Company shall be in default with respect to its
payment of any obligations under the related Guarantee, or (iii) the Company
shall have given notice of its election to defer payments of interest on such
Junior Subordinated Debt Securities by extending the interest payment period as
provided in the Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of the Company in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or consultants, (ii) as a
result of an exchange or conversion of any class or series of the Company's
capital stock for any other class or series of the Company's capital stock, or
(iii) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged), and (b) the Company shall not make
any payment of interest on or principal of (or premium, if any, on), or repay,
repurchase or redeem any debt securities issued by the Company which rank PARI
PASSU with or junior to such Junior Subordinated Debt Securities. The foregoing,
however, will not apply to any stock dividends paid by the Company where the
dividend stock is the same stock as that on which the dividend is being paid.
In the event Junior Subordinated Debt Securities are issued to a TRV Trust
or a trustee of such trust in connection with the issuance of Trust Securities
of such TRV Trust, for so long as such Trust Securities remain outstanding, the
Company will covenant (i) to directly or indirectly maintain 100% ownership of
the Common Securities of such TRV Trust; PROVIDED, HOWEVER, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of such Common Securities, (ii) to not voluntarily dissolve, wind-up
or terminate such TRV Trust, except in connection with a distribution of Junior
Subordinated Debt Securities upon a Special Event and in connection with certain
mergers, consolidations or amalgamations permitted by the Declaration of the
applicable TRV Trust, (iii) to timely perform its duties as Sponsor of the
applicable TRV Trust and (iv) to use its reasonable efforts to cause such TRV
Trust (a) to remain a statutory business trust, except in connection with the
11
<PAGE>
distribution of Junior Subordinated Debt Securities to the holders of Trust
Securities in liquidation of such TRV Trust, the redemption of all of the Trust
Securities of such TRV Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such TRV Trust, and (b)
to otherwise continue to be classified as a grantor trust for United States
federal income tax purposes. (Section 10.5)
DESCRIPTION OF PREFERRED SECURITIES
The following description sets forth certain general terms and provisions of
the Preferred Securities to which any Prospectus Supplement may relate. The
particular terms of the Preferred Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply to
the Preferred Securities so offered will be described in the Prospectus
Supplement relating to such Preferred Securities. The description does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the forms of Declarations, which
are filed as exhibits to the Registration Statement of which this Prospectus
forms a part.
Each TRV Trust may issue, from time to time, only one series of Preferred
Securities having terms described in the Prospectus Supplement relating thereto.
The Declaration of each TRV Trust authorizes the Regular Trustees of such TRV
Trust to issue on behalf of such TRV Trust one series of Preferred Securities.
Each Declaration has been or will be qualified as an indenture under the Trust
Indenture Act. The Preferred Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as shall be set forth in
the Declaration of the TRV Trust issuing such Preferred Securities or made part
of such Declaration by the Trust Indenture Act. Reference is made to any
Prospectus Supplement relating to the Preferred Securities of a TRV Trust for
specific terms, including (i) the distinctive designation of such Preferred
Securities, (ii) the number of Preferred Securities issued by such TRV Trust,
(iii) the annual distribution rate (or method of determining such rate) for
Preferred Securities issued by such TRV Trust and the date or dates upon which
such distributions shall be payable, (iv) whether distributions on Preferred
Securities issued by such TRV Trust shall be cumulative, and, in the case of
Preferred Securities having such cumulative distribution rights, the date or
dates or method of determining the date or dates from which distributions on
Preferred Securities issued by such TRV Trust shall be cumulative, (v) the
amount or amounts which shall be paid out of the assets of such TRV Trust to the
Holders of Preferred Securities of such TRV Trust upon voluntary or involuntary
dissolution, winding-up or termination of such TRV Trust, (vi) the obligation,
if any, of such TRV Trust to purchase or redeem Preferred Securities issued by
such TRV Trust and the price or prices at which, the period or periods within
which and the terms and conditions upon which Preferred Securities issued by
such TRV Trust shall be purchased or redeemed, in whole or in part, pursuant to
such obligation, (vii) the voting rights, if any, of Preferred Securities issued
by such TRV Trust in addition to those required by law, including the number of
votes per Preferred Security and any requirement for the approval by the holders
of Preferred Securities, or of Preferred Securities issued by one or more TRV
Trusts, or of both, as a condition to specified action or amendments to the
Declaration of such TRV Trust, and (viii) any other relevant rights,
preferences, privileges, limitations or restrictions of Preferred Securities
issued by such TRV Trust consistent with the Declaration of such TRV Trust or
with applicable law. All Preferred Securities offered hereby will be guaranteed
by the Company to the extent set forth below under "Description of Guarantees."
Certain United States federal income tax considerations applicable to any
offering of Preferred Securities will be described in the Prospectus Supplement
relating thereto.
In connection with the issuance of Preferred Securities, each TRV Trust will
issue one series of Common Securities. The Declaration of each TRV Trust
authorizes the Regular Trustees of such trust to issue on behalf of such TRV
Trust one series of Common Securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the Common Securities issued by such TRV Trust will
be substantially identical to the terms of the Preferred Securities issued by
such TRV Trust and the Common Securities will rank PARI PASSU, and payments will
be made thereon PRO RATA with such Preferred Securities except that, upon an
Event of Default under the Declaration of such TRV Trust, the rights of the
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to the
rights of the holders of such Preferred Securities. Except in certain limited
circumstances, the Common Securities of a TRV Trust will also carry the right to
vote and to appoint, remove or replace any of the TRV Trustees of such TRV
Trust. All of the Common Securities of a TRV Trust will be directly or
indirectly owned by the Company.
If an Event of Default with respect to a Declaration of any TRV Trust occurs
and is continuing, then the holders of Preferred Securities of such TRV Trust
would rely on the enforcement by the Institutional Trustee of its rights as a
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holder of the Junior Subordinated Debt Securities against the Company. In
addition, the holders of a majority in liquidation amount of such Preferred
Securities will have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee under such Declaration, including the right to direct the Institutional
Trustee to exercise the remedies available to it as a holder of the Junior
Subordinated Debt Securities. If the Institutional Trustee fails to enforce its
rights under the Junior Subordinated Debt Securities, any holder of such
Preferred Securities may directly institute a legal proceeding against the
Company to enforce the Institutional Trustee's rights under the Junior
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. If an Event of
Default with respect to the Declaration of any TRV Trust has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Junior Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a holder of Preferred Securities of such TRV Trust
may also directly institute a proceeding for enforcement of payment to such
holder of the principal of or interest on the Junior Subordinated Debt
Securities having a principal amount equal to the aggregate liquidation amount
of such Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Junior Subordinated Debt Securities without
first (i) directing the Institutional Trustee to enforce the terms of the Junior
Subordinated Debt Securities or (ii) instituting a legal proceeding against the
Company to enforce the Institutional Trustee's Rights under the Junior
Subordinated Debt Securities. In connection with such Direct Action, the Company
will be subrogated to the rights of such holder of such Preferred Securities
under such Declaration to the extent of any payment made by the Company to such
holder of such Preferred Securities in such Direct Action. Consequently, the
Company will be entitled to payment of amounts that a holder of Preferred
Securities receives in respect of an unpaid distribution that resulted in the
bringing of a Direct Action to the extent that such holder receives or has
already received full payment with respect to such unpaid distribution from a
TRV Trust. The holders of Preferred Securities of a TRV Trust will not be able
to exercise directly any other remedy available to the holders of the Junior
Subordinated Debt Securities.
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DESCRIPTION OF GUARANTEES
Set forth below is a summary of information concerning the Guarantees that
will be executed and delivered by the Company for the benefit of the holders,
from time to time, of Preferred Securities. Each Guarantee will be qualified as
an indenture under the Trust Indenture Act. The Chase Manhattan Bank will act as
indenture trustee under each Guarantee (the "Guarantee Trustee"). The terms of
each Guarantee will be those set forth in such Guarantee and those made part of
such Guarantee by the Trust Indenture Act. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
the Trust Indenture Act. Each Guarantee will be held by the Guarantee Trustee
for the benefit of the holders of the Preferred Securities of a TRV Trust.
GENERAL
Pursuant to and to the extent set forth in each Guarantee, and except as
otherwise set forth in the applicable Prospectus Supplement, the Company will
irrevocably and unconditionally agree to pay in full to the holders of the
Preferred Securities issued by a TRV Trust (except to the extent paid by such
TRV Trust), as and when due, regardless of any defense, right of set-off or
counterclaim which such TRV Trust may have or assert, the following payments
(the "Guarantee Payments"), without duplication: (i) any accrued and unpaid
distributions that are required to be paid on such Preferred Securities, to the
extent such TRV Trust has funds available therefor, and (ii) the redemption
price per Preferred Security set forth in the applicable Prospectus Supplement,
which will not be lower than the stated liquidation amount, plus all accrued and
unpaid distributions (the "Redemption Price"), to the extent such TRV Trust has
funds available therefor, with respect to any Preferred Securities called for
redemption by such TRV Trust, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of such TRV Trust (other than in
connection with the distribution of Junior Subordinated Debt Securities to the
holders of Preferred Securities or the redemption of all of the Preferred
Securities) the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on such Preferred Securities to the date of
payment or (b) the amount of assets of such TRV Trust remaining for distribution
to holders of such Preferred Securities in liquidation of such TRV Trust. The
Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of Preferred
Securities or by causing such TRV Trust to pay such amounts to such holders.
Each Guarantee will be a guarantee on a subordinated basis with respect to
the Preferred Securities issued by a TRV Trust from the time of issuance of such
Preferred Securities but will not apply to any payment of distributions or
Redemption Price, or to payments upon the dissolution, winding-up or termination
of such TRV Trust, except to the extent such TRV Trust shall have funds
available therefor. If the Company does not make interest payments on the Junior
Subordinated Debt Securities purchased by a TRV Trust, such TRV Trust will not
pay distributions on the Preferred Securities issued by such TRV Trust and will
not have funds available therefor. See "Description of Junior Subordinated Debt
Securities." The Guarantee, when taken together with the Company's obligations
under the Junior Subordinated Debt Securities, the Indenture and the Declaration
of any TRV Trust, including its obligations to pay costs, expenses, debts and
liabilities of such TRV Trust (other than with respect to Trust Securities) will
provide a full and unconditional guarantee on a subordinated basis by the
Company of payments due on the Preferred Securities issued by such TRV Trust.
CERTAIN COVENANTS OF THE COMPANY
In each Guarantee, the Company will covenant that, so long as any Preferred
Securities issued by a TRV Trust remain outstanding, if there shall have
occurred any event that would constitute an Event of Default under such
Guarantee or the Declaration of such TRV Trust, then (a) the Company shall not
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock or make any guarantee payment with respect thereto (other than
(i) repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of employees, officers, directors or
consultants, (ii) as a result of an exchange or conversion of any class or
series of the Company's capital stock for any other class or series of the
Company's capital stock, or (iii) the purchase of fractional interests in shares
of the Company's capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged) and (b) the
Company shall not make any payment of interest on, or principal of (or premium,
if any, on), or repay,
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repurchase or redeem, any debt securities issued by the Company which rank PARI
PASSU with or junior to such Junior Subordinated Debt Securities. Each
Guarantee, however, will except from the foregoing any stock dividends paid by
the Company where the dividend stock is the same stock as that on which the
dividend is being paid.
MODIFICATION OF THE GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities to which a Guarantee relates (in which case
no vote will be required), each Guarantee may be amended only with the prior
approval of the holders of not less than a majority in aggregate liquidation
amount of the outstanding related Preferred Securities issued by a TRV Trust.
The manner of obtaining any such approval of holders of such Preferred
Securities will be set forth in an accompanying Prospectus Supplement. All
guarantees and agreements contained in a Guarantee shall bind the successors,
assignees, receivers, trustees and representatives of the Company and shall
inure to the benefit of the holders of the related Preferred Securities of a TRV
Trust then outstanding.
EVENTS OF DEFAULT
An Event of Default under a Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate liquidation amount of the Preferred
Securities to which a Guarantee relates have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of the Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Guarantee. If the
Guarantee Trustee fails to enforce the Guarantee Trustee's rights under a
Guarantee, any holder of related Preferred Securities may directly institute a
legal proceeding against the Company to enforce the Guarantee Trustee's rights
under such Guarantee without first instituting a legal proceeding against the
TRV Trust that issued such Preferred Securities, the Guarantee Trustee or any
other person or entity. A holder of Preferred Securities may also directly
institute a legal proceeding against the Company to enforce such holder's right
to receive payment under such Guarantee without first (i) directing the
Guarantee Trustee to enforce the terms of the Guarantee or (ii) instituting a
legal proceeding against the TRV Trust that issued such Preferred Securities or
any other person or entity.
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under each of the Guarantees and as to any default in such performance.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
a Guarantee, undertakes to perform only such duties as are specifically set
forth in the Guarantee and, after default with respect to a Guarantee, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by a
Guarantee at the request of any holder of Preferred Securities to which such
Guarantee relates unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate as to the Preferred Securities issued by a TRV
Trust upon full payment of the Redemption Price of all Preferred Securities of
such TRV Trust, upon distribution of the Junior Subordinated Debt Securities
held by such TRV Trust to the holders of the Preferred Securities of such TRV
Trust or upon full payment of the amounts payable in accordance with the
Declaration of such TRV Trust upon liquidation of such TRV Trust. Each Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of related Preferred Securities issued by a TRV Trust must
restore payment of any sums paid under such Preferred Securities or such
Guarantee.
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STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of the Company and
will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, (ii) PARI PASSU with the most senior preferred or
preference stock now or hereafter issued by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred or
preference stock of any subsidiary of the Company and (iii) senior to the
Company's common stock. The terms of the Preferred Securities provide that each
holder of Preferred Securities issued by a TRV Trust by acceptance thereof
agrees to the subordination provisions and other terms of the applicable
Guarantee.
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under a Guarantee without instituting a
legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantees will be governed by, and construed in accordance with, the
internal laws of the State of New York.
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of the date of this Prospectus, the Company's authorized capital stock
consists of 1,500,000,000 shares of Common Stock and 30,000,000 shares of
Preferred Stock. The descriptions below of certain provisions of the Company's
Common Stock and Preferred Stock do not purport to be complete and are subject
to and qualified in their entirety by reference to the Certificate of
Incorporation (as defined below) which is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus forms a part.
COMMON STOCK
As of April 30, 1997, the Company had outstanding approximately 641.3
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 the Company's 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 (as defined below). 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 the 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 PCX.
PREFERRED STOCK
Under the Company's Restated 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, 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,
as shall be stated and expressed in the resolution or resolutions providing for
the issue 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 of the
Company will adopt resolutions creating and designating such series as a series
of Preferred Stock and such resolutions will be filed in a Certificate of
Designation (a "Certificate of Designation") as an amendment to the Certificate
of Incorporation. 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.
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The rights of holders of the Preferred Stock offered hereby will be subject
to, and may be adversely affected by, the rights of holders of any shares of
Preferred Stock that may be issued in the future. The Board of Directors may
cause shares of Preferred Stock to be issued in public or private transactions
for any proper corporate purpose, 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.
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"), 2,978,803 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 2,262 shares of
its Cumulative Adjustable Rate Preferred Stock, Series Y (the "Series Y
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 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 "Stated Value"). 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 2.61 votes per share, subject
to adjustment as the conversion price is adjusted, 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. The Series C
Preferred Stock is convertible at the option of the holder into that number of
shares of Common Stock determined by dividing the Stated Value by the conversion
price. as adjusted pursuant to the provisions of the Certificate of
Incorporation. The conversion price as of the date of this Prospectus is $32.98
per share of Series C Preferred Stock.
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.
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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 Y PREFERRED STOCK. The Series Y Preferred Stock ranks on a parity as
to dividends, other distributions and upon liquidation with all of the currently
outstanding series of Preferred Stock. The holder of the Series Y Preferred
Stock is entitled to a cumulative quarterly dividend at an annual rate equal to
the greater of (i) the Short Term Rate and (ii) 4.85%. The "Short Term Rate"
generally will be equal to either 85% or 78% of the Money Market Yield (as
defined in the Certificate of Incorporation) of the 90-day rate for commercial
paper multiplied by the stock's $100,000 per share liquidation value. The Series
Y Preferred Stock is owned by a subsidiary of the Company, is redeemable without
premium at the Company's option at any time at a redemption price of $100,000
per share, plus accrued and unpaid dividends thereon to the date fixed for
redemption, and is subject to repurchase at the holder's request at its
liquidation value of $100,000 per share, plus accrued and unpaid dividends, if
not redeemed on or prior to March 31, 1999. The holder of the Series Y 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 Y Preferred Stock.
CERTAIN 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 (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 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.
VACANCIES. 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.
DESCRIPTION OF PREFERRED STOCK OFFERED HEREBY
The following summary contains a description of certain general terms of the
Company's Preferred Stock to which any Prospectus Supplement may relate. Certain
terms of any series of Preferred Stock offered by any Prospectus Supplement will
be described in the Prospectus Supplement relating thereto. If so indicated in
the
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Prospectus Supplement, the terms of any series may differ from the terms set
forth below. The description of certain provisions of the Company's Preferred
Stock does not purport to be complete and is subject to and qualified in its
entirety by reference to the provisions of the Company's Certificate of
Incorporation and the Certificate of Designation relating to each particular
series of Preferred Stock which will be filed or incorporated by reference, as
the case may be, as an exhibit to the Registration Statement of which this
Prospectus forms a part at or prior to the time of the issuance of such
Preferred Stock.
GENERAL
The Preferred Stock may be issued in one or more series, with such
designations of titles; dividend rates; any redemption provisions; special or
relative rights in the event of liquidation, dissolution, distribution or
winding up of the Company; any sinking fund provisions; any conversion or
exchange provisions; any voting rights thereof; and any other preferences,
privileges, powers, rights, qualifications, limitations and restrictions, as
shall be set forth as and when established by the Board of Directors of the
Company. The shares of any series of Preferred Stock will be, when issued, fully
paid and non-assessable and holders thereof will have no preemptive rights in
connection therewith.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of Preferred Stock will be specified in the
Prospectus Supplement relating thereto.
RANK
Unless otherwise specified in the Prospectus Supplement relating to the
shares of any series of Preferred Stock, such shares will rank on a parity with
each other series of Preferred Stock and prior to the Common Stock as to
dividends and distributions of assets.
DIVIDENDS
Holders of each series of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors of the Company out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of Preferred Stock.
Such rates may be fixed or variable or both. Dividends will be payable to
holders of record of Preferred Stock as they appear on the books of the Company
(or, if applicable, the records of the Depositary referred to below under
"Description of Depositary Shares") on such record dates as shall be fixed by
the Board of Directors. Dividends on any series of Preferred Stock may be
cumulative or noncumulative.
No full dividends may be declared or paid on funds set apart for the payment
of dividends on any series of Preferred Stock unless dividends shall have been
paid or set apart for such payment on equity securities ranking on a parity with
respect to dividends with such series of Preferred Stock. If full dividends are
not so paid, such series of Preferred Stock shall share dividends PRO RATA with
such other equity securities.
CONVERSION AND EXCHANGE
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into or
exchangeable for shares of Common Stock.
REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise upon terms and at
the redemption prices set forth in the Prospectus Supplement relating to such
series.
In the event of partial redemptions of Preferred Stock, whether by mandatory
or optional redemption, the shares to be redeemed will be determined by lot or
PRO RATA, as may be determined by the Board of Directors of the Company, or by
any other method determined to be equitable by the Board of Directors.
On and after a redemption date, unless the Company defaults in the payment
of the redemption price, dividends will cease to accrue on shares of Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
19
<PAGE>
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of each series of Preferred Stock will be entitled to
receive out of assets of the Company available for distribution to shareholders,
before any distribution is made on any securities ranking junior with respect to
liquidation, including Common Stock, distributions upon liquidation in the
amount set forth in the Prospectus Supplement relating to such series of
Preferred Stock, plus an amount equal to any accrued and unpaid dividends. If,
upon any voluntary or involuntary liquidation, dissolution or winding up of the
Company, the amounts payable with respect to the Preferred Stock of any series
and any other securities ranking on a parity with respect to liquidation rights
are not paid in full, the holders of the Preferred Stock of such series and such
other securities will share ratably in any such distribution of assets of the
Company in proportion to the full liquidation preferences to which each is
entitled. After payment of the full amount of the liquidation preference to
which they are entitled, the holders of such series of Preferred Stock will not
be entitled to any further participation in any distribution of assets of the
Company.
VOTING RIGHTS
Except as indicated in the Prospectus Supplement relating to a particular
series of Preferred Stock or except as expressly required by applicable law, the
holders of shares of Preferred Stock will have no voting rights.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below of certain material provisions of the
Deposit Agreement (as defined below) and of the Depositary Shares and Depositary
Receipts (as defined below) is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipt relating to
the Preferred Stock, which will be filed or incorporated by reference, as the
case may be, as exhibits to the Registration Statement of which this Prospectus
forms a part at or prior to the issuance of Depositary Shares. The particular
terms of any Depositary Shares, any Depositary Receipts and any Deposit
Agreement relating to a particular series of Preferred Stock which vary from the
terms set forth below will be set forth in the applicable Prospectus Supplement.
GENERAL
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In such event, the
Company will issue receipts for Depositary Shares, each of which will represent
a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock) of a share of a particular series of
Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000 (the "Preferred Stock Depositary"). Subject to the terms
of the Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion
and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional shares
of Preferred Stock in accordance with the terms of the applicable Prospectus
Supplement.
Pending the preparation of definitive Depositary Receipts, the Preferred
Stock Depositary may, upon the written order of the Company or any holder of
deposited Preferred Stock, execute and deliver temporary Depositary Receipts
which are substantially identical to, and entitle the holders thereof to all the
rights pertaining to, the definitive Depositary Receipts. Depositary Receipts
will be prepared thereafter without unreasonable delay, and temporary Depositary
Receipts will be exchangeable for definitive Depositary Receipts.
20
<PAGE>
DIVIDENDS AND OTHER DISTRIBUTIONS
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the deposited Preferred Stock to the
record holders of Depositary Shares relating to such Preferred Stock in
proportion to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto. If the Preferred Stock Depositary determines
that it is not feasible to make such distribution, it may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
REDEMPTION OF PREFERRED STOCK
If a series of Preferred Stock represented by Depositary Shares is to be
redeemed, the Depositary Shares will be redeemed from the proceeds received by
the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of such series of Preferred Stock held by the Preferred Stock Depositary.
The Depositary Shares will be redeemed by the Preferred Stock Depositary at a
price per Depositary Share equal to the applicable fraction of the redemption
price per share payable in respect of the shares of Preferred Stock so redeemed.
Whenever the Company redeems shares of Preferred Stock held by the Preferred
Stock Depositary, the Preferred Stock Depositary will redeem as of the same date
the number of Depositary Shares representing shares of Preferred Stock so
redeemed. If fewer than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by the Preferred Stock
Depositary by lot or PRO RATA or by any other equitable method as may be
determined by the Preferred Stock Depositary.
WITHDRAWAL OF PREFERRED STOCK
Any holder of Depositary Shares may, upon surrender of the Depositary
Receipts at the corporate trust office of the Preferred Stock Depositary (unless
the related Depositary Shares have previously been called for redemption),
receive the number of whole shares of the related series of Preferred Stock and
any money or other property represented by such Depositary Receipts. Holders of
Depositary Shares making such withdrawals will be entitled to receive whole
shares of Preferred Stock on the basis set forth in the related Prospectus
Supplement for such series of Preferred Stock, but holders of such whole shares
of Preferred Stock will not thereafter be entitled to deposit such Preferred
Stock under the Deposit Agreement or to receive Depositary Receipts therefor. If
the Depositary Shares surrendered by the holder in connection with such
withdrawal exceed the number of Depositary Shares that represent the number of
whole shares of Preferred Stock to be withdrawn, the Preferred Stock Depositary
will deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares.
VOTING DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
deposited Preferred Stock are entitled to vote, the Preferred Stock Depositary
will mail the information contained in such notice of meeting to the record
holders of the Depositary Shares relating to such series of Preferred Stock.
Each record holder of such Depositary Shares on the record date (which will be
the same date as the record date for the relevant series of Preferred Stock)
will be entitled to instruct the Preferred Stock Depositary as to the exercise
of the voting rights pertaining to the amount of the Preferred Stock represented
by such holder's Depositary Shares. The Preferred Stock Depositary will
endeavor, insofar as practicable, to vote the amount of such series of Preferred
Stock represented by such Depositary Shares in accordance with such
instructions, and the Company will agree to take all reasonable actions that may
be deemed necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will vote
all shares of any series of Preferred Stock held by it proportionately with
instructions received, to the extent it does not receive specific instructions
from the holders of Depositary Shares representing such series of Preferred
Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Preferred Stock Depositary. However, any amendment
that imposes additional charges or materially and adversely alters any
substantial existing right of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least
21
<PAGE>
a majority of the affected Depositary Shares then outstanding. Every holder of
an outstanding Depositary Receipt at the time any such amendment becomes
effective, or any transferee of such holder, shall be deemed, by continuing to
hold such Depositary Receipt, or by reason of the acquisition thereof, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. The Deposit Agreement automatically terminates if (i) all
outstanding Depositary Shares have been redeemed; or (ii) each share of
Preferred Stock has been converted into or exchanged for Common Stock; or (iii)
there has been a final distribution in respect of the Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company and
such distribution has been distributed to the holders of Depositary Shares. The
Deposit Agreement may be terminated by the Company at any time and the Preferred
Stock Depositary will provide notice of such termination to the record holders
of all outstanding Depositary Receipts not less than 30 days prior to the
termination date, in which event the Preferred Stock Depositary will deliver or
make available for delivery to holders of Depositary Shares, upon surrender of
such Depositary Shares, the number of whole or fractional shares of the related
series of Preferred Stock as are represented by such Depositary Shares.
CHARGES OF DEPOSITARY; TAXES AND OTHER GOVERNMENTAL CHARGES
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay all charges of the Preferred Stock Depositary in connection with the
initial deposit of the relevant series of Preferred Stock and any redemption of
such Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges or expenses as are
expressly provided in the Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its intent to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary and its
acceptance of such appointment. Such successor Preferred Stock Depositary must
be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
The Preferred Stock Depositary will forward all reports and communications
from the Company which are delivered to the Preferred Stock Depositary and which
the Company is required to furnish to the holders of the deposited Preferred
Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstances beyond its control in
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performance in good faith of their duties thereunder and they will
not be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares, Depositary Receipts or shares of Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Preferred Stock
Depositary may rely upon written advice of counsel or accountants, or upon
information provided by holders of Depositary Receipts or other persons believed
to be competent and on documents believed to be genuine.
PLAN OF DISTRIBUTION
The Company may sell any series of Preferred Stock or Depositary Shares and
any TRV Trust may sell Preferred Securities in one or more of the following ways
from time to time: (i) to or through underwriters or dealers, (ii) directly to
purchasers, or (iii) through agents. Any such underwriters, dealers or agents
may include Smith Barney. The Prospectus Supplement with respect to any Offered
Securities will set forth (i) the terms of the offering of the Offered
Securities, including the name or names of any underwriters, dealers or agents,
(ii) the purchase price of the Offered Securities and the proceeds to the
Company or a TRV Trust, as the case may be, from such sale, (iii) any
underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation, (iv) any initial public
offering prices, (v) any discounts or concessions allowed or reallowed or paid
to dealers and (vi) any securities exchange on which such Offered Securities may
be listed. Any initial public offering price, discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time.
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<PAGE>
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
In connection with underwritten offerings of the Offered Securities and in
accordance with applicable law and industry practice, underwriters may
over-allot or effect transactions which stabilize, maintain or otherwise affect
the market price of the Offered Securities at levels above those which might
otherwise prevail in the open market, including by entering stabilizing bids,
effecting syndicate covering transactions or imposing penalty bids. A
stabilizing bid means the placing of any bid, or the effecting of any purchase,
for the purpose of pegging, fixing or maintaining the price of a security. A
syndicate covering transaction means the placing of any bid on behalf of the
underwriting syndicate or the effecting of any purchase to reduce a short
position created in connection with the offering. A penalty bid means an
arrangement that permits the managing underwriter to reclaim a selling
concession from a syndicate member in connection with the offering when Offered
Securities originally sold by the syndicate member are purchased in syndicate
covering transactions. Such transactions may be effected on the NYSE, in the
over-the-counter market, or otherwise. Underwriters are not required to engage
in any of these activities. Any such activities, if commenced, may be
discontinued at any time.
If dealers are utilized in the sale of Offered Securities, the Company or
the applicable TRV Trust will sell such Offered Securities to the dealers as
principals. The dealers may then resell such Offered Securities to the public at
varying prices to be determined by such dealers at the time of resale. The names
of the dealers and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company and/or, if
applicable, any TRV Trust to one or more institutional purchasers, or through
agents designated by the Company and/or, if applicable, any TRV Trust from time
to time, at a fixed price, or prices, which may be changed, or at varying prices
determined at time of sale. Any agent involved in the offer or sale of the
Offered Securities in respect to which this Prospectus is delivered will be
named, and any commissions payable by the Company or the applicable TRV Trust to
such agent will be set forth in the Prospectus Supplement relating thereto.
Unless otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company or the applicable
TRV Trust will authorize agents, underwriters or dealers to solicit offers from
certain types of institutions to purchase Offered Securities from the Company or
such TRV Trust at the public offering price set forth in the Prospectus
Supplement pursuant to delayed delivery contracts (the "Contracts") providing
for payment and delivery on a specified date or dates in the future. Such
Contracts will not be subject to any conditions except (a) the purchase by an
institution of the Offered Securities covered by its Contracts shall not at the
time of delivery be prohibited under the laws of any jurisdiction in the United
States to which such institution is subject and (b) if the Offered Securities
are being sold to underwriters, the Company shall have sold to such underwriters
the total principal amount of the Offered Securities less the principal amount
thereof covered by the Contracts. The Prospectus Supplement will set forth the
commission payable for solicitation of such Contracts.
Smith Barney, a member of the National Association of Securities Dealers,
Inc. (the "NASD"), a subsidiary of the Company and an affiliate of the TRV
Trusts, may participate in distributions of the Offered Securities. Accordingly,
the offerings of Offered Securities will conform with the requirements set forth
in Rule 2720 of the Conduct Rules of the NASD.
This Prospectus together with an applicable Prospectus Supplement may also
be used by Smith Barney 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. Smith Barney may act as principal
or agent in such transactions. Smith Barney has no obligation to make a market
in any of the Offered Securities and may discontinue any market-making
activities at any time without notice, at its sole discretion.
23
<PAGE>
Agents, dealers and underwriters may be entitled, under agreements with the
Company or a TRV Trust, to indemnification by the Company or the applicable TRV
Trust against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments that such agents,
dealers or underwriters may be required to make in respect thereof. Agents,
dealers and underwriters may be customers of, engage in transactions with, or
perform services for the Company or a TRV Trust in the ordinary course of
business.
Each series of Offered Securities will be a new issue of securities and will
have no established trading market. Any underwriters to whom Offered Securities
are sold for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Offered Securities
may or may not be listed on a national securities exchange. No assurance can be
given that there will be a market for the Offered Securities.
LEGAL MATTERS
The validity of the Preferred Securities, the Junior Subordinated Debt
Securities, the Guarantees, the Preferred Stock and the Depositary Shares and
certain matters relating thereto and certain United States federal income tax
matters will be passed upon for the Company and the TRV Trusts by Skadden, Arps,
Slate, Meagher & Flom LLP, New York, New York. Certain legal matters will be
passed upon for the Underwriters by Dewey Ballantine, New York, New York.
Kenneth J. Bialkin, a partner of Skadden, Arps, Slate, Meagher & Flom LLP, is a
director of the Company and he and other attorneys in such firm beneficially own
an aggregate of less than one percent of the Common Stock of the Company.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1996 and 1995, and for each of the years in the three-year period
ended December 31, 1996, incorporated by reference or included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996, have been
incorporated by reference herein, in reliance upon the reports (also
incorporated by reference herein) of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing. The combined financial statements as of and for the
year ended December 31, 1995 and 1994 of The Aetna Casualty and Surety Company
and The Standard Fire Insurance Company and their subsidiaries included in the
Company's Current Report on Form 8-K dated April 2, 1996, as amended, have been
incorporated by reference herein, in reliance upon the report (also incorporated
by reference herein) of KPMG Peat Marwick LLP, independent certified public
accountants, and upon the authority of said firm as experts in accounting and
auditing.
24
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NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION 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 OR BY ANY OF THE UNDERWRITERS. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT 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 OFFERS OR
SOLICITATIONS IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS OR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company....................................... S-2
Use of Proceeds................................... S-3
Capitalization.................................... S-3
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends....................... S-4
Description of Series F Preferred Stock........... S-4
Description of Depositary Shares.................. S-8
Book-Entry Procedures............................. S-9
Underwriting...................................... S-11
Legal Matters..................................... S-12
Experts........................................... S-12
PROSPECTUS
Available Information............................. 3
Incorporation of Certain Documents by Reference... 4
The Company....................................... 5
TRV Trusts........................................ 5
Use of Proceeds................................... 6
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends....................... 6
Description of Junior Subordinated Debt
Securities...................................... 7
Description of Preferred Securities............... 12
Description of Guarantees......................... 14
Description of Capital Stock...................... 16
Description of Preferred Stock Offered Hereby..... 18
Description of Depositary Shares.................. 20
Plan of Distribution.............................. 22
Legal Matters..................................... 24
Experts........................................... 24
</TABLE>
8,000,000 SHARES
TRAVELERS GROUP INC.
DEPOSITARY SHARES, EACH
REPRESENTING A 1/5TH
INTEREST IN A SHARE OF
6.365% CUMULATIVE
PREFERRED STOCK,
SERIES F
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PROSPECTUS SUPPLEMENT
JUNE 11, 1997
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SMITH BARNEY INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY DEAN WITTER
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