<PAGE>
FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-27155
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 22, 1997)
4,000,000 SHARES
TRAVELERS GROUP INC.
DEPOSITARY SHARES
EACH REPRESENTING 1/5TH OF A SHARE OF
5.864% CUMULATIVE PREFERRED STOCK, SERIES M
---------------
Each Depositary Share (a "Depositary Share") represents ownership of 1/5th
of a share of 5.864% Cumulative Preferred Stock, Series M, $1.00 par value per
share (the "Series M Preferred Stock"), of Travelers Group Inc., a Delaware
corporation (the "Company"), to be deposited with The Bank of New York as
Depositary and, through the Depositary, entitles the holder, proportionately, to
all rights, preferences and privileges of the Series M Preferred Stock
represented thereby. The proportionate stated value of each Depositary Share is
$50.00. See "Description of Depositary Shares."
The Series M Preferred Stock will not be redeemable prior to October 8,
2007. On or after such date the Series M 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 M Preferred
Stock (equivalent to $50.00 per Depositary Share) plus dividends accrued and
unpaid to the redemption date.
Dividends on the Series M Preferred Stock will be cumulative from the date
of issuance and are payable quarterly, commencing November 1, 1997. The amount
of dividends payable in respect of the Series M 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 M Preferred Stock--Dividends."
Application will be made to list the Depositary Shares on the New York Stock
Exchange. Trading of the Depositary Shares on the New York Stock Exchange is
expected to commence within a 30-day period after the initial delivery of the
Depositary Shares. The shares of Series M 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 M Preferred Stock except
as represented by the Depositary Shares.
--------------------------
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 $200,000,000 $4,000,000 $196,000,000
</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 at
the offices of Smith Barney Inc., 388 Greenwich Street, New York, New York
10013, on or about October 8, 1997 against payment therefor in immediately
available funds.
--------------------------
SMITH BARNEY INC.
LEHMAN BROTHERS
MORGAN STANLEY DEAN WITTER
SALOMON BROTHERS INC
October 3, 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 83.4% 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.
RECENT DEVELOPMENTS
On September 24, 1997, the Company and Salomon Inc ("Salomon") announced
that they have entered into a definitive agreement pursuant to which a wholly
owned subsidiary of the Company will merge with and into Salomon and Salomon
will become a wholly owned subsidiary of the Company. After the merger, it is
anticipated that Salomon and Smith Barney Holdings Inc., a subsidiary of the
Company, will merge to form Salomon Smith Barney Holdings Inc.
The transaction is expected to be completed by year-end 1997. It is subject
to various regulatory approvals, including the Hart-Scott-Rodino Antitrust
Improvements Act and by certain regulatory entities, and approval by Salomon
stockholders. The merger will be a tax-free exchange and will be accounted for
on a "pooling of interests" basis.
The consolidated financial statements of Salomon and its subsidiaries as of
December 31, 1996 and 1995 and for each of the three years in the period ended
December 31, 1996, the unaudited consolidated financial statements of Salomon
and its subsidiaries as of June 30, 1997 and for the six-month periods ended
June 30, 1997 and 1996 and certain PRO FORMA financial information with respect
to the proposed transaction have been filed by the Company with a Current Report
on Form 8-K dated September 24, 1997, which Form 8-K is incorporated herein by
reference.
The pro forma financial data is not necessarily indicative of the results of
operations that would have occurred had the merger been consummated or of future
operations of the combined companies.
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 June 30,
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 June 30, 1997
through the date hereof, including $200,000,000 of long-term debt of Smith
Barney Holdings Inc. which is expected to close on October 8, 1997, (ii) the
issuance and sale of the Company's 6.213% Cumulative Preferred Stock, Series G,
(iii) the issuance and sale of the Company's 6.231% Cumulative Preferred Stock,
Series H, (iv) the issuance and sale of the Series M Preferred Stock represented
by the Depositary Shares offered hereby, (v) the redemption, on July 1, 1997, of
all of the outstanding shares of the 9.25% Preferred Stock, Series D, of the
Company, (vi) the redemption, on July 28, 1997, of all of the outstanding shares
of the 8.125% Cumulative Preferred Stock, Series A, of the Company, and (vii)
the application of the proceeds from the issuance of such long-term debt to the
repayment of investment banking and brokerage borrowings and short-term
borrowings and, in the case of the Preferred Stock issuances, the redemption of
preferred stock, as if such transactions had occurred on June 30, 1997.
<TABLE>
<CAPTION>
AT JUNE 30, 1997
------------------------
OUTSTANDING AS ADJUSTED
----------- -----------
<S> <C> <C>
(DOLLARS IN MILLIONS)
Debt:
Investment banking and brokerage borrowings.......................................... $ 4,268 $ 3,731
Short-term borrowings................................................................ 2,812 1,912
Long-term debt....................................................................... 11,122 12,559
----------- -----------
Total debt......................................................................... $ 18,202 $ 18,202
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....................................... 1,075 1,000
Common stock ($.01 par value; authorized shares: 1,500,000,000; issued shares:
743,415,984 outstanding and as adjusted)........................................... 7 7
Additional paid-in capital........................................................... 7,561 7,561
Retained earnings.................................................................... 8,524 8,524
Treasury stock at cost (103,807,529 shares outstanding and as adjusted).............. (2,958) (2,958)
Unrealized gain (loss) on investment securities...................................... 436 436
Other, principally unearned compensation............................................. (407) (407)
----------- -----------
Total stockholders' equity......................................................... 14,238 14,163
----------- -----------
Total capitalization............................................................... $ 34,340 $ 34,265
----------- -----------
----------- -----------
</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,
SIX MONTHS ENDED ----------------------------
JUNE 30, 1997 1996 1995 1994 1993 1992
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges
and preferred stock dividends................................................... 2.43 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 M PREFERRED STOCK
GENERAL
The following description of the Series M 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 M 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 M Preferred Stock (the
"Certificate of Designation").
Pursuant to action of the Board of Directors of the Company, the shares of
Series M 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 M Preferred Stock is not convertible into shares
of any other class or series of stock of the Company. Shares of Series M
Preferred Stock have no preemptive rights. Any shares of Series M Preferred
Stock that are surrendered for redemption will be returned to the status of
authorized and unissued Preferred Stock.
The Bank of New York is the registrar, transfer agent and dividend
disbursing agent for the shares of Series M Preferred Stock and also serves as
the Depositary for the Series M Preferred Stock.
VOTING RIGHTS
Holders of Series M 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 M
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 M 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 M 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 M 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 M 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 M 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 M Preferred Stock) so as to
adversely affect the powers, preferences or rights of the holders of shares of
Series M 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 M Preferred Stock are entitled to receive, when
and as declared by the Board of Directors out of funds legally available
therefor, cash dividends payable quarterly at the rate of 5.864% per annum.
Dividends on shares of Series M Preferred Stock will be payable quarterly on
February 1, May 1, August 1 and November 1 of each year, commencing November 1,
1997, for each of the quarterly periods beginning November 1, February 1, May 1
and August 1, 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 M Preferred Stock will be cumulative from the date of initial issuance of
shares of Series M 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 M Preferred Stock for any period
less than a full dividend period (a "Dividend Period") shall be computed on the
basis of the actual number of days elapsed in the Dividend Period divided by the
actual number of days in the Dividend 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 M Preferred Stock, then in
making any dividend payment on account of arrears on the Series M Preferred
Stock or such other class or series of Preferred Stock, the Company will make
payments ratably upon all outstanding shares of Series M 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 M Preferred Stock and such
other class or series of preferred stock to the date of such dividend payment.
If, prior to 18 months after the date of the original issuance of the Series
M Preferred Stock, one or more amendments to the Internal Revenue Code of 1986,
as amended (the "Code"), are enacted that reduce the percentage of the
dividends-received deduction for certain corporations (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 M
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 M 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 M Preferred Stock on the record date applicable to the next
succeeding dividend payment date or, if the Series M Preferred Stock is called
for redemption prior to such record date, to holders of Series M 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 M Preferred
Stock (each, an "Affected Dividend Payment Date"), the Company will pay (if
declared) additional dividends (the "Retroactive Dividends") to holders of
Series M 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 M
Preferred Stock on the record date following the date of enactment) or, if the
Series M Preferred Stock is called for redemption prior to such record date, to
holders of Series M 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 M 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 M Preferred Stock that reduces the Dividends-Received Percentage.
In the event that the amount of dividends payable per share of the Series M
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 M Preferred Stock.
OPTIONAL REDEMPTION
The Series M Preferred Stock is not subject to any mandatory redemption,
pursuant to a sinking fund or otherwise. The Series M Preferred Stock is not
redeemable prior to October 8, 2007. On or after such date the Series M
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 M 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 M 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 M
Preferred Stock may not be redeemed in part and the Company may not purchase or
acquire any shares of Series M Preferred Stock otherwise than pursuant to a
purchase or exchange offer made on the same terms to all holders of the Series M
Preferred Stock. If fewer than all the outstanding shares of Series M 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 M 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 M 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 M 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 M 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 M Preferred Stock and of any other shares of stock
of the Company ranking as to any such distribution on a parity with the Series M
Preferred Stock the full preferential amount to which they are entitled, then
such assets shall be distributed ratably among the shares of all Series M
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 M
Preferred Stock. The shares of Series M Preferred Stock represented by
Depositary Shares will be deposited under the Deposit Agreement (the "Deposit
Agreement") among the Company, The Bank of New York (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 M Preferred Stock
represented by such Depositary Share, to all the rights and preferences of the
Series M 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 M 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 M 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 M
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 M Preferred
Stock, until such taxes or other governmental charges are paid.
REDEMPTION OF DEPOSITARY SHARES
If the Company redeems the Series M 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 M Preferred Stock so redeemed, upon payment by the Company to the
Depositary of the redemption price of such shares of Series M 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 M 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 M 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 M 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 M 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 M Preferred Stock, but holders of
such whole shares of Series M Preferred Stock will not thereafter be entitled to
deposit such shares with the Depositary or to receive Depositary Shares
therefor. 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 M 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 M Preferred Stock, except as represented by the
Depositary Shares.
VOTING THE SERIES M PREFERRED STOCK
Because each Depositary Share represents ownership of 1/5th of a share of
Series M 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 M Preferred Stock are entitled to vote.
Upon receipt of notice of any meeting at which the holders of shares of
Series M 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 M 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 M 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 M 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 M 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 M 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 M Preferred Stock.
S-9
<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.................................. 1,000,000
Lehman Brothers Inc............................... 1,000,000
Morgan Stanley & Co. Incorporated................. 1,000,000
Salomon Brothers Inc.............................. 1,000,000
----------
Total........................................... 4,000,000
----------
----------
</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 $.40 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 connection with such transactions. Such sales, if any,
will be made at varying prices related to prevailing
S-10
<PAGE>
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.
Trading of the Depositary Shares on the New York Stock Exchange is expected to
commence within a 30-day period after the initial delivery of the Depositary
Shares.
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.
The consolidated financial statements of Salomon and its subsidiaries for
the fiscal years ended December 31, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996, included in the Company's Current
Report on Form 8-K dated September 24, 1997, have been audited by Arthur
Andersen LLP, independent public accountants, as set forth in their report
thereon included therein and incorporated herein by reference. Such financial
statements referred to above are incorporated by reference herein in reliance
upon such report given upon the authority of such firm as experts in accounting
and auditing.
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 LLP, 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.
S-11
<PAGE>
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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.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Company....................................... S-2
Recent Developments............................... 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 M Preferred Stock........... S-4
Description of Depositary Shares.................. S-8
Underwriting...................................... S-10
Experts........................................... S-11
Legal Matters..................................... S-11
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>
4,000,000 SHARES
TRAVELERS GROUP INC.
DEPOSITARY SHARES, EACH
REPRESENTING A 1/5TH
INTEREST IN A SHARE OF
5.864% CUMULATIVE
PREFERRED STOCK,
SERIES M
------
PROSPECTUS SUPPLEMENT
OCTOBER 3, 1997
--------
SMITH BARNEY INC.
LEHMAN BROTHERS
MORGAN STANLEY DEAN WITTER
SALOMON BROTHERS INC
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