<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
SCHEDULE TO
(RULE 14D-100)
(AMENDMENT NO. 2)
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1)
OR SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
--------------
TRAVELERS PROPERTY CASUALTY CORP.
(Name of Subject Company (Issuer))
THE TRAVELERS INSURANCE GROUP INC.
CITIGROUP INC.
TRAVELERS PROPERTY CASUALTY CORP.
(Names of Filing Persons (Offerors))
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CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
(Title of Class of Securities)
--------------
893939108
(CUSIP Number of Class of Securities)
--------------
Charles O. Prince, III, Esq.
Citigroup Inc.
153 East 53rd Street
New York, New York 10043
Telephone: (212) 559-1000
(Name, address and telephone number of
person authorized to receive notices
and communications on behalf of filing persons)
Copy to:
Eric J. Friedman, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telephone: (212) 735-3000
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [ ]
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This Amendment No. 2 amends the Tender Offer Statement on Schedule TO
initially filed on March 23, 2000 by Citigroup Inc., a Delaware corporation
("Parent"), The Travelers Insurance Group Inc., a Connecticut corporation (the
"Purchaser") and an indirect wholly owned subsidiary of Parent, and Travelers
Property Casualty Corp., a Delaware corporation (the "Company") relating to the
third-party tender offer by the Purchaser to purchase all of the issued and
outstanding shares of Class A common stock, par value $.01 per share, of the
Company, at a purchase price of $41.50 per Share, net to the seller in cash,
without interest thereon. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings given such terms in the Schedule TO.
ITEM 11. ADDITIONAL INFORMATION.
Item 11 is hereby amended as follows:
There have now been at least twelve lawsuits filed alleging substantially
similar claims as those described in "THE TENDER OFFER Section 14. Certain
Legal Matters" in the Offer to Purchase.
On March 28, 2000, the plaintiff in Civil Action No. 17902-NC filed an
Amended Complaint against the Company, its directors and Parent. The Amended
Complaint alleges, among other things, that defendants have withheld and
obscured vital material information needed by stockholders to properly assess
and consider the Offer and the true value of the Company. In particular, the
Amended Complaint alleges that:
o "Defendants have failed to disclose that the so-called `Special
Committee' appointed by the [Company] Board of Directors (the `Special
Committee') was riddled with conflicts of interest. Indeed, the 14D-1
does not disclose the material fact that defendant Leslie B.
Disharoon, the Chairman of the Special Committee, was formerly
affiliated with Citigroup (or its predecessors) and, therefore, has a
material conflict of interest. In this regard, the 14D-1 is inaccurate
when it states that the Special Committee was `independent.'
o The financial analyses (particularly the `minority squeeze-out
analysis') performed by Morgan Stanley Dean Witter (`Morgan Stanley'),
the Special Committee's financial advisor, contained material
inaccuracies and, therefore, the true range of value for the Company's
shares is materially higher than that being reported to shareholders.
For example, in its `Analysis Of Selected Acquisitions Of Minority
Interests -- Analysis Of Selected Minority Interest Acquisitions 1992
To Present,' Morgan Stanley reported that the `Final Consideration'
paid in the PEC Israel Economic Corp./Investor Group transaction was
$30.00 per share. That number is wrong. The actual final consideration
received by PEC's shareholders was $36.50 per share, a number
materially higher than $30.00 -- the number used in the analysis.
There are at least five other similar misrepresentations in Morgan
Stanley's analysis of minority squeeze-outs where Morgan Stanley
materially understated the final consideration received by
shareholders.
o Morgan Stanley also omitted several pertinent and comparable
squeeze-out transactions from its analysis which would have further
demonstrated the inadequacy of the $41.50 Tender Offer price. These
transactions all occurred between 1992 and the present (the same time
period used by Morgan Stanley) and were used by Salomon Brothers, the
predecessor to Salomon Smith Barney (`Salomon'), Citigroup's financial
advisor, in another analysis of a squeeze-out acquisition of a
property and casualty insurance company.
o Defendants assert in the 14D-1 mailed to shareholders that Morgan
Stanley calculated a `summary indicative value range' for [the
Company's] shares of $38.00 to $48.00 per share, but fail to disclose
that Morgan Stanley also performed an analysis which illustrated that
`Indicative Premiums Paid In Precedent Mergers & Acquisitions' yielded
values materially in excess of summary indicative value range, which
Morgan Stanley did not incorporate into its final analysis.
o Defendants did not disclose that Salomon, Citigroup's financial
advisor, upon which Citigroup purportedly relied for its statement
that `the consideration to be received' by [the Company's]
stockholders `was fair to and in the best interests' of those
stockholders, was irremediably conflicted, as Salomon is a
wholly-owned subsidiary of Citigroup.
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o [The Company] is worth more to Citigroup as a wholly-owned entity, as
it will trade at materially higher multiples of its earnings when the
acquisition is completed, as compared to the multiples it currently
trades as a partly publicly-owned entity."
The Amended Complaint also alleges that the consideration that Parent has
offered in the Offer, $41.50 per Share in cash, is grossly inadequate and
unfair and the Special Committee appointed by the Company Board to purportedly
represent the interests of the public stockholders of the Company is a "sham."
The Amended Complaint also alleges that, as a result of the foregoing, the
Company's stockholders will be forced, without full or complete disclosure by
defendants, to make final decisions regarding their ownership in the Company
and are threatened with the immediate divestiture of their Shares as a result
of defendants' alleged wrongful course of conduct.
The Amended Complaint seeks, among other things, a declaration that the
defendants and each of them have committed or participated in a gross abuse of
trust and have breached their fiduciary duties to plaintiff and other members
of the Class or aided and abetted such breaches; a declaration that defendants
have breached their duty of candor; an Order enjoining the Offer or, if the
transaction is consummated, rescinding it; an Order that defendants make
corrective disclosures; an award of compensatory and/or rescissory damages; and
an award to plaintiff of the costs and disbursements of the action, including
reasonable fees and expenses of plaintiff's attorneys and experts.
Copies of each of the additional complaints including the Amended
Complaint are attached as exhibits hereto and are incorporated herein by
reference.
ITEM 12. EXHIBITS.
Item 12 is hereby amended as follows:
(a)(1)(L) Confidential Instructions to Participants in the Travelers Group
401(k) Savings Plan who hold outstanding Shares of Class A Common
Stock of the Company.
(a)(5)(F) Amended Complaint of Howard Vogel, on behalf of himself and all others
similarly situated, against Travelers Property Casualty Corp., Robert
J. Lipp, Jay S. Fishman, Frank J. Tasco, Dudley C. Mecum II, Arthur
Zankel, Kenneth J. Bialkin, Sanford I. Weill, TAP Merger Corp., Leslie
B. Disharoon and Citigroup Inc., filed in the Court of Chancery in the
State of Delaware on March 28, 2000.
(a)(5)(G) Complaint of Alfred Ronconi against Kenneth J. Bialkin, Leslie B.
Disharoon, Jay S. Fishman, Robert I. Lipp, Dudley C. Mecum, Frank J.
Tasco, Sanford I. Weill, Arthur Zankel, Travelers Property Casualty
Corp. and Citigroup Inc., filed in the Court of Chancery of the State
of Delaware on March 21, 2000.
(a)(5)(H) Complaint of Benjamin Wyche against Kenneth J. Bialkin, Leslie B.
Disharoon, Jay S. Fishman, Robert I. Lipp, Dudley C. Mecum, Frank J.
Tasco, Sanford I. Weill, Arthur Zankel, Travelers Property Casualty
Corp. and Citigroup Inc., filed in the Court of Chancery of the State
of Delaware on March 21, 2000.
(a)(5)(I) Complaint of Geo-Center, Inc., Profit Sharing Plan and Trust against
Kenneth J. Bialkin, Leslie B. Disharoon, Jay S. Fishman, Robert I.
Lipp, Dudley C. Mecum, Frank J. Tasco, Sanford I. Weill, Arthur
Zankel, Citigroup Inc. and Travelers Property Casualty Corp., filed in
the Court of Chancery of the State of Delaware on March 21, 2000.
(a)(5)(J) Complaint of M. Denise Welch against Travelers Property Casualty
Corp., Citigroup Inc., Jay S. Fishman, Sanford I. Weill, Robert I.
Lipp, Kenneth Bialkin, Leslie B. Disharoon, Dudley C. Mecum, Frank J.
Tasco and Arthur Zankel, filed in the Court of Chancery of the State
of Delaware on March 21, 2000.
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(a)(5)(K) Complaint of Crandon Capital Partners, individually and on behalf of
all others similarly situated against Robert I. Lipp, Jay S. Fishman,
Leslie B. Disharoon, Sanford I. Weill, Kenneth J. Bialkin, Dudley C.
Mecum, Frank J. Tasco, Arthur Zankel, Citigroup Inc. and Travelers
Property Casualty Corp., filed in the Court of Chancery of the State
of Delaware on March 21, 2000.
(a)(5)(L) Complaint of Rodman Insurance Agency, Inc. against Travelers Property
Casualty Corp., Robert I. Lipp, Jay S. Fishman, Frank J. Tasco, Dudley
C. Mecum II, Arthur Zankel, Kenneth J. Bialkin, Sanford I. Weill,
Leslie B. Disharoon and Citigroup Inc., filed in the Court of Chancery
of the State of Delaware on March 23, 2000.
(a)(5)(M) Complaint of Robert Lewis against Travelers Property Casualty Corp.,
Robert I. Lipp, Jay S. Fishman, Frank J. Tasco, Dudley C. Mecum II,
Arthur Zankel, Kenneth J. Bialkin, Sanford I. Weill, Leslie B.
Disharoon and Citigroup Inc., filed in the Court of Chancery of the
State of Delaware on March 23, 2000.
(a)(5)(N) Complaint of Cheryl Settos and George Settos against Travelers
Property Casualty Corp., Sanford I. Weill, Jay S. Fishman, Robert I.
Lipp, Frank J. Tasco, Dudley C. Mecum II, Arthur Zankel, Kenneth J.
Bialkin, Leslie B. Disharoon and Citigroup Inc., filed in the Court of
Chancery of the State of Delaware on March 29, 2000.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
SCHEDULE TO AND SCHEDULE 13E-3
CITIGROUP INC.
By: /s/ Charles O. Prince, III
-------------------------------------
Name: Charles O. Prince, III
Title: General Counsel and Corporate
Secretary
THE TRAVELERS INSURANCE GROUP INC.
By: /s/ Irwin Ettinger
-------------------------------------
Name: Irwin Ettinger
Title: Senior Vice President
SCHEDULE 13E-3
TRAVELERS PROPERTY CASUALTY CORP.
By: /s/ James M. Michener
-------------------------------------
Name: James M. Michener
Title: General Counsel and Secretary
Date: March 30, 2000
5
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
(a)(1)(L) Confidential Instructions to Participants in the Travelers Group
401(k) Savings Plan who hold outstanding Shares of Class A Common
Stock of the Company.
(a)(5)(F) Amended Complaint of Howard Vogel, on behalf of himself and all
others similarly situated, against Travelers Property Casualty
Corp., Robert J. Lipp, Jay S. Fishman, Frank J. Tasco, Dudley C.
Mecum II, Arthur Zankel, Kenneth J. Bialkin, Sanford I. Weill,
TAP Merger Corp., Leslie B. Disharoon and Citigroup Inc., filed
in the Court of Chancery of the State of Delaware on March 28,
2000.
(a)(5)(G) Complaint of Alfred Ronconi against Kenneth J. Bialkin, Leslie B.
Disharoon, Jay S. Fishman, Robert I. Lipp, Dudley C. Mecum, Frank
J. Tasco, Sanford I. Weill, Arthur Zankel, Travelers Property
Casualty Corp. and Citigroup Inc., filed in the Court of Chancery
of the State of Delaware on March 21, 2000.
(a)(5)(H) Complaint of Benjamin Wyche against Kenneth J. Bialkin, Leslie B.
Disharoon, Jay S. Fishman, Robert I. Lipp, Dudley C. Mecum, Frank
J. Tasco, Sanford I. Weill, Arthur Zankel, Travelers Property
Casualty Corp. and Citigroup Inc., filed in the Court of Chancery
of the State of Delaware on March 21, 2000.
(a)(5)(I) Complaint of Geo-Centers, Inc., Profit Sharing Plan and Trust
against Kenneth J. Bialkin, Leslie B. Disharoon, Jay S. Fishman,
Robert I. Lipp, Dudley C. Mecum, Frank J. Tasco, Sanford I.
Weill, Arthur Zankel, Citigroup Inc. and Travelers Property
Casualty Corp., filed in the Court of Chancery of the State of
Delaware on March 21, 2000.
(a)(5)(J) Complaint of M. Denise Welch, against Travelers Property Casualty
Corp., Citigroup Inc., Jay S. Fishman, Sanford I. Weill, Robert
I. Lipp, Kenneth Bialkin, Leslie B. Disharoon, Dudley C. Mecum,
Frank J. Tasco and Arthur Zankel, filed in the Court of Chancery
of the State of Delaware on March 21, 2000.
(a)(5)(K) Complaint of Crandon Capital Partners, individually and on behalf
of all others similarly situated against Robert I. Lipp, Jay S.
Fishman, Leslie B. Disharoon, Sanford I. Weill, Kenneth J.
Bialkin, Dudley C. Mecum, Frank J. Tasco, Arthur Zankel,
Citigroup Inc. and Travelers Property Casualty Corp., filed in
the Court of Chancery of the State of Delaware on March 21, 2000.
(a)(5)(L) Complaint of Rodman Insurance Agency, Inc. against Travelers
Property Casualty Corp., Robert I. Lipp, Jay S. Fishman, Frank J.
Tasco, Dudley C. Mecum II, Arthur Zankel, Kenneth J. Bialkin,
Sanford I. Weill, Leslie B. Disharoon and Citigroup Inc., filed
in the Court of Chancery of the State of Delaware on March 23,
2000.
(a)(5)(M) Complaint of Robert Lewis against Travelers Property Casualty
Corp., Robert I. Lipp, Jay S. Fishman, Frank J. Tasco, Dudley C.
Mecum II, Arthur Zankel, Kenneth J. Bialkin, Sanford I. Weill,
Leslie B. Disharoon and Citigroup Inc., filed in the Court of
Chancery of the State of Delaware on March 23, 2000.
(a)(5)(N) Complaint of Cheryl Settos and George Settos against Travelers
Property Casualty Corp., Sanford I. Weill, Jay S. Fishman, Robert
I. Lipp, Frank J. Tasco, Dudley C. Mecum II, Arthur Zankel,
Kenneth J. Bialkin, Leslie B. Disharoon and Citigroup Inc., filed
in the Court of Chancery of the State of Delaware on March 29,
2000.
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CONFIDENTIAL INSTRUCTIONS
FOR
TENDER OFFER FOR OUTSTANDING SHARES OF CLASS A
COMMON STOCK OF TRAVELERS PROPERTY CASUALTY CORP.
HELD IN THE TRAVELERS GROUP 401(k) SAVINGS PLAN
---------------------------------------------------
THE OFFER WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY,
APRIL 19, 2000 UNLESS THE OFFER IS EXTENDED.
---------------------------------------------------
NOTICE TO PARTICIPANTS IN THE
TRAVELERS GROUP 401(k) SAVINGS PLAN
Dear Plan Participant:
Enclosed is a copy of the Offer to Purchase, dated March 23, 2000, and the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"), and an Instruction
Form relating to the Offer by The Travelers Insurance Group Inc., an indirect
wholly owned subsidiary of Citigroup Inc. (the "Offeror"), to purchase all the
outstanding shares of Class A common stock (the "Shares") of Travelers Property
Casualty Corp. at a price of $41.50 per Share, net to the seller in cash,
without interest thereon (as described in the Offer). You should read the Offer
materials carefully before completing the enclosed Instruction Form relating to
the units of the Travelers Property Casualty Corp. Common Stock Fund held in
your account under the Travelers Group 401(k) Savings Plan (the "Savings
Plan").
TRAVELERS PROPERTY CASUALTY CORP. COMMON STOCK FUND
The Shares held in the Savings Plan are held in a common stock fund (the
"Common Stock Fund") that is invested primarily in Shares. A portion of the
Common Stock Fund is invested in cash and/or cash equivalents for the purpose
of maintaining the liquidity of the Common Stock Fund. Your investment in the
Common Stock Fund is expressed in units (the "Units"). There are more Units
credited to participants' accounts under the Savings Plan than there are Shares
held in the Savings Plan because the Units allocated to your Savings Plan
account consist of both Shares and cash/cash equivalents. Accordingly, the cash
credited to your account as a result of providing instructions to the Trustee
will be less than $41.50 per Unit. Similarly, with respect to the proposed
merger transaction that will take place after the completion of the Offer, any
cash credited to your account for Shares attributable to Units will be less
than $41.50 per Unit.
If you hold Shares outside of the Savings Plan, you will also receive, in
a separate mailing, a Letter of Transmittal relating to those Shares held
outside the Savings Plan. In order for all Shares owned by you outside the
Savings Plan to be tendered in accordance with your direction, the Letter of
Transmittal for the Shares held by you outside the Savings Plan will need to be
signed and returned to Citibank, N.A., the Depositary in connection with the
Offer. IN ORDER FOR ALL SHARES ATTRIBUTABLE TO UNITS ALLOCATED TO YOU UNDER THE
SAVINGS PLAN TO BE TENDERED IN ACCORDANCE WITH YOUR DIRECTION, THE ENCLOSED
INSTRUCTION FORM WILL NEED TO BE SIGNED AND RETURNED TO STATE STREET BANK &
TRUST CO. ("STATE STREET"), THE CUSTODIAN IN CONNECTION WITH THE SAVINGS PLAN
(THE "CUSTODIAN"), WHO WILL TABULATE YOUR INSTRUCTIONS.
INSTRUCTIONS TO THE TRUSTEE
State Street, as custodian for Citibank, N.A., the trustee of the Savings
Plan (the "Trustee"), holds Shares in the Common Stock Fund for the benefit of
Savings Plan participants. Only the Trustee can
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tender the Shares held by the Common Stock Fund for the Savings Plan. However,
under the terms of the Savings Plan, you may instruct the Trustee how to tender
the Shares attributable to Units allocated to your Savings Plan account in the
Offer. To preserve confidentiality, the Custodian will collect your
instructions and will transmit to the Trustee one instruction representing the
total of all Shares attributable to Units in the Savings Plan with respect to
which tender instructions have been received. The enclosed Instruction Form is
designed to permit you to instruct the Custodian to instruct the Trustee on how
to tender the Shares attributable to Units allocated to your Savings Plan
account in the Offer.
You may instruct the Custodian to instruct the Trustee to tender all or a
percentage of the Shares attributable to Units held in your Savings Plan
account. You may also instruct the Custodian to instruct the Trustee not to
tender any of the Shares attributable to Units held in your Savings Plan
account. IF YOU DO NOT COMPLETE THE ENCLOSED INSTRUCTION FORM OR RETURN IT ON A
TIMELY BASIS, THE CUSTODIAN WILL INSTRUCT THE TRUSTEE NOT TO TENDER ANY SHARES
ATTRIBUTABLE TO UNITS ALLOCATED TO YOUR SAVINGS PLAN ACCOUNT. THE TRUSTEE WILL
ONLY TENDER THOSE SHARES FOR WHICH IT RECEIVES INSTRUCTIONS FROM PARTICIPANTS
IN THE SAVINGS PLAN.
Please note that a tender of Shares attributable to Units allocated to
your Savings Plan account can be made only by the Trustee as the holder of
record. DO NOT COMPLETE THE ENCLOSED LETTER OF TRANSMITTAL; IT IS FURNISHED TO
YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER DIRECTLY
SHARES ATTRIBUTABLE TO UNITS ALLOCATED TO YOUR SAVINGS PLAN ACCOUNT. If you
wish to direct the Custodian to instruct the Trustee concerning the tender of
the Shares attributable to Units allocated to your Savings Plan account, you
must complete and return the enclosed Instruction Form. You should be aware, in
the event you do not tender the Shares attributable to Units allocated to your
account in the Savings Plan, the Offeror has announced its intention, upon
completion of the Offer, to acquire any Shares (including those in the Common
Stock Fund) not purchased in the Offer in a subsequent merger transaction on
the same terms as the Offer.
Neither the Custodian nor the Trustee makes any recommendation as to
whether to direct the tender of Shares attributable to Units or whether to
refrain from directing the tender of such Shares. You must make your own
decision on these matters.
If you have questions about the terms and conditions of the Offer, please
contact the Information Agent for the Offer, Innisfree M&A Incorporated at
(888) 750-5835 (call toll free) or (212) 750-5833 (call collect).
TENDER DEADLINE
In order to ensure that your instructions to the Trustee will be followed,
you must complete, sign and date the enclosed Instruction Form so that it can
be received by State Street for tabulation no later than 12:00 midnight, New
York City time, on Thursday, April 13, 2000. This date is four business days
prior to the expiration of the Offer which is scheduled to expire at 12:00
midnight New York City time, on Wednesday, April 19, 2000. If the expiration of
the Offer is extended beyond its scheduled expiration date, the time by which
the Custodian must receive your instruction will be extended automatically
until four business days prior to the extended expiration date. Please return
the Instruction Form in the enclosed envelope. Do not send the Instruction Form
to Travelers Property Casualty Corp. or to Citibank, N.A.
WITHDRAWAL RIGHTS
Except as otherwise provided in the following sentence and the Offer, your
direction will be deemed irrevocable. Your direction may be withdrawn at any
time on or prior to 12:00 midnight New York City time, on Thursday, April 13,
2000. This date is four business days prior to the expiration of the Offer
which is scheduled to expire at 12:00 midnight New York City time, on
Wednesday, April 19, 2000. If the expiration of the Offer is extended beyond
its scheduled expiration date, the time by which you may withdraw such
instruction will be extended automatically until four business days prior to
the extended expiration date. To revoke your instructions to tender Shares
attributable to Units, you must send a statement to the Custodian that you are
withdrawing your prior instruction and requesting another instruction form. You
must sign the statement and print your name and Social Security number under
2
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your signature. The statement must be sent by regular mail to the following
address: State Street Bank & Trust Co., P.O. Box 1997GPO, New York, New York
10116-1997.
You must obtain new a Instruction Form by calling 1-800-881-3938, entering
your social security number and personal identification number at the prompt
and pressing Option #1 for the 401(k) Savings Plan. After you receive a new
Instruction Form, you must complete, sign and return the new Instruction Form
in the enclosed envelope accompanying such form. The new Instruction Form must
be received by State Street for tabulation no later than 12:00 midnight, New
York City time, on Thursday, April 13, 2000, unless the Offer is extended.
CONFIDENTIALITY
YOUR INSTRUCTIONS ARE COMPLETELY CONFIDENTIAL. Under no circumstances will
the Custodian or the Trustee, or any of their agents (including Citibank, N.A.,
as the Depositary), disclose to Travelers Property Casualty Corp. or any other
party whether or not you tender the Shares attributable to Units allocated to
your Savings Plan account in the Offer.
Sincerely,
State Street Bank & Trust Co.
Custodian for Citibank, N.A., Trustee
3
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INSTRUCTION FORM
RE: TRAVELERS PROPERTY GROUP 401(k) SAVINGS PLAN
(THE "SAVINGS PLAN")
To State Street Bank & Trust Co.:
I am a participant in the above Savings Plan and, as such, I received a
copy of the Offer to Purchase, dated March 23, 2000, and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"), relating to the Offer by The Travelers
Insurance Group Inc., an indirect wholly owned subsidiary of Citigroup Inc., to
purchase all the outstanding shares of Class A common stock (the "Shares") of
Travelers Property Casualty Corp., at a price of $41.50 per Share, net to the
seller in cash, without interest thereon (as described in the Offer), including
those Shares held in the Travelers Property Casualty Common Stock Fund of the
Savings Plan (the "Savings Plan"), and forming a portion of the Units credited
to my Savings Plan account.
I hereby direct you to:
[ ] Tender all Shares attributable to Units held in my account.
[ ] Tender only ___% (insert number in whole percents) of such Shares
attributable to Units held in my account.
[ ] Do not tender any such Shares attributable to Units held in my account.
Name:
-----------------------------------------
(Please Print)
----------------------------------------------
(Signature of Participant)
Address:
--------------------------------------
----------------------------------------------
(Include Zip Code)
----------------------------------------------
(Taxpayer Identification or
Social Security Number)
----------------------------------------------
(Date)
PLEASE SIGN, DATE AND MAIL THIS INSTRUCTION FORM
PROMPTLY IN THE ENVELOPE PROVIDED
THE INSTRUCTION FORM MUST BE RECEIVED
NO LATER THAN 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON APRIL 13, 2000 UNLESS THE OFFER IS EXTENDED
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - - - - - - x
HOWARD VOGEL, on behalf of himself and all others :
similarly situated,
:
Plaintiff, Civil Action No. 17902 NC
:
-against-
:
TRAVELERS PROPERTY CASUALTY CORP., ROBERT I. LIPP,
JAY S. FISHMAN, FRANK J. TASCO, DUDLEY C. MECUM II, :
ARTHUR ZANKEL, KENNETH J. BIALKIN, SANFORD I.
WEILL, TAP MERGER CORP., LESLIE B. DISHAROON and :
CITIGROUP INC.,
:
Defendants.
- - - - - - - - - - - - - - - - - - - - - - - - - - - x
AMENDED COMPLAINT
Plaintiff, by his attorneys, for his amended complaint against defendants,
alleges upon personal knowledge with respect to himself, and upon information
and belief based, inter alia, upon the investigation of counsel, as to all other
allegations herein, as follows:
NATURE OF THE ACTION
1. This is a class action on behalf of the public stockholders of Travelers
Property Casualty Corp. ("Travelers" or the "Company"), against the
directors
<PAGE>
and controlling shareholder of Travelers for injunctive and other relief
concerning the acquisition of the outstanding publicly-held shares of
Travelers common stock by Travelers' majority shareholder, defendant
Citigroup Inc. ("Citigroup"), through a wholly-owned Delaware subsidiary.
2. On March 21, 2000, Travelers publicly announced that it had agreed to a
transaction with Citigroup whereby Citigroup, through entities under its
control, would be commencing a cash tender offer (the "Tender Offer") for
all of the outstanding shares of the Company to be followed by a merger at
the same price. On or about March 24, 2000, Travelers and Citigroup
disseminated an Offer to Purchase on Schedule 14D-1 (the "14D-1") and a
Solicitation/Recommendation Statement on Schedule 14D-9 (the "14D-9") to
Travelers' shareholders concerning the Tender Offer. Pursuant to the
transaction, Travelers' shareholders are to receive $41.50 in cash for each
share of their stock, grossly inadequate and unfair compensation given
Travelers' valuable product lines and promising future results.
3. As set forth in detail below, defendants are seeking to induce Travelers'
shareholders to tender their shares by claiming in the 14D-9 that the
transaction is "fair" to them. Yet, defendants have withheld and obscured
vital material information needed by shareholders to properly assess and
consider
2
<PAGE>
the Tender Offer and the true value of Travelers. In particular, as set
forth more fully below:
- Defendants have failed to disclose that the so-called "Special Committee"
appointed by the Travelers Board of Directors (the "Special Committee") was
riddled with conflicts of interest. Indeed, the 14D-1 does not disclose the
material fact that defendant Leslie B. Disharoon, the Chairman of the
Special Committee, was formerly affiliated with Citigroup (or its
predecessors) and, therefore, has a material conflict of interest. In this
regard, the 14D-1 is inaccurate when it states that the Special Committee
was "independent."
- The financial analyses (particularly the "minority squeeze-out analysis")
performed by Morgan Stanley Dean Witter ("Morgan Stanley"), the Special
Committee's financial advisor, contained material inaccuracies and,
therefore, the true range of value for the Company's shares is materially
higher than that being reported to shareholders. For example, in its
"Analysis Of Selected Acquisitions Of Minority Interests - Analysis Of
Selected Minority Interest Acquisitions 1992 To Present," Morgan Stanley
reported that the "Final Consideration" paid in the PEC Israel Economic
Corp./Investor Group transaction was $30.00 per share. That number is
wrong. The actual final consideration received by PEC's shareholders was
$36.50 per share, a number materially higher than $30.00 -- the number used
in the analysis. There are at least five other similar misrepresentations
in Morgan Stanley's analysis of minority squeeze-outs where Morgan Stanley
materially understated the final consideration received by shareholders.
- Morgan Stanley also omitted several pertinent and comparable squeeze-out
transactions from its analysis which would have further demonstrated the
inadequacy of the $41.50 Tender Offer price. These transactions all
occurred between 1992 and the present (the same time period used by Morgan
Stanley) and were used by Salomon Brothers, the predecessor to Salomon
Smith Barney ("Salomon"), Citigroup's financial advisor, in another
analysis of a squeeze-out acquisition of a property and casualty insurance
company.
- Defendants assert in the 14D-1 mailed to shareholders that Morgan Stanley
calculated a "summary indicative value range" for Travelers' shares of
$38.00 to $48.00 per share, but fail to disclose that Morgan Stanley also
performed an analysis which illustrated that "Indicative Premiums Paid In
Precedent Mergers & Acquisitions" yielded values materially in excess of
summary
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indicative value range, which Morgan Stanley did not incorporate into its
final analysis.
- Defendants did not disclose that Salomon, Citigroup's financial advisor,
upon which Citigroup purportedly relied for its statement that "the
consideration to be received" by Travelers' stockholders "was fair to and
in the best interests" of those stockholders, was irremediably conflicted,
as Salomon is a wholly-owned subsidiary of Citigroup.
- Travelers is worth more to Citigroup as a wholly-owned entity, as it will
trade at materially higher multiples of its earnings when the acquisition
is completed, as compared to the multiples it currently trades as a partly
publicly-owned entity.
4. Furthermore, as demonstrated herein, the consideration that Citigroup has
offered in the Tender Offer, $41.50 per share in cash, is grossly
inadequate and unfair and the Special Committee appointed by the Travelers'
Board of Directors to purportedly represent the interests of the public
shareholders of Travelers is a sham. In addition to these conflicts of
interest, the compensation of Morgan Stanley, the Special Committee's
financial advisor was, in large part, contingent upon getting the deal
done. Thus, it is clear that the true purpose of the "Special Committee"
was to create the appearance that the public shareholders of Travelers were
being independently represented and having their interests protected when,
in fact, that was not the case.
5. As a result of the foregoing, Travelers' shareholders will be forced,
without full or complete disclosure by defendants, to make final decisions
regarding their ownership in the Company and are threatened with the
immediate
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divestiture of their shares as a result of defendants' wrongful course of
conduct.
THE PARTIES
6. Plaintiff, at all relevant times, has owned Travelers common stock.
7. Travelers is a Delaware corporation with its principal executive offices
located at One Tower Square, Hartford, Connecticut.
8. Defendant Citigroup, a Delaware corporation, is a diversified financial
services holding company that provides a broad range of financial services.
Citigroup was formed in 1998 through the merger of Citicorp and Travelers
Group. Salomon Smith Barney is a wholly-owned subsidiary of Citigroup.
Citigroup and its affiliates hold approximately 85% of the total
outstanding common stock of Travelers and approximately 98% of the voting
control over the Company. As such, Citigroup and its representatives on the
Travelers' Board effectively control and dominate Travelers' affairs.
Citigroup, therefore, is a controlling shareholder and owes fiduciary
obligations of good faith, candor, loyalty and fair dealing to the public
shareholders of Travelers.
9. Defendant TAP Merger Corp., a wholly-owned Delaware subsidiary of the
Travelers Insurance Group Inc., which is a wholly-owned subsidiary of
defendant Citigroup, was established to facilitate the acquisition of
Travelers' publicly-held shares.
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10. Defendant Robert I. Lipp ("Lipp") is a Director of Travelers and the Chief
Executive Officer of Citigroup's Global Insurance Business.
11. Defendant Jay S. Fishman ("Fishman") is the President and Chief Executive
Officer of Travelers and Chairman of its Board of Directors.
12. Defendant Frank J. Tasco ("Tasco') is a Director of Travelers. From 1992 to
1998, Tasco was a Director of Travelers Group, a predecessor of Citicorp.
13. Defendant Dudley C. Mecum II ("Mecum") is a Director of Travelers and a
Director of Citigroup.
14. Defendant Arthur Zankel ("Zankel") is a Director of Travelers and a
Director of Citigroup.
15. Defendant Kenneth J. Bialkin ("Bialkin") is a Director of Travelers and a
Director of Citigroup.
16. Defendant Sanford I. Weill ("Weill") is a Director of Travelers and the
Co-Chairman and Co-Chief Executive Officer of Citigroup.
17. Defendant Leslie B. Disharoon ("Disharoon") is a Director of Travelers.
From 1986 to 1988, Disharoon was a Director of Travelers Group.
18. At all relevant times, defendants Lipp, Fishman, Tasco, Mecum, Zankel,
Bialkin, Weill and Disharoon (collectively, the "Individual Defendants")
constituted Travelers' Board of Directors.
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19. None of the Individual Defendants maintains significant ownership of
Travelers' stock. Collectively, the 16 executive officers and directors of
Travelers hold just over 312,000 of the over 57 million shares of the
Company's publicly-traded (non-Citigroup) common stock. Defendants
Disharoon and Tasco, the members of the Special Committee, hold just 11,515
shares of Travelers stock. By contrast, at the time they left their long-
standing Board memberships with Travelers Group less than two years ago,
Disharoon held 243,363 shares of Travelers Group (now Citigroup) stock, and
Tasco held 38,879 shares of Travelers Group stock.
20. By virtue of their positions as directors and/or officers of Travelers
and/or their exercise of control and dominant ownership over the business
and corporate affairs of Travelers, each Individual Defendant and Citigroup
owed and owes Travelers and its stockholders fiduciary obligations and were
and are required to: use their ability to control and manage Travelers in a
fair, just and equitable manner; act with complete candor when soliciting
shareholder action; act in furtherance of the best interests of Travelers
and its stockholders; refrain from abusing their positions of control; and
not favor their own interests at the expense of Travelers and its
stockholders.
21. As discussed in detail below, Citigroup, in concert with the Individual
Defendants, who collectively control the actions of Travelers, have
breached
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their fiduciary duties to Travelers' public stockholders by acting to cause
or facilitate Citigroup's acquisition of the publicly-held minority shares
of Travelers for unfair and inadequate consideration, and colluding in
Citigroup's coercive tactics in accompanying such buy-out.
CLASS ACTION ALLEGATIONS
22. Plaintiff brings this action pursuant to Rule 23 of the Rules of this
Court, on behalf of himself and all other shareholders of the Company
except the defendants herein and any persons, firm, trust, corporation, or
other entity related to or affiliated with them and their successors in
interest, who are or will be threatened with injury arising from
defendants' actions, as more fully described herein (the "Class").
23. This action is properly maintainable as a class action for the following
reasons:
(a) The Class is so numerous that joinder of all members is impracticable.
There are millions of shares of Travelers common stock outstanding, held by
hundreds if not thousands of stockholders of Travelers stock who are
members of the Class.
(b) Members of the Class are scattered throughout the United States and are so
numerous that it is impracticable to bring them all before this Court.
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(c) There are questions of law and fact that are common to the Class including,
inter alia, the following:
(i) whether defendants have engaged in and are continuing to engage in
conduct which unfairly benefits Citigroup at the expense of 1he
members of the Class;
(ii) whether the Individual Defendants, as officers and/or directors of the
Company, and Citigroup, the controlling stockholder of Travelers are
violating their fiduciary duties to plaintiff and the other members of
the Class;
(iii) whether plaintiff and the other members of the Class would be
irreparably damaged were defendants not enjoined from the conduct
described herein;
(iv) whether defendants have initiated and timed their buy-out of Travelers
shares to unfairly benefit Citigroup at the expense of Travelers'
public shareholders.
(d) The claims of plaintiff are typical of the claims of the other members of
the Class in that all members of the Class will be damaged by defendants'
actions.
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(e) Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. Plaintiff is an
adequate representative of the Class.
(f) The prosecution of separate actions by individual members of the Class
would create the risk of inconsistent or varying adjudications with respect
to individual members of the Class which would establish incompatible
standards of conduct for defendants, or adjudications with respect to
individual members of the Class which would as a practical matter be
dispositive of the interests of the other members not parties to the
adjudications or substantially impair or impede their ability to protect
their interests.
(g) The defendants have acted, or refused to act, on grounds generally
applicable to, and causing injury to, the Class and, therefore, preliminary
and final injunctive relief on behalf of the Class as a whole is
appropriate.
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SUBSTANTIVE ALLEGATIONS
A. THE COMPANY
24. Travelers provides a broad range of insurance products and services for the
commercial and consumer markets. Travelers is the second largest writer of
personal insurance lines through independent agents and the third largest
writer of commercial lines. It is the third largest publicly traded United
States property and casualty company by market capitalization. Among other
things, Travelers has (1) a universally highly-regarded management team,
(2) a proven consolidation ability, (3) a high quality balance sheet and
(4) reserve quality. Indeed, Travelers is considered to be the premiere
player in the property and casualty sector. Travelers 3-year average return
on equity of 15.1% significantly outperformed the Company's property and
casualty insurance peer group median 3-year return on equity of 10.9%.
Travelers' 3-year operating income growth of 9.0% also handily beat the
peer group median 3-year operating income growth of 5.7%.
B. A CONFLICTED SPECIAL COMMITTEE IS FORMED
25. According to the 14D-1, during the March 3, 2000 meeting of the Travelers
Board of Directors, a representative of Citigroup advised the Travelers
Board that Citigroup was "examining strategic alternatives" with respect to
its ownership of Travelers shares. Therefore, because of "possible
conflicts of interest," Travelers formed a "Special Committee" consisting
of defendants Disharoon and Tasco, neither of whom, according to the 14D-1,
were
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"employed by or affiliated with the Company (except in their capacity as
directors) or Parent [Citigroup] or any of its affiliates." Disharoon was
appointed Chairman of the Special Committee.
26. Defendants Disharoon and Tasco, however, are former Directors of Travelers
Group, having served in that position from 1986-1998 and 1992-1998,
respectively. At the time they left Travelers Group, Disharoon and Tasco
also served on Travelers Group's Audit Committee (along with defendant
Mecum) and Finance Committee (along with defendant Zankel). Travelers Group
has since merged with Citicorp, creating Citigroup. Defendant Weill, the
former head of Travelers Group, is now the Co-Chief Executive Officer of
Citigroup. Defendants Disharoon and Tasco, therefore, have overriding
loyalties to defendant Weill and were and are not truly independent. In
this regard, the 14D-1 is inaccurate when it states that the Special
Committee was "independent." Moreover, the 14D-1 fails to disclose that
Disharoon was a Director of Travelers Group.
27. On March 10, 2000, the Special Committee retained Morgan Stanley to act as
its financial advisor and to "prepare an analysis as to the range of
values" of Travelers' shares. The 14D-1 states that "Prior" to the Special
Committee meeting with Morgan Stanley to review Morgan Stanley's results,
the "Special Committee had been informally advised" by Citigroup that it
planned to make
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an offer "no higher than the mid to high $30's." If, as is likely, the
Special Committee conveyed this information to Morgan Stanley prior to its
analysis, Morgan Stanley did not actually undertake to derive a "range of
values" for Travelers' shares but, rather, was justifying the price which
Citigroup wanted to pay for Travelers' shares. The 14D-1, however, does not
say whether Morgan Stanley, prior to performing its analysis, had been
"tipped-off" as to the amount of consideration which Citigroup was willing
to pay.
28. Pursuant to Morgan Stanley's engagement letter, Travelers agreed to pay
Morgan Stanley (1) an advisory fee upon commencement of its engagement of
$350,000 for the first month of the assignment and up to $75,000 per month
for each month thereafter, (2) a fee of $5,000,000 upon and in connection
with delivering its fairness opinion and (3) if the deal is completed, a
"Transaction fee" against which the advisory and opinion fees will be
credited. The Transaction Fee will be calculated by multiplying 0.40% times
the total dollar value of the consideration paid for acquiring the
publicly-held shares. Based on the current transaction valuation of $2.57
billion, Morgan Stanley's Transaction Fee is valued at approximately $9.48
million. The full Transaction Fee is payable at the time at which 95% or
more of the Company's common stock is controlled by Citigroup or its
affiliates. The Morgan Stanley contingent compensation arrangement
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irremediably conflicted Morgan Stanley and incentivized Morgan Stanley to
give its blessing to a deal that had a reasonable probability of
consummation, rather than put transaction at risk by vigorously pursuing
the interests of Travelers' shareholders.
C. CITIGROUP OFFERS TO PURCHASE TRAVELERS SHARES, MORGAN STANLEY OPINES THAT
$41.50 PER SHARE IS FAIR AND REASONABLE AND THE COMPANY'S BOARD APPROVES
THE TRANSACTION
29. On March 21, 2000, Citigroup contacted the Special Committee and formally
offered to acquire all the publicly-held shares of Travelers that it did
not presently own for $41.50 per share. Later that day, Morgan Stanley
rendered its opinion to the Special Committee that this consideration to be
received by Travelers' public shareholders was "fair to and in the best
interest of" Travelers' shareholders "from a financial point of view." The
Special Committee then unanimously recommended that the Travelers Board
vote in favor of the merger. The Board, thereafter, approved the merger.
D. THE TRANSACTION IS ANNOUNCED
30. Also, on March 21, 2000, Travelers issued a press release announcing the
transaction, which is valued at $2.4 billion. According to Keith Anderson,
a Travelers spokesman, the merger "will simply change the company's capital
structure. It will not affect employment levels, or how we do business."
The
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market price of Citigroup's shares rose $1.87 per share, reflecting the
accretive nature of the transaction to Citigroup.
31. On or about March 24, 2000, Citigroup and Travelers disseminated the 14D-1
and 14D-9 to Travelers' shareholders purportedly describing, inter alia,
the merger transaction, the history of negotiations between the companies,
the opinion of the Special Committee's financial advisor and certain other
purportedly relevant information. The Tender Offer is scheduled to expire
on April 19, 2000.
E. DEFENDANTS BREACHED THEIR FIDUCIARY DUTIES TO PLAINTIFF AND THE CLASS
1. THE TENDER OFFER PRICE GROSSLY UNDERVALUES THE COMPANY'S SHARES
32. The Tender Offer represents only a modest premium over the trading price of
Travelers stock prior to the announcement of the offer. Indeed, the offer
is timed to take advantage of a temporarily depressed trading price of
Travelers common stock and the property and casualty insurance industry in
general. This temporary depression is ending, as noted by the substantial
value which representatives of the Company as well as various analysts have
placed on Travelers.
33. For example, on March 20, 2000, Travelers announced that Jay S. Fishman,
Travelers' President and Chief Executive Officer, was elected to also serve
as
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Chairman of the Company. Commenting on Mr. Fishman's appointment, defendant
Lipp, Travelers' departing Chairman stated: Today's action by the Board
underscores the success of our company under Jay's leadership as the Chief
Executive Officer. That success is particularly noteworthy in light of the
challenging market conditions faced by the property casualty industry
during Jay's tenure. During this period, Travelers Property Casualty has
recorded record earnings each year, built a solid capital base, and
positioned the company as a leader in the industry. [Emphasis added.]
34. Furthermore, according to an article which appeared on March 23, 2000 in
the Wall Street Journal, Weston Hicks, an analyst at J.P. Morgan
Securities, stated that Citigroup's bid for Travelers "is 'a validation'
that insurers are at the bottom of this tough cycle ... If you've got a
three-to-five year investment horizon, it's a good time to be moving assets
into this industry ... Citigroup is buying assets when they are cheap and
things are improving." The article also stated that, "For its part,
Citigroup believes Travelers stock is cheap -- about 11 times projected
earnings, at the cash takeover price of $41.50 per share. Some portfolio
managers owning Travelers complain that it is a steal at that price. Mr.
Hicks, the J.P. Morgan analyst, had estimated that Travelers had an
intrinsic value of $47 a share." Indeed, Morgan Stanley calculated that at
the minimal 11 times P/E multiple, management's current year 2000
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estimated earnings translates to $41.68 per share. Applying an indicative
premium formulated by Morgan Stanley (which itself was understated, as
explained more fully below) to the year 2000 estimated earnings translates
to $49.26 per share.
35. According to a March 22, 2000 article in The Hartford Courant, Kenneth S.
Zuckerberg, an analyst at Keefe, Bruyette & Woods, stated that the
acquisition will enable Travelers to "take advantage of Citigroup's strong
stock price as currency to buy other property-casualty companies."
According to Zuckerberg, when companies merge, the acquiror often uses its
stock to buy the target. Among property-casualty insurers, however, stock
is a comparatively weak currency with little purchasing power. Travelers'
stock, for example, traded at approximately 9 times earnings before the
Citigroup acquisition announcement. Similarly, many other property-casualty
insurers trade below 10 times earnings -- and trade at or below their book
values. After Travelers is acquired by Citigroup, which trades at 17 times
earnings, Travelers will take hold of powerful currency which it can then
use when it looks to buy other property-casualty insurers in the future.
Thus, Citigroup will get "more bang for the buck" with its acquisition of
Travelers, than Travelers' shareholders have received up until now. That,
however, is not reflected in the $41.50 acquisition price.
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2. MORGAN STANLEY'S FAIRNESS OPINION WAS MATERIALLY INACCURATE AND DID NOT
VALIDATE THE TRANSACTION
36. The 14D-1 contained a summary of the results of various financial analyses
performed by Morgan Stanley in connection with its fairness opinion. The
Special Committee relied heavily on the Morgan Stanley analyses. Indeed,
among the 11 factors the Special Committee identified in reaching its
conclusion to recommend the transaction, the first two factors listed refer
to Morgan Stanley's financial analyses. A review of these analyses,
however, confirms that the consideration to be received by Travelers'
public shareholders is grossly unfair and inadequate as these analyses are
riddled with material inaccuracies.
37. For example, Morgan Stanley performed a "going private premium analysis."
According to the 14D-1, that analysis implied a value reference range for
Travelers' shares of $40.00 to $48.00 per share. At $41.50 per share, the
Tender Offer price is only marginally higher than the number at the lower
end of that range. The underlying data for the "going private premium
analysis" is annexed as Exhibit 99 (C)(2) to the 14D-1, in a document
entitled "Project Juice Presentation to the Special Committee March 20,
2000." That analysis, however, contains at least six material inaccuracies
which relate to the prices paid in other comparable deals. In each and
every one of the six instances, the price paid by the acquiror was
materially higher (and, therefore, the
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premium was higher) than that reported by Morgan Stanley in the analysis.
These inaccuracies caused the "going private premium analysis" to
understate the range of values for that analysis and, in turn, created a
false range of values here.
38. For example, in its "Analysis Of Selected Acquisitions Of Minority
Interests - Analysis Of Selected Minority Interest Acquisitions 1992 To
Present," Morgan Stanley reported that the "Final Consideration" paid in
the PEC Israel Economic Corp./Investor Group transaction was $30.00 per
share. That number is wrong. The actual final consideration received by
PEC's shareholders was $36.50 per share, a number materially higher than
the $30.00 number used in Morgan Stanley's analysis.
39. The "Final Consideration" numbers used for the following transactions in
the "going private premium analysis" were also wrong: (1) Wheelabrator
Technologies Inc./Waste Management, Inc. (the "Final Consideration" number
used by Morgan Stanley was $15.00 per share - however, the actual final
consideration received by shareholders was $16.50 per share), (2) Fina
Inc./Petrofina SA (the "Final Consideration" number used by Morgan Stanley
was $60.00 per share -- however, the actual final consideration received by
shareholders was $60 in cash per share, plus an additional warrant valued
at $4.25-$4.75 per share), (3) Lin Broadcasting Corp./AT&T Corp. (the
"Final Consideration" number used by Morgan Stanley was $129.50 per share -
however, the actual final consideration received by shareholders was
$129.90 per share), (4) Medical Marketing Group Inc./ Medco Containment
Services Inc. (the "Final Consideration" number used by Morgan Stanley was
$27.25 -- however, the actual consideration received by shareholders was
$27.75 per share) and (5) Mafco Consolidated Group/Mafco Holdings (the
"Final
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Consideration" number used by Morgan Stanley was $33.50 -- however, the
actual consideration received by shareholders was $33.50, plus an
additional cash dividend of $10.00 per share, yielding final consideration
of $43.50 cash per share). Significantly, Morgan Stanley acted as the
financial advisor to the Special Committee in the Mafco Consolidated/Mafco
Holding Merger.
40. In addition to these material inaccuracies, Morgan Stanley also omitted
several pertinent squeeze-out transactions from its analysis which would
have further demonstrated the inadequacy of the $41.50 Tender Offer price.
These transactions all occurred between 1992 and the present (the same time
period used in the Morgan Stanley analysis) and were used by Salomon
Brothers, the predecessor to Salomon, Citigroup's financial advisor, in a
minority squeeze-out transaction analysis of an acquisition of another
property and casualty insurance company. These transactions include (1) the
1997 acquisition of Calgene, Inc. by Monsanto, Inc., which had an implied
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premium of 60% over Calgene's unaffected market price one week before the
transaction was announced, (2) the 1994 acquisition of Orient-Express
Hotels, Inc. by Sea Containers Ltd., which had an implied premium of 64.8%
over Orient-Express Hotels' unaffected market price one week before the
transaction was announced, (3) the 1995 acquisition of Rust International,
Inc. by WMX Technologies, Inc., which had an implied premium of 39.1% over
Rust's unaffected market price one week before the transaction was
announced and (4) the 1992 acquisition of Spelling Entertainment Inc., by
Charter Co., which had an implied premium of 45% over Spelling's unaffected
market price one week before the transaction was announced.
41. Morgan Stanley's failure to include these relevant, comparable squeeze-out
transactions in its premium analysis served to understate the value range
for that analysis.
3. THE 14D-1 AND 14D-9 FAIL TO DISCLOSE MATERIAL INFORMATION
42. The 14D-1 and 14D-9 also fail to disclose material information necessary
for Travelers shareholders to make an informed decision. The 14D-1 does not
provide a basis upon which shareholders can independently determine the
value of the Company's stock and decide whether or not to tender their
shares. Among other things, the 14D-1 fails to disclose and/or
misrepresents:
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(a) that defendant Disharoon, the Chairman of the Special Committee, was
formerly affiliated with Citigroup (or its predecessors) and, therefore, is
aligned with the interests of Citigroup, and is thereby irremediably
conflicted. In this regard, the 14D-1 is inaccurate when it states that the
Special Committee was "independent",
(b) the fact that Salomon, Citigroup's financial advisor upon whom Citigroup
stated that the "consideration to be received" by Travelers' stockholders
"was fair to and in the best interests" of those stockholders, was
irremediably conflicted as Salomon is a wholly-owned subsidiary of
Citigroup,
(c) the fact that Morgan Stanley's squeeze-out analysis contained material
inaccuracies and omissions as described above,
(d) that Morgan Stanley performed an analysis which illustrated "Indicative
Premiums Paid In Precedent Mergers & Acquisitions." The results of this
analysis yielded values materially in excess of the "summary indicative
value range" for Travelers shares of $38.00 to $49.00 per share set forth
in the 14D-1. For example, under Morgan Stanley's "Indicative Premiums Paid
In Precedent Mergers & Acquisitions Analysis," the results of which are not
described in the "summary analysis" section of the 14D-1 or in the 14D-9,
Morgan
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Stanley obtained price ranges for Travelers shares results based on
"precedent mergers and acquisitions" using Travelers' (1) 1999 actual
earnings per share ($49.00 - $60.00), (2) 2000 institutional brokers'
median estimated earnings per share ($47.45 - $58.40), (3) 2000 estimated
management earnings per share ($49.26 - $60.63) and (4) 12/31/1999 book
value per share ($52.21 - $60.00). Overall, the indicative reference range
for these analyses was $50.00 - $60.00 per Travelers share. Also
undisclosed is the fact that Morgan Stanley did not incorporate this
analysis into its final analysis;
(e) whether Morgan Stanley was "tipped-off" by the Special Committee as to the
price which Citigroup was willing to pay for Travelers' shares prior to
Morgan Stanley performing its "analysis as to the range of values" of
Travelers' shares. If a "tip-off" occurred, Morgan Stanley was not actually
undertaking to derive a "range of values" for Travelers' shares but,
rather, was justifying the price which Citigroup wanted to pay for
Travelers' shares;
(f) Citigroup has timed the Tender Offer to take advantage of the depressed
price of Travelers' common stock and that, given the Company's strong
financial prospects, the timing of the Tender Offer
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was designed to artificially "cap" the price of Travelers' common stock;
and
(g) Travelers is worth more to Citigroup as a wholly-owned entity, as it will
trade at materially higher multiples of its earnings, as compared to its
current status as a partly, publicly-owned entity.
CLAIM FOR RELIEF
43. In light of the foregoing, the Tender Offer is wrongful, unfair and harmful
to Class members. In seeking to consummate the transactions, defendants
have failed to negotiate a fair price and to afford Class members adequate
procedural safeguards and have acted in breach of their duty of candor.
44. Citigroup is the primary financial backer of Travelers and is, therefore,
well aware of the true financial condition of Travelers. In making its
inadequate offer to acquire the remaining stock of Travelers, Citigroup has
tried to take advantage of the fact that the market price of Travelers
stock does not fully reflect the true value of the Company.
45. Any transaction to acquire the Company at the price being considered does
not represent the true value of the Company and is unconscionable, unfair
and grossly inadequate and constitutes unfair dealing.
46. The price that Citigroup has offered has been dictated by Citigroup to
serve its own interests, and is being crammed down by Citigroup and its
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representatives on Travelers' Board to force Travelers' minority
shareholders to relinquish their Travelers shares at a grossly unfair
price.
47. In addition, defendants' failure to disclose all material facts relevant to
the proposed transaction in an accurate and non-misleading manner
constitutes a breach of defendants' duty of candor.
48. Citigroup, by reason of its 85% ownership of Travelers' outstanding shares,
is in a position to ensure effectuation of the transaction without regard
to its fairness to Travelers' public shareholders.
49. Because Citigroup is in possession of proprietary corporate information
concerning Travelers' future financial prospects, the degree of knowledge
and economic power between Citigroup and the class members is unequal,
making it grossly and inherently unfair for Citigroup to obtain the
remaining 15% of Travelers' shares at the unfair and inadequate price that
it has proposed.
50. By offering a grossly inadequate price for Travelers' shares and
threatening or planning to use its coercive means of control to force the
consummation of the transaction, Citigroup is violating its duties as a
majority shareholder.
51. Any buy-out of Travelers public shareholders by Citigroup on the terms
recently offered, will deny class members their right to share
proportionately and equitably in the true value of Travelers' valuable and
profitable business,
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and future growth in profits and earnings, at a time when the Company is
poised to increase its profitability.
52. Defendants' fiduciary obligations require then to:
(a) act independently so that the interests of Travelers' public
stockholders will be protected;
(b) adequately ensure that no conflicts of interest exist between
defendants' own interests and their fiduciary obligation of entire
fairness or, if such conflicts exist, to ensure that all the conflicts
are resolved in the best interests of Travelers' public stockholders;
and
(c) provide Travelers' stockholders with independent representation in the
negotiations with Citigroup.
53. Because Citigroup controls 85% of Travelers and dominates its Board, no
auction or market check can be effected to establish Travelers' worth
through arm's-length bargaining. Thus, Citigroup has the power and is
exercising its power to acquire Travelers' minority shares and dictate
terms which are in Citigroup's best interest, without competing bids and
regardless of the wishes or best interests of the class members or the
intrinsic value of Travelers' stock.
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54. By reason of the foregoing, defendants have breached and will continue to
breach their duties to the minority public shareholders of Travelers and
are engaging in improper, unfair dealing and wrongful and coercive conduct.
55. Plaintiff and the Class will suffer irreparable harm unless defendants are
enjoined from breaching their fiduciary duties and from carrying out the
aforesaid plan and scheme.
56. By reason of the foregoing, defendants have violated the fiduciary duties
which each of them owes to plaintiff and the other members of the Class.
57. Unless enjoined by this Court, defendants will continue to breach their
fiduciary duties owed to plaintiff and the other members of the Class, and
are prepared to consummate a buy-out on unfair and inadequate terms which
will exclude the Class from its fair proportionate share of Travelers'
valuable assets and businesses, all to the irreparable harm of the Class,
as aforesaid.
58. Plaintiff and the other class members are immediately threatened by the
acts and transactions complained of herein, and lack an adequate remedy at
law.
WHEREFORE, plaintiff demands judgment and preliminary and permanent relief,
including injunctive relief, in their favor and in favor of the Class and
against defendants as follows:
A. Declaring that this action is properly maintainable as a class action,
and certifying plaintiff as a class representative;
27
<PAGE>
B. Declaring that the defendants and each of them have committed or
participated in a gross abuse of trust and have breached their fiduciary duties
to plaintiff and other members of the Class or aided and abetted such breaches;
C. Declaring that defendants have breached their duty of candor;
D. Enjoining the Tender Offer or, if the transaction is consummated,
rescinding it;
E. Ordering defendants to make corrective disclosures;
F. Awarding plaintiff and the Class compensatory damages and/or rescissory
damages;
G. Awarding plaintiff the costs and disbursements of this action, including
reasonable fees and expenses of plaintiffs attorneys and experts; and
H. Granting such other, and further relief as this Court may deem to be
just and proper.
28
<PAGE>
ROSENTHAL, MONHAIT, GROSS &
GODDESS, P.A.
By: ______________________________
Suite 1401, Mellon Bank Center
P.O. BOX 1070
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
Robert A. Wallner
U. Seth Ottensoser
MILBERG WEISS BERSHAD HYNES
& LERACH LLP
One Pennsylvania Plaza
New York, NY 10119
(212) 594-5300
Arthur N. Abbey
James S. Notis
ABBEY, GARDY & SQUITIERI, LLP
212 East 39th Street
New York, NY 10016
(212) 889-3700
Nadeem Faruqi
FARUQI & FARUQI, LLP
320 East 39th Street
New York, NY 10016
(212) 983-9330
March 28, 2000
29
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - x
ALFRED RONCONI
:
Plaintiff, Civil Action No. 17908
:
v.
:
KENNETH J. BIALKIN; LESLIE B.
DISHAROON; JAY S. FISHMAN; ROBERT I. :
LIPP; DUDLEY C. MECUM; FRANK J.
TASCO; SANFORD I. WEILL; ARTHUR :
ZANKEL; TRAVELERS PROPERTY
CASUALTY CORP.; and CITIGROUP INC. :
Defendants. :
- - - - - - - - - - - - - - - - - - - - - x
COMPLAINT
Plaintiff, Alfred Ronconi, by his attorneys, alleges upon information
and belief, except as to paragraph 1 which is alleged upon personal knowledge,
as follows:
THE PARTIES
1. Plaintiff Alfred Ronconi ("plaintiff") is the owner of shares of the
common stock of Travelers Property Casualty Corp. ("Travelers" or the "Company")
and has been the owner of such shares continuously since prior to the wrongs
complained of herein.
2. Travelers is a corporation duly existing and organized under the
laws of the State of Delaware, with its principal executive offices located at
One Tower Square, Hartford, CT. Travelers provides a broad range of insurance
products and services for the commercial and consumer markets. Travelers is 85%
owned by defendant Citigroup Inc. ("Citigroup").
<PAGE>
3. Defendant Jay S. Fishman ("Fishman") is President, Chief Executive
Officer and a director of Travelers.
4. Defendant Robert I. Lipp ("Lipp") is Chairman of the Board of
Directors and a director of Travelers.
5. Defendants Kenneth J. Bialkin, Leslie B. Disharoon, Dudley C. Mecum,
Frank J. Tasco, Sanford I. Weill and Arthur Zankel are directors of Travelers.
6. The individual defendants are in a fiduciary relationship with
plaintiff and the other public stockholders of Travelers, and owe them the
highest obligations of good faith, fair dealing, due care, loyalty and full and
candid disclosure.
7. Defendant Citigroup provides products and services to individuals,
businesses, governments and financial institutions. As the majority shareholder
of Travelers, Citigroup owes fiduciary duties of good faith, fair dealing,
loyalty, candor, and due care to plaintiff and the other members of the Class.
CLASS ACTION ALLEGATIONS
8. Plaintiff brings this action on his own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
the public shareholders of Travelers (the "Class"). Excluded from the Class are
defendants herein and any person, firm, trust, corporation or other entity
related to or affiliated with any of the defendants.
9. This action is properly maintainable as a class action.
10. The Class is so numerous that joinder of all members is
impracticable. There are thousands of beneficial owners of Travelers' stock.
2
<PAGE>
11. There are questions of law and fact which are common to the Class
and which predominate over questions affecting any individual Class members. The
common questions include, inter alia, the following:
(a) whether plaintiff and the other members of the Class would be
irreparably damaged were the transactions complained of herein consummated;
and
(b) whether defendants have breached their fiduciary and other common
law duties owed by them to plaintiff and the other members of the Class.
12. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. Plaintiff's claims
are typical of the claims of the other members of the Class and plaintiff has
the same interests as the other members of the Class. Accordingly, plaintiff is
an adequate representative of the Class and will fairly and adequately protect
the interests of the Class.
13. Defendants have acted on grounds generally applicable to the Class
with respect to the matters complained of herein, thereby making appropriate the
relief sought herein with respect to the Class as a whole.
SUBSTANTIVE ALLEGATIONS
14. On March 21, 2000, Citigroup announced that it intends to make a
cash tender offer for all of the publicly-held shares of Travelers' Class A
common stock not already owned by Citigroup at a price of $41.50 per share. Any
shares of Travelers Class A common stock not purchased in the tender offer will
be acquired by Citigroup in a subsequent merger transaction at the same $41.50
per share cash price.
3
<PAGE>
15. Citigroup has timed the proposal to freeze out Travelers' public
shareholders in order to capture for itself Travelers' future potential without
paying an adequate or fair price to the Company's public shareholders.
16. Citigroup timed the announcement of the proposed buyout to place an
artificial lid on the market price of Travelers' stock so that the market would
not reflect Travelers' improving potential, thereby purporting to justify an
unreasonably low price.
17. Citigroup has access to internal financial information about
Travelers, its true value, expected increase in true value and the benefits of
100% ownership of Travelers to which plaintiff and the Class members are not
privy. Citigroup is using such inside information to benefit itself in this
transaction, to the detriment of the Travelers' public stockholders.
18. Citigroup has clear and material conflicts of interest and is
acting to better its own interests at the expense of Travelers' public
shareholders. Citigroup has voting control of the Company and controls its proxy
machinery. Citigroup has selected and elected all of Travelers' directors who
are beholden to Citigroup for their offices and the valuable perquisites which
they enjoy therefrom.
19. Citigroup, with the acquiescence of the directors of Travelers, is
engaging in self-dealing and not acting in good faith toward plaintiff and the
other members of the Class. By reason of the foregoing, Citigroup and the
individual defendants have breached and are breaching their fiduciary duties to
the members of the Class.
20. Unless the proposed buyout is enjoined by the Court, defendants
will continue to breach their fiduciary duties owed to plaintiff and the members
of the Class to the irreparable harm of the members of the Class.
4
<PAGE>
21. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff prays for judgment and relief as fol1ows:
A. Ordering that this action may be maintained as a class action and
certifying plaintiff as the Class representative;
B. Preliminarily and permanently enjoining defendants and all persons
acting in concert with them, from proceeding with, consummating or closing the
proposed transaction;
C. In the event the proposed buyout is consummated, rescinding it and
setting it aside or awarding rescissory damages to the Class;
D. Directing defendants to account to Class members for their damages
sustained as a result of the wrongs complained of herein;
E. Awarding plaintiff the costs of this action, including reasonable
allowances for plaintiff's attorneys' and experts' fees;
5
<PAGE>
F. Granting such other and further relief as this Court may deem just
and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By:/s/ Illegible
---------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
SCHIFFRIN & BARROWAY, LLP
Marc A. Topaz
Patricia C. Weiser
Three Bala Plaza East
Suite 400
Bala Cynwyd, PA 19004
(610) 667-7706
6
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - x
BENJAMIN WYCHE,
:
Plaintiff, Civil Action No. 17909
:
v.
:
KENNETH J. BIALKIN; LESLIE B.
DISHAROON; JAY S. FISHMAN; ROBERT I. :
LIPP; DUDLEY C. MECUM; FRANK J.
TASCO; SANFORD I. WEILL; ARTHUR :
ZANKEL; TRAVELERS PROPERTY
CASUALTY CORP.; and CITIGROUP INC. :
Defendants. :
- - - - - - - - - - - - - - - - - - - - x
COMPLAINT
Plaintiff, Benjamin Wyche, by his attorneys, alleges upon information
and belief, except as to paragraph 1 which is alleged upon personal knowledge,
as follows:
THE PARTIES
1. Plaintiff Benjamin Wyche ("plaintiff") is the owner of shares of the
common stock of Travelers Property Casualty Corp. ("Travelers" or the "Company")
and has been the owner of such shares continuously since prior to the wrongs
complained of herein.
2. Travelers is a corporation duly existing and organized under the
laws of the State of Delaware, with its principal executive offices located at
One Tower Square, Hartford, CT. Travelers provides a broad range of insurance
products and services for the commercial and consumer markets. Travelers is 85%
owned by defendant Citigroup Inc. ("Citigroup").
<PAGE>
3. Defendant Jay S. Fishman ("Fishman") is President, Chief Executive
Officer and a director of Travelers.
4. Defendant Robert I. Lipp ("Lipp") is Chairman of the Board of
Directors and a director of Travelers.
5. Defendants Kenneth J. Bialkin, Leslie S. Disharoon, Dudley C. Hecum,
Frank J. Tasco, Sanford I. Weill and Arthur Zankel are directors of Travelers.
6. The individual defendants are in a fiduciary relationship with
plaintiff and the other public stockholders of Travelers, and owe them the
highest obligations of good faith, fair dealing, due care, loyalty and full and
candid disclosure.
7. Defendant Citigroup provides products and services to individuals,
businesses, governments and financial institutions. As the majority shareholder
of Travelers, Citigroup owes fiduciary duties of good faith, fair dealing,
loyalty, candor, and due care to plaintiff and the other members of the class.
CLASS ACTION ALLEGATIONS
8. Plaintiff brings this action on his own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
the public shareholders of Travelers (the "Class"). Excluded from the Class are
defendants herein and any person, firm, trust, corporation or other entity
related to or affiliated with any of the defendants.
9. This action is properly maintainable as a class action.
10. The Class is so numerous that joinder of all members is
impracticable. There are thousands of beneficial owners of Travelers' stock.
2
<PAGE>
11. There are questions of law and fact which are common to the Class
and which predominate over questions affecting any individual Class members. The
common questions include, inter alia, the following:
(a) whether plaintiff and the other members of the Class would be
irreparably damaged were the transactions complained of herein consummated;
and
(b) whether defendants have breached their fiduciary and other common
law duties owed by them to plaintiff and the other members of the Class.
12. Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. Plaintiff's claims
are typical of the claims of the other members of the Class and plaintiff has
the same interests as the other members of the Class. Accordingly, plaintiff is
an adequate representative of the Class and will fairly and adequately protect
the interests of the Class.
13. Defendants have acted on grounds generally applicable to the Class
with respect to the matters complained of herein, thereby making appropriate the
relief sought herein with respect to the Class as a whole.
SUBSTANTIVE ALLEGATIONS
14. On March 21, 2000, Citigroup announced that it intends to make a
cash tender offer for all of the publicly-held shares of Travelers' Class A
common stock not already owned by Citigroup at a price of $4l.50 per share. Any
shares of Travelers Class A common stock not purchased in the tender offer will
be acquired by Citigroup in a subsequent merger transaction at the same $41.50
per share cash price.
3
<PAGE>
15. Citigroup has timed the proposal to freeze out Travelers' public
shareholders in order to capture for itself Travelers' future potential without
paying an adequate or fair price to the Company's public shareholders.
16. Citigroup timed the announcement of the proposed buyout to place an
artificial lid, on the market price of Travelers' stock so that the market would
not reflect Travelers' improving potential, thereby purporting to justify an
unreasonably low price.
17. Citigroup has access to internal financial information about
Travelers, its true value, expected increase in true value and the benefits of
100% ownership of Travelers to which plaintiff and the Class members are not
privy. Citigroup is using such inside information to benefit itself in this
transaction, to the detriment of the Travelers' public stockholders.
18. Citigroup has clear and material conflicts of interest and is
acting to better its own interests at the expense of Travelers' public
shareholders. Citigroup has voting control of the Company and controls its proxy
machinery. Citigroup has selected and elected all of Travelers' directors who
are beholden to Citigroup for their offices and the valuable perquisites which
they enjoy therefrom.
19. Citigroup, with the acquiescence of the directors of Travelers, is
engaging in self-dealing and not acting in good faith toward plaintiff and the
other members of the Class. By reason of the foregoing, Citigroup and the
individual defendants have breached and are breaching their fiduciary duties to
the members of the Class.
20. Unless the proposed buyout is enjoined by the Court, defendants
will continue to breach their fiduciary duties owed to plaintiff and the members
of the Class to the irreparable harm of the members of the Class.
4
<PAGE>
21. Plaintiff and the Class have no adequate remedy at law.
WHEREFORE, plaintiff prays for judgment and relief as follows:
A. Ordering that this action may be maintained as a class action and
certifying plaintiff as the Class representative;
B. Preliminarily and permanently enjoining defendants and all persons
acting in concert with them, from proceeding with, consummating or closing the
proposed transaction;
C. In the event the proposed buyout is consummated, rescinding it and
setting it aside or awarding rescissory damages to the Class;
D. Directing defendants to account to Class members for their damages
sustained as a result of the wrongs complained of herein;
E. Awarding plaintiff the costs of this action, including reasonable
allowances for plaintiff's attorneys' and experts' fees;
5
<PAGE>
F. Granting such other and further relief as this Court may deem just
and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By: /s/ Illegible
-------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
CAULEY & GELLER, LLP
Paul J. Geller, Esquire
Suite 203, 7200 West Camino Real
Boca Raton, Florida 33433
(561) 750-3000
6
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - x
GEO-CENTERS, INC., PROFIT SHARING
PLAN AND TRUST, :
Plaintiff, : Civil Action No. 17910
-against- : CLASS ACTION COMPLAINT
KENNETH J. BIALKIN, LESLIE B. :
DISHAROON, JAY S. FISHMAN, ROBERT I.
LIPP, DUDLEY C. MECUM, FRANK J. :
TASCO, SANFORD I. WEILL, ARTHUR
ZANKEL, CITIGROUP INC., and TRAVELERS :
PROPERTY CASUALTY CORP.,
:
Defendants.
- - - - - - - - - - - - - - - - - - - - - x
Plaintiff, by its attorneys, alleges the following upon information and
belief, except for those allegations which pertain to plaintiff, which
allegations are based upon personal knowledge:,
1. This action arises out of an unlawful scheme and plan by Citigroup,
Inc. ("Citigroup") and certain members of management, (the "Travelers Management
Buyout Group") to acquire the remaining public shares of Travelers Property
Casualty Corp. ("Travelers" or the "Company") in a going-private transaction for
grossly inadequate consideration and in breach of defendants' fiduciary duties.
Plaintiff alleges that it and the other public stockholders of Travelers common
stock are entitled to enjoin the proposed transaction, or alternatively, recover
damages in the event the transaction is consummated.
<PAGE>
THE PARTIES
2. Plaintiff GEO-CENTERS, Inc., Profit Sharing Plan and Trust is and at
all relevant times was the owner of Travelers common stock.
3. Defendant Travelers is a corporation organized and existing under
the laws of the State of Delaware with its principal executive offices located
at One Tower Square, Hartford, CT 06183. Travelers provides, through its
subsidiaries, a wide range of commercial and personal property and casualty
insurance products and services to businesses, government units, associations
and individuals,
4. Defendant Citigroup is a majority shareholder, holding approximately
85% of the total outstanding common stock of the Company. As a majority
shareholder, Citigroup, owes fiduciary duties to the Company.
5. Defendant Kenneth J. Bialkin ("Bialkin") is a director of the
Company and has been a director of Citigroup (or its predecessor) since 1986.
6. Defendant Leslie B. Disharoon ("Disharoon") is a director of the
Company, and was a director of Citigroup from 1986 to 1998.
7. Defendant Jay S. Fishman ("Fishman") is the Chief Executive Officer,
President and a director of the Company.
8. Defendant Robert I. Lipp ("Lipp") is the Chairman of the Board of
Directors of the Company, and is the Chairman and Chief Executive Officer of
Global Consumer Business at Citigroup since April 1999.
9. Defendant Dudley C. Mecum ("Mecum") is a director of the Company,
and has been a director of Citigroup since 1986.
2
<PAGE>
10. Defendant Frank J. Tasco ("Tasco") is a director of the Company.
11. Defendant Sanford I. Weill ("Weill") is a director of the Company,
and is the Chairman and Co-Chief Executive Officer of Citigroup.
12. Defendant Arthur Zankel ("Zankel") is a director of the Company and
has been a director of Citigroup since 1986.
13. The foregoing individual defendants (collectively the "Individual
Defendants") as officers and/or directors of the Company, owe fiduciary duties
of good faith, loyalty, fair dealing, due care, and candor to plaintiff and the
other members of the Class (as defined below).
CLASS ACTION ALLEGATIONS
14. Plaintiff brings this action pursuant to Rule 23 of the Rules of
this Court, on behalf of itself and all other stockholders of the Company (the
"Class"), and their successors in interest, who are or will be threatened with
injury arising from defendants' actions. Excluded from the Class are the
defendants herein, members of their immediate families, any subsidiary, firm,
trust, corporation, or other entity related to or affiliated with any of the
defendants.
15. This action is properly maintainable as a class action for the
following reasons:
(a) the Class is so numerous that joinder of all members is impractica-
ble. While the exact number of Class members is unknown to plaintiff at this
time and can only be ascertained through appropriate discovery, there are
over 50 million shares of Travelers' common stock outstanding, held by
thousands of shareholders of record. The holders of these shares are
believed to be geographically dispersed
3
<PAGE>
throughout the United States. Travelers common stock is listed and actively
traded on the New York Stock Exchange;
(b) there are questions of law and fact which are common to members of
the Class including, inter alia, the following:
(i) whether defendants have engaged and are continuing to engage
in a plan and scheme to benefit the Travelers Management Buyout Group
at the expense of the members of the Class;
(ii) whether defendants, as directors and/or officers of the
Company and/or as significant shareholders of the Company, have
breached their fiduciary duties owed to plaintiff and the other members
of the Class, including their duties of entire fairness, loyalty, due
care, and candor;
(iii) whether defendants have disclosed all material facts in
connection with the challenged transaction; and
(iv) whether plaintiff and the other members of the Class would be
irreparably damaged were defendants not enjoined from the conduct
described herein;
(c) the claims of plaintiff are typical of the claims of the other
members of the Class and plaintiff has no interest that is adverse or
antagonistic to the interests of the Class;
(d) the plaintiff is committed to prosecuting this action and has
retained counsel competent and experienced in litigation of this nature.
Plaintiff is an
4
<PAGE>
adequate representative of the Class and will fairly and adequately
protect the interests of the Class.
SUBSTANTIVE ALLEGATIONS
16. On March 21, 2000, Travelers announced that management of the
company and an investor group led by Citigroup, had proposed to acquire the
remaining public shares (consisting of approximately 15% of Travelers' common
stock) of Travelers that they did not already own. The transaction has been
approved by a special committee of the Company. Pursuant to the proposed
transaction, each of Travelers' common shares would be converted into the right
to receive $41.50 per share (the "Tender Offer"). Specifically, the Travelers
Management Buyout Group offered to acquire any outstanding shares of the
Company's common stock it does not presently own for $41.50 per share payable in
cash, and those shares not purchased in the tender offer will be acquired by
Citigroup in a subsequent merger transaction, for $41.50 per share.
17. The purpose of the Tender Offer is to enable the Travelers
Management Buyout Group to acquire one hundred percent (100%) equity ownership
of Travelers and its valuable assets for its own benefit at the expense of
Travelers' public stockholders who will be deprived of their equity investment
and the benefits thereof including, among other things, the expected growth in
the Company's profitability.
18. The Tender Offer is the product of unfair dealing, and the price of
$41.50 per share to be paid to Class members is unfair and grossly inadequate
because, among other things:
5
<PAGE>
(a) the announcement of the proposed Tender Offer was made when the
Company was poised for significant future growth and earnings. For example,
on January 18, 2000, the Company announced its fourth quarter 1999 results.
Defendant Fishman stated:
We had a very solid quarter in all respects . . . In fact, this quarter
topped off a particularly strong year. Our results continue to validate
our commitment to the fundamentals of the business: strict
underwriting and financial discipline and expense management.
The Company reported operating earnings of $347.7 million or $0.90 per share on
a diluted basis for the quarter, up from $345.4 million or $0.88 per share from
the fourth quarter of 1998. Furthermore, net income was $400.9 million, or $1.03
per share compared to $367.9 million, or $0.94 per share in 1998.
(b) the Travelers Management Buyout Group timed the announcement of the
Tender Offer to place an artificial lid or cap on the market price for
Travelers' stock to enable itself to acquire the stock at the lowest
possible price;
(c) Although the Buyout Price of $41.50 per share represents a premium
over the market price on the day prior to the announcement of the Tender
Offer ($33 3/16), this is not reflective of the Company's true market value,
considering that as recently as July 1999 the Company's stock has traded as
high as $41 15/16.
19. By reason of defendants' positions, defendants are in possession of
nonpublic information concerning the financial condition and prospects of
Travelers, and especially the true value and expected increased future value of
Travelers and its assets, which
6
<PAGE>
they have not disclosed to Travelers' public stockholders. Such concealed
information is of critical importance to Class members in evaluating the
transaction.
20. While the Travelers Management Buyout Group is intent on paying the
lowest buyout price to Class members, the defendants are duty-bound to maximize
shareholder value. The defendants have clear and material conflicts of interest
and are acting to better the interests of the Management Group at the expense of
Travelers' public shareholders.
21. The proposed Tender Offer is wrongful, unfair and harmful to
Travelers' public stockholders, and represents an effort by the Travelers
Management Buyout Group to aggrandize their own financial position and interests
at the expense of and to the detriment of Class members. The Tender Offer is an
attempt to deny plaintiff and the other members of the Class their right to
share proportionately in the true value of Travelers' valuable assets and future
growth in profits, earnings and dividends, while usurping the same for the
benefit of the Management Group on unfair and inadequate terms.
22. Defendants have breached and are breaching their fiduciary duties
to the members of the Class in that they have failed to disclose the material
non-public information in their possession as to the value of Travelers' assets,
the full extent of the future earnings potential of Travelers and its expected
increase in profitability.
23. As a result of defendants' unlawful actions, plaintiff and the
other members of the Class will be damaged in that they will not receive their
fair portion of the value of Travelers' assets and business and will be
prevented from obtaining the real value of their equity ownership of the
Company.
7
<PAGE>
24. Unless the proposed Tender Offer is enjoined by the Court,
defendants will continue to breach their fiduciary duties owed to the plaintiff
and the members of the Class, will not engage in arm's-length negotiations on
the merger terms, and will consummate and close the proposed merger complained
of and succeed in their plan described above, all to the irreparable harm of the
members of the Class.
25. Plaintiff and the other members of the Class have no adequate
remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) declaring this action to be a proper class action and certifying
plaintiff as the representative of the Class;
(b) ordering defendants to carry out their fiduciary duties to
plaintiff and the other members of the Class, including the duties of care,
loyalty, candor and fair dealing;
(c) granting preliminary and permanent injunctive relief against the
consummation of the Tender Offer as described herein;
(d) in the event the Tender Offer is consummated, rescinding the Tender
Offer effected by defendants awarding rescissory damages to the Class;
(e) ordering defendants, jointly and severally, to account to plaintiff
and other members of the Class for all damages suffered and to be suffered
by them as the result of the acts and transactions alleged herein;
(f) awarding plaintiff the costs and disbursements of the action
including allowances for plaintiff's reasonable attorneys' and experts'
fees; and
8
<PAGE>
(g) granting such other and further relief as the Court may deem just
and proper.
Dated: March 21, 2000
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By:/s/ Carmella P. Keener
--------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899
Attorneys for Plaintiff
OF COUNSEL:
WOLF POPPER LLP
845 Third Avenue
New York, New York 10022
(212) 759-4600
9
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - - - - - - - x
M. DENISE WELCH,
:
Plaintiff, Civil Action No. 17911
:
-against-
:
Travelers Property Casualty Corp., Citigroup,
Inc., Jay S. Fishman, Sanford I. Weill, Robert I. :
Lipp, Kenneth Bialkin, Leslie B. Disharoon,
Dudley C. Mecum, Frank J. Tasco, and Arthur :
Zankel,
:
Defendants.
:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - x
SHAREHOLDER'S CLASS ACTION COMPLAINT
Plaintiff alleges upon personal knowledge with respect to paragraph 2,
and upon information and belief as to all other allegations herein, as follows:
NATURE OF THE ACTION
1. This is a stockholders' class action on behalf of the public
stockholders of Travelers Property Casualty Corp. ("Travelers Property" or the
"Company") to enjoin the proposed acquisition of the publicly owned shares of
Travelers Property's common stock by its controlling shareholder, defendant
Citigroup, Inc. ("Citigroup").
THE PARTIES
2. Plaintiff has been the owner of common stock of the Company since
prior to the transaction complained of herein and continuously to date.
<PAGE>
3. Travelers Property is a corporation duly organized and existing
under the laws of the State of Delaware.
4. Defendant Citigroup is a corporation duly organized and existing
under the laws of Delaware. Citigroup, controls approximately 83.8% of the
Company's outstanding common stock.
5. Defendant Jay S. Fishman ("Fishman") is Chief Executive Officer,
President and a director of the Company.
6. Defendant Sanford I. Weill ("Weill") is a director of the Company.
He is currently co-chief executive officer of Citigroup.
7. Defendant Robert I. Lipp is Chairman of the Board of the Company.
8. Defendants Kenneth Bialkin, Leslie B. Disharoon, Dudley C. Mecum,
Frank J. Tasco, and Arthur Zankel are directors of Travelers Property.
9. The individual defendants named in paragraphs 5 through 8 (the
"Individual Defendants") are in a fiduciary relationship with plaintiff and the
other public stockholders of Travelers Property and owe them the highest
obligations of good faith and fair dealing.
10. Defendant Citigroup, through its approximately 83.8% ownership of
Travelers Property and having persons affiliated with it comprise a majority of
Travelers Property's board, has effective and working control of Travelers
Property. As such, defendant Citigroup is in a fiduciary relationship with
plaintiff and the other public stockholders of Travelers Property and owes them
the highest obligations of good faith and fair dealing.
2
<PAGE>
CLASS ACTION ALLEGATIONS
11. Plaintiff brings this action on her own behalf and as a class
action pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all Travelers Property stockholders (except defendants herein and any person,
firm, trust, corporation or other entity related to or affiliated with any of
the defendants) and their successors in interest, who are or will be threatened
with injury arising from defendants' actions as more fully described herein.
12. This action is properly maintainable as a class action:
(a) The class of stockholders for whose benefit this action is brought
is so numerous that joinder of all Class members is impracticable. There are
in excess of 50 million shares of Travelers Property common stock held by
shareholders other than Citigroup, who are geographically dispersed
throughout the United States.
(b) There are questions of law and fact which are common to the Class
including, inter alia, the following:
(i) whether the Individual Defendants have breached their
fiduciary and other common law duties owed by them to plaintiff and the
members of the Class;
(ii) whether plaintiff and the other members of the Class will be
damaged irreparably by defendants' failure to take action designed to
obtain the best value for the public shareholders' interest in
Travelers Property.
(c) Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of
plaintiff are typical of the claims of the other members of the Class and
plaintiff has the same interests
3
<PAGE>
as the other members of the Class. Accordingly, plaintiff will fairly
and adequately represent the Class.
(d) The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent or varying adjudications with
respect to individual members of the Class and establish incompatible
standards of conduct for the party opposing the Class.
13. Defendants have acted and are about to act on grounds generally
applicable to the Class, thereby making appropriate final injunctive relief
with respect to the Class as a whole.
SUBSTANTIVE ALLEGATIONS
14. On March 21, 2000, it was announced that Citigroup offered to
acquire all of the outstanding shares of Travelers Property it does not already
own for $41.50 per share.
15. The consideration to be paid to Class members in the transaction is
unfair and grossly inadequate because, among other things, the intrinsic value
of Travelers Property's common stock is materially in excess of the amount
offered for those securities in the proposed acquisition given the stock's
current trading price and the Company's net asset value and prospects for future
growth and earnings. The proposed transaction constitutes unfair dealing.
16. Citigroup timed its offer to take advantage of the decline in the
market price of Travelers Property's stock. The offer has the effect of capping
the market for Travelers Property's stock to facilitate Citigroup's plan to
obtain the public interest in Travelers Property as cheaply as possible.
4
<PAGE>
17. Under the circumstances, the Individual Defendants are obligated to
explore all alternatives to maximize shareholder value.
18. The defendants have breached their duty of loyalty to Travelers
Property stockholders by using their control of Travelers Property to force
plaintiff and the Class to sell their equity interest in Travelers Property at
an unfair price, and deprive Travelers Property's public shareholders of maximum
value to which they are entitled. The Individual Defendants have also breached
the duties of loyalty and due care by not taking adequate measures, to ensure
that the interests of Travelers Property's public shareholders are properly
protected from overreaching. Citigroup has breached its fiduciary duties, which
arise from its effective control of Travelers Property, by using such effective
control for its own benefit.
19. The unfairness of the transaction is compounded by the gross
disparity between the knowledge and information possessed by defendants by
virtue of their positions of control of the Company and that possessed by
Travelers Property's public shareholders. Defendants' scheme and intent is to
take advantage of this disparity and to induce the Class to relinquish their
shares at an unfair price on the basis of incomplete or inadequate information.
20. Because Citigroup controls nearly 84% of Travelers and dominates
its Board, no auction or market check can be effected to establish Travelers'
worth through arm's-length bargaining. Thus, Citigroup has the power and is
exercising its power to acquire Travelers' minority shares and dictate terms
which are in Citigroup's best interest, without competing bids and regardless of
the wishes or best interests of Class members or the intrinsic value of
Travelers' stock.
5
<PAGE>
21. By reason of the foregoing, defendants have breached and will
continue to breach their duties to the minority public shareholders of Travelers
and are engaging in improper, unfair dealing and wrongful and coercive conduct.
22. Plaintiff and the Class will suffer irreparable harm unless
defendants are enjoined from breaching their fiduciary duties and from carrying
out the aforesaid plan and scheme.
23. Plaintiff and the other Class members are immediately threatened by
the acts and transactions complained of herein and lack an adequate remedy at
law.
WHEREFORE, plaintiff demands judgment as follows:
A. declaring this to be a proper class action and designating plaintiff
Class representative;
B. enjoining, preliminarily and permanently, the acquisition under the
terms presently proposed;
C. to the extent, if any, that the transaction complained of is
consummated prior to the entry of this Court's final judgment, rescinding the
same or awarding rescissory damages to the Class;
D. directing that defendants account to plaintiff and the Class for all
damages caused to them and account for all profits and any special benefits
obtained by defendants as a result of their unlawful conduct;
E. awarding to plaintiff the costs and disbursements of this action,
including a reasonable allowance for the fees and expenses of plaintiff's
attorneys and experts; and
6
<PAGE>
F. granting such other and further relief as the Court deems
appropriate.
Dated: March 21, 2000
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By:/s/ Carmella P. Keener
---------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19801
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
SHEPHERD & ASSOCIATES, LLC
117 Gayley Street, #200
Media, PA 19063
(610) 891-9883
7
<PAGE>
IN THE COURT CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - x
CRANDON CAPITAL PARTNERS,
Individually :
And On Behalf of All Others
Similarly Situated, :
Plaintiff, : Civil Action No. 17907
-against- :
ROBERT I. LIPP, JAY S. FISHMAN, LESLIE B. :
DISHAROON, SANFORD I. WEIL, KENNETH
J. BIALKIN, DUDLEY C. MECUM, FRANK J. :
TASCO, ARTHUR ZANKEL, CITIGROUP
INC., and TRAVELERS PROPERTY CASUALTY :
CORP.
:
Defendants.
- - - - - - - - - - - - - - - - - - - - - - x
CLASS ACTION COMPLAINT
Plaintiff, by its attorneys, alleges upon personal knowledge as to its
own acts and upon information and belief as to all other matters, as follows:
1. Plaintiff brings this action individually and as a class action on
behalf of all persons, other than defendants, who own the securities of
Travelers Property Casualty Corp. ("TAP" or the "Company") and who are similarly
situated (the "Class"), for injunctive and other relief in connection with a
proposed transaction whereby Citigroup Inc. ("Citigroup") would buy the
remaining TAP shares that it does not already own. Citigroup is the controlling
shareholder of the Company, owning approximately 85% of the Company's
outstanding shares. Alternatively, in the event that the proposed transaction is
implemented, plaintiff seeks to recover damages caused by the breach of
fiduciary duties owed to the public stockholders of Travelers.
<PAGE>
PARTIES
2. Plaintiff is and, at all relevant times, has been the owner of
shares of TAP common stock.
3. TAP is a corporation duly organized and existing under the laws of
the State of Delaware. The Company is a leading provider of a broad range of
insurance products for commercial markets, including workers' compensation,
integrated disability and property insurance. TAP maintains its principal
executive offices at One Tower Square, Hartford, Connecticut. TAP has
approximately 57,340,000 shares of Class A common stock and 328,020,000 shares
of Class B common stock.
4. Defendant Robert I. Lipp ("Lipp") is Chairman of the Board of TAP.
Lipp is also the Chairman and Chief Executive Officer of Citigroup's Global
Business Department.
5. Jay S. Fishman ("Fishman") is the President, Chief Executive Officer
and a director of TAP.
6. Leslie B. Disharoon ("Disharoon") is a director of TAP. Disharoon
was also a director of Citigroup from 1986 through 1998.
7. Sanford I. Weil ("Weil") is a director of TAP. Weil is also the
Chairman and Chief Executive Officer of Citigroup.
8. Kenneth J. Bialkin ("Bialkin") is a director of TAP.
9. Dudley C. Mecum ("Mecum") is a director of TAP. Mecum is also a
director of Citigroup.
2
<PAGE>
10. Frank J. Tasco ("Tasco") is a director of TAP. Tasco was a director
of Travelers Group from 1992 to 1998 prior to its merger with Citigroup.
11. Arthur Zankel ("Zankel") is a director of TAP. Zankel is also a
director of Citigroup.
12. Defendant Citigroup is a corporation duly organized and existing
under the laws of the State of Delaware. Citigroup is the majority owner of TAP,
controlling 85% of the outstanding common stock and 98.3% of the total voting
power of Class A and B stock. Citigroup maintains its principal executive
offices at 153 East 53rd Street, New York, New York 10043.
13. Because of their positions as officers/directors, and in the case
of Citigroup as controlling shareholder of the Company, defendants owe fiduciary
duties of loyalty and due care to plaintiff and the other members of the Class.
CLASS ACTION ALLEGATIONS
14. Plaintiff brings this case in its own behalf and as a class action,
pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of all
stockholders of the Company (except defendants herein and any person, firm,
trust, corporation, or other entity related to or affiliated with any of the
defendants, or any of the Company's principal stockholders), who are threatened
with injury arising from defendants' actions as is described more fully below.
15. This action is properly maintainable as a class action.
16. The Class is so numerous that joinder of all members is
impracticable. The Company has approximately 57 million shares of Class A common
stock outstanding. There are thousands of record and beneficial stockholders who
are members of the Class.
3
<PAGE>
17. There are questions of law and fact common to the Class including,
inter alia, whether:
(a) defendants have breached and will continue to breach their
fiduciary and other common law duties owed by them to plaintiff and the
members of the Class; and
(b) plaintiff and the other members of the Class would be irreparably
damaged by the wrongs complained of herein.
18. Plaintiff is committed to prosecuting the action and has retained
competent counsel experienced in litigation of this nature. Plaintiff's claims
are typical of the claims of the other members of the Class and plaintiff has
the same interests as the other members of the Class. Accordingly, plaintiff is
an adequate representative of the Class.
19. The prosecution of separate actions by individual members of the
Class would create the risk of inconsistent or varying adjudications with
respect to individual members of the Class which would establish incompatible
standards of conduct for defendants or adjudications with respect to individual
members of the Class which would as a practical matter be dispositive of the
interests of the other members not parties to the adjudications or substan-
tially impair or impede their ability to protect their interests.
20. The defendants have acted, or refused to act, on grounds generally
applicable to, and causing injury to, the Class and, therefore, preliminary and
final injunctive relief on behalf of the Class as a whole is appropriate.
4
<PAGE>
SUBSTANTIVE ALLEGATIONS
21. On March 21, 2000, defendants announced that Citigroup and TAP had
agreed to a transaction whereby Citigroup would make a cash tender offer to
acquire all of the publicly held TAP common stock, which was not already owned
by Citigroup, for approximately $41.50 per share.
22. Citigroup seeks to take TAP private by squeezing out TAP's public
shareholders at a price which is inadequate in light of TAP's recent trading
price and earnings.
23. TAP recently reported record earnings for the most recent fiscal
quarter. On January 18, 2000, TAP reported 1999 4th quarter earnings of $347.7
million or $0.90 per share as compared to 1998 4th Quarter earnings of $345
million.
24. Because of its control over the Board through majority ownership of
the outstanding stock, Citigroup is in a position to dictate the terms of the
proposed transaction so that the Individual Defendants have acceded to its
wishes.
25. The proposed transaction is unfair, inadequate, and provides value
to TAP's stockholders substantially below the fair or inherent value of the
Company. The intrinsic value of the equity of TAP is materially greater than the
consideration contemplated by the proposed transaction price, taking into
account TAP's asset value, its expected growth, and its revenues and cash flow
and earnings power.
26. The proposed transaction is wrongful, unfair, and harmful to TAP
public stockholders, and will deny Class members their right to share
proportionately in the true value of TAP's valuable assets, and future growth in
profits and earnings, while usurping the same for the benefit of Citigroup.
5
<PAGE>
27. Defendants have violated fiduciary and other common law duties owed
to the plaintiff and the other members of the Class in that they have not and
are not exercising independent business judgment, and have acted and are acting
to the detriment of the Class.
28. As a result of defendants' action, plaintiff and the Class have
been and will be damaged by the breaches of fiduciary duty and, therefore,
plaintiff and the Class will not receive the fair value of TAP's assets and
businesses.
29. Unless enjoined by this Court, defendants will continue to breach
their fiduciary duties owed to plaintiff and the Class, and Citigroup will
succeed in its plan to exclude plaintiff and the Class from the fair
proportionate share of TAP's valuable assets and businesses, to the irreparable
harm of the Class.
30. Plaintiff and the Class have no adequate remedy of law.
WHEREFORE, plaintiff prays for judgment and relief as follows:
(a) declaring that this lawsuit is properly maintainable as a class
action and certifying plaintiff as representative of the Class;
(b) preliminarily and permanently enjoining defendants and their
counsel, agents, employees, and all persons acting under, in concert with,
or for them, from proceeding with or implementing the transaction;
(c) in the event the transaction is consummated, rescinding it and
setting it aside;
(d) awarding the Class compensatory damages against defendants, jointly
and severally, in an amount to be determined at trial, together with
prejudgment interest at the maximum rate allowable by law;
6
<PAGE>
(e) awarding plaintiff its costs and disbursements and reasonable
allowances for plaintiff's counsel and experts' fees and expenses; and
(f) granting such other and further relief as may be just and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By:/s/ Illegible
---------------------------------
Mellon Bank Center
Suite 1401
919 Market Street
Wilmington, DE 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
WECHSLER HARWOOD
HALEBIAN & FEFFER LLP
805 Third Avenue
New York, New York 10022
(212) 935-7400
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - - x
RODMAN INSURANCE AGENCY, INC.,
:
Plaintiff, Civil Action No. 179-19-NC
:
-against-
:
TRAVELERS PROPERTY CASUALTY CORP.,
ROBERT I. LIPP, JAY S. FISHMAN, FRANK J. :
TASCO, DUDLEY C. MECUM II, ARTHUR
ZANKEL, KENNETH J. BIALKIN, SANFORD :
I. WEILL, LESLIE B. DISHAROON and
CITIGROUP INC., :
Defendants. :
- - - - - - - - - - - - - - - - - - - - - - - x
COMPLAINT
Plaintiff alleges upon personal knowledge with respect to itself, and
upon information and belief as to all other allegations herein, as follows:
NATURE OF THE ACTION
1. This is a class action on behalf of the public stockholders of
Travelers Property Casualty Corp. ("Travelers" or the "Company"), in connection
with the proposed acquisition of the publicly owned shares of Travelers common
stock by its majority controlling shareholder, defendant Citigroup Inc.
("Citigroup").
<PAGE>
2. The consideration that Citigroup stated it would offer to members of
the Class (as defined below) in the proposed acquisition is unfair and
inadequate because, among other things, the intrinsic value of Travelers' common
stock is materially in excess of the amount offered, giving due consideration to
the Company's growth and anticipated operating results, net asset value and
profitability.
THE PARTIES
3. Plaintiff Rodman Insurance Agency, Inc. is the owner of shares of
Travelers common stock.
4. Travelers is a Delaware corporation with its principal executive
offices at One Tower Square, Hartford, Connecticut.
5. Defendant Citigroup is a diversified financial services holding
company that provides a broad range of financial services. Citigroup and its
affiliates control approximately 85% of the outstanding common stock of
Travelers. As such, Citigroup and its representatives on the Travelers board
effectively control and dominate Travelers' affairs. Citigroup, therefore, is a
controlling shareholder and owes fiduciary obligations of good faith, candor,
loyalty and fair dealing to the public shareholders of Travelers.
6. (a) Defendants Robert I. Lipp, Jay S. Fishman, Frank J. Tasco,
Dudley C. Mecum II, Arthur Zankel, Kenneth J. Bialkin, Sanford I. Weill, Leslie
B. Disharoon serve as directors of Travelers (collectively, the "Individual
Defendants").
2
<PAGE>
(b) In addition, defendant Lipp is Chairman of the Company and
defendant Fishman is President and Chief Executive Officer.
(c) Defendants Lipp, Mecum, Sankel, Bialkin and Weill are
Citigroup's appointees to the Travelers' Board of Directors.
7. Each individual defendant owed and owes Travelers' public
stockholders fiduciary obligations and were and are required to: use their
ability to control and manage Travelers in a fair, just and equitable manner;
act in furtherance of the best interests of Travelers' public stockholders;
govern Travelers in such a manner as to heed the expressed views of its public
shareholders; and refrain from abusing their positions of control.
CLASS ACTION ALLEGATIONS
8. Plaintiff brings this action, pursuant to Rule 23 of the Rules of
this Court, on behalf of itself and all other shareholders of the Company
(except the defendants herein and any persons, firm, trust, corporation, or
other entity related to or affiliated with them) and their successors in
interest, who are or will be threatened with injury arising from defendants'
actions, as more fully described herein (the "Class").
9. This action is properly maintainable as a class action for the
following reasons:
(a) The Class is so numerous that joinder of all members is
impracticable. There are millions of shares of Travelers common stock which are
outstanding, held by hundreds if not thousands of stockholders who are members
of the Class.
3
<PAGE>
(b) There are questions of law and fact that are common to the
Class and that predominate over questions affecting any individual class member.
The common questions include, inter alia, the following:
(i) whether defendants have engaged in and are continuing to
engage in conduct which unfairly benefits Citigroup at the expense of the
members of the Class;
(ii) whether the Individual Defendants, as officers and/or
directors of the Company, and Citigroup, the controlling stockholder of
Travelers are violating their fiduciary duties to plaintiff and the other
members of the Class;
(iii) whether plaintiff and the other members of the Class
would be irreparably damaged were defendants not enjoined from the conduct
described herein; and
(iv) whether defendants have initiated and timed their
buy-out of Travelers shares to unfairly benefit Citigroup at the expense of
Travelers' public shareholders.
(c) The claims of plaintiff are typical of the claims of the other
members of the Class in that all members of the Class will be damaged alike by
defendants' actions.
(d) Plaintiff is committed to prosecuting this action and has
retained competent counsel experience in litigation of this nature. Accordingly,
plaintiff is an adequate representative of the Class.
4
<PAGE>
SUBSTANTIVE ALLEGATIONS
A. THE COMPANY
10. Travelers provides a broad range of insurance products and services
for the commercial and consumer markets.
B. THE OFFER
11. On March 21, 2000, Citigroup issued a press release stating that it
intends to make a cash tender offer for all the publicly-held shares of
Travelers that it does not presently own for $41.50 per share. According to the
press release, the transaction was purportedly approved by a special committee
of the Board of Directors of Travelers.
12. Given Citigroup's stranglehold on the Travelers Board, any
purported independent committee is a sham.
13. Citigroup is the primary financial backer of Travelers and is,
therefore, well aware of the true financial condition of Travelers. In making
its inadequate offer to acquire the remaining stock of Travelers, Citigroup has
tried to take advantage of the fact that the market price of Travelers stock
does not fully reflect the true value of the Company.
14. Any transaction to acquire the Company at the price being
considered does not represent the true value of the Company and is unfair and
inadequate and constitutes unfair dealing.
15. The price that Citigroup has offered has been dictated by Citigroup
to serve its own interest, and is being crammed down by Citigroup and its
representatives on
5
<PAGE>
Travelers' Board to force Travelers' minority shareholders to relinquish their
Travelers shares at a grossly unfair price.
16. Because Citigroup is in possession of proprietary corporate
information concerning Travelers' future financial prospects, the degree of
knowledge and economic power between Citigroup and the class members is unequal,
making it grossly and inherently unfair for Citigroup to obtain the remaining
15% of Travelers' shares at the unfair and inadequate price that it has
proposed.
17. By offering an inadequate price for Travelers' shares and planning
to use its control to force the consummation of the transaction. Citigroup is
violating its duties as majority shareholder.
18. Any buy-out of Travelers' public shareholders by Citigroup on the
terms recently offered on lesser terms, will deny class members their right to
share proportionately and equitably in the true value of Travelers' valuable and
profitable business, and future growth in profits and earnings, at a time when
the Company is poised to increase its profitability.
19. Because Citigroup controls 85% of Travelers and dominates its
Board, no auction or market check can be effected to establish Travelers' worth
through arm's-length bargaining. Thus, Citigroup has the power and is exercising
its power to acquire Travelers' minority shares and dictate terms which are in
Citigroup's best interest, without competing bids and regardless of the wishes
or best interests of the class members or the intrinsic value of Travelers'
stock.
6
<PAGE>
20. By reason of the foregoing, defendants have breached and will
continue to breach their duties to the minority public shareholders of Travelers
and are engaging in improper, unfair dealing and wrongful and coercive conduct.
21. Plaintiff and the Class will suffer irreparable harm unless
defendants are enjoined from breaching their fiduciary duties and from carrying
out the aforesaid plan and scheme.
22. Plaintiff and the other class members are immediately threatened by
the acts and transactions complained of herein and lack an adequate remedy at
law.
WHEREFORE, plaintiff demands judgment as follows:
A. Declaring that this action is properly maintainable as a class
action, and certifying plaintiff as class representative;
B. Enjoining the proposed transaction and, if the transaction is
consummated, rescinding the transaction;
C. Awarding plaintiff and the Class compensatory damages and/or
rescissory damages;
D. Awarding plaintiff the costs and disbursements of this action,
including reasonable allowance for plaintiff's attorneys' and experts' fees; and
E. Granting such other, and further relief as this Court may deem
to be just and proper.
7
<PAGE>
ROSENTHAL MONHAIT GROSS
& GODDESS, P.A.
By:/s/ Illegible
-------------------------------
Suite 1401, Mellon Bank Center
919 North Market Street
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
LOWEY DANNENBERG BEMPORAD
& SELINGER, P.C.
The Gateway
One North Lexington Avenue
White Plains, New York 10601
(914) 997-0500
GILMAN & PASTOR LLP
One Boston Place, 28th Floor
Boston, MA 02108
(617) 589-3750
8
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- - - - - - - - - - - - - - - - - - - - - - x
ROBERT LEWIS,
:
Plaintiff, Civil Action No. 1792 ONC
:
-against-
:
TRAVELERS PROPERTY CASUALTY CORP.,
ROBERT I. LIPP, JAY S. FISHMAN, FRANK J. :
TASCO, DUDLEY C. MECUM II, ARTHUR
ZANKEL, KENNETH J. BIALKIN, SANFORD :
I. WEILL, LESLIE B. DISHAROON and
CITIGROUP INC., :
Defendants. :
- - - - - - - - - - - - - - - - - - - - - - x
COMPLAINT
Plaintiff alleges upon personal knowledge with respect to himself, and
upon information and belief as to all other allegations herein, as follows:
NATURE OF THE ACTION
1. This is a class action on behalf of the public stockholders of
Travelers Property Casualty Corp. ("Travelers" or the "Company"), in connection
with the proposed acquisition of the publicly owned shares of Travelers common
stock by its majority controlling shareholder, defendant Citigroup Inc.
("Citigroup").
2. The consideration that Citigroup stated it would offer to members of
the Class (as defined below) in the proposed acquisition is unfair and
inadequate because, among
<PAGE>
other things, the intrinsic value of Travelers' common stock is materially in
excess of the amount offered, giving due consideration to the Company's growth
and anticipated operating results, net asset value and profitability.
THE PARTIES
3. Plaintiff Robert Lewis is the owner of shares of Travelers common
stock.
4. Travelers is a Delaware corporation with its principal executive
offices at One Tower Square, Hartford, Connecticut.
5. Defendant Citigroup is a diversified financial services holding
company that provides a broad range of financial services. Citigroup and its
affiliates control approximately 85% of the outstanding common stock of
Travelers. As such, Citigroup and its representatives on the Travelers board
effectively control and dominate Travelers' affairs. Citigroup, therefore, is a
controlling shareholder and owes fiduciary obligations of good faith, candor,
loyalty and fair dealing to the public shareholders of Travelers.
6. (a) Defendants Robert I. Lipp, Jay S. Fishman, Frank J. Tasco,
Dudley C. Mecum II, Arthur Zankel, Kenneth J. Bialkin, Sanford I. Weill, Leslie
B. Disharooon serve as directors of Travelers (collectively, the "Individual
Defendants").
(b) In addition, defendant Lipp is Chairman of the Company and
defendant Fishman is President and Chief Executive Officer.
(c) Defendants Lipp, Mecum, Zankel, Bialkin and Weill are
Citigroup's appointees to the Travelers' Board of Directors.
2
<PAGE>
7. Each individual defendant owed and owes Travelers' public
stockholders fiduciary obligations and were and are required to: use their
ability to control and manage Travelers in a fair, just and equitable manner;
act in furtherance of the best interests of Travelers' public stockholders;
govern Travelers in such a manner as to heed the expressed views of its public
shareholders; and refrain from abusing their positions of control.
CLASS ACTION ALLEGATIONS
8. Plaintiff brings this action, pursuant to Rule 23 of the Rules of
this Court, on behalf of himself and all other shareholders of the Company
(except the defendants herein and any persons, firm, trust, corporation, or
other entity related to or affiliated with them) and their successors in
interest, who are or will be threatened with injury arising from defendants'
actions, as more fully described herein (the "Class").
9. This action is properly maintainable as a class action for the
following reasons:
(a) The Class is so numerous that joinder of all members is
impracticable. There are millions of shares of Travelers common stock which are
outstanding, held by hundreds if not thousands of stockholders who are members
of the Class.
(b) There are questions of law and fact that are common to the Class
and that predominate over questions affecting any individual class member. The
common questions include, inter alia, the following:
3
<PAGE>
(i) whether defendants have engaged in and are continuing to
engage in conduct which unfairly benefits Citigroup at the expense of the
members of the Class;
(ii) whether the Individual Defendants, as officers and/or
directors of the Company, and Citigroup, the controlling stockholder of
Travelers are violating their fiduciary duties to plaintiff and the other
members of the Class;
(iii) whether plaintiff and the other members of the Class would
be irreparably damaged were defendants not enjoined from the conduct described
herein; and
(iv) whether defendants have initiated and timed their buy-out of
Travelers shares to unfairly benefit Citigroup at the expense of Travelers'
public shareholders.
(c) The claims of plaintiff are typical of the claims of the other
members of the Class in that all members of the Class will be damaged alike by
defendants' actions.
(d) Plaintiff is committed to prosecuting this action and has
retained competent counsel experience in litigation of this nature. Accordingly,
plaintiff is an adequate representative of the Class.
SUBSTANTIVE ALLEGATIONS
A. THE COMPANY
10. Travelers provides a broad range of insurance products and services
for the commercial and consumer markets.
B. THE OFFER
4
<PAGE>
11. On March 21, 2000, Citigroup issued a press release stating that it
intends to make a cash tender offer for all the publicly-held shares of
Travelers that it does not presently own for $41.50 per share. According to the
press release, the transaction was purportedly approved by a special committee
of the Board of Directors of Travelers.
12. Given Citigroup's stranglehold on the Travelers Board, any
purported independent committee is a sham.
13. Citigroup is the primary financial backer of Travelers and is,
therefore, well aware of the true financial condition of Travelers. In making
its inadequate offer to acquire the remaining stock of Travelers, Citigroup has
tried to take advantage of the fact that the market price of Travelers stock
does not fully reflect the true value of the Company.
14. Any transaction to acquire the Company at the price being
considered does not represent the true value of the Company and is unfair and
inadequate and constitutes unfair dealing.
15. The price that Citigroup has offered has been dictated by Citigroup
to serve its own interests, and is being crammed down by Citigroup and its
representatives on Travelers' Board to force Travelers' minority shareholders to
relinquish their Travelers shares at a grossly unfair price.
16. Because Citigroup is in possession of proprietary corporate
information concerning Travelers' future financial prospects, the degree of
knowledge and economic power between Citigroup and the class members is unequal,
making it grossly and inherently unfair for
5
<PAGE>
Citigroup to obtain the remaining 15% of Travelers' shares at the unfair and
inadequate price that it has proposed.
17. By offering an inadequate price for Travelers' shares and planning
to use its control to force the consummation of the transaction, Citigroup is
violating its duties as majority shareholder.
18. Any buy-out of Travelers' public shareholders by Citigroup on the
terms recently offered on lesser terms, will deny class members their right to
share proportionately and equitably in the true value of Travelers' valuable and
profitable business, and future growth in profits and earnings, at a time when
the Company is poised to increase its profitability.
19. Because Citigroup controls 85% of Travelers and dominates its
Board, no auction or market check can be effected to establish Travelers' worth
through arm's-length bargaining. Thus, Citigroup has the power and is exercising
its power to acquire Travelers' minority shares and dictate terms which are in
Citigroup's best interest, without competing bids and regardless of the wishes
or best interests of the class members or the intrinsic value of Travelers'
stock.
20. By reason of the foregoing, defendants have breached and will
continue to breach their duties to the minority public shareholders of Travelers
and are engaging in improper, unfair dealing and wrongful and coercive conduct.
6
<PAGE>
21. Plaintiff and the Class will suffer irreparable harm unless
defendants are enjoined from breaching their fiduciary duties and from carrying
out the aforesaid plan and scheme.
22. Plaintiff and the other class members are immediately threatened by
the acts and transactions complained of herein and lack an adequate remedy at
law.
WHEREFORE, plaintiff demands judgment as follows:
A. Declaring that this action is properly maintainable as a class
action, and certifying plaintiff as class representative;
B. Enjoining the proposed transaction and, if the transaction is
consummated, rescinding the transaction;
C. Awarding plaintiff and the Class compensatory damage and/or
rescissory damages;
D. Awarding plaintiff the costs and disbursements of this action,
including reasonable allowance for plaintiff's attorneys' and experts' fees; and
E. Granting such other, and further relief as this Court may deem
to be just and proper.
7
<PAGE>
ROSENTHAL MONHAIT GROSS
& GODDESS, P.A.
By:/s/ Illegible
---------------------------------
Suite 1401, Mellon Bank Center
919 North Market Street
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiff
OF COUNSEL:
Harold B. Obstfeld
HAROLD B. OBSTFELD P.C.
260 Madison Avenue
New York, New York 10016
(212) 696-1212
8
<PAGE>
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
- -----------------------------------
|
CHERYL SETTOS and GEORGE SETTOS, | C.A. No. 17929 NC
|
Plaintiffs, |
|
-against- |
|
TRAVELERS PROPERTY CASUALTY |
CORP., SANFORD I WEILL, JAY S. |
FISHMAN, ROBERT I. LIPP, FRANK |
J. TASCO, DUDLEY C. MECUM II, |
ARTHUR ZANKEL, KENNETH J. |
BIALKIN, LESLIE B. DISHAROON |
and CITIGROUP INC., |
|
Defendants. |
|
- -----------------------------------
CLASS ACTION COMPLAINT
----------------------
Plaintiffs, by their attorneys, allege upon information and belief, except
as to paragraph 1 which plaintiffs allege upon knowledge, as follows:
1. Plaintiffs are stockholders of defendant Travelers Property Casualty
Corp. ("TPC" or the "Company").
2. TPC is a corporation duly organized and existing under the laws of the
State of Delaware, with its principal offices located at One Tower Square,
Hartford, Connecticut 06183. TPC provides a range of insurance products and
services for the commercial and consumer markets, including workers'
compensations, property, liability, fidelity and surety bonds, as well as
homeowners and auto insurance.
3. Defendant Citigroup Inc. ("Citigroup") is a corporation duly organized
and existing under the laws of the State of Delaware with its principal offices
located at 153 East 53rd
<PAGE>
Street, New York, New York 10043. Citigroup is a diversified financial services
holding company that provides a range a financial services to consumer and
corporate customers, including investment banking, retail brokerage, corporate
banking, and cash management products and services. Citigroup and its affiliates
own approximately 85 percent of TPC's total shares outstanding.
4. Defendant Sanford I Weill is a Director of TPC and the Co-Chairman and
Co-Chief Executive Officer of Citigroup.
5. Defendant Jay S. Fishman is the President and Chief Executive Officer
of TPC and Chairman of its Board of Directors.
6. Defendant Robert I. Lipp is a Director of TPC and the Chief Executive
Officer of Citigroups Global Insurance Business.
7. Defendant Frank J. Tasco is a Director of TPC.
8. Defendant Dudley C. Mecum, II is a Director of TPC and a Director of
Citigroup.
9. Defendant Arthur Zankel is a Director of TPC and a Director of
Citigroup.
10. Defendant Kenneth J. Bialikin is a Director of TPC and a Director of
Citigroup.
11. Defendant Leslie B. Disharoon is a Director of TPC.
12. The individual defendants, as officers and/or directors of TPC, and
Citigroup, as controlling shareholder, have a fiduciary relationship and
responsibility to plaintiff and the other public stockholders of TPC and owe to
them the highest
2
<PAGE>
obligations of good faith, loyalty, fair dealing, due care and candor.
CLASS ACTION ALLEGATIONS
------------------------
13. Plaintiffs bring this action on their own behalf and as a Class
action, pursuant to Rule 23 of the rules of the Court of Chancery, on behalf of
all common stockholders of TPC, or their successors in interest, who are being
and will be harmed by defendants' actions described below (the "Class").
Excluded from the Class are defendants herein and any person, firm, trust,
corporation, or other entity related to or affiliated with any of defendants.
14. This action is properly maintainable as a class action because:
a. The Class is so numerous that joinder of all members is
impracticable. There are hundreds of TPC stockholders of record and many more
beneficial owners who are located throughout the United States.
b. There are questions of law and fact which are common to the
Class, including: whether Citigroup has acted in a manner calculated to benefit
itself at the expense of TPC public stockholders; and whether plaintiffs and the
other members of the Class would be irreparably damaged if Citigroup is not
enjoined from committing the wrongs complained of herein;
c. Defendants have acted or refused to act on grounds generally
applicable to the Class, thereby making
3
<PAGE>
appropriate final injunctive relief with respect to the Class as a whole; and
d. Plaintiffs are committed to prosecuting this action and have
retained competent counsel experienced in litigation of this nature. The claims
of plaintiffs are typical of the claims of the other members of the Class and
plaintiffs have in the same interests as the other members of the Class.
Accordingly, plaintiffs are adequate representatives of the Class and will
fairly and adequately protect the interests of the Class.
CLAIM FOR RELIEF
----------------
15. Approximately 85% of TPC's total shares outstanding are owned by
Citigroup and its affiliates.
16. On March 21, 2000, Citigroup announced that it intends to make a cash
tender offer to acquire each share of TPC that it does not already own for
$41.50 cash per share. The transaction was already approved by a "Special
Committee" allegedly comprised of "independent" TPC directors.
17. Citigroup has timed the proposal to freeze out TPC's public
shareholders in order to capture for itself TPC's future potential without
paying an adequate or fair price to the Company's public shareholders.
18. Citigroup timed the announcement of the proposed buyout to place an
artificial lid on the market price of TPC's stock so that the market would not
reflect TPC's improving potential, thereby purporting to justify an unreasonably
low price.
4
<PAGE>
19. Citigroup has access to internal financial information about TPC, its
true value, expected increase in true value and the benefits of 100% ownership
of TPC to which plaintiff and the Class members are not privy. Citigroup is
using such inside information to benefit itself in this transaction, to the
detriment of the TPC's public stockholders.
20. Citigroup has clear and material conflicts of interest and is acting
to better its own interests at the expense of TPC's public shareholders.
Citigroup has voting control of the Company and controls it proxy machinery. It
has selected and elected all of TPC's directors who are beholden to Citigroup
for their offices and the valuable perquisites which they enjoy therefrom.
21. Citigroup, with the acquiescence of the directors of TPC, is engaging
in self-dealing and not acting in good faith toward plaintiff and the other
members of the Class. By reason of the foregoing, Citigroup and the individual
defendants have breached and are breaching their fiduciary duties to the members
of the Class.
22. Unless the proposed buyout is enjoined by the Court, defendants will
continue to breach their fiduciary duties owed to plaintiffs and the members of
the Class to the irreparable harm of the members of the Class.
23. Plaintiffs have no adequate remedy at law.
WHEREFORE, plaintiffs pray for judgment and relief as follows:
5
<PAGE>
A. Ordering that this action may be maintained as a class action and
certifying plaintiffs as the Class representatives;
B. Preliminarily and permanently enjoining defendants and all
persons acting in concert with them, from proceeding with, consummating or
closing the proposed transaction;
C. In the event the proposed buyout is consummated, rescinding it
and setting it aside or awarding rescissory damages to the Class;
D. Directing defendants to account to Class members for their
damages sustained as a result of the wrongs complained of herein;
E. Awarding plaintiffs the costs of this action, including a
reasonable allowance for plaintiffs' attorneys' and experts' fees; and
F. Granting such other and further relief as to the Court may seem
just and proper.
Dated: March 29, 2000
ROSENTHAL, MONHATT, GROSS
& GODDESS, P.A.
By: /s/ Carmella P. Keener
------------------------------
919 North Market Street
Suite 1401, Mellon Bank Center
Wilmington, Delaware 19899
(302) 656-4433
Attorneys for Plaintiffs
OF COUNSEL:
LAW OFFICES OF CURTIS TRINKO, LLP
16 West 46th Street
New York, NY 10036
(212) 450-9550
