EXHIBIT 4.01
CERTIFICATE OF DESIGNATION
of
6.231% CUMULATIVE PREFERRED STOCK, SERIES H
of
TRAVELERS GROUP INC.
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pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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TRAVELERS GROUP INC., a Delaware corporation (the "Corporation"),
hereby certifies that:
1. The Restated Certificate of Incorporation, as amended, of the
Corporation (the "Certificate of Incorporation") fixes the total number of
shares of all classes of capital stock that the Corporation shall have the
authority to issue at one billion five hundred million (1,500,000,000) shares of
common stock, par value $.01 per share ("Common Stock") and thirty million
(30,000,000) shares of preferred stock, par value $1.00 per share ("Preferred
Stock").
2. The Certificate of Incorporation expressly grants to the Board of
Directors of the Corporation (the "Board of Directors") authority to provide for
the issuance of the shares of Preferred Stock in series, and to establish from
time to time the number of shares to be included in each such series and to fix
the designation, powers, preferences and rights of the shares of each such
series and the qualifications, limitations or restrictions thereof. Pursuant to
resolutions duly adopted by the Board of Directors in accordance with Section
141 of the General Corporation Law of the State of Delaware (the "DGCL"), the
Board of Directors has granted such authority to its Executive Committee (the
"Executive Committee").
3. Pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation, and upon the Executive Committee by
resolution of the Board of Directors, the Executive Committee, by action duly
taken on July 8, 1997, and the Notes Committee by action duly taken on September
3, 1997 adopted resolutions that provide for a series of Preferred Stock as
follows:
RESOLVED, that an issue of a series of Preferred Stock is hereby
provided for, and the number of shares to be included in such series is
established, and the designation, powers, preference and rights, and
qualifications, limitations or restrictions thereof, of such series are fixed,
hereby as follows:
1. DESIGNATION AND NUMBER OF SHARES. The designation of such series
shall be 6.231% Cumulative Preferred Stock, Series H (the "Series H Preferred
Stock"), and the number of shares constituting such series shall be 800,000. The
number of authorized shares of Series H Preferred Stock may be reduced (but not
below the number of shares thereof then outstanding) by further resolution duly
adopted by the Board of Directors or the Executive Committee and by the filing
of a certificate pursuant to the provisions of the DGCL stating that such
reduction has been so authorized, but the number of authorized shares of Series
H Preferred Stock shall not be increased.
2. DIVIDENDS. Dividends on each share of Series H Preferred Stock
shall be cumulative from the date of original issue of such share and shall be
payable, when and as declared by the Board of Directors out of funds legally
available therefor, in cash on February 1, May 1, August 1 and November 1 of
each year, commencing November 1, 1997.
Each quarterly period beginning on February 1, May 1, August 1 and
November 1 in each year and ending on and including the day next preceding the
first day of the next such quarterly period shall be a "Dividend Period." If a
share of Series H Preferred Stock is outstanding during an entire Dividend
Period, the dividend payable on such share on the first day of the calendar
month immediately following the last day of such Dividend Period shall be
$3.894375 (or one-fourth of 6.231% of the Liquidation Preference (as defined in
Section 7) for such share). If a share of Series H Preferred Stock is
outstanding for less than an entire Dividend Period, the dividend payable on
such share on the first day of the calendar month immediately following the last
day of such Dividend Period on which such share shall be outstanding shall be
the product of $3.894375 multiplied by the ratio (which shall not exceed one)
that the number of days that such share was outstanding during such Dividend
Period bears to the number of days in such Dividend Period.
If, prior to 18 months after the date of the original issuance of the
Series H Preferred Stock, one or more amendments to the Internal Revenue Code of
1986, as amended (the "Code") are enacted that reduce the percentage of the
dividends-received deduction (currently 70%) as specified in
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section 243(a)(1) of the Code or any successor provision (the
"Dividends-Received Percentage"), the amount of each dividend payable (if
declared) per share of Series H Preferred Stock for dividend payments made on or
after the effective date of such change in the Code will be adjusted by
multiplying the amount of the dividend payable described above (before
adjustment) by the following fraction (the "DRD Formula"), and rounding the
result to the nearest cent (with one-half cent rounded up):
1-.35(1-.70)
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1-.35(1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends-Received
Percentage (expressed as a decimal) applicable to the dividend in
question; provided, however, that if the Dividends-Received Percentage
applicable to the dividend in question shall be less than 50%, then the
DRP shall equal .50. Notwithstanding the foregoing provisions, if, with
respect to any such amendment, the Company receives either an unqualified
opinion of nationally recognized independent tax counsel selected by the Company
or a private letter ruling or similar form of authorization from the Internal
Revenue Service ("IRS") to the effect that such amendment does not apply to a
dividend payable on the Series H Preferred Stock, then such amendment will not
result in the adjustment provided for pursuant to the DRD Formula with respect
to such dividend. Such opinion shall be based upon the legislation amending or
establishing the DRP or upon a published pronouncement of the IRS addressing
such legislation.
If any such amendment to the Code is enacted after the dividend
payable on a dividend payment date has been declared, the amount of the dividend
payable on such dividend payment date will not be increased; instead, additional
dividends (the "Post Declaration Date Dividends") equal to the excess, if any,
of (x) the product of the dividend paid by the Company on such dividend payment
date and the DRD Formula (where the DRP used in the DRD Formula would be equal
to the greater of the Dividends-Received Percentage applicable to the dividend
in question and .50) over (y) the dividend paid by the Company on such dividend
payable date, will be payable (if declared) to holders of Series H Preferred
Stock on the record date applicable to the next succeeding dividend payment date
or, if the Series H Preferred Stock is called for redemption prior to such
record
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date, to holders of Series H Preferred Stock on the applicable redemption date,
as the case may be, in addition to any other amounts payable on such date.
If any such amendment to the Code is enacted and the reduction in the
Dividends-Received Percentage retroactively applies to a dividend payment date
as to which the Company previously paid dividends on the Series H Preferred
Stock (each, an "Affected Dividend Payment Date"), the Company will pay (if
declared) additional dividends (the "Retroactive Dividends") to holders of
Series H Preferred Stock on the record date applicable to the next succeeding
dividend payment date (or, if such amendment is enacted after the dividend
payable on such dividend payment date has been declared, to holders of Series H
Preferred Stock on the record date following the date of enactment) or, if the
Series H Preferred Stock is called for redemption prior to such record date, to
holders of Series H Preferred Stock on the applicable redemption date, as the
case may be, in an amount equal to the excess of (x) the product of the dividend
paid by the Company on each Affected Dividend Payment Date and the DRD Formula
(where the DRP used in the DRD Formula would be equal to the greater of the
Dividends-Received Percentage and .50 applied to each Affected Dividend Payment
Date) over (y) the sum of the dividend paid by the Company on each Affected
Dividend Payment Date; provided, however that if the Company has received the
opinion, letter ruling or authorization referred to above, with respect to a
dividend payable on the Affected Payment Date, then no such Retroactive
Dividends will be payable.
Each dividend on the shares of Series H Preferred Stock shall be paid
to the holders of record of shares of Series H Preferred Stock as they appear on
the stock register of the Company on such record date, not more than 60 days nor
less than 10 days preceding the payment date of such dividend, as shall be fixed
in advance by the Board of Directors. Dividends on account of arrears for any
past Dividend Periods may be declared and paid at any time, without reference to
any regular dividend payment date, to holders of record on such date, not
exceeding 45 days preceding the payment date thereof, as may be fixed in advance
by the Board of Directors.
If there shall be outstanding shares of any other class or series of
preferred stock of the Company ranking on a
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parity as to dividends with the Series H Preferred Stock, the Company, in making
any dividend payment on account of arrears on the Series H Preferred Stock or
such other class or series of preferred stock, shall make payments ratably upon
all outstanding shares of Series H Preferred Stock and such other class or
series of preferred stock in proportion to the respective amounts of dividends
in arrears upon all such outstanding shares of Series H Preferred Stock and such
other class or series of preferred stock to the date of such dividend payment.
Holders of shares of Series H Preferred Stock shall not be entitled to
any dividend, whether payable in cash, property or stock, in excess of full
cumulative dividends on such shares. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment that is in
arrears.
3. REDEMPTION. The Series H Preferred Stock is not subject to any
mandatory redemption pursuant to a sinking fund or otherwise. The Company, at
its option, may redeem shares of Series H Preferred Stock, as a whole or in
part, at any time or from time to time on or after September 8, 2007, at a price
of $250 per share, plus accrued and accumulated but unpaid dividends thereon to
but excluding the date fixed for redemption (the "Redemption Price").
If the Company shall redeem shares of Series H Preferred Stock
pursuant to this Section 3, notice of such redemption shall be given by first
class mail, postage prepaid, not less than 30 or more than 90 days prior to the
redemption date, to each holder of record of the shares to be redeemed, at such
holder's address as shown on the stock register of the Company. Each such notice
shall state: (a) the redemption date; (b) the number of shares of Series H
Preferred Stock to be redeemed and, if less than all such shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (c) the Redemption Price; (d) the place or places where certificates for
such shares are to be surrendered for payment of the Redemption Price; and
(e) that dividends on the shares to be redeemed will cease to accrue on such
redemption date. Notice having been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Company in providing money
for the payment of the Redemption Price) dividends on the shares of Series H
Preferred Stock so called for redemption shall cease to accrue, and such shares
shall no longer be deemed to be outstanding, and
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all rights of the holders thereof as stockholders of the Company (except the
right to receive from the Company the Redemption Price) shall cease. Upon
surrender in accordance with such notice of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of Directors
shall so require and the notice shall so state), the Company shall redeem such
shares at the Redemption Price. If less than all the outstanding shares of
Series H Preferred Stock are to be redeemed, the Company shall select those
shares to be redeemed from outstanding shares of Series H Preferred Stock not
previously called for redemption by lot or pro rata (as nearly as may be) or by
any other method determined by the Board of Directors to be equitable.
The Company shall not redeem less than all the outstanding shares of
Series H Preferred Stock pursuant to this Section 3, or purchase or acquire any
shares of Series H Preferred Stock otherwise than pursuant to a purchase or
exchange offer made on the same terms to all holders of shares of Series H
Preferred Stock, unless full cumulative dividends shall have been paid or
declared and set apart for payment upon all outstanding shares of Series H
Preferred Stock for all past Dividend Periods, and unless all matured
obligations of the Company with respect to all sinking funds, retirement funds
or purchase funds for all series of Preferred Stock then outstanding have been
met.
4. SHARES TO BE RETIRED. All shares of Series H Preferred Stock
redeemed by the Company shall be retired and canceled and shall be restored to
the status of authorized but unissued shares of Preferred Stock, without
designation as to series, and may thereafter be reissued.
5. CONVERSION OR EXCHANGE. The holders of shares of Series H
Preferred Stock shall not have any rights to convert any such shares into or
exchange any such shares for shares of any other class or series of capital
stock of the Company.
6. VOTING. Except as otherwise provided in this Section 6 or as
otherwise required by law, the Series H Preferred Stock shall have no voting
rights.
If six quarterly dividends (whether or not consecutive) payable on
shares of Series H Preferred Stock are in arrears at the time of the record date
to determine stockholders for any annual meeting of stockholders of the Company,
the number of
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directors of the Company shall be increased by two, and the holders of shares of
Series H Preferred Stock (voting separately as a class with the holders of
shares of any one or more other series of Preferred Stock upon which like voting
rights have been conferred and are exercisable) shall be entitled at such annual
meeting of stockholders to elect two directors of the Company, with the
remaining directors of the Company to be elected by the holders of shares of any
other class or classes or series of stock entitled to vote therefor. In any such
election, holders of shares of Series H Preferred Stock shall have one vote for
each share held.
At all meetings of stockholders at which holders of Preferred Stock
shall be entitled to vote for Directors as a single class, the holders of a
majority of the outstanding shares of all classes and series of capital stock of
the Company having the right to vote as a single class shall be necessary to
constitute a quorum, whether present in person or by proxy, for the election by
such single class of its designated Directors. In any election of Directors by
stockholders voting as a class, such Directors shall be elected by the vote of
at least a plurality of shares held by such stockholders present or represented
at the meeting. At any such meeting, the election of Directors by stockholders
voting as a class shall be valid notwithstanding that a quorum of other
stockholders voting as one or more classes may not be present or represented at
such meeting.
Any director who has been elected by the holders of shares of Series H
Preferred Stock (voting separately as a class with the holders of shares of any
one or more other series of Preferred Stock upon which like voting rights have
been conferred and are exercisable) may be removed at any time, with or without
cause, only by the affirmative vote of the holders of the shares at the time
entitled to cast a majority of the votes entitled to be cast for the election of
any such director at a special meeting of such holders called for that purpose,
and any vacancy thereby created may be filled by the vote of such holders. If a
vacancy occurs among the Directors elected by such stockholders voting as a
class, other than by removal from office as set forth in the preceding sentence,
such vacancy may be filled by the remaining Director so elected, or his
successor then in office, and the Director so elected to fill such vacancy shall
serve until the next meeting of stockholders for the election of Directors.
The voting rights of the holders of the Series H Preferred Stock to
elect Directors as set forth above shall continue
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until all dividend arrearages on the Series H Preferred Stock have been paid or
declared and set apart for payment. Upon the termination of such voting rights,
the terms of office of all persons who may have been elected pursuant to such
voting rights shall immediately terminate, and the number of directors of the
Company shall be decreased by two.
Without the consent of the holders of shares entitled to cast at least
two-thirds of the votes entitled to be cast by the holders of the total number
of shares of Preferred Stock then outstanding, voting separately as a class
without regard to series, with the holders of shares of Series H Preferred Stock
being entitled to cast one vote per share, the Company may not:
(i) create any class of stock that shall have preference as to
dividends or distributions of assets over the Series H Preferred Stock; or
(ii) alter or change the provisions of the Certificate of
Incorporation (including any Certificate of Amendment or Certificate of
Designation relating to the Series H Preferred Stock) so as to adversely affect
the powers, preferences or rights of the holders of shares of Series H Preferred
Stock;
PROVIDED, however, that if such creation or such alteration or change would
adversely affect the powers, preferences or rights of one or more, but not all,
series of Preferred Stock at the time outstanding, such alteration or change
shall require consent of the holders of shares entitled to cast at least
two-thirds of the votes entitled to be cast by the holders of all of the shares
of all such series so affected, voting as a class.
7. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the Company, voluntary or involuntary, the holders
of Series H Preferred Stock shall be entitled to receive out of the assets of
the Company available for distribution to stockholders, before any distribution
of assets shall be made to the holders of the Common Stock or of any other
shares of stock of the Company ranking as to such distribution junior to the
Series H Preferred Stock, a liquidating distribution in an amount equal to $250
per share (the "Liquidation Preference") plus an amount equal to any accrued and
accumulated but unpaid dividends thereon to the date of final distribution. The
holders of the Series H Preferred Stock shall not be entitled to receive the
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Liquidation Preference and such accrued dividends, however, until the
liquidation preference of any other class of stock of the Company ranking senior
to the Series H Preferred Stock as to rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full.
If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the assets available for distribution are
insufficient to pay in full the amounts payable with respect to the Series H
Preferred Stock and any other shares of stock of the Company ranking as to any
such distribution on a parity with the Series H Preferred Stock, the holders of
the Series H Preferred Stock and of such other shares shall share ratably in any
distribution of assets of the Company in proportion to the full respective
preferential amounts to which they are entitled.
After payment to the holders of the Series H Preferred Stock of the
full preferential amounts provided for in this Section 7, the holders of the
Series H Preferred Stock shall be entitled to no further participation in any
distribution of assets by the Company.
Consolidation or merger of the Company with or into one or more other
corporations, or a sale, whether for cash, shares of stock, securities or
properties, of all or substantially all of the assets of the Company, shall not
be deemed or construed to be a liquidation, dissolution or winding up of the
Company within the meaning of this Section 7 if the preferences or special
voting rights of the holders of shares of Series H Preferred Stock are not
impaired thereby.
8. LIMITATION ON DIVIDENDS ON JUNIOR STOCK. So long as any Series H
Preferred Stock shall be outstanding the Company shall not declare any dividends
on the Common Stock or any other stock of the Company ranking as to dividends or
distributions of assets junior to the Series H Preferred Stock (the Common Stock
and any such other stock being herein referred to as "Junior Stock"), or make
any payment on account of, or set apart money for, a sinking fund or other
similar fund or agreement for the purchase, redemption or other retirement of
any shares of Junior Stock, or make any distribution in respect thereof, whether
in cash or property or in obligations or stock of the Company, other than a
distribution of Junior Stock (such dividends, payments,
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setting apart and distributions being herein called "Junior Stock Payments"),
unless the following conditions shall be satisfied at the date of such
declaration in the case of any such dividend, or the date of such setting apart
in the case of any such fund, or the date of such payment or distribution in the
case of any other Junior Stock Payment:
(i) full cumulative dividends shall have been paid or declared and
set apart for payment on all outstanding shares of Preferred Stock other than
Junior Stock; and
(ii) the Company shall not be in default or in arrears with respect to
any sinking fund or other similar fund or agreement for the purchase, redemption
or other retirement of any shares of Preferred Stock other than Junior Stock;
PROVIDED, however, that any funds theretofore deposited in any sinking fund or
other similar fund with respect to any Preferred Stock in compliance with the
provisions of such sinking fund or other similar fund may thereafter be applied
to the purchase or redemption of such Preferred Stock in accordance with the
terms of such sinking fund or other similar fund regardless of whether at the
time of such application full cumulative dividends upon shares of Series H
Preferred Stock outstanding to the last dividend payment date shall have been
paid or declared and set apart for payment by the Company.
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Travelers Group Inc. has caused this Certificate to be duly executed by its
Executive Vice President, and attested by its Assistant Secretary this 5th day
of September, 1997.
TRAVELERS GROUP INC.
By /s/ Charles O. Prince, III
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Charles O. Prince, III
Executive Vice President
Attest:
/s/ Shelley J. Dropkin
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Shelley J. Dropkin
Assistant Secretary
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