EXHIBIT 4.1
VOTING AGREEMENT
VOTING AGREEMENT (this "Agreement"), dated as of September 24, 1997,
by and between TRAVELERS GROUP INC., a Delaware corporation ("Parent"), and
BERKSHIRE HATHAWAY INC., a Delaware corporation (the "Securityholder").
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Merger Agreement (as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, concurrently with the execution and delivery of this
Agreement, an Agreement and Plan of Merger (as such agreement may be amended
from time to time, the "Merger Agreement") is being entered into by and among
Parent, Salomon Inc, a Delaware corporation (the "Company"), and Diamonds
Acquisition Corp., a Delaware corporation ("Sub"), pursuant to which Sub has
agreed to merge with and into the Company, with the Company continuing as the
surviving corporation (the "Merger"); and
WHEREAS, as a condition to, and in consideration for, Parent's
willingness to enter into the Merger Agreement and to consummate the
transactions contemplated thereby, Parent has required that the Securityholder
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. For purposes of this Agreement:
-----------
"Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), including pursuant to any agreement, ar
rangement or understanding, whether or not in writing. Without duplicative
counting of the same securities by the Securityholder, securities Beneficially
Owned by the Securityholder shall include any securities Beneficially Owned by
all other Persons with whom such Person would constitute a "group" as within the
meaning of Section 13(d)(3) of the Exchange Act, and any securities held by any
subsidiary (as such term is defined in the Merger Agreement) of the
Securityholder.
"Company Securities" shall mean the Company Common Stock and the
Company Series A Convertible Preferred Stock.
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
2. Agreements.
----------
(a) Voting Agreement. The Securityholder shall, at any meeting of the
----------------
holders of any class or classes of Company Securities, however such meeting is
called and regardless of whether such meeting is a special or annual meeting of
the securityholders of the Company, or in connection with any written consent of
the securityholders of the Company, vote (or cause to
Page 6 of 14
be voted) the Company Securities (if any) then held of record or Beneficially
Owned by the Securityholder and entitled to vote in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the approval
of the terms thereof and each of the other actions contemplated by the Merger
Agreement and this Agreement and any actions required in furtherance thereof and
hereof.
(b) No Inconsistent Arrangements. Except pursuant to the terms of
----------------------------
the Berkshire Hathaway Inc. 1.00% Senior Exchangeable Notes due December 2, 2001
(the "Exchangeable Securities"), the Securityholder hereby covenants and agrees
that it shall not (i) transfer (which term shall include, without limitation,
any sale, gift, pledge or other disposition), or consent to any transfer of, any
or all of such Securityholder's Company Securities, or any interest therein if
such transfer would result in the Securityholder no longer having the power to
vote or cause to be voted the relevant Company Securities, (ii) enter into any
contract, option or other agreement or understanding with respect to any such
transfer of any or all of such Company Securities, or any interest therein,
(iii) except as otherwise provided hereunder, grant any proxy, power-of-attorney
or other authorization in or with respect to such Company Securities, (iv)
deposit such shares of Company Securities into a voting trust or enter into a
voting agreement or arrangement with respect to such Company Securities, or (v)
take any other action that would in any way restrict, limit or interfere with
the performance of its obligations hereunder or the transactions contemplated
hereby or by the Merger Agreement. The parties agree that nothing contained in
this Agreement shall restrict the redemption or conversion of the Company Series
A Convertible Preferred Stock held by the Securityholder in accordance with the
terms of the Company Series A Convertible Preferred Stock in effect on the date
hereof or any exchange pursuant to the terms of the Exchangeable Securities or
the agreements related thereto.
(c) Grant of Irrevocable Proxy; Appointment of Proxy.
------------------------------------------------
(i) Subject to Section 7, the Securityholder hereby irrevocably
grants to, and appoints, Xxxxxxx X. Xxxxx, Xxxxx Xxxxx and Xxxxxxx X. Xxxxxx,
III, or any one of them, in their respective capacities as officers of Parent,
and any individual who shall hereafter succeed to any such office of Parent, and
each of them individually, the Securityholder's proxy and attorney-in-fact (with
full power of substitution), for and in the name, place and stead of the
Securityholder, to vote the Company Securities held at the time of the rele
vant stockholder vote in favor of the transactions contemplated by the Merger
Agreement. The Securityholder will cause any record holder of Company
Securities Beneficially Owned by the Securityholder to grant substantially
similar proxies as requested in accordance with Section 8(e) hereof.
(ii) The Securityholder represents that any proxies heretofore given
in respect of the Securityholder's Company Securities are not irrevoca ble, and
that any such proxies are hereby revoked.
(iii) The Securityholder understands and acknowledges that Parent is
entering into the Merger Agreement in reliance upon the Securityholder's
execution and delivery of this Agreement. The Securityholder hereby affirms
that the irrevocable proxy set forth in this Section 2(c) is given in connection
with the execution of the Merger Agreement, and that such irrevoca ble proxy is
given to secure the performance of the duties of the Securityholder under this
Agreement. The Securityholder hereby further affirms that the irrevocable proxy
is coupled with an interest and, subject to Section 7, may under no
circumstances be revoked. Such irrevocable proxy is
Page 7 of 14
executed and intended to be irrevocable in accordance with the provisions of
Section 212(e) of the Delaware General Corporation Law.
(d) No Solicitation. The Securityholder hereby agrees, in its
---------------
capacity as a securityholder of the Company, that neither the Securityholder nor
any of its subsidiaries shall (and the Securityholder shall use reasonable
efforts to cause its officers, directors, employees, representatives and agents,
including, but not limited to, investment bankers, attorneys and accountants,
not to), directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any Person
(other than Parent, any of its Affiliates or representatives) concerning any
Company Takeover Proposal; provided that nothing contained in this Section 2(d)
shall restrict any officer, director or employee of the Securityholder or its
subsidiaries from taking any action in his or her capacity as a director of the
Company which is permitted to be taken pursuant to Section 4.2 of the Merger
Agreement.
(e) Best Reasonable Efforts. Subject to the terms and conditions of
-----------------------
this Agreement, each of the parties hereto agrees to use its reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
and the Merger Agreement; provided that nothing contained in this Section 2(e)
shall restrict any officer, director or employee of the Securityholder or its
subsidiaries from taking any action in his or her capacity as a director of the
Company which is permitted to be taken pursuant to Section 4.2 of the Merger
Agreement.
(f) Waiver of Appraisal Rights. The Securityholder hereby waives any
--------------------------
rights of appraisal or rights to dissent from the Merger that it may have.
3. Representations and Warranties. The Securityholder hereby
------------------------------
represents and warrants to Parent as follows:
(i) Ownership of Securities. On the date hereof, the Securityholder
-----------------------
is the Beneficial Owner of the Company Securities as set forth on Schedule I
hereto (the "Existing Securities") and the Existing Securities are owned of
record by the Securityholder or certain of its subsidiaries or by nominees on
their behalf (together, the "Record Holders"). On the date here of, the Existing
Securities constitute all of the shares of voting capital stock of the Company
owned of record or Beneficially Owned by such Securityholder. The Record Holders
have sole voting power and sole power to issue instructions with respect to the
matters set forth in Section 2 hereof, sole power of disposition, sole power of
conversion, sole power (if any) to demand appraisal rights and sole power to
agree to all of the matters set forth in this Agreement, in each case with
respect to all of the Existing Securities with no limitations, qualifications or
restrictions on such rights, subject to applicable securities laws and the terms
of this Agreement, the Purchase Agreement relating to the Company Series A
Convertible Preferred Stock and the terms of the Exchangeable Securities.
(ii) Power; Binding Agreement. The Securityholder has the corporate
------------------------
power and authority to enter into and perform all of its obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Securityholder will not violate any other agreement to which the Securityholder
is a party including, without limitation, any voting agreement, proxy
arrangement, pledge agreement, shareholders agreement or voting trust. This
Agreement has been duly and validly executed and delivered by the Securityholder
and constitutes a valid and binding agreement of the Secur-
Page 8 of 14
ityholder, enforceable against the Securityholder in accordance with its terms.
There is no beneficiary or holder of a voting trust certificate or other
interest of any trust of which the Securityholder is a trustee whose consent is
required for the execution and delivery of this Agreement or the compliance by
the Securityholder with the terms hereof.
(iii) No Conflicts. No filing with, and no permit, authorization,
------------
consent or approval of, any Governmental Entity is required for the execution of
this Agreement by the Securityholder and the consummation by the Securityholder
of the transactions contemplated hereby, and none of the execution and delivery
of this Agreement by the Securityholder, the consummation by the Securityholder
of the transactions contemplated hereby or compliance by the Securityholder with
any of the provisions hereof shall (A) conflict with or result in any breach of
any organizational documents applicable to the Securityholder, (B) result in a
violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, loan agreement, bond, mortgage, indenture,
license, contract, commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind to which the Securityholder is a party or
by which the Securityholder or any of its properties or assets may be bound, or
(C) violate any order, writ, injunction, decree, judgment, order, statute,
arbitration award, rule or regulation applicable to the Securityholder or any of
its properties or assets.
(h) Parent hereby represents and warrants to the Securityholder as
follows:
(i) Power; Binding Agreement. Parent has the corporate power and
------------------------
authority to enter into and perform all of its obligations under this Agreement.
The execution, delivery and performance of this Agreement by Parent will not
violate any material agreement to which Parent is a party. This Agreement has
been duly and validly executed and delivered by Parent and constitutes a valid
and binding agreement of Parent, enforceable against Parent in accordance with
its terms.
(ii) No Conflicts. No filing with, and no permit, authorization,
------------
consent or approval of, any Governmental Entity is required for the execution of
this Agreement by Parent and the consummation by Parent of the transactions
contemplated hereby, and none of the execution and delivery of this Agreement by
Parent, the consummation by Parent of the transactions contemplated hereby or
compliance by Parent with any of the provisions hereof shall (A) conflict with
or result in any breach of any organizational documents applicable to Parent,
(B) result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or provisions of any material note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which Parent is a
party or by which Parent or any of its properties or assets may be bound, or (C)
violate any order, writ, injunction, decree, judgment, order, statute,
arbitration award, rule or regulation applicable to Parent or any of its
properties or assets.
4. Stop Transfer. Except pursuant to the terms of the Exchangeable
-------------
Securities, the Securityholder shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated interest
representing any of its Existing Securities, unless
Page 9 of 14
such transfer is made in compliance with this Agreement. In the event of any
dividend or distribution, or any change in the capital structure of the Company
by reason of any non-cash dividend, split-up, recapitalization, combination,
exchange of securities or the like, or in the event of a conversion of the
Company Series A Preferred Stock into Company Common Stock, the term "Existing
Securities" shall refer to and include the Existing Securities as well as all
such dividends and distributions of securities and any securities into which or
for which any or all of the Existing Securities may be changed, exchanged or
converted.
5. Restriction on Sales of Securities. Except pursuant to the
----------------------------------
terms of the Exchangeable Securities and except for the conversion of the
Company Series A Convertible Preferred Stock, from the date that is 30 days
prior to the Effective Time, neither the Securityholder nor any of its
subsidiaries will sell, transfer or otherwise dispose of any of its Company
Securities, any shares of Parent Common Stock or Parent New Preferred Stock it
receives in the Merger or any other shares of Parent Common Stock or Parent
Authorized Preferred Stock it holds until after such time (the "Permitted Sale
Time") as results covering at least 30 days of post-Merger combined operations
of the Company and Parent have been published by Parent, in the form of a
quarterly earnings report, an effective registration statement filed with the
SEC, a report to the SEC on Forms 10-K, 10-Q or 8-K, or any other public filing
or announcement which includes such combined results of operations; provided
that this Section 5 shall in no event restrict any sales, transfers or
dispositions that would not, in the opinion of Parent, reasonably be expected
to adversely affect the qualification of the Merger as a pooling-of-interests.
Parent shall publish no later than 30 days after, and shall use its best efforts
to publish on the earliest possible date after, the end of the first month after
the Effective Time in which there are at least 30 days of post-Merger combined
operations (which month may be the month in which the Effective Time occurs),
combined sales and net income figures as contemplated by and in accordance with
the terms of SEC Accounting Series Release No. 135. This Section 5 is intended
to be for the benefit of affiliates of the Company. Notwithstanding anything in
this Section 5 to the contrary, if the Closing occurs after November 30, 1997,
Parent's obligations under this Section 5 shall only require Parent to publish
such financial information no later than 30 days after the end of the first
fiscal quarter ending after the Closing in which there was at least 30 days of
post-Merger combined operations.
6. Agreements of Parent.
--------------------
(a) Purchase Agreement. As of the Effective Time, without any
------------------
further action, that certain agreement dated as of September 27, 1987, as
amended, between the Securityholder and the Company (the "1987 Agreement") shall
terminate and shall be of no further force and effect.
(b) Underwriting Agreement. As of the Effective Time, Parent shall
----------------------
assume the unexecuted obligations of the Company under and be bound by the
provisions of that certain Underwriting Agreement dated as of November 26, 1996,
among the Securityholder, the Company, and the representatives of the several
underwriters (the "Underwriting Agreement") in connection therewith and, in this
regard, Parent shall use its best efforts to cause a registration statement to
be effective under the Securities Act during each Exchange Period (as defined in
the Underwriting Agreement) in order to permit a Parent prospectus to be usable
by the Securityholder in connection with any exchange of Exchangeable
Securities. Parent shall perform all the duties and obligations of the Company
under Section 2(f) of the Underwriting Agreement without regard to whether the
Securityholder is at any time an affiliate of the Company, Parent or Sub, until
such time as the applicable period specified
Page 10 of 14
in Rule 145(d) (or any successor provision thereto) under the Securities Act
with respect to the Securityholder has elapsed or the Exchangeable Securities
are no longer outstanding.
7. Termination. This Agreement and the covenants, representations
-----------
and warranties, agreements and irrevocable proxy or proxies contained herein or
granted pursuant hereto shall terminate upon the earlier to occur of (i) the
termination of the Merger Agreement in accordance with Article VII thereof or
(ii) the consummation of the transactions contemplated by the Merger Agreement,
provided that the provisions of Sections 5 and 6 hereof shall survive the
consummation of such transactions in accordance with their terms (but shall not
survive the termination of the Merger Agreement).
8. Miscellaneous.
-------------
(a) Specific Performance. Each party hereto recognizes and agrees
--------------------
that if for any reason any of the provisions of this Agreement are not performed
by the other party in accordance with their specific terms or are otherwise
breached, immediate and irreparable harm or injury would be caused to the non-
breaching party for which money damages would not be an adequate remedy.
Accordingly, the parties agree that, in addition to any other avail able
remedies, the non-breaching party shall be entitled to an injunction re
straining any violation or threatened violation of the provisions of this
Agreement without the necessity of the non-breaching party posting a bond or
other form of security. In the event that any action should be brought in
equity to enforce the provisions of this Agreement, the breaching party will not
allege, and the breaching party hereby waives the defense, that there is an
adequate remedy at law.
(b) Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. Without limiting the
foregoing, with respect to any provision of this Agreement, if it is determined
by a court of competent jurisdiction to be excessive as to duration or scope, it
is the parties' intention that such provision nevertheless be enforced to the
fullest extent which it may be enforced.
(c) Attorneys' Fees. If any action at law or equity, including an
---------------
action for declaratory relief, is brought to enforce or interpret any provision
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees and expenses from the other party, which fees and expenses shall
be in addition to any other relief which may be awarded.
(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, REGARDLESS OF THE LAWS
THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
(e) Further Assurances. From time to time, at the request of Parent,
------------------
the Securityholder shall execute and deliver to Parent or cause other Record
Holders to execute and deliver to Parent such additional instruments containing
grants of proxy with respect to the Company Securities Beneficially Owned by the
Securityholder (which grants of proxy will be in substantially the form of
Section 2(c)(i) hereto) as Parent may reasonably request in con nection with
the Securityholder's obligations under this Agreement.
Page 11 of 14
(f) Entire Agreement. This Agreement constitutes the entire
----------------
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them with respect to the subject matter hereof.
(g) Consent to Jurisdiction, Etc. Each of the parties hereto
-----------------------------
irrevocably and unconditionally submits to the exclusive jurisdiction of the
Court of Chancery in the State of Delaware and The United States District Court
for the Southern District of New York or, if such court will not accept
jurisdiction, any court of competent civil jurisdiction sitting in Kent County,
Delaware. In any action, suit or other proceeding, each of the parties hereto
irrevocably and unconditionally waives and agrees not to assert by way of
motion, as a defense or otherwise any claims that it is not subject to the
jurisdiction of the above courts, that such action or suit is brought in an
inconvenient forum or that the venue of such action, suit or other proceeding is
improper. Each of the parties hereto also agrees that any final and unappealable
judgment against a party hereto in connection with any action, suit or other
proceeding shall be conclusive and binding on such party and that such award or
judgment may be enforced in any court of competent jurisdiction, either within
or outside of the United States. A certified or exemplified copy of such award
or judgment shall be conclusive evidence of the fact and amount of such award or
judgment.
(h) Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
(which is confirmed), or by registered or certified mail (postage prepaid,
return receipt requested):
If to the Securityholder, to:
Berkshire Hathaway Inc.
0000 Xxxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Hamburg
Facsimile: (000) 000-0000
copies to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: X. Xxxxxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
and
Xxxxxx, Xxxxxx & Xxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: R. Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
If to Parent, to:
Travelers Group Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Page 12 or 14
Attention: Xxxxxxx X. Xxxxxx III, Esq.
Facsimile: (000) 000-0000
copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(i) Descriptive Headings; Interpretation. The descriptive headings
------------------------------------
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
(j) Assignment; Binding Agreement. Neither this Agreement nor any of
-----------------------------
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other party hereto.
(k) Amendment, Modification and Waiver. This Agreement may not be
----------------------------------
amended, modified or waived except by an instrument or instruments in writing
signed and delivered on behalf of the party hereto against whom such amendment,
modification or waiver is sought to be entered.
(l) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
IN WITNESS WHEREOF, Parent and the Securityholder has caused this
Agreement to be duly executed as of the day and year first above written.
TRAVELERS GROUP INC.
By:_____________________________
Name:
Title:
BERKSHIRE HATHAWAY INC.
By:_____________________________
Name:
Title:
Page 13 of 14
SCHEDULE I
----------
LIST OF EXISTING SECURITIES
Berkshire Hathaway and Affiliates
Holding of Salomon Inc
Capital Stock
REGISTERED HOLDER SALOMON SERIES A SALOMON
CONVERTIBLE COMMON
PREFERRED STOCK
STOCK
--------------------------------------------------------------------
Columbia Insurance 60,000 526,315
Company
Cornhusker Casualty 5,400 47,368
Insurance Company
Cypress Insurance 6,000 52,631
Company
National Fire & Marine 36,000 315,789
Insurance Company
National Indemnity 240,600 8,744,126
Company
National Liability & 7,800 68,421
Fire Insurance Company
Oak River Insurance 4,200 36,842
Company
Wesco Financial 30,000 263,157
Corporation
Wesco-Financial 30,000 263,157
Insurance Company
TOTAL 420,000 10,317,806
Page 14 of 14
