EXHIBIT 10.1
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, arrangement
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 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
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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, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, 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 relevant
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 irrevocable, 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
irrevocable 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 executed
and intended to be irrevocable in accordance with the provisions of Section
212(e) of the Delaware General Corporation Law.
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(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. (a) 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 hereof, the Existing
Securities constitute all of the shares of voting capital stock of the Company
owned of
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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
Securityholder, 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, ▇▇▇▇, ▇▇▇▇-
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gage, 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.
(b) 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
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request that the Company register the transfer (book-entry or otherwise) of any
certificate or uncertificated interest representing any of its Existing
Securities, unless 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 disposi-
tions 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
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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 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).
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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 available
remedies, the non-breaching party shall be entitled to an injunction
restraining 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.
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(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 connection with the
Securityholder's obligations under this Agreement.
(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):
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If to the Securityholder, to:
Berkshire Hathaway Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. Hamburg
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
copies to:
Cravath, Swaine & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Parent, to:
Travelers Group Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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
11
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.
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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: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board
and Chief Executive
Officer
BERKSHIRE HATHAWAY INC.
By: /s/ ▇▇▇▇▇▇ ▇. Buffet
---------------------------
Name: ▇▇▇▇▇▇ ▇. Buffet
Title: Chairman and Chief
Executive Officer
SCHEDULE I
LIST OF EXISTING SECURITIES
Berkshire Hathaway and Affiliates
Holding of Salomon Inc
Capital Stock
===============================================================================
REGISTERED HOLDER SALOMON SERIES A SALOMON COMMON
CONVERTIBLE PREFERRED STOCK
STOCK
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Columbia Insurance 60,000 526,315
Company
-------------------------------------------------------------------------------
Cornhusker Casu- 5,400 47,368
alty Insurance
Company
-------------------------------------------------------------------------------
Cypress Insurance 6,000 52,631
Company
-------------------------------------------------------------------------------
National Fire & 36,000 315,789
Marine Insurance
Company
-------------------------------------------------------------------------------
National Indemnity 240,600 8,744,126
Company
-------------------------------------------------------------------------------
National Liability 7,800 68,421
& Fire Insurance
Company
-------------------------------------------------------------------------------
Oak River Insur- 4,200 36,842
ance Company
-------------------------------------------------------------------------------
Wesco Financial 30,000 263,157
Corporation
-------------------------------------------------------------------------------
Wesco-Financial 30,000 263,157
Insurance Company
===============================================================================
TOTAL 420,000 10,317,806
===============================================================================