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1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 25049 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 3)* ALEXANDER & ALEXANDER SERVICES INC. (Name of Issuer) Common Stock, par value $1.00 per share (Title of Class of Securities) 014476105 (CUSIP Number) Florence A. Davis - Vice President and General Counsel American International Group, Inc. 70 Pine Street New York, New York 10270 (212) 770-5457 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 11, 1996 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-l(b)(3) or (4), check the following box. [ ] NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-l(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 2 SCHEDULE 13D CUSIP NO. 014476105 PAGE 2 OF 44 PAGES 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON American International Group, Inc. IRS No. 13-2592361 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Incorporated in the State of Delaware 7. SOLE VOTING POWER None 8. SHARED VOTING POWER 4,960,719 9. SOLE DISPOSITIVE POWER None 10. SHARED DISPOSITIVE POWER 4,960,719 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,960,719 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) (represents 9.9% of the outstanding voting stock of Alexander & Alexander Services Inc.) 10.34% 14. TYPE OF REPORTING PERSON* HC, CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION 3 SCHEDULE 13D CUSIP NO. 014476105 PAGE 3 OF 44 PAGES 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON American Home Assurance Company IRS No. 13-5124990 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Incorporated in the State of New York 7. SOLE VOTING POWER 8. SHARED VOTING POWER 3,472,503 9. SOLE DISPOSITIVE POWER 10. SHARED DISPOSITIVE POWER 3,472,503 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,472,503 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.24% 14. TYPE OF REPORTING PERSON* IC, CO * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION 4 SCHEDULE 13D CUSIP NO. 014476105 PAGE 4 OF 44 PAGES 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Commerce & Industry Insurance Company IRS No. 31-1938623 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Incorporated in the State of New York 7. SOLE VOTING POWER 8. SHARED VOTING POWER 744,107 9. SOLE DISPOSITIVE POWER 10. SHARED DISPOSITIVE POWER 744,107 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON [ ] 744,107 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.55% 14. TYPE OF REPORTING PERSON* IC, CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION 5 SCHEDULE 13D CUSIP NO. 014476105 PAGE 5 OF 44 PAGES 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Insurance Company of the State of Pennsylvania IRS No. 31-5540698 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [ ] 3. SEC USE ONLY 4. SOURCE OF FUNDS* WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6. CITIZENSHIP OR PLACE OF ORGANIZATION Incorporated in the State of Pennsylvania 7. SOLE VOTING POWER 8. SHARED VOTING POWER 744,107 9. SOLE DISPOSITIVE POWER 10. SHARED DISPOSITIVE POWER 744,107 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON [ ] 744,107 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.55% 14. TYPE OF REPORTING PERSON* IC, CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION 6 Item 1. Security and Issuer This Amendment No. 3 to Schedule 13D relates to the common stock, $1.00 par value per share (the "Common Stock"), of Alexander & Alexander Services Inc., a Maryland corporation (the "Company"). Capitalized terms used herein without definition shall have the meanings given to such terms in the Schedule 13D relating to the Common Stock filed by the Reporting Persons with the Securities and Exchange Commission on July 15, 1994 (the "Schedule 13D"). Item 2. Identity and Background Item 2 is amended by deleting the first sentence of the second paragraph and replacing it with the following: "Starr International Company, Inc., a private holding company incorporated in Panama ("SICO"), The Starr Foundation ("The Starr Foundation"), a New York not-for-profit corporation, and C.V. Starr & Co., Inc., a Delaware corporation ("Starr"), have the right to vote approximately 16.14%, 3.46% and 2.39%, respectively, of the outstanding common stock of AIG." Item 5. Interests in Securities of the Issuer Item 5 is amended by adding the following: "The information required by this Item is set forth in Items 7 through 11 and 13 of the cover pages of this Amendment No. 3 to Schedule 13D and is based on the number of shares of Common Stock outstanding as of November 1, 1996 as contained in the Company's quarterly report on Form 10-Q relating to the quarterly period ended September 30, 1996. The number of shares beneficially owned by AIG and the Purchasers, as described in Items 7 through 11 and 13 of the cover pages of this Amendment No. 3 to Schedule 13D, reflects (i) the Purchasers' purchase of the Preferred Shares pursuant to the Stock Purchase and Sale Agreement, (ii) the beneficial ownership of the Portfolio Shares by AHAC and (iii) the receipt by the Purchasers of dividends on the Preferred Shares owned by them which were paid in the form of additional Preferred Shares, as reported in Amendment No. 1 to Schedule 13D dated February 15, 1995 and Amendment No. 2 to Schedule 13D dated February 15, 1996 and in the amounts and on the dates set forth below: 7 Preferred Shares Purchaser Received Date --------- --------- -------- AHAC 62,681 03/15/96 AHAC 63,934 06/15/96 AHAC 65,213 09/15/96 AHAC 66,517 12/15/96 CIIC 13,432 03/15/96 CIIC 13,700 06/15/96 CIIC 13,974 09/15/96 CIIC 14,254 12/15/96 ICP 13,432 03/15/96 ICP 13,700 06/15/96 ICP 13,974 09/15/96 ICP 14,254 12/15/96" Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Item 6 is amended by adding the following: "Pursuant to a Stock Purchase and Sale Agreement dated December 11, 1996 (the "Aon Purchase Agreement") between AIG and Aon Corporation, a Delaware corporation ("Aon"), AIG, for and on behalf of itself, AHAC, CIIC and ICP, agreed to sell all of the Preferred Shares to Aon for a purchase price of $317,500,000 in cash plus a cash amount equal to all accrued and unpaid dividends on the Preferred Shares. The closing (the "Aon Closing") of such purchase and sale is scheduled to take place on the date which is two business days after Aon or any affiliate of Aon first acquires on or after December 11, 1996 in any manner any equity interest in the Company, or any right or security convertible or exercisable into any such interest, or any right to acquire any thereof, by purchase or tender offer or otherwise (an "Aon Equity Acquisition"). Under the Aon Purchase Agreement, all the rights and preferences of the Preferred Shares remain in full force and effect until the Closing; provided, however, that AIG agreed to suspend voluntarily its rights under Section (9d). of the Articles Supplementary and its right to require the Company to repurchase any of the Preferred Shares pursuant to Section 7 of the Articles Supplementary related thereto, in each case until the earlier of the Closing or termination of the Aon Purchase Agreement. Further, AIG agreed not to transfer, assign, sell, pledge or otherwise dispose of any of the Preferred Shares to any third party, other than as 8 contemplated in the Aon Purchase Agreement, until the earlier of the Closing or the termination of the Aon Purchase Agreement. The Aon Purchase Agreement (A) terminates without any action by the parties thereto on the earliest of (i) if the Closing shall not have occurred, April 15, 1997, (ii) if the Closing has not occurred, four business days after an Aon Equity Acquisition and (iii) the effective date of termination of the Merger Agreement dated December 11, 1996 between Aon, the Company and the other parties thereto, as amended from time to time, and (B) may be terminated at any time prior to the Closing by a written instrument executed and delivered by the parties thereto." Item 7. Material To Be filed as Exhibits Item 7 is amended as follows: (a) the previously filed Exhibit A is replaced with the following updated exhibit: A. Executive Officers and Directors of AIG, the Purchasers, SICO, The Starr Foundation and Starr. (b) a new Exhibit I is added as follows: I. Stock Purchase and Sale Agreement, dated as of December 11, 1996 between AIG and Aon. 9 SIGNATURE After reasonable 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. Dated: December 24, 1996 AMERICAN INTERNATIONAL GROUP, INC. By: /s/ Edward E. Matthews ----------------------------------------- Name: Edward E. Matthews Title: Vice Chairman AMERICAN HOME ASSURANCE COMPANY By: /s/ Edward E. Matthews ----------------------------------------- Name: Edward E. Matthews Title: Senior Vice President COMMERCE AND INDUSTRY INSURANCE COMPANY By: /s/ Edward E. Matthews ----------------------------------------- Name: Edward E. Matthews Title: Senior Vice President THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA By: /s/ David J. Walsh ----------------------------------------- Name: David J. Walsh Title: Senior Vice President, General Counsel 10 Exhibit Index Exhibit No. Description Page No. - ----------- ----------- -------- Exhibit A Executive Officers and Directors Exhibit I Stock Purchase and Sale Agreement dated as of December 11, 1996 between AIG and Aon
1 EXHIBIT A AMERICAN INTERNATIONAL GROUP, INC. DIRECTORS M. Bernard Aidinoff Sullivan & Cromwell 125 Broad Street New York, New York 10004 Lloyd M. Bentsen 2600 Texas Commerce Tower 600 Travis Street, Suite 2600 Houston, Texas 77002 Marshall A. Cohen The Molson Companies Limited 40 King Street West Toronto, Ontario M5H 3Z5 Barber B. Conable, Jr. P.O. Box 218 Alexander, New York 14005 Martin Feldstein National Bureau of Economic Research, Inc. 1050 Massachusetts Avenue Cambridge, Massachusetts 02138 Leslie L. Gonda International Lease Finance Corporation 1999 Avenue of the Stars Los Angeles, California 90017 Evan G. Greenberg American International Group, Inc. 70 Pine Street New York, New York 10270 M.R. Greenberg American International Group, Inc. 70 Pine Street New York, New York 10270 Carla A. Hills Hills & Company 1200 19th Street, N.W. - 5th Flr. Washington, DC 20036 2 -2- AMERICAN INTERNATIONAL GROUP, INC. DIRECTORS (CONTINUED) Frank Hoenemeyer 7 Harwood Drive Madison, New Jersey 07940 Edward E. Matthews American International Group, Inc. 70 Pine Street New York, New York 10270 Dean P. Phypers 220 Rosebrook Road New Canaan, Connecticut 06840 John J. Roberts American International Group, Inc. 70 Pine Street New York, New York 10270 Thomas R. Tizzio American International Group, Inc. 70 Pine Street New York, New York 10270 Edmund S. W. Tse American International Assurance Company, Ltd. 1 Stubbs Road Hong Kong Honorary Directors Marion E. Fajen 5608 N. Waterbury Road Des Moines, Iowa 50312 Houghton Freeman Freeman Foundation 1880 Mountain Road, #14 Stowe, VT 05672 John I. Howell Indian Rock Corporation P.O. Box 2606 Greenwich, Connecticut 06836 3 -3- AMERICAN INTERNATIONAL GROUP, INC. DIRECTORS (CONTINUED) The Honorable Douglas MacArthur, II 2101 Connecticut Ave., N.W. Apartment #4 Washington, DC 20008 Edwin A.G. Manton American International Group, Inc. 70 Pine Street New York, New York 10270 Ernest E. Stempel American International Group, Inc. 70 Pine Street New York, New York 10270 K.K. Tse American International Group, Inc. 70 Pine Street New York, New York 10270 4 AMERICAN INTERNATIONAL GROUP, INC. EXECUTIVE OFFICERS M.R. Greenberg 70 Pine Street Chairman and Chief Executive New York, New York 10270 Officer Thomas R. Tizzio 70 Pine Street President New York, New York 10270 Edwin A.G. Manton 70 Pine Street Senior Advisor New York, New York 10270 Ernest E. Stempel 70 Pine Street Senior Advisor New York, New York 10270 Edward E. Matthews 70 Pine Street Vice Chairman - Investments and New York, New York 10270 Financial Services John J. Roberts 70 Pine Street Vice Chairman - External New York, New York 10270 Affairs Evan G. Greenberg 70 Pine Street Executive Vice President New York, New York 10270 Robert Sandler 70 Pine Street Executive Vice President and New York, New York 10270 Senior Actuary and Senior Claims Officer Howard Smith 70 Pine Street Executive Vice President, Chief Financial New York, New York 10270 Officer and Comptroller Ronald J. Anderson 1-1-3 Marunouchi, Chiyoda-ku Senior Vice President Tokyo 100, JAPAN 5 -2- AMERICAN INTERNATIONAL GROUP, INC. EXECUTIVE OFFICERS (CONTINUED) Edmund S.W. Tse 1 Stubbs Road Executive Vice President - Hong Kong Life Insurance Lawrence W. English 70 Pine Street Senior Vice President - New York, New York 10270 Administration Axel Freudmann 72 Wall Street Senior Vice President - New York, New York 10038 Human Resources John G. Hughes 70 Pine Street Senior Vice President - New York, New York 10270 Worldwide Claims Kevin H. Kelley 200 State Street Senior Vice President - Boston, MA 02109 Domestic General Win J. Neuger 70 Pine Street Senior Vice President - Investments New York, New York 10270 R. Kendall Nottingham 1 ALICO Plaza, P.O. Box 667 Senior Vice President - Wilmington, DE 19899 Life Insurance Robert J. O'Connell 80 Pine Street Senior Vice President New York, New York 10038 Petros K. Sabatacakis 70 Pine Street Senior Vice President - New York, New York 10270 Financial Services B. Michael Schlenke 70 Pine Street Senior Vice President New York, New York 10270 6 -3- AMERICAN INTERNATIONAL GROUP, INC. EXECUTIVE OFFICERS (CONTINUED) Martin J. Sullivan 70 Pine Street Senior Vice President New York, New York 10270 Steven Y.N. Tse 70 Pine Street Senior Vice President New York, New York 10270 Hamilton C. Da Silva 70 Pine Street Vice President New York, New York 10270 Florence A. Davis 70 Pine Street Vice President and General New York, New York 10270 Counsel William A. Freda 70 Pine Street Vice President New York, New York 10270 David M. Hupp 70 Pine Street Vice President New York, New York 10270 L. Oakley Johnson 70 Pine Street Vice President - Corporate New York, New York 10270 Affairs Thomas G. Kaiser 70 Pine Street Vice President New York, New York 10270 Jeffrey M. Kestenbaum 80 Pine Street Vice President New York, New York 10038 Robert E. Lewis 70 Pine Street Vice President New York, New York 10270 Christian Milton 99 John Street Vice President - Reinsurance New York, New York 10038 Nicholas A. O'Kulich 70 Pine Street Vice President - Life New York, New York 10270 Insurance 7 -4- AMERICAN INTERNATIONAL GROUP, INC. EXECUTIVE OFFICERS (CONTINUED) Douglas Paul 70 Pine Street Vice President - Strategic New York, New York 10270 Planning Frank Petralito II 70 Pine Street Vice President and Director New York, New York 10270 Of Taxes Theodore Rupley 70 Pine Street Vice President New York, New York 10270 Kathleen E. Shannon 70 Pine Street Vice President, Secretary New York, New York 10270 and Associate General Counsel Joseph C. Smetana, Jr. 70 Pine Street Vice President New York, New York 10270 Joseph Umansky 70 Pine Street Vice President and Deputy New York, New York 10270 Comptroller John T. Wooster, Jr. 72 Wall Street Vice President - New York, New York 10270 Communications William N. Dooley 70 Pine Street Treasurer New York, New York 10270 8 AMERICAN HOME ASSURANCE COMPANY DIRECTORS Michael J. Castelli American Home Assurance Company 99 John Street New York, New York 10038 Charles Dangelo 70 Pine Street New York, New York 10270 Florence A. Davis 70 Pine Street New York, New York 10270 Evan G. Greenberg 70 Pine Street New York, New York 10270 M.R. Greenberg American International Group, Inc. 70 Pine Street New York, New York 10270 John G. Hughes American Home Assurance Company 70 Pine Street New York, New York 10270 David M. Hupp American International Companies 70 Pine Street New York, New York 10270 Edwin A.G. Manton American International Group, Inc. 70 Pine Street New York, New York 10270 Edward E. Matthews American International Group, Inc. 70 Pine Street New York, New York 10270 9 -2- AMERICAN HOME ASSURANCE COMPANY DIRECTORS (CONTINUED) Christian Milton American International Group, Inc. 99 John Street New York, New York 10038 Kristian P. Moor 70 Pine Street New York, New York 10270 Win J. Neuger 70 Pine Street New York, New York 10270 Takaki Sakai A.I.U. K.K. P.O. Box 951 Tokyo, Japan Robert Sandler American International Group, Inc. 70 Pine Street New York, New York 10270 Michael B. Schlenke American Home Assurance Company 70 Pine Street New York, New York 10270 Howard I. Smith American International Group, Inc. 70 Pine Street New York, New York 10270 Thomas R. Tizzio American International Group, Inc. 70 Pine Street New York, New York 10270 10 AMERICAN HOME ASSURANCE COMPANY EXECUTIVE OFFICERS Thomas R Tizzio 70 Pine Street Chairman of the Board New York, New York 10270 Michael B. Schlenke 70 Pine Street President and Chief Executive New York, New York 10270 Officer Frank Douglas 70 Pine Street Senior Vice President and New York, New York 10270 Actuary John G. Hughes 70 Pine Street Senior Vice President New York, New York 10270 Vincent J. Masucci 777 S. Figueroa Street 18th Floor Los Angeles, CA 90017 Edward E. Matthews 70 Pine Street Senior Vice President New York, New York 10270 Timothy P. Mitchell 70 Pine Street Executive Vice President New York, New York 10270 David M. Hupp 70 Pine Street Senior Vice President New York, New York 10270 /9 Charles Schader 70 Pine Street Senior Vice President New York, New York 10270 William R. Jacobi 70 Pine Street Senior Vice President New York, New York 10270 11 -2- AMERICAN HOME ASSURANCE COMPANY EXECUTIVE OFFICERS (CONTINUED) David J. Walsh 70 Pine Street Senior Vice President, New York, New York 10270 General Counsel Robert Beier 99 John Street Vice President New York, New York 10038 John J. Blumenstock 99 John Street Vice President New York, New York 10038 Michael J. Castelli 99 John Street Senior Vice President New York, New York 10038 Lawrence W. Carlstrom 520 Pike Street Vice President Suite 2700 Seattle, WA 98101 John Colona 505 Carr Road Vice President Willmington, DE 19809 Robert K. Conry 70 Pine Street Vice President New York, New York 10270 Brian S. Frisch 99 John Street Vice President New York, New York 10038 Kumar Gursahaney 99 John Street Vice President New York, New York 10038 Harold Jacobowitz 70 Pine Street Vice President New York, New York 10270 Dee Klock 99 John Street Vice President New York, New York 10038 Gary McMillan 145 Wellington Street West Vice President and Chief Toronto, Ontario, Canada M5J 1H8 Agent in Canada 12 -3- AMERICAN HOME ASSURANCE COMPANY EXECUTIVE OFFICERS (CONTINUED) Robert Meyer 200 Liberty Street Vice President and New York, New York 10281 Assistant Treasurer Christian Milton 99 John Street Vice President - Reinsurance New York, New York 10038 Kristian Moor 70 Pine Street Executive Vice President New York, New York 10270 David Pinkerton 200 Liberty Street Vice President - New York, New York 10281 Private Investments John Schumacher 70 Pine Street Senior Vice President New York, New York 10270 13 THE STARR FOUNDATION EXECUTIVE OFFICERS & DIRECTORS M.R. Greenberg 70 Pine Street Director and Chairman New York, New York 10270 T.C. Hsu 70 Pine Street Director and President New York, New York 10270 Marion Breen 70 Pine Street Director and Vice President New York, New York 10270 John J. Roberts 70 Pine Street Director New York, New York 10270 Ernest E. Stempel 70 Pine Street Director New York, New York 10270 Houghton Freeman 70 Pine Street Director New York, New York 10270 Edwin A.G. Manton 70 Pine Street Director New York, New York 10270 Gladys Thomas 70 Pine Street Vice President New York, New York 10270 Frank Tengi 70 Pine Street Treasurer New York, New York 10270 Ida Galler 70 Pine Street Secretary New York, New York 10270 14 C.V. STARR & CO., INC. EXECUTIVE OFFICERS & DIRECTORS Houghton Freeman 70 Pine Street Director and Senior New York, New York 10270 Vice President Evan G. Greenberg 70 Pine Street Director and Vice New York, New York 10270 President Maurice R. Greenberg 70 Pine Street Director, President and New York, New York 10270 Chief Executive Officer Edwin A.G. Manton 70 Pine Street Director New York, New York 10270 Edward E. Matthews 70 Pine Street Director, Senior Vice New York, New York 10270 President and Secretary John J. Roberts 70 Pine Street Director and Senior New York, New York 10270 Vice President Robert M. Sandler 70 Pine Street Director and Vice New York, New York 10270 President Howard I. Smith 70 Pine Street Director and Vice President New York, New York 10270 Ernest E. Stempel 70 Pine Street Director and Senior New York, New York 10270 Vice President Thomas R. Tizzio 70 Pine Street Director and Vice New York, New York 10270 President 15 -2- C.V. STARR & CO., INC. EXECUTIVE OFFICERS & DIRECTORS (CONTINUED) Edmund Tse No. 1 Stubbs Road Director and Vice President Hong Kong Stephen Y.N. Tse 70 Pine Street Director and Vice President New York, New York 10270 Gary Nitzsche 70 Pine Street Treasurer and Comptroller New York, New York 10270 16 STARR INTERNATIONAL COMPANY, INC. EXECUTIVE OFFICERS & DIRECTORS Houghton Freeman 70 Pine Street Director New York, New York 10270 Evan G. Greenberg 70 Pine Street Director New York, New York 10270 Maurice R. Greenberg 70 Pine Street Director and Chairman New York, New York 10270 of the Board Joseph C.H. Johnson P.O. Box 152 Executive Vice President and Hamilton, Bermuda Treasurer Edwin A.G. Manton 70 Pine Street Director New York, New York 10270 Edward E. Matthews 70 Pine Street Director New York, New York 10270 L. Michael Murphy P.O. Box 152 Director and Secretary Hamilton, Bermuda John J. Roberts 70 Pine Street Director New York, New York 10270 Robert M. Sandler 70 Pine Street Director New York, New York 10270 Ernest E. Stempel 70 Pine Street Director and President New York, New York 10270 Thomas R. Tizzio 70 Pine Street Director New York, New York 10270 Edmund S.W. Tse No. 1 Stubbs Road Director Hong Kong 17 COMMERCE AND INDUSTRY INSURANCE COMPANY DIRECTORS Michael J. Castelli American Home Assurance Company 99 John Street New York, New York 10038 Florence A. Davis Commerce & Industry Insurance Company 70 Pine Street New York, New York 10270 M.R. Greenberg American International Group, Inc. 70 Pine Street New York, New York 10270 John G. Hughes American Home Assurance Company 70 Pine Street New York, New York 10270 David Hupp American Home Assurance Company 70 Pine Street New York, New York 10270 Kevin H. Kelley Lexington Insurance Company 200 State Street Boston, Massachusetts 02109 Edwin A.G. Manton American International Group, Inc. 70 Pine Street New York, New York 10270 Edward E. Matthews American International Group, Inc. 70 Pine Street New York, New York 10270 18 -2- COMMERCE AND INDUSTRY INSURANCE COMPANY DIRECTORS (CONTINUED) Win J. Neuger Commerce & Industry Insurance Company 70 Pine Street New York, New York 10270 Howard I. Smith American International Group, Inc. 70 Pine Street New York, New York 10270 Thomas R. Tizzio American International Group, Inc. 70 Pine Street New York, New York 10270 19 COMMERCE AND INDUSTRY INSURANCE COMPANY EXECUTIVE OFFICERS Kevin H. Kelley 200 State Street Chairman of the Board Boston, MA 20109 Chief Executive Officer Joseph L. Boren 70 Pine Street Executive Vice President New York, New York 10270 Frank Douglas 70 Pine Street Senior Vice President and New York, New York 10270 Actuary Edward E. Matthews 70 Pine Street Senior Vice President New York, New York 10270 David J. Walsh 70 Pine Street Senior Vice President, General New York, New York 10270 Counsel Vincent J. Masucci 777 S. Figueroa Street Senior Vice President 18th Floor Los Angeles, CA 90017 Robert Beier 99 John Street Vice President New York, New York 10038 John J. Blumenstock 99 John Street Vice President New York, New York 10038 Michael J. Castelli 99 John Street Senior Vice President, Treasurer New York, New York 10038 and Comptroller David Hupp 70 Pine Street Senior Vice President New York, New York 10270 Brian S. Firsch 99 John Street Vice President New York, New York 10038 20 -2- COMMERCE AND INDUSTRY INSURANCE COMPANY EXECUTIVE OFFICERS (CONTINUED) Kumar Gursahaney 99 John Street Vice President New York, New York 10038 Shaun E. Kelly 70 Pine Street Vice President New York, New York 10270 Dee Klock 99 John Street Vice President New York, New York 10038 Robert Meyer 200 Liberty Street Vice President and New York, New York 10281 Assistant Treasurer Christian Milton 99 John Street Vice President New York, New York 10038 Clifford E. Moore 70 Pine Street Vice President - New York, New York 10270 Administration David Pinkerton 200 Liberty Street Vice President - Private New York, New York 10281 Investments 21 THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA DIRECTORS Michael J. Castelli American Home Assurance Company 99 John Street New York, New York 10038 M.R. Greenberg American International Group, Inc. 70 Pine Street New York, New York 10270 John G. Hughes American Home Assurance Company 70 Pine Street New York, New York 10270 David Hupp American Home Assurance Company 70 Pine Street New York, New York 10270 Edwin A.G. Manton American International Group, Inc. 70 Pine Street New York, New York 10270 Edward E. Matthews American International Group, Inc. 70 Pine Street New York, New York 10270 Win J. Neuger The Insurance Company of the State of Pennsylvania 70 Pine Street New York, New York 10270 Howard I. Smith American International Group, Inc. 70 Pine Street New York, New York 10270 22 -2- THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA DIRECTORS (CONTINUED) Theodore Rupley American International Group, Inc. 70 Pine Street New York, New York 10270 Thomas R. Tizzio American International Group, Inc. 70 Pine Street New York, New York 10270 23 THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA EXECUTIVE OFFICERS Thomas R. Tizzio 70 Pine Street Chairman of the Board New York, New York 10270 Theordore Rupley 70 Pine Street President New York, New York 10270 Frank Douglas 70 Pine Street Actuary New York, New York 10270 David J. Walsh 70 Pine Street Senior Vice President, New York, New York 10270 General Counsel Michael J. Castelli 99 John Street Senior Vice President, Treasurer and New York, New York 10038 Comptroller Robert Meyer 200 Liberty Plaza Vice President and New York, New York 10281 Assistant Treasurer Christian Milton 99 John Street Vice President New York, New York 10038 David Pinkerton 200 Liberty Plaza Vice President - Private New York, New York 10281 Investments, Assistant Treasurer David M. Hupp 70 Pine Street Senior Vice President New York, New York 10270 Vincent J. Masucci 777 S. Figueroa Street Senior Vice President 18th Floor Los Angeles, CA 90017 24 -3- THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA EXECUTIVE OFFICERS (CONTINUED) Edward E. Matthews 70 Pine Street Senior Vice President New York, NY 10270 Marc Timothy Willis 500 Madison Street Senior Vice President 10th Floor Chicago, Illinois 60606-2511 Robert Beier 99 John Street Vice President New York, NY 10038 John J. Blumenstock 99 John Street Vice President New York, NY 10038 Lawrence W. Carlstrom National Union Fire Insurance Co. Vice President 520 Pike Street, Suite 2700 Seattle, Washington 98101 John G. Colona 505 Carr Road Vice President Wilmington, Delaware 19809 Robert K. Conry 70 Pine Street Vice President New York, NY 10270 Brian S. Frisch 99 John Street Vice President New York, NY 10038 Kumar Gursahaney 99 John Street Vice President New York, NY 10038 Harold S. Jacobowitz 70 Pine Street Vice President New York, New York 10270 Dee R. Klock 99 John Street Vice President New York, NY 10038 25 -4- THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA EXECUTIVE OFFICERS (CONTINUED) Michael G. McCarter 70 Pine Street Vice President New York, New York 10270 Tobey J. Russ 70 Pine Street Vice President New York, New York 10270
1 EXHIBIT I STOCK PURCHASE AND SALE AGREEMENT Stock Purchase and Sale Agreement (the "Agreement") dated as of December 11, 1996 between AMERICAN INTERNATIONAL GROUP, INC., a Delaware corporation and including its wholly-owned subsidiaries ("AIG"), and AON CORPORATION, a Delaware corporation ("Aon"). WHEREAS, AIG desires to sell to Aon or a designated wholly owned subsidiary thereof (the "Purchaser"), and the Purchaser desires to purchase, an aggregate of 4,846,232 shares (the "Shares") (including 95,024 shares to be issued as a regular quarterly dividend on December 15, 1996) of 8% Series B Cumulative Convertible Preferred Stock, par value $1.00 per share, of A&A (the "Series B Stock") for the consideration and upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the premises and of the respective covenants, agreements and conditions contained herein, each of the parties agree as follows: 1. Closing a. Time and Place of the Closing. The Closing (the "Closing") shall take place at the offices of Cahill Gordon & Reindel, 80 Pine Street, New York, New York on the date which is two Business Days after Aon or any affiliate of Aon first acquires on or after the date hereof in any manner any equity interest in Alexander & Alexander Services Inc. ("A&A"), or any right or security convertible or exercisable into any such interest, or any right to acquire any thereof, by purchase or tender offer or otherwise (an "Aon Equity Acquisition"). Aon shall give AIG two business days prior written notice of the date the Closing is scheduled to occur. The "Closing Date" shall be the date the Closing occurs. b. Transactions at the Closing. At the Closing, subject to the terms and conditions of this Agreement, AIG shall sell to Aon, and Aon shall purchase from AIG, the Shares. At the Closing, AIG shall deliver to Aon a certificate or certificates representing the Shares, with stock powers duly endorsed in blank for transfer, against receipt of the Purchase Price with respect thereto by wire transfer of immediately available funds to an account or accounts previously designated by AIG. 2 -2- c. Purchase Price. The Purchase Price for the Shares shall be $317,500,000 in cash plus a cash amount equal to all accrued and unpaid dividends on the Series B Stock to and including the Closing Date (as well as cash equal to the liquidation preference of any additional shares of Series B Stock issued as a pay-in-kind dividend on the Series B Stock after December 15, 1996, if any, which shares shall be included in the definition of "Shares" herein). In the event that the Closing Date occurs after the record date for any dividend payment date after December 15, 1996 and before the dividend payment date, AIG will assign to Aon its right to receive any dividend so declared by A&A. 2. Conditions to the Closing a. Conditions Precedent to the obligations of Aon. The obligations of Aon to be discharged under this Agreement on the Closing Date are subject to satisfaction of the following conditions at the Closing (unless expressly waived in writing by Aon at or prior to the Closing): (i) Compliance by AIG. All of the terms, covenants and conditions of this Agreement to be complied with and performed by AIG at or prior to the Closing shall have been complied with and performed by AIG in all material respects, and the representations and warranties made by AIG in this Agreement shall be true and correct in all material respects at and as of the Closing, with the same force and effect as though such representations and warranties had been made at and as of the Closing. (ii) No Injunction. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other governmental entity preventing the consummation of the purchase of the Shares shall be in effect. b. Conditions Precedent to Obligations of AIG. The obligations of AIG to be discharged under this agreement on the Closing Date are subject to satisfaction of the following conditions at the Closing (unless waived by AIG at or prior to the Closing): (i) Compliance by Aon. All of the terms, covenants and conditions of this Agreement to be complied with and performed by Aon at or prior to the Closing shall have been complied with and performed by it in all material respects, and the representations and warranties made by Aon in this Agreement shall be true and correct in all material respects at and as of the Closing, with the same force and 3 -3- effect as though such representations and warranties had been made at and as of the Closing. (ii) No Injunction. No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other governmental entity preventing the consummation of the purchase of the Shares shall be in effect. 3. Representations and Warranties of Aon. Aon hereby represents and warrants to AIG: a. Organization, Good Standing, Power, Authority, Etc. Aon is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Aon has the full corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. Aon has taken all action required by law, its Certificate of Incorporation, its by-laws or otherwise required to be taken by it to authorize the execution, delivery and performance by it of this Agreement. This Agreement is a valid and binding obligation of Aon, enforceable in accordance with its terms, except that such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and general principles of equity. b. No Conflicts. Neither the execution and delivery of this Agreement nor the consummation by Aon of the transactions contemplated hereby will (i) conflict with, or result in a breach of, any provision of its charter or by-laws, (ii) violate any statute or law or any judgment, order, writ, injunction, decree, rule or regulation applicable to Aon and/or any of its subsidiaries or (iii) cause a breach of any material contract of Aon, which breach would prevent consummation of the transactions contemplated hereby. c. No Consents. No consent, authorization or approval of, or declaration, filing or registration with, or exemption by, any governmental or regulatory authority is required in connection with the execution and delivery of, and the performance by Aon of its obligations under, this Agreement or the consummation by Aon of the transactions to be performed by it as contemplated hereby, other than the approvals of the Department of Insurance of the States of Delaware, New York, and Vermont with respect to the transactions contemplated hereby and filings under the Hart-Scott- 4 -4- Rodino Antitrust Improvements Act ("HSR") and the Competition Act (Canada). d. Investment Intent, Etc. Aon (i) has such knowledge, sophistication and experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Shares, (ii) can bear the economic risk of an investment in the Shares and can afford a complete loss of such investment, and (iii) is purchasing the Shares for investment and not with a view to, or for a sale in connection with, any public distribution in violation of the Securities Act of 1933 (the "Act"). 4. Representations and Warranties of AIG. AIG hereby represents and warrants to Aon: a. Organization, Good Standing, Power, Authority, Etc. AIG is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. AIG has the full power and authority to execute and deliver this Agreement. AIG has taken all action required by law, its charter, its by-laws or otherwise required to be taken by it to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated to be performed by it hereby. This Agreement is a valid and binding agreement of AIG, enforceable in accordance with its terms, except that such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights and general principles of equity. b. No Conflicts. Neither the execution and delivery of this Agreement nor the consummation by AIG of the transactions contemplated hereby will (i) conflict with, or result in a breach of, any provision of its charter or by-laws, (ii) violate any statute or law or any judgment, order, writ, injunction, decree, rule or regulation applicable to AIG and/or any of its subsidiaries or (iii) cause a breach of any material contract of AIG, which breach would prevent consummation of the transactions contemplated hereby. c. No Consents. No consent, authorization or approval of, or declaration, filing or registration with, or exemption by, any governmental or regulatory authority is required in connection with the execution and delivery of, and the performance by AIG of its obligations under, this Agreement or the consummation by AIG of the transactions to be performed by it as contemplated hereby, other than such filings under HSR as may be required. 5 -5- d. Title to Shares. AIG, indirectly through its wholly owned subsidiaries, owns the Shares. Each wholly owned subsidiary of AIG which owns Shares has legal and valid title to such Shares, free and clear of all restrictions on transfer (other than those imposed by the Act, securities or Blue Sky laws of certain jurisdictions, the A&A charter and restrictions under Section 6 of the Stock Purchase Agreement (the "Stock Purchase Agreement") by and between AIG and A&A dated as of June 6, 1994), liens, encumbrances, security interests and claims whatsoever. 5. Covenants. a. Pre-Closing Activities. From and after the date of this Agreement until the Closing, each of AIG and Aon shall act with good faith towards, and shall use its reasonable best efforts to consummate, the transactions contemplated by this Agreement. b. Publicity. Each of AIG and Aon will consult with each other before issuing any press release or otherwise making any public statements with respect to the transactions contemplated hereby and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by law. c. Dividends. Aon will not waive or modify its rights under the Merger Agreement that require A&A to pay dividends on the Series B Stock in cash after December 15, 1996. d. Series B Stock. All the rights and preferences of the Series B Stock shall remain in full force and effect until the Closing; provided, however, that AIG agrees to suspend voluntarily its rights under Section 9(d) of the Articles Supplementary and its right to require A&A to repurchase any of the Series B Stock pursuant to Section 7 of the Articles Supplementary related thereto, in each case until the earlier of the Closing or termination of this Agreement. AIG will not transfer, assign, sell, pledge or otherwise dispose of any of the Shares to any third party, other than as contemplated in this Agreement, until the earlier of the Closing or the termination of this Agreement. e. Waiver of Rights and Acknowledgment. Effective as of the date hereof, AIG waives its rights, if any, under Section 6.o of the Stock Purchase Agreement. AIG acknowledges that the consent of AIG referred to in paragraph (1) of the letter between A&A and AIG dated June 30, 1994, or any other consent related to the same subject matter, 6 -6- cannot be withheld or delayed with respect to commercially reasonable actions proposed to be taken by A&A. 6. Termination. This Agreement (A) shall terminate without any action by the parties hereto on the earliest of (i) if the Closing shall not have occurred, April 15, 1997, (ii) if the Closing has not occurred, four Business Days after an Aon Equity Acquisition and (iii) the effective date of termination of the Merger Agreement between Aon, A&A and the other parties thereto, dated the date hereof and as amended from time to time, and (B) may be terminated at any time prior to the Closing by a written instrument executed and delivered by the parties hereto. 7. Miscellaneous. a. Notices. All notices or other communications given or made hereunder shall be validly given or made if in writing and delivered by facsimile transmission or in person at, or mailed by registered or certified mail, return receipt requested, postage prepaid, to, the following addressees (and shall be deemed effective at the time of receipt thereof). If to Aon: Aon Corporation 123 North Wacker Drive Chicago, IL 60606 Attention: Raymond I. Skilling, Esq. Executive Vice President & Chief Counsel If to AIG: American International Group, Inc. 70 Pine Street New York, New York 10270 Attention: Vice Chairman - Investments and Financial Services Or to such other addresses the party to whom notice is to be given may have previously furnished in writing to the others in the manner set forth above. b. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS IN THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. 7 -7- c. Severability; Interpretation. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, each of Aon and AIG directs that such court interpret and apply the remainder of this Agreement in the manner which it determines most closely effectuates their intent in entering into this Agreement, and in doing so particularly take into account the relative importance of the term, provision, covenant or restriction being held invalid, void or unenforceable. d. Headings. The section headings herein are for convenience only and shall not affect the construction hereof. e. Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party without the prior written consent of the other party, except that Aon may assign the right to acquire the Shares in accordance with the terms hereof to one or more wholly owned subsidiaries of Aon. f. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. g. Survival of Representations and Warranties. The representations and warranties in this Agreement shall survive the Closing Date. h. Entire Agreement; No Third Party Beneficiaries. This Agreement, including the documents and instruments referred to herein, constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof and is not intended to confer upon any person other than the parties any rights or remedies hereunder. i. Enforcement of this Agreement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. 8 -8- j. Amendment. This Agreement may be amended, modified or supplemented; provided that the same shall be in writing and be signed by each of the parties hereto. 9 -9- IN WITNESS WHEREOF, the parties hereto have executed this Agreement. AMERICAN INTERNATIONAL GROUP, INC., for and on behalf of itself and its wholly owned subsidiaries By:/s/ M.R. Greenberg ----------------------------------------- Name: M.R. Greenberg Title: Chairman and Chief Executive Officer AON CORPORATION By:/s/ Patrick G. Ryan ----------------------------------------- Name: Patrick G. Ryan Title: Chairman, President & Chief Executive Officer