<PAGE> 1
Filed pursuant to Rule 424(b)(2)
Registration No. 33-59111
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED AUGUST 12, 1998
$400,000,000
(LOGO) THE CHUBB CORPORATION
$300,000,000 6.15% NOTES DUE 2005
$100,000,000 6.60% DEBENTURES DUE 2018
------------------------
Interest on the Securities is payable on August 15 and February 15 of each
year, commencing February 15, 1999. The Securities will be issued only in
registered form in denominations of $1,000 and integral multiples thereof. The
Securities will not be redeemable prior to maturity. See "Description of Certain
Terms of the Securities" herein and in the accompanying Prospectus.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) DISCOUNT(2) COMPANY(1)(3)
----------------- ------------ -------------
<S> <C> <C> <C>
Per 6.15% Note................................ 99.944% .625% 99.319%
Total......................................... $299,832,000 $1,875,000 $297,957,000
Per 6.60% Debenture........................... 99.913% .875% 99.038%
Total......................................... $99,913,000 $875,000 $99,038,000
</TABLE>
- ---------------
(1) Plus accrued interest, if any, from August 17, 1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $400,000 payable by the Company.
------------------------
The Securities offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the
Securities will be ready for delivery in New York, New York, on or about August
17, 1998, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
------------------------
The date of this Prospectus Supplement is August 12, 1998.
<PAGE> 2
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES,
INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH
SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE
OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed with the Commission on March 27, 1998.
2. The Company's Quarterly Report on Form 10-Q for the fiscal
quarters ended March 31, 1998 and June 30, 1998.
3. Each document filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus Supplement and prior to the termination of the
offering of the Notes shall be deemed to be incorporated by reference into
this Prospectus Supplement and to be made a part hereof from the date of
filing of such document.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus Supplement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus
Supplement.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus Supplement is delivered, upon the
request of such person, a copy of any of the documents incorporated by reference
herein, except for the exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Written requests
should be addressed to The Chubb Corporation, 15 Mountain View Road, P.O. Box
1615, Warren, New Jersey 07061-1615, Attention: Corporate Secretary (Telephone:
(908) 903-3576).
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS
The Prospectus, as supplemented by the Prospectus Supplement, contains and
incorporates by reference certain statements which may be considered to be
"forward looking statements" as that term is defined in the Private Securities
Litigation Reform Act of 1995, such as statements that include the word or
phrases "will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project" or similar expressions. Such statements are
subject to certain risks and uncertainties. The factors which could cause actual
results to differ materially from those suggested by any such statements
include, but are not limited to, those discussed or identified from time to time
in the Company's public filings with the Securities and Exchange Commission (the
"Commission") and specifically to: risks or uncertainties associated with the
Company's expectations with respect to its activity value analysis program, year
2000 liabilities, its market risk evaluations or with respect to announced real
estate plans or premium growth and investment income or cash flow projections
and, more generally, to: general economic conditions including changes in
interest rates and the performance of the financial markets, changes in domestic
and foreign laws, regulations and taxes, changes in competition and pricing
environments, regional or general changes in asset valuations, the occurrence of
significant natural disasters, the inability to reinsure certain risks
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economically, the adequacy of loss reserves, as well as general market
conditions, competition, pricing and restructurings.
THE COMPANY
The Chubb Corporation ("Chubb" or the "Company"), organized in 1967 as a
New Jersey corporation, is a holding company with subsidiaries primarily engaged
in the property and casualty insurance business. Chubb traces its history back
to the formation in 1882 of Chubb & Son, an underwriter and manager of insurance
companies, and the founding in 1901 of its principal property and casualty
insurance subsidiary, Federal Insurance Company. Since its founding as a
specialized manager of marine insurance, Chubb's property and casualty business
has expanded to include most forms of property and casualty coverages. The
Company's property and casualty insurance subsidiaries provide insurance
coverages principally in the United States, Canada, Europe and parts of
Australia, Latin America and the Far East. The Company and its subsidiaries
employed approximately 11,000 persons worldwide on December 31, 1997.
Chubb is a holding company whose primary source of funds for the payment of
interest on its obligations or dividends to its stockholders is dividends from
its subsidiaries. The amount of dividend distributions to Chubb from its
insurance subsidiaries may be restricted by state insurance laws and regulations
as administered by state insurance departments.
USE OF PROCEEDS
Proceeds from the sale of the Securities will be used by the Company for
general corporate purposes, which may include the repurchase by the Company of
shares of its capital stock.
RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES OF CHUBB
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED
------------------------------------- JUNE 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges...... 2.73 5.81 7.63 6.30 10.71 20.18
</TABLE>
For the purpose of computing the above ratios of consolidated earnings to
fixed charges, earnings consist of income from continuing operations before
income taxes and the cumulative effect of changes in accounting principles, plus
those fixed charges that were charged against income. Fixed charges consist of
interest expense before reduction for capitalized interest and the portion of
rental expense (net of rental income from subleased properties), which is
considered to be representative of the interest factors in the leases.
DESCRIPTION OF CERTAIN TERMS OF THE SECURITIES
GENERAL
The following descriptions of the particular terms of the 6.15% Notes due
2005 (the "Notes") and the 6.60% Debentures due 2018 (the "Debentures" and,
together with the Notes, the "Securities") offered hereby supplements the
description of the general terms and provisions of the Debt Securities set forth
in the accompanying Prospectus under the captions "Description of the
Indentures, the Debt Securities and the Guaranteed Debt Securities" and "Terms
Applicable to Both the Debt Securities and the Guaranteed Debt Securities."
The Securities will be issued by the Company under the Senior Indenture
dated as of October 25, 1989 between the Company and the First National Bank of
Chicago, as trustee ("Trustee"). The Senior Indenture is more fully described in
the accompanying Prospectus. The Notes will bear interest at 6.15% per annum and
mature on August 15, 2005 and the Debentures will bear interest at 6.60% per
annum and mature on August 15, 2018. The Securities will bear interest from
August 17, 1998, payable in arrears on August 15 and February 15 of each year,
commencing on February 15, 1999, to the persons in whose names the Securities
are registered on the next preceding August 1 and February 1, respectively. The
Securities will be unsecured and un-
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subordinated indebtedness of the Company and will rank on a parity with the
Company's other unsecured and unsubordinated indebtedness.
The Securities will be issued only in fully registered book-entry form
without coupons, in denominations of $1,000 and any integral multiple thereof.
The Securities may not be redeemed prior to maturity. All payments of interest
and principal will be in U.S. dollars. No service charge will be made for any
transfer or exchange of the Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Securities of each series will be represented by a
Global Security registered in the name of a nominee of the Depository Trust
Company, New York, New York ("DTC"). Except as set forth under "Book-Entry
System" below, the Securities will not be issued in certificated form.
DEFEASANCE AND DISCHARGE
The Senior Indenture contains provisions applicable to the Securities of
each series, which provide that the Company will be discharged from any and all
obligations in respect of the Securities of such series (except for certain
obligations relating to registration of transfer or exchange of Securities of
such series, replacement of stolen, lost or mutilated Securities of such series,
maintenance of paying agencies and holding of monies in trust) upon the deposit
with the Trustee, in trust, of money or Government Obligations (as defined in
the Senior Indenture), or both, which through the payment of interest and
principal in respect thereof in accordance with their terms will provide money
in an amount sufficient to pay the principal of, and each installment of
interest on, the Securities of such series at maturity of such payments in
accordance with the terms of the Senior Indenture and Securities of such series.
Such a trust may only be established if, among other things, the Company has
delivered to the Trustee an opinion of counsel to the effect that the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling to the effect, or in lieu thereof, an opinion of such counsel to the
effect, that holders of the Securities of such series will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to federal income tax on the same
amount and in the same manner and at the same times, as would have been the case
if such deposit, defeasance and discharge had not occurred. In the event of any
such defeasance and discharge, holders of Securities of such series would be
able to look only to such trust fund for payment of principal of, and any
interest on, their Securities of such series until maturity.
BOOK-ENTRY SYSTEM
Upon issuance, the Securities of each series will be represented by a
global security or securities (the "Global Security"). The Global Security
representing the Securities of each series will be deposited with, or on behalf
of DTC (the "Depositary"). Upon the issuance of such Global Security, the
Depositary or its nominee will credit the accounts of persons held with it with
the respective principal or face amounts of the Securities represented by such
Global Security. Ownership of beneficial interests in such Global Security will
be limited to persons that have accounts with the Depositary ("participants") or
persons that may hold interests through participants. Ownership of beneficial
interest by participants in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depositary. Ownership of beneficial interests in such Global Security by
persons that hold through participants will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to acquire
or transfer beneficial interests in such Global Security.
Payment of principal of and interest on each series of Securities will be
made to the Depositary or its nominee, as the case may be, as the sole
registered owner and holder of the Global Security for such series for all
purposes under the Senior Indenture. Neither the company, the Trustee nor
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<PAGE> 5
any agent of the Company or the Trustee will have any responsibility or
liability for any aspect of the Depositary's records relating to or payments
made on account of beneficial ownership interests in such Global Security or for
maintaining, supervising or reviewing any of the Depositary's records relating
to such beneficial ownership interests.
The Company has been advised by the Depositary that upon receipt of any
payment of principal of or interest on any Global Security, the Depositary will
immediately credit, on its book-entry registration and transfer system, the
accounts of participants with payments in amounts proportionate to their
respective beneficial interests in the principal or face amount of such Global
Security as shown on the records of the Depositary. Payments by participants to
owners of beneficial interests in such Global Security held through such
participants will be governed by standing instructions and customary practices
as is now the case with securities held for customer accounts registered in
"street name" and will be the sole responsibility of such participants.
Neither Global Security may be transferred except as a whole by the
Depositary to a nominee of the Depositary. The Global Security representing each
series of Securities is exchangeable for certificated Securities of such series
only if (x) the Depositary notifies the Company that it is unwilling or unable
to continue as Depositary for such Global Security or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act and
the Company fails within 90 days thereafter to appoint a successor, (y) the
Company in its sole discretion determines that such Global Security shall be
exchangeable or (z) there shall have occurred and be continuing an Event of
Default (as defined in the Senior Indenture) or an event which with the giving
of notice or lapse of time or both, would constitute an Event of Default with
respect to the Securities represented by such Global Security. In such event,
the Company will issue Securities of the applicable series in certificated form
in exchange for such Global Security. In any such instance, an owner of a
beneficial interest in the Global Security will be entitled to physical delivery
in certificated form of Securities of such series equal in principal amount to
such beneficial interest and to have such Securities registered in its name.
Securities so issued in certificated form will be issued in denominations of
$1,000 or any larger amount that is an integral multiple thereof, and will be
issued in registered form only, without coupons. Subject to the foregoing,
neither Global Security is exchangeable, except for a Global Security for the
same series of Securities of like denomination to be registered in the name of
the Depositary or its nominee.
So long as the Depositary, or its nominee, is the registered owner of a
Global Security, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Securities represented by such Global
Security for the purposes of receiving payment on such Securities, receiving
notices and for all other purposes under the Senior Indenture and such
Securities. Beneficial interests in any series of Securities will be evidenced
only by, and transfer thereof will be effected only through, records maintained
by the Depositary and its participants. Except as provided herein, owners of
beneficial interests in any Global Security will not be entitled to and will not
be considered the holders thereof for any purposes under the Senior Indenture.
Accordingly, each person owning a beneficial interest in such Global Security
must rely on the procedures of the Depositary, and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a Holder under the Senior Indenture. The
Depositary will not consent or vote with respect to the Global Security
representing a series of Securities. Under its usual procedures, the Depositary
mails an Omnibus Proxy to the Company as soon as possible after the applicable
record date. The Omnibus Proxy assigns Cede & Co.'s (the Depositary's
partnership nominee) consenting or voting rights to those participants to whose
accounts the Securities of a series are credited on the applicable record date
(identified in a listing attached to the Omnibus Proxy).
The Depositary has advised the Company that the Depositary is a
limited-purpose trust company organized under New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered
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<PAGE> 6
under the Exchange Act. The Depositary was created to hold the securities of its
participants and to facilitate the clearance and settlement of securities
transactions among its participants through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. The Depositary's participants include securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations some of whom (and/or their representatives) own the
Depositary. Access to the Depositary's book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to the Depositary and its participants are on
file with the Commission.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for each series of the Securities will be made by the
Underwriters in immediately available funds. All payments of principal and
interest will be made by the Company in immediately available funds.
The Securities of each series will trade in the Depositary's same-day funds
settlement system until maturity or until such Securities are issued in
definitive form, and second market trading activity in such Securities will
therefore be required by the Depositary to settle in immediately available
funds. No assurance can be given as to the effect, if any, of settlement in
immediately available funds on trading activity in such Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company has agreed to sell to each of the underwriters named
below (the "Underwriters"), severally, and the Underwriters have agreed to
purchase, severally, the principal amount of the Notes and Debentures set forth
opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL AMOUNT
UNDERWRITERS OF NOTES OF DEBENTURES
------------ ---------------- ----------------
<S> <C> <C>
Goldman, Sachs & Co. ................................. $ 75,000,000 $ 25,000,000
Lehman Brothers Inc................................... 75,000,000 25,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.... 75,000,000 25,000,000
Salomon Brothers Inc.................................. 75,000,000 25,000,000
------------ ------------
Total....................................... $300,000,000 $100,000,000
============ ============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Securities, if any are
taken.
The Underwriters propose to offer the Notes and the Debentures in part
directly to the public at the public offering prices set forth on the cover page
of this Prospectus Supplement and in part to certain securities dealers at such
prices less a concession not in excess of .375% of the principal amount of the
Notes and .500% of the principal amount of the Debentures. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of .250% of the
principal amount of each series of the Securities to certain brokers and
dealers. After the Securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Underwriters.
The Securities are new issues of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Securities but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Securities.
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<PAGE> 7
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
In connection with the offering, the Underwriters may purchase and sell the
Notes and the Debentures in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover short
positions created by the Underwriters in connection with the offering.
Stabilizing transactions consist of certain bids or purchases for the purpose of
preventing or retarding a decline in the market price of the Notes and the
Debentures; and short positions created by the Underwriters involve the sale by
the Underwriters of a greater number of Notes and Debentures than they are
required to purchase from the Company in the offering. The Underwriters may also
impose a penalty bid, whereby selling concessions allowed to broker-dealers in
respect of the Notes and the Debentures sold in the offering may be reclaimed by
the Underwriters if such Notes and Debentures are repurchased by the
Underwriters in stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price for the Notes and the
Debentures which may be higher than the price that might otherwise prevail in
the open market; and these activities, if commenced, may be discontinued at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
In the ordinary course of their respective businesses, the Underwriters and
their respective affiliates have engaged, and may in the future engage, in
investment banking and/or commercial banking transactions with the Company and
its affiliates.
EXPERTS
The consolidated financial statements of the Company at December 31, 1997
and 1996, and for each of the three years in the period ended December 31, 1997,
incorporated by reference in this Prospectus Supplement and the accompanying
Prospectus have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon and incorporated by reference herein, and are
included in reliance upon such report given upon the authority of such firm as
experts in auditing and accounting.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by Davis
Polk & Wardwell, New York, New York, and for the Underwriters by Sullivan &
Cromwell, New York, New York. Davis Polk & Wardwell and Sullivan & Cromwell will
rely upon Shanley & Fisher, P.C., with respect to certain matters of New Jersey
law.
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<PAGE> 8
PROSPECTUS
(LOGO)
U.S. $400,000,000
THE CHUBB CORPORATION
DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK
CHUBB CAPITAL CORPORATION DEBT SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
THE CHUBB CORPORATION
AND
WARRANTS TO PURCHASE THE ABOVE SECURITIES
------------------------
The Chubb Corporation ("Chubb") may from time to time offer, together or
separately, its (i) debt securities (the "Debt Securities") which may be either
senior debt securities (the "Senior Debt Securities") or subordinated debt
securities (the "Subordinated Debt Securities"), (ii) shares of preferred stock
(the "Preferred Stock"), which may be issued in the form of Depositary Shares
(as defined below) evidenced by Depositary Receipts (as defined below), and
(iii) shares of common stock, $1.00 par value per share (the "Common Stock").
Subordinated Debt Securities or Preferred Stock may be convertible into Common
Stock.
Chubb Capital Corporation ("Capital," collectively with Chubb, the
"Issuers") may also offer from time to time its debt securities (the "Guaranteed
Debt Securities") which may be either senior debt securities (the "Guaranteed
Senior Debt Securities") or subordinated debt securities (the "Guaranteed
Subordinated Debt Securities"). The payment of principal of and premium, if any,
and interest on the Guaranteed Debt Securities is unconditionally guaranteed by
Chubb. Guaranteed Subordinated Debt Securities may be convertible into Common
Stock.
Chubb or Chubb Capital may also from time to time offer warrants for the
purchase of the above-mentioned securities (the "Warrants"), in amounts, at
prices and on terms to be determined at the time of the offering.
The Debt Securities, Preferred Stock, Common Stock, Guaranteed Debt
Securities and Warrants are collectively called the "Securities." The Securities
offered pursuant to this Prospectus may be issued in one or more series or
issuances and will be limited to the initial public offering price of
$400,000,000 (or its equivalent in one or more foreign currencies, currency
units or composite currencies). Specific terms of the securities in respect of
which this Prospectus is being delivered ("Offered Securities") will be set
forth in an accompanying Prospectus Supplement ("Prospectus Supplement"),
together with the terms of the offering of the Offered Securities, the initial
price thereof and the net proceeds from the sale thereof. The Prospectus
Supplement will set forth with regard to the particular Offered Securities,
without limitation, the following: (i) in the case of Debt Securities or
Guaranteed Debt Securities, whether the Debt Securities or Guaranteed Debt
Securities are senior debt securities or subordinated debt securities, the
specific designation, aggregate principal amount, authorized denomination,
maturity, rate (which may be fixed or variable) or method of calculation of
interest and dates for payment thereof, and any exchangeability, conversion,
redemption, prepayment or sinking fund provisions and any listing on a
securities exchange, (ii) in the case of Preferred Stock, the designation,
number of shares or fractional interests therein, liquidation preference per
security, initial public offering price, dividend rate (or method of calculation
thereof), dates on which dividends shall be payable and dates from which
dividends shall accrue, any voting rights, any redemption, conversion or
exchange provisions, any other rights, preferences, privileges, limitations, and
restrictions relating to the Preferred Stock, and any listing on a securities
exchange and (iii) in the case of Warrants, the duration, purchase price,
exercise price and detachability of such Warrants and a description of the
securities for which each Warrant is exercisable.
Chubb's Common Stock is listed on the New York Stock Exchange under the
trading symbol "CB."
Unless otherwise specified in a Prospectus Supplement, the Senior Debt
Securities or Guaranteed Senior Debt Securities, when issued, will be unsecured
and will rank equally with all other unsecured and unsubordinated indebtedness
of Chubb or Capital, respectively. The Subordinated Debt Securities or
Guaranteed Subordinated Debt Securities, when issued, will be subordinated in
right of payment to all Senior Indebtedness (as defined below) of Chubb or
Capital, respectively.
The Offered Securities may be offered directly, through agents designated
from time to time, through dealers or through underwriters. Such agents or
underwriters may act alone or with other agents or underwriters. See "Plan of
Distribution." Any such agents, dealers or underwriters will be set forth in a
Prospectus Supplement. If an agent of Chubb or Capital, as the case may be, or a
dealer or underwriter is involved in the offering of the Offered Securities, the
agent's commission, dealer's purchase price, underwriter's discount and net
proceeds to Chubb or Capital, as the case may be, will be set forth in, or may
be calculated from, the Prospectus Supplement. Any underwriters, dealers or
agents participating in the offering may be deemed "underwriters" within the
meaning of the Securities Act of 1933.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
The date of this Prospectus is August 12, 1998.
<PAGE> 9
CERTAIN PERSONS PARTICIPATING IN AN OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE OFFERED
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH OFFERED SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN
CONNECTION WITH SUCH OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING" IN THE APPLICABLE PROSPECTUS SUPPLEMENT.
No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus or any Prospectus Supplement, and, if given or
made, such information or representation must not be relied upon as having been
authorized by Chubb, Capital or by any underwriter, agent or dealer. This
Prospectus and any Prospectus Supplement shall not constitute an offer to sell
or a solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus and
any Prospectus Supplement nor any sale made thereunder shall, under any
circumstances, create any implication that the information therein is correct as
of any time subsequent to the date thereof.
------------------------
AVAILABLE INFORMATION
Chubb is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The registration
statement of which this Prospectus forms a part, as well as reports, proxy
statements and other information filed by Chubb, may be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, 7 World Trade Center, New York, New York
10048; and Northwestern Atrium Center, 500 West Madison Street, 14th Floor,
Chicago, Illinois 60661-2511. Copies of such material can be obtained at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a web
site at http://www.sec.gov containing reports, proxy and information statements,
and other information regarding registrants, including the Company, that file
electronically with the Commission. Chubb's Common Stock is listed on the New
York Stock Exchange and reports and other information herein and therein
concerning Chubb can also be inspected at the office of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed with the Commission under the Securities Act of 1933 (the
"Securities Act") with respect to the Offered Securities. This Prospectus does
not contain all of the information set forth in such Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Reference is made to such Registration Statement and to the
exhibits relating thereto for further information with respect to Chubb and
Capital and the Offered Securities. Any statements contained herein concerning
the provisions of any document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission or incorporated by reference herein are
not necessarily complete, and in each instance reference is made to the copy of
such document so filed for a more complete description of the matter involved.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Annual Report on Form 10-K of Chubb for the year ended December 31,
1997, which has been filed with the Commission, is hereby incorporated by
reference.
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<PAGE> 10
All documents filed by Chubb after the date of this Prospectus pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
termination of the offering of the Offered Securities offered hereby, shall be
deemed to be incorporated herein by reference and to be a part hereof from the
date of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statements as modified or superseded shall be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
Chubb will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus (other than certain exhibits to
such documents). Requests for such documents should be directed to The Chubb
Corporation, 15 Mountain View Road, P.O. Box 1615, Warren, New Jersey
07061-1615, Attention: Corporate Secretary (Telephone: (908) 903-3576).
THE ISSUERS
Chubb, organized in 1967 as a New Jersey corporation, is a holding company
with subsidiaries primarily engaged in the property and casualty insurance
business. Chubb traces its history back to the formation in 1882 of Chubb & Son,
an underwriter and manager of insurance companies, and the founding in 1901 of
its principal property and casualty insurance subsidiary, Federal Insurance
Company. Since its founding as a specialized manager of marine insurance,
Chubb's property and casualty business has expanded to include most forms of
property and casualty coverages. The Company's property and casualty insurance
subsidiaries provide insurance coverages principally in the United States,
Canada, Europe and parts of Australia, Latin America and the Far East. The
Company and its subsidiaries employed approximately 11,000 persons worldwide on
December 31, 1997.
Chubb is a holding company whose primary source of funds for the payment of
interest on its obligations or dividends to its stockholders is dividends from
its subsidiaries. The amount of dividend distributions to Chubb from its
insurance subsidiaries may be restricted by state insurance laws and regulations
as administered by state insurance departments.
Chubb's principal executive office is located at 15 Mountain View Road,
P.O. Box 1615, Warren, New Jersey 07061-1615, and its telephone number is (908)
903-2000.
Capital, organized in 1986 as a New Jersey corporation, is engaged in the
business of borrowing by issuing unsecured securities and lending money to Chubb
and affiliates of Chubb. Capital's principal executive office is located at 15
Mountain View Road, P.O. Box 1615, Warren, New Jersey 07061-1615, and its
telephone number is (908) 903-2000.
RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES OF CHUBB
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED
------------------------------------ JUNE 30,
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Consolidated Earnings to Fixed
Charges................................. 2.73 5.81 7.63 6.30 10.71 20.18
</TABLE>
For the purpose of computing the above ratios of consolidated earnings to
fixed charges, earnings consist of income from continuing operations before
income taxes and the cumulative effect of changes in accounting principles, plus
those fixed charges that were charged against income. Fixed charges consist of
interest expense before reduction for capitalized interest and the portion of
rental expense (net of rental income from subleased properties), which is
considered to be representative of the interest factors in the leases.
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<PAGE> 11
USE OF PROCEEDS
Proceeds from the sale of Debt Securities, Preferred Stock, Common Stock
and Warrants will be used by Chubb for general corporate purposes. All or a
substantial portion of the proceeds from the sale of Guaranteed Debt Securities
will be lent by Capital to Chubb or its affiliates, and Chubb or such affiliate
will use such proceeds for general corporate purposes. Proceeds from the sale of
Securities initially may be temporarily invested in short-term securities.
DESCRIPTION OF THE INDENTURES, THE DEBT SECURITIES
AND THE GUARANTEED DEBT SECURITIES
The Debt Securities are to be issued under (i) in the case of the Senior
Debt Securities, an indenture (the "Senior Indenture"), dated as of October 25,
1989, between Chubb and The First National Bank of Chicago, as trustee (the
"Trustee"), or (ii) in the case of the Subordinated Debt Securities, an
indenture (the "Subordinated Indenture"), to be executed by Chubb and the
Trustee. The Guaranteed Debt Securities are to be issued under (i) in the case
of the Guaranteed Senior Debt Securities, an indenture (the "Senior Capital
Indenture"), dated as of October 25, 1989, between Capital, Chubb, as guarantor,
and the Trustee, or (ii) in the case of the Guaranteed Subordinated Debt
Securities, an indenture (the "Subordinated Capital Indenture") to be executed
by Capital, Chubb, as guarantor, and the Trustee. Copies of the Senior
Indenture, the Subordinated Indenture, the Senior Capital Indenture and the
Subordinated Capital Indenture (each an "Indenture," collectively the
"Indentures") have been filed as exhibits to the Registration Statement of which
this Prospectus forms a part. The terms of each Indenture are the same in all
material respects, except as described below. The following is a summary of
certain provisions of each Indenture and does not purport to be complete.
Reference is made to each Indenture for a complete statement of such provisions.
Certain capitalized terms used below are defined in each Indenture and have the
meanings given them in each Indenture. Section references are to each Indenture.
Wherever particular sections or defined terms of each Indenture are referred to,
such sections or defined terms are incorporated by reference as part of the
statements made, and the statement is qualified in its entirety by such
reference.
The Prospectus Supplement will contain any additional or revised
information with respect to the senior and subordinated debt outstanding as of
the date of the Prospectus Supplement.
TERMS APPLICABLE TO BOTH THE DEBT SECURITIES
AND THE GUARANTEED DEBT SECURITIES
GENERAL
None of the Indentures limit the amount of debentures, notes or other
evidences of indebtedness which may be issued thereunder. Each Indenture
provides that Debt Securities or Guaranteed Debt Securities, as the case may be,
may be issued from time to time in one or more series and may be denominated and
payable in foreign currencies or units based on or relating to foreign
currencies, including European Currency Units ("ECUs"). Special United States
federal income tax considerations applicable to any Debt Securities or
Guaranteed Debt Securities, as the case may be, so denominated will be described
in the relevant Prospectus Supplement.
The Debt Securities issued under the Senior Indenture will be unsecured
obligations of Chubb. The Guaranteed Debt Securities issued under the Senior
Capital Indenture will be unsecured obligations of Capital. The Debt Securities
issued under the Subordinated Indenture will be subordinate and junior in right
of payment to the extent and in the manner set forth in the Subordinated
Indenture to all Senior Indebtedness of Chubb. The Guaranteed Debt Securities
issued under the Subordinated Capital Indenture will be subordinate and junior
in right of payment to
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<PAGE> 12
the extent and in the manner set forth in the Subordinated Capital Indenture to
all Senior Indebtedness of Capital (see "Subordination").
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities or Guaranteed Debt Securities, as the case may be, (to the
extent such terms are applicable to such Debt Securities or Guaranteed Debt
Securities and are not set forth herein) offered pursuant thereto (the "Offered
Debt Securities"): (i) whether the Offered Debt Securities will be Debt
Securities issued by Chubb or Guaranteed Debt Securities issued by Capital; (ii)
designation, aggregate principal amount, purchase price and denomination; (iii)
currency or currency units based on or relating to currencies in which such Debt
Securities or Guaranteed Debt Securities, as the case may be, are denominated
and/or in which principal (and premium, if any) and/or any interest will or may
be payable; (iv) the date of maturity; (v) interest rate or rates (or method by
which such rate will be determined), if any; (vi) the dates on which any such
interest will be payable; (vii) the place or places where the principal of and
interest, if any, on the Offered Debt Securities will be payable; (viii) any
redemption or sinking fund provisions; (ix) any rights of the holders of Offered
Debt Securities to convert or exchange the Offered Debt Securities into other
securities or property of Chubb or Capital, as the case may be; and (x) any
other specific terms of the Offered Debt Securities, including any additional
events of default or covenants provided for with respect to Offered Debt
Securities, and any terms which may be required by or advisable under United
States laws or regulations.
Debt Securities or Guaranteed Debt Securities may be presented for exchange
or transfer in the manner, at the places and subject to the restrictions set
forth in such Debt Securities or such Guaranteed Debt Securities, as applicable,
and the Prospectus Supplement. Such services will be provided without charge,
other than any tax or other governmental charge payable in connection therewith,
but subject to the limitations provided in the applicable Indenture.
Debt Securities or Guaranteed Debt Securities will bear interest at a fixed
rate (a "Fixed Rate Security") or a floating rate (a "Floating Rate Security").
Debt Securities or Guaranteed Debt Securities bearing no interest or interest at
a rate which, at the time of issuance, is below the prevailing market rate, will
be sold at a discount below their stated principal amount. Special United States
federal income tax considerations applicable to any such discounted Debt
Securities or Guaranteed Debt Securities or to certain Debt Securities or
Guaranteed Debt Securities issued at par which are treated as having been issued
at a discount for United States income tax purposes will be described in the
relevant Prospectus Supplement.
Debt Securities or Guaranteed Debt Securities may be issued, from time to
time, with the principal amount payable on any principal payment date, or the
amount of interest payable on any interest payment date, to be determined by
reference to one or more currency exchange rates, commodity prices, equity
indices or other factors. Holders of such Debt Securities or Guaranteed Debt
Securities may receive a principal amount on any principal payment date, or a
payment of interest on any interest payment date, that is greater than or less
than the amount of principal or interest otherwise payable on such dates,
depending upon the value on such dates of the applicable currency, commodity,
equity index or other factor. Information as to the methods of determining the
amount of principal or interest payable on any date, the currencies,
commodities, equity indices or other factors to which the amount payable on such
date is linked and certain additional tax considerations will be set forth in
the applicable Prospectus Supplement.
None of the Indentures contain any covenant or other specific provision to
afford protection to holders of the Debt Securities or Guaranteed Debt
Securities in the event of a highly leveraged transaction or a change in control
of Chubb or Capital, as the case may be, except to the limited extent described
under "Consolidation, Merger and Sale of Assets".
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<PAGE> 13
GUARANTEE
Chubb will guarantee (each a "Guarantee") the punctual payment of the
principal of, premium, if any, and interest on the Guaranteed Debt Securities,
when and as the same are due and payable. Each Guarantee is absolute and
unconditional, irrespective of any circumstance that might otherwise constitute
a legal or equitable discharge of a surety or guarantor. Notwithstanding the
foregoing, the Guarantees of the Guaranteed Subordinated Debt Securities will be
subordinate and junior in right of payment to the extent and in the manner set
forth in the Subordinated Indenture to all Senior Indebtedness of Chubb. To
evidence the Guarantee, a guarantee, executed by Chubb, will be endorsed on each
Guaranteed Debt Security. (Senior Capital Indenture and Subordinated Capital
Indenture sec.sec. 3.1, 3.2)
SUBORDINATION
The payment of the principal of, premium, if any, and interest on the
Subordinated Debt Securities or the Guaranteed Subordinated Debt Securities, as
the case may be, is subordinated in right of payment, as set forth in the
Subordinated Debt Securities, Guaranteed Subordinated Debt Securities and the
applicable Indenture, to the prior payment in full of all Senior Indebtedness of
Chubb or Capital, as applicable, and the Guarantees are subordinated to the
prior payment in full of all Senior Indebtedness of Chubb. "Senior Indebtedness"
of Chubb or Capital, as the case may be, is defined as the principal of,
premium, if any, and unpaid interest on the following, whether outstanding at
the date of the applicable Indenture or thereafter incurred or created: (a)
indebtedness of Chubb or Capital, as the case may be, for money borrowed
(including purchase-money obligations) evidenced by notes or other written
obligations, (b) indebtedness of Chubb or Capital, as the case may be, evidenced
by notes (other than the Offered Securities), debentures, bonds or other
securities issued under the provisions of an indenture or similar instrument,
(c) obligations of Chubb or Capital, as the case may be, as lessee under
capitalized leases and leases of property made as part of any sale and leaseback
transactions, (d) indebtedness of others of any of the kinds described in the
preceding clauses (a) through (c) assumed or guaranteed by Chubb or Capital, as
the case may be, and (e) renewals, extensions and refundings of, and
indebtedness and obligations of a successor corporation issued in exchange for
or in replacement of, indebtedness or obligations of the kinds described in the
preceding clauses (a) through (d), unless in the case of any particular
indebtedness, obligation, renewal, extension or refunding the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such indebtedness, obligation, renewal, extension or refunding is
not superior in right of payment to the Subordinated Debt Securities or to the
Guaranteed Subordinated Debt Securities. The applicable Indentures, the
Subordinated Debt Securities and the Guaranteed Subordinated Debt Securities do
not limit the amount of Senior Indebtedness that may be incurred. Information
concerning the amount of Senior Indebtedness to which the Debt Securities and
the Guaranteed Debt Securities would be subordinate at a then recent date will
be set forth in the applicable Prospectus Supplement. (Subordinated Indenture
sec. 15.1; Subordinated Capital Indenture sec. 16.1)
No payment on account of principal of, premium, if any, or interest on the
Subordinated Debt Securities or the Guaranteed Subordinated Debt Securities, as
the case may be, may be made if, at the time of such payment, there exists any
default with respect to any Senior Indebtedness and the default is the subject
of judicial proceedings or Chubb or Capital, as the case may be, receives notice
of the default from any holder of Senior Indebtedness or any trustee therefor.
Upon any acceleration of the maturity of the Subordinated Debt Securities or the
Guaranteed Subordinated Debt Securities, as the case may be, by reason of any
Event of Default (as defined below), Chubb or Capital, as the case may be, must
give notice of the acceleration to holders of the Senior Indebtedness and may
not pay holders of the Subordinated Debt Securities or the Guaranteed
Subordinated Debt Securities, as applicable, until 120 days after the
acceleration and then only if such payment is otherwise permitted at that time.
The terms of the Subordinated Indenture and the
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<PAGE> 14
Subordinated Capital Indenture provide that neither Chubb nor Capital will issue
any subordinated debt unless such debt is pari passu with the Subordinated Debt
Securities or the Guaranteed Subordinated Debt Securities. In the event of any
payment or distribution of assets or securities of Chubb or Capital, as the case
may be, upon any dissolution, winding up, total or partial liquidation or
reorganization of or similar proceeding relating to Chubb or Capital, as the
case may be, all principal of, premium, if any, and interest due on all Senior
Indebtedness of Chubb or Capital, as applicable, must be paid in full before the
holders of the Subordinated Debt Securities or the Guaranteed Subordinated Debt
Securities are entitled to receive or retain any payment. By reason of such
subordination, in the event of insolvency, creditors of Chubb and/or Capital who
are holders of Senior Indebtedness of Chubb or Capital, as the case may be, as
well as general creditors of Chubb and/or Capital, may recover more, ratably,
than the holders of the Subordinated Debt Securities or the Guaranteed
Subordinated Debt Securities, as the case may be. (Subordinated Indenture
sec.sec. 15.1, 15.2, 15.3; Subordinated Capital Indenture sec.sec. 16.1, 16.2,
16.3)
MODIFICATION AND WAIVER
Modifications and amendments of any Indenture may be made by Chubb, and in
the case of Indentures to which it is a party, Capital, and the Trustee, with
the consent of the record holders of a majority in aggregate principal amount of
the outstanding securities issued under the Indenture which are affected by the
modification or amendment provided that no such modification or amendment may,
without the consent of the record holder of each such security affected thereby,
among other things: (a) extend the final maturity of any security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on redemption thereof, or reduce
the amount of the principal of an Original Issue Discount Security that would be
due and payable upon an acceleration of the maturity thereof or the amount
thereof provable in bankruptcy, or change the currency of payment of principal
of or interest on any security, or extend the time or reduce the amount of any
payment to any sinking fund or analogous obligation relating to any security, or
impair or affect the right of any security holder to institute suit for the
payment thereof or, if the relevant securities provide therefor, any right of
repayment at the option of the security holder (b) reduce the aforesaid
percentage of securities of any series, the consent of the holders of which is
required for any such supplemental indenture, or (c) reduce the percentage of
securities of any series necessary to consent to waive any past default under
the Indenture to less than a majority, or (d) modify any of the provisions of
the sections of such Indenture relating to supplemental indentures with the
consent of the holders of securities, except to increase any such percentage or
to provide that certain other provisions of the Indenture cannot be modified or
waived without the consent of the holder of each security affected thereby,
provided, however, that this clause shall not be deemed to require the consent
of any holder with respect to changes in the references to "the Trustee" and
concomitant changes in such section or the deletion of this proviso. (Senior
Indenture and Subordinated Indenture sec. 8.2; Senior Capital Indenture and
Subordinated Capital Indenture sec. 9.2)
A supplemental indenture which changes or eliminates any covenant or other
provision of any Indenture which has expressly been included solely for the
benefit of one or more particular series of securities, or which modifies the
rights of the holders of securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under the Indenture
of the holders of securities of any other series. (Senior Indenture and
Subordinated Indenture sec. 8.2; Senior Capital Indenture and Subordinated
Capital Indenture sec. 9.2)
Modifications and amendments of any Indenture may be made by Chubb and in
the case of Indentures to which it is a party, Capital and the Trustee, without
the consent of the holders of any series of securities issued thereunder: (1) to
secure any securities issued thereunder; (2) to evidence the succession of
another corporation to Chubb or Capital and the assumption by any such successor
of the covenants, agreements and obligations of Chubb or Capital, as the case
may be, in the Indenture and in the securities issued thereunder; (3) to add to
the covenants of Chubb or
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<PAGE> 15
Capital or to add any additional events of default; (4) to cure any ambiguity,
to correct or supplement any provision in such Indenture that may be
inconsistent with any other provision of such Indenture or to make any other
provisions with respect to matters or questions arising under such Indenture,
provided that such action shall not adversely affect the interests of the
holders of any series of securities issued thereunder; (5) to establish the form
and terms of securities issued thereunder; (6) to evidence and provide for a
successor Trustee under such Indenture with respect to one or more series of
securities issued thereunder or to provide for or facilitate the administration
of the trusts under the Indenture by more than one trustee; (7) to permit or
facilitate the issuance of securities in bearer form or to provide for
uncertificated securities to be issued thereunder; or (8) to change or eliminate
any provision of such Indenture, provided that any such change or elimination
shall become effective only when there is no security outstanding of any series
created prior to the execution of such supplemental indenture which is entitled
to the benefit of such provision. (Senior Indenture and Subordinated Indenture
sec. 8.1; Senior Capital Indenture and Subordinated Capital Indenture sec. 9.1)
EVENTS OF DEFAULT
The following will be events of default (each an "Event of Default") under
each Indenture with respect to each series of Debt Securities or Guaranteed Debt
Securities: (a) failure to pay principal (or premium, if any) on any of the
securities of such series outstanding under such Indenture when due; (b) failure
to pay any interest on any of the securities of such series outstanding under
such Indenture when due, continued for 30 days; (c) default in the payment, if
any, of any sinking fund installment when due, payable by the terms of
securities of such series; (d) failure to perform any other covenant of Chubb or
Capital, as the case may be, contained in such Indenture continued for 60 days
after written notice; and (e) certain events of bankruptcy, insolvency or
reorganization of Chubb or, in the case of Guaranteed Debt Securities only,
Capital. If an Event of Default shall happen and be continuing, the Trustee in
its discretion may, and at the written request of record holders of a majority
in aggregate principal amount of the securities of each series affected
outstanding under the relevant Indenture and upon being indemnified to its
satisfaction shall, proceed to protect and enforce its rights, and those of the
record holders of such securities. In case an Event of Default described in (a),
(b), (c) or (d) (if such Event of Default is with respect to less than all
series of securities under the relevant Indenture then outstanding) above shall
occur and be continuing with respect to any series of securities, the Trustee or
the holders of not less than 25% in aggregate principal amount of the securities
of such series then outstanding (each such series acting as a separate class)
may declare the principal (or, in the case of discounted Debt Securities or
discounted Guaranteed Debt Securities, the amount specified in the terms
thereof) of such series to be due and payable. In case an Event of Default
described in (d) (if such Event of Default is with respect to all series of
securities under the relevant Indenture then outstanding) or (e) above shall
occur and be continuing, the Trustee or the holders of not less than 25% in
aggregate principal amount of all securities then outstanding under the relevant
Indenture (treated as one class) may declare the principal (or, in the case of
discounted Debt Securities or discounted Guaranteed Debt Securities, the amount
specified in the terms thereof) of all outstanding securities to be due and
payable. Any Event of Default with respect to a particular series of securities
under the relevant Indenture may be waived by the holders of a majority in
aggregate principal amount of the outstanding securities of such series (or of
all the outstanding securities under the relevant Indenture, as the case may
be), except in each case a failure to pay principal of or premium, if any, or
interest on such security. (Senior Indenture and Subordinated Indenture
sec. 5.1, 5.10; Senior Capital Indenture and Subordinated Capital Indenture
sec. 6.2, 6.10)
The Trustee may withhold notice to the holders of any default with respect
to any series of securities (except in payment of principal of or interest or
premium on, or sinking fund payment in respect of, the securities) if the
Trustee considers it in the interest of holders to do so. (Senior Indenture and
Subordinated Indenture sec. 5.11; Senior Capital Indenture and Subordinated
Capital Indenture sec. 6.11)
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<PAGE> 16
Each of Chubb and Capital is required to furnish to the Trustee annually a
statement as to its performance or fulfillment of covenants, agreements or
conditions in the Indenture and as to the absence of default. (Senior Indenture
and Subordinated Indenture sec. 3.5; Senior Capital Indenture and Subordinated
Capital Indenture sec. 4.5)
CONSOLIDATION, MERGER AND SALE OF ASSETS
Chubb may not consolidate with, merge into or sell, convey or lease all or
substantially all of its assets to any Person nor permit any Person to
consolidate with, merge into or sell, convey or lease all or substantially all
of its assets to Chubb unless Chubb is the surviving corporation or the
successor Person is a corporation organized under the laws of any domestic
jurisdiction and assumes Chubb's obligations on the Debt Securities, the
Guarantees of the Guaranteed Debt Securities, if applicable, and under the
Indentures, and after giving effect thereto no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default
shall have occurred and be continuing, and that certain other conditions are
met. Senior Indenture and Subordinated Indenture sec.sec. 9.1, 9.2; Senior
Capital Indenture and Subordinated Capital Indenture sec.sec. 10.3, 10.4)
Capital may not consolidate with, merge into or sell, convey or lease all
or substantially all of its assets to any Person nor permit any Person to
consolidate with, merge into or sell, convey or lease all or substantially all
of its assets to Capital unless Capital is the surviving corporation or the
successor Person is a corporation organized under the laws of any domestic
jurisdiction and assumes Capital's obligations on the Guaranteed Debt Securities
and under the Senior Capital Indenture and the Subordinated Capital Indenture,
and after giving effect thereto no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default shall have
occurred and be continuing, and that certain other conditions are met. (Senior
Capital Indenture and Subordinated Capital Indenture sec.sec. 10.1, 10.2)
APPLICABLE LAW
The Debt Securities, Guaranteed Debt Securities and each Indenture will be
governed by and construed in accordance with the laws of the State of New York.
(Senior Indenture and Subordinated Indenture sec. 11.8; Senior Capital Indenture
and Subordinated Capital Indenture sec. 12.8).
CONCERNING THE TRUSTEE
The First National Bank of Chicago, 153 West 51 Street, New York, New York
10019, is the Trustee under the Senior Indenture and the Senior Capital
Indenture and will be the Trustee under the Subordinated Indenture and the
Subordinated Capital Indenture.
DESCRIPTION OF THE CAPITAL STOCK
GENERAL
The authorized capital stock of Chubb consists of 600,000,000 shares of
common stock, $1.00 par value per share (the "Common Stock"), and 4,000,000
shares of Preferred Stock, $1.00 par value (the "Preferred Stock"). As of July
31, 1998, there were issued 175,993,039 shares of Common Stock, of which
10,379,988 were treasury shares and 165,613,051 were outstanding, and Chubb had
no Preferred Stock issued or outstanding.
The following summary of the terms of Chubb's capital stock does not
purport to be complete and is qualified in its entirety by reference to the
applicable provisions of New Jersey law and Chubb's Restated Certificate of
Incorporation, as amended (the "Charter").
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<PAGE> 17
COMMON STOCK
The holders of shares of Common Stock, subject to the preferential rights
of the holders of any shares of Preferred Stock of Chubb, are entitled to
dividends when and as declared by the Board of Directors. The holders of the
Common Stock have one vote per share on all matters submitted to a vote of the
shareholders, and the right to the net assets of Chubb in liquidation after
payment of any amounts due to creditors and in respect of the preferred stock of
Chubb. Holders of shares of Common Stock are not entitled as a matter of right
to any preemptive or subscription rights and are not entitled to cumulative
voting for directors. All outstanding shares of Common Stock are, and the shares
of Common Stock issued hereunder upon exchange of the Debt Securities,
Guaranteed Debt Securities or Preferred Stock will be, fully paid and
nonassessable.
Under New Jersey law and the Charter, the affirmative vote of two-thirds of
the votes cast is required for shareholder approval of any merger or any plan of
consolidation as well as for any sale, lease, exchange or other disposition of
all, or substantially all, of the assets of Chubb, if not in the usual and
regular course of its business, and for any liquidation, dissolution or
amendment of the Charter. All other shareholder action is decided by a majority
of the votes cast at a meeting of shareholders.
The By-Laws of Chubb provide that the annual meeting of shareholders shall
be held on such day in the month of April of each year as is designated by the
Board of Directors and as stated in a written notice, which notice is mailed or
delivered to each shareholder at least ten days prior to any shareholder
meeting. The Charter and the By-Laws provide that shareholder meetings may be
held in the State of New Jersey or in the City of New York, State of New York,
at such place therein as may from time to time be designated by the Board of
Directors.
The Charter further provides that the Board of Directors has the power,
except as provided by statute, in its discretion, to use or apply any funds of
Chubb lawfully available therefor for the purchase or acquisition of shares of
the capital stock or bonds or other securities of Chubb, in the market or
otherwise, at such price as may be fixed by the Board, and to such extent and in
such manner and for such purposes and upon such terms as the Board may deem
expedient and as may be permitted by law.
The Transfer Agent and Registrar for Chubb's Common Stock is First Chicago
Trust Company of New York, P.O. Box 2500, Jersey City, New Jersey 07303-2500.
PREFERRED STOCK
Under the Charter, Chubb is authorized to issue up to 4,000,000 shares of
Preferred Stock, in one or more series, with such designations and such relative
voting, dividend, liquidation, conversion and other rights, preferences and
limitations as are stated in the Charter any amendment thereto establishing such
series adopted by the Board of Directors of Chubb.
Shares of Preferred Stock of Chubb may be issued in one or more series and
the shares of all series will rank pari passu and be identical in all respects,
except that with respect to each series the Board of Directors may fix, among
other things: the rate of dividends payable thereon; the time and prices of
redemption; the amount payable upon voluntary liquidation; the retirement or
sinking fund, if any; the conversion rights, if any; the voting rights, if any,
in addition to the voting right described below; the restrictions, if any, upon
creation of indebtedness of Chubb, or any subsidiary thereof, or the issuance of
stock ranking on a parity with or senior to the shares of Preferred Stock either
as to dividends or upon liquidation; the restrictions, if any, on the payment of
dividends upon, or on the acquisition of, the Common Stock or upon any other
class or classes of stock of Chubb (other than Preferred Stock) ranking on a
parity with or junior to the shares of Preferred Stock either as to dividends or
upon liquidation; and the number of shares to comprise such series. Each series
of Preferred Stock will be entitled to receive an amount payable upon
liquidation, dissolution or winding up, fixed for each series, plus all
dividends accumulated to the date of final distribution, before any
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payment or distribution of assets of Chubb is made on Common Stock. Shares of
Preferred Stock that have been issued and reacquired in any manner by Chubb
(including shares redeemed, shares purchased and retired and shares that have
been converted into shares of another series or class) may be reissued as part
of the same or another series of Preferred Stock. In accordance with the
foregoing, the 4,000,000 authorized but unissued shares of Preferred Stock may
be issued pursuant to resolution of the Board of Directors without the vote of
the holders of any capital stock of Chubb.
PREFERRED STOCK DEPOSITARY SHARES
Chubb may, at its option, elect to offer receipts for fractional interests
("Depositary Shares") in Preferred Stock. In such event, receipts ("Depositary
Receipts") for Depositary Shares, each of which will represent a fraction (to be
set forth in the Prospectus Supplement relating to a particular series of
Preferred Stock) of a share of a particular series of Preferred Stock, will be
issued as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a deposit agreement (the "Deposit Agreement")
between Chubb and the depositary named in the Prospectus Supplement relating to
such shares (the "Preferred Stock Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption, conversion,
exchange, subscription and liquidation rights). The following summary of certain
provisions of the Deposit Agreement does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of the Deposit Agreement, including the definitions therein of certain terms.
Whenever particular sections of the Deposit Agreement are referred to, it is
intended that such section shall be incorporated herein by reference. Copies of
the forms of Deposit Agreement and Depositary Receipt are filed as exhibits to
the Registration Statement of which this Prospectus is a part, and the following
summary is qualified in its entirety by reference to such exhibits.
The Preferred Stock Depositary will distribute to holders of Depositary
Receipts all cash dividends or other cash distributions received in respect of
the Preferred Stock to the record holders of Depositary Shares relating to such
Preferred Stock in proportion to the numbers of such Depositary Shares owned by
such holders. (Deposit Agreement sec. 4.01)
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares in an equitable manner, unless the Preferred Stock Depositary
determines that it is not feasible to make such distribution, in which case the
Preferred Stock Depositary may sell such property and distribute the net
proceeds from such sale to such holders. (Deposit Agreement sec. 4.02)
Upon surrender of a Depositary Receipt at the corporate trust office of the
Preferred Stock Depositary and upon payment of the taxes, charges and fees
provided for in the Deposit Agreement and subject to the terms thereof, the
holder of the Depositary Shares evidenced thereby is entitled to delivery at
such office, to or upon his or her order, of the number of whole shares of the
related series of Preferred Stock and any money or other property, if any,
represented by such Depositary Shares.
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Preferred Stock Depositary resulting from the redemption, in whole or in
part, of such series of Preferred Stock held by the Preferred Stock Depositary.
The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever Chubb redeems shares of Preferred Stock held by
the Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of
the same redemption date the number of Depositary Shares representing shares of
Preferred Stock so redeemed. If fewer than all the
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Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot, pro rata or by any other equitable method as may be
determined by the Preferred Stock Depositary. (Deposit Agreement sec. 2.08)
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Preferred Stock Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the record
date for the Preferred Stock) will be entitled to instruct the Preferred Stock
Depositary as to the exercise of the voting rights pertaining to the amount of
the Preferred Stock represented by such holder's Depositary Shares. The
Preferred Stock Depositary will endeavor, insofar as practicable, to vote the
amount of the Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and Chubb will agree to take all reasonable
action which may be deemed necessary by the Preferred Stock Depositary in order
to enable the Preferred Stock Depositary to do so. The Preferred Stock
Depositary will abstain from voting shares of the Preferred Stock to the extent
it does not receive specific instructions from the holder of Depositary Shares
representing such Preferred Stock. (Deposit Agreement sec. 4.05)
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Chubb and the Preferred Stock Depositary. However, any amendment which
materially and adversely alters the rights of the holders of Depositary Shares
will not be effective unless such amendment has been approved by the holders of
at least a majority of the Depositary Shares then outstanding. The Deposit
Agreement will terminate only if (i) all outstanding Depositary Shares have been
redeemed or (ii) there has been a final distribution in respect of the Preferred
Stock in connection with any liquidation, dissolution or winding-up of Chubb and
such distribution has been distributed to the holders of Depositary Receipts.
(Deposit Agreement sec.sec. 6.01, 6.02)
Chubb will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Chubb will pay
charges of the Preferred Stock Depositary in connection with the initial deposit
of the Preferred Stock and issuance of Depositary Receipts, all withdrawals of
shares of Preferred Stock by owners of Depositary Shares and any redemption of
the Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges as are expressly
provided in the Deposit Agreement to be for their accounts. (Deposit Agreement
sec. 5.07)
The Preferred Stock Depositary may resign at any time by delivering to
Chubb notice of its election to do so, and Chubb may at any time remove the
Preferred Stock Depositary, any such resignation or removal to take effect upon
the appointment of a successor Preferred Stock Depositary and its acceptance of
such appointment. Such successor Preferred Stock Depositary must be appointed
within 60 days after delivery of the notice of resignation or removal and must
be a bank or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000 (Deposit Agreement
sec. 5.04)
The Preferred Stock Depositary will forward to holders of Depositary
Receipts all reports and communications from Chubb which are delivered to the
Preferred Stock Depositary and which Chubb is required or otherwise determines
to furnish to the holders of the Preferred Stock. (Deposit Agreement sec. 4.07)
Neither the Preferred Stock Depositary nor Chubb will be liable under the
Deposit Agreement to holders of Depositary Receipts other than for its
negligence, willful misconduct or bad faith. Neither Chubb nor the Preferred
Stock Depositary will be obligated to prosecute or defend any legal proceeding
in respect of any Depositary Shares or Preferred Stock unless satisfactory
indemnity is furnished. Chubb and the Preferred Stock Depositary may rely upon
written advice of its counsel or accountants, or upon information provided by
persons presenting Preferred Stock for deposit,
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holders of Depositary Receipts or other persons believed to be competent and on
documents believed to be genuine. (Deposit Agreement sec. 5.03)
SHAREHOLDERS RIGHTS PLAN
The Corporation has a Shareholder Rights Plan under which each shareholder
has one-quarter of a right (a "Right") for each share of Common Stock held. Each
Right entitles the registered holder to purchase from Chubb a unit consisting of
one one-hundredth of a share (a "Unit") of Series A Participating Cumulative
Preferred Stock, par value $1.00 per share (the "Preferred Stock"), at a
purchase price (the "Purchase Price") of $225 per Unit. The rights are subject
to adjustment to prevent dilution of the interests represented by each Right.
The description and terms of the Rights are set forth in the Rights Agreement
between Chubb and First Chicago Trust Company of New York, as Rights Agent.
The Rights are attached to all outstanding shares of Common Stock and trade
with the Common Stock until the Rights become exercisable, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Stock and a Distribution Date will occur upon the earlier of: (i) 10 days
following the date (the "Stock Acquisition Date") of any public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 25% or more of the outstanding
shares of Common Stock, or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group becoming
an Acquiring Person. Until the Distribution Date (or earlier redemption or
expiration of the Rights), (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after June 12, 1989 will
contain a notation incorporating the Rights Agreement by reference, and (iii)
the surrender for transfer of any certificates for Common Stock will also
constitute the transfer of the Rights associated with the common Stock
represented by such certificates.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on June 12, 1999 unless previously redeemed by Chubb as
described below.
As soon as practicable after the Distribution Date, Right Certificates will
be mailed to holders of record of Common Stock as of the close of business on
the Distribution Date and, thereafter the separate Right Certificates alone will
represent the Rights. Except as otherwise determined by the Board of Directors,
only shares of Common Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that any person becomes an Acquiring Person, proper provision
will be made so that each holder of a Right, other than Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of shares of
Common Stock having a market value of two times the exercise price of the right.
In the event that, at any time following the Stock Acquisition Date, (i) Chubb
is acquired in a merger or other business combination transaction, or (ii) 50%
or more of Chubb's assets or earning power is sold, each holder of a Right shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right. The events described in this paragraph are referred to as "Triggering
Events".
The Purchase Price payable, and the number of Units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of
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<PAGE> 21
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of $.01
per Right by the Board of Directors at any time until the tenth day after the
Stock Acquisition Date (or such later date as a majority of the Continuing
Directors then in office may determine). Under certain circumstances set forth
in the Rights Agreement, the decision to redeem shall require the concurrence of
a majority of the Continuing Directors.
Immediately upon the action of the Board of Directors ordering redemption
of the Rights, with, where required, the concurrence of a majority of the
Continuing Directors, the Rights will terminate and thereafter the only right of
the holders of Rights will be to receive the redemption price.
The term "Continuing Director" means any member of the Board of Directors
who was a member of the Board prior to the time the Acquiring Person becomes
such, and any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors. Continuing
Directors do not include an Acquiring Person, or an affiliate or associate of an
Acquiring Person, or any representative of the foregoing entities.
Until a Right is exercised, the holder will have no rights as a shareholder
of Chubb (beyond those as an existing shareholder), including the right to vote
or to receive dividends. As long as the Rights are attached to the Common Stock,
Chubb will issue one half of a Right with each new share of Common Stock issued.
DESCRIPTION OF WARRANTS
Chubb or Capital may issue Warrants, including Warrants to purchase Debt
Securities or Guaranteed Debt Securities ("Debt Warrants") as well as other
types of Warrants to purchase Securities. Warrants may be issued independently
or together with any Securities and may be attached to or separate from such
Securities. The Warrants are to be issued under warrant agreements (each a
"Warrant Agreement") to be entered into between Chubb or Capital, as the case
may be, and a bank or trust company, as warrant agent (the "Warrant Agent"), all
as shall be set forth in the Prospectus Supplement relating to the warrants
being offered pursuant thereto.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the debt warrant certificates representing such Debt Warrants, including the
following: (1) the title of such Debt Warrants; (2) the aggregate number of such
Debt Warrants; (3) the price or prices at which such Debt Warrants will be
issued; (4) the currency or currencies, including composite currencies or
currency units, in which the price of such Debt Warrants may be payable; (5) the
designation, aggregate principal amount and terms of the Debt Securities or
Guaranteed Debt Securities purchasable upon exercise of such Debt Warrants, and
the procedures and conditions relating to the exercise of such Debt Warrants;
(6) the designation and terms of any related Debt Securities or Guaranteed Debt
Securities with which such Debt Warrants are issued, and the number of such Debt
Warrants issued with each such security; (7) the currency or currencies,
including composite currencies or currency units, in which the principal (or
premium, if any), or interest, if any, on the Debt Securities or Guaranteed Debt
Securities purchasable upon exercise of such Debt Warrants will be payable; (8)
the date, if any, on and after which such Debt Warrants and the related Debt
Securities or Guaranteed Debt Securities will be separately transferable; (9)
the principal amount of Debt
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Securities or Guaranteed Debt Securities purchasable upon exercise of each Debt
Warrant, and the price at which and the currency, including composite currency
or currency unit, in which such principal amount of Debt Securities or
Guaranteed Debt Securities may be purchased upon such exercise; (10) the date on
which the right to exercise such Debt Warrants shall commence, and the date on
which such right shall expire; (11) the maximum or minimum number of such Debt
Warrants which may be exercised at any time; (12) a discussion of material
federal income tax considerations, if any; (13) in the case of Debt Warrants
issued by Capital, the extent (if any) to which Chubb will guarantee the
performance by Capital of its obligations under such Debt Warrants; and (14) any
other terms of such Debt Warrants and terms, procedures and limitations relating
to the exercise of such Debt Warrants.
Debt Warrant certificates will be exchangeable for new Debt Warrant
certificates of different denominations, and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the Prospectus Supplement. Prior to the exercise of their Debt Warrants, holders
of Debt Warrants will not have any of the rights of holders of the securities
purchasable upon such exercise and will not be entitled to payments of principal
of (or premium, if any) or interest, if any, on the securities purchasable upon
such exercise.
OTHER WARRANTS
Chubb may issue other Warrants. The applicable Prospectus Supplement will
describe the following terms of any such other Warrants in respect of which this
Prospectus is being delivered: (1) the title of such Warrants; (2) the
Securities (which may include Preferred Stock or Common Stock) for which such
Warrants are exercisable; (3) the price or prices at which such Warrants will be
issued; (4) the currency or currencies, including composite currencies or
currency units, in which the price of such Warrants may be payable; (5) if
applicable, the designation and terms of the Preferred Stock with which such
Warrants are issued, and the number of such Warrants issued with each share of
Preferred Stock or Common Stock; (6) any provisions for adjustment of the number
or amount of securities receivable upon exercise of such Warrants or the
exercise price of such Warrants; (7) if applicable, the date on and after which
such Warrants and the related Preferred Stock or Common Stock will be separately
transferable; (8) if applicable, a discussion of material federal income tax
considerations; (9) any other terms of such Warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
Warrants; (10) the date on which the right to exercise such Warrants shall
commence, and the date on which such right shall expire; and (11) the maximum or
minimum number of such Warrants which may be exercised at any time.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder of Warrants to purchase for cash such
principal amount of Securities at such exercise price as shall in each case be
set forth in, or be determinable as set forth in, the Prospectus Supplement
relating to the Warrants offered thereby. Warrants may be exercised at any time
up to the close of business on the expiration date set forth in the Prospectus
Supplement relating to the Warrants offered thereby. After the close of business
on the expiration date, unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Warrants offered thereby. Upon receipt of payment and the
warrant certificate properly completed and duly executed at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement, the Corporation will, as soon as practicable, forward the Securities
purchasable upon such exercise. If less than all of the Warrants represented by
such warrant certificate are exercised, a new warrant certificate will be issued
for the remaining Warrants.
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PLAN OF DISTRIBUTION
Offered Securities may be sold (i) through agents, (ii) through
underwriters, (iii) through dealers or (iv) directly to purchasers (through a
specific bidding or auction process or otherwise).
Offers to purchase Offered Securities may be solicited by agents designated
by Chubb or Capital, as the case may be, from time to time. Any such agent
involved in the offer or sale of the Offered Securities will be named, and any
commissions payable by Chubb or Capital, as the case may be, to such agent will
be set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act of 1933, as amended
(the "1933 Act") of the Offered Securities so offered and sold.
If an underwriter or underwriters are utilized in the sale of Offered
Securities, Chubb or Capital, as the case may be, will execute an underwriting
agreement with such underwriter or underwriters at the time an agreement for
such sale is reached, and the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including compensation of the underwriters and dealers, if any,
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of Offered Securities.
If a dealer is utilized in the sale of Offered Securities, Chubb or
Capital, as the case may be, will sell such Offered Securities to the dealer, as
principal. The dealer may then resell such Offered Securities to the public at
varying prices to be determined by such dealer at the time of resale. The name
of the dealer and the terms of the transactions will be set forth in the
Prospectus Supplement relating thereto.
Offers to purchase Offered Securities may be solicited directly by Chubb or
Capital, as the case may be, and sales thereof may be made by Chubb or Capital,
as the case may be, directly to institutional investors or others. The terms of
any such sales, including the terms of any bidding or auction process, if
utilized, will be described in the Prospectus Supplement relating thereto.
Offered Securities may also be offered and sold, if so indicated in the
Prospectus Supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms ("remarketing firms"), acting as principals for their own
accounts or as agents for Chubb or Capital, as the case may be. Any remarketing
firm will be identified and the terms of its agreement, if any, with Chubb or
Capital, as the case may be, and its compensation will be described in the
Prospectus Supplement. Remarketing firms may be deemed to be underwriters in
connection with the Debt Securities or Guaranteed Debt Securities remarketed
thereby.
Agents, underwriters, dealers and remarketing firms may be entitled under
agreements which may be entered into with Chubb or Capital, as the case may be,
to indemnification by Chubb or Capital, as the case may be, against certain
liabilities, including liabilities under the 1933 Act, and any such agents,
underwriters, dealers or remarketing firms, or their affiliates may be customers
of, engage in transactions with or perform services for Chubb or Capital, as the
case may be, in the ordinary course of business.
If so indicated in the Prospectus Supplement, Chubb or Capital, as the case
may be, will authorize agents and underwriters to solicit offers by certain
institutions to purchase Debt Securities or Guaranteed Debt Securities from
Chubb or Capital, as the case may be, at the public offering price set forth in
the Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date stated in the Prospectus
Supplement. Such Contracts will be subject to only those conditions set forth in
the Prospectus Supplement. A commission indicated in the Prospectus Supplement
will be paid to underwriters and agents soliciting purchases of Debt Securities
or Guaranteed Debt Securities pursuant to Contracts accepted by Chubb or
Capital, as the case may be.
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EXPERTS
The consolidated financial statements of The Chubb Corporation incorporated
by reference in the Annual Report (Form 10-K) and the financial statement
schedules included therein of Chubb for the year ended December 31, 1997 have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report dated February 20, 1998, included or incorporated by reference therein,
and are incorporated herein by reference in reliance upon such reports given
upon the authority of such firm as experts in accounting and auditing.
Any financial statements and schedules hereafter incorporated by reference
in the registration statement of which this prospectus is a part that have been
audited and are the subject of a report by independent accountants will be
incorporated herein by reference in reliance upon such reports and upon the
authority of such firms as experts in accounting and auditing to the extent
covered by consents filed with the Commission.
LEGAL MATTERS
The validity of the Offered Securities offered hereby will be passed upon
for Chubb or Capital, as the case may be, by Davis Polk & Wardwell, New York,
New York. Davis Polk & Wardwell will rely upon Shanley & Fisher, P.C., with
respect to certain matters of New Jersey law.
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by
Reference........................... S-2
Cautionary Statements Regarding
Forward-Looking Statements.......... S-2
The Company........................... S-3
Use of Proceeds....................... S-3
Ratio of Consolidated Earnings to
Fixed Charges of Chubb.............. S-3
Description of Certain Terms of the
Securities.......................... S-3
Underwriting.......................... S-6
Experts............................... S-7
Validity of Securities................ S-7
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Issuers........................... 3
Ratio of Consolidated Earnings to
Fixed Charges of Chubb.............. 3
Use of Proceeds....................... 4
Description of the Indentures, the
Debt Securities and the Guaranteed
Debt Securities..................... 4
Terms Applicable to Both the Debt
Securities and the Guaranteed Debt
Securities.......................... 4
Description of the Capital Stock...... 9
Description of Warrants............... 14
Plan of Distribution.................. 16
Experts............................... 17
Legal Matters......................... 17
</TABLE>
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$400,000,000
THE CHUBB CORPORATION
$300,000,000
6.15% NOTES DUE 2005
$100,000,000
6.60% DEBENTURES DUE 2018
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(LOGO)
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GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SALOMON SMITH BARNEY
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