As filed with the Securities and Exchange Commission on June 4, 1996.
Registration No. 333-1909
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
AMENDMENT NO. 1 TO FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------
Equitable of Iowa Companies Iowa 42-1083593
Equitable of Iowa Companies Delaware 42-1456092
Capital Trust
(Exact name of the Registrants (State or other jurisdiction (I.R.S. Employer
as specified in their of incorporation or Identification
respective charters) organization) No.)
604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306-1635
(515) 245-6911
(Address, including zip code, and telephone number, including area code,
of each Registrant's principal executive offices)
--------
John A. Merriman, Esq.
General Counsel and Secretary
604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306-1635
(515) 245-6787
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each Registrant)
Copies to:
G. R. Neumann Lynn Soukup
Nyemaster, Goode, McLaughlin, Shaw, Pittman, Potts
Voigts, West, Hansell & O'Brien, P.C. & Trowbridge
1900 Hub Tower 2300 N Street, NW
Des Moines, Iowa 50309 Washington, D.C. 20037
(515) 283-3121 (202) 663-8000
Approximate date of commencement of proposed sale to the public: From
time to time after the Registration Statement becomes effective, as
determined by market conditions.
____________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box: [X]
2
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed
Proposed Maximum
Title of Each Maximum Aggregate
Class of Offering Offering Amount of
Securities to Amount to be Price Per Price Registration
be Registered Registered (1) Unit (3)(4) (3)(4) Fee (2)(3)
______________________________________________________________________________
<S> <C> <C> <C> <C>
Debt Securities of
Equitable of Iowa
Companies
Preferred Stock(5) of
Equitable of Iowa
Companies, without
par value
Common Stock(5)(6) of
Equitable of Iowa
Companies, without
par value
Preferred Securities
of Equitable of Iowa
Companies Capital
Trust
Guarantee(7) of
Preferred Securities
of Equitable of Iowa
Companies Capital
Trust by Equitable
of Iowa Companies
Warrants of Equitable
of Iowa Companies
______________________________________________________________________________
Total $300,000,000 100% $300,000,000 $94,828.25 (8)
==============================================================================
<FN>
(1) Such indeterminate number or amount of Debt Securities, Preferred Stock
and Common Stock of Equitable of Iowa Companies, Preferred Securities of
Equitable of Iowa Companies Capital Trust and Warrants of Equitable of
Iowa Companies as may from time to time be issued at indeterminate prices.
Debt Securities of Equitable of Iowa Companies may be issued and sold to
Equitable of Iowa Companies Capital Trust, in which event such Debt
Securities may later be distributed to the holders of Preferred Securities
of Equitable of Iowa Companies Capital Trust upon its dissolution and the
distribution of the assets thereof. The amount registered is in United
States dollars or the equivalent thereof in any other currency, currency
unit or units, or composite currency or currencies.
(2) Does not include the filing fee of $8,620.75 associated with certain
securities which has been previously paid, being carried forward
pursuant to Rule 429 under the Securities Act of 1933, as described in
the last paragraph of this cover page.
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(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate offering price of the Debt
Securities, Preferred Stock, Common Stock, Preferred Securities and
Warrants, and the exercise price of any Securities issuable upon
exercise of Warrants registered hereby will not exceed $300,000,000.
(4) Exclusive of accrued interest and distributions, if any.
(5) Also includes such indeterminate number of shares of Preferred Stock
and Common Stock as may be issued upon conversion of or exchange for any
Debt Securities or Preferred Stock that provide for conversion or exchange
into other securities. No separate consideration will be received for the
Preferred Stock or Common Stock issuable upon conversion of or in exchange
for Debt Securities or Preferred Stock.
(6) Includes Common Share Purchase Rights ("Rights"). The Rights are
associated with and trade with the Common Stock. The value, if any,
attributable to the Rights is reflected in the market price of the
Common Stock.
(7) Includes the rights of holders of the Preferred Securities under the
Trust Guarantee and back-up undertakings, consisting of obligations of
Equitable of Iowa Companies as set forth in the Declaration of Trust
(including the obligation to pay expenses of Equitable Trust), the
Indenture and any applicable supplemental indentures thereto, and the Debt
Securities issued to Equitable Trust, in each case as further described in
the Registration Statement. No separate consideration will be received for
the Guarantee or any back-up undertakings.
(8) All of this amount has been paid previously.
</TABLE>
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
4
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to Section 8(a), may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
contained herein constitutes a combined Prospectus that also relates to
$25,000,000 unsold principal amount of the debt securities previously
registered pursuant to Equitable of Iowa Companies Registration Statement
on Form S-3 (File No. 33-57343). This Registration Statement constitutes
Post-Effective Amendment No. 1 to Registration Statement on Form S-3 (File
No. 33-57343) pursuant to which the total amount of unsold debt securities
previously registered on Registration Statement on Form S-3 (File No. 33-
57343) may be offered and sold as Debt Securities, Preferred Stock, Common
Stock, Preferred Securities and Warrants, without limitation as to class of
securities, together with the securities registered hereunder, through the
use of the combined Prospectus included herein. In the event any such
previously registered debt securities are offered prior to the effective
date of this Registration Statement, they will not be included in any
Prospectus hereunder.
5
Subject to Completion, Dated June 4, 1996
[Legend on Left Hand Margin]
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
PROSPECTUS
$300,000,000
EQUITABLE OF IOWA COMPANIES
Debt Securities, Preferred Stock, Common Stock and Warrants
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST
Preferred Securities Guaranteed to the Extent Set Forth Herein
by Equitable of Iowa Companies
Equitable of Iowa Companies (the "Company") may from time to time offer,
together or separately, (i) its unsecured debt securities (the "Debt
Securities"), (ii) shares of its serial preferred stock, without par value
(the "Preferred Stock"), (iii) shares of its common stock, without par
value (the "Common Stock") and (iv)
warrants to purchase Debt Securities, Preferred Stock or Common Stock or any
combination thereof, as shall be designated by the Company at the time of the
offering (the "Warrants") in amounts, at prices and on terms to be determined
at the time of the offering.
Equitable of Iowa Companies Capital Trust, a statutory business trust formed
under the laws of the State of Delaware ("Equitable Trust"), may offer
preferred securities, representing undivided beneficial interests in the assets
of Equitable Trust ("Preferred Securities"). The payment of periodic cash
distributions ("Distributions") with respect to Preferred Securities out of
moneys held by Equitable Trust, and payments on liquidation, redemption or
otherwise with respect to such Preferred Securities, will be guaranteed to the
extent described herein (a "Trust Guarantee"). The Trust Guarantee, when taken
together with the back-up undertakings, consisting of obligations of the
Company as set forth in the Declaration of Trust of Equitable Trust (including
the obligation to pay expenses of Equitable Trust), the Indenture and any
applicable supplemental indentures thereto, and the Debt Securities issued to
Equitable Trust, provide a full and unconditional guarantee of the amounts due
on the Preferred Securities. See "Description of Preferred Securities of
Equitable Trust" and "Description of Trust Guarantee." The Company's
obligations under the Trust Guarantee will rank junior and subordinate in right
of payment to all other liabilities of the Company and pari passu with its
obligations under the senior most preferred or preference stock of the Company.
See "Description of Trust Guarantee - Status of Trust Guarantees." Debt
Securities may be issued and sold by the Company to Equitable Trust or a
trustee of Equitable Trust in connection with the investment of the proceeds
from the offering of Preferred Securities and Common Securities (as defined
herein). The Debt Securities purchased by Equitable Trust may be subsequently
distributed pro rata to holders of Preferred Securities and Common Securities
in connection with the dissolution of Equitable Trust, upon the occurrence of
2
certain events as may be described in an accompanying Prospectus Supplement.
The Debt Securities, Preferred Stock, Common Stock, Warrants and Preferred
Securities are collectively called the "Securities".
The Securities may be offered as separate series or issuances at an
aggregate initial public offering price not to exceed $300,000,000 or, if
applicable, the equivalent thereof in one or more foreign currencies,
currency units, composite currencies or in amounts determined by reference
to an index as shall be designated by the Company or Equitable Trust, in
amounts, at prices and on terms to be determined in light of market
conditions at the time of sale and set forth in the applicable Prospectus
Supplement.
Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered will be set forth in an accompanying
supplement to this Prospectus (the "Prospectus Supplement") which will
describe, without limitation and where applicable, (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, ranking
as senior or subordinated debt securities, denominations, maturity, any
interest rate (which may be fixed or variable) and time and method of
calculating payment of any interest, any premium, dates on which any
premium or any interest are payable, any terms for redemption, any terms
for sinking fund payments, any terms for conversion or exchange into other
securities, any right of the Company to defer payment of interest on the
Debt Securities, and the maximum length of such deferral period,
subordination terms, currency or currencies of denomination and payment, if
other than U.S. dollars, the purchase price, any listing on a securities
exchange and any other terms in connection with the offering and sale of
the Debt Securities in respect of which this Prospectus is delivered; (ii)
in the case of Preferred Stock, the specific designation, stated value and
liquidation preference per share and number of shares offered, any dividend
rate (including the method of calculating payment of dividends), place or
places where dividends on such Preferred Stock will be payable, dates on
which such dividends will be payable and dates from which such dividends
3
shall accrue, seniority, redemption, voting and other rights, any terms for any
conversion or exchange into other securities, the purchase price, any listing
on a securities exchange, and any other terms; (iii) in the case of Common
Stock, the number of shares of Common Stock, dividend information and the terms
of offering thereof; (iv) in the case of Warrants, the specific designation,
the number, the purchase price, the exercise price, any listing of the
Warrants or the underlying securities on a securities exchange and any other
terms in connection with the offering, sale and exercise of the Warrants; and
(v) in the case of Preferred Securities, the specific designation, number of
securities, liquidation preference per security, the purchase price, any
listing on a securities exchange, distribution rate (or method of calculation
thereof), dates on which distributions shall be payable and dates from which
distributions shall accrue, any voting rights, terms for any conversion or
exchange into other securities, any redemption, exchange or sinking fund
provisions, any other rights, preferences, privileges, limitations or
restrictions relating to the Preferred Securities and the terms upon which the
proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Debt Securities of the Company. The Debt Securities may be
issued in registered or bearer form, or both. If so specified in the
applicable Prospectus Supplement, Securities may be issued in whole or in part
in the form of one or more temporary or permanent global securities.
The Company's Common Stock is listed on the New York Stock Exchange under
the trading symbol "EIC." Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on such exchange, subject to official notice of
issuance.
The Securities may be sold by the Company or Equitable Trust directly, or
to or through underwriters or through dealers or agents. See "Plan of
Distribution." The names of any underwriters, dealers or agents involved
in the sale of the Securities in respect of which this Prospectus is being
4
delivered and any applicable fee, commission or discount arrangements with
them will be set forth in the applicable Prospectus Supplement. See "Plan
of Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
This Prospectus may not be used to consummate sales of
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 SECURITIES 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 _________, 1996.
5
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, any
accompanying Prospectus Supplement or the documents incorporated or deemed
incorporated by reference herein, and any information or representations
not contained herein or therein must not be relied upon as having been
authorized by the Company or Equitable Trust or by any agent, dealer or
underwriter. This Prospectus and any accompanying Prospectus Supplement do
not constitute an offer to sell or a solicitation of an offer to buy the
Securities in any circumstances in which such offer or solicitation is
unlawful. The delivery of this Prospectus or any Prospectus Supplement at
any time does not imply that the information herein or therein is correct
as of any time subsequent to the date of such information.
AVAILABLE INFORMATION
The Company 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"). Such
reports, proxy statements and other information filed by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices located at Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60601, and 13th Floor,
Seven World Trade Center, New York, New York 10048. Copies of such
reports, proxy statements and other information can be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Copies of such
6
reports, proxy statements and other information may also be inspected and
copied at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
The Company and Equitable Trust have filed with the Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended, with respect to the Securities. This Prospectus does not contain
all of the information set forth in the Registration Statement and the
exhibits thereto, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. Statements contained in this
Prospectus or in any Prospectus Supplement as to the contents of any
document are not necessarily complete and, in each instance, are qualified
in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the
Commission for a complete version of the provisions thereof.
No separate financial statements of Equitable Trust have been included or
incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the Preferred Securities
because (i) all of the voting securities of Equitable Trust will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) Equitable Trust has no independent operations but exists for the sole
purpose of issuing securities representing undivided beneficial interests in
its assets and investing the proceeds thereof in Debt Securities issued by the
Company, and (iii) Equitable's obligations described herein and in any
prospectus supplement, under the Declaration (including the obligation to pay
expenses of Equitable Trust), the Indenture and any supplemental indentures
thereto, the Debt Securities issued to Equitable Trust and the Trust Guarantee,
taken together, constitute a full and unconditional guarantee of payments due
on the Preferred Securities. See "Description of Preferred Securities of
Equitable Trust" and "Description of Trust Guarantees."
7
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act (File No. 0-8590) are incorporated by reference into
this Prospectus and made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1995.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996.
3. The Company Report on Form 8-K filed on May 3, 1996.
4. The descriptions of the Company's Common Stock, without par value,
and its Shareholder Rights Agreement, as amended, contained in separate Form
8-A Registration Statements filed with the Commission on August 27, 1993
pursuant to Section 12 of the Exchange Act and any amendment or report filed
for the purpose of updating those descriptions.
5. All other documents 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 and prior to the termination of the offering of the
Securities shall be deemed to be incorporated herein by reference and to be
a part hereof from the date of filing of such documents.
8
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein or in the accompanying Prospectus
Supplement or contained herein or in the accompanying Prospectus Supplement
shall be deemed to be supplemented, modified or superseded for purposes of
this Prospectus or such Prospectus Supplement to the extent that a
statement contained herein or therein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
or therein supplements, modifies or supersedes such statement. Any such
statement so supplemented, modified or superseded shall not be deemed,
except as so supplemented, modified or superseded, to constitute a part of
this Prospectus or any Prospectus Supplement.
The Company undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any or all of the foregoing documents
incorporated herein by reference. Such requests should be directed to
Equitable of Iowa Companies, 604 Locust Street, P.O. Box 1635, Des Moines,
Iowa 50306-1635, Attention: Secretary, telephone: (515) 245-6799.
THE COMPANY
Equitable of Iowa Companies, a Des Moines, Iowa based insurance holding
company, is a provider of individual annuity and life insurance products,
targeting middle-income individuals and small businesses throughout the
United States. Through its primary insurance subsidiaries, Equitable Life
Insurance Company of Iowa ("Equitable Life") and USG Annuity & Life Company
("USG"), the Company offers its products in 49 states and the District of
Columbia. Equitable Life was founded in 1867 and is the oldest life
9
insurance company west of the Mississippi River. The Company began
actively marketing annuity products in 1988, principally through USG. The
Company has had a rapid rate of growth in assets over the past few years,
primarily as a result of increased demand for its annuity products.
The Company believes that, because of its diversified portfolio of
annuity and life insurance products, it is well-positioned to take
advantage of certain demographic and economic trends that are expected to
increase demand for these types of products. These trends include: an
aging "baby boomer" segment of the population that is increasingly
concerned about retirement and estate planning; an increase in the number
of families that are concerned about maintaining their standard of living
at retirement; and lower public confidence that government and employer-
provided benefits at retirement will be sufficient.
The Company offers, through its insurance subsidiaries, a portfolio of
life insurance and annuity products designed to meet the needs of its
customers for supplemental retirement income, estate planning and
protection from unexpected death. The Company requires that each of its
products be priced to earn an adequate margin between the interest credited
to the policyholder and the return earned by the Company on its investments.
Annuities. Annuities are long-term savings vehicles that are particularly
attractive to customers over the age of 50 who are planning for retirement and
seeking secure, tax-deferred savings products. The individual annuity business
is a growing segment of the savings and retirement market, and among the
fastest growing segments of the life insurance industry. Annuity products
currently enjoy an advantage over certain other retirement savings products,
because the payment of federal income taxes on interest credited on annuity
policies is deferred during the investment accumulation period.
10
The Company offers a variety of annuity products. Single premium
deferred annuities ("SPDAs"), in general, are savings vehicles in which the
policyholder, or annuitant, makes a single premium payment to an insurance
company. The insurance company credits the account of the annuitant with
earnings at an interest rate (the "crediting rate"), which is declared by
the insurance company from time to time and may exceed, but may not be
lower than, any contractually guaranteed minimum crediting rate. The
Company also offers flexible premium deferred annuities ("FPDAs"). FPDAs
are deferred annuities in which the policyholder may elect to make more
than one premium payment.
The Company's annuity products incorporate a number of features designed
to reduce the early withdrawal or surrender of the policies and to partially
compensate the Company for its costs if policies are withdrawn early. Under
the terms of the Company's policies, the policyholder is permitted to withdraw
all or part of the premium paid plus the amount credited to his or her account,
less a surrender charge for withdrawals. Certain of the Company's deferred
annuity contracts provide for penalty-free partial withdrawals, typically up
to 10% of the accumulation value annually. Surrender charge periods on
annuity policies currently typically range from five years to the term of the
policy, with the majority of such policies currently being issued with a
surrender charge period of seven years or more. The initial surrender charge
on annuity policies generally ranges from 5% to 20% of the premium and
decreases over the surrender charge period. In 1992, the Company introduced
a number of annuity products in which a "market value adjustment" is applied
to adjust the applicable surrender charge during the surrender charge period.
More than half of the Company's new annuity sales currently incorporate a
market value adjustment. The withdrawal rates of policyholder funds may be
affected to some degree, however, by changes in interest rates.
11
In the fourth quarter of 1994, the Company introduced a variable annuity
product. A variable annuity involves maintaining the policyholder premiums
in a separate account. Policyholders have discretion to allocate their
premiums among several available fund options. The cash surrender value of
a variable annuity policy depends on the performance of these underlying
funds, which the policyholder may reallocate from time to time. Similarly,
during the variable annuity's payout period, the payments distributed to
the annuitant fluctuate with the performance of the underlying funds
selected by the annuitant. Variable annuities provide the Company with fee-
based revenue in the form of management and administration fees charged to
the policyholder's account.
Life Insurance Products. The Company offers a variety of traditional,
universal and term life insurance products. Traditional life insurance
policies incorporate a fixed premium schedule and combine guaranteed insurance
protection with a savings feature. Traditional life polices cost more than
comparable term life insurance coverage when the policyholder is younger, but
less as the policyholder grows older. The policyholder may borrow against the
accumulated cash value, with policy loans typically available at a rate of
interest lower than that available from other lending sources. The
policyholder may also choose to surrender the policy at any time and receive
the accumulated cash value, less any applicable withdrawal charge, rather than
continuing the insurance protection. The Company currently offers fixed
premium current interest and other traditional life insurance products, and its
insurance in force also includes participating policies.
Universal life insurance products provide whole life insurance and
adjustable rates of return related to current interest rates.
Policyholders may vary the frequency and size of their premium payments,
although policy benefits may also fluctuate according to such payments.
12
Term life insurance policies provide insurance protection for unexpected
death during the period in which the policy is in force, generally one, five,
ten or twenty years. These products are designed to meet the customers'
shorter-term needs because the policies do not have an investment feature and
no cash value is built up. Term life premiums are accordingly lower than
premiums of certain of the Company's other products. The Company's current
term life products include annually renewable term and five-year, ten-year and
fifteen-year renewable and convertible term policies.
In order to discourage early policy withdrawals and to partially compensate
the Company for its costs if policies are terminated, all of the Company's
universal life and interest-sensitive policies issued since 1986 have
incorporated withdrawal charges or similar provisions for periods ranging from
14 to 19 years.
Distribution. The Company maintains a diverse distribution network that
seeks to provide high quality service to its customers, including the
Company's policyholders, agents, brokers and other producers, while
controlling costs. The Company markets its products through a variable
cost distribution network of over 53,000 licensed independent brokerage and
career agents as well as through financial institutions, such as banks and
thrifts. The Company competes with other life insurance companies and
distributors of retirement savings products.
As a holding company, the Company's principal source of liquidity to meet
its obligations (including any dividends, interest, principal and redemption
payments with respect to the Securities) is distributions from its
subsidiaries. The rights of the Company to participate in any distribution
of earnings or assets of any of its subsidiaries (and thus the ability of the
Company to use earnings and assets of its subsidiaries to pay its obligations
under the Securities) are subject to state insurance regulatory and other
13
statutory restrictions, including limitations on the amount of dividends that
may be paid by the Company's insurance subsidiaries in any year without the
prior approval of the state regulatory authorities, as more fully described
in the notes to the Company's financial statements. Any such distributions
are also subject to the prior claims of creditors of that subsidiary,
including claims for policy benefits, debt obligations and other liabilities
incurred in the ordinary course of business, except to the extent that the
claims, if any, of the Company as a creditor of such subsidiary may be
recognized.
The mailing address of the principal executive office of the Company is
604 Locust Street, P.O. Box 1635, Des Moines, Iowa 50306-1635 and the
telephone number is 515-245-6911.
EQUITABLE TRUST
Equitable Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust (the "Declaration") executed by the
Company as sponsor for such trust (the "Sponsor"), and the Equitable
Trustees (as defined herein) of such trust and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware
on March 19, 1996. Equitable Trust exists for the exclusive purposes of
(i) issuing and selling the Preferred Securities and common securities
representing undivided beneficial interests in the assets of Equitable
Trust (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities"), (ii) using the gross proceeds from the sale of the
Trust Securities to acquire the Debt Securities and (iii) engaging in only
those other activities necessary, appropriate, convenient or incidental
thereto. All of the Common Securities will be directly or indirectly owned
by the Company. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities, except that,
14
if an event of default under the Declaration has occurred and is continuing,
the rights of the holders of the Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Preferred Securities. The
Company will directly or indirectly acquire Common Securities, in an aggregate
liquidation amount equal to at least 3% of the total capital of Equitable Trust.
Equitable Trust has a term of approximately 25 years but may terminate
earlier, as provided in the Declaration. Equitable Trust's business and
affairs will be conducted by the trustees (the "Equitable Trustees")
appointed by the Company as the direct or indirect holder of all of the
Common Securities. The holder of the Common Securities will be entitled to
appoint, remove or replace any of, or increase or reduce the number of, the
Equitable Trustees of Equitable Trust. The duties and obligations of the
Equitable Trustees shall be governed by the Declaration. Equitable Trust
will have three Equitable Trustees (the "Regular Trustees") who are
employees or officers of or who are affiliated with the Company. One
Equitable Trustee of Equitable Trust will be a financial institution that
is not affiliated with the Company and has a minimum amount of combined
capital and surplus of not less than $50,000,000, which shall act as
property trustee and as indenture trustee for the purposes of compliance
with the provisions of Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), pursuant to the terms set forth in the applicable
Prospectus Supplement (the "Property Trustee"). In addition, unless the
Property Trustee maintains a principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law, one
Equitable Trustee of Equitable Trust will be an entity having a principal
place of business in, or a natural person resident of, the State of
Delaware (the "Delaware Trustee"). The Company will pay all fees and
expenses related to Equitable Trust and the offering of the Trust Securities.
15
The Property Trustee for Equitable Trust is the First National Bank
of Chicago and its corporate trust office is at One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126 Attention: Corporate Trust
Services Division. The Delaware Trustee for Equitable Trust is First
Chicago Delaware, Inc. and its address in the State of Delaware is c/o FCC
National Bank, 300 King Street, Wilmington, Delaware 19801. The Delaware
Trustee is an affiliate of the Property Trustee. The Property Trustee also
serves as Trustee under the Indenture of the Company dated as of January
17, 1995, pursuant to which the Company has issued $100,000,000 of its 8 1/2%
Notes due 2005 and will issue any Debt Securities to Equitable Trust in
connection with the issuance of Preferred Securities. The address for
Equitable Trust is c/o Equitable of Iowa Companies, the Sponsor of
Equitable Trust, at the Company's corporate headquarters located at 604
Locust Street, Des Moines, Iowa 50309-3705, telephone 515-245-6911.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds received by the Company from the sale of any Debt Securities,
Common Stock, Preferred Stock or Warrants offered hereby are expected to be
used for general corporate purposes. The proceeds from the sale of
Preferred Securities by Equitable Trust will be invested in the Debt
Securities of the Company. Except as may otherwise be described in the
Prospectus Supplement relating to such Preferred Securities, the Company
expects to use the net proceeds from the sale of such Debt Securities to
Equitable Trust for general corporate purposes. Until the net proceeds are
used for these purposes, the Company may deposit them in interest-bearing
accounts or invest them in short-term marketable securities. The specific
allocations, if any, of the proceeds of any of the Securities will be
described in the Prospectus Supplement relating thereto.
16
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges for the Company and its subsidiaries on a consolidated basis for
each of the years ended December 31, 1991 through 1995. The ratio of
consolidated earnings to fixed charges is calculated by dividing
consolidated earnings (income from continuing operations before income
taxes plus fixed charges) by fixed charges (interest expense on debt and a
portion of rental expense).
<TABLE>
<CAPTION>
Year Ended
December 31
________________________________________
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
Ratio of earnings to fixed charges 10.0 17.8 12.3 8.0 4.9
</TABLE>
17
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by any Prospectus Supplement and the extent, if any, to
which such general provisions may apply or do not apply to such Debt
Securities, will be described in the Prospectus Supplement relating to such
Debt Securities.
Unless otherwise indicated in an accompanying Prospectus Supplement, the Debt
Securities will be issued in one or more series under an Indenture dated as of
January 17, 1995 (as amended or supplemented from time to time, the "Indenture")
between the Company and The First National Bank of Chicago, as Trustee (together
with any successor thereto, the "Trustee"). The following summaries of certain
provisions of the Indenture and the Debt Securities do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all provisions of the Indenture, a copy of which is incorporated by
reference as an exhibit to the Registration Statement of which this Prospectus
is a part. Certain terms defined in the Indenture are capitalized in this
Prospectus. The parenthetical section references below are to the Indenture.
General
The Debt Securities will be unsecured obligations of the Company. The
Indenture does not limit the aggregate principal amount of Debt Securities
which may be issued thereunder. The Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more
series, with different maturity dates, interest rates and other terms, and
may be denominated and payable in United States dollars or in foreign
18
currencies or units based on or relating to foreign currencies, in each
case as authorized from time to time by the Company. Unless otherwise
indicated in the applicable Prospectus Supplement, the Indenture also
permits the Company to increase the principal amount of any series of Debt
Securities previously issued and to issue additional securities of such
series in such increased principal amount. (Section 2.3)
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus and which will set forth the following terms
relating to the Debt Securities, to the extent applicable thereto: (1) the
specific designation of the Debt Securities and authorized denominations
thereof; (2) any limit on the aggregate principal amount of the Debt
Securities; (3) the percentage of the principal amount representing the
price for which the Debt Securities will be issued; (4) the date or dates,
or method of determining the same, on which the principal of and premium,
if any, on the Debt Securities will mature; (5) the rate or rates per annum
(which may be fixed or variable) at which the Debt Securities will bear
interest, if any, or the method by which such rate or rates will be determined,
the date or dates from which any such interest will accrue or the method by
which such date or dates will be determined, and the date or dates on which
any such interest will be payable and (in the case of Debt Securities in
registered form) the Record Dates for any interest payable on the Debt
Securities or the method by which such dates will be determined; (6) any
index used to determine the amount of principal, premium or interest payable
on the Debt Securities; (7) any subordination of the Debt Securities to other
indebtedness of the Company (including to any other series of Debt Securities)
and the right of the Company, if any, to defer payment of interest on
Debt Securities and the maximum length of any such deferral period; (8) any
mandatory or optional redemption, repayment or sinking fund or analogous
provisions, including the period or periods within or the date upon which, the
price or prices at which, the currency or units based on or relating to foreign
currencies in which and the terms and conditions upon which the Debt Securities
may be redeemed or purchased, in whole or in part, at the option of the
19
Company, at the option of the Holder thereof or otherwise; (9) whether the Debt
Securities will be issuable in registered form or bearer form or both, and, if
issuable in bearer form, the restrictions as to the offer, sale, delivery,
transfer and exchange of the Debt Securities in bearer form or the payment of
interest thereon and the terms of exchanges between registered and bearer form;
(10) whether the Debt Securities will be issuable in whole or in part in the
form of one or more temporary or permanent Registered Global Securities and, if
so, the identity of the Depositary for such Registered Global Securities and
the terms and conditions, if any, upon which such Registered Global Security or
Securities may be exchanged in whole or in part for other definitive
securities; (11) each office or agency where the principal of and premium and
interest, if any, on the Debt Securities will be payable, and each office or
agency where the Debt Securities may be presented for registration of transfer
or exchange and where notices may be served upon the Company; (12) if other
than in United States dollars, the foreign currency or the units based on or
relating to foreign currencies in which the Debt Securities are denominated
and/or in which the payment of the principal of and premium and interest, if
any, on the Debt Securities will or may be payable; (13) any right of the
Company to require a Holder to accept, or of a Holder to elect to receive,
payment of the Debt Securities in a currency other than that in which they are
denominated or stated to be payable; (14) if other than the stated principal
amount thereof, the portion of the principal amount of the Debt Securities
payable upon declaration of acceleration of the maturity of the Debt Securities
and/or the method by which such amount shall be determined; (15) any variation
to the provisions of the Indenture with respect to the satisfaction and
discharge of the Company's indebtedness and obligations, or termination of
certain of its covenants and Events of Default under the Indenture, with
respect to the Debt Securities by deposit of money or Government Obligations;
(16) any additions to or deletions from the Events of Default or covenants of
the Company contained in the Indenture with respect to the Debt Securities;
(17) any trustee (other than The First National Bank of Chicago), depositary,
currency determination agent, authenticating or paying agent, transfer agent,
20
registrar or other agent with respect to the Debt Securities; (18) the person
to whom any interest on any such Debt Security shall be payable if other than
the person in whose name such Debt Security is registered on the applicable
Record Date; (19) any United States federal income tax considerations
applicable to holders of the Debt Securities; (20) any terms for conversion or
exchange of the Debt Securities into other securities of the Company; and (21)
any other terms of the Debt Securities which shall not adversely affect the
interests of any Holders of any Debt Securities then outstanding. (Section 2.3)
Debt Securities may be issued bearing no interest or interest at a rate
below the prevailing market rate at the time of issuance and may be offered
and sold at a substantial discount below their stated principal amount.
Certain United States federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities or to
other Debt Securities offered and sold at par which are treated as having
been issued at a discount for United States federal income tax purposes
will be described in the Prospectus Supplement relating thereto. Certain
United States federal income tax considerations and other information
applicable to any Debt Securities denominated in or having principal, any
premium or any interest payable in foreign currencies or in units based on
or relating to foreign currencies will be described in the Prospectus
Supplement relating thereto.
Unless the Prospectus Supplement relating thereto specifies otherwise,
Debt Securities denominated in U.S. dollars will be issued only in
denominations of $1,000 or any integral multiple thereof. (Section 2.7)
The Prospectus Supplement relating to a series of Debt Securities
denominated in a foreign currency or currency unit will specify the
denominations thereof.
21
Unless the Prospectus Supplement relating thereto specifies otherwise, the
Debt Securities will be issued only in fully registered form without coupons.
Debt Securities of a series may be issuable in whole or in part in the form of
one or more Registered Global Securities, as described below under "Registered
Global Securities." In such case, one or more Registered Global Securities
will be issued in a denomination or aggregate denominations equal to the
aggregate principal amount of Outstanding Securities of the series to be
represented by such Registered Global Security or Securities. (Section 2.4)
The Debt Securities will be unsecured and, unless otherwise described in the
Prospectus Supplement relating thereto, will rank on a parity with all other
unsecured and unsubordinated indebtedness of the Company. (Section 2.3)
Except as described below under "Description of Debt Securities -- Covenants --
Limitation on Liens on Stock of Restricted Subsidiaries", there is no
restriction in the Indenture against the Company or subsidiaries of the Company
incurring secured or unsecured indebtedness or issuing secured or unsecured
securities. The Company has from time to time entered into, and will in the
future enter into, credit agreements to fund its operations. Such credit
agreements may be secured by the assets of the Company, secured by the assets
of the Company's subsidiaries or guaranteed by the Company's subsidiaries. To
the extent that such credit agreements are so secured or guaranteed, the
lenders under such credit agreements will have priority over the Holders of the
Debt Securities with respect to the assets of the Company or its subsidiaries.
Except as described below under "Description of Debt Securities --
Covenants", the Indenture does not contain covenants or other provisions
designed to afford Holders of Debt Securities protection in the event of a
change in capital structure, reorganization, dividend or distribution in
respect of Capital Stock, change in credit rating, incurrence of
indebtedness or similar obligations that would have priority over or be on
22
a parity with the Debt Securities or other similar occurrence. Holders of
the Debt Securities will not have the right to accelerate the Debt Securities
in the event of material adverse changes in the financial condition or results
of operations of the Company or of its subsidiaries or other events which may
adversely affect the creditworthiness of the Company. Therefore, the financial
condition and results of operations of the Company, and not the covenants and
other provisions of the Indenture, should be the primary factor in an
evaluation of whether the Company will be able to satisfy its obligations under
the Debt Securities.
Exchange and Transfer
At the option of the Holder upon request confirmed in writing, and subject to
the terms of the Indenture, Debt Securities of any series (other than Regis-
tered Global Securities) will be exchangeable into an equal aggregate principal
amount of Debt Securities of the same series (with the same interest rate,
maturity date and other terms) of different authorized denominations except
that Debt Securities of any series issued in registered form may not be ex-
changed for Debt Securities of the same series issued in bearer form unless the
applicable Prospectus Supplement shall provide to the contrary. (Section 2.8)
Unless otherwise provided in the applicable Prospectus Supplement, the Debt
Securities may be presented for exchange, and registered Debt Securities
(other than a Registered Global Security) may be presented for registration
of transfer, at the offices or agency of the Security Registrar in New York,
New York. No service charge will be made for any transfer or exchange, but
the Company may require payment of any taxes or other governmental charges
due in connection therewith, subject to any applicable limitations or
conditions contained in the Indenture. Such transfer or exchange will be
effected by the Security Registrar upon its being satisfied with the
documents of title and the identity of the person making the request. The
23
Company has appointed the Trustee as Security Registrar. Debt Securities in
bearer form and the related coupons, if any, will be transferable by delivery.
(Sections 2.8 and 3.2)
Payment
Unless otherwise provided in the applicable Prospectus Supplement,
payment of principal of and premium, if any, on the Debt Securities will be
made at the office of the Trustee in New York, New York. Unless otherwise
provided in the applicable Prospectus Supplement, payment of any
installment of interest, if any, on a Debt Security will be made at the
office or agency of the Trustee in New York, New York, except that, at the
option of the Company, payment of any interest on Debt Securities in
registered form may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer to an account maintained by the Person
entitled thereto as specified in the Security Register. (Sections 3.1 and
3.2) Unless otherwise provided in the applicable Prospectus Supplement,
payment of any interest due on Debt Securities in registered form will be
made to the Persons in whose name such Debt Securities are registered at
the close of business on the Record Date for such interest payments;
provided, however, that any interest that is payable at maturity will be
payable to the person to whom principal payable at maturity shall be
payable. (Section 2.7)
Principal and premium and interest, if any, shall be considered paid on
the due date if on such date the Trustee or the paying agent holds money
sufficient to pay all such amounts then due and the Trustee or the paying
agent, as the case may be, is not prohibited under the terms of the
Indenture from paying such money to the Holders of the Debt Securities on
that date. (Section 3.1)
24
Registered Global Securities
The registered Debt Securities of a particular series may be issued in
whole or in part in the form of one or more Registered Global Securities,
which will be deposited with or on behalf of a depositary located in the
United States (the "Depositary") that will be identified in the Prospectus
Supplement relating to such series, and registered in the name of the
Depositary or its nominee. (Section 2.4) Unless and until exchanged, in
whole or in part, for other Debt Securities of such series in definitive
form, a Registered Global Security may not be transferred except as a whole
by the Depositary for such Registered Global Security to a nominee of such
Depositary, by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor of such Depositary or a nominee of such successor, and except in
the circumstances described in the applicable Prospectus Supplement.
(Section 2.8)
The specific terms of the depositary arrangement with respect to any portion
of a particular series of Debt Securities to be represented by a Registered
Global Security will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
apply to all depositary arrangements.
Upon the issuance of a Registered Global Security, the Depositary therefor
or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Debt Securities represented
by such Registered Global Security to the accounts of such persons having
accounts with such Depositary ("participants") as shall be designated by the
dealers, underwriters or agents participating in the distribution of such
Debt Securities or by the Company if such Debt Securities are offered and
25
sold directly by the Company. Ownership of beneficial interests in a
Registered Global Security will be limited to participants or persons that
may hold interests through participants; however, the Company will have no
obligations to participants or any persons that hold interests through
participants. Ownership of beneficial interests in a Registered Global
Security will be shown on, and the transfer of such beneficial interests will
be effected only through, records maintained by the Depositary therefor or
its nominee (with respect to interests of participants) or by participants or
persons that hold through participants (with respect to interests of persons
other than participants). The laws of some states require certain purchasers
of securities to take physical delivery thereof in definitive form. The
depositary arrangements described above and such laws may impair the ability
to own or transfer beneficial interests in a Registered Global Security.
So long as the Depositary for a Registered Global Security, or its
nominee, is the registered owner thereof, such Depositary or such nominee,
as the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Registered Global Security for all purposes
under the Indenture. Unless otherwise specified in the applicable
Prospectus Supplement and except as provided below, owners of beneficial
interests in a Registered Global Security will not be entitled to have Debt
Securities of the series represented by such Registered Global Security
registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in definitive form and
will not be considered the owners or Holders thereof for any purposes under
the Indenture. (Section 7.3) Accordingly, each person owning a beneficial
interest in such Registered 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 Indenture. The Depositary may grant
proxies and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
which a Holder is entitled to give or take under the Indenture. The Company
26
understands that, under existing industry practices, if the Company requests
any action of Holders or if any owner of a beneficial interest in such
Registered Global Security desires to give any notice or take any action which
a Holder is entitled to give or take under the Indenture, the Depositary would
authorize the participants to give such notice or take such action, and such
participants would authorize beneficial owners owning through such participants
to give such notice or take such action or would otherwise act upon the
instructions of beneficial owners owning through them.
Principal of and premium and interest payments, if any, on Debt Securities
represented by a Registered Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or nominee, as the
case may be, as the registered owner of such Registered Global Security. The
Company expects that the Depositary for a Registered Global Security or its
nominee, upon receipt of any payment of principal or premium or interest, if
any, in respect thereof, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amounts of such Registered Global Security as shown on the
records of such Depositary. The Company also expects that payments by
participants to owners of beneficial interests in such Registered Global
Security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name", and will be the
responsibility of such participants. Neither the Company, the Trustee nor
any paying agent or Security Registrar for Debt Securities of the series
represented by such Registered Global Security will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial interests in such Registered Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests. (Section 7.3)
27
Unless otherwise specified in the applicable Prospectus Supplement, if the
Depositary for a Registered Global Security representing Debt Securities or a
particular series of Debt Securities is at any time unwilling or unable to
continue as Depositary or ceases to be a clearing agency registered under the
Exchange Act and any other applicable statute or regulation and a successor
Depositary is not appointed by the Company within ninety (90) days, the
Company will issue Debt Securities of such series in definitive form in
exchange for all of the Registered Global Securities representing Debt
Securities of such series. In addition, the Company may at any time and in
its sole discretion determine to no longer have the Debt Securities of a
particular series represented by one or more Registered Global Securities
and, in such event, will issue Debt Securities of such series in definitive
form in exchange for all of the Registered Global Securities representing
Debt Securities of such series. (Section 2.8)
Within seven days after the occurrence of an Event of Default concerning
nonpayment of interest, principal or any sinking fund or analogous payment
with respect to any series of Debt Securities that is, in whole or in part,
represented by a Registered Global Security, the Company will execute, and
the Trustee will authenticate and deliver, Debt Securities of such series
in definitive registered form, in any authorized denominations and in an
aggregate principal amount equal to the principal amount of the Registered
Global Security in exchange for such Registered Global Security. (Section 2.8)
Debt Securities in definitive registered form issued in exchange for a
Registered Global Security shall be registered in such names and in such
authorized denominations as the Depositary for such Registered Global Security,
pursuant to instructions from the participants or persons that hold interests
through such participants, shall instruct the Trustee. The Trustee will
deliver Debt Securities in definitive registered form to or as directed by the
persons in whose names such Debt Securities are so registered. (Section 2.8)
28
Covenants
General. Unless otherwise specified in the applicable Prospectus
Supplement, the Indenture requires the Company to covenant to the following
with respect to each series of Debt Securities: (i) to duly and punctually
pay the principal of and premium and interest, if any, on such series of
Debt Securities (together with any additional amounts payable pursuant to
the terms thereof) and comply with all other terms, agreements and
conditions contained therein or made in the Indenture for the benefit of
the Debt Securities of such series; (ii) to maintain an office or agency
where Debt Securities of such series may be presented, surrendered for
payment, transferred or exchanged and where notices to the Company may be
served; (iii) if the Company shall act as its own paying agent for any
series of Debt Securities, to segregate and hold in trust for the benefit
of the persons entitled thereto a sum sufficient to pay the principal of
and premium or interest, if any, so becoming due; (iv) to appoint a
successor trustee whenever necessary to avoid or fill a vacancy in the
office of trustee, and (v) to preserve its corporate existence (Article 3).
The Indenture also requires the Company to deliver to the Trustee, within
120 days after the end of each fiscal year, a written statement as to
whether, to the best knowledge of the officer signing the statement, the
Company is in compliance with the terms of the Indenture and, if not, the
nature and status of such non-compliance. (Section 4.3)
Limitation on Liens on Stock of Restricted Subsidiaries. Unless otherwise
specified in the applicable Prospectus Supplement, the Company will not, nor
will it permit any Restricted Subsidiary to, issue, assume or guarantee any
indebtedness for borrowed money (hereinafter referred to as "Debt") secured
by a security interest, pledge, lien or other encumbrance upon any shares of
Capital Stock of any Restricted Subsidiary without effectively providing that
the Debt Securities (together with, if the Company shall so determine, any
29
other indebtedness of or guarantee by the Company or any Restricted
Subsidiary ranking senior to or equally with the Debt Securities and then
existing or thereafter created) shall be secured equally and ratably with
such Debt. (Section 3.6).
For purposes of the Indenture, "Restricted Subsidiary" means each of
Equitable Life and USG, in each case, so long as it remains a subsidiary of
the Company, as well as any subsidiary of the Company that is a successor
to all or a principal part of the business of any such subsidiary and
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock. (Section 1.1). The Restricted
Subsidiaries accounted for substantially all of the consolidated revenues
of the Company during the year ended December 31, 1995 and the consolidated
assets of the Company at December 31, 1995.
Limitation on Issuance or Disposition of Stock of Restricted Subsidiaries.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company will not, nor will it permit any Restricted Subsidiary to, issue,
sell, assign, transfer or otherwise dispose of, directly or indirectly, any
Capital Stock (other than nonvoting preferred stock) of any Restricted
Subsidiary, except for (i) the purpose of qualifying directors; (ii) sales
or other dispositions to the Company or one or more Restricted Subsidiaries;
(iii) the disposition of all or any part of the Capital Stock of any
Restricted Subsidiary for consideration which is at least equal to the fair
value of such Capital Stock as determined by the Company's Board of Directors
(acting in good faith); or (iv) an issuance, sale, assignment, transfer or
other disposition required to comply with an order of a court or regulatory
authority of competent jurisdiction, other than an order issued at the
request of the Company or any Restricted Subsidiary. (Section 3.7)
30
Consolidation, Merger and Transfer of Assets. Unless otherwise specified in
the applicable Prospectus Supplement, the Company has agreed that it will not
consolidate or merge with or into, or transfer, sell, convey or lease its
properties or assets as, or substantially as, an entirety unless (i) either
the Company is the continuing entity or the successor (if other than the
Company) is a domestic corporation or other domestic entity which expressly
assumes the Company's obligations for each series of Debt Securities and
under the Indenture, (ii) immediately after giving effect to such transaction,
no Event of Default, and no event that, after notice or lapse of time, or both,
would become an Event of Default, shall have occurred and be continuing, and
(iii) the Company delivers to the Trustee an officer's certificate and opinion
of counsel stating that such consolidation, merger, transfer, sale, conveyance
or lease complies with the Indenture. (Article 9)
Events of Default
The occurrence of any of the following events with respect to the Debt
Securities of any series will, unless otherwise specified in the applicable
Prospectus Supplement, constitute an "Event of Default" with respect to the
Debt Securities of such series: (a) default for thirty (30) days in the
payment of any installment of interest on any of the Debt Securities of such
series; (b) default in the payment of any of the principal of or the premium,
if any, on any of the Debt Securities of such series when due, whether at
maturity, upon redemption, by declaration of acceleration or otherwise; (c)
default in the deposit when due of any sinking fund payment or analogous
obligation in respect of any of the Debt Securities of such series; (d)
default for sixty (60) days by the Company in the observance or performance
of any other covenant or agreement contained in the Debt Securities of such
series or the Indenture (other than a covenant or agreement default which is
specifically designated as having a different time period) for the benefit of
the Debt Securities of such
31
series after written notice thereof as provided in the Indenture; (e) (i) an
event of default occurs under any instrument (including the Indenture) under
which there is at the time outstanding, or by which there may be secured or
evidenced, any indebtedness of the Company or any of its Restricted
Subsidiaries for money borrowed by the Company or any of its Restricted
Subsidiaries (other than non-recourse indebtedness) which results in
acceleration or nonpayment at maturity (after giving effect to any applicable
grace period) of such indebtedness in an aggregate amount exceeding
$15,000,000; or any such indebtedness exceeding $15,000,000 shall otherwise
be declared to be due and payable, or required to be prepaid (other than by a
regularly scheduled prepayment or exercise of an optional prepayment right),
prior to the stated maturity thereof; or any failure by the Company or any
Restricted Subsidiary to make any payment under a guarantee in respect of any
indebtedness (except up to $26,311,000 aggregate principal amount of 8.70%
Guaranteed Notes issued by Walnut Mall Limited Partnership, due August 19, 1996
and any accrued interest or premium with respect thereto, which indebtedness
is more fully described in the notes to the Company's financial statements),
in each case in an amount of at least $15,000,000, on the date such payment is
due (or within any grace period specified in the agreement or other instrument
governing such indebtedness); in which case the Company shall immediately give
notice to the Trustee of such acceleration or non-payment, and (ii) there shall
have been a failure to cure such default or to pay or discharge such defaulted
indebtedness within ten (10) days after written notice thereof as provided in
the Indenture; (f) any final non-appealable judgment or order for the payment
of money in excess of $15,000,000 is rendered against the Company or any
Restricted Subsidiary, such judgment or order is not satisfied by payment or
bonded and either enforcement proceedings have been commenced by the judgment
creditor or there has been a period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not have been in effect; provided, however, that a judgment
or order fully covered by insurance (or a judgment or order for the payment of
money covered by insurance to the extent of all payments in excess of
32
$15,000,000), which coverage has not been disputed by the insurer, shall not be
considered a default or an Event of Default; or (g) certain events of bank-
ruptcy, insolvency or reorganization relating to the Company. (Section 5.1)
Different or additional Events of Default may be prescribed for the benefit
of the Holders of a particular series of Debt Securities and will be
described in the Prospectus Supplement relating thereto. (Sections 2.3 and
5.1) No Event of Default with respect to a particular series of Debt
Securities issued under the Indenture will necessarily constitute an Event of
Default with respect to any other series of Debt Securities issued thereunder.
If an Event of Default shall have occurred and be continuing with respect
to any series of the Debt Securities unless the principal of all of the Debt
Securities of such series shall have already become due and payable, either
the Trustee or the Holders of not less than 25% in aggregate principal amount
of the Debt Securities of such series then Outstanding may declare the
principal of all Debt Securities of such series then Outstanding and the
interest, if any, accrued thereon to be due and payable immediately. If an
Event of Default due to certain events of bankruptcy, insolvency or
reorganization of the Company shall have occurred and be continuing, the
principal and interest on all the Debt Securities then Outstanding shall
thereby become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders of Debt Securities. Upon
certain conditions, any such declaration of acceleration with respect to Debt
Securities of any series may be rescinded and annulled if all Events of
Default, other than the nonpayment of accelerated principal and premium, if
any, with respect to the Debt Securities of such series shall have been cured,
waived or otherwise remedied as provided in the Indenture by the Holders of a
majority in aggregate principal amount of the Debt Securities of such series
then Outstanding. Reference is made to the Prospectus Supplement relating to
any series of Original Issue Discount Securities for the particular provisions
33
relating to the acceleration of a portion of the principal thereof upon the
occurrence and continuance of an Event of Default with respect thereto.
(Section 5.1)
Holders of Debt Securities may not enforce the Indenture or the Debt
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debt
Securities. (Sections 5.6 and 6.2) Subject to such provisions for
indemnity and certain other limitations contained in the Indenture, the
Holders of a majority in aggregate principal amount of the Debt Securities
of any series then Outstanding will have the right to direct the Trustee in
the conduct of any proceeding for any remedy or the exercise of any trust or
power with respect to such series, except that the Trustee may decline to
follow such directions if it in good faith determines that the actions or
proceedings so directed would unduly prejudice the rights of Holders of
Securities of other affected series not joining in the giving of such
directions. (Section 5.9) Holders and beneficial owners of the Debt
Securities have no recourse under the Indenture, any Debt Security or the
indebtedness evidenced thereby against any incorporator, officer, director,
employee, stockholder or partner, as such, of the Company. (Section 11.1)
The Indenture provides that the Trustee may withhold notice to the
Holders of the Debt Securities of any series of any continuing default
affecting such series (except a default in payment) if it considers such
withholding to be in the interests of the Holders of the Debt Securities of
such series. (Section 5.11)
Modification and Waiver
The Indenture permits the Company and the Trustee to enter into
supplemental indentures without the consent of the Holders of the Debt
Securities to: (a) pledge collateral as security for the Debt Securities
34
of one or more series, (b) add guarantees with respect to the Debt
Securities of one or more series, (c) evidence the assumption by a
successor entity of the obligations of the Company under the Indenture and
with regard to the Debt Securities then Outstanding, (d) add covenants for
the protection of the Holders of the Debt Securities of one or more series,
including any different grace periods or remedies for breach thereof
otherwise than as provided in the Indenture, (e) cure any ambiguity or
correct or supplement any provision that may be defective or inconsistent
with any other provisions contained in the Indenture or make or add such
other provisions as the Company may deem necessary or desirable, provided
that no such action adversely affects the interests of the Debt Securities
of any series, (f) establish the form and terms of the Debt Securities of
any series, (g) evidence the acceptance of appointment by a successor
Trustee with respect to the Debt Securities of one or more series and
certain related matters, (h) subject to compliance with certain
requirements of the Indenture, provide for uncertificated Debt Securities
in addition to or in place of certificated Debt Securities, (i) comply with
any requirements of the Securities and Exchange Commission in connection
with qualifying the Indenture under the Trust Indenture Act of 1939, as
amended, or to comply with any amendments thereto, (j) comply with any
requirements related to the listing of the Debt Securities of any series
for trading on a securities exchange or through an interdealer quotation
system, and (k) add to or change or eliminate any provision of the
Indenture if such change or elimination is applicable only to Debt
Securities of any series that are first issued after the effective date
thereof. (Section 8.1)
The Indenture also permits the Company and the Trustee, with the consent
of the Holders of not less than a majority in aggregate principal amount of
the Debt Securities of any series then Outstanding and affected thereby, to
execute supplemental indentures adding any provisions to, or changing in
any manner or eliminating any of the provisions of, the Indenture or any
supplemental indenture or modifying in any manner the rights of the Holders
of the Debt Securities of any such affected series; provided, however, that
35
without the consent of the Holder of each Debt Security of any such series
then Outstanding and affected thereby, no such supplemental indenture may:
(a) extend the time of payment of the principal (or any installment thereof)
of, or premium on any Debt Securities, or reduce the amount thereof, or
reduce the rate, alter the method of computation of the rate or extend the
time of payment of interest thereon, reduce any amount payable on the
redemption thereof, reduce the amount of, or postpone the date fixed for, any
sinking fund payment or analogous obligation, or change the currency or
currency unit in which the principal thereof or the premium or interest
thereon is payable, or reduce the amount payable on any Original Issue
Discount Security upon acceleration or provable in bankruptcy, or change the
place of payment specified for such Debt Securities, or alter certain
provisions of the Indenture relating to Debt Securities not denominated in
United States dollars, or impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Securities when due
or, if such Debt Security shall so provide, any right of repayment at the
option of the Holder thereof; or (b) reduce the percentage in principal
amount of the Debt Securities of such series, the consent of whose Holders
is required for any modification or amendment of the Indenture or for any
waiver provided for in the Indenture; or (c) modify any of the foregoing
provisions, 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 Holders of each Outstanding Debt Security so affected.
(Section 8.2)
The Holders of a majority in aggregate principal amount of the Debt
Securities of any series then Outstanding may on behalf of the Holders of
all Debt Securities of that series waive, insofar as that series is
concerned, compliance by the Company with any covenant or provision of the
Indenture applicable to that series, except for any covenant or provision
which cannot be modified or amended without the consent of the Holder of
each Debt Security of such affected series. (Section 11.13) Prior to the
declaration of acceleration of the maturity of Debt Securities of any
series then Outstanding, the Holders of a majority in aggregate principal
36
amount of the Debt Securities of such series then Outstanding with respect
to which a default or an Event of Default shall have occurred and is
continuing may, on behalf of the Holders of all Debt Securities of such
series, waive any past default or Event of Default and its consequences,
except a default or an Event of Default in respect of a covenant or
provision of the Indenture or of any Debt Securities of such series which
cannot be modified or amended without the consent of each of the Holders of
the Debt Securities of such series. (Section 5.10)
Defeasance and Discharge
Unless otherwise specified in the applicable Prospectus Supplement, the
Company may elect either (a) to defease and be discharged from any and all
obligations in respect of all outstanding Debt Securities of any particular
series (defeasance and discharge), or (b) to be released from its obligations
with respect to certain covenants of the Indenture and certain Events of
Default applicable to such series, all of which shall be specified in the
applicable Prospectus Supplement (covenant defeasance), in each case if the
Company irrevocably deposits in trust with the Trustee for the benefit of the
Holders of the Debt Securities of such series funds and/or securities that
are direct full faith and credit obligations of, or obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of and
the payment of which is unconditionally guaranteed by the full faith and
credit of, the government which issued the currency in which the Debt
Securities of such series are payable or certain depository receipts therefor
("Government Obligations") which, through the payment of the principal
thereof and the interest thereon in accordance with their terms, will provide
funds in an amount sufficient to pay all the principal of and premium and
interest, if any, on the Debt Securities of such series (including any
mandatory sinking fund or analogous payments) as they shall become due from
time to time in accordance with the terms thereof. To effect a defeasance
37
and discharge with respect to Debt Securities of a series that will not be
fully paid (upon maturity or redemption) within one year or to effect a
covenant defeasance, the Company is required, among other things, to deliver
to the Trustee an opinion of counsel to the effect that the Holders of the Debt
Securities of such series would not recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance and
discharge or such covenant defeasance, as the case may be, and that such
Holders will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such defeasance had not occurred, and in the case of such a defeasance and
discharge such opinion shall additionally state that either (A) there has
been a change in the applicable United States federal income tax law to the
foregoing effect or (B) the Company has received a private letter ruling
from the Internal Revenue Service or there has been published a revenue
ruling to the foregoing effect. Neither a defeasance and discharge with
respect to Debt Securities of a series that will not be fully paid (upon
maturity or redemption) within one year nor a covenant defeasance will be
made with respect to any Debt Securities of a series then listed on any
national securities exchange if such defeasance and discharge or covenant
defeasance would cause Debt Securities of such series to be delisted. Upon
defeasance and discharge, the Indenture will cease to be of further effect
with respect to the Debt Securities of such series and the Holders of such
Debt Securities shall look only to the deposited funds or Government
Obligations for payment. Upon covenant defeasance, however, the Company
will not be relieved of its obligation to pay when due principal of and
premium and interest, if any, on the Debt Securities of such series if not
otherwise paid from such deposited funds or Government Obligations.
Notwithstanding the foregoing, certain obligations and rights under the
Indenture with respect to the obligations of the Trustee, compensation,
reimbursement and indemnification of the Trustee, rights of the Holders of
Debt Securities of a series to receive payments from the funds and Government
Obligations deposited with the Trustee for such series, registration of
transfer and exchange of the Debt Securities of such series, replacement of
mutilated, defaced,
38
destroyed, lost or stolen Debt Securities and certain other administrative
provisions will survive defeasance and discharge. (Section 10.1)
In the event the Company exercises its option to effect a covenant
defeasance with respect to any series of Debt Securities and the Debt
Securities of such series are declared due and payable because of the
occurrence of any Event of Default still applicable to such series, the
amount of money and Government Obligations on deposit with the Trustee may
not be sufficient to pay amounts due on the Debt Securities of such series
at the time of the acceleration resulting from such Event of Default.
However, the Company shall remain liable for such payments. (Section 10.1)
If the Trustee or paying agent is unable to apply any funds or Government
Obligations deposited with respect to a series of Debt Securities in
accordance with the foregoing provisions by reason of any legal proceeding
or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under the Indenture and the Debt Securities of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to such provisions until such time as the Trustee or paying agent
is permitted to apply all such funds or Government Obligations in accordance
therewith; provided, however, that, if the Company has made any payment of
premium or interest on or principal of any Debt Securities of such series
because of the reinstatement of its obligations, the Company shall be
entitled, at its election, (a) to receive from the Trustee or paying agent,
as applicable, that portion of such money or Government Obligations equal to
the amount of such payment or (b) to be subrogated to the rights of the
Holders of the Debt Securities of such series to receive such payment from
the funds or Government Obligations held by the Trustee or paying agent.
(Section 10.6)
39
Governing Law
The Indenture and the Debt Securities issued thereunder will be governed
by the laws of the State of New York. (Section 11.8)
Concerning the Trustee
The First National Bank of Chicago, the Trustee under the Indenture, is
one of a number of banks with which the Company and its subsidiaries has
and in the future may have banking relationships in the ordinary course of
business, including, in certain cases, credit facilities. The First
National Bank of Chicago is also the Property Trustee of Equitable Trust, the
Preferred Securities Guarantee Trustee (as defined herein) and an affiliate of
the Delaware Trustee of Equitable Trust.
The Trustee, prior to the occurrence of an Event of Default under the
Indenture, undertakes to perform only such duties as are specifically set forth
in the Indenture and, after an Event of Default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provision, the Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
Holder of Debt Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby.
40
DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of the Company's Restated
Articles of Incorporation, as amended (the "Articles"), Amended and
Restated Bylaws (the "Bylaws"), and Shareholder Rights Agreement, effective
as of April 30, 1992, as amended, does not purport to be complete and is
subject to and qualified in its entirety by reference to such documents,
copies of which are incorporated by reference as exhibits to the
Registration Statement of which this Prospectus is a part.
Under the Articles, the authorized capital stock of the Company consists
of 70,000,000 shares of common stock, without par value ("Common Stock"),
and 2,500,000 shares of serial preferred stock, without par value ("Preferred
Stock"). As of February 29, 1996, (a) 31,853,432 shares of Common Stock and
(b) no shares of Preferred Stock were outstanding.
DESCRIPTION OF COMMON STOCK
General
All shares of Common Stock offered hereby, or issuable upon conversion,
exchange or exercise of Securities, will be fully paid and non-assessable.
Holders of shares of Common Stock do not have any preemptive rights to
subscribe for or purchase any additional securities of the Company. The
Common Stock is listed on the New York Stock Exchange. The registrar and
41
transfer agent for the Common Stock is currently Boatmen's Trust Company,
510 Locust Street, P.O. Box 14737, St. Louis, Missouri 63178-4737.
Dividends
Subject to the rights of the holders of any shares of Preferred Stock,
holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors of the Company (the
"Board" or the "Board of Directors") out of funds legally available therefor.
Liquidation Rights
Holders of Common Stock are entitled to receive, upon any liquidation of
the Company, all remaining assets available for distribution to shareholders
after satisfaction of the Company's liabilities and the preferential rights
of any Preferred Stock that may then be issued and outstanding.
Voting Rights
The Articles and the Bylaws provide that each outstanding share of Common
Stock is entitled to one vote on each matter to be voted on at a stockholder
meeting, except that the holders of Common Stock have cumulative voting
rights with respect to the election of directors. Cumulative voting permits
holders of shares of Common Stock to cast, for any one or more nominees for
election to the Board of Directors, the number of votes equal to the product
of the number of shares such shareholder owns and the number of nominees
42
proposed for election to the Board. A shareholder may cast all of such votes
for a single director or may distribute such votes among any number of nominees
proposed for election.
The affirmative vote of two-thirds of the votes entitled to be cast at a
meeting of the Company's stockholders is required to remove directors for
cause and to effect certain amendments to the Articles.
Shareholder Rights Plan
The Board adopted the Shareholder Rights Agreement (the "Rights Plan"),
effective as of April 30, 1992. In connection with the effectiveness of
the Rights Plan, the Board declared a dividend distribution of one right (a
"Right") for each outstanding share of Common Stock. Each Right, when
exercisable, entitles the registered holder to purchase from the Company
one or more shares of Common Stock (or in some instances an equivalent security
equal in value to a share of Common Stock) at an exercise price of $100.00 per
Right, subject to adjustment.
Initially the Rights are not exercisable. They will trade with, and
cannot be separated from, the outstanding shares of Common Stock. The
Rights become exercisable (i) ten (10) days following a public announcement
that a person or group of affiliated or associated persons, with the
exception of certain Company related entities (an "Acquiring Person"), has
acquired, or obtained the right to acquire, beneficial ownership of 25% or
more of the Common Stock or (ii) ten (10) days following the commencement
of (or a public announcement of an intention to make) a tender offer or
exchange offer which would result in any person or group of related persons
acquiring beneficial ownership of 25% or more of the Common Stock (the
earlier of such dates being called the "Distribution Date").
43
The Rights will expire on the earlier of April 30, 2002 or redemption of
the Rights by the Company. The Rights are redeemable at a price of
one-quarter of one cent ($.0025) per Right at any time before a person
becomes an Acquiring Person, or at any time before the Distribution Date.
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain general terms of
the Preferred Stock to which any Prospectus Supplement may relate. Certain
terms of any series of Preferred Stock offered by any Prospectus Supplement
will be described in the Prospectus Supplement relating thereto. If so
specified in the Prospectus Supplement, the terms of any series may differ
from the terms set forth below. The description of certain provisions of
the Preferred Stock does not purport to be complete and is subject to and
qualified in its entirety by reference to the provisions of the Articles
and the amendment thereto relating to each particular series of Preferred
Stock (the "Series Amendment") which will be filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement
of which this Prospectus is a part at or prior to the time of the issuance
of such Preferred Stock.
General
Under the Articles, the Board of Directors is authorized, without further
stockholder action, to provide for the issuance of up to 2,500,000 shares
of Preferred Stock. As of the date hereof, no shares of Preferred Stock
were outstanding. The Board of Directors may from time to time authorize
the issuance of shares of Preferred Stock in series, and each such series
shall have such dividend and liquidation preferences, redemption prices,
44
conversion rights, and other terms and provisions as may be contained in the
resolutions of the Board of Directors providing for their issuance. All shares
of Preferred Stock offered hereby, or issuable upon conversion, exchange or
exercise of Securities, will be, when issued, fully paid and non-assessable and
holders thereof will have no preemptive rights in connection therewith.
Rank
Any series of Preferred Stock will, with respect to rights on liquidation,
winding up and dissolution, rank (i) senior to all classes of Common Stock and
to all equity securities issued by the Company, the terms of which specifically
provide that such equity securities will rank junior to such series of
Preferred Stock; (ii) on a parity with all equity securities issued by the
Company, the terms of which specifically provide that such equity securities
will rank on a parity with such series of Preferred Stock; and (iii) junior to
all equity securities issued by the Company, the terms of which specifically
provide that such equity securities will rank senior to such series of
Preferred Stock. In addition, any series of Preferred Stock will, with respect
to dividend rights, rank (i) senior to all equity securities issued by the
Company, the terms of which specifically provide that such equity securities
will rank junior to such series of Preferred Stock and, to the extent provided
in the applicable Series Amendment, to Common Stock, (ii) on a parity with all
equity securities issued by the Company, the terms of which specifically
provide that such equity securities will rank on a parity with such series of
Preferred Stock and, to the extent provided in the applicable Series Amendment,
to Common Stock, and (iii) junior to all equity securities issued by the
Company, the terms of which specifically provide that such equity securities
will rank senior to such series of Preferred Stock. As used in any Series
Amendment for these purposes, the term "equity securities" will not include
debt securities convertible into or exchangeable for equity securities.
45
Dividends
Holders of each series of Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends at such rates and on such dates as are
set forth in the Prospectus Supplement relating to such series of Preferred
Stock. Such rate may be fixed or variable or both. Dividends will be
payable to holders of record of Preferred Stock as they appear on the books
of the Company on such record dates as shall be fixed by the Board of
Directors. Dividends on any series of Preferred Stock may be cumulative or
noncumulative.
No full dividends may be declared or paid or funds set apart for the payment
of dividends on any series of Preferred Stock unless dividends shall have been
paid or funds set apart for such payment on the equity securities ranking on a
parity or senior with respect to dividends with such series of Preferred Stock.
If full dividends are not so paid, such series of Preferred Stock shall share
dividends pro rata with such other equity securities ranking on a parity with
such series of Preferred Stock with respect to dividends after payments of any
dividends on equity securities ranking senior to such series of Preferred Stock
with respect to dividends.
Conversion and Exchange
The Prospectus Supplement for any series of Preferred Stock will state
the terms, if any, on which shares of that series are convertible into
shares of another series of Preferred Stock or Common Stock or exchangeable
for another series of Preferred Stock, Common Stock or Debt Securities of
the Company. The Common Stock of the Company is described under
"Description of Common Stock".
46
Redemption
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof and may be subject
to mandatory redemption pursuant to a sinking fund or otherwise upon terms
and at the redemption prices set forth in the Prospectus Supplement
relating to such series.
In the event of partial redemptions of Preferred Stock, whether by
mandatory or optional redemption, the shares to be redeemed will be
determined by lot or pro rata, as may be determined by the Board of
Directors, or by any other method determined to be equitable by the Board
of Directors.
On and after a redemption date, unless the Company defaults in the
payment of the redemption price, dividends will cease to accrue on shares
of Preferred Stock called for redemption and all rights of holders of such
shares will terminate except for the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up
of the Company, holders of each series of Preferred Stock will be entitled
to receive out of assets of the Company available for distribution to
shareholders, before any distribution is made on any securities ranking
junior with respect to liquidation, including Common Stock, distributions
upon liquidation in the amount set forth in the Prospectus Supplement
relating to such series of Preferred Stock, plus an amount equal to any
accrued and unpaid dividends. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable
47
with respect to the Preferred Stock of any series and any other securities
of the Company ranking on a parity with respect to liquidation rights are
not paid in full, the holders of the Preferred Stock of such series and
such other securities will share ratably in any such distribution of assets
of the Company in proportion to the full liquidation preferences to which
each is entitled. After payment of the full amount of the liquidation
preference to which they are entitled, the holders of Preferred Stock will
not be entitled to any further participation in any distribution of assets
of the Company.
Voting Rights
Except as set forth in the Prospectus Supplement relating to a particular
series of Preferred Stock or except as expressly required by applicable
law, the holders of shares of Preferred Stock will have no voting rights.
Transfer Agent and Registrar
The transfer agent and registrar for each series of Preferred Stock will
be described in the applicable Prospectus Supplement.
LIMITATIONS ON CHANGE IN CONTROL
The purpose of the Rights Plan and certain provisions of the Articles and
the Bylaws are to discourage certain types of transactions that may involve an
actual or threatened change of control of the Company. The Company believes
that the Rights Plan and these provisions are designed to reduce the
vulnerability of
48
the Company to an unsolicited proposal for a takeover of the Company that does
not have the effect of maximizing long-term stockholder value or is otherwise
unfair to stockholders of the Company. However, the Rights Plan and these
provisions, individually and collectively, make more difficult, and may
discourage certain types of potential acquirers from proposing, a merger,
tender offer or proxy contest, even if such transaction or occurrence may be
favorable to the interest of the stockholders, and may delay or frustrate the
assumption of control by a holder of a large block of Common Stock and the
removal of incumbent management, even if such removal might be beneficial to
stockholders. By discouraging takeover attempts, these provisions might have
the incidental effect of inhibiting certain changes in management and the
temporary fluctuations in the market price of the shares that often result
from actual or considered takeover attempts.
Classified Board of Directors. The Articles provide for the classification
of the Board of Directors into three classes of directors serving staggered
three-year terms, with the classes to be as nearly equal in number as possible.
One class of directors stands for election at each annual meeting of
stockholders. Therefore, at least two stockholder meetings will generally be
required to effect a change in control of the Board.
Cumulative Voting. As discussed above, cumulative voting permits a
shareholder to distribute votes to one or any number of nominees proposed
for election. As a result, a minority shareholder may be able to prevent
an attempt to gain full control over the Board.
Preferred Stock. Preferred Stock can be issued in one or more series by the
Board of Directors without further stockholder approval. The Board of Directors
has the power to determine the designations, preferences and rights of each
such series. Because the Board of Directors has substantial discretion in
setting the
49
terms of the Preferred Stock, such stock may act as a defensive measure.
Advance Notice for Stockholder Business Proposals. The Bylaws provide
for an orderly procedure for the notification of the Board of Directors of
business which is to be presented by a stockholder at stockholder meetings.
The procedure is designed to enable the Board to plan such meetings and
also, to the extent it deems necessary or desirable, to inform the stock
holders, prior to the meeting, of any new business that will be presented
at the meeting.
This procedure precludes the conducting of business at a particular
meeting if the proper notice procedures have not been followed. Nothing
precludes discussion by any stockholder of any business properly brought
before the annual meeting of stockholders of the Company.
Advance Notice for Stockholder Nomination Proposals. The Bylaws provide that
only persons who are nominated in accordance with the procedures specified
therein are eligible for election as directors. Such nominations may be made
by the Board of Directors, by any committee appointed by the Board or by any
stockholder of the Company entitled to vote for the election of directors at
the meeting, provided that any stockholder seeking to nominate a person for
election as a director of the Company has complied with the notice procedures.
Written notice of a stockholder nomination must be made to the Secretary of the
Company not later than, with respect to an annual meeting, 120 days in advance
of the date on which the Company's proxy statement for the preceding year's
annual meeting of stockholders was released. With respect to an election to be
held at a special meeting of stockholders, notice by the stockholder must be
delivered or received not later than the close of business on the tenth day
following the date on which notice of such meeting is first given to
stockholders. This notice must set forth the name and address of the
50
stockholder who intends to make the nomination and the name and address of the
person being nominated, together with certain other accompanying information.
Independence Policy. Since 1980, the Board has had an internal
"Continuation Policy" which recognizes the Board's adherence to management
policies designed to enhance the long-term value of the Company. In 1991,
the Board of Directors adopted an Independence Policy which reaffirms its
adherence to such management policies and acknowledges the importance of
the Company's continued independence to the achievement of such policies.
The Independence Policy also indicates that the Board may consider the
interests of the Company's other constituents, such as its employees and
policyholders, as well as the interests of the Company's stockholders, in
evaluating any offer for control of the Company. Under Iowa law, the
consideration by the Board of the interests of such non-stockholder
constituencies is consistent with its fiduciary duties.
Removal of Directors Solely for Cause. The Articles provide that the
directors of the Company may be removed from office by the stockholders
only for cause. Cause is defined as the conviction of a director of a
felony or an adjudication by a court of competent jurisdiction that a
director was liable for negligence or misconduct in the performance of a
director's duty to the Company. This provision makes it more difficult for
the Company's stockholders to remove a director and, thereby, may
discourage outsiders from seeking to acquire control of the Company because
they could be delayed in making changes in existing management.
Employee Benefit Plans. The Company presently has four executive compensa-
tion plans that contain provisions which entitle participants to certain
benefits in the event of a change in control. Under the Company's Amended and
Restated Key Employee Incentive Plan (a cash bonus plan), in the event of a
change
51
in control, any awards that are outstanding become immediately vested, any
performance standards related to the awards are deemed achieved at target
levels and applicable restrictions lapse. Similarly, under the Company's 1982
Stock Incentive Plan, outstanding options become exercisable, restrictions on
stock awards lapse and any performance standards are deemed achieved in the
event of a change of control. Under the Company's Restated and Amended 1992
Stock Incentive Plan, in the event of a change in control, the Compensation
Committee of the Company's Board of Directors may, in its discretion, either
at or after the time an award is made (i) provide for the vesting of any
award, (ii) provide for the Company's purchase of any award upon the
participant's request, (iii) make adjustments to the award to reflect the
change in control, (iv) determine that any performance goals required to be
met are deemed to have been achieved and provide for the acceleration of such
an award, or (v) cause the award to be assumed by the surviving company.
Finally, under the Company's Executive Severance Pay Plan, each eligible
employee terminated subsequent to a change in control is entitled to receive
a maximum severance benefit equal to one year's base salary even though the
full vesting period may not have expired. These measures individually and in
the aggregate may have an anti-takeover effect.
State Insurance Laws. The insurance laws and regulations of the
jurisdictions in which the Company or its insurance subsidiaries do business
may impede or delay a business combination involving the Company.
INDEMNIFICATION
The Articles provide that directors shall not be liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, to the fullest extent permitted by the Iowa Business Corporation
Act (the "IBCA"). The IBCA provides in such case that a director shall not
be liable for
52
monetary damages for breach of fiduciary duty as a director, except for (i) a
breach of the duty of loyalty to the Company or its stockholders, (ii) acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) transactions from which the director derives
improper personal benefit, or (iv) liability for an unlawful distribution
under the IBCA.
The Articles and Bylaws provide that the Company shall indemnify its
directors, officers, employees and agents to the fullest extent permitted by
the IBCA. The IBCA provides that a company may indemnify its officers and
directors if (i) the person acted in good faith and (ii) the person reasonably
believed, in the case of conduct in the person's official capacity with the
company, that the conduct was in the company's best interests, and in all other
cases, that the person's conduct was at least not opposed to the company's best
interests and (iii) in the case of any criminal proceeding, the person had no
reasonable cause to believe the person's conduct was unlawful. The Company is
required to indemnify officers and directors against reasonable expenses
incurred in connection with any proceeding in which they are wholly successful,
on the merits or otherwise, to which the person may be a party because of the
person's position with the Company. If the proceeding is by or in the right of
the Company, indemnification may be made only for reasonable expenses and may
not be made in respect of any proceeding in which the person shall have been
adjudged liable to the Company. Further, any such person may not be
indemnified in respect of any proceeding that charges improper personal benefit
to the person, in which the person shall have been adjudged to be liable.
The Company maintains directors' and officers' liability insurance, which
indemnifies directors and officers of the Company against certain damages
and expenses relating to certain claims against them caused by negligent
acts, errors or omissions.
53
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities, Preferred Stock, Common Stock , or any combination thereof.
Warrants may be issued independently or together with any such 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 the Company and a bank or trust company, as warrant
agent (the "Warrant Agent"), all as shall be set forth in the applicable
Prospectus Supplement. No warrants may be issued to purchase Preferred
Securities or Common Securities issued by Equitable Trust.
The applicable Prospectus Supplement will describe the terms of any
Warrants in respect of which this Prospectus is being delivered, including
the following: (i) the title of such Warrants; (ii) the aggregate number
of such Warrants; (iii) the price or prices at which such Warrants will be
issued; (iv) the currency or currencies, including composite currencies, in
which the price of such Warrants may be payable; (v) the designation, amount
and terms of the Securities (other than Preferred Securities and Common
Securities) purchasable upon exercise of such Warrants; (vi) the price at
which and the currency or currencies, including composite currencies, in which
the Securities (other than Preferred Securities and Common Securities)
purchasable upon exercise of such Warrants may be purchased; (vii) the date on
which the right to exercise such Warrants shall commence and the date on which
such right shall expire; (viii) whether such Warrants will be issued in
registered form or bearer form; (ix) if applicable, the minimum or maximum
amount of such Warrants which may be exercised at any one time; (x) if
applicable, the designation and terms of the Securities (other than Preferred
Securities and Common Securities) with which such Warrants are issued and the
number of such Warrants issued with each such Security; (xi) if applicable, the
54
date on and after which such Warrants and the related Securities (other than
Preferred Securities and Common Securities) will be separately transferable;
(xii) information with respect to book-entry procedures, if any; (xiii) if
applicable, a discussion of certain United States federal income tax
considerations; and (xiv) any other terms of such Warrants, including terms,
procedures and limitations relating to the exchange and exercise of such
Warrants.
DESCRIPTION OF PREFERRED SECURITIES OF EQUITABLE TRUST
The following summary of certain provisions of the Declaration of Trust
of Equitable Trust (the "Declaration") does not purport to be complete and
is subject to and qualified in its entirety by reference to the
Declaration, a copy of which is included as an exhibit to the Registration
Statement of which this Prospectus is a part.
Equitable Trust may issue a series of Preferred Securities having terms
described in the Prospectus Supplement relating thereto. The Declaration
authorizes the Regular Trustees of Equitable Trust to issue on behalf of
Equitable Trust one series of Preferred Securities. The Declaration will
be qualified as an indenture under the Trust Indenture Act. The Property
Trustee, an independent trustee, will act as indenture trustee for the
Preferred Securities for purposes of compliance with the provisions of the
Trust Indenture Act. The Preferred Securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions as shall be established
by the Regular Trustees in accordance with the Declaration or as shall be set
forth in the Declaration or made part of the Declaration by the Trust Indenture
Act. Reference is made to any Prospectus Supplement relating to the Preferred
Securities of Equitable Trust for specific terms of the Preferred Securities,
55
including, to the extent applicable, (i) the distinctive designation of such
Preferred Securities, (ii) the number of Preferred Securities issued by
Equitable Trust, (iii) the annual distribution rate (or method of determining
such rate) for Preferred Securities issued by Equitable Trust and the date or
dates upon which such distributions shall be payable (provided, however,
that distributions on such Preferred Securities shall, subject to any deferral
provisions, and any provisions for payment of defaulted distributions, be
payable on a quarterly basis to Holders of such Preferred Securities as of a
record date in each quarter during which such Preferred Securities are
outstanding), (iv) any right of Equitable Trust to defer quarterly distributions
on the Preferred Securities as a result of an interest deferral right exercised
by the Company on the Debt Securities held by Equitable Trust; (v) whether
distributions on Preferred Securities shall be cumulative, and, in the case of
Preferred Securities having such cumulative distribution rights, the date or
dates or method of determining the date or dates from which distributions on
Preferred Securities shall be cumulative, (vi) the amount or amounts which
shall be paid out of the assets of Equitable Trust to the Holders of Preferred
Securities upon voluntary or involuntary dissolution, winding-up or termination
of Equitable Trust, (vii) the obligation or option, if any, of Equitable Trust
to purchase or redeem Preferred Securities and the price or prices at
which, the period or periods within which and the terms and conditions upon
which Preferred Securities shall be purchased or redeemed, in whole or in
part, pursuant to such obligation or option (with such redemption price to be
specified in the applicable Prospectus Supplement), (viii) the voting rights,
if any, of Preferred Securities in addition to those required by law,
including the number of votes per Preferred Security and any requirement
for the approval by the Holders of Preferred Securities as a condition to
specified action or amendments to the Declaration, (ix) the terms and
conditions, if any, upon which Debt Securities held by Equitable Trust may
be distributed to holders of Preferred Securities, and (x) any other
relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities consistent with the Declaration or with applicable
law. All Preferred Securities offered hereby will be guaranteed by the
Company to the extent
56
set forth below under "Description of Trust Guarantee." The Trust Guarantee,
when taken together with the Company's back-up undertakings, consisting of its
obligations under the Declaration (including the obligation to pay expenses of
Equitable Trust), the Indenture and any applicable supplemental indentures
thereto and the Debt Securities issued to Equitable Trust will provide a full
and unconditional guarantee of the Preferred Securities. Certain United States
federal income tax considerations applicable to any offering of Preferred
Securities will be described in the Prospectus Supplement relating thereto.
The payment terms of the Preferred Securities will be the same as the Debt
Securities issued to Equitable Trust by the Company.
An Event of Default under the Declaration will be deemed to have occurred
whenever an event of default (as defined in the Indenture) shall have occurred
with respect to the Debt Securities held by Equitable Trust. If the Property
Trustee fails to enforce its rights with respect to the Debt Securities held
by Equitable Trust, any holder of Preferred Securities may institute a legal
proceeding against the Company to enforce the Property Trustee's rights under
such Debt Securities. Notwithstanding the foregoing, if an Event of Default
under the Declaration has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on the
Debt Securities issued to Equitable Trust on the date such interest or principal
is otherwise payable, then a holder of Preferred Securities may directly
institute a proceeding against the Company for payment.
The Declaration authorizes the Regular Trustees to issue on behalf of
Equitable Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions
as shall be established by the Regular Trustees in accordance with the
Declaration or as shall otherwise be set forth therein. The terms of the
Common Securities issued by Equitable Trust will be substantially identical
to the terms of the Preferred Securities issued by Equitable Trust, and the
57
Common Securities will rank pari passu, and payments will be made thereon
pro rata, with the Preferred Securities except that, if an event of default
under the Declaration has occurred and is continuing, the rights of the
holders of the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Preferred Securities. Except in certain
limited circumstances, the Common Securities will also carry the right to vote
and to appoint, remove or replace any of the Equitable Trustees of Equitable
Trust. All of the Common Securities of Equitable Trust will be directly or
indirectly owned by the Company.
The financial statements of Equitable Trust will be reflected in the Company's
consolidated financial statements with the Preferred Securities shown as
Company-obligated mandatorily-redeemable preferred securities of its subsidiary,
Equitable of Iowa Companies Capital Trust, holding solely Debt Securities of
the Company and indicating the principal amount, interest rate and maturity
date thereof.
DESCRIPTION OF TRUST GUARANTEE
Set forth below is a summary of information concerning the Trust Guarantee
that will be executed and delivered by the Company for the benefit of the
holders, from time to time, of Preferred Securities. The Trust Guarantee will
be qualified as an indenture under the Trust Indenture Act. The First National
Bank of Chicago will act as independent indenture trustee for Trust Indenture
Act purposes under the Trust Guarantee (the "Preferred Securities Guarantee
Trustee"). The terms of the Trust Guarantee will be those set forth in such
Trust Guarantee and those made part of such Trust Guarantee by the Trust
Indenture Act. The summary of certain provisions of the Trust Guarantee does
not purport to be complete and
58
is subject to and qualified in its entirety by reference to the provisions of
the form of Trust Guarantee, a copy of which has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part, and the Trust
Indenture Act. The Trust Guarantee will be held by the Preferred Securities
Guarantee Trustee for the benefit of the holders of the Preferred Securities
of Equitable Trust.
General
Pursuant to the Trust Guarantee, the Company will agree, to the extent set
forth therein, to pay in full to the holders of the Preferred Securities, the
Trust Guarantee Payments (as defined below) (except to the extent paid by
Equitable Trust), as and when due, regardless of any defense, right of set-off
or counterclaim which Equitable Trust may have or assert. The following
payments or distributions with respect to the Preferred Securities (the "Trust
Guarantee Payments"), to the extent not paid by Equitable Trust, will be
subject to the Trust Guarantee (without duplication): (i) any accrued and
unpaid distributions that are required to be paid on such Preferred Securities,
to the extent Equitable Trust shall have funds available therefor, (ii) the
redemption price, including all accrued and unpaid distributions to the date of
redemption (the "Redemption Price"), to the extent Equitable Trust has funds
available therefor, with respect to any Preferred Securities called for
redemption by Equitable Trust and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of Equitable Trust (other than in
connection with the distribution of Debt Securities to the holders of Preferred
Securities or the redemption of all of the Preferred Securities upon maturity
or redemption of the Debt Securities) the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid distributions on such Preferred
Securities to the date of payment, to the extent Equitable Trust has funds
available therefor or (b) the amount of assets of Equitable Trust remaining for
distribution to holders of such Preferred Securities in liquidation of
Equitable Trust. The Company's
59
obligation to make a Trust Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of Preferred
Securities or by causing Equitable Trust to pay such amounts to such holders.
The Trust Guarantee will not apply to any payment of distributions except to
the extent Equitable Trust shall have funds available therefor. If the Company
does not make interest or principal payments on the Debt Securities purchased
by Equitable Trust, Equitable Trust will not pay distributions on the
Preferred Securities issued by Equitable Trust and will not have funds
available therefor.
The Company has also agreed to guarantee the obligations of Equitable Trust
with respect to the Common Securities (the "Trust Common Guarantee") to the
same extent as the Trust Guarantee, except that, if an Event of Default under
the Indenture has occurred and is continuing, holders of Preferred Securities
under the Trust Guarantee shall have priority over holders of the Common
Securities under the Trust Common Guarantee with respect to distributions and
payments on liquidation, redemption or otherwise.
Certain Covenants of the Company
In the Trust Guarantee, the Company will covenant that, so long as any
Preferred Securities remain outstanding, if there shall have occurred any
event of default under the Trust Guarantee or under the Declaration, then
(a) the Company will not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock; (b) the
Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Company which rank pari
60
passu with or junior to the Debt Securities issued to Equitable Trust and (c)
the Company shall not make any guarantee payments with respect to the foregoing
(other than pursuant to the Trust Guarantee); provided, however, that the
Company may declare and pay a stock dividend where the dividend stock is the
same stock as that on which the dividend is being paid.
Modification of the Trust Guarantees; Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of Preferred Securities (in which case no consent of such
holders will be required), the Trust Guarantee may be amended only with the
prior approval of the holders of not less than a majority in liquidation
amount of the outstanding Preferred Securities. The manner of obtaining
any such approval of holders of such Preferred Securities will be set forth
in an accompanying Prospectus Supplement. All guarantees and agreements
contained in the Trust Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to
the benefit of the holders of the Preferred Securities then outstanding.
Events of Default
An event of default under the Trust Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations
thereunder. The holders of a majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred
Securities Guarantee Trustee in respect of the Trust Guarantee or to direct
the exercise of any trust or power conferred upon the Preferred Securities
Guarantee Trustee under the Trust Guarantee.
61
If the Preferred Securities Guarantee Trustee fails to enforce the Trust
Guarantee, any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Trust Guarantee
without first instituting a legal proceeding against Equitable Trust, the
Preferred Securities Guarantee Trustee or any other person or entity.
Notwithstanding the foregoing, if the Company has failed to make a Guarantee
Payment, a holder of Preferred Securities may directly institute a proceeding
against the Company for enforcement of the Trust Guarantee for such payment.
The Company has waived any right or remedy to require that any action be
brought first against Equitable Trust or any other person or entity before
proceeding directly against the Company.
The Company will be required to provide annually to the Preferred
Securities Guarantee Trustee a statement as to the performance by the
Company of certain of its obligations under the Trust Guarantee and as to
any default in such performance.
Information Concerning the Preferred Securities Guarantee Trustee
The Preferred Securities Guarantee Trustee, prior to the occurrence of a
default, undertakes to perform only such duties as are specifically set forth
in the Trust Guarantee and, after default with respect to the Trust Guarantee,
shall exercise the same degree of care as a prudent individual would exercise
in the conduct of his or her own affairs. Subject to such provision, the
Preferred Securities Guarantee Trustee is under no obligation to exercise any
of the powers vested in it by the Trust Guarantee at the request of any holder
of Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby.
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Termination of the Trust Guarantee
The Trust Guarantee will terminate as to the Preferred Securities upon
full payment of the Redemption Price of all Preferred Securities, upon
distribution of the Debt Securities held by Equitable Trust to the holders
of all of the Preferred Securities or upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of Equitable
Trust. The Trust Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Preferred
Securities must restore payment of any sums paid under such Preferred
Securities or the Trust Guarantee.
Status of the Trust Guarantee
The Trust Guarantee will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company, including the Debt Securities, except
those liabilities of the Company made pari passu or subordinate by their
terms, (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Company and with any guarantee now or
hereafter entered into by the Company in respect of any preferred or
preference stock of any affiliate of the Company and (iii) senior to the
Company's Common Stock. The terms of the Preferred Securities provide that
each holder of Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the Trust Guarantee.
The Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the Company to enforce its rights under the Trust Guaran
tee without instituting a legal proceeding against any other person or
entity).
63
Governing Law
The Trust Guarantee will be governed by and construed in accordance with
the law of the State of Iowa.
PLAN OF DISTRIBUTION
The Company and Equitable Trust may offer and sell Securities in any of
the following ways: (i) directly to purchasers, (ii) through agents, (iii)
through underwriters, (iv) through dealers or (v) through a combination of
any such methods. The Prospectus Supplement with respect to an offering of
Securities will set forth the terms of such offering, including, to the
extent applicable, the name or names of any underwriters (and any managing
underwriters), the names of any dealers or agents, the purchase price of
the Securities and the proceeds to the Company or Equitable Trust from such
sale, any underwriting discounts and commissions or agency fees and other
items constituting underwriters' or agents' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed
or paid to dealers and any securities exchanges or interdealer quotation
system on which such Securities are expected to be listed. Any initial
public offering price and any discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time.
Securities may be offered and sold, and offers to purchase such
securities may be solicited, by agents designated by the Company or
Equitable Trust from time to time. Any such agent involved in the offer or
sale of the Securities in respect of which this Prospectus is delivered
will be named, and the terms of such agency (including any commissions
payable by the Company or Equitable Trust to such agent) will be set forth,
64
in the applicable Prospectus Supplement. Unless otherwise indicated in
such Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale of Securities,
the Company or Equitable Trust 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 managing underwriter or managing underwriters,
as well as any other underwriters, and the terms of the transaction, including
commissions, discounts and other 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 the Securities in respect of which such
Prospectus Supplement is delivered to the public. If underwriters are used
in the sale, such underwriters will acquire Securities for their own account
and may resell such Securities from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at
varying prices determined by the underwriter at the time of sale. Securities
may be offered to the public either through underwriting syndicates
represented by managing underwriters, or directly by underwriters without a
syndicate. Only underwriters named in the Prospectus Supplement are deemed
to be underwriters in connection with the Securities offered thereby. If any
underwriters are utilized in the sale of the Securities, unless otherwise set
forth in the Prospectus Supplement relating thereto the underwriting agreement
will provide that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a sale of
Securities will be obligated to purchase all such Securities, if any are
purchased.
If a dealer is utilized in the sale of the Securities, the Company or
Equitable Trust will sell such Securities to the dealer, as principal. The
dealer may then resell such Securities to the public at varying prices to
65
be determined by such dealer at the time of resale. The name of the dealer
and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Agents, underwriters and dealers may be entitled under agreements that
may be entered into with the Company or Equitable Trust to indemnification
by the Company or Equitable Trust against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or to
contribution with respect to payments which the agents, underwriters or
dealers may be required to make in respect thereof. Agents, underwriters
and dealers may be customers of, engage in transactions with, or perform
services for the Company and affiliates of the Company. Any agents,
dealers or underwriters participating in the offering of Securities may be
deemed "underwriters" within the meaning of the Securities Act of 1933, as
amended, of the Securities so offered.
Offers to purchase Securities may be solicited directly by the Company or
Equitable Trust and sales thereof may be made by the Company or Equitable
Trust directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act with respect to
any resale thereof. 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.
Each series of Securities (other than Common Stock) will be a new issue
of securities and may have no established trading market. Agents and
underwriters may from time to time purchase and sell Securities in the
secondary market or may make a market in the Securities, but are not
obligated to do so, and there can be no assurance that there will be a
secondary market for the Securities or liquidity in the secondary market if
one develops.
66
If so indicated in the applicable Prospectus Supplement, the Company or
Equitable Trust will authorize agents, underwriters or dealers to solicit
offers by certain institutions to purchase Securities from the Company or
Equitable Trust at the public offering price set forth in the applicable
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on a specified date in the future. A
commission indicated in the applicable Prospectus Supplement will be paid to
underwriters, dealers or agents soliciting purchases of Securities pursuant
to Contracts accepted by the Company or Equitable Trust. The Contracts will
be subject to the conditions set forth in the applicable Prospectus Supplement.
As one of the means of direct issuances of Securities, the Company or
Equitable Trust may utilize the services of an entity through which it may
conduct an electronic "dutch auction" or similar offering of the Securities
among potential purchasers who are eligible to participate in the auction or
offering of such Securities, if so described in the applicable Prospectus
Supplement.
The anticipated place and time of delivery for the Securities in respect
of which this Prospectus is delivered will be set forth in the applicable
Prospectus Supplement.
LEGAL MATTERS
The validity of the Securities offered hereby other than the Preferred
Securities will be passed upon for the Company and Equitable Trust by
Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, P.C., 1900
Hub Tower, Des Moines, Iowa 50309. Certain United States federal income
taxation matters also will be passed upon for the Company and Equitable
Trust by Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien,
67
P.C. Attorneys in such law firm hold shares of Common Stock. Certain matters
of Delaware law relating to the validity of the Preferred Securities will be
passed upon for Equitable Trust by Richards, Layton & Finger, P.A., One Rodney
Square, Wilmington, Delaware 19899, special Delaware counsel to Equitable
Trust. Certain legal matters in connection with the Securities will be passed
upon for the underwriter(s), dealer(s) or agent(s) by LeBoeuf, Lamb, Greene &
MacRae, L.L.P., a limited liability partnership including professional
corporations, 125 West 55th Street, New York, New York 10019. As to
certain matters of Iowa law, LeBoeuf, Lamb, Greene & MacRae, L.L.P. may rely
upon the opinions of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C.
EXPERTS
The consolidated financial statements and schedules of the Company
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 incorporated by reference in this Prospectus, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedules are, and audited financial
statements and schedules to be included in subsequently filed documents
will be, incorporated herein in reliance upon the reports of Ernst & Young
LLP pertaining to such financial statements (to the extent covered by
consents filed with the Securities and Exchange Commission) given upon the
authority of such firm as experts in accounting and auditing.
68
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission registration fee $94,828.25
New York Stock Exchange Listing Fee 40,000
Legal fees and expenses 135,000
Accounting fees and expenses 50,000
Printing and engraving expenses 40,000
Trustee's fees and expenses 5,000
Rating Agencies' fees 180,000
Blue Sky Fees and Expenses 15,000
Miscellaneous 15,171.75
Total $575,000
=========
Except for the SEC registration fee, all of the foregoing are estimates.
69
Item 15. Indemnification of Officers and Directors
The Company's Restated Articles of Incorporation and Amended and Restated
Bylaws provide that the Company shall indemnify its directors, officers,
employees and agents to the fullest extent permitted by the Iowa Business
Corporation Act (the "IBCA"). The IBCA provides that a company may
indemnify its officers and directors if (i) the person acted in good faith,
and (ii) the person reasonably believed, in the case of conduct in the
person's official capacity with the Company, that the conduct was in the
Company's best interests, and in all other cases, that the person's conduct
was at least not opposed to the Company's best interests, and (iii) in the
case of any criminal proceeding, the person had no reasonable cause to
believe the person's conduct was unlawful. The Company is required to
indemnify officers and directors against reasonable expenses incurred in
connection with any proceeding in which they are wholly successful, on the
merits or otherwise, to which the person may be a party because of the person's
position with the Company. If the proceeding is by or in the right of the
Company, indemnification may be made only for reasonable expenses and may not
be made in respect of any proceeding in which the person shall have been
adjudged liable to the Company. Further, any such person may not be
indemnified in respect of any proceeding that charges improper personal benefit
to the person, in which the person shall have been adjudged to be liable.
The Company maintains directors' and officers' liability insurance, which
indemnifies directors and officers of the Company against certain damages
and expenses relating to claims against them caused by negligent acts,
errors or omissions.
The Declaration of Equitable Trust provides that no Property Trustee or
any of its Affiliates, Delaware Trustee or any of its Affiliates, or any
officer, director, shareholder, member, partner, employee, representative,
70
custodian, nominee or agent of the Property Trustee or the Delaware Trustee
(each a "Fiduciary Indemnified Person"), and no Regular Trustee, Affiliate
of any Regular Trustee, or any officer, director, shareholder, member,
partner, employee, representative or agent of any Regular Trustee or any
Affiliate thereof, or any employee or agent of Equitable Trust or its
Affiliates (each a "Company Indemnified Person") shall be liable,
responsible or accountable in damages or otherwise to Equitable Trust or
any officer, director, shareholder, partner, member, representative,
employee or agent of Equitable Trust or its Affiliates or to any holder of
Preferred Securities for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Fiduciary Indemnified
Person or Company Indemnified Person in good faith on behalf of Equitable
Trust and in a manner such Fiduciary Indemnified Person or Company
Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Fiduciary Indemnified Person or Company
Indemnified Person by such Declaration or by law, except that a Fiduciary
Indemnified Person or Company Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Fiduciary Indemnified
Person's or Company Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
The Declaration of Equitable Trust also provides that to the full extent
permitted by law, the Company shall indemnify any Company Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of Equitable Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of Equitable Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
71
was unlawful. The Declaration of Equitable Trust also provides that
to the full extent permitted by law, the Company shall indemnify any
Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or
in the right of Equitable Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of Equitable Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to Equitable Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such Court of
Chancery or such other court shall deem proper. The Declaration of Equitable
Trust further provides that expenses (including attorneys' fees) incurred by
a Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in the immediately
preceding two sentences shall be paid by the Company in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking
by or on behalf of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by
the Company as authorized in the Declaration.
The directors and officers of the Company and the Regular Trustees are
covered by insurance policies indemnifying them against certain liabilities,
including certain liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), which might be incurred by them in such
capacities and against which they cannot be indemnified by the Company or
Equitable Trust. Any agents, dealers or underwriters who execute any of the
72
agreements filed as Exhibit 1 to this Registration Statement will agree to
indemnify the Company's directors and their officers and the Equitable
Trustees who signed the Registration Statement against certain liabilities
that may arise under the Securities Act with respect to information furnished
to the Company or Equitable Trust by or on behalf of any such indemnifying
party.
The Declaration of Equitable Trust also provides that the Company shall
indemnify each Fiduciary Indemnified Person against any loss, liability or
expense incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust or
trusts under the Equitable Trust, including the costs and expenses
(including reasonable legal fees and expenses) of defending itself against
or investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties thereunder.
Item 16. Exhibits
Exhibit
Number Description of Exhibit
1.1 Form of Underwriting Agreement for Debt Securities*
1.2 Form of Underwriting Agreement for Equity Securities*
1.3 Form of Underwriting Agreement for Preferred Securities*
4.1 Restated Articles of Incorporation of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 3(a) to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1993)
4.2 Amendment(s) to the Restated Articles of Incorporation of Equitable
of Iowa Companies with respect to a series of Preferred Stock*
73
4.3 Amended and Restated Bylaws of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 2 to the Company's Form
8-K dated November 11, 1991)
4.4 Rights Agreement (incorporated herein by reference to Exhibit 1 to
the Company's Form 8-K dated April 30, 1992)
4.5 First Amendment to Rights Agreement (incorporated herein by
reference to Exhibit 4(b)(ii) to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1992)
4.6 Second Amendment to Rights Agreement (incorporated herein by
reference to Exhibit 2.2 to the Company's Form 8-A dated May 13,
1993)
4.7 Indenture dated as of January 17, 1995 by and between Equitable of
Iowa Companies and the First National Bank of Chicago, as Trustee,
pursuant to which the Debt Securities are to be issued (incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-3 Registration No. 33-57343 filed January 18, 1995)
4.8 Certificate of Trust of Equitable of Iowa Companies Capital Trust**
4.9 Declaration of Trust of Equitable of Iowa Companies Capital Trust **
4.10 Form of Preferred Securities Guarantee Agreement by Equitable of
Iowa Companies**
4.11 Form of Debt Security*
4.12 Form of Preferred Stock*
4.13 Form of Warrant Agreement*
4.14 Form of Preferred Security*
4.15 First Supplemental Indenture*
5.1 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C.**
5.2 Opinion of Richards, Layton & Finger, P.A.**
8 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. as to certain federal income taxation matters*
12 Computation of Ratio of Earnings to Fixed Charges**
23.1 Consent of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. (included in Exhibits 5.1 and 8 hereto)**
74
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5.2 hereto)**
23.3 Consent of Independent Auditors, Ernst & Young LLP**
24 Power of Attorney (set forth on the signature page of this
Registration Statement)**
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Indenture**
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Declaration of Equitable of Iowa Companies Capital
Trust**
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee of the Trust Preferred Securities Guarantee for the benefit
of the holders of Preferred Securities of Equitable of Iowa
Companies Capital Trust**
_________________
* To be filed by amendment or incorporated by reference from other
documents filed with the Commission.
** Previously filed
Item 17. Undertakings
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
75
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities
Act if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
76
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) If the securities to be registered are to be offered at competitive
bidding, the undersigned Registrant hereby undertakes: (1) to use
its best efforts to distribute prior to the opening of bids, to
prospective bidders, underwriters, and dealers, a reasonable number
of copies of a prospectus which at that time meets the requirements
of Section 10(a) of the Act, and relating to the securities offered
at competitive bidding, as contained in the Registration Statement,
together with any supplements thereto, and (2) to file an amendment
to the Registration Statement reflecting the results of bidding, the
terms of the reoffering and related matters to the extent required
by the applicable form, not later than the first use, authorized by
77
the issuer after the opening of bids, of a prospectus relating to
the securities offered at competitive bidding, unless no further
public offering of such securities by the issuer and no reoffering
of such securities by the purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
(e) The undersigned Registrant hereby undertakes that
(1) for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall
78
be deemed to be part of this Registration Statement as of the
time it was declared effective; and
(2) for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(f) The undersigned Registrant hereby undertakes to file, if necessary,
an application for the purpose of determining the eligibility of
the Trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939, as amended, in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission
under Section 305(b)(2) of such Act.
79
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Equitable of
Iowa Companies certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Des Moines, State of Iowa, on
June 4, 1996.
EQUITABLE OF IOWA COMPANIES
By /s/ Fred S. Hubbell
______________________
Fred S. Hubbell
Chairman, President and Chief
Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
/s/ Fred S. Hubbell Chairman of the Board, President June 4, 1996
________________________ and Chief Executive Officer
Fred S. Hubbell (Principal Executive Officer)
/s/ Paul E. Larson Executive Vice President, Treasurer June 4, 1996
________________________ and Chief Financial Officer
Paul E. Larson (Principal Financial Officer)
/s/ David A. Terwilliger Vice President and Controller June 4, 1996
________________________ (Principal Accounting Officer)
David A. Terwilliger
/s/ Richard B. Covey* Director June 4, 1996
________________________
Richard B. Covey
/s/ Doris M. Drury* Director June 4, 1996
________________________
Doris M. Drury
/s/ James L. Heskett* Director June 4, 1996
________________________
James L. Heskett
/s/ Richard S. Ingham, Jr.* Director June 4, 1996
________________________
Richard S. Ingham, Jr.
/s/ Robert E. Lee* Director June 4, 1996
________________________
Robert E. Lee
/s/ Jack D. Rehm* Director June 4, 1996
________________________
Jack D. Rehm
/s/ Thomas N. Urban* Director June 4, 1996
________________________
Thomas N. Urban
/s/ Hans F. E. Wachtmeister* Director June 4, 1996
___________________________
Hans F. E. Wachtmeister
/s/ Richard S. White* Director June 4, 1996
________________________
Richard S. White
*By /s/ Paul E. Larson Attorney-in-fact June 4, 1996
________________________
Paul E. Larson
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Equitable
of Iowa Companies Capital Trust certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Des Moines,
State of Iowa, on June 4, 1996.
EQUITABLE OF IOWA COMPANIES
CAPITAL TRUST
By /s/ Fred S. Hubbell
_________________________
Fred S. Hubbell, as Trustee
By /s/ Paul E. Larson
________________________
Paul E. Larson, as Trustee
By /s/ John A. Merriman*
________________________
John A. Merriman, as Trustee
*By /s/ Paul E. Larson
________________________
Paul E. Larson, Attorney-in-fact
EXHIBIT INDEX
to Registration Statement
on Form S-3
EQUITABLE OF IOWA COMPANIES
Exhibit
Number Description of Exhibit
1.1 Form of Underwriting Agreement for Debt Securities*
1.2 Form of Underwriting Agreement for Equity Securities*
1.3 Form of Underwriting Agreement for Preferred Securities*
4.1 Restated Articles of Incorporation of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 3(a) to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1993)
4.2 Amendment(s) to the Restated Articles of Incorporation of Equitable
of Iowa Companies with respect to a series of Preferred Stock*
4.3 Amended and Restated Bylaws of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 2 to the Company's Form
8-K dated November 11, 1991)
4.4 Rights Agreement (incorporated herein by reference to Exhibit 1 to
the Company's Form 8-K dated April 30, 1992)
4.5 First Amendment to Rights Agreement (incorporated herein by reference
to Exhibit 4(b)(ii) to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1992)
4.6 Second Amendment to Rights Agreement (incorporated herein by
reference to Exhibit 2.2 to the Company's Form 8-A dated May 13,
1993)
4.7 Indenture dated as of January 17, 1995 by and between Equitable of
Iowa Companies and the First National Bank of Chicago, as Trustee,
pursuant to which the Debt Securities are to be issued (incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-3 Registration No. 33-57343 filed January 18, 1995)
4.8 Certificate of Trust of Equitable of Iowa Companies Capital Trust**
4.9 Declaration of Trust of Equitable of Iowa Companies Capital Trust**
4.10 Form of Preferred Securities Guarantee Agreement by Equitable of
Iowa Companies**
4.11 Form of Debt Security*
4.12 Form of Preferred Stock*
4.13 Form of Warrant Agreement*
4.14 Form of Preferred Security*
4.15 First Supplemental Indenture*
5.1 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C.**
5.2 Opinion of Richards, Layton & Finger, P.A.**
8 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. as to certain federal income taxation matters*
12 Computation of Ratio of Earnings to Fixed Charges**
23.1 Consent of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. (included in Exhibits 5.1 and 8 hereto)**
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5.2 hereto)**
23.3 Consent of Independent Auditors, Ernst & Young LLP**
24 Power of Attorney (set forth on the signature page of this
Registration Statement)**
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Indenture**
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Declaration of Equitable of Iowa Companies Capital
Trust**
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee of the Trust Preferred Securities Guarantee for the benefit
of the holders of Preferred Securities of Equitable of Iowa
Companies Capital Trust**
_________________
* To be filed by amendment or incorporated by reference from other
documents filed with the Commission.
** Previously filed.
