<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 16, 1996
REGISTRATION NO. 333-07167
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PREEFFECTIVE AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
AETNA INC. AETNA LIFE AND CASUALTY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS
CHARTER) CHARTER)
CONNECTICUT CONNECTICUT
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
02-0488491 06-0843808
(I.R.S. EMPLOYER IDENTIFICATION NO.) (I.R.S. EMPLOYER IDENTIFICATION NO.)
LUCILLE NICKERSON LUCILLE NICKERSON
VICE PRESIDENT AND CORPORATE SECRETARY VICE PRESIDENT AND CORPORATE SECRETARY
AETNA INC. AETNA LIFE AND CASUALTY COMPANY
151 FARMINGTON AVENUE 151 FARMINGTON AVENUE
HARTFORD, CONNECTICUT 06156 HARTFORD, CONNECTICUT 06156
(860) 273-0123 (860) 273-0123
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S
PRINCIPAL EXECUTIVE OFFICES AND AGENT FOR SERVICE) PRINCIPAL EXECUTIVE OFFICES AND AGENT FOR SERVICE)
</TABLE>
------------------------
COPY OF CORRESPONDENCE TO:
<TABLE>
<S> <C> <C>
William J. Casazza Robert S. Risoleo Richard J. Sandler
Aetna Life and Casualty Company Sullivan & Cromwell Davis Polk & Wardwell
151 Farmington Avenue 125 Broad Street 450 Lexington Avenue
Hartford, Connecticut 06156 New York, New York 10004 New York, New York 10017
(860) 273-0123 (212) 558-4000 (212) 450-4000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER UNIT(2) OFFERING PRICE(2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
Debt Securities of Aetna Life and Casualty
Company.................................. $1,450,000,000(4) 100% $1,450,000,000(4) $500,000*
Guarantees of Debt Securities by Aetna
Inc.(3)..................................
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies.
(2) Estimated for the sole purpose of computing the registration fee.
(3) No separate consideration will be received for the Guarantees.
(4) Such amount represents the principal amount of any Debt Securities issued at
their principal amount and the issue price, rather than the principal amount
of any Debt Securities issued at an original issue discount.
* Has been previously paid.
------------------------
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 SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
------------------------
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
included in this Registration Statement also relates to $50 million and $500
million of securities registered and remaining unissued under Registration
Statement Nos. 33-49543 and 33-50427, respectively, previously filed by Aetna
Life and Casualty Company, in respect of which $203,129 and $156,250,
respectively, has been paid to the Commission as filing fees.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
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.
SUBJECT TO COMPLETION, DATED JULY 16, 1996
[LOGO]
AETNA LIFE AND CASUALTY COMPANY
DEBT SECURITIES
UNCONDITIONALLY GUARANTEED AS TO
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY,
AND INTEREST BY
AETNA INC.
Aetna Life and Casualty Company, to be renamed Aetna Services, Inc. (the
"Company"), may from time to time offer its debt securities (the "Debt
Securities") which may be either senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities") in amounts, at prices and on terms to be determined at the time of
offering. The Senior Debt Securities are unconditionally guaranteed (the "Senior
Debt Guarantees") as to the payment of principal, premium, if any, and interest
by Aetna Inc. ("Aetna") and the Subordinated Debt Securities are unconditionally
guaranteed on a subordinated basis (the "Subordinated Debt Guarantees" and,
together with the Senior Debt Guarantees, the "Debt Guarantees") as to the
payment of principal, premium, if any, and interest by Aetna. Upon consummation
of the mergers described under "Aetna Inc.", the Company will be a wholly-owned
subsidiary of Aetna.
The Debt Securities offered pursuant to this Prospectus may be issued in
one or more series and will be limited to $2,000,000,000 aggregate public
offering price (or its equivalent (based on the applicable exchange rate at the
time of sale) in one or more foreign currencies, currency units or composite
currencies as shall be designated by the Company). Certain specific terms of the
particular Debt Securities in respect of which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"), including, where applicable, the specific title,
aggregate principal amount, the denomination, whether such Debt Securities are
secured or unsecured obligations, maturity, premium, if any, the interest rate
(which may be fixed, floating or adjustable), the time and method of calculating
payment of interest, if any, the place or places where principal of (and
premium, if any) and interest, if any, on such Debt Securities will be payable,
the currency in which the principal of (and premium, if any) and interest, if
any, on such Debt Securities will be payable, any terms of redemption at the
option of the Company or the holder, any sinking fund provisions, the initial
public offering price and other special terms. If so specified in the applicable
Prospectus Supplement, Debt Securities of a series may be issued in whole or in
part in the form of one or more temporary or permanent global securities.
Unless otherwise specified in a Prospectus Supplement, the Senior Debt
Securities and the Senior Debt Guarantees, when issued, will be unsecured and
will rank equally with all other unsecured and unsubordinated indebtedness of
the Company and Aetna, respectively, and the Subordinated Debt Securities and
the Subordinated Debt Guarantees, when issued, will be unsecured and will be
subordinated in right of payment to all Senior Debt of the Company and Senior
Debt of Aetna, respectively,
The Prospectus Supplement will contain information concerning certain U.S.
federal income tax considerations, if applicable to the Debt Securities offered.
------------------------
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 Debt Securities will be sold directly, through agents, underwriters or
dealers as designated from time to time, or through a combination of such
methods. If agents of the Company or any dealers or underwriters are involved in
the sale of the Debt Securities in respect of which this Prospectus is being
delivered, the names of such agents, dealers or underwriters and any applicable
commissions or discounts are set forth in or may be calculated from the
Prospectus Supplement with respect to such Debt Securities.
------------------------
The date of this Prospectus is , 1996.
<PAGE> 3
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, AETNA OR ANY UNDERWRITERS, AGENTS OR
DEALERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF
AN OFFER TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY AND ITS
SUBSIDIARIES, U.S. HEALTHCARE, INC. AND ITS SUBSIDIARIES OR AETNA AND ITS
SUBSIDIARIES SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AT ANY TIME SUBSEQUENT TO THE DATE HEREOF.
AVAILABLE INFORMATION
Aetna is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed by Aetna can 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 following Regional Offices of
the Commission: Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional
Office, 7 World Trade Center, New York, New York 10048. Copies of such material
can be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Such reports, proxy
and information statements and other information concerning Aetna may also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, and the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California 94104. Such material may also be accessed electronically
by means of the Commission's home page on the Internet at http://www.sec.gov.
The Company and Aetna have filed with the Commission a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Debt Securities and Debt Guarantees offered hereby (the
"Registration Statement"). This prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
Reference is made to the Registration Statement and to the exhibits relating
thereto for further information with respect to the Company and Aetna and the
Debt Securities and Debt Guarantees offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission (File No.
1-5704) by the Company pursuant to the Exchange Act are incorporated by
reference into this Prospectus:
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 three month
period ended March 31, 1996.
3. The Company's Current Reports on Form 8-K dated April 1, 1996,
April 15, 1996, June 28, 1996 and July 16, 1996.
The following documents previously filed with the Commission (File No.
0-11531) by U.S. Healthcare, Inc. ("U.S. Healthcare") pursuant to the Exchange
Act are incorporated by reference into this Prospectus:
1. U.S. Healthcare's Annual Report on Form 10-K for the year ended
December 31, 1995.
2. U.S. Healthcare's Amendments to its Annual Report on Form 10-K/A,
dated April 26, 1996 and June 11, 1996.
3. U.S. Healthcare's Quarterly Report on Form 10-Q for the three month
period ended March 31, 1996.
4. U.S. Healthcare's Current Report on Form 8-K dated April 2, 1996.
2
<PAGE> 4
All documents filed by Aetna, the Company or U.S. Healthcare with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof and prior to the termination of the offering of
the Debt Securities shall hereby be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in any Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company and Aetna will provide without charge to each person to whom
this Prospectus is delivered, on written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies should
be directed to the office of the Corporate Secretary, Aetna Inc., 151 Farmington
Avenue, Hartford CT 06156, telephone (860) 273-3977.
AETNA LIFE AND CASUALTY COMPANY
The Company was organized in 1967 as a Connecticut insurance company. The
Company and its subsidiaries constitute one of the nation's largest insurance
and financial services organizations, centered around three core businesses:
Aetna Health Plans ("AHP"), Aetna Retirement Services ("ARS") and Aetna
International.
AHP consists of Health, Specialty Health and Group Insurance businesses.
The Health business provides a full spectrum of managed care and traditional
indemnity plans, providing its members with a choice of health plans to meet
their individual needs. AHP's managed care products vary with respect to the
extent to which health care costs and utilization are managed and range from
preferred provider organization plans to point-of-service and health maintenance
organization plans. The Company also owns and manages physician practices for
use by its members and other consumers. Specialty Health products include
behavioral health, pharmacy and dental plans, which provide managed care or
indemnity features. The Group Insurance business provides life insurance,
disability (including managed disability) and long-term care plans.
AHP products and services are marketed primarily to employers for the
benefit of employees and their dependents. Plans may be insured, whereby the
Company assumes all or a portion of health care cost and utilization risk, or
self-funded, whereby employers assume all or a significant portion of such
risks. AHP also provides administrative and claim services and, in many cases,
partial insurance protection, for an appropriate fee or premium charge.
ARS markets and services two principal types of products: financial
services and life insurance.
The financial services products include individual and group annuity
contracts which offer a variety of funding and distribution options for personal
and employer-sponsored retirement plans that qualify under Sections 401, 403,
408 and 457 of the Internal Revenue Code of 1986, as amended, and individual and
group nonqualified annuity contracts.
ARS's life insurance products include universal life, variable universal
life, interest-sensitive whole life and term insurance. These products are
offered primarily to individuals, small businesses, employer-sponsored groups
and executives of Fortune 2000 companies.
Aetna International, through subsidiaries and joint venture operations,
sells primarily life insurance and financial services products in non-U.S.
markets including Canada, Mexico, Taiwan, Chile, Malaysia, Hong Kong, New
Zealand, Peru, Argentina and Indonesia.
On April 2, 1996, the Company completed the previously announced sale of
its property-casualty operations to an affiliate of The Travelers Insurance
Group Inc. ("Travelers") for total consideration of approximately $4.1 billion.
3
<PAGE> 5
In connection with the approval by shareholders of the Company of the
proposed merger of the Company and U.S. Healthcare pursuant to which each of the
Company and U.S. Healthcare will become wholly-owned subsidiaries of Aetna, the
shareholders of the Company will also be asked to approve an amendment to the
Company's Certificate of Incorporation to change its name to Aetna Services,
Inc. See "Aetna Inc." below.
The principal executive offices of the Company are located at 151
Farmington Avenue, Hartford, CT 06156. The Company's telephone number is (860)
273-0123.
4
<PAGE> 6
AETNA INC.
Aetna Inc., a Connecticut corporation, was formed by the Company and U.S.
Healthcare in March 1996 in connection with the Agreement and Plan of Merger,
dated as of March 30, 1996, as amended by Amendment No. 1 thereto dated as of
May 30, 1996 (the "Merger Agreement"), among the Company, U.S. Healthcare,
Aetna, Antelope Sub, Inc., a Connecticut corporation and a wholly-owned
subsidiary of Aetna ("Aetna Sub"), and New Merger Corporation, a Pennsylvania
corporation and a wholly-owned subsidiary of Aetna ("U.S. Healthcare Sub").
Pursuant to such Merger Agreement and subject to the conditions contained
therein, including the approval of the Merger Agreement by the shareholders of
the Company and U.S. Healthcare at shareholder meetings to be held on July 18,
1996, Aetna Sub will be merged with and into the Company (the "Aetna Sub
Merger") and U.S. Healthcare Sub will be merged with and into U.S. Healthcare
(the "U.S. Healthcare Sub Merger" and, together with the Aetna Sub Merger, the
"Mergers"), with the result that the Company and U.S. Healthcare will become
wholly-owned subsidiaries of Aetna. Accordingly, the businesses of Aetna through
its wholly-owned subsidiaries, the Company and U.S. Healthcare, initially will
be the businesses currently conducted by the Company and U.S. Healthcare and
their respective subsidiaries. The U.S. Healthcare Sub Merger will be accounted
for under the purchase method of accounting and the Aetna Sub Merger will be
treated as a reorganization with no change in the recorded amount of the
Company's assets and liabilities. If approved by the shareholders of the Company
and U.S. Healthcare at such meetings and if the other conditions to the Mergers
set forth in the Merger Agreement are satisfied, it is currently expected that
the Mergers will be consummated in the third quarter of 1996. Aetna has not
conducted any business activities to date, other than those incident to its
formation, its execution of the Merger Agreement and related agreements and in
connection with the Mergers.
The principal executive offices of Aetna are located at 151 Farmington
Avenue, Hartford, Connecticut 06156; its telephone number is (860) 273-0123.
U.S. HEALTHCARE, INC.
U.S. Healthcare is a Pennsylvania corporation, incorporated in 1982. U.S.
Healthcare is one of the largest managed care companies in the United States. As
of December 31, 1995, U.S. Healthcare's health maintenance organization ("HMO")
service network included approximately 13,400 primary care physicians, 40,600
specialists, 441 hospitals and 7,000 pharmacies.
U.S. Healthcare provides comprehensive managed health care services through
HMOs it owns and operates in Pennsylvania, New Jersey, New York, Delaware,
Connecticut, Massachusetts, New Hampshire, Maryland, Georgia, Virginia, Rhode
Island, North Carolina, South Carolina, Ohio and the District of Columbia. The
services of U.S. Healthcare's HMOs are marketed primarily to employer groups and
are provided through networks of independent health care providers, including
selected primary care physicians who coordinate each member's individual medical
care. In addition to comprehensive primary physician care, specialist care and
hospital services, U.S. Healthcare makes available home health care and other
outpatient services as well as optional prescription drug, vision care and
dental plans. U.S. Healthcare contracts with independent primary care physicians
who are reimbursed under prospective payment arrangements.
U.S. Healthcare's health plans consist of HMO plans and indemnity-type
plans offered both on a fully-insured and an employer-funded basis. Under
fully-insured health plans, U.S. Healthcare charges a premium and bears the risk
for medical costs incurred. Under employer-funded health plans, U.S. Healthcare
charges a fee for providing administrative services and the employer bears
substantially all risk for medical costs incurred. Under fully-insured HMO
plans, members receive comprehensive medical coverage in exchange for a fixed
monthly premium. In addition, U.S. Healthcare also offers a number of
supplemental benefit coverages to employers, either as supplements to HMO plans
or as stand-alone products, including dental plans, prescription drug plans,
vision plans, employee assistance programs and wellness programs.
U.S. Healthcare offers network-based workers' compensation case management
and network-based managed disability services, quality and outcome measurement
and improvement programs and health care data analysis systems for providers and
purchasers of health care. U.S. Healthcare provides assistance to multi-state
employers by coordinating their relationships with other HMOs.
5
<PAGE> 7
USE OF PROCEEDS
Except as may otherwise be set forth in the applicable Prospectus
Supplement, the net proceeds from the sale of the Debt Securities will be added
to the Company's general funds and used for general corporate purposes,
including the repayment of indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES OF THE COMPANY
The following table sets forth the Company's historical ratio of earnings
to fixed charges for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS YEARS ENDED DECEMBER 31,
ENDED ------------------------------------------
MARCH 31, 1996 1995 1994 1993 1992 1991
- -------------- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
6.04 4.97 4.74 (a) 1.90 .54(b)
</TABLE>
- ---------------
(a) The Company reported a pretax loss from continuing operations in 1993 which
was inadequate to cover fixed charges by $1.0 billion.
(b) Earnings were inadequate to cover fixed charges by $92.0 million in 1991.
For purposes of computing the ratio of earnings to fixed charges,
"earnings" represent consolidated earnings from continuing operations before
income taxes, cumulative effect adjustments and extraordinary items plus fixed
charges and minority interests. "Fixed charges" consist of interest (and the
portion of rental expense deemed representative of the interest factor). The
Company's former property-casualty operations, sold to Travelers on April 2,
1996 and certain other operations are reflected as discontinued operations in
its consolidated financial statements.
6
<PAGE> 8
DESCRIPTION OF DEBT SECURITIES AND DEBT GUARANTEES
The following description sets forth certain general terms and provisions
of the Debt Securities and Debt Guarantees to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities and Debt Guarantees
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may not apply to the Debt Securities and Debt Guarantees so
offered will be described in the Prospectus Supplement relating to such Debt
Securities and Debt Guarantees.
The Senior Debt Securities and the Senior Debt Guarantees are to be issued
under an Indenture to be dated as of July 1, 1996 (the "Senior Indenture"),
between the Company, Aetna and State Street Bank and Trust Company of
Connecticut, National Association, as trustee. The Subordinated Debt Securities
and the Subordinated Debt Guarantees are to be issued under a separate Indenture
to be dated as of July 1, 1996 (the "Subordinated Indenture"), also between the
Company, Aetna and State Street Bank and Trust Company of Connecticut, National
Association, as trustee. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures." Copies of the Senior
Indenture and the Subordinated Indenture have been filed as exhibits to the
Registration Statement. State Street Bank and Trust Company of Connecticut,
National Association is hereinafter referred to as the "Trustee." The following
summaries of certain provisions of the Senior Debt Securities, the Subordinated
Debt Securities, the Senior Debt Guarantees, the Subordinated Debt Guarantees
and the Indentures do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all the provisions of the
Indentures applicable to a particular series of Debt Securities and the related
Debt Guarantees, including the definitions therein of certain terms. Wherever
particular Sections, Articles or defined terms of the Indentures are referred
to, it is intended that such Sections, Articles or defined terms shall be
incorporated herein by reference. Article and Section references used herein are
references to the applicable Indenture. Capitalized terms not otherwise defined
herein shall have the meaning given in the Indentures.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and each Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more series.
Unless otherwise specified in the Prospectus Supplement, the Senior Debt
Securities and the Senior Debt Guarantees when issued will be unsecured and
unsubordinated obligations of the Company and Aetna, respectively, and will rank
equally and ratably with all other unsecured and unsubordinated indebtedness of
the Company and Aetna, respectively. The Subordinated Debt Securities and the
Subordinated Debt Guarantees when issued will be unsecured and subordinated in
right of payment to the prior payment in full of all Senior Debt (as defined) of
the Company and Aetna, respectively, as described under "Subordination of
Subordinated Debt Securities and Subordinated Debt Guarantees" and in the
Prospectus Supplement applicable to an offering of Subordinated Debt Securities
and the Subordinated Debt Guarantees.
Reference is made to the Prospectus Supplement relating to the particular
Debt Securities offered thereby (the "Offered Debt Securities") which shall set
forth whether the Offered Debt Securities shall be Senior Debt Securities,
guaranteed on a senior basis by Aetna pursuant to the Senior Debt Guarantees, or
Subordinated Debt Securities, guaranteed on a subordinated basis by Aetna
pursuant to the Subordinated Debt Guarantees, and shall further set forth the
following terms of the Offered Debt Securities: (1) the title of the Offered
Debt Securities; (2) any limit on the aggregate principal amount of the Offered
Debt Securities; (3) the Person to whom any interest on the Offered Debt
Securities will be payable, if other than the Person in whose name such Offered
Debt Securities are registered on any Regular Record Date; (4) the date or dates
on which the principal of the Offered Debt Securities will be payable; (5) the
rate or rates per annum (which may be fixed, floating or adjustable) at which
the Offered Debt Securities will bear interest, if any, or the formula pursuant
to which such rate or rates shall be determined, the date or dates from which
such interest will accrue and the dates on which such interest, if any, will be
payable and the Regular Record Dates for such interest payment dates; (6)
whether the Offered Debt Securities will be secured; (7) the place or places
where principal of (and premium, if any) and interest, if any, on Offered Debt
Securities will be payable; (8) if applicable, the price at which, the periods
within which and the terms and conditions upon which the Offered Debt Securities
may be redeemed at the option of the Company pursuant to a sinking fund or
otherwise; (9) if
7
<PAGE> 9
applicable, any obligation of the Company to redeem or purchase Offered Debt
Securities pursuant to any sinking fund or analogous provisions or at the option
of a Holder thereof, and the period or periods within which, the price or prices
at which and the terms and conditions upon which the Offered Debt Securities
will be redeemed or purchased, in whole or in part; (10) if other than
denominations of $1,000 and any integral multiple thereof, the denominations in
which the Offered Debt Securities will be issuable; (11) the currency or
currencies, including composite currencies or currency units, in which payment
of the principal of (or premium, if any) or interest, if any, on any of the
Offered Debt Securities will be payable if other than the currency of the United
States of America; (12) if the amount of payments of principal of (or premium,
if any) or interest, if any, on the Offered Debt Securities may be determined
with reference to one or more indices, the manner in which such amounts will be
determined; (13) if the principal of (or premium, if any) or interest, if any,
on any of the Offered Debt Securities of the series is to be payable, at the
election of the Company or a Holder thereof, in one or more currencies,
including composite currencies, or currency units other than that or those in
which the Debt Securities are stated to be payable, the currency, currencies,
including composite currencies, or currency units in which payment of the
principal of (or premium, if any) or interest, if any, on Debt Securities of
such series as to which such election is made will be payable, and the periods
within which and the terms and conditions upon which such election is to be
made; (14) the portion of the principal amount of the Offered Debt Securities,
if other than the principal amount thereof, payable upon acceleration of
maturity thereof; (15) whether all or any part of the Offered Debt Securities
will be issued in the form of a Global Security or Securities and, if so, the
depositary for, and other terms relating to, such Global Security or Securities;
(16) any event or events of default applicable with respect to the Offered Debt
Securities in addition to those provided in the Indentures; (17) any other
covenant or warranty included for the benefit of the Offered Debt Securities in
addition to (and not inconsistent with) those included in the Indentures for the
benefit of Debt Securities of all series, or any other covenant or warranty
included for the benefit of the Offered Debt Securities in lieu of any covenant
or warranty included in the Indentures for the benefit of Debt Securities of all
series, or any provision that any covenant or warranty included in the
Indentures for the benefit of Debt Securities of all series shall not be for the
benefit of the Offered Debt Securities, or any combination of such covenants,
warranties or provisions; (18) the guarantee of Aetna of the Debt Securities if
other than as described herein; (19) any restriction or condition on the
transferability of the Offered Debt Securities; (20) any authenticating or
paying agents, registrars, conversion agents or any other agents with respect to
the Offered Debt Securities; and (21) any other terms of the Offered Debt
Securities. (Section 301)
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities are to be issued as registered securities without
coupons in denominations of $1,000 or any integral multiple of $1,000. (Section
302) No service charge will be made for any transfer or exchange of such Offered
Debt Securities, but the Company or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 305)
Debt Securities may be issued under the Indentures as Original Issue
Discount Securities to be sold at a substantial discount below their stated
principal amount. Federal income tax consequences and other considerations
applicable thereto will be described in the Prospectus Supplement relating
hereto.
Since the Company is, and following the Mergers Aetna will be, a holding
company, the rights of the Company and Aetna, respectively, and hence the right
of creditors of the Company and Aetna (including the Holders of Debt
Securities), to participate in any distribution of the assets of their
respective subsidiaries (including in the case of Aetna following the Mergers,
the Company and U.S. Healthcare), upon any such Subsidiary's liquidation or
reorganization or otherwise is necessarily subject to the prior claims of
creditors of the subsidiary, except to the extent that claims of the Company or
Aetna, as a creditor of the subsidiary, may be recognized.
The Indentures do not contain any provisions that limit the ability of the
Company or Aetna to incur indebtedness or that afford Holders of the Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Company or Aetna.
8
<PAGE> 10
EVENTS OF DEFAULT AND NOTICE THEREOF
Unless otherwise specified in the Prospectus Supplement, the following
events are defined in the Indentures as "Events of Default" with respect to Debt
Securities of any series: (a) failure to pay principal (including any sinking
fund payment) of, or premium (if any) on, any Debt Security of that series when
due (in the case of the Subordinated Indenture, whether or not payment is
prohibited by the subordination provisions); (b) failure to pay interest, if
any, on any Debt Security of that series when due and such failure continues for
a period of 30 days; (c) failure by the Company or Aetna to perform in any
material respect any other covenant in the Indentures (other than a covenant
included in the Indentures solely for the benefit of a series of Debt Securities
other than that series) continued for a period of 90 days after written notice
to the Company and Aetna; (d) due acceleration (which acceleration shall not
have been rescinded within 30 days after written notice to the Company and
Aetna) of any indebtedness for borrowed money in a principal amount in excess of
$50,000,000 for which the Company, Aetna or a Principal Subsidiary (as defined)
is liable, including Debt Securities of another series (other than acceleration
of Non-Recourse Debt for borrowed money which does not exceed in the aggregate
4% of Aetna's total shareholders' equity, as set forth in the most recently
published audited consolidated balance sheet of Aetna), or a default by the
Company, Aetna or any Principal Subsidiary in the payment at final maturity of
outstanding indebtedness for borrowed money in a principal amount in excess of
$50,000,000 (other than default in payment at final maturity of Non-Recourse
Debt which does not exceed in the aggregate 4% of Aetna's total shareholders'
equity, as set forth in the most recently published audited consolidated balance
sheet of Aetna) unless such acceleration or default at maturity shall be
remedied or cured by the Company, Aetna or such Principal Subsidiary or
rescinded, annulled or waived by the holders of such indebtedness, in which case
such acceleration or default at maturity shall not constitute an Event of
Default under this provision and any acceleration relating thereto shall be
rescinded; and (e) certain events of insolvency, reorganization, receivership or
liquidation of the Company or Aetna. (Section 501)
No Event of Default with respect to Debt Securities of a particular series
shall necessarily constitute an Event of Default with respect to Debt Securities
of any other series. If an Event of Default with respect to Debt Securities of
any series at the time Outstanding shall occur and be continuing, either the
Trustee or the Holders of at least 25% in principal amount of the Outstanding
Debt Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
Debt Securities of that series to be due and payable immediately; provided,
however, that under certain circumstances the Holders of a majority in aggregate
principal amount of Outstanding Debt Securities of that series may rescind or
annul such declaration and its consequences. (Section 502)
Reference is made to the Prospectus Supplement relating to any series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to the principal amount of such Original Issue
Discount Securities due on acceleration upon the occurrence of an Event of
Default and the continuation thereof.
The Indentures provide that the Trustee may withhold notice to the Holders
of the Debt Securities of any default (except in payment of principal (or
premium, if any) or interest, if any) if it considers it in the interest of the
holders of the Debt Securities to do so. (Section 602)
The Company and Aetna will be required to furnish to the Trustee annually a
statement by certain officers of the Company and Aetna as to the compliance with
all conditions and covenants of the Indentures. (Section 1004)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series affected will have the right, subject to certain
limitations, to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Debt Securities of such series, and
to waive certain defaults. (Sections 512 and 513)
The Indentures provide that, in case an Event of Default shall occur and be
continuing, the Trustee shall exercise such of its rights and powers under the
Indentures, and use the same degree of care and skill in its
9
<PAGE> 11
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs. (Section 601) Subject to such provisions, the
Trustee will be under no obligation to exercise any of its rights or powers
under the Indentures at the request of any of the Holders of Debt Securities
unless they shall have offered to the Trustee security or indemnity in form and
substance reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request.
(Section 603)
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indentures or for any remedy thereunder,
unless such Holder shall have previously given to the Trustee written notice of
a continuing Event of Default with respect to the Debt Securities of such series
and unless also the Holders of at least 25% in aggregate principal amount of the
Outstanding Debt Securities of the same series shall have made written request,
and offered indemnity to the Trustee in form and substance reasonably
satisfactory to the Trustee, to institute such proceeding as trustee, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of the same series a
direction inconsistent with such request and shall have failed to institute such
proceeding within 60 days. (Section 507) However, such limitations do not apply
to a suit instituted by a Holder of a Debt Security for enforcement of payment
of the principal of (or premium, if any) or interest, if any, on such Debt
Security on or after the respective due dates expressed in such Debt Security.
(Section 508)
MODIFICATION AND WAIVER
Modifications and amendments of the Indentures may be made by the Company,
Aetna and the Trustee, with the consent of the Holders of not less than a
majority of aggregate principal amount of each series of the Outstanding Debt
Securities issued under the Indentures which is affected by the modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of each Holder of such Debt Security affected thereby: (1)
change the Stated Maturity of the principal of (or premium, if any) or any
installment of principal or interest, if any, on any such Debt Security; (2)
reduce the principal amount of (or premium, if any) or the interest rate, if
any, on any such Debt Security or the principal amount due upon acceleration of
an Original Issue Discount Security; (3) change the place or currency of payment
of principal of (or premium, if any) or the interest, if any, on any such Debt
Security; (4) impair the right to institute suit for the enforcement of any such
payment on or with respect to any such Debt Security; (5) reduce the percentage
of Holders of Debt Securities necessary to modify or amend the Indentures; (6)
modify or affect in any manner adverse to the interest of Holders of Debt
Securities the obligation of Aetna under the Debt Guarantees in respect of the
due and punctual payment of the principal of (and premium, if any) or interest
on the Debt Securities, (7) in the case of the Subordinated Indenture, modify
the subordination provisions in a manner adverse to the holders of the
Subordinated Debt Securities; or (8) modify the foregoing requirements or reduce
the percentage of Outstanding Debt Securities necessary to waive compliance with
certain provisions of the Indentures or for waiver of certain defaults. (Section
902)
The holders of at least a majority of the aggregate principal amount of the
Outstanding Debt Securities of any series may, on behalf of all Holders of that
series, waive compliance by the Company and Aetna with certain restrictive
provisions of the Indentures and waive any past default under the Indentures,
except a default in the payment of principal, premium or interest or in the
performance of certain covenants. (Sections 907 and 513)
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide that the Company and Aetna, at the Company's option,
(A) will be defeased and discharged from any and all of their respective
obligations with respect to such Debt Securities and the Debt Guarantees
(including, in the case of Subordinated Debt Securities and Subordinated Debt
Guarantees, the provisions described under "Subordination of Subordinated Debt
Securities and Subordinated Debt Guarantees" herein and except for the
obligations to exchange or register the transfer of such Debt Securities, to
replace temporary or mutilated, destroyed, lost or stolen Debt Securities, to
maintain an office or agency in respect of the Debt Securities, and to hold
monies for payments in trust) ("defeasance"), or (B) will be released from their
respective obligations under the Indentures concerning the restrictions
described under
10
<PAGE> 12
"Limitations on Liens on Common Stock of Principal Subsidiaries" and
"Consolidation, Merger and Sale of Assets" and any other covenants applicable to
such Debt Securities and the Debt Guarantees (including, in the case of the
Subordinated Debt Securities and the Subordinated Debt Guarantees, the
provisions described under "Subordination of Subordinated Debt Securities and
Subordinated Debt Guarantees" herein) which are subject to covenant defeasance
("covenant defeasance"), and the occurrence of an event described and notice
thereof in clauses (c) and (d) under "Events of Default and Notice Thereof"
(with respect to covenants subject to covenant defeasance) shall no longer be an
Event of Default, in each case, upon the irrevocable deposit with the Trustee
(or other qualifying trustee), in trust for such purpose, of money, and/or U.S.
Government Obligations (as defined) (or Foreign Government Obligations (as
defined) in the case of Debt Securities denominated in foreign currencies) which
through the payment of principal and interest in accordance with their terms
will provide money in an amount sufficient to pay the principal of (and premium,
if any) and interest, if any, on such Debt Securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor. Such a
trust may only be established if, among other things, (i) the Company has
delivered to the Trustee an opinion of counsel (as specified in the Indentures)
to the effect that the Holders of such Debt Securities will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to 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 or covenant defeasance had not occurred, (ii) no
Event of Default or event which with the giving of notice or lapse of time, or
both, would become an Event of Default under the Indenture shall have occurred
and be continuing on the date of such deposit (or, with respect to any event
specified in clause (e) under "Events of Default and Notice Thereof", at any
time on or prior to the 90th day after the date of such deposit) and (iii) in
the case of Subordinated Debt Securities, (x) no default in the payment of
principal of (or premium, if any) or interest, if any, on any Senior Debt of the
Company or Aetna beyond any applicable grace period shall have occurred and be
continuing, or (y) no other default with respect to any Senior Debt of the
Company or Aetna shall have occurred and be continuing and shall have resulted
in the acceleration of such Senior Debt. (Article Twelve)
The Company may exercise its defeasance option with respect to such Debt
Securities and Debt Guarantees notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its defeasance option,
payment of such Debt Securities may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of
such Debt Securities may not be accelerated by reference to the covenants noted
under clause (B) above. In the event the Company and Aetna omit to comply with
their remaining obligations with respect to such Debt Securities and Debt
Guarantees under the Indentures after the exercise by the Company of its
covenant defeasance option and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations (or Foreign Government Obligations in the case of Debt
Securities denominated in foreign currencies) on deposit with the Trustee may be
insufficient 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 and Aetna will remain liable in respect of such payments. (Article
Twelve)
LIMITATIONS ON LIENS ON COMMON STOCK OF PRINCIPAL SUBSIDIARIES
As long as any of the Debt Securities remains outstanding, Aetna will not,
and will not permit any Principal Subsidiary to, issue, assume, incur or
guarantee any indebtedness for borrowed money secured by a mortgage, pledge,
lien or other encumbrance, directly or indirectly, on any of the Common Stock of
a Principal Subsidiary, which Common Stock is owned by Aetna, by the Company or
by any Principal Subsidiary, unless the obligations of the Company under the
Debt Securities and, if the Company or Aetna so elects, any other indebtedness
of the Company or Aetna ranking on a parity with, or prior to, the Debt
Securities or the Guarantor's obligations under the Debt Guarantees, as the case
may be, shall be secured equally and ratably with, or prior to, such secured
indebtedness for borrowed money so long as it is outstanding and is so secured.
(Section 1005)
"Principal Subsidiary" means only Aetna Life Insurance Company, Aetna Life
Insurance and Annuity Company and U.S. Healthcare and any other Subsidiary of
Aetna which shall hereafter succeed by merger or
11
<PAGE> 13
otherwise to a major part of the business of one or more of the Principal
Subsidiaries. The decision as to whether a Subsidiary shall have succeeded to a
major part of the business of one or more of the Principal Subsidiaries shall be
made in good faith by the Board of Directors of Aetna or a committee thereof by
the adoption of a resolution so stating, and Aetna shall within 30 days of the
date of the adoption of such resolution deliver to the Trustee a copy thereof,
certified by the Corporate Secretary or an Assistant Corporate Secretary of
Aetna. (Section 101)
"Common Stock" means, with respect to any Principal Subsidiary, stock of
any class, however designated, except stock which is non-participating beyond
fixed dividend and liquidation preferences and the holders of which have either
no voting rights or limited voting rights entitling them, only in the case of
certain contingencies, to elect less than a majority of the directors (or
persons performing similar functions) of such Principal Subsidiary, and shall
include securities of any class, however designated, which are convertible into
such Common Stock. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS; ASSUMPTION BY GUARANTOR OR SUBSIDIARY
OF COMPANY OBLIGATIONS
Neither the Company nor Aetna may consolidate with or merge into any other
Person or sell its property and assets as, or substantially as, an entirety to
any Person and neither the Company nor Aetna may permit any Person to merge into
or consolidate with the Company or Aetna, as the case may be, unless (i) either
the Company or Aetna, as the case may be, will be the resulting or surviving
entity or any successor or purchaser is a corporation, partnership or trust
organized under the laws of the United States of America, any State or the
District of Columbia, and any such successor or purchaser expressly assumes the
Company's or Aetna's obligations on the Debt Securities or the Debt Guarantees,
as applicable, under a supplemental Indenture, (ii) immediately after giving
effect to the transaction no Event of Default shall have occurred and be
continuing, and (iii) certain other conditions are met. (Section 801)
Aetna or any Subsidiary of Aetna may, where permitted by law, assume the
obligations of the Company for the due and punctual payment of the principal of
(premium, if any) and interest on and any other payments with respect to the
Debt Securities of any series and the performance of every covenant of the
Indenture and the Debt Securities on the part of Company to be performed or
observed if (i) Aetna or such Subsidiary, as the case may be, shall expressly
assume such obligations by a supplemental indenture, in form reasonably
satisfactory to the Trustee, and, if such Subsidiary assumed such obligations,
Aetna shall, by such supplemental indenture, confirm that its Debt Guarantees
with respect to the Debt Securities of such series shall apply to such
Subsidiary's obligations under the Debt Securities of such series and the
Indenture; (ii) immediately after giving effect to such transaction, no Event of
Default shall have occurred and be continuing; and (iii) certain other
conditions are met. (Section 803).
SUBORDINATION OF SUBORDINATED DEBT SECURITIES AND SUBORDINATED DEBT GUARANTEES
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities and Subordinated Debt
Guarantees.
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all Senior Debt of the Company, including the Senior Debt Securities,
and the Subordinated Debt Guarantees will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all Senior Debt of Aetna, including the Senior Debt Guarantees. Upon
any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshalling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company or Aetna, as the case may be, the holders
of Senior Debt of the Company or Aetna, as the case may be, will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt of the Company or Aetna, as the case may
be, before the holders of the Subordinated Debt Securities will be entitled to
receive or retain any payment in respect of the principal of (and premium, if
any) or interest, if any, on the Subordinated Debt Securities. (Subordinated
Indenture Sections 1402 and 1602)
12
<PAGE> 14
By reason of such subordination, in the event of liquidation or insolvency,
(i) creditors of the Company who are not holders of Senior Debt of the Company
or Subordinated Debt Securities may recover less, ratably, than holders of
Senior Debt of the Company and may recover more, ratably, than the holders of
the Subordinated Debt Securities and (ii) creditors of Aetna who are not holders
of Senior Debt of Aetna or Subordinated Debt Securities may recover less,
ratably, than holders of Senior Debt of Aetna and may recover more, ratably,
than holders of Subordinated Debt Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt of the Company and Aetna outstanding
at the time of such acceleration will first be entitled to receive payment in
full of all amounts due thereon before the Holders of Subordinated Debt
Securities will be entitled to receive any payment upon the principal of (or
premium, if any) or interest, if any, on the Subordinated Debt Securities.
(Subordinated Indenture Sections 1403 and 1603)
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in the payment of principal of (or
premium, if any) or interest on Senior Debt of the Company or Aetna, or an event
of default with respect to any Senior Debt of the Company or Aetna resulting in
the acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default. (Subordinated Indenture Sections 1404
and 1604)
"Debt" means (without duplication and without regard to any portion of
principal amount that has not accrued and to any interest component thereof
(whether accrued or imputed) that is not due and payable) with respect to any
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
borrowed; (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; and (vi) every obligation of the type
referred to in clauses (i) through (v) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or is responsible or liable, directly or indirectly, as obligor or otherwise.
(Subordinated Indenture Section 101)
"Senior Debt" means with respect to any Person the principal of (and
premium, if any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to such
Person to the extent that such claim for post-petition interest is allowed in
such proceeding), on Debt of such Person, whether incurred on or prior to the
date of the Subordinated Indenture or thereafter incurred, unless, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are not superior in right of
payment to the Subordinated Debt Securities, in the case of the Company, or the
Subordinated Debt Guarantees, in the case of Aetna, or to other Debt of such
Person which is pari passu with, or subordinated to the Subordinated Debt
Securities, in the case of the Company, or the Subordinated Debt Guarantees, in
the case of Aetna; provided, however, that Senior Debt shall be deemed not to
include (i) in the case of the Company, the Subordinated Debt Securities or (ii)
in the case of Aetna, the Subordinated Debt Guarantees. (Subordinated Indenture
Section 101)
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Debt of the Company or Aetna, which may include indebtedness
that is senior to the Subordinated Debt Securities and the Subordinated Debt
Guarantees, but subordinate to other obligations of the Company or Aetna,
respectively. The Senior Debt Securities and the Senior Debt Guarantees, when
issued, will constitute Senior Debt of the Company and Aetna, respectively.
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series or the Subordinated Debt Guarantees with respect thereto.
13
<PAGE> 15
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depositary or its nominee. In
such a case, one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of Outstanding Debt Securities of the series to be represented by such Global
Security or Securities. Unless and until it is exchanged in whole or in part for
Debt Securities in definitive registered form, a Global Security may not be
registered for transfer or exchange except as a whole by the Depositary for such
Global Security to a nominee for such Depositary and except in the circumstances
described in the applicable Prospectus Supplement. (Sections 204 and 305)
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
and a description of the Depositary will be contained in the applicable
Prospectus Supplement.
THE TRUSTEE
The Indentures contain limitations on the right of the Trustee, as a
creditor of the Company and Aetna, to obtain payment of claims in certain cases,
or to realize on certain property received in respect of any such claim as
security or otherwise. In addition, the Trustee may be deemed to have a
conflicting interest and may be required to resign as Trustee if at the time of
a default under the Indentures it is a creditor of the Company or Aetna.
The Trustee or its affiliates act as depositary for funds of, makes loans
to and performs other services for, or may be a customer of, the Company and
Aetna in the ordinary course of business.
GOVERNING LAW
The Indentures are governed by and shall be construed in accordance with
the laws of the State of New York, but without regard to principles of conflicts
of laws.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to one or more underwriters for public
offering and sale by them or may sell Debt Securities to investors or other
persons directly or through agents. The Company may sell Debt Securities as soon
as practicable after effectiveness of the Registration Statement, provided that
favorable market conditions exist. Any such underwriter or agent involved in the
offer and sale of the Debt Securities will be named in an applicable Prospectus
Supplement.
Underwriters may offer and sell the Debt Securities at a fixed price or
prices, which may be changed, or at prices related to prevailing market prices
or at negotiated prices. The Company also may, from time to time, authorize
firms acting as the Company's agents to offer and sell the Debt Securities upon
the terms and conditions as shall be set forth in any Prospectus Supplement. In
connection with the sale of Debt Securities, underwriters may be deemed to have
received compensation from the Company in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of Debt Securities
for whom they may act as agent. Underwriters may sell Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
(which may be changed from time to time) from the purchasers for whom they may
act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Debt Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Debt Securities may be deemed
to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers
14
<PAGE> 16
and agents may be entitled, under agreements with the Company and Aetna, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by the
Company for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Company and Aetna in the ordinary
course of business.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Debt Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount
specified in the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be subject
to the approval of the Company. Contracts will not be subject to any conditions
except that (i) the purchase by an institution of the Debt Securities covered by
its Contracts shall not at the time of delivery be prohibited under the laws of
any jurisdiction in the United States to which such institution is subject and
(ii) if the Debt Securities are being sold to underwriters, the Company shall
have sold to such underwriters such amount specified in the applicable
Prospectus Supplement. Agents and underwriters will have no responsibility in
respect of the delivery or performance of Contracts.
The Debt Securities may or may not be listed on a national securities
exchange or a foreign securities exchange. No assurances can be given that there
will be a market for the Debt Securities.
VALIDITY OF THE SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Debt Securities and the Debt Guarantees offered hereby will be
passed upon for the Company and Aetna, respectively, by Thomas J. Calvocoressi,
counsel to the Company and Aetna, and Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York 10017, and for any agents or underwriters by Sullivan
& Cromwell, 125 Broad Street, New York, New York 10004. Davis Polk & Wardwell
and Sullivan & Cromwell will rely upon the opinion of Thomas J. Calvocoressi as
to certain matters governed by Connecticut law. As of May 31, 1996 and giving
effect to the Mergers, Thomas J. Calvocoressi beneficially owned 558 shares, and
had options to purchase 21,250 shares, of Aetna's Common Stock.
EXPERTS
The consolidated financial statements and schedules of the Company and
Subsidiaries as of December 31, 1995 and 1994, and for each of the years in the
three-year period ended December 31, 1995 which are incorporated by reference in
the Company's Annual Report on Form 10-K for the year ended December 31, 1995,
have been incorporated by reference in this Prospectus in reliance upon the
reports of KPMG Peat Marwick LLP, independent certified public accountants, and
upon the authority of said firm as experts in accounting and auditing. The
reports of KPMG Peat Marwick LLP covering the December 31, 1995 consolidated
financial statements and schedules of the Company and Subsidiaries refers to the
Company's changes in 1993 in its method of accounting for certain investments in
debt and equity securities, postemployment benefits, workers' compensation life
table indemnity reserves and retrospectively rated reinsurance contracts.
The consolidated balance sheet of Aetna Inc. as of April 22, 1996 which is
included in the Company's Current Report on Form 8-K, dated June 28, 1996, has
been incorporated by reference in this Prospectus in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing.
With respect to the unaudited interim financial information of the Company
incorporated by reference in this Prospectus and of the Company and Aetna to be
incorporated by reference in this Prospectus, the independent certified public
accountants have reported and may report that they applied limited procedures in
15
<PAGE> 17
accordance with professional standards for a review of such information.
However, any separate report included in the Company's or Aetna's Quarterly
Reports on Form 10-Q and incorporated by reference herein states and will state
that they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on any report on such
information should be restricted in light of the limited nature of the review
procedures applied. The accountants are not subject to the liability provisions
of Section 11 of the Securities Act for any report on the unaudited interim
financial information because that report is not a "report" or a "part" of the
Registration Statement prepared or certified by the accountants within the
meaning of Sections 7 and 11 of the Securities Act.
The consolidated financial statements of U.S. Healthcare, Inc. incorporated
by reference in U.S. Healthcare, Inc.'s Annual Report on Form 10-K, as amended,
for the year ended December 31, 1995, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
16
<PAGE> 18
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses in connection with the issuance
and distribution of the securities being registered. Except for the SEC
Registration Fee, all amounts shown are estimates.
<TABLE>
<S> <C>
SEC Registration Fee................................................... $ 500,000
Accounting Fees and Expenses........................................... 120,000
Legal Fees and Expenses................................................ 200,000
Blue Sky Fees and Expenses............................................. 75,000
Printing and Engraving Expenses........................................ 80,000
Trustee's Fees and Expenses............................................ 27,500
Rating Agency Fees..................................................... 500,000
Miscellaneous.......................................................... 22,500
------
Total........................................................ $1,525,000
======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrants are Connecticut corporations. Section 33-320a of the
Connecticut General Statutes ("C.G.S.") provides that a Connecticut corporation
shall, under certain circumstances, indemnify its shareholders, directors,
officers, employees, agents and certain other persons.
Subsection (b) of C.G.S. Section 33-320a provides that a corporation shall
indemnify any director or officer of the corporation or an eligible outside
party, 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 the corporation), against judgments, fines, penalties, amounts paid in
settlement and reasonable expenses (including attorneys' fees) actually incurred
by such person in connection with such action, suit or proceeding, provided (1)
that such person was successful on the merits in the defense of such action,
suit or proceeding, or (2) that it shall be concluded that such person acted in
good faith and in a manner he or she reasonably believed to be in the best
interests of the corporation and, with respect to any criminal action or
proceeding, provided that such person had no reason to believe his or her
conduct was unlawful, or (3) a court shall have determined that in view of all
the circumstances, such person is fairly and reasonably entitled to be
indemnified, and then for such amount as the court shall determine; except that,
in connection with an alleged claim based upon the purchase or sale of
securities, the corporation shall only indemnify such person after a court shall
have determined that in view of all the circumstances, he or she is fairly and
reasonably entitled to be indemnified, and then for such amount as the court
shall determine.
Subsection (c) of C.G.S. Section 33-320a provides that, where a director or
officer was or is a party or was threatened to be made a party to a proceeding
by or in the right of the corporation, the corporation shall indemnify him or
her against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with the proceeding or any appeal therein,
in relation to matters as to which he or she is finally adjudged not to have
breached his or her duty to the corporation. The corporation shall also
indemnify a director or officer if a court determines that in view of all the
circumstances, such person is fairly and reasonably entitled to be indemnified;
however, in such a situation, the individual shall only be indemnified for such
amount as the court determines to be appropriate. Furthermore, the statute
provides that the corporation shall not indemnify a director or officer for
amounts paid to the corporation, to a plaintiff or to counsel for a plaintiff in
settling or otherwise disposing of a threatened or pending action, with or
without court approval, or for expenses incurred in defending a threatened
action or a pending action which is settled or otherwise disposed of without
court approval.
II-1
<PAGE> 19
C.G.S. Section 33-320a is an exclusive statute. A corporation cannot
indemnify a director or officer to an extent either greater or less than that
authorized by the statute; provided, however, that the statute specifically
authorizes a corporation to procure insurance providing greater indemnification
rights than those set out in C.G.S. Section 33-320a.
Consistent with the statute, Aetna Life and Casualty Company has procured,
and Aetna Inc. intends to procure, insurance from several carriers for their
respective directors and officers which supplements the indemnification rights
provided to those individuals by C.G.S. Section 33-320a. Unlike the statute,
these policies do not require an after-the-fact determination of good faith in
order for the insured director or officer to receive the benefits provided under
the policies nor do they require affirmative judicial or corporate action as a
prerequisite to the insurance company's duty to defend (and pay for the defense
of) the insured director or officer under the policies. Furthermore, the
insurance policies cover or will cover directors and officers for any acts not
specifically excluded for which the director or officer is not eligible for
indemnification under C.G.S. Section 33-320a to the extent such coverage does
not violate public policy.
As permitted under Connecticut law, the Registrants' Certificates of
Incorporation limit the personal liability of directors for monetary damages to
the Registrants and their respective shareholders for a breach of their
fiduciary duty as directors to the amount of their compensation for serving the
applicable Registrant as directors during the year of the violation. These
provisions do not eliminate the liability of a director if such breach (i)
involved a knowing and culpable violation of law by the director, (ii) enabled
the director or an associate (as defined) to receive an improper personal gain,
(iii) showed a lack of good faith and a conscious disregard for the duty of the
director to the Registrants under circumstances in which the director was aware
that his or her conduct or omission created an unjustifiable risk of serious
injury to the Registrants, (iv) constituted a sustained and unexcused pattern of
inattention that amounted to an abdication of the director's duty to the
Registrants or (v) created liability under C.G.S. Section 33-321 (relating to
the distribution of assets of the Registrants, whether by dividend, purchase or
redemption of shares or otherwise, in violation of the Connecticut corporation
law).
Reference is made to the Underwriting Agreement filed as Exhibit 1.1 to
this Registration Statement for certain provisions relating to the
indemnification of directors and officers of Aetna and the Company against
certain liabilities, including liabilities under the Securities Act.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
1.1 -- Form of Underwriting Agreement for Debt Securities*
4.1 -- Form of Senior Indenture between the Company, Aetna and State Street Bank and
Trust Company of Connecticut, National Association, as Trustee (including
the forms of the Senior Debt Securities and Senior Debt Guarantees)*
4.2 -- Form of Subordinated Indenture between the Company, Aetna and State Street
Bank and Trust Company of Connecticut, National Association, as Trustee
(including the forms of the Subordinated Debt Securities and Subordinated
Debt Guarantees)*
5.1 -- Opinion of Thomas J. Calvocoressi, counsel to the Company and Aetna*
5.2 -- Opinion of Davis Polk & Wardwell*
12.1 -- Computation of Ratio of Earnings to Fixed Charges of the Company incorporated
by reference to Exhibit 12 of the Company's Quarterly Report on Form 10-Q
for the three month period ended March 31, 1996, as filed on April 26, 1996.
15.1 -- Letter from KPMG Peat Marwick LLP re: Unaudited Interim Financial Information
23.1 -- Consent of Thomas J. Calvocoressi (contained in Exhibit 5.1)
23.2 -- Consent of Davis Polk & Wardwell (contained in Exhibit 5.2)
23.3 -- Consent of KPMG Peat Marwick LLP re: Aetna Life and Casualty Company
23.4 -- Consent of KPMG Peat Marwick LLP re: Aetna Inc.
23.5 -- Consent of Ernst & Young LLP
</TABLE>
II-2
<PAGE> 20
<TABLE>
<S> <C>
24.1 -- Powers of Attorney for the Company*
24.2 -- Powers of Attorney for Aetna*
25.1 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
State Street Bank and Trust Company of Connecticut, National Association, as
Trustee under the Senior Indenture*
25.2 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
State Street Bank and Trust Company of Connecticut, National Association, as
Trustee under the Subordinated Indenture*
28 -- Information from Reports Furnished to State Insurance Regulatory Authorities;
incorporated herein by reference to Exhibit 28 of the Company's 1995 Form
10-K, filed on February 26, 1996 (File No. 1-5704)
</TABLE>
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
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;
(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) if, in the aggregate, the
changes in volume and price represent no more than 20 percent 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 (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by Aetna or the Company pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of Aetna's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act that is incorporated by
reference in this 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.
II-3
<PAGE> 21
(5) That for purposes of determining any liability under the
Securities Act, 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 Registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(6) That for the purpose of determining any liability under the
Securities Act, 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 public offering thereof.
(7) Insofar as indemnification (other than pursuant to the insurance
described in Item 15 above) for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by either
of the registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants 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
registrants will, unless in the opinion of their counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Aetna Life and
Casualty Company 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
Pre-effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Hartford,
State of Connecticut on July 16, 1996.
AETNA LIFE AND CASUALTY COMPANY
By /s/ LUCILLE M. NICKERSON
------------------------------------
Name: Lucille M. Nickerson
Title: Vice President and Corporate
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Pre-effective Amendment No. 1 to the Registration Statement has been signed by
the following directors and officers of Aetna Life and Casualty Company in the
capacities indicated on July 16, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------- --------------------------------------------
<S> <C>
* Chairman, President and Director
- ----------------------------------------------- (Principal Executive Officer)
Ronald E. Compton
- ----------------------------------------------- Director
William H. Donaldson
* Director
- -----------------------------------------------
Barbara Hackman Franklin
* Director
- -----------------------------------------------
Earl G. Graves
* Director
- -----------------------------------------------
Gerald Greenwald
- ----------------------------------------------- Director
Ellen M. Hancock
- ----------------------------------------------- Director
Michael H. Jordan
* Director
- -----------------------------------------------
Jack D. Kuehler
* Director
- -----------------------------------------------
Frank R. O'Keefe, Jr.
</TABLE>
II-5
<PAGE> 23
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------- --------------------------------------------
<S> <C>
- ----------------------------------------------- Director
Judith Rodin
* Vice Chairman for Strategy and Finance
- ----------------------------------------------- (Principal Financial Officer)
Richard L. Huber
* Vice President and Corporate Controller
- ----------------------------------------------- (Controller)
Robert J. Price
*By /s/ WILLIAM J. CASAZZA
- -----------------------------------------------
(Attorney-in-Fact)
</TABLE>
II-6
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Aetna Inc. has
duly caused this Pre-effective Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Hartford, State of Connecticut, on July 16, 1996.
AETNA INC.
By /s/ LUCILLE M. NICKERSON
------------------------------------
Name: Lucille M. Nickerson
Title: Vice President and Corporate
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Pre-effective Amendment No. 1 to the Registration Statement has been signed by
the following officers and directors of Aetna Inc. in the capacities indicated
on July 16, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------- --------------------------------------------
<S> <C>
* Chairman, President and Director
- ----------------------------------------------- (Principal Executive Officer)
Ronald E. Compton
* Vice Chairman for Strategy
- ----------------------------------------------- and Finance and Director
Richard L. Huber (Principal Financial and Accounting Officer)
* Director
- -----------------------------------------------
James H. Dickerson, Jr.
- ----------------------------------------------- Director
David F. Simon
*By /s/ WILLIAM J. CASAZZA
- -----------------------------------------------
(Attorney-in-Fact)
</TABLE>
II-7
<PAGE> 25
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ --------------------------------------------------------------------------------
<C> <S>
1.1 -- Form of Underwriting Agreement for Debt Securities*
4.1 -- Form of Senior Indenture between the Company, Aetna and State Street Bank and
Trust Company of Connecticut, National Association, as Trustee (including the
forms of the Senior Debt Securities and Senior Debt Guarantees)*
4.2 -- Form of Subordinated Indenture between the Company, Aetna and State Street Bank
and Trust Company of Connecticut, National Association, as Trustee (including
the forms of the Subordinated Debt Securities and Subordinated Debt Guarantees)*
5.1 -- Opinion of Thomas J. Calvocoressi, counsel to the Company and Aetna*
5.2 -- Opinion of Davis Polk & Wardwell*
12.1 -- Computation of Ratio of Earnings to Fixed Charges of the Company incorporated by
reference to Exhibit 12 of the Company's Quarterly Report on Form 10-Q for the
three month period ended March 31, 1996, as filed on April 26, 1996
15.1 -- Letter from KPMG Peat Marwick LLP re: Unaudited Interim Financial Information
23.1 -- Consent of Thomas J. Calvocoressi (contained in Exhibit 5.1)
23.2 -- Consent of Davis Polk & Wardwell (contained in Exhibit 5.2)
23.3 -- Consent of KPMG Peat Marwick LLP re: Aetna Life and Casualty Company
23.4 -- Consent of KPMG Peat Marwick LLP re: Aetna Inc.
23.5 -- Consent of Ernst & Young LLP
24.1 -- Powers of Attorney for the Company*
24.2 -- Powers of Attorney for Aetna*
25.1 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of State
Street Bank and Trust Company of Connecticut, National Association, as Trustee
under the Senior Indenture*
25.2 -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of State
Street Bank and Trust Company of Connecticut, National Association, as Trustee
under the Subordinated Indenture*
28 -- Information from Reports Furnished to State Insurance Regulatory Authorities;
incorporated herein by reference to Exhibit 28 of the Company's 1995 Form 10-K,
filed on February 26, 1996 (File No. 1-5704)
</TABLE>
--------------------
* Previously filed.
<PAGE> 1
EXHIBIT 15.1
LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
Aetna Life and Casualty Company
Hartford, Connecticut
Gentlemen:
With respect to Pre-effective Amendment No. 1 to the Registration Statement
on Form S-3 of Aetna Life and Casualty Company and Aetna Inc. for the
registration of up to $2,000,000,000 of debt securities of Aetna Life and
Casualty Company and guarantees thereof of Aetna Inc., we acknowledge our
awareness of the incorporation by reference of our report dated April 25, 1996
related to our review of interim financial information of Aetna Life and
Casualty Company and Subsidiaries.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is
not considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Sections 7 and 11 of the Act.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
July 16, 1996
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Aetna Life and Casualty Company:
We consent to incorporation by reference in Pre-effective Amendment No. 1
to the Registration Statement on Form S-3 of Aetna Life and Casualty Company
(the "Company") and Aetna Inc. for the registration of up to $2,000,000,000 of
debt securities of Aetna Life and Casualty Company and guarantees thereof of
Aetna Inc. of our reports dated February 6, 1996, relating to the consolidated
balance sheets of Aetna Life and Casualty Company and Subsidiaries as of
December 31, 1995 and 1994 and the related consolidated statements of income,
shareholders' equity, and cash flows and related schedules for each of the years
in the three-year period ended December 31, 1995, which reports appear in or are
incorporated by reference in the December 31, 1995 annual report on Form 10-K of
Aetna Life and Casualty Company. Our reports refer to changes in 1993 in the
Company's method of accounting for certain investments in debt and equity
securities, postemployment benefits, workers' compensation life table indemnity
reserves and retrospectively rated reinsurance contracts.
We also consent to the reference to our firm under the heading "Experts" in
the Prospectus.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
July 16, 1996
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Aetna Inc.:
We consent to incorporation by reference in Pre-effective Amendment No. 1
to the Registration Statement on Form S-3 of Aetna Life and Casualty Company
(the "Company") and Aetna Inc. for the registration of up to $2,000,000,000 of
debt securities of Aetna Life and Casualty Company and guarantees thereof of
Aetna Inc. of our report dated April 23, 1996, relating to the consolidated
balance sheet of Aetna Inc. as of April 22, 1996, which report appears in the
Company's Current Report on Form 8-K dated June 28, 1996.
We also consent to the reference to our firm under the heading "Experts" in
the Prospectus.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
July 16, 1996
<PAGE> 1
EXHIBIT 23.5
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Aetna Life and
Casualty Company and Aetna Inc. for the registration of up to $2,000,000,000 of
debt securities of Aetna Life and Casualty Company and guarantees thereof of
Aetna Inc. and to the incorporation by reference therein of our reports dated
February 2, 1996, with respect to the consolidated financial statements of U.S.
Healthcare, Inc. incorporated by reference in its Annual Report (Form 10-K, as
amended) for the year ended December 31, 1995 and the related financial
statement schedule included therein, filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
July 15, 1996
