As filed with the Securities and Exchange Commission on January 10, 1994
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
USF&G CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-1220567
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
100 Light Street
Baltimore, Maryland 21202
(410) 547-3000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
John A. MacColl, Esq.
Senior Vice President - General Counsel
USF&G Corporation
100 Light Street
Baltimore, Maryland 21202
(410) 547-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Robert W. Smith, Jr., Esq. Keith L. Kearney, Esq.
Piper & Marbury Davis Polk & Wardwell
36 South Charles Street 450 Lexington Avenue
Baltimore, Maryland 21201 New York, New York 10017
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this
Registration Statement as determined in light
of market conditions and other factors
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /xx/
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Proposed Proposed
Title of Each Class Maximum Maximum Amount of
of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered(1) Per Unit(2) Offering Fee
Price(2)
<S> <C> <C> <C> <C>
Debt Securities(3)..\ 100% \ \
Preferred Stock, | | |
$50 par value(3). > $200,000,000(4) -- > $200,000,000(4)(5)> $68,966
Common Stock, $2.50 | | |
par value(3)(6).. | -- | |
Depositary Shares(7)| -- | |
Warrants(8)........ / -- / /
<FN>
(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) Also includes such indeterminate amounts of Debt Securities and Preferred
Stock and indeterminate number of shares of Common Stock as may be issued
upon conversion of or exchange for any other Debt Securities or Preferred
Stock that provide for conversion or exchange into other Securities.
(4) Such amount represents the principal amount of the Debt Securities issued
at their principal amount, the issue price rather than the principal amount
of any Debt Securities issued at an original issue discount, the
liquidation preference of any Preferred Stock, the amount computed pursuant
to Rule 457(c) for any Common Stock, the issue price of any Warrants and
the exercise price of any Securities issuable upon the exercise of
Warrants.
(5) No separate consideration will be received for the Debt Securities,
Preferred Stock, Common Stock or the Depositary Shares issuable upon
conversion of or in exchange for Debt Securities or Preferred Stock.
(6) Includes Preferred Share Purchase Rights. Prior to the occurrence of
certain events, the Rights will not be exercisable or evidenced separately
from the Common Stock.
(7) Such indeterminate number of Depositary Shares to be evidenced by
Depositary Receipts issued pursuant to a Deposit Agreement. In the event
the Registrant elects to offer to the public fractional interests in shares
of the Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests and the
shares of Preferred Stock will be issued to the Depositary under the
Deposit Agreement. No separate consideration will be received for the
Depositary Shares.
(8) Warrants may be sold separately or with Debt Securities, Preferred Stock
or Common Stock.
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant 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 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine. Pursuant to Rule 429 under the Securities Act of 1933, as
amended, the Prospectus included in this Registration Statement also relates to
unsold securities in the amount of $400,000,000 registered under Registration
Statement No. 33-33271.
SUBJECT TO COMPLETION, DATED JANUARY 7, 1994
$600,000,000
USF&G CORPORATION
DEBT SECURITIES, PREFERRED STOCK,
COMMON STOCK AND WARRANTS
USF&G Corporation (the "Corporation") may from time to
time offer, together or separately, its (i) debt securities (the
"Debt Securities") which may be either senior debt securities (the
"Senior Debt Securities") or subordinated debt securities (the
"Subordinated Debt Securities"), (ii) shares of its preferred
stock, $50.00 par value per share (the "Preferred Stock"), which
may be issued in the form of Depositary Shares evidenced by
Depositary Receipts, (iii) shares of its common stock, $2.50 par
value per share (the "Common Stock"), and (iv) warrants to
purchase securities of the Corporation as shall be designated by
the Corporation at the time of the offering (the "Warrants"), in
amounts, at prices and on terms to be determined at the time of
offering. The Debt Securities, Preferred Stock, Common Stock and
Warrants are collectively called the "Securities."
The Securities offered pursuant to this Prospectus may be
issued in one or more series or issuances and will be limited to
$600,000,000 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 Corporation). Certain specific terms
of the particular Securities in respect of which this Prospectus
is being delivered are set forth in the accompanying Prospectus
Supplement (the "Prospectus Supplement"), including, where
applicable, in the case of Debt Securities, 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 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 Corporation
or the holder, any sinking fund provisions, terms for any
conversion or exchange into other Securities, the initial public
offering price and other special terms, in the case of Preferred
Stock, the specific title,
the aggregate number of shares offered, any dividend including the
method of calculating payment of dividends), liquidation,
redemption, voting and other rights, any terms for any conversion
or exchange into other Securities, the initial public offering
price and other terms, and, in the case of Warrants, the duration,
purchase price, exercise price and detachability of such Warrants
and a description of the securities for which each Warrant is
exercisable. 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 ("Global Securities").
The Corporation's Common Stock is listed on the New York
Stock Exchange under the trading symbol "FG." Any Common Stock
sold pursuant to a Prospectus Supplement will be listed on such
exchange, subject to official notice of issuance. The
Corporation's Common Stock is also listed on the Pacific Stock
Exchange, the London Stock Exchange and the Swiss Exchanges in
Basle, Geneva and Zurich, Switzerland.
Unless otherwise specified in a Prospectus Supplement,
the Senior Debt Securities, when issued, will be unsecured and
will rank equally with all other unsecured and unsubordinated
indebtedness of the Corporation. The Subordinated Debt Securities,
when issued, will be subordinated in right of payment to all
Senior Debt (as defined herein) of the Corporation.
The Prospectus Supplement will contain information
concerning certain U.S. federal income tax considerations, if
applicable to the 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 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
Corporation or any dealers or underwriters are involved in the
sale of the 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 Securities.
The date of this Prospectus is , 1994.
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.
AVAILABLE INFORMATION
The Corporation is subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange
Act") and, in accordance therewith, files reports, proxy or
information statements and other information with the Securities
and Exchange Commission (the "Commission"). This Prospectus
contains information concerning the Corporation but does not
contain all of the information set forth in the Registration
Statement and exhibits thereto which the Corporation has filed
with the Commission under the Securities Act of 1933 (the
"Securities Act"). Such reports, proxy or information statements,
Registration Statement and exhibits and other information filed by
the Corporation with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth St., N.W., Washington, D.C. 20549, and at the
Regional Offices of the Commission at 7 World Trade Center, New
York, New York 10048; and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. 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 or information
statements, Registration Statement and exhibits and other
information concerning the Corporation can 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, Inc.,
301 Pine Street, San Francisco, California 94104 and 233 South
Beaudry Avenue, Los Angeles, California 90012.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this
Prospectus its (1) Annual Report on Form 10-K for the year ended
December 31, 1992, as amended on July 13, 1993, under File
No. 1-8233, (2) Quarterly Report on Form 10-Q for the three months
ended March 31, 1993, under File No. 1-8233, (3) Quarterly Report
on Form 10-Q for the six months ended June 30, 1993, under File
No. 1-8233, (4) Quarterly Report on Form 10-Q for the nine months
ended September 30, 1993, under File No. 1-8233, and (5) the description
of the Corporation's
Common Stock and Shareholder Rights Plan contained in its
Registration Statements filed pursuant to Section 12 of the
Exchange Act and any amendment or report filed for the purpose of
updating those descriptions.
All documents filed by the Corporation pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the
offering of the Securities shall be deemed to be incorporated by
reference in this Prospectus and made a part hereof from the date
of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall
be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other document subsequently filed with the Commission which
also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Corporation will provide without charge to each person to
whom this Prospectus is delivered, upon the written or oral request
of such person, a copy of any or all of the documents incorporated
by reference herein (not including the exhibits to such documents,
unless such exhibits are specifically incorporated by reference in
such documents). Requests for such copies should be directed to:
USF&G Corporation, 100 Light Street, Baltimore, Maryland 21202,
Attention: John F. Hoffen, Jr., Secretary, telephone (410)
547-3000.
THE CORPORATION
USF&G Corporation (the "Corporation") is a holding company
whose principal subsidiaries are engaged in writing
property/casualty insurance and life insurance/annuities.
Property/casualty insurance is written primarily by United States
Fidelity and Guaranty Company, founded in 1896, and is sold through
independent agents supported by the Company's underwriting,
marketing, administrative and claim services offices located
throughout the United States. Life insurance and annuities are
written primarily by Fidelity and Guaranty Life Insurance Company,
founded in 1959, and are sold throughout the United States through
independent agents. The Corporation is incorporated in Maryland,
and its principal executive office is located at 100 Light Street,
Baltimore, Maryland 21202, telephone (410) 547-3000.
RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES AND RATIO
OF CONSOLIDATED EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
On a consolidated basis, the ratios of earnings to fixed
charges and earnings to combined fixed charges and preferred stock
dividends include the earnings and fixed charges of the Corporation
and its subsidiaries.
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Years ended December 31
1993 1992 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings
to Fixed Charges... 2.3 1.3 1.4 (A) (B) 2.9 5.1
Ratio of Earnings
to Combined Fixed
Charges and
Preferred Stock
Dividends.......... 1.3 .8 .8 (A) (B) 2.4 4.0
<FN>
(A) The Corporation had a net loss for the year ended December
31, 1991, and earnings were inadequate to cover fixed charges
and combined fixed charges and preferred stock dividends by
$149 million and $186 million, respectively, for the year
ended December 31, 1991.
(B) The Corporation had a net loss for the year ended
December 31, 1990, and earnings were inadequate to cover
fixed charges and combined fixed charges and preferred stock
dividends by $435 million and $452 million, respectively, for
the year ended December 31, 1990.
</TABLE>
The ratios were determined by dividing consolidated earnings
by total fixed charges and total fixed charges and preferred stock
dividends, respectively. Earnings consist of income from
continuing operations before considering income taxes, the
cumulative effect of accounting changes, and fixed charges. Fixed
charges consist of interest, that portion of rentals which is
deemed to be an appropriate interest factor and preferred stock
dividend requirements.
USE OF PROCEEDS
Except as otherwise stated in a Prospectus Supplement,
the net proceeds from the sale of the Securities will be added to
the general funds of the Corporation and will be available for
general corporate purposes, including the repayment of
indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general
terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by any Prospectus Supplement and the extent, if
any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus
Supplement relating to such Debt Securities.
The Senior Debt Securities are to be issued under an
Indenture to be dated as of January 28, 1994 (the "Senior
Indenture"), between the Corporation and Signet Trust Company, as
trustee. The Subordinated Debt Securities are to be issued under
a separate Indenture to be dated as of January 28, 1994 (the
"Subordinated Indenture"), between the Corporation and Chemical
Bank, 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. Each of Signet Trust Company and Chemical Bank is
hereinafter referred to as a "Trustee" and collectively, as the
"Trustees." The following summaries of certain provisions of the
Senior Debt Securities, the Subordinated Debt Securities 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, 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 and may be denominated and
payable in foreign currencies or units based on or relating to
foreign currencies. Unless otherwise specified in the Prospectus
Supplement, the Senior Debt Securities when issued will be
unsecured and unsubordinated obligations of the Corporation and
will rank equally and ratably with all other unsecured and
unsubordinated indebtedness of the Corporation. The Subordinated
Debt Securities when issued will be subordinated in right of
payment to the prior payment in full of all Senior Debt (as
defined below) of the Corporation, as described under
"Subordination of Subordinated Debt Securities" and in the
Prospectus Supplement applicable to an offering of Subordinated
Debt Securities.
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 or Subordinated Debt
Securities, and shall further set forth the following terms of the
Offered Debt Securities: (l) 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 he redeemed at the option of the Corporation
pursuant to a sinking fund or otherwise; (9) if applicable, any
obligation of the Corporation 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 applicable, the terms
of any right to convert or exchange the Offered Debt Securities
into other securities or property of the Corporation; (ll) if
other than denominations of $1,000 and any integral multiple
thereof, the denominations in which the Offered Debt Securities
will be issuable; (12) 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; (13) 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; (14) 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 Corporation or a
Holder thereof, in one or more currencies, including composite
currencies, or currency units other than that or those in which
the 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
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; (15) the
portion of the principal amount of the Offered Debt Securities, if
other than the principal amount thereof, payable upon acceleration
of maturity thereof; (16) 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; (17) any event or
events of default applicable with respect to the Offered Debt
Securities in addition to those provided in the Indentures; (18)
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; (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. (Indentures, Section 301) Debt
Securities may also be issued under the Indentures upon the
exercise of Warrants. See "Description of Warrants."
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. (Indentures, Section 302) No
service charge will be made for any transfer or exchange of such
Offered Debt Securities, but the Corporation or the Trustee may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. (Indentures,
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 Corporation is a holding company, the rights of the
Corporation, and hence the right of creditors of the Corporation
(including the Holders of Debt Securities), to participate in any
distribution of the assets of any subsidiary upon its 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 Corporation itself as a creditor of the subsidiary
may be recognized.
The Indentures do not contain any provisions that limit the
ability of the Corporation or any subsidiary to incur indebtedness
or that afford Holders of the Debt Securities protection in the
event of a highly leveraged or similar transaction involving the
Corporation or any subsidiary.
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 Corporation 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) which continues for a
period of 90 days after written notice to the Corporation; (d) due
acceleration (which acceleration shall not have been rescinded
within 30 days after written notice to the Corporation) of any
indebtedness for borrowed money in a principal amount in excess of
$50,000,000 for which the Corporation is liable, including Debt
Securities of another series, or a default by the Corporation in
the payment at final maturity of outstanding indebtedness for
borrowed money in a principal amount in excess of $50,000,000
unless such acceleration or default at maturity shall be remedied
or cured by the Corporation 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 Corporation. (Indentures,
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.
(Indentures, 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 applicable 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. (Indentures, Section 602)
The Corporation will be required to furnish to the applicable
Trustee annually a statement by certain officers of the Corporation
as to the compliance with all conditions and covenants of the
Indentures. (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 applicable Trustee or exercising any trust or power conferred
on such applicable Trustee with respect to the Debt Securities of
such series, and to waive certain defaults. (Indentures, Sections
512 and 513)
The Indentures provide that, in case an Event of Default shall
occur and be continuing, the applicable Trustee shall exercise such
of its rights and powers under the Indentures, and use the same
degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own
affairs. (Indentures, Section 601) Subject to such provisions, the
applicable 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
such Trustee security or indemnity in form and substance reasonably
satisfactory to such Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request. (Indentures, 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 applicable Trustee written notice of a continuing
Event of Default 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
security or indemnity to such Trustee in form and substance
reasonably satisfactory to such Trustee, to institute such
proceeding as trustee, and such 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. (Indentures, 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, or of the right to convert such Debt Security in
accordance with the Indentures (if applicable). (Indentures,
Section 508)
Modification and Waiver
Modifications and amendments of the Indentures may be made by
the Corporation and the applicable 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) adversely change the right to convert
or exchange, including decreasing the conversion rate or increasing
the conversion price of, such Debt Security (if applicable); (6)
reduce the percentage of Holders of Debt Securities necessary to
modify or amend the Indentures; (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.
(Indentures, 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
Corporation 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. (Indentures, Sections 907 and
513)
Defeasance and Covenant Defeasance
The Indentures provide that the Corporation may elect either
(A) to defease and be discharged from any and all obligations with
respect to such Debt Securities (including, in the case of
Subordinated Debt Securities, the provisions described under
"Subordination of Subordinated Debt Securities" 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) to be released from its obligations
with respect to such Debt Securities concerning the restrictions
described under "Consolidation, Merger and Sale of Assets" and any
other covenants applicable to such Debt Securities (including, in
the case of Subordinated Debt Securities, the provisions described
under "Subordination of Subordinated Debt Securities" 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 applicable 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 Corporation has delivered to the applicable
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
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 beyond any applicable grace
period shall have occurred and be continuing, and (y) no other
default with respect to any Senior Debt shall have occurred
and be continuing and shall have resulted in the acceleration of such
Senior Debt. (Indentures, Article Thirteen)
The Corporation may exercise its defeasance option with
respect to such Debt Securities notwithstanding its prior exercise
of its covenant defeasance option. If the Corporation exercises its
defeasance option, payment of such Debt Securities may not be
accelerated because of an Event of Default. If the Corporation
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 Corporation omits to
comply with its remaining obligations with respect to such Debt
Securities under the Indentures after exercising 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 applicable 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 Corporation will remain liable in respect of
such payments. (Indentures, Article Thirteen)
Limitation on Liens
As long as any of the Debt Securities remains outstanding, the
Corporation will not, and will not permit any Principal Insurance
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 Insurance Subsidiary, which Common Stock is owned by
the Corporation or by any Principal Insurance Subsidiary, unless
the Debt Securities and, if the Corporation so elects, any other
indebtedness of the Corporation ranking on a parity with the Debt
Securities, shall be secured equally and ratably with, or prior to,
such secured indebtedness for borrowed money so long as it is
outstanding. (Indentures, Section 1005)
"Principal Insurance Subsidiary" means each of United States
Fidelity and Guaranty Company and Fidelity and Guaranty Life
Insurance Company, so long as it remains a Subsidiary, or any other
Subsidiary of the Corporation which shall hereafter succeed by
merger or otherwise to a major part of the business of one or more
of the Principal Insurance 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 Insurance Subsidiaries
shall be made in good faith by the board of directors of the Corporation
or a committee thereof by the
adoption of a resolution so stating, and the Corporation shall
within 30 days of the date of the adoption of such resolution
deliver to the applicable Trustee a copy thereof, certified by the
Corporate Secretary or an Assistant Corporate Secretary of the
Corporation. (Indentures, Section 101)
"Common Stock" means, with respect to any Principal Insurance
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 Insurance Subsidiary, and shall include securities of any
class, however designated, which are convertible into such Common
Stock. (Indentures, Section 101)
Consolidation, Merger and Sale of Assets
The Corporation may not consolidate with or merge into any
other Person or sell its property and assets as, or substantially
as, an entirety to any Person and may not permit any Person to
merge into or consolidate with the Corporation unless (i) either
the Corporation 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 Corporation's obligations on the Debt
Securities 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. (Indentures, Section 801)
Conversion Rights
The terms on which Debt Securities of any series may be
convertible or exchangeable into Common Stock or other securities
of the Corporation or exchangeable into securities of another
corporation will be set forth in the Prospectus Supplement relating
thereto. Such terms shall include provisions as to whether
conversion or exchange is mandatory, at the option of the holder or
at the option of the Corporation, and may include provisions
pursuant to which the number of shares of Common Stock or other
securities of the Corporation or the securities of another
corporation, as the case may be, to be received by the holders of
Debt Securities would be calculated according to the market price
of Common Stock or other securities of the Corporation as of a time
stated in the Prospectus Supplement. (Indentures, Article Twelve)
Subordination of Subordinated Debt Securities
Unless otherwise indicated in the Prospectus Supplement, the
following provisions will apply to the Subordinated Debt
Securities.
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, including the
Senior Debt Securities. 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 Corporation, the holders
of Senior Debt will first be entitled to receive payment in full of
principal of (and premium, if any) and interest, if any, on such
Senior Debt 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, Section
1502)
By reason of such subordination, in the event of liquidation
or insolvency, creditors of the Corporation who are not holders of
Senior Debt or Subordinated Debt Securities may recover less,
ratably, than holders of Senior Debt and may recover more, ratably,
than the holders of the Subordinated Debt Securities.
In the event of the acceleration of the maturity of any
Subordinated Debt Securities, the holders of all Senior Debt
outstanding at the time of such acceleration will first be entitled
to receive payment in full of all amounts due thereon (including
any amounts due upon acceleration) before the Holders of the
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,
Section 1503)
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 any payment with respect to Senior Debt, or an event of
default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding
shall be pending with respect to any such default. (Subordinated
Indenture, Section 1504) For purposes of the subordination
provisions, the payment, issuance and delivery of cash, property
or securities (other than stock and certain
subordinated securities of the Corporation) upon conversion of a
Subordinated Debt Security will be deemed to constitute payment on
account of the principal of such Subordinated Debt Security.
"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; (vi) the maximum fixed redemption or
repurchase price of redeemable stock of such Person at the time of
determination; and (vii) every obligation of the type referred to
in clauses (i) through (vi) 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.
"Senior Debt" means 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 the Corporation to the extent that such claim for post-petition
interest is allowed in such proceeding) on Debt, 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 or to other Debt which is pari passu
with, or subordinated to the Subordinated Debt Securities;
provided, however, that Senior Debt shall not be deemed to include
(i) the Subordinated Debt Securities or (ii) the Debt referred to
in clause (vi) of the definition of Debt.
The Subordinated Indenture does not limit or prohibit the
incurrence of additional Senior Debt, which may include
indebtedness that is senior to the Subordinated Debt Securities,
but subordinate to other obligations of the Corporation. The Senior
Debt Securities, when issued, will constitute Senior Debt.
The Prospectus Supplement may further describe the provisions,
if any, applicable to the subordination of the Subordinated Debt
Securities of a particular series.
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. (Indentures, 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
applicable Trustee, as a creditor of the Corporation, 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 applicable 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 Corporation.
The applicable Trustee or its affiliates may act as depositary
for funds of, make loans to and perform other services for, or may
be a customer of, the Corporation 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.
DESCRIPTION OF CAPITAL STOCK
General
The authorized capital stock of the Corporation consists
of 240,000,000 shares of common stock, $2.50 par value per share
(the "Common Stock") and 12,000,000 shares of preferred stock,
$50.00 par value per share, of which 4,000,000 shares are
classified as $4.10 Series A Convertible Exchangeable Preferred
Stock (the "Series A Preferred Stock"), 1,300,000 shares are
classified as Series B Cumulative Convertible Preferred Stock (the
"Series B Preferred Stock"), 3,800,000 shares are classified as
$5.00 Series C Cumulative Convertible Preferred Stock (the "Series
C Preferred Stock") and 1,200,000 are classified as Junior
Participating Preferred Stock (the "Junior Preferred Stock"). As
of December 31, 1993, there were issued and outstanding 85,009,482
shares of Common Stock, 4,000,000 shares of Series A Preferred
Stock, 1,300,000 shares of Series B Preferred Stock and 3,800,000
shares of Series C Preferred Stock. The shares of Junior
Preferred Stock have been reserved for issuance in connection with
the Corporation's Shareholder Rights Plan and no shares of the
Junior Preferred Stock currently are outstanding.
The following summary of the terms of the Corporation's
capital stock does not purport to be complete and is qualified in
its entirety by reference to the applicable provisions of Maryland
law and the Corporation's Articles of Incorporation, as amended
(the "Charter").
The Series A Preferred Stock, Series B Preferred Stock
and Series C Preferred Stock rank on a parity with each other and
rank senior to the Junior Preferred Stock and the Common Stock as
to dividends and upon liquidation.
The Transfer Agent and Registrar for the Corporation's
Common Stock, Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Junior Preferred Stock is First
Chicago Trust Company, New York, New York ("First Chicago Trust").
Common Stock
Each holder of Common Stock is entitled to one vote for
each share of Common Stock held. Cumulative voting for the
election of directors is not provided for in the Charter or the
by-laws. Subject to the prior rights of the Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock
and the Junior Preferred Stock and any other preferred stock
which may be classified and issued, the holders of the
Common Stock of the Corporation are entitled to receive, pro-rata,
such dividends as may be declared by the Board of Directors out of
funds legally available therefor, and are also entitled to share,
pro-rata, in any other distribution to stockholders. There are no
redemption or sinking fund provisions and no direct limitations in
any indenture or agreement on the payment of dividends. Payment
of dividends by the Corporation is not subject to restrictions
under the Maryland Insurance Code. However, payment of dividends
to the Corporation by its insurance subsidiaries is subject to
certain restrictions under Maryland and other state insurance
laws. Such restrictions as well as other contractual restrictions
may limit the amount of dividends that may be paid by the
Corporation. All shares of Common Stock sold hereunder will be
fully paid and non-assessable.
Preferred Stock
The following description of the terms of the Preferred
Stock sets forth certain general terms and provisions of the
Preferred Stock (the "Preferred Stock") to which any Prospectus
Supplement may relate. Certain terms of any series of the
Preferred Stock offered by any Prospectus Supplement will be
described in the Prospectus Supplement relating to such series of
the Preferred Stock. If so indicated in the Prospectus Supplement,
the terms of any such series, including any Depositary Shares (as
defined below) issued in respect thereof, may differ from the
terms set forth below. The description of certain provisions of
the Preferred Stock set forth below and in any Prospectus
Supplement does not purport to be complete and is subject to, and
qualified in its entirety by reference to, the Corporation's
Charter which is an exhibit to this Registration Statement and the
articles supplementary to the Corporation's Charter which has been
or will be filed with the Commission in connection with the
offering of such series of Preferred Stock.
General. Under the Corporation's Charter, the Corporation is
authorized to issue 12,000,000 shares of preferred stock, $50.00
par value per share, in one or more series. The Board of
Directors is authorized to fix and determine the terms,
limitations and relative rights and preferences of any of the
series of the Preferred Stock including, without limitation, any
voting rights thereof, to divide and issue any Preferred Stock in
series, and to fix and determine the variations among series to
the extent permitted by law. The Corporation may amend from time
to time its Charter to increase the number of authorized shares of
Preferred Stock. Any such amendment would require the approval of
the holders of a majority of the outstanding shares of Common Stock,
and the approval of the
holders of a majority of the outstanding shares of the Series A
Preferred Stock, Series B Preferred Stock and Series C Preferred
Stock (together with any other shares of Preferred Stock which may
be then outstanding and have similar rights) voting together as a
single class and the holders of two-thirds of the outstanding
shares of the Series B Preferred Stock voting separately as a
class.
The Preferred Stock shall have the dividend, liquidation,
redemption and voting rights set forth below, unless otherwise
provided in the Prospectus Supplement relating to a particular
series of the Preferred Stock. Reference is made to the
Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i)
the title of such Preferred Stock and the number of shares
offered; (ii) the amount of liquidation preference per share;
(iii) the price at which such Preferred Stock will be issued; (iv)
the dividend rate (or method of calculation), the dates on which
dividends shall be payable, whether such dividends shall be
cumulative or noncumulative and, if cumulative, the dates from
which dividends shall commence to cumulate; (v) any redemption or
sinking fund provisions of such Preferred Stock; (vi) the terms of
any right to convert or exchange the Preferred Stock into other
securities or property of the Corporation; (vii) whether the
Corporation has elected to offer Depositary Shares (as defined
below); and (viii) any additional voting, dividend, liquidation,
redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions of such Preferred Stock.
The Preferred Stock will, when issued, be fully paid and
non-assessable and have no preemptive rights. Unless otherwise
specified in the Prospectus Supplement relating to a particular
series of the Preferred Stock, each series of the Preferred Stock
will rank on a parity as to dividends and liquidation rights in
all respects with each other series of the Preferred Stock.
Dividend Rights. Holders of the Preferred Stock of each series
will be entitled to receive, when, as and if declared by the Board
of Directors of the Corporation, out of assets of the Corporation
legally available therefor, cash dividends at such rates and on
such dates as are set forth in the Prospectus Supplement relating
to such series of the Preferred Stock. Such rate may be fixed or
variable or both. Each such dividend will be payable to the
holders of record as they appear on the stock record books of the
Corporation (or, if applicable, the records of the Depositary
referred to below under "Depositary Shares") on such record dates
as will be fixed by the Board of Directors of
the Corporation or a duly authorized committee thereof. Dividends
on any series of the Preferred Stock may be cumulative or
noncumulative, as provided in the Prospectus Supplement relating
thereto.
Each series of Preferred Stock will be entitled to
dividends as described in the Prospectus Supplement relating to
such series, which may be based upon one or more methods of
determination. Different series of the Preferred Stock may be
entitled to dividends at different rates or based upon different
methods of determination.
Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the
holders of each series of Preferred Stock will be entitled to
receive out of assets of the Corporation available for
distribution to shareholders, before any distribution of assets is
made to holders of Common Stock or any other class of stock
ranking junior to such series of the Preferred Stock upon
liquidation, liquidating distributions in the amount set forth in
the Prospectus Supplement relating to such series of the Preferred
Stock plus an amount equal to accrued and unpaid dividends for the
then-current dividend period and, if such series of the Preferred
Stock is cumulative, for all dividend periods prior thereto, all
as set forth in the Prospectus Supplement with respect to such
shares.
Redemption. A series of the Preferred Stock may be redeemable, in
whole or in part, at the option of the Corporation, and may be
subject to mandatory redemption pursuant to a sinking fund, in each
case upon terms, at the times and at the redemption prices set
forth in the Prospectus Supplement relating to such series. After
the date fixed for redemption, the shares of Preferred Stock so
called for redemption will no longer be deemed to be outstanding
and rights of the holders of such shares will cease, except the
right to receive the moneys payable upon such redemption and any
money or other property to which the holders of such shares were
entitled upon such redemption, upon surrender to the Corporation of
the certificates evidencing such shares.
Conversion and Exchange. The terms, if any, on which shares of any
series of Preferred Stock are convertible into Common Stock or
exchangeable for Debt Securities will be set forth in the
Prospectus Supplement relating thereto. Such terms may include
provisions for conversion, either mandatory, at the option of the
holder, or at the option of the Corporation, in which case the
number of shares of Common Stock or the amount of Debt Securities
to be received by the holders of Preferred Stock would
be calculated as of a time and in the manner stated in the
Prospectus Supplement.
Transfer Agent and Registrar. The transfer agent, registrar and
dividend disbursement agent for a particular series of Preferred
Stock will be named in the Prospectus Supplement relating to such
series of Preferred Stock. The registrar for shares of such series
of Preferred Stock will send notices to shareholders of any
meetings at which holders of such series of the Preferred Stock
have the right to elect directors of the Corporation or to vote on
any other matter.
Voting Rights. Except as indicated in the Prospectus Supplement
relating to a particular series of Preferred Stock, or except as
expressly required by applicable law, the holders of the Preferred
Stock will not be entitled to any voting rights.
Depositary Shares. The Corporation may, at its option, elect to
offer receipts for fractional interests ("Depositary Shares") in
Preferred Stock. In such event, receipts ("Depositary Receipts")
for Depositary Shares, each of which will represent a fraction (to
be set forth in the Prospectus Supplement relating to a particular
series of Preferred Stock) of a share of a particular series of
Preferred Stock, will be issued as described below.
The shares of any series of Preferred Stock represented by
Depositary Shares will be deposited under a Deposit Agreement (the
"Deposit Agreement") between the Corporation and the depositary
named in the Prospectus Supplement relating to such shares (the
"Preferred Stock Depositary"). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock
represented by such Depositary Share, to all the rights and
preferences of the Preferred Stock represented thereby (including
dividend, voting, redemption, subscription and liquidation rights).
The following summary of certain provisions of the Deposit
Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of
the Deposit Agreement, including the definitions therein of certain
terms. Whenever particular sections of the Deposit Agreement are
referred to, it is intended that such sections shall be
incorporated herein by reference. Copies of the forms of Deposit
Agreement and Depositary Receipt are filed as exhibits to the
Registration Statement of which this Prospectus is a part, and the
following summary is qualified in its entirety by reference to such
exhibits.
The Preferred Stock Depositary will distribute all cash
dividends or other cash distributions received in respect of the
Preferred Stock to the record holders of Depositary Shares relating
to such Preferred Stock in proportion to the numbers of such
Depositary Shares owned by such holders. (Deposit Agreement,
Section 4.01)
In the event of a distribution other than in cash, the
Preferred Stock Depositary will distribute property received by it
to the record holders of Depositary Shares in an equitable manner,
unless the Preferred Stock Depositary determines that it is not
feasible to make such distribution, in which case the Preferred
Stock Depositary may sell such property and distribute the net
proceeds from such sale to such holders. (Deposit Agreement,
Section 4.02)
Upon surrender of the Depositary Receipts at the corporate
trust office of the Preferred Stock Depositary and upon payment of
the taxes, charges and fees provided for in the Deposit Agreement
and subject to the terms thereof, the holder of the Depositary
Shares evidenced thereby is entitled to delivery at such office, to
or upon his or her order, of the number of whole shares of the
related series of Preferred Stock and any money or other property,
if any, represented by such Depositary Shares.
If a series of Preferred Stock represented by Depositary
Shares is subject to redemption, the Depositary Shares will be
redeemed from the proceeds received by the Preferred Stock
Depositary resulting from the redemption, in whole or in part, of
such series of Preferred Stock held by the Preferred Stock
Depositary. The redemption price per Depositary Share will be equal
to the applicable fraction of the redemption price per share
payable with respect to such series of the Preferred Stock.
Whenever the Corporation redeems shares of Preferred Stock held by
the Preferred Stock Depositary, the Preferred Stock Depositary will
redeem as of the same redemption date the number of Depositary
Shares representing shares of Preferred Stock so redeemed. If fewer
than all the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot, pro rata or by any
other equitable method as may be determined by the Preferred Stock
Depositary. (Deposit Agreement, Section 2.08)
Upon receipt of notice of any meeting at which the holders of
the Preferred Stock are entitled to vote, the Preferred Stock
Depositary will mail the information contained in such notice of
meeting to the record holders of the Depositary Shares relating to
such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date
for the Preferred Stock) will be entitled to instruct the Preferred
Stock Depositary as to the exercise of the
voting rights pertaining to the amount of the Preferred Stock
represented by such holder's Depositary Shares. The Preferred Stock
Depositary will endeavor, insofar as practicable, to vote the
amount of the Preferred Stock represented by such Depositary Shares
in accordance with such instructions, and the Corporation will
agree to take all reasonable action which may be deemed necessary
by the Preferred Stock Depositary in order to enable the Preferred
Stock Depositary to do so. The Preferred Stock Depositary will
abstain from voting shares of the Preferred Stock to the extent it
does not receive specific instructions from the holder of
Depositary Shares representing such Preferred Stock. (Deposit
Agreement, Section 4.05)
The form of Depositary Receipt evidencing the Depositary
Shares and any provision of the Deposit Agreement may at any time
be amended by agreement between the Corporation and the Preferred
Stock Depositary. However, any amendment which materially and
adversely alters the rights of the holders of Depositary Shares
will not be effective unless such amendment has been approved by
the holders of at least a majority of the Depositary Shares then
outstanding. (Deposit Agreement, Section 6.01) The Deposit
Agreement will only terminate if (i) all outstanding Depositary
Shares have been redeemed or (ii) there has been a final
distribution in respect of the Preferred Stock in connection with
any liquidation, dissolution or winding-up of the Corporation and
such distribution has been distributed to the holders of Depositary
Receipts. (Deposit Agreement, Section 6.02)
The Corporation will pay all transfer and other taxes and
governmental charges arising solely from the existence of the
depositary arrangements. The Corporation will pay charges of the
Preferred Stock Depositary in connection with the initial deposit
of the Preferred Stock and issuance of Depositary Receipts, all
withdrawals of shares of Preferred Stock by owners of Depositary
Shares and any redemption of the Preferred Stock. Holders of
Depositary Receipts will pay other transfer and other taxes and
governmental charges and such other charges as are expressly
provided in the Deposit Agreement to be for their accounts.
(Deposit Agreement, Section 5.07)
The Preferred Stock Depositary may resign at any time by
delivering to the Corporation notice of its election to do so, and
the Corporation may at any time remove the Preferred Stock
Depositary, any such resignation or removal to take effect upon the
appointment of a successor Preferred Stock Depositary and its
acceptance of such appointment. Such successor Preferred Stock
Depositary must be appointed within 60 days after delivery
of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
(Deposit Agreement, Section 5.04)
The Preferred Stock Depositary will forward all reports and
communications from the Corporation which are delivered to the
Preferred Stock Depositary and which the Corporation is required or
otherwise determines to furnish to the holders of the Preferred
Stock. (Deposit Agreement, Section 4.07)
Neither the Preferred Stock Depositary nor the Corporation
will be liable under the Deposit Agreement to holders of Depositary
Receipts other than for its negligence, willful misconduct or bad
faith. Neither the Corporation nor the Preferred Stock Depositary
will be obligated to prosecute or defend any legal proceeding in
respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Corporation and the
Preferred Stock Depositary may rely upon written advice of counsel
or accountants, or upon information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Receipts or
other persons believed to be competent and on documents believed to
be genuine. (Deposit Agreement, Section 5.03)
Outstanding Preferred Stock
The Corporation currently has outstanding three classes of
Preferred Stock.
Series A Preferred Stock. Subject to the limitations discussed
herein, the holders of the Series A Preferred Stock are entitled to
receive, when and as declared by the Board of Directors out of
funds legally available therefor, cumulative dividends at the
annual rate of $4.10 per share. Dividends are payable quarterly,
in arrears, on January 31, April 30, July 31 and October 31 in each
year. Unless full cumulative dividends on all outstanding Series
A Preferred Stock and any other class of preferred stock ranking on
a parity with the Series A Preferred Stock as to dividends and upon
liquidation ("Parity Stock") have been paid, the Corporation will
not declare or pay any dividend on, or set aside or apply any
amount to the redemption or purchase of, any shares of the Common
Stock or any other class of stock ranking junior to the Series A
Preferred Stock (except for dividends payable only in, or rights to
subscribe for or purchase, shares of junior stock).
Except as indicated below, or except as expressly required by
applicable law, the holders of shares of Series A Preferred Stock
have no voting rights.
During any period in which dividends on the Series A Preferred
Stock or any outstanding Parity Stock are cumulatively in arrears
in the amount of six or more full quarterly dividends, the number
of directors of the Corporation will be increased by two and the
holders of shares of Series A Preferred Stock, voting together as
a class with the holders of any other class or series of Parity
Stock having a similar voting right, will have the right to elect
two additional directors to the Corporation's Board of Directors to
fill such newly created directorships until all such dividends have
been paid in full.
The approval of two-thirds of the outstanding shares of
Series A Preferred Stock and Parity Stock, voting together as a
single class, shall be required in order to amend the Charter of
the Corporation to affect adversely the rights of the holders of
the Series A Preferred Stock or to authorize or create any class of
stock having rights senior or superior with respect to dividends
and upon liquidation to the Series A Preferred Stock. In addition,
the approval of a majority of the outstanding shares of Series A
Preferred Stock and Parity Stock, voting together as a single
class, shall be required in order to increase the number of shares
of preferred stock authorized in the Charter or to create any other
class of stock (but not any other series of preferred stock)
ranking on a parity with the Series A Preferred Stock as to
dividends and upon liquidation.
At the option of the holders of the Series A Preferred Stock,
such shares may be converted into shares of Common Stock of the
Corporation at the then applicable conversion rate. The current
conversion rate is 1.179 shares of Common Stock for each share of
Series A Preferred Stock (equivalent to a conversion price of
$42.40 per share). The conversion rate is subject to adjustment in
certain events, including stock dividends, subdivisions, splits and
combinations, and certain other distributions of rights or warrants
to purchase Common Stock at less than the then current market price
(as defined), and distributions to all holders of Common Stock of
evidences of indebtedness or assets of the Corporation other than
cash out of earned surplus. The conversion rate has been adjusted
under this provision as a result of dividend payments by the
Corporation on its Common Stock notwithstanding the deficit in its
earned surplus account.
The Series A Preferred Stock is exchangeable in whole but not
in part at the option of the Corporation on any dividend payment
date for the Corporation's 8.20% Convertible Subordinated
Debentures due October 31, 2011 (the "Debentures") at a rate of
$50.00 principal amount of the Debentures plus cash in the amount
of accrued but unpaid dividends, if any, for each share of Series
A Preferred Stock.
The Series A Preferred Stock is redeemable at the option of
the Corporation for cash, as a whole or in part, at redemption
prices declining to $50.00 per share on October 31, 1996, plus
accrued and unpaid dividends to the redemption date. The
Corporation may not purchase or redeem less than all the Series A
Preferred Stock and any other series of Parity Stock if, as of
such time, the Corporation has failed to pay all accrued and
unpaid dividends thereon.
In case of the voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, holders of any
shares of Series A Preferred Stock are entitled to receive $50.00
per share, plus an amount equal to any dividends accrued and
unpaid to the payment date, before any distribution is made to the
holders of any junior stock.
Series B Preferred Stock. The 1,300,000 shares of the Series B
Preferred Stock were issued in three subseries: 650,000 shares
of the Series B Cumulative Convertible Preferred Stock 1995 (the
"Series B Preferred Stock 1995"); 325,000 shares of the Series B
Cumulative Convertible Preferred Stock 1996 (the "Series B
Preferred Stock 1996"); and 325,000 shares of the Series B
Cumulative Convertible Preferred Stock 1997 (the "Series B
Preferred Stock 1997"). Subject to the limitations discussed
herein, the holders of the Series B Preferred Stock are entitled
to receive, when and as declared by the Board of Directors out of
funds legally available therefor, cumulative dividends at the
annual rate of $10.25 per share. Dividends are payable quarterly,
in arrears, on January 31, April 30, July 31, and October 31 of
each year. Unless full cumulative dividends on all outstanding
Series B Preferred Stock and any other Parity Stock have been
paid, the Corporation will not declare or pay any dividend on, or
set aside or apply any amount to the redemption or purchase of,
any shares of the Common Stock or any other class of stock ranking
junior to the Series B Preferred Stock.
Holders of Series B Preferred Stock have limited voting
rights similar to those of the Series A Preferred Stock except
that under the terms of the Series B Preferred Stock the right to
elect two additional directors accrues when dividends on the
Series B Preferred Stock are cumulatively in arrears in the amount
of two or more full quarterly dividends. A special class vote of
holders of two-thirds of the outstanding Series B Preferred Stock
is necessary in order to authorize the issuance of a new, or to
increase the authorized number of any existing, class of capital
stock senior to the Series B Preferred Stock as to dividends and
upon liquidation or to increase the number of
shares of preferred stock or create any additional Parity Stock
authorized in the Charter.
At the option of the holders of the Series B Preferred Stock,
such shares may be converted into shares of Common Stock at the
then applicable conversion rate. The current conversion rate for
the Series B Preferred Stock is 8.316 shares of Common Stock per
converted share of Series B Preferred Stock (equivalent to a
conversion price of $12.025 per share). The conversion rate is
subject to adjustment in certain events, including stock
dividends, subdivisions, splits and combinations, and certain
distributions of rights or warrants to purchase Common Stock at
less than the then current market price (as defined), and
distributions to all holders of Common Stock of evidences of
indebtedness or assets of the Corporation (other than regular
quarterly Common Stock dividends consistent with the Corporation's
current dividend policy and future dividends payable out of
consolidated earned surplus or current earnings).
The Series B Preferred Stock is redeemable at the option of
the Corporation for cash, as a whole or in part, at any time or
from time to time, as follows: (1) the Series B Preferred Stock
1995, at any time on and after June 1, 1994; (2) the Series B
Preferred Stock 1996, at any time on or after June 1, 1995; and
(3) the Series B Preferred Stock 1997, at any time on or after
June 1, 1996; at a per share redemption price equal to the
liquidation value of $100.00 and accrued and unpaid dividends
plus, beginning after June 1, 1997, a premium which declines to
zero on June 1, 2001. Notwithstanding the foregoing, no
redemption may be effected prior to June 1, 1997, unless the
closing price of the Common Stock exceeds 150% of the then current
Series B Conversion Price on the date notice of redemption is
given and for each of the twenty prior consecutive trading days.
In the event that there shall occur a "change in control" (as
defined below) of the Corporation, then, at the election of each
holder of Series B Preferred Stock, the Corporation will issue and
sell additional nonredeemable equity securities and apply the net
proceeds thereof to redeem the Series B Preferred Stock at the
appropriate redemption price, plus accrued dividends, but only if
and to the extent any such proceeds are raised. The term "change
in control" means any acquisition by any person or group of 50% or
more of the combined voting power of the outstanding voting
securities of the Corporation, a sale of substantially all of the
assets of the Corporation, or a merger of the Corporation with or
into another person which results in the exchange, conversion,
reclassification or cancellation of the Common Stock of the
Corporation.
In case of the voluntary liquidation, dissolution or
winding-up of the Corporation, holders of any shares of Series B
Preferred Stock are entitled to receive $100.00 per share, plus an
amount equal to any dividends accrued and unpaid to the payment
date, before any distribution is made to the holders of any junior
stock.
Series C Preferred Stock. Subject to the limitations discussed
herein, the holders of the Series C Preferred Stock are entitled
to receive, when and as declared by the Board of Directors out of
funds legally available therefor, cumulative dividends at the
annual rate of $5.00 per share. Dividends are payable quarterly,
in arrears, on January 31, April 30, July 31 and October 31 in
each year. Unless full cumulative dividends on all outstanding
Series C Preferred Stock and any other Parity Stock have been
paid, the Corporation will not declare or pay any dividend on or
set aside or apply any amount to the redemption or purchase of,
any shares of the Common Stock or on any other class of stock
ranking junior to the Series C Preferred Stock (except for
dividends payable only in, or rights to subscribe for or purchase,
shares of junior stock).
Holders of Series C Preferred Stock have limited voting
rights similar to those of the Series A Preferred Stock except
that under the terms of the Series C Preferred Stock the right to
elect two additional directors accrues when dividends on the
Series C Preferred Stock are cumulatively in arrears in the amount
of two or more full quarterly dividends.
At the option of the holders of the Series C Preferred Stock,
such shares may be converted into shares of Common Stock of the
Corporation at the then applicable conversion rate. The present
conversion rate is 4.158 shares of Common Stock for each share of
Series C Preferred Stock (equivalent to a conversion price of
$12.025 per share). The conversion rate is subject to adjustment
in certain events, including stock dividends, subdivisions, splits
and combinations, and certain other distributions of rights or
warrants to purchase Common Stock at less than the then current
market price (as defined), and distributions to all holders of
Common Stock of evidences of indebtedness or assets of the
Corporation (other than regular quarterly Common Stock dividends
consistent with the Corporation's current dividend policy and
future dividends payable out of consolidated earned surplus or
current earnings). The conversion rate is also subject to further
adjustment in the event of certain transactions pursuant to a plan
under which all or substantially all the Common Stock is to be
exchanged or converted into the right to receive cash, securities
or other assets.
The Series C Preferred Stock is redeemable, commencing on
June 13, 1994, at the option of the Corporation for cash, as a
whole or in part, at redemption prices declining to $50 per share
on June 13, 2001, plus accrued and unpaid dividends to the
redemption date. The Corporation may not purchase or redeem less
than all the Series C Preferred Stock and any other series of
Parity Stock if, as of such time, the Corporation has failed to
pay all accrued and unpaid dividends thereon.
In case of the voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, holders of any
shares of Series C Preferred Stock are entitled to receive $50 per
share, plus an amount equal to any dividends accrued and unpaid to
the payment date, before any distribution is made to the holders
of any junior stock.
Shareholder Rights Plan
The Corporation has a shareholder rights plan (the "Plan") to
deter coercive or unfair takeover tactics and to prevent a
potential purchaser from gaining control of the Corporation
without offering a fair price to all of the Corporation's
stockholders. Under the Plan, each outstanding share of the
Corporation's Common Stock has one preferred share purchase right
(a "Right") expiring in 1997. Each Right entitles the registered
holder to purchase 1/100 of a share of Junior Preferred Stock for
$140. The Rights cannot be exercised unless certain events occur
that might lead to a concentration in ownership of Common Stock.
At that time, the Rights may be exercised for Common Stock having
a value of twice the exercise price. Under certain conditions,
the Rights also become exercisable into shares of Common Stock of
a purchaser having a value of twice the exercise price. The
Corporation will generally be entitled to redeem the Rights, at
$.05 per Right, any time before the tenth day after a 20% position
in the Corporation is acquired. The Form 8-A setting forth a
description of the Plan is an exhibit to the Registration
Statement of which this Prospectus is a part and is incorporated
by reference herein.
Special Statutory Requirements for Certain Transactions
Business Combination Statute. The Maryland General
Corporation Law establishes special requirements with respect to
"business combinations" between Maryland corporations and
"interested stockholders" unless exemptions are applicable. Among
other things, the law prohibits for a period of five years a
merger and other specified or similar transactions between a
company and an interested stockholder and requires a
super-majority vote for such transactions after the end of such
five-year period.
"Interested stockholders" are all persons owning
beneficially, directly or indirectly, more than 10% of the
outstanding voting stock of a Maryland corporation. "Business
combinations" include any merger or similar transaction subject to
a statutory vote and additional transactions involving transfers
of assets or securities in specified amounts to interested
stockholders or their affiliates. Unless an exemption is
available, transactions of these types may not be consummated
between a Maryland corporation and an interested stockholder or
its affiliates for a period of five years after the date on which
the stockholder first became an interested stockholder and
thereafter may not be consummated unless recommended by the board
of directors of the Maryland corporation and approved by the
affirmative vote of at least 80% of the votes entitled to be cast
by all holders of outstanding shares of voting stock and 66-2/3%
of the votes entitled to be cast by all holders of outstanding
shares of voting stock other than the interested stockholder. A
business combination with an interested stockholder which is
approved by the board of directors of a Maryland corporation at
any time before an interested stockholder first becomes an
interested stockholder is not subject to the special voting
requirements. An amendment to a Maryland corporation's charter
electing not to be subject to the foregoing requirements must be
approved by the affirmative vote of at least 80% of the votes
entitled to be cast by all holders of outstanding shares of voting
stock and 66-2/3% of the votes entitled to be cast by holders of
outstanding shares of voting stock who are not interested
stockholders. Any such amendment is not effective until 18 months
after the vote of stockholders and does not apply to any business
combination of a corporation with a stockholder who was an
interested stockholder on the date of the stockholder vote. The
Corporation has not adopted any such amendment to its Charter.
Control Share Acquisition Statute. The Maryland law imposes
limitations on the voting rights in a "control share acquisition."
The Maryland statute defines a "control share acquisition" at the
20%, 33-1/3% and 50% acquisition levels, and requires a two-thirds
stockholder vote (excluding shares owned by the acquiring person
and certain members of management) to accord voting rights to
stock acquired in a control share acquisition. The statute also
requires Maryland corporations to hold a special meeting at the
request of an actual or proposed control share acquiror generally
within 50 days after a request is made with the submission of an
"acquiring person statement," but only if the acquiring person
(a) posts a bond for the cost of the meeting and (b) submits a
definitive financing agreement to the extent that financing is not
provided by the acquiring person. In addition, unless the charter
or by-laws provide otherwise, the statute gives the Maryland
corporation, within certain time limitations, various redemption
rights if there is a stockholder vote on the issue and the grant
of voting rights is not approved, or if an "acquiring person
statement" is not delivered to the target within 10 days following
a control share acquisition. Moreover, unless the charter or
by-laws provide otherwise, the statute provides that if, before a
control share acquisition occurs, voting rights are accorded to
control shares which results in the acquiring person having
majority voting power, then minority stockholders have appraisal
rights. An acquisition of shares may be exempted from the control
share statute provided that a charter or by-law provision is
adopted for such purpose prior to the control share acquisition.
There are no such provisions in the charter or by-laws of the
Corporation.
Reference is made to the full text of the foregoing statutes
for their entire terms, and the partial summary contained in this
Prospectus is not intended to be complete.
Insurance Acquisitions Disclosure and Control Act. Under the
Maryland Insurance Code, unless certain filings are made with the
State Insurance Commissioner, no person may acquire any voting
security or security convertible into a voting security of an
insurance holding company, such as the Corporation, which controls
one or more Maryland insurance companies if, as a result of such
acquisition, such person would "control" such insurance holding
company. The acquisition may not proceed unless it has been
approved by the Maryland Insurance Commissioner within 60 days
after such filings have been submitted. "Control" is presumed to
exist if a person, directly or indirectly, owns or controls 10% or
more of the voting securities of another person. This presumption
may be rebutted by establishing by a preponderance of evidence
that control does not exist in fact.
Reference is made to the full text of the statute for its
entire terms, and this partial summary is not intended to be
complete.
DESCRIPTION OF WARRANTS
The Corporation may issue Warrants, including Warrants to
purchase Debt Securities ("Debt Warrants") as well as other types
of Warrants to purchase Securities. Warrants may be issued independently
or together with any Securities and may be
attached to or separate from such Securities. The Warrants are to
be issued under warrant agreements (each a "Warrant Agreement") to
be entered into between the Corporation and a bank or trust
company, as warrant agent (the "Warrant Agent"), all as shall be
set forth in the Prospectus Supplement relating to the Warrants
being offered pursuant thereto.
Debt Warrants
The applicable Prospectus Supplement will describe the terms
of Debt Warrants offered thereby, the Warrant Agreement relating
to such Debt Warrants and the debt warrant certificates
representing such Debt Warrants, including the following: (1) the
title of such Debt Warrants; (2) the aggregate number of such Debt
Warrants; (3) the price or prices at which such Debt Warrants will
be issued; (4) the currency or currencies, including composite
currencies or currency units, in which the price of such Debt
Warrants may be payable; (5) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise
of such Debt Warrants, and the procedures and conditions relating
to the exercise of such Debt Warrants; (6) the designation and
terms of any related Debt Securities with which such Debt Warrants
are issued, and the number of such Debt Warrants issued with each
such Debt Security; (7) the currency or currencies, including
composite currencies or currency units, in which the principal of
(or premium, if any), or interest, if any, on the Debt Securities
purchasable upon exercise of such Debt Warrants will be payable;
(8) the date, if any, on and after which such Debt Warrants and
the related Debt Securities will be separately transferable; (9)
the principal amount of Debt Securities purchasable upon exercise
of each Debt Warrant, and the price at which and the currency,
including composite currency or currency unit, in which such
principal amount of Debt Securities may be purchased upon such
exercise; (10) the date on which the right to exercise such Debt
Warrants shall commence, and the date on which such right shall
expire; (11) the maximum or minimum number of such Debt Warrants
which may be exercised at any time; (12) a discussion of material
federal income tax considerations, if any; and (13) any other
terms of such Debt Warrants and terms, procedures and limitations
relating to the exercise of such Debt Warrants.
Debt warrant certificates will be exchangeable for new debt
warrant certificates of different denominations, and Debt Warrants
may be exercised at the corporate trust office of the Warrant
Agent or any other office indicated in the Prospectus Supplement.
Prior to the exercise of their Debt Warrants, holders of Debt
Warrants will not have any of the rights of holders of the Debt
Securities purchasable upon such exercise and
will not be entitled to payments of principal of (or premium, if
any) or interest, if any, on the Debt Securities purchasable upon
such exercise.
Other Warrants
The Corporation may issue other Warrants. The applicable
Prospectus Supplement will describe the following terms of any
such other Warrants in respect of which this Prospectus is being
delivered: (l) the title of such Warrants; (2) the Securities
(which may include Preferred Stock or Common Stock) for which such
Warrants are exercisable; (3) the price or prices at which such
Warrants will be issued; (4) the currency or currencies, including
composite currencies or currency units, in which the price of such
Warrants may be payable; (5) if applicable, the designation and
terms of the Preferred Stock or Common Stock with which such
Warrants are issued, and the number of such Warrants issued with
each such share of Preferred Stock or Common Stock; (6) if
applicable, the date on and after which such Warrants and the
related Preferred Stock or Common Stock will be separately
transferable; (7) if applicable, a discussion of material federal
income tax considerations; and (8) any other terms of such
Warrants, including terms, procedures and limitations relating to
the exchange and exercise of such Warrants.
Exercise of Warrants
Each Warrant will entitle the holder of Warrants to purchase
for cash such principal amount of Securities at such exercise price
as shall in each case be set forth in, or be determinable as set
forth in, the Prospectus Supplement relating to the Warrants
offered thereby. Warrants may be exercised at any time up to the
close of business on the expiration date set forth in the
Prospectus Supplement relating to the Warrants offered thereby.
After the close of business on the expiration date, unexercised
Warrants will become void.
Warrants may be exercised as set forth in the Prospectus
Supplement relating to the Warrants offered thereby. Upon receipt
of payment and the warrant certificate properly completed and duly
executed at the corporate trust office of the Warrant Agent or any
other office indicated in the Prospectus Supplement, the
Corporation will, as soon as practicable, forward the Securities
purchasable upon such exercise. If less than all of the Warrants
represented by such warrant certificate are exercised, a new
warrant certificate will be issued for the remaining Warrants.
PLAN OF DISTRIBUTION
The Corporation may sell Securities to or through
underwriters, and also may sell Securities directly to other
purchasers or through agents.
The distribution of the Securities may be effected from time
to time in one or more transactions at a fixed price or prices,
which may be changed, or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at
negotiated prices.
Sales of Common Stock offered hereby may be effected from time
to time in one or more transactions on the New York Stock Exchange
or in negotiated transactions or a combination of such methods of
sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at other negotiated
prices. In connection with distributions of Common Stock or
otherwise, the Corporation may enter into hedging transactions with
broker-dealers in connection with which such broker-dealers may
sell Common Stock registered hereunder in the course of hedging
through short sales the positions they assume with the Corporation.
In connection with the sale of Securities, underwriters or
agents may receive compensation from the Corporation or from
purchasers of Securities for whom they may act as agents in the
form of discounts, concessions or commissions. Underwriters may
sell 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 from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that
participate in the distribution of Securities may be deemed to be
underwriters, and any discounts or commissions received by them
from the Corporation and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions,
under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Corporation
will be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Corporation,
underwriters and agents who participate in the distribution of
Securities may be entitled to indemnification by the Corporation
against certain liabilities, including liabilities under the
Securities Act.
If so indicated in the Prospectus Supplement, the Corporation
will authorize underwriters or other persons acting as the Corporation's
agents to solicit offers by certain
institutions to purchase Securities from the Corporation pursuant
to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and
others, but in all cases such institutions must be approved by the
Corporation. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the
Securities shall not at the time of delivery be prohibited under
the laws of the jurisdiction to which such purchaser is subject.
The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such
contracts.
Certain of the underwriters or agents and their associates may
be customers of, engage in transactions with and perform services
for the Corporation in the ordinary course of business.
The Securities may or may not be listed on a national
securities exchange or a foreign securities exchange (other than
the Common Stock, which is listed on the New York Stock Exchange,
the Pacific Stock Exchange, the London Stock Exchange and the Swiss
Exchanges in Basle, Geneva and Zurich). Any Common Stock sold
pursuant to a Prospectus Supplement will be listed on the New York
Stock Exchange, subject to official notice of issuance. No
assurances can be given that there will be an active trading market
for the Securities.
VALIDITY OF SECURITIES
The legal validity of the Securities offered hereby will be
passed upon for the Corporation by Piper & Marbury, Baltimore,
Maryland and for any underwriters or agents by Davis Polk &
Wardwell, New York, New York. Davis Polk & Wardwell will rely upon
the opinion of Piper & Marbury as to certain matters governed by
Maryland law. L.P. Scriggins, a Director of the Corporation, is a
partner of Piper & Marbury. As of January 1, 1994 lawyers in the
firm of Piper & Marbury beneficially owned in the aggregate
approximately 20,000 shares of Common Stock or Common Stock
equivalents of the Corporation.
EXPERTS
The consolidated financial statements of the Corporation
incorporated in this Prospectus by reference to Form 10-K for the
year ended December 31, 1992 have been audited by Ernst & Young,
independent auditors, as set forth in their report thereon included
therein and incorporated by reference herein. 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.
With respect to the unaudited condensed consolidated interim
financial information for the three-month periods ended March 31,
1993 and 1992, and the three- and six-month periods ended June 30,
1993 and 1992, and the three- and nine-month periods ended
September 30, 1993 and 1992, incorporated by reference in this
Registration Statement, the independent auditors have reported that
they have applied limited procedures in accordance with
professional standards for a review of such information. However,
their separate reports included in USF&G's quarterly reports on
Form 10-Q for the quarters ended March 31, 1993, June 30, 1993, and
September 30, 1993, and incorporated by reference herein, state
that they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance
on their reports on such information should be restricted in light
of the limited nature of the review procedures applied. The
independent auditors are not subject to the liability provisions of
Section 11 of the Securities Act of 1933 for their reports on the
unaudited interim financial information because those reports are
not "reports" or a "part" of the Registration Statement prepared or
certified by the auditors within the meaning of Sections 7 and 11
of the Securities Act.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in
connection with the offering of the Securities other than
underwriting discounts and commissions:
SEC Registration Fee...................................$ 68,966
Blue Sky Fees and Expenses............................. 30,000
Accounting Fees and Expenses........................... 75,000
Rating Agency Fees..................................... 200,000
Legal Fees and Expenses................................ 250,000
Trustees' Fees and Expenses............................ 32,000
Printing and Engraving Fees and Expenses............... 75,000
Miscellaneous.......................................... 50,034
TOTAL.........................................$781,000
Item 15. Indemnification of Directors and Officers.
1. Statutory Provisions.
Section 2-418 of the Maryland General Corporation Law provides
as follows:
(a) Definitions.--In this section the following words
have the meanings indicated.
(1) "Director" means any person who is or was a
director of a corporation and any person who, while a
director of a corporation, is or was serving at the
request of the corporation as a director, officer,
partner, trustee, employee, or agent of another foreign
or domestic corporation, partnership, joint venture,
trust, other enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign
predecessor entity of a corporation in a merger,
consolidation, or other transaction in which the
predecessor's existence ceased upon consummation of the
transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the
office of director in the corporation; and
(ii) When used with respect to a person other
than a director as contemplated in subsection (j),
the elective or appointive office in the
corporation held by the officer, or the employment
or agency relationship undertaken by the employee
or agent in behalf of the corporation.
(iii) "Official capacity" does not include
service for any other foreign or domestic
corporation or any partnership, joint venture,
trust, other enterprise, or employee benefit plan.
(5) "Party" includes a person who was, is, or is
threatened to be made a named defendant or respondent in
a proceeding.
(6) "Proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil,
criminal, administrative, or investigative.
(b) Permitted indemnification of director.--(1) A
corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity unless it is
established that:
(i) The act or omission of the director was
material to the matter giving rise to the proceeding; and
1. Was committed in bad faith; or
2. Was the result of active and deliberate
dishonesty; or
(ii) The director actually received an improper
personal benefit in money, property, or services; or
(iii) In the case of any criminal proceeding, the
director had reasonable cause to believe that the act or
omission was unlawful.
(2) (i) Indemnification may be against judgments,
penalties, fines, settlements, and reasonable expenses
actually incurred by the director in connection with the
proceeding.
(ii) However, if the proceeding was one by or in
the right of the corporation, indemnification may not be
made in respect of any proceeding in which the director
shall have been adjudged to be liable to the corporation.
(3) (i) The termination of any proceeding by judgment,
order, or settlement does not create a presumption that
the director did not meet the requisite standard of
conduct set forth in this subsection.
(ii) The termination of any proceeding by
conviction, or a plea of nolo contendere or its
equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the
director did not meet that standard of conduct.
(c) No indemnification of director liable for improper
personal benefit.--A director may not be indemnified under
subsection (b) of this section in respect of any proceeding
charging improper personal benefit to the director, whether or not
involving action in the director's official capacity, in which the
director was adjudged to be liable on the basis that personal
benefit was improperly received.
(d) Required indemnification against expenses incurred
in successful defense.--Unless limited by the charter:
(1) A director who has been successful, on the
merits or otherwise, in the defense of any proceeding referred to
in subsection (b) of this section shall be indemnified against
reasonable expenses incurred by the director in connection with
the proceeding.
(2) A court of appropriate jurisdiction, upon
application of a director and such notice as the court shall
require, may order indemnification in the following circumstances:
(i) If it determines a director is entitled to
reimbursement under paragraph (1) of this subsection, the
court shall order indemnification, in which case the
director shall be entitled to recover the expenses of
securing such reimbursement; or
(ii) If it determines that the director is fairly
and reasonably entitled to indemnification in view of all
the relevant circumstances, whether or not the director has
met the standards of conduct set forth
in subsection (b) of this section or has been adjudged
liable under the circumstances described in subsection (c)
of this section, the court may order such indemnification as
the court shall deem proper. However, indemnification with
respect to any proceeding by or in the right of the corporation or
in which liability shall have been adjudged in the circumstances
described in subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the
same court in which the proceeding involving the director's
liability took place.
(e) Determination that indemnification is proper.--(1)
Indemnification under subsection (b) of this section may not be
made by the corporation unless authorized for a specific proceeding
after a determination has been made that indemnification of the
director is permissible in the circumstances because the director
has met the standard of conduct set forth in subsection (b) of this
section.
(2) Such determination shall be made:
(i) By the board of directors by a majority vote
of a quorum consisting of directors not, at the time,
parties to the proceeding, or, if such a quorum cannot be
obtained, then by a majority vote of a committee of the
board consisting solely of two or more directors not, at
the time, parties to such proceeding and who were duly
designated to act in the matter by a majority vote of the
full board in which the designated directors who are
parties may participate;
(ii) By special legal counsel selected by the
board of directors or a committee of the board by vote as
set forth in subparagraph (i) of this paragraph, or, if
the requisite quorum of the full board cannot be obtained
therefor and the committee cannot be established, by a
majority vote of the full board in which directors who
are parties may participate; or
(iii) By the stockholders.
(3) Authorization of indemnification and
determination as to reasonableness of expenses shall be made in
the same manner as the determination that indemnification is
permissible. However, if the determination that indemnification
is permissible is made by special legal counsel, authorization of
indemnification and determination as to
reasonableness of expenses shall be made in the manner specified
in subparagraph (ii) of paragraph (2) of this subsection for
selection of such counsel.
(4) Shares held by directors who are parties to the
proceeding may not be voted on the subject matter under this
subsection.
(f) Payment of expenses in advance of final disposition
of action.--(1) Reasonable expenses incurred by a director who is
a party to a proceeding may be paid or reimbursed by the
corporation in advance of the final disposition of the proceeding
upon receipt by the corporation of:
(i) A written affirmation by the director of the
director's good faith belief that the standard of conduct
necessary for indemnification by the corporation as
authorized in this section has been met; and
(ii) A written undertaking by or on behalf of the
director to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
(2) The undertaking required by subparagraph (ii)
of paragraph (1) of this subsection shall be an unlimited general
obligation of the director but need not be secured and may be
accepted without reference to financial ability to make the
repayment.
(3) Payments under this subsection shall be made as
provided by the charter, bylaws, or contract or as specified in
subsection (e) of this section.
(g) Validity of indemnification provision.--The
indemnification and advancement of expenses provided or authorized
by this section may not be deemed exclusive of any other rights,
by indemnification or otherwise, to which a director may be
entitled under the charter, the bylaws, a resolution of
stockholders or directors, an agreement or otherwise, both as to
action in an official capacity and as to action in another
capacity while holding such office.
(h) Reimbursement of director's expenses incurred while
appearing as witness.--This section does not limit the
corporation's power to pay or reimburse expenses incurred by a
director in connection with an appearance as a witness in a proceeding
at a time when the director has not been made a named
defendant or respondent in the proceeding.
(i) Director's service to employee benefit plan.--For
purposes of this section:
(1) The corporation shall be deemed to have
requested a director to serve an employee benefit plan
where the performance of the director's duties to the
corporation also imposes duties on, or otherwise involves
services by, the director to the plan or participants or
beneficiaries of the plan;
(2) Excise taxes assessed on a director with
respect to an employee benefit plan pursuant to
applicable law shall be deemed fines; and
(3) Action taken or omitted by the director with
respect to an employee benefit plan in the performance of
the director's duties for a purpose reasonably believed
by the director to be in the interest of the participants
and beneficiaries of the plan shall be deemed to be for
a purpose which is not opposed to the best interests of
the corporation.
(j) Officer, employee or agent.--Unless limited by the
charter:
(1) An officer of the corporation shall be
indemnified as and to the extent provided in subsection
(d) of this section for a director and shall be entitled,
to the same extent as a director, to seek indemnification
pursuant to the provisions of subsection (d);
(2) A corporation may indemnify and advance
expenses to an officer, employee, or agent of the
corporation to the same extent that it may indemnify
directors under this section; and
(3) A corporation, in addition, may indemnify and
advance expenses to an officer, employee, or agent who is
not a director to such further extent, consistent with
law, as may be provided by its charter, bylaws, general
or specific action of its board of directors, or
contract.
(k) Insurance or similar protection.--(1) A corporation
may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee, or agent
of the corporation, or who, while a director, officer, employee,
or agent of the corporation, is or was serving at the request of
the corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, other enterprise, or employee
benefit plan against any liability asserted against and incurred
by such person in any such capacity or arising out of such
person's position, whether or not the corporation would have the
power to indemnify against liability under the provisions of this
section.
(2) A corporation may provide similar protection,
including a trust fund, letter of credit, or surety bond, not
inconsistent with this section.
(3) The insurance or similar protection may be
provided by a subsidiary or an affiliate of the corporation.
(l) Report of indemnification to stockholders.--Any
indemnification of, or advance of expenses to, a director in
accordance with this section, if arising out of a proceeding by or
in the right of the corporation, shall be reported in writing to
the stockholders with the notice of the next stockholders' meeting
or prior to the meeting.
2. Charter Provisions.
The Registrant has provided for indemnification of its
directors and officers by the provisions of Article NINTH, Section
5 of its charter, as follows:
(5) The Corporation shall indemnify (a) its directors to
the full extent provided by the General Laws of the State of
Maryland now or hereafter in force, including the advance of
expenses under the procedures provided by such laws; (b) its
officers to the same extent it shall indemnify its directors; and
(c) its officers who are not directors to such further extent as
shall be authorized by the Board of Directors and be consistent
with such law. The foregoing shall not limit the authority of the
Corporation to indemnify other employees and agents consistent
with law.
Item 16. Exhibits.
Exhibit Number Exhibit
1 Proposed form of Underwriting Agreement.@
4.1 Charter of USF&G Corporation (incorporated
by reference to Exhibit 3(a), Registration
Statement on Form S-14, No. 2-73339; Exhibit
3(a), Amendment No. 2 on Form 8 to Form 8-B,
filed June 22, 1984; Exhibit 2, Amendment
No. 1 on Form 8 to Form 8-A, filed July 31,
1986; Exhibit A to Exhibit 1 to Form 8-A,
filed September 21, 1987; Exhibit 4.3,
Amendment No. 3 to Registration Statement on
Form S-3, No. 33-40492, filed June 13, 1991;
Exhibit 19, Form 10-Q for the quarter ended
March 31, 1992, filed May 15, 1992; and
Exhibit 4.3 to Registration Statement on
Form S-3, No. 33-50825, filed October 29,
1993).
4.2 Form of Indenture for Senior Debt Securities
between the Corporation and
Signet Trust Company as Trustee.@
4.3 Form of Indenture for Subordinated Debt
Securities between the Corporation and
Chemical Bank as Trustee.@
4.4 Form of Stock Warrant Agreement.@
4.5 Form of Debt Warrant Agreement.@
4.6 Form of Deposit Agreement.@
4.7 Description of Shareholder Rights Plan
(incorporated by reference to Form 8-A,
filed September 21, 1987)@
5 Opinion and Consent of Piper & Marbury
as to Legality.@
12 Statement regarding computation of
the Corporation's ratio of consolidated
earnings to fixed charges and ratio of
consolidated earnings to combined fixed
charges and preferred stock dividends
(incorporated by reference to Exhibit 12
to the Corporation's 1992 Annual Report on
Form 10-K, 1991 Annual Report on Form 10-K
and 1990 Annual Report on Form 10-K, and
Quarterly Report on Form 10-Q for the nine
months ended October 31, 1993).
15 Acknowledgement of Ernst & Young re:
unaudited interim financial information.
24.1 Consent of Ernst & Young.
24.2 Consent of Piper & Marbury (included
in Exhibit 5).
25 Power of Attorney of the Board of Directors.
26.1 Form T-1: Statement of Eligibility and
Qualification under the Trust Indenture
Act of 1939 of Chemical Bank,
Trustee under the Indenture for Subordinated
Debt Securities.@
26.2 Form T-1: Statement of Eligibility and
Qualification under the Trust Indenture
Act of 1939 of Signet Trust Company,
Trustee under Indenture for Senior Debt
Securities.@
29 Information from reports furnished to state
insurance regulatory authorities
(incorporated by reference to Exhibit 29
to the Corporation's 1992 Annual Report
on Form 10-K).
@ To be filed by amendment.
Item 17. Undertakings.
(a) Rule 415 Offering. The undersigned registrant
hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement;
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(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; and
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the Registration Statement is
on Form S-3 or Form S-8, and the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) Incorporation of Subsequent Exchange Act Documents.
The undersigned Registrant undertakes hereby that, for purposes of
determining liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Indemnification. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Baltimore, State of Maryland, on January 7, 1994.
USF&G CORPORATION
By:NORMAN P. BLAKE, JR.
Norman P. Blake, Jr.
Chairman of the Board,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of
1933, this registration statement has been signed by the following
persons in the capacities and on the dates indicated.
January 7, 1994 NORMAN P. BLAKE, JR.
Norman P. Blake, Jr.
Chairman of the Board, President
and Chief Executive Officer
(Principal Executive Officer)
January 7, 1994 DAN L. HALE
Dan L. Hale, Executive Vice
President, Chief Financial
Officer (Principal Financial
Officer and Principal Accounting
Officer)
Board of Directors:
H. Furlong Baldwin, Michael J. Birck, George L. Bunting,
Jr., Robert E. Davis, Rhoda M. Dorsey, Dale F. Frey, Robert E.
Gregory, Jr., Robert J. Hurst, Wilbur G. Lewellen, Henry A.
Rosenberg, Jr., Larry P. Scriggins, Anne Marie Grimes Whittemore
and George S. Wills.
January 7, 1994 NORMAN P. BLAKE, JR.
Norman P. Blake, Jr., (for
himself and as attorney-in-fact)
EXHIBIT INDEX
Exhibit
Number Exhibit Page No.
1 Proposed form of Underwriting Agreement.@
4.1 Charter of USF&G Corporation (incorporated
by reference to Exhibit 3(a), Registration
Statement on Form S-14, No. 2-73339; Exhibit 3(a),
Amendment No. 2 on Form 8 to Form 8-B, filed June
22, 1984; Exhibit 2, Amendment No. 1 on Form 8 to
Form 8-A, filed July 31, 1986; Exhibit A to
Exhibit 1 to Form 8-A, filed September 21, 1987;
Exhibit 4.3, Amendment No. 3 to Registration
Statement on Form S-3, No. 33-40492, filed June
13, 1991; Exhibit 19, Form 10-Q for the quarter
ended March 31, 1992, filed May 15, 1992; and
Exhibit 4.3 to Registration Statement on Form S-3,
No. 33-50825, filed October 29, 1993).
4.2 Form of Indenture for Senior Debt Securities
between the Corporation and
Signet Trust Company as Trustee.@
4.3 Form of Indenture for Subordinated Debt
Securities between the Corporation and
Chemical Bank as Trustee.@
4.4 Form of Stock Warrant Agreement.@
4.5 Form of Debt Warrant Agreement.@
4.6 Form of Deposit Agreement.@
4.7 Description of Shareholder Rights Plan
(incorporated by reference to Form 8-A, filed
September 21, 1987).@
5 Opinion and Consent of Piper & Marbury
as to Legality.@
12 Statement regarding computation of
the Corporation's ratio of consolidated
earnings to fixed charges and ratio of
consolidated earnings to combined fixed
charges and preferred stock dividends
(incorporated by reference to Exhibit 12
to the Corporation's 1992 Annual Report on
Form 10-K, 1991 Annual Report on Form 10-K
and 1990 Annual Report on Form 10-K, and
Quarterly Report on Form 10-Q for the nine
months ended October 31, 1993).
15 Acknowledgement of Ernst & Young re:
unaudited interim financial information.
24.1 Consent of Ernst & Young.
24.2 Consent of Piper & Marbury (included
in Exhibit 5).
25 Power of Attorney of the Board of Directors.
26.1 Form T-1: Statement of Eligibility and
Qualification under the Trust Indenture
Act of 1939 of Chemical Bank,
Trustee under the Indenture for Subordinated Debt
Securities.@
26.2 Form T-1: Statement of Eligibility and
Qualification under the Trust Indenture
Act of 1939 of Signet Trust Company,
Trustee under Indenture for Senior Debt
Securities.@
29 Information from reports furnished to state
insurance regulatory authorities
(incorporated by reference to Exhibit 29
to the Corporation's 1992 Annual Report
on Form 10-K).
@ To be filed by amendment.
EXHIBIT 15
USF&G Corporation
We are aware of the incorporation by reference in the Registration
Statement (Form S-3) of USF&G Corporation for the registration of $600
million of its debt securities, preferred stock, common stock and
warrants of our reports dated May 13, 1993, August 12, 1993 and
November 12, 1993 relating to the unaudited condensed consolidated
interim financial statements of USF&G Corporation that are included in
its Forms 10-Q for the quarters ended March 31, 1993, June 30, 1993 and
September 30, 1993.
Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are
not a part of the registration statement prepared or certified by
accountants within the meaning of Section 7 or 11 of the Securities Act
of 1933.
/s/ ERNST & YOUNG
Baltimore, Maryland
January 6, 1994
EXHIBIT 24.1
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of USF&G
Corporation for the registration of $600 million of its debt
securities, preferred stock, common stock and warrants, and to the
incorporation by reference therein of our report dated February 22,
1993 with respect to the consolidated financial statements of USF&G
Corporation incorporated by reference in its Annual Report (10-K) for
the year ended December 31, 1992, and the related financial statement
schedules included therein, filed with the Securities and Exchange
Commission.
/s/ ERNST & YOUNG
Baltimore, Maryland
January 6, 1994
Exhibit 25
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that the undersigned Officers and Directors of
USF&G Corporation, a Maryland corporation, hereby constitute and appoint Norman
P. Blake, Jr., Dan L. Hale and John A. MacColl, of Baltimore City, Maryland, and
each of them, the true and lawful agents and attorneys-in-fact of the
undersigned with full power and authority in said agents and attorneys-in-fact,
and in any one or more of them, to sign for the undersigned and in their
respective name as Officers and as Directors of the Corporation a Registration
Statement on Form S-3 of the Corporation to be filed with the Securities and
Exchange Commission, Washington, D.C., under the Securities Act of 1933, as
amended, and any amendment or amendments to such Registration Statement,
relating to the proposed issuances of equity or debt securities of the
Corporation in one or more offerings through one or more underwriters or selling
agents; hereby ratifying and confirming all acts taken by such agents and
attorneys-in-fact, or any one or more of them, as herein authorized.
Dated: January 5, 1994
Name Title
H. FURLONG BALDWIN Director
H. Furlong Baldwin
NORMAN P. BLAKE, JR. Director, Chairman of the
Norman P. Blake, Jr. Board, President and Chief
Executive Officer
MICHAEL J. BIRCK Director
Michael J. Birck
GEORGE L. BUNTING, JR. Director
George L. Bunting, Jr.
ROBERT E. DAVIS Director
Robert E. Davis
RHODA M. DORSEY Director
Rhoda M. Dorsey
DALE F. FREY Director
Dale F. Frey
ROBERT E. GREGORY, JR. Director
Robert E. Gregory, Jr.
DAN L. HALE Executive Vice President,
Dan L. Hale Chief Financial Officer and
Principal Accounting Officer
ROBERT J. HURST Director
Robert J. Hurst
WILBUR G. LEWELLEN Director
Wilbur G. Lewellen
HENRY A. ROSENBERG, JR. Director
Henry A. Rosenberg, Jr.
LARRY P. SCRIGGINS Director
Larry P. Scriggins
ANNE MARIE GRIMES WHITTEMORE Director
Anne Marie Grimes Whittemore
GEORGE S. WILLS Director
George S. Wills
