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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
CIGNA CORPORATION
-----------------
(Name of Company)
One Liberty Place
1650 Market Street
Philadelphia, PA 19192
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(Address of Principal Executive Offices)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
TITLE OF CLASS AMOUNT
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Notes due January 15, 2033 $100,000,000
Approximate date of proposed public offering:
June 24, 1998
Name and address of agent for service:
Thomas J. Wagner
Executive Vice President
and General Counsel
CIGNA Corporation
One Liberty Place
Philadelphia, PA 19192
The Company hereby amends this application for qualification on such date
or dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment, which specifically states that it shall
supersede this amendment, or (ii) such date as the Securities and Exchange
Commission, acting pursuant to Section 307(c) of the Act, may determine upon the
written request of the Company.
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GENERAL
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1. General information.
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(a) Form of organization: Corporation.
(b) State or other sovereign power under the laws of which organized:
Delaware.
2. Securities Act exemption applicable. CIGNA Corporation, a Delaware
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corporation (the "Company"), is relying upon the exemption from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), provided by Section 3(a)(9) thereunder, in connection
with the Company's exchange offer as described herein (the "Exchange
Offer"). The Exchange Offer is being made by the Company pursuant to its
Offering Circular dated June 24, 1998 ("Offering Circular"), and the
related Letter of Transmittal and Notice of Guaranteed Delivery of even
date therewith, and consists of an offer to exchange up to $100,000,000 of
the Company's Notes Due 2033 (the "New Notes") for the Company's
outstanding $100,000,000 8.30% Notes Due 2023 (the "Old Notes").
There have not been any sales of securities of the same class as the
New Notes or the Old Notes by the Company, nor are there any such other
sales planned, by or through an underwriter at or about the time of the
Exchange Offer transaction.
The Company retained Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ") to advise the Company as to the structure, process and
financial matters related to the Exchange Offer. DLJ's services to the
Company are limited solely to such advisory services, and DLJ will not,
directly or indirectly, solicit the exchange of Old Notes for New Notes
under the Exchange Offer or otherwise make recommendations with respect to
acceptance or rejection of the Exchange Offer. In exchange for such
advisory services, DLJ will be paid a flat fee upon consummation of the
transaction. The fee will not be based upon the level of participation in
the Exchange Offer. DLJ will not be paid any commission or similar variable
type of remuneration.
The Company also has retained MacKenzie Partners, Inc. as the
"Information Agent" and IBJ Schroder Bank & Trust Company as the "Exchange
Agent" in connection with the Exchange Offer. The Information Agent and
Exchange Agent will provide to holders of Old Notes only information
otherwise contained in the Offering Circular and general information
regarding the mechanics of the exchange process. The Exchange Agent will
provide the actual acceptance and exchange services with respect to the
exchange of Old Notes and New Notes. Neither the Information Agent nor the
Exchange Agent will solicit exchanges in connection with the Exchange Offer
or make recommendations as to the acceptance or rejection of the Exchange
Offer. Both the Information Agent and Exchange Agent will be paid
reasonable fees directly by the Company for their services.
Cash payments in the form of a participation fee will be paid to
Holders that tender and do not withdraw their Old Notes and whose Old Notes
are accepted for exchange by the Company. Such participation will be equal
to 1.50% of the principal amount of Old Notes tendered. Holders that do not
tender Old Notes are not eligible to receive a participation fee.
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There are no cash payments made or to be made by any holder of the
outstanding Old Notes in connection with the Exchange Offer.
AFFILIATION
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3. Affiliates. Furnish a list or diagram of all affiliates of the Company and
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indicate the respective percentages of voting securities or other bases of
control.
Below is a list of direct and indirect subsidiaries of the Company as of
December 31, 1997, unless otherwise indicated all of the subsidiaries are
wholly-owned. The names of certain subsidiaries, which if considered in the
aggregate as a single subsidiary would not constitute a significant subsidiary,
are omitted.
CIGNA Holdings, Inc. (Delaware)
I. Connecticut General Corporation (Connecticut)
A. CG Trust Company (Illinois)
B. CIGNA Associates, Inc. (Connecticut)
C. CIGNA Dental Health, Inc. (Florida)
(1) CIGNA Dental Health of California, Inc. (California)
(2) CIGNA Dental Health of Colorado, Inc. (Colorado)
(3) CIGNA Dental Health of Delaware, Inc. (Delaware)
(4) CIGNA Dental Health of Florida, Inc. (Florida)
(5) CIGNA Dental Health of Illinois, Inc. (Illinois)
(6) CIGNA Dental Health of Kansas, Inc. (Kansas)
(7) CIGNA Dental Health of Kentucky, Inc. (Kentucky)
(8) CIGNA Dental Health of Maryland, Inc. (Delaware)
(9) CIGNA Dental Health of New Jersey, Inc. (New Jersey)
(10) CIGNA Dental Health of New Mexico, Inc. (New Mexico)
(11) CIGNA Dental Health of North Carolina, Inc. (North Carolina)
(12) CIGNA Dental Health of Ohio, Inc. (Ohio)
(13) CIGNA Dental Health of Pennsylvania, Inc. (Pennsylvania)
(14) CIGNA Dental Health of Texas, Inc. (Texas)
(15) CIGNA Dental Health Plan of Arizona, Inc. (Arizona)
D. CIGNA Financial Advisors, Inc. (Connecticut)
E. CIGNA Financial Services, Inc. (Delaware)
F. CIGNA Health Corporation (Delaware)
(1) Healthsource, Inc. (New Hampshire)
(a) Healthsource Connecticut Ventures, Inc. (Connecticut)
(i) Healthsource Connecticut, Inc. (Connecticut)
(b) Healthsource Health Plans, Inc. (North Carolina)
(i) Healthsource North Carolina, Inc. (North Carolina)
(ii) Healthsource North Carolina Administrators, Inc. (North
Carolina)
(c) Healthsource Indiana, Inc. (New Hampshire)
(i) Healthsource Indiana Insurance Company (Indiana)
(ii) Healthsource Indiana Managed Care Plan, Inc. (Indiana)
(d) Healthsource Insurance Group, Inc. (New Hampshire)
(e) Healthsource Kentucky Ventures, Inc. (Kentucky)
(i) Healthsource Kentucky, Inc. (Kentucky)
(ii) Healthsource Kentucky Preferred, Inc. (Kentucky)
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(f) Healthsource Maine, Inc. (Maine)
(g) Healthsource Maine Preferred, Inc. (New Hampshire)
(h) Healthsource Management, Inc. (New Hampshire)
(i) Healthsource Syracuse, Inc. (New York)
(a) Healthsource New York, Inc. (New York)
(i) Healthsource HMO of New York, Inc. (New York)
(ii) Healthsource Preferred of New York, Inc. (New
York)
(ii) Healthsource Tennessee, Inc. (Tennessee)
(iii) Healthsource Tennessee Preferred, Inc. (Tennessee)
(i) Healthsource Massachusetts, Inc. (Massachusetts)
(j) Healthsource Metropolitan New York Holding Company, Inc.
(New Hampshire)
(i) Healthsource New York/New Jersey, Inc. (New York)
(k) Healthsource New Hampshire, Inc. (New Hampshire)
(l) Healthsource Ohio Ventures, Inc. (Ohio)
(i) Healthsource Ohio, Inc. (Ohio)
(ii) Healthsource Ohio Preferred, Inc. (Ohio)
(m) Healthsource Rhode Island, Inc. (Rhode Island)
(n) Healthsource RX, Inc. (New Hampshire)
(o) Healthsource South, Inc. (New Hampshire)
(i) Healthsource Arkansas Ventures, Inc. (Arkansas) (70%
with balance owned by non-affiliate)
(a) Healthsource Arkansas, Inc. (Arkansas)
(b) Healthsource Arkansas Preferred, Inc. (Arkansas)
(ii) Healthsource Insurance Company (Tennessee)
(iii) Healthsource Physicians Group of South Carolina, Inc.
(South Carolina)
(iv) Healthsource Provident Administrators, Inc.
(v) Healthsource Texas, Inc. (Texas)
(vi) HS North Texas Ventures, Inc. (Texas)
(a) Healthsource North Texas, Inc. (Texas)
(vii) Provident Health Care Plans, Inc. (Tennessee)
(a) Healthsource Georgia, Inc. (Georgia)
(b) Provident Health Care Plan, Inc. of North Carolina
(North Carolina)
(c) Provident Health Care Plan, Inc. of Tennessee
(Tennessee)
(p) Physicians' Health Systems, Inc. (South Carolina)
(i) Healthsource Insurance Services, Inc. (South Carolina)
(72% with balance owned by another CIGNA subsidiary)
(ii) Healthsource South Carolina, Inc. (South Carolina)
(2) CIGNA HealthCare of Arizona, Inc. (Arizona)
(a) CIGNA Community Choice, Inc. (Arizona)
(3) CIGNA HealthCare of California, Inc. (California)
(4) CIGNA HealthCare of Colorado, Inc. (Colorado)
(5) CIGNA HealthCare of Connecticut, Inc. (Connecticut)
(6) CIGNA HealthCare of Delaware, Inc. (Delaware)
(7) CIGNA HealthCare of Florida, Inc. (Florida)
(8) CIGNA HealthCare of Georgia, Inc. (Georgia)
(9) CIGNA HealthCare of Illinois, Inc. (Delaware) (99.60% with
balance owned by non-affiliate)
(10) CIGNA Healthplan of Louisiana, Inc. (Louisiana)
(11) CIGNA HealthCare of Massachusetts, Inc. (Massachusetts)
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(12) CIGNA HealthCare Mid-Atlantic, Inc. (Maryland)
(13) CIGNA HealthCare of New Jersey, Inc. (New Jersey)
(14) CIGNA HealthCare of New York, Inc. (New York)
(15) CIGNA HealthCare of North Carolina, Inc. (North Carolina)
(16) CIGNA HealthCare of North Louisiana, Inc. (Louisiana)
(17) CIGNA HealthCare of Northern New Jersey, Inc. (New Jersey)
(18) CIGNA HealthCare of Ohio, Inc. (Ohio)
(19) CIGNA HealthCare of Oklahoma, Inc. (Oklahoma)
(20) CIGNA HealthCare of Pennsylvania, Inc. (Pennsylvania)
(21) CIGNA HealthCare of St. Louis, Inc. (Missouri)
(22) CIGNA HealthCare of Tennessee, Inc. (Tennessee)
(23) CIGNA HealthCare of Texas, Inc. (Texas)
(24) CIGNA HealthCare of Utah, Inc. (Utah)
(25) CIGNA HealthCare of Virginia, Inc. (Virginia)
(26) Lovelace Health Systems, Inc. (New Mexico)
(27) Temple Insurance Company Limited (Bermuda)
G. CIGNA RE Corporation (Delaware)
H. Connecticut General Life Insurance Company (Connecticut)
(1) All-Net Preferred Providers, Inc. (Delaware)
(2) CIGNA Life Insurance Company (Connecticut)
I. Disability Claim Services, Inc. (Delaware)
J. Global Portfolio Strategies, Inc. (Connecticut)
K. INA Life Insurance Company of New York (New York)
L. International Rehabilitation Associates, Inc. d/b/a Intracorp
(Delaware)
M. Life Insurance Company of North America (Pennsylvania)
(1) CIGNA Direct Marketing Company, Inc. (Delaware)
(2) CIGNA Life Insurance Company of Canada (Canada)
(3) INA Himawari Life Insurance Co., Ltd. (Japan) (90% with balance
owned by non-affiliate)
N. MCC Behavioral Care, Inc. (Minnesota)
(1) MCC Behavioral Care of California, Inc. (California)
O. TEL-DRUG, INC. (South Dakota)
II. INA Corporation (Pennsylvania)
A. CIGNA International Holdings, Ltd. (Delaware)
(1) Afia Finance Corporation (Delaware)
(a) CIGNA Brasil Participacoes Ltda. (Brazil)
(i) AMICO Assistencia Medica A Industria E Comercio Ltda.
(Brazil) (50% with balance owned by non-affiliate)
(ii) Excel CIGNA Seguardora S.A. (Brazil) (50% with balance
owned by non-affiliate)
(b) CIGNA Reinsurance New Zealand Limited (New Zealand)
(c) P. T. Asuransi CIGNA Indonesia (Indonesia) (53.51% with
balance owned by non-affiliates)
(2) CIGNA Argentina Compania de Seguros S.A. (Argentina)
(3) CIGNA Brasil Empreendimentos Ltda. (Brazil)
(a) INA Seguradora S.A. (Brazil) (85.80% with 13.79% owned by
another CIGNA affiliate and balance owned by non-affiliates)
(4) CIGNA Compania de Seguros (Chile) S.A. (Chile) (99.13% with
balance owned by non-affiliates)
(5) CIGNA G.B. Holdings, Ltd. (Delaware)
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(a) CIGNA Reinsurance Company (UK) Limited (United Kingdom)
(b) Insurance Company of North America (U.K.) Limited (United
Kingdom)
(6) CIGNA Insurance Asia Pacific Limited (Australia)
(a) CIGNA Insurance Singapore Limited (Singapore)
(7) CIGNA Insurance Company Limited (Rep. of South Africa)
(8) CIGNA Insurance Company of Puerto Rico (Puerto Rico)
(9) CIGNA Insurance New Zealand Limited (New Zealand)
(a) CIGNA Life Insurance New Zealand Limited (New Zealand)
(10) CIGNA International Corporation (Delaware)
(a) CIGNA Eastern European Corporate Services Sp. z.o.o.
(Poland)
(11) CIGNA International Insurance Company of Hong Kong Limited (Hong
Kong)
(12) CIGNA Overseas Insurance Company Ltd. (Bermuda)
(a) CIGNA Accident and Fire Insurance Company, Ltd. (Japan)
(b) CIGNA China Investment Fund LDC (Cayman Islands) (67% with
balance owned by another CIGNA subsidiary)
(c) CIGNA Marketing Group, C.A. (Venezuela)
(d) CIGNA Overseas Holdings, Inc. (Delaware)
(i) CIGNA Insurance Company of Europe S.A.-N.V. (Belgium)
(a) CIGNA Life Insurance Company of Europe S.A.-N.V.
(Belgium)
(b) CIGNA STU, S.A. (Poland) (49% with balance owned by
non-affiliate)
(c) CIGNA STU Zycie, S.A. (Poland) (51% with balance
owned by non-affiliate)
(13) CIGNA Worldwide Insurance Company (Delaware)
(a) P.T. Asuransi Niaga CIGNA Life (Indonesia) (60% with balance
owned by non-affiliate)
(b) PCIB CIGNA Life Insurance Corporation (Philippines) (50%
with balance owned by non-affiliate)
(14) ESIS International, Inc. (Delaware)
(15) INACAN Holdings, Ltd. (Canada)
(a) CIGNA Insurance Company of Canada (Canada)
(16) Inversiones INA Limitada (Chile) (98.6% with balance owned by
another CIGNA subsidiary)
(a) CIGNA Compania de Seguros de Vida (Chile) S.A. (Chile)
(96.6% with balance owned by non-affiliate)
(b) CIGNA Salud Isapre S.A. (Chile) (99.20% with balance owned
by another CIGNA subsidiary)
(17) LATINA Holdings, Ltd. (Delaware)
(a) CIGNA Seguros de Colombia S.A. (Colombia) (85.76% with
balance owned by other CIGNA subsidiaries and non-affiliate)
(b) Empresa Guatemalteca CIGNA de Seguros, Sociedad Anonima
(Guatemala) (97.375% with balance owned by non-affiliates)
(18) Perdana CIGNA Insurance Berhard (Malaysia) (51% with balance
owned by non-affiliate)
(19) Seguros CIGNA, S.A. (Mexico) (92.98% with balance owned by
non-affiliates)
B. INA Financial Corporation (Delaware)
(1) Brandywine Holdings Corporation (Delaware)
(a) CIGNA International Reinsurance Company, Ltd. (Bermuda)
(b) Century Indemnity Company (Pennsylvania)
(i) Century Reinsurance Company (Pennsylvania)
(ii) CIGNA Reinsurance Company (Pennsylvania)
(a) CIGNA Reinsurance Company S.A.-N.V. (Belgium)
(2) INA Holdings Corporation (Delaware)
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(a) Bankers Standard Insurance Company (Pennsylvania)
(i) Bankers Standard Fire & Marine Company (Pennsylvania)
(b) CIGNA Property and Casualty Insurance Company (Connecticut)
(i) ALIC, Incorporated (Texas)
(a) CIGNA Lloyds Insurance Company (Texas)
(ii) CIGNA Fire Underwriters Insurance Company
(Pennsylvania)
(iii) CIGNA Insurance Company (Pennsylvania)
(a) Pacific Employers Insurance Company (Pennsylvania)
(i) CIGNA Insurance Company of Texas (Texas)
(ii) Illinois Union Insurance Company (Illinois)
(iv) CIGNA Insurance Company of the Midwest (Indiana)
(c) ESIS, Inc. (California)
(d) INAC Corp. (Delaware)
(e) INAC Corp. of California (California)
(f) INAMAR Insurance Underwriting Agency, Inc. (New Jersey)
(i) INAMAR Insurance Underwriting Agency, Inc. of
Massachusetts (Massachusetts)
(ii) INAMAR Insurance Underwriting Agency, Inc. of Ohio
(Ohio)
(iii) INAMAR Insurance Underwriting Agency of Texas (Texas)
(g) INAPRO, Inc. (Delaware)
(i) Reinsurance Solutions International, L.L.C. (Delaware)
(50% with balance owned by non-affiliate)
(h) Insurance Company of North America (Pennsylvania)
(i) Atlantic Employers Insurance Company (New Jersey)
(ii) CIGNA Employers Insurance Company (Pennsylvania)
(iii) CIGNA Insurance Company of Ohio (Ohio)
(iv) Indemnity Insurance Company of North America
(Pennsylvania)
(a) Allied Insurance Company (California)
(b) CIGNA Indemnity Insurance Company (Pennsylvania)
(c) CIGNA Insurance Company of Illinois (Illinois)
(v) INA Surplus Insurance Company (Pennsylvania)
(i) Marketdyne International, Inc. (Delaware)
(j) Recovery Services International, Inc. (Delaware)
III. CIGNA Investment Group, Inc. (Delaware)
A. CIGNA International Finance Inc. (Delaware)
(1) CIGNA International Investment Advisors, Ltd. (Delaware)
(a) CIGNA International Investment Advisors Australia Limited
(Australia)
(b) CIGNA International Investment Advisors K.K. (Japan)
B. CIGNA Investment Advisory Company, Inc. (Delaware)
C. CIGNA Investments, Inc. (Delaware)
(1) CIGNA Advisory Partners, Inc. (Delaware)
(2) CIGNA Leveraged Capital Fund, Inc. (Delaware)
MANAGEMENT AND CONTROL
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4. Directors and executive officers. List the names and complete mailing
--------------------------------
addresses of all directors and executive officers of the applicant and all
persons chosen to become directors and executive officers.
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Indicate all offices with the applicant held or to be held by each person
named.
The names and addresses of the directors and executive officers of the
Company are set forth below. The title of each of the executive officers set
forth below refers to such executive officer's position with the Company.
<TABLE>
<CAPTION>
NAME ADDRESS OFFICE
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<S> <C> <C>
Robert P. Bauman One Liberty Place Director
Philadelphia, PA 19192
Robert H. Campbell One Liberty Place Director
Philadelphia, PA 19192
Alfred C. DeCrane, Jr. One Liberty Place Director
Philadelphia, PA 19192
Peter N. Larson One Liberty Place Director
Philadelphia, PA 19192
Marilyn W. Lewis One Liberty Place Director
Philadelphia, PA 19192
Charles R. Shoemate One Liberty Place Director
Philadelphia, PA 19192
Louis W. Sullivan, M.D. One Liberty Place Director
Philadelphia, PA 19192
Wilson H. Taylor One Liberty Place Chairman,
Philadelphia, PA 19192 Chief Executive Officer
and Director
Harold A. Wagner One Liberty Place Director
Philadelphia, PA 19192
Carol Cox Wait One Liberty Place Director
Philadelphia, PA 19192
Paul Bergsteinsson Two Liberty Place Vice President and
Philadelphia, PA 19192 Assistant Treasurer
J. Raymond Caron Two Liberty Place Senior Vice President
Philadelphia, PA 19192
John J. Corcoran Two Liberty Place Vice President
Philadelphia, PA 19192
</TABLE>
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<TABLE>
<S> <C> <C>
David B. Gerges One Liberty Place Senior Vice President
Philadelphia, PA 19192 and Treasurer
William L. Gerner 900 Cottage Grove Road Vice President
Bloomfield, CT 06002
Arthur J. Harris, II 2001 Pennsylvania Avenue N.W. Vice President
Washington, D.C. 20006
Donald M. Levinson One Liberty Place Executive Vice
Philadelphia, PA 19192 President
Nancy J. Meyer Two Liberty Place Vice President
Philadelphia, PA 19192
Gerald T. Meyn Two Liberty Place Vice President
Philadelphia, PA 19192
Michael J. Monroe One Liberty Place Vice President
Philadelphia, PA 19192
James J. Ritchie Two Liberty Place Senior Vice President
Philadelphia, PA 19192
Robert L. Robinson Two Liberty Place Senior Vice President
Philadelphia, PA 19192
Paul H. Rohrkemper Two Liberty Place Senior Vice President
Philadelphia, PA 19192
Mordecai Schwartz One Liberty Place Vice President
Philadelphia, PA 19192
Judith E. Soltz Two Liberty Place Vice President
Philadelphia, PA 19192
James G. Stewart One Liberty Place Executive Vice
Philadelphia, PA 19192 President and
Chief Financial
Officer
Gary A. Swords Two Liberty Place Vice President and
Philadelphia, PA 19192 Chief Accounting
Officer
D. Timothy Tammany Two Liberty Place Vice President
Philadelphia, PA 19192
</TABLE>
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<TABLE>
<S> <C> <C>
Thomas J. Wagner One Liberty Place Executive Vice President
Philadelphia, PA 19192 and General Counsel
Barry F. Wiksten One Liberty Place Senior Vice President
Philadelphia, PA 19192
Carol J. Ward One Liberty Place Corporate Secretary
Philadelphia, PA 19192
</TABLE>
5. Principal owners of voting securities. Furnish the following information as
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to each person owning 10 percent or more of the voting securities of the
applicant.
As of May 31, 1998, no person owned 10 percent or more of voting securities
of the Company.
UNDERWRITERS
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6. Underwriters. Give the name and complete mailing address of (a) each person
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who, within three years prior to the date of filing the application, acted
as an underwriter of any securities of the obligor which were outstanding
on the date of filing the application, and (b) each proposed principal
underwriter of the securities proposed to be offered. As to each person
specified in (a), give the title of each class of securities underwritten.
(a) The following were the underwriters in the Company's issuance in May
1997 of $300 million of 7.40% Notes due 2007 and $300 million 7.875%
Debentures due 2027:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10055
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10282
(b) There are no underwriters of the securities proposed to be offered in
the Exchange Offer.
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CAPITAL SECURITIES
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7. Capitalization. (a) Furnish the following information as to each authorized
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class of securities of the applicant.
(i) Equity Securities (as of May 31, 1998)
<TABLE>
<CAPTION>
Title of Class Amount Authorized Amount Outstanding
-------------- ----------------- ------------------
<S> <C> <C>
Common Stock
$.25 par value 600,000,000 shares 215,377,643
Preferred Stock
$ 1.00 par value 25,000,000 shares None
</TABLE>
(ii) Debt Securities (as of May 31, 1998) (in millions)
<TABLE>
<CAPTION>
Title of Class Amount Authorized Amount Outstanding
--------------- ----------------- ------------------
<S> <C> <C>
8.16% Notes due 2000 $ 25 $ 25
8 3/4% Notes due 2001 100 100
7.17% Notes due 2002 25 25
7.4% Notes due 2003 100 100
6 3/8% Notes due 2006 100 100
7.4% Notes due 2007 300 300
8 1/4% Notes due 2007 100 100
7.65% Notes due 2023 100 100
8.3% Notes due 2023 100 100
7 7/8% Debentures due 2027 300 300
Medium-term Notes 129 129
Commercial paper 1,200 241
</TABLE>
(b) Give a brief outline of the voting rights of each class of voting
securities referred to in paragraph (a) above.
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Holders of the Company's Common Stock have one vote per share for the election
of directors and all other matters, and have no cumulative voting rights.
Of the 25 million shares of authorized Preferred Stock, six million shares have
been designated as Junior Participating Preferred Stock, Series D ("Series D
Stock"), issuable pursuant to the exercise of rights under the Company's
shareholders rights plan. If the Series D Stock were issued, each 1/100 of a
share would have voting rights approximately equal to one share of Common Stock.
INDENTURE SECURITIES
--------------------
8. Analysis of indenture provisions. Insert at this point the analysis of
--------------------------------
indenture provisions required under Section 305(a)(2) of the Trust Indenture
Act of 1939, as amended.
For purposes of this Section 8, the "Indenture" refers to the Indenture,
dated as of January 1, 1994, by and between CIGNA Corporation and Marine
Midland Bank (formerly Marine Midland Bank, N.A.), as Trustee (the
"Trustee"). Other capitalized terms used in Section 8 are defined in the
Indenture or the Offering Circular.
A. EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to
the New Notes: (1) default in the payment of interest on any New Note when
due, continued for 30 days; (2) default in the payment of principal of (or
premium, if any, on) any New Note when due; (3) default in the performance or
breach of any other covenant or warranty of the Company in the Indenture
(other than one included in the Indenture solely for the benefit of series of
Debt Securities other than the New Notes), continued for 90 days after
written notice as provided in the Indenture; (4) the acceleration, or failure
to pay at maturity (including any applicable grace period), of any
indebtedness for money borrowed by the Company exceeding $20,000,000 in
principal amount, which acceleration or failure to pay is not rescinded or
annulled or indebtedness paid within 15 days after the date on which written
notice thereof shall have first been given to the Company as provided in the
Indenture; and (5) certain events in bankruptcy, insolvency or reorganization
in respect of the Company.
If an Event of Default with respect to the New Notes occurs and is
continuing, either the Trustee or the Holders of at least 25 percent in
principal amount of the New Notes may declare the principal amount of all New
Notes to be due and payable immediately. At any time after a declaration of
acceleration with respect to the New Notes has been made, but before a
judgment or decree based on acceleration has been obtained, the Holders of a
majority in principal amount of the New Notes may, under certain
circumstances, rescind and annul such acceleration.
B. AUTHENTICATION AND DELIVERY
The New Notes shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its
Vice Presidents, under the Company's corporate seal reproduced thereon and
attested by the Corporate Secretary or one of the Assistant Corporate
Secretaries. Upon delivery of New Notes so executed to the Trustee for
authentication together with a Company Order for the authentication and
delivery of the New Notes, the Trustee shall authenticate and deliver the New
Notes. The Indenture does not contain provisions regarding the application of
the proceeds
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from issuance of the New Notes.
C. RELEASE OF PROPERTY SUBJECT TO LIEN
The Company's obligations under the New Notes are not secured by any
liens or security interests on any assets of the Company. Therefore, the
Indenture does not contain any provisions with respect to the release or the
release and substitution of any property subject to such a lien.
D. SATISFACTION AND DISCHARGE
The Indenture shall cease to be of further effect and shall be discharged
as to the New Notes after certain actions are taken, when (1) either: (i) all
of the New Notes have been delivered to the Trustee for cancellation, or (ii)
all New Notes not delivered to the Trustee for cancellation have become due
and payable or will become due and payable at their Stated Maturity within
one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee, and, in each case, the Company has
deposited or caused to be deposited with the Trustee funds sufficient to pay
and discharge the entire indebtedness of the New Notes; (2) the Company has
paid all other sums required to be paid under the Indenture; and (3) the
Company has delivered to the Trustee an Officer's Certificate and an Opinion
of Counsel each stating that all conditions precedent relating to the
satisfaction and discharge of the Indenture have been complied with.
E. EVIDENCE OF COMPLIANCE WITH CONDITIONS AND COVENANTS
The Company is required by the Indenture to deliver to the Trustee,
within 120 days after the end of each of the Company's fiscal years, an
Officer's Certificate stating whether or not, to the best knowledge of the
signers thereof, the Company is in default in the performance and observance
of certain terms of the Indenture, and, if there is such a default,
specifying the nature and status of such default.
9. Other Obligors. Give the name and complete mailing address of any person,
--------------
other than the applicant, who is an obligor upon the indenture securities.
No person other than the Company is an obligor with respect to the New Notes.
Contents of Application For Qualification. This application for
-----------------------------------------
qualification comprises:
(a) Pages numbered one to 14, consecutively;
(b) The Statement of eligibility and qualification of the Trustee under the
Indenture to be qualified (on Form T-1 incorporated herein by reference
to Exhibit 99 attached hereto);
(c) The following exhibits, in addition to those filed as a part of the
statement of eligibility and qualification of the trustee:
(i) Exhibit T3A -- The Company's Restated Certificate of Incorporation,
-----------
as amended (incorporated by reference to Exhibit 3.1(a) and Exhibit 3.1(b) to
the applicant's Form 10-Q for the quarter
13
<PAGE>
ended March 31, 1998);
(ii) Exhibit T3B -- The Company's Bylaws (incorporated herein by reference
-----------
as Exhibit 3.2 to the registrant's Form 10-K for the year ended December 31,
1997);
(iii) Exhibit T3C -- Form of Senior Indenture, dated as of January 1, 1994,
-----------
between the Company and Marine Midland Bank, N.A., as Senior Trustee,
(incorporated herein by reference to Exhibit 4.1 to the Company's Registration
Statement No. 33-65396);
(iv) Exhibit T3D -- Not applicable;
-----------
(v) Exhibit T3E.1 -- Form of Offering Circular, dated as of June 24,
-------------
1998;
(vi) Exhibit T3E.2 -- Form of Letter of Transmittal, dated as of June 24,
-------------
1998;
(vii) Exhibit T3E.3 --Form of Notice of Guaranteed Delivery, dated as of
-------------
June 24, 1998;
(viii) Exhibit T3E.4 -- Form of Letter to Beneficial Owners, dated as of
-------------
June 24, 1998;
(ix) Exhibit T3E.5 -- Form of Letter to DTC Participants, dated as of June
-------------
24, 1998;
(x) Exhibit T3E.6 -- Form of Letter to Clients, dated as of June 24,
-------------
1998;
(xi) Exhibit T3F - - Cross-Reference Sheet;
-----------
(xii) Exhibit 99 -- Form T-1 of Marine Midland Bank.
----------
14
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Applicant, CIGNA Corporation, a corporation organized and existing under the
laws of the State of Delaware, has duly caused this application to be signed on
its behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Philadelphia and Commonwealth
of Pennsylvania, on the 24th of June, 1998.
CIGNA Corporation
By: /s/ Mordecai Schwartz
------------------------
Mordecai Schwartz
Vice President
Attest: /s/ Robert A. Lukens
---------------------------
Robert A. Lukens
Assistant Corporate Secretary
15
<PAGE>
EXHIBIT T3E.1
Offering Circular
CIGNA CORPORATION LOGO
Offer to Exchange
Notes Due 2033
for Any and All of its Outstanding
8.30% Notes Due 2023
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, JULY 23, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
CIGNA Corporation (the "Company"), a Delaware corporation, hereby offers, upon
the terms and subject to the conditions set forth in this Offering Circular (the
"Offering Circular") and the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), to exchange an aggregate principal amount of
up to $100,000,000 of its Notes Due 2033 (the "New Notes") for a like principal
amount of its issued and outstanding 8.30% Notes Due 2023 (the "Old Notes") from
the registered holders (individually, a "Holder" and collectively, the
"Holders") thereof. The terms of the New Notes are discussed in "Offering
Circular Summary--Comparison of Old Notes and New Notes" and "Description of New
Notes." The New Notes will evidence the same class of debt as the Old Notes and
will be issued pursuant to, and entitled to the benefits of, an Indenture (the
"New Indenture"), dated as of January 1, 1994, between the Company and Marine
Midland Bank (formerly Marine Midland Bank, N.A.) (the "New Trustee"). The Old
Notes were issued pursuant to, and are entitled to the benefits of, an Indenture
(the "Old Indenture"), dated as of June 30, 1988, between the Company and
Bankers Trust Company, as trustee.
The Company will accept for exchange any and all Old Notes validly tendered
and not withdrawn prior to the Expiration Date. Old Notes may be tendered only
in denominations of $1,000 or an integral multiple thereof. See "The Exchange
Offer--Procedures for Tendering Old Notes." The Exchange Offer is subject to
certain customary conditions. See "The Exchange Offer--Conditions to the
Exchange Offer." Holders that tender and do not withdraw their Old Notes will
receive upon acceptance of the Old Notes by the Company a participation fee
equal to 1.50% of the principal amount tendered (the "Participation Fee").
Holders that do not tender Old Notes are not eligible to receive the
Participation Fee.
The New Notes will constitute, and the Old Notes constitute, general unsecured
obligations of the Company and the Old Notes rank, and the New Notes will rank,
pari passu with all existing and future unsecured and unsubordinated senior
indebtedness of the Company.
(cover continued on next page)
SEE "RISK FACTORS" FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED
IN EVALUATING THE EXCHANGE OFFER.
The date of this Offering Circular is June 24, 1998.
<PAGE>
THE OFFER OF THE SECURITIES CONTEMPLATED IN THE EXCHANGE OFFER IS MADE
PURSUANT TO THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SECTION 5 OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), PROVIDED BY SECTION
3(A)(9) THEREOF AND, ACCORDINGLY, THE OFFER OF SUCH SECURITIES HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT APPROVED
OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS OFFER TO EXCHANGE.
(Continued from cover page)
The New Notes will have the same 8.30% interest coupon as the Old Notes until,
but not including, January 15, 2023 and, thereafter, the New Notes will have an
interest coupon calculated as provided herein. For the Old Notes, a price (the
"Reference Price of the Old Notes") will be determined using a specified fixed
spread pricing formula. Such Reference Price of the Old Notes will be based on
a yield (the "Reference Yield of the Old Notes") to the maturity date of the Old
Notes equal to (i) the yield (the "Benchmark Treasury Yield") on the 6.125% U.S.
Treasury Note due November 15, 2027 (the "Benchmark Treasury Security") plus
(ii) 130 basis points (the "2023 Fixed Spread"). For the New Notes, a per annum
interest coupon (the "Extension Coupon") will be determined for the period from
January 15, 2023 to the maturity date, January 15, 2033. This Extension Coupon
(expressed as a percentage with two decimal places) will be the lesser of: (i)
8.30% per annum and (ii) a per annum interest rate at which the price of the New
Notes (the "Reference Price of the New Notes") will be equal to the Reference
Price of the Old Notes per $1,000 principal amount thereof. The Extension
Coupon of the New Notes will be determined by using the Reference Price of the
New Notes (equal to the Reference Price of the Old Notes if the Benchmark
Treasury Yield is 5.88% or lower) and a yield (the "Reference Yield of the New
Notes"), equal to (i) the Benchmark Treasury Yield plus (ii) 140 basis points
(the "2033 Fixed Spread"). For each $1,000 principal amount of Old Notes
exchanged, the Holder thereof will receive $1,000 principal amount of New Notes.
The Extension Coupon and the reference prices will be determined as of 2:00
p.m., New York City time, on the second business day prior to the Expiration
Date (the "Extension Coupon Determination Date").
Interest on the New Notes will accrue from the last interest payment date on
the Old Notes (July 15, 1998) at the rate of 8.30%. The first interest payment
date on the New Notes will be January 15, 1999. Accordingly, holders exchanging
Old Notes for New Notes will not receive any interest payment in respect of Old
Notes so exchanged.
The Company, at its discretion, may elect to redeem the New Notes at any time,
in whole or from time to time in part, until maturity, at an amount equal to the
sum of (i) the principal amount of the New Notes being
2
<PAGE>
redeemed plus accrued and unpaid interest thereon to the redemption date, and
(ii) the Make-Whole Amount (as defined below), if any, with respect to such New
Notes. See "Description of New Notes - Optional Redemption."
The purpose of the Exchange Offer is to increase the Company's financial
flexibility by adding the optional redemption provision to the New Notes and to
take advantage of the current low interest rate environment by extending the
maturity date of a portion of the Company's long-term debt. The New Notes will
maintain the same interest rate as the Old Notes until, but not including,
January 15, 2023 and, thereafter, the interest rate will be at the Extension
Coupon as calculated herein until maturity, while deferring any additional
refinancing costs. The Company believes that the terms of the New Notes will be
more beneficial to it over the long-term.
Based on an interpretation by the staff of the Division of Corporation Finance
of the Securities and Exchange Commission (the "Commission"), the Company
believes that the New Notes issued pursuant to the Exchange Offer may be offered
for resale, resold and otherwise transferred by any Holder thereof without
compliance with the registration requirements of the Securities Act.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer and, to
the best of the Company's information and belief, each person participating in
the Exchange Offer is acquiring the New Notes in the ordinary course of business
and has no arrangement or understanding with any person to participate in the
distribution of the New Notes.
The Company has made no arrangements for and has no understanding with any
dealer, salesman or other person regarding the solicitation of tenders
hereunder, and no person has been authorized by the Company to give any
information or to make any representations in connection with the Exchange Offer
other than those contained or incorporated by reference in this Offering
Circular and, if given or made, such other information or representations must
not be relied upon as having been authorized. Neither the delivery of this
Offering Circular nor the exchange of New Notes for Old Notes shall, under any
circumstances, create any implication that the information contained herein is
correct as of any time subsequent to the date hereof.
The Company will not receive any proceeds from the Exchange Offer. The
Company has agreed to bear the expenses of the Exchange Offer.
The Exchange Agent (as defined herein) and The Depository Trust Company
("DTC") have confirmed that the Exchange Offer is eligible for the DTC Automated
Tender Offer Program ("ATOP"). Accordingly, DTC participants may electronically
transmit their acceptance of the Exchange Offer by causing DTC to transfer Old
Notes to the Exchange Agent in accordance with DTC's ATOP procedures for such a
transfer. DTC will then send an Agent's Message (as defined herein) to the
Exchange Agent.
3
<PAGE>
---------------------------------------
NONE OF THE COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY, EXECUTIVE OFFICERS
OF THE COMPANY, THE FINANCIAL ADVISOR, THE INFORMATION AGENT OR THE EXCHANGE
AGENT MAKES ANY RECOMMENDATION TO HOLDERS OF THE OLD NOTES AS TO WHETHER TO
EXCHANGE OR REFRAIN FROM EXCHANGING THEIR OLD NOTES. IN ADDITION, NO ONE HAS
BEEN AUTHORIZED TO MAKE ANY SUCH RECOMMENDATION. HOLDERS OF OLD NOTES MUST MAKE
THEIR OWN DECISION WHETHER TO EXCHANGE OLD NOTES PURSUANT TO THE EXCHANGE OFFER
AND, IF SO, THE AGGREGATE PRINCIPAL AMOUNT OF OLD NOTES TO EXCHANGE.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT TENDERS
FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at its Regional Offices located at 7 World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. 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. The
Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. Such
reports, proxy statements and other information can also be inspected at the
offices of the New York Stock Exchange, Inc., the Pacific Stock Exchange, Inc.
and the Philadelphia Stock Exchange, Inc.
The Company has instructed the Financial Advisor, the Exchange Agent and the
Information Agent not to solicit exchanges in connection with the Exchange Offer
or to make any recommendation with respect to acceptance or rejection of the
Exchange Offer. Solicitations will be made solely by employees of the Company.
The Financial Advisor, the Exchange Agent and the Information Agent will answer
any questions from Holders of the Old Notes with respect to the Exchange Offer
solely by reference to the terms of this Offering Circular, and Holders may
contact the Financial Advisor, the Exchange Agent and the Information Agent at
the addresses and telephone numbers listed below. Holders of the Old Notes who
have any questions regarding the mechanics of the Exchange Offer should contact
either the Exchange Agent or the Information Agent. In addition, all questions
with respect to the Exchange Offer may be directed to the Company (Attn: Kim
Bonner Massey, telephone number (215) 761-1131).
FINANCIAL ADVISOR: INFORMATION AGENT:
Donaldson, Lufkin & Jenrette MacKenzie Partners, Inc.
Securities Corporation 156 Fifth Avenue, Penthouse
277 Park Avenue New York, New York 10010
New York, New York 10172 (800) 322-2885 (Toll Free)
(800) 334-1604 (Toll Free) (212) 929-5500 (Call Collect)
(212) 892-3351 (Call Collect)
Attn: Paul S. Galant
EXCHANGE AGENT:
IBJ Schroder Bank & Trust
Company
By Mail: By Hand or Overnight Delivery:
P.O. Box 84 One State Street
Bowling Green Station By Facsimile: New York, New York 10004
New York, New York 10274-0084 (212) 858-2611 Attn: Securities Processing
Attn: Reorganization Operations Window, Subcellar One (SC-1)
Department
Confirm by Telephone:
(212) 858-2103
5
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
(Commission File No. 1-8323) pursuant to the Exchange Act and are incorporated
herein by reference and made a part hereof (1) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997; (2) the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1998; and (3) the
Company's Current Reports on Form 8-K dated February 10 and April 30, 1998. In
addition, the Company has filed a Form T-3, dated June 24, 1998, pursuant to the
Trust Indenture Act of 1939, which Form T-3 includes a Form T-1 and the form of
the New Indenture.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Offering Circular and
prior to the Expiration Date are deemed to be incorporated by reference herein
and shall be a part hereof from their respective filing dates. Information
contained in this Offering Circular modifies or supersedes similar information
contained in the documents incorporated by reference above. Further,
information contained in any subsequently filed document, which is deemed to be
incorporated by reference in this Offering Circular, will modify and supersede
similar information contained in this Offering Circular or any of the documents
incorporated by reference above.
The Company will provide, without charge, to each person to whom a copy of
this Offering Circular is delivered, upon written or oral request, a copy of any
and all of the documents incorporated by reference in this Offering Circular,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the documents that this Offering Circular
incorporates. Requests for copies of such documents, including the Form T-3,
should be directed to CIGNA Corporation, Shareholder Services Department, Two
Liberty Place, 1601 Chestnut Street, P.O. Box 7716, Philadelphia, PA 19192-2378,
telephone number (215) 761-3517.
6
<PAGE>
OFFERING CIRCULAR SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere, or incorporated by reference, in this Offering
Circular. See "Risk Factors" for a discussion of certain factors that should be
considered in connection with the Exchange Offer and the New Notes offered
hereby.
THE COMPANY
With shareholders' equity of $8.3 billion and assets of $111.2 billion as of
March 31, 1998 and revenues of $20.0 billion for the year ended December 31,
1997, CIGNA Corporation and its subsidiaries constitute one of the largest
investor-owned insurance organizations in the United States and one of the
principal United States companies in the financial services industry. CIGNA
Corporation is not an insurance company. Its subsidiaries are major providers
of group life and health insurance, managed care products and services,
retirement products and services, and property and casualty insurance. CIGNA is
one of the largest international insurance organizations based in the United
States, measured by international revenues, and one of the largest investor-
owned health maintenance organizations in the United States, based on the number
of members. CIGNA's major insurance subsidiaries, Connecticut General Life
Insurance Company ("CG Life") and Insurance Company of North America ("INA"),
are among the oldest insurance companies in the United States, with INA tracing
its origins to 1792 and CG Life to 1865. CIGNA Corporation was incorporated in
the State of Delaware in 1981.
The principal executive offices of the Company are located at One Liberty
Place, 1650 Market Street, P.O. Box 7716, Philadelphia, Pennsylvania 19192-1550.
Its telephone number is (215) 761-1000.
THE EXCHANGE OFFER
The Exchange Offer: Pursuant to the Exchange Offer, the
Company is offering to any Holder to
exchange, for any and all of its Old
Notes, an equal principal amount of
newly issued New Notes.
The New Notes will have the same
8.30% interest coupon as the Old
Notes until, but not including,
January 15, 2023, and thereafter, the
interest coupon on the New Notes will
be the Extension Coupon as calculated
herein to January 15, 2033, the final
maturity of the New Notes. For the
Old Notes, a Reference Price of the
Old Notes will be determined using a
specified fixed spread pricing
formula. Such Reference Price of the
Old Notes will be based on the
Reference Yield of the Old Notes to
the maturity date of the Old Notes
equal to (i) the Benchmark Treasury
Yield plus (ii) the 2023 Fixed
Spread. For the New Notes, an
Extension Coupon will be determined
for the period January 15, 2023 to
the maturity date, January 15, 2033.
The Extension Coupon (expressed as a
percentage with two decimal places)
will be the lesser of: (i) 8.30% per
annum and (ii) a per annum interest
rate at which the Reference Price of
the New Notes will be equal to the
Reference Price of the Old Notes per
$1,000 principal amount of the Old
Notes. The Extension Coupon of the
New Notes will be determined by using
the Reference Price of the New Notes
(equal to the Reference Price of the
Old Notes if the
7
<PAGE>
Benchmark Treasury Yield is 5.88% or
lower) and the Reference Yield of the
New Notes. For each $1,000 principal
amount of Old Notes exchanged in the
Exchange Offer, an exchanging Holder
will receive $1,000 principal amount of
New Notes. The Extension Coupon and the
reference prices will be determined
based on the Benchmark Treasury Yield as
of 2:00 p.m., New York City time, on the
Extension Coupon Determination Date.
Interest on the New Notes will accrue
from the last interest payment date on
the Old Notes (July 15, 1998) at the
rate of 8.30%. The first interest
payment date on the New Notes will be
January 15, 1999. Accordingly, holders
exchanging Old Notes for New Notes will
not receive any interest payment in
respect of Old Notes so exchanged.
The New Notes will be unsecured
obligations of the Company and will rank
pari passu with all existing and future
unsecured and unsubordinated
indebtedness of the Company. The terms
and conditions of the New Notes will be
similar to those that currently apply to
the Old Notes. Changes from the Old
Notes and the Old Indenture, including
an optional redemption provision not
found in the Old Notes, are set forth
below in the section "Comparison of Old
Notes and New Notes". See also
"Description of New Notes".
Calculations: The reference prices, reference yields,
the Benchmark Treasury Yield and the
Extension Coupon will be determined as
set forth in the section "The Exchange
Offer--Calculations; Information" and in
Schedules A, B, C and D attached hereto.
Participation Fee: Holders that tender and do not withdraw
their Old Notes and whose Old Notes are
accepted for exchange by the Company
will receive a participation fee equal
to 1.50% of the principal amount of Old
Notes tendered. Holders that do not
tender Old Notes are not eligible to
receive a Participation Fee.
Information: As soon as practicable on the Extension
Coupon Determination Date, but in any
event before 9:00 a.m., New York City
time, on the following business day, the
Company will publicly announce by press
release to the Dow Jones News Service:
the Benchmark Treasury Yield, the
Reference Yield of the Old Notes, the
Reference Price of the Old Notes, the
Reference Yield of the New Notes, the
Extension Coupon and the Reference Price
of the New Notes.
8
<PAGE>
During the term of the Exchange Offer,
Holders of the Old Notes can obtain
information regarding the Benchmark
Treasury Yield, reference yields,
reference prices and other information
regarding the terms of the Exchange
Offer from the Financial Advisor at
(800) 334-1604 (toll-free) or (212) 892-
3351 (call collect), attention Paul S.
Galant. In addition, the Company intends
to publish information about the
Exchange Offer, including the
information described in the preceding
paragraph when available, on MCM
"Corporate Watch" Service on Telerate
page 64150.
Old Notes Outstanding: As of the date hereof, $100,000,000
aggregate principal amount of Old Notes
are outstanding.
CUSIP Number: The CUSIP Number of the Old Notes is
125509AG4.
Conditions to the Exchange Offer: Consummation of the Exchange Offer is
conditioned upon certain customary
conditions described herein. The Company
may, in its sole discretion, waive any
condition with respect to the Exchange
Offer and accept for exchange any Old
Notes tendered. See "The Exchange
Offer--Conditions to the Exchange
Offer".
Expiration and Extensions: The Exchange Offer will expire at 5:00
p.m., New York City time, on Thursday,
July 23, 1998, or at such later time and
date to which the Exchange Offer may be
extended by the Company in accordance
with the procedures described herein.
See "The Exchange Offer--Expiration
Date; Extensions; Termination;
Amendments".
If the Exchange Offer is extended for a
period longer than three business days
from the previously scheduled Expiration
Date, then a new Extension Coupon
Determination Date, which would be two
business days prior to the new
Expiration Date, may be established. If
the extension is for three business days
or less, no new Extension Coupon
Determination Date will be established
and the Extension Coupon will remain as
determined on the Extension Coupon
Determination Date prior to the
extension of the Exchange Offer.
If the consideration offered with
respect to the Exchange Offer is changed
or if any other amendment to the terms
of the Exchange Offer is made that, in
the opinion of the Company, would be
adverse to the interests of the holders
tendering Old Notes for exchange, the
Exchange Offer will remain open for at
least five business days from the date
public notice of such change or
amendment is given.
9
<PAGE>
Certain U.S. Federal Income Tax In the opinion of Milbank, Tweed,
Consequences: Hadley & McCloy, special tax counsel to
the Company, the exchange of Old Notes
pursuant to the Exchange Offer will
constitute a recapitalization for U.S.
federal income tax purposes and a Holder
of Old Notes that tenders pursuant to
the Exchange Offer generally will
recognize no gain or loss upon the
exchange of Old Notes for New Notes. See
"Certain U.S. Federal Income Tax
Consequences".
Certain Consequences of the In deciding whether to participate in
Exchange Offer: the Exchange Offer, each Holder
should consider carefully, in addition
to the other information contained in
this Offering Circular- the information
set forth under the captions
"Description of New Notes" and "Risk
Factors".
Tender of Old Notes: Old Notes may be tendered for exchange
only in denominations of $1,000 or an
integral multiple thereof. To tender Old
Notes, Holders must deliver their Old
Notes together with a properly completed
and duly executed Letter of Transmittal
to the Exchange Agent or follow the
procedures for book-entry transfer. If
Old Notes are held by a broker, dealer,
commercial bank, trust company or other
nominee (individually, a "Custodian" and
collectively, the "Custodians"), the
beneficial owner thereof must instruct
such Custodian to tender such Old Notes
on their behalf. All tenders must be
made on or prior to the Expiration Date.
See "The Exchange Offer--Procedures for
Tendering Old Notes".
New Notes will be delivered only in
book-entry form through DTC.
Accordingly, Holders who anticipate
tendering and whose Old Notes are not
held through DTC are urged to contact
promptly a Custodian that has the
capability to hold securities through
DTC, to arrange for receipt of any New
Notes to be delivered pursuant to the
Exchange Offer and to obtain the
information necessary to provide the
required DTC participant and account
information in the relevant Letter of
Transmittal. See "The Exchange Offer
Proper Execution and Delivery of Letter
of Transmittal".
Guaranteed Delivery: Holders of Old Notes who wish to
tender their Old Notes and who cannot
deliver their Old Notes or the Letter
of Transmittal to the Exchange Agent,
prior to the Expiration Date, or
cannot complete procedures for
book-entry transfer on a timely
basis, must tender their Old Notes
according to the guaranteed delivery
procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures".
10
<PAGE>
Acceptance of Old Notes and Subject to satisfaction or waiver of
Delivery of New Notes: the conditions to the Exchange Offer,
the Company will exchange any and all
Old Notes that are properly tendered
and not withdrawn prior to the
Expiration Date. New Notes will be
delivered only in book-entry form
through DTC. New Notes will be
delivered, along with payment of the
Participation Fee, on the fifth
business day following the Expiration
Date (the "Exchange Date"). See "The
Exchange Offer--Acceptance of Old
Notes Tendered for Exchange; Delivery
of New Notes".
Withdrawal Rights: Tenders of Old Notes may be withdrawn
at any time prior to the Expiration
Date. Withdrawal of tendered Old
Notes will be deemed a rejection of
the Exchange Offer. See "The
Exchange Offer--Withdrawal Rights".
Absence of Dissenters' Rights: Holders of Old Notes do not have any
appraisal or dissenters' rights under
the Delaware General Corporation Law
or the Old Indenture. See "The
Exchange Offer--Absence of
Dissenters' Rights".
Financial Advisor: Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
(800) 334-1604 (toll-free)
(212) 892-3351 (call collect)
Attention: Paul S. Galant
Exchange Agent: IBJ Schroder Bank & Trust Company
Bowling Green Station
P.O. Box 84
New York, New York 10274-0084
(212) 858-2103
Attention: Reorganization Operations
Department
Information Agent: MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(800) 322-2885 (toll-free)
(212) 929-5500 (call collect)
THE NEW NOTES
Issuer: CIGNA Corporation.
Indenture: The New Notes will be issued under
the New Indenture.
11
<PAGE>
Maturity: January 15, 2033. The New Notes are
subject to redemption at the option of
the Company as discussed herein.
Interest: Interest will be paid each January 15
and July 15, commencing January 15,
1999. Interest will be calculated on
the basis of a 360-day year
consisting of twelve 30-day months.
The January 15, 1999 interest payment
will include interest accruing on the
New Notes from July 15, 1998 until,
but not including, January 15, 1999.
Holders of record of the Old Notes as
of July 1, 1998 will be entitled to
interest on the Old Notes until, but
not including, July 15, 1998.
Rating: As of the date hereof, the Company's
senior debt securities, including the
Old Notes, are rated A3 by Moody's
Investors Service, Inc. ("Moody's"),
A by Standard & Poor's Ratings Group,
a division of The McGraw-Hill
Companies ("S&P") and A by Duff &
Phelps Credit Rating Co. ("DCR").
The Company expects that the New
Notes will receive ratings equivalent
to those assigned from time to time
to the Old Notes. A security rating
is not a recommendation to buy, sell
or hold securities and may be subject
to revision or withdrawal at any time
by the assigning rating agency.
Ranking: The New Notes will be unsecured
obligations of the Company and will
rank pari passu with all existing and
future unsecured and unsubordinated
indebtedness of the Company.
Form: The New Notes will be available only
in book-entry form through DTC. See
"Description of the New
Notes-Book-Entry Procedures".
Optional Redemption: CIGNA Corporation, at its option, may
redeem the New Notes at any time, in
whole or from time to time in part,
until maturity, upon not less than 30
nor more than 60 days' notice, at a
redemption price equal to the sum of
(i) the principal amount of the New
Notes being redeemed plus accrued and
unpaid interest thereon to the
redemption date, and (ii) the
Make-Whole Amount (as defined below),
if any, with respect to such New
Notes.
See "Description of New Notes".
Use of Proceeds: The New Notes will be issued only in
exchange for the Old Notes. The
Company will not receive any cash
proceeds from the issuance of the New
Notes.
Listing: None.
12
<PAGE>
COMPARISON OF OLD NOTES AND NEW NOTES
The following is a brief comparison of the principal features of the Old Notes
and the New Notes. The following descriptions are brief summaries, do not
purport to be complete and are qualified in their entirety by reference, with
respect to the Old Notes, to the Old Notes and the Old Indenture and, with
respect to the New Notes, to the New Notes and the New Indenture. For further
information regarding the New Notes and for definitions of capitalized terms
used with respect to the New Notes but not otherwise defined herein, see
"Description of New Notes."
<TABLE>
<CAPTION>
OLD NOTES NEW NOTES
------------------ ------------------------
<S> <C> <C>
Obligor: CIGNA Corporation CIGNA Corporation
Trustee: Bankers Trust Company Marine Midland Bank
Aggregate Principal $100,000,000 Up to $100,000,000
Amount:
Maturity: January 15, 2023 January 15, 2033
Interest Rate: 8.30% per annum 8.30% per annum until, but not including, January
15, 2023, and thereafter, at the Extension Coupon as
calculated herein to January 15, 2033.
Interest Payment Dates: January 15 and July 15 annually January 15 and July 15 annually
Rating: As of the date hereof, the Old Notes As of the date hereof, the Company's
are rated A3 by Moody's, A by S&P and senior debt securities are rated A3 by
A by DCR. Moody's, A by S&P and A by DCR. The
Company expects that the New Notes
will receive ratings equivalent to
those assigned from time to time to
the Old Notes.
Ranking: The Old Notes are unsecured obligations The New Notes will be unsecured
of the Company, and rank pari passu obligations of the Company and will
with all existing and future unsecured rank pari passu with all existing and
and unsubordinated indebtedness of the future unsecured and unsubordinated
Company. indebtedness of the Company.
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
OLD NOTES NEW NOTES
------------------ ------------------------
<S> <C> <C>
Optional Redemption: None The Company may, at its option, redeem the New Notes
at any time, in whole or from time to time in part,
until maturity, upon not less than 30 nor more than
60 days' notice, at a redemption price equal to the
sum of (i) the principal amount of the New Notes
being redeemed plus accrued and unpaid interest
thereon to the redemption date, and (ii) the Make-
Whole Amount (as defined), if any, with respect to
such New Notes.
Sinking Fund: None None
Security: None None
Change of Control: None None
</TABLE>
14
<PAGE>
RISK FACTORS
In deciding whether to participate in the Exchange Offer, each Holder should
consider carefully, in addition to the other information contained in the
Offering Circular, the factors listed below.
CERTAIN CONSIDERATIONS FOR TENDERING AND NON-TENDERING HOLDERS
To the extent that Old Notes are tendered and purchased in the Exchange Offer
and the number of Old Notes is decreased, the trading market for the Old Notes
could become more limited. A debt security with a smaller outstanding principal
amount available for trading (a "smaller float") may command a lower price than
would a comparable debt security with a larger float. Therefore, the market
price for the Old Notes not tendered or not purchased may be adversely affected
to the extent that the principal amount of Old Notes tendered reduces the float.
Depending upon, among other things, the amount of Old Notes outstanding after
the Exchange Offer, the trading market for the Old Notes may be more limited
which may, therefore, adversely affect the liquidity and market price of the Old
Notes. Similarly, depending upon, among other things, the amount of New Notes
outstanding after the Exchange Offer, the trading market for the New Notes may
be limited, which may, therefore, adversely affect the liquidity and market
price of the New Notes.
The trading market for the Old Notes not tendered and purchased pursuant to
the Exchange Offer and the New Notes issued by the Company pursuant to the
Exchange Offer will, in each case, depend upon, among other things, the
principal amount outstanding after the consummation of the Exchange Offer, the
number of Holders and the interest in maintaining a market in the securities on
the part of securities firms.
TERMS OF THE NEW NOTES
The New Notes will be issued under the New Indenture. The New Indenture
contains covenants and other terms similar to those that currently apply to the
Old Notes. However, the New Notes, unlike the Old Notes, may be redeemed at any
time, in whole or from time to time in part, prior to maturity, at the option of
the Company subject to a "Make-Whole" provision. See "Offering Circular
Summary--Comparison of Old Notes and New Notes" and "Description of New Notes".
15
<PAGE>
BUSINESS OF THE COMPANY
With shareholders' equity of $8.3 billion and assets of $111.2 billion
as of March 31, 1998 and revenues of $20.0 billion for the year ended December
31, 1997, CIGNA Corporation and its subsidiaries constitute one of the largest
investor-owned insurance organizations in the United States and one of the
principal United States companies in the financial services industry. CIGNA
Corporation is not an insurance company. Its subsidiaries are major providers
of group life and health insurance, managed care products and services,
retirement products and services, and property and casualty insurance. CIGNA is
one of the largest international insurance organizations based in the United
States, measured by international revenues, and one of the largest investor-
owned health maintenance organizations in the United States, based on the number
of members. CIGNA's major insurance subsidiaries, Connecticut General Life
Insurance Company ("CG Life") and Insurance Company of North America ("INA"),
are among the oldest insurance companies in the United States, with INA tracing
its origins to 1792 and CG Life to 1865. CIGNA Corporation was incorporated in
the State of Delaware in 1981.
CIGNA's revenues are derived principally from premiums and fees and
investment income. CIGNA conducts its business through the following operating
divisions, the financial results of which are reported in the following
segments:
Employee Life and Health Benefits Segment
CIGNA HealthCare
CIGNA Group Insurance: Life, Accident, Disability
Employee Retirement and Savings Benefits Segment
CIGNA Retirement & Investment Services
Individual Financial Services Segment
CIGNA Reinsurance
Property and Casualty Segment
CIGNA Property & Casualty
CIGNA International
Investment results produced by CIGNA Investment Management on behalf of
CIGNA's insurance operations are reported in each segment's results or in Other
Operations.
Principally through an indemnity reinsurance transaction, CIGNA sold the
individual life insurance and annuity business of its Individual Financial
Services Segment to Lincoln National Corporation effective January 1, 1998. As
of March 31, 1998, the Individual Financial Services Segment includes the
results of CIGNA's corporate-owned life insurance, and life, accident and health
reinsurance businesses as well as the recognition of the deferred gain from the
sale of the individual life insurance and annuity business.
16
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth certain selected historical financial
information of the Company for, and as of the end of, each of the periods
presented. The selected historical financial information should be read in
conjunction with the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 and its Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998. The selected historical financial information provided
below is not necessarily indicative of future results of operations or financial
performance for the Company. All share and per share amounts have been adjusted
for the Company's three-for-one stock split effective May 4, 1998.
<TABLE>
<CAPTION>
Three Months Ended
March 31, Year Ended December 31,
------------------------- --------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- --------- --------- ---------
(Dollars in millions, except per share (unaudited)
amounts)
INCOME STATEMENT DATA
- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Premiums and fees $ 3,901 $ 3,388 $ 14,935 $ 13,916 $ 13,914 $ 13,912 $ 13,712
Net investment income and other revenues 1,451 1,213 4,936 4,943 4,808 4,438 4,408
Realized investment gains 59 44 167 91 233 42 282
- ----------------------------------------- ---------- ---------- ---------- ---------- --------- --------- ---------
Total $ 5,411 $ 4,645 $ 20,038 $ 18,950 $ 18,955 $ 18,392 $ 18,402
========================================= ========== ========== ========== ========== ========= ========= =========
NET INCOME (LOSS)
Employee Life and Health Benefits $ 149 $ 121 $ 441 $ 500 $ 597 $ 548 $ 589
Employee Retirement and Savings Benefits 59 62 233 222 194 190 159
Individual Financial Services 248 55 208 168 151 136 110
Property and Casualty 62 65 275 240 (673) (235) (530)
Other Operations (23) (15) (71) (74) (58) (85) (94)
- ----------------------------------------- ---------- ---------- ---------- ---------- --------- --------- ---------
Total $ 495 $ 288 $ 1,086 $ 1,056 $ 211 $ 554 $ 234
========================================= ========== ========== ========== ========== ========= ========= =========
Net income per share - basic $ 2.30 $ 1.31 $ 4.93 $ 4.68 $ 0.97 $ 2.58 $ 1.09
========================================= ========== ========== ========== ========== ========= ========= =========
Net income per share - diluted $ 2.27 $ 1.30 $ 4.88 $ 4.64 $ 0.96 $ 2.50 $ 1.09
========================================= ========== ========== ========== ========== ========= ========= =========
BALANCE SHEET DATA
- ------------------
Total assets $111,219 $ 98,752 $108,199 $ 98,932 $ 95,903 $ 86,102 $ 84,975
Long-term debt $ 1,463 $ 910 $ 1,465 $ 1,021 $ 1,066 $ 1,389 $ 1,235
Shareholders' equity $ 8,325 $ 7,117 $ 7,932 $ 7,208 $ 7,157 $ 5,811 $ 6,575
Per share $ 38.58 $ 32.06 $ 36.55 $ 32.38 $ 31.25 $ 26.82 $ 30.43
Common shares outstanding (thousands) 215,808 221,982 216,996 222,594 228,996 216,675 216,045
Common dividends declared per share $ 0.29 $ 0.28 $ 1.11 $ 1.07 $ 1.01 $ 1.01 $ 1.01
17
</TABLE>
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company
as of March 31, 1998. This table should be read in conjunction with the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1997
and its Quarterly Report on Form 10-Q for the quarter ended March 31, 1998.
Since March 31, 1998, there has been no material change in the consolidated
capitalization of the Company as adjusted for the Company's three-for-one stock
split effective May 4, 1998.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
(unaudited)
(in millions)
<S> <C>
Short-term debt $ 266
=======
Long-term debt $ 1,463
=======
Shareholders' equity:
Common stock $ 66
Additional paid-in capital 2,695
Net unrealized appreciation - fixed maturities $ 723
Net unrealized appreciation - equity securities 214
Net translation of foreign currencies (125)
-------
Accumulated other comprehensive income 812
Retained earnings 6,129
Treasury stock, at cost (1,377)
-------
Total shareholders' equity $ 8,325
=======
Total short-term debt and capitalization $10,054
=======
</TABLE>
18
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The purpose of the Exchange Offer is to increase the Company's financial
flexibility by adding the optional redemption provision into the New Notes and
to take advantage of the current low interest rate environment by extending the
maturity date of a portion of the Company's long-term debt. The New Notes will
maintain the same interest rate as the Old Notes until, but not including,
January 15, 2023, and, thereafter, will be at the Extension Coupon as calculated
herein until maturity, while deferring any additional refinancing costs. The
Company believes that the terms of the New Notes will be more beneficial to it
over the long-term.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Offering
Circular and the accompanying Letter of Transmittal, the Company is making the
Exchange Offer, pursuant to which it is offering to exchange $1,000 principal
amount of the Company's New Notes for each $1,000 principal amount of the
Company's Old Notes.
The New Notes will have the same 8.30% interest coupon as the Old Notes until,
but not including, January 15, 2023, and thereafter, the interest coupon will be
calculated as provided herein to January 15, 2033, the final maturity of the New
Notes. For the Old Notes, a Reference Price of the Old Notes will be determined
using a specified fixed spread pricing formula. Such Reference Price of the Old
Notes will be based on a Reference Yield of the Old Notes to the maturity date
of the Old Notes equal to (i) the Benchmark Treasury Yield plus (ii) the 2023
Fixed Spread. For the New Notes, an Extension Coupon will be determined for the
period January 15, 2023 to the maturity date, January 15, 2033. The Extension
Coupon (expressed as a percentage within two decimal places) will be the lesser
of: (i) 8.30% per annum and (ii) a per annum interest rate at which the price
of the New Notes will be equal to the Reference Price of the Old Notes per
$1,000 principal amount of the Old Notes. The Extension Coupon of the New Notes
will be determined by using the Reference Price of the New Notes (equal to the
Reference Price of the Old Notes if the Benchmark Treasury Yield is 5.88% or
lower) and the Reference Yield of the New Notes. For each $1,000 principal
amount of Old Notes exchanged in the Exchange Offer, an exchanging Holder will
receive $1,000 principal amount of New Notes. The Extension Coupon and
Reference Prices will be determined based on the Benchmark Treasury Yield as of
2:00 p.m., New York City time, on the Extension Coupon Determination Date.
SUMMARY OF TERMS
The following is a summary of certain defined terms used in describing the
Exchange Offer.
Benchmark Treasury Security: means the 6.125% U.S. Treasury Note due November
15, 2027.
Benchmark Treasury Yield: means, on the Extension Coupon Determination Date,
the yield on the Benchmark Treasury Security (expressed as a percentage with two
decimal points).
Exchange Date: means the date five business days following the Expiration
Date on which New Notes will be delivered pursuant to the Exchange Offer, along
with payment of the Participation Fee. The Exchange Date is Thursday, July 30,
1998, unless the Expiration Date is extended.
Expiration Date: means 5:00 p.m. New York City time, on Thursday, July 23,
1998, unless the Exchange Offer is extended.
19
<PAGE>
Extension Coupon: means, for the New Notes, the per annum interest rate
(expressed as a percentage with two decimal places) paid on such New Notes from
and including, January 15, 2023, to the maturity date, January 15, 2033, as
described in Schedule C. The Extension Coupon will be the lesser of: (i) 8.30%
----------
per annum and (ii) a per annum interest rate set such that for any Benchmark
Treasury Yield, on the Extension Coupon Determination Date, the reference prices
for the New Notes will equal the Reference Prices for the Old Notes per $1,000
principal amount of the Old Notes.
Extension Coupon Determination Date: means 2:00 p.m., New York City time, on
the second business day prior to the Expiration Date.
Participation Fee: an amount equal to 1.50% of the principal amount exchanged
payable upon acceptance of the Old Notes for exchange by the Company to a Holder
that tenders and does not withdraw its Old Notes.
Reference Price of the New Notes: means the applicable price per $1,000
principal amount of the New Notes (which will be equal to the Reference Price of
the Old Notes if the Benchmark Treasury Yield is 5.88% or lower).
Reference Price of the Old Notes: means the price per $1,000 principal amount
of the Old Notes, determined in accordance with standard market practice as
described in Schedule A. Such price will be based on the Reference Yield of the
Old Notes to the maturity date of January 15, 2023.
Reference Yield of the New Notes: means, at the Extension Coupon
Determination Date, the sum of the Benchmark Treasury Yield and the 2033 Fixed
Spread.
Reference Yield of the Old Notes: means, on the Extension Coupon
Determination Date, the sum of the Benchmark Treasury Yield and the 2023 Fixed
Spread.
2023 Fixed Spread: means 1.30% (130 basis points).
2033 Fixed Spread: means 1.40% (140 basis points).
Illustrative Example and Formulas. The following is a table that applies (i)
the formulas to be used to determine the reference prices for the Old Notes and
New Notes and (ii) the applicable fixed spread pursuant to which a reference
price for the Old and New Notes will be determined for any given Benchmark
Treasury Yield and Extension Coupon assuming an Exchange Date of July 30, 1998
(which will be the Exchange Date unless the Exchange Offer is extended). Set
forth in Schedule A is the methodology used to determine the Reference Prices of
----------
the Old Notes in the following table. Set forth in Schedule C is the
----------
methodology used to determine the Extension Coupons in the following table.
Schedule B provides an illustrative example of the calculation of Reference
- ----------
Prices of the Old Notes. Schedule D provides illustrative examples of the
----------
calculation of the Extension Coupons.
The following table sets forth the (i) Reference Yield of the Old Notes, (ii)
Reference Price of the Old Notes, (iii) Reference Yield of the New Notes, (iv)
Extension Coupon and (v) Reference Price of the New Notes, if the Benchmark
Treasury Yield on the Extension Coupon Determination Date is between 5.40% and
5.93%.
20
<PAGE>
<TABLE>
<CAPTION>
Benchmark Reference Yield Reference Price Reference Yield Reference Price
Treasury Yield of the Old Notes Of the Old Notes of the New Notes Extension Coupon of the New Notes
- -------------- ----------------- ---------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
5.40% 6.70% $1,191.11 6.80% 7.77% $1,191.11
5.41% 6.71% $1,189.74 6.81% 7.78% $1,189.74
5.42% 6.72% $1,188.38 6.82% 7.79% $1,188.38
5.43% 6.73% $1,187.02 6.83% 7.80% $1,187.02
5.44% 6.74% $1,185.66 6.84% 7.81% $1,185.66
5.45% 6.75% $1,184.30 6.85% 7.83% $1,184.30
5.46% 6.76% $1,182.95 6.86% 7.84% $1,182.95
5.47% 6.77% $1,181.60 6.87% 7.85% $1,181.60
5.48% 6.78% $1,180.25 6.88% 7.86% $1,180.25
5.49% 6.79% $1,178.90 6.89% 7.87% $1,178.90
5.50% 6.80% $1,177.55 6.90% 7.88% $1,177.55
5.51% 6.81% $1,176.21 6.91% 7.89% $1,176.21
5.52% 6.82% $1,174.87 6.92% 7.90% $1,174.87
5.53% 6.83% $1,173.53 6.93% 7.91% $1,173.53
5.54% 6.84% $1,172.20 6.94% 7.93% $1,172.20
5.55% 6.85% $1,170.86 6.95% 7.94% $1,170.86
5.56% 6.86% $1,169.53 6.96% 7.95% $1,169.53
5.57% 6.87% $1,168.21 6.97% 7.96% $1,168.21
5.58% 6.88% $1,166.88 6.98% 7.97% $1,166.88
5.59% 6.89% $1,165.56 6.99% 7.98% $1,165.56
5.60% 6.90% $1,164.23 7.00% 7.99% $1,164.23
5.61% 6.91% $1,162.91 7.01% 8.00% $1,162.91
5.62% 6.92% $1,161.60 7.02% 8.01% $1,161.60
5.63% 6.93% $1,160.28 7.03% 8.02% $1,160.28
5.64% 6.94% $1,158.97 7.04% 8.04% $1,158.97
5.65% 6.95% $1,157.66 7.05% 8.05% $1,157.66
5.66% 6.96% $1,156.35 7.06% 8.06% $1,156.35
5.67% 6.97% $1,155.05 7.07% 8.07% $1,155.05
5.68% 6.98% $1,153.74 7.08% 8.08% $1,153.74
5.69% 6.99% $1,152.44 7.09% 8.09% $1,152.44
5.70% 7.00% $1,151.14 7.10% 8.10% $1,151.14
5.71% 7.01% $1,149.85 7.11% 8.11% $1,149.85
5.72% 7.02% $1,148.55 7.12% 8.12% $1,148.55
5.73% 7.03% $1,147.26 7.13% 8.14% $1,147.26
5.74% 7.04% $1,145.97 7.14% 8.15% $1,145.97
5.75% 7.05% $1,144.68 7.15% 8.16% $1,144.68
5.76% 7.06% $1,143.40 7.16% 8.17% $1,143.40
5.77% 7.07% $1,142.12 7.17% 8.18% $1,142.12
5.78% 7.08% $1,140.84 7.18% 8.19% $1,140.84
5.79% 7.09% $1,139.56 7.19% 8.20% $1,139.56
5.80% 7.10% $1,138.28 7.20% 8.21% $1,138.28
5.81% 7.11% $1,137.01 7.21% 8.22% $1,137.01
5.82% 7.12% $1,135.73 7.22% 8.24% $1,135.73
5.83% 7.13% $1,134.46 7.23% 8.25% $1,134.46
5.84% 7.14% $1,133.20 7.24% 8.26% $1,133.20
5.85% 7.15% $1,131.93 7.25% 8.27% $1,131.93
5.86% 7.16% $1,130.67 7.26% 8.28% $1,130.67
5.87% 7.17% $1,129.41 7.27% 8.29% $1,129.41
5.88% 7.18% $1,128.15 7.28% 8.30% $1,128.15
5.89% N/A N/A N/A 8.30% N/A
5.90% N/A N/A N/A 8.30% N/A
5.91% N/A N/A N/A 8.30% N/A
5.92% N/A N/A N/A 8.30% N/A
5.93% N/A N/A N/A 8.30% N/A
</TABLE>
21
<PAGE>
CALCULATIONS; INFORMATION
The Reference Price of the Old Notes will be determined in the manner described
in Schedule A by calculating, per $1,000 principal amount of such Old Notes, the
----------
present value, using the Reference Yield of the Old Notes, of (i) the principal
amount payable on the maturity date of the Old Notes plus (ii) all remaining
payments of interest up to and including the maturity date of the Old Notes.
The Reference Price of the Old Notes will be rounded to the nearest cent per
$1,000 principal amount of the Old Notes. The methodology to be used in
calculating the Reference Price of the Old Notes is set forth in Schedule A
----------
hereto. An example of the application of such methodology is provided for the
Old Notes in Schedule B hereto. The Reference Yield of the Old Notes will be
----------
determined by calculating the sum of (a) the Benchmark Treasury Yield and (b)
the 2023 Fixed Spread. The reference price calculation will be made using the
Benchmark Treasury Yield as of the Extension Coupon Determination Date.
For the New Notes, a per annum interest rate, i.e., the Extension Coupon, will
be determined for the period from January 15, 2023 to the maturity date of the
New Notes, January 15, 2033. The Extension Coupon, expressed as a percentage
with two decimal places, will be the lesser of: (i) 8.30% per annum and (ii) a
per annum interest rate at which the Reference Price of the New Notes will be
equal to the Reference Price of the Old Notes per $1,000 principal amount of the
Old Notes. The Extension Coupon of the New Notes will be determined in the
manner described in Schedule C hereto by using the Reference Price of the New
----------
Notes (equal to the Reference Price of the Old Notes if the Benchmark Treasury
Yield is 5.88% or lower) and the Reference Yield of the New Notes. The
methodology to be used in calculating the Extension Coupon of the New Notes is
set forth in Schedule C hereto. An example of the application of such
----------
methodology is provided for the New Notes in Schedule D hereto. The Reference
----------
Yield of the New Notes will be determined by calculating the sum of the
Benchmark Treasury Yield and the 2033 Fixed Spread. The reference price
calculation will be made using the Benchmark Treasury Yield as of the Extension
Coupon Determination Date.
The Benchmark Treasury Yield will be calculated by the Financial Advisor in
accordance with standard market practice based on the bid side price for such
Benchmark Treasury Security as of the Extension Coupon Determination Date, as
such bid side price is displayed on the Cantor Fitzgerald Quotation Service for
U.S. Government Securities (the "Cantor Fitzgerald Quotation Service") on
Telerate page 500. If any relevant price is not available on a timely basis on
the Cantor Fitzgerald Quotation Service or is manifestly erroneous, the relevant
price information may be obtained from such other quotation service as the
Company and the Financial Advisor shall select in their reasonable discretion,
the identity of which shall be disclosed by the Company and the Financial
Advisor to exchanging Holders. Although the Benchmark Treasury Yield will be
determined based solely on the sources described above, information regarding
the price of the Benchmark Treasury Security also may be found in The Wall
Street Journal.
After the Extension Coupon Determination Date, the Extension Coupon that will be
received by a holder pursuant to the Exchange Offer will be known and holders
will be able to ascertain the Reference Price of the Old Notes and the Reference
Price of the New Notes in the manner described above, unless the Exchange Offer
is extended for a period longer than three business days. In the event the
Exchange Offer is extended for a period longer than three business days from the
previously scheduled Expiration Date, then a new Extension Coupon Determination
Date, which would be two business days prior to the new Expiration Date, may be
established. If the extension is for three business days or less, no new
Extension Coupon Determination Date may be established and the Extension Coupon
will remain as determined on the Extension Coupon Determination Date prior to
the extension of the Exchange Offer.
22
<PAGE>
As soon as practicable after the Extension Coupon Determination Date, but in
any event before 9:00 a.m., New York City time, on the following business day,
the Company will publicly announce by press release to the Dow Jones News
Service: the Benchmark Treasury Yield, the Reference Yield of the Old Notes, the
Reference Price of the Old Notes, the Reference Yield of the New Notes, the
Extension Coupon and the Reference Price of the New Notes.
During the term of the Exchange Offer, Holders of the Old Notes can obtain
current information regarding the Benchmark Treasury Yield, reference yields,
reference prices and other information regarding the terms of the Exchange Offer
from the Financial Advisor at (800) 334-1604 (toll free) or (212) 892-3351 (call
collect), attention Paul S. Galant. In addition, the Company intends to publish
information about the Exchange Offer, including the information described in the
preceding paragraph when available, on the MCM "CorporateWatch" Service on
Telerate page 64150.
In the event any dispute arises with respect to any Benchmark Treasury Yield,
reference yields, reference prices, the Extension Coupon or any quotation or
calculation with respect to the Exchange Offer, the Company's determination
shall be conclusive and binding absent manifest error.
EXPIRATION DATE; EXTENSIONS; TERMINATION; AMENDMENTS
The Exchange Offer will expire at 5:00 p.m., New York City time, on the
Expiration Date, unless extended by the Company as provided herein. In the
event that the Exchange Offer is extended, the term "Expiration Date" with
respect to such extended Exchange Offer shall mean the time and date on which
the Exchange Offer, as so extended, shall expire.
The Company expressly reserves the right, in its sole discretion, subject to
applicable law, to (i) extend or terminate the Exchange Offer and not accept for
exchange any tendered Old Notes if any of the conditions specified in "--
Conditions to the Exchange Offer" are not satisfied or waived, (ii) waive any
condition to the Exchange Offer and accept all Old Notes tendered pursuant to
the Exchange Offer, (iii) extend the Exchange Offer and retain all the Old Notes
tendered pursuant to the Exchange Offer until the expiration of the Exchange
Offer, subject, however, to the withdrawal rights of Holders as provided in, "--
Withdrawal Rights", (iv) amend the terms of the Exchange Offer and (v) modify
the form of the consideration to be paid pursuant to the Exchange Offer.
Any extension, termination or amendment will be followed as promptly as
practicable by a public announcement and notification to the Exchange Agent. In
the case of any extension, a public announcement will be issued prior to 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date of the Exchange Offer. Without limiting the manner in
which the Company may choose to make any public announcement, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by release to the Dow Jones News Service or
otherwise as required by law. In the event of any extension of the Exchange
Offer, all Old Notes tendered pursuant to the Exchange Offer and not
subsequently withdrawn, will remain subject to, and Holders will continue to
have withdrawal rights until the expiration of, the Exchange Offer.
EFFECT OF TENDER
A tendering Holder of Old Notes that are exchanged in the Exchange Offer will
not be obligated to pay transfer taxes or any fees or commissions with respect
to the acquisition of their Old Notes by the Company pursuant to the Exchange
Offer. See "--Transfer Taxes". However, if the beneficial owner tenders
through a Custodian, such beneficial owner may be required to pay fees or
commissions to such institution.
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ABSENCE OF DISSENTERS' RIGHTS
Holders of Old Notes do not have any appraisal or dissenters' rights under the
Delaware General Corporation Law or the Old Indenture, in connection with the
Exchange Offer.
ACCEPTANCE OF OLD NOTES TENDERED FOR EXCHANGE; DELIVERY OF NEW NOTES
Upon the terms and subject to the conditions of the Exchange Offer, the
Company will exchange Old Notes by accepting such Old Notes for exchange and in
consideration will issue a like principal amount of New Notes. New Notes will
be delivered on the Exchange Date. The Exchange Agent will act as agent for the
tendering Holders for the purpose of receiving Old Notes and delivering New
Notes to such Holders. In all cases, Old Notes will be accepted for exchange
pursuant to the Exchange Offer only after timely receipt by the Exchange Agent
of certificates representing Old Notes (or confirmation of a book-entry
transfer), a properly completed and duly executed Letter of Transmittal (or a
manually signed facsimile thereof or satisfaction of DTC's ATOP procedures) and
any other documents required thereby.
New Notes will be delivered only in book-entry form through DTC and only to
the DTC account of the tendering Holder or the tendering Holder's Custodian.
Accordingly, a Holder who tenders Old Notes must specify on the Letter of
Transmittal the DTC participant to which New Notes should be delivered and all
necessary account information to effect such delivery. Failure to provide such
information will render such Holder's tender defective and the Company will have
the right, which it may waive, to reject such tender. The Company and the
Exchange Agent shall not incur any liability for delivering New Notes in
accordance with any instructions provided by a tendering Holder.
The Company will be deemed to have accepted for exchange tendered Old Notes
as, if and when the Company gives oral or written notice to the Exchange Agent
of the Company's acceptance of such Old Notes for exchange. Old Notes accepted
for exchange by the Company will be canceled. Upon acceptance of Old Notes for
exchange, the Company will pay a Participation Fee to tendering Holders of 1.50%
of the principal amount tendered. The Company will not pay any Participation
Fee to Holders for any Old Notes not tendered in the Offer.
If Old Notes in a principal amount in excess of the principal amount indicated
as being tendered on the Letter of Transmittal are submitted, an Old Note in a
principal amount equal to the excess principal amount over the amount indicated
as tendered in the Letter of Transmittal will be issued to the tendering Holder
or the tendering Holder's Custodian, at the Company's expense, in the same form
in which such security was tendered, as promptly as practicable following the
expiration or termination of the Exchange Offer. If any tendered Old Notes are
not accepted for exchange because of an invalid tender, the occurrence of
certain other events set forth herein or otherwise, such Old Notes will be
returned, at the Company's expense, to the tendering holder thereof, as promptly
as practicable following the expiration or termination of the Exchange Offer.
PROCEDURES FOR TENDERING OLD NOTES
Minimum Denominations. A Holder may tender less than all Old Notes held by
such Holder. However, Old Notes may be tendered only in denominations of $1,000
or an integral multiple thereof.
Tender of Old Notes Held in Physical Form. To tender Old Notes held in
physical form, a Holder must (i) complete (including the required information
regarding delivery of New Notes through DTC) and sign the Letter of Transmittal
in accordance with the instructions set forth therein and (ii) deliver the
properly completed and executed Letter of Transmittal, together with any other
documents required by the Letter of Transmittal, and
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the Old Notes in physical form to the Exchange Agent at the address set forth on
page 5 hereof prior to the Expiration Date.
Tender of Old Notes Held Through a Custodian. To tender Old Notes held by a
Custodian, the beneficial owner of the Old Notes must contact the Custodian and
direct the Custodian to tender such Old Notes in accordance with the procedures
set forth herein and in the Letter of Transmittal.
The Exchange Agent and DTC have confirmed that the Exchange Offer is eligible
for ATOP. Accordingly, DTC participants may electronically transmit their
acceptance of the Exchange Offer by causing DTC to transfer Old Notes to the
Exchange Agent in accordance with DTC's ATOP procedures for such a transfer.
DTC will then send an Agent's Message to the Exchange Agent.
The term "Agent's Message" means a message transmitted by DTC, received by the
Exchange Agent and forming part of a Book-Entry Confirmation (as defined
herein), which states that DTC has received an express acknowledgment from the
DTC participant tendering Old Notes which are the subject of such Book-Entry
Confirmation, that such DTC participant has received and agrees to be bound by
the terms of the Letter of Transmittal and that the Company may enforce such
agreement against such DTC participant. In the case of an Agent's Message
relating to a guaranteed delivery, the term means a message transmitted by DTC
and received by the Exchange Agent, which states that DTC has received an
express acknowledgment from the DTC participant tendering Old Notes that such
DTC participant has received and agrees to be bound by the Notice of Guaranteed
Delivery (as described below). Holders desiring to tender Old Notes on the
Expiration Date should note that such Holders must allow sufficient time for
completion of the ATOP procedures during the normal business hours of DTC on
that date.
If the Custodian holds such Old Notes in physical form, the Custodian must
follow the procedure set forth above under "Procedures for Tendering Old Notes -
Tender of Old Notes Held In Physical Form".
If the Custodian holds such Old Notes in book-entry form through DTC (the
"Book-Entry Transfer Facility"), to tender such Old Notes the Custodian must
effect a book-entry transfer (a "Book-Entry Confirmation") of all Old Notes to
be tendered to the Exchange Agent's account at such Book-Entry Transfer Facility
prior to the Expiration Date.
BOOK-ENTRY DELIVERY PROCEDURES
The Exchange Agent will establish promptly an account with respect to the Old
Notes at the Book-Entry Transfer Facility for purposes of the Exchange Offer.
Any financial institution that is a participant in the Book-Entry Transfer
Facility may make a book-entry delivery of Old Notes by causing the Book-Entry
Transfer Facility to transfer Old Notes to the Exchange Agent's account.
Delivery of a Letter of Transmittal to a Book-Entry Transfer Facility will not
constitute valid delivery to the Exchange Agent.
LETTERS OF TRANSMITTAL AND OLD NOTES MUST BE SENT ONLY TO THE EXCHANGE AGENT.
DO NOT SEND LETTERS OF TRANSMITTAL OR OLD NOTES TO THE COMPANY, THE TRUSTEE, THE
INFORMATION AGENT OR THE FINANCIAL ADVISOR.
Any Holder whose Old Notes have been mutilated, lost, stolen or destroyed will
be responsible for obtaining replacement securities or for arranging for
indemnification with Bankers Trust Company, as trustee for the Old Notes.
Holders may contact the Information Agent for assistance with such matters.
In order for a tendering Holder to be assured of participating in an Exchange
Offer, such Holder must tender Old Notes in accordance with the procedures set
forth herein and in the Letter of Transmittal prior to the
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Expiration Date. The method of delivery of Old Notes and all other required
documents is at the option and risk of the Holder. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended
and enough time should be allowed to ensure timely delivery.
GUARANTEED DELIVERY PROCEDURES
If a Holder of Old Notes wishes to tender such Old Notes and time will not
permit such Holders of the Old Notes or other required documents to reach the
Exchange Agent prior to the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if (i)
the tender is made through an Eligible Institution (as such term is defined in
the Letter of Transmittal), (ii) on or prior to 5:00 p.m., New York City time,
on the Expiration Date, the Exchange Agent receives from such Eligible
Institution a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by facsimile
transmission, mail or hand delivery), setting forth the name and address of the
holder of Old Notes and the amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that within three New York Stock
Exchange ("NYSE") trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Old Notes, in
proper form for transfer or a Book-Entry Confirmation, as the case may be,
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) with any required signature guarantees and
any other documents required by the Letter of Transmittal will be deposited by
the Eligible Institution with the Exchange Agent, and (iii) the certificates for
all physically tendered Old Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) with any
required signature guarantees, and any other documents required by the Letter of
Transmittal are deposited by the Eligible Institution within three NYSE trading
days after the date of execution of the Notice of Guaranteed Delivery.
PROPER EXECUTION AND DELIVERY OF LETTER OF TRANSMITTAL
In general, all signatures on a Letter of Transmittal or a notice of
withdrawal must be guaranteed by an Eligible Institution; however, such
signatures need not be guaranteed if (a) the Letter of Transmittal is signed by
the Holder of the Old Notes tendered thereby or by a participant in a Book-Entry
Transfer Facility whose name appears on a security position listing as the
Holder of the Old Notes tendered thereby and such Holder has not completed the
portion entitled "Special Delivery Instructions" on the Letter of Transmittal,
or (b) such Old Notes tendered are for the account of an Eligible Institution.
If the Letter of Transmittal is signed by the Holder of the Old Notes tendered
thereby or a participant in a Book-Entry Transfer Facility whose name appears on
a security position listing with respect to the Old Notes tendered thereby, the
signature must correspond with the name as written on the face of the Old Notes
or on the security position listing, respectively, without any change
whatsoever. If any of the Old Notes tendered thereby are held by two or more
holders, all such Holders must sign the Letter of Transmittal. If any of the
Old Notes tendered thereby are registered in different names on different Old
Notes, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations.
If the Letter of Transmittal is signed by a person other than the Holder of
the Old Notes tendered thereby or a participant in a Book-Entry Transfer
Facility whose name appears on a security position listing with respect to the
Old Notes tendered thereby, the Old Notes must be endorsed or accompanied by
appropriate instruments of transfer, in either case, signed exactly as the name
of the Holder appears on the face of the Old Notes or on the security position
listing with respect thereto. If the Letter of Transmittal or any Old Notes
proxy or instrument of transfer is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person must so indicate when
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signing, and proper evidence satisfactory to the Exchange Agent of the authority
of such person so to act must be submitted.
New Notes will be delivered only in book-entry form through DTC and only to
the DTC account of the Holder or the Holder's Custodian. If Old Notes not
tendered or not exchanged are to be delivered to a person other than the Holder
of the Old Notes tendered, or to an address other than that of the Holder of the
Old Notes tendered, such Holder should indicate in the portion of the Letter of
Transmittal entitled "Special Delivery Instructions" the person and/or address
to which such Old Notes are to be delivered. If Old Notes not tendered or not
exchanged are to be issued to a person other than the Holder of the Old Notes
tendered, the employer identification or social security number of the person to
whom issuance is to be made must be indicated on the Letter of Transmittal. If
Old Notes not tendered or not exchanged are to be issued to a person other than
the Holder of the Old Notes tendered, the Old Notes must be endorsed or
accompanied by appropriate instruments of transfer signed exactly as the name of
the Holder appears on the face of the Old Notes or the security position listing
with respect thereto, with the signature on the certificates or instruments of
transfer guaranteed by an Eligible Institution. If no such instructions are
given, any Old Notes not tendered or exchanged will be delivered to the Holder
of the Old Notes tendered.
Because New Notes will be delivered only in book-entry form through DTC, a
Holder who tenders Old Notes must specify on the Letter of Transmittal the DTC
participant to which New Notes should be delivered and all necessary account
information to effect such delivery. Such DTC participant must be either the
Holder or a Custodian for the Holder. Failure to provide such information will
render such Holder's tender defective and the Company will have the right, which
it may waive, to reject such tender. Holders who anticipate tendering other
than through DTC are urged to contact promptly a Custodian (that has the
capability to hold securities through DTC) to arrange for receipt of any New
Notes to be delivered pursuant to the Exchange Offer and to obtain the
information necessary to complete the account information table in the Letter of
Transmittal.
No alternative, conditional, irregular or contingent tenders will be accepted.
By executing the Letter of Transmittal, the Holder of Old Notes waives any right
to receive any notice of the acceptance for exchange of such Holder's Old Notes,
except as otherwise provided herein.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Old Notes will be determined by the Company,
whose determination shall be conclusive and binding. The Company reserves the
absolute right to reject any or all tenders that are not in proper form or the
acceptance of which may be, in the opinion of counsel for the Company, unlawful.
The Company also reserves the absolute right to waive any condition of the
Exchange Offer as set forth under "--Conditions to the Exchange Offer" and any
irregularities or conditions of tender as to particular Old Notes. The
Company's interpretation of the terms and conditions of the Exchange Offer
(including the instructions in the Letters of Transmittal) shall be conclusive
and binding.
Unless waived, any irregularities in connection with tenders must be cured
within such time as the Company may determine. The Company, the Exchange Agent
and the Information Agent shall not be under any duty to give notification of
defects in such tenders and shall not incur liability for any failure to give
such notification. Tenders of Old Notes will not be deemed to have been made
until such irregularities have been cured or waived. Any Old Notes received by
the Exchange Agent that are not properly tendered and as to which the
irregularities have not been cured or waived will be returned by the Exchange
Agent to the Holder, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
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CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer or any extension of
the Exchange Offer, the Company will not be required to issue New Notes and may
terminate the Exchange Offer by oral or written notice to the Exchange Agent,
or, at its option, modify or otherwise amend the Exchange Offer with respect to
such Old Notes, if any of the following conditions has not been satisfied, on or
prior to the Expiration Date:
(a) there shall not have been any action taken or threatened, or any statute,
rule, regulation, judgment, order, stay, decree or injunction
promulgated, enacted, entered, enforced or deemed applicable to the
Exchange Offer or the exchange of Old Notes pursuant to the Exchange
Offer (the "Exchange"), by or before any court or governmental regulatory
or administrative agency or authority or tribunal, domestic or foreign,
which (i) challenges the making of the Exchange Offer or the Exchange, or
might, directly or indirectly, prohibit, prevent, restrict or delay
consummation of the Exchange Offer or the Exchange, or might otherwise
adversely affect in any material manner the Exchange Offer or the
Exchange or (ii) in the sole judgment of the Company, could materially
adversely affect the business, condition (financial or otherwise),
income, operations, properties, assets, liabilities or prospects of the
Company and its subsidiaries, taken as a whole, or materially impair the
contemplated benefits of the Exchange Offer or the Exchange to the
Company or might be material to Holders of Old Notes in deciding whether
to accept such Exchange Offer;
(b) there shall not have occurred or be likely to occur any event affecting the
business or financial affairs of the Company that, in the sole judgment
of the Company, would or might prohibit, prevent, restrict or delay
consummation of the Exchange Offer or the Exchange or that will, or is
reasonably likely to, materially impair the contemplated benefits of the
Exchange Offer or the Exchange to the Company or might be material to
Holders of Old Notes in deciding whether to accept such Exchange Offer;
(c) there shall not have occurred (i) any material adverse change in the market
price of the Old Notes or the Reference Price of the Old Notes, (ii) a
material impairment in the general trading market for debt securities,
(iii) a declaration of a banking moratorium or any suspension of payments
in respect of banks by federal or state authorities in the United States
(whether or not mandatory), (iv) a commencement or escalation of a war,
armed hostilities or other national or international crisis directly or
indirectly relating to the United States, (v) any limitation (whether or
not mandatory) by any governmental authority on, or other event having a
reasonable likelihood of affecting, the extension of credit by banks or
other lending institutions in the United States, (vi) any material
adverse change in United States securities or financial markets
generally, or in the case of any of the foregoing existing at the time of
the commencement of the Exchange Offer, a material acceleration or
worsening thereof or (vii) any general suspension of or limitation on
trading in securities on the NYSE or on the over-the-counter market
(whether or not mandatory); and
(d) the Old Trustee or the New Trustee shall not have objected in any respect
to, or taken any action that could in the sole judgment of the Company
adversely affect the consummation of, the Exchange Offer or the Exchange
nor shall the Old Trustee or the New Trustee have taken any action that
challenges the validity or effectiveness of the procedures used by the
Company or in making the Exchange Offer or the Exchange.
If any of the foregoing conditions are not satisfied, the Company may (i)
terminate the Exchange Offer and return such Old Notes to the Holders who
tendered them, (ii) extend the Exchange Offer and retain all tendered Old Notes
until the expiration of the Exchange Offer, as extended, subject, however, to
the withdrawal
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rights of Holders, see "--Withdrawal Rights" and "--Expiration Date; Extensions;
Termination; Amendment"; or (iii) waive any of the conditions with respect to
such Exchange Offer and accept all Old Notes tendered therein.
The foregoing conditions are for the sole benefit of the Company and may be
waived by the Company, in whole or in part, in its sole discretion. Any
determination made by the Company concerning an event, development or
circumstance described or referred to above shall be conclusive and binding.
WITHDRAWAL RIGHTS
Tendered Old Notes may be withdrawn by the Holder prior to the Expiration
Date.
A Holder of Old Notes who tendered Old Notes in physical form may withdraw the
Old Notes tendered by providing a written notice of withdrawal (or facsimile
thereof) to the Exchange Agent, at its address set forth on page 5 hereof, prior
to the Expiration Date, which notice must contain: (i) the name of the person
who tendered the Old Notes; (ii) a description of the Old Notes to be withdrawn;
(iii) the certificate number or numbers shown on the particular certificate or
certificates evidencing such Old Notes; (iv) the aggregate principal amount
represented by such Old Notes; (v) the signature of the Holder of such Old Notes
executed in the same manner as the original signature on the Letter of
Transmittal (including a signature guarantee, if such original signature was
guaranteed); and (vi) if such Old Notes are owned by a new beneficial owner,
evidence satisfactory to the Company that the person withdrawing the tender has
succeeded to the beneficial ownership of the Old Notes.
If a beneficial owner of Old Notes tendered through a Custodian wishes to
withdraw the Old Notes tendered, such beneficial owner must contact the
Custodian and direct the Custodian to withdraw such Old Notes in accordance with
the following procedures. In order to withdraw such Old Notes, the Custodian
must provide a written notice of withdrawal (or facsimile thereof) to the
Exchange Agent, at its address set forth on page 5, prior to the Expiration
Date, which notice must contain: (i) the name of the person who tendered the Old
Notes; (ii) a description of the Old Notes to be withdrawn; (iii) the
certificate number or numbers shown on the particular certificate or
certificates evidencing such Old Notes (if Old Notes were tendered in physical
form); (iv) the aggregate principal amount represented by such Old Notes; and
(v) if such Old Notes are owned by a new beneficial owner, evidence satisfactory
to the Company that the person withdrawing the tender has succeeded to the
beneficial ownership of the Old Notes. If the Old Notes were tendered by book
entry transfer, the Custodian also must debit the Exchange Agent's account at
the Book-Entry Transfer Facility through which the tender was made of all Old
Notes to be withdrawn.
A purported notice of withdrawal which lacks any of the required information
will not be an effective withdrawal of a tender previously made. Tenders may
not be withdrawn after the Expiration Date.
Holders who have tendered in the Exchange Offer will continue to have
withdrawal rights following any extension of the Expiration Date. Any permitted
withdrawals of tenders of Old Notes may not be rescinded, and any Old Notes so
withdrawn will thereafter be deemed not validly tendered for purposes of the
Exchange Offer and the Holder thereof will be deemed to have rejected the
Exchange Offer. However, withdrawn Old Notes may be re-tendered prior to the
Expiration Date by following the procedures for tendering described above.
All questions as to the validity (including time of receipt) of notices of
withdrawal will be determined by the Company, whose determination will be
conclusive and binding. None of the Company, the Exchange Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
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FUTURE OFFERS
The Company reserves the right, in its sole discretion, to purchase or make
offers for any Old Notes that remain outstanding subsequent to the completion of
the Exchange Offer. The terms of any such purchase or offer could differ from
the terms of the Exchange Offer.
TRANSFER TAXES
The Company will pay all transfer taxes, if any, applicable to the transfer
and sale of Old Notes pursuant to the Exchange Offer. If, however, substitute
Old Notes for amounts not tendered or not exchanged are to be delivered to, or
are to be registered in the name of any person other than the Holder of Old
Notes tendered, or if tendered Old Notes are registered in the name of any
person other than the person signing the Letter of Transmittal, or if a transfer
tax is imposed for any reason other than the transfer or sale of Old Notes to
the Company pursuant to the Exchange Offer, the amount of any such transfer
taxes (whether imposed on the Holder or any other persons) shall be payable by
the Holder. If satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the appropriate Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such Holder and/or
withheld from any payments due with respect to the Old Notes tendered by such
Holder.
FINANCIAL ADVISOR
The Company has engaged Donaldson, Lufkin & Jenrette Securities Corporation to
act as Financial Advisor in connection with the Exchange Offer. Any Holder who
has questions concerning the terms of the Exchange Offer or who would like
current information regarding the Benchmark Treasury Yield, the reference
yields, the reference prices or the Extension Coupon may contact the Financial
Advisor at (800) 334-1604 (toll free) or (212) 892-3351 (call collect), or at
the address set forth on page 5 of this Offering Circular, attention Paul S.
Galant.
The Company has agreed to pay the Financial Advisor a fee for its services and
to reimburse the Financial Advisor for its reasonable out-of-pocket expenses,
including certain reasonable fees and expenses of legal counsel and the Company
has agreed to indemnify the Financial Advisor against certain liabilities,
including certain liabilities under the federal securities laws, in connection
with the Exchange Offer.
Milbank, Tweed, Hadley & McCloy, special counsel to the Financial Advisor, is
also acting as special tax counsel to the Company in connection with the
Exchange Offer.
EXCHANGE AGENT
IBJ Schroder Bank & Trust Company has been appointed Exchange Agent for the
Exchange Offer. The Company will pay the Exchange Agent reasonable and
customary fees for its services and will reimburse it for its reasonable out-of-
pocket expenses in connection therewith. Letters of Transmittal and all
correspondence in connection with the Exchange Offer must be sent or delivered
to the Exchange Agent at the address set forth on page 5 of this Offering
Circular.
INFORMATION AGENT
MacKenzie Partners, Inc. has been appointed Information Agent for the Exchange
Offer. The Company will pay the Information Agent reasonable and customary fees
for its services and will reimburse it for its reasonable out-of-pocket expenses
in connection therewith.
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Any questions concerning the tender procedures or requests for assistance or
additional copies of this Offering Circular or the Letters of Transmittal may be
directed to the Information Agent at the address and telephone number set forth
on page 5 of this Offering Circular. Holders of Old Notes may also contact the
Financial Advisor or their broker, dealer, commercial bank, trust company or
other nominee for assistance concerning the Exchange Offer.
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DESCRIPTION OF NEW NOTES
The following summaries of certain provisions of the New Notes and the New
Indenture do not purport to be complete and are subject, and are qualified in
their entirety by reference, to all the provisions of the New Notes and the New
Indenture, including the definitions therein of certain terms.
GENERAL
The New Notes will be issued under the New Indenture. The New Notes are
unsecured obligations of the Company and will rank pari passu with all other
unsecured and unsubordinated indebtedness of the Company. The New Notes will be
issued as a single series of Securities under the New Indenture and will be
issued only in fully registered form, without coupons, in denominations of
$1,000 or any integral multiple thereof. The New Notes will not be entitled to
any sinking fund.
The New Notes will be subject to defeasance and discharge and defeasance of
certain obligations and certain covenants. The New Notes mature on January 15,
2033 and will bear interest at the rates described herein. Interest on the New
Notes will be payable semi-annually on January 15 and July 15 of each year,
commencing January 15, 1999, to the Persons in whose names such New Notes are
registered at the close of business on the January 1 or the July 1 immediately
preceding such interest payment date. The January 15, 1999 interest payment
will include interest accruing on the New Notes from July 15, 1998 until, but
not including, January 15, 1999. Holders of record of the Old Notes as of July
1, 1998 will be entitled to interest on the Old Notes until, but not including,
July 15, 1998. Interest is calculated on the basis of a 360-day year consisting
of twelve 30-day months.
In any case where the date on which the principal of and premium, if any, and
interest, if any, on the New Notes is payable is not a Business Day at any Place
of Payment for the New Notes, then (notwithstanding any other provision of the
New Indenture or of the New Notes) payment of such principal, premium or
interest need not be made at such Place of Payment, but may be made on the next
succeeding Business Day at such Place of Payment, provided that no interest
shall accrue for the period from and after the date on which such principal,
premium or interest is payable.
OPTIONAL REDEMPTION
The New Notes will be subject to redemption (the "Make-Whole Redemption") at
the option of the Company at any time, in whole or from time to time in part,
until maturity, upon not less than 30 nor more than 60 days' notice, at a
redemption price equal to the sum of (i) the principal amount of the New Notes
being redeemed plus accrued and unpaid interest thereon to the Redemption Date,
and (ii) the Make-Whole Amount (as defined below), if any, with respect to such
New Notes.
"Make-Whole Amount" means, in connection with any Make-Whole Redemption of any
New Notes, the excess, if any, of (i) the sum, as determined by a Quotation
Agent (as defined herein) of the present values of the principal amount of such
New Notes, together with scheduled payments of interest from the Redemption Date
to the Stated Maturity of the New Notes, in each case discounted to the
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined herein) over
(ii) 100% of the principal amount of the New Notes to be redeemed.
"Adjusted Treasury Rate" means, with respect to any Redemption Date for a
Make-Whole Redemption, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount)
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equal to the Comparable Treasury Price for such Redemption Date,
calculated on the third Business Day preceding the Redemption Date, plus in each
case 0.20% (20 basis points).
"Comparable Treasury Issue" means the United States Treasury security selected
by the Quotation Agent as having a maturity comparable to the remaining term
from the Redemption Date to the Stated Maturity of the New Notes that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the New Notes.
"Quotation Agent" means the Reference Treasury Dealer selected by the New
Trustee after consultation with the Company. "Reference Treasury Dealer" means
a primary U.S. Government securities dealer.
"Comparable Treasury Price" means, with respect to any Redemption Date for a
Make-Whole Redemption, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such Redemption Date, as
set forth in the daily statistical release designated "H.15" (or any successor
release) published by the Board of Governors of the Federal Reserve System or
(ii) if such release (or any successor release) is not published or does not
contain such prices on such Business Day, (A) the average of the Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee
obtains fewer than three such Reference Treasury Dealer Quotations, the average
of such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any Redemption Date for a Make-Whole Redemption, the
average, as determined by the New Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the New Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
Notice of any redemption by the Company will be mailed at least 30 days
but not more than 60 days before any Redemption Date to each holder of New Notes
to be redeemed. If less than all the New Notes are to be redeemed at the option
of the Company, the New Trustee shall select, in such manner as it shall deem
fair and appropriate, the New Notes of such series to be redeemed in whole or in
part.
Unless the Company defaults in payment of the Redemption Price, on and
after any Redemption Date, interest will cease to accrue on the New Notes or
portions thereof called for redemption.
BOOK-ENTRY PROCEDURES
Upon issuance, all New Notes will be represented by one or more fully
registered global securities (each a "Global Security"). Each such Global
Security will be deposited with, or on behalf of, The Depository Trust Company,
as Depository, registered in the name of the Depository or a nominee thereof.
Unless and until it is exchanged in whole or in part for New Notes in definitive
form, no Global Security may be transferred except as a whole by the Depository
to a nominee of such Depository or by a nominee of such Depository to such
Depository.
The Depository has advised the Company as follows: The Depository is a
limited-purpose trust company organized under the Banking Law of the state of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depository was created to hold securities of its participants (defined
below) and to facilitate the clearance and settlement transactions
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among its participants in such securities through electronic book-entry changes
in accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. The Depository's participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations, and certain other organizations, some of whom
(and/or their representatives) own the Depository. Access to the Depository's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
Ownership of beneficial interests in the New Notes will be limited to Persons
that have accounts with the Depository ("participants") or Persons that may hold
interests through participants. The Depository has advised the Company that upon
the issuance of the Global Securities representing the New Notes, the Depository
will credit, on its book-entry registration and transfer system, the
participants' accounts with the respective principal amounts of the New Notes.
Ownership of beneficial interests in such Global Securities will be shown on,
and the transfer of such ownership interests will be effected only through,
records maintained by the Depository (with respect to interests of participants)
and on the records of participants (with respect to interests of Persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge beneficial interests in Global Securities.
So long as the Depository, or its nominee, is the registered owner of a Global
Security, the Depository or its nominee, as the case may be, will be considered
the sole owner or Holder of the New Notes represented by such Global Security
for all purposes under the New Indenture. Except as provided below, owners of
beneficial interests in a Global Security will not be entitled to have the New
Notes represented by such Global Securities registered in their names, will not
receive or be entitled to receive physical delivery of the New Notes in
definitive form and will not be considered the owners or Holders thereof under
the New Indenture. Accordingly, each Person owning a beneficial interest in a
Global Security must rely on the procedures of the Depository and, if such
Person is not a participant, on the procedures of the participant through which
such Person owns its interest, to exercise any rights of a Holder under the New
Indenture. The Company understands that under existing industry practices, in
the event that the Company requests any action of Holders or that an owner of a
beneficial interest in such a Global Security desires to give or take any action
which a Holder is entitled to give or take under the New Indenture, the
Depository would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instructions of beneficial owners holding
through them.
Payment of principal of, and interest on, New Notes registered in the name of
the Depository or its nominee will be made to the Depository or its nominee, as
the case may be, as the Holder of the Global Securities representing the New
Notes. None of the Company, the New Trustee or any other agent of the Company
or agent of the New Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests or for supervising or reviewing any records relating to such
beneficial ownership interests. The Depository, upon receipt of any payment of
principal or interest in respect of a Global Security, will credit the accounts
of the participants with payment in amounts proportionate to their respective
beneficial interests in such Global Security as shown on the records of the
Depository. Payments by participants to owners of beneficial interests in a
Global Security will be governed by standing customer instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name", and will be the responsibility of
such participants.
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If (x) the Depository is at any time unwilling or unable to continue as
Depository or the Depository ceases to be a clearing agency registered under the
1934 Act, (y) the Company executes and delivers to the New Trustee a Company
Order to the effect that the Global Securities shall be transferable and
exchangeable or (z) an Event of Default has occurred and is continuing with
respect to the New Notes, the Global Securities will be transferable or
exchangeable for New Notes in definitive form of like tenor in an equal
aggregate principal amount. Such definitive New Notes shall be registered in
such name or names as the Depository shall instruct the New Trustee. It is
expected that such instructions may be based upon directions received by the
Depository from participants with respect to ownership of beneficial interests
in such Global Securities.
EVENTS OF DEFAULT
The following are Events of Default with respect to the New Notes: (a)
failure to pay any interest on any New Note when due, continued for 30 days; (b)
failure to pay principal of or premium, if any, on any New Note when due; (c)
failure to perform any other covenant of the Company in the New Indenture (other
than a covenant included in the New Indenture solely for the benefit of series
of Debt Securities other than the New Notes), continued for 90 days after
written notice as provided in the New Indenture; (d) the acceleration, or
failure to pay at maturity (including any applicable grace period), of any
indebtedness for money borrowed by the Company exceeding $20,000,000 in
principal amount, which acceleration or failure to pay is not rescinded or
annulled or indebtedness paid within 15 days after the date on which written
notice thereof shall have first been given to the Company as provided in the New
Indenture; and (e) certain events in bankruptcy, insolvency or reorganization in
respect of the Company.
If an Event of Default with respect to the New Notes occurs and is continuing,
either the New Trustee or the Holders of at least 25 percent in principal amount
of the New Notes may declare the principal amount of all New Notes to be due and
payable immediately. At any time after a declaration of acceleration with
respect to the New Notes has been made, but before a judgment or decree based on
acceleration has been obtained, the Holders of a majority in principal amount of
the New Notes may, under certain circumstances, rescind and annul such
acceleration. For information as to waiver of defaults, see "-Modification and
Waiver."
The New Trustee will not be under any obligation, subject to the duty of the
New Trustee during default to act with the required standard of care, to
exercise any of its rights or powers under the New Indenture at the request or
direction of any of the Holders of New Notes, unless such Holders shall have
offered to such New Trustee reasonable security or indemnity. Subject to such
provisions for indemnification of the New Trustee, the Holders of a majority in
principal amount of the New Notes will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to such New
Trustee, or exercising any trust or power conferred on such New Trustee, with
respect to the New Notes.
The Company will furnish to the New Trustee annually a certificate as to
compliance with all conditions and covenants under the New Indenture.
MODIFICATION AND WAIVER
Modifications and amendments of the New Indenture may be made by the Company
and the New Trustee with the consent of the Holders of not less than 66 2/3
percent in principal amount of the Outstanding Securities of each series issued
under the New Indenture affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
Holder of each New Note affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of principal of or interest on, any New Note,
(b) reduce the principal amount of, or the premium, if any, or the rate of
interest on, any New Note, (c) change the place or currency of payment of
principal of, or premium, if any, or the rate of interest on, any New Note, (d)
impair the right to institute suit for the enforcement of any payment on or with
respect to any
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New Note, or (e) reduce the percentage in principal amount of the Outstanding
New Notes or the percentage of Holders, the consent of which is required for
modification or amendment of the New Indenture for the New Notes or for waiver
of compliance with certain provisions of the New Indenture or for waiver of
certain defaults.
The New Indenture provides that the Holders of a majority in principal amount
of the New Notes may, on behalf of the Holders of the New Notes, waive any past
default under the New Indenture with respect to the New Notes, except a default
in the payment of the principal of or premium, if any, or interest on any New
Notes or in respect of a provision which under the New Indenture cannot be
modified or amended without the consent of the Holder of each Outstanding New
Note.
The New Indenture provides that the Holders of not less than a majority in
principal amount of the Outstanding New Notes may, on behalf of the Holders of
all New Notes, waive, insofar as that series is concerned, compliance by the
Company with certain restrictive provisions of the New Indenture.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may, without the consent of any Holders of Outstanding New Notes,
consolidate or merge with or into, or transfer or lease its assets substantially
as an entirety to, any Person, and any other Person may consolidate or merge
with or into, or transfer or lease its assets substantially as an entirety to,
the Company, provided that (i) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged, or the Person, if other
than a wholly-owned Subsidiary (except for directors' qualifying shares), which
acquires or leases the assets of the Company substantially as an entirety is
organized under the laws of any United States jurisdiction and assumes the
Company's obligations on the New Notes and under the New Indenture, (ii) after
giving effect to the transaction, no Event of Default, and no event related to
such transaction which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing and (iii) certain other
conditions are met.
LIMITATION ON LIENS
The New Indenture provides that the Company will not, and will not permit any
Subsidiary, directly or indirectly, to create, issue, assume, incur or guarantee
any indebtedness for money borrowed which is secured by a mortgage, pledge,
lien, security interest or other encumbrance of any nature on any of the present
or future common stock of a Designated Subsidiary (as defined below) (or any
company, other than the Company, having direct or indirect control of any
Designated Subsidiary) unless the Securities of all series under the New
Indenture and, if the Company so elects, any other indebtedness of the Company
ranking at least pari passu with the Securities, shall be secured equally and
ratably with, or prior to, such other secured indebtedness for money borrowed so
long as it is outstanding.
The Company does not believe that the covenant described above will have a
material effect on the Company's or any Subsidiary's ability to conduct its
operations. A similar covenant has appeared in other indentures and agreements
relating to outstanding long-term indebtedness of the Company and guarantees by
the Company of long-term indebtedness of Subsidiaries, and such covenant has not
had a material effect on the operations of the Company or any Subsidiary. This
covenant does not restrict the ability of the Company or any Subsidiary to
mortgage, pledge or grant liens, security interests or other encumbrances of any
nature on any property or assets other than the common stock of a Designated
Subsidiary. The Company believes that this covenant may provide some benefit to
Holders of the New Notes in the event the Company or any Subsidiary finds it
necessary to obtain financing secured by the common stock of a Designated
Subsidiary.
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The term "Designated Subsidiary" means each of CIGNA Property and Casualty
Insurance Company, Connecticut General Life Insurance Company and Insurance
Company of North America, so long as such company remains a Subsidiary, or any
Subsidiary which is a successor of such Designated Subsidiary.
DEFEASANCE
Defeasance and Discharge. The New Indenture provides that the Company will be
discharged from any and all obligations in respect of the New Notes (except for
certain obligations to register the transfer or exchange of the New Notes, to
replace stolen, lost or mutilated New Notes, to maintain paying agencies and to
hold monies for payment in trust) upon the deposit with the New Trustee, or
another qualified corporate trustee, in trust, of money and/or U.S. Government
Obligations which through the payment of interest and principal in respect of
such U.S. Government Obligations in accordance with their terms will provide
money in an amount sufficient to pay the principal of and premium, if any, and
each installment of interest on the New Notes on the Stated Maturity of such
payments and any mandatory sinking fund payments or analogous payments
applicable to the New Notes on the day on which such payments are due and
payable in accordance with the terms of the New Indenture and the New Notes.
Such a trust may only be established if, among other things, (i) either (x) the
Company has delivered to the New Trustee an Opinion of Counsel to the effect
that since the date of the New Indenture there has been a change in the
applicable federal income tax law, including a change in the official
interpretation thereof, or (y) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, in either case to the
effect that Holders of the New Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amounts and in
the same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred, and (ii) the Company has
delivered to the New Trustee an Opinion of Counsel to the effect that the New
Notes, if then listed on the New York Stock Exchange, will not be delisted as a
result of such deposit, defeasance and discharge.
Defeasance of Certain Obligations and Certain Events of Default. The New
Indenture provides that, if applicable, the Company may omit to comply with the
restrictive covenants in Section 1005 ("Maintenance of Properties") or Section
1006 ("Limitation on Liens on Common Stock of Designated Subsidiaries"), and
Section 501(4) (described in clause (c) under "Events of Default") with respect
to Sections 1005 and 1006 and Section 501(5) (described in clause (d) under
"Events of Default") shall be deemed not to be an Event of Default under the New
Indenture with respect to the New Notes, upon the deposit with the New Trustee,
or another qualified corporate trustee, in trust, of money and/or U.S.
Government Obligations which through the payment of interest and principal in
respect of such U.S. Government Obligations in accordance with their terms will
provide money in an amount sufficient to pay the principal of and premium, if
any, and each installment of interest on the New Notes on the Stated Maturity of
such payments and any mandatory sinking fund payments or analogous payments
applicable to the New Notes on the day on which such payments are due and
payable in accordance with the terms of the New Indenture and the New Notes.
The obligations of the Company under the New Indenture and the New Notes other
than with respect to the covenants referred to above and the Events of Default
other than the Events of Default referred to above shall remain in full force
and effect. Such a trust may only be established if, among other things, the
Company has delivered to the New Trustee an Opinion of Counsel to the effect
that (i) the Holders of the New Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and defeasance of
certain obligations and Events of Default and will be subject to federal income
tax on the same amounts and in the same manner and at the same times, as would
have been the case if such deposit and defeasance had not occurred, and (ii) the
New Notes, if then listed on the New York Stock Exchange, will not be delisted
as a result of such deposit and defeasance.
In the event the Company exercises its option to omit compliance with certain
covenants of the New Indenture with respect to the New Notes as described above
and the New Notes are declared due and payable
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because of the occurrence of any Event of Default other than an Event of Default
described above in clause (c) or (d) under "Events of Default," the amount of
money and U.S. Government Obligations on deposit with the New Trustee, or
another qualified corporate trustee, will be sufficient to pay amounts due on
the New Notes at the time of their Stated Maturity but may not be sufficient to
pay amounts due on the New Notes at the time of the acceleration resulting from
such Event of Default. However, the Company will remain liable for such
payments. If the Company fails to pay such amounts as and when required by the
terms of the New Indenture, the New Trustee may institute and prosecute a
judicial proceeding for the collection of such amounts and may enforce any
judgment or final decree obtained in such proceeding.
CONCERNING THE NEW TRUSTEE
The Company and certain of its subsidiaries in the ordinary course of business
maintain general banking relations with Marine Midland Bank. Pursuant to the
provisions of the Trust Indenture Act of 1939, upon a default under either the
New Indenture or the Company's Convertible Subordinated Indenture, Marine
Midland Bank may be deemed to have a conflicting interest by virtue of its
acting as New Trustee under the New Indenture and Trustee under the Company's
Subordinated Indenture requiring it to resign and be replaced by a successor
trustee in one of such positions.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of certain federal income tax
consequences of the Exchange Offer to Holders of Old Notes and of the ownership
and disposition of New Notes acquired pursuant to the Exchange Offer. The
statements of law and legal conclusions set forth in this summary are based on
the opinion of Milbank, Tweed, Hadley & McCloy, special tax counsel to the
Company for the Exchange Offer and counsel to the Financial Advisor. This
summary is based on the Internal Revenue Code of 1986, as amended (the "Code").
Treasury Regulations, Internal Revenue Service ("IRS") rulings, official
pronouncements and judicial decisions, all as in effect on the date hereof and
all of which are subject to change, possibly with retroactive effect, or
different interpretations. This summary is applicable only to persons who hold
Old Notes as capital assets and who will hold New Notes as capital assets. This
summary does not discuss all the federal income tax consequences that may be
relevant to a Holder in light of the Holder's particular circumstances. In
particular, this summary does not address any special rules that may be
applicable to insurance companies, tax-exempt persons, financial institutions,
regulated investment companies, dealers in securities or currencies, pass-
through entities, persons that hold Old Notes or New Notes as part of an
integrated investment (including a "straddle") consisting of Old Notes or New
Notes and one or more other positions, foreign corporations, persons who are not
citizens or residents of the United States, or persons whose functional currency
is other than the United States dollar. In addition, this summary does not
address any state or local tax considerations that may be relevant to a Holder's
decision to exchange Old Notes for New Notes pursuant to the Exchange Offer.
THE FOLLOWING IS NOT TAX ADVICE TO ANY HOLDER OF OLD NOTES. ALL HOLDERS OF
OLD NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE UNITED STATES
FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF THE EXCHANGE OF OLD NOTES FOR NEW
NOTES AND OF THE OWNERSHIP AND DISPOSITION OF NEW NOTES RECEIVED IN THE EXCHANGE
OFFER IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.
EXCHANGE OF OLD NOTES FOR NEW NOTES
The exchange of Old Notes for New Notes (the "Exchange") pursuant to the
Exchange Offer will constitute a recapitalization within the meaning of section
368(a)(1)(E) of the Code. A Holder of Old Notes who exchanges Old Notes for New
Notes will recognize no gain or loss on the Exchange, except that a cash-basis
holder of Old Notes who exchanges Old Notes for New Notes may be required to
recognize as interest income received on the Exchange Date an amount equal to
the interest accrued on such Old Notes from July 15, 1998 through the Exchange
Date. An exchanging Holder's tax basis in New Notes received in the Exchange
will be the same as such Holder's tax basis in the Old Notes exchanged. An
exchanging Holder's holding period for the New Notes received in the Exchange
will include its holding period for the Old Notes exchanged.
If a Holder's tax basis in Old Notes immediately after the acquisition of Old
Notes exceeded the principal amount of such Old Notes, such excess constituted
amortizable bond premium which the Holder may have elected to amortize under a
constant yield method under section 171 of the Code. If such an electing Holder
exchanges Old Notes for New Notes, the remaining bond premium on the New Notes
would be amortizable over the extended term of the New Notes.
Some Holders of Old Notes may have acquired them at a "market discount." For
this purpose "market discount" is the excess (if any) of the principal amount
over the Holder's acquisition price, subject to a statutory de minimis
exception. While accrued market discount generally must be recognized to the
extent of gain realized on the disposition of a market discount debt instrument,
the Exchange will not cause any exchanging Holders of Old Notes who acquired
them at a market discount to recognize any accrued market discount as
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income. Instead, any accrued market discount on Old Notes that are exchanged for
New Notes will attach to the New Notes. In addition, unaccrued market discount
on such Old Notes will accrue over the extended term of the New Notes.
NEW NOTES
Stated Interest on New Notes. In general, payments of "qualified stated
interest" on the New Notes will be ordinary income, taxable when accrued, in the
case of a Holder utilizing the accrual method of accounting, or when received in
the case of a holder utilizing the cash method of accounting. Qualified stated
interest on the New Notes will equal interest payable at a rate equal to the
lower of 8.30% or the Extension Coupon. Payments of interest in excess of
qualified stated interest will be treated as payments of principal which will
result in whole or in part in the recognition of additional income depending on
the Holder's basis in the New Notes.
No Original Issue Discount. The New Notes will not be treated as issued with
original issue discount ("OID"), assuming, as is expected, the stated redemption
price at maturity ("SRPM") of the New Notes will not exceed their issue price by
more than a statutory de minimis amount. The SRPM of the New Notes will equal
the sum of the principal amount plus the portion of interest in excess of the
lower of 8.30% or the Extension Coupon. The issue price of the New Notes will
be their fair market value on their date of issue if, as expected the New Notes
are considered to be "traded on an established market." If the New Notes were
not considered to be traded on an established market, their issue price would be
the fair market value of the Old Notes, which are so traded. In either case,
the issue price is expected to exceed the SRPM.
Bond Premium. If a Holder's tax basis in the New Notes immediately after the
Exchange exceeds the SRPM of such New Notes, such excess will constitute
amortizable bond premium which the Holder may elect to amortize under a constant
yield method under section 171 of the Code. A Holder that elects to amortize
bond premium must reduce the tax basis in the New Notes by the amount so
amortized. The amortizable bond premium will be treated as an offset to
interest income rather than as a separate deduction item. An election to
amortize bond premium under section 171 of the Code by a Holder will apply to
all obligations owned or acquired by the Holder in the current and all
subsequent taxable years and may not be revoked without the permission of the
IRS. If an election to amortize bond premium is not made, a Holder must include
the full amount of each interest payment in income in accordance with its
regular method of accounting and will receive a tax benefit from the premium
only in computing gain or loss upon the redemption, sale or other disposition of
the New Notes.
Market Discount. If a Holder's basis in the New Notes immediately after the
Exchange is less than their SRPM by more than a statutory de minimis amount the
Holder will have market discount with respect to the New Notes. If the New
Notes have market discount any gain realized on sale or redemption of the New
Notes or receipt of payments other than qualified stated interest would be
treated as ordinary income to the extent of accrued market discount that has not
previously been taken into income. In addition, a Holder may be required to
defer deductions for interest on indebtedness incurred or continued to purchase
or carry the New Notes to the extent of market discount that accrues but is not
taken into account currently. For these purposes market discount is deemed to
accrue on a straight-line basis unless the Holder has made an election to treat
market discount as accruing on a constant yield basis. In addition, a Holder
may elect to include market discount in income as it accrues on all market
discount obligations acquired by the Holder in the year of election or
thereafter. If that election is made, the deferral of interest deductions
described above will not be required.
Redemption or Sale of the New Notes. In general, upon a redemption, sale or
other disposition of the New Notes, a Holder will recognize gain or loss equal
to the difference between (i) the amount realized on the
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disposition (other than amounts attributable to accrued interest) and (ii) the
Holder's tax basis in the New Notes. Subject to the application of the market
discount rules, such gain or loss will be capital gain or loss.
CASH PAYMENTS
Cash payments will be treated as fees for participating in the Offer and will
constitute ordinary income to recipient United States Holders.
BACKUP WITHHOLDING
A Holder of New Notes may be subject to backup withholding at a rate of 31
percent with respect to interest paid or the proceeds of a redemption, sale or
other disposition of New Notes, unless the Holder provides its taxpayer
identification number and certain required certifications to the payor or
otherwise establishes an exemption. Any amounts so withheld would be allowed as
a credit against the Holder's federal income tax liability.
PLAN OF DISTRIBUTION
The Company will exchange New Notes for Old Notes. Accordingly, the Company
will not receive any proceeds from the exchange of New Notes for Old Notes.
Based on an interpretation by the staff of the Division of Corporation Finance
of the Commission, the Company believes that the New Notes issued pursuant to
the Exchange Offer may be offered for resale, resold and otherwise transferred
by any Holder thereof without compliance with the registration requirements of
the Securities Act.
The Company has not entered into any arrangement or understanding with any
person to distribute the New Notes to be received in the Exchange Offer and, to
the best of the Company's information and belief, each person participating in
the Exchange Offer is acquiring the New Notes in the ordinary course of business
and has no arrangement or understanding with any person to participate in the
distribution of the New Notes.
The Company has agreed to pay all expenses incident to the Exchange Offer
(other than commissions or concessions of any brokers or dealers).
VALIDITY OF NEW NOTES
The validity of the offered New Notes will be passed upon for the Company by
Thomas J. Wagner, Esquire, Executive Vice President and General Counsel, and
David R. DeVoe, Esquire, Assistant General Counsel, of CIGNA Corporation.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements as of December 31, 1997 and 1996 and for
each of the three years in the period ended December 31, 1997, incorporated by
reference in this Offering Circular from the Company's Annual Report on Form 10-
K for the year ended December 31, 1997 have been audited by Price Waterhouse
LLP, independent accountants, as stated in their report incorporated by
reference herein.
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SCHEDULE A
FIXED SPREAD PRICING FORMULA TO DETERMINE THE
REFERENCE PRICE OF THE OLD NOTES
YLD = Reference Yield of the Old Notes expressed as a decimal
number.
CPN = The nominal rate of interest payable on the Old Notes
expressed as a decimal number.
N = The number of semi-annual interest payments, based on the
maturity date of the Old Notes from (but excluding) the
Exchange Date to (and including) the maturity date of the
Old Notes.
S = The number of days from and including the semi-annual
interest payment date immediately preceding the Exchange
Date up to, but not including, the Exchange Date. The
number of days is computed using the 30/360 day-count
method.
exp = Exponentiate. The term to the left of "exp" is raised to
the power indicated by the term to the right of "exp".
PRICE = The applicable Reference Price of the Old Notes per
$1,000 principal amount of Old Notes. The Reference Price
of the Old Notes is rounded to the nearest cent.
PRICE = 1,000
---------------------------
(1 + YLD/2) exp (N - S/180)
N
+ (SIGMA) 1,000 (CPN/2)
---------------------------
K = 1 (1 + YLD/2) exp (K - S/180)
minus 1,000 (CPN/2) (S/180)
A-1
<PAGE>
SCHEDULE B
HYPOTHETICAL PRICING EXAMPLE
FOR THE OLD NOTES
This Schedule B provides a hypothetical illustration of the calculation of the
Reference Price of the Old Notes based on hypothetical data, and should,
therefore, be used solely for the purpose of obtaining an understanding of the
calculation of the Reference Price of the Old Notes, as quoted at a hypothetical
Benchmark Treasury Yield, and should not be used or relied upon for any other
purpose.
OLD NOTES
Maturity Date of the Old Notes: January 15, 2023
Benchmark Treasury Security: 6.125% U.S. Treasury Note due November
15, 2027
2023 Fixed Spread: 1.30% (130 basis points)
EXAMPLE:
Hypothetical Extension Coupon 2:00 p.m., New York City time,
Determination Date: on June 23, 1998
Exchange Date: July 30, 1998
Benchmark Treasury Yield on the
Hypothetical Extension Coupon
Determination Date = 5.65%
2023 Fixed Spread = 1.30%
YLD = 6.95%
CPN = 8.30%
N = 49
S = 15
PRICE = $1,157.66
B-1
<PAGE>
SCHEDULE C
FIXED SPREAD PRICING FORMULA TO DETERMINE THE
EXTENSION COUPON PRICE OF THE NEW NOTES
YLD = Reference Yield of the New Notes expressed as a
decimal number.
CPN = The nominal rate of interest payable on the New Notes
expressed as a decimal number to January 15, 2023.
N = The number of semi-annual interest payments, based on
the maturity date of the Old Notes from (but
excluding) the Exchange Date to (and including) the
maturity date of the Old Notes.
M = The number of semi-annual interest payments, based on
the maturity date of the New Notes from (but
excluding) the Exchange Date to (and including) the
maturity date of the New Notes.
S = The number of days from and including the semi-annual
interest payment date immediately preceding the
Exchange Date up to, but not including, the Exchange
Date. The number of days is computed using the 30/360
day-count method.
exp = Exponentiate. The term to the left of "exp" is raised
to the power indicated by the term to the right of
"exp".
PRICE = The applicable Reference Price of the New Notes per
$1,000 principal amount of New Notes (which is equal
to the Reference Price of the Old Notes).
EXT = The nominal rate of interest payable on the New Notes
expressed as a decimal number from January 15, 2023
to January 15, 2033.
PRICE = 1,000
---------------------------------
(1 + YLD/2) exp (M - S/180)
+ N 1,000 (CPN/2)
(SIGMA) ---------------------------------
K = 1 (1 + YLD/2) exp (K - S/180)
+ M 1,000 (EXT/2)
(SIGMA) ---------------------------------
K = N + 1 (1 + YLD/2) exp (K - S/180)
minus 1,000 (CPN/2) (S/180)
C-1
<PAGE>
SCHEDULE D
HYPOTHETICAL EXTENSION COUPON
FOR THE NEW NOTES
This Schedule D provides a hypothetical illustration of the calculation of the
Extension Coupon of the New Notes based on hypothetical data, and should,
therefore, be used solely for the purpose of obtaining an understanding of the
calculation of the Extension Coupon of the New Notes, as quoted at a
hypothetical Reference Price and Benchmark Treasury Yield, and should not be
used or relied upon for any other purpose.
NEW NOTES
Maturity Date of the New Notes: January 15, 2033
Benchmark Treasury Security: 6.125% U.S. Treasury Note due November
15, 2027
2033 Fixed Spread: 1.40% (140 basis points)
EXAMPLE:
Hypothetical Extension Coupon 2:00 p.m., New York City time, on June
Determination Date: 23, 1998
Exchange Date: July 30, 1998
PRICE = $1,157.66
Benchmark Treasury Yield on the = 5.65%
Hypothetical Extension Coupon
Determination Date
2033 Fixed Spread = 1.40%
YLD = 7.05%
CPN = 8.30%
N = 49
M = 69
S = 15
EXT = 8.05%
D-1
<PAGE>
EXHIBIT T3E.2
LETTER OF TRANSMITTAL
OFFER TO EXCHANGE
NOTES DUE 2033
FOR ANY AND ALL OF THE OUTSTANDING
8.30% NOTES DUE 2023
OF
CIGNA CORPORATION
PURSUANT TO THE OFFERING CIRCULAR
DATED JUNE 24, 1998
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, JULY 23, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal should be
completed, signed, and submitted to the Exchange Agent:
IBJ SCHRODER BANK & TRUST COMPANY
<TABLE>
<S> <C> <C>
By Facsimile
By Mail: (212) 858-2611 By Hand or Overnight Delivery:
P.O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attn: Securities Processing
Attn: Reorganization Operations Window, Subcellar One (SC-1)
Department
Confirm by Telephone
(212) 858-2103
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION VIA
FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID
DELIVERY.
The Information Agent:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
(800) 322-2885 (toll free)
<PAGE>
For any questions regarding this Letter of Transmittal or for any additional
information you may contact the Exchange Agent or the Information Agent.
The undersigned hereby acknowledges receipt of the Offering Circular dated
June 24, 1998 (as it may be supplemented and amended from time to time, the
"Offering Circular") of CIGNA Corporation, a Delaware corporation ("Company"),
and this Letter of Transmittal (the "Letter of Transmittal") and the Notice of
Guaranteed Delivery, of even date herewith, that together constitute the
Company's offer (the "Exchange Offer") to exchange an aggregate principal amount
of up to $100,000,000 of its Notes Due 2033 (the "New Notes") for a like amount
of its issued and outstanding 8.30% Notes Due 2023 (the "Old Notes") from its
registered holders (individually, a "Holder" and collectively, the "Holders")
thereof.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Offering Circular.
The undersigned hereby tenders the Old Notes described in Box 1 below, upon
the terms and subject to the conditions described in the Offering Circular and
this Letter of Transmittal. The undersigned is the Holder of all the Old Notes
and the undersigned represents that it has received from each beneficial owner
of the tendered Old Notes ("Beneficial Owners") valid instructions which
authorize and instruct the undersigned to take the action described in this
Letter of Transmittal.
Subject to, and effective upon, the acceptance for exchange of the tendered
Old Notes, the undersigned hereby exchanges, assigns and transfers to, or upon
the order of, the Company all right, title, and interest in, to and under the
tendered Old Notes. Holders that tender and do not withdraw their Old Notes
will receive upon acceptance of the Old Notes by the Company a participation fee
equal to 1.50% of the principal amount tendered (the "Participation Fee").
Please issue the New Notes exchanged for tendered Old Notes in the name(s) of
the undersigned. If Old Notes not tendered or not exchanged are to be delivered
to, or a check for the Participation Fee is to be issued to, a person other than
to the Holder of the Old Notes tendered or to an address other than that of the
Holder of such Old Notes, such Holder should so indicate in the section of this
Letter of Transmittal entitled "Special Delivery Instructions" below (see Box
2).
The undersigned hereby irrevocably constitutes and appoints the Exchange Agent
as the true and lawful agent and attorney in fact of the undersigned with
respect to the tendered Old Notes, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver the tendered Old Notes to the Company or cause ownership of the
tendered Old Notes to be transferred to, or upon the order of, the Company, on
the books of the registrar for the Old Notes and deliver all accompanying
evidences of transfer and authenticity to, or upon the order of, the Company
upon receipt by the Exchange Agent, as the undersigned's agent, of the New Notes
to which the undersigned is entitled upon acceptance by the Company of the
tendered Old Notes pursuant to the Exchange Offer, (ii) receive all benefits and
otherwise exercise all rights of beneficial ownership of the tendered Old Notes,
all in accordance with the terms of the Exchange Offer, and (iii) receive
payment of the Participation Fee from the Company and transmit payment to the
Holders.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer--Procedures for
Tendering Old Notes" in the Offering Circular and in the instructions hereto
will constitute a binding agreement between the undersigned and the Company upon
the terms and subject to the conditions of the Exchange Offer, subject only to
withdrawal of such tenders on the terms set forth in the Offering Circular under
the caption "The Exchange Offer--Withdrawal Rights." All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any Beneficial Owner(s), and every obligation of the undersigned
or any Beneficial Owner(s) hereunder shall be binding upon the heirs,
representatives, successors, and assigns of the undersigned and such Beneficial
Owner(s).
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, assign, and transfer the tendered Old
Notes and that the Company will acquire good and unencumbered title thereto,
free and clear of all liens, restrictions, charges, encumbrances, and adverse
claims when the tendered Old Notes are acquired by the Company as contemplated
herein. The undersigned and each Beneficial Owner will, upon request, execute
and deliver any additional documents reasonably requested by the Company or the
Exchange Agent as necessary or desirable to complete and give effect to the
transactions contemplated hereby.
The undersigned hereby represents and warrants that the information set forth
in Box 1 is true and correct.
2
<PAGE>
Holders of Old Notes that are tendering their Old Notes by book-entry transfer
to the Exchange Agent's account at DTC can execute the tender through the DTC
Automated Tender Offer Program ("ATOP"), for which the transaction will be
eligible. DTC participants that are accepting the Exchange Offer must transmit
their acceptance to DTC, which will verify the acceptance and execute a book-
entry delivery to the Exchange Agent's DTC account. DTC will then send an
Agent's Message to the Exchange Agent for its acceptance. DTC participants may
also accept the Exchange Offer prior to the Expiration Date by submitting a
Notice of Guaranteed Delivery through ATOP.
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO
THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE "USE OF BOOK-ENTRY TRANSFER" BELOW (Box 4).
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE
"USE OF GUARANTEED DELIVERY" BELOW (Box 3).
[ ] CHECK HERE IF OLD NOTES ARE BEING DELIVERED HEREWITH.
3
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
BOX 1
DESCRIPTION OF OLD NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AGGREGATE
PRINCIPAL AGGREGATE
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S), CERTIFICATE AMOUNT PRINCIPAL
EXACTLY AS NAME(S) APPEAR(S) ON OLD NOTE NUMBER(S) OF REPRESENTED BY AMOUNT
CERTIFICATE(S) OLD NOTES* CERTIFICATE(S) TENDERED**
(PLEASE FILL IN, IF BLANK)
- -----------------------------------------------------------------------------------------------------
--------------------
--------------------
--------------------
--------------------
--------------------
- -------------------------------------------------- --------------------
TOTAL
- -----------------------------------------------------------------------------------------------------
* NEED NOT BE COMPLETED BY PERSONS TENDERING BY BOOK-ENTRY TRANSFER.
** THE MINIMUM PERMITTED TENDER IS $1,000 IN PRINCIPAL AMOUNT OF OLD NOTES. ALL OTHER TENDERS MUST BE
IN INTEGRAL MULTIPLES OF $1,000 OF PRINCIPAL AMOUNT. UNLESS OTHERWISE INDICATED IN THIS COLUMN,
THE PRINCIPAL AMOUNT OF ALL OLD NOTES IDENTIFIED IN THIS BOX 1 OR DELIVERED TO THE EXCHANGE AGENT
HEREWITH SHALL BE DEEMED TENDERED. SEE INSTRUCTION 4.
- ------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
- -----------------------------------------------------------------------------
BOX 2
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
TO BE COMPLETED ONLY IF NEW NOTES EXCHANGED FOR OLD NOTES AND UNTENDERED OLD
NOTES AND/OR THE CHECK FOR PAYMENT OF THE PARTICIPATION FEE ARE TO BE SENT TO
SOMEONE OTHER THAN THE UNDERSIGNED, OR TO THE UNDERSIGNED AT AN ADDRESS OTHER
THAN THAT SHOWN ABOVE.
MAIL: [ ] NEW NOTE(S) AND ANY OLD NOTES NOT TENDERED HEREBY TO:
[ ] CHECK TO:
NAME(S):
- -----------------------------------------------------------------------------
(PLEASE PRINT)
ADDRESS:
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
TAX IDENTIFICATION OR
SOCIAL SECURITY NO.:
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
5
<PAGE>
- -----------------------------------------------------------------------------
BOX 3
USE OF GUARANTEED DELIVERY
(SEE INSTRUCTION 2)
TO BE COMPLETED ONLY IF OLD NOTES ARE BEING TENDERED BY MEANS OF A NOTICE OF
GUARANTEED DELIVERY.
NAME(S) OF HOLDER(S):---------------------------------------------------------
WINDOW TICKET NO. (IF ANY):---------------------------------------------------
DATE OF EXECUTION OF NOTICE OF GUARANTEED DELIVERY:---------------------------
NAME OF ELIGIBLE INSTITUTION THAT GUARANTEED DELIVERY:------------------------
IF DELIVERED BY BOOK-ENTRY TRANSFER, COMPLETE THE FOLLOWING:
DTC ACCOUNT NUMBER:---------------------------------------------------
VOI NUMBER:-----------------------------------------------------------
- -------------------------------------------------------------------------------
BOX 4
USE OF BOOK-ENTRY TRANSFER
(SEE INSTRUCTION 1)
TO BE COMPLETED ONLY IF DELIVERY OF OLD NOTES IS TO BE MADE BY BOOK-ENTRY
TRANSFER.
NAME OF TENDERING INSTITUTION:--------------------------------------------------
ACCOUNT NUMBER:-----------------------------------------------------------------
VOI NUMBER:---------------------------------------------------------------------
- --------------------------------------------------------------------------------
6
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
BOX 5
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------------------------------------------
<S> <C>
X -------------------------------------------- SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 5)
X --------------------------------------------
(SIGNATURE OF HOLDER(S) AUTHORIZED SIGNATURE
OR AUTHORIZED SIGNATORY)
X------------------------------------------------------
NOTE: THE ABOVE LINES MUST BE SIGNED BY THE
REGISTERED HOLDER(S) OF OLD NOTES AS THEIR NAME(S) NAME:--------------------------------------------------
APPEAR(S) THEREIN OR BY PERSON(S) AUTHORIZED TO (PLEASE PRINT)
BECOME REGISTERED HOLDER(S) (EVIDENCE OF SUCH
AUTHORIZATION MUST BE TRANSMITTED WITH THIS LETTER TITLE:-------------------------------------------------
OF TRANSMITTAL). IF SIGNATURE IS BY A TRUSTEE,
EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, NAME OF FIRM:------------------------------------------
OFFICER, OR OTHER PERSON ACTING IN A FIDUCIARY OR (MUST BE AN ELIGIBLE INSTITUTION
REPRESENTATIVE CAPACITY, SUCH PERSON MUST SET FORTH AS DEFINED IN INSTRUCTION 2)
HIS OR HER FULL TITLE BELOW. SEE INSTRUCTION 5
NAME(S): ----------------------------------- ADDRESS: ----------------------------------------------
CAPACITY:----------------------------------- ----------------------------------------------
ADDRESS: ----------------------------------- ----------------------------------------------
(ZIP CODE)
-----------------------------------
(ZIP CODE) AREA CODE AND TELEPHONE NUMBER:------------------------
AREA CODE AND TELEPHONE NUMBER:------------- DATED:-------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER:
-----------------------------------
- ------------------------------------------------------ -----------------------------------------------------
</TABLE>
7
<PAGE>
PAYORS NAME: IBJ SCHRODER BANK & TRUST COMPANY
---------------------------------
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
NAME: (If joint names, list first and circle the name of the person or
SUBSTITUTE entity whose number you enter in Part 1 below. See instructions if your
name has changed.
FORM W-9
DEPARTMENT OF THE -------------------------------------------------------------------------------------------
TREASURY
INTERNAL REVENUE SERVICE ADDRESS:-----------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
PAYER'S REQUEST FOR TAXPAYER CITY, STATE AND ZIP CODE:------------------------------------------------------------------
IDENTIFICATION NUMBER (TIN) -------------------------------------------------------------------------------------------
LIST ACCOUNT NUMBER(S) (OPTIONAL):---------------------------------------------------------
-------------------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR TAXPAYER
IDENTIFICATION NUMBER IN THE BOX AT ------------------------------
RIGHT AND CERTIFY BY SIGNING AND Social Security Number
DATING BELOW
OR
------------------------------
Taxpayer Identification Number
-------------------------------------------------------------------------------------------
PART 2--Check the box if you are NOT PART 3--
subject to backup withholding under
the provisions of section Awaiting TIN [ ]
3406(a)(1)(C) of the Internal Revenue
Code because (1) you have not been
notified that you are subject to
backup withholding as a result of
failure to report all interest or
dividends or (2) the Internal Revenue
Service has notified you that you are
no longer subject to backup
withholding. [ ]
- -----------------------------------------------------------------------------------------------------------------------
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION PROVIDED ON THIS FORM IS
TRUE, CORRECT AND COMPLETE.
SIGNATURE----------------------------------- DATE-----------------------------------------
NAME (Please Print)
- -----------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS
MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me,
and either (a) I have mailed or delivered an application to receive a taxpayer identification number
to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I
intend to mail or deliver an application in the near future. I understand that, if I do not provide a
taxpayer identification number to the exchange agent, 31% of all reportable payments made to me will
be withheld, but will be refunded if I provide a certified taxpayer identification number within 60
days.
------------------------------------------------- --------------------------------------------------
Signature Date
--------------------------------------------------
Name (Please Print)
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
INSTRUCTIONS TO LETTER OF TRANSMITTAL
Forming Part of the Terms and Conditions of the Exchange Offer
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES. This Letter of
Transmittal is to be completed by Holders of tendered Old Notes if certificates
representing such tendered Old Notes are to be forwarded herewith pursuant to
the procedures set forth in the Offering Circular under "The Exchange Offer--
Procedures for Tendering Old Notes," unless delivery of such certificates is to
be made by book-entry transfer to the Exchange Agent's account maintained by DTC
through ATOP. For a Holder to properly tender Old Notes pursuant to the
Exchange Offer, a properly completed and duly executed copy of this Letter of
Transmittal, including the Substitute Form W-9, and any other documents required
by this Letter of Transmittal must be received by the Exchange Agent at its
address set forth herein, and either (i) certificates for tendered Old Notes
must be received by the Exchange Agent at its address set forth herein, or (ii)
such tendered Old Notes must be transferred pursuant to the procedures for book-
entry transfer described in the Offering Circular under the caption "The
Exchange Offer--Procedures for Tendering" (and a confirmation of such transfer
received by the Exchange Agent) in each case prior to Expiration Date. The
method of delivery of certificates for tendered Old Notes, this Letter of
Transmittal and all other required documents to the Exchange Agent is at the
election and risk of the tendering holder and the delivery will be deemed made
only when actually received by the Exchange Agent. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
Instead of delivery by mail, it is recommended that the Holder use an overnight
or hand delivery service. In all cases, sufficient time should be allowed to
assure timely delivery. No Letter of Transmittal or tendered Old Notes should
be sent to the Company. Neither the Company nor the Exchange Agent is under any
obligation to notify any tendering holder of the Company's acceptance of
tendered Old Notes prior to the closing of the Exchange Offer.
2. GUARANTEED DELIVERY PROCEDURES. If a Holder desires to tender Old Notes
pursuant to the Exchange Offer and (a) certificates representing such tendered
Old Notes are not immediately available, (b) time will not permit such Holder(s)
Letter of Transmittal, certificates representing such tendered Old Notes and all
other required documents to reach the Exchange Agent on or prior to the
Expiration Date, or (c) the procedures for book-entry transfer cannot be
completed on or prior to the Expiration Date, such Holder may tender Old Notes
with the effect that such tender will be deemed to have been received on or
prior to the Expiration Date if the procedures set forth below and in the
Offering Circular under "The Exchange Offer--Guaranteed Delivery Procedures"
(including the completion of Box 3 above) are followed. Pursuant to such
procedures, (i) the tender must be made by or through an Eligible Institution
(as defined), (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company herewith, or an
Agent's Message with respect to a guaranteed delivery that is accepted by the
Company, must be received by the Exchange Agent on or prior to the Expiration
Date, and (iii) the certificates for the tendered Old Notes, in proper form for
transfer (or a Book-Entry Confirmation of the transfer of such tendered Old
Notes to the Exchange Agent's account at DTC as described in the Offering
Circular), together with a Letter of Transmittal (or manually signed facsimile
thereof) properly completed and duly executed, with any required signature
guarantees and any other documents required by the Letter of Transmittal or a
properly transmitted Agent's Message, must be received by the Exchange Agent
within three New York Stock Exchange trading days after the date of execution of
the Notice of Guaranteed Delivery. Any Holder who wishes to tender Old Notes
pursuant to the guaranteed delivery procedures described above must ensure that
the Exchange Agent receives the Notice of Guaranteed Delivery relating to such
tendered Old Notes prior to the Expiration Date. Failure to complete the
guaranteed delivery procedures outlined above will not, of itself, affect the
validity or effect a revocation of any Letter of Transmittal form properly
completed and executed by an Eligible Holder who attempted to use the guaranteed
delivery process.
3. BENEFICIAL OWNER INSTRUCTIONS TO HOLDERS. Only a Holder in whose name Old
Notes are registered on the books of the registrar (or the legal representative
or attorney-in-fact of such registered holder) may execute and deliver this
Letter of Transmittal. Any Beneficial Owner of Old Notes who is not the Holder
must arrange promptly with the Holder to execute and deliver this Letter of
Transmittal on his or her behalf.
4. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral
multiples of $1,000 in principal amount. If less than the entire principal
amount of Old Notes held by the Holder is tendered, the Holder should fill in
the principal amount tendered in the column labeled "Aggregate Principal Amount
Tendered" of the box entitled "Description of Notes Tendered" (see Box 1) above.
The entire principal amount of Old Notes delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Old Notes held by the Holder is not tendered, then new
certificates representing the Old Notes for the principal amount of Old Notes
not tendered and New Notes issued in exchange for any Old Notes tendered and
accepted will be sent to the Holder at its registered address, unless a
different address is provided in the box entitled "Special Delivery
Instructions" on this Letter of Transmittal, as soon as practicable following
the Expiration Date.
2
<PAGE>
5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
Holder(s) of the tendered Old Notes, the signature must correspond with the
name(s) as written on the face of the tendered Old Notes without alteration,
enlargement or any change whatsoever.
If any of the tendered Old Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any tendered
Old Notes are held in different names, it will be necessary to complete, sign
and submit as many separate copies of the Letter of Transmittal as there are
different names in which such tendered Old Notes are held.
If this Letter of Transmittal is signed by the Holder(s) of Old Notes, and New
Notes issued in exchange therefor are to be issued (and any untendered principal
amount of Old Notes is to be reissued) in the name of the Holder(s), then such
Holder(s) need not and should not endorse any Old Notes, nor provide a separate
bond power. In any other case, such Holder(s) must either properly endorse the
tendered Old Notes or transmit a properly completed separate bond power with
this Letter of Transmittal with the signature(s) on the endorsement or bond
power guaranteed by a Medallion Signature Guarantor (as defined below).
If this Letter of Transmittal is signed by a person other than the Holder(s)
of any tendered Old Notes, such tendered Old Notes must be endorsed or
accompanied by appropriate bond powers, in each case, signed as the name(s) of
the Holder(s) appear(s) on the tendered Old Notes, with the signature(s) on the
endorsement or bond power guaranteed by a Medallion Signature Guarantor.
If this Letter of Transmittal or any tendered Old Notes or bond powers are
signed by trustees, executors, administrators, guardians, attorney-in-fact,
officers of corporations, or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing and, unless waived by the
Company, evidence satisfactory to the Company of their authority to so act must
be submitted with this Letter of Transmittal.
Signatures on this Letter of Transmittal must be guaranteed by a recognized
participant in the Securities Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program (each a "Medallion Signature Guarantor"), unless the Old Notes are
tendered (i) by the Holder of the Old Notes (or by a participant in DTC whose
name appears on a security position listing as the owner of such Old Notes) who
has not completed Box 2 ("Special Delivery Instructions") on this Letter of
Transmittal, or (ii) for the account of a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc. ("NASD") or a commercial bank or trust company having an office or
correspondent in the United States (each of the foregoing being referred to as
an "Eligible Institution"). If the tendered Old Notes are registered in the
name of a person other than the signer of the Letter of Transmittal or if Old
Notes not tendered are to be returned to a person other than the Holder, then
the signature on this Letter of Transmittal accompanying the tendered Old Notes
must be guaranteed by a Medallion Signature Guarantor as described above.
Beneficial Owners whose tendered Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee must contact
such broker, dealer, commercial bank, trust company or other nominee if they
desire to tender such Old Notes.
6. SPECIAL DELIVERY INSTRUCTIONS. Holders should indicate in Box 2 ("Special
Delivery Instructions") the name and address to which the New Notes and/or
substitute Old Notes for principal amounts not tendered or not accepted for
exchange, and/or payment of the Participation Fee, are to be sent, if different
from the name and address of the person signing this Letter of Transmittal. In
the case of issuance in a different name, the taxpayer identification or social
security number of the person named must also be indicated.
7. TRANSFER TAXES. The Company will pay all transfer taxes, if any,
applicable to the exchange of Old Notes pursuant to the Exchange Offer. If,
however, a transfer tax is imposed for any reason other than the transfer and
exchange of Old Notes pursuant to the Exchange Offer, then the amount of any
such transfer taxes (whether imposed on the Holder or on any other person) will
be payable by the Holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not submitted with this Letter of Transmittal, the amount
of such transfer taxes will be billed directly to such Holder.
It will not be necessary for transfer tax stamps to be affixed to the tendered
Old Notes listed in this Letter of Transmittal.
8. TAX IDENTIFICATION NUMBER. Federal income tax law requires that the
Holder(s) of any Old Notes which are accepted for exchange must provide the
Exchange Agent (as payor) with its correct taxpayer identification number
("TIN"), which, in the case of a Holder who is an individual, is his or her
social security number. If the Exchange
3
<PAGE>
Agent is not provided with the correct TIN, the Holder may be subject to backup
withholding and a $50 penalty imposed by the Internal Revenue Service ("IRS").
(If withholding results in an over-payment of taxes, a refund may be obtained.)
Certain Holders (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
To prevent backup withholding, each Holder of tendered Old Notes must provide
such Holder's correct TIN by completing the Substitute Form W-9 set forth
herein, certifying that the TIN provided is correct (or that such Holder is
awaiting a TIN), and that (i) the Holder has not been notified by the IRS that
such Holder is subject to backup withholding as a result of failure to report
all interest or dividends or (ii) if previously so notified, the IRS has
notified the Holder that such Holder is no longer subject to backup withholding.
If the tendered Old Notes are registered in more than one name or are not in the
name of the actual owner, consult the "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for information on which TIN to
report.
The Company reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Company's obligation regarding backup
withholding.
9. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility
(including time of receipt), acceptance and withdrawal of tendered Old Notes
will be determined by the Company in its sole discretion, which determination
will be final and binding. The Company reserves the right to reject any and all
Old Notes not validly tendered or any Old Notes the Company's acceptance of
which would, in the opinion of the Company or its counsel, be unlawful. The
Company also reserves the right to waive any conditions of the Exchange Offer or
defects or irregularities in tenders of Old Notes as to any ineligibility of any
Holder who seeks to tender Old Notes in the Exchange Offer. The interpretation
of the terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) by the Company shall be final and
binding on all parties. Unless waived, any defects or irregularities in
connection with tenders of Old Notes must be cured within such time as the
Company shall determine. Neither the Company, the Exchange Agent nor any other
person shall be under any duty to give notification of defects or irregularities
with respect to tenders of Old Notes, nor shall any of them incur any liability
for failure to give such notification. Tenders of Old Notes will not be deemed
to have been made until such defects or irregularities have been cured or
waived. Any Old Notes received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the Holders, unless otherwise
provided in this Letter of Transmittal, as soon as practicable following the
Expiration Date.
10. WAIVER OF CONDITIONS. The Company reserves the absolute right to amend,
waive or modify any of the conditions in the Exchange Offer in the case of any
Old Notes.
11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or
contingent tender of Old Notes or transmittal of this Letter of Transmittal will
be accepted.
12. MUTILATED, LOST, STOLEN OR DESTROYED NOTES. Any Holder whose tendered
Old Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated herein for further instructions.
13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance and requests for additional copies of the Offering Circular or this
Letter of Transmittal may be directed to the Exchange Agent or the Information
Agent at the addresses and telephone numbers indicated herein. Holders may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Exchange Offer.
14. ACCEPTANCE OF TENDERED NOTES AND ISSUANCE OF EXCHANGE NOTES; RETURN OF
NOTES. Subject to the terms and conditions of the Exchange Offer, the Company
will accept for exchange all validly tendered Old Notes as soon as practicable
after the Expiration Date and will issue New Notes therefor, along with payment
of the Participation Fee, on the fifth business day following the Expiration
Date. For purposes of the Exchange Offer, the Company shall be deemed to have
accepted tendered Old Notes when, as and if the Company has given written or
oral notice (immediately followed in writing) thereof to the Exchange Agent. If
any tendered Old Notes are not exchanged pursuant to the Exchange Offer for any
reason, such unexchanged Old Notes will be returned, without expense, to the
undersigned at the address shown in Box l or at a different address as may be
indicated herein under "Special Delivery Instructions" (Box 2).
15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the procedures set
forth in the Offering Circular under the caption "The Exchange Offer--Withdrawal
Rights."
4
<PAGE>
EXHIBIT T3E.3
NOTICE OF GUARANTEED DELIVERY
IN RESPECT OF
OFFER TO EXCHANGE
NOTES DUE 2033
FOR ANY AND ALL OF THE OUTSTANDING
8.30% NOTES DUE 2023
OF
CIGNA CORPORATION
PURSUANT TO THE OFFERING CIRCULAR
DATED JUNE 24, 1998
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, JULY 23, 1998, UNLESS EXTENDED ("THE EXPIRATION DATE").
- --------------------------------------------------------------------------------
The Exchange Agent for the Exchange Offer is:
IBJ SCHRODER BANK & TRUST COMPANY
By Facsimile:
By Mail: (212) 858-2611 By Hand or Overnight Delivery:
P.O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attn: Securities Processing
Attn: Reorganization Operations Window, Subcellar One (SC-1)
Department
Confirm by Telephone:
(212) 858-2103
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION VIA FACSIMILE TO A NUMBER, OTHER THAN AS SET FORTH ABOVE WILL NOT
CONSTITUTE VALID DELIVERY.
As set forth in the Offering Circular dated June 24, 1998 (as it may
be supplemented and amended from time to time, the "Offering Circular") of CIGNA
Corporation (the "Company") under "The Exchange Offer--Guaranteed Delivery
Procedures," and in the Instructions to the related Letter of Transmittal (the
"Letter of Transmittal"), this form, or one substantially equivalent hereto, or
an Agent's Message relating to the guaranteed delivery procedures, must be used
to accept the Company's offer (the "Exchange Offer") to exchange an aggregate
principal amount of up to $100,000,000 of its Notes Due 2033 (the "New Notes")
for a like amount of its issued and outstanding 8.30% Notes Due 2023 (the "Old
Notes"), if time will not permit the Letter of Transmittal to reach the Exchange
Agent, or the procedures for book-entry transfer cannot be completed, on or
prior to the Expiration Date (as defined herein).
This form must be delivered by an Eligible Institution (as defined
herein) by facsimile transmission, mail or hand delivery to the Exchange Agent
as set forth above. If a signature on the Letter of Transmittal is required to
be guaranteed by a Medallion Signature Guarantor under the instructions thereto,
such signature guarantee must appear in the applicable space provided in the
Letter of Transmittal. This form is not to be used to guarantee signatures.
Questions and requests for additional copies of the Offering Circular
may be directed to the Exchange Agent at the address above. Beneficial owners
may also contact their broker, dealer, commercial bank, trust company, or other
nominee for assistance concerning the Exchange Offer.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tender(s) to the Company, upon the terms and
subject to the conditions set forth in the Offering Circular and the Letter of
Transmittal (receipt of which is hereby acknowledged), the principal amount of
the Old Notes specified below pursuant to the guaranteed delivery procedures set
forth in the Offering Circular under "The Exchange Offer--Guaranteed Delivery
Procedures" and in Instruction 2 to the Letter of Transmittal. The undersigned
hereby authorizes the Exchange Agent to deliver this Notice of Guaranteed
Delivery to the Company with respect to the Old Notes tendered pursuant to the
Exchange Offer.
The undersigned understands that Old Notes will be exchanged only
after timely receipt by the Exchange Agent of (i) such Old Notes, or a Book-
Entry Confirmation, and (ii) a Letter of Transmittal (or a manually signed
facsimile thereof), including by means of an Agent's Message, of the transfer of
such Old Notes into the Exchange Agent's account at the Book-Entry Transfer
Facility, with respect to such Old Notes, properly completed and duly executed,
with any signature guarantees and any other documents required by the Letter of
Transmittal within three New York Stock Exchange trading days after the
execution hereof. The undersigned also understands that the method of delivery
of this Notice of Guaranteed Delivery and any other required documents to the
Exchange Agent is at the election and sole risk of the Holder, and the delivery
will be deemed made only when actually received by the Exchange Agent.
THE UNDERSIGNED UNDERSTANDS THAT TENDERS OF OLD NOTES WILL BE ACCEPTED
ONLY IN DENOMINATIONS OF $1,000 OR AN INTEGRAL MULTIPLE THEREOF. THE
UNDERSIGNED ALSO UNDERSTANDS THAT TENDERS OF OLD NOTES MAY BE WITHDRAWN AT ANY
TIME PRIOR TO THE EXPIRATION DATE.
All authority conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and every obligation of the undersigned under
this Notice of Guaranteed Delivery shall be binding upon the heirs, executors,
administrators, trustees in bankruptcy, personal and legal representatives,
successors and assigns of the undersigned.
All capitalized terms used herein but not defined herein shall have
the meanings ascribed to them in the Offering Circular.
2
<PAGE>
PLEASE SIGN AND COMPLETE
<TABLE>
<S> <C>
________________________________________ ____________________________________________
Signature(s) of Holder(s) or Authorized Date: ______________________________________
Signatory:______________________________
Address:____________________________________
________________________________________
____________________________________________
________________________________________
Area Code and Telephone No.: _______________
Name(s) of Holder(s): __________________
____________________________________________
________________________________________
If Notes will be delivered by book-entry
________________________________________ transfer, check book-entry transfer
facility below:
Principal Amount of Old Notes
Tendered:_______________________________ The Depository Trust Company
________________________________________ DTC No. ____________________________________
Account No. ________________________________
Certificate No.(s) of Old Notes
(if available): ________________________
________________________________________ ____________________________________________
</TABLE>
- --------------------------------------------------------------------------------
This Notice of Guaranteed Delivery must be signed by the Holder(s) exactly as
their name(s) appear(s) on certificate(s) for Old Notes or on a security
position listing as the owner of Old Notes, or by person(s) authorized to become
Holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery without alteration, enlargement or any change whatsoever.
If signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer or other person acting in a fiduciary or representative capacity,
such person must provide the following information.
Please print name(s) and address(es)
Name(s):
___________________________________________________________
___________________________________________________________________
Capacity:
__________________________________________________________
Address(es):
_______________________________________________________
___________________________________________________________________
___________________________________________________________________
- --------------------------------------------------------------------------------
DO NOT SEND OLD NOTES WITH THIS FORM. OLD NOTES SHOULD BE SENT TO THE
EXCHANGE AGENT WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF
TRANSMITTAL.
3
<PAGE>
================================================================================
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of the Securities Transfer Agents Medallion Program,
the Stock Exchange Medallion Program or the New York Stock Exchange, Inc.
Medallion Signature Program (each, an "Eligible Institution"), hereby guarantees
that the Notes tendered hereby are in proper form for transfer (pursuant to the
procedures set forth in the Offering Circular under "The Exchange Offer--
Guaranteed Delivery Procedures"), and that the Exchange Agent will receive (a)
such Old Notes, or a timely confirmation of a book-entry transfer of such Notes
to a Book-Entry Transfer Facility and (b) a properly completed and duly executed
Letter of Transmittal or manually signed facsimile thereof (or Agent's message)
with any required signature guarantees and any other documents required by the
Letter of Transmittal within three New York Stock Exchange trading days after
the date of execution hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Exchange Agent and must deliver the Letter of Transmittal and
Notes to the Exchange Agent within the time period shown herein. Failure to do
so could result in a financial loss to such Eligible Institution.
Name of Firm:
____________________________________________________________
Authorized Signature:
____________________________________________________
Title:
___________________________________________________________________
Address:
_________________________________________________________________
_________________________________________________________________________
(Zip Code)
Area Code and Telephone Number:
__________________________________________
Dated: _____________________________
================================================================================
4
<PAGE>
EXHIBIT T3E.4
LETTER TO BENEFICIAL OWNERS
CIGNA CORPORATION
OFFER TO EXCHANGE
NOTES DUE 2033
FOR ANY AND ALL OF ITS OUTSTANDING
8.30% NOTES DUE 2023
- -------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THURSDAY, JULY 23, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE'').
- -------------------------------------------------------------------------------
June 24, 1998
To Our Clients:
Enclosed for your consideration are the Offering Circular dated June 24, 1998
(the "Offering Circular") and the accompanying Letter of Transmittal (which
together constitute the "Exchange Offer") in connection with the offer by CIGNA
Corporation, a Delaware corporation (the "Company"), upon the terms and subject
to the conditions set forth in the Offering Circular and the accompanying Letter
of Transmittal to exchange an aggregate principal amount of up to $100,000,000
of its Notes Due 2033 (the "New Notes") for a like principal amount of its
issued and outstanding 8.30% Notes Due 2023 (the "Old Notes") from the
registered holders (individually, a "Holder" and collectively, the "Holders")
thereof. The New Notes will evidence the same class of debt as the Old Notes
and will be issued pursuant to, and entitled to the benefits of, an Indenture
dated as of January 1, 1994, between the Company and Marine Midland Bank
(formerly Marine Midland Bank, N.A.), the trustee.
The New Notes will have the same 8.30% interest coupon as the Old Notes until,
but not including, January 15, 2023. The interest coupon for the final 10 years
of maturity will be calculated on the Extension Coupon Determination Date (as
defined below) using a fixed spread pricing formula. For the Old Notes, a price
(the "Reference Price of the Old Notes") will be determined using a specified
fixed spread pricing formula. Such Reference Price of the Old Notes will be
based on a yield to the maturity date of the Old Notes equal to (i) the yield on
the 6.125% U.S. Treasury Note due November 15, 2027 (the "Benchmark Treasury
Yield") plus (ii) 130 basis points. For the New Notes, a per annum interest
coupon (the "Extension Coupon") will be determined for the period from January
15, 2023 to the maturity date, January 15, 2033. This Extension Coupon
(expressed as a percentage with two decimal places) will be the lesser of: (i)
8.30% per annum and (ii) a per annum interest rate at which the price of the New
Notes (the "Reference Price of the New Notes") will be equal to the Reference
Price of the Old Notes per $1,000 principal amount thereof. The Extension
Coupon of the New Notes will be determined by using the Reference Price of the
New Notes (equal to the Reference Price of the Old Notes if the Benchmark
Treasury Yield is 5.88% or lower) and a yield equal to the Benchmark Treasury
Yield plus 140 basis points. For each $1,000 principal amount of Old Notes
exchanged, the Holder thereof will receive $1,000 principal amount of New Notes.
An amount will be payable upon acceptance of the Old Notes for exchange by the
Company to any Holder who tenders, and does not withdraw, its Old Notes prior to
the Expiration Date equal to 1.50% of the principal amount of the Old Notes
exchanged in denominations of $1,000 or an integral multiple thereof.
The Extension Coupon and the reference prices will be determined as of 2:00
p.m., New York City time, on the second business day prior to the Expiration
Date (the "Extension Coupon Determination Date").
We are the Holder of Old Notes held for your account. A tender of such Old
Notes can be made only by us as the Holder and pursuant to your instructions.
The enclosed Letter of Transmittal is furnished to you for your information only
and cannot be used by you to tender Old Notes held by us for your account.
Beneficial owners of Old Notes whose Old Notes are held in the name of a broker,
dealer, commercial bank, trust company or other nominee must contact such
broker, dealer, commercial bank, trust company or other nominee if they desire
to exchange such Old Notes.
<PAGE>
We request that you advise us whether you wish us to tender any or all of the
Old Notes held by us for your account upon the terms and subject to the
conditions set forth in the Offering Circular and the Letter of Transmittal.
Your instructions to us should be forwarded as promptly as possible in order
to permit us to execute a Letter of Transmittal and tender your Old Notes on
your behalf in accordance with the terms of the Exchange Offer.
Your attention is directed to the following:
1. The Exchange Offer and withdrawal rights will expire at 5:00 p.m., New
York City time, on Thursday, July 23, 1998, unless extended.
2. The Company's obligation to exchange Old Notes for New Notes is subject to
certain conditions set forth in the Offering Circular under the caption "The
Exchange Offer--Conditions to the Exchange Offer."
3. Tenders of Old Notes may only be withdrawn prior to the Expiration Date.
4. Any transfer taxes with respect to the exchange and transfer of any Old
Notes pursuant to the Exchange Offer will be paid by the Company, except as
otherwise provided in Instruction 7 of the Letter of Transmittal.
If you wish to have us tender any or all of your Old Notes, please so instruct
us by completing, executing, detaching and returning to us the detachable
instruction form set forth below. An envelope to return your instructions is
enclosed. If you authorize the tender of your Old Notes, all such Old Notes
will be tendered unless otherwise specified on such instructions. Your
instruction should be forwarded to us in ample time to permit us to submit a
tender on your behalf before the Expiration Date.
The Exchange Offer is not being made to, and offers are not being solicited
from (nor will tenders of Old Notes be accepted from or on behalf of), Holders
in any jurisdiction in which the making of the Exchange Offer or acceptance for
exchange of the Old Notes would not be in compliance with the laws of that
jurisdiction. However, the Company may, in its sole discretion, take such
action as it may deem necessary to make the Exchange Offer in any such
jurisdiction, and may extend the Exchange Offer to Holders in that jurisdiction.
IMPORTANT: THE LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE THEREOF),
TOGETHER WITH THE OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
2
<PAGE>
Instruction With Respect to the Exchange Offer
The undersigned acknowledge(s) receipt of your letter, the Offering Circular
dated June 24, 1998 and the related Letter of Transmittal relating to the Old
Notes in connection with the Exchange Offer by the Company to exchange its New
Notes for up to $100,000,000 of the Old Notes that are validly tendered and
accepted for exchange, upon the terms and subject to the conditions set forth in
the Offering Circular. Pursuant to the Exchange Offer, exchanges will be made
on the basis of one Old Note for each New Note validly tendered and accepted for
exchange in the Exchange Offer.
This will instruct you to tender the number of Old Notes indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offering Circular and the Letter of Transmittal with
respect to the Old Notes tendered.
SIGN HERE
- -------------------------------- ------------------------------------
Signature Signature
(if more than one account holder)
- -------------------------------- ------------------------------------
Name (Please Print) Name (Please Print)
- -------------------------------- ------------------------------------
Address Telephone No. (including Area Code)
- -------------------------------- Date: -------------------------------
City, State and Postal Code
[ ] By checking this box, all Old Notes held by you for our account will be
tendered in the Exchange Offer. If fewer than all Old Notes are to be tendered,
we have checked the box below and indicated the aggregate number of Old Notes to
be tendered by you.
[ ] -------------------- Old Notes*
- -----------------------------
* Unless otherwise indicated, it will be assumed that all such Old Notes are to
be tendered.
3
<PAGE>
EXHIBIT T3E.5
LETTER TO DTC PARTICIPANTS
CIGNA CORPORATION
OFFER TO EXCHANGE
NOTES DUE 2033
FOR ANY AND ALL OF ITS OUTSTANDING
8.30% NOTES DUE 2023
- -------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THURSDAY, JULY 23, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
- -------------------------------------------------------------------------------
June 24, 1998
To DTC participants, including Brokers, Dealers, Commercial Banks, Trust Company
and Other Nominees:
CIGNA Corporation, a Delaware corporation (the "Company"), is offering upon
the terms and subject to the conditions set forth in the Offering Circular dated
June 24, 1998 (the "Offering Circular") and the accompanying Letter of
Transmittal (which together constitute the "Exchange Offer") to exchange an
aggregate principal amount of up to $100,000,000 of its Notes Due 2033 (the "New
Notes") for a like principal amount of its issued and outstanding 8.30% Notes
Due 2023 (the "Old Notes") from the registered holders (individually, a "Holder"
and collectively, the "Holders") thereof. The New Notes will evidence the same
class of debt as the Old Notes and will be issued pursuant to, and entitled to
the benefits of, an Indenture dated as of January 1, 1994, between the Company
and Marine Midland Bank (formerly Marine Midland Bank, N.A.), the trustee.
The New Notes will have the same 8.30% interest coupon as the Old Notes until,
but not including, January 15, 2023. The interest coupon for the final 10 years
of maturity will be calculated on the Extension Coupon Determination Date (as
defined below) using a fixed spread pricing formula. For the Old Notes, a price
(the "Reference Price of the Old Notes") will be determined using a specified
fixed spread pricing formula. Such Reference Price of the Old Notes will be
based on a yield to the maturity date of the Old Notes equal to (i) the yield on
the 6.125% U.S. Treasury Note due November 15, 2027 (the "Benchmark Treasury
Yield") plus (ii) 130 basis points. For the New Notes, a per annum interest
coupon (the "Extension Coupon") will be determined for the period from January
15, 2023 to the maturity date, January 15, 2033. This Extension Coupon
(expressed as a percentage with two decimal places) will be the lesser of (i)
8.30% per annum and (ii) a per annum interest rate at which the price of the New
Notes (the "Reference Price of the New Notes") will be equal to the Reference
Price of the Old Notes per $1,000 principal amount thereof. The Extension
Coupon of the New Notes will be determined by using the Reference Price of the
New Notes (equal to the Reference Price of the Old Notes if the Benchmark
Treasury Yield is 5.88% or lower) and a yield equal to the Benchmark Treasury
Yield plus 140 basis points. For each $1,000 principal amount of Old Notes
exchanged, the Holder thereof will receive $1,000 principal amount of New Notes.
An amount will be payable upon acceptance of the Old Notes for exchange by the
Company to any Holder who tenders, and does not withdraw, its Old Notes prior to
the Expiration Date equal to 1.50% of the principal amount of Old Notes
exchanged in denominations of $1,000 or an integral multiple thereof.
The Extension Coupon and the reference prices will be determined as of 2:00
p.m., New York City time, on the second business day prior to the Expiration
Date (the "Extension Coupon Determination Date").
Upon the terms and subject to the conditions of the Exchange Offer and
applicable law, the Company will exchange all Old Notes validly tendered (and
not withdrawn) pursuant to the Exchange Offer and accepted for exchange on the
fifth New York Stock Exchange trading day following the Expiration Date, or as
soon as possible thereafter (the "Settlement Date").
For your information and for forwarding to your clients for whom you hold
Notes registered in your name or in the name of your nominee, we are enclosing
the following documents:
<PAGE>
1. Offering Circular;
2. The Letter of Transmittal to be used by each Holder of Old Notes to
exchange Old Notes for New Notes;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if
Old Notes and all other required documents cannot be delivered to IBJ Schroder
Bank & Trust Company (the "Exchange Agent") by the Expiration Date, or the book-
entry transfer of such Old Notes cannot be completed by the Expiration Date;
4. A form of letter which may be sent to your clients for whose accounts you
hold Old Notes in your name or in the name of your nominee with space provided
for obtaining such clients' instructions with regard to the Exchange Offer;
5. A letter from the Company, regarding the Exchange Offer that may be sent
to your clients; and
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
PROMPTLY. PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON THURSDAY, JULY 23, 1998, UNLESS EXTENDED.
IMPORTANT: THE LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
THEREOF), TOGETHER WITH THE OLD NOTES AND ALL OTHER REQUIRED DOCUMENTS, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
In order to exchange Old Notes pursuant to the Exchange Offer, a duly executed
and properly completed Letter of Transmittal and any required signature
guarantees should be sent to the Exchange Agent, and certificates representing
the tendered Old Notes (or confirmation of a book-entry transfer) should be
delivered to the Exchange Agent, all in accordance with the instructions set
forth in the Letter of Transmittal and the Offering Circular.
The Company will, upon request, reimburse brokers, dealers, commercial banks,
trust companies and other nominees for reasonable and customary mailing and
handling expenses incurred by them in forwarding material to their customers.
The Company will pay or cause to be paid all transfer taxes, if any, with
respect to the transfer of any Old Notes to it pursuant to the Exchange Offer,
except as otherwise provided in Instruction 7 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer should be
addressed to, and additional copies of the enclosed materials may be obtained
from, MacKenzie Partners, Inc., the Information Agent, at the address and
telephone number contained in the Offering Circular. In addition, Holders may
contact Donaldson, Lufkin & Jenrette Securities Corporation, the financial
advisor, at the address and telephone number contained in the Offering Circular.
Very truly yours,
CIGNA CORPORATION
2
<PAGE>
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS IS INTENDED TO
CONSTITUTE YOU OR ANY PERSON THE AGENT OF THE COMPANY, IBJ SCHRODER BANK & TRUST
COMPANY, OR MACKENZIE PARTNERS, INC. OR ANY OF THEIR RESPECTIVE AFFILIATES, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT ON THEIR BEHALF OTHER
THAN STATEMENTS EXPRESSLY MADE IN THE OFFERING CIRCULAR OR THE LETTER OF
TRANSMITTAL OR USE ANY DOCUMENTS IN CONNECTION WITH THE EXCHANGE OFFER OTHER
THAN FOR THE PURPOSES DESCRIBED HEREIN.
3
<PAGE>
EXHIBIT T3E.6
DAVID B. GERGES, FSA, MAAA LOGO
SENIOR VICE PRESIDENT AND TREASURER
CIGNA CORPORATION One Liberty Place
1650 Market Street
Philadelphia, PA 19192-1560
Facsimile 215.761.5521
June 24, 1998
Dear Noteholder:
CIGNA Corporation (the "Company") is offering upon the terms and subject to
the conditions set forth in the enclosed Offering Circular dated June 24, 1998
(the "Offering Circular") and the accompanying Letter of Transmittal (which
together constitute the "Exchange Offer") to exchange an aggregate principal
amount of up to $100,000,000 of its Notes Due 2033 (the "New Notes") for a like
principal amount of its issued and outstanding 8.30% Notes Due 2023 (the "Old
Notes") from the registered holders thereof. The New Notes will evidence the
same class of debt as the Old Notes.
The New Notes will have the same 8.30% interest coupon as the Old Notes until,
but not including, January 15, 2023. The interest coupon for the final 10 years
of maturity will be calculated using a fixed spread pricing formula described in
the enclosed Offering Circular. Holders that tender and do not withdraw their
Old Notes will receive upon acceptance of the Old Notes by the Company a
participation fee equal to 1.50% of the principal amount tendered. The New
Notes will also be subject to a "make-whole redemption" at the option of the
Company as described in the Offering Circular. The Exchange Offer is explained
in detail in the enclosed Offering Circular and the accompanying Letter of
Transmittal. If you wish to participate in the Exchange Offer, the instructions
on how to exchange your Old Notes are in the enclosed materials. I encourage
you to carefully read these materials before making any decision with respect to
the Exchange Offer.
None of the Company, the Board of Directors of the Company, the Information
Agent or the Exchange Agent makes any recommendation to Holders of the Old Notes
as to whether to exchange or refrain from exchanging their Old Notes. In
addition, no one has been authorized to make any such recommendation. Holders
of Old Notes must make their own decision whether to exchange Old Notes pursuant
to the Exchange Offer and, if so, the aggregate principal amount of Old Notes to
exchange.
Holders of the Old Notes may obtain additional copies of the Offering Circular
by contacting MacKenzie Partners, Inc., the Information Agent, at (800) 322-2885
or (212) 929-5500. Holders of the Old Notes may obtain information regarding
the terms of the Exchange Offer by contacting Donaldson, Lufkin & Jenrette
Securities Corporation, the financial advisor, at (800) 334-1604 (toll free) or
(212) 892-3351 (call collect), attention: Paul S. Galant.
Very truly yours,
/s/ David B. Gerges
----------------------
David B. Gerges
Senior Vice President
and Treasurer
<PAGE>
EXHIBIT T3F
Exhibit T3F -- Cross Reference Sheet
CIGNA CORPORATION
CERTAIN SECTION OF THE INDENTURE RELATING TO SECTIONS 310 THROUGH 318,
INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
(S)310(a)(1) .............................. 609
(a)(2) .............................. 609
(a)(3) .............................. Not Applicable
(a)(4) .............................. Not Applicable
(b) .............................. 608
610
(S)311(a) .............................. 613
(b) .............................. 613
(S)312(a) .............................. 701
702(a)
(b) .............................. 702(b)
(c) .............................. 702(c)
(S)313(a) .............................. 703(a)
(b) .............................. 703(b)
(c) .............................. 703(a)
(d) .............................. 703(b)
(S)314(a) .............................. 704
(a)(4) .............................. 101
(b) .............................. Not Applicable
(c)(1) .............................. 102
(c)(2) .............................. 102
(c)(3) .............................. Not Applicable
(d) .............................. Not Applicable
(e) .............................. 102
(S)315(a) .............................. 601
(b) .............................. 602
(c) .............................. 601
(d) .............................. 601
(e) .............................. 514
(S)316(a) .............................. 101
(a)(1)(A) .............................. 502
512
(a)(1)(B) .............................. 513
(a)(2) .............................. Not Applicable
(b) .............................. 508
(c) .............................. 104(c)
(S)317(a)(1) .............................. 503
(a)(2) .............................. 504
(b) .............................. 1003
(S)318(a) .............................. 107
</TABLE>
16
<PAGE>
Conformed Copy
Exhibit 99
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
------------------
Marine Midland Bank
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
John J. Mazzarella
Vice President
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-1792
(Name, address and telephone number of agent for service)
CIGNA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 06-1059331
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Liberty Place, 1650 Market St., P.O. Box 7716, Philadelphia,
Pennsylvania, 19192-1550
(215) 761-1000
(Address, including zip code, and telephone number,
including area code of registrant's principal executive offices)
Thomas J. Wagner
Executive Vice President and General Counsel
CIGNA Corporation
One Liberty Place, 1650 Market St., P.O. Box 7716, Philadelphia,
Pennsylvania, 19192-1550
(215) 761-6027
(Name, Address, Including Zip Code, and Telephone Number, Including
Area Code, Of Agent for Service)
Debt Securities
(Title of Indenture Securities)
<PAGE>
General
Item 1. General Information.
-------------------
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
-------------------------
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None
<PAGE>
Item 16. List of Exhibits.
----------------
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C> <C> <C>
T1A(i) * - Copy of the Organization Certificate of Marine Midland
Bank.
T1A(ii) * - Certificate of the State of New York Banking Department
dated December 31, 1993 as to the authority of
Marine Midland Bank to commence business.
T1A(iii) - Not applicable.
T1A(iv) * - Copy of the existing By-Laws of Marine Midland Bank as
adopted on January 20, 1994.
T1A(v) - Not applicable.
T1A(vi) * - Consent of Marine Midland Bank required by Section 321(b)
of the Trust Indenture Act of 1939.
T1A(vii) - Copy of the latest report of condition of the trustee
(March 31, 1998), published pursuant to law or
the requirement of its supervisory or examining
authority.
T1A(viii) - Not applicable.
T1A(ix) - Not applicable.
</TABLE>
* Exhibits previously filed with the Securities and Exchange
Commission with Registration No. 33-53693 and incorporated herein
by reference thereto.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee,
Marine Midland Bank, a banking corporation and trust company organized under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of New York and State of New York on the 22nd day of June, 1998.
MARINE MIDLAND BANK
By: /s/ Robert A. Conrad
---------------------------------
Robert A. Conrad
Vice President
<PAGE>
Exhibit T1A (vii)
Board of Governors of the
Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance
Corporation
OMB Number: 3064-0052
Office of the Comptroller
of the Currency
OMB Number: 1557-0081
Federal Financial Institutions Examination Council Expires March 31, 2000
- --------------------------------------------------------------------------------
Please refer to page i, -----
Table of Contents, for 1
the required disclosure -----
of estimated burden.
- --------------------------------------------------------------------------------
Consolidated Reports of Condition and Income for
A Bank With Domestic and Foreign Offices--FFIEC 031
Report at the close of business March 31, 1998
This report is required by law; 12 U.S.C. (S)324 (State member banks); 12 U.S.C.
(S) 1817 (State nonmember banks); and 12 U.S.C. (S)161 (National banks).
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National Banks.
I, Gerald A. Ronning, Executive VP & Controller
---------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and Income
(including the supporting schedules) have been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and are true
to the best of my knowledge and believe.
/s/ Gerald A. Ronning
-------------------------------------------------
Signature of Officer Authorized to Sign Report
4/27/98
-------------------------------------------------
Date of Signature
(971231)
-----------
(RCRI 9999)
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) and declare that it has
been examined by us and to the best of our knowledge and belief has been
prepared in conformance with the instructions issued by the appropriate Federal
regulatory authority and is true and correct.
/s/ Malcolm Burnett
-------------------------------------------------
Director (Trustee)
/s/ Bernard J. Kennedy
-------------------------------------------------
Director (Trustee)
/s/ Sal H. Alfiero
-------------------------------------------------
Director (Trustee)
Submission of Reports
Each Bank must prepare its Reports of Condition and Income either:
(a) in automated form and then file the computer data file directly with the
banking agencies' collection agent, Electronic Data System Corporation
(EDS), by modem or computer diskette; or
(b) in hard-copy (paper) form and arrange for another party to convert the paper
report to automated for. That party (if other than EDS) must transmit the
bank's computer data file to EDS
To fulfill the signature and attestation requirement for the Reports of
Condition and Income for this report date, attach this signature page to the
hard-copy of the completed report that the bank places in its files.
- --------------------------------------------------------------------------------
FDIC Certificate Number | 0 | 0 | 5 | 8 | 9 |
---------------------
(RCRI 9030)
<PAGE>
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
Marine Midland Bank of Buffalo
Name of Bank City
in the state of New York, at the close of business
March 31, 1998
ASSETS
Thousands
of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances
currency and coin ........................................ $ 1,256,485
Interest-bearing balances ................................ 2,022,831
Held-to-maturity securities .............................. 0
Available-for-sale securities ............................ 3,703,793
Federal funds sold and securities purchased
under agreements to resell ............................... 1,758,449
Loans and lease financing receivables:
Loans and leases net of unearned
income ..................................21,468,541
LESS: Allowance for loan and lease
losses .................................. 404,696
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allowance, and reserve............................ 21,063,845
Trading assets ........................................... 885,006
Premises and fixed assets (including
capitalized leases) ...................................... 215,178
Other real estate owned ..................................... 13,130
Investments in unconsolidated
subsidiaries and associated companies ....................... 0
Customers' liability to this bank on
acceptances outstanding ..................................... 28,219
Intangible assets ........................................... 471,296
Other assets ................................................ 501,251
Total assets ................................................ 31,919,483
<PAGE>
LIABILITIES
Deposits:
In domestic offices ...................................... 20,966,355
Noninterest-bearing ................... 3,689,470
Interest-bearing ...................... 17,276,885
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs ...................................... 4,101,409
Noninterest-bearing ................... 0
Interest-bearing ...................... 4,101,409
Federal funds purchased and securities sold
under agreements to repurchase ........................... 814,706
Demand notes issued to the U.S. Treasury .................... 309,243
Trading Liabilities ......................................... 143,683
Other borrowed money:
With a remaining maturity of one year
or less .................................................. 1,878,712
With a remaining maturity of more than
one year through three years ............................. 70,086
With a remaining maturity of more than
three years .............................................. 54,547
Bank's liability on acceptances
executed and outstanding .................................... 28,219
Subordinated notes and debentures ........................... 497,837
Other liabilities ........................................... 822,464
Total liabilities ........................................... 29,687,261
EQUITY CAPITAL
Perpetual preferred stock and related
surplus ..................................................... 0
Common Stock ................................................ 205,000
Surplus ..................................................... 1,984,728
Undivided profits and capital reserves ...................... 19,101
Net unrealized holding gains (losses)
on available-for-sale securities ............................ 23,393
Cumulative foreign currency translation
adjustments ................................................. 0
Total equity capital ........................................ 2,232,222
Total liabilities, limited-life
preferred stock, and equity capital ......................... 31,919,483
