<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1995 Commission File Number 1-9254
UNUM Corporation
(Exact name of registrant as specified in its charter)
Delaware 01-0405657
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2211 Congress Street, Portland, Maine 04122
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (207) 770-2211
NONE
(Former name, former address, and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at March 31, 1995
Common stock, $0.10 par value 72,583,638 shares
<PAGE>
UNUM Corporation and Subsidiaries
Form 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income - Three Months Ended March 31,
1995, and 1994 (Unaudited)
Consolidated Balance Sheets as of March 31, 1995, (Unaudited)
and December 31, 1994
Consolidated Statements of Cash Flows - Three Months Ended March
31, 1995, and 1994 (Unaudited)
Notes to Consolidated Financial Statements (Unaudited)
Independent Accountant's Review Report
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
UNUM Corporation and Subsidiaries
Form 10-Q
C O N S O L I D A T E D S T A T E M E N T S O F I N C O M E
Three Months Ended
March 31,
(Unaudited - Dollars in millions,
except per common share data)
1995 1994
Revenues
Premiums $734.0 $652.7
Investment income 191.9 191.1
Net realized investment gains 10.9 11.9
Fees and other income 18.3 19.4
Total revenues 955.1 875.1
Benefits and expenses
Benefits to policyholders 571.8 479.3
Interest credited 57.1 61.0
Operating expenses 171.1 163.4
Commissions 92.1 87.9
Increase in deferred policy acquisition costs (29.7) (30.6)
Interest expense 7.3 3.3
Total benefits and expenses 869.7 764.3
Income before income taxes 85.4 110.8
Income taxes
Current 15.7 15.6
Deferred 6.3 18.1
Total income taxes 22.0 33.7
Net income $ 63.4 $ 77.1
Net income per common share $ 0.87 $ 1.02
See notes to consolidated financial statements.
<PAGE>
UNUM Corporation and Subsidiaries
Form 10-Q
C O N S O L I D A T E D B A L A N C E S H E E T S
March 31, 1995 December 31,
(Dollars in millions) (Unaudited) 1994
Assets
Investments
Fixed maturities:
Held to maturity-principally at amortized cost
(fair value: 1995-$6,354.5; 1994-$6,168.6) $ 6,251.8 $ 6,227.2
Available for sale-at fair value (amortized cost:
1995-$1,924.2; 1994-$1,701.4) 1,922.5 1,640.6
Equity securities available for sale-at fair value
(cost: 1995-$493.3; 1994-$492.2) 662.4 627.9
Mortgage loans 1,208.8 1,216.3
Real estate, net 203.9 190.8
Policy loans 203.3 201.0
Other long-term investments 37.2 38.1
Short-term investments 137.7 291.9
Total investments 10,627.6 10,433.8
Cash 32.1 36.1
Accrued investment income 187.5 195.9
Premiums due 199.6 189.7
Deferred policy acquisition costs 1,057.2 1,035.2
Property and equipment, net 154.8 153.4
Other assets 772.6 737.2
Separate account assets 385.4 345.9
Total assets $13,416.8 $13,127.2
(Continued on next page)
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UNUM Corporation and Subsidiaries
Form 10-Q
C O N S O L I D A T E D B A L A N C E S H E E T S
March 31, 1995 December 31,
(Dollars in millions) (Unaudited) 1994
Liabilities and Stockholders' Equity
Liabilities
Future policy benefits $ 1,635.1 $ 1,591.6
Unpaid claims and claim expenses 3,975.3 3,853.9
Other policyholder funds 3,877.7 4,058.8
Income taxes
Current 41.3 12.4
Deferred 386.9 348.6
Notes payable 550.4 428.7
Other liabilities 531.6 571.9
Separate account liabilities 385.4 345.9
Total liabilities 11,383.7 11,211.8
Stockholders' equity
Preferred stock, par value $0.10 per share, authorized
10,000,000 shares, none issued
Common stock, par value $0.10 per share, authorized
120,000,000 shares, issued 99,987,958 shares 10.0 10.0
Additional paid-in capital 1,082.9 1,080.5
Unrealized gains on available for sale securities,
net of deferred taxes 110.5 49.6
Unrealized foreign currency translation adjustment (15.9) (23.7)
Retained earnings 1,553.2 1,507.2
2,740.7 2,623.6
Less:
Treasury stock, at cost (1995-27,404,320 shares;
1994-27,575,430 shares) 702.4 706.6
Restricted stock deferred compensation 5.2 1.6
Total stockholders' equity 2,033.1 1,915.4
Total liabilities and stockholders' equity $13,416.8 $13,127.2
See notes to consolidated financial statements.
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UNUM Corporation and Subsidiaries
Form 10-Q
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W S
Three Months Ended
March 31,
(Unaudited- Dollars in millions) 1995 1994
Operating activities:
Net income $ 63.4 $ 77.1
Adjustments to reconcile net income to net cash provided
by operating activities:
Increase in future policy benefits and unpaid claims
and claim expenses 179.5 113.8
Increase in amounts receivable under reinsurance
agreements (6.8) (5.3)
Increase in income tax liability 32.3 23.7
Increase in deferred policy acquisition costs (29.7) (30.6)
Other (61.7) (23.3)
Net cash provided by operating activities 177.0 155.4
Investing activities:
Maturities of fixed maturities held to maturity 181.8 235.7
Maturities of fixed maturities available for sale 16.0 10.5
Sales of fixed maturities available for sale 128.4 133.6
Sales of equity securities available for sale 94.0 65.8
Sales and maturities of other investments 59.7 42.0
Purchases of fixed maturities held to maturity (216.3) (292.3)
Purchases of fixed maturities available for sale (369.7) (259.3)
Purchases of equity securities available for sale (82.3) (62.2)
Purchases of other investments (67.6) (7.0)
Net decrease in short-term investments 154.9 34.4
Net additions to property and equipment (6.3) (4.6)
Net cash used in investing activities (107.4) (103.4)
Financing activities:
Deposits and interest credited to investment contracts 159.0 157.0
Maturities and withdrawals from investment contracts (340.1) (198.5)
Dividends to stockholders (17.4) (15.1)
Treasury stock acquired -- (29.2)
Proceeds from notes payable -- 9.9
Repayment of notes payable (1.3) --
Net increase in short-term debt 123.0 28.7
Other 2.8 (3.1)
Net cash used in financing activities $ (74.0) $ (50.3)
(Continued on next page)
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UNUM Corporation and Subsidiaries
Form 10-Q
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W S
Three Months Ended
March 31,
(Unaudited-Dollars in millions) 1995 1994
Effect of exchange rate changes on cash $ 0.4 $ 0.6
Net increase (decrease) in cash (4.0) 2.3
Cash at beginning of year 36.1 20.8
Cash at end of period $ 32.1 $ 23.1
Supplemental disclosures of cash flow information:
Cash paid (received) during the period for:
Income taxes $ (12.7) $ 9.0
Interest $ 4.3 $ 1.3
See notes to consolidated financial statements.
<PAGE>
UNUM Corporation and Subsidiaries
Form 10-Q
Notes to Consolidated Financial Statements (Unaudited)
March 31, 1995
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
applicable to stock life insurance companies for interim financial
information and with the requirements of Form 10-Q. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles applicable to stock life insurance companies
for complete financial statements. In the opinion of management, all
adjustments, consisting of normal recurring accruals, considered necessary
for a fair presentation have been included. Interim results for the three
month period ended March 31, 1995, are not necessarily indicative of the
results that may be expected for the year ending December 31, 1995. For
further information, refer to the audited consolidated financial statements
and footnotes included in the 1994 annual report to stockholders of UNUM
Corporation and subsidiaries ("UNUM").
Certain 1994 amounts have been reclassified in 1995 for comparative
purposes.
Note 2. Accounting Changes
Effective January 1, 1995, UNUM adopted Financial Accounting Standard
("FAS") No. 114, "Accounting by Creditors for Impairment of a Loan" and FAS
No. 118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures," which define the principles to measure and
record an impaired loan. When it is probable that UNUM will be unable to
collect all amounts of principal and interest due according to the
contractual terms of a loan agreement, the loan is deemed impaired. Once a
loan is determined to be impaired, an allowance for probable losses is
established for the difference between the carrying amount of the loan and
its estimated value. The estimated value is based on either the present
value of expected future cash flows discounted using the loan's effective
interest rate, the loan's observable market price or the fair value of the
collateral. The adoption of FAS 114 and FAS 118 did not have a material
effect on UNUM's results of operations or financial position.
Note 3. Business Restructuring and Other Charges
During the first quarter of 1995, UNUM utilized $4.0 million of the $12.3
million liability recorded in the Disability Insurance segment during the
fourth quarter of 1994, which related to the restructuring of the
individual disability business and resulting consolidation of home office
operations in UNUM Life Insurance Company of America ("UNUM America"). The
$4.0 million, which was paid in the first quarter of 1995, was comprised of
$3.4 million for severance costs for 120 field and 12 home office employees
and $0.6 million of lease costs.
In connection with the organizational changes within UNUM America, a
voluntary severance plan was announced in the first quarter of 1995, which
offered eligible UNUM America employees the right to certain severance
benefits for each year of service. Management expects to incur a one-time
expense in the second quarter of 1995 of approximately $4.5 million, for
severance costs related to the 229 UNUM America employees who elected to
accept the voluntary severance plan. These severance costs will be paid in
the second quarter of 1995.
Note 4. Earnings Per Share
The weighted average number of shares outstanding used to calculate
earnings per share was approximately 72,466,000 and 75,608,000 for first
quarter 1995 and 1994, respectively. The assumed exercise of outstanding
stock options would not result in a material dilution of earnings per
share.
Note 5. Dividends to Stockholders
On April 11, 1995, UNUM's Board of Directors declared a twenty-six and one
half cents per share cash dividend. The dividend is payable on May 19,
1995, to common stockholders of record at the close of business on April
24, 1995. During the first three months of 1995, a twenty-four cents per
share cash dividend was paid on February 17, 1995.
Note 6. Notes Payable
Notes payable consisted of the following at March 31, 1995:
(Dollars in millions)
Short-term debt:
Commercial paper $234.9
Bank note payable, with interest rate of 6.325% 100.0
Other notes payable, with weighted average interest rate of 2.7% 34.7
Total short-term debt 369.6
Long-term debt:
Medium-term notes payable, due 1996 to 2024,
with interest rates ranging from 5.1% to 7.5% 180.8
Total notes payable $550.4
At March 31, 1995, UNUM Corporation had a $500 million committed
revolving credit facility which expires on October 1, 1999. UNUM's
commercial paper program is supported by the revolving credit facility
and is available for general liquidity needs, capital expansion,
acquisitions or stock repurchase. The committed revolving credit
facility contains certain covenants which, among other provisions,
require maintenance of certain levels of stockholders' equity and limits
on level of debt. At March 31, 1995, approximately $165 million was
available for additional financing under the existing revolving credit
facility. The commercial paper outstanding at March 31, 1995, had a
weighted average interest rate of approximately 6.3%.
On May 11, 1995, UNUM Corporation issued $172.5 million of 8.80% Monthly
Income Debt Securities ("MIDS") (Junior Subordinated Deferrable Interest
Debentures, Series A), which mature in 2025. UNUM intends to use the
net MIDS proceeds to repay short-term debt and for general corporate
purposes.
Note 7. Litigation
In the normal course of its business operations, UNUM is involved in
litigation from time to time with claimants, beneficiaries and others,
and a number of lawsuits were pending at March 31, 1995. In the opinion
of management, the ultimate liability, if any, arising from this
litigation is not expected to have a material adverse effect on the
consolidated financial position or the consolidated operating results of
UNUM.
On December 29, 1993, UNUM filed a suit in the United States District
Court for the District of Maine, seeking a federal income tax refund. The
suit is based on a claim for a deduction in certain prior tax years, for
$652 million in cash and stock distributed to policyholders in connection
with the 1986 conversion of Union Mutual Life Insurance Company to a stock
company. Although UNUM believes its claims are meritorious, the United States
is aggressively resisting the claims and the ultimate recovery, if any, cannot
be determined at this time.
Note 8. New Accounting Pronouncement
In March 1995, the Financial Accounting Standards Board issued Financial
Accounting Standard ("FAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of," which
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets
to be held and used and for long-lived assets and certain identifiable
intangibles to be disposed of. UNUM is required to adopt FAS 121 by
January 1, 1996. UNUM has not yet determined what effect the adoption
of FAS 121 will have on its results of operations or financial
position.
Note 9. Segment Information
To more clearly reflect UNUM's management of its businesses and to more
appropriately group its product portfolios, UNUM began reporting its
operations, effective January 1, 1995, principally in four business
segments: Disability Insurance, Special Risk Insurance, Colonial Products
and Retirement Products. For comparative purposes, prior period
information has been restated to reflect reporting in these segments.
The Disability Insurance segment includes disability products offered in
North America, the United Kingdom and Japan including: group long term
disability, individual disability, short term disability, association group
disability, disability reinsurance and long term care insurance. The
Special Risk Insurance segment includes group life, special risk accident
insurance, non-disability reinsurance operations, reinsurance underwriting
management operations and other special risk insurance products, including
accidental death and dismemberment and dental insurance. The Colonial
Products segment includes Colonial Companies, Inc. and subsidiaries, which
offer payroll-deducted, voluntary employee benefits including personal
accident and sickness, cancer and life insurance products to employees at
their worksites. The Retirements Products segment includes tax sheltered
annuities and products which are no longer actively marketed by UNUM
including guaranteed investment contracts, deposit administration accounts
and 401(k) plans. Corporate includes transactions which are generally non-
insurance related.
<PAGE>
Note 9. Segment Information (continued)
Summarized financial information for the four business segments and
Corporate is as follows:
Three Months Ended
March 31,
(Dollars in millions) 1995 1994
Revenues
Disability Insurance $ 559.4 $ 499.7
Special Risk Insurance 180.5 158.8
Colonial Products 127.0 116.4
Retirement Products 86.4 97.6
Corporate 1.8 2.6
Total revenues $ 955.1 $ 875.1
Income (loss) before income taxes
Disability Insurance $ 50.8 $ 67.6
Special Risk Insurance 17.0 17.7
Colonial Products 17.1 15.8
Retirement Products 6.7 13.4
Corporate (6.2) (3.7)
Total income before income taxes 85.4 110.8
Income taxes 22.0 33.7
Net income $ 63.4 $ 77.1
March 31, December 31,
(Dollars in millions) 1995 1994
Identifiable Assets
Disability Insurance $ 6,378.6 $ 6,131.9
Special Risk Insurance 893.6 846.8
Colonial Products 891.7 846.2
Retirement Products 4,543.0 4,504.0
Corporate 363.7 451.3
Individual Participating Life and Annuity 346.2 347.0
Total assets $13,416.8 $13,127.2
<PAGE>
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
To the Board of Directors and Stockholders
UNUM Corporation
We have reviewed the accompanying consolidated balance sheet of UNUM
Corporation and subsidiaries as of March 31, 1995, and the related
consolidated statements of income and cash flows for the three-month
periods ended March 31, 1995 and 1994. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND L.L.P.
Portland, Maine
April 25, 1995, except for Note 6 for
which the date is May 11, 1995
<PAGE>
UNUM Corporation and Subsidiaries
Form 10-Q
March 31, 1995
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Consolidated Financial
Statements (Unaudited) and Notes to Consolidated Financial Statements
(Unaudited) included elsewhere in the Form 10-Q.
Revenues for UNUM for first quarter 1995 were $955.1 million as compared
with $875.1 million for first quarter 1994. Net income for the quarter
ended March 31, 1995, was $63.4 million or $0.87 per share as compared with
net income of $77.1 million or $1.02 per share for the same quarter in
1994.
To more clearly reflect UNUM's management of its businesses and to more
appropriately group its product portfolios, UNUM began reporting its
operations, effective January 1, 1995, principally in four business
segments: Disability Insurance, Special Risk Insurance, Colonial Products
and Retirement Products. Corporate includes transactions that are
generally non-insurance related. For comparative purposes, the prior
period information has been restated to reflect reporting in these
segments.
Disability Insurance Segment. The Disability Insurance segment includes
disability products offered in North America, the United Kingdom and Japan
including: group long term disability, individual disability, short term
disability, association group disability, disability reinsurance and long
term care insurance.
Special Risk Insurance Segment. The Special Risk Insurance segment
includes group life, special risk accident insurance, non-disability
reinsurance operations, reinsurance underwriting management operations and
other special risk insurance products, including accidental death and
dismemberment and dental insurance.
Colonial Products Segment. The Colonial Products segment includes Colonial
Companies, Inc. and subsidiaries, which offer payroll-deducted, voluntary
employee benefits including accident and sickness, cancer and life
insurance products to employees at their worksites.
Retirement Products Segment. The Retirement Products segment includes tax
sheltered annuities, and products which are no longer actively marketed by
UNUM including guaranteed investment contracts, deposit administration
accounts and 401(k) plans.
<PAGE>
Premiums:
Premiums for the three months ended March 31, 1995, and 1994, are
summarized by segment in the table below. For the three months ended March
31, 1995, and 1994, claim block acquisitions generated one-time premium for
the Disability Insurance segment of $13.2 million and $2.1 million,
respectively, for group long term disability ("group LTD"), and $4.3
million in 1995 for long term care insurance. Management intends to pursue
additional claim block acquisitions in the future.
Three Months Ended
March 31,
(Dollars in millions) 1995 1994 Change
Disability Insurance
Group LTD $265.7 $231.7 14.7%
UNUM Limited 26.0 22.5 15.6
Individual Disability 89.3 83.5 6.9
Short Term Disability 31.8 27.6 15.2
Other Disability Insurance 38.2 32.4 17.9
Total 451.0 397.7 13.4
Special Risk Insurance
Group Life 85.9 74.2 15.8
Other Special Risk Products 73.3 63.4 15.6
Total 159.2 137.6 15.7
Colonial Products 116.2 108.3 7.3
Retirement Products 7.6 9.1 (16.5)
Total premiums $734.0 $652.7 12.5%
<PAGE>
Income (Loss) Before Income Taxes:
Income (loss) before income taxes for the four business segments and
Corporate for the three months ended March 31, 1995, and 1994, was as
follows:
Three Months Ended
March 31,
(Dollars in millions) 1995 1994 Change
Disability Insurance $ 50.8 $ 67.6 $ (16.8)
Special Risk Insurance 17.0 17.7 (0.7)
Colonial Products 17.1 15.8 1.3
Retirement Products 6.7 13.4 (6.7)
Corporate (6.2) (3.7) (2.5)
Total $ 85.4 $110.8 $ (25.4)
During the first quarter of 1995, UNUM reported decreased income before
income taxes, as compared with the same period in 1994, which was primarily
attributable to unfavorable claims experience in certain disability
businesses reported in the Disability Insurance segment, decreased interest
spread margins on tax sheltered annuity products as reported in the
Retirement Products segment and increased interest expense as reported in
Corporate. During the first quarter of 1995, UNUM's United Kingdom
affiliate, UNUM Limited, was adversely affected by the continuation of
unfavorable claims experience, which began to emerge in late 1994, in its
group long term disability business. Management is evaluating this
unfavorable claims experience in the United Kingdom to determine the need
for pricing actions, changes in underwriting standards or risk management
programs.
Disability Insurance Segment:
During the first quarter of 1995, the Disability Insurance segment reported
decreased income before income taxes, as compared with the same period in
1994, which was primarily attributable to unfavorable claims experience in
certain disability businesses and the inclusion of the results of UNUM
Japan's operations in the Disability Insurance segment effective January 1,
1995. These decreases were partially offset by continued expense
management and premium growth.
During the first quarter of 1995, UNUM Limited's group long term disability
business was adversely affected by the continuation of unfavorable claims
experience, which began to emerge in late 1994. Management is evaluating
this unfavorable claims experience in the United Kingdom to determine the
need for pricing actions, changes in underwriting standards or risk
management programs.
The individual disability business reported higher claim levels in the
first quarter of 1995, as compared with the same period in 1994. However,
the claim levels of the first quarter of 1995 showed improvement as
compared with the claim levels reported in the later part of 1994.
Throughout 1994, UNUM's individual disability business in the United States
experienced a higher incidence of new claims and a disproportionate number
of larger claims that management has attributed to certain geographical and
occupational segments, particularly physicians. As a result, in the third
quarter of 1994 UNUM increased reserves by $192.4 million. These increased
reserves reflected management's expectations for morbidity trends for the
existing individual disability business. It is not possible to predict
whether morbidity trends will be consistent with UNUM's assumptions.
During the first quarter of 1995, group LTD was unfavorably affected by an
increased benefit ratio, which was primarily attributable to increased
levels of incurred but not reported ("IBNR") reserves. IBNR reserves,
which are established to fund anticipated case reserves for claims which
have been incurred but not reported to UNUM, have increased as a function
of the increased incidence levels of the last five quarters. Partially
offsetting the increased benefit ratio was continued improvement in claim
recoveries, which management believes can be attributed to risk management
programs. Management continues to address the unfavorable claim trends in
group LTD by increasing prices on selected new and inforce business,
implementing more stringent underwriting guidelines, and strengthening risk
management programs. Management believes these actions will strengthen
UNUM's ability to deal with these claim trends, and that the level of
earnings of the group long term disability product will be a function of
the effectiveness of these continuing actions and the time required for
these actions to take effect.
Special Risk Insurance Segment:
The Special Risk Insurance segment reported a decrease in income before
income taxes for the three months ended March 31, 1995, as compared with
the corresponding period in 1994. The decrease was primarily due to
reduced fee income from the reinsurance underwriting management operations
and unfavorable claims experience in special risk accident insurance and
certain reinsurance pools. Partially offsetting these decreases was strong
premium growth, primarily attributed to higher sales and rate increases
imposed on certain portions of the group life business. Due to the nature
of the risks underwritten and the relative size of the blocks of
businesses, several of the Special Risk Insurance segment's products can
exhibit claims variability.
Colonial Products Segment:
In first quarter 1995, increased investment income and premium growth,
partially offset by a higher expense ratio, resulted in increased income
before income taxes for the Colonial Products segment. Premium growth for
the quarter was driven by sales growth over the last three quarters and the
continuing benefits from enhanced customer conservation programs. The
expense ratio increased primarily because of costs incurred in the
continuation of the sales organization realignment and product development
costs.
The Colonial Products segment's benefit ratio was relatively unchanged in
first quarter 1995, as compared with first quarter 1994. Management
expects the benefit ratio to increase in the future as Colonial continues
to shift its product mix toward products with higher benefit ratios, lower
expense ratios and better persistency.
Retirement Products Segment:
Income before income taxes decreased in the first quarter of 1995 as
compared with the same period in 1994, primarily due to lower interest
spread margins on tax sheltered annuities. Management expects the lower
interest spread margins on tax sheltered annuities to continue, which may
reduce future earnings for the Retirement Products segment. During 1994,
UNUM increased investments in tax-exempt securities, which have also
contributed to the reduced level of income before income taxes for the
segment. Although investments in tax-exempt securities resulted in
increased consolidated net income, these investments reduced the Retirement
Products segment's income before income taxes by approximately $2.4 million
and $1.2 million for the first quarter of 1995 and 1994, respectively.
The reduced asset base under management for guaranteed investment contracts
("GICs"), deposit administration contracts ("DAs") and 401(k) plans has
also resulted in lower revenues from investment and fee income and reduced
amounts of interest credited and operating expenses. Management expects
continued decreases in the amounts of investment income and interest
credited as the related GICs, DAs and 401(k) contracts mature or terminate.
Management expects future earnings for these closed blocks of businesses to
decline, reflecting their run-off nature.
Corporate:
The increased loss before income taxes in Corporate for the first quarter
of 1995 was primarily attributable to increased interest expense, as
compared with first quarter 1994. Effective January 1, 1995, the
operations of UNUM Japan are reported in the Disability Insurance segment.
Costs related to the investment in Japan prior to January 1, 1995, are
reported in Corporate.
Business Restructuring and Other Charges:
During the first quarter of 1995, UNUM utilized $4.0 million of the $12.3
million liability recorded in the Disability Insurance segment during the
fourth quarter of 1994, which related to the restructuring of the
individual disability business and resulting consolidation of home office
operations in UNUM Life Insurance Company of America ("UNUM America"). The
$4.0 million, which was paid in the first quarter of 1995, was comprised of
$3.4 million for severance costs for 120 field and 12 home office employees
and $0.6 million of lease costs.
In connection with the organizational changes within UNUM America, a
voluntary severance plan was announced in the first quarter of 1995, which
offered eligible UNUM America employees the right to certain severance
benefits for each year of service. Management expects to incur a one-time
expense in the second quarter of 1995 of approximately $4.5 million, for
severance costs related to the 229 UNUM America employees who elected to
accept the voluntary severance plan. These severance costs will be paid in
the second quarter of 1995.
Investments:
UNUM has a fairly conservative investment philosophy, with a portfolio that
is concentrated in investment grade bonds. UNUM evaluates total expected
return after consideration of all associated expenses and losses, within
criteria established for each product line. Product line investment
strategies are developed to complement business risks by meeting the
liquidity and solvency requirements of each product. UNUM purchases assets
whose maturities, expected cash flows and prepayment conditions are
consistent with these strategies. The nature and quality of the types of
investments comply with policies established by management, which are more
stringent overall than the statutes and regulations imposed by the
jurisdictions in which UNUM's insurance subsidiaries are licensed.
UNUM's investments are reported in the consolidated financial statements
net of any allowances for probable losses. Allowances are established
based on a review of specific assets as well as the overall portfolio,
considering the carrying value of the underlying assets. If a decline in
market value is considered to be other than temporary, the investment is
reduced to estimated net realizable value and the reduction is recorded as
a realized investment loss. UNUM discontinues the accrual of investment
income on invested assets when it is determined that collectability is
doubtful. Management monitors the risk associated with the invested asset
portfolio and regularly reviews and adjusts the allowance for probable
losses.
At March 31, 1995, the composition of UNUM's $10,627.6 million of invested
assets was 76.9% fixed maturities, 11.4% mortgage loans, 6.2% equity
securities, 1.9% real estate and 3.6% other invested assets.
Fixed Maturities:
At March 31, 1995, and December 31, 1994, the fixed maturity portfolio
included $137.2 million and $193.8 million of below investment grade bonds
(below "Baa"), which represented 1.7% and 2.5% of the fixed maturity
portfolio, respectively. These bonds had associated market values of
$135.1 million and $193.4 million, respectively. Virtually all of the
nonconvertible, below investment grade bonds were purchased at investment
grade, but were subsequently downgraded. UNUM's investment policy is to
invest primarily in fixed maturities of investment grade quality. Selected
purchases of convertible subordinated debentures, which UNUM considers to
be part of its investment strategy for equity securities, have contributed
to the amount of below investment grade bonds. Fixed maturity ratings are
obtained from external rating agencies, and if not externally rated, are
rated by UNUM internally using similar methods. Management does not expect
any risks or uncertainties associated with below investment grade bonds to
have a significant effect on UNUM's consolidated financial position or
results of operations. The percentage of fixed maturities delinquent 60
days or more compared to total fixed maturities was 0.01% at March 31,
1995, and 0.25% at December 31, 1994.
Mortgages:
At March 31, 1995, and December 31, 1994, UNUM's mortgage loans were
$1,208.8 million and $1,216.3 million, respectively. Management
establishes allowances for mortgage loans based upon a review of individual
loans and the overall loan portfolio, considering the value of the
underlying collateral. UNUM uses a comprehensive rating system to evaluate
the investment and credit risk of each mortgage loan and to target specific
properties for inspection and reevaluation. The percentage of mortgage
loans delinquent sixty days or more on a contract delinquency basis was
2.3% and 1.8% at March 31, 1995, and December 31, 1994, respectively.
Overall, management believes that its mortgage loan portfolio is well
diversified geographically and among property types. UNUM's incidence of
new problem mortgage loans continued to decline in first quarter 1995 as
overall economic activity improved modestly, and many of the real estate
markets in which UNUM has mortgage loans stabilized. Management expects a
modest level of additional delinquencies and problem loans in the future.
Management believes the allowance provided on mortgage loans as of March
31, 1995, is adequate to cover probable losses.
Realized investment losses related to restructured and impaired mortgage
loans during first quarter 1995 amounted to $0.7 million, compared with
$3.8 million for the same period in 1994. Impaired mortgage loans as of
March 31, 1995, are not expected to have a significant impact on UNUM's
results of operations, liquidity, or capital resources.
Effective January 1, 1995, UNUM adopted Financial Accounting Standard
("FAS") No. 114, "Accounting by Creditors for Impairment of a Loan," and
FAS No. 118, "Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosures," which defined the principles to measure and
record a loan when it is probable that a creditor will be unable to collect
all amounts due according to the contractual terms of the loan agreement.
The adoption of FAS 114 and FAS 118 did not have a material effect on
UNUM's results of operations or financial position. In general, impaired
loans as defined by FAS 114 compare with loans previously defined and
disclosed as problem and potential problem loans.
Real Estate:
At March 31, 1995, investment real estate amounted to $203.9 million
compared with $190.8 million at December 31, 1994. UNUM purchases
investment real estate in selected markets when certain investment criteria
are met. Investment real estate is intended to be held long-term and is
carried at cost less accumulated depreciation. Occasionally, investment
real estate is reclassified and revalued as real estate held for sale when
it no longer meets UNUM's investment criteria.
At March 31, 1995, real estate held for sale amounted to $30.2 million
compared with $31.0 million at December 31, 1994. Real estate that has
been acquired through foreclosure is valued at fair value at the date of
foreclosure. Real estate held for sale is included in other assets in the
Consolidated Balance Sheets and is valued net of an allowance which reduces
the carrying value to the lower of fair value less estimated costs to sell,
or cost. Additions to the allowance for probable losses related to real
estate held for sale resulted in a realized investment gain of $0.6 million
and a realized investment loss of $0.3 million for the three months ended
March 31, 1995, and 1994, respectively. Additions to the allowance
represent charges to net realized investment gains less recoveries.
Given the current real estate environment, additional foreclosures are
anticipated, but at a reduced level from the early 1990s. Current and
anticipated real estate acquired through foreclosure is not expected to
have a significant effect on UNUM's results of operations, liquidity, or
capital resources.
Liquidity and Capital Resources:
UNUM's businesses produce positive cash flows, which are invested primarily
in intermediate, fixed maturity investments intended to reflect the nature
of anticipated cash obligations of insurance benefit payments and insurance
contract maturities and to optimize investment returns at appropriate risk
levels. To meet unexpected cash requirements and liquidity needs, UNUM
maintains part of its investment portfolio in fixed maturities classified
as available for sale, equity securities, cash and short-term investments.
From time to time, dividend payments, which may be subject to approval by
insurance regulatory authorities, are made from UNUM's affiliates and
insurance subsidiaries to UNUM Corporation. These dividends, along with
other funds, are used to service the needs of UNUM Corporation including:
debt service, common stock dividends, stock repurchase, administrative
costs and corporate development. Income determined using statutory
accounting is one of the major determinants of an insurance company's
dividend capacity to its parent in the following fiscal year. Statutory
accounting rules and practices, which differ in certain respects from
generally accepted accounting principles, are mandated by regulators in an
insurance company's state of domicile.
At March 31, 1995, UNUM Corporation had a $500 million committed revolving
credit facility which expires on October 1, 1999. UNUM's commercial paper
program is supported by the revolving credit facility and is available for
general liquidity needs, capital expansion, acquisitions and stock
repurchase. The committed revolving credit facility contains certain
covenants which, among other provisions, require maintenance of certain
levels of stockholders' equity and limits on level of debt.
In September 1993, UNUM announced the filing of an omnibus shelf
registration statement with the Securities and Exchange Commission which
became effective on October 8, 1993, relating to $450 million of securities
(including debt securities, preferred stock, common stock and other
securities). On October 8, 1993, UNUM filed a prospectus supplement to
establish a $250 million medium-term note program under the shelf
registration. The medium-term note program and the unsold portion of the
shelf registration carry ratings of "A1" (Medium Quality) and "(P)A1"
(Medium Quality), respectively, from Moody's Investors Service, and "A+"
(Strong) from Standard & Poor's Corporation. The unsold portion of the
shelf registration relating to subordinated debt and preferred stock
carries ratings of "(P)A2" (Medium Quality) and "(P)"a1"" (Upper-Medium
Quality), respectively, from Moody's Investors Service.
At March 31, 1995, UNUM had short-term and long-term debt totaling $369.6
million and $180.8 million, respectively. At March 31, 1995, approximately
$165 million was available for additional financing under the existing
revolving credit facility, and approximately $393 million of investment
grade debt instruments was available for issuance under the shelf
registration. Contingent upon market conditions and corporate needs,
management may refinance short-term notes payable with longer term
securities.
On May 11, 1995, UNUM Corporation issued $172.5 million of 8.80% Monthly
Income Debt Securities ("MIDS") (Junior Subordinated Deferrable Interest
Debentures, Series A), which mature in 2025, and carry ratings of "A2"
(Medium Quality) from Moody's Investors Service and "A" (Strong) from
Standard & Poor's Corporation. UNUM intends to use the net MIDS proceeds
to repay short-term debt and for general corporate purposes. Issuance of
the MIDS reduced the amount of financing available under the shelf
registration as of May 11, 1995, to approximately $220 million.
Litigation:
In the normal course of its business operations, UNUM is involved in litigation
from time to time with claimants, beneficiaries and others, and a number of
lawsuits were pending at March 31, 1995. In the opinion of management, the
ultimate liability, if any, arising from this litigation is not expected to
have a material adverse effect on the consolidated financial position or the
consolidated operating results of UNUM.
On December 29, 1993, UNUM filed a suit in the United States District Court
for the District of Maine, seeking a federal income tax refund. The suit is
based on a claim for a deduction in certain prior tax years, for $652 million
in cash and stock distributed to policyholders in connection with the 1986
conversion of Union Mutual Life Insurance Company to a stock company. Although
UNUM believes its claims are meritorious, the United States is aggressively
resisting the claims and the ultimate recovery, if any, cannot be determined
at this time.
New Accounting Pronouncement:
In March 1995, the Financial Accounting Standards Board issued Financial
Accounting Standard ("FAS") No. 121, "Accounting for the Impairment of Long
Lived Assets and for Long-Lived Assets to be Disposed Of," which
establishes accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets to
be held and used and for long-lived assets and certain identifiable
intangibles to be disposed of. UNUM is required to adopt FAS 121 by
January 1, 1996. UNUM has not yet determined what effect the adoption of
FAS 121 will have on its results of operations or financial position.
<PAGE>
UNUM Corporation and Subsidiaries
Form 10-Q
March 31, 1995
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
12. Statement re: Computation of ratio of earnings to fixed charges.
15. Letter re: Unaudited interim financial information.
27. Financial Data Schedule
99.1 Underwriting Agreement for 8.80% Junior Subordinated Deferrable
Interest Debentures, Series A, Due 2025.
99.2 Pricing Agreement for 8.80% Junior Subordinated Deferrable Interest
Debentures, Series A, Due 2025.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant with the Securities and
Exchange Commission during the quarter ended March 31, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date May 12, 1995 /s/ RODNEY N. HOOK
Rodney N. Hook
Senior Vice President and Chief Financial
Officer
Date May 12, 1995 /s/ STEPHEN D. ROBERTS
Stephen D. Roberts
Vice President and Corporate Controller
<PAGE>
Exhibit 12
Computation of Ratio of Earnings to Fixed Charges
Three Months Ended
March 31,
(Unaudited - Dollars in millions) 1995 1994
Earnings:
Income from continuing operations before
income taxes $ 85.4 $110.8
Add: Fixed charges 10.0 5.9
Earnings as adjusted $ 95.4 $116.7
Fixed charges:
Interest expense $ 7.3 $ 3.3
Interest portion of rent expense 2.7 2.6
Total fixed charges $ 10.0 $ 5.9
Ratio of earnings to fixed charges 9.5 19.8
For purposes of computing the ratio of earnings to fixed charges, earnings
as adjusted consist of income from continuing operations before income
taxes and fixed charges. Fixed charges consist of interest expense and the
estimated interest portion of rent expense.
<PAGE>
Exhibit 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
We are aware that our report dated April 25, 1995, except for Note 6 for
which the date is May 11, 1995, on our review of interim financial
information of UNUM Corporation for the three month period ended March 31,
1995, and included in the Company's quarterly report on Form 10-Q for the
quarter then ended is incorporated by reference in the following
Registration Statements:
- Form S-8 No. 33-31270 pertaining to the UNUM Employees
Retirement Savings Plan and Trust
- Form S-8 No. 33-19090 pertaining to the 1987 Executive Stock
Option Plan
- Form S-8 No. 33-38225 pertaining to the 1990 Long-Term Stock
Incentive Plan
- Form S-8 No. 33-52741 pertaining to the 1990 Long-Term Stock
Incentive Plan
- Form S-3 No. 33-36873
- Form S-3 No. 33-69132
- Form S-8 No. 33-60124 pertaining to the Colonial Companies,
Inc. Security Saver Plan
- Post-Effective Amendment No. 1 on Form S-8 to Registration
Statement on Form S-4 No. 33-55870
Pursuant to Rule 436 (c) under the Securities Act of 1933, this report
should not be considered a part of the registration statements prepared or
certified by accountants within the meaning of Sections 7 and 11 of that
Act.
/s/ COOPERS & LYBRAND L.L.P.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY CONSOLIDATED FINANCIAL STATEMENTS OF UNUM CORPORATION AND SUBSIDIARIES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONTAINED IN UNUM
CORPORATION'S SEC FORM 10-Q DATED MARCH 31, 1995.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<DEBT-HELD-FOR-SALE> 1,922,500
<DEBT-CARRYING-VALUE> 6,251,800
<DEBT-MARKET-VALUE> 6,354,500
<EQUITIES> 662,400
<MORTGAGE> 1,208,800
<REAL-ESTATE> 203,900
<TOTAL-INVEST> 10,627,600
<CASH> 32,100
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 1,057,200
<TOTAL-ASSETS> 13,416,800
<POLICY-LOSSES> 5,610,400
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 3,877,700
<NOTES-PAYABLE> 550,400
<COMMON> 10,000
0
0
<OTHER-SE> 2,023,100
<TOTAL-LIABILITY-AND-EQUITY> 13,416,800
734,000
<INVESTMENT-INCOME> 191,900
<INVESTMENT-GAINS> 10,900
<OTHER-INCOME> 18,300
<BENEFITS> 571,800
<UNDERWRITING-AMORTIZATION> (29,700)<F1>
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 85,400
<INCOME-TAX> 22,000
<INCOME-CONTINUING> 63,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,400
<EPS-PRIMARY> 0.87
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>THIS ITEM CONTAINS THE AMOUNTS OF DEFERRED AND AMORTIZED POLICY ACQUISITION
COSTS FOR THE PERIOD PRESENTED.
</FN>
</TABLE>
<PAGE>
UNUM Corporation
8.80% Junior Subordinated Deferrable
Interest Debentures Series A, Due 2025
Underwriting Agreement
May 4, 1995
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Dear Sirs:
From time to time UNUM Corporation, a Delaware corporation (the
"Company"), proposes to enter into one or more Pricing Agreements
(each a "Pricing Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine, and,
subject to the terms and conditions stated herein and therein, to issue
and sell to the firms named in Schedule I to the applicable Pricing
Agreement (such firms constituting the "Underwriters" with respect to
such Pricing Agreement and the securities specified therein) certain of
its debt securities (the "Securities") specified in Schedule II to such
Pricing Agreement (with respect to such Pricing Agreement, the "Firm
Securities" and together with any Optional Securities, as defined below,
the "Designated Securities"),less the principal amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as provided in
Section 3 hereof and as may be specified in Schedule II to such Pricing
Agreement (with respect to such Pricing Agreement, any Designated Securities
to be covered by Delayed Delivery Contracts being herein sometimes
referred to as "Contract Securities" and the Designated Securities to be
purchased by the Underwriters (after giving effect to the deduction, if any,
for Contract Securities) being herein sometimes referred to as "Underwriters'
Securities").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Pricing Agreement relating
thereto and in or pursuant to the indenture (the "Indenture")
identified in such Pricing Agreement.
1. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated
as representatives of the Underwriters of such Securities in the Pricing
Agreement relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers to a single
firm acting as sole representative of the Underwriters and to Underwriters
who act without any firm being designated as their representative. This
Underwriting Agreement shall not be construed as an obligation of the
Company to sell any of the Securities or as an obligation of any of the
Underwriters to purchase the Securities. The obligation of the Company to
issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Securities specified
therein. Each Pricing Agreement with respect to Designated Securities
shall be substantially in the form attached hereto as Annex I and shall
specify the names of the Underwriters of such Designated Securities,
the names of the Representatives, if any, of such Underwriters, the
principal amount of Firm Securities and the principal amount of Optional
Securities, if any, to be purchased by each Underwriter and the commission,
if any, payable to the Underwriter with respect thereto, whether any of such
Designated Securities shall be covered by Delayed Delivery Contracts (as
defined in Section 3 hereof), the purchase price to the Underwriters of such
Designated Securities, the nature of the funds to be delivered by the
Underwriters, the initial public offering price or the manner of determining
such price, if any, including, interest rates, if any, maturity, whether
such Securities will be convertible at the option of the holder thereof
into any conversion rates or price(s), whether warrants shall be
attached to such Debt Securities, any redemption provisions and any
sinking fund requirements. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts, and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission
device designed to produce a written record of communications transmitted).
The obligations of the Underwriters under this Agreement and each Pricing
Agreement shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement (No. 33-69132) in respect of
the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such registration statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives for each of the other
Underwriters and, excluding exhibits to such registration statement, but
including all documents incorporated by reference in the prospectus
contained therein, has been declared effective by the Commission in such
form; no other document with respect to such registration statement or
document incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission (other than prospectuses filed
pursuant to Rule 424(b) of the rules and regulations of the Commission
under the Securities Act of 1933, as amended (the "Act"), each in the form
heretofore delivered to the Representatives); such prospectus included
for use in connection with the Securities meets the requirements of the
Act and the rules and regulations thereunder for use of such prospectus in
connection with the Securities; and no stop order suspending the
effectiveness of such registration statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission. Any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the
rules and regulations of the Commission under the Act, is hereinafter
called a "Preliminary Prospectus;" the various parts of such registration
statement, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in such
registration statement at the time such part of such registration
statement became effective but excluding Form T-1, each as
amended at the time such part of the registration statement became
effective and at the time each incorporated document was filed with
the Commission is hereinafter called the "Registration Statement";
the prospectus relating to the Securities, in the form in which it
has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter
called the "Prospectus;" any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to
and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus
as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of
such filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as
amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the
requirements of the Act, and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and the rules and regulations of
the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein
(i) in the case of the Registration Statement, not misleading
and (ii) in the case of the Prospectus, in light of the
circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company
by an Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended
or supplemented relating to such Securities;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included
or incorporated by reference in th Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, there has not been any material change in the
capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any
development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and
its subsidiaries considered as a whole, otherwise than as set
forth or contemplated in the Prospectus;
(e) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the
transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, except for any jurisdiction where failure to so
qualify will not have a material adverse effect on the
Company; and each subsidiary of the Company has been duly organized
and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation;
(f) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly
authorized and issued and are fully paid and nonassessable;
(g) The Firm Securities and any Optional Securities have
been duly and validly authorized, and, when the Firm
Securities are issued and delivered pursuant to this
Agreement, and the Pricing Agreement with respect to such
Designated Securities and, in the case of any Contract
Securities, pursuant to Delayed Delivery Contracts (as
defined in Section 3 hereof) with respect to such Contract
Securities, and in the case of any Optional Securities
pursuant to Over-allotment Options (as defined in Section 3 hereof)
with respect to such Securities, such Designated Securities
will have been duly executed, authenticated,
issued and delivered and will constitute valid and legally
binding obligations of the Company entitled to the benefits
provided by the Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the
Indenture has been duly authorized and duly qualified under the
Trust Indenture Act and, at the Time of Delivery for such Designated
Securities (as defined in Section 4 hereof), the Indenture
will constitute a valid and legally binding
instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles; and the indenture conforms, and the
Designated Securities will conform, to the descriptions
thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Securities;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture,
each of the Delayed Delivery Contracts, this Agreement and any
Pricing Agreement and each Over-allotment Option, if any, and the
consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the
Company is subject, nor will such action result in any
violation of the provisions of the Certificate of
Incorporation or By-Laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties; and no
consent, approval, authorization, order, registration or
qualification of or with any such court or
governmental agency or body is required for the issue and
sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or any Pricing
Agreement or any Over-allotment Option, or the
Indenture, or any Delayed Delivery Contract except such as have
been, or will have been prior to the Time of Delivery, obtained under
the Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, stockholders'
equity or results of operations of the Company and its
subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others;
(j) Coopers & Lybrand and Ernst & Young, who have each audited
certain financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the
rules and regulations of the Commission thereunder;
(k) The Company and its subsidiaries which are engaged in the
insurance business are, in all material respects, in compliance
with, and conduct, in all material respects, their respective
businesses in conformity with, all applicable insurance laws and
regulations; and no order preventing or suspending the use of the
Prospectus or any Preliminary Prospectus has been issued
or threatened by the Superintendent of the Maine Bureau of Insurance; and
(l) In the event any of the Securities are purchased pursuant
to Delayed Delivery Contracts, each of such Delayed
Delivery Contracts has been duly authorized by the Company and,
when executed and delivered by the Company and the purchaser
named therein, will constitute a valid and legally binding agreement
of the Company enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting
creditors' rights and to general equity principles; and any
Delayed Delivery Contracts conform to the description thereof
in the Prospectus.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the
Representatives of the release of such Firm Securities, the several
Underwriters propose to offer such Firm Securities for sale upon the
terms and conditions set forth in the Prospectus as amended or
supplemented.
The Company may specify in the Pricing Agreement applicable to any
Designated Securities that the Company thereby grants to the Underwriters
the right (an "Over-allotment Option") to purchase at their election
up to the aggregate principal amount of Optional Securities set forth
in such Pricing Agreement, at the terms set forth in the paragraph
above, for the sole purpose of covering over-allotments in the sale of the
Firm Securities. Any such election to purchase Optional Securities may
be exercised only by written notice from the Representatives to the
Company, given within a period specified in the Pricing Agreement, setting
forth the aggregate principal amount of Optional Securities to be purchased
and the date on which such Optional Securities are to be delivered, as
determined by the Representatives but in no event earlier than the
First Time of Delivery (as defined in Section 4 hereof) or, unless the
Representatives and the Company otherwise agree in writing, earlier than
or later than the respective number of business days after the date of
such notice set forth in such Pricing Agreement.
The principal amount of Optional Securities to be added to the number of
Firm Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement applicable to such Designated
Securities shall be, in each case, the principal amount of Optional
Securities which the Company has been advised by the Representatives have
been attributed to such Underwriter, provided that, if the Company has
not been so advised, the principal amount of Optional Securities to be
so added shall be, in each case, that proportion of Optional Securities
which the principal amount of Firm Securities to be purchased by
such Underwriter under such Pricing Agreement bears to the aggregate
principal amount of Firm Securities. The total principal amount of
Designated Securities to be purchased by all the Underwriters pursuant to
such Pricing Agreement shall be the aggregate principal amount of
Firm Securities set forth in Schedule I to such Pricing Agreement plus
the aggregate number of the Optional Securities which the Underwriters
elect to purchase.
The Company may specify in Schedule II to the Pricing Agreement
applicable to any Designated Securities that the Underwriters are
authorized to solicit offers to purchase Designated Securities from
the Company pursuant to delayed delivery contracts (herein called
"Delayed Delivery Contracts"), substantially in the form of Annex III
attached hereto but with such changes therein as the Representatives and
the Company may authorize or approve. If so specified, the
Underwriters will endeavor to make such arrangements, and as compensation
therefor the Company will pay to the Representatives, for the accounts of
the Underwriters, at the Time of Delivery (as defined in Section
4 hereof), such commission, if any, as may be set forth in such Pricing
Agreement. Delayed Delivery Contracts, if any, are to be
with investors of the types described in the Prospectus and
subject to other conditions therein set forth. The Underwriters will not
have any responsibility with respect to the validity or
performance of any Delayed Delivery Contracts.
The principal amount of Contract Securities to be deducted from
the principal amount of Designated Securities to be purchased by each
Underwriter as set forth in Schedule I to the Pricing Agreement applicable
to such Designated Securities shall be, in each case, the principal amount
of Contract Securities which the Company has been advised by the
Representatives have been attributed to such Underwriter, provided that, if
the Company has not been so advised, the amount of Contract
Securities to be so deducted shall be, in each case, that
proportion of Contract Securities which the principal amount of
Designated Securities to be purchased by such Underwriter under such
Pricing Agreement bears to the total principal amount of the Designated
Securities (rounded as the Representatives may
determine). The total principal amount of Underwriters'
Securities to be purchased by all the Underwriters pursuant to
such Pricing Agreement shall be the total principal amount of
Designated Securities set forth in Schedule I to such Pricing Agreement
less the principal amount of the Contract Securities. The Company will
deliver to the Representatives not later than 3:30 p.m., New York
City time, on the third business day preceding the Time of Delivery
specified in the applicable Pricing Agreement (or such other time and
date as the Representatives and the Company may agree upon in writing)
a written notice setting forth the principal amount of Contract Securities.
4. Certificates for the Firm Securities and the Optional
Securities, if any, to be purchased by each Underwriter pursuant to the
Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such
names as the Representatives may request upon at least forty-eight hours'
prior notice to the Company, shall be delivered by or on behalf of the
Company to the Representatives for the account of such Underwriter,
against payment by such Underwriter or on its behalf of the purchase
price therefor by certified or official bank check or checks, payable to
the order of the Company in the funds specified in such Pricing Agreement,
(i) with respect to the Firm Securities, all at the place and time and date
specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such
time and date being herein called the "First Time of Delivery" and (ii) with
respect to the Optional Securities, if any, on the time and date specified
by the Representatives in the written notice given by
the Representatives of the Underwriters' election to purchase such
Optional Securities, or at such other time and date as the
Representatives and the Company may agree upon in writing, such time
and date, if not the First Time of Delivery, herein called
the "Second Time of Delivery." Each such time and date for delivery
is herein called a "Time of Delivery."
Concurrently with the delivery of and payment for the
Underwriters' Securities, the Company will deliver to the
Representatives for the accounts of the Underwriters payable to
the order of the party designated in the Pricing Agreement relating
to such Securities in the amount of any compensation payable by the
Company to the Underwriters in respect of any Delayed Delivery Contracts
as provided in Section 3 hereof and the Pricing Agreement relating to
such Securities.
5. The Company agrees with each of the Underwriters of any
Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus
pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating
to the applicable Designated Securities or, if
applicable, such earlier time as may be required by Rule 424(b);
to make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or
supplemented after the date of the Pricing Agreement relating to such
Securities and prior to the Time of Delivery for such Securities which
amendment or supplement shall be disapproved by the Representatives
for such Securities promptly after reasonable notice thereof; to
advise the Representatives promptly of any such amendment or supplement
after such Time of Delivery and furnish the Representatives with copies
thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Securities,
and during such same period to advise the Representatives, promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been
filed with the Commission, of the issuance by the Commission of
any stop order or of any order preventing or
suspending the use of any prospectus relating to the
Securities, of the suspension of the qualification of such
Securities for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Securities or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such
Securities for offering and sale under the securities laws of
such jurisdictions as the Representatives may request and to
comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may
be necessary to complete the distribution of such Securities,
provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or
to file a general consent to service of process in any
jurisdiction;
(c) To furnish the Underwriters with copies of the
Prospectus as amended or supplemented in such quantities as
the Representatives may from time to time reasonably request, and, if
the delivery of a prospectus is required at any time in connection
with the offering or sale of the Securities and if at such time any
event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include
an untrue statement of a material fact or omit to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such Prospectus is delivered, not misleading, or,
if for any other reason it shall be necessary during such same period
to amend or supplement the Prospectus or to file under the Exchange
Act any document incorporated by reference in the Prospectus in order
to comply with the Act, the Exchange Act or the Trust Indenture Act,
to notify the Representatives and upon their request to file
such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an
amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule
158(c)), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158); and
(e) During the period beginning from the date hereof and
continuing to and including the earlier of (i) the
termination of trading restrictions for such Designated
Securities and (ii) the Time of Delivery for such Designated
Securities, not to offer, sell, contract to sell or otherwise dispose
of any securities of the Company (other than pursuant to employee stock
option plans existing, or on the conversion or exchange of
convertible or exchangeable securities
outstanding on the date of the Pricing Agreement) which are
substantially similar to the Designated Securities and which mature
more than one year after the related Time of Delivery, without your
prior written consent.
(f) To use its best efforts to list, subject to notice of issuance,
the Designated Securities on the New York Stock Exchange or such
other exchange on which the Company's Common Stock is then listed.
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following:
(i) the fees, disbursements and expenses of the Company's counsel and
accountants in connection with the registration of the Securities under
the Act and all other expenses in connection with the preparation, printing
and filing of the Registration Statement, any Preliminary Prospectus and
the Prospectus and amendments and supplements thereto and the mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of printing or producing any Agreement among Underwriters, this Agreement,
any Pricing Agreement, any Indenture, any Warrant Agreement, any Delayed
Delivery Contracts, and Blue Sky and Legal Investment Memoranda and any other
documents in connection with the offering, purchase, sale and delivery of the
Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the
Underwriters in connection with such qualification and in
connection with the Blue Sky and legal investment surveys; (iv) any fees
charged by securities rating services for rating the Securities; (v) any
filing fees incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Securities;
(vi) the cost of preparing the Securities; (vii) the fees and expenses of any
Trustee, any Warrant Agent, any Registrar, any Transfer Agent, Dividend
Disbursing Agent, or any Calculation Agent and any agent of any Trustee,
Warrant Agent, Registrar, Transfer Agent, Dividend Disbursing Agent, or
Calculation Agent and the fees and
disbursements of counsel for any such persons in connection with any
Indenture, any Warrant Agent Agreement, any Calculation Agent Agreement
and the Securities; and (viii) all other costs and expenses incident to
the performance of the Company's obligations hereunder and under any Over-
allotment Options and under any Delayed Delivery Contracts which are
not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, Section 8
and Section 11 hereof, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses
connected with any offers they may make.
7. The obligations of the Underwriters of any Designated
Securities under the Pricing Agreement relating to such
Designated Securities shall be subject, in the discretion of the
Representatives, to the condition that all representations and
warranties and other statements of the Company in or incorporated by
reference in the Pricing Agreement relating to such Designated Securities
are, at and as of each Time of Delivery for such Designated
Securities, true and correct, the condition that the Company shall have
performed in all material respects all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing by the rules and regulations
under the Act and in accordance with Section 5(a) hereof; no stop order
suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall
have been complied with to the Representatives' reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall
have furnished to the Representatives such opinion or
opinions, dated each Time of Delivery for such Designated
Securities, with respect to the incorporation of the Company, the
validity of the Indenture, the Designated Securities, the Delayed
Delivery Contracts, if any, the Registration Statement, the
Prospectus as amended or supplemented and other related matters as
the Representatives may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(c) Kevin J. Tierney, Senior Vice President, Secretary and General
Counsel of the Company, shall have furnished to the Representatives
his written opinion, dated each Time of Delivery for such Designated
Securities, in form and substance satisfactory to the Representatives, to
the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its
properties and conduct its business as described in the
Prospectus as amended or supplemented;
(ii) The Company has an authorized capitalization as
set forth in the Prospectus as amended or supplemented and all of
the issued shares of capital stock of the Company have been duly
and validly authorized and issued and are fully paid and
nonassessable;
(iii) The Company is qualified to do business, and is
in good standing, as a foreign corporation under the laws of each
jurisdiction in which the business conducted by it requires such
qualification or, if not so qualified and in good standing in any such
jurisdiction, such failure to be so qualified and in good standing, as
of the date of this opinion, will not result in liabilities material
to the business of the Company;
(iv) Each subsidiary of the Company has been duly
organized, and is subsisting and in good standing as a
corporation under the laws of its jurisdiction of
incorporation, and all of the issued shares of capital stock of
each such subsidiary have been duly and validly authorized and
issued, are fully paid and nonassessable, and, to the best
knowledge of such counsel, are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims;
(v) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and, to
the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened
by others;
(vi) This Agreement and the Pricing Agreement with respect
to the Designated Securities have been duly
authorized, executed and delivered by the Company;
(vii) The Designated Securities have been duly
authorized, by requisite corporate action on the part of
the Company, and the Designated Securities, when executed and
authenticated in accordance with the terms of the Indenture
and delivered to and paid for by the
Underwriters in accordance with the terms of the
Underwriting Agreement, will be valid and binding
obligations of the Company entitled to the benefit of the Indenture
and enforceable against the Company in
accordance with their terms, except to the extent that the
enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights
generally, (2) general principles of equity (regardless of
whether enforcement is considered in a proceeding at law or
equity), (3) requirements that a claim with respect to
any Debt Securities denominated other than in United States
dollars (or a judgment denominated other than in
United States dollars in respect of such claim) be
converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable
law, and (4) governmental authority to limit, delay or
prohibit the making of payments outside the United States or
in foreign currencies or composite currencies or
currency units; and the Designated Securities conform in all
material respects to the description thereof contained in the
Registration Statement and Prospectus as amended or supplemented with
respect to such Designated Securities.
(viii) The Indenture has been duly authorized,
executed and delivered by the Company and constitutes a valid
and binding agreement, enforceable against the
Company in accordance with its terms, except to the extent that
the enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights
generally, (2) general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or equity), (3)
requirements that a claim with respect to any Debt Securities
denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such
claim) be converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable
law, and (4) governmental authority to limit, delay or
prohibit the making of payments outside the United States or
in foreign currencies or composite currencies or
currency units; and the Indenture has been duly qualified under the
Trust Indenture Act;
(ix) The issue and sale of the Designated Securities and
the compliance by the Company with all of the
provisions of the Designated Securities, the Indenture,
each of the Delayed Delivery Contracts, if any, any
Over-allotment Options, this Agreement and the Pricing Agreement
with respect to the Designated Securities and the consummation
of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
known to such counsel to which the Company is a party or by which
the Company is bound or to which any of the property or assets
of the Company is subject, nor will such actions result in any
violation of the provisions of the Certificate of Incorporation or
By-Laws of the Company or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its
properties;
(x) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Designated Securities or the consummation by
the Company of the transactions contemplated by this
Agreement or such Pricing Agreement or the Indenture or any
of such Delayed Delivery Contracts or any
Over-allotment Options, except such as have been obtained
under the Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue
Sky laws in connection with the purchase and distribution of
the Designated Securities by the Underwriters;
(xi) The documents incorporated by reference in the
Prospectus as amended or supplemented (other than the financial
statements and related schedules therein, as to which such
counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder; and he has no reason to believe that any
of such documents, when they became effective or were so filed, as
the case may be, contained, in the case of a registration
statement which became effective under the Act, an untrue statement
of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed
under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
documents were so filed, not misleading;
(xii) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements
thereto made by the Company prior to the Time of Delivery for the
Designated Securities (other than the financial statements and
related schedules therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the
rules and regulations thereunder; and
(xiii) In the event any of the Designated Securities are to
be purchased pursuant to Delayed Delivery
Contracts, each of such Delayed Delivery Contracts has been
duly authorized, executed and delivered by the
Company and, assuming such Delayed Delivery Contracts have been
duly authorized, executed and delivered by the
purchaser named therein, constitutes a valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by (1) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws now or hereafter
in effect relating to creditors' rights generally, (2)
general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity),
(3) requirements that a claim with respect to any Debt Securities
denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such
claim) be converted into United States dollars at a rate of
exchange prevailing on a date determined pursuant to applicable
law, and (4) governmental authority to limit, delay or prohibit
the making of payments outside the United States or in foreign
currencies or composite currencies or currency units; and any
Delayed Delivery Contracts conform in all material respects to
the description thereof in the Registration Statement and
Prospectus as amended or supplemented.
In addition, such counsel shall state that he has no reason to
believe that, as of its effective date, the Registration Statement
or any further amendment thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading or that, as of its date, the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein, as to which such
counsel need express no opinion) contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as of
such Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contains
an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading; and he shall
state that he does not know of any amendment to the Registration
Statement required to be filed or any contracts or other documents of
a character required to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be described in
the Registration Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by reference or
described as required.
(d) Skadden, Arps, Slate, Meagher & Flom, special counsel for the
Company, shall have furnished to the Representatives their written
opinion, dated each Time of Delivery for such Designated Securities,
in form and substance satisfactory to the Representatives, to the
effect that:
(i) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement,
enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited
by (1) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally,
(2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity),
(3) requirements that a claim with respect to any Debt Securities
denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such
claim) be converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law,
and (4) governmental authority to limit, delay or prohibit the making
of payments outside the United States or in foreign currencies or
composite currencies or currency units.
(ii) The sale and issuance of the Designated Securities have been
duly authorized by requisite corporate action on the part of the
Company, and the Designated Securities, when executed and
authenticated in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters in accordance with
the terms of the Underwriting Agreement, will be valid
and binding obligations of the Company entitled to the benefit of the
Indenture and enforceable against the Company in
accordance with their terms, except to the extent that
enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws now or hereafter in effect
relating to or affecting creditors' rights
generally, (2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or equity),
(3) requirements that a claim with respect to any Debt Securities
denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of
such claim) be
converted into United States dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law, and
(4) governmental authority to limit, delay or prohibit the making
of payments outside the United States or in foreign currencies
or composite currencies or currency units; and the Designated
Securities conform in all material respects to the description
thereof contained in the Registration Statement and Prospectus as
amended or supplemented with respect to such Designated Securities.
(e) On the date of the Pricing Agreement for such
Designated Securities and at each Time of Delivery for such
Designated Securities, Coopers & Lybrand and Ernst & Young shall
have each furnished to the Representatives a letter, dated the
effective date of the Registration Statement or the date of the
most recent report filed with the Commission containing
financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than
such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex II hereto,
and with respect to such letter dated such Time of Delivery, as to
such other matters as the Representatives may reasonably request
and in form and substance satisfactory to the Representatives;
(f) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus as
amended or supplemented any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or government action, order or decree, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented, and (ii) since the respective dates as of which
information is given in the Prospectus as amended or supplemented
there shall not have been any material change in the capital stock
or long-term debt of the Company or any of its subsidiaries or any
change, or any development involving a prospective change, in or
affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries considered as a whole, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the
Underwriters' Securities on the terms and in the manner contemplated in
the Prospectus as amended or supplemented;
(g) On or after the date of the Pricing Agreement relating
to the Designated Securities (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities
or preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Act and (ii) no
such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its
rating of any of the Company's debt securities or preferred stock;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange;
(ii) a general moratorium on commercial banking activities in New
York declared by either Federal or New York state authorities; or
(iii) the outbreak or material
escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or
war, if the effect of any such event specified in this Clause (iii) in
the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering
or the delivery of the Firm Securities or the
Optional Securities, or both, on the terms and in the manner
contemplated by the Prospectus as amended or supplemented; and
(i) The Company shall have furnished or caused to be
furnished to the Representatives at each Time of Delivery for the
Designated Securities a certificate or certificates of
officers of the Company satisfactory to the Representatives
as to the accuracy of the representations and warranties of
the Company herein at and as of each Time of Delivery, as to
the performance by the Company of all of its obligations
hereunder to be performed at or prior to each Time of
Delivery, as to the matters set forth in subsections (a) and (e)
of this Section and as to such other matters as the
Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Securities, or any amendment or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (i) in the case of
the Registration Statement, not misleading and (ii) in the case of the
Prospectus, in the light of the circumstances under which they were
made, not misleading, and will reimburse each Underwriter for any legal
or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to
such Securities; and provided, further, that the Company shall not be
liable to any Underwriter under the indemnity agreement in this subsection
(a) with respect to any Preliminary Prospectus to the extent that any such
loss, claim, damage or liability of such Underwriter results from the
fact such Underwriter sold Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy
of the Prospectus (excluding documents incorporated by reference) or of
the Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is
required by the Act if the Company has previously furnished copies
thereof to such Underwriter and the loss, claim, damage or liability of
such Underwriter results from an untrue statement or omission of a
material fact contained in the Preliminary Prospectus which was
corrected in the Prospectus (or the Prospectus as amended or
supplemented).
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to
the Securities, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein (i) in the case of the
Registration Statement, not misleading and (ii) in the case of
any Prospectus, in the light of the circumstances under which they
were made, not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating
to the Securities, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Company by
such Underwriter through the Representatives expressly for use therein;
and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or
defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under
such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other
than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters of the
Designated Securities on the other from the offering of the
Designated Securities to which such loss, claim, damage or liability
(or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party failed to give the notice
required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also
the relative fault of the Company on the one hand and the
Underwriters of the Designated Securities on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one
hand and such Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from such offering (before deducting
expenses) received by the Company bear to the total underwriting discounts
and commissions received by such Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or such Underwriters on the other and the
parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid
or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated
Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations
of the Underwriters of Designated Securities in this subsection (d)
to contribute are several in proportion to their respective
underwriting obligations with respect to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in addition
to any liability which the respective Underwriters may otherwise have and
shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company
within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Firm Securities or Optional Securities which it has agreed to
purchase under the Pricing Agreement relating to such Firm Securities or
Optional Securities, the Representatives may in their discretion arrange
for themselves or another party or other parties to purchase such
Underwriters' Securities on the terms contained herein. If within
thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm Securities or
Optional Securities, then the Company shall be entitled to a further period
of thirty-six hours within which to procure another party or other parties
satisfactory to the Representatives to purchase such Firm
Securities or Optional Securities on such terms. In the event that,
within the respective prescribed period, the
Representatives notify the Company that they have so arranged for the
purchase of such Firm Securities or Optional Securities, or
the Company notifies the Representatives that it has so arranged
for the purchase of such Firm Securities or Optional Securities,
the Representatives or the Company shall have the right to
postpone the Time of Delivery for such Firm Securities or Optional
Securities for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Company
agrees to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the Representatives
may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase
of the Firm Securities or Optional Securities, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the
Company as provided in subsection (a) above, the aggregate principal
amount of such Firm Securities or Optional Securities, as the case
may be, which remains unpurchased does not exceed one-eleventh of
the aggregate principal amount of the Firm Securities or Optional
Securities, as the case may be, then the Company shall have the right
to require each non-defaulting Underwriter to purchase the principal amount
of Firm Securities or Optional Securities, as the case may be, which such
Underwriter agreed to purchase under the Pricing
Agreement relating to such Designated Securities and, in
addition, to require each non-defaulting Underwriter to purchase its
pro rata share (based on the principal amount of Firm
Securities or Optional Securities, as the case may be, which such
Underwriter agreed to purchase under such Pricing Agreement) of the
Firm Securities or Optional Securities, as the case may be,
of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Securities or Optional Securities, as the case may
be, of a defaulting Underwriter or Underwriters by the Representatives
and the Company as provided in subsection (a) above, the aggregate
principal amount of Firm Securities or Optional Securities, as the
case may be, which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of the Firm Securities or Optional Securities,
as the case may be, as referred to in subsection (b) above, or if the Company
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Firm Securities or Optional
Securities, as the case may be, of a defaulting Underwriter or Underwriters,
then the Pricing Agreement relating to such Designated Securities shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the
Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section 8 hereof; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several
Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, or the Company, or any officer or
director or controlling person of the Company, and shall survive delivery
of and payment for the Securities.
11. If any Pricing Agreement or Over-allotment Option shall
be terminated pursuant to Section 9 hereof, the Company shall not then be
under any liability to any Underwriter with respect to the Firm
Securities or Optional Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof; but, if for any
other reason Designated Securities are not delivered by or on behalf of
the Company as provided herein, the Company will reimburse the
Underwriters through the Representatives for all out-of-pocket expenses
approved in writing by the Representatives, including fees and disbursements of
counsel, reasonably incurred by the Underwriters in making preparations
for the purchase, sale and delivery of such Designated Securities,
but the Company shall then be under no further liability to any
Underwriter with respect to such Designated Securities except as
provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Securities shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter
made or given by such Representatives jointly or by such of the
Representatives, if any, as may be designated for such purpose in the
Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Representatives
as set forth in the Pricing Agreement; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Registration Statement; Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section
8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire,
which address will be supplied to the Company by the Representatives
upon request. Any such statements, requests, notices or agreements
shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the
Underwriters, the Company and, to the extent provided in Section 8 and
Section 10 hereof, the officers and directors of the
Company and each person who controls the Company or any
Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire
or have any right under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence for each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all
such respective counterparts shall together constitute one and the same
instrument.
Very truly yours,
UNUM Corporation
By: /s/ RODNEY N. HOOK
Name: Rodney N. Hook
Title: Senior Vice President and Chief
Financial Officer
<PAGE>
ANNEX I
Pricing Agreement
Goldman, Sachs & Co.,
As Representatives of the several
Underwriters named in Schedule I hereto
85 Broad Street,
New York, New York 10004
May __, 1995
Dear Sirs:
UNUM Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated May 4, 1995 (the "Underwriting
Agreement"), to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities")
consisting of Firm Securities. Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Agreement to the same extent
as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein
shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty that refers to
the Prospectus in Section 2 of the Underwriting Agreement shall be
deemed to be a representation or warranty as of the date of the
Underwriting Agreement in relation to the Prospectus (as therein defined),
and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented
relating to the Designated Securities which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in
the provisions of the Underwriting Agreement so incorporated by
reference shall be deemed to refer to you. Unless otherwise defined
herein, terms defined in the Underwriting Agreement are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting Agreement and the
address of the Representatives referred to in such Section 12 are set forth
at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated
Securities, in the form heretofore delivered to you is now proposed
to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a)
the Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, at the time and place and at the purchase
price to the Underwriters set forth in Schedule II hereto, the
principal amount of Firm Securities set forth opposite the name of
such Underwriter in Schedule I hereto, less the principal
amount of Designated Securities covered by Delayed
Delivery Contracts, if any, as may be specified in Schedule II.
If the foregoing is in accordance with your understanding, please
sign and return to us counterparts hereof, and upon acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or
will be pursuant to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
UNUM Corporation
By:......................................
Name:
Title:
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Smith Barney Inc.
By: Goldman, Sachs & Co.
..................................
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect
that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma
financial information examined) by them and
included or incorporated by reference in the Registration Statement
or the Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in
accordance with standards established by the American Institute of
Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial
information, prospective financial statements and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter,
as indicated in their reports thereon, copies of which have been
furnished to the representatives of the Underwriters (the
"Representatives");
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
and included or incorporated by reference in Item 6 of the Company's
Annual Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for five such fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit
in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included
or incorporated by reference in the Prospectus, inquiries of officials
of the Company and its subsidiaries responsible for financial and
accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused
them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included or incorporated by reference in the
Company's Quarterly Reports on Form 10-Q incorporated by reference
in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related
published rules and regulations thereunder or are not in conformity
with generally accepted accounting principles applied on a basis
substantially consistent with the basis for the audited consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included or incorporated by reference
in the Company's Annual Report on Form 10-K for the most
recent fiscal year;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report
on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) above
and any unaudited income statement data and balance sheet items
included in the Prospectus and referred to in Clause (B) above
were not determined on a basis substantially consistent with the
basis for the audited financial statements included or
incorporated by reference in the Company's Annual Report on Form 10-
K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the published
rules and regulations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital
stock upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on the
date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net assets or other items specified by the
Representatives, or any increases in any items specified
by the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) above there were
any decreases in consolidated net revenues or any material decrease
in operating profit or any material decrease in the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the
Representatives, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or which
are described in such letter; and
(v) In addition to the audit referred to in their report(s) included
or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (iv) above, they have carried out
certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect
to certain amounts, percentages and financial information specified
by the Representatives which are derived from the general accounting
records of the Company and its subsidiaries, which appear in the
Prospectus (excluding documents incorporated by
reference), or in Part II of, or in exhibits and schedules to,
the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared
certain of such amounts, percentages and financial information with
the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed
to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date
of the letter delivered on the date of the Pricing Agreement for purposes
of such letter and to the Prospectus as amended or supplemented (including
the documents incorporated by reference therein) in relation to the
applicable Designated Securities for purposes of the letter delivered at the
Time of Delivery for such Designated Securities.
<PAGE>
ANNEX III
DELAYED DELIVERY CONTRACT
UNUM Corporation
2211 Congress Street
Portland, Maine 04122
Attention
, 199
Dear Sirs:
The undersigned hereby agrees to purchase from UNUM
Corporation (hereinafter called the "Company"), and the Company agrees to
sell to the undersigned,
$
principal amount of the Company's debt securities (hereinafter called
the "Designated Securities"), offered by the Company's Prospectus dated
199 , as amended or supplemented, receipt of a copy of which is hereby
acknowledged, at a purchase price of % of the principal amount
thereof, plus accrued interest from the date from which interest accrues
as set forth below, and on the further terms and conditions set forth
below, and on the further terms and conditions set forth in this
contract.
The undersigned will purchase the Designated Securities from the
Company on , 199 (the "Delivery Date") and
interest on the Designated Securities so purchased will accrue from
, 199 .
The undersigned will purchase the Designated Securities from the
Company on the delivery date or dates and in the principal
amount or amounts set forth below:
Principal Date from Which
Delivery Date Amount Interest Accrues
, 19 $ , 19
, 19 $ , 19
EACH SUCH DATE ON WHICH DESIGNATED SECURITIES ARE TO BE PURCHASED HEREUNDER
IS HEREINAFTER REFERRED TO AS A "DELIVERY DATE".
Payment for the Designated Securities which the undersigned has
agreed to purchase on each Delivery Date shall be made to the Company or
its order by certified or official bank check in Clearing House funds
at the office of , or by wire transfer to a bank account
specified by the Company, on such Delivery Date upon delivery to the
undersigned of the Designated Securities then to be purchased by the
undersigned in definitive fully registered form and in such denominations
and registered in such names as the undersigned may designate by written,
telex or facsimile communication addressed to the Company not less than
five full business days prior to such Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Designated Securities on each Delivery Date shall be subject to
the condition that the purchase of Designated
Securities to be made by the undersigned shall not on such Delivery
Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject. The obligation of the undersigned to take
delivery of and make payment for Designated Securities shall not be
affected by the failure of any purchaser to take delivery of and make
payment for Designated Securities pursuant to other contracts similar to
this contract.
The undersigned understands that Underwriters (the
"Underwriters") are also purchasing Designated Securities from the
Company, but that the obligations of the Undersigned
hereunder are not contingent on such purchases. Promptly after
completion of the sale to the Underwriters the Company will mail or
deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the Opinion of Counsel for the
Company delivered to the Underwriters in connection therewith.
The undersigned represents and warrants that, as of the date of this
contract, the undersigned is not prohibited from purchasing the
Designated Securities hereby agreed to be purchased by it under the
laws of the jurisdiction to which the undersigned is subject.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
This contract may be executed by either of the parties hereto in any
number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and
the same instrument.
It is understood that the acceptance by the Company of any Delayed
Delivery Contract (including this contract) is in the Company's sole
discretion and that, without limiting the foregoing, acceptances of
such contracts need not be on a first-come, first-served basis. If
this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at its address set forth
below. This will become a binding contract between the Company and
the undersigned when such counterpart is so mailed or delivered by the
Company.
Very truly yours,
By:
(Authorized Signature)
Name:
Title:
(Address)
Accepted: , 1995
UNUM Corporation
By
Name:
Title:
<PAGE>
SCHEDULE I
Principal Principal
Amount of Amount of
Firm Optional
Securities Securities
to be to be
Underwriter Purchased Purchased
Goldman, Sachs & Co. $ $
Merrill Lynch, Pierce Fenner &
Smith Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Smith Barney Inc.
Total $150,000,00 $22,500,000
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
% Junior Subordinated Deferrable Interest Debentures, Series A
AGGREGATE PRINCIPAL AMOUNT:
Principal amount of Firm Securities: $150,000,000
Optional Securities: $ 22,500,000
Any notice to exercise the election to purchase Optional
Securities must be given within a period of 30 calendar days of
the date of this Agreement. The date on which any Optional
Securities so purchased are to be delivered shall be no earlier
than two or later than ten business days after the date of such
notice.
PRICE TO PUBLIC:
100% of the principal amount of the Designated Securities
PURCHASE PRICE BY UNDERWRITERS:
% of principal amount of the Designated Securities
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
New York Clearinghouse (Next-Day) Funds
INDENTURE:
Indenture dated as of May 1, 1995, between the Company and
Mellon Bank, N.A., as Trustee, and the First Supplemental
Indenture thereto dated as of May 1, 1995 between the Company
and Mellon Bank, N.A., as Trustee (together, the "Indenture")
MATURITY:
May 31, 2025
INTEREST RATE:
%
INTEREST PAYMENT DATES:
last day of each month, commencing May 31, 1995
COVENANTS:
The Designated Securities are not subject to the provisions
relating to limitation upon sales of capital stock of
Restricted Subsidiaries and limitations upon creation of liens
on capital stock of Restricted Subsidiaries set forth in
Sections 1006 and 1007 of the Indenture, respectively.
REDEMPTION PROVISIONS:
At the option of the Company, at any time on or after May 11,
2000 and prior to maturity, at 100% of their principal amount,
together with accrued interest to the redemption date.
SINKING FUND PROVISIONS:
No sinking fund provisions
DEFEASANCE PROVISIONS:
The provisions of Section 401 of the Indenture, relating to
defeasance of certain obligations, shall apply to the
Designated Securities.
EXTENSION OF INTEREST PAYMENT PERIOD:
The Designated Securities are subject to the provisions
relating to the extension of interest payment period set forth
in Section 301 of the First Supplemental Indenture.
EVENTS TO DEFAULT:
The Designated Securities are not subject to the provision[s]
relating to cross-default and to bankruptcy, insolvency or
reorganization of any Restricted Subsidiary set forth in
Section 501 of the Indenture.
BOOK-ENTRY ONLY:
Yes
TIME OF DELIVERY:
9:30 A.M., New York City time, on May __, 1995
CLOSING LOCATION:
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004
DELAYED DELIVERY:
None
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Goldman, Sachs & Co.
Merrill Lynch Pierce Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Smith Barney Inc.
Address for Notices, etc.: Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
<PAGE>
UNUM Corporation
8.80% Junior Subordinated Deferrable
Interest Debentures Series A, Due 2025
Pricing Agreement
May 4, 1995
Goldman, Sachs & Co.,
As Representatives of the several
Underwriters named in Schedule I hereto
85 Broad Street,
New York, New York 10004
Dear Sirs:
UNUM Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein
and in the Underwriting Agreement, dated May 4, 1995 (the "Underwriting
Agreement"), to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Securities specified in Schedule II
hereto (the "Designated Securities") consisting of Firm
Securities. Each of the provisions of the
Underwriting Agreement is incorporated herein by reference in its entirety,
and shall be deemed to be a part of this Agreement to the same extent as
if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have
been made at and as of the date of this Pricing Agreement, except that
each representation and warranty that refers to the Prospectus in
Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation
and warranty as of the date of this Pricing Agreement in relation to the
Prospectus as amended or supplemented relating to the Designated
Securities which are the subject of this Pricing
Agreement. Each reference to the Representatives herein and in
the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein as therein
defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such
Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a
supplement to the Prospectus, as the case may be, relating to the
Designated Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference,
(a) the Company agrees to issue and sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the time and place and at the
purchase price to the Underwriters set forth in Schedule II hereto, the
principal amount of Firm Securities set forth opposite the name of such
Underwriter in Schedule I hereto, less the principal amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as may be
specified in Schedule II.
If the foregoing is in accordance with your
understanding, please sign and return to us counterparts hereof, and upon
acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the
Underwriting Agreement incorporated herein by reference, shall constitute
a binding agreement between each of the Underwriters and the Company. It
is understood that your acceptance of this letter on behalf of each of
the Underwriters is or will be pursuant to the authority set forth in a
form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without
warranty on the part of the Representatives as to the authority of the
signers thereof.
Very truly yours,
UNUM Corporation
By: /s/ RODNEY N. HOOK
Name: Rodney N. Hook
Title: Senior Vice President and Chief
Financial Officer
Accepted as of the date hereof:
Goldman, Sachs & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Smith Barney Inc.
By: Goldman, Sachs & Co.
/s/ GOLDMAN, SACHS & CO.
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Underwriter Principal Principal
Amount of Amount of
Firm Optional
Securities Securities
to be to be
Purchased Purchased
Goldman, Sachs & Co. $20,812,500 $ 3,121,875
Merrill Lynch, Pierce Fenner &
Smith Incorporated 20,812,500 3,121,875
Morgan Stanley & Co. Incorporated 20,812,500 3,121,875
PaineWebber Incorporated 20,812,500 3,121,875
Smith Barney Inc. 20,812,500 3,121,875
Alex. Brown & Sons Incorporated 2,625,000 393,750
CS First Boston Corporation 2,625,000 393,750
Dillon, Read & Co. Inc. 2,625,000 393,750
A.G. Edwards & Sons, Inc. 2,625,000 393,750
Kemper Securities, Inc. 2,625,000 393,750
Lehman Brothers Inc. 2,625,000 393,750
Oppenheimer & Co., Inc. 2,625,000 393,750
Prudential Securities Incorporated 2,625,000 393,750
The Robinson-Humphrey Company, Inc. 2,625,000 393,750
Salomon Brothers Inc 2,625,000 393,750
Advest, Inc. 937,500 140,625
Dain Bosworth Incorporated 937,500 140,625
Fahnestock & Co. Inc. 937,500 140,625
Interstate/Johnson Lane Corporation 937,500 140,625
Janney Montgomery Scott Inc. 937,500 140,625
Kennedy, Cabot & Co. 937,500 140,625
Legg Mason Wood Walker, Incorporated 937,500 140,625
McDonald & Company Securities, Inc. 937,500 140,625
Morgan Keegan & Company, Inc. 937,500 140,625
Olde Discount Corporation 937,500 140,625
Piper Jaffray Inc. 937,500 140,625
Principal Financial Securities, Inc. 937,500 140,625
Pryor, McClendon, Counts & Co., Inc. 937,500 140,625
Rauscher Pierce Refsnes, Inc. 937,500 140,625
Raymond James & Associates, Inc. 937,500 140,625
Sutro & Co. Incorporated 937,500 140,625
Trilon International Inc. 937,500 140,625
Tucker Anthony Incorporated 937,500 140,625
U.S. Clearing Corp. 937,500 140,625
Wedbush Morgan Securities 937,500 140,625
Wheat, First Securities, Inc. 937,500 140,625
Total $150,000,000 $22,500,000
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
8.80% Junior Subordinated Deferrable Interest Debentures, Series A
AGGREGATE PRINCIPAL AMOUNT:
Principal amount of Firm Securities: $150,000,000
Optional Securities: $ 22,500,000
Any notice to exercise the election to purchase Optional
Securities must be given within a period of 30 calendar days of
the date of this Agreement. The date on which any Optional
Securities so purchased are to be delivered shall be no earlier
than two or later than ten business days after the date of such
notice.
PRICE TO PUBLIC:
100% of the principal amount of the Designated Securities
PURCHASE PRICE BY UNDERWRITERS:
96.85% of principal amount of the Designated Securities
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
New York Clearinghouse (Next-Day) Funds
INDENTURE:
Indenture dated as of May 1, 1995, between the Company and
Mellon Bank, N.A., as Trustee, and the First Supplemental
Indenture thereto dated as of May 1, 1995 between the Company
and Mellon Bank, N.A., as Trustee (together, the "Indenture")
MATURITY:
May 31, 2025
INTEREST RATE:
8.80%
INTEREST PAYMENT DATES:
last day of each month, commencing May 31, 1995
COVENANTS:
The Designated Securities are not subject to the provisions
relating to limitation upon sales of capital stock of
Restricted Subsidiaries and limitations upon creation of liens
on capital stock of Restricted Subsidiaries set forth in
Sections 1006 and 1007 of the Indenture, respectively.
REDEMPTION PROVISIONS:
At the option of the Company, at any time on or after May 11,
2000 and prior to maturity, at 100% of their principal amount,
together with accrued interest to the redemption date.
SINKING FUND PROVISIONS:
No sinking fund provisions
DEFEASANCE PROVISIONS:
The provisions of Section 401 of the Indenture, relating to
defeasance of certain obligations, shall apply to the
Designated Securities.
EXTENSION OF INTEREST PAYMENT PERIOD:
The Designated Securities are subject to the provisions
relating to the extension of interest payment period set forth
in Section 301 of the First Supplemental Indenture.
EVENTS TO DEFAULT:
The Designated Securities are not subject to the provision[s]
relating to cross-default and to bankruptcy, insolvency or
reorganization of any Restricted Subsidiary set forth in
Section 501 of the Indenture.
BOOK-ENTRY ONLY:
Yes
TIME OF DELIVERY:
9:30 A.M., New York City time, on May 11, 1995
CLOSING LOCATION:
Sullivan & Cromwell, 125 Broad Street, New York, New York 10004
DELAYED DELIVERY:
None
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Goldman, Sachs & Co.
Merrill Lynch Pierce Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Smith Barney Inc.
<PAGE>
Address for Notices, etc.: Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
