<PAGE>
As filed with the Securities Exchange Commission on July 28, 1998
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
MBIA INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CONNECTICUT 06-1185706
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
113 KING STREET
ARMONK, NEW YORK 10504
(914) 273-4545
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
LOUIS G. LENZI, ESQ.
GENERAL COUNSEL AND CORPORATE SECRETARY
MBIA INC.
113 KING STREET
ARMONK, NEW YORK 10504
(914) 273-4545
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------
COPIES TO:
ANDREW L. SOMMER, ESQ.
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions and other factors. [ ]
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, please check the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1)(2) PER UNIT (3) OFFERING PRICE (3) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities N/A
- ---------------------------------------------------------------------------------------------------------
Preferred Stock N/A
- ---------------------------------------------------------------------------------------------------------
Common Stock N/A
- ---------------------------------------------------------------------------------------------------------
TOTAL $350,000,000 100% $350,000,000 $103,250.00
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</TABLE>
(1) Includes such indeterminate principal amount of Debt Securities, such
indeterminate number of shares of Preferred Stock and such indeterminate
number of shares of Common Stock as may from time to time be issued at
indeterminate prices. There are also being registered hereunder an
indeterminate number of shares of Common Stock and Preferred Stock which may
be issued from time to time upon conversion of or in exchange for Preferred
Stock or Debt Securities issued hereby. No separate consideration will be
received for the Common Stock or Preferred Stock issuable upon conversion of
or in exchange for any such securities registered hereunder.
(2) In United States dollars or the equivalent thereof in one or more foreign
denominated currencies or currency units if Debt Securities are issued with
principal amounts denominated in one or more foreign or composite currencies
as shall be designated by the Company.
(3) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(o) under the Securities Act of 1933 and exclusive
of accrued interest and dividends, if any.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
Subject to Completion, Dated July 28, 1998
PROSPECTUS
, 1998
US $350,000,000
MBIA INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
MBIA Inc. (the "Company") may offer from time to time its (a) unsecured
-
debt securities, in one or more series, which may be either senior debt
securities (the "Senior Debt Securities") or subordinated debt securities (the
"Subordinated Debt Securities" and, together with the Senior Debt Securities,
the "Debt Securities"); (b) shares of its preferred stock, par value $1.00 per
-
share (the "Preferred Stock"); and (c) shares of its common stock, par value
-
$1.00 per share (the "Common Stock"). The Debt Securities, Preferred Stock
and Common Stock (collectively, the "Securities") may be offered either
together or separately and will be offered in amounts, at prices and on terms
to be determined at the time any such Securities are to be offered. The
Securities will have an aggregate initial offering price of up to $350,000,000
or the equivalent thereof in U.S. dollars if any Securities are denominated in
a foreign currency or in currency units.
Specific terms of the particular Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement (the "Prospectus Supplement"), which will describe, without
limitation and where applicable the following: (a) in the case of Debt
-
Securities, the specific designation, aggregate principal amount,
denominations, maturity, premium, if any, interest rate (which may be fixed or
variable) or method of calculation of interest and premium, if any, place or
places where principal, premium, if any, and interest will be payable, any
terms of redemption, any sinking fund provisions, terms for any conversion or
exchange into other Securities, initial public offering or purchase price,
methods of distribution and other special terms, (b) in the case of Preferred
-
Stock, the specific designation, stated value and liquidation preference per
share and the number of shares offered, dividend rate (which may be fixed or
variable) or method of calculating dividends, place or places where dividends
will be payable, any terms of redemption, any sinking fund provisions, terms
for any conversion or exchange into other Securities, initial public offering
or purchase price, methods of distribution and other special terms, and (c) in
-
the case of Common Stock, the number of shares offered, initial public
offering or purchase price, methods of distribution and other special terms.
The Prospectus Supplement will also contain information, as applicable,
about certain United States Federal income tax considerations relating to the
Securities. The Securities may be sold to or through underwriters, through
dealers or agents or directly to purchasers. See "Plan of Distribution". The
names of any underwriters, dealers or agents involved in the sale of
Securities in respect of which this Prospectus is being delivered and any
applicable fee, commission or discount arrangements with them will be set
forth in the Prospectus Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission (the "Commission"). The securities may not
be
<PAGE>
sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This Prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws
of any such State.
---------------
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and the applicable Prospectus
Supplement, and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company or any agent,
underwriter or dealer. This Prospectus and the Prospectus Supplement do not
constitute an offer to sell or a solicitation of an offer to buy any
securities to which they relate in any jurisdiction in which it is unlawful to
make such an offer or solicitation. Neither the delivery of this Prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports and proxy and information statements and other
information concerning the Company may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the following regional offices
of the Commission: Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661, 14th Floor, and Seven World Trade Center, Suite 1300,
New York, New York 10048. Copies of such material can be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, at prescribed rates, or may be viewed
by visiting the Commission's web site at http://www.sec.gov. Reports, proxy
statements and other information concerning the Company may also be inspected
at the offices of the New York Stock Exchange, Inc. at 20 Broad Street, New
York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act") with respect to the securities offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement, certain
portions of which have been omitted as permitted by the rules and regulations
of the Commission. In addition, certain documents filed by the Company with
the Commission have been incorporated by reference in this Prospectus. See
"Incorporation of Certain Documents by Reference." Statements contained
herein concerning the provisions of any document do not purport to be
complete, and in each instance are qualified in all respects by reference to
the copy of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997.
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998.
(3) The description of the Common Stock of the Company contained in
the Company's Registration Statement on Form 8-A filed with the Commission
on June 15, 1987, as amended by the Form 8-A filed with the Commission on
December 31, 1991, by the Form 8-A filed with the Commission on October 27,
1994, and by the Form 8-A filed with the Commission on May 29, 1998.
(4) The Company's Current Reports on Form 8-K filed with the Commission
on November 19, 1997, January 16, 1998 and February 20, 1998.
2
<PAGE>
Any documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Prospectus, shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the foregoing documents). Any such request
should be directed to: Louis G. Lenzi, Esq., MBIA Inc., 113 King Street,
Armonk, New York 10504 (telephone: (914) 273-4545).
3
<PAGE>
THE COMPANY
MBIA Inc. (the "Company") is engaged primarily in providing financial
guarantees for municipal bonds, asset-backed and mortgaged-backed securities,
selected corporate debt, including investor-owned utility bonds, and debt of
high quality financial institutions. These financial guarantees are provided
principally through the Company's wholly-owned subsidiary, MBIA Insurance
Corporation ("MBIA Corp.")./1/ For the year ended December 31, 1997, the
Company insured $48.4 billion and $1.8 billion of gross par value,
respectively, of domestic and international new issue and secondary market
municipal bonds and $38.2 billion and $3.5 billion of gross par value,
respectively, of domestic and international structured finance business. As of
December 31, 1997, the total net par amount of outstanding bonds insured by
the Company was $303.8 billion and the aggregate net insurance in force was
$513.7 billion.
Financial guarantee insurance provides an unconditional and irrevocable
guarantee of the payment of the principal of and interest on insured
obligations when due. MBIA Corp. primarily insures obligations sold in the
new issue and secondary markets, including those held in unit investment
trusts and by mutual funds. It also provides surety bonds for debt service
reserve funds. The principal economic value of financial guarantee insurance
to the entity offering the obligations is the saving in interest costs
resulting from the difference in the market yield between an insured
obligation and the same obligation on an uninsured basis. In addition, for
complex financings and for obligations of issuers that are not well known by
investors, insured obligations receive greater market acceptance than
uninsured obligations. All obligations insured by MBIA Corp. are rated AAA by
Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc.
and Fitch IBCA, Inc. and Aaa by Moody's Investors Service, Inc., the highest
ratings assigned by these rating agencies.
The Company, through its wholly-owned subsidiary, MBIA Assurance S.A., writes
financial guarantee insurance in the international market, including policies
insuring sovereign risk, public infrastructure financings, asset-backed
transactions and certain obligations of corporations and financial
institutions. In 1995, MBIA Corp. entered into a joint venture agreement with
Ambac Assurance Corporation for the purpose of jointly marketing financial
guarantee insurance outside the United States.
The Company's insurance operations derive their income from insurance
premiums earned over the life of the insured obligations and from investment
income earned on assets representing capital, retained earnings and deferred
premium revenues. As of December 31, 1997, the Company's deferred premiums
revenues were $2,090 million, its shareholders' equity was $3,355 million, and
its total investments were $8,534 million and $8,908 million at book value and
market value, respectively. As of December 31, 1997, MBIA Corp.'s investment
portfolio was $4,860 million and $5,127 million at book value and market
value, respectively, and was primarily comprised of high-quality fixed income
securities with intermediate maturities.
The Company's subsidiaries also provide consulting services to public
sector clients, including U.S. state and local governments, municipalities,
colleges and universities. These services include cash management, municipal
investment agreements, discretionary asset management, purchase and
administrative services, tax discovery and compliance, tax audit, analysis and
information services and bond administration services.
In February, 1998, the Company acquired Holdings in a stock-for-stock
merger which was accounted for as a pooling of interests. Holdings, through
its insurance subsidiaries, is in the business of insuring structured asset-
backed, corporate, municipal and other financial obligations in the U.S. and
international capital markets and providing financial guarantee reinsurance
for structured asset-backed, corporate, municipal and other financial
obligations written by other major insurance companies. For the year ended
December 31, 1997, Holdings insured $9.4 billion and $2.3 billion of gross par
value, respectively, of domestic and international structured finance business
and $0.3 billion and $0.2 billion of gross par value of domestic and
international new issue and secondary market municipal bonds.
The financial guarantee industry is subject to the direct and indirect
effects of governmental regulation, including changes in tax laws affecting
the municipal and asset-backed debt markets. No assurance can be given that
future
----------
/1/ The Company's results have been restated to reflect its merger with CapMAC
Holdings Inc. ("Holdings"). MBIA Corp.'s results have not been restated.
4
<PAGE>
legislative or regulatory changes might not adversely affect the results of
operations and financial condition of the Company.
The principal executive offices of the Company are located at 113 King
Street, Armonk, New York 10504. The telephone number is (914) 273-4545.
USE OF PROCEEDS
Unless otherwise stated in the applicable Prospectus Supplement, the net
proceeds to the Company from the sale of the Securities will be used to
provide additional capital for the future needs of the Company and for general
corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated. Earnings represent consolidated
earnings before income taxes and fixed charges. Fixed charges consist of
interest and that portion of rental expense deemed representative of the
interest factor for such rental expense. The Company had no capitalized
interest for the periods presented. (See Exhibit 12.01 for Computation of
Ratio.)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
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1993 1994 1995 1996 1997
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<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1) 12.8 12.9 13.2 13.5 14.0
- ---------------------------------------------------------------------
</TABLE>
(1) Fixed charges do not include the amount of fixed charges associated with
obligations insured by MBIA Corp.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities offered hereby are to be issued in one or more
series under the Senior Indenture, dated as of August 1, 1990, as supplemented
from time to time (as so supplemented, the "Senior Indenture"), between the
Company and The First National Bank of Chicago, as trustee (the "Senior
Indenture Trustee"). The Subordinated Debt Securities offered hereby are to
be issued in one or more series under a Subordinated Indenture, as
supplemented from time to time (as so supplemented, the "Subordinated
Indenture" and, together with the Senior Indenture, the "Indentures"), between
the Company and a trustee to be named in the applicable Prospectus Supplement
(the "Subordinated Indenture Trustee" and, together with the Senior Indenture
Trustee, the "Trustees"). Copies of the Senior Indenture and the form of the
Subordinated Indenture have been filed as exhibits to the Registration
Statement of which this Prospectus forms a part.
The statements herein relating to the Debt Securities and the following
summaries of certain provisions of the Indentures do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indentures (as they may be amended or
supplemented from time to time) and the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). Whenever particular sections or defined
terms of the Indentures (as they may be amended or supplemented from time to
time) are referred to herein or in a Prospectus Supplement, such sections or
defined terms are incorporated herein or therein by reference.
GENERAL
The Debt Securities will be direct and unsecured obligations of the
Company. The Senior Debt Securities will rank equally and ratably with all
other unsecured and unsubordinated obligations of the Company. The
Subordinated Debt Securities will be subordinate and junior in right of
payment to the extent and in the manner set forth in the Subordinated
Indenture to all Senior Debt (as defined below) of the Company. See "-
Subordination under the Subordinated Indenture". Because the Company is a non-
operating holding company, most of the assets of the Company are owned by the
Company's subsidiaries, and the Company relies primarily on dividends from
such subsidiaries to meet its obligations for payment of principal and
interest on its outstanding debt obligations. Accordingly, the Debt
Securities will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries. In addition, the payment of
dividends by
5
<PAGE>
the Company's insurance company subsidiary, MBIA Corp., is limited under the
applicable insurance laws and regulations of the State of New York. The
Indentures do not limit the aggregate amount of Debt Securities that may be
issued thereunder. Except as otherwise provided in the applicable Prospectus
Supplement, the Indentures, as they apply to any series of Debt Securities, do
not limit the incurrence or issuance of other secured or unsecured debt of the
Company, whether under either of the Indentures or any other indenture that
the Company may enter into in the future or otherwise.
The Debt Securities will be issuable in one or more series pursuant to an
indenture supplemental to the Senior Indenture or the Subordinated Indenture,
as the case may be, or a resolution of the Company's Board of Directors or a
committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debt Securities (to the extent such terms
are applicable to such Debt Securities): (1) the title of the Debt
Securities; (2) any limit upon the aggregate principal amount of the Debt
Securities; (3) the date or dates on which the principal of the Debt
Securities is payable; (4) the rate or rates, if any, at which the Debt
Securities shall bear interest, the interest payment dates on which any such
interest shall be payable, the right, if any, of the Company to defer or
extend an interest payment date, or the method by which any of the foregoing
shall be determined; (5) the place or places where, subject to the terms of
the Indenture, the principal of and premium, if any, and interest on the Debt
Securities will be payable; (6) any period or periods within or date or dates
on which, the price or prices at which and the terms and conditions upon which
Debt Securities may be redeemed, in whole or in part, at the option of the
Company pursuant to any sinking fund or otherwise; (7) the obligation, if any,
of the Company to redeem, purchase or repay the Debt Securities pursuant to
any sinking fund, amortization or analogous provisions or at the option of a
Holder thereof and the period or periods within which, the price or prices at
which, the currency or currencies (including currency unit or units) in which
and the other terms and conditions upon which the Debt Securities shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation; (8) the denominations in which any Debt Securities shall be
issuable if other than denominations of $1,000 and any integral multiple
thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Debt Securities shall be payable, or in
which the Debt Securities shall be denominated; (10) any additions,
modifications or deletions, in the Events of Default or covenants of the
Company specified in the Indenture with respect to the Debt Securities; (11)
if other than the principal amount thereof, the portion of the principal
amount of Debt Securities that shall be payable upon declaration of
acceleration of the maturity thereof; (12) any index or indices used to
determine the amount of payments of principal of and premium, if any, on the
Debt Securities and the manner in which such amounts will be determined; (13)
the issuance of a temporary Global Security representing all of the Debt
Securities of such series and exchange of such temporary Global Security for
definitive Debt Securities of such series; (14) whether the Debt Securities of
the series shall be issued in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary for such Global
Securities, and the circumstances under which any such Registered Global
Security may be registered for transfer or exchange, or authenticated and
delivered, in the name of a Person other than such Depositary or its nominee,
if other than as set forth in the Indentures; (15) the appointment of any
paying agent, transfer agent or registrars; (16) the terms and conditions of
any obligation or right of the Company to convert or exchange the Subordinated
Debt Securities into other Securities or at the option of a Holder thereof;
(17) the relative degree, if any, to which the Debt Securities of any series
shall be senior to or subordinated to other series of Debt Securities in right
of payment, whether such other series of Debt Securities are outstanding or
not; and (18) any other terms of the Debt Securities not inconsistent with the
provisions of the Indentures. (Section 2.3).
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time
of issuance is below market rates. Certain federal income tax consequences
and special considerations applicable to any such Debt Securities will be
described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is payable in one or
more foreign currencies or currency units or if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, or premium or interest, if any, on, any Debt Securities is
payable in one or more foreign currencies or currency units, the restrictions,
elections, certain federal income tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such foreign
currency or currency units will be set forth in the applicable Prospectus
Supplement.
6
<PAGE>
If any index is used to determine the amount of payments of principal of,
or premium or interest, if any, on, any series of Debt Securities, special
federal income tax, accounting and other considerations applicable thereto
will be described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION, PAYMENT AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities will be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. Debt Securities of
any series will be exchangeable for other Debt Securities of the same issue
and series, of any authorized denominations, of a like aggregate principal
amount.
Debt Securities may be presented for exchange as provided above, and may be
presented for registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly executed), at
the office of the registrar or at the office of any transfer agent designated
by the Company for such purpose with respect to any series of Debt Securities
and referred to in an applicable Prospectus Supplement, without service charge
and upon payment of any taxes and other governmental charges as described in
the Indenture. The Company will appoint the Trustees as registrars under the
Indentures. If the applicable Prospectus Supplement refers to any transfer
agents or paying agents (in addition to the registrar) initially designated by
the Company with respect to any series of Debt Securities, the Company may at
any time rescind the designation of any such transfer agent or paying agent or
approve a change in the location through which any such transfer agent or
paying agent acts. The Company may at any time designate additional transfer
agents or paying agents with respect to any series of Debt Securities.
Neither the Company nor the Trustees shall be required to exchange or register
a transfer of (a) any Debt Securities of any series for a period of 15 days
-
preceding the first mailing of notice of redemption for such series to be
redeemed, or (b) any Debt Securities selected, called or being called for
-
redemption except, in the case of any Debt Security to be redeemed in part,
the portion thereof not so to be redeemed.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of (and premium, if any) and interest, if any, on Debt Securities
will be made at the office of the Trustee for such Debt Securities in the City
of New York or at the office of such paying agent or paying agents as the
Company may designate from time to time in an applicable Prospectus
Supplement, except that at the option of the Company payment of any interest
may be made by check mailed to the address of the person entitled thereto as
such address shall appear in the register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any interest on Debt Securities
will be made to the person in whose name such Debt Security is registered at
the close of business on any record date for such interest, except in the case
of defaulted interest.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Debt Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Debt Securities may be issued only
in fully registered form and in either temporary or permanent form. Unless
and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Debt Security may not be transferred
except as a whole by the Depositary for such Global Debt Security to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by the Depositary or any nominee to a
successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Debt Security, and the deposit of such Global
Debt Security with or on behalf of the Depositary, the Depositary for such
Global Debt Security or its nominee will credit on its book-entry registration
and transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Debt Security to the accounts of persons
that have accounts with such Depositary ("Participants"). Such accounts shall
be
7
<PAGE>
designated by the dealers, underwriters or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Debt
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Debt
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The
laws of some states require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global Debt
Security.
So long as the Depositary for a Global Debt Security, or its nominee, is
the registered owner of such Global Debt Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Global Debt Security for all purposes
under the Indenture governing such Debt Securities. Except as provided below,
owners of beneficial interests in a Global Debt Security will not be entitled
to have any of the individual Debt Securities of the series represented by
such Global Debt Security registered in their names, will not receive or be
entitled to receive physical delivery of any such Debt Securities of such
series in definitive form and will not be considered the owners or holders
thereof under the Indenture governing such Debt Securities.
Payments of principal of (and premium, if any) and interest, if any, on
individual Debt Securities represented by a Global Debt Security registered in
the name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Debt
Security representing such Debt Securities. None of the Company, the Trustee
for such Debt Securities, any paying agent or the Securities registrar for
such Debt Securities will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interest of the Global Debt Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Debt Security representing any of such Debt
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Debt Security for such Debt Securities as shown on the
records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global Debt
Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in 'street name'.
Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Debt Securities is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual
Debt Securities of such series in exchange for the Global Debt Security
representing such series of Debt Securities. In addition, the Company may at
any time and in its sole discretion, subject to any limitations described in
the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of such series represented by one or more Global Debt
Securities and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Debt Security or Securities representing
such series of Debt Securities. Further, if the Company so specifies with
respect to the Debt Securities of a series, an owner of a beneficial interest
in a Global Debt Security representing Debt Securities of such series may, on
terms acceptable to the Company, the Trustee and the Depositary for such
Global Debt Security, receive individual Debt Securities of such series in
exchange for such beneficial interests, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities. In any such
instance, an owner of a beneficial interest in a Global Debt Security will be
entitled to physical delivery of individual Debt Securities of the series
represented by such Global Debt Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and
integral multiples thereof.
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CERTAIN COVENANTS OF THE COMPANY
Limitations on Liens. Under the Senior Indenture, so long as Senior Debt
--------------------
Securities are outstanding, the Company will not, and will not permit any
Subsidiary to, directly or indirectly, create, issue, assume, incur or
guarantee any indebtedness for borrowed money which is secured by a Mortgage
of any nature on any of the present or future capital stock of any Restricted
Subsidiary unless the Senior Debt Securities then outstanding shall be secured
equally and ratably with, or prior to, such other secured debt so long as it
is outstanding. (Section 3.6)
Limitations on Disposition of Stock of Restricted Subsidiaries. Under the
--------------------------------------------------------------
Senior and Subordinated Indentures, so long as Debt Securities are
outstanding, the Company will not, and will not permit any Subsidiary to,
sell, transfer or otherwise dispose of any shares of capital stock of any
Restricted Subsidiary except for (i) a sale, transfer or other disposition of
-
any capital stock of any Restricted Subsidiary to a wholly owned Subsidiary of
the Company or such Subsidiary; (ii) a sale, transfer or other disposition
--
of the entire capital stock of any Restricted Subsidiary for at least fair
value (as determined by the Board of Directors of the Company acting in good
faith); or (iii) a sale, transfer or other disposition of the capital stock of
---
any Restricted Subsidiary for at least fair value (as determined by the Board
of Directors of the Company acting in good faith) if, after giving effect
thereto, the Company and its Subsidiaries would own more than 80% of the
issued and outstanding Voting Stock of such Restricted Subsidiary. (Section
3.7 of the Senior Indenture; Section 3.6 of the Subordinated Indenture)
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Under the Senior and Subordinated Indentures, so long as Debt Securities
are outstanding, the Company will not consolidate with or merge with or into
any other corporation or convey, transfer or lease its properties or assets as
an entirety or substantially as an entirety to any person, unless (i) the
-
successor or purchaser is a corporation organized and existing under the laws
of the United States of America, any State thereof or the District of
Columbia; (ii) such successor or purchaser shall expressly assume, by
--
supplemental indenture satisfactory in form to the related Trustee, the due
and punctual payment of the principal of, premium, if any, and interest on all
the Debt Securities and the performance and observance of every covenant and
condition of the Company under the related Indenture; and (iii) immediately
---
after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have occurred and be continuing under the related Indenture.
(Section 9.1)
CERTAIN DEFINITIONS
The covenants and other provisions relating to the Debt Securities are to
be read in conjunction with the definitions contained in the Senior and
Subordinated Indentures, certain of which are substantially to the following
effect:
"Debt Securities" means all unsecured debt securities, notes or other
evidences of indebtedness issued in one or more series that the Company may
issue from time to time in accordance with the terms of the related
Indentures.
"Mortgage" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Restricted Subsidiary" means MBIA Corp. and any successor to all or
substantially all of its business, provided that such successor is a
Subsidiary.
"Subsidiary" means a corporation of which more than 50% of the outstanding
Voting Stock is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
"Voting Stock" means, with respect to any Subsidiary, stock of any class or
classes (or equivalent interests), if the holders of the stock of such class
or classes (or equivalent interests) are ordinarily, in the absence of
contingencies, entitled to vote for the election of the directors (or persons
performing similar functions) of such corporation, even though the right so to
vote has been suspended by the happening of such a contingency.
9
<PAGE>
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default with
regard to any series of Debt Securities under each of the Indentures: (i)
-
default continued for 30 days in payment of any installment of interest on any
of the Debt Securities when due; (ii) default in payment of all or any part of
--
the principal of the Debt Securities when due and payable either at maturity,
upon any redemption, by declaration or otherwise; (iii) default continued for
---
60 days after notice of such default in performance of any covenant or
warranty of the Indenture by the Company in respect of the Debt Securities;
(iv) certain events of default with respect to indebtedness of the Company
---
(other than the Debt Securities or non-recourse obligations of the Company) in
an aggregate principal amount in excess of $10,000,000 which default shall
consist of the failure to make any payment at maturity or shall have resulted
in the acceleration of the maturity of such indebtedness; (v) certain events
-
of bankruptcy, insolvency, or reorganization of the Company or any Restricted
Subsidiary; or (vi) any other Event of Default provided in the supplemental
--
indenture or resolution of the Board of Directors under which such series of
Debt Securities is issued or in the form of Debt Security for such series.
(Section 5.1) The Company is required to file with the Trustee annually a
written statement as to the fulfillment of certain of its obligations under
the Indenture. (Section 3.5)
Each Indenture provides that the Trustee may withhold notice to the holders
of Debt Securities of any default (except in payment of principal of or
premium, if any, or interest on the Debt Securities) if the Trustee considers
it in the interest of the holders of the Debt Securities to do so. (Section
5.11)
Each Indenture provides that (a) if an Event of Default described in clause
-
(i) or (ii) above shall have occurred and be continuing with regard to the
Debt Securities of any series, either the Trustee or the holders of 25% in
aggregate principal amount of the Debt Securities of that series then
outstanding (each such series acting as a separate class) may declare the
principal (or, if Debt Securities of such series are original issue discount
Debt Securities, such portion of the principal amount as may be specified in
the terms of that series) of all Debt Securities of such series and interest
accrued thereon, if any, to be due and payable immediately and (b) if an Event
-
of Default described in clause (iii), (iv) or (v) above shall have occurred
and be continuing, either the Trustee or the holders of 25% in aggregate
principal amount of all Debt Securities (or in the case of an Event of Default
described in clause (iii) above, all series affected by such Event of Default)
then outstanding (voting as a single class) may declare the principal (or, if
Debt Securities of such series are original issue discount Debt Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all Debt Securities (in the case of clause (iii) above, limited to
all series affected) then outstanding and any premium or interest accrued
thereon, to be due and payable immediately. Upon certain conditions, such
declaration by the holders of Debt Securities of any series may be annulled
and past defaults which have been cured may be waived by (a) with respect to
-
clauses (i) or (ii) the holders of a majority in aggregate principal amount of
Debt Securities of such series (each such series voting as a separate class)
then outstanding and (b) with respect to clauses (iii), (iv) or (v) above, the
-
holders of a majority in aggregate principal amount of the Debt Securities of
all series (in the case of clause (iii) above, limited to all series affected
by such default) then outstanding (voting as a single class). (Section 5.1)
Prior to a declaration of acceleration of maturity of the Debt Securities of
any series, the holders of a majority in aggregate principal amount of the
Debt Securities of each series voting separately or all series voting as a
single class, depending on the nature of the Event of Default, may waive any
Event of Default, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Debt Securities of
such series or in respect of a covenant or provision of the Indenture which
cannot be modified or amended without the consent of the holder of each Debt
Security of such series affected. (Section 5.10)
Subject to the provisions of each Indenture relating to the duties of the
Trustee, the Trustee shall be under no obligation to exercise any of its
rights or powers under the relative Indenture at the request, order or
direction of any of the holders of Debt Securities, unless such holders shall
have offered the Trustee reasonable indemnity. (Section 6.2) Subject to such
provision for indemnification, the holders of a majority in aggregate
principal amount of the Debt Securities shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee.
(Section 5.9)
10
<PAGE>
DEFEASANCE AND COVENANT DEFEASANCE
Except as may otherwise be provided in the applicable Prospectus Supplement
with respect to the Debt Securities of any series, each Indenture provides
that, subject to certain conditions, the Company may elect either (i) to be
-
discharged from any and all obligations with respect to the Debt Securities
(except for the obligations to register the transfer or exchange of the Debt
Securities, to replace temporary or mutilated, defaced, destroyed, lost or
stolen Debt Securities, to maintain an office or agency for the payment of
principal and interest in respect of the Debt Securities, to appoint a paying
agent and, if the Company elects to act as the paying agent, to hold moneys
for such payment in trust) ("Defeasance") or (ii) to be released from its
--
obligations with respect to the Debt Securities under Sections 3.6 and 3.7 of
the Indenture (being the sections of the Indenture captioned "Limitations on
Liens" and "Limitations on Disposition of Stock of Restricted Subsidiaries"
see "Certain Covenants of the Company") ("Covenant Defeasance"), upon the
deposit with the Trustee (or another qualifying trustee) irrevocably in trust
for such purpose, of money and/or United States government obligations in an
amount which, in the opinion of a nationally recognized firm of independent
public accountants delivered to such trustee, would be sufficient to pay the
principal of and premium, if any, and interest on the Debt Securities on the
scheduled due dates therefor. (Sections 13.1 through 13.4)
Each Indenture provides that, to effect Defeasance or Covenant Defeasance,
the Company must deliver to the Trustee an opinion of counsel to the effect
that Defeasance or Covenant Defeasance, as the case may be, will not cause the
holders of the Debt Securities to recognize income, gain or loss for federal
income tax purposes. In addition, in the case of Defeasance, such opinion of
counsel must state that a private letter ruling or a revenue ruling to the
same effect has been issued by the United States Internal Revenue Service or
state that since the date of the Indenture there has been a change in the
applicable federal income tax law to the same effect. (Sections 13.3 and 13.4)
With respect to the Subordinated Indenture, in order to be discharged as
described above, no default in the payment of principal of (or premium, if
any) or interest on any Senior Debt shall have occurred and be continuing or
no Event of Default with respect to the Senior Debt shall have occurred and be
continuing and shall have resulted in such Senior Debt becoming or being
declared due and payable prior to the date it would have become due and
payable.
MODIFICATION AND WAIVER
Each Indenture provides that the Company may enter into a supplemental
indenture or indentures for the purpose of adding to, changing or eliminating
any of the provisions of such Indenture or of any supplemental indentures or
of modifying the rights of the holders of Debt Securities issued thereunder if
approved in writing signed by the holders of not less than a majority in
aggregate principal amount of all outstanding Debt Securities affected thereby
voting as one class; provided that the consent of each holder of Debt
Securities affected thereby is required for any modification or alteration
which (i) extends the final maturity of any Debt Securities, or reduces the
-
principal amount thereof, or reduces the rate or extends the time of payment
of interest thereon, or reduces any amount payable on redemption thereof or
impairs or affects the right of any holder of Debt Securities to institute
suit for the payment thereof, (ii) reduces the percentage in aggregate
--
principal amount, the consent of the holders of which is required for any such
supplemental indenture or (iii) modifies any provision with respect to the
---
subordination of Debt Securities of any series in a manner adverse to the
holders thereof. (Section 8.2) The holders of at least a majority in
aggregate principal amount of the outstanding Debt Securities of all series
(including the Debt Securities) voting as one class may waive compliance by
the Company with certain covenants contained in each Indenture. (Section 3.9)
SUBORDINATION UNDER THE SUBORDINATED INDENTURE
In the Subordinated Indenture, the Company has covenanted and agreed that
any Subordinated Debt Securities issued thereunder will be subordinate and
junior in right of payment to all Senior Debt to the extent provided in the
Subordinated Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in
connection with any insolvency or bankruptcy proceeding of the Company, the
holders of the Senior Debt will first be entitled to receive payment in full
of principal of (and premium, if any) and interest,
11
<PAGE>
if any, on such Senior Debt before the holders of Subordinated Debt Securities
will be entitled to receive or retain any payment in respect of the principal
of (and premium, if any) or interest, if any, on the Subordinated Debt
Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders
of Subordinated Debt Securities will be entitled to receive any payment upon
the principal of (or premium, if any) or interest, if any, on the Subordinated
Debt Securities.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in any payment with respect to
Senior Debt, or an event of default with respect to any Senior Debt resulting
in the acceleration of the maturity thereof, or if any judicial proceeding
shall be pending with respect to any such default.
The Subordinated Indenture defines "Senior Debt" as the principal of (and
premium, if any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not such claim for post-petition interest is allowed in
such proceeding), on Debt, whether incurred on or prior to the date of the
Subordinated Indenture or thereafter incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is provided that such obligations are not superior in right of payment to
the Subordinated Debt Securities or to other Debt which is pari passu with, or
subordinated to, the Subordinated Debt Securities; provided, however, that
Senior Debt shall not be deemed to include (i) any Debt of the Company which
-
when incurred and without respect to any election under Section 1111(b) of the
Bankruptcy code was without recourse to the Company, (ii) any Debt of the
--
Company to any of its subsidiaries, (iii) Debt to any employee of the Company,
---
(iv) any liability for taxes, (v) indebtedness or monetary obligations to
-- -
trade taxes and (vi) indebtedness or monetary obligations to trade creditors
--
or assumed by the Company or any of its subsidiaries in the ordinary course of
business in connection with the obtaining of materials or services. As used
in the proceeding sentence the term "Debt" means with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (i) every obligation of such Person for money
-
borrowed; (ii) every obligation of such Person evidenced by bonds, debentures,
--
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses; (iii) every
---
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (iv) every obligation of such Person issued or assumed as the deferred
--
purchase price of property or services (but excluding trade accounts payable
or accrued liabilities arising in the ordinary course of business); (v) every
-
capital lease obligation of such Person; and (vi) every obligation of the type
--
referred to in clauses (i) through (v) of another Person and all dividends of
another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable, directly or indirectly, as obligor or
otherwise.
The Subordinated Indenture places no limitation on the amount of additional
Senior Debt that may be incurred by the Company. The Company may from time to
time incur additional indebtedness constituting Senior Debt.
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated
Debt Securities, may be changed prior to such issuance. Any such change would
be described in the Prospectus Supplement relating to such Subordinated Debt
Securities.
CONVERSION OR EXCHANGE
The Subordinated Debt Securities of any series may be convertible or
exchangeable into Common Stock or other Securities. The specific terms and
conditions on which Subordinated Debt Securities of any series may be so
converted or exchanged will be set forth in the applicable Prospectus
Supplement. Such terms may include the conversion or exchange price,
provisions for conversion or exchange, either mandatory, at the option of the
holder, or at the option of the Company, and provisions under which the number
of shares of Common Stock or other Securities to be received by the holders of
Subordinated Debt Securities would be calculated as of a time and in the
manner stated in the applicable Prospectus Supplement.
12
<PAGE>
CONCERNING THE TRUSTEE
The Senior Indenture Trustee, The First National Bank of Chicago, performs
services for the Company in the ordinary course of business.
DESCRIPTION OF CAPITAL STOCK
The following is a summary of the terms of the Company's Amended and
Restated Certificate of Incorporation.
The Company's authorized capital stock consists of 200,000,000 shares of
Common Stock and 10,000,000 shares of Preferred Stock, par value $1.00 per
share. At the date of this Prospectus no shares of Preferred Stock are
presently outstanding. The Company does not presently have outstanding, and
the Amended and Restated Certificate of Incorporation does not authorize, any
other classes of capital stock. The issued and outstanding shares of Common
Stock are duly authorized, validly issued, fully paid and nonassessable.
COMMON STOCK
Holders of shares of Common Stock have no preemptive, redemption or
conversion rights. The holders of Common Stock are entitled to receive
dividends when and as declared by the Board of Directors out of funds legally
available therefor. Upon liquidation, dissolution or winding up of the
Company, the holders of Common Stock may share ratably in the net assets of
the Company after payment in full to all creditors of the Company and
liquidating distributions to holders of Preferred Stock, if any. Each holder
of Common Stock is entitled to one vote per share on all matters submitted to
a vote of shareholders.
The Common Stock is traded on the New York Stock Exchange under the symbol
'MBI'. The transfer agent for the Common Stock is ChaseMellon Shareholder
Services, L.L.C.
The applicable Prospectus Supplement relating to an offering of Common
Stock will describe terms relevant thereto, including the number of shares
offered, the initial offering price, market price and dividend information.
PREFERRED STOCK
The particular terms of any series of Preferred Stock offered hereby will
be set forth in the Prospectus Supplement relating thereto. The rights,
preferences, privileges and restrictions, including dividend rights, voting
rights, terms of redemption, retirement and sinking fund provisions and
liquidation preferences, if any, of the Preferred Stock of each series will be
fixed or designated pursuant to a certificate of designation adopted by the
Board of Directors or a duly authorized committee thereof. The terms, if any,
on which shares of any series of Preferred Stock are convertible or
exchangeable into Common Stock will also be set forth in the Prospectus
Supplement relating thereto. Such terms may include provisions for conversion
or exchange, either mandatory, at the option of the holder, or at the option
of the Company, in which case the number of shares of Common Stock to be
received by the holders of Preferred Stock would be calculated as of a time
and in the manner stated in the applicable Prospectus Supplement. The
description of the terms of a particular series of Preferred Stock that will
be set forth in the applicable Prospectus Supplement does not purport to be
complete and is qualified in its entirety by reference to the certificate of
designation relating to such series.
CERTAIN PROVISIONS OF RESTATED CERTIFICATE OF INCORPORATION
The Company's Amended and Restated Certificate of Incorporation requires
the approval of at least 80% of the outstanding shares of Common Stock for the
amendment of certain provisions which describe the factors the Board may
consider in evaluating proposed mergers, sales and other corporate
transactions. Further, as an insurance holding company, the Company is
subject to certain state insurance regulations that require prior approval of
a change of control. See "Business-Regulation" in the Company's 1997 Form
10-K. These provisions and regulations may discourage attempts to obtain
control of the Company.
13
<PAGE>
In the Amended and Restated Certificate of Incorporation the Company elects
not to be subject to the provisions of Sections 33-374a through 33-374c of the
Connecticut Stock Corporation Act. If the Company had not made such elections
these provisions would require the approval of the holders of at least 80% of
the voting power of the outstanding voting stock of the Company, and at least
66 2/3% of the voting power of the outstanding voting stock of the Company
other than voting stock held by certain holders of 10% or more of such voting
power or by certain affiliates of the Company, as a condition for mergers,
liquidations and other business transactions involving the Company and the
holders of 10% or more of such voting power or certain affiliates of the
Company unless certain minimum price and procedural requirements are met.
RIGHTS AGREEMENT
On December 12, 1991, the Company's Board of Directors declared a dividend
distribution of one Preferred Share Purchase Right (a "Right") for each share
of Common Stock pursuant to a Rights Agreement, dated as of December 12, 1991,
between MBIA Inc. and Mellon Bank, N.A. (the "Rights Agreement"). A Right is
attached to each share of Common Stock issued subsequent to the date of the
Rights Agreement. Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a Junior Participating Cumulative Preferred
Share (the "Junior Preferred Stock") of the Company at a price of $160,
subject to certain adjustments to prevent dilution through stock dividends,
splits and combinations and distributions of warrants or other securities or
assets. The Junior Preferred Stock will rank senior to Common Stock, but
could rank junior to other classes of Preferred Stock that might be issued, as
to dividends and liquidating distributions, and will have 100 votes per share,
voting together with Common Stock. Initially, the Rights are attached to
shares of Common Stock and are not represented by separate certificates or
exercisable until the earlier to occur of (a) ten business days following the
-
public announcement by the Company (the "Shares Acquisition Date") that a
person or group of persons acquired (or obtained the right to acquire)
beneficial ownership of 10% or more of the outstanding Common Stock and (b)
-
ten business days (or, if determined by the Board of Directors, a later date)
following the announcement or commencement of a tender offer or exchange offer
which, if successful, would result in the bidder owning 10% or more of the
outstanding Common Stock. However, no person shall be deemed to have acquired
or obtained the right to acquire the beneficial ownership of 10% or more of
the outstanding shares of the Company's Common Stock, if the Board of
Directors determines that such acquisition is inadvertent, and such person
promptly divests itself of a sufficient number of shares to be below the 10%
ownership threshold. On such earlier date, Rights certificates would be
issued and mailed to holders of Common Stock. The Rights will expire on
December 12, 2001, unless earlier redeemed or exchanged.
If an acquiring person or group acquires beneficial ownership of 10% or
more of the Common Stock (except pursuant to a tender or exchange offer for
all of the outstanding Common Stock determined by a majority of the Company's
independent directors to be fair and in the best interests of the Company and
its shareholders), then each Right (other than those held by the acquiror,
which will become void) will entitle its holder to purchase for $160 (or the
purchase price as then adjusted) that number of shares of Common Stock (or, in
certain circumstances, cash, a reduction in the purchase price, Common Stock,
other securities of the Company, other property or a combination thereof)
having a market value of $320 (or 200% of the adjusted purchase price). If,
after an acquiring person or group so acquires 10% or more of the Common Stock
in a merger or other business combination and (a) the Company shall not be the
-
surviving or continuing corporation, (b) the Company shall be the surviving or
-
continuing corporation and all or part of the Shares of Common Stock shall be
changed or exchanged, or (c) 50% or more of the Company's assets, cash flow or
-
earning power is sold, then proper provision shall be made so that each Right
(other than those held by the acquiror) will entitle its holder to purchase
that number of shares of common stock of the acquiring company which at the
time of such transaction would have a market value of 200% of the then-
effective purchase price.
The Company's Board of Directors may redeem all but not less than all of
the Rights at $0.01 per Right at any time prior to ten business days following
the Shares Acquisition Date. Additionally, at any time after a person or
group acquires 10% or more but less than 50% of the outstanding Common Stock,
the Company's Board of Directors may exchange the Rights (other than those
held by the acquiror, which will become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
The Board of Directors may also amend the Rights at any time prior to the
Shares Acquisition Date. The Company's Rights Plan is designed to make it
more likely that all of the Company's shareholders receive fair and equal
treatment in the event of any unsolicited attempt to acquire the
14
<PAGE>
Company and to guard against the use of coercive tactics to gain control of
the Company. However, the existence of the Company's Rights Plan might
discourage unsolicited merger proposals and unfriendly tender offers and may
therefore deprive shareholders of an opportunity to sell their shares at a
premium over prevailing market prices.
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents or dealers. Any such underwriter, agent or dealer involved in
the offer and sale of the Securities will be named in an applicable Prospectus
Supplement.
Offers and sales of Securities hereunder may be effected at a fixed price
or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Company also may, from time to time,
authorize underwriters acting as its agents to offer and sell the Securities
upon the terms and conditions set forth in any Prospectus Supplement. If
Securities are sold by means of an underwritten offering, the Company will
execute an underwriting agreement with an underwriter or underwriters at the
time an agreement for such sale is reached, and the names of the specific
managing underwriter or underwriters, as well as any other underwriters, the
respective amounts underwritten and the terms of the transaction, including
commissions, discounts and any other compensation of the underwriters and
dealers, if any, will be set forth in the applicable Prospectus Supplement
which will be used by the underwriters to make resales of the Securities in
respect of which this Prospectus is being delivered to the public. If any
underwriter or underwriters are utilized in the sale of the Securities, unless
otherwise set forth in the applicable Prospectus Supplement, the underwriting
agreement will provide that the obligations of the underwriters are subject to
certain conditions precedent and that the underwriters with respect to a sale
of Securities will be obligated to purchase all such Securities if any are
purchased.
In connection with the sale of Securities, underwriters may be deemed to
have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Securities for whom they may act as agent. Underwriters may sell Securities
to or through dealers, and such dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters and/or
commissions (which may be changed from time to time) from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers, will be set
forth in an applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Securities may be deemed to be
underwriters under the Securities Act, and any discounts and commissions
received by them and any profit realized by them on resale of the Securities
may be deemed to be underwriting discounts and commissions under the
Securities Act. Underwriters, dealers and agents may be entitled, under
agreements with the Company to indemnification against and contribution toward
certain civil liabilities, including liabilities, under the Securities Act,
and to reimbursement by the Company for certain expenses.
If a dealer is utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealer, as principal. The dealer may then resell such Securities to the
public at varying prices to be determined by such dealer at the time of
resale. The name of the dealer and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Offers to purchase Securities may be solicited directly by the Company and
the sale thereof may be made by the Company directly to institutional
investors or others, who may be deemed to be underwriters within the meaning
of the Securities Act with respect to any resale thereof. The terms of any
such transaction will be set forth in the Prospectus Supplement relating
thereto.
The Securities may or may not be listed on a national securities exchange
or a foreign securities exchange. Certain series of the Securities will be a
new issue and will not have an established trading market. No assurances can
be given that there will be a market for any of the Securities.
15
<PAGE>
Agents, underwriters and dealers may be customers of, engage in
transactions with or perform services for the Company and its subsidiaries in
the ordinary course of business.
LEGAL MATTERS
Certain legal matters with respect to the legality of the Securities being
offered hereby will be passed upon for the Company by Debevoise & Plimpton,
New York, New York, and for any underwriters of agents by counsel to be named
in the Prospectus Supplement. Such counsel may rely, as to matters of
Connecticut law, upon the opinion of Day, Berry & Howard, City Place,
Hartford, Connecticut 06103, Connecticut counsel for the Company.
EXPERTS
The consolidated financial statements and the related financial statement
schedules of the Company appearing or incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997,
have been audited by PricewaterhouseCoopers LLP, independent accountants,
as set forth in their report thereon dated February 3, 1998 incorporated by
reference or included therein and incorporated herein by reference. Such
consolidated financial statements and financial statement schedules are
incorporated herein by reference in reliance upon such report given the
authority of such firm as experts in accounting and auditing.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the Securities being registered, other than
underwriting discounts and commissions:
<TABLE>
<S> <C>
Registration Fee....................................... $103,250.00
Trustee Fees........................................... 7,500.00
Printing............................................... 50,000.00
Accounting Fees........................................ 35,000.00
Legal Fees............................................. 100,000.00
Rating Agency Fees..................................... 322,500.00
Blue Sky Fees and Expense.............................. 5,000.00
Miscellaneous.......................................... 6,750.00
-----------
$630,000.00
===========
</TABLE>
Item 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 33-320a of the Stock Corporation Act of the State of Connecticut
provides that a corporation shall indemnify a director or officer against
judgments, fines, penalties, amounts paid in settlement and reasonable
expenses actually incurred by him, including attorneys' fees, for actions
brought or threatened to be brought against him in his capacity as a director
or officer, other than actions brought by or in the right of the corporation,
when it is determined by certain disinterested parties that he acted in a
manner reasonably believed to be in the corporation's best interest. In any
criminal action or proceeding, it also must be determined that the director or
officer had no reason to believe that his conduct was unlawful. The director
or officer must also be indemnified when he is successful on the merits in the
defense of a proceeding or in circumstances where a court determines that he
is fairly and reasonably entitled to be indemnified, and the court approves
the amount. In connection with shareholder derivative suits, the director or
officer may not be indemnified unless he is finally adjudged not to have
breached his duty to the corporation or a court has determined that he is
fairly and reasonably entitled to be indemnified, and then for such amount as
the court shall determine. The statute provides that the indemnification
provided thereby is exclusive and cannot be reduced or expanded by charter,
by-law or agreement, although a corporation may procure insurance providing
greater indemnification.
The Company has purchased insurance providing officers and directors of the
Company (and their heirs and other legal representatives) coverage against
certain liabilities arising from any negligent act, error, omission or breach
of duty claimed against them solely by reason of their being such officers and
directors, and providing coverage for the Company against its obligation to
provide indemnification as required by the above-described statute. The
insurance policy has a $50 million aggregate policy limit for any loss or
losses during the policy year.
The Amended and Restated Shareholders' Agreement among the Company and its
Founding Shareholders provides for indemnification of the shareholders that
are parties thereto under certain circumstances (filed as Exhibit 10.30 to the
Company's Registration Statement on Form S-1 (Registration No. 33-14474)).
II-1
<PAGE>
Item 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
1. Underwriting Agreement.
1.01. Form of Underwriting Agreement, incorporated by reference to
Exhibit 1.01 to the Registration Statement on Form S-3, filed
with the Commission on October 29, 1996 (Registration No. 333-
15003).
4. Instruments Defining the Rights of Security Holders.
4.01. Specimen stock certificates representing shares of Common Stock,
incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-1, filed with the Commission on May 21, 1987
(Registration No. 33-14474).
4.02. Rights Agreement, dated as of December 12, 1991, between the
Company and Mellon Bank, N.A., as Rights Agent, incorporated by
reference to Exhibit 1 to the Form 8-A and the Current Report on
Form 8-K, filed with the Commission December 31, 1991, as
amended by Amendment No. 1 to the Rights Agreement, incorporated
by reference to Exhibit 1 to the Form 8-A and the Current Report
on Form 8-K, filed with the Commission on October 27, 1994.
4.03. Senior Indenture, dated as of August 1, 1990, between the
Company and The First National Bank of Chicago, as Trustee,
incorporated by reference to Exhibit 4.01 to the Company's
Registration Statement on Form S-3 (Registration No. 33-33937).
4.04. Form of Subordinated Indenture, incorporated by reference to
Exhibit 4.04 to the Registration Statement on Form S-3, filed
with the Commission on October 29, 1996 (Registration
No. 333-15003).
5. Opinions as to Validity.
5.01. Opinion of Debevoise & Plimpton.*
5.02. Opinion of Day, Berry & Howard.*
12. Computation Re Computation of Ratios.
12.01. Computation of Ratios of Earnings to Fixed Charges.
23. Consents of Experts and Counsel.
23.01. Consent of PricewaterhouseCoopers LLP
23.02. Consent of Debevoise & Plimpton (contained in Exhibit 5.01).
23.03. Consent of Day, Berry & Howard (contained in Exhibit 5.02).
24. Powers of Attorney.
24.01. Powers of Attorney.
25. Statement of Eligibility of Trustee.
25.01. Statement of Eligibility and Qualification on Form T-1 under the
Trust Indenture Act of 1939, as amended, of the First National
Bank of Chicago, as Senior Trustee under the Senior Indenture,
incorporated by reference to Exhibit 25.01 to the Registration
Statement on Form S-3, filed with the Commission on December 8,
1995 (Registration No. 33-64681).
25.02. Statement of Eligibility and Qualification on Form T-1 of the
Subordinated Trustee, as Trustee for the Subordinated Indenture,
incorporated by reference to Exhibit 25.02 to the Registration
Statement on Form S-3, filed with the Commission on October 29,
1996 (Registration No. 333-15003).
- ----------
* To be filed by amendment.
Item 17. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
II-2
<PAGE>
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(B) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
(D) Rule 415 Offering
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) under the Securities Act if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by such
registrant pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered
II-3
<PAGE>
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(E) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee under
subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under
Section 305(b)(2) of the Trust Indenture Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Armonk, New York, on July 28, 1998.
MBIA Inc.
(Registrant)
By /s/ David H. Elliott
----------------------------------------
David H. Elliott,
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ David H. Elliott Chairman, Chief Executive July 28, 1998
- -------------------------- Officer and Director (principal
David H. Elliott executive officer)
/s/ Richard L. Weill Vice Chairman and Director July 28, 1998
- --------------------------
Richard L. Weill
/s/ Julliette S. Tehrani Executive Vice President, Chief July 28, 1998
- -------------------------- Financial Officer and Treasurer
Julliette S. Tehrani (principal financial officer)
/s/ Elizabeth B. Sullivan Vice President and Controller July 28, 1998
- -------------------------- (principal accounting officer)
Elizabeth B. Sullivan
/s/ * Director July 28, 1998
-----------------------
Joseph W. Brown, Jr.
/s/ * Director July 28, 1998
-----------------------
David C. Clapp
/s/ * Director July 28, 1998
-----------------------
Claire L. Gaudiani
/s/ * Director July 28, 1998
-----------------------
William H. Gray, III
/s/ * Director July 28, 1998
-----------------------
Freda S. Johnson
/s/ * Director July 28, 1998
-----------------------
Daniel P. Kearney
/s/ * Director July 28, 1998
-----------------------
James A. Lebenthal
/s/ * Director July 28, 1998
-----------------------
Pierre-Henri Richard
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C> <C>
/s/ * Director July 28, 1998
----------------------
John A. Rolls
*By: /s/ Louis G. Lenzi Director July 28, 1998
----------------------
Louis G. Lenzi
Attorney-in-Fact
</TABLE>
II-6
<PAGE>
EXHIBIT 12.01
MBIA Inc. and Subsidiaries(1)
Computation of the Ratio of Earnings to Fixed Charges
(in thousands except for ratios)
The information appearing below presents historical consolidated financial
results for the Company.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------------------------------------------------- --------------------
1993 1994 1995 1996 1997 1998 1997
----------------------------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Operating income before taxes $338,739 $348,292 $370,724 $442,521 $517,807 $128,246 $122,745
Interest Expense 28,103 28,362 29,642 34,665 38,653 10,420 8,858
Portion of Rentals deemed to
be interest 688 791 799 817 1,092 235 263
----------------------------------------------------------------------- --------------------
EARNINGS $367,530 $377,445 $401,165 $478,003 $557,552 $138,901 $131,866
======================================================================= ====================
FIXED CHARGES
Interest Expense $ 28,103 $ 28,362 $ 29,642 $ 34,665 $ 38,653 $ 10,420 $ 8,858
Portion of Rentals deemed to
be interest 688 791 799 817 1,092 235 263
----------------------------------------------------------------------- --------------------
FIXED CHARGES $ 28,791 $ 29,153 $ 30,441 $ 35,482 $ 39,745 $ 10,655 $ 9,121
======================================================================= ====================
RATIO OF EARNINGS TO FIXED
CHARGES 12.8 12.9 13.2 13.5 14.0 13.0 14.5
======================================================================= ====================
</TABLE>
(1) = Includes Merged Company Results (MBIA Inc. & CapMAC Holdings Inc.)
<PAGE>
Exhibit 23.01
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement on Form S-3 of our report dated February 3, 1998, on our audits of the
consolidated financial statements and the related financial statement schedules
of MBIA Inc. as of December 31, 1997 and 1996 and for each of the three years in
the period ended December 31, 1997. We also consent to the reference to our firm
under the caption "Experts".
July 28, 1998
New York, New York /s/ PricewaterhouseCoopers LLP
<PAGE>
Exhibit 24.01
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned hereby
constitutes and appoints Louis G. Lenzi as his/her lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for his/her and in
his/her name, place and stead, in any and all capacities, to sign Registration
Statements on Form S-3 or other appropriate forms for MBIA Inc. and any or all
amendments or post-effective amendments thereto for offering of up to
$350,000,000 of securities of MBIA Inc., and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commissiion, granting unto said attorney-in-fact and agent full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agent, or his/her substitute, may lawfully do
or cause to be done by virtue hereof.
/s/ Joseph W. Brown, Jr. June 3, 1998
- ------------------------
Joseph W. Brown Jr.
/s/ David C. Clapp June 3, 1998
- ------------------------
David C. Clapp
/s/ Claire L. Gaudiani June 3, 1998
- ------------------------
Claire L. Gaudiani
/s/ William H. Gray, III June 3, 1998
- ------------------------
William H. Gray, III
/s/ Freda S. Johnson June 3, 1998
- ------------------------
Freda S. Johnson
/s/ Daniel P. Kearney June 3, 1998
- ------------------------
Daniel P. Kearney
/s/ James A. Lebenthal June 3, 1998
- ------------------------
James A. Lebenthal
/s/ Pierre-Henri Richard June 3, 1998
- ------------------------
Pierre-Henri Richard
/s/ John A. Rolls June 3, 1998
- ------------------------
John A. Rolls
