<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 22, 1997
REGISTRATION NO. 333-26881
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
Amendment Number 1 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________________
RELIASTAR FINANCIAL CORP.
RELIASTAR FINANCING II
RELIASTAR FINANCING III
RELIASTAR FINANCING IV
RELIASTAR FINANCING V
(Exact name of the Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of
incorporation or organization)
41-1620373
APPLIED FOR
APPLIED FOR
APPLIED FOR
APPLIED FOR
(I.R.S. Employer Identification Nos.)
20 WASHINGTON AVENUE SOUTH
MINNEAPOLIS, MINNESOTA 55401
(612) 372-5432
(Address and telephone number
of the Registrant's principal executive offices)
COPIES TO:
RICHARD R. CROWL THOMAS G. MORGAN
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY FAEGRE & BENSON LLP
RELIASTAR FINANCIAL CORP. 2200 NORWEST CENTER
20 WASHINGTON AVENUE SOUTH MINNEAPOLIS, MINNESOTA 55402
MINNEAPOLIS, MINNESOTA 55401 (612) 336-3000
(612) 342-3514
(Name, address and telephone number of agent for service)
_______________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
________________________________
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 22, 1997
PROSPECTUS
$400,000,000
RELIASTAR FINANCIAL CORP.
DEBT SECURITIES AND OTHER SECURITIES
-----------
RELIASTAR FINANCING II
RELIASTAR FINANCING III
RELIASTAR FINANCING IV
RELIASTAR FINANCING V
PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED BY
RELIASTAR FINANCIAL CORP.
-----------
ReliaStar Financial Corp., a Delaware corporation (the "Company"), may offer,
from time to time, (i) its unsecured debt securities consisting of debentures
or notes, which may be senior ("Senior Debt Securities"), senior subordinated
("Senior Subordinated Debt Securities") or junior subordinated ("Junior
Subordinated Debt Securities," and together with the Senior Subordinated Debt
Securities, "Subordinated Debt Securities," and the Subordinated Debt
Securities together with the Senior Debt Securities, "Debt Securities"); (ii)
warrants to purchase Debt Securities ("Debt Warrants"); (iii) shares of its
preferred stock, without par value ("Preferred
(continued on the following page)
-----------
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 OR ANY PROSPECTUS
SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The Company's Common Stock is traded on the New York Stock Exchange ("NYSE")
under the symbol "RLR."
The Offered Securities (as defined herein) may be offered directly, through
agents designated from time to time or to or through underwriters or dealers.
See "Plan of Distribution." If any agents or underwriters are involved in the
sale of any Offered Securities, their names, and any applicable fees,
commissions, purchase prices or discount arrangements with them, will be set
forth, or will be calculable from the information set forth, in a Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement applicable to the Offered
Securities being sold.
The date of this Prospectus is May , 1997.
<PAGE>
(continued from previous page)
Stock"), interests in which may be represented by depositary shares
("Depositary Shares"); (iv) warrants to purchase Preferred Stock or Depositary
Shares ("Preferred Stock Warrants"); or (v) warrants to purchase shares of its
common stock, without par value ("Common Stock"), ("Common Stock Warrants,"
and, together with Debt Warrants and Preferred Stock Warrants, "Securities
Warrants"). Debt Securities, Preferred Stock, Depositary Shares, Securities
Warrants, Preferred Securities (referred to below) and the Preferred
Securities Guarantee (also referred to below) may be offered separately or as
a part of units consisting of one or more such securities ("Units"), in each
case in one or more series and in amounts, on terms and at prices to be
determined at or prior to the time of sale and described in a supplement
accompanying this Prospectus (a "Prospectus Supplement"), and may be
convertible into or exchangeable for Common Stock, Debt Securities, Preferred
Stock, Depositary Shares or Preferred Securities. Senior Debt Securities will
rank on par with all other unsecured Debt (as defined herein) of the Company
other than Debt that by its terms is subordinated to the Senior Debt
Securities. Senior Subordinated Debt Securities will be subordinated to all
existing and future Debt of the Company other than Debt evidenced by Junior
Subordinated Debt Securities, which includes debt securities (and guarantees
in respect of those debt securities) initially issued to any trust, or a
trustee of a trust, partnership or other entity affiliated with the Company
that is, directly or indirectly, a financing vehicle of the Company ("Trust
Related Securities") in connection with the issuance by that entity of
preferred securities or other securities. Junior Subordinated Debt Securities
will be subordinated to all existing and future Debt of the Company other than
Trust Related Securities and will rank on par with such Trust Related
Securities.
Debt Securities may be issued in registered or bearer form, or both. The
offer, sale and issuance of securities in bearer form, and payment thereof, to
United States Persons are restricted as discussed under "Description of Debt
Securities" and "Plan of Distribution."
ReliaStar Financing II, ReliaStar Financing III, ReliaStar Financing IV, and
ReliaStar Financing V, each a statutory business trust formed under Delaware
law (each, a "Financing Trust" and collectively, the "Financing Trusts"), may
offer, from time to time, in one or more series, preferred securities
representing undivided beneficial interests in the assets of a Financing Trust
("Preferred Securities"). The Financing Trusts were formed by the Company
solely to issue Preferred Securities and to loan the net proceeds from the
sale thereof to the Company. Accordingly, the net proceeds received from the
sale of an offering of Preferred Securities, together with all capital
contributions made to the Financing Trusts by the Company, will be loaned to
the Company in exchange for Junior Subordinated Debt Securities having terms
described herein and in a Prospectus Supplement. These Junior Subordinated
Debt Securities subsequently may be distributed pro rata to holders of
Preferred Securities in connection with the dissolution of the Financing
Trusts upon the occurrence of certain events as may be described in a
Prospectus Supplement. Interest and principal payments on these Junior
Subordinated Debt Securities are intended to fund the payment of periodic cash
distributions ("distributions") and liquidation and redemption amounts on such
Preferred Securities. The payment of distributions and payments on liquidation
or redemption with respect to the Preferred Securities will be guaranteed by
the Company to the extent set forth herein and in a Prospectus Supplement
("Preferred Securities Guarantee"). See "The Financing Trusts" and "The
Preferred Securities Guarantee." The Preferred Securities Guarantee, when
taken together with the Company's obligations under any Junior Subordinated
Debt Securities, the Junior Subordinated Indenture and the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of the
Financing Trusts (other than with respect to the Preferred Securities and the
Common Securities (as defined herein)), will provide a full and unconditional
guarantee, on a subordinated basis, by the Company of payments due on the
Preferred Securities.
The specific amounts, terms and prices of particular Debt Securities,
Preferred Stock, Depositary Shares, Securities Warrants, Preferred Securities,
Preferred Securities Guarantee and Units (collectively, "Offered Securities")
for which this Prospectus is being delivered will be set forth in an
accompanying Prospectus Supplement or Supplements and may include the initial
public offering price and such other terms as (i) in the case of Debt
Securities, the designation, aggregate principal amount, currency,
denominations, maturity, interest rate (which may be fixed or variable) and
time and method of calculating interest payments, any conversion,
2
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exchange or sinking fund provisions, any provisions for redemption at the
option of the Company or repayment at the option of the holder, any premium
provisions, any subordination terms, the right of the Company, if any, to
defer payment of interest on Subordinated Debt Securities and the maximum
length of any such deferral period; (ii) in the case of Preferred Stock, the
designation, number of shares, stated value, any dividend, redemption,
conversion, exchange, sinking fund and liquidation provisions, voting and
other rights and whether interests in the Preferred Stock will be represented
by Depositary Shares; (iii) in the case of Securities Warrants, the duration,
exercise price and detachability; and (iv) in the case of Preferred
Securities, the designation, number of securities, and any distribution,
redemption, exchange, sinking fund and liquidation provisions, voting and
other rights and the terms upon which the proceeds from the sale of the
Preferred Securities will be loaned to the Company in exchange for Junior
Subordinated Debt Securities. Units may be issued in amounts, at prices, on
terms and containing such conditions, covenants and other provisions, and
consisting of Offered Securities and other securities, as are set forth in a
Prospectus Supplement. A Prospectus Supplement also will contain, where
applicable, information about certain United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Offered Securities covered by the Prospectus Supplement. The aggregate initial
public offering price (including the exercise price of any Securities
Warrants) of the Offered Securities in respect of which this Prospectus may be
delivered will not exceed $400,000,000 or the equivalent thereof in one or
more foreign currencies or composite currencies, including European Currency
Units.
3
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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
Securities and Exchange Commission (the "Commission"). These reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices
located at 75 Park Place, 14th Floor, New York, New York 10007, and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of these materials
can be obtained by mail from the public reference section of the Commission at
Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission maintains a Web site that contains reports,
proxy statements and other information filed by the Company at:
http://www.sec.gov. In addition, these materials may be inspected and copied
at the offices of the NYSE, 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company and the Financing Trusts with
the Commission under the Securities Act of 1933, as amended (the "Securities
Act"). This Prospectus omits certain of the information contained in the
Registration Statement, and reference is hereby made to the Registration
Statement for further information with respect to the Company, the Financing
Trusts and the Offered Securities. Any statements contained herein concerning
the provisions of any document are not necessarily complete, and, in each
instance, reference is made to the copy of the document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
No separate financial statements of the Financing Trusts are included
herein. The Company and the Financing Trusts do not consider that such
financial statements would be material to holders of the Preferred Securities
because (i) the Financing Trusts are special purpose entities, have no
independent operations and are not engaged in, and do not propose to engage
in, any activity other than the issuance of the Common Securities (as defined
herein), the Preferred Securities, and the lending of the net proceeds from
the sale of the Common Securities and Preferred Securities to the Company
pursuant to loans evidenced by Junior Subordinated Debt Securities; (ii) the
Company, a reporting company under the Exchange Act, owns, directly or
indirectly, all of the voting securities of the Financing Trusts; and (iii)
under the Preferred Securities Guarantee, the Company will guarantee the
payment of distributions and amounts on liquidation and redemption of
Preferred Securities to the extent described herein. See "The Financing
Trusts" and "The Preferred Securities Guarantee." The Preferred Securities
Guarantee, when taken together with the Company's obligations under any Junior
Subordinated Debt Securities, the Junior Subordinated Indenture (as described
herein) and the Declaration (as defined herein), including its obligations to
pay costs, expenses and certain liabilities of the Financing Trusts (other
than with respect to the Preferred Securities and Common Securities), provides
a full and unconditional guarantee of amounts due on any Preferred Securities
for which this Prospectus and accompanying Prospectus Supplement or
Supplements is being delivered. See "Particular Terms of Junior Subordinated
Debt Securities Issued in Connection with Preferred Securities." The Financing
Trusts are not currently subject to the informational requirements of the
Exchange Act. The Financing Trusts will become subject to those requirements
upon the effectiveness of the Registration Statement, although they intend to
seek and expect to receive an exemption therefrom.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-10640) pursuant to the Exchange Act are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the year ended December
31, 1996 (which incorporates by reference certain portions of the Company's
1996 Annual Report to Shareholders, including financial statements and
accompanying information, and certain portions of the Company's definitive
proxy statement for the Company's 1997 Annual Meeting of Shareholders);
4
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(ii) The Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1997, and its Current Report on Form 8-K dated February 23, 1997;
(iii) the Company's Form 8-K/A dated May 20, 1993 to the Company's
Current Report on Form 8-K dated January 17, 1989 filed by the Company in
lieu of a Registration Statement on Form 8-B and Amendment on Form 8A/A
dated September 12, 1994 to a Registration Statement on Form 8-A dated
October 4, 1989, as amended on February 15, 1990 (File No. 0-17441), which
contain a description of the Company's Common Stock and related Rights to
Purchase Preferred Stock of the Company; and
(iv) all other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of an offering of Offered
Securities.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference 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 that also is or is deemed
to be incorporated herein or in an accompanying Prospectus Supplement by
reference) modifies or supersedes that statement. Any such statement so
modified or superseded shall not be deemed to constitute a part hereof or an
accompanying Prospectus Supplement except as so modified or superseded.
The Company will provide without charge to each person, including any
beneficial holder, to whom a copy of this Prospectus is delivered, upon the
written or oral request of that person, a copy of any or all of the documents
which are incorporated herein by reference (other than exhibits to those
documents, unless the exhibits are specifically incorporated therein by
reference). Requests should be directed to ReliaStar Financial Corp., 20
Washington Avenue South, Minneapolis, Minnesota 55401, Attn: Secretary,
telephone (612) 342-3514.
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS OR A PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFERING
DESCRIBED HEREIN AND THEREIN, AND ANY INFORMATION OR REPRESENTATIONS NOT
CONTAINED HEREIN OR THEREIN MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT APPLICABLE TO THE OFFERED
SECURITIES BEING SOLD. THE DELIVERY OF THIS PROSPECTUS AND A PROSPECTUS
SUPPLEMENT RELATING TO PARTICULAR OFFERED SECURITIES SHALL NOT CONSTITUTE AN
OFFER OF ANY OF THE OTHER OFFERED SECURITIES COVERED BY THIS PROSPECTUS. THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE OFFERED SECURITIES
IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION OF AN OFFER TO BUY
THE OFFERED SECURITIES IS UNLAWFUL.
THE COMPANY
The Company is a holding company whose subsidiaries specialize in life
insurance and related financial services. Through ReliaStar Life Insurance
Company ("ReliaStar Life"), Minneapolis, Minnesota, and other subsidiaries,
the Company issues and distributes individual life insurance and annuities,
group life and health insurance, life and health reinsurance, mutual funds,
residential mortgages, and personal finance education. The Company operates in
four business segments: Individual Insurance, Employee Benefits, Life and
Health Reinsurance, and Pension.
Other principal subsidiaries are Northern Life Insurance Company, ReliaStar
United Services Life Insurance Company, ReliaStar Bankers Security Life
Insurance Society, Northstar Investment Management Corporation, Successful
Money Management Seminars, Inc., and PrimeVest Financial Services, Inc.
On February 23, 1997, the Company entered into a definitive agreement to
merge Security-Connecticut Corporation, an insurance holding company, with and
into the Company. The merger is valued at approximately
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$488 million and is expected to close during the summer of 1997. For more
information on the merger, see the Company's Current Report on Form 8-K dated
February 23, 1997.
The Company, which was incorporated in Delaware in 1988, became the parent
of ReliaStar Life and its subsidiaries pursuant to a Plan of Conversion and
Reorganization which became effective on January 3, 1989. Under this plan,
ReliaStar Life, which was organized in 1885 (as "Northwestern National Life
Insurance Company"), was converted from a combined stock and mutual life
insurance company to a stock life insurance company.
The Company's principal executive offices are located at 20 Washington
Avenue South, Minneapolis, Minnesota 55401, telephone (612) 372-5432.
References herein to the Company relate to ReliaStar Financial Corp. and its
subsidiaries.
THE FINANCING TRUSTS
Each Financing Trust is a statutory business trust formed under Delaware law
pursuant to (i) a separate declaration of trust executed by the Company, as
sponsor for the trust (the "Sponsor"), and Trustees (as defined herein) of the
Financing Trust and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on May 8, 1997. Each declaration will be amended
and restated in its entirety (as so amended and restated, the "Declaration")
substantially in the form filed as an exhibit to the Registration Statement.
The Financing Trusts exist for the exclusive purposes of (i) issuing the
Preferred Securities and common securities representing undivided beneficial
interests in the assets of the Financing Trusts (the "Common Securities," and
together with the Preferred Securities, the "Trust Securities"), (ii) lending
the net proceeds from the sale of the Preferred Securities together with the
capital contributions made in respect of the Common Securities to the Company
in exchange for Junior Subordinated Debt Securities and (iii) engaging in only
those other activities necessary or incidental thereto. The distribution rate
and the disbursement payment dates and other payment dates for the Preferred
Securities will correspond to the interest rate and interest payment dates and
other payment dates on the Junior Subordinated Debt Securities, which will be
the sole assets of each Financing Trust.
All of the Common Securities will be directly or indirectly owned by the
Company. The Common Securities will rank on par, and payments will be made
thereon pro rata, with the Preferred Securities, except that, upon an event of
default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and amounts upon
liquidation, redemption and otherwise will be subordinated to the rights of
the holders of the Preferred Securities. The Company will directly or
indirectly acquire Common Securities in an aggregate liquidation amount equal
to 3% of the total capital of each Financing Trust. Each Financing Trust has a
term of approximately 55 years, but may terminate earlier, as provided in the
Declaration.
Each Financing Trust's business and affairs will be conducted by the
trustees (the "ReliaStar Trustees") appointed by the Company, as the direct or
indirect holder of all the Common Securities. The duties and obligations of
the ReliaStar Trustees shall be governed by the Declaration. The holder of the
Common Securities will be entitled to appoint, remove or replace any of, or
increase or reduce the number of, the ReliaStar Trustees. Financing Trust will
have two ReliaStar Trustees who are employees or officers of or who are
affiliated with the Company (the "Regular Trustees"). One ReliaStar Trustee
will be a financial institution that is not affiliated with the Company and
has a specified minimum amount of aggregate capital, surplus, and undivided
profits of not less than $50,000,000, which shall act as property trustee (the
"Property Trustee") and as indenture trustee for the purposes of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), pursuant to the
terms set forth in a Prospectus Supplement. In addition, unless the Property
Trustee maintains a principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, one Trustee of each Trust
will have a principal place of business or reside in the State of Delaware
(the "Delaware Trustee"). The Company will pay all fees and expenses related
to each Financing Trust and the offering of the Trust Securities, the payment
of which will be guaranteed by the Company. The office of the Property Trustee
for Financing Trust is Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate
Trust Administration, telephone (302) 651-8504.
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Under the Preferred Securities Guarantee, the Company will guarantee the
payment of distributions and amounts on liquidation and redemption of
Preferred Securities to the extent described herein. See "The Preferred
Securities Guarantee." The Preferred Securities Guarantee, when taken together
with the Company's obligations under the Junior Subordinated Debt Securities,
the Junior Subordinated Indenture and the Declaration, including its
obligations to pay costs, expenses and certain liabilities of the Financing
Trust (other than with respect to the Trust Securities), provides a full and
unconditional guarantee of amounts due on the Preferred Securities. See
"Particular Terms of Junior Subordinated Debt Securities Issued in Connection
with Preferred Securities" and the information set forth in a Prospectus
Supplement with respect to any offering of Preferred Securities.
The principal place of business of each Financing Trust is c/o ReliaStar
Financial Corp., 20 Washington Avenue South, Minneapolis, Minnesota 55401,
telephone (612) 372-5432.
USE OF PROCEEDS
The Company intends to add the net proceeds from the sale of Offered
Securities, including the proceeds from the exchange of Junior Subordinated
Debt Securities for the net proceeds from the Trust Securities issued by
Financing Trusts, to its general funds to be used for general corporate
purposes, including the repurchase of its Common Stock, investments in or
advances to existing or future subsidiaries, repayment of maturing obligations
and purchase or redemption of outstanding indebtedness. Each Financing Trust
will use all proceeds received by the trust from the sale of its Trust
Securities to purchase Junior Subordinated Debt Securities of the Company. A
more detailed description of the use of proceeds received from the sale of
specific Offered Securities shall be set forth in the Prospectus Supplement
relating thereto.
RATIOS OF EARNINGS TO FIXED CHARGES
AND TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following are the Company's consolidated ratios of earnings to fixed
charges and to combined fixed charges and preferred stock dividends for the
periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31
-------------------------
1996 1995 1994 1993 1992
---- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges................... 8.34 9.44 11.46 6.76 4.20
Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends........................... 7.43 7.17 7.12 4.73 3.16
</TABLE>
For purposes of calculating the ratios of earnings to fixed charges,
earnings (consisting of income from continuing operations before income taxes,
extraordinary charges and accounting changes plus fixed charges, amortization
of previously capitalized interest and adjustments for less than 50%-owned
persons) have been divided by fixed charges. For purposes of calculating the
ratios of earnings to combined fixed charges and preferred stock dividends,
earnings have been divided by fixed charges and pre-tax earnings required to
cover preferred stock dividends. Fixed charges consist of interest on short-
term borrowings and long-term debt, amortization of debt expense and discount,
capitalized interest and the interest factor of rental expense (generally
deemed to be one-third of net rental expense). Pre-tax earnings required to
cover preferred stock dividends have been calculated by dividing preferred
stock dividends by one minus the Company's effective income tax rate.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms and provisions of the
Debt Securities offered by any Prospectus Supplement and the extent, if any,
to which these general terms
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and provisions may apply to the Debt Securities so offered will be described
in a Prospectus Supplement relating to the Debt Securities. See also
"Particular Terms of Junior Subordinated Debt Securities Issued in Connection
with Preferred Securities."
The Senior Debt Securities are to be issued under an indenture (the "Senior
Indenture") between the Company and the trustee named in the applicable
Prospectus Supplement as trustee (the "Senior Trustee"). The Senior
Subordinated Debt Securities are to be issued under an indenture (the "Senior
Subordinated Indenture") between the Company and the trustee named in the
applicable Prospectus Supplement as trustee (the "Senior Subordinated
Trustee"). The Junior Subordinated Debt Securities are to be issued under an
indenture (the "Junior Subordinated Indenture," and together with the Senior
Subordinated Indenture, the "Subordinated Indentures") between the Company and
the trustee named in the applicable Prospectus Supplement as trustee (the
"Junior Subordinated Trustee," and together with the Senior Trustee and the
Senior Subordinated Trustee, the "Trustees"). The forms of Senior Indenture
and Subordinated Indentures (collectively, the "Indentures") are exhibits to
this Registration Statement. The following summaries of certain provisions of
the Indentures do not purport to be complete and are qualified in their
entirety by reference to the respective provisions of the Indentures.
Numerical references in parentheses below are to sections of the Indentures.
Wherever particular sections or defined terms of the Indentures are referred
to, it is intended that those sections or defined terms shall be incorporated
herein by reference. Unless otherwise indicated, capitalized terms are defined
in the Indentures.
GENERAL
The amount of Debt Securities offered by this Prospectus will be limited to
the amount set forth on the cover of this Prospectus. Each Indenture provides
that Debt Securities in an unlimited aggregate principal amount may be issued
thereunder from time to time in one or more series (Section 301).
Senior Debt Securities will be unsecured and will rank on par with all other
unsecured Debt of the Company other than Debt that by its terms is
subordinated to the Senior Debt Securities. Senior Subordinated Debt
Securities will be unsecured, except as described in a Prospectus Supplement
relating thereto, will rank on par with all other Senior Subordinated Debt
Securities of the Company, and will be subordinated to all existing and future
Debt of the Company, other than Debt evidenced by the Junior Subordinated Debt
Securities and Trust Related Securities. Junior Subordinated Debt Securities
will be unsecured, except as described in a Prospectus Supplement relating
thereto, will rank on par with any existing or future Trust Related
Securities, and will be subordinated to all existing and future Debt of the
Company. See "Subordination" below.
Reference is hereby made to the Prospectus Supplement relating to the
particular series of Debt Securities for the terms of the Debt Securities,
including, where applicable, (i) the designation and any limit on the
aggregate principal amount of the Debt Securities; (ii) the price (which may
be expressed as a percentage of the aggregate principal amount thereof) at
which the Debt Securities will be issued; (iii) the date or dates on which the
Debt Securities will mature or the method by which such dates can be
determined; (iv) the currency or currencies in which the Debt Securities are
being sold and are denominated and the circumstances, if any, under which any
such Debt Securities may be payable in a currency other than the currency in
which the Debt Securities are denominated, and, if so, the exchange rate, the
exchange rate agent and, if the Holder of any such Debt Securities may elect
the currency in which payments thereon are to be made, the manner of that
election; (v) the denominations in which any Debt Securities which are
Registered Securities will be issuable, if other than denominations of $1,000
and any integral multiple thereof with respect to Debt Securities, and the
denomination or denominations in which any Debt Securities that are Bearer
Securities will be issuable, if other than the denomination of $5,000; (vi)
the rate or rates (which may be fixed or variable) at which the Debt
Securities will bear interest, which may be zero in the case of certain Debt
Securities issued at an issue price representing a discount from the principal
amount payable at maturity; (vii) the date from which interest on the Debt
Securities will accrue, the dates on which that interest will be payable or
the method by which such dates can be determined, the date on which payment of
that interest will commence and the circumstances, if any, in which the
Company may defer interest payments; (viii) the date or dates on which, and
the price or prices at
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which, the Debt Securities will, pursuant to any mandatory sinking fund
provision, or may, pursuant to any optional redemption or required repayment
provisions, be redeemed or repaid and the other terms and provisions of any
such optional redemption or required repayment; (ix) in the case of
Subordinated Debt Securities, any terms by which those securities may be
convertible into Preferred Stock, Depositary Shares or Common Stock (see
"Description of Capital Stock") and, in the case of Subordinated Debt
Securities convertible into Preferred Stock or Depositary Shares, the terms of
the Preferred Stock or Depositary Shares; (x) whether the Debt Securities are
to be issuable as Bearer Securities and/or Registered Securities and, if
issuable as Bearer Securities, the terms upon which any Bearer Securities may
be exchanged for Registered Securities; (xi) whether the Debt Securities are
to be issued in the form of one or more temporary or permanent Global
Securities and, if so, the identity of the depositary for that Global Security
or Securities; (xii) if a temporary Global Security is to be issued with
respect to the Debt Securities, the extent to which, and the manner in which,
any interest thereon payable on an interest payment date prior to the issuance
of a permanent Global Security or definitive Bearer Securities will be
credited to the accounts of the persons entitled thereto on that interest
payment date; (xiii) if a temporary Global Security is to be issued with
respect to the Debt Securities, the terms upon which interests in such
temporary Global Security may be exchanged for interests in a permanent Global
Security or for definitive Debt Securities and the terms upon which interests
in a permanent Global Security, if any, may be exchanged for definitive Debt
Securities; (xiv) any additional restrictive covenants included for the
benefit of Holders of such Debt Securities; (xv) any additional Events of
Default provided with respect to such Debt Securities; (xvi) information with
respect to book-entry procedures, if any; (xvii) whether the Debt Securities
will be repayable at the option of the Holder; (xviii) any other terms of the
Debt Securities not inconsistent with the provisions of the applicable
Indenture; (xix) the right of the Company to defease such Debt Securities or
certain covenants under the applicable Indenture; and (xx) the terms of any
securities being offered together with or separately from the Debt Securities.
The Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Debt Securities and certain
United States federal income tax consequences and other special considerations
applicable to the Debt Securities. If a Debt Security is denominated in a
foreign currency, the Debt Security may not trade on a United States national
securities exchange unless and until the Commission has approved appropriate
rule changes to accommodate the such trading.
Because the Company is primarily a holding company, its rights and the
rights of its creditors, including the Holders of Debt Securities, to
participate in the assets of any Subsidiary (as defined below) upon its
liquidation or recapitalization would be subject to the prior claims of the
Subsidiary's creditors (including policyholders of the Company's insurance
company Subsidiaries), provided that, in certain instances, the Company may
itself be a creditor with recognized claims against the Subsidiary. There is
no restriction in the Indentures against Subsidiaries of the Company incurring
unsecured indebtedness or issuing unsecured securities. The ability of the
Company to pay principal of and interest on Debt Securities will be dependent
upon the payment to it of dividends, interest payments on the Surplus Note
(referred to below) or other charges by the Subsidiaries. The payment of
dividends, interest or other charges by ReliaStar Life, and other insurance
company Subsidiaries, is subject to legal restrictions, primarily imposed by
applicable insurance laws and regulations. See "Description of Capital Stock--
Dividends."
The Company holds a surplus note issued by ReliaStar Life in the amount of
$100 million (the "Surplus Note"). Interest on the Surplus Note at the annual
rate of 6 5/8% is payable semi-annually. The Surplus Note matures in September
2003. The terms of the Surplus Note provide that ReliaStar Life must secure
the approval of the Commissioner of the Minnesota Department of Commerce (the
"Commissioner") prior to making any payments of principal or interest. The
requirement for prior regulatory approval of such payments is a condition for
the Surplus Note to be considered "surplus" for statutory accounting purposes.
The Company is not aware of any basis for the Commissioner to disapprove any
scheduled interest payment under the Surplus Note.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. Unless otherwise indicated in the Prospectus
Supplement, Bearer Securities, other than Bearer Securities in temporary or
permanent global form,
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will have interest coupons attached (Section 201). Each Indenture also
provides that Bearer Securities or Registered Securities of a series may be
issuable in permanent global form (Section 203). See "Permanent Global
Securities" below.
Registered Securities of any series will be exchangeable for other
Registered Securities of such series of any authorized form and denomination
and of a like aggregate principal amount, tenor and terms. In addition, if
Debt Securities of any series are issuable as both Registered Securities and
Bearer Securities, at the option of the Holder upon request confirmed in
writing, and subject to the terms of the applicable Indenture, Bearer
Securities (with all unmatured coupons, except as provided below, and all
matured coupons in default) of that series will be exchangeable into
Registered Securities of such series of any authorized form and denomination
and of a like aggregate principal amount, tenor and terms. Bearer Securities
surrendered in exchange for Registered Securities between the close of
business on a Regular Record Date or a Special Record Date and the relevant
date for payment of interest shall be surrendered without the coupon relating
to that date for payment of interest, and interest will not be payable in
respect of the Registered Security issued in exchange for that Bearer
Security, but will be payable only to the Holder of the coupon when due in
accordance with the terms of the applicable Indenture. Bearer Securities will
not be issued in exchange for Registered Securities (Section 305). Each Bearer
Security, other than one in temporary global form, and each interest coupon
will bear substantially the following legend: "Any United States Person who
holds this obligation will be subject to limitations under the United States
federal income tax laws including the limitations provided in Sections 165(j)
and 1287(a) of the Internal Revenue Code." Additional information regarding
restrictions on the issuance, exchange and transfer of and special United
States federal income tax considerations relating to Bearer Securities will be
set forth in the applicable Prospectus Supplement.
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (duly
endorsed or accompanied by a satisfactory written instrument of transfer) at
the office of the Security Registrar or at the office of any transfer agent
designated by the Company for that purpose, without service charge and upon
payment of any taxes and other governmental charges (Section 305). If the
applicable Prospectus Supplement refers to any transfer agent (in addition to
the Security 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 approve a change in the location
through which any such transfer agent (or Security Registrar) acts, except
that, if Debt Securities of a series are issuable solely as Registered
Securities, the Company will be required to maintain a transfer agent in each
Place of Payment for that series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (in
addition to the Security Registrar) a transfer agent in a Place of Payment for
that series located outside the United States. The Company may at any time
designate additional transfer agents with respect to any series of Debt
Securities (Section 1002).
TEMPORARY GLOBAL SECURITIES
If so specified in the applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series which are issuable as Bearer Securities
initially will be represented by one or more temporary Global Securities,
without interest coupons, to be deposited with a common depositary for the
benefit of the Euroclear System and Cedel S.A. for credit to designated
accounts. On and after the date determined as provided in any such temporary
Global Security and described in the applicable Prospectus Supplement, but
within a reasonable time, each such temporary Global Security will be
exchangeable for definitive Bearer Securities, definitive Registered
Securities or all or a portion of a permanent global Bearer Security, or any
combination thereof, as specified in the Prospectus Supplement. No definitive
Bearer Security or permanent global Bearer Security delivered in exchange for
a portion of a temporary Global Security shall be mailed or otherwise
delivered to any location in the United States in connection with such
exchange.
Additional information regarding restrictions on and special United States
federal income tax consequences relating to temporary Global Securities will
be set forth in the applicable Prospectus Supplement.
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PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form,
the applicable Prospectus Supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such permanent Global
Security may exchange those interests for Debt Securities of such series of
any authorized form and denomination and of a like aggregate principal amount,
tenor and terms. Principal of and any premium and interest on a permanent
Global Security will be payable in the manner described in the Prospectus
Supplement relating thereto.
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payments
of principal of and any premium and interest on Bearer Securities will be
payable in the currency designated in the Prospectus Supplement, subject to
any applicable laws and regulations, at such paying agencies outside the
United States as the Company may designate from time to time. Unless otherwise
provided in the Prospectus Supplement, these payments may be made, at the
option of the Holder, by a check in the designated currency or by transfer to
an account in the designated currency maintained by the payee with a bank
located outside the United States. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest on Bearer Securities on
any Interest Payment Date will be made only against surrender of the coupon
relating to that Interest Payment Date to a paying agent outside the United
States (Section 1001). No payment with respect to any Bearer Security will be
made at any office or paying agency maintained by the Company in the United
States nor will any such payment be made by transfer to an account, or by mail
to an address, in the United States. Notwithstanding the foregoing, payments
of principal of and any premium and interest on Bearer Securities denominated
and payable in U.S. dollars will be made in U.S. dollars at an office or
agency of, and designated by, the Company located in the United States, if
payment of the full amount thereof in U.S. dollars at all paying agencies
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions, and the applicable Trustee receives an
opinion of counsel that such payment within the United States is legal
(Section 1002).
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of and any premium and interest on a Registered Security will be
payable in the currency designated in the Prospectus Supplement, and interest
will be payable at the office of such paying agent or paying agents as the
Company may designate from time to time, except that at the option of the
Company payment of any interest may be made by a check in such currency mailed
to the Holder at the Holder's registered address or by wire transfer to an
account in such currency designated by the Holder in writing not less than ten
days prior to the date of the payment. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of any installment of interest on a
Registered Security will be made to the Person in whose name such Registered
Security is registered at the close of business on a Regular Record Date or a
Special Record Date for the payment (Section 307). Unless otherwise indicated
in the applicable Prospectus Supplement, principal payable at maturity will be
paid to the Holder upon surrender of the Registered Security at the office of
a duly designated paying agent.
The paying agents outside the United States initially designated by the
Company for a series of Debt Securities will be named in the applicable
Prospectus Supplement. The Company may terminate the designation of any of the
paying agents from time to time, except that, so long as any Bearer Securities
are outstanding, the Company will maintain at least one paying agent outside
the United States where Bearer Securities may be presented for payment and may
be surrendered for exchange, provided that, so long as any Debt Securities of
a series are listed on The Stock Exchange of the United Kingdom and the
Republic of Ireland or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a paying agent in London or Luxembourg or
any other required city located outside the United States, as the case may be,
for Debt Securities of such series (Section 1002).
All moneys paid by the Company to a paying agent for the payment of
principal of or any premium or interest on any Debt Security that remain
unclaimed at the end of two years after that principal, premium or
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interest shall have become due and payable will, at the request of the
Company, be repaid to the Company, and the Holder of that Debt Security or any
coupon appertaining thereto will thereafter look only to the Company for
payment thereof (Section 1003).
COVENANTS CONTAINED IN INDENTURES
The Company has covenanted in the Senior Indenture that it will not, and
will not permit any Restricted Subsidiary (as defined herein) to, create,
incur, issue, assume or guarantee any indebtedness for borrowed money
("indebtedness") that is secured by a mortgage, pledge, lien or security
interest (a "Lien") of or upon any shares of capital stock or indebtedness of
any Restricted Subsidiary or any indebtedness of any Restricted Subsidiary
owned by the Company or any Subsidiary, whether existing or issued on
September 30, 1994 or thereafter created or issued, without effectively
providing that any Debt Securities issued under the Senior Indenture (together
with, if the Company shall so determine, any other indebtedness created,
incurred, issued, assumed or guaranteed by the Company or any Restricted
Subsidiary then existing or thereafter created) shall be secured equally and
ratably with (or, at the option of the Company, prior to) such indebtedness,
so long as such indebtedness shall be so secured. The foregoing restrictions,
however, shall not apply to: (i) Liens of or upon any indebtedness or shares
of capital stock acquired by the Company or any Restricted Subsidiary after
September 30, 1994 to secure the payment of all or part of the purchase price
of such shares of capital stock or indebtedness upon the acquisition thereof
by the Company or any Restricted Subsidiary; (ii) Liens of or upon any
indebtedness or shares of capital stock existing at the time of acquisition
thereof by the Company or any Restricted Subsidiary; (iii) Liens of or upon
indebtedness or shares of capital stock of any Person existing at the time
that Person became a Restricted Subsidiary; (iv) Liens to secure indebtedness
of any Restricted Subsidiary to the Company or any Restricted Subsidiary; and
(v) under certain circumstances, extensions, renewals or replacements of any
Liens existing on September 30, 1994 or any Lien referred to in the foregoing
clauses (i) through (iv), inclusive (Section 1007 of the Senior Indenture).
The term "Restricted Subsidiary" means: (i) so long as they are Subsidiaries
of the Company, ReliaStar Life and Northern Life Insurance Company; (ii) any
other company, so long as it is a Subsidiary of the Company, which is a
Subsidiary and which has Consolidated Total Assets equal to or greater than
20% of the Consolidated Total Assets of the Company (as of the date hereof,
ReliaStar United Services Life Insurance Company is the only such subsidiary);
and (iii) any successor, by merger or otherwise, to all or a principal part
(as determined in good faith by the Company's Board of Directors or an
appropriate committee thereof) of the business or properties of any Subsidiary
referred to or described in the foregoing clauses (i) or (ii).
The term "Consolidated Total Assets" means, in respect of the Company as of
any date of determination, the amount of total assets shown on the
consolidated balance sheet of the Company and its consolidated subsidiaries
contained in the most recent annual report to shareholders and, in respect of
any Subsidiary as of any date of determination, the amount of total assets of
the Subsidiary and its consolidated subsidiaries from which such consolidated
balance sheet of the Company and its consolidated subsidiaries was derived.
The term "Subsidiary" means any company more than 50% of the outstanding
voting stock of which is at the time owned, directly or indirectly, by the
Company and/or one or more of its other Subsidiaries (Section 101).
The Company also has covenanted in the Senior Indenture that, so long as any
Debt Securities of any series shall be Outstanding, the Company will not, nor
will it permit any Restricted Subsidiary to, issue, sell, transfer or
otherwise dispose of (except to the Company or to another Restricted
Subsidiary) any shares of capital stock of any Restricted Subsidiary, unless
(i) such shares so issued, sold, transferred or otherwise disposed of
constitute directors' qualifying shares; (ii) the entire outstanding capital
stock of that Restricted Subsidiary then owned by the Company and its
Restricted Subsidiaries is disposed of at the same time for a consideration,
whether in cash or property, which, in the opinion of the Company's Board of
Directors or an appropriate committee thereof, is at least equal to the fair
value of such capital stock; or (iii) after giving effect to such issuance,
sale, transfer or other disposition, the Company and its Restricted
Subsidiaries would own, directly or indirectly, at least 80% of the issued and
outstanding capital stock of that Restricted Subsidiary (Section 1008 of the
Senior Indenture).
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The Company is not restricted by the Indentures from incurring, assuming or
becoming liable for any type of debt or other obligations, or, except as
specified above, from creating liens on its property for any purpose or from
paying dividends or making distributions on its capital stock or purchasing or
redeeming its capital stock, or, except as described under "Consolidation,
Merger and Sale of Assets" below, from engaging in corporate transactions or
reorganizations that could result in the Company's involvement in a highly
leveraged transaction. The Indentures do not require the maintenance of any
financial ratios or specified levels of net worth or liquidity. In addition,
the Indentures do not contain any provision that would require the Company to
repurchase or redeem or otherwise modify the terms of any of its Debt
Securities upon a change in control or other events involving the Company that
may adversely affect the creditworthiness of the Debt Securities.
The applicable Prospectus Supplement may describe other covenants. See also
"Particular Terms of Junior Subordinated Debt Securities Issued in Connection
with Preferred Securities."
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge with or into, or convey,
transfer or lease its assets substantially as an entirety to, any Person
unless the successor Person is a corporation organized and validly existing
under the laws of a domestic jurisdiction and expressly assumes the Company's
obligations on the Debt Securities and under the applicable Indenture; after
giving effect to the 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; and, in the case of the Senior
Indenture, if, upon or as a result of any such consolidation, merger,
conveyance, transfer or lease, any shares of capital stock or indebtedness of
any Restricted Subsidiary would thereupon become subject to any mortgage,
security interest, pledge or lien securing any indebtedness for borrowed money
of, or guaranteed by, such Person (other than any mortgage, security interest,
pledge or lien permitted by the Senior Indenture), the successor Person, prior
to such consolidation, merger, conveyance, transfer or lease, shall expressly
assume the Company's obligations on the Debt Securities and under the Senior
Indenture (together with, if the Company shall so determine, any other
indebtedness of, or guaranteed by, the Company or any Restricted Subsidiary
ranking equally with the Debt Securities and then existing or thereafter
created) equally and ratably with (or, at the option of the Company, prior to)
the indebtedness secured by such mortgage, security interest, pledge or lien
(Section 801).
MODIFICATION AND WAIVER
Unless otherwise stated in the applicable Prospectus Supplement, except as
to certain modifications and amendments not adverse to Holders of Debt
Securities, modifications and amendments of and waivers of compliance with
certain restrictive provisions under each Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of each series thereunder affected by that
modification, amendment or waiver; provided that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security or coupon affected thereby, (i) change the Stated Maturity of the
principal or any installment of principal or any installment of interest, if
any; (ii) reduce the amount of principal or interest thereon, or any premium
payable upon redemption or repayment thereof, or in the case of an Original
Issue Discount Security the amount of principal payable upon acceleration of
the Maturity thereof; (iii) change the Place of Payment or the currency in
which principal or any interest is payable; (iv) impair the right to institute
suit for the enforcement of any payment of the principal and any premium and
interest, or adversely affect the right of any repayment at the option of the
Holder; (v) reduce the percentage in principal amount of Outstanding Debt
Securities of any series the consent of whose Holders is required for
modification or amendment of the applicable Indenture or for waiver of
compliance with certain provisions of the applicable Indenture or for waiver
of certain defaults; (vi) reduce the requirements contained in the applicable
Indenture for quorum or voting; (vii) in the case of Subordinated Debt
Securities convertible into Common Stock, impair any right to convert those
Subordinated Debt Securities; or (viii) modify any of the above provisions
(Section 902).
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Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series issued thereunder if Debt Securities of such
series are issuable in whole or in part as Bearer Securities (Section 1401). A
meeting may be called at any time by the Trustee for the Debt Securities, or
upon the request of the Company or the Holders of at least 10% in principal
amount of the Outstanding Debt Securities of such series, in any such case
upon notice given in accordance with the applicable Indenture (Section 1402).
Except as limited by the proviso in the preceding paragraph, any resolution
presented at a meeting or adjourned meeting at which a quorum is present may
be adopted by the affirmative vote of the Holders of a majority in principal
amount of the Outstanding Debt Securities of a series; provided, that, except
as limited by the proviso in the preceding paragraph, any resolution with
respect to any demand, consent, waiver or other action which may be made,
given or taken by the Holders of not less than a majority in principal amount
of the Outstanding Debt Securities of a series issued under an Indenture may
be adopted at a meeting or an adjourned meeting at which a quorum is present
only by the affirmative vote of the Holders of a majority in principal amount
of the Outstanding Debt Securities of such series; and provided further, that,
except as limited by the proviso in the preceding paragraph, any resolution
with respect to any demand, consent, waiver or other action which may be made,
given or taken by the Holders of a specified percentage that is less than a
majority in principal amount of the Outstanding Debt Securities of a series
issued under an Indenture may be adopted at a meeting or adjourned meeting at
which a quorum is present by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Debt Securities of
such series (plain Section 1404).
Any resolution passed or decision taken at any meeting of Holders of Debt
Securities of a series duly held in accordance with the applicable Indenture
will be binding on all Holders of Debt Securities of that series and the
related coupons issued under such Indenture. The quorum at any meeting of
Holders of a series of Debt Securities called to adopt a resolution, and at
any adjourned meeting, will be persons holding or representing a majority in
principal amount of the Outstanding Debt Securities of such series (Section
1404).
MODIFICATION AND WAIVER
Unless otherwise stated in the applicable Prospectus Supplement, except as
to certain modifications and amendments not adverse to Holders of Debt
Securities, modifications and amendments of and waivers of compliance with
certain restrictive provisions under each Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of each series thereunder affected by that
modification, amendment or waiver; provided that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security or coupon affected thereby, (i) change the Stated Maturity of the
principal or any installment of principal or any installment of interest, if
any; (ii) reduce the amount of principal or interest thereon, or any premium
payable upon redemption or repayment thereof, or in the case of an Original
Issue Discount Security the amount of principal payable upon acceleration of
the Maturity thereof; (iii) change the Place of Payment or the currency in
which principal or any interest is payable; (iv) impair the right to institute
suit for the enforcement of any payment of the principal and any premium and
interest, or adversely affect the right of any repayment at the option of the
Holder; (v) reduce the percentage in principal amount of Outstanding Debt
Securities of any series the consent of whose Holders is required for
modification or amendment of the applicable Indenture or for waiver of
compliance with certain provisions of the applicable Indenture or for waiver
of certain defaults; (vi) reduce the requirements contained in the applicable
Indenture for quorum or voting; (vii) in the case of Subordinated Debt
Securities convertible into Common Stock, impair any right to convert those
Subordinated Debt Securities; or (viii) modify any of the above provisions
(Section 902).
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series issued thereunder if Debt Securities of such
series are issuable in whole or in part as Bearer Securities (Section 1401). A
meeting may be called at any time by the Trustee for the Debt Securities, or
upon the request of the Company or the Holders of at least 10% in principal
amount of the Outstanding Debt Securities of such series, in any such case
upon notice given in accordance with the applicable Indenture (Section 1402).
Except as limited by the proviso in the preceding paragraph, any resolution
presented at a meeting or adjourned meeting at which a quorum is present may
be adopted by the affirmative vote of the Holders of a majority in principal
amount of
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the Outstanding Debt Securities of a series; provided, that, except as limited
by the proviso in the preceding paragraph, any resolution with respect to any
demand, consent, waiver or other action which may be made, given or taken by
the Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of a series issued under an Indenture may be adopted at a
meeting or an adjourned meeting at which a quorum is present only by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series; and provided further, that, except
as limited by the proviso in the preceding paragraph, any resolution with
respect to any demand, consent, waiver or other action which may be made,
given or taken by the Holders of a specified percentage that is less than a
majority in principal amount of the Outstanding Debt Securities of a series
issued under an Indenture may be adopted at a meeting or adjourned meeting at
which a quorum is present by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Debt Securities of
such series (plain Section 1404).
Any resolution passed or decision taken at any meeting of Holders of Debt
Securities of a series duly held in accordance with the applicable Indenture
will be binding on all Holders of Debt Securities of that series and the
related coupons issued under such Indenture. The quorum at any meeting of
Holders of a series of Debt Securities called to adopt a resolution, and at
any adjourned meeting, will be persons holding or representing a majority in
principal amount of the Outstanding Debt Securities of such series (Section
1404).
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of a series may on behalf of the Holders of all Debt
Securities of that series waive (insofar as that series is concerned)
compliance by the Company with certain restrictive covenants of the Indenture
under certain circumstances. Unless otherwise stated in the applicable
Prospectus Supplement, the Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of any series may on behalf of the
Holders of all Debt Securities of that series waive any past default under the
Indenture with respect to that series, except a default in the payment of the
principal of or premium, if any, or any interest on any Debt Security of that
series or in respect of a provision which under the Indenture cannot be
modified or amended without the consent of the Holder of each Outstanding Debt
Security of the series affected (Sections 513 and 1005).
EVENTS OF DEFAULT
Unless otherwise stated in the applicable Prospectus Supplement, any series
of Senior Debt Securities issued under the Senior Indenture will provide that
the following shall constitute Events of Default with respect to such series:
(i) default in payment of principal of or premium, if any, on any Senior Debt
Security of such series when due; (ii) default for 30 days in payment of
interest, if any, on any Senior Debt Security of such series or related
coupon, if any, when due; (iii) default in the deposit of any sinking fund
payment on any Senior Debt Security of such series when due; (iv) default in
the performance of any covenants in such Indenture continued for 90 days after
written notice thereof by the Trustee thereunder or the Holders of at least
25% in principal amount of the Outstanding Senior Debt Securities of such
series issued under such Indenture; (v) certain events of bankruptcy,
insolvency or reorganization of the Company; and (vi) default by the Company
or any Restricted Subsidiary in the payment of any amount due under other
indebtedness of the Company or any Restricted Subsidiary for money borrowed
having unpaid principal in excess of $20,000,000 or under any indenture or
other instrument under which any such indebtedness has been issued or by which
it is governed, whether now existing or hereafter created, which default shall
have resulted in the acceleration of the maturity thereof without such
acceleration having been rescinded after due notice to the Company of such
default by the Trustee or by such notice to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Debt Securities
of such series; provided, however, that for purposes of this clause (vi) no
Event of Default shall be deemed to have occurred with respect to Senior Debt
Securities of any series if (a) such default in the payment of any amount due
or under any such indenture or other instrument relates solely to indebtedness
that has been issued, assumed or guaranteed on terms which provide that the
creditor with respect thereto shall have no recourse of any nature whatsoever
to the whole of the property and assets or any portion thereof (other than the
property specifically pledged to secure such indebtedness) of the Company and
any Restricted Subsidiary in the event of any such default, (b) in the opinion
of the Board of Directors (or an appropriate committee thereof) of the Company
or such Restricted Subsidiary, as the case may be, which shall have issued,
assumed or guaranteed
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jsuch indebtedness, such default, the acceleration of the maturity of such
indebtedness and the enforcement by such creditor of all of its other rights
and remedies as a result of such default and acceleration of indebtedness
shall not adversely affect the financial condition of the Company or such
Restricted Subsidiary, as the case may be, and (c) in the opinion of the
Company's Board of Directors (or an appropriate committee thereof) such
default and the acceleration of such indebtedness do not adversely affect the
interest of the Holders of any series of Senior Debt Securities (Section 501
of the Senior Indenture).
Unless otherwise stated in the applicable Prospectus Supplement, any series
of Subordinated Debt Securities issued under the Subordinated Indentures will
provide that the only Events of Default will be (i) default in payment of
principal of or premium, if any, on any Subordinated Debt Security of such
series when due; (ii) default for 30 days in payment of interest, if any, on
any Subordinated Debt Security of such series or related coupon, if any, when
due; (iii) failure to convert any Subordinated Debt Security into Common Stock
upon the election of a Holder to convert such Subordinated Debt Security if
the terms of such Subordinated Debt Security provide for conversion; and (iv)
certain events of bankruptcy of the Company (Section 501 of the Subordinated
Indentures). Unless specifically stated in the applicable Prospectus
Supplement for a particular series of Subordinated Debt Securities, there is
no right of acceleration of the payment of principal of the Subordinated Debt
Securities upon a default in the payment of principal, premium, if any, or
interest, if any, or in the performance of any covenant or agreement in the
Subordinated Debt Securities or Subordinated Indentures. In the event of a
default in the payment of principal, premium, if any, or interest, if any, or
the performance of any covenant or agreement in the Subordinated Debt
Securities or Subordinated Indentures, the Trustee, subject to certain
limitations and conditions, may institute judicial proceedings to enforce
payment of such principal, premium or interest or to obtain the performance of
such covenant or agreement or any other proper remedy (Section 503 of the
Subordinated Indentures).
The Company is required to file annually with each Trustee an Officers'
Certificate concerning the absence of certain defaults under the terms of the
Indentures (Section 1004). Each Indenture provides that if an Event of Default
specified therein shall occur and be continuing, either the Trustee thereunder
or the Holders of not less than 25% in principal amount of the Outstanding
Debt Securities of such series issued under such Indenture may declare the
principal of all such Debt Securities (or in the case of Original Issue
Discount Securities, such portion of the principal amount thereof as may be
specified in the terms thereof) to be due and payable (Section 502). In
certain cases, the Holders of a majority in principal amount of the
Outstanding Debt Securities of a series may, on behalf of the Holders of all
Senior Debt Securities of such series and any related coupons, waive any past
default or Event of Default, except a default (i) in payment of the principal
of or premium, if any, or interest, if any, on any of the Debt Securities of
such series and (ii) in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of such series or coupon affected (Section 513).
Each Indenture contains a provision entitling the Trustee thereunder,
subject to the duty of the Trustee during default to act with the required
standard of care, to be indemnified by the Holders of the Debt Securities of a
series thereunder or any related coupons before proceeding to exercise any
right or power under the Indenture with respect to such series at the request
of such Holders. (Section 603) Each Indenture provides that no Holder of any
Debt Securities of a series thereunder or any related coupons may institute
any proceeding, judicial or otherwise, to enforce the Indenture except in the
case of failure of the Trustee thereunder, for 60 days, to act after it is
given notice of default, a request to enforce such Indenture by the Holders of
not less than 25% in aggregate principal amount of the Outstanding Debt
Securities of such series and an offer of reasonable indemnity (Section 507).
This provision will not prevent any Holder of Debt Securities or any related
coupons from enforcing payment of the principal thereof and premium, if any,
and interest, if any, thereon at the respective due dates thereof (Section
508). The Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series issued under an Indenture may direct
the time, method and place of conducting any proceedings for any remedy
available to the Trustee for such Debt Securities or exercising any trust or
power conferred on it with respect to the Debt Securities of such series.
However, such Trustee may refuse to follow any direction that conflicts with
law or the Indenture under which it serves or which would be unjustly
prejudicial to Holders not joining therein (Section 512).
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Each Indenture provides that the Trustee thereunder will give to the Holders
of Debt Securities notice of a default if not cured or waived, but, except in
the case of a default in the payment of principal of or premium, if any, or
interest, if any, on any Debt Securities of such series or any related coupons
or in the payment of any sinking fund installment with respect to Debt
Securities of such series, the Trustee for such Debt Securities shall be
protected in withholding such notice if it determines in good faith that the
withholding of such notice is in the interest of the Holders of such Debt
Securities (Section 602).
DEFEASANCE AND DISCHARGE
Except for Junior Subordinated Debt Securities issued in connection with
Preferred Securities, the Company may be discharged from any and all
obligations in respect of the Debt Securities of a series (except for certain
obligations relating to temporary Debt Securities and exchange of Debt
Securities, registration of transfer or exchange of Debt Securities of such
series, replacement of stolen, lost or mutilated Debt Securities of such
series, maintenance of paying agencies, holding monies for payment in trust
and payment of additional amounts, if any, required in consequence of United
States withholding taxes imposed on payments to non-U.S. persons) upon the
deposit with the Trustee, in trust, of money and/or, to the extent such Debt
Securities are denominated and payable in U.S. dollars only, Eligible
Instruments that, through the payment of principal and interest in respect
thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and premium, if any, each installment of
interest, if any, on, and any mandatory sinking fund, repayment or analogous
payments on, the Debt Securities of such series on the scheduled due dates
therefor or upon redemption (if the Debt Securities of such series are subject
to redemption and the Company shall have given irrevocable instructions to the
Trustee to effect such redemption) in accordance with the terms of the
applicable Indenture and the Debt Securities of such series. Such a trust may
be established only if, among other things, (i) the Company has delivered to
the Trustee an Opinion of Counsel to the effect that (a) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling, or (b) since the date of the applicable Indenture there has been a
change in applicable federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Holders of Debt Securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit, defeasance
and discharge, and will be subject to federal income tax on the same amounts
and in the same manner and at the same times as would have been the case if
such deposit, defeasance and discharge had not occurred; and (ii) the Debt
Securities of such series, if then listed on any domestic or foreign
securities exchange, will not be delisted as a result of such deposit,
defeasance and discharge (Section 403). In the event of any such defeasance
and discharge of Debt Securities of such series, Holders of Debt Securities of
such series would be able to look only to such trust fund for payment of
principal of and any premium and interest on their Debt Securities until
Maturity.
Except for Junior Subordinated Debt Securities issued in connection with
Preferred Securities, the Company may terminate certain of its obligations
under each Indenture with respect to the Debt Securities of a series
thereunder, including its obligations to comply with the covenants described
above under "Covenants Contained in Indentures," with respect to Debt
Securities of such series, on the terms and subject to the conditions
contained in such Indenture, by depositing in trust with the Trustee money
and/or, to the extent such Debt Securities are denominated and payable in U.S.
dollars only, Eligible Instruments that, through the payment of principal and
interest in respect thereof in accordance with their terms, will provide money
in an amount sufficient to pay the principal of and premium, if any, each
installment of interest, if any, on, and any mandatory sinking fund, repayment
or analogous payments on, the Debt Securities of such series on the scheduled
due dates therefor. This deposit and termination is conditioned, among other
things, upon the Company's delivery of an Opinion of Counsel that the Holders
of such Debt Securities will have no federal income tax consequences as a
result of the deposit and termination. Termination will not relieve the
Company of its obligation to pay when due the principal of or any interest on
such Debt Securities if such Debt Securities of such series are not paid from
the money or Eligible Instruments held by the Trustee for the payment thereof
(Section 1501). The applicable Prospectus Supplement may further describe the
provisions, if any, permitting or restricting such defeasance with respect to
Debt Securities of a series. In the event the Company exercises its option to
omit
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compliance with the covenants described above under "Covenants Contained in
Indentures" with respect to the Debt Securities of a series as described above
and the Debt Securities of such series are declared due and payable because of
the occurrence of an Event of Default, then the amount of money and Eligible
Instruments on deposit with the Trustee will be sufficient to pay amounts due
on the Debt Securities of such series at the time of the scheduled due dates
therefor but may not be sufficient to pay amounts due on the Debt Securities
of such series at the time of the acceleration resulting from such Event of
Default. The Company shall in any event remain liable for such payments as
provided in the applicable Indenture.
SUBORDINATION
The Senior Subordinated Debt Securities shall be subordinate to all existing
and future Debt of the Company other than Debt evidenced by the Junior
Subordinated Debt Securities and the Trust Related Securities. The Junior
Subordinated Debt Securities shall rank on par with any Trust Related
Securities and shall be subordinate to all existing and future Debt of the
Company other than the Trust Related Securities. In the event that the Company
shall default in the payment of any principal, premium, if any, or interest,
if any, on any Debt to which the Senior Subordinated Debt Securities or the
Junior Subordinated Debt Securities are subordinated when the same becomes due
and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, unless and until such default
shall have been cured or waived or shall have ceased to exist, no direct or
indirect payment (in cash, property, securities, by set-off or otherwise)
shall be made or agreed to be made for principal, premium, if any, or
interest, if any, on the Senior Subordinated Debt Securities or the Junior
Subordinated Debt Securities, as the case may be, or in respect of any
redemption, repayment, retirement, purchase or other acquisition of any of the
Senior Subordinated Debt Securities or the Junior Subordinated Debt
Securities, as the case may be (Section 1601 of the Subordinated Indentures).
"Debt" means, with respect to the Company, (i) the principal, premium, if any,
and interest in respect of (a) indebtedness of the Company for money borrowed;
(b) indebtedness evidenced by securities, debentures, bonds or other similar
instruments issued by the Company; (ii) all capital lease obligations of the
Company; (iii) all obligations of the Company issued or assumed as the
deferred purchase price of property, all conditional sale obligations of the
Company and all obligations of the Company under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business); (iv) all obligations of the Company for the reimbursement on any
letter of credit, banker's acceptance, security purchase facility or similar
credit transaction; (v) all obligations of the type referred to in clauses (i)
through (iv) of other Persons for the payment of which the Company is
responsible or liable as obligor, guarantor or otherwise; and (vi) all
obligations of the type referred to in clauses (i) through (v) of other
Persons secured by any lien on any property or asset of the Company (whether
or not such obligation is assumed by the Company) (Section 101 of the
Subordinated Indentures). As of December 31, 1996, the Company had
approximately $407.5 million of Debt outstanding to which the Subordinated
Debt Securities would be subordinated. The term "Senior Debt" means a Debt to
which the Senior Subordinated Debt Securities or the Junior Subordinated Debt
Securities, as the case may be, are subordinated.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Company, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors, or (iv) any
other marshalling of the assets of the Company, all Senior Debt (including any
interest thereon accruing after the commencement of any such proceedings)
shall first be paid in full before any payment or distribution, whether in
cash, securities or other property, shall be made on account of the principal
of or interest on the Junior Subordinated Debt Securities. In such event, any
payment or distribution on account of the principal of or interest on the
Senior Subordinated Debt Securities or Junior Subordinated Debt Securities, as
the case may be, whether in cash, securities or other property (other than
securities of the Company or any other company provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least
to the extent provided in the subordination provisions with respect to such
Subordinated Debt Securities, to the payment of all Senior Debt at the time
outstanding, and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or
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deliverable in respect of such Subordinated Debt Securities shall be paid or
delivered directly to the holders of Senior Debt in accordance with the
priorities then existing among such holders until all Senior Debt (including
any interest thereon accruing after the commencement of any such proceedings)
shall have been paid in full (Section 1601 of the Subordinated Indentures).
In the event of any such proceeding, after payment in full of all sums owing
with respect to Senior Debt, the Holders of Senior Subordinated Debt
Securities or Junior Subordinated Debt Securities, as the case may be,
together with the holders of any obligations of the Company ranking on par
with Senior Subordinated Debt Securities or Junior Subordinated Debt
Securities, as the case may be, shall be entitled to be repaid from the
remaining assets of the Company the amounts at the time due and owing on
account of unpaid principal, premium, if any, and interest, if any, on such
Subordinated Debt Securities and such other obligations before any payment or
other distribution, whether in cash, property or otherwise, shall be made on
account of any capital stock or obligations of the Company ranking junior to
such Subordinated Debt Securities and such other obligations. If any payment
or distribution on account of the principal of or interest on the Senior
Subordinated Debt Securities or Junior Subordinated Debt Securities, as the
case may be, of any character or any security, whether in cash, securities or
other property (other than securities of the Company or any other company
provided for by a plan of reorganization or readjustment the payment of which
is subordinate, at least to the extent provided in the subordination
provisions with respect to such Subordinated Debt Securities, to the payment
of all Senior Debt at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment) shall
be received by any Holder of any such Subordinated Debt Securities in
contravention of any of the terms of applicable Subordinated Indenture and
before all the Senior Debt shall have been paid in full, such payment or
distribution or security shall be received in trust for the benefit of, and
shall be paid over or delivered and transferred to, the holders of the Senior
Debt at the time outstanding in accordance with the priorities then existing
among such holders for application to the payment of all Senior Debt remaining
unpaid to the extent necessary to pay all such Senior Debt in full (Section
1601 of the Subordinated Indentures). By reason of such subordination, in the
event of the insolvency of the Company, holders of Senior Debt may receive
more, ratably, and holders of the Subordinated Debt Securities having a claim
pursuant to such securities may receive less, ratably, than the other
creditors of the Company. Such subordination will not prevent the occurrence
of any Event of Default in respect of the Subordinated Debt Securities.
The Subordinated Indentures may be modified or amended as provided under
"Modification and Waiver" above, provided that no such modification or
amendment may, without the consent of the holders of all Senior Debt
outstanding, modify any of the provisions of the Subordinated Indentures
relating to the subordination of the Subordinated Debt Securities and any
related coupons in a manner adverse to such holders (Section 902 of the
Subordinated Indentures).
CONVERSION OF SUBORDINATED CONVERTIBLE SECURITIES
The Holders of Subordinated Debt Securities of a specified series that are
convertible into Preferred Stock, Depositary Shares or Common Stock of the
Company ("Subordinated Convertible Securities") will be entitled at certain
times specified in the applicable Prospectus Supplement, subject to prior
redemption, repayment or repurchase, to convert any Subordinated Convertible
Securities of such series (in denominations set forth in the Prospectus
Supplement) into Preferred Stock, Depositary Shares or Common Stock, as the
case may be, at the conversion price set forth in the applicable Prospectus
Supplement, subject to adjustment as described below and in the Prospectus
Supplement. Except as described below, no adjustment will be made on
conversion of any Subordinated Convertible Securities for interest accrued
thereon or for dividends on any Preferred Stock, Depositary Shares or Common
Stock issued on such conversion (Section 1703 of the Subordinated Indentures).
If any Subordinated Convertible Securities not called for redemption or
submitted for repayment are converted between a Regular Record Date for the
payment of interest and the next succeeding Interest Payment Date, such
Subordinated Convertible Securities must be accompanied by funds equal to the
interest payable on such succeeding Interest Payment Date on the principal
amount so converted (Section 1703 of the Subordinated Indentures). The Company
is not required to issue fractional shares of Common Stock upon conversion of
Subordinated Convertible Securities that are convertible into Common Stock
and, in lieu thereof, will pay a cash
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adjustment based upon the Closing Price (as defined in the Subordinated
Indentures) of the Common Stock on the last business day prior to the date of
conversion (Section 1704 of the Subordinated Indentures). In the case of
Subordinated Convertible Securities called for redemption or submitted for
repayment, conversion rights will expire at the close of business on the
redemption date or repayment date, as the case may be (Section 1702 of the
Subordinated Indentures).
Unless otherwise indicated in the applicable Prospectus Supplement, the
conversion price for Subordinated Convertible Securities that are convertible
into Common Stock is subject to adjustment under formulas set forth in the
Subordinated Indentures in certain events, including (i) the issuance of
capital stock as a dividend or distribution on the Common Stock; (ii)
subdivisions and combinations of the Common Stock; (iii) the issuance to all
holders of Common Stock of certain rights or warrants entitling them to
subscribe for or purchase Common Stock within 45 days after the date fixed for
the determination of the shareholders entitled to receive such rights or
warrants, at less than the current market price (as defined in the
Subordinated Indentures); and (iv) the distribution to all holders of Common
Stock of evidences of indebtedness or assets of the Company (excluding certain
cash dividends and distributions described in the next paragraph) or rights or
warrants (excluding those referred to above) (Section 1706 of the Subordinated
Indentures). In the event that the Company shall distribute any rights or
warrants to acquire capital stock ("Capital Stock Rights") pursuant to which
separate certificates representing such Capital Stock Rights will be
distributed subsequent to the initial distribution of such Capital Stock
Rights (whether or not such distribution shall have occurred prior to the date
of the issuance of a series of Subordinated Convertible Securities), such
subsequent distribution shall be deemed to be the distribution of such Capital
Stock Rights; provided that the Company may, in lieu of making any adjustment
in the conversion price upon a distribution of separate certificates
representing such Capital Stock Rights, make proper provision so that each
Holder of such a Subordinated Convertible Security who converts such
Subordinated Convertible Security (or any portion thereof) (a) before the
record date for such distribution of separate certificates shall be entitled
to receive upon such conversion shares of Common Stock issued with Capital
Stock Rights and (b) after such record date and prior to the expiration,
redemption or termination of such Capital Stock Rights shall be entitled to
receive upon such conversion, in addition to the shares of Common Stock
issuable upon such conversion, the same number of such Capital Stock Rights as
would a holder of the number of shares of Common Stock that such Subordinated
Convertible Security so converted would have entitled the holder thereof to
acquire in accordance with the terms and provisions applicable to the Capital
Stock Rights if such Subordinated Convertible Security were converted
immediately prior to the record date for such distribution. Common Stock owned
by or held for the account of the Company or any majority owned subsidiary
shall not be deemed outstanding for the purpose of any adjustment.
No adjustment in the conversion price of Subordinated Convertible Securities
that are convertible into Common Stock will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of
at least 1% in the conversion price then in effect; provided that any such
adjustment not so made will be carried forward and taken into account in any
subsequent adjustment; and provided further that any such adjustment not so
made shall be made no later than three years after the occurrence of the event
requiring such adjustment to be made or carried forward. Notwithstanding any
of the foregoing, the issuance of Common Stock under the Company's Dividend
Reinvestment and Optional Cash Payment Plan (the "DRIP") shall not require an
adjustment in the conversion price of Subordinated Convertible Securities that
are convertible into Common Stock. The Company reserves the right to make such
reductions in the conversion price in addition to those required in the
foregoing provisions as the Company in its discretion shall determine to be
advisable in order that certain stock-related distributions thereafter made by
the Company to its shareholders shall not be taxable (Section 1706 of the
Subordinated Indentures). Except as stated above, the conversion price will
not be adjusted for the issuance of Common Stock or any securities convertible
into or exchangeable for Common Stock, or securities carrying the right to
purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Company, or (iii) a sale or conveyance
to another corporation of the property and assets of the Company as
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an entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock will be entitled to receive stock, securities, other
property or assets (including cash) in respect of, or in exchange for, such
Common Stock, the Holders of the Subordinated Convertible Securities then
outstanding that are convertible into Common Stock will be entitled thereafter
to convert such Subordinated Convertible Securities into the kind and amount
of shares of stock and other securities or property which they would have
received upon such reclassification, change, consolidation, merger, sale or
conveyance had such Subordinated Convertible Securities been converted into
Common Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance (Section 1707 of the Subordinated
Indentures).
In the event of a taxable distribution to holders of Common Stock (or other
transaction) which results in any adjustment of the conversion price of
Subordinated Convertible Securities that are convertible into Common Stock,
the Holders of such Subordinated Convertible Securities may, in certain
circumstances, be deemed to have received a distribution subject to United
States federal income tax as a dividend; in certain other circumstances, the
absence of such an adjustment may result in a taxable dividend to the holders
of Common Stock or such Subordinated Convertible Securities.
PARTICULAR TERMS OF JUNIOR SUBORDINATED DEBT SECURITIES
ISSUED IN CONNECTION WITH PREFERRED SECURITIES
The statements under this caption are brief summaries of certain provisions
of the Junior Subordinated Indenture that will be applicable to Junior
Subordinated Debt Securities issued in connection with Preferred Securities
(unless otherwise provided in the Prospectus Supplement relating to such
Preferred Securities) and do not purport to be complete and are qualified in
their entirety by reference to the Junior Subordinated Indenture.
The distribution rate and the distribution payment dates and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment dates and other payment dates on the Junior Subordinated Debt
Securities, which will be the sole assets of the Financing Trusts.
In the event Junior Subordinated Debt Securities are issued to a Financing
Trust (or a Trustee of a Financing Trust) in connection with the issuance of
Trust Securities by the Financing Trust, such Junior Subordinated Debt
Securities subsequently may be distributed pro rata to the Holders of the
Trust Securities in connection with the dissolution of the Financing Trust
upon the occurrence of certain events described in a Prospectus Supplement
relating to such Trust Securities. Only one series of Junior Subordinated Debt
Securities will be issued to the Financing Trust, or a Trustee of such
Financing Trust, in connection with the issuance of Trust Securities by the
Financing Trust.
If Junior Subordinated Debt Securities are issued to a Financing Trust or to
a Trustee of a Financing Trust in connection with the issuance of Trust
Securities and (i) there shall have occurred any event that would constitute
an Event of Default under the Junior Subordinated Indenture, (ii) the Company
shall be in default with respect to its payment of any obligations under the
related Preferred Securities Guarantee or limited guarantee of the Common
Securities, or (iii) the Company shall have given notice of its election to
defer payments of interest on such Junior Subordinated Debt Securities by
extending the interest payment period as provided in the Junior Subordinated
Indenture and such period, or any extension thereof, shall be continuing, then
(a) the Company shall not declare or pay dividends on, or make a distribution
with respect to or redeem, purchase or acquire, or make a liquidation payment
with respect to, any of its capital stock, and (b) the Company shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities issued by the Company that rank on par with or
junior to such Junior Subordinated Debt Securities; provided, however, that,
restriction (a) above does not apply to any stock dividends paid by the
Company where the dividend stock is the same stock as that on which the
dividend is being paid.
If the Company fails to make interest or other payments on the Junior
Subordinated Debt Securities when due, the Declaration provides a mechanism
whereby the holders of the Preferred Securities may direct the Property
Trustee to enforce its rights under the Junior Subordinated Debt Securities.
If the Property Trustee fails
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to enforce its rights under the Junior Subordinated Debt Securities, any
holder of Preferred Securities may institute a legal proceeding against the
Company to enforce the Property Trustee's rights under the Junior Subordinated
Debt Securities without first instituting any legal proceeding against the
Property Trustee or any other person or entity. Notwithstanding the foregoing,
if the Company has failed to pay interest or principal on the Junior
Subordinated Debt Securities on the date such interest or principal is
otherwise payable, then, pursuant to the terms of the Junior Subordinated
Indenture, a holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder directly of the principal
of or interest on the Junior Subordinated Debt Securities having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities
of such holder on or after the respective due date specified in the Junior
Subordinated Debt Securities.
In the event Junior Subordinated Debt Securities are issued to a Financing
Trust or a Trustee of a Financing Trust, in connection with the issuance of
Trust Securities, for so long as the Trust Securities remain outstanding, the
Company will covenant (i) to directly or indirectly maintain 100% ownership of
the Common Securities; provided, however, that any permitted successor of the
Company under the Junior Subordinated Indenture may succeed to the Company's
ownership of such Common Securities; and (ii) to use its reasonable efforts to
cause the Financing Trust (a) to remain a statutory business trust, except in
connection with the distribution of Junior Subordinated Debt Securities to the
holders of Trust Securities in liquidation of the Financing Trust, the
redemption of all of the Trust Securities, or certain mergers, consolidations
or amalgamations, each as permitted by the Declaration, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes.
DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of the Certificate of
Incorporation of the Company (the "Certificate of Incorporation"), the By-Laws
of the Company (the "By-Laws") and a Rights Agreement between the Company and
Norwest Bank Minnesota, National Association, as Rights Agent (as amended, the
"Rights Agreement"), does not purport to be complete and is qualified in its
entirety by reference to such documents, copies of which are included as
exhibits to the Registration Statement.
Rule 13e-4 and Rule 14e-1 of the Commission's rules and regulations relating
to tender offers, as currently in effect and interpreted by the Commission's
staff, may be applicable to certain repurchases of Offered Securities that are
equity securities or exchange or conversion of Offered Securities for such
equity securities. If, at the time of any such repurchase, exchange or
conversion, Rule 13e-4 or Rule 14e-1 (or any successor rule) applies to such
transaction, the Company will comply with such rule (or any successor rule)
and will afford holders of such Offered Securities all rights and will make
all filings required by such rule (or successor rule). Rule 13e-4 and Rule
14e-1 may also be deemed to apply to Offered Securities that are mandatorily
convertible into equity securities.
GENERAL
The authorized capital stock of the Company consists of 100,000,000 shares
of Common Stock and 7,000,000 shares of Preferred Stock, all without par
value.
All issued and outstanding shares of Common Stock are, and the shares
issuable upon conversion of or in exchange for any Offered Securities will be,
fully paid and non-assessable. Holders of shares of Common Stock and holders
of shares of Preferred Stock do not have any preemptive rights to subscribe
for or purchase any securities of the Company, except, with respect to shares
of Preferred Stock, such preemptive rights as may be provided in the
resolution or resolutions of the Board of Directors of the Company or a
committee designated by the Board of Directors of the Company providing for
the issuance thereof. Holders of shares of Common Stock have the rights
described below under "Share Rights Plan."
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PREFERRED STOCK
The Certificate of Incorporation authorizes the Board of Directors of the
Company to issue, without action or approval of the Company's shareholders,
one or more series of Preferred Stock with such designations, voting powers,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be stated in the
resolution or resolutions providing for the issuance thereof.
There are also currently reserved for issuance up to 2,500,000 shares of
Series A Junior Participating Preferred Stock ("Junior Participating Preferred
Stock") of the Company issuable under the Rights Agreement referred to below
under "Share Rights Plan."
DIVIDENDS
Under Delaware law, subject to restrictions contained in the Certificate of
Incorporation discussed in the following paragraph, dividends may be declared
or paid out of surplus of the Company or, if there is no such surplus, out of
net profits for the fiscal year in which the dividend is declared and/or the
preceding fiscal year.
The Certificate of Incorporation provides that so long as there are
outstanding any shares of Preferred Stock entitled to cumulative dividends, no
dividends (other than dividends payable in shares of Common Stock) may be paid
or declared, nor may any distribution be made, on shares of Common Stock, nor
may any shares of Common Stock be purchased, redeemed or otherwise acquired
for value by the Company (other than in exchange for, or through application
of the proceeds of the sale of, shares of Common Stock) if the Company is in
default with respect to any dividend payable on, or obligation to redeem or to
maintain a purchase, retirement or sinking fund with respect to, shares of
Preferred Stock.
The Company is primarily a holding company owning, directly or indirectly,
the capital stock of ReliaStar Life, other insurance company subsidiaries, and
other subsidiaries. There are legal limitations on the extent to which
ReliaStar Life and the Company's other insurance company subsidiaries may pay
dividends or lend or otherwise supply funds to the Company or ReliaStar Life.
The payment of future dividends by the Company will be largely dependent
upon the ability of ReliaStar Life to pay dividends to the Company. Under
Minnesota insurance law regulating the payment of dividends by ReliaStar Life,
any such payments shall be in an amount deemed prudent by ReliaStar Life's
board of directors and, unless otherwise approved by the Commissioner, must be
paid solely from the adjusted earned surplus of ReliaStar Life. Adjusted
earned surplus means the earned surplus as determined in accordance with
statutory accounting principles (unassigned funds) less 25% of the amount of
such earned surplus that is attributable to net unrealized capital gains.
Further, without approval of the Commissioner, ReliaStar Life may not pay in
any calendar year any dividend that, when combined with other dividends paid
within the preceding 12 months, exceeds the greater of (i) 10% of ReliaStar
Life's statutory surplus at the prior year end or (ii) 100% of ReliaStar
Life's statutory net gain from operations (not including realized capital
gains) for the prior calendar year.
The payment of future dividends by the Company may be affected by the
foregoing limitations, further restrictions and limitations in the event of
statutory or regulatory changes and by such other factors as the Board of
Directors of the Company may deem relevant. See also "Particular Terms of
Junior Subordinated Debt Securities Issued in Connection with Preferred
Securities."
VOTING RIGHTS
The Certificate of Incorporation provides that, except as otherwise provided
by law or the Certificate of Incorporation, holders of shares of Common Stock
are entitled to one vote per share. Holders of shares of Common Stock do not
have any cumulative voting rights.
Except as otherwise provided by law or by the resolution or resolutions
providing for the issuance thereof, holders of shares of Preferred Stock have
no voting rights.
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The Certificate of Incorporation requires the affirmative vote of 75% of the
Company's outstanding capital stock entitled to vote, voting as a single
class, (i) to approve certain "Business Combinations" involving an "Interested
Shareholder" unless the transaction is approved by a majority of the
"Continuing Directors," as these terms are defined in the Certificate of
Incorporation (the "Fair Price Provision"), (ii) to remove directors, (iii) to
effect certain amendments to the Certificate of Incorporation, and (iv) in
order for the shareholders of the Company to amend its By-Laws.
SHARE RIGHTS PLAN
Pursuant to the Rights Agreement, each share of Common Stock issued by the
Company has attached one preferred share purchase right (a "Right"). Each
Right entitles the registered holder to purchase from the Company one-tenth of
a share of Junior Participating Preferred Stock at an exercise price of $200,
subject to adjustment.
Until the Distribution Date, the Rights will be evidenced by certificates
representing shares of Common Stock and will be transferred only with the
shares of Common Stock. The Rights will separate from the shares of Common
Stock and a Distribution Date for the Rights will occur upon the earlier of
(i) the close of business on the 15th day following a public announcement that
a person or group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding shares of Common Stock, or (ii) the close of business
on the 15th day following the commencement or announcement of a tender or
exchange offer the consummation of which would result in a person or group of
affiliated or associated persons becoming the beneficial owner of 20% or more
of the outstanding shares of Common Stock.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on September 8, 2004, unless extended or earlier redeemed by the
Company.
In the event that (i) the Company is the surviving corporation in a merger,
consolidation or statutory share exchange with an Acquiring Person and
outstanding shares of the Company are not changed or exchanged, (ii) an
Acquiring Person engages in one of a number of self-dealing transactions
specified in the Rights Agreement, (iii) an Acquiring Person increases by more
than 1% its proportion of beneficial ownership of the outstanding shares of
any class of equity securities or securities exercisable for or convertible
into equity securities of the Company or any of its subsidiaries pursuant to a
recapitalization, reclassification or similar transaction, or (iv) a person
(other than the Company and certain of its affiliates) becomes a beneficial
owner of 20% or more of the outstanding shares of Common Stock, each holder of
a Right (other than Rights beneficially owned by an Acquiring Person or, in
certain circumstances, transferees) will thereafter have the right to receive,
upon exercise thereof at the then current exercise price of the Right, that
number of shares of Common Stock having a market value of two times the
exercise price of the Right, subject to certain possible adjustments.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of the assets or earning power of the
Company and its subsidiaries (taken as a whole) are sold after a public
announcement that a person has become an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise thereof at the
then current exercise price of the Right, that number of common shares of the
Acquiring Person (or in certain cases, one of its affiliates) having a market
value of two times the exercise price of the Right.
In certain instances, the Company may exchange Rights for shares of Common
Stock or reduce the 20% stock ownership threshold to not less than 10%.
The Rights are redeemable at a price of one cent per Right at any time prior
to the 30th day after a public announcement that a person has become an
Acquiring Person, provided, however, that such redemption may occur after any
person has become an Acquiring Person only if there has not been a change in
control of the Board of Directors of the Company. The redemption period may be
extended if no such change in control has occurred or if no person has become
an Acquiring Person.
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LIQUIDATION
Subject to preferential payments due or other rights with respect to any
shares of Preferred Stock that may then be issued and outstanding, in the
event of any liquidation of the Company the holders of Common Stock are
entitled to share, in proportion to the number of shares of Common Stock held,
in the assets remaining after discharge of all obligations and liabilities of
the Company.
LIMITATIONS ON CHANGE IN CONTROL
The Certificate of Incorporation and the By-Laws provide that the Board of
Directors of the Company will be divided into three classes serving staggered
terms, with one class of directors to be elected for a three-year term at each
annual meeting of shareholders. As a result, at least two meetings of the
Company's shareholders will generally be required for the Company's
shareholders to effect a change in control of the Board of Directors of the
Company. The Certificate of Incorporation and the By-Laws also provide that
shareholder action may be taken only at annual or special meetings of
shareholders, and may not be taken by shareholder consent, and that
shareholders are not permitted to call, or to require the Company's Board of
Directors to call, special meetings of shareholders. The Certificate of
Incorporation provides that, when considering a merger, consolidation, sale of
assets, business combination (including a Business Combination under the Fair
Price Provision) or other transaction (including a tender or exchange offer),
the Company's Board of Directors, any committee thereof and the directors and
the officers of the Company may, in considering the best interests of the
Company and its shareholders, consider the interests of and the effects of
such transaction upon the employees, customers and suppliers of the Company
and its subsidiaries and upon communities in which the Company and its
subsidiaries are located or do business. The By-Laws provide that advance
notice of nominations for the election of directors to be made at, and
business to be brought before, an annual meeting of shareholders by a
shareholder must be received by the Secretary of the Company not less than 60
days in advance of such meeting (except that if public disclosure of such
meeting is made less than 75 days prior to the meeting, the notice need only
be received within 15 days following such public disclosure). The Company has
entered into agreements with certain of its executive employees for certain
financial arrangements that the Company will provide upon termination of
employment under certain circumstances following a change in control of the
Company. In addition, certain retirement and other employee benefit
arrangements provide for accelerated vesting of benefits and allocation to
participants of surplus retirement plan benefits upon a change in control of
the Company. The foregoing provisions and agreements, the voting provisions,
including the Fair Price Provision, referred to above under "Voting Rights,"
the Rights Agreement and the authority of the Board of Directors of the
Company to issue additional shares of capital stock, without action or
approval of the shareholders, could have the effect of discouraging, delaying
or preventing a tender or exchange offer, proxy contest or other attempt to
gain control of or change the management of the Company.
LIMITATION ON CERTAIN LIABILITY OF DIRECTORS AND INDEMNIFICATION
The Certificate of Incorporation and the By-Laws contain provisions limiting
the liability of directors for monetary damages to the Company and its
shareholders for breach of fiduciary duty of care to the Company and
authorizing the indemnification of directors, officers and employees to the
fullest extent permitted by Delaware law. The Company maintains a directors'
and officers' liability insurance policy.
TRANSFER AGENT
The Transfer Agent for the Company's Common Stock is Norwest Bank Minnesota,
National Association.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of Depositary
Shares and Depositary Receipts does not purport to be complete
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and is subject to and qualified in its entirety by reference to the Deposit
Agreement and Depositary Receipts relating to a series of Preferred Stock,
which will be filed with the Commission at or prior to the time of the
offering of such series.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock rather than full shares. In the event such option is
exercised, the Company will provide for the issuance by a Depositary to the
public of Depositary Receipts evidencing Depositary Shares, each of which will
represent a fractional interest (to be set forth in the Prospectus Supplement
relating to a particular series of Depositary Shares) in a share of a
particular series of Preferred Stock as described below.
The shares of any series of Preferred Stock underlying Depositary Shares
will be deposited under a separate deposit agreement (the "Deposit Agreement")
between the Company and a bank or trust company selected by the Company having
its principal office in the United States and having a combined capital and
surplus of at least $50,000,000 (the "Depositary"). The Prospectus Supplement
relating to a series of Depositary Shares will set forth the name and address
of the Depositary. Subject to the terms of the Deposit Agreement, each owner
of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Share, to all the rights and preferences of the shares of Preferred Stock
underlying such Depositary Share (including dividend, voting, redemption,
conversion and liquidation rights).
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts
but not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will
be exchangeable for definitive Depositary Receipts at the Company's expense.
Upon surrender of the Depositary Receipts at the principal office of the
Depositary in Minneapolis (unless the related Depositary Shares have
previously been called for redemption), the holder of the Depositary Shares
evidenced thereby is entitled to delivery at such office, to or upon the
holder's order, of the number of shares of Preferred Stock and any money or
other property represented by such Depositary Shares. Fractional shares will
not be issued. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of whole shares of Preferred Stock to be withdrawn,
the Depositary will deliver to such holder at the same time a new Depositary
Receipt evidencing such excess number of Depositary Shares. Holders of shares
of Preferred Stock thus withdrawn will not thereafter be entitled to deposit
such shares under the Deposit Agreement or to receive Depositary Shares
therefor. The Company does not expect that there will be any public trading
market for underlying shares of Preferred Stock except as represented by the
Depositary Shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the underlying shares of Preferred Stock
to the record holders of related Depositary Shares in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction
of one cent, and any balance not so distributed shall be added to and treated
as part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute to such holders the net
proceeds received from such sale.
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The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the shares of Preferred Stock shall be made available to holders of Depositary
Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of Preferred Stock underlying Depositary Shares is subject to
redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The Depositary shall mail
notice of redemption not less than 30 and not more then 60 days prior to the
date fixed for redemption to the record holders of the Depositary Shares to be
so redeemed at their respective addresses appearing in the Depositary's books.
The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares relating to the shares so redeemed. If
less than all the Depositary Shares are to be redeemed, the Depositary Shares
to be redeemed will be selected by lot or pro rata as may be determined by the
Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of such Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the shares of
any series of Preferred Stock are entitled to vote, the Depositary will mail
the information contained in such notice of meeting to the record holders of
the Depositary Shares relating to such shares. Each record holder of such
Depositary Shares on the record date (which will be the same date as the
record date for the shares) will be entitled to instruct the Depositary as to
the exercise of the voting rights pertaining to the number of shares of
Preferred Stock underlying such holder's Depositary Shares. The Depositary
will endeavor, insofar as practicable, to vote the number of shares underlying
such Depositary Shares in accordance with such instructions, and the Company
will agree to take all action that may be deemed necessary by the Depositary
in order to enable the Depositary to do so. The Depositary will abstain from
voting shares to the extent it does not receive specific instructions from the
recordholders of related Depositary Shares.
TAXATION
Owners of Depositary Shares will be treated for federal income tax purposes
as if they were owners of the shares of Preferred Stock represented by such
Depositary Shares and, accordingly, will be entitled to take into account for
federal income tax purposes income and deductions to which they would be
entitled if they were holders of such shares. In addition, (i) no gain or loss
will be recognized for federal income tax purposes upon the withdrawal of
shares in exchange for Depositary Shares as provided in the Deposit Agreement,
(ii) the tax basis of each share to an exchanging owner of Depositary Shares
will, upon such exchange, be the same as the aggregate tax basis of the
Depositary Shares exchanged therefor, and (iii) the holding period for the
shares in the hands of an exchanging owner of Depositary Shares who held such
Depositary Shares as a capital asset at the time of the exchange thereof for
shares will include the period during which such person owned such Depositary
Shares.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any
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amendment which materially and adversely alters the rights of the existing
holders of Depositary Shares will not be effective unless such amendment has
been approved by the record holders of at least a majority of the Depositary
Shares then outstanding. A Deposit Agreement may be terminated by the Company
or the Depositary only if (i) all outstanding Depositary Shares relating
thereto have been redeemed or (ii) there has been a final distribution in
respect of the shares of Preferred Stock of the relevant series in connection
with any liquidation, dissolution or winding up of the Company and such
distribution has been distributed to the holders of the related Depositary
Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of
the shares of Preferred Stock and any redemption of such shares. Holders of
Depositary Shares will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of underlying shares
of Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and
the Depositary under the Deposit Agreement will be limited to performance in
good faith of their duties thereunder and they will not be obligated to
prosecute or defend any legal proceeding in respect of any Depositary Shares
or shares of Preferred Stock unless satisfactory indemnity is furnished. They
may rely upon written advice of counsel or accountants, or information
provided by holders of Depositary Shares or other persons believed to be
competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and
surplus of at least $50,000,000.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock, Depositary Shares or Common Stock. Securities
Warrants may be issued independently or together with Debt Securities,
Preferred Stock or Depositary Shares offered by any Prospectus Supplement and
may be attached to or separate from such Debt Securities, Preferred Stock or
Depositary Shares. Each series of Securities Warrants will be issued under a
separate warrant agreement (a "Securities Warrant Agreement") to be entered
into between the Company and a bank or trust company, as Securities Warrant
Agent, all as set forth in the Prospectus Supplement relating to the
particular issue of offered Securities Warrants. The Securities Warrant Agent
will act solely as an agent of the Company in connection with the Securities
Warrant Certificates and will not assume any obligation or relationship of
agency or trust for or with any holders of Securities Warrant Certificates or
beneficial owners of Securities Warrants. Copies of the forms of Securities
Warrant Agreements, including the forms of Securities Warrant Certificates
representing the Securities Warrants, are filed as exhibits to the
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Registration Statement. The following summaries of certain provisions of the
forms of Securities Warrant Agreements and Securities Warrant Certificates do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Securities Warrant
Agreements and the Securities Warrant Certificates.
GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities, the following where
applicable: (i) the offering price; (ii) the currencies in which such
Securities Warrants are being offered; (iii) the designation, aggregate
principal amount, currencies, denominations and terms of the series of Debt
Securities purchasable upon exercise of such Securities Warrants; (iv) the
designation and terms of any series of Debt Securities, Preferred Stock or
Depositary Shares with which such Securities Warrants are being offered and
the number of such Securities Warrants being offered with each such Debt
Security, share of Preferred Stock or Depositary Share; (v) the date on and
after which such Securities Warrants and the related series of Debt
Securities, Preferred Stock or Depositary Shares will be transferable
separately; (vi) the principal amount of the series of Debt Securities
purchasable upon exercise of each such Securities Warrant and the price at
which and currencies in which such principal amount of Debt Securities of such
series may be purchased upon such exercise; (vii) the date on which the right
to exercise such Securities Warrants shall commence and the date (the
"Expiration Date") on which such right shall expire; (viii) whether the
Securities Warrants will be issued in registered or bearer form; (ix) United
States federal income tax consequences; and (x) any other terms of such
Securities Warrants.
In the case of Securities Warrants for the purchase of Preferred Stock,
Depositary Shares or Common Stock, the applicable Prospectus Supplement will
describe the terms of such Securities Warrants, including the following where
applicable: (i) the offering price; (ii) the aggregate number of shares
purchasable upon exercise of such Securities Warrants and, in the case of
Securities Warrants for Preferred Stock or Depositary Shares, the designation,
aggregate number of shares and terms of the series of Preferred Stock
purchasable upon exercise of such Securities Warrants or underlying the
Depositary Shares purchasable upon exercise of such Securities Warrants; (iii)
the designation and terms of the series of Debt Securities, Preferred Stock or
Depositary Shares with which such Securities Warrants are being offered and
the number of such Securities Warrants being offered with each such Debt
Security, share of Preferred Stock or Depositary Share; (iv) the date on and
after which such Securities Warrants and the related series of Debt
Securities, shares of Preferred Stock or Depositary Shares will be
transferable separately; (v) the number of shares of Preferred Stock,
Depositary Shares or shares of Common Stock purchasable upon exercise of each
such Securities Warrant and the price at which such number of shares of
Preferred Stock or Depositary Shares of such series or shares of Common Stock
may be purchased upon each exercise; (vi) the date on which the right to
exercise such Securities Warrants shall commence and the Expiration Date;
(vii) United States federal income tax consequences; and (viii) any other
terms of such Securities Warrants. Securities Warrants for the purchase of
Preferred Stock, Depositary Shares or Common Stock will be offered and
exercisable for U.S. dollars only and will be in registered form only.
Securities Warrant Certificates may be exchanged for new Securities Warrant
Certificates of different denominations, may (if in registered form) be
presented for registration of transfer and may be exercised at the corporate
trust office of the Securities Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of any Securities
Warrant to purchase Debt Securities, holders of such Securities Warrants will
not have any of the rights of Holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of or any
premium or interest on the Debt Securities purchasable upon such exercise or
to enforce covenants in the applicable Indenture. Prior to the exercise of any
Securities Warrants to purchase Preferred Stock, Depositary Shares or Common
Stock, holders of such Securities Warrants will not have any of the rights of
holders of the Preferred Stock, Depositary Shares or Common Stock purchasable
upon such exercise, including the right to receive payments of dividends, if
any, on the Preferred Stock, Depositary Shares or Common Stock purchasable
upon such exercise or to exercise any applicable right to vote.
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EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or number of shares of Preferred Stock,
Depositary Shares or shares of Common Stock, as the case may be, at such
exercise price as shall in each case be set forth in, or calculable from, the
applicable Prospectus Supplement. After the close of business on the
Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the Securities Warrant
Agent payment as provided in the applicable Prospectus Supplement of the
amount required to purchase the Debt Securities, Preferred Stock, Depositary
Shares or Common Stock, as the case may be, purchasable upon such exercise
together with certain information set forth on the reverse side of the
Securities Warrant Certificate. Securities Warrants will be deemed to have
been exercised upon receipt of payment of the exercise price, subject to the
receipt, within five business days, of the Securities Warrant Certificate
evidencing such Securities Warrants. Upon receipt of such payment and the
Securities Warrant Certificate properly completed and duly executed at the
corporate trust office of the Securities Warrant Agent or any other office
indicated in the Prospectus Supplement, the Company will, as soon as
practicable, issue and deliver the Debt Securities, Preferred Stock,
Depositary Shares or Common Stock, as the case may be, purchasable upon such
exercise. If fewer than all of the Securities Warrants represented by such
Securities Warrant Certificate are exercised, a new Securities Warrant
Certificate will be issued for the remaining amount of Securities Warrants.
AMENDMENTS AND SUPPLEMENTS TO SECURITIES WARRANT AGREEMENTS
The Securities Warrant Agreements may be amended or supplemented without the
consent of the holders of the Securities Warrants issued thereunder to effect
changes that are not inconsistent with the provisions of the Securities
Warrants and that do not adversely affect the interests of the holders of the
Securities Warrants.
COMMON STOCK WARRANT ADJUSTMENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
exercise price of, and the number of shares of Common Stock covered by, a
Common Stock Warrant are subject to adjustment in certain events, including
(i) the issuance of capital stock as a dividend or distribution on the Common
Stock; (ii) subdivisions and combinations of the Common Stock; (iii) the
issuance to all holders of Common Stock of certain rights or warrants
entitling them to subscribe for or purchase Common Stock within 45 days after
the date fixed for the determination of the shareholders entitled to receive
such rights or warrants, at less than the current market price (as defined in
the Warrant Agreement for such series of Common Stock Warrants); and (iv) the
distribution to all holders of Common Stock of evidences of indebtedness or
assets of the Company (excluding certain cash dividends and distributions
described in the next paragraph) or rights or warrants (excluding those
referred to above). In the event that the Company shall distribute any rights
or warrants to acquire capital stock pursuant to clause (iv) above (the
"Capital Stock Rights") pursuant to which separate certificates representing
such Capital Stock Rights will be distributed subsequent to the initial
distribution of such Capital Stock Rights (whether or not such distribution
shall have occurred prior to the date of the issuance of a series of Common
Stock Warrants), such subsequent distribution shall be deemed to be the
distribution of such Capital Stock Rights; provided that the Company may, in
lieu of making any adjustment in the exercise price of and the number of
shares of Common Stock covered by a Common Stock Warrant upon a distribution
of separate certificates representing such Capital Stock Rights, make proper
provision so that each holder of such a Common Stock Warrant who exercises
such Common Stock Warrant (or any portion thereof) (a) before the record date
for such distribution of separate certificates shall be entitled to receive
upon such exercise shares of Common Stock issued with Capital Stock Rights and
(b) after such record date and prior to the expiration, redemption or
termination of such Capital Stock Rights shall be entitled to receive upon
such exercise, in addition to the shares of Common Stock issuable upon such
exercise, the same number of such Capital Stock Rights as would a holder of
the number of shares of Common Stock that such Common Stock Warrant so
exercised would have entitled the holder thereof
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to acquire in accordance with the terms and provisions applicable to the
Capital Stock Rights if such Common Stock Warrant was exercised immediately
prior to the record date for such distribution. Common Stock owned by or held
for the account of the Company or any majority owned subsidiary shall not be
deemed outstanding for the purpose of any adjustment.
No adjustment in the exercise price of and the number of shares of Common
Stock covered by a Common Stock Warrant will be made for regular quarterly or
other periodic or recurring cash dividends or distributions or for cash
dividends or distributions to the extent paid from retained earnings. No
adjustment will be required unless such adjustment would require a change of
at least 1% in the exercise price then in effect; provided that any such
adjustment not so made will be carried forward and taken into account in any
subsequent adjustment; and provided further that any such adjustment not so
made shall be made no later than three years after the occurrence of the event
requiring such adjustment to be made or carried forward. Notwithstanding any
of the foregoing, the issuance of Common Stock under the DRIP shall not
require an adjustment in the exercise price of or number of shares of Common
Stock covered by a Common Stock Warrant. Except as stated above, the exercise
price of and the number of shares of Common Stock covered by a Common Stock
Warrant will not be adjusted for the issuance of Common Stock or any
securities convertible into or exchangeable for Common Stock, or securities
carrying the right to purchase any of the foregoing.
In the case of (i) a reclassification or change of the Common Stock, (ii) a
consolidation or merger involving the Company or, (iii) a sale or conveyance
to another corporation of the property and assets of the Company as an
entirety or substantially as an entirety, in each case as a result of which
holders of the Company's Common Stock will be entitled to receive stock,
securities, other property or assets (including cash) in respect of or in
exchange for such Common Stock, the holders of the Common Stock Warrants then
outstanding will be entitled thereafter to convert such Common Stock Warrants
into the kind and amount of shares of stock and other securities or property
which they would have received upon such reclassification, change,
consolidation, merger, sale or conveyance had such Common Stock Warrants been
exercised immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance.
DESCRIPTION OF PREFERRED SECURITIES OF THE FINANCING TRUSTS
Each Financing Trust may issue, from time to time, only one series of
Preferred Securities having terms described in a Prospectus Supplement
relating thereto. The Declaration of each Financing Trust will be qualified as
an indenture under the Trust Indenture Act.
The Preferred Securities will have such terms, including distributions,
redemption, exchange, sinking fund and liquidation provisions, voting and
other rights and such other preferred, deferred or other special rights or
such restrictions as shall be set forth in the Declaration or made part of the
Declaration by the Trust Indenture Act. Reference is made to a Prospectus
Supplement relating to the Preferred Securities for specific terms, including
(i) the distinctive designation of the Preferred Securities, (ii) the number
of Preferred Securities and the date or dates upon which distributions shall
be payable (provided, however, that distributions on the Preferred Securities
shall be payable on a quarterly basis to holders of the Preferred Securities
as of a record date in each quarter during which the Preferred Securities are
outstanding), (iii) whether distributions on Preferred Securities issued by
the Financing Trust shall be cumulative, and, in the case of Preferred
Securities having such cumulative distribution rights, the date or dates or
method of determining the date or dates from which distributions on Preferred
Securities shall be cumulative, (iv) the amount or amounts which shall be paid
out of the assets of the Financing Trust to the holders of Preferred
Securities upon voluntary or involuntary dissolution, winding-up or
termination of the Trust, (v) the obligation, if any, of the Financing Trust
to purchase or redeem Preferred Securities and the price or prices at which,
the period or periods within which and the terms and conditions upon which the
Preferred Securities shall be purchased or redeemed, in whole or in part,
pursuant to such obligation, (vi) the voting rights, if any, of Preferred
Securities in addition to those required by law, including the number of votes
per Preferred Security and any requirement for the approval by the holders of
Preferred Securities as a
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condition to specified action or amendments to the Declaration, and (vii) any
other relevant rights, preferences, or privileges of, or limitations or
restrictions on, Preferred Securities consistent with the Declaration and
applicable law. The distribution rate and the distribution payment dates and
other payment dates for the Preferred Securities will correspond to the
interest rate and interest payment dates and other payment dates on the Junior
Subordinated Debt Securities, which will be the sole assets of the Financing
Trust.
All Preferred Securities offered hereby will be guaranteed by the Company to
the extent set forth below under "The Preferred Securities Guarantee." Certain
United States federal income tax considerations applicable to any offering of
Preferred Securities will be described in the Prospectus Supplement relating
thereto.
In connection with the issuance of Preferred Securities, each Financing
Trust will issue one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions as
shall be set forth therein. The terms of the Common Securities will be
substantially identical to the terms of the Preferred Securities and the
Common Securities will rank on par, and payments will be made thereon pro
rata, with the Preferred Securities except that, upon an event of default
under the Declaration, the rights of the holders of the Common Securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the
Preferred Securities. Except in certain limited circumstances, the Common
Securities will also carry the right to vote and to appoint, remove or replace
any of the ReliaStar Trustees. All of the Common Securities will be directly
or indirectly owned by the Company.
TAX LEGISLATION
On February 6, 1997, as part of President Clinton's Fiscal 1998 Budget
Proposal, the United States Treasury Department proposed legislation that
would, among other things, deny an issuer a deduction for United States
federal income tax purposes for the payment of interest on instruments with
characteristics similar to the Junior Subordinated Debentures. If the proposed
legislation were enacted in its current form, it is not expected to apply to
the Junior Subordinated Debentures since the proposed effective date for this
provision is the date of first committee action. There can be no assurances,
however, that the proposed legislation, if enacted, or similar legislation
enacted after the date hereof would not adversely affect the tax treatment of
the Junior Subordinated Debentures.
THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee that will be executed and delivered by the Company for
the benefit of the holders, from time to time, of Preferred Securities. The
Preferred Securities Guarantee will be qualified as an indenture under the
Trust Indenture Act. Wilmington Trust Company will act as indenture trustee
under the Preferred Securities Guarantee (the "Guarantee Trustee"). The terms
of the Preferred Securities Guarantee will be those set forth in the Preferred
Securities Guarantee and those made part of the Preferred Securities Guarantee
by the Trust Indenture Act. This summary does not purport to be complete and
is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the form of Preferred Securities Guarantee, which is
filed as an exhibit to the Registration Statement of which this Prospectus
forms a part, and the Trust Indenture Act. The Preferred Securities Guarantee
will be held by the Guarantee Trustee for the benefit of the holders of the
Preferred Securities.
GENERAL
Pursuant to the Preferred Securities Guarantee, the Company will agree, to
the extent set forth herein, to pay in full to the holders of the Preferred
Securities the Guarantee Payments (as defined herein) (except to the extent
paid by the Financing Trust), as and when due, regardless of any defense,
right of set-off or counterclaim which the Financing Trust may have or assert.
The following payments or distributions with respect to Preferred Securities
(the "Guarantee Payments"), to the extent not paid or made by the Financing
Trust, will be subject to
the Preferred Securities Guarantee (without duplication): (i) any accrued and
unpaid distributions that are
32
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required to be paid on the Preferred Securities, to the extent the Financing
Trust shall have funds available therefor, (ii) the redemption price,
including all accrued and unpaid distributions (the "Redemption Price"), to
the extent the Financing Trust has funds available therefor with respect to
any Preferred Securities called for redemption by the Trust, and (iii) upon a
voluntary or involuntary dissolution, winding-up or termination of the
Financing Trust (other than in connection with the distribution of Junior
Subordinated Debt Securities to the holders of Preferred Securities or the
redemption of all the Preferred Securities) the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid distributions on the
Preferred Securities to the date of payment to the extent the Financing Trust
has funds available therefor or (b) the amount of assets of the Financing
Trust remaining available for distribution to holders of the Preferred
Securities in liquidation of the Financing Trust. The Company's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Company to the holders of Preferred Securities or by causing
the Financing Trust to pay such amounts to such holders.
The Preferred Securities Guarantee will be a guarantee on a subordinated
basis of the Guarantee Payments from the time of issuance, but will not apply
to any payment of distributions except to the extent the Financing Trust shall
have funds available therefor. If the Company does not make interest payments
on the Junior Subordinated Debt Securities purchased by the Financing Trust,
the Financing Trust will not pay distributions on the Preferred Securities and
will not have funds available therefor. See "Particular Terms of Junior
Subordinated Debt Securities Issued in Connection with Preferred Securities."
The Preferred Securities Guarantee, when taken together with the Company's
obligations under the Junior Subordinated Debt Securities, the Junior
Subordinated Indenture and the Declaration, including its obligations to pay
costs, expenses and certain liabilities of the Financing Trust (other than
with respect to the Trust Securities), provides a full and unconditional
guarantee of amounts due on the Preferred Securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Financing Trust with respect to the Common
Securities (the "Common Securities Guarantee") to the same extent as the
Preferred Securities Guarantee, except that, upon an Event of Default under
the Junior Subordinated Indenture, holders of Preferred Securities under the
Preferred Securities Guarantee shall have priority over holders of Common
Securities under the Common Securities Guarantee with respect to distributions
and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In the Preferred Securities Guarantee, the Company will covenant that, so
long as any Preferred Securities issued by the Financing Trust remain
outstanding, if there shall have occurred any event that would constitute an
event of default under the Preferred Securities Guarantee or the Declaration,
then (a) the Company shall not declare or pay any dividend on, or make any
distribution with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock and (b) shall
not make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company that which rank on par with or junior to such Junior Subordinated Debt
Securities. However, the Preferred Securities Guarantee will except from the
foregoing any stock dividends paid by the Company where the dividend stock is
the same as that on which the dividend is being paid.
MODIFICATIONS OF THE PREFERRED SECURITIES GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required),
the Preferred Securities Guarantee may be amended only with the prior approval
of the holders of a majority in liquidation amount of the Preferred Securities
then outstanding. All guarantees and agreements contained in a Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Company and shall inure to the benefit of the
holders of the Preferred Securities then outstanding.
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EVENTS OF DEFAULT
An event of default under the Preferred Securities Guarantee will occur upon
the failure of the Company to make any of the payments required by the
Preferred Securities Guarantee or to perform its other obligations thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Preferred Securities Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Preferred Securities Guarantee.
If the Company fails to make any of the payments required by the Preferred
Securities Guarantee, a holder of Preferred Securities may directly institute
a proceeding against the Company for enforcement of such holder's rights to
receive such payments under the Preferred Securities Guarantee without first
instituting a legal proceeding against the Financing Trust, the Guarantee
Trustee or any other person or entity.
The Company will be required to provide annually to the Guarantee Trustee a
statement as to the performance by the Company of certain of its obligations
under the Preferred Securities Guarantee and as to any default in such
performance.
The Company is required to file annually with the Guarantee Trustee an
officer's certificate as to the Company's compliance with all conditions under
the Preferred Securities Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Preferred Securities Guarantee and after curing all such defaults that may
have occurred, undertakes to perform only such duties as are specifically set
forth in the Preferred Securities Guarantee and, after default, shall exercise
the same degree of care as a prudent individual would exercise in the conduct
of his or her own affairs. Subject to such provisions, the Guarantee Trustee
is under no obligation to exercise any of the powers vested in it by the
Preferred Securities Guarantee at the request of any holder of Preferred
Securities, unless offered reasonable indemnity against the costs, expenses
and liabilities which might be incurred thereby.
TERMINATION
The Preferred Securities Guarantee will terminate as to the Preferred
Securities upon full payment of the Redemption Price of all Preferred
Securities, upon distribution of the Junior Subordinated Debt Securities held
by the Financing Trust to the holders of the Preferred Securities or upon full
payment of the amounts payable in accordance with the Declaration upon
liquidation of the Financing Trust. The Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of Preferred Securities must restore payment of any sums paid
under the Preferred Securities or the Preferred Securities Guarantee.
STATUS OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will constitute an unsecured obligation
of the Company and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Company (other than the Common Securities
Guarantee), (ii) on par with the most senior preferred or preference stock
hereafter issued by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred or preference stock of
any affiliate of the Company and (iii) senior to the Common Stock. The terms
of the Preferred Securities provide that each holder of Preferred Securities
by acceptance thereof agrees to the subordination provisions and other terms
of the Preferred Securities Guarantee.
The Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity).
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GOVERNING LAW
The Preferred Securities Guarantee will be governed by and construed in
accordance with the internal laws of the State of New York.
PLAN OF DISTRIBUTION
The Company may offer and sell the Offered Securities in any of three ways:
(i) through agents; (ii) through underwriters or dealers; or (iii) directly to
one or more purchasers. The Prospectus Supplement with respect to any of the
Offered Securities will set forth the terms of the offering of such Offered
Securities, including the name or names of any underwriters or agents, the
purchase price of such Offered Securities, the proceeds to the Company from
such sale, any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation, the initial public
offering price, any discounts or concessions allowed or reallowed or paid to
dealers, and any securities exchanges on which such Offered Securities may be
listed.
The distribution of the Offered Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed,
at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contributions with respect to payments which the underwriters, dealers or
agents may be required to make in respect thereof. Such underwriters, dealers
and agents, and affiliates thereof, may be customers of, engage in
transactions with, or perform services for the Company and its affiliates in
the ordinary course of business.
Each underwriter, dealer and agent participating in the distribution of any
Debt Securities that are issuable as Bearer Securities will agree that, in
connection with the original issuance of such Bearer Securities, it will not
offer, sell or deliver, directly or indirectly, Bearer Securities to a United
States Person or to any person within the United States, except to the extent
permitted under United States Treasury regulations.
All Offered Securities will be new issues of securities with no established
trading market. Any underwriters to whom Offered Securities are sold by the
Company for public offering and sale may make a market in such Offered
Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given concerning the liquidity of the trading market for any Offered
Securities.
VALIDITY OF SECURITIES
The validity of the Debt Securities, Preferred Stock, Depository Shares and
Securities Warrants will be passed upon for the Company by Faegre & Benson
LLP, Minneapolis, Minnesota.
EXPERTS
The consolidated financial statements of the Company and related financial
statement schedules as of December 31, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996, incorporated herein by reference
from the Company's Annual Report on Form 10-K for the year ended December 31,
1996, have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon
their authority as experts in accounting and auditing.
35
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS,
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED HEREIN,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE TRUST OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THE PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS. THE PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANY PERSON IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an estimate, subject to future contingencies, of the
expenses to be incurred by the Registrants in connection with the issuance and
distribution of the securities being registered:
Registration fee.................................. $ 121,212
Listing fees...................................... 56,000
Legal services and expenses....................... 60,000
Trustee and depositary services and expenses...... 40,000
Accounting services and expenses.................. 50,000
Printing fees..................................... 75,000
Rating agency fees................................ 75,000
Miscellaneous..................................... 27,788
----------
Total............................................ $ 505,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Section 145 of the General Corporation Law of the
State of Delaware, which provides for indemnification of directors and officers
in certain circumstances.
Article VIII of the By-Laws of the Company provides for broad
indemnification of directors and officers of the Company. See Exhibit 4(d)
hereto.
The Company also maintains director and officer liability insurance
policies.
In addition, Section 7 of Article Sixth of the Company's Certificate of
Incorporation contains broad provisions limiting the liability of directors for
monetary damages for breach of fiduciary duty as a director. See Exhibit 4(a)
hereto.
The Declaration of Trust provides that no Trustee, affiliate of any
Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Trustee, or any employee or agent of a
Financing Trust or its affiliates (each an "Indemnified Person") shall be
liable, responsible or accountable in damages or otherwise to the Financing
Trust or any employee or agent of the Financing Trust or its affiliates for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Financing
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by the
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions. The Declaration also
provides that to the fullest extent permitted by applicable law, the Company
shall indemnify and hold harmless each Indemnified Person from and against any
loss, damage or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Financing Trust and in a manner such Indemnified Person reasonably
believed to be within the scope of authority conferred on such Indemnified
Person by the Declaration, except that no Indemnified Person shall be entitled
to be indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence (or, in the case of the
Property Trustee, negligence) or willful misconduct with respect to such acts or
omissions. The Declaration further provides that, to the fullest extent
permitted by applicable, law, expenses (including legal fees) incurred by an
Indemnified Person in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Financing Trust prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by or
an undertaking by or on behalf
<PAGE>
of the Indemnified Person to repay such amount if it shall be determined that
the Indemnified Person is not entitled to be indemnified for the underlying
cause of action as authorized by the Declaration.
ITEM 16. EXHIBITS
Exhibit
Number
------
1(a) Form of Underwriting Agreement for Debt Securities (incorporated by
reference to Exhibit 1(a)(i) to the Company's Registration Statement
on Form S-3, Registration No. 33-87588).
1(b) Form of Underwriting Agreement for Preferred Stock and Depositary
Shares (incorporated by reference to Exhibit 1 to the Company's
Registration Statement on Form S-3, Registration No. 33-39960).
1(c) Form of Underwriting Agreement for Preferred Securities (incorporated
by reference to Exhibit 1(c) to the Company's Current Report on Form
8-K dated March 29, 1996, File No. 0-17441).
4(a) Certificate of Incorporation, as amended, of the Company (incorporated
by reference to Exhibit 3(b)(1) to the Company's Registration
Statement on Form S-4, Registration No. 33-25107).
4(b) By-Laws, as amended, of the Company (incorporated by reference to
Exhibit 3 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1990, File No. 1-10640).
4(c) Surplus Note (incorporated by reference to Exhibit 4(e) to the
Company's Registration Statement on Form S-3, Registration No. 33-
87588).
4(d) Rights Agreement dated as of October 7, 1988 (incorporated by
reference to Exhibit 1 to the Company's Registration Statement on Form
8-A dated October 4, 1989, File No. 0-17441).
4(e) Amendment to Rights Agreement dated as of February 8, 1990
(incorporated by reference to Exhibit 1 to the Company's Amendment on
Form 8 dated February 15, 1990 to Registration Statement on Form 8-A
dated October 4, 1989, File No. 0-17441).
4(f) Amendment to Rights Agreement dated as of September 10, 1994
(incorporated by reference to Exhibit 1 to the Company's Amendment on
Form 8-A/A dated September 12, 1994 to Registration Statement on Form
8-A dated October 4, 1989, File No. 0-17441).
4(g) Form of Senior Indenture (incorporated by reference to Exhibit 4(i) to
the Company's Registration Statement on Form S-3, Registration No. 33-
87588).
4(h) Form of Senior Subordinated Indenture.*
4(i) Junior Subordinated Indenture between the Company and Wilmington Trust
Company, as Trustee, dated as of March 29, 1996 (incorporated by
reference to Exhibit 4(k) to the Company's Current Report on Form 8-K
dated March 29, 1996, File No. 0-17441).
4(j) Form of Certificate of Designations of Preferred Stock (incorporated
by reference to Exhibit 4(b) to the Company's Registration Statement
on Form S-3, Registration No. 33-50310).
4(k) Form of Deposit Agreement, including form of Depositary Receipt
(incorporated by reference to Exhibit 4(d) to the Company's
Registration Statement on Form S-3, Registration No. 33-39960).
4(l) Form of Debt Warrant Agreement, including form of Debt Warrant
Certificate (incorporated by reference to Exhibit 4(m) to the
Company's Registration Statement on Form S-3, Registration No. 33-
87588).
4(m) Form of Preferred Stock Warrant Agreement, including form of Preferred
Stock Warrant Certificate (incorporated by reference to Exhibit 4(n)
to the Company's Registration Statement on Form S-3, Registration No.
33-87588).
4(n) Form of Common Stock Warrant Agreement, including form of Common Stock
Warrant Certificate (incorporated by reference to Exhibit 4(o) to the
Company's Registration Statement on Form S-3, Registration No. 33-
87588).
4(o) Certificates of Trust.*
4(p) Form of Declaration of Trust.*
4(q) Form of Amended and Restated Declaration of Trust, including form of
Preferred Security.*
4(r) Form of Supplemental Indenture to be used in connection with issuance
of Subordinated Debt Securities and Preferred Securities.*
4(s) Form of Guarantee with respect to Preferred Securities.*
5 Opinion of Faegre & Benson LLP.*
II-2
<PAGE>
12 Calculations of ratios of earnings to fixed charges and ratios of
earnings to combined fixed charges and preferred stock dividends.*
23(a) Consent of Deloitte & Touche LLP.#
23(b) Consent of Faegre & Benson LLP (included in Exhibit 5).*
24 Powers of Attorney of directors and officers of the Company.*
25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of _______________ ___________________________________, as
Trustee under the Senior Indenture (to be filed by amendment or
pursuant to a Form 8-K).
25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of ________________ ___________________________________, as
Trustee under the Senior Subordinated Indenture (to be filed by
amendment or pursuant to a Form 8-K).
25(c) Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Wilmington Trust Company, as Trustee under the Junior
Subordinated Indenture (incorporated by reference to Exhibit 25(c) to
the Company's Current Report on Form 8-K, dated March 29, 1996, File
No. 0-17441).
25(d) Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Wilmington Trust Company, as Trustee under the Amended and
Restated Declaration (to be filed by amendment or pursuant to a Form
8-K).
25(e) Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of Wilmington Trust Company, as Trustee under the Preferred
Securities Guarantee for the benefit of the holders of Preferred
Securities (to be filed by amendment or pursuant to a Form
8-K).
- --------------------
* previously filed
# filed herewith
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933, (ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; provided, however, that paragraphs (1)(i) and
(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 by the Company pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934)
that is incorporated by reference in the Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-3
<PAGE>
The undersigned Registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission under Section
305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, each Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
act of 1933, 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 of 1933 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 of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
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 the City of Minneapolis, State of Minnesota, on
May 21, 1997.
RELIASTAR FINANCIAL CORP.
(Registrant)
By JOHN G. TURNER*
----------------------------------------------
John G. Turner, Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, the undersigned
Financing Trusts certifies that they have reasonable grounds to believe that
they meet all of the requirements for filing on Form S-3 and have duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Minneapolis, State of Minnesota, on
May 21, 1997.
RELIASTAR FINANCING II
RELIASTAR FINANCING III
RELIASTAR FINANCING IV
RELIASTAR FINANCING V
By /s/ WAYNE R. HUNEKE
----------------------------------------------
Wayne R. Huneke, Trustee
By /s/ RICHARD R. CROWL
----------------------------------------------
Richard R. Crowl, Trustee
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on May 21, 1997 by the following persons
in the capacities with ReliaStar Financial Corp. indicated:
JOHN G. TURNER* Chairman and Chief Executive Officer
------------------------------ (Principal Executive Officer)
John G. Turner
/s/ WAYNE R. HUNEKE Senior Vice President, Chief Financial
------------------------------ Officer and Treasurer
Wayne R. Huneke (Principal Financial Officer)
/s/ CHRIS D. SCHREIER Second Vice President and Controller
------------------------------ (Principal Accounting Officer)
Chris D. Schreier
CAROLYN H. BALDWIN )
DAVID C. COX )
JOHN H. FLITTIE )
LUELLA GROSS GOLDBERG )
WILLIAM A. HODDER )
JAMES J. HOWARD III ) A majority of the Board of Directors*
RANDY C. JAMES )
RICHARD L. KNOWLTON )
DAVID A. KOCH )
RICHARD M. KOVACEVICH )
GLEN D. NELSON, M.D. )
JAMES J. RENIER )
JOHN G. TURNER )
___________________
* Richard R. Crowl, by signing his name hereto, does hereby sign this document
on behalf off each of the above-named officers or directors of ReliaStar
Financial Corp. pursuant to powers of attorney duly executed by such persons.
/s/ RICHARD R. CROWL
------------------------------------
Richard R. Crowl
Attorney-in-fact
II-5
<PAGE>
Exhibit 23(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
ReliaStar Financial Corp. and subsidiaries on Form S-3 of our reports dated
January 31, 1997, except for Note 14, as to which the date is February 23, 1997,
appearing in and incorporated by reference in the Annual Report on Form 10-K of
ReliaStar Financial Corp. and subsidiaries for the year ended December 31,
1996 and to the reference to us under the heading "Experts" in the Prospectus,
which is part of this Registration Statement.
Minneapolis, Minnesota /s/ Deloitte & Touche LLP
May 19, 1997
