<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 9, 2000
REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3 REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3 REGISTRATION STATEMENT
(NO. 333-12617)
UNDER
THE SECURITIES ACT OF 1933
<TABLE>
<S> <C>
HARTFORD CAPITAL III
HARTFORD CAPITAL IV
THE HARTFORD FINANCIAL SERVICES GROUP, INC. HARTFORD CAPITAL V
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
</TABLE>
<TABLE>
<S> <C>
DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (STATE OR OTHER JURISDICTION OF INCORPORATION OR
ORGANIZATION) ORGANIZATION OF EACH REGISTRANT)
</TABLE>
<TABLE>
<S> <C>
06-6431735
(HARTFORD CAPITAL III)
06-6431736
13-3317783 (HARTFORD CAPITAL IV)
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) TO BE APPLIED FOR
(HARTFORD CAPITAL V)
(I.R.S. EMPLOYER IDENTIFICATION NUMBERS)
</TABLE>
<TABLE>
<S> <C>
C/O THE HARTFORD FINANCIAL SERVICES GROUP, INC.
HARTFORD PLAZA HARTFORD PLAZA
HARTFORD, CONNECTICUT 06115 HARTFORD, CONNECTICUT 06115
(860) 547-5000 (860) 547-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE INCLUDING AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE
OFFICES) OFFICES)
</TABLE>
------------------------
Please address a copy of all communications to:
<TABLE>
<S> <C>
KATHERINE VINES TRUMBULL JAMES C. SCOVILLE
VICE PRESIDENT AND CORPORATE SECRETARY DEBEVOISE & PLIMPTON
THE HARTFORD FINANCIAL SERVICES GROUP, INC. 875 THIRD AVENUE
HARTFORD PLAZA NEW YORK, NEW YORK 10022
HARTFORD, CONNECTICUT 06115 (212) 909-6000
(860) 547-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE OF EACH
REGISTRANT)
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) FEE(2)
---------------------------------------------------------------------------------------------------------------------------------
Common Stock of The Hartford Financial Services Group,
Inc., par value $.01 per share(3).......................
Debt Securities of The Hartford Financial Services Group,
Inc.(4).................................................
Preferred Stock of The Hartford Financial Services Group,
Inc., par value $.01 per share(5).......................
Depositary Shares of The Hartford Financial Services
Group, Inc.(6)..........................................
Warrants of The Hartford Financial Services Group,
Inc.(7).................................................
Stock Purchase Contracts of The Hartford Financial
Services Group, Inc.(8).................................
Stock Purchase Units of The Hartford Financial Services
Group, Inc.(9)..........................................
Junior Subordinated Deferrable Interest Debentures of The
Hartford Financial Services Group, Inc.(10).............
Preferred Securities of Hartford Capital III(11).........
Preferred Securities of Hartford Capital IV(11)..........
Preferred Securities of Hartford Capital V(11)...........
Guarantees with respect to Preferred Securities of
Hartford Capital III, Hartford Capital IV and Hartford
Capital V by The Hartford Financial Services Group,
Inc.(12)................................................
Total............................................. $1,000,000,000(13) 100% $1,000,000,000(13)(14) $264,000
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(continued on next page)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
(continued from previous page)
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933 and exclusive of accrued
interest and dividends, if any.
(2) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933 in respect of the $1,000,000,000 of
previously unregistered securities registered hereunder. An additional
registration fee of $36,823 was paid by The Hartford Financial Services
Group, Inc. on September 25, 1996 in connection with an aggregate of
$126,975,000 Debt Securities, Preferred Stock and Depositary Shares of The
Hartford Financial Services Group, Inc. registered and not yet sold
pursuant to its Registration Statement on Form S-3 (No. 333-12617).
(3) Includes Preferred Share Purchase Rights. Prior to the occurrence of
certain events, such Rights will not be exercisable or evidenced separately
from the Common Stock. Subject to note (13) below, there is being
registered hereunder an indeterminate number of shares of Common Stock as
may be sold from time to time by The Hartford Financial Services Group,
Inc., including sales upon the exercise of Warrants. Also includes such
indeterminate number of shares of Common Stock as may be issued upon
conversion of or exchange for any securities being registered hereunder
that provide for conversion or exchange into Common Stock.
(4) Subject to note (13) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time by The Hartford Financial Services Group, Inc., including sales
upon the exercise of Warrants. Also includes such indeterminate principal
amount of Debt Securities as may be issued upon conversion of or exchange
for any securities being registered hereunder that provide for conversion
or exchange into Debt Securities.
(5) Subject to note (13) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold from time
to time by The Hartford Financial Services Group, Inc., including sales
upon the exercise of Warrants. Also includes such indeterminate number of
shares of Preferred Stock as may be issued upon conversion of or exchange
for any securities being registered hereunder that provide for conversion
or exchange into Preferred Stock.
(6) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event The Hartford
Financial Services Group, Inc. elects to offer to the public fractional
interests in shares of the Preferred Stock registered hereunder, Depositary
Receipts will be distributed to those persons purchasing such fractional
interests and shares of Preferred Stock will be issued to the Depositary
under the Deposit Agreement. No separate consideration will be received for
the Depositary Shares.
(7) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Warrants as may be sold from time to
time by The Hartford Financial Services Group, Inc., representing rights to
purchase Debt Securities, Preferred Stock or Common Stock. Warrants may be
sold separately or with Debt Securities, Preferred Stock or Common Stock.
(8) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Contracts as may be sold
from time to time by The Hartford Financial Services Group, Inc.,
representing rights to purchase Preferred Stock or Common Stock.
(9) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Units as may be sold from
time to time by The Hartford Financial Services Group, Inc., representing
ownership of Stock Purchase Contracts and Debt Securities, Preferred
Securities or debt obligations of third parties, including U.S. Treasury
Securities or Preferred Securities of Hartford Capital III, Hartford
Capital IV or Hartford Capital V.
(10) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Junior Subordinated Deferrable Interest Debentures
as may be sold from time to time by The Hartford Financial Services Group,
Inc.
(11) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Preferred Securities as may be sold severally from
time to time by Hartford Capital III, IV and V.
(12) This registration statement is deemed to include the obligations of The
Hartford Financial Services Group, Inc. under the Junior Subordinated
Deferrable Interest Debentures, the related Indenture, the Trust
Agreements, the Preferred Securities, the Guarantees and the Expense
Agreements as described in the Registration Statement.
(13) Prospectuses included herein relate to $1,126,975,000 of Securities. Such
amount represents the principal amount of any Debt Securities or Junior
Subordinated Deferrable Interest Debentures issued at their principal
amount, the issue price rather than the principal amount of any Debt
Securities or Junior Subordinated Deferrable Interest Debentures issued at
an original issue discount, the liquidation preference of any Preferred
Stock, the amount computed pursuant to Rule 457(c) for any Common Stock,
the issue price of any Warrants, the exercise price of any Offered
Securities issuable upon the exercise of Warrants and the initial public
offering price of any Preferred Securities. Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(14) No separate consideration will be received for the Debt Securities,
Preferred Stock, Common Stock or the Depositary Shares issuable upon
conversion of or in exchange for any securities registered hereunder that
provide for conversion or exchange into such securities. No separate
consideration will be received for any Junior Subordinated Deferrable
Interest Debentures if issued to evidence a loan by Hartford Capital III,
IV or V to The Hartford Financial Services Group, Inc., or for any related
Guarantee or Expense Agreement.
------------------------
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement includes a Prospectus which may relate to a total of $126,975,000 of
securities previously registered by the Registrants under their Registration
Statement on Form S-3 (No. 333-12617), which was declared effective on October
2, 1996. In the event any of such previously registered and unsold Securities
are offered and sold prior to the effective date of this Registration Statement,
the amount of such Securities will not be included in such Prospectus hereunder.
This
Registration Statement also constitutes Post-Effective Amendment No. 1 to
the Registration Statement on Form S-3 (No. 333-12617). Such Post-Effective
Amendment shall hereafter become effective concurrently with the effectiveness
of this Registration Statement in accordance with Section 8(c) of the Securities
Act of 1933.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT AND POST-EFFECTIVE
AMENDMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY THEIR EFFECTIVE
DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES
ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT AND POST-EFFECTIVE AMENDMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE> 3
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT
SOLICITING OFFERS TO BUY THE SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION DATED NOVEMBER 9, 2000
PROSPECTUS
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
DEBT SECURITIES
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
PREFERRED STOCK
COMMON STOCK
DEPOSITARY SHARES
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
HARTFORD CAPITAL III
HARTFORD CAPITAL IV
HARTFORD CAPITAL V
PREFERRED SECURITIES GUARANTEED
AS DESCRIBED IN THIS PROSPECTUS
AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT
BY THE HARTFORD FINANCIAL SERVICES GROUP, INC.
By this prospectus, we may offer from time to time up to $1,126,975,000 of
any combination of the securities described in this prospectus.
We will provide specific terms of the securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest. A supplement may also change or update information contained in this
prospectus.
We will not use this prospectus to confirm sales of any of our securities
unless it is attached to a prospectus supplement.
Unless we state otherwise in a prospectus supplement, we will not list any
of these securities on any securities exchange.
Neither the Securities and Exchange Commission nor any state securities
commission has determined whether this prospectus is truthful or complete. Nor
have they made, nor will they make, any determination as to whether anyone
should buy these securities. Any representation to the contrary is a criminal
offense.
THE DATE OF THIS PROSPECTUS IS --, 2000
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
About This Prospectus....................................... ii
The Hartford Financial Services Group, Inc.................. 1
The Hartford Capital Trusts................................. 1
Use of Proceeds............................................. 3
Ratio of Earnings to Fixed Charges.......................... 3
Description of the Debt Securities.......................... 4
Description of Junior Subordinated Debentures............... 16
Description of Capital Stock of The Hartford Financial
Services Group, Inc....................................... 27
Description of Warrants..................................... 35
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 37
Description of Preferred Securities......................... 37
Description of Guarantee.................................... 49
Description of Corresponding Junior Subordinated
Debentures................................................ 52
Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the
Guarantees................................................ 54
Plan of Distribution........................................ 56
Legal Opinions.............................................. 56
Experts..................................................... 57
Where You Can Find More Information......................... 57
Incorporation by Reference.................................. 57
</TABLE>
<PAGE> 5
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a "shelf" registration process.
Under this shelf process, we may sell the securities described in the prospectus
from time to time. This prospectus provides you with a general description of
the securities we may offer. We may also add, update or change information
contained in this prospectus through a supplement to this prospectus. Any
statement that we make in this prospectus will be modified or superseded by any
inconsistent statement made by us in a prospectus supplement. You should read
both this prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More Information."
ii
<PAGE> 6
For the purpose of this prospectus "The Hartford Financial Services Group,"
"we," "us," "our" or similar terms mean The Hartford Financial Services Group,
Inc.
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
We are a holding company that owns, directly and indirectly, a number of
insurance companies. Our insurance companies are among the largest providers of
both property and casualty insurance and life insurance products in the United
States. Hartford Fire Insurance Company, or Hartford Fire, founded in 1810, is
the oldest of our subsidiaries. Our companies write insurance and reinsurance in
the United States and internationally. At June 30, 2000, our total assets and
total stockholders' equity were $171.9 billion and $6.3 billion, respectively.
We were formed as a Delaware corporation in December 1985 as a wholly-owned
subsidiary of ITT Corporation. On December 19, 1995, all our outstanding shares
were distributed to ITT Corporation's stockholders and we became an independent
company. On May 2, 1997, we changed our name from ITT Hartford Group, Inc. to
our current name, The Hartford Financial Services Group, Inc.
As a holding company, we have no significant business operations of our
own. Therefore, we rely on the dividends from our insurance company
subsidiaries, which are primarily domiciled in Connecticut, as the principal
source of cash flow to meet our obligations. The Connecticut insurance holding
company laws limit the payment of dividends by Connecticut-domiciled insurers
and require notice to and approval by the state insurance commissioner for the
declaration or payment of any dividend if the dividend and other dividends or
distributions made within the preceding twelve months exceeds the greater of:
- 10% of the insurer's policyholder surplus as of December 31 of the
preceding year or
- net income (or net gain from operations if the company is a life
insurance company) for the twelve-month period ending on the thirty-first
day of December last preceding, in each case determined under statutory
insurance accounting principles.
The insurance holding company laws of the other jurisdictions in which our
insurance subsidiaries are incorporated, or deemed commercially domiciled,
generally contain similar (although in certain instances somewhat more
restrictive) limitations on the payment of dividends. The maximum amount of
statutory dividends which may be paid to us from our insurance subsidiaries in
2000, without prior approval, is $1.0 billion.
We are an entity separate and distinct from our insurance subsidiaries. The
principal source for payments on our debt obligations (including the debt
securities), and payment of dividends to holders of our capital stock (including
the preferred stock), is expected to be dividends paid on common stock of these
subsidiaries. Our rights to participate in any distribution of assets of any of
our subsidiaries upon their liquidation or reorganization or otherwise (and thus
the ability of holders of the securities to benefit indirectly from a
distribution) are subject to the prior claims of creditors of the applicable
subsidiary, except to the extent that we may be a creditor of that subsidiary.
Claims on these subsidiaries by persons other than us include, as of June 30,
2000, claims by policyholders for benefits payable amounting to $38.3 billion,
claims by separate account holders of $115.7 billion, claims of trade creditors,
claims from guaranty associations and claims from holders of debt obligations
amounting to $6.7 billion.
Our principal executives offices are located at Hartford Plaza, Hartford,
Connecticut 06115, and our telephone number is (860) 547-5000.
THE HARTFORD CAPITAL TRUSTS
We created each trust as a statutory Delaware business trust pursuant to a
trust agreement. We will enter into an amended and restated trust agreement for
each trust, which will state the terms and conditions for the trust to issue and
sell its preferred securities and common securities. Each trust agreement will
be amended and restated in its entirety substantially in the form filed as an
exhibit to the Registration Statement which
1
<PAGE> 7
includes this prospectus. Each trust agreement will be qualified as an indenture
under the Trust Indenture Act of 1939, as amended, which we refer to in this
prospectus as the "Trust Indenture Act."
Each trust exists for the exclusive purposes of:
- issuing and selling to the public preferred securities, representing
undivided beneficial interests in the assets of the trust,
- issuing and selling to us common securities, representing undivided
beneficial interests in the assets of the trust,
- using the proceeds from the sale of the preferred securities and common
securities to acquire a corresponding series of junior subordinated
deferrable interest debentures, which we refer to in this prospectus as
the "corresponding junior subordinated debentures,"
- distributing the cash payments it receives from the corresponding junior
subordinated debentures it owns to the holders of preferred securities
and common securities, and
- engaging in the other activities that are necessary or incidental to
these purposes.
Accordingly, the corresponding junior subordinated debentures will be the
sole assets of the trust, and payments under the corresponding junior
subordinated debentures and the related expense agreement will be the sole
revenue of the trust.
We will own all of the common securities of each trust. The common
securities of a trust will rank equal to and payments will be made pro rata with
the preferred securities of the trust, except that upon the occurrence and
continuance of an event of default under a trust agreement, our rights as holder
of the common securities to payment in respect of distributions and payments
upon liquidation, redemption or otherwise will be subordinated to the rights of
the holders of the preferred securities of the trust. See "Description of
Preferred Securities -- Subordination of Common Securities."
We will acquire common securities in an aggregate liquidation amount equal
to not less than 3% of the total capital of each trust. The preferred securities
will represent the remaining approximately 97% of each trust's total
capitalization.
Unless otherwise specified in the applicable prospectus supplement, each
trust has a term of approximately 45 years, but may terminate earlier as
provided in the applicable trust agreement. The business and affairs of each
trust will be conducted by its trustees, each appointed by us as holder of the
common securities:
- Wilmington Trust Company, which will act as property trustee and as
Delaware trustee, and
- Two of our employees or officers or those of our affiliates, who will act
as administrative trustees.
Wilmington Trust Company, as property trustee, will act as sole indenture
trustee under each trust agreement for purposes of compliance with the Trust
Indenture Act. Wilmington Trust Company will also act as trustee under the
guarantee and the junior subordinated indenture pursuant to which the junior
subordinated debentures will be issued. See "Description of Junior Subordinated
Debentures" and "Description of Guarantee."
The holder of the common securities of a trust, or the holders of a
majority in liquidation preference of the preferred securities if an event of
default under the trust agreement for the trust has occurred and is continuing,
will be entitled to appoint, remove or replace the property trustee and/or the
Delaware trustee of the trust. In no event will the holders of the preferred
securities have the right to vote to appoint, remove or replace the
administrative trustees; such voting rights are vested exclusively in the holder
of the common securities. The duties and obligations of the trustees are
governed by the applicable trust agreement. We will pay all fees and expenses
related to the trusts and the offering of the preferred securities and will pay,
directly or indirectly, all ongoing costs, expenses and liabilities of the
trusts.
The principal executive office of each trust is Hartford Plaza, Hartford,
Connecticut 06115, Attention: Secretary, and its telephone number is (860)
547-5000.
2
<PAGE> 8
USE OF PROCEEDS
Unless otherwise set forth in the applicable prospectus supplement, we
intend to use the proceeds from the sale of the securities offered by this
prospectus (including the corresponding junior subordinated deferrable interest
debentures issued to the trusts in connection with their investment of all the
proceeds from the sale of preferred securities) for general corporate purposes,
including working capital, capital expenditures, investments in loans to
subsidiaries, acquisitions and refinancing of debt, including outstanding
commercial paper and other short-term indebtedness. We will include a more
detailed description of the use of proceeds of any specific offering of
securities in the prospectus supplement pertaining to the offering.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of consolidated earnings to fixed
charges for the years and the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------- --------------------------------
2000 1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Consolidated Earnings to Fixed
Charges(1)........................................ 5.3 5.8 5.4 6.5 7.5 (0.7) 5.8
</TABLE>
---------------
(1) Excluding the equity gain on the Hartford Life, Inc. initial public offering
of $368 million, the consolidated earnings to fixed charges ratio was 6.1
for the year ended December 31, 1997. The December 31, 1996 consolidated
earnings to fixed charges ratio, excluding other charges of $1.1 billion,
before tax, primarily related to environmental and asbestos reserve
increases and recognition of losses on guaranteed investment contract
business, was 5.0.
For purposes of computing the ratio of consolidated earnings to fixed
charges, "earnings" consists of income from operations before federal income
taxes and fixed charges. "Fixed charges" consists of interest expense,
capitalized interest, amortization of debt expense, an imputed interest
component for rental expense and dividend requirements on preferred stock of
Hartford Fire.
3
<PAGE> 9
DESCRIPTION OF THE DEBT SECURITIES
We may offer unsecured general obligations, which may be senior debt
securities or subordinated debt securities. The senior debt securities and the
subordinated debt securities are together referred to in this prospectus as the
"debt securities". The senior debt securities will have the same rank as all of
our other unsecured , unsubordinated obligations. The subordinated debt
securities will be subordinate and junior in right of payment of all of our
senior debt to the extent and in the manner set forth in the subordinated
indenture.
The senior debt securities will be issued in one or more series under an
indenture, which we refer to as the "senior indenture", dated as of October 20,
1995, between us and The Chase Manhattan Bank, as trustee. The subordinated debt
securities will be issued in one or more series under an indenture, which we
refer to as the "subordinated indenture", between us and the trustee to be named
in the prospectus supplement pertaining to the offering of subordinated debt
securities.
We have summarized certain general features of the debt securities from the
indentures. We encourage you to read the indentures, which are filed or
incorporated by reference as exhibits to the Registration Statement that
includes this prospectus. The following summaries of certain provisions of the
indentures are not complete and are subject to, and are qualified by reference
to, all the provisions of the indentures and the provisions of the Trust
Indenture Act. References in parentheses below to sections or articles are to
sections or articles of the indentures.
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 of the debt securities
offered by any prospectus supplement and the extent, if any, to which such
general provisions may apply to the debt securities will be described in the
related prospectus supplement. Accordingly, for a description of the terms of a
particular issue of debt securities, you should refer to both the related
prospectus supplement and to the following description.
GENERAL
Our debt securities will be unsecured obligations. Our senior debt
securities will be unsecured and will rank on a parity with all our other
unsecured and unsubordinated obligations. As a non-operating holding company
most of our operating assets and the assets of our consolidated subsidiaries are
owned by our subsidiaries, and we rely primarily on dividends from these
subsidiaries to meet our obligations for payment of principal and interest on
our outstanding debt obligations and corporate expenses. Accordingly, the debt
securities will be effectively subordinated to all existing and future
liabilities of our subsidiaries, and holders of debt securities should look only
to our assets for payments on the debt securities. The payment of dividends by
our insurance subsidiaries, including Hartford Fire, is limited under the
insurance holding company laws in which such subsidiaries are domiciled. See
"The Hartford Financial Services Group, Inc."
Except as otherwise provided in the applicable prospectus supplement, the
indentures, as they apply to any series of debt securities, do not limit us from
incurring or issuing other secured or unsecured debt, whether under either of
the indentures, any other indenture that we may enter into in the future or
otherwise. See "-- Subordination under the Subordinated Indenture" and the
prospectus supplement relating to any offering of subordinated debt securities.
The debt securities will be issuable in one or more series pursuant to an
indenture supplemental to the senior indenture or the subordinated indenture, as
the case may be, or a resolution of our board of directors or a duly authorized
committee of our board of directors.
You should refer to the applicable prospectus supplement for the specific
terms of the debt securities, which may include the following:
- title of the debt securities,
- any limit upon the aggregate principal amount,
4
<PAGE> 10
- maturity date(s) or the method of determining the maturity date(s),
- interest rate(s),
- dates on which interest will be payable and interest deferral provisions,
if any,
- dates from which interest will accrue and the method of determining dates
from which interest will accrue,
- place or places where principal of and premium, if any, and interest will
be payable and where the debt securities may be presented for
registration or transfer or exchange,
- place or places where notices and demands in respect of debt securities
and the indentures may be made,
- redemption or early payment provisions,
- sinking fund or analogous provisions,
- authorized denominations if other than denominations of $1,000,
- currency, currencies (including currency unit or units), if other than in
U.S. dollars in which the principal of, premium, if any, and interest, if
any, on the debt securities shall be payable, or in which the debt
securities shall be denominated,
- any additions, modifications or deletions, in the event of default or
covenants of The Hartford Financial Services Group, Inc. specified in the
indenture with respect to the debt securities,
- if other than the principal amount of the debt securities, the portion of
the principal amount of the debt securities that shall be payable upon
declaration of acceleration of maturity,
- any additions or changes to the indenture necessary to permit or
facilitate the issuance of such series in bearer form, registrable or not
registrable as to principal, and with or without interest coupons,
- any index or indices used to determine the amount of payments of
principal of and premium, if any, on the debt securities and the method
of determining such amounts,
- whether a temporary global security will be issued and the exchange of
such temporary debt securities for definitive debt securities,
- whether the debt securities will be issued in whole or in part in the
form of one or more global securities,
- identity of the depositary for global securities,
- appointment of any paying agent(s),
- in the case of the subordinated indenture, the terms and conditions of
any obligation or right of The Hartford Financial Services Group, Inc. or
the option of the holder of the subordinated debt securities. to convert
or exchange the subordinated debt securities into other securities,
- in the case of the subordinated indenture, any provisions regarding
subordination, and
- additional terms not inconsistent with the provisions of the indentures.
(Section 301)
Debt securities may also be issued under the indentures upon the exercise
of the warrants. See "Description of Warrants."
One or more series of debt securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. United States federal tax
consequences and special considerations applicable to any series may be
described in the applicable prospectus supplement.
5
<PAGE> 11
If the purchase price of any of the debt securities is payable in one or
more foreign currencies or currency units or if any debt securities are
denominated in one or more foreign currencies or currency units or if the
principal or, premium, if any, or interest, if any, on any debt securities is
payable in one or more foreign currencies or currency units, the restrictions,
elections, federal income tax considerations, specific terms and other
information with respect to the debt securities and the foreign currency units
will be set forth in the applicable prospectus supplement.
If any index is used to determine the amount of payments of principal, of
premium, if any, or interest on any series of debt securities, special federal
income tax, accounting and other considerations applicable to the debt
securities will be described in the applicable prospectus supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
We expect most debt securities to be issued in fully registered form
without coupons and in denominations of $1,000 and any integral multiple of
$1,000. Except as described in the applicable prospectus supplement, debt
securities of any series will be exchangeable for other debt securities of the
same issue and series, of any authorized denominations, of a like aggregate
principal amount and bearing the same interest rate (Section 305.)
Debt securities may be presented for exchange as provided above, and may be
presented for registration of transfer at the office of the securities registrar
or at the office of any transfer agent designated by us for such purpose with
respect to any series of debt securities and referred to in an applicable
prospectus supplement, without service charge and upon payment of any taxes and
other governmental charges as described in the indenture. We will appoint the
trustees as securities registrar under the indentures. (Section 305.) If the
applicable prospectus supplement refers to any transfer agents, in addition to
the securities registrar, initially designated by us with respect to any series
of debt securities, we may at any time rescind the designation of any such
transfer agent or approve a change in the location through which the transfer
agent acts. We may at any time designate additional transfer agents with respect
to any series of debt securities. (Section 305.)
GLOBAL DEBT SECURITIES
We may issue the debt securities of a series in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a depositary identified in the prospectus supplement. We will issue global
securities in registered form and in either temporary or definitive form. Unless
and until it is exchanged in whole or in part for the individual debt
securities, a global security may not be transferred except as a whole by the
depositary for the global security to a nominee of the depositary or by a
nominee of the depositary to such depositary or another nominee of the
depositary or by the depositary or any such nominee to a successor of the
depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of debt securities will be described in the prospectus supplement relating to
the series. We expect that the following provisions will apply to depositary
arrangements.
Upon the issuance of a global security, the depositary for the global
security or its nominee will credit on its book-entry registration and transfer
system, the respective principal amounts of the individual debt securities
represented by such global security to the accounts of persons that have
accounts with such depositary or its nominee. The accounts shall be designated
by the dealers, underwriters or agents with respect to the debt securities or by
us if such debt securities are offered and sold directly by us. Ownership of
beneficial interests in a global security will be limited to persons that have
accounts with the applicable depositary, who we refer to in this prospectus as
"participants," or persons who may hold interests through participants.
Ownership of the global security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
depositary or its nominee with respect to interests of participants and the
records of participants with respect to interests of persons other than
participants. The laws of some states require that purchasers of securities take
physical delivery of securities in definitive form. These limits and laws may
impair the ability to transfer beneficial interests in a global security.
6
<PAGE> 12
So long as the depositary for a global security, or its nominee, is the
registered owner of a global security, the depositary or nominee will be
considered the sole owner or holder of the debt securities represented by the
global security for all purposes under the indenture governing the debt
securities. Except as provided below, owners of beneficial interests in a global
security will not be entitled to have any of the individual debt securities of
the series represented by the global security registered in their names, will
not receive or be entitled to receive physical delivery of any debt securities
in definitive form and will not be considered the owners or holders of the debt
securities under the indenture governing the debt securities.
Payment of principal, premium, if any, and interest on individual debt
securities represented by a global security registered in the name of a
depositary or its nominee will be made to the depositary or its nominee, as the
case may be, as the registered owner of the global security representing such
debt securities. Neither we, the trustee for the debt securities, any paying
agent nor the registrar for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of the global security for the debt securities
or for maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
We expect that the depositary for a series of debt securities or its
nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent global debt security representing any of the debt
securities, immediately will credit participants' accounts with payments in
amount proportionate to their respective beneficial interest in the principal
amount of such global security for such debt securities as shown on the records
of such depositary or its nominee. We also expect that payments by participants
to owners of beneficial interest in such global security held through such
participants will be governed by standing instructions and customary practices,
as it is now the case with securities held for the accounts of customers in
bearer form or registered in "street name." These payments will be the
responsibility of such participants.
Unless otherwise specified in the applicable prospectus supplement, if a
depositary for a series of debt securities is at any time unwilling, unable or
ineligible to continue as depositary and a successor depositary is not appointed
by us within 90 days, we will issue individual debt securities in exchange for
the global security representing that series of debt securities. In addition, we
may at any time and in our sole discretion, subject to any limitations described
in the prospectus supplement relating to the debt securities, determine not to
have any debt securities represented by one or more global securities and, in
such event, we will issue individual debt securities in exchange for the global
security representing the debt securities.
Further, if we so specify with respect to the debt securities of a series,
an owner of a beneficial interest in a global security representing the debt
securities may, on terms acceptable to us, the trustee and the depositary for
the global security, receive individual debt securities in exchange for the
beneficial interests, subject to any limitations described in the prospectus
supplement relating to the debt securities. In any such instance, an owner of a
beneficial interest in a global security will be entitled to physical delivery
of individual debt securities of the series represented by the global security
equal in principal amount to that beneficial interest and to have the debt
securities registered in its name. Individual debt securities so issued will be
issued in denominations, unless we otherwise specify, of $1,000 and integral
multiples of $1,000.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable prospectus supplement, payment
of principal, and premium, if any, and any interest on debt securities will be
made at the office of the trustee for the debt securities in the City of New
York or at the office of such paying agent or paying agents as we may designate
from time to time in an applicable prospectus supplement, except that as our
payment of any interest may be made
- by check mailed to the address of the person entitled to the payment as
such address shall appear in the securities register or
- by transfer to an account maintained by the person entitled to the
payment as specified in the securities register.
Unless otherwise indicated in an applicable prospectus supplement, payment
of any interest on debt securities will be made to the person in whose name the
debt security is registered at the close of business on
7
<PAGE> 13
the record date for the interest, except in the case of defaulted interest. We
may at any time designate additional paying agents or rescind the designation of
any paying agent; however, we will at all times be required to maintain a paying
agent in each place of payment for each series of debt securities. (Sections
301, 307 and 1002.)
Any moneys deposited with the trustee or any paying agent, or then held by
us in trust, for the payment of the principal of, and premium, if any, or
interest on any debt security and remaining unclaimed for two years after such
principal, and premium, if any, or interest has become due and payable shall, at
our request, be repaid to us and the holder of the debt security shall
thereafter look, as a general unsecured creditor only to us for payment.
(Section 1003.)
REDEMPTION
Unless otherwise indicated in an applicable prospectus supplement, debt
securities will not be subject to any sinking fund and will not be redeemable
prior to their stated maturity except as described below.
We may, at our option, redeem the debt securities of any series on any
interest payment date in whole at any time or in part from time to time. Debt
securities in denominations larger than $1,000 may be redeemed in part but only
in integral multiples of $1,000.
Except as otherwise specified in the applicable prospectus supplement, the
redemption price for any debt security so redeemed shall equal any accrued and
unpaid interest thereon to the redemption date, plus the greater of
- the principal amount thereof and
- an amount equal to
- in respect of debt securities of any series bearing interest at a
fixed rate, the discounted remaining fixed amount payments, as
defined below, or
- in respect of debt securities of any series bearing interest
determined by reference to a floating rate, the discounted swap
equivalent payments, calculated as described below to determine any
redemption premium based upon the value of interest payable on an
equivalent fixed rate debt security. (Section 1107.)
For purposes of this redemption provision, the following terms have the
meanings set forth below:
"Discounted remaining fixed amount payments" means, in respect of a debt
security of any series bearing interest at a fixed rate, an amount equal to the
sum of the current values, as defined below, of the amounts of interest and
principal that would have been payable by us pursuant to the terms of the debt
security on each interest payment date after the redemption date and at stated
maturity of the final payment of principal, taking into account any required
sinking fund payments but otherwise assuming that we have not redeemed the debt
security prior to the stated maturity.
"Current value" means, in respect of any amount, the present value of that
amount on the redemption date after discounting that amount on a semiannual
basis from the originally scheduled date for payment on the basis of the
treasury rate.
"Treasury rate" means a per annum rate, determined on the redemption date
to be the per annum rate equal to the semiannual bond equivalent yield to
maturity for United States Treasury securities maturing at the stated maturity
of the final payment of principal of any series of debt securities redeemed
pursuant to the provisions described above, as determined by reference to the
weekly average yield to maturity for United States Treasury securities maturing
on such stated maturity if reported in the most recent Statistical Release
H.15(519) of the Board of Governors of the Federal Reserve, or if no such
securities mature at such stated maturity, by interpolation between the most
recent weekly average yields to maturity for two series of United States
Treasury securities, (1) one maturing as close as possible to, but earlier than,
such stated maturity and (2) the other maturing as close as possible to, but
later than, such stated maturity, in each case as published in the most recent
Statistical Release H.15(519) of the Board of Governors of the Federal Reserve.
8
<PAGE> 14
"Discounted swap equivalent payments" means, in respect of a debt security
of any series bearing interest determined by reference to a floating rate, an
amount equal to the sum of:
- the current value of the amount of principal that would have been payable
by us pursuant to the terms of the debt security of stated maturity of
the final payment of the principal, taking into effect any required
sinking fund payments but otherwise assuming that we have not redeemed
the debt security prior to the stated maturity, and
- the sum of the current values of the fixed rate payments that leading
interest rate swap dealers would require to be paid by an assumed fixed
rate payer having the same credit standing as ours against floating rate
payment to be made by these leading dealers equal to the interest
payments on the debt security being redeemed, taking into effect any
required sinking fund payment but otherwise assuming we had not redeemed
the debt security prior to the stated maturity, under a standard interest
rate swap agreement having a notional principal amount equal to the
principal amount of the debt security, a termination date set at the
stated maturity of the debt security and payment dates for both fixed and
floating rate payers set at each interest payment date of the debt
security. The amount of such fixed rate payments will be based on
quotations received by the trustee, or an agent appointed for that
purpose, from four leading interest rate swap dealers or, if quotations
from four leading interest rate swap dealers are not obtainable, three
such dealers.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of debt securities to be
redeemed at his or her registered address. Unless we default in payment of the
redemption price, on and after the redemption date interest ceases to accrue on
such debt securities or the portions called for redemption.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The indentures provide that we shall not consolidate with or merge into any
other corporation or convey, transfer or lease our properties and assets
substantially as an entirety to any person, and no person shall consolidate with
or merge into us or convey, transfer or lease its properties and assets
substantially as an entirety to us unless,
- in case we consolidate with or merge into another corporation or convey
or transfer our properties and assets substantially as an entirety to any
person, the successor corporation is organized under the laws of the
United States of America or any state or the District of Columbia, and
the successor corporation expressly assumes our obligations on the debt
securities issued under the related indenture,
- immediately after giving effect to the consolidation, merger, conveyance
or transfer, no event of default, and no event which, after notice or
lapse of time or both, would become an event of default, shall have
happened and be continuing, and
- certain other conditions as prescribed in the indenture are met.
(Sections 801and 802.)
The general provisions of the indenture do not afford holders of the debt
securities protection in the event of a highly leveraged or other transaction
involving The Hartford Financial Services Group, Inc. that may adversely affect
holders of the debt securities.
LIMITATIONS UPON LIENS
The indentures provide that we will not, nor will we permit certain of our
subsidiaries to, issue, assume or guarantee any indebtedness for money borrowed
if the indebtedness is secured by a lien upon any of our principal property, as
defined below, or any restricted subsidiaries, as defined below, or on any
shares of stock of any restricted subsidiary (whether such principal property or
shares of stock are now owned or hereafter acquired) without in any such case
effectively providing that the debt securities of any series outstanding that
are entitled to the benefits of this provision together with, if we so
determine, any other indebtedness of or
9
<PAGE> 15
guaranteed by us or the restricted subsidiary, subject to applicable priority of
payment, shall be secured equally and ratably with or prior to such
indebtedness, except that the foregoing restriction shall not apply to:
- liens on property or shares of stock of any corporation existing at the
time such corporation becomes a restricted subsidiary,
- liens on property existing at the time of acquisition thereof, or liens
on property which secure the payment of the purchase price of such
property, or liens on property which secure indebtedness incurred or
guaranteed for the purpose of financing the purchase price of such
property or the construction of such property (including improvements to
existing property), which indebtedness is incurred or guaranteed within
180 days after the latest of such acquisition or completion of such
construction or commencement of operation of such property,
- liens securing indebtedness owing by any restricted subsidiary to us or a
wholly owned restricted subsidiary,
- liens on the property of a corporation existing at the time such
corporation is merged into or consolidated with us or a restricted
subsidiary or at the time of a purchase, lease or other acquisition of
the properties of a corporation or other person as an entirety or
substantially as an entirety by us or a restricted subsidiary,
- liens on our property or the property of a restricted subsidiary in favor
of the United States of America or any State thereof or any agency,
instrumentality or political subdivision thereof, or in favor of any
other country, or any political subdivision thereof, to secure any
indebtedness incurred or guaranteed for the purpose of financing all or
any part of the purchase price or the cost of construction of the
property subject to such liens within 180 days after the latest of the
acquisition, completion of construction or commencement of operation of
such property, and
- any extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of any lien referred to in the
five preceding clauses, inclusive.
Notwithstanding the above, we and one or more restricted subsidiaries may,
without securing the debt securities, issue, assume or guarantee secured
indebtedness which would otherwise be subject to the above restrictions,
provided that after giving effect thereto the aggregate amount of such
indebtedness issued pursuant to such exception at such time does not exceed 10%
of consolidated net tangible assets, as defined below. In computing the
aggregate amount of indebtedness outstanding for purposes of the foregoing
sentence, there shall not be included in the calculation any indebtedness
issued, assumed or guaranteed pursuant to the above clauses. (Section 1008.)
When we use the term "consolidated net tangible assets", we mean the total
amount of assets (less applicable reserves and other properly deductible items)
after deducting:
- all current liabilities, excluding any liabilities which are by their
terms extendible or renewable at the option of the obligor to a time more
than 12 months after the time as of which the amount is being computed,
and
- all segregated goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, all as set forth on
the most recent balance sheet of The Hartford Financial Services Group,
Inc. and its consolidated subsidiaries and prepared in accordance with
generally accepted accounting principles. "Subsidiary" is defined as any
corporation where more than 50% of its voting stock is owned by us or by
another subsidiary. (Section 101.)
When we use the term "principal property" we mean all land, buildings,
machinery and equipment, and leasehold interests and improvements in respect of
these items, which would be reflected on our consolidated balance sheet and our
subsidiaries prepared in accordance with generally accepted accounting
principles, excluding all such tangible property located outside the United
States of America and excluding any such property which, in the opinion of our
board of directors set forth in a board resolution, is not material to us and
our consolidated subsidiaries taken as a whole. (Section 101.)
10
<PAGE> 16
When we use the term "restricted subsidiary" we mean any subsidiary which
is incorporated under the laws of any state of the United States or of the
District of Columbia, and which is a regulated insurance company principally
engaged in one or more of the property, casualty and life insurance businesses.
However, no subsidiary shall be a restricted subsidiary:
- if the total assets of such subsidiary are less than 10% of our total
assets and the total of our consolidated subsidiaries (including such
subsidiary) in each case as set forth on the most recent fiscal year-end
balance sheets of the subsidiary and us and our consolidated
subsidiaries, respectively, and computed in accordance with generally
accepted accounting principles, or
- if in the judgment of our board of directors, as evidenced by a board
resolution, the subsidiary is not material to our financial condition and
the financial condition of our subsidiaries taken as a whole. (Section
101.)
As of the date of this prospectus, our subsidiaries which meet the
definition of restricted subsidiaries are the following: Hartford Fire, Hartford
Life Insurance Company, Hartford Life and Accident Insurance Company and
Hartford Life and Annuity Insurance Company.
MODIFICATION AND WAIVER
Modification and amendments of each indenture may be made by us and the
trustee with the consent of the holders of a majority in aggregate principal
amount of the outstanding debt securities of each series affected. However, no
such modification or amendment may, without the consent of the holder of each
outstanding debt security affected thereby:
- change the stated maturity of the principal of, or any installment of
interest on, any outstanding debt security,
- reduce the principal amount of, or the rate of interest on or any premium
payable upon the redemption of, or the amount of principal of an original
issue discount security that would be due and payable upon a declaration
of acceleration of the maturity of, any outstanding debt security,
- change the place of payment, or the coin or currency in which any
outstanding debt security or the interest is payable,
- impair the right to institute suit for the enforcement of any payment on
or with respect to any outstanding debt security after the stated
maturity or
- change the provisions of the indenture relating to amendments of the
indenture requiring the consent of the affected holders for waiver of
compliance with certain provisions of the indenture or waiver of past
defaults. (Section 902.)
The holders of a majority in principal amount of the outstanding debt
securities of each series may on behalf of the holders of all debt securities of
that series waive, insofar as the series is concerned, compliance by us with
certain restrictive covenants of the indenture. (Section 1009.)
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 that
series waive any past default under the indenture with respect to that series of
debt securities, except a default in the payment of the principal of, 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 that series affected. (Section 513.)
EVENTS OF DEFAULT
Each indenture provides that the following shall constitute events of
default with respect to any series of debt securities:
- default for 30 days in the payment of any interest when due,
- default in the payment of principal, or premium, if any, at maturity,
11
<PAGE> 17
- default in the performance of any other covenant in the indenture for 60
days after written notice,
- certain events in bankruptcy, insolvency or reorganization of The
Hartford Financial Services Group, Inc.,
- acceleration or default in the payment of indebtedness for borrowed money
in excess of $25,000,000, which acceleration or default shall not have
been rescinded or annulled within 30 day after notice or
- any other event of default provided in the applicable board resolution or
supplemental indenture under which such series of debt securities is
issued. (Section 501.)
We are required to furnish the trustee annually with a statement as to the
fulfillment of our obligations under the indenture. (Section 1006.) Each
indenture provides that the trustee may withhold notice to the holders of the
debt securities of any default, except in respect of the payment of principal or
interest on the debt securities, if it considers it in the interest of the
holders to do so. (Section 602.)
If an event of default with respect to outstanding debt securities of any
series occurs and is continuing, then and in every such case the trustee or the
holders of not less than 25% in principal amount of the outstanding debt
securities of that series may declare the principal amount, or, if the debt
securities of that series are original issue discount securities, such portion
of the principal amount as may be specified in the terms of that series, of all
the debt securities of that series to be due and payable immediately, by a
notice in writing to us (and to the trustee if given by holders), and upon any
such declaration such principal shall become immediately due and payable.
However, at any time after a declaration or acceleration with respect to debt
securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained, the holders of a majority in
principal amount of outstanding debt securities of that series may, subject to
certain conditions, rescind and annul that declaration. (Section 502.)
Subject to the provisions of the indentures relating to the duties of the
trustee, in case an event of default shall occur and be continuing, the trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request, order or direction of any of the holders, unless the
holders shall have offered to the trustee reasonable security or indemnity.
(Section 603.) Subject to such provisions for the security or indemnification of
the trustee, the holders of a majority in principal amount of the outstanding
debt securities of any series shall have the right to direct the time, method
and place of conducting and proceeding for and remedy available to the trustee,
or exercising any trust or power conferred on the trustee with respect to the
debt securities of that series. (Section 512.)
No holder of any debt security of any series will have any right to
institute any proceeding with respect to the indenture or for any remedy
thereunder, unless such holder shall have previously given to the trustee
written notice of a continuing event of default with respect to debt securities
of that series and unless the holders of at least 25% in principal amount of the
outstanding debt securities shall have made written request, and offered
reasonable indemnity, to the trustee to institute such proceeding as trustee,
and, within 60 days following the receipt of such notice, the trustee shall not
have received from the holders of a majority in principal amount of the
outstanding debt securities of that series a direction inconsistent with such
request, and the trustee shall have failed to institute such proceeding.
(Section 507.) However, the holder of any debt security will have an absolute
right to receive payment of the principal of, and premium, if any, and interest
on such debt security on or after the due dates expressed in the debt security
and to institute a suit for the enforcement of any such payment. (Section 508.)
SATISFACTION AND DISCHARGE OF THE INDENTURES
Each indenture provides that when, among other things, all debt securities
not previously delivered to the trustee for cancellation:
- have become due and payable or
- will become due and payable at their stated maturity within one year and
we deposit or cause to be deposited with the trustee as trust funds in
trust for the purpose an amount in the currency or currencies in which
the debt securities are payable sufficient to pay and discharge the
entire
12
<PAGE> 18
indebtedness on the debt securities not previously delivered to the
trustee for cancellation, for the principal (and premium, if any) and
interest to the date of the deposit or to the stated maturity, as the
case may be,
then the indenture will cease to be of further effect, except as to our
obligations to pay all other sums due pursuant to the indenture and to provide
the officers' certificates and opinions of counsel described in the indenture,
and we will be deemed to have satisfied and discharged the indenture. (Section
401.)
DEFEASANCE
Except as may otherwise be provided in the applicable prospectus supplement
with respect to the debt securities of any series, each indenture provides that
we shall be deemed to have paid and discharged the entire indebtedness on all
the debt securities of a series at any time prior to their stated maturity or
redemption when:
- we have irrevocably deposited or caused to be deposited with the trustee,
in trust, either:
- sufficient funds to pay and discharge the entire indebtedness on the
debt securities for the principal, and premium, if any, and interest
to the stated maturity or any redemption date or
- such amount of U.S. government securities as will, in the written
opinion of independent public accountants delivered to the trustee,
together with predetermined and certain income to accrue thereon,
without consideration of any reinvestment thereof, be sufficient to
pay and discharge when due the entire indebtedness on the debt
securities for principal, and premium, if any, and interest to the
stated maturity or any redemption date;
- we have paid or caused to be paid all other sums payable with respect to
the debt securities;
- we have delivered to the trustee an officer's certificate and an opinion
of counsel to the effect that
- we have received from, or there has been published by, the Internal
Revenue Service a ruling, or
- since the date of execution of the applicable indenture, there has
been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon the opinion confirms
that, the deposit and related defeasance would not cause the holders
of the debt securities of such series to recognize income, gain or
loss for federal income tax purposes and the opinion is accompanied
by a ruling to such effect received from or published by the United
States Internal Revenue Service;
- we have delivered to the trustee an opinion of counsel that neither we
nor the trust held by such trustee will immediately after the deposit
just described be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940; and
- we have delivered to the trustee such other officer's certificates and
opinions of counsel as may be required by the indenture, each stating
that all conditions precedent relating to the satisfaction and discharge
of the entire indebtedness on all debt securities have been complied
with. (Section 403.)
With respect to the subordinated indenture, in order to be discharged as
described above, no default in the payment of principal of, or premium, if any,
or interest on any senior debt shall have occurred and be continuing or no other
event of default with respect to the senior debt shall have occurred and be
continuing and shall have resulted in such senior debt becoming or being
declared due and payable prior to the date it would have become due and payable.
CONVERSION OR EXCHANGE
Subordinated debt securities may be convertible or exchangeable into common
stock or other securities to the extent set forth in the applicable prospectus
supplement. The specific terms on which subordinated debt securities may be so
converted or exchanged will be set forth in the applicable prospectus
supplement. These
13
<PAGE> 19
terms may include provisions for conversion or exchange, either mandatory, at
the option of the holder, or at our option, in which case the number of shares
of common stock or other securities to be received by the holders of
subordinated debt securities would be calculated as of a time and in the manner
stated in the applicable prospectus supplement.
SUBORDINATION UNDER THE SUBORDINATED INDENTURE
In the subordinated indenture, we have agreed that any subordinated debt
securities are subordinate and junior in right of payment to all senior debt to
the extent provided in the subordinated indenture.
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of The Hartford Financial Services Group, Inc., the
holders of senior debt will first be entitled to receive payment in full of
principal of, and premium, if any, and interest, if any, on the senior debt
before the holders of subordinated debt securities will be entitled to receive
or retain any payment in respect of the principal of, and premium, if any, or
interest, if any, on the subordinated debt securities.
In the event of the acceleration of the maturity of any subordinated debt
securities, the holders of all senior debt outstanding at the time of the
acceleration will first be entitled to receive payment in full of all amounts
due, including any amounts due upon acceleration, before the holders of
subordinated debt securities will be entitled to receive any payment upon the
principal of, or premium, if any, or interest, if any, on the subordinated debt
securities.
No payments on account of principal, or premium, if any, or interest, if
any, in respect of the subordinated debt securities may be made if:
- there shall have occurred and be continuing a default in any payment with
respect to senior debt,
- there shall have occurred an event of default with respect to any senior
debt resulting in the acceleration of its maturity, or
- any judicial proceeding shall be pending with respect to any such
default.
When we use the term "debt" we mean, with respect to any person, whether
recourse is to all or a portion of the assets of such person and whether or not
contingent:
- every obligation of that person for money borrowed,
- every obligation of that person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses,
- every reimbursement obligation of that person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account
of that person,
- every obligation of that person issued or assumed as the deferred
purchase price of property or services, but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business,
- every capital lease obligation of that person, and
- every obligation of the type referred to in the prior five clauses of
another person and all dividends of another person the payment of which,
in either case, that person has guaranteed or is responsible or liable,
directly or indirectly, as obligor or otherwise.
When we use the term "senior debt" we mean the principal of, and premium,
if any, and interest, if any, including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to The Hartford
Financial Services Group, Inc. whether or not such claim for post-petition
interest is allowed in such proceeding, on debt, whether incurred on or prior to
the date of the subordinated indenture or thereafter incurred, unless, in the
instrument creating or evidencing that debt or pursuant to which that debt is
14
<PAGE> 20
outstanding, it is provided that such obligations are not superior in right of
payment to the subordinated debt securities or to other debt which ranks equally
with, or subordinated to, the subordinated debt securities.
However, senior debt will not include:
- any debt of The Hartford Financial Services Group, Inc. which when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Code, was without recourse to The Hartford Financial Services
Group, Inc.,
- any debt of The Hartford Financial Services Group, Inc. to any of it
subsidiaries,
- debt to any employee of The Hartford Financial Services Group, Inc.,
- any liability for taxes, and
- indebtedness or monetary obligations to trade creditors or assumed by The
Hartford Financial Services Group, Inc. or any of its subsidiaries in the
ordinary course of business in connection with the obtaining of materials
or services.
We are a non-operating holding company, and most of our assets are owned by
our subsidiaries. Accordingly, the debt securities will be effectively
subordinated to all our existing and future liabilities, including liabilities
under contracts of insurance and annuities written by our insurance
subsidiaries. Holders of debt securities should look only to our assets for
payments of interest and principal and premium if any. The payment of dividends
by our insurance company subsidiaries, including Hartford Fire is limited under
the insurance holding company laws in which such subsidiaries are domiciled. See
"The Hartford Financial Services Group, Inc."
The subordinated indenture places no limitation on the amount of additional
senior debt that may be incurred by us. We expect from time to time to incur
additional indebtedness constituting senior debt.
The subordinated indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of subordinated debt
securities, may be changed prior to issuance. Any such change would be described
in the prospectus supplement relating to the subordinated debt securities.
GOVERNING LAW
The indentures and the debt securities will be governed by and construed in
accordance with the laws of the State of New York. (Section 112.)
CONCERNING THE TRUSTEES
Each of the trustees acts as depositary for funds of, makes loans to, and
performs other services for, us and our subsidiaries in the normal course of
business.
15
<PAGE> 21
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The junior subordinated debentures will be issued in one or more series
under a junior subordinated indenture, as supplemented from time to time,
between us and Wilmington Trust Company, as debenture trustee. This summary of
certain terms and provisions of the junior subordinated debentures and the
junior subordinated indenture does not purport to be complete and is subject to,
and is qualified in its entirety by reference to the junior subordinated
indenture, the form of which is filed or incorporated by reference as an exhibit
to the Registration Statement which includes this prospectus, and to the Trust
Indenture Act.
GENERAL
Each series of junior subordinated debentures will rank equally with all
other series of junior subordinated debentures, and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the junior subordinated indenture to all of our senior debt, as defined
below. See "-- Subordination."
As a non-operating holding company, most of our operating assets and the
assets of our consolidated subsidiaries are owned by our subsidiaries, and we
rely primarily on dividends from our subsidiaries to meet our obligations for
payment of principal and interest on our outstanding debt obligations and
corporate expenses. Accordingly, the junior subordinated debentures will be
effectively subordinated to all existing and future liabilities of our
subsidiaries, and holders of junior subordinated debentures should look only to
our assets for payments on the junior subordinated debentures. The payment of
dividends by our insurance company subsidiaries, including Hartford Fire, is
limited under the insurance holding company laws in which such subsidiaries are
domiciled. See "The Hartford Financial Services Group, Inc."
Except as otherwise provided in the applicable prospectus supplement, the
junior subordinated indenture does not limit our ability to incur or issue other
secured or unsecured debt, whether under the junior subordinated indenture, any
other indenture that we may enter into in the future or otherwise. See
"-- Subordination" and the prospectus supplement relating to any offering of
securities.
The junior subordinated debentures will be issuable in one or more series
pursuant to an indenture supplemental to the junior subordinated indenture or a
resolution of our board of directors or a duly authorized committee of our board
of directors.
The applicable prospectus supplement or prospectus supplements will
describe the following terms of the junior subordinated debentures:
- the title and any limit upon the aggregate principal amount,
- the date(s) on which the principal is payable or the method of
determining such date(s),
- the interest rate(s) or the method of determining such interest rate(s),
- the date(s) on which interest will be payable or the method of
determining these date(s),
- the interest deferral provisions, if any,
- the regular record date or the method of determining this date,
- the place or places where principal, premium, if any, and interest will
be payable,
- conversion or exchange provisions, if any,
- the redemption or early payment provisions,
- the authorized denominations,
- the currency, currencies or currency units in which the purchase price
for, the principal of and any premium and any interest on, the junior
subordinated debentures will be payable,
- additions to or changes in the events of default or any changes in any of
our covenants specified in the junior subordinated indenture,
16
<PAGE> 22
- any index or indices used to determine the amount of payments of
principal and premium, if any, or the method of determining these
amounts,
- whether a temporary global security is to be issued with respect to such
services and the terms upon which such temporary global security may be
exchanged for definitive junior subordinated debt securities,
- whether the junior subordinated debt securities will be issued in whole
or in part in the form of one or more global securities,
- the terms and conditions of any obligation or right we would have to
convert or exchange the junior subordinated debentures into preferred
securities or other securities, and
- additional terms not inconsistent with the provisions of the junior
subordinated indenture.
Junior subordinated debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. United States Federal income tax
consequences and special considerations applicable to any such junior
subordinated debentures will be described in the applicable prospectus
supplement.
If the purchase price of any of the junior subordinated debentures is
payable in one or more foreign currencies or currency units or if any junior
subordinated debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest, if any, on
any junior subordinated debentures is payable in one or more foreign currencies
or currency units, the restrictions, elections, federal income tax
considerations, specific terms and other information with respect to the junior
subordinated debentures and the foreign currency units will be set forth in the
applicable prospectus supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of junior subordinated debentures,
special federal income tax, accounting and other considerations applicable to
the junior subordinated debentures will be described in the applicable
prospectus supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable prospectus supplement, the
junior subordinated debentures will be issuable only in registered form without
coupons in denominations of $25 and any integral multiple of $25. Junior
subordinated debentures of any series will be exchangeable for other junior
subordinated debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same original issue
date and stated maturity and bearing the same interest rate.
Junior subordinated debentures may be presented for exchange as provided
above, and may be presented for registration of transfer, at the office of the
appropriate securities registrar or at the office of any transfer agent
designated by us for such purpose with respect to any series of junior
subordinated debentures and referred to in the applicable prospectus supplement,
without service charge and upon payment of any taxes and other governmental
charges as described in the indenture. We will appoint the trustees as
securities registrars under the indentures. If the applicable prospectus
supplement refers to any transfer agents, in addition to the securities
registrar, initially designated by us with respect to any series of junior
subordinated debentures, we may at any time rescind the designation of any such
transfer agent or approve a change in the location through which the transfer
agent acts, provided that we maintain a transfer agent in each place of payment.
We may at any time designate additional transfer agents with respect to any
series of junior subordinated debentures.
In the event of any redemption, neither we nor the debenture trustee shall
be required to:
- issue, register the transfer of or exchange junior subordinated
debentures of any series during a period beginning at the opening of
business, 15 days before the day of selection for redemption of junior
subordinated debentures of that series and ending at the close of
business on the day of mailing of the relevant notice of redemption or
17
<PAGE> 23
- transfer or exchange any junior subordinated debentures so selected for
redemption except, in the case of any junior subordinated debentures
being redeemed in part, any portion not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBENTURES
We may issue the junior subordinated debentures of a series in whole or in
part in the form of one or more global junior subordinated debentures that will
be deposited with, or on behalf of, a depositary identified in the prospectus
supplement. We will issue global junior subordinated debentures only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for an individual junior subordinated
debenture, a global junior subordinated debenture may not be transferred except
as a whole by the depositary for the global junior subordinated debenture to a
nominee of the depositary or by a nominee of such depositary to such depositary
or another nominee of the depositary or by the depositary or any nominee to a
successor depositary or any nominee of the successor.
The specific terms of the depositary arrangement with respect to a series
of junior subordinated debentures will be described in the applicable prospectus
supplement. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global junior subordinated debenture, and the
deposit of the global junior subordinated debenture with or on behalf of the
depositary, the depositary for the global junior subordinated debenture or its
nominee will credit on its book-entry registration and transfer system, the
respective principal amounts of the individual junior subordinated debentures
represented by the global junior subordinated debenture to the accounts of
persons that have accounts with such depositary, who we refer to in this
prospectus as "participants." The accounts shall be designated by the dealers,
underwriters or agents with respect to the junior subordinated debentures or by
us if such junior subordinated debentures are offered and sold directly by us.
Ownership of beneficial interests in a global junior subordinated debenture will
be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in the global junior
subordinated debenture will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons who hold through
participants). The laws of some states require that purchasers of securities
take physical delivery of securities in definitive form. These limits and laws
may impair the ability to transfer beneficial interests in a global junior
subordinated debenture.
So long as the depositary for a global junior subordinated debenture, or
its nominee, is the registered owner of the global junior subordinated
debenture, the depositary or the nominee will be considered the sole owner or
holder of the junior subordinated debentures represented by the global junior
subordinated debenture for all purposes under the junior subordinated indenture
governing the junior subordinated debentures. Except as provided below, owners
of beneficial interests in a global junior subordinated debenture will not be
entitled to have any of the individual junior subordinated debentures of the
series represented by the global junior subordinated debenture registered in
their names, will not receive or be entitled to receive physical delivery of any
junior subordinated debentures in definitive form and will not be considered the
owners or holders of the junior subordinated debenture under the junior
subordinated indenture.
Payments of principal, premium and interest on individual junior
subordinated debentures represented by a global junior subordinated debenture
registered in the name of a depositary or its nominee will be made to the
depositary or its nominee, as the case may be, as the registered owner of the
global junior subordinated debenture representing the junior subordinated
debentures. Neither we nor the debenture trustee, any paying agent, or the
securities registrar for the junior subordinated debentures will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest of the global junior
subordinated debenture for the junior subordinated debentures or for
maintaining, supervising or reviewing any records relating to the beneficial
ownership interests.
We expect that the depositary for a series of junior subordinated
debentures or its nominee, upon receipt of any payment of principal, premium or
interest in respect of a permanent global junior subordinated debenture
representing any of the junior subordinated debentures, immediately will credit
participants'
18
<PAGE> 24
accounts with payments in amounts proportionate to their respective beneficial
interest in the principal amount of the global junior subordinated debenture for
the junior subordinated debentures as shown on the records of the depositary or
its nominee. We also expect that payments by participants to owners of
beneficial interests in the global junior subordinated debenture held through
such participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name." These payments will be the
responsibility of such participants.
Unless otherwise specified in the applicable prospectus supplement, if a
depositary for a series of junior subordinated debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by us within 90 days, we will issue individual
junior subordinated debentures in exchange for the global junior subordinated
debenture representing that series of junior subordinated debentures. In
addition, we may at any time and in our sole discretion, subject to any
limitations described in the prospectus supplement relating to the junior
subordinated debentures, determine not to have any junior subordinated
debentures represented by one or more global junior subordinated debentures and,
in such event, will issue individual junior subordinated debentures in exchange
for the global junior subordinated debenture or securities representing the
junior subordinated debentures.
Further, if we so specify with respect to the junior subordinated
debentures of a series, an owner of a beneficial interest in a global junior
subordinated debenture representing the junior subordinated debentures may, on
terms acceptable to us, the debenture trustee and the depositary for the global
junior subordinated debenture, receive individual junior subordinated debentures
in exchange for the beneficial interests, subject to any limitations described
in the prospectus supplement relating to the junior subordinated debentures. In
any such instance, an owner of a beneficial interest in a global junior
subordinated debenture will be entitled to physical delivery of individual
junior subordinated debentures of the series represented by the global junior
subordinated debenture equal in principal amount to that beneficial interest and
to have the junior subordinated debentures registered in its name. Individual
junior subordinated debentures so issued will be issued in denominations, unless
we otherwise specify, of $25 and integral multiples of $25.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable prospectus supplement, payment
of principal, premium, if any, and any interest on junior subordinated
debentures will be made at the office of the debenture trustee in the City of
New York or at the office of the paying agent or paying agents as we may
designate from time to time in the applicable prospectus supplement, except that
at our option payment of any interest may be made
- except in the case of global junior subordinated debentures, by check
mailed to the address of the person entitled to the payment as such
address shall appear in the securities register, or
- by transfer to an account maintained by the person entitled to the
payment as specified in the securities register. Unless otherwise
indicated in the applicable prospectus supplement, payment of any
interest on junior subordinated debentures will be made to the person in
whose name the junior subordinated debenture is registered at the close
of business on the regular record date for such interest.
Any moneys deposited with the debenture trustee or any paying agent, or
then held by us in trust, for the payment of the principal, premium or interest
on any junior subordinated debenture and remaining unclaimed for two years after
such principal, if any, premium, if any, or interest has become due and payable
shall, at our request, be repaid to us and the holder of the junior subordinated
debenture shall thereafter look, as a general unsecured creditor, only to us for
payment.
REDEMPTION
Unless otherwise indicated in the applicable prospectus supplement, junior
subordinated debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable prospectus supplement, we may,
at our option, redeem the junior subordinated debentures of any series on any
interest payment date in whole at any time or in part from
19
<PAGE> 25
time to time. Junior subordinated debentures in denominations larger than $25
may be redeemed in part but only in integral multiples of $25. Except as
otherwise specified in the applicable prospectus supplement, the redemption
price for any junior subordinated debenture so redeemed shall equal any accrued
and unpaid interest thereon to the redemption date, plus the greater of:
- the principal amount and
- an amount equal to
- in respect of junior subordinated debentures of any series bearing
interest at a fixed rate, the discounted remaining fixed amount
payments, calculated as described below, or
- in respect of junior subordinated debentures of any series bearing
interest determined by reference to a floating rate, the discounted
swap equivalent payments, calculated as described below to determine
any redemption premium based upon the value of interest payable on
an equivalent fixed rate junior subordinated debenture.
For purposes of this redemption provision, the following terms have the
meanings set forth below:
"Discounted remaining fixed amount payments" means, in respect of a junior
subordinated debenture of any series bearing interest at a fixed rate, an amount
equal to the sum of the current values, as defined below, of the amounts of
interest and principal that would have been payable by us pursuant to the terms
of the junior subordinated debenture on each interest payment date after the
redemption date and at stated maturity of the final payment of principal, taking
into account any required sinking fund payments but otherwise assuming that we
have not redeemed the junior subordinated debenture prior to the stated
maturity.
"Current value" means, in respect of any amount, the present value of that
amount on the redemption date after discounting that amount on a monthly,
quarterly or semiannual basis, whichever corresponds to the interest payment
date periods of the related series of junior subordinated debentures, from the
originally scheduled date for payment on the basis of the treasury rate.
"Treasury rate" means a per annum rate, expressed as a decimal and, in the
case of United States Treasury bills, converted to a per annum yield, determined
on the redemption date to be the per annum rate equal to the semiannual bond
equivalent yield to maturity, adjusted to reflect monthly or quarterly
compounding in the case of junior subordinated debentures having monthly or
quarterly interest payment dates, respectively, for United States Treasury
securities maturing at the stated maturity of the final payment of principal of
any series of junior subordinated debentures redeemed pursuant to the provisions
described above, as determined by reference to the weekly average yield to
maturity for United States Treasury securities maturing on such stated maturity
if reported in the most recent Statistical Release H.15(519) of the Board of
Governors of the Federal Reserve, or, if no such securities mature at such
stated maturity, by interpolation between the most recent weekly average yields
to maturity for two series of United States Treasury securities, (1) one
maturing as close as possible to, but earlier than, such stated maturity and (2)
the other maturing as close as possible to, but later than, such stated
maturity, in each case as published in the most recent Statistical Release
H.15(519) of the Board of Governors of the Federal Reserve.
"Discounted swap equivalent payments" means, in respect of a junior
subordinated debenture of any series bearing interest determined by reference to
a floating rate, an amount equal to the sum of:
- the current value of the amount of principal that would have been payable
by us pursuant to the terms of the junior subordinated debenture at
stated maturity of the final payment of the principal, taking into effect
any required sinking fund payments but otherwise assuming that we had not
redeemed the junior subordinated debenture prior to the stated maturity,
and
- the sum of the current values of the fixed rate payments that leading
interest rate swap dealers would require to be paid by an assumed fixed
rate payer having the same credit standing as ours against floating rate
payments to be made by these leading dealers equal to the interest
payments on the junior subordinated debenture being redeemed, taking into
effect any required sinking fund payment but otherwise assuming we had
not redeemed the junior subordinated debenture prior to the stated
20
<PAGE> 26
maturity, under a standard interest rate swap agreement having a notional
principal amount equal to the principal amount of the junior subordinated
debenture, a termination date set at the stated maturity of the junior
subordinated debenture and payment dates for both fixed and floating rate
payers set at each interest payment date of the junior subordinated
debenture. The amount of such fixed rate payments will be based on
quotations received by the trustee, or an agent appointed for that
purpose, from four leading interest rate swap dealers or, if quotations
from four leading interest rate swap dealers are not obtainable, three
such dealers.
Except as otherwise specified in the applicable prospectus supplement, if a
debenture tax event, as defined below, in respect of a series of junior
subordinated debentures shall occur and be continuing, we may, at our option,
redeem the series of junior subordinated debentures in whole, but not in part,
on any interest payment date within 90 days of the occurrence of the debenture
tax event, at a redemption price equal to 100% of the principal amount of the
junior subordinated debentures then outstanding plus accrued and unpaid interest
to the date fixed for redemption.
"Debenture tax event" means our receipt of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change, including any announced prospective change in, the laws, or any
regulations of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying those
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
applicable series of junior subordinated debentures under the junior
subordinated indenture, there is more than an insubstantial risk that interest
payable by us on the series of junior subordinated debentures is not, or within
90 days of the date thereof, will not be, deductible, in whole or in part, for
United States federal income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of junior subordinated
debentures to be redeemed at his or her registered address. Unless we default in
payment of the redemption price, on and after the redemption date interest
ceases to accrue on the junior subordinated debentures or the portions called
for redemption.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable prospectus supplement, we will have the right
at any time and from time to time during the term of any series of junior
subordinated debentures to extend the interest payment period for such number of
consecutive interest payment periods with respect to each deferred period as may
be specified in the applicable prospectus supplement, subject to the terms,
conditions and covenants, if any, specified in the prospectus supplement, except
that the extension period may not extend beyond the maturity of the junior
subordinated debentures. Federal income tax consequences and special
considerations applicable to any such junior subordinated debentures will be
described in the applicable prospectus supplement.
In the event that we exercise this right, during the extension period we
may not and may not permit any of our subsidiaries to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our capital
stock, or
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank pari passu with or
junior in interest to the corresponding junior subordinated debentures or
make any guarantee payments with respect to the foregoing, other than:
- dividends or distributions in our common stock,
- redemptions or purchases of any rights pursuant to our rights plan,
or any successor to such rights plan, and the declaration of a
dividend of these rights in the future and
- payments under any guarantee.
21
<PAGE> 27
MODIFICATION OF INDENTURE
From time to time we and the debenture trustee may, without the consent of
the holders of any series of junior subordinated debentures, amend, waive or
supplement the junior subordinated indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies. However, no
such action may materially adversely affect the interest of the holders of any
series of junior subordinated debentures or, in the case of corresponding junior
subordinated debentures, the holders of the corresponding series of preferred
securities so long as they remain outstanding, and qualifying, or maintaining
the qualification of, the indenture under the Trust Indenture Act.
The junior subordinated indenture contains provisions permitting us and the
debenture trustee, with the consent of the holders of not less than a majority
in principal amount of each outstanding series of junior subordinated debentures
affected, to modify the junior subordinated indenture in a manner affecting the
rights of the holders of the series of the junior subordinated debentures.
However, no such modification may, without the consent of the holder of each
outstanding junior subordinated debenture so affected:
- change the stated maturity of any series of junior subordinated
debentures,
- reduce the principal amount of the junior subordinated debenture,
- reduce the rate or extend the time of payment of interest on the junior
subordinated debenture, or
- reduce the percentage of principal amount of junior subordinated
debentures of any series, the holders of which are required to consent to
any such modification of the junior subordinated indenture, provided
that, in the case of corresponding junior subordinated debentures, so
long as any of the corresponding series of preferred securities remain
outstanding, no such modification may be made that adversely affects the
holders of the preferred securities, and no termination of the junior
subordinated indenture may occur, and no waiver of any debenture event of
default or compliance with any covenant under the junior subordinated
indenture may be effective, without the prior consent of the holders of
at least a majority of the aggregate liquidation preference of the
preferred securities unless and until the principal of the corresponding
junior subordinated debentures and all accrued and unpaid interest on the
corresponding junior subordinated debentures have been paid in full and
certain other conditions are satisfied.
In addition, we and the debenture trustee may execute, without the consent
of any holder of junior subordinated debentures, any supplemental indenture for
the purpose of creating any new series of junior subordinated debentures.
DEBENTURE EVENTS OF DEFAULT
The junior subordinated indenture provides that any one or more of the
following described events with respect to a series of junior subordinated
debentures that has occurred and is continuing constitutes a "debenture event of
default" with respect to the series of junior subordinated debentures:
- failure for 30 days to pay any interest on such series of the junior
subordinated debentures, when due, subject to the deferral of any due
date in the case of an extension period, as defined below,
- failure to pay any principal or premium, if any, on such series of junior
subordinated debentures when due whether at maturity, upon redemption, by
declaration or otherwise,
- failure to observe or perform in any material respect certain other
covenants contained in the indenture for 90 days after written notice
from the debenture trustee or the holders of at least 25% in principal
amount of such series of outstanding junior subordinated debentures, or
- certain events in bankruptcy, insolvency or reorganization of The
Hartford Financial Services Group, Inc.
The holders of a majority in outstanding principal amount of the series of
junior subordinated debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to
22
<PAGE> 28
the debenture trustee. The debenture trustee or the holders of not less than 25%
in aggregate outstanding principal amount of the series of junior subordinated
debentures may declare the principal due and payable immediately upon a
debenture event of default, and, in the case of corresponding junior
subordinated debentures, should the debenture trustee or such holders of such
corresponding junior subordinated debentures fail to make this declaration, the
holders of at least 25% in aggregate liquidation preference of the corresponding
series of preferred securities shall have that right.
The holders of a majority in aggregate outstanding principal amount of the
series of junior subordinated debentures may annul such declaration and waive
the default if the default, other than the non-payment of the principal of the
junior subordinated debentures which has become due solely by such acceleration,
has been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
debenture trustee.
The holders of a majority in outstanding principal amount of the junior
subordinated debentures affected by the default may, on behalf of the holders of
all the junior subordinated debentures, waive any past default, except a default
in the payment of principal or interest, unless the default has been cured and a
sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the debenture trustee, or
a default in respect of a covenant or provision which under the junior
subordinated indenture cannot be modified or amended without the consent of the
holder of each outstanding junior subordinated debenture. The junior
subordinated indenture includes a covenant that we file annually with the junior
subordinated indenture trustee a certificate of compliance.
In case a debenture event of default shall occur and be continuing as to a
series of corresponding junior subordinated debentures, the property trustee
will have the right to declare the principal of and the interest on the
corresponding junior subordinated debentures, and any other amounts payable
under the indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such corresponding junior subordinated
debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a debenture event of default has occurred and is continuing and the
event is attributable to our failure to pay interest or principal on the
corresponding junior subordinated debentures on the date the interest or
principal is otherwise payable, a holder of preferred securities may institute a
legal proceeding directly against us, which we refer to in this prospectus as to
as a "direct action," for enforcement of payment to such holder of the principal
of or interest on the corresponding junior subordinated debentures having a
principal amount equal to the aggregate liquidation amount of the related
preferred securities of the holder.
We may not amend the junior subordinated indenture to remove the foregoing
right to bring a direct action without the prior written consent of the holders
of all of the preferred securities. If the right to bring a direct action is
removed, the applicable issue may become subject to the reporting obligations
under the Securities Exchange Act of 1934, as amended. We shall have the right
under the junior subordinated indenture to set-off any payment made to such
holder of preferred securities by us in connection with a direct action. The
holders of preferred securities will not be able to exercise directly any other
remedy available to the holders of the corresponding junior subordinated
debentures.
The holders of the preferred securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the junior subordinated debentures unless there
shall have been an event of default under the trust agreement.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The junior subordinated indenture provides that we shall not consolidate
with or merge into any other corporation or convey, transfer or lease our
properties and assets substantially as an entirety to any person, and
23
<PAGE> 29
no person shall consolidate with or merge into us or convey, transfer or lease
its properties and assets substantially as an entirety to us, unless:
- in case we consolidate with or merge into another corporation or convey
or transfer our properties and assets substantially as an entirety to any
person, the successor corporation is organized under the laws of the
United States or any state or the District of Columbia, and the successor
corporation expressly assumes our obligations on the junior subordinated
debentures issued under the junior subordinated indenture,
- immediately after giving effect to the consolidation, merger, conveyance
or transfer, no debenture event of default, and no event which, after
notice or lapse of time or both, would become a debenture event of
default, shall have happened and be continuing,
- in the case of corresponding junior subordinated debentures, the
transaction is permitted under the related trust agreement or guarantee
and does not give rise to any breach or violation of the related trust
agreement or guarantee, and
- certain other conditions as prescribed in the junior subordinated
indenture are met.
The general provisions of the junior subordinated indenture do not afford
holders of the junior subordinated debentures protection in the event of a
highly leveraged or other transaction involving The Hartford Financial Services
Group that may adversely affect holders of the junior subordinated debentures.
SATISFACTION AND DISCHARGE
The junior subordinated indenture provides that when, among other things,
all junior subordinated debentures not previously delivered to the debenture
trustee for cancellation:
- have become due and payable or
- will become due and payable at their stated maturity within one year, and
we deposit or cause to be deposited with the debenture trustee trust
funds, in trust, for the purpose an amount in the currency or currencies
in which the junior subordinated debentures are payable sufficient to pay
and discharge the entire indebtedness on the junior subordinated
debentures not previously delivered to the debenture trustee for
cancellation, for the principal, premium, if any, and interest on the
date of the deposit or to the stated maturity, as the case may be,
then the junior subordinated indenture will cease to be of further effect,
except as to our obligations to pay all other sums due pursuant to the junior
subordinated indenture and to provide the officers' certificates and opinions of
counsel described in the junior subordinated indenture, and we will be deemed to
have satisfied and discharged the indenture.
CONVERSION OR EXCHANGE
The junior subordinated debentures may be convertible or exchangeable into
preferred securities or other securities to the extent set forth in the
applicable prospectus supplement. The specific terms on which junior
subordinated debentures may be so converted or exchanged will be set forth in
the applicable prospectus supplement. These terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder, or at our
option, in which case the number of shares of preferred securities or other
securities to be received by the holders of junior subordinated debentures would
be calculated as of a time and in the manner stated in the applicable prospectus
supplement.
SUBORDINATION
In the junior subordinated indenture, we have agreed that any junior
subordinated debentures issued pursuant to the junior subordinated indenture
will be subordinate and junior in right of payment to all senior debt, as
defined below, to the extent provided in the junior subordinated indenture.
24
<PAGE> 30
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of The Hartford Financial Services Group, Inc. the holders
of senior debt will first be entitled to receive payment in full of principal,
premium, if any, and interest, if any, on the senior debt before the holders of
junior subordinated debentures or, in the case of corresponding junior
subordinated debentures, the property trustee on behalf of the holders, will be
entitled to receive or retain any payment in respect of the principal, and
premium, if any, or interest, if any, on the junior subordinated debentures.
In the event of the acceleration of the maturity of any junior subordinated
debentures, the holders of all senior debt outstanding at the time of the
acceleration will first be entitled to receive payment in full of all amounts
due, including any amounts due upon acceleration, before the holders of junior
subordinated debentures will be entitled to receive any payment upon the
principal, premium or interest, if any, on the junior subordinated debentures.
No payments on account of principal, premium or interest, if any, in
respect of the junior subordinated debentures may be made if:
- there shall have occurred and be continuing a default in any payment with
respect to senior debt,
- there shall have occurred and be continuing an event of default with
respect to any senior debt resulting in the acceleration of its maturity;
or
- if any judicial proceeding shall be pending with respect to any such
default.
When we use the term "debt", we mean with respect to any person, whether
recourse is to all or a portion of the assets of the person and whether or not
contingent:
- every obligation of that person for money borrowed,
- every obligation of that person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses,
- every reimbursement obligation of that person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account
of the person,
- every obligation of that person issued or assumed as the deferred
purchase price of property or services but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business,
- every capital lease obligation of that person, and
- every obligation of the type referred to in the prior five clauses of
another person and all dividends of another person the payment of which,
in either case, the person has guaranteed or is responsible or liable,
directly or indirectly, as obligor or otherwise.
When we use the term "senior debt" we mean the principal, premium and
interest, if any, including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to The Hartford Financial
Services Group, Inc. whether or not such claim for post-petition interest is
allowed in such proceeding, on debt, whether incurred on or prior to the date of
the junior subordinated indenture or thereafter incurred, unless, in the
instrument creating or evidencing that debt or pursuant to which that debt is
outstanding, it is provided that such obligations are not superior in right of
payment to the junior subordinated debentures or to other debt which ranks
equally with, or subordinated to, the junior subordinated debentures.
However, senior debt will not include:
- any debt of The Hartford Financial Services Group, Inc. which when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy code, was without recourse to The Hartford Financial Services
Group, Inc.,
- any debt of The Hartford Financial Services Group, Inc. to any of its
subsidiaries,
25
<PAGE> 31
- debt to any employee of The Hartford Financial Services Group, Inc.,
- any liability for taxes,
- indebtedness or monetary obligations to trade creditors or assumed by The
Hartford Financial Services Group, Inc. or any of its subsidiaries in the
ordinary course of business in connection with the obtaining of materials
or services, and
- any other debt securities issued pursuant to the junior subordinated
indenture.
We are a non-operating holding company, and most of our assets are owned by
our subsidiaries. Accordingly, the junior subordinated debentures will be
effectively subordinated to all existing and future liabilities of our
subsidiaries, including liabilities under contracts of insurance and annuities
written by our insurance subsidiaries. Holders of junior subordinated debentures
should look only to our assets for payments of interest and principal and
premium, if any. The payment of dividends by our insurance company subsidiaries,
including Hartford Fire, is limited under the insurance holding company laws in
which such subsidiaries are domiciled. See "The Hartford Financial Services
Group, Inc."
The junior subordinated indenture places no limitation on the amount of
additional senior debt that we may incur. We expect from time to time to incur
additional indebtedness constituting senior debt.
The indenture provides that the foregoing subordination provisions, insofar
as they relate to any particular issue of junior subordinated debentures, may be
changed prior to issuance. Any such change would be described in the prospectus
supplement relating to the junior subordinated debentures.
GOVERNING LAW
The junior subordinated indenture and the junior subordinated debentures
will be governed by and construed in accordance with the laws of the State of
New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The debenture trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the debenture trustee is under no
obligation to exercise any of the powers vested in it by the junior subordinated
indenture at the request of any holder of junior subordinated debentures, unless
offered reasonable indemnity by such holder against the costs, expenses and
liabilities which might be incurred thereby. The debenture trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the debenture trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
26
<PAGE> 32
DESCRIPTION OF CAPITAL STOCK OF THE HARTFORD FINANCIAL
SERVICES GROUP, INC.
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
Pursuant to our Restated Certificate of Incorporation, our authorized
capital stock is 450,000,000 shares, consisting of:
- 50,000,000 shares of preferred stock, par value $.01 per share, of which
300,000 shares were designated as Series A Participating Cumulative
Preferred Stock; and
- 400,000,000 shares of common stock, par value $.01 per share.
As of September 30, 2000, we had 225,165,836 outstanding shares of common
stock. Holders of common stock have received a right, entitling them, when such
right becomes exercisable, to purchase shares of Series A Participating
Cumulative Preferred Stock in certain circumstances. See "-- Rights Agreement."
No shares of preferred stock are currently outstanding.
No holders of any class of our capital stock are entitled to preemptive
rights.
In general, the classes of authorized capital stock are afforded
preferences with respect to dividends and liquidation rights in the order listed
above. Our board of directors is empowered, without approval of our
stockholders, to cause the preferred stock to be issued in one or more series,
with the numbers of shares of each series and the rights, preferences and
limitations of each series to be determined by it. The specific matters that may
be determined by our board of directors include the dividend rights, voting
rights, redemption rights, liquidation preferences, if any, conversion and
exchange rights, retirement and sinking fund provisions and other rights,
qualifications, limitations and restrictions of any wholly unissued series of
preferred stock (or of the entire class of preferred stock if none of the shares
have been issued), the number of shares constituting that series and the terms
and conditions of the issue of the shares.
The descriptions set forth below do not purport to be complete and are
qualified in their entirety by reference to our Restated Certificate of
Incorporation and our By-laws, which are filed or incorporated by reference, as
exhibits to the Registration Statement that includes this prospectus.
COMMON STOCK
Subject to any preferential rights of any preferred stock created by our
board of directors, each outstanding share of our common stock is entitled to
such dividends as our board of directors may declare from time to time out of
funds that we can legally use to pay dividends. The holders of common stock
possess exclusive voting rights, except to the extent our board of directors
specifies voting power with respect to any preferred stock that is issued.
Each holder of our common stock is entitled to one vote for each share of
common stock and does not have any right to cumulate votes in the election of
directors. In the event of liquidation, dissolution or winding-up of The
Hartford Financial Services Group, Inc., holders of our common stock will be
entitled to receive on a pro-rata basis any assets remaining after provision for
payment of creditors and after payment of any liquidation preferences to holders
of preferred stock. Our common stock is listed on the New York Stock Exchange
under the symbol "HIG".
The transfer agent and registrar for our common stock is The Bank of New
York.
PREFERRED STOCK
The particular terms of any series of preferred stock will be set forth in
the prospectus supplement relating to the offering.
The rights, preferences, privileges and restrictions, including dividend
rights, voting rights, terms of redemption, retirement and sinking fund
provisions and liquidation preferences, if any, of the preferred stock of each
series will be fixed or designated pursuant to a certificate of designation
adopted by our board of
27
<PAGE> 33
directors or a duly authorized committee of our board of directors. The terms,
if any, on which shares of any series of preferred stock are convertible or
exchangeable into common stock will also be set forth in the prospectus
supplement relating to the offering. These terms may include provisions for
conversion or exchange, either mandatory, at the option of the holder, or at our
option, in which case the number of shares of common stock to be received by the
holders of preferred stock would be calculated as of a time and in the manner
stated in the applicable prospectus supplement. The description of the terms of
a particular series of preferred stock that will be set forth in the applicable
prospectus supplement does not purport to be complete and is qualified in its
entirety by reference to the certificate of designation relating to the series.
On October 10, 1995, our board of directors declared a dividend of rights
to holders of record of our common stock outstanding as of the close of business
on December 19, 1995. When such rights become exercisable, holders of such
rights shall be entitled to purchase shares of Series A Participating Cumulative
Preferred Stock in certain circumstances pursuant to the rights agreement. See
"-- Rights Agreement."
DEPOSITARY SHARES
General
We may, at our option, elect to offer depositary shares representing
receipts for fractional interests in preferred stock, rather than full shares of
preferred stock. In such event, receipts for depositary shares, each of which
will represent a fraction, to be set forth in the prospectus supplement relating
to a particular series of preferred stock, of a share of a particular series of
preferred stock, will be issued as described below.
The shares of any series of preferred stock represented by depositary
shares will be deposited under a deposit agreement between us and a depositary
which we will name in a prospectus supplement. Subject to the terms of the
deposit agreement, each owner of a depositary share will be entitled, in
proportion to the applicable fraction of a share of preferred stock represented
by such depositary share, to all the rights and preferences of the preferred
stock represented by the depositary share, including dividend, voting,
redemption, subscription and liquidation rights. We have summarized certain
provisions of the deposit agreement. This summary does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the deposit agreement. Copies of the forms of deposit
agreement and depositary receipt are filed or incorporated by reference as
exhibits to the Registration Statement that includes this prospectus.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received in respect of the preferred stock to the record holders
of depositary shares relating to such preferred stock in proportion to the
numbers of such depositary shares owned by these holders.
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 in
an equitable manner, unless the depositary determines that it is not feasible to
make such distribution, in which case the depositary may sell such property and
distribute the net proceeds from such sale to these holders.
Redemption of Depositary Shares
If a series of preferred stock represented by depositary shares is subject
to redemption, the depositary shares will be redeemed from the proceeds received
by the depositary resulting from the redemption, in whole or in part, of such
series of preferred stock held by the depositary. The redemption price per
depositary share will be equal to the applicable fraction of the redemption
price per share payable with respect to the series of the preferred stock.
Whenever we redeem shares of preferred stock held by the depositary, the
depositary will redeem as of the same redemption date the number of depositary
shares representing shares of preferred stock so redeemed. If fewer than all the
depositary shares are to be redeemed, the depositary shares to be redeemed will
be selected by lot, pro rata or by any other equitable method as may be
determined by the depositary.
28
<PAGE> 34
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the preferred
stock are entitled to vote, the depositary will mail the information contained
in that notice of meeting to the record holders of the depositary shares
relating to the preferred stock. Each record holder of such depositary shares on
the record date, which will be the same date as the record date for the
preferred stock, will be entitled to instruct the depositary as to the exercise
of the voting rights pertaining to the amount of the preferred stock represented
by such holder's depositary shares. The depositary will endeavor, insofar as
practicable, to vote the amount of the preferred stock represented by the
depositary shares in accordance with those instructions, and we will agree to
take all reasonable action which may be deemed necessary by the depositary in
order to enable the depositary to do so. The depositary will abstain from voting
shares of the preferred stock to the extent it does not receive specific
instructions from the holder of depositary shares representing the preferred
stock.
Amendment and Termination of the Deposit 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 us and the depositary. However, any amendment which materially and
adversely alters the rights of the holders of depositary shares will not be
effective unless the amendment has been approved by the holders of at least a
majority of the depositary shares then outstanding.
The deposit agreement will only terminate if:
- all outstanding depositary shares have been redeemed or
- there has been a final distribution in respect of the preferred stock,
including in connection with our liquidation, dissolution or winding up
and the distribution has been distributed to the holders of depositary
receipts.
Resignation and Removal of Depositary
The depositary may resign at any time by delivering to us notice of its
election to do so, and we may at any time remove the depositary. Any such
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of such appointment. The 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.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will pay charges of
the depositary in connection with the initial deposit of the preferred stock and
issuance of depositary receipts, all withdrawals of shares of preferred stock by
owners of the depositary shares and any redemption of the preferred stock.
Holders of depositary receipts will pay other transfer and other taxes and
governmental charges and such other charges as they are expressly provided in
the deposit agreement to be for their accounts.
Miscellaneous
The depositary will forward all reports and communications from us which
are delivered to the depositary and which we are required or otherwise determine
to furnish to the holders of the preferred stock.
Neither we nor the depositary will be liable under the deposit agreement to
holders of depositary receipts other than for its gross negligence, willful
misconduct or bad faith. Neither we nor the depositary will be obligated to
prosecute or defend any legal proceedings in respect of any depositary shares or
preferred stock unless satisfactory indemnity is furnished. We and the
depositary may rely upon written advice of counsel or
29
<PAGE> 35
accountants, or upon information provided by persons presenting preferred stock
for deposit, holders of depositary receipts or other persons believed to be
competent and on documents believed to be genuine.
PROVISIONS OF OUR RESTATED CERTIFICATE OF INCORPORATION AND BY-LAWS
Provisions of our Restated Certificate of Incorporation and By-laws may
delay or make more difficult unsolicited acquisitions or changes of our control.
We believe that these provisions will enable us to develop our business in a
manner that will foster long-term growth without disruption caused by the threat
of a takeover not thought by our board of directors to be in our best interests
and the best interests of our shareholders.
Those provisions could have the effect of discouraging third parties from
making proposals involving an unsolicited acquisition or change of control of
our company, although the proposals, if made, might be considered desirable by a
majority of our shareholders. Those provisions may also have the effect of
making it more difficult for third parties to cause the replacement of our
current management without the concurrence of our board of directors.
These provisions include:
- the availability of capital stock for issuance from time to time at the
discretion of our board of directors (see "-- Authorized and Outstanding
Capital Stock" and "-- Preferred Stock"),
- prohibitions against shareholders calling a special meeting of
shareholders or acting by written consent in lieu of a meeting,
- requirements for advance notice for raising business or making
nominations at shareholders' meetings, and
- the ability of our board of directors to increase the size of the board
and to appoint directors to fill newly created directorships.
No Shareholder Action by Written Consent; Special Meetings
Our Restated Certificate of Incorporation and By-laws provide that
shareholder action can be taken only at an annual or special meeting and cannot
be taken by written consent in lieu of a meeting. Our Restated Certificate of
Incorporation and By-laws also provide that special meetings of shareholders can
be called only by the Chairman of our board of directors or by a vote of the
majority of the entire board of directors. Furthermore, our By-laws provide that
only such business as is specified in the notice of any such special meeting of
shareholders may come before such meeting.
Advance Notice for Raising Business or Making Nominations at Meetings
Our By-laws establish an advance notice procedure for shareholder proposals
to be brought before an annual meeting of shareholders and for nominations by
shareholders of candidates for election as directors at an annual or special
meeting at which directors are to be elected. Only such business may be
conducted at an annual meeting of shareholders as has been brought before the
meeting by, or at the direction of, the board of directors, or by a shareholder
who has given to the secretary of the company timely written notice, in proper
form, of the shareholder's intention to bring that business before the meeting.
The Chairman of the meeting will have the authority to make these
determinations. Only persons who are nominated by, or at the direction of, the
board of directors, or who are nominated by a shareholder who has given timely
written notice, in proper form, to the secretary prior to a meeting at which
directors are to be elected will be eligible for election as directors.
To be timely, notice of business to be brought before an annual meeting or
nominations of candidates for election as directors at an annual meeting is
required to be received by the company's secretary not later than 90 days in
advance of the anniversary date for the immediately preceding annual meeting (or
not more than 10 days after the first public disclosure of the originally
scheduled date of such of such annual meeting, whichever is earlier).
30
<PAGE> 36
Similarly, notice of nominations to be brought before a special meeting of
shareholders for the election of directors is required to be delivered to the
secretary no later than the close of business on the seventh day following the
day on which notice of the date of the special meeting of shareholders is given.
The notice of any nomination for election as a director is required to set
forth:
- the name and address of the shareholder who intends to make the
nomination and of the person or persons to be nominated,
- a representation that the shareholder is a holder of record of stock
entitled to vote at such meeting and intends to appear in person or by
proxy at the meeting to nominate the person or persons specified in the
notice,
- a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming
those persons) pursuant to which the nomination or nominations are to be
made by the shareholder, such other information regarding each nominee
proposed by such shareholder as would have been required to be included
in a proxy statement filed pursuant to the proxy rules of the Securities
and Exchange Commission had each nominee been nominated, or intended to
be nominated, by our board of directors, and
- the consent of each nominee to serve as a director if so elected.
Number of Directors; Filling of Vacancies
Our Restated Certificate of Incorporation and By-laws provide that newly
created directorships resulting from any increase in the authorized number of
directors, or any vacancy, may be filled by a vote of a majority of directors
then in office, subject to the requirement provided in the By-laws that the
majority of directors holding office immediately after such election must be
"independent directors," as defined in the By-laws. Accordingly, our board of
directors may be able to prevent any shareholder from obtaining majority
representation on the board of directors by increasing the size of the board and
filling the newly created directorships with its own nominees.
RIGHTS AGREEMENT
The Hartford Financial Services Group, Inc. Rights
On October 10, 1995, our board of directors declared a dividend of one
right for each share of common stock outstanding as of the close of business on
December 19, 1995, with respect to common stock issued after that date until the
distribution date, as defined below and, in certain circumstances, with respect
to common stock issued after the distribution date.
On May 21, 1998, our board of directors declared a two-for-one stock split
effected in the form of a 100% stock dividend distributed on July 15, 1998 to
stockholders of record as of June 24, 1998. Before our board of directors
declared the two-for-one stock split, the rights entitled the registered holder
to purchase from us, when it became exercisable, one one-thousandth (1/1000th)
of a share of Series A Participating Cumulative Preferred Stock, par value $.01
per share, at a price of $2.20 with respect to each right, subject to adjustment
in specific circumstances. As a result of the stock split, the terms of the
rights were adjusted so that the holder of a right may purchase from us, when it
becomes exercisable, one-five hundredth (1/500th) of a share of Series A
Participating Cumulative Preferred Stock, par value $.01 per share, at a price
of $1.10 with respect to each right, subject to adjustment in specific
circumstances.
Each right is subject to redemption at a price of $.005 per share. The
description and terms of the rights are set forth in the rights agreement, dated
as of November 1, 1995, between us and The Bank of New York, as rights agent.
The rights will not be exercisable until the distribution date and will expire
on November 1, 2005, unless earlier redeemed by us as described below. Until a
right is exercised, the holder of the right, as such, will have no rights as a
shareholder of The Hartford Financial Services Group, Inc. including, without
limitation, the right to vote or to receive dividends with respect to the rights
or the Series A Participating Cumulative Preferred Stock relating to the right.
A copy of the rights agreement has been filed as an exhibit to
31
<PAGE> 37
the Registration Statement that includes this prospectus. The description set
forth below does not purport to be complete and is qualified in its entirety by
reference to the rights agreement.
Distribution Date
Under the rights agreement, the distribution date is the earlier of:
- such time as we learn that a person or group (including any affiliate or
associate of such person or group) has acquired, or has obtained the
right to acquire, beneficial ownership of more than 15% of the
outstanding shares of our common stock (we are referring to such person
or group as an "acquiring person"), unless provisions preventing
accidental triggering of the distribution of the rights apply, and
- the close of business on such date, if any, as may be designated by our
board of directors following the commencement of, or first public
disclosure of an intent to commence, a tender or exchange offer for more
than 15% or more of the outstanding shares of our common stock.
A person or group (or any affiliate or associate of such person or group),
however, that inadvertently acquires more than 15% of the outstanding shares of
our common stock will not be deemed to be an acquiring person provided that such
person or group reduces its percentage of beneficial ownership to less than 15%
of the outstanding shares of our common stock by the close of business on the
fifth business day after notice from us that that person's or group's ownership
interest exceeds 15% of the outstanding shares of our common stock. That person
or group will be deemed to be an acquiring person at the end of such five
business day period absent such reduction.
Evidence of Rights
Until the distribution date, the rights will be evidenced by the
certificates for common stock registered in the names of the holders thereof
rather than separate right certificates. Therefore, on and after the issuance
date and until the distribution date, the rights will be transferred with and
only with the common stock and each transfer of common stock also will transfer
the associated rights. As soon as practicable following the distribution date,
separate certificates evidencing the rights will be mailed to holders of record
of the common stock as of the close of business on the distribution date (and to
each initial record holder of common stock originally issued after the
distribution date), and such separate certificates alone will thereafter
evidence the rights.
Adjustments
The number of Series A Participating Cumulative Preferred Stock or other
securities issuable upon exercise of the rights, the purchase price, the
redemption price and the number of rights associated with each share of common
stock are all subject to adjustment from time to time in the event of any change
in the common stock or the Series A Participating Cumulative Preferred Stock,
whether by reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations or exchanges of securities, split-ups, split-offs,
spin-offs, liquidations, other similar changes in capitalization or any
distribution or issuance of cash, assets, evidences of indebtedness or
subscription rights, options or warrants to holders of common stock or Series A
Participating Cumulative Preferred Stock.
We may, but we are not required to, issue fractions of rights or distribute
right certificates which evidence fractional rights. In lieu of such fractional
rights, we may make a cash payment based on the market price of those rights. In
addition, we may, but we are not required to, issue fractions of shares upon the
exercise of the rights or distribute certificates which evidence fractional
Series A Participating Cumulative Preferred Stock. In lieu of fractional Series
A Participating Cumulative Preferred Stock, we may utilize a depositary
arrangement as provided by the terms of the Series A Participating Cumulative
Preferred Stock and, in the case of fractions other than one-five hundredth
(1/500th) of a Series A Participating Cumulative Preferred Stock or integral
multiples thereof, may make a cash payment on the market price of those shares.
32
<PAGE> 38
Triggering Event and Effect of Triggering Event
At such time as there is an acquiring person, the rights will entitle each
holder, other than such acquiring person, of a right to purchase, for the
purchase price, that number of one-five hundredth (1/500th) of a Series A
Participating Cumulative Preferred Stock equivalent to the number of shares of
common stock which at the time of that event would have a market value of twice
the purchase price.
In the event we are acquired in a merger or other business combination by
an acquiring person or an affiliate or associate of an acquiring person that is
a publicly traded corporation or 50% or more of our assets or assets
representing 50% or more of our revenues or cash flow are sold, leased,
exchanged or otherwise transferred (in one or more transactions) to an acquiring
person or an affiliate or associate of an acquiring person that is not a
publicly traded corporation, each right will entitle its holder (subject to the
next paragraph) to purchase, for the purchase price, that number of common
shares of such corporation which at the time of the transaction would have a
market value of twice the purchase price. In the event we are acquired in a
merger or other business combination by an acquiring person or an affiliate or
associate of an acquiring person that is not a publicly traded entity or 50% or
more of our assets or assets representing 50% or more of our revenues or cash
flow are sold, leased, exchanged or otherwise transferred (in one or more
transactions) to an acquiring person or an affiliate or associate of an
acquiring person that is not a publicly traded entity, each right will entitle
its holder (subject to the next paragraph) to purchase, for the purchase price,
at such holder's option:
- that number of shares of the surviving corporation in the transaction
with that entity (which surviving corporation could be us), which at the
time of the transaction would have a book value of twice the purchase
price,
- that number of shares of such entity which at the time of the transaction
would have a book value of twice the purchase price, or
- if that entity has an affiliate which has publicly traded common shares,
that number of common shares of that affiliate which at the time of the
transaction would have market value of twice the purchase price.
Any rights that are at any time beneficially owned by an acquiring person,
or any affiliate or associate of an acquiring person, will be null and void and
nontransferable and any holder of any such right (including any purported
transferee or subsequent holder) will be unable to exercise or transfer any such
right.
Redemption
At any time prior to the earlier of:
- such time as a person or group becomes an acquiring person and
- November 1, 2005,
our board of directors may redeem the rights in whole, but not in part, at a
price, which we refer to in this prospectus as the "redemption price," in cash
or common stock or other securities deemed by our board of directors to be at
least equivalent in value, of $.005 per right. This amount is subject to
adjustment as provided in the rights agreement. Immediately upon the action of
our board of directors ordering the redemption of the rights, and without any
further action and without any notice, the right to exercise the rights will
terminate and the only right of the holders of rights will be to receive the
redemption price. Within 10 business days after the action of our board of
directors ordering the redemption of the rights, we will give notice of such
redemption to the holders of the then outstanding rights by mail. Each such
notice of redemption will state the method by which payment of the redemption
price will be made.
In addition, at any time after there is an acquiring person, our board of
directors may elect to exchange each right, other than rights that have become
null and void and nontransferable as described above, for a consideration per
right consisting of one-half of the securities that would be issuable at such
time upon exercise of one right pursuant to the terms of the rights agreement.
33
<PAGE> 39
Amendment
At any time prior to the distribution date, we may, without the approval of
any holder of any rights, supplement or amend any provision of the rights
agreement, including, without limitation, the date on which the distribution
date shall occur, the definition of acquiring person, the time during which the
rights may be redeemed or the terms of the Series A Participating Cumulative
Preferred Stock. However, no supplement or amendment shall be made which reduces
the redemption price or provides for an earlier expiration date. From and after
the distribution date and subject to applicable law, we may amend the rights
agreement without the approval of any holders of right certificates:
- to cure any ambiguity or to correct or supplement any provision contained
in the rights agreement which may be defective or inconsistent with any
other provision of the rights agreement, or
- to make any other provision which we may deem necessary or desirable and
which shall not adversely affect the interests of the holders of right
certificates.
Any supplement or amendment adopted during any period after any person or
group has become an acquiring person but prior to the distribution date shall be
null and void unless that supplement or amendment could have been adopted under
the prior sentence from and after the distribution date.
Certain Effects of the Rights Agreement
The rights agreement is designed to protect our shareholders in the event
of unsolicited offers to acquire us and other coercive takeover tactics which,
in the opinion of our board of directors, could impair our ability to represent
shareholder interests. The provisions of the rights agreement may render an
unsolicited takeover more difficult or less likely to occur or might prevent
such a takeover, even though that takeover may offer our shareholders the
opportunity to sell their stock at a price above the prevailing market rate and
may be favored by a majority of our shareholders.
RESTRICTIONS ON OWNERSHIP UNDER INSURANCE LAWS
Although our Restated Certificate of Incorporation and By-laws do not
contain any provision restricting ownership as a result of the application of
various state insurance laws, these laws will be a significant deterrent to any
person interested in acquiring our control. The insurance holding company laws
of each of the jurisdictions in which our insurance subsidiaries are
incorporated or commercially domiciled, as well as state corporation laws,
govern any acquisition of control of our insurance subsidiaries or of us. In
general, these laws provide that no person or entity may directly or indirectly
acquire control of an insurance company unless that person or entity has
received the prior approval of the insurance regulatory authorities. An
acquisition of control would be presumed in the case of any person or entity who
purchases 10% or more of our outstanding common stock (5% or more, in the case
of the Florida insurance holding company laws) unless the applicable insurance
regulatory authorities determine otherwise.
DELAWARE GENERAL CORPORATION LAW
The terms of Section 203 of the Delaware General Corporation Law apply to
us since we are a Delaware corporation. Pursuant to Section 203, with certain
exceptions, a Delaware corporation may not engage in any of a broad range of
business combinations, such as mergers, consolidations and sales of assets, with
an "interested stockholder," as defined below, for a period of three years from
the date that such person became an interested stockholder unless:
- the transaction that results in a person's becoming an interested
stockholder or the business combination is approved by the board of
directors of the corporation before the person becomes an interested
stockholder,
- upon consummation of the transaction which results in the shareholder
becoming an interested stockholder, the interested stockholder owns 85%
or more of the voting stock of the corporation
34
<PAGE> 40
outstanding at the time the transaction commenced, excluding shares owned
by persons who are directors and also officers and shares owned by
certain employee stock plans, or
- on or after the date the person becomes an interested stockholder, the
business combination is approved by the corporation's board of directors
and by holders of at least two-thirds of the corporation's outstanding
voting stock, excluding shares owned by the interested stockholder, at a
meeting of shareholders.
Under Section 203, an "interested stockholder" is defined as any person,
other than the corporation and any direct or indirect majority-owned subsidiary,
that is:
- the owner of 15% or more of the outstanding voting stock of the
corporation or
- an affiliate or associate of the corporation and was the owner of 15% or
more of the outstanding voting stock of the corporation at any time
within the three-year period immediately prior to the date on which it is
sought to be determined whether such person is an interested stockholder.
Section 203 does not apply to a corporation that so provides in an
amendment to its certificate of incorporation or by-laws passed by a majority of
its outstanding shares at any time. Such stockholder action does not become
effective for 12 months following its adoption and would not apply to persons
who were already interested stockholders at the time of the amendment. Our
Restated Certificate of Incorporation does not exclude us from the restrictions
imposed under Section 203.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an interested stockholder to effect various business
combinations with a corporation for a three-year period, although the
shareholders may elect to exclude a corporation from the restrictions imposed
thereunder. The provisions of Section 203 may encourage companies interested in
acquiring us to negotiate in advance with our board of directors, because the
shareholder approval requirement would be avoided if a majority of the directors
then in office approve either the business combination or the transaction which
results in the shareholder becoming an interested shareholder. These provisions
also may have the effect of preventing changes in our management. It is further
possible that such provisions could make it more difficult to accomplish
transactions that shareholders may otherwise deem to be in their best interest.
DESCRIPTION OF WARRANTS
We may issue warrants, including warrants to purchase debt securities,
which we refer to in this prospectus as "debt warrants", preferred stock, common
stock or other of our securities. We may issue warrants independently or
together with any other securities, and they may be attached to or separate from
such securities. We will issue the other warrants under warrant agreements
between us and a bank or trust company, as warrant agent, as we shall set forth
in the prospectus supplement relating to the warrants being offered. The
description of the terms of the warrants that are set forth below and that will
be set forth in the applicable prospectus supplement do not purport to be
complete and are qualified in their entirety by reference to the warrant
agreement and warrant certificate relating to such warrants. The forms of
warrant and warrant certificate are filed or incorporated by reference as
exhibits to the Registration Statement that includes this prospectus.
DEBT WARRANTS
The applicable prospectus supplement will describe the terms of debt
warrants offered by such prospectus, the warrant agreement relating to such debt
warrants and the warrant certificates representing such debt warrants, including
the following:
- the title of the debt warrants,
- the debt securities for which such debt warrants are exercisable,
- the aggregate number of the debt warrants,
35
<PAGE> 41
- the principal amount of debt securities purchasable upon exercise of each
debt warrant, and the price or prices at which the debt warrants will be
issued,
- the procedures and conditions relating to the exercise of the debt
warrants,
- the designation and terms of any related debt securities with which the
debt warrants are issued, and the number of the debt warrants issued with
each such debt security,
- the date, if any, on and after which the debt warrants and the related
securities will be separately transferable,
- the date on which the right to exercise the debt warrants shall commence,
and the date on which such right shall expire,
- the maximum or minimum number of the debt warrants which may be exercised
at any time,
- if applicable, a discussion of material United States federal income tax
considerations,
- any other terms of the debt warrants and terms, procedures and
limitations relating to the exercise of the debt warrants, and
- the terms of the securities purchasable upon exercise of the debt
warrants.
Debt warrant certificates may be exchanged for new debt warrant
certificates of different denominations and debt warrants may be exercised at
the corporate trust office of the warrant agent or any other office indicated in
the applicable prospectus supplement. Prior to the exercise of their debt
warrants, holders of debt warrants exercisable for debt securities will not have
any of the rights of holders of the debt securities purchasable upon such
exercise and will not be entitled to payments of principal, or premium, if any,
or interest, if any, on the debt securities purchasable upon such exercise.
OTHER WARRANTS
We may issue other warrants. The applicable prospectus supplement will
describe the following terms of any of those warrants:
- the title of the warrant,
- the securities, which may include preferred stock or common stock, for
which the warrants are exercisable,
- the price or prices at which the warrants will be issued,
- if applicable, the designation and terms of the preferred stock or common
stock with which the warrants are issued, the designation and terms of
the preferred stock or common stock with which the warrants are issued,
and the number of warrants issued with each share of preferred stock or
common stock,
- if applicable, the date on and after which the warrants and the related
preferred stock or common stock will be separately transferable,
- if applicable, a discussion of material United States federal income tax
considerations, and
- any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of such warrants.
The applicable prospectus supplement will also set forth (1) the amount of
securities called for by the warrants, and if applicable, the amount of warrants
outstanding, and (2) information relating to provisions, if any, for a change in
the exercise price or the expiration date of such warrants and the kind,
frequency and timing of any notice to be given. Prior to the exercise of their
warrants for shares of preferred stock or common stock, holders of such warrants
will not have any rights of holders of the preferred stock or common stock
purchasable upon that exercise and will not be entitled to dividend payments, if
any, or voting rights of the preferred stock or common stock purchasable upon
such exercise.
36
<PAGE> 42
EXERCISE OF WARRANTS
Each warrant will entitle the holder to purchase for cash such principal
amount or such number of our securities at such exercise price as shall in each
case be set forth in, or be determinable as set forth in, the prospectus
supplement relating to the warrants. Warrants may be exercised as set forth in
the prospectus supplement relating to the warrants at any time up to the close
of business on the expiration date set forth in the prospectus supplement. After
the close of business on the expiration date, or such later expiration date as
may be extended by us, unexercised warrants will become void.
Upon receipt of payment and the warrant certificate properly completed and
duly executed at the corporate trust office of the warrant agent or any other
office indicated in the applicable prospectus supplement, we will, as soon as
practicable, forward the securities purchasable upon such exercise. If less than
all of the warrants represented by such warrant certificate are exercised, a new
warrant certificate will be issued for the remaining warrants.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and for us to sell to the holders, a specific
number of shares of common stock or preferred stock at a future date or dates.
The price per share of preferred stock or common stock may be fixed at the time
the stock purchase contracts are issued or may be determined by reference to a
specific formula set forth in the stock purchase contracts. The stock purchase
contract can be issued separately or as a part of units, or stock purchase
units, consisting of a stock purchase contract and debt securities, trust
preferred securities or debt obligations of third parties, including U.S.
Treasury securities, securing the holders' obligations to purchase the preferred
stock or the common stock under the purchase contracts. The stock purchase
contracts may require us to make periodic payments to the holders of the stock
purchase units or vice versa and such payments may be unsecured or prefunded on
some basis. The stock purchase contracts may require holders to secure their
obligations in a specified manner.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units. The description in the prospectus
supplement will not purport to be complete and will be qualified in its entirety
by reference to the stock purchase contracts, and, if applicable, collateral
arrangements and depositary arrangements, relating to such stock purchase
contracts or stock purchase units.
DESCRIPTION OF PREFERRED SECURITIES
The trustees on behalf of each trust will issue the preferred securities
and the common securities of the trust pursuant to the terms of the related
trust agreement. The preferred securities of a particular issue will represent
preferred undivided beneficial interests in the assets of the related trust, and
the holders of the trust preferred securities will generally be entitled to a
preference with respect to distributions and amounts payable on redemption or
liquidation over the common securities of the trust, as well as other benefits
as described in the corresponding trust agreement. This summary of certain
provisions of the trust agreement does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
trust agreement, including the definitions of certain terms, and the Trust
Indenture Act. The form of the trust agreement has been filed or incorporated by
reference as an exhibit to the Registration Statement which includes this
prospectus. Each of the trusts is a legally separate entity and the assets of
one are not available to satisfy the obligations of any of the others.
GENERAL
The preferred securities of a trust will rank equally, and payments will be
made pro rata, with the common securities of that trust except as described
under "-- Subordination of Common Securities." Legal title to the corresponding
junior subordinated debentures will be held by the property trustee in trust for
the benefit of the holders of the related preferred securities and common
securities.
37
<PAGE> 43
Each guarantee agreement executed by us for the benefit of the holders of
preferred securities of a trust will be a guarantee on a subordinated basis with
respect to the related preferred securities but will not guarantee payment of
distributions or amounts payable on redemption or liquidation of the preferred
securities when the related trust does not have funds on hand available to make
such payments. See "Description of Guarantee."
DISTRIBUTIONS
The preferred securities of each trust represent preferred undivided
beneficial interests in the assets of the trust, and the distributions on each
preferred security will be payable at a rate specified in the prospectus
supplement for such preferred securities.
The amount of distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months unless otherwise specified in
the applicable prospectus supplement. Distributions that are in arrears may bear
interest on the amount thereof at the rate per annum if and as specified in the
applicable prospectus supplement. The term "distributions" as we use it in this
prospectus includes any additional amounts unless otherwise stated.
Distributions on the preferred securities will be cumulative, will accrue
from the date of original issuance and will be payable on such dates as
specified in the applicable prospectus supplement. In the event that any date on
which distributions are payable on the preferred securities is not a business
day, as defined below, payment of the distribution payable on that date will be
made on the next succeeding day that is a business day, and without any interest
or other payment in respect to any such delay, except that, if such business day
is in the next succeeding calendar year, payment of such distribution shall be
made on the immediately preceding business day, in each case with the same force
and effect as if made on that date. When we use the term "business day" in this
prospectus, we mean any day other than a Saturday or a Sunday, or a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to remain closed or a day on which the corporate trust office
of the property trustee or the debenture trustee is closed for business.
If provided in the applicable prospectus supplement, we have the right
under the junior subordinated indenture pursuant to which we will issue the
corresponding junior subordinated debentures, to extend the interest payment
period at any time and from time to time on any series of the corresponding
junior subordinated debentures, to a period which will be specified in the
prospectus supplement. However, the extension period may not extend beyond the
maturity of the junior subordinated debentures. As a consequence of any such
extension, distributions on the corresponding preferred securities would be
deferred (but would continue to accumulate additional distributions thereon at
the rate per annum set forth in the prospectus supplement) by the trust during
the extension period.
In the event that we exercise this right, during the extension period we
may not, and may not permit any of our subsidiaries to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our capital
stock, or
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank equally with or junior
in interest to the corresponding junior subordinated debentures or make
any guarantee payments with respect to the foregoing, other than (1)
dividends or distributions in our common stock, (2) redemptions or
purchases of any rights pursuant to our rights plan, or any successor to
such rights plan, and the declaration of a dividend of such rights in the
future, and (c) payments under any guarantee.
We anticipate that the revenue of each trust available for distribution to
holders of its preferred securities will be limited to payments under the
corresponding junior subordinated debentures in which the trust will invest the
proceeds from the issuance and sale of its preferred securities and its common
securities. See "Description of Corresponding Junior Subordinated Debentures".
38
<PAGE> 44
If we do not make interest payments on the corresponding junior
subordinated debentures, the property trustee will not have funds available to
pay distributions on the corresponding preferred securities. The payment of
distributions, if and to the extent the trust has funds legally available for
the payment of such distributions and cash sufficient to make these payments, is
guaranteed on a limited basis as set forth herein under "Description of
Guarantee".
Distributions on the preferred securities will be payable to the holders of
the preferred securities as they appear on the register of the trust on the
relevant record dates, which, as long as the preferred securities remain in
book-entry form, will be one business day prior to the relevant distribution
date. In the event any preferred securities are not in book-entry form, the
relevant record date for the preferred securities shall be the date 15 days
prior to the relevant distribution date.
REDEMPTION
Mandatory Redemption
Upon the repayment or redemption, in whole or in part, of any corresponding
junior subordinated debentures, whether at maturity or upon earlier redemption
as provided in the junior subordinated indenture, the proceeds from that
repayment or redemption shall be applied by the property trustee to redeem a
like amount, as defined below, of the corresponding preferred securities, upon
not less than 30 nor more than 60 days notice, at a redemption price equal to
the aggregate liquidation preference of the preferred securities plus
accumulated and unpaid distributions thereon to the date of redemption and the
related amount of the premium, if any, paid by us upon the concurrent redemption
of such corresponding junior subordinated debentures. See "Description of
Corresponding Junior Subordinated Debentures -- Optional Redemption."
If less than all of any series of corresponding junior subordinated
debentures are to be repaid or redeemed on a redemption date, then the proceeds
from the repayment or redemption shall be allocated to the redemption pro rata
of the preferred securities and the common securities. The amount of premium, if
any, paid by us upon the redemption of all or any part of any series of any
corresponding junior subordinated debentures to be repaid or redeemed on a
redemption date shall be allocated to the redemption pro rata of the preferred
securities and the common securities.
We will have the right to redeem any series of corresponding junior
subordinated debentures:
- in whole at any time or in part from time to time, subject to the
conditions described under "Description of Corresponding Junior
Subordinated Debentures -- Optional Redemption," or
- at any time, in whole, but not in part, upon the occurrence of a tax
event or an investment company event, each as defined below, and subject
to the further conditions described under "Description of Corresponding
Junior Subordinated Debentures -- Optional Redemption," or
- as may be otherwise specified in the applicable prospectus supplement.
Redemption or Distribution upon the occurrence of a Tax Event or an
Investment Company Event
If a tax event or an investment company event in respect of a series of
preferred securities and common securities shall occur and be continuing, we
will have the right to:
- redeem the corresponding junior subordinated debentures in whole, but not
in part, and therefore cause a mandatory redemption of the preferred
securities and common securities in whole, but not in part, at the
redemption price within 90 days following the occurrence of such tax
event or an investment company event, or
- terminate the related trust and cause the corresponding junior
subordinated debentures to be distributed to the holders of the preferred
securities and common securities in liquidation of the trust.
If at any time a trust is not or will not be taxed as a grantor trust but a
tax event in respect of the related preferred securities has not occurred, we
will have the right to terminate the trust and cause the corresponding junior
subordinated debentures to be distributed to the holders of the preferred
securities in liquidation of the
39
<PAGE> 45
trust. If we do not elect either option above, the applicable series of
preferred securities will remain outstanding and, in the event a tax event has
occurred and is continuing, additional sums, as defined below, will be payable
on the corresponding junior subordinated debentures.
Extension of Maturity of Corresponding Junior Subordinated Debentures
If provided in the applicable prospectus supplement, we shall have the
right to extend or shorten the maturity of any series of corresponding junior
subordinated debentures at the time that we exercise our right to elect to
terminate the related trust and cause such corresponding junior subordinated
debentures to be distributed to the holders of such preferred securities and
common securities in liquidation of the trust. However, we can extend the
maturity only if certain conditions specified in the applicable prospectus
supplement are met at the time such election is made and at the time of such
extension.
When we use the term "additional sums" we mean the additional amounts as
may be necessary in order that the amount of distributions then due and payable
by a trust on its outstanding preferred securities and common securities shall
not be reduced as a result of any additional taxes, duties and other
governmental charges to which such trust has become subject as a result of a tax
event.
When we use the term "tax event" we mean the receipt by the trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change, including any announced prospective change, in,
the laws of the United States or any political subdivision or taxing authority
thereof or therein affecting taxation, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying those
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of issuance of the
preferred securities under the trust agreement, there is more than an
insubstantial risk that:
- the trust is, or will be within 90 days of the date thereof, subject to
United States federal income tax with respect to income received or
accrued on the corresponding series of corresponding junior subordinated
debentures,
- interest payable by us on the series of corresponding junior subordinated
debentures is not, or within 90 days of the date thereof, will not be,
deductible, in whole or in part, for United States federal income tax
purposes or
- the trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of other taxes, duties or other
governmental charges.
When we use the term "investment company event" we mean the occurrence of a
change in law or regulation or a change in interpretation or application of law
or regulation by any legislative body, court, governmental agency or regulatory
authority to the effect that the applicable trust is or will be considered an
investment company that is required to be registered under the Investment
Company Act of 1940, as amended, which change becomes effective on or after the
date of original issuance of the series of preferred securities issued by the
trust.
When we use the term "like amount", we mean:
- with respect to a redemption of any series of preferred securities,
preferred securities of such series having a liquidation amount, as
defined below, equal to that portion of the principal amount of
corresponding junior subordinated debentures to be contemporaneously
redeemed in accordance with the junior subordinated indenture and the
proceeds of which will be used to pay the redemption price of the
preferred securities, and
- with respect to a distribution of corresponding junior subordinated
debentures to holders of any series of preferred securities in connection
with a dissolution or liquidation of the related trust, corresponding
junior subordinated debentures having a principal amount equal to the
liquidation amount of the preferred securities of the holder to whom such
corresponding junior subordinated debentures are distributed.
40
<PAGE> 46
When we use the term "liquidation amount", we mean the stated amount of $25
per preferred security and common security.
After the liquidation date fixed for any distribution of corresponding
junior subordinated debentures for any series of preferred securities:
- the series of preferred securities will no longer be deemed to be
outstanding,
- The Depositary Trust Company, which we refer to in this prospectus as a
"DTC," or its nominee, as the record holder of the series of preferred
securities, will receive a registered global certificate or certificates
representing the corresponding junior subordinated debentures to be
delivered upon such distribution, and
- any certificates representing the series of preferred securities not held
by DTC or its nominee will be deemed to represent the corresponding
junior subordinated debentures having a principal amount equal to the
stated liquidation preference of the series of preferred securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid distributions on the series of preferred securities until the
certificates are presented to the administrative trustees or their agent
for transfer or reissuance.
There can be no assurance as to the market prices for the preferred
securities or the corresponding junior subordinated debentures that may be
distributed in exchange for preferred securities if a dissolution and
liquidation of a trust were to occur. Accordingly, the preferred securities that
an investor may purchase, or the corresponding junior subordinated debentures
that the investor may receive on dissolution and liquidation of a trust, may
trade at a discount to the price that the investor paid to purchase the
preferred securities offered by this prospectus.
REDEMPTION PROCEDURES
Preferred securities redeemed on each redemption date shall be redeemed at
the redemption price with the applicable proceeds from the contemporaneous
redemption of the corresponding junior subordinated debentures. Redemptions of
the preferred securities shall be made and the redemption price shall be payable
on each redemption date only to the extent that the related trust has funds on
hand available for the payment of the redemption price. See also
"-- Subordination of Common Securities."
If a trust gives a notice of redemption in respect of its preferred
securities, then, by 12:00 noon, New York City time, on the redemption date, to
the extent funds are available, the property trustee will deposit irrevocably
with DTC funds sufficient to pay the applicable redemption price and will give
DTC irrevocable instructions and authority to pay the redemption price to the
holders of such preferred securities. See "-- Book-Entry Issuance."
If the preferred securities are no longer in book-entry form, the trust, to
the extent funds are available, will irrevocably deposit with the paying agent
for the preferred securities funds sufficient to pay the applicable redemption
price and will give such paying agent irrevocable instructions and authority to
pay the redemption price to the holders thereof upon surrender of their
certificates evidencing such preferred securities.
Notwithstanding the foregoing, distributions payable on or prior to the
redemption date for any preferred securities called for redemption shall be
payable to the holders of the preferred securities on the relevant record dates
for the related distribution dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of the deposit, all
rights of the holders of the preferred securities so called for redemption will
cease, except the right of the holders of the preferred securities to receive
the redemption price (without interest on such redemption price), and the
preferred securities will cease to be outstanding. In the event that any date
fixed for redemption of preferred securities is not a business day, then payment
of the redemption price payable on such date will be made on the next succeeding
day which is a business day, and without any interest or other payment in
respect of any such delay, except that, if such business day falls in the next
calendar year, the payment will be made on the immediately preceding business
day. In the event that payment of the redemption price in respect of preferred
securities called for redemption
41
<PAGE> 47
is improperly withheld or refused and not paid either by the trust or by us
pursuant to the guarantee as described under "Description of Guarantee",
distributions on the preferred securities will continue to accrue at the then
applicable rate, from the redemption date originally established by the trust
for such preferred securities to the date the redemption price is actually paid,
in which case the actual payment date will be the date fixed for redemption for
purposes of calculating the redemption price.
Subject to applicable law, including, without limitation, United States
federal securities law, we or our subsidiaries may at any time and from time to
time purchase outstanding preferred securities by tender, in the open market or
by private agreement.
Payment of the redemption price on the preferred securities and any
distribution of corresponding junior subordinated debentures to holders of
preferred securities shall be made to the applicable recordholders as they
appear on the register for such preferred securities on the relevant record
date. This date shall generally be one business day prior to the relevant
redemption date or liquidation date, as applicable. However, in the event that
any preferred securities are not in book-entry form, the relevant record date
for such preferred securities shall be the date 15 days prior to the redemption
date or liquidation date, as applicable.
If less than all of the preferred securities and common securities issued
by a trust are to be redeemed on a redemption date, then the aggregate
liquidation amount of the preferred securities and common securities to be
redeemed shall be allocated pro rata among the preferred securities and the
common securities. The particular preferred securities to be redeemed shall be
selected on a pro rata basis not more than 60 days prior to the redemption date
by the property trustee from the outstanding preferred securities not previously
called for redemption, by such method as the property trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof) of the
liquidation amount of preferred securities of a denomination larger than $25.
The property trustee shall promptly notify the trust registrar in writing of the
preferred securities selected for redemption and, in the case of any preferred
securities selected for partial redemption, the liquidation amount of the
preferred securities to be redeemed. For all purposes of each trust agreement,
unless the context otherwise requires, all provisions relating to the redemption
of preferred securities shall relate, in the case of any preferred securities
redeemed or to be redeemed only in part, to the portion of the aggregate
liquidation amount of preferred securities which has been or is to be redeemed.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions, including additional amounts, if applicable, on,
and the redemption price of, the preferred securities and common securities of
each trust, as applicable, shall be made pro rata based on the liquidation
amount of the preferred securities and common securities. However, if on any
distribution date or redemption date a debenture event of default shall have
occurred and be continuing, no payment of any distribution (including additional
amounts, if applicable) on, or redemption price of, any of the common securities
of the trust, and no other payment on account of the redemption, liquidation or
other acquisition of the common securities, shall be made unless payment in full
in cash of all accumulated and unpaid distributions, including additional
amounts, if applicable, on all of the outstanding preferred securities of the
trust for all distribution periods terminating on or prior to that date, or in
the case of payment of the redemption price the full amount of such redemption
price on all of the outstanding preferred securities of the trust, shall have
been made or provided for, and all funds available to the property trustee shall
first be applied to the payment in full in cash of all distributions, including
additional amounts, if applicable, on, or redemption price of, the trust's
preferred securities then due and payable.
In the case of any event of default resulting from a debenture event of
default, we as holder of the common securities of the trust will be deemed to
have waived any right to act with respect to any such event of default under the
trust agreement until the effect of all those events of default with respect to
the preferred securities have been cured, waived or otherwise eliminated. Until
any such events of default under the trust agreement with respect to the
preferred securities have been so cured, waived or otherwise eliminated, the
property trustee shall act solely on behalf of the holders of the preferred
securities and not on our behalf as
42
<PAGE> 48
holder of the common securities, and only the holders of such preferred
securities will have the right to direct the property trustee to act on their
behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to the trust agreement, each trust shall automatically terminate
upon expiration of its term and shall be terminated by us on the first to occur
of:
- the occurrence of certain events of bankruptcy, dissolution or
liquidation of The Hartford Financial Services Group, Inc.,
- the distribution of a like amount of the corresponding junior
subordinated debentures to the holders of its preferred securities and
common securities following the occurrence of an investment company event
or a tax event or in the event the trust is not or will not be taxed as a
grantor trust but a tax event has not occurred and in each case we as
depositor have given written direction to the property trustee to
terminate such trust within 45 days of such event (which direction is
optional and within our discretion as depositor),
- the redemption of all of the preferred securities of the trust, and
- an order for the dissolution of the trust shall have been entered by a
court of competent jurisdiction.
If an early termination occurs as described in the first, second or fourth
clauses above, the trust shall be liquidated by the trustees as expeditiously as
the trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of such trust as provided by applicable law, to the
holders of the preferred securities and common securities a like amount, as
defined above, of the corresponding junior subordinated debentures. If such
distribution is determined by the property trustee not to be practical, the
holders will be entitled to receive out of the assets of the trust available for
distribution to holders, after satisfaction of liabilities to creditors of the
trust as provided by applicable law, an amount equal to, in the case of holders
of preferred securities, the aggregate of the liquidation amount plus accrued
and unpaid distributions thereon to the date of payment. We refer to this
liquidation amount in this prospectus as the "liquidation distribution." If the
liquidation distribution can be paid only in part because the trust has
insufficient assets available to pay in full the aggregate liquidation
distribution, then the amounts payable directly by the trust on its preferred
securities shall be paid on a pro rata basis. The holder(s) of the common
securities of such trust will be entitled to receive distributions upon any
liquidation pro rata with the holders of its preferred securities, except that
if a debenture event of default has occurred and is continuing, the preferred
securities shall have a priority over the common securities. A supplemental
indenture may provide that if an early termination occurs as described in the
fourth clause above, the corresponding junior subordinated debentures may be
subject to optional redemption in whole, but not in part.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "event of default" under
each trust agreement with respect to the preferred securities issued pursuant to
the trust agreement:
- the occurrence of a debenture event of default under the junior
subordinated indenture (see "Description of Junior Subordinated
Debentures -- Debenture Events of Default"),
- default by the property trustee in the payment of any distribution when
it becomes due and payable, and continuation of such default for a period
of 30 days,
- default by the property trustee in the payment of any redemption price of
any preferred security or common security when it becomes due and
payable,
- default in the performance, or breach, in any material respect, of any
covenant or warranty of the trustees in the trust agreement, other than a
covenant or warranty a default in the performance of which or the breach
of which is dealt with in the second and third clauses above, and
continuation of the default or breach for a period of 60 days after there
has been given, by registered or certified mail,
43
<PAGE> 49
to the defaulting trustee or trustees by the holders of at least 10% in
aggregate liquidation amount of the outstanding preferred securities of
the applicable trust, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a notice
of default under such trust agreement, or
- the occurrence of certain events of bankruptcy or insolvency with respect
to the property trustee and the failure by us to appoint a successor
property trustee within 60 days thereof.
Within five business days after the occurrence of any event of default
actually known to the property trustee, the property trustee shall transmit
notice of the event of default to the holders of the preferred securities, the
administrative trustees and us, as depositor, unless the event of default shall
have been cured or waived. We, as depositor, and the administrative trustees are
required to file annually with the property trustee a certificate as to whether
or not we are and they are in compliance with all the conditions and covenants
applicable to them and to us under the trust agreement.
If a debenture event of default has occurred and is continuing, the
preferred securities shall have a preference over the common securities upon
termination of the trust as described above. See "-- Liquidation Distribution
Upon Termination."
The existence of an event of default does not entitle the holders of
preferred securities to accelerate the maturity.
REMOVAL OF TRUSTEES
Unless a debenture event of default shall have occurred and be continuing,
any trustee may be removed at any time by the holder of the common securities.
If a debenture event of default has occurred and is continuing, the property
trustee and the Delaware trustee may be removed at such time by the holders of a
majority in liquidation amount of the outstanding preferred securities. In no
event will the holders of the preferred securities have the right to vote to
appoint, remove or replace the administrative trustees, which voting rights are
vested exclusively in us as the holder of the common securities. No resignation
or removal of a trustee and no appointment of a successor trustee shall be
effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the trust agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an event of default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the trust property may
at the time be located, we, as the holder of the common securities, and the
administrative trustees shall have power to appoint one or more persons either
to act as a co-trustee, jointly with the property trustee, of all or any part of
such trust property, or to act as separate trustee of any such property, in
either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the trust agreement. In case a debenture event of default has
occurred and is continuing, the property trustee alone shall have power to make
that appointment.
MERGER OR CONSOLIDATION OF TRUSTEES
Any corporation into which the property trustee, the Delaware trustee or
any administrative trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the trustee, shall be the successor of such trustee under the
trust agreements, provided such corporation shall be otherwise qualified and
eligible.
44
<PAGE> 50
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUSTS
A trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described below.
A trust may, at our request, with the consent of the administrative
trustees and without the consent of the holders of the preferred securities,
merge with or into, consolidate, amalgamate, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to a
trust organized as such under the laws of any state; provided, that:
- the successor entity either:
- expressly assumes all of the obligations of the trust with respect
to the preferred securities, or
- substitutes for the preferred securities other securities having
substantially the same terms as the preferred securities so long as
such securities rank the same as the preferred securities rank in
priority with respect to distributions and payments upon
liquidation, redemption and otherwise;
- we expressly appoint a trustee of such successor entity possessing the
same powers and duties as the property trustee as the holder of the
corresponding junior subordinated debentures,
- the successor securities are listed, or any successor securities will be
listed upon notification of issuance, on any national securities exchange
or other organization on which the preferred securities are then listed,
if any,
- the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the preferred securities, including any
successor securities, to be downgraded by any nationally recognized
statistical rating organization,
- the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the preferred securities, including any
successor securities, in any material respect,
- the successor entity has a purpose identical to that of the trust,
- prior to the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease we have received an opinion from
independent counsel to the trust experienced in such matters to the
effect that:
- the merger, consolidation, amalgamation, replacement conveyance,
transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the preferred securities, including
any successor securities, in any material respect, and
- following the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease neither the trust nor such successor
entity will be required to register as an investment company under
the Investment Company Act, and
- we or any permitted successor or assignee own all of the common
securities of such successor entity and guarantee the obligations of such
successor entity under the successor securities at least to the extent
provided by the guarantee.
Notwithstanding the foregoing, a trust shall not, except with the consent
of holders of 100% in liquidation amount of the preferred securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if it would cause the trust or the successor entity to be
classified as other than a grantor trust for federal income tax purposes.
45
<PAGE> 51
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and each trust agreement, the
holders of the preferred securities will have no voting rights.
A trust agreement may be amended from time to time by us and the trustees,
without the consent of the holders of the preferred securities:
- to cure any ambiguity, correct or supplement any provisions in the trust
agreement which may be inconsistent with any other provision, or to make
any other provisions with respect to matters or questions arising under
the trust agreement, which shall not be inconsistent with the other
provisions of the trust agreement, or
- to modify, eliminate or add to any provisions of the trust agreement to
such extent as shall be necessary to ensure that the trust will be
classified for federal income tax purposes as a grantor trust at all
times that any preferred securities and common securities are outstanding
or to ensure that the trust will not be required to register as an
investment company under the Investment Company Act.
However, in the case of the first clause above, the action may not adversely
affect in any material respect the interests of any holder of preferred
securities or common securities. Any amendments of the trust agreement shall
become effective when notice is given to the holders of preferred securities and
common securities.
A trust agreement may be amended by the trustees and us with
- the consent of holders representing not less than a majority, based upon
liquidation amounts, of the outstanding preferred securities and common
securities and
- receipt by the trustees of an opinion of counsel to the effect that the
amendment or the exercise of any power granted to the trustees in
accordance with the amendment will not affect the status of the trust as
a grantor trust for federal income tax purposes or its exemption from
status of an "investment company" under the Investment Company Act.
Without the consent of each holder of preferred securities and common
securities, a trust agreement may not be amended to:
- change the amount or timing of any distribution on the preferred
securities and common securities or otherwise adversely affect the amount
of any distribution required to be made in respect of the preferred
securities and common securities as of a specified date, or
- restrict the right of a holder of preferred securities and common
securities to institute suit for the enforcement of any payment on or
after that date.
So long as any corresponding junior subordinated debentures are held by the
property trustee, the trustees shall not:
- direct the time, method and place of conducting any proceeding for any
remedy available to the debenture trustee, or for executing any trust or
power conferred on the property trustee with respect to such
corresponding junior subordinated debentures,
- waive any past default that is waiveable under Section 513 of the junior
subordinated indenture,
- exercise any right to rescind or annul a declaration that the principal
of all the junior subordinated debentures shall be due and payable, or
- consent to any amendment, modification or termination of the junior
subordinated indenture or the corresponding junior subordinated
debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the holders of a majority
in aggregate liquidation amount of all outstanding preferred securities.
However, where a consent under the junior subordinated indenture would require
the consent of each holder of corresponding junior subordinated debentures
affected thereby, no
46
<PAGE> 52
such consent shall be given by the property trustee without the prior consent of
each holder of the corresponding preferred securities.
The trustees shall not revoke any action previously authorized or approved
by a vote of the preferred securities except by subsequent vote of the holders
of the preferred securities. The property trustee shall notify all holders of
the preferred securities of any notice of default with respect to the
corresponding junior subordinated debentures. In addition to obtaining the
foregoing approvals of the holders of the preferred securities, prior to taking
any of the foregoing actions, the trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the trust will not be classified
as a corporation or partnership for United States federal income tax purposes on
account of the action.
Any required approval of holders of preferred securities may be given at a
meeting of holders of preferred securities convened for such purpose or pursuant
to written consent. The property trustee will cause a notice of any meeting at
which holders of preferred securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of preferred securities in the manner set forth in each
trust agreement.
No vote or consent of the holders of preferred securities will be required
for a trust to redeem and cancel its preferred securities in accordance with the
applicable trust agreement.
Notwithstanding that holders of preferred securities are entitled to vote
or consent under any of the circumstances described above, any of the preferred
securities that are owned by us, the trustees or any of our affiliates or any
affiliate of the trustees, shall, for purposes of such vote or consent, be
treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The preferred securities of a series may be issued in whole or in part in
the form of one or more global preferred securities that will be deposited with,
or on behalf of, the depositary identified in the prospectus supplement. Unless
otherwise indicated in the applicable prospectus supplement the depositary will
be DTC. Global preferred securities may be issued only in fully registered form
and in either temporary or permanent form. Unless and until it is exchanged in
whole or in part for the individual preferred securities, a global preferred
security may not be transferred except as a whole by the depositary to a nominee
of the depositary or by a nominee of the depositary to the depositary or another
nominee of such depositary or by the depositary or any nominee to a successor
depositary or any nominee of the successor.
The specific terms of the depositary arrangement with respect to a series
of preferred securities will be described in the applicable prospectus
supplement. We anticipate that the following provisions will generally apply to
depositary arrangements.
Upon the issuance of a global preferred security, and the deposit of the
global preferred security with or on behalf of the depositary, the depositary
for such global preferred security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate liquidation amounts
of the individual preferred securities represented by the global preferred
securities to the accounts of participants. The accounts shall be designated by
the dealers, underwriters or agents with respect to the preferred securities or
by us if the preferred securities are offered and sold directly by us. Ownership
of beneficial interests in a global preferred security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in the global preferred security will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the applicable depositary or its nominee (with respect to interests of
participants) and the records of participants (with respect to interests of
persons who hold through participants). The laws of some states require that
purchasers of securities take physical delivery of the securities in definitive
form. These limits and laws may impair the ability to transfer beneficial
interests in a global preferred security.
So long as the depositary for a global preferred security, or its nominee,
is the registered owner of the global preferred security, the depositary or
nominee will be considered the sole owner or holder of the preferred securities
represented by the global preferred security for all purposes under the trust
agreement
47
<PAGE> 53
governing the preferred securities. Except as provided below, owners of
beneficial interests in a global preferred security will not be entitled to have
any of the individual preferred securities of the series represented by the
global preferred security registered in their names, will not receive or be
entitled to receive physical delivery of any preferred securities in definitive
form and will not be considered the owners of holders of the preferred security
under the trust agreement.
Payments of principal of, and premium, if any, and interest on individual
preferred securities represented by a global preferred security registered in
the name of a depositary or its nominee will be made to the depositary or its
nominee, as the case may be, as the registered owner of the global preferred
security representing the preferred securities. None of The Hartford Financial
Services Group, Inc., the property trustee, any paying agent, or the securities
registrar for such preferred securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of the global preferred security representing
the preferred securities or for maintaining, supervising or reviewing any
records relating to the beneficial ownership interests.
We expect that the depositary for a series of preferred securities or its
nominee, upon receipt of any payment of liquidation amount, premium or
distributions in respect of a permanent global preferred security representing
any of the preferred securities, immediately will credit participants' accounts
with payments in amounts proportionate to their respective beneficial interest
in the aggregate liquidation amount of the global preferred security for the
preferred securities as shown on the records of the depositary or its nominee.
We also expect that payments by participants to owners of beneficial interests
in the global preferred security held through the participants will be governed
by standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." These payments will be the responsibility of such participants.
Unless otherwise specified in the applicable prospectus supplement, if a
depositary for a series of preferred securities is at any time unwilling, unable
or ineligible to continue as a depositary and a successor depositary is not
appointed by us within 90 days, we will issue individual preferred securities in
exchange for the global preferred security representing the series of preferred
securities. In addition, we may at any time and in our sole discretion, subject
to any limitations described in the prospectus supplement relating to the
preferred securities, determine not to have any preferred securities represented
by one or more global preferred securities and, in such event, will issue
individual preferred securities in exchange for the global preferred security or
securities representing the series of preferred securities.
Further, if we specify with respect to the preferred securities of a
series, an owner of a beneficial interest in a global preferred security
representing preferred securities of the series may, on terms acceptable to us,
the property trustee and the depositary for the global preferred security,
receive individual preferred securities in exchange for the beneficial
interests, subject to any limitations described in the prospectus supplement
relating to such preferred securities. In any such instance, an owner of a
beneficial interest in a global preferred security will be entitled to physical
delivery of individual preferred securities of the series represented by the
global preferred security equal in principal amount to that beneficial interest
and to have the preferred securities registered in its name. Individual
preferred securities so issued will be issued in denominations, unless we
otherwise specify, of $25 and integral multiples thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the preferred securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable distribution dates.
However, if any preferred securities are not held by DTC, the payments shall be
made by check mailed to the address of the holder entitled to the payment as
such address shall appear on the register. Unless otherwise specified in the
applicable prospectus supplement, the paying agent shall initially be the
property trustee and any co-paying agent chosen by the property trustee and
acceptable to the administrative trustees and us. The paying agent shall be
permitted to resign as paying agent upon 30 days' written notice to the property
trustees and us. In the event that the property trustee shall no longer be the
paying agent, the administrative trustees shall appoint a successor to act as
paying agent. The successor must be a bank or trust company acceptable to the
administrative trustees and us.
48
<PAGE> 54
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable prospectus supplement, the
property trustee will act as registrar and transfer agent for the preferred
securities.
Registration of transfers of preferred securities will be effected without
charge by or on behalf of the applicable trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The trust will not be required to register or cause to be
registered the transfer of its preferred securities after the preferred
securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than during the occurrence and continuance of
an event of default, undertakes to perform only such duties as are specifically
set forth in the trust agreements and, after an event of default, must exercise
the same degree of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this provision, the property
trustee is under no obligation to exercise any of the powers vested in it by the
trust agreement at the request of any holder of preferred securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby. If no event of default has occurred and is continuing
and the property trustee is required to decide between alternative causes of
action, construe ambiguous provisions in a trust agreement or is unsure of the
application of any provision of a trust agreement, and the matter is not one on
which holders of preferred securities are entitled under the trust agreement to
vote, then the property trustee shall take such action as is directed by us and
if not so directed, shall take such action as it deems advisable and in the best
interests of the holders of the preferred securities and the common securities
and will have no liability except for its own bad faith, negligence or willful
misconduct.
MISCELLANEOUS
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the trusts in such a way that no trust will be deemed
to be an investment company required to be registered under the Investment
Company Act or taxed as a corporation for federal income tax purposes and so
that the corresponding junior subordinated debentures will be treated as our
indebtedness for United States federal income tax purposes. In this connection,
we and the administrative trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of each trust or each
trust agreement, that we and the administrative trustees determine in our
discretion to be necessary or desirable for such purposes, as long as such
action does not materially adversely affect the interests of the holders of the
related preferred securities.
Holders of the preferred securities have no preemptive or similar rights.
No trust may borrow money or issue debt or mortgage or pledge any of its assets.
DESCRIPTION OF GUARANTEE
We will execute and deliver concurrently with the issuance by each trust of
its preferred securities, a guarantee for the benefit of the holders from time
to time of the preferred securities. The Wilmington Trust Company will act as
indenture trustee under the guarantee for the purposes of compliance with the
Trust Indenture Act. The guarantee will be qualified as an indenture under the
Trust Indenture Act. This summary of certain provisions of the guarantee does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the guarantee agreement, including the
definitions therein of certain terms, and the Trust Indenture Act. The form of
the guarantee has been filed or incorporated by reference as an exhibit to the
Registration Statement which includes this prospectus. Reference in this summary
to preferred securities means the trust and the preferred securities to which a
guarantee relates. The guarantee trustee will hold each guarantee for the
benefit of the holders of the related trust preferred securities.
49
<PAGE> 55
GENERAL
We will irrevocably agree to pay in full on a subordinated basis, to the
extent set forth herein, the guarantee payments, as defined below, to the
holders of the preferred securities, as and when due, regardless of any defense,
right of set-off or counterclaim that the trust may have or assert other than
the defense of payment.
The following payments, which we refer to in this prospectus as the
"guarantee payments," with respect to the preferred securities, to the extent
not paid by or on behalf of the related trust, will be subject to the guarantee:
- any accumulated and unpaid distributions required to be paid on the
preferred securities, to the extent that such trust has funds on hand
available therefore,
- the redemption price with respect to any preferred securities called for
redemption to the extent that such trust has funds on hand available
therefore, or
- upon a voluntary or involuntary dissolution, winding up or liquidation of
such trust, unless the corresponding junior subordinated debentures are
distributed to holders of such preferred securities, the lesser of (1)
the liquidation distribution and (2) the amount of assets of the trust
remaining available for distribution to holders of preferred securities.
Our obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by us to the holders of the applicable preferred
securities or by causing the trust to pay the amounts to such holders.
The guarantee will be an irrevocable guarantee on a subordinated basis of
the related trust obligations under the preferred securities, but will apply
only to the extent that the related trust has funds sufficient to make the
payments, and is not a guarantee of collection.
If we do not make interest payments on the corresponding junior
subordinated debentures held by the trust, it is expected that the trust will
not pay distributions on the preferred securities and will not have funds
legally available therefor. The guarantee will rank subordinate and junior in
right of payment to all senior debt. See "-- Status of Guarantee."
As a non-operating holding company, most of our operating assets and the
assets of our consolidated subsidiaries are owned by our subsidiaries, and we
rely primarily on dividends from our subsidiaries to meet our obligations for
payment of principal and interest on our outstanding debt obligations and
corporate expenses. Accordingly, our obligations under the guarantee will be
effectively subordinated to all existing and future liabilities of our
subsidiaries, and claimants should look only to our assets for payments
thereunder. The payment of dividends by our insurance company subsidiaries,
including Hartford Fire, is limited under the insurance holding company laws in
which such subsidiaries are domiciled. See "The Hartford Financial Services
Group, Inc."
Except as otherwise provided in the applicable prospectus supplement, the
guarantee does not limit the incurrence or issuance of other secured or
unsecured debt by us whether under the junior subordinated indenture, any other
indenture that we may enter into in the future or otherwise. See the prospectus
supplement relating to any offering of preferred securities.
We have, through the guarantee, the trust agreement, the junior
subordinated debentures, the junior subordinated indenture and the expense
agreement, taken together, fully, irrevocably and unconditionally guaranteed all
of the obligations of the trust under the preferred securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes the guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the obligations of the trust under the preferred
securities. See "Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Guarantee."
50
<PAGE> 56
STATUS OF THE GUARANTEE
The guarantee will constitute an unsecured obligation of The Hartford
Financial Services Group, Inc. and will rank subordinate and junior in right of
payment to all its senior debt.
The guarantee will rank equally with the guarantee issued by us in respect
of other guarantees of all preferred securities that are executed and delivered
by The Hartford Financial Services Group, Inc. The guarantee will constitute a
guarantee of payment and not of collection, which means that the guaranteed
party may institute a legal proceeding directly against the guarantor to enforce
its rights under the guarantee without first instituting a legal proceeding
against any other person or entity. The guarantee will be held for the benefit
of the holders of the related preferred securities. The guarantee will not be
discharged except by payment of the guarantee payments in full to the extent not
paid by the trust or upon distribution to the holders of the preferred
securities of the corresponding junior subordinated debentures. The guarantee
will not place a limitation on the amount of additional senior debt that may be
incurred by us. We expect from time to time to incur additional indebtedness
constituting senior debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related preferred securities, in which case no vote
will be required, no guarantee may be amended without the prior approval of the
holders of not less than a majority of the aggregate liquidation amount of
outstanding preferred securities. The manner of obtaining any such approval will
be as set forth under "Description of the Preferred Securities -- Voting Rights;
Amendment of Trust Agreement."
All guarantees and agreements contained in the guarantee shall bind the
successors, assigns, receivers, trustees and representatives of The Hartford
Financial Services Group, Inc. and shall inure to the benefit of the holders of
the related preferred securities then outstanding.
EVENTS OF DEFAULT
An event of default under the guarantee will occur upon our failure to
perform any of our payment or other obligations under the guarantee. The holders
of not less than a majority in aggregate liquidation amount of the related
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 guarantee or to direct the exercise of any trust or power
conferred upon the guarantee trustee under the guarantee.
Any holder of the preferred securities may institute a legal proceeding
directly against us to enforce its rights under the guarantee without first
instituting a legal proceeding against the trust, the guarantee trustee or any
other person or entity.
We, as guarantor, are required to file annually with the guarantee trustee
a certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to us under the guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, other than during the occurrence and continuance of
a default by us in the performance of the guarantee, undertakes to perform only
such duties as are specifically set forth in each guarantee and, after default
with respect to the guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the guarantee trustee is under no obligation
to exercise any of the powers vested in it by the guarantee at the request of
any holder of any preferred securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The guarantee will terminate and be of no further force and effect upon
full payment of the redemption price of the related preferred securities, upon
full payment of the amounts payable upon liquidation of the
51
<PAGE> 57
related trust or upon distribution of corresponding junior subordinated
debentures to the holders of the related preferred securities. The guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of the related preferred securities must restore payment of
any sums paid under such preferred securities or the guarantee.
GOVERNING LAW
The guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the expense agreement entered into by us under each trust
agreement, we will irrevocably and unconditionally guarantee to each person or
entity to whom the related trust becomes indebted or liable, the full payment of
any costs, expenses or liabilities of the trust, other than obligations of the
trust to pay to the holders of any preferred securities or other similar
interests in the trust the amounts due such holders pursuant to the terms of the
preferred securities or such other similar interests.
DESCRIPTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The corresponding junior subordinated debentures are to be issued in one or
more series of junior subordinated debentures under the junior subordinated
indenture with terms corresponding to the terms of the related preferred
securities. See "Description of Junior Subordinated Debentures."
This summary of certain terms and provisions relating to corresponding
junior subordinated debentures and the junior subordinated indenture does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to the junior subordinated indenture, the form of which is filed or
incorporated by reference as an exhibit to the Registration Statement which
includes this prospectus, and to the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the preferred securities of each trust,
the trust will invest the proceeds from the sale and the consideration paid by
us for the common securities in a series of corresponding junior subordinated
debentures issued by us to the trust. Each series of corresponding junior
subordinated debentures will be in the principal amount equal to the aggregate
stated liquidation amount of the related preferred securities plus our
concurrent investment in the common securities and will rank equally with all
other series of corresponding junior subordinated debentures. The corresponding
junior subordinated debentures will be unsecured and subordinate and junior in
right of payment to the extent and in the manner set forth in the junior
subordinated indenture to all our senior debt. See "Description of Junior
Subordinated Debentures -- Subordination" and the prospectus supplement relating
to any offering of corresponding preferred securities.
OPTIONAL REDEMPTION
Unless otherwise specified in the applicable prospectus supplement, we may,
at our option, redeem the corresponding junior subordinated debentures on any
interest payment date with respect to the corresponding junior subordinated
debentures, in whole at any time or in part from time to time. Except as
otherwise set forth in the applicable prospectus supplement, the redemption
price for any corresponding junior subordinated debentures so redeemed shall be
equal to any accrued and unpaid interest thereon to the date fixed for
redemption, plus the greater of (1) the principal amount thereof and (2) an
amount equal to the discounted remaining fixed amount payments. See "Description
of Junior Subordinated Debentures -- Redemption."
If a tax event or an investment company event in respect of a trust shall
occur and be continuing, we may, at our option, redeem the corresponding junior
subordinated debentures on any interest payment date falling within 90 days of
the occurrence of the tax event or investment company event, in whole but not in
part, subject to the provisions of the junior subordinated indenture. The
redemption price for any corresponding
52
<PAGE> 58
junior subordinated debentures shall be equal to 100% of the principal amount of
the corresponding junior subordinated debentures then outstanding plus accrued
and unpaid interest to the date fixed for redemption.
For so long as the applicable trust is the holder of all the outstanding
series of corresponding junior subordinated debentures, the proceeds of any such
redemption will be used by the trust to redeem the corresponding preferred
securities in accordance with their terms. We may not redeem a series of
corresponding junior subordinated debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding corresponding junior
subordinated debentures of the series for all interest periods terminating on or
prior to the redemption date.
COVENANTS OF THE HARTFORD FINANCIAL SERVICES GROUP, INC.
We will covenant in the junior subordinated indenture as to each series of
corresponding junior subordinated debentures, that if and so long as:
- the trust that has issued the corresponding series of preferred
securities and common securities is the holder of all such corresponding
junior subordinated debentures,
- a tax event in respect of the trust has occurred and is continuing, and
- we have elected and have not revoked the election to pay additional sums
in respect of such preferred securities and common securities
we will pay to trust the additional sums.
We will also covenant, as to each series of corresponding junior
subordinated debentures, that we will not, and will not permit any of our
subsidiaries to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of our
capital stock or
- make any payment of principal, interest or premium, if any, on or repay
or repurchase or redeem any debt securities (including other
corresponding junior subordinated debentures) that rank equally with or
junior in interest to the corresponding junior subordinated debentures or
make any guarantee payments with respect to the foregoing (other than (1)
dividends or distributions in our common stock, (2) redemptions or
purchases of any rights pursuant to our rights plan, or any successor to
our rights plan, and the declaration of a dividend of these rights in the
future, and (3) payments under any guarantee of preferred securities) if
at such time,
- there shall have occurred any event of which we have actual knowledge
that (1) with the giving of notice or the lapse of time, or both, would
constitute an "event of default" under the junior subordinated indenture
with respect to corresponding junior subordinated debentures of that
series and (2) in respect of which we shall not have taken reasonable
steps to cure,
- we shall be in default with respect to our payment of any obligations
under the guarantee relating to the preferred securities of the trust to
which corresponding junior subordinated debentures of that series have
been issued, or
- we shall have given notice of our selection of an extension period as
provided in the junior subordinated indenture with respect to
corresponding junior subordinated debentures of that series and shall not
have rescinded such notice, or the extension period, or any extension
thereof, shall be continuing.
We will also covenant, as to each series of corresponding junior
subordinated debentures,
- to maintain directly or indirectly 100% ownership of the common
securities of the trust to which corresponding junior subordinated
debentures have been issued, provided that certain successors which are
permitted pursuant to the junior subordinated indenture may succeed to
our ownership of the common securities,
53
<PAGE> 59
- not to voluntarily terminate, wind-up or liquidate any trust, except (1)
in connection with a distribution of corresponding junior subordinated
debentures to the holders of the preferred securities in liquidation of
the trust, or (2) in connection with mergers, consolidations or
amalgamations permitted by the related trust agreement, and
- to use our reasonable efforts, consistent with the terms and provisions
of the related trust agreement, to cause the trust to remain a business
trust and not to be classified as an association taxable as a corporation
for United States federal income tax purposes.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING JUNIOR
SUBORDINATED DEBENTURES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on
each series of corresponding junior subordinated debentures, these payments will
be sufficient to cover distributions and other payments due on the corresponding
preferred securities, primarily because:
- the aggregate principal amount of each series of corresponding junior
subordinated debentures will be equal to the sum of the aggregate stated
liquidation amount of the corresponding preferred securities and
corresponding common securities,
- the interest rate and interest and other payment dates on each series of
corresponding junior subordinated debentures will match the distribution
rate and distribution and other payment dates for the corresponding
preferred securities,
- we will pay for all and any costs, expenses and liabilities of the trust
except the obligations of the trust to holders of its preferred
securities under the preferred securities, and
- each trust agreement further provides that the trust will not engage in
any activity that is not consistent with the limited purposes of the
trust.
Payments of distributions and other amounts due on the preferred
securities, to the extent the trust has funds available for the payment of such
distributions, are irrevocably guaranteed by us as and to the extent set forth
under "Description of Guarantee".
Taken together, our obligations under each series of junior subordinated
debentures, the junior subordinated indenture, the related trust agreement, the
related expense agreement, and the related guarantee provide a full, irrevocable
and unconditional guarantee of payments of distributions and other amounts due
on the related series of preferred securities. No single document standing alone
or operating in conjunction with fewer than all of the other documents
constitutes the guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the obligations of the trust under the preferred securities. If and to the
extent that we do not make payments on any series of corresponding junior
subordinated debentures, the trust will not pay distributions or other amounts
due on its preferred securities.
Notwithstanding anything to the contrary in the junior subordinated
indenture, we have the right to set-off any payment we are otherwise required to
make thereunder with and to the extent we have theretofore made, or are
concurrently on the date of the payment making, a payment under the related
guarantee.
A holder of any related preferred security may institute a legal proceeding
directly against us to enforce its rights under the related guarantee without
first instituting a legal proceeding against the guarantee trustee, the related
trust or any other person or entity.
The preferred securities of each trust evidence the rights of the holders
thereof to the benefits of the trust, and each trust exists for the sole purpose
of issuing its preferred securities and common securities and investing the
proceeds from the sale of such securities in corresponding junior subordinated
debentures.
A principal difference between the rights of a holder of a preferred
security and a holder of a corresponding junior subordinated debenture is that a
holder of a corresponding junior subordinated debenture
54
<PAGE> 60
will accrue, and (subject to the permissible extension of the interest period)
is entitled to receive, interest on the principal amount of corresponding junior
subordinated debentures held, while a holder of preferred securities is only
entitled to receive distributions if and to the extent the trust has funds
available for the payment of such distributions.
Upon any voluntary or involuntary termination, winding-up or liquidation of
any trust involving the liquidation of the corresponding junior subordinated
debentures, the holders of preferred securities will be entitled to receive, out
of assets held by the trust, the liquidation distribution in cash. See
"Description of Preferred Securities -- Liquidation Distribution Upon
Termination."
Upon any voluntary or involuntary liquidation or bankruptcy of The Hartford
Financial Services Group, Inc., the property trustee, as holder of the
corresponding junior subordinated debentures, would be a subordinated creditor
of The Hartford Financial Services Group, Inc. subordinated in right of payment
to all senior debt, but entitled to receive payment in full of principal and
interest, before any stockholders of The Hartford Financial Services Group, Inc.
receive payments or distributions. Since we are the guarantor under each
guarantee and have agreed to pay for all costs, expenses and liabilities of each
trust, the positions of a holder of such preferred securities and a holder of
such corresponding junior subordinated debentures relative to other creditors
and to stockholders of The Hartford Financial Services Group, Inc. in the event
of liquidation or bankruptcy of The Hartford Financial Services Group, Inc.
would be substantially the same.
A default or event of default under any senior debt would not constitute a
default or event of default under the junior subordinated indenture. However, in
the event of payment defaults under, or acceleration of, senior debt, the
subordination provisions of the junior subordinated indenture provide that no
payments may be made in respect of the corresponding junior subordinated
debentures until the senior debt has been paid in full or any payment default
under the senior debt has been cured or waived. Failure to make required
payments on any series of corresponding junior subordinated debentures would
constitute an event of default under the junior subordinated indenture.
55
<PAGE> 61
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus through agents,
underwriters, dealers or directly to purchasers.
Agents who we designate may solicit offers to purchase the securities.
- We will name any agent involved in offering or selling securities, and
any commissions that we will pay to the agent, in our prospectus
supplement.
- Unless we indicate otherwise in our prospectus supplement, our agents
will act on a best efforts basis for the period of their appointment.
- Our agents may be deemed to be underwriters under the Securities Act of
1933 of any of the securities that they offer or sell.
We may use an underwriter or underwriters in the offer or sale of our
securities.
- If we use an underwriter or underwriters, we will execute an underwriting
agreement with the underwriter or underwriters at the time that we reach
an agreement for the sale of the securities.
- We will include the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including the compensation the underwriters and dealers
will receive, in our prospectus supplement.
- The underwriters will use our prospectus supplement to sell the
securities.
We may use a dealer to sell the securities.
- If we use a dealer, we, as principal, will sell the securities to the
dealer.
- The dealer will then sell the securities to the public at varying prices
that the dealer will determine at the time it sells our debt securities.
- We will include the name of the dealer and the terms of our transactions
with the dealer in our prospectus supplement.
We may solicit directly offers to purchase the securities, and we may
directly sell the securities to institutional or other investors. We will
describe the terms of our direct sales in our prospectus supplement.
We may indemnify agents, underwriters, and dealers against certain
liabilities, including liabilities under the Securities Act. Our agents,
underwriters, and dealers, or their affiliates, may be customers of, engage in
transactions with or perform services for us, in the ordinary course of
business.
We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase the securities at the public offering price under
delayed delivery contracts.
- If we use delayed delivery contracts, we will disclose that we are using
them in the prospectus supplement and will tell you when we will demand
payment and delivery of the debt securities under the delayed delivery
contracts.
- These delayed delivery contracts will be subject only to the conditions
that we set forth in the prospectus supplement.
- We will indicate in our prospectus supplement the commission that
underwriters and agents soliciting purchases of the securities under
delayed contracts will be entitled to receive.
LEGAL OPINIONS
Unless otherwise indicated in the applicable prospectus supplement the
validity of any securities offered by this prospectus will be passed upon for us
by Michael S. Wilder, our General Counsel, and for the trusts by
56
<PAGE> 62
Richards, Layton & Finger, special Delaware counsel to the trusts and for any
underwriters or agents by counsel to be named in the applicable prospectus
supplement.
EXPERTS
The audited consolidated financial statements and schedules of The Hartford
Financial Services Group, Inc. and subsidiaries incorporated by reference in
this prospectus and in the Registration Statement have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference herein and in the
Registration Statement in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission. The registration statement, including the
attached exhibits, contains additional relevant information about us. The rules
and regulations of the Securities and Exchange Commission allow us to omit some
of the information about The Hartford Financial Services Group, Inc. In
addition, we file reports, proxy statements and other information with the
Securities and Exchange Commission. This information may be inspected and copied
at the public reference facilities maintained by the Securities and Exchange
Commission at:
- Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549;
- 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048;
and
- Suite 1400, Northwestern Atrium Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60611.
COPIES OF SUCH MATERIAL CAN BE OBTAINED AT PRESCRIBED RATES FROM THE PUBLIC
REFERENCE SECTION OF THE SECURITIES AND EXCHANGE COMMISSION AT ROOM 1024, 450
FIFTH STREET, N.W., JUDICIARY PLAZA, WASHINGTON, D.C. 20549. SUCH MATERIAL MAY
ALSO BE ACCESSED ELECTRONICALLY BY MEANS OF THE SECURITIES AND EXCHANGE
COMMISSION'S HOME PAGE ON THE INTERNET AT HTTP://WWW.SEC.GOV.
Our common stock is listed on the New York Stock Exchange, Inc. and reports
and other information concerning us can also be inspected at the office of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
INCORPORATION BY REFERENCE
The rules of the Securities and Exchange Commission allow us to incorporate
by reference information into this prospectus. The information incorporated by
reference is considered to be a part of this prospectus, and information that we
file later with the Securities and Exchange Commission will automatically update
and supercede this information. This prospectus incorporates by reference the
documents listed below.
- Our Annual Report on Form 10-K for the year ended December 31, 1999,
- Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000
and June 30, 2000,
- Description of our common stock and the rights associated with our common
stock contained in our registration statement on Form 8-A, dated
September 18, 1995 (as amended by the Form 8-A/A filed on November 15,
1995); and
- all documents filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Exchange Act after the date of this prospectus.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents referred to above which have been or may be
incorporated by reference in this prospectus (other than certain exhibits to
such documents).
57
<PAGE> 63
Requests for such documents should be directed to The Hartford Financial
Services Group, Inc., Hartford Plaza, Hartford, Connecticut 06115, Attention:
Secretary (Telephone: 860-547-5000).
------------------------
No person has been authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by The Hartford Financial Services Group,
Inc., or any underwriter, agent or dealer. Neither the delivery of this
prospectus nor any sale made hereunder shall under any circumstances create any
implication that there has been no change in the affairs of The Hartford
Financial Services Group, Inc. since the date hereof or that the information
contained or incorporated by reference herein is correct as of any time
subsequent to the date of such information. This prospectus does not constitute
an offer to sell or a solicitation of an offer to buy any securities by anyone
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.
58
<PAGE> 64
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth those expenses to be incurred by The
Hartford Financial Services Group, Inc. in connection with the issuance and
distribution of the securities being registered. Except for the Securities and
Exchange Commission filing fee, all amounts shown are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee............... $264,000
Fees and expenses of Trustee................................ $ 15,000
Printing and engraving expenses............................. $ 14,000
Accountant's fees and expenses.............................. $ 7,000
Legal fees and expenses..................................... $250,000
Miscellaneous expenses...................................... $ 10,000
--------
Total............................................. $560,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, provides
in regards to indemnification of directors and officers as follows:
145. Indemnification of Officers, Directors, Employees and Agents;
Insurance.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit it he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
II-1
<PAGE> 65
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by a majority vote of the
directors who were not parties to such action, suit or proceeding even though
less than a quorum, or (2) if there are no such directors, or, if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees) incurred
by other employees and agents may be so paid upon such terms and conditions, if
any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this section shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that
any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or granted
pursuant to, this section shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a
II-2
<PAGE> 66
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
Article 4 of The Hartford Financial Services Group, Inc. By-laws provides
in regard to indemnification of directors and officers as follows:
4.1(a) Right to Indemnification. The Corporation, to the fullest
extent permitted by applicable law as then in effect, shall indemnify any
person who is or was a Director or officer of the Corporation and who is or
was involved in any manner (including, without limitation, as a party or a
witness) or is threatened to be made so involved in any threatened, pending
or completed investigation, claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative (including, without
limitation, any action, suit or proceeding by or in the right of the
Corporation to procure a judgment in its favor) (a "Proceeding") by reason
of the fact that such person is or was a Director, officer, employee or
agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or agent of another
corporation, partnership, joint venture, trust or other enterprise
(including, without limitation, any employee benefit plan) (a "Covered
Entity"), against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such Proceeding; provided, however, that the
foregoing shall not apply to a Director or officer of the Corporation with
respect to a Proceeding that was commenced by such Director or officer
prior to a Change in Control (as defined in Section 4.4(e)(i) of this
Article 4). Any Director or officer of the Corporation entitled to
indemnification as provided in this Section 4.1(a) is hereinafter called an
"Indemnitee". Any right of an Indemnitee to indemnification shall be a
contract right and shall include the right to receive, prior to the
conclusion of any Proceeding, payment of any expenses actually and
reasonably incurred by the Indemnitee in connection with such Proceeding,
consistent with the provisions of applicable law as then in effect and the
other provisions of this Article 4.
(b) Effect of Amendments. Neither the amendment or repeal of, nor the
adoption of a provision inconsistent with, any provision of this Article 4
(including, without limitation, this Section 4.1(b)) shall adversely affect
the rights of any Director or officer under this Article 4 (i) with respect
to any Proceeding commenced or threatened prior to such amendment, repeal
or adoption of an inconsistent provision or (ii) after the occurrence of a
Change in Control, with respect to any Proceeding arising out of any action
or omission occurring prior to such amendment, repeal or adoption of an
inconsistent provision, in either case without the written consent of such
Director or officer.
4.2 Insurance, Contracts and Funding. The Corporation may purchase
and maintain insurance to protect itself and any indemnified person against
any expenses, judgments, fines and amounts paid in settlement as specified
in Section 4.1(a) or Section 4.5 of this Article 4 or incurred by any
indemnified person in connection with any Proceeding referred to in such
Sections, to the fullest extent permitted by applicable law as then in
effect. The Corporation may enter into contracts with any Director,
officer, employee or agent of the Corporation or any director, officer,
employee, fiduciary or agent of any Covered Entity in furtherance of the
provisions of this Article 4 and may create a trust fund or use other means
(including, without limitation, a letter of credit) to ensure the payment
of such amounts as may be necessary to effect indemnification as provided
in this Article 4.
4.3 Indemnification; Not Exclusive Right. The right of
indemnification provided in this Article 4 shall not be exclusive of any
other rights to which any indemnified person may otherwise be entitled, and
the provisions of this Article 4 shall inure to the benefit of the heirs
and legal representatives of any indemnified person under this Article 4
and shall be applicable to Proceedings commenced or continuing after the
adoption of this Article 4, whether arising from acts or omissions
occurring before or after such adoption.
4.4 Advancement of Expenses; Procedures; Presumptions and Effect of
Certain Proceedings; Remedies. In furtherance, but not in limitation, of
the foregoing provisions, the following procedures,
II-3
<PAGE> 67
presumptions and remedies shall apply with respect to the advancement of
expenses and the right to indemnification under this Article 4:
(a) Advancement of Expenses. All reasonable expenses incurred by
or on behalf of the Indemnitee in connection with any Proceeding shall
be advanced to the Indemnitee by the Corporation within 20 days after
the receipt by the Corporation of a statement or statements from the
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding. Any such
statement or statements shall reasonably evidence the expenses incurred
by the Indemnitee and shall include any written affirmation or
undertaking required by applicable law in effect at the time of such
advance.
(b) Procedures for Determination of Entitlement to
Indemnification. (i) To obtain indemnification under this Article 4, an
Indemnitee shall submit to the Secretary of the Corporation a written
request, including such documentation and information as is reasonably
available to the Indemnitee and reasonably necessary to determine
whether and to what extent the Indemnitee is entitled to indemnification
(the "Supporting Documentation"). The determination of the Indemnitee's
entitlement to indemnification shall be made not later than 60 days
after receipt by the Corporation of the written request for
indemnification together with the Supporting Documentation. The
Secretary of the Corporation shall, promptly upon receipt of such a
request for indemnification, advise the Board in writing that the
Indemnitee has requested indemnification.
(ii) The Indemnitee's entitlement to indemnification under this
Article 4 shall be determined in one of the following ways: (A) by a
majority vote of the Disinterested Directors (as hereinafter defined),
if they constitute a quorum of the Board; (B) by a written opinion of
Independent Counsel as hereinafter defined) if (x) a Change in Control
(as hereinafter defined) shall have occurred and the Indemnitee so
requests or (y) a quorum of the Board consisting of Disinterested
Directors is not obtainable or, even if obtainable, a majority of such
Disinterested Directors so directs; (C) by the stockholders of the
Corporation (but only if a majority of the Disinterested Directors, if
they constitute a quorum of the Board, presents the issue of entitlement
to indemnification to the stockholders for their determination); or (D)
as provided in Section 4.4(c) of this Article 4.
(iii) in the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section
4.4(b)(ii), a majority of the Disinterested Directors shall select the
Independent Counsel, but only an Independent Counsel to which the
Indemnitee does not reasonably object; provided, however, that if a
Change in Control shall have occurred, the Indemnitee shall select such
Independent Counsel, but only an Independent Counsel to which a majority
of the Disinterested Directors does not reasonably object.
(c) Presumptions and Effect of Certain Proceedings. Except as
otherwise expressly provided in this Article 4, if a Change in Control
shall have occurred, the Indemnitee shall be presumed to be entitled to
indemnification under this Article 4 (with respect to actions or
failures to act occurring prior to such Change in Control) upon
submission of a request for indemnification together with the Supporting
Documentation in accordance with Section 4.4(b) of this Article 4, and
thereafter the Corporation shall have the burden of proof to overcome
that presumption in reaching a contrary determination. In any event, if
the person or persons empowered under Section 4.4(b) of this Article 4
to determine entitlement to indemnification shall not have been
appointed or shall not have made a determination within 60 days after
receipt by the Corporation of the request therefor together with the
Supporting Documentation, the Indemnitee shall be deemed to be, and
shall be, entitled to indemnification unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making the
request for indemnification or in the Supporting Documentation or (B)
such indemnification is prohibited by law. The termination of any
Proceeding described in Section 4.1 of this Article 4, or of any claim,
issue or matter therein, by judgment, order, settlement or conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of
itself, adversely affect the right of the Indemnitee to indemnification
or create a presumption that the Indemnitee did not act in good faith
and in a manner which the Indemnitee reasonably believed to be in or not
opposed to the best
II-4
<PAGE> 68
interests of the Corporation or, with respect to any criminal
Proceeding, that the Indemnitee had reasonable cause to believe that his
or her conduct was unlawful.
(d) Remedies of Indemnitee. (i) In the event that a determination
is made pursuant to Section 4.4(b) of this Article 4 that the Indemnitee
is not entitled to indemnification under this Article 4, (A) the
Indemnitee shall be entitled to seek an adjudication of his or her
entitlement to such indemnification either, at the Indemnitee's sole
option, in (x) an appropriate court of the state of Delaware or any
other court of competent jurisdiction or (y) an arbitration to be
conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association; (B) any such judicial proceeding or arbitration
shall be de novo and the Indemnitee shall not be prejudiced by reason of
such adverse determination; and (C) if a Change in Control shall have
occurred, in any such judicial proceeding or arbitration the Corporation
shall have the burden of proving that the Indemnitee is not entitled to
indemnification under this Article 4 (with respect to actions or
failures to act occurring prior to such Change in Control).
(ii) If a determination shall have been made or deemed to have been
made, pursuant to Section 4.4(b) or (c) of this Article 4, that the
Indemnitee is entitled to indemnification, the Corporation shall be
obligated to pay the amounts constituting such indemnification within
five days after such determination has been made or deemed to have been
made and shall be conclusively bound by such determination unless (A)
the Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification or in the Supporting
Documentation or (B) such indemnification is prohibited by law. In the
event that (x) advancement of expenses is not timely made pursuant to
Section 4.4(a) of this Article 4 or (y) payment of indemnification is
not made within five days after a determination of entitlement to
indemnification has been made or deemed to have been made pursuant to
Section 4.4(b) or (c) of this Article 4, the Indemnitee shall be
entitled to seek judicial enforcement of the Corporation's obligation to
pay to the Indemnitee such advancement of expenses or indemnification.
Not-withstanding the foregoing, the Corporation may bring an action, in
an appropriate court in the state of Delaware or any other court of
competent jurisdiction, contesting the right of the Indemnitee to
receive indemnification hereunder due to the occurrence of an event
described in Subclause (A) or (B) of this Clause (ii) (a "Disqualifying
Event"); provided, however, that in any such action the Corporation
shall have the burden of proving the occurrence of such Disqualifying
Event.
(iii) The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section
4.4(d) that the procedures and presumptions of this Article 4 are not
valid, binding and enforceable and shall stipulate in any such court or
before any such arbitrator that the Corporation is bound by all the
provisions of this Article 4.
(iv) In the event that the Indemnitee, pursuant to this Section
4.4(d), seeks a judicial adjudication of or an award in arbitration to
enforce his or her rights under, or to recover damages for breach of,
this Article 4, the Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any
expenses actually and reasonably incurred by the Indemnitee if the
Indemnitee prevails in such judicial adjudication or arbitration. If it
shall be determined in such judicial adjudication or arbitration that
the Indemnitee is entitled to receive part but not all of the
indemnification or advancement of expenses sought, the expenses incurred
by the Indemnitee in connection with such judicial adjudication or
arbitration shall be prorated accordingly.
(e) Definitions. For purposes of this Article 4:
(i) "Change in Control" means a change in control of the
Corporation of a nature that would be required to be reported in
response to Item 6(e) (or any successor provision) of Schedule 14A of
Regulation 14A (or any amendment or successor provision thereto)
promulgated under the Securities Exchange Act of 1934 (the "Act"),
whether or not the Corporation is then subject to such reporting
requirement; provided that, without limitation, such a change in
control shall be deemed to have occurred if (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act) is or becomes
the "beneficial owner" (as defined in
II-5
<PAGE> 69
Rule 13d-3 under the Act), directly or indirectly, of securities of
the Corporation representing 20% or more of the voting power of all
outstanding shares of stock of the Corporation entitled to vote
generally in an election of Directors without the prior approval of
at least two-thirds of the members of the Board in office immediately
prior to such acquisition; (B) the Corporation is a party to any
merger or consolidation in which the Corporation is not the
continuing or surviving corporation or pursuant to which shares of
the Corporation's common stock would be converted into cash,
securities or other property, other than a merger of the Corporation
in which the holders of the Corporation's common stock immediately
prior to the merger have the same proportionate ownership of common
stock of the surviving corporation immediately after the merger, (C)
there is a sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, the assets of the Corporation, or liquidation or
dissolution of the Corporation; (D) the Corporation is a party to a
merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board in
office immediately prior to such transaction or event constitute less
than a majority of the Board thereafter; or (E) during any period of
two consecutive years, individuals who at the beginning of such
period constituted the Board (including for this purpose any new
Director whose election or nomination for election by the
stockholders was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the beginning of
such period) cease for any reason to constitute at least a majority
of the Board.
(ii) "Disinterested Director" means a Director who is not or was
not a party to the proceeding in respect of which indemnification is
sought by the Indemnitee.
(iii) "Independent Counsel" means a law firm or a member of a
law firm that neither presently is, nor in the past five years has
been, retained to represent: (a) the Corporation or the Indemnitee in
any matter material to either such party or (b) any other party to
the Proceeding giving rise to a claim for indemnification under this
Article 4. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under applicable standards
of professional conduct, would have a conflict of interest in
representing either the Corporation or the Indemnitee in an action to
determine the Indemnitee's rights under this Article 4.
4.5 Indemnification of Employees and Agents. Notwithstanding any
other provision of this Article 4, the Corporation, to the fullest extent
permitted by applicable law as then in effect, may indemnify any person
other than a Director or officer of the Corporation who is or was an
employee or agent of the Corporation and who is or was involved in any
manner (including, without limitation, as a party or a witness) or is
threatened to be made so involved in any threatened, pending or completed
Proceeding by reasons of the fact that such person is or was an employee or
agent of the Corporation or, at the request of the Corporation, a director,
officer, employee, fiduciary or agent of a Covered Entity against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection
with such Proceeding. The Corporation may also advance expenses incurred by
such employee, fiduciary or agent in connection with any such Proceeding,
consistent with the provisions of applicable law as then in effect.
4.6 Severability. If any of this Article 4 shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (i) the
validity, legality and enforceability of the remaining provisions of this
Article 4 (including, without limitation, all portions of any Section of
this Article 4 containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (ii) to the
fullest extent possible, the provisions of this Article 4 (including,
without limitation, all portions of any Section of this Article 4
containing any such provision held to be invalid, illegal or unenforceable,
that are not themselves invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.
II-6
<PAGE> 70
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
provides in regard to the limitation of liability of directors and officers as
follows:
(b) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section, the
certificate of incorporation may also contain any or all of the following
matters:
* * * *
(7) A provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of a director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct of a
knowing violation of law, (iii) under section 174 of this Title, or (iv) for any
transaction from which the director derived an improper personal benefit. No
such provision shall eliminate or limit the liability of a director for any act
or omission occurring prior to the date when such provision becomes effective.
All references in this paragraph to a director shall also be deemed to refer (x)
to a member of the governing body of a corporation which is not authorized to
issue capital stock, and (y) to such other person or persons, if any, who,
pursuant to a provision of the certificate of incorporation in accordance with
subsection (a) of sec. 141 of this title, exercise or perform any of the powers
or duties otherwise conferred or imposed upon the board of directors by this
title.
Article SIXTH of The Hartford Financial Services Group, Inc. Restated
Certificate of Incorporation provides in regard to the limitation of liability
of directors and officers as follows:
To the fullest extent permitted by applicable law as then in effect,
no director or officer shall be personally liable to the Corporation or any
of its stockholders for damages for breach of fiduciary duty as a director
or officer, except for liability (a) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the Delaware General
Corporation Law, (d) for any transaction from which the director derived an
improper personal benefit or (e) for any act or omission occurring prior to
the effective date of this ARTICLE SIXTH. Any repeal or modification of
this ARTICLE SIXTH by the stockholders of the Corporation shall not
adversely affect any right or protection of a director or officer of the
Corporation existing at the time of such repeal or modification with
respect to acts or omissions occurring prior to such repeal or
modification.
The Hartford Financial Services Group, Inc., as Depositor, has agreed
to indemnify the Issuer Trustees for, and to hold the Issuer Trustees
harmless against, any loss, damage, claims, liability, penalty or expense
incurred without negligence or bad faith on the part of any Issuer Trustee,
arising out of or in connection with the acceptance or administration of
the Trust Agreement, including the costs and expenses of any Issuer Trustee
of defending itself against any claim or liability in connection with the
exercise and performance of any of its powers or duties under the Trust
Agreement.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.01 Proposed form of Underwriting Agreement (Equity).*
1.02 Proposed form of Underwriting Agreement (Debt) (incorporated
herein by reference to Exhibit 1.02 to the Registration
Statement on Form S-3 (No. 333-12617) of The Hartford
Financial Services Group, Inc., Hartford Capital II,
Hartford Capital III and Hartford Capital IV.
</TABLE>
II-7
<PAGE> 71
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.03 Proposed form of Underwriting Agreement (Preferred
Securities) (incorporated herein by reference to Exhibit
1.03 to the Registration Statement on Form S-3 (No.
333-12617) of The Hartford Financial Services Group, Inc.,
Hartford Capital II, Hartford Capital III and Hartford
Capital IV).
1.04 Proposed form of Underwriting Agreement (Stock Purchase
Contracts) (incorporated herein by reference to Exhibit 1.04
to the Registration Statement on Form S-3 (No. 333-12617) of
The Hartford Financial Services Group, Inc., Hartford
Capital II, Hartford Capital III and Hartford Capital IV).
4.01 Amended and Restated Certificate of Incorporation of The
Hartford Financial Services Group, Inc. ("The Hartford"),
amended effective May 21, 1998 (incorporated herein by
reference to Exhibit 3.01 to The Hartford's Form 10-Q for
the quarterly period ended June 30, 1998).
4.02 Amended By-Laws of The Hartford, amended effective February
18, 1999, (incorporated by reference to Exhibit 3.02 to The
Hartford's Form 10-K for the fiscal year ended December 31,
1998).
4.03 Senior Indenture, dated as of October 20, 1995, between ITT
Hartford and The Chase Manhattan Bank (National Association)
as Trustee (incorporated herein by reference to Exhibit 4.03
the Registration Statement on Form S-3 (Registration No.
33-98014) of ITT Hartford, Hartford Capital I, Hartford
Capital II, Hartford Capital III and Hartford Capital IV).
4.04 Form of Subordinated Indenture (incorporated herein by
reference to Exhibit 4.04 to the Registration Statement on
Form S-3 (No. 333-12617) of The Hartford, Hartford Capital
II, Hartford Capital III and Hartford Capital IV).
4.05 Junior Subordinated Indenture, dated as of February 28,
1996, between ITT Hartford and Wilmington Trust Company, as
Debenture Trustee (incorporated herein by reference to
Exhibit 4.09 to ITT Hartford's Annual Report on Form 10-K
for the year ended December 31, 1995).
4.06 Certificate of Trust of Hartford Capital III (incorporated
herein by reference to Exhibit 4.13 to the Registration
Statement on Form S-3 (Registration No. 33-98014) of ITT
Hartford, Hartford Capital I, Hartford Capital II, Hartford
Capital III and Hartford Capital IV).
4.07 Trust Agreement of Hartford Capital III (incorporated herein
by reference to Exhibit 4.14 to the Registration Statement
on Form S-3 (Registration No. 33-98014) of ITT Hartford,
Hartford Capital I, Hartford Capital II, Hartford Capital
III and Hartford Capital IV).
4.08 Certificate of Trust of Hartford Capital IV (incorporated
herein by reference to Exhibit 4.15 to the Registration
Statement on Form S-3 (Registration No. 33-98014) of ITT
Hartford, Hartford Capital I, Hartford Capital II, Hartford
Capital III and Hartford Capital IV).
4.09 Trust Agreement of Hartford Capital IV (incorporated herein
by reference to Exhibit 4.16 to the Registration Statement
on Form S-3 (Registration No. 33-98014) of ITT Hartford,
Hartford Capital I, Hartford Capital II, Hartford Capital
III and Hartford Capital IV).
4.10 Certificate of Trust of Hartford Capital V.
4.11 Trust Agreement of Hartford Capital V.
4.12 Form of Amended and Restated Trust Agreement for Hartford
Capital III (incorporated herein by reference to Exhibit
4.15 to the Registration Statement on Form S-3 (Registration
No. 333-12617) of The Hartford, Hartford Capital II,
Hartford Capital III and Hartford Capital IV).
4.13 Form of Preferred Security Certificate for Hartford Capital
III (included as Exhibit E of Exhibit 4.12).
</TABLE>
II-8
<PAGE> 72
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4.14 Form of Guarantee Agreement in respect of Hartford Capital
III (incorporated herein by reference to Exhibit 4.17 to the
Registration Statement on Form S-3 (Registration No.
333-12617) of The Hartford, Hartford Capital II, Hartford
Capital III and Hartford Capital IV).
4.15 Form of Amended and Restated Trust Agreement for Hartford
Capital IV (incorporated herein by reference to Exhibit 4.18
to the Registration Statement on Form S-3 (Registration No.
333-12617) of The Hartford, Hartford Capital II, Hartford
Capital III and Hartford Capital IV).
4.16 Form of Preferred Security Certificate for Hartford Capital
IV (included as Exhibit E of Exhibit 4.15).
4.17 Form of Guarantee Agreement in respect of Hartford Capital
IV (incorporated herein by reference to Exhibit 4.20 to the
Registration Statement on Form S-3 (Registration No.
333-12617) of The Hartford, Hartford Capital II, Hartford
Capital III and Hartford Capital IV).
4.18 Form of Amended and Restated Trust Agreement for Hartford
Capital V.
4.19 Form of Preferred Security Certificate for Hartford Capital
V (included as Exhibit E of Exhibit 4.18).
4.20 Form of Guarantee Agreement in respect of Hartford Capital
V.
4.21 Form of Depositary Receipt.*
4.22 Form of Depositary Agreement.*
4.23 Rights Agreement, dated as of November 1, 1995, between ITT
Hartford and The Bank of New York, as Rights Agent
(incorporated herein by reference to Exhibit 4.02 to The
Hartford's Form 10-K for the fiscal year ended December 31,
1995).
4.24 Form of Certificate of Voting Powers, Preferences and
Relative, Participating, Optional and Other Special Rights
and Qualifications, Limitations or Restrictions of Series A
Participating Cumulative Preferred Stock of The Hartford
(attached as Exhibit A to the Rights Agreement filed as
Exhibit 4.23 hereto).
4.25 Form of Right Certificate (attached as Exhibit B to the
Rights Agreement filed as Exhibit 4.23 hereto).
4.26 Form(s) of Warrant Agreement(s), including form of Warrant.*
4.27 Specimen Common Share Certificate (incorporated herein by
reference to Exhibit 4.1 to The Hartford's Registration
Statement on Form 8-A, dated September 18, 1995, as amended
by the Form 8-A/A, filed on November 15, 1995).
4.28 Form of Purchase Contract Agreement.*
4.29 Form of Pledge Agreement.*
5.01 Opinion of Michael S. Wilder.
5.02 Opinion of Richards, Layton & Finger, special Delaware
counsel, relating to the legality of the Preferred
Securities of Hartford Capital III.
5.03 Opinion of Richards, Layton & Finger, special Delaware
counsel, relating to the legality of the Preferred
Securities of Hartford Capital IV.
5.04 Opinion of Richards, Layton & Finger, special Delaware
counsel, relating to the legality of the Preferred
Securities of Hartford Capital V.
12.01 Statement Re: Computation of Ratio of Earnings to Fixed
Charges and Earnings to Combined Fixed Charges and Preferred
Stock Dividends.
23.01 Consent of Arthur Andersen LLP.
</TABLE>
II-9
<PAGE> 73
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
23.02 Consent of Michael S. Wilder (included in Exhibit 5.01
hereto).
23.03 Consent of Richards, Layton & Finger, special Delaware
counsel (included in Exhibits 5.02, 5.03 and 5.04 hereto).
24.01 Powers of Attorney of certain officers and directors of The
Hartford.
25.01 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Trustee for the Junior Subordinated Indenture (incorporated
herein by reference to Exhibit 25.01 to The Hartford's
Registration on Form S-3 (Registration No. 333-12617)).
25.02 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Property Trustee for the Amended and Restated Trust
Agreement of Hartford Capital Trust III (incorporated herein
by reference to Exhibit 25.04 to The Hartford's Registration
Statement on Form S-3 (Registration No. 333-12617)).
25.03 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Guarantee Trustee for the Guarantee for Hartford Capital
Trust III (incorporated herein by reference to Exhibit 25.07
to the Registration Statement on Form S-3 (Registration No.
33-98014) of The Hartford, Hartford Capital I, Hartford
Capital II, Hartford Capital III and Hartford Capital IV,
filed on February 7, 1996).
25.04 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Property Trustee for the Amended and Restated Trust
Agreement of Hartford Capital Trust IV (incorporated by
reference from Exhibit 25.04 to The Hartford's Registration
Statement on Form S-3 (Registration No. 333-12617)).
25.05 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Guarantee Trustee for the Guarantee for Hartford Capital
Trust IV (incorporated herein by reference to Exhibit 25.09
to the Registration Statement on Form S-3 (Registration
No.33-98014) of ITT Hartford, Hartford Capital I, Hartford
Capital II, Hartford Capital III and Hartford Capital IV).
25.06 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Property Trustee for the Amended and Restated Trust
Agreement of Hartford Capital Trust V.
25.07 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Wilmington Trust Company, as
Guarantee Trustee for the Guarantee for Hartford Capital
Trust V.
25.08 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Chase Manhattan Bank (National
Association), as Trustee for the Senior Debt securities
(incorporated herein by reference to Exhibit 25.01 to ITT
Hartford's Registration Statement on Form S-3 (Registration
No. 33-98014)).
25.09 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of the Subordinated Trustee, as
Trustee for the Subordinated Debt Securities.*
</TABLE>
---------------
* To be filed by amendment or by a report on Form 8-K pursuant to Item 601 of
Regulation S-K.
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering.
II-10
<PAGE> 74
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act 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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by such registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
Each undersigned registrant hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933, each filing of such
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Acceleration of Effectiveness.
Insofar as indemnifications for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have 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 a registrant of expenses
incurred or paid by a director, officer or controlling person, if any, of such
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, such 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
II-11
<PAGE> 75
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) Rule 430A Offering.
Each 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) of
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act 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.
(e) Equity Offerings of nonreporting registrants.
Each undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
(f) Qualification of Trust Indentures for Delayed Offerings.
Each undersigned registrant hereby undertakes to file an application for
the purpose of determining eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Act.
II-12
<PAGE> 76
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Hartford
Financial Services Group, Inc. (i) certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and (ii)
has duly caused this Registration Statement on Form S-3 and Post-Effective
Amendment No. 1 to the Registration Statement on Form S-3 (No. 333-12617) to be
signed on its behalf by the undersigned, thereunto duly authorized, in Hartford,
Connecticut, on this 9th day of November, 2000.
THE HARTFORD FINANCIAL SERVICES GROUP,
INC.
By: /s/ C.M. O'HALLORAN
------------------------------------
C.M. O'Halloran
Vice President and Director of
Corporate Law
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (No. 333-12617) has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman, President, Chief Executive November 9, 2000
----------------------------------------------------- Officer and Director
Ramani Ayer (Principal Executive Officer)
* Vice Chairman and Director November 9, 2000
-----------------------------------------------------
Lowndes A. Smith
* Executive Vice President, Chief November 9, 2000
----------------------------------------------------- Financial Officer and Director
David K. Zwiener (Principal Financial Officer)
* Senior Vice President and Controller November 9, 2000
----------------------------------------------------- (Principal Accounting Officer)
John N. Giamalis
* Director November 9, 2000
-----------------------------------------------------
Bette B. Anderson
* Director November 9, 2000
-----------------------------------------------------
Rand V. Araskog
* Director November 9, 2000
-----------------------------------------------------
Dina Dublon
* Director November 9, 2000
-----------------------------------------------------
Donald R. Frahm
* Director November 9, 2000
-----------------------------------------------------
Paul G. Kirk, Jr.
</TABLE>
II-13
<PAGE> 77
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director November 9, 2000
-----------------------------------------------------
Robert W. Selander
* Director November 9, 2000
-----------------------------------------------------
H. Patrick Swygert
* Director November 9, 2000
-----------------------------------------------------
Gordon I. Ulmer
*By: /s/ C.M. O'HALLORAN
-----------------------------------------------------
C.M. O'Halloran
as Attorney-in-Fact
</TABLE>
II-14
<PAGE> 78
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Hartford
Capital III (i) certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and (ii) has duly caused
this Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to
the Registration Statement on Form S-3 (No. 333-12617) to be signed on its
behalf by the undersigned, thereunto duly authorized, in Hartford, Connecticut,
on this 9th day of November, 2000.
HARTFORD CAPITAL III
By THE HARTFORD FINANCIAL SERVICES
GROUP, INC., as Depositor
By /s/ J. RICHARD GARRETT
------------------------------------
J. Richard Garrett
Vice President and Treasurer
II-15
<PAGE> 79
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Hartford
Capital IV (i) certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) has duly caused this
Registration Statement on Form S-3 and Post Effective Amendment No. 1 to the
Registration Statement on Form S-3 (No. 333-12617) to be signed on its behalf by
the undersigned, thereunto duly authorized, in Hartford, Connecticut, on this
9th day of November, 2000.
HARTFORD CAPITAL IV
By THE HARTFORD FINANCIAL SERVICES
GROUP, INC., as Depositor
By /s/ J. RICHARD GARRETT
------------------------------------
J. Richard Garrett
Vice President and Treasurer
II-16
<PAGE> 80
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Hartford
Capital V (i) certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) has duly caused this
Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (No. 333-12517) to be signed on its behalf by
the undersigned, thereunto duly authorized, in Hartford, Connecticut, on this
9th day of November, 2000.
HARTFORD CAPITAL V
By THE HARTFORD FINANCIAL SERVICES
GROUP, INC., as Depositor
By /s/ J. RICHARD GARRETT
------------------------------------
J. Richard Garrett
Vice President and Treasurer
II-17
