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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1998.
REGISTRATION NO. 333-53967
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ARM FINANCIAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 63 61-1244251
(State or other jurisdiction (Primary standard industrial (I.R.S. Employer
of incorporation or organization) Classification code number) Identification No.)
</TABLE>
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ARM FINANCIAL GROUP, INC.
515 WEST MARKET STREET
LOUISVILLE, KENTUCKY 40202
(502) 582-7900
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
------------------------
ROBERT H. SCOTT
ARM FINANCIAL GROUP, INC.
515 WEST MARKET STREET
LOUISVILLE, KENTUCKY 40202
(502) 582-7900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
FAITH D. GROSSNICKLE, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 848-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after the effective date of this Registration
Statement.
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 of 1933, 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 of 1933, 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. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS (SUBJECT TO COMPLETION)
ISSUED JUNE 17, 1998
ARM FINANCIAL GROUP, INC.
PREFERRED STOCK
------------------------
ARM Financial Group, Inc. (the "Company") may issue from time to time, in
one or more series, shares of its preferred stock, par value $.01 per share (the
"Preferred Stock"), which may be issued in the form of depositary shares (the
"Depositary Shares") evidenced by depositary receipts, in amounts, at prices and
on terms to be determined at or prior to the time of any such offering. The
specific number of shares, designation, stated value and liquidation preference
of each share, issuance price, dividend rate or method of calculation, dividend
periods, dividend payment dates, voting rights, any redemption or sinking fund
provisions, any conversion or exchange provisions, and other specific terms of
each series of Preferred Stock in respect of which this Prospectus is being
delivered shall be set forth in an accompanying Prospectus Supplement (the
"Prospectus Supplement").
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The Preferred Stock may be sold directly by the Company or through agents,
underwriters or dealers designated from time to time. If any agents or
underwriters of the Company are involved in the sale of the Preferred Stock, the
names of such agents or underwriters and any applicable fees, commissions or
discounts shall be set forth in the Prospectus Supplement. The net proceeds to
the Company from such sale also shall be set forth in the Prospectus Supplement.
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, 1998
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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEPOSITARY SHARES.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, THE DEPOSITARY SHARES IN THE OPEN MARKET.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") are incorporated herein by reference:
(a) The Annual Report of the Company on Form 10-K for the year ended
December 31, 1997;
(b) The Quarterly Report of the Company on Form 10-Q for the quarter
ended March 31, 1998;
(c) The Current Reports of the Company on Form 8-K dated March 4,
1998, April 22, 1998 and June 1, 1998; and
(d) The description of the Company's outstanding 9 1/2% Cumulative
Perpetual Preferred Stock (the "Existing Preferred Stock") contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
November 12, 1993, including any amendment or report filed for the purposes
of updating such description.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), subsequent to the date of this Prospectus and prior to the
termination of the offering made hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the date of filing
of such documents. Any statement contained herein or in a document all or any
portion of which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus. As used herein, the terms "Prospectus"
and "herein" mean this Prospectus, including the documents incorporated by
reference, as the same may be amended, supplemented, or otherwise modified from
time to time. Statements contained in this Prospectus as to the contents of any
contract or other documents referred to herein do not purport to be complete and
are qualified in all respects by reference to all of the provisions of such
contract or other document.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY
OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN OR MAY BE
INCORPORATED IN THIS PROSPECTUS BY REFERENCE, OTHER THAN EXHIBITS TO SUCH
DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH
DOCUMENTS. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO: PETER S. RESNIK,
TREASURER, ARM FINANCIAL GROUP, INC., 515 WEST MARKET STREET, LOUISVILLE,
KENTUCKY 40202 (TELEPHONE (502) 582-7900).
No person is authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
Prospectus or the Prospectus Supplement, in connection with the offering
contemplated hereby, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or any
underwriter, dealer or agent. This Prospectus and the Prospectus Supplement do
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the Preferred Stock to which they relate and do not
constitute an offer to sell or a solicitation of an offer to buy any securities
in any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus or
the Prospectus Supplement, nor any sale made hereunder or thereunder, shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof or thereof or
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that the information contained or incorporated by reference herein or therein is
correct as of any time subsequent to such date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, is required to file reports, proxy statements
and other information with the Commission. Such reports, proxy statements and
other information can be inspected and copied at the Public Reference Section of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and
at the Commission's regional offices at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of the reports, proxy statements and
other information can be obtained from the Public Reference Section of the
Commission, Washington, D.C. 20549, at prescribed rates. The Commission
maintains a web site on the Internet at http://www.sec.gov that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The Company's Existing
Preferred Stock is traded on the American Stock Exchange and such reports, proxy
statements and other information concerning the Company can be inspected at the
offices of the American Stock Exchange, 86 Trinity Place, New York, New York
10006. The Company's Class A Convertible Common Stock, par value $.01 per share
(the "Class A Common Stock") is traded on the New York Stock Exchange and such
reports, proxy statements and other information concerning the Company can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities offered by this Prospectus. The Registration Statement
has been filed electronically through the Commission's Electronic Data
Gathering, Analysis, and Retrieval System and may be accessed electronically by
means of the Commission's home page on the Internet at http://www.sec.gov. As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information set forth in the Registration Statement. For
further information about the Company and the securities offered hereby,
reference is made to the Registration Statement and to the financial statements,
exhibits and schedules filed therewith. The statements contained in this
Prospectus about the contents of any contract or other document referred to are
not necessarily complete, and in each instance, reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. Copies of each such document may be obtained from the Commission at
its principal office in Washington, D.C. upon payment of the charges prescribed
by the Commission.
THE COMPANY
The Company specializes in the growing asset accumulation business with
particular emphasis on retirement savings and investment products. The Company's
earnings are derived from investment spread (the difference between income
earned on investments and interest credited on customer deposits) and fee
income. The Company's retail products include a variety of fixed, indexed and
variable annuities and face-amount certificates sold through a broad spectrum of
distribution channels including independent broker-dealers, independent agents,
stockbrokers, and financial institutions. The Company offers institutional
products, such as funding agreements, installment face-amount certificates and
guaranteed investment contracts ("GICs"), directly to bank trust departments,
plan sponsors, cash management funds, corporate treasurers, and other
institutional investors.
The principal offices of the Company are located at 515 West Market Street,
Louisville, Kentucky 40202 and its telephone number is (502) 582-7900.
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RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the consolidated ratios of earnings to
combined fixed charges and preferred stock dividends for the Company for the
periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS YEARS ENDED DECEMBER 31,
ENDED ----------------------------------
MARCH 31, 1998 1997 1996 1995 1994(3) 1993(3)
-------------- ---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Excluding interest
credited on customer deposits(1)......... 6.4x 4.3x 3.4x 2.0x -- --
Including interest credited on customer
deposits(2).............................. 1.2x 1.1x 1.1x 1.1x -- --
</TABLE>
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(1) In computing the ratio of earnings to combined fixed charges and preferred
stock dividends (excluding interest credited on customer deposits), combined
fixed charges and preferred stock dividends consist of interest expense on
debt, the portion of operating lease rentals representative of the interest
factor and dividends on the preferred stock of the Company on a tax
equivalent basis. Earnings are computed by adding fixed charges to pretax
income.
(2) In computing the ratio of earnings to combined fixed charges and preferred
stock dividends (including interest credited on customer deposits), combined
fixed charges and preferred stock dividends consist of interest expense on
debt, the portion of operating lease rentals representative of the interest
factor, interest credited on customer deposits, and dividends on the
preferred stock of the Company on a tax equivalent basis. Earnings are
computed by adding fixed charges to pretax income.
(3) Earnings were inadequate to cover combined fixed charges and preferred stock
dividends by $29.2 million and $41.0 million for the years ended December
31, 1994 and 1993, respectively.
USE OF PROCEEDS
Except as otherwise provided in the Prospectus Supplement, the net proceeds
from the sale of the Preferred Stock will be used for general corporate
purposes, which may include redemption of the Company's Existing Preferred
Stock, which may be redeemed on or after December 15, 1998.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 150 million shares
of Class A Common Stock, 50 million shares of Class B Convertible Common Stock,
par value $.01 per share (the "Class B Common Stock" and, together with the
Class A Common Stock, the "Common Stock"), and 10 million shares of Preferred
Stock. The Board of Directors of the Company has the power, without further
action by the stockholders unless action is required by applicable laws or
regulations or by the terms of outstanding Preferred Stock, to issue Preferred
Stock in one or more series and to fix the voting rights, designations,
preferences and relative, participating, optional and other special rights, and
the qualifications, limitations and restrictions applicable thereto.
The rights of holders of the Preferred Stock offered hereby (the "Offered
Preferred Stock") will be subject to, and may be adversely affected by, the
rights of holders of any shares of Preferred Stock that may be issued in the
future. The Board of Directors may cause shares of Preferred Stock to be issued
in public or private transactions for any proper corporate purpose, which may
include issuance to obtain additional financing in connection with acquisitions
or otherwise, and issuance to officers, directors and employees of the Company
and its subsidiaries pursuant to benefit plans or otherwise. Shares of Preferred
Stock issued by the Company may have the effect, under certain circumstances,
alone or in combination with certain other provisions of the Company's Restated
Certificate of Incorporation dated June 24, 1997, as amended (the "Certificate
of Incorporation"), described below, of rendering more difficult or discouraging
an acquisition of the Company deemed undesirable by the Board of Directors of
the Company.
At May 26, 1998, the Company had 23,397,471 shares of Class A Common Stock
and no shares of Class B Common Stock outstanding. The Company also had
outstanding on such date 2,000,000 shares of Preferred Stock designated as the
Existing Preferred Stock. The following summary does not purport to be complete
and is subject to the detailed provisions of, and qualified in its entirety by
reference to, the Company's Certificate of Incorporation and the Company's
By-laws (the "By-laws") and to the applicable provisions of the General
Corporation Law of the State of Delaware (the "DGCL").
OFFERED PREFERRED STOCK
The following description of the terms of the Offered Preferred Stock sets
forth certain general terms and provisions of the Offered Preferred Stock to
which any Prospectus Supplement may relate. Certain other terms of any series of
Offered Preferred Stock offered by any Prospectus Supplement will be specified
in the applicable Prospectus Supplement. If so specified in the applicable
Prospectus Supplement, the terms of any series of Offered Preferred Stock may
differ from the terms set forth below. The description of the terms of the
Offered Preferred Stock set forth below and in any Prospectus Supplement does
not purport to be complete and is subject to and qualified in its entirety by
reference to the Certificate of Designations relating to the applicable series
of Offered Preferred Stock (the "Certificate of Designations"), which
Certificate of Designations will be filed as an exhibit to or incorporated by
reference in the Registration Statement of which this Prospectus forms a part.
Under the Certificate of Incorporation, the Company's Board of Directors is
authorized, without further stockholder action, to issue any or all the
authorized Preferred Stock from time to time in one or more series, and for such
consideration, and with such voting powers (not to exceed one vote per share) as
the Board may determine and to determine the designations, preferences and
relative participating, optional or other special rights, and qualifications,
limitations, or restrictions thereon, as shall be stated and expressed in the
resolution or resolutions providing for the issue thereof adopted by the Board
of Directors of the Company and as are not stated and expressed in the
Certificate of Incorporation. Prior to the issuance of each series of Preferred
Stock, the Board of Directors of the Company will adopt resolutions creating and
designating such series as a series of Preferred Stock and such resolutions will
be filed in the Certificate of Designations as an amendment to the Certificate
of Incorporation. As used herein the term "Board of Directors of the Company"
means the Board of Directors of the Company and includes any duly authorized
committee thereof. Stockholders do not have
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any preemptive rights with respect to any of the presently authorized but
unissued shares of authorized Preferred Stock. Other than the Existing Preferred
Stock described below, as of the date of this Prospectus, the Board of Directors
of the Company has not authorized any series of Preferred Stock and there are no
agreements or understandings for the issuance of any shares of Preferred Stock.
As described under "Depositary Shares" below, the Company may, at its
option, elect to offer Depositary Shares evidenced by depositary receipts, each
representing a fraction (to be specified in the Prospectus Supplement relating
to the particular series of Offered Preferred Stock) of a share of the
particular series of Offered Preferred Stock issued and deposited with a
depositary, in lieu of offering full shares of such series of Offered Preferred
Stock. In the event that the Company elects to issue Depositary Shares, subject
to the terms of the Deposit Agreement (as defined below), each such Depositary
Share will be entitled, in proportion to the applicable fraction of a share of
Offered Preferred Stock represented by such Depositary Share, to all the rights
and preferences of the Offered Preferred Stock represented thereby (including
dividends, voting, redemption and liquidation rights). See "Depositary Shares"
below. The statements below concerning Depositary Shares, Depositary Receipts
(as defined below) and the Deposit Agreement do not purport to be complete and
are qualified in their entirety by reference to the forms of such documents,
which have been filed as exhibits to the Registration Statement of which this
Prospectus is a part.
General
The Offered Preferred Stock shall have the dividend, liquidation,
redemption, voting and conversion or exchange rights set forth below unless
otherwise specified in the applicable Prospectus Supplement. Reference is made
to the Prospectus Supplement relating to the particular series of Offered
Preferred Stock offered thereby for specific terms, including: (i) the
designation, stated value and liquidation preference of such Offered Preferred
Stock and the number of shares offered; (ii) the initial public offering price
at which such shares will be issued; (iii) the dividend rate or rates (or method
of calculation), the dividend periods, the date on which dividends shall be
payable and whether such dividends shall be cumulative or noncumulative and, if
cumulative, the dates from which dividends shall commence to cumulate; (iv) any
redemption or sinking fund provisions; (v) any conversion or exchange
provisions; and (vi) any additional dividend, liquidation, redemption, sinking
fund and other rights, preferences, privileges, limitations and restrictions of
such Offered Preferred Stock.
The Offered Preferred Stock will, when issued against payment therefor, be
fully paid and nonassessable. Unless otherwise specified in the applicable
Prospectus Supplement, the shares of each series of Offered Preferred Stock will
upon issuance rank on a parity in all respects with the outstanding shares of
Preferred Stock of the Company. Holders of the Preferred Stock will have no
preemptive rights to subscribe for any additional securities which may be issued
by the Company. Unless otherwise specified in the applicable Prospectus
Supplement, ChaseMellon Shareholder Services LLC (or its successors or assigns)
will be the transfer agent and registrar for the Offered Preferred Stock.
Dividends
The holders of the Offered Preferred Stock will be entitled to receive,
when and as declared by the Board of Directors of the Company, out of funds
legally available therefor, dividends at such rates and on such dates as will be
specified in the applicable Prospectus Supplement. Such rates may be fixed or
variable or both. If variable, the formula used for determining the dividend
rate for each dividend period will be specified in the applicable Prospectus
Supplement. Dividends will be payable to the holders of record as they appear on
the stock books of the Company on such record dates as will be fixed by the
Board of Directors of the Company. Dividends may be paid in the form of cash,
Preferred Stock (of the same or a different series) or Common Stock of the
Company, in each case as specified in the applicable Prospectus Supplement.
Dividends on any series of Offered Preferred Stock may be cumulative or
noncumulative, as specified in the applicable Prospectus Supplement. If the
Board of Directors of the Company fails to declare a dividend payable on a
dividend payment date on any Offered Preferred Stock for which dividends are
noncumulative ("Noncumulative Offered Preferred Stock"), then the holders of
such Offered Preferred Stock will have no
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right to receive a dividend in respect of the dividend period relating to such
dividend payment date, and the Company will have no obligation to pay the
dividend accrued for such period, whether or not dividends on such Offered
Preferred Stock are declared or paid on any future dividend payment dates.
The Company shall not declare or pay or set apart for payment any dividends
on any series of its Preferred Stock ranking, as to dividends, on a parity with
or junior to the outstanding Offered Preferred Stock of any series unless (i) if
such Offered Preferred Stock has a cumulative dividend ("Cumulative Offered
Preferred Stock"), full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment on such Offered Preferred Stock for all dividend periods
terminating on or prior to the date of payment of any such dividends on such
other series of Preferred Stock of the Company, or (ii) if such Offered
Preferred Stock is Noncumulative Offered Preferred Stock, full dividends for the
then-current dividend period on such Offered Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment. When dividends are not paid in full
upon Offered Preferred Stock of any series and any other shares of preferred
stock of the Company ranking on a parity as to dividends with such Offered
Preferred Stock, all dividends declared upon such Offered Preferred Stock and
any other Preferred Stock of the Company ranking on a parity as to dividends
with such Offered Preferred Stock shall be declared pro rata so that the amount
of dividends declared per share on such Offered Preferred Stock and such other
shares shall in all cases bear to each other the same ratio that the accrued
dividends per share on such Offered Preferred Stock (which shall not, if such
Offered Preferred Stock is Noncumulative Offered Preferred Stock, include any
accumulation in respect of unpaid dividends for prior dividend periods) and such
other Preferred Stock bear to each other. Except as set forth in the preceding
sentence, unless full dividends on the outstanding Cumulative Offered Preferred
Stock of any series have been declared and paid or set apart for payment for all
past dividend periods and full dividends for the then-current dividend period on
the outstanding Noncumulative Offered Preferred Stock of any series have been
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment, no dividends (other than in Common Stock of the Company
or other shares of the Company ranking junior to such Offered Preferred Stock as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment, nor shall any other distribution be made, on the Common Stock of the
Company or on any other shares of the Company ranking junior to or on a parity
with such Offered Preferred Stock as to dividends or upon liquidation. Unless
full dividends on the Cumulative Offered Preferred Stock of any series have been
declared and paid or set apart for payment for all past dividend periods and
full dividends for the then-current dividend period on the Noncumulative Offered
Preferred Stock of any series have been declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment, no Common Stock
or any other shares of the Company ranking junior to or on a parity with such
Offered Preferred Stock as to dividends or upon liquidation shall be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid or
made available for a sinking fund for the redemption of any such shares) by the
Company or any subsidiary of the Company except by conversion into or exchange
for shares of the Company ranking junior to such Offered Preferred Stock as to
dividends and upon liquidation.
The ability of the Company, as a holding company, to pay dividends on the
Offered Preferred Stock will be dependent upon, among other factors, the
Company's earnings, financial condition and cash requirements at the time such
payment is considered and the payment to it of dividends or principal and
interest by, or the availability of other funds from, its subsidiaries. The
Company's assets consist primarily of the capital stock of Integrity Holdings,
Inc., which owns Integrity Life Insurance Company ("Integrity") and National
Integrity Life Insurance Company ("National Integrity" and, together with
Integrity, the "Integrity Companies") (domiciled in the States of Ohio and New
York, respectively), SBM Certificate Company and ARM Securities Corporation. The
ability of the Integrity Companies to pay dividends to the Company is subject,
among other things, to regulatory restrictions of their respective states of
domicile and will depend on their statutory surplus and earnings. Because
National Integrity is a subsidiary of Integrity, dividend payments by National
Integrity to Integrity must be made in compliance with New York standards, and
the ability of Integrity to pass those dividends on to the Company is subject to
compliance with Ohio standards. From time to time, the National Association of
Insurance Commissioners and various state insurance regulators have
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considered, and may in the future consider, proposals to further restrict
dividend payments that may be made by an insurance company without regulatory
approval.
Redemption
Offered Preferred Stock may be redeemable, in whole or in part, at the
option of the Company, out of funds legally available therefor, and may be
subject to mandatory redemption pursuant to a sinking fund or otherwise, in each
case upon terms, at the times and at the redemption prices specified in the
applicable Prospectus Supplement and subject to the rights of holders of other
securities of the Company. Offered Preferred Stock redeemed by the Company will
be restored to the status of authorized but unissued shares of Preferred Stock.
The Prospectus Supplement relating to a series of Offered Preferred Stock
that is subject to mandatory redemption will specify the number of shares of
such Offered Preferred Stock that shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to all accrued and unpaid dividends
thereon (which shall not, if such Offered Preferred Stock is Noncumulative
Offered Preferred Stock, include any accumulation in respect of unpaid dividends
for prior dividend periods) to the date of redemption. The redemption price may
be payable in cash or other property, as specified in the applicable Prospectus
Supplement.
If fewer than all the outstanding shares of Offered Preferred Stock of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Board of Directors of the Company and such shares may be
redeemed pro rata from the holders of record of such shares in proportion to the
number of such shares held by such holders (with adjustments to avoid redemption
of fractional shares) or by lot in a manner determined by the Board of Directors
of the Company.
Notwithstanding the foregoing, if any dividends, including any
accumulation, on Cumulative Offered Preferred Stock of any series are in
arrears, no Offered Preferred Stock of such series shall be redeemed unless all
outstanding Preferred Stock of such series is simultaneously redeemed, and the
Company shall not purchase or otherwise acquire any Offered Preferred Stock of
such series; provided, however, that the foregoing shall not prevent the
purchase or acquisition of Preferred Stock of such series pursuant to a purchase
or exchange offer provided such offer is made on the same terms to all holders
of the Offered Preferred Stock of such series.
Notice of redemption shall be given by mailing the same to each record
holder of the Offered Preferred Stock to be redeemed, not less than 30 nor more
than 60 days prior to the date fixed for redemption thereof, at the address of
such holder as the same shall appear on the stock books of the Company. Each
notice shall state: (i) the redemption date; (ii) the number of shares and
series of the Offered Preferred Stock to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Offered Preferred
Stock are to be surrendered for payment of the redemption price; (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date; and (vi) the date upon which the holder's conversion or exchange rights,
if any, as to such shares, shall terminate. If fewer than all the shares of
Offered Preferred Stock of any series are to be redeemed, the notice mailed to
each such holder thereof shall also specify the number of shares of Offered
Preferred Stock to be redeemed from each such holder.
If notice of redemption of any shares of Offered Preferred Stock has been
given and if the funds necessary for such redemption have been set aside by the
Company, separate and apart from its other funds, in trust for the pro rata
benefit of the holders of any shares of Offered Preferred Stock so called for
redemption, from and after the redemption date for such shares, dividends on
such shares shall cease to accrue and such shares shall no longer be deemed to
be outstanding, and all rights of the holders thereof as stockholders of the
Company (except the right to receive the redemption price) shall cease. If fewer
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares without cost to
the holder thereof.
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Conversion or Exchange Rights
The Prospectus Supplement relating to a series of Offered Preferred Stock
that is convertible or exchangeable will state the terms on which shares of such
series are convertible or exchangeable into Common Stock of the Company or
another series of Preferred Stock.
Rights Upon Liquidation
In the event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company, the holders of Offered Preferred Stock shall be
entitled to receive out of the assets of the Company available for distribution
to stockholders, before any distribution of assets is made to holders of Common
Stock or any other class or series of shares ranking junior to such Offered
Preferred Stock upon liquidation, liquidating distributions in the amount of the
liquidation preference of such Offered Preferred Stock plus accrued and unpaid
dividends (which shall not, if such Offered Preferred Stock is Noncumulative
Offered Preferred Stock, include any accumulation in respect of unpaid dividends
for prior dividend periods). If, upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the amounts payable with respect to
Offered Preferred Stock of any series and any other shares of the Company
ranking as to any such distribution on a parity with such Offered Preferred
Stock are not paid in full, the holders of such Offered Preferred Stock and of
such other shares will share ratably in any such distribution of assets of the
Company in proportion to the full respective preferential amounts to which they
are entitled. After payment of the full amount of the liquidating distribution
to which they are entitled, the holders of Offered Preferred Stock of any series
will not be entitled to any further participation in any distribution of assets
by the Company.
Substantially all of the assets of the Company are owned by its
subsidiaries. Therefore, the Company's rights and the rights of its creditors
and preferred stockholders to participate in the assets of any subsidiary upon
such subsidiary's liquidation or recapitalization will be subject to (or
effectively subordinated to) the prior claims of such subsidiary's creditors (if
any) and policyholders and to the rights and preferences of such subsidiary's
preferred stockholders (if any), except to the extent that the Company may
itself be a creditor with recognized claims against the subsidiary or a holder
of preferred stock of such subsidiary.
Voting Rights
Except as indicated below or in the applicable Prospectus Supplement, or
except as expressly required by applicable law, the holders of the Offered
Preferred Stock will not be entitled to vote.
Whenever dividends on any shares of Cumulative Offered Preferred Stock
shall be in arrears for six consecutive quarterly periods, the holders of such
shares of Cumulative Offered Preferred Stock (voting separately as a class with
all other series of cumulative preferred stock upon which like voting rights
have been conferred and are exercisable) will be entitled to vote for the
election of two additional directors of the Company at the next annual meeting
of stockholders and at each subsequent meeting until all dividends accumulated
on such shares of Cumulative Offered Preferred Stock shall have been fully paid
or set aside for payment. In such case, the entire Board of Directors of the
Company will be increased by two directors.
So long as any shares of Offered Preferred Stock remain outstanding, the
Company shall not, without the affirmative vote of the holders of at least
two-thirds of the votes of the shares of Offered Preferred Stock outstanding at
the time, given in person or by proxy, at a meeting (voting separately as one
class): (i) authorize, create or issue, or increase the authorized or issued
amount of, any class or series of stock ranking prior to the Offered Preferred
Stock with respect to payment of dividends or the distribution of assets upon
liquidation, dissolution or winding-up, or (ii) amend, alter or repeal the
provisions of the Certificate of Incorporation, including the Certificate of
Designations relating to the Offered Preferred Stock, whether by merger,
consolidation or otherwise, so as to materially and adversely affect any right,
preference, privilege or voting power of such shares of Offered Preferred Stock
or the holders thereof; provided, however, that any increase in the amount of
the authorized Preferred Stock or any outstanding series of Preferred Stock or
any other capital stock of the Company, or the creation and issuance of other
series of Preferred Stock including the Offered Preferred Stock, or of any other
capital stock of the Company, in each case ranking on a parity with or junior to
the Offered Preferred Stock with respect to the payment of dividends and the
distribution of
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assets upon liquidation, dissolution or winding-up shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of Offered Preferred Stock shall have been
redeemed or sufficient funds shall have been deposited in trust to effect such
redemption.
DEPOSITARY SHARES
The description set forth below of certain material provisions of the
Deposit Agreement (as defined below) and of the Depositary Shares and Depositary
Receipts (as defined below) is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipt relating to
the Offered Preferred Stock, which will be filed or incorporated by reference,
as the case may be, as exhibits to the Registration Statement of which this
Prospectus forms a part at or prior to the issuance of Depositary Shares. The
particular terms of any Depositary Shares, any Depositary Receipts and any
Deposit Agreement relating to a particular series of Offered Preferred Stock
which vary from the terms set forth below will be set forth in the applicable
Prospectus Supplement.
General
The Company may, at its option, elect to offer fractional shares of Offered
Preferred Stock, rather than full shares of Offered Preferred Stock. In such
event, the Company will issue 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 Offered Preferred Stock) of a share of a particular series
of Offered Preferred Stock as described below.
The shares of any series of Offered Preferred Stock represented by
Depositary Shares will be deposited under a Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Preferred Stock Depositary").
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 Offered
Preferred Stock represented by such Depositary Share, to all the rights and
preferences of the Offered Preferred Stock represented thereby (including
dividend, voting, redemption, conversion and liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional shares
of Offered Preferred Stock in accordance with the terms of the applicable
Prospectus Supplement.
Pending the preparation of definitive Depositary Receipts, the Preferred
Stock Depositary may, upon the written order of the Company or any holder of
deposited Offered Preferred Stock, execute and deliver temporary Depositary
Receipts which are substantially identical to, and entitle the holders thereof
to all the rights pertaining to, the definitive Depositary Receipts. Depositary
Receipts will be prepared thereafter without unreasonable delay, and temporary
Depositary Receipts will be exchangeable for definitive Depositary Receipts.
Dividends and Other Distributions
The Preferred Stock Depositary will distribute all cash dividends or other
cash distributions received in respect of the deposited Offered Preferred Stock
to the record holders of Depositary Shares relating to such Offered Preferred
Stock in proportion to the number of such Depositary Shares owned by such
holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto. If the Preferred Stock Depositary determines
that it is not feasible to make such distribution, it may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
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Redemption of Preferred Stock
If a series of Offered Preferred Stock represented by Depositary Shares is
to be redeemed, the Depositary Shares will be redeemed from the proceeds
received by the Preferred Stock Depositary resulting from the redemption, in
whole or in part, of such series of Offered Preferred Stock held by the
Preferred Stock Depositary. The Depositary Shares will be redeemed by the
Preferred Stock Depositary at a price per Depositary Share equal to the
applicable fraction of the redemption price per share payable in respect of the
shares of Preferred Stock so redeemed. Whenever the Company redeems shares of
Offered Preferred Stock held by the Preferred Stock Depositary, the Preferred
Stock Depositary will redeem as of the same date the number of Depositary Shares
representing shares of Offered 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 the Preferred Stock Depositary by lot or pro rata or by any
other equitable method as may be determined by the Preferred Stock Depositary.
Withdrawal of Preferred Stock
Any holder of Depositary Shares may, upon surrender of the Depositary
Receipts at the corporate trust office of the Preferred Stock Depositary (unless
the related Depositary Shares have previously been called for redemption),
receive the number of whole shares of the related series of Offered Preferred
Stock and any money or other property represented by such Depositary Receipts.
Holders of Depositary Shares making such withdrawals will be entitled to receive
whole shares of Offered Preferred Stock on the basis set forth in the related
Prospectus Supplement for such series of Offered Preferred Stock, but holders of
such whole shares of Offered Preferred Stock will not thereafter be entitled to
deposit such Offered Preferred Stock under the Deposit Agreement or to receive
Depositary Receipts therefor. If the Depositary Shares surrendered by the holder
in connection with such withdrawal exceed the number of Depositary Shares that
represent the number of whole shares of Offered Preferred Stock to be withdrawn,
the Preferred Stock Depositary will deliver to such holder at the same time a
new Depositary Receipt evidencing such excess number of Depositary Shares.
Voting Deposited Offered Preferred Stock
Upon receipt of notice of any meeting at which the holders of any series of
deposited Offered Preferred Stock are entitled to vote, the Preferred Stock
Depositary will mail the information contained in such notice of meeting to the
record holders of the Depositary Shares relating to such series of Offered
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 relevant series of
Offered Preferred Stock) will be entitled to instruct the Preferred Stock
Depositary as to the exercise of the voting rights pertaining to the amount of
the Offered Preferred Stock represented by such holder's Depositary Shares. The
Preferred Stock Depositary will endeavor, insofar as practicable, to vote the
amount of such series of Offered Preferred Stock represented by such Depositary
Shares in accordance with such instructions, and the Company will agree to take
all reasonable actions that may be deemed necessary by the Preferred Stock
Depositary in order to enable the Preferred Stock Depositary to do so. The
Preferred Stock Depositary will vote all shares of any series of Offered
Preferred Stock held by it proportionately with instructions received, to the
extent it does not receive specific instructions from the holders of Depositary
Shares representing such series of Offered 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 the Company and the Preferred Stock Depositary. However, any amendment
that imposes additional charges or materially and adversely alters any
substantial existing right of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the affected Depositary Shares then outstanding. Every holder of an
outstanding Depositary Receipt at the time any such amendment becomes effective,
or any transferee of such holder, shall be deemed, by continuing to hold such
Depositary Receipt, or by reason of the acquisition thereof, to consent and
agree to such amendment and to be bound by the Deposit Agreement as amended
thereby. The Deposit Agreement automatically terminates if (i) all outstanding
Depositary Shares
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have been redeemed; or (ii) each share of Offered Preferred Stock has been
converted into or exchanged for Common Stock; or (iii) there has been a final
distribution in respect of the Offered Preferred Stock in connection with any
liquidation, dissolution or winding-up of the Company and such distribution has
been distributed to the holders of Depositary Shares. The Deposit Agreement may
be terminated by the Company at any time and the Preferred Stock Depositary will
provide notice of such termination to the record holders of all outstanding
Depositary Receipts not less than 30 days prior to the termination date, in
which event the Preferred Stock Depositary will deliver or make available for
delivery to holders of Depositary Shares, upon surrender of such Depositary
Shares, the number of whole or fractional shares of the related series of
Offered Preferred Stock as are represented by such Depositary Shares.
Charges of Depositary; Taxes and Other Governmental Charges
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay all charges of the Preferred Stock Depositary in connection with the
initial deposit of the relevant series of Offered Preferred Stock and any
redemption of such Offered Preferred Stock. Holders of Depositary Receipts will
pay other transfer and other taxes and governmental charges and such other
charges or expenses as are expressly provided in the Deposit Agreement to be for
their accounts.
Resignation and Removal of Depositary
The Preferred Stock Depositary may resign at any time by delivering to the
Company notice of its intent to do so, and the Company may at any time remove
the Preferred Stock Depositary, any such resignation or removal to take effect
upon the appointment of a successor Preferred Stock Depositary and its
acceptance of such appointment. Such successor Preferred Stock 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.
Miscellaneous
The Preferred Stock Depositary will forward all reports and communications
from the Company which are delivered to the Preferred Stock Depositary and which
the Company is required to furnish to the holders of the deposited Preferred
Stock.
Neither the Preferred Stock Depositary nor the Company will be liable if it
is prevented or delayed by law or any circumstances beyond its control from
performing its obligations under the Deposit Agreement. The obligations of the
Company and the Preferred Stock Depositary under the Deposit Agreement will be
limited to performance in good faith of their duties thereunder and they will
not be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares, Depositary Receipts or shares of Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Preferred Stock
Depositary may rely upon written advice of counsel or accountants, or upon
information provided by holders of Depositary Receipts or other persons believed
to be competent and on documents believed to be genuine.
EXISTING PREFERRED STOCK
General
The Company has designated 2,300,000 authorized shares of Preferred Stock
as the Existing Preferred Stock and has issued 2,000,000 of such shares. The
Existing Preferred Stock of the Company is traded on the American Stock Exchange
under the symbol ARM Pr. The following description of the Existing Preferred
Stock is qualified in its entirety by reference to the Company's Certificate of
Incorporation and the Certificate of Designations, Preferences and Rights
relating to the Existing Preferred Stock (the "Existing Certificate of
Designations"), which is filed with the Secretary of State of the State of
Delaware and incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part.
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Holders of the Existing Preferred Stock do not have, by virtue of such
ownership, any preemptive rights with respect to any shares of capital stock of
the Company or any other securities of the Company convertible into or carrying
rights or options to purchase any such shares. The Existing Preferred Stock has
a perpetual maturity and is not subject to any sinking fund or other obligation
of the Company to redeem or retire the Existing Preferred Stock.
Dividends
Holders of shares of the Existing Preferred Stock are entitled to receive,
when, as and if declared by the Board of Directors of the Company, cash
dividends at a rate of 9 1/2% per annum per share, payable quarterly on the
fifteenth day of March, June, September and December of each year, or, if such
date is not a business day, on the next succeeding business day. Dividends are
cumulative, accrue from the date of original issue and are payable to holders of
record of the Existing Preferred Stock as they appear on the books of the
Company on such respective dates, not exceeding 60 days preceding such dividend
payment date, as may be fixed by the Board of Directors of the Company in
advance of the payment of each particular dividend. Dividends on the Existing
Preferred Stock accrue whether or not the Company has earnings, whether or not
there are funds legally available for the payment of such dividends and whether
or not such dividends are declared and will accumulate to the extent they are
not paid on the dividend payment date for the quarter for which they accrue. All
dividends paid with respect to shares of Existing Preferred Stock are paid pro
rata to the holders entitled thereto. Accruals of dividends do not bear
interest.
The Existing Preferred Stock ranks prior to the Common Stock of the
Company. Before any dividends (other than dividends payable in Common Stock) on
any class or series of stock of the Company ranking junior to the Existing
Preferred Stock as to dividends or upon liquidation shall be declared or paid or
set apart for payment, the holders of shares of the Existing Preferred Stock are
entitled to receive full cumulative cash dividends, but only when and as
declared by the Board of Directors, at the annual rate set forth above. When
dividends are not paid in full upon the Existing Preferred Stock, any dividends
declared or paid upon shares of Existing Preferred Stock and any class or series
of stock ranking on a parity with the Existing Preferred Stock ("Dividend Parity
Stock") shall be declared or paid, as the case may be, pro rata so that the
amount of dividends declared or paid, as the case may be, per share on the
Existing Preferred Stock and such Dividend Parity Stock in all cases bear to
each other the same ratio that accumulated and unpaid dividends per share on the
shares of Existing Preferred Stock and such Dividend Parity Stock bear to each
other. Unless full accumulated dividends on all outstanding shares of the
Existing Preferred Stock have been paid, the Company may not declare or pay or
set apart for payment any dividends or make any distribution in cash or other
property on, or redeem, purchase or otherwise acquire, any other class or series
of stock ranking junior to the Existing Preferred Stock either as to dividends
or upon liquidation.
The amount of dividends payable per share for each full quarterly dividend
period is computed by dividing the 9 1/2% annual rate by four and multiplying
the resulting rate by $25. The amount of dividends payable for the initial
dividend period or any period shorter than a full dividend period is computed on
the basis of a 360-day year of twelve 30-day months.
Optional Redemption
The shares of Existing Preferred Stock may not be redeemed prior to
December 15, 1998. On or after December 15, 1998, the Company may, at its
option, redeem all or a part of the shares of Existing Preferred Stock at any
time and from time to time, upon at least 30 but not more than 60 days' notice,
at a redemption price of $25 per share, plus an amount equal to all accrued and
unpaid dividends and distributions thereon (the "redemption price"), whether or
not declared, to the date fixed for redemption.
The Company shall, on or prior to the date fixed for redemption, but not
earlier than 45 days prior to the redemption date, deposit with its transfer
agent or other redemption agent, as a trust fund, a sum sufficient to redeem the
shares called for redemption, with irrevocable instructions and authority to
such agent to give or complete the required notice of redemption and to pay the
holders of such shares the redemption price upon surrender of their
certificates. Such deposit shall be deemed to constitute full payment of such
shares to their
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holders and from and after the date of such deposit, notwithstanding that any
certificates for such shares shall not have been surrendered for cancellation,
the shares represented thereby shall no longer be deemed outstanding, the right
to receive dividends and distributions shall cease to accrue from and after the
redemption date, and all rights of the holders of the Existing Preferred Stock
called for redemption as stockholders of the Company will cease and terminate,
except the right to receive the redemption price, without interest, upon the
surrender of their respective certificates.
Unless full accumulated dividends on all outstanding shares of the Existing
Preferred Stock shall have been or contemporaneously are declared and paid or
set apart for payment for all past dividend periods, the Existing Preferred
Stock may not be redeemed unless all the outstanding Existing Preferred Stock is
redeemed and neither the Company nor any subsidiary may purchase any shares of
the Existing Preferred Stock otherwise than pursuant to a purchase offer made on
the same terms to all holders of Existing Preferred Stock, provided that the
Company may complete the purchase or redemption of shares of Existing Preferred
Stock for which a purchase contract was entered into, or notice of redemption of
which was initially given, prior to any time at which the Company becomes in
arrears with respect to any dividends.
Notice of redemption shall be mailed to each holder of Existing Preferred
Stock to be redeemed at the address shown on the books of the Company not fewer
than 30 days nor more than 60 days prior to the redemption date. If less than
all of the outstanding shares of Existing Preferred Stock are to be redeemed,
the Company will select the shares to be redeemed by lot, pro rata (as nearly as
may be practicable), or in such other equitable manner as the Board of Directors
may determine.
Voting Rights
Except as indicated herein or provided by law, the holders of Existing
Preferred Stock are not entitled to vote.
Whenever dividends on the Existing Preferred Stock are in arrears for at
least six quarterly dividends, whether or not consecutive, the holders of
Existing Preferred Stock (voting as a class with all other series of authorized
Preferred Stock ranking on a parity with the Existing Preferred Stock either as
to dividends or upon liquidation and upon which like voting rights have been
conferred and are exercisable) will be entitled to vote for the election of two
additional directors on the terms set forth below until, in the case of the
Existing Preferred Stock, all past dividends in arrears on the Existing
Preferred Stock shall have been paid in full. Holders of all such series of
authorized Preferred Stock which are granted such voting rights (none of which
is currently outstanding), together with the Existing Preferred Stock, will vote
as a single class. In such case, the Board of Directors of the Company will be
increased by two directors, and the holders of all such series of authorized
Preferred Stock, together with the holders of Existing Preferred Stock, will
have the exclusive right as a class, as outlined above, to elect two directors
(the "Additional Directors") at the next annual meeting of stockholders or at a
special meeting of holders of all such series of authorized Preferred Stock and
the Existing Preferred Stock. At any time when such voting rights shall have
vested, a proper officer of the Company shall, upon written request of holders
of record of 10% of the shares of Existing Preferred Stock then outstanding,
call a special meeting of holders of all such series of authorized Preferred
Stock and the Existing Preferred Stock for the purpose of such election. For
purposes of the foregoing, each share of Existing Preferred Stock shall have one
vote per share, except that when any other series of authorized Preferred Stock
shall have the right to vote with the Preferred Stock as a single class on any
matter, then the Preferred Stock and such other series of authorized Preferred
Stock shall have with respect to such matters one vote per $25 of stated
liquidation preference. Upon termination of the right of the holders of all such
series of authorized Preferred Stock to vote for directors, the term of office
of all directors then in office elected by all such series of authorized
Preferred Stock voting as a class shall terminate. For so long as the holders of
all such series of authorized Preferred Stock shall have the right to vote for
directors, any vacancy in the office of an Additional Director may be filled
(except in the case of the removal of an Additional Director) by a person
appointed by the remaining Additional Director. In the case of the removal of an
Additional Director, or, if there is no remaining Additional Director, the
vacancy may be filled by a person elected by the holders of all such series of
authorized Preferred Stock.
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The affirmative vote or consent of the holders of at least two-thirds of
the outstanding shares of the Existing Preferred Stock, voting as a class, will
be required to (i) authorize, create or issue, or increase the authorized or
issued amount of shares of, any class or series of stock ranking prior to the
Existing Preferred Stock, either as to dividends or upon liquidation, or (ii)
amend, alter or repeal (whether by merger, consolidation or otherwise) any
provision of the Certificate of Incorporation or of the Certificate of
Designations so as to materially and adversely affect the preferences, special
rights or powers of the Preferred Stock; provided, however, that any increase in
the authorized Preferred Stock or the creation and issuance of any other series
of authorized Preferred Stock ranking on a parity with or junior to the Existing
Preferred Stock shall not be deemed to materially and adversely affect such
preferences, special rights or powers.
Except as set forth above or as required by law, the holders of Existing
Preferred Stock will not be entitled to vote on any merger or consolidation
involving the Company or a sale of all or substantially all of the assets of the
Company.
Liquidation Rights
In the event of any liquidation, dissolution or winding-up of the Company,
whether voluntary or involuntary, before any payment or distribution of the
assets of the Company or proceeds thereof (whether capital or surplus) shall be
made to or set apart for the holders of any class or series of stock of the
Company ranking junior to the Existing Preferred Stock upon liquidation, holders
of the Existing Preferred Stock shall be entitled to receive $25 per share (the
"stated liquidation preference"), plus an amount equal to all dividends (whether
or not earned or declared) accrued and unpaid to the date of final distribution
(together with the stated liquidation preference, the "preferential amount"),
but such holders shall not be entitled to any further payment. If, upon any
liquidation, dissolution or winding-up of the Company the assets of the Company,
or proceeds thereof, distributable among the holders of shares of Preferred
Stock and any other class or series of stock ranking on a parity with the
Preferred Stock as to payments upon liquidation, dissolution or winding-up shall
be insufficient to pay in full the preferential amount payable on all such
shares of stock, then such assets, or the proceeds thereof, shall be distributed
among such holders ratably in accordance with the respective amounts that would
be payable on such shares if all amounts payable thereon were paid in full. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all the
property or assets of the Company to, or a consolidation or merger of the
Company with or into, one or more other corporations (whether or not the Company
is the corporation surviving such consolidation or merger) will not be deemed to
be a liquidation, dissolution or winding-up, voluntary or involuntary.
Transfer Agent
The transfer agent, dividend disbursing agent and registrar for the
Existing Preferred Stock is ChaseMellon Shareholder Services LLC.
COMMON STOCK
General
At May 26, 1998, the Company had 23,397,471 shares of Class A Common Stock
and no shares of Class B Common Stock outstanding.
Class A Common Stock and Class B Common Stock
Holders of Class A Common Stock are entitled to one vote for each share of
Class A Common Stock on each matter submitted to a vote of stockholders,
including the election of directors. Holders of Class A Common Stock are not
entitled to cumulative voting. Shares of Class A Common Stock have no preemptive
or other subscription rights and were, until May 13, 1998, convertible by the
Morgan Stanley Stockholders into an equal number of shares of Class B Common
Stock.
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Holders of Class B Common Stock have no right to vote on matters submitted
to a vote of stockholders, except (i) as otherwise required by law; and (ii)
that the holders of Class B Common Stock shall have the right to vote as a class
on any amendment, repeal or modification to the Certificate of Incorporation
that adversely affects the powers, preferences or special rights of the holders
of the Class B Common Stock. Shares of Class B Common Stock have no preemptive
or other subscription rights and are convertible into an equal number of shares
of Class A Common Stock (x) at the option of the holder thereof to the extent
that, following such conversion, the Morgan Stanley Stockholders will not, in
the aggregate, own more than 49% of the outstanding shares of Class A Common
Stock; and (y) automatically upon the transfer of such shares by any Morgan
Stanley Stockholder to a person that is not a Morgan Stanley Stockholder or an
affiliate of a Morgan Stanley Stockholder.
The Morgan Stanley Stockholders sold their interests in the Company on May
13, 1998. Accordingly, the shares of Class A Common Stock are no longer
convertible into shares of Class B Common Stock, there are no shares of Class B
Common Stock outstanding and the Certificate of Incorporation does not authorize
the issuance of any additional shares of Class B Common Stock.
Dividends
All holders of Common Stock are entitled to receive such dividends or other
distributions, if any, as may be declared from time to time by the Board of
Directors in its discretion out of funds legally available therefor, subject to
the prior rights of any Preferred Stock then outstanding, and to share equally,
share for share, in such dividends or other distributions as if all shares of
Common Stock were a single class. Dividends or other distributions declared or
paid in shares of Common Stock, or options, warrants or rights to acquire such
stock or securities convertible into or exchangeable for shares of such stock,
are payable to all of the holders of Common Stock ratably according to the
number of shares held by them, in shares of Class A Common Stock to holders of
that class of stock and in shares of Class B Common Stock to holders of that
class of stock. Delaware law generally requires that dividends be paid only out
of the Company's surplus or current net profits in accordance with the DGCL.
Liquidation
Subject to the rights of any holders of Preferred Stock outstanding, upon
the dissolution, liquidation or winding-up of the Company, the holders of Common
Stock are entitled to share equally and ratably in the assets available for
distribution after payments are made to the Company's creditors.
Full Payment and Nonassessability
All of the outstanding shares of Common Stock are fully paid and
nonassessable.
Listing
The Class A Common Stock is listed on the New York Stock Exchange under the
symbol "ARM."
Registrar and Transfer Agent
ChaseMellon Shareholder Services LLC is the registrar and transfer agent
for the Common Stock.
CERTIFICATE OF INCORPORATION AND BY-LAWS
Stockholders' rights and related matters are governed by the DGCL, the
Certificate of Incorporation and the By-laws. Certain provisions of the
Certificate of Incorporation and By-laws, which are summarized below, may have
the effect, either alone or in combination with each other, of discouraging or
making more difficult a tender offer or takeover attempt that is opposed by the
Company's Board of Directors but that a stockholder might consider to be in its
best interest. Such provisions may also adversely affect prevailing market
prices for the Offered Preferred Stock.
16
<PAGE> 18
Classified Board of Directors and Related Provisions
The Certificate of Incorporation provides for the classification of the
Board of Directors into three classes with each class of directors serving
staggered three-year terms. The term of the initial Class I directors will
terminate on the date of the 1998 annual meeting of stockholders; the term of
the initial Class II directors will terminate on the date of the 1999 annual
meeting of stockholders; and the term of the initial Class III directors shall
terminate on the date of the 2000 annual meeting of stockholders. At each annual
meeting of stockholders beginning in 1998, successors to the class of directors
whose term expires at that annual meeting will be elected for a three-year term.
Accordingly, approximately one-third of the Company's Board of Directors will be
elected each year. In addition, subject to certain limited exceptions, if the
number of directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain the number of directors in each class as
nearly equal as possible, and any additional director of any class elected to
fill a vacancy resulting from an increase in such class shall hold office for a
term that shall coincide with the remaining term of that class, but in no case
will a decrease in the number of directors shorten the term of any incumbent
director. Subject to the rights of holders of any outstanding preferred stock
issued by the Company, vacancies on the Board of Directors may be filled only by
the Board of Directors, the stockholders acting at an annual meeting or, if the
vacancy is with respect to a director elected by a voting group, by action of
any other directors elected by such voting group or such voting group.
The Certificate of Incorporation also provides that, subject to the rights
of holders of any preferred stock then outstanding and any requirements of law,
directors may be removed only for cause.
Action by Written Consent; Special Meeting
Any action required or permitted to be taken at an annual or special
meeting of stockholders will not be permitted to be taken by written consent in
lieu of a meeting of stockholders, and, thus, stockholders will only be
permitted to take action at an annual or special meeting called in accordance
with the By-laws. The Certificate of Incorporation and By-laws provide that
special meetings of stockholders may only be called by the Chief Executive
Officer of the Company or by a majority of the Board of Directors. Special
meetings may not be called by the stockholders.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
The Certificate of Incorporation and By-laws establish advance notice
procedures with regard to stockholder proposals and the nomination, other than
by or at the direction of the Board of Directors or a committee thereof, of
candidates for election as directors. These procedures provide that the notice
of stockholder proposals and stockholder nominations for the election of
directors at an annual meeting must be in writing and received by the Secretary
of the Company not less than 60 days nor more than 90 days prior to the
anniversary date of the previous year's annual meeting or, if the date of the
annual meeting is not within 30 days before or after the anniversary date of the
previous year's annual meeting, not later than the close of business on the
tenth day following the day on which notice of the date of such meeting was
mailed or public disclosure of the date of the meeting of stockholders was made,
whichever first occurs. The notice of stockholder nominations must set forth
certain information with respect to the stockholder giving the notice and with
respect to each nominee.
Indemnification
The Certificate of Incorporation and By-laws provide that the Company shall
advance expenses to and indemnify each director and officer of the Company to
the fullest extent permitted by law.
Amendments
Stockholders may adopt, alter, amend or repeal provisions of the By-laws
only by vote of the holders of 80% or more of the outstanding Common Stock and
any other voting securities. In addition, the affirmative vote of the holders of
80% or more of the outstanding Common Stock and any other voting securities is
required to amend certain provisions of the Certificate of Incorporation,
including filling vacancies on the
17
<PAGE> 19
Board of Directors, removal of directors only for cause, prohibiting stockholder
action by written consent, prohibiting the calling of special meetings by
stockholders, approval of amendments to the By-laws and the provisions referred
to above relating to the classification of the Company's Board of Directors.
LIMITATIONS ON DIRECTORS' LIABILITY
The Certificate of Incorporation provides that no director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for any breach of fiduciary duty as a director, except for liability:
(i) for any breach of the director's duty of loyalty to the Company or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) in respect of
certain unlawful dividend payments or stock redemptions or purchases or (iv) for
any transaction from which the director derived an improper personal benefit.
The effect of these provisions is to eliminate the rights of the Company and its
stockholders (through stockholders' derivative suits on behalf of the Company)
to recover monetary damages against a director for breach of fiduciary duty as a
director (including breaches resulting from grossly negligent behavior), except
in the situations described above. These provisions do not limit the liability
of directors under federal securities laws and do not affect the availability of
equitable remedies such as an injunction or rescission based upon a director's
breach of his duty of care.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
Section 203 of the DGCL prohibits certain transactions between a Delaware
corporation and an "interested stockholder," which is defined as a person who,
together with any affiliates and/or associates of such person, beneficially
owns, directly or indirectly, 15% or more of the outstanding voting shares of a
Delaware corporation. This provision prohibits certain business combinations
(defined broadly to include mergers, consolidations, sales or other dispositions
of assets having an aggregate value of 10% or more of the consolidated assets of
the corporation, and certain transactions that would increase the interested
stockholder's proportionate share ownership in the corporation) between an
interested stockholder and a corporation for a period of three years after the
date the interested stockholder acquired its stock, unless: (i) the business
combination is approved by the corporation's board of directors prior to the
date the interested stockholder acquired shares; (ii) the interested stockholder
acquired at least 85% of the voting stock of the corporation in the transaction
in which it became an interested stockholder or (iii) the business combination
is approved by a majority of the board of directors and by the affirmative vote
of two-thirds of the outstanding voting stock owned by disinterested
stockholders at an annual or special meeting. A Delaware corporation, pursuant
to a provision in its certificate of incorporation or by-laws, may elect not to
be governed by Section 203 of the DGCL. The Company has not made such an
election and, as a result, the Company is subject to the provisions of Section
203 of the DGCL.
18
<PAGE> 20
PLAN OF DISTRIBUTION
The Company may sell any series of Offered Preferred Stock or Depositary
Shares (collectively, the "Offered Securities") in one or more of the following
ways from time to time: (i) to or through underwriters or dealers, (ii) directly
to purchasers, or (iii) through agents. The Prospectus Supplement with respect
to any Offered Securities will set forth (i) the terms of the offering of the
Offered Securities, including the name or names of any underwriters, dealers or
agents, (ii) the purchase price of the Offered Securities and the proceeds to
the Company from such sale, (iii) any underwriting discounts and commissions or
agency fees and other items constituting underwriters' or agents' compensation,
(iv) any initial public offering prices, (v) any discounts or concessions
allowed or reallowed or paid to dealers and (vi) any securities exchange on
which such Offered Securities may be listed. Any initial public offering price,
discounts or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased.
In connection with underwritten offerings of the Offered Securities and in
accordance with applicable law and industry practice, underwriters may
over-allot or effect transactions which stabilize, maintain or otherwise affect
the market price of the Offered Securities at levels above those which might
otherwise prevail in the open market, including by entering stabilizing bids,
effecting syndicate covering transactions or imposing penalty bids. A
stabilizing bid means the placing of any bid, or the effecting of any purchase,
for the purpose of pegging, fixing or maintaining the price of a security. A
syndicate covering transaction means the placing of any bid on behalf of the
underwriting syndicate or the effecting of any purchase to reduce a short
position created in connection with the offering. A penalty bid means an
arrangement that permits the managing underwriter to reclaim a selling
concession from a syndicate member in connection with the offering when Offered
Securities originally sold by the syndicate member are purchased in syndicate
covering transactions. Such transactions may be effected on a stock exchange, in
the over-the-counter market, or otherwise. Underwriters are not required to
engage in any of these activities. Any such activities, if commenced, may be
discontinued at any time.
If dealers are utilized in the sale of Offered Securities, the Company will
sell such Offered Securities to the dealers as principals. The dealers may then
resell such Offered Securities to the public at varying prices to be determined
by such dealers at the time of resale. The names of the dealers and the terms of
the transaction will be set forth in the Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company to one or more
institutional purchasers, or through agents designated by the Company from time
to time, at a fixed price, or prices, which may be changed, or at varying prices
determined at time of sale. Any agent involved in the offer or sale of the
Offered Securities in respect to which this Prospectus is delivered will be
named, and any commissions payable by the Company to such agent will be set
forth in the Prospectus Supplement relating thereto. Unless otherwise indicated
in the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts (the "Contracts") providing for payment and delivery on a
specified date or dates in the future. Such Contracts will
19
<PAGE> 21
not be subject to any conditions except (a) the purchase by an institution of
the Offered Securities covered by its Contracts shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the United States
to which such institution is subject and (b) if the Offered Securities are being
sold to underwriters, the Company shall have sold to such underwriters the total
principal amount of the Offered Securities less the principal amount thereof
covered by the Contracts. The Prospectus Supplement will set forth the
commission payable for solicitation of such Contracts.
Agents, dealers and underwriters may be entitled, under agreements with the
Company, to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribution with respect to payments that such agents, dealers or underwriters
may be required to make in respect thereof. Agents, dealers and underwriters may
be customers of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities and
will have no established trading market. Any underwriters to whom Offered
Securities are sold for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Offered Securities
may or may not be listed on a national securities exchange. No assurance can be
given that there will be a market for the Offered Securities.
The place and time of delivery of the Preferred Stock are set forth in the
Prospectus Supplement.
LEGAL MATTERS
The validity of the Offered Preferred Stock will be passed upon for the
Company by Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022,
and, if underwriters are utilized, on behalf of such underwriters by such
counsel, which will be named in the Prospectus Supplement, as such underwriters
may select.
EXPERTS
The consolidated financial statements and financial statement schedules for
the Company at December 31, 1997 and 1996, and for each of three years in the
period ended December 31, 1997, appearing in and/or incorporated by reference
into this Prospectus and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon appearing
elsewhere herein and/or incorporated herein by reference, and are included
and/or incorporated by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
ERISA MATTERS FOR PENSION PLANS AND INSURANCE COMPANIES
The Offered Preferred Stock may, subject to certain legal restrictions, be
purchased and held by an employee benefit plan (a "Plan") subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or an
individual retirement account or an employee benefit plan subject to section
4975 of the Internal Revenue Code of 1986, as amended (the "Code"). A fiduciary
of a Plan must determine that the purchase and holding of Offered Preferred
Stock is consistent with its fiduciary duties under ERISA and does not result in
a non-exempt prohibited transaction as defined in section 406 of ERISA or
section 4975 of the Code. Employee benefit plans that are governmental plans (as
defined in section 3(32) of ERISA) and certain church plans (as defined in
section 3(33) of ERISA) are not subject to Title I of ERISA or section 4975 of
the Code. The Offered Preferred Stock may, subject to certain legal
restrictions, be purchased and held by such plans.
20
<PAGE> 22
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following fees and expenses shall be borne by the Company in connection
with this offering. All fees and expenses other than the SEC and listing fees
are estimated.
<TABLE>
<S> <C>
SEC Registration Fee........................................ $22,125
NASD Filing Fee............................................. 8,000
Listing Fee................................................. 29,500
Rating Agency Fees.......................................... 75,000
Printing and Engraving Expenses............................. 75,000
Legal Fees and Expenses..................................... 100,000
Accountants' Fees and Expenses.............................. 50,000
Blue Sky Qualification Fees and Expenses.................... 10,000
Preferred Stock Depositary's Fees and Expenses.............. 5,000
Miscellaneous............................................... 50,375
-------
TOTAL............................................. 425,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides, in summary,
that directors and officers of Delaware corporations are entitled, under certain
circumstances, to be indemnified against all expenses and liabilities (including
attorneys' fees) incurred by them as a result of suits brought against them in
their capacity as a director or officer, if they acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, if they
had no reasonable cause to believe their conduct was unlawful; provided that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the
corporation, unless and only to the extent that 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, they
are fairly and reasonably entitled to indemnity for such expenses which the
court shall deem proper. Any such indemnification may be made by the corporation
only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct.
The Restated Certificate of Incorporation of the Registrant (the
"Certificate of Incorporation") provides that no director of the Registrant
shall be personally liable to the Registrant or its stockholders for monetary
damages for any breach of fiduciary duty as a director, except for liability:
(i) for any breach of the director's duty of loyalty to the Registrant or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) in respect of
certain unlawful dividend payments or stock redemptions or purchases or (iv) for
any transaction from which the director derived an improper personal benefit.
The Certificate of Incorporation and the By-laws of the Registrant provide
for indemnification of its directors and officers to the fullest extent
permitted by Delaware law, as the same may be amended from time to time. In
addition, Morgan Stanley Dean Witter & Co. ("MSDW") indemnifies those directors
of the Registrant who are also officers of Morgan Stanley & Co. Incorporated.
The Underwriting Agreement (Exhibit 1.1 hereto) contains provisions for
certain indemnification rights to the directors and officers of the Registrant.
In addition, the Registrant and MSDW maintain directors' and officers'
liability insurance for their respective directors and officers.
II-1
<PAGE> 23
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
NUMBER
ASSIGNED IN
REGULATION S-K,
ITEM 601 DESCRIPTION OF EXHIBIT
- - --------------- ----------------------
<S> <C>
1.1* Form of underwriting agreement.
2.1 Asset Purchase Agreement, dated as of January 5, 1995, among
Kleinwort Benson Investment Management Holdings Ltd.,
Kleinwort Benson Investment Management Americas Inc., ARM
Financial Group, Inc., and ARM Capital Advisors, Inc.+
2.2 Stock and Asset Purchase Agreement by and between SBM
Company and ARM Financial Group, Inc. dated as of February
16, 1995.+
2.3 Amended and Restated Stock and Asset Purchase Agreement,
dated as of April 7, 1995, by and between SBM Company and
ARM Financial Group, Inc.++, amending the Stock and Asset
Purchase Agreement, dated as of February 16, 1995.+
2.4 Subscription Agreement dated as of June 12, 1995, among ARM
Financial Group, Inc. and New ARM, LLC, Dudley J. Godfrey,
Jr. and Edward Powers.+++
4.1 Second Amended and Restated Stockholders Agreement dated as
of June 24, 1997, among ARM Financial Group, Inc., The
Morgan Stanley Leveraged Equity Fund II, L.P., John Franco,
Martin H. Ruby, Oldarm L.P., Morgan Stanley Capital Partners
III, L.P., Morgan Stanley Capital Investors, L.P., MSCP III
892 Investors, L.P. and New ARM, LLC.++++
4.2* Form of Certificate of Designation of Offered Preferred
Stock.
4.3* Form of Certificate of Offered Preferred Stock.
4.4* Form of Deposit Agreement.
5.1* Opinion of Shearman & Sterling.
12.1* Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends.
23.1* Consent of Shearman & Sterling (included in its opinion
delivered under Exhibit No. 5.1)
23.2** Consent of Ernst & Young LLP.
24.1* Powers of Attorney.
</TABLE>
- - ---------------
<TABLE>
<S> <C>
* Previously filed.
** Filed herewith.
+ Incorporated by reference to the Form 10-K filed by the
Registrant on March 30, 1995.
++ Incorporated by reference to the Form 10-Q filed by the
Registrant on May 15, 1995.
+++ Incorporated by reference to the Form 10-K filed by the
Registrant on March 29, 1996.
++++ Incorporated by reference to Amendment No. 3 to the Form S-1
Registration Statement filed by the Registrant on May 23,
1997.
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales of the
securities 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
II-2
<PAGE> 24
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 set forth in the Registration
Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the Registration Statement is on Form S-3, Form S-8 or Form
F-3, and 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 the 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) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 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) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant for expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the Registrant pursuant to Rule 424(b)(1)
or (4) or 497(h) under the 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.
II-3
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Louisville, State of
Kentucky, on June 17, 1998.
ARM FINANCIAL GROUP, INC.
By: /s/ ROBERT H. SCOTT
------------------------------------
Name: Robert H. Scott
Title: Executive Vice President,
General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement on Form S-3 has been signed below by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Chairman of the Board of June 17, 1998
- - ----------------------------------------------------- Directors and Chief
Martin H. Ruby Executive Officer (Principal
Executive Officer) and
Director
* President -- Retail Business June 17, 1998
- - ----------------------------------------------------- Division and Director
John R. Lindholm
* Executive Vice June 17, 1998
- - ----------------------------------------------------- President -- Chief Financial
Edward L. Zeman Officer (Principal Financial
Officer)
* Controller (Principal June 17, 1998
- - ----------------------------------------------------- Accounting Officer)
Barry G. Ward
* Director June 17, 1998
- - -----------------------------------------------------
Dudley J. Godfrey, Jr.
* Director June 17, 1998
- - -----------------------------------------------------
Edward D. Powers
* Director June 17, 1998
- - -----------------------------------------------------
Colin F. Raymond
* Director June 17, 1998
- - -----------------------------------------------------
Irwin T. Vanderhoof
*By Robert H. Scott, attorney-in-fact.
</TABLE>
II-4
<PAGE> 26
<TABLE>
<CAPTION>
NUMBER
ASSIGNED IN SEQUENTIALLY
REGULATION S-K, NUMBERED
ITEM 601 DESCRIPTION OF EXHIBIT PAGE
- - --------------- ---------------------- ------------
<S> <C> <C>
1.1* Form of underwriting agreement.
2.1 Asset Purchase Agreement, dated as of January 5, 1995, among
Kleinwort Benson Investment Management Holdings Ltd.,
Kleinwort Benson Investment Management Americas Inc., ARM
Financial Group, Inc., and ARM Capital Advisors, Inc.+
2.2 Stock and Asset Purchase Agreement by and between SBM
Company and ARM Financial Group, Inc. dated as of February
16, 1995.+
2.3 Amended and Restated Stock and Asset Purchase Agreement,
dated as of April 7, 1995, by and between SBM Company and
ARM Financial Group, Inc.++, amending the Stock and Asset
Purchase Agreement, dated as of February 16, 1995.+
2.4 Subscription Agreement dated as of June 12, 1995, among ARM
Financial Group, Inc. and New ARM, LLC, Dudley J. Godfrey,
Jr. and Edward Powers.+++
4.1 Second Amended and Restated Stockholders Agreement dated as
of June 24, 1997, among ARM Financial Group, Inc., The
Morgan Stanley Leveraged Equity Fund II, L.P., John Franco,
Martin H. Ruby, Oldarm L.P., Morgan Stanley Capital Partners
III, L.P., Morgan Stanley Capital Investors, L.P., MSCP III
892 Investors, L.P. and New ARM, LLC.++++
4.2* Form of Certificate of Designation of Offered Preferred
Stock.
4.3* Form of Certificate of Offered Preferred Stock.
4.4* Form of Deposit Agreement.
5.1* Opinion of Shearman & Sterling.
12.1* Computation of Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends.
23.1* Consent of Shearman & Sterling (included in its opinion
delivered under Exhibit No. 5.1)
23.2** Consent of Ernst & Young LLP.
24.1* Powers of Attorney.
</TABLE>
- - ---------------
<TABLE>
<S> <C>
* Previously filed.
** Filed herewith.
+ Incorporated by reference to the Form 10-K filed by the
Registrant on March 30, 1995.
++ Incorporated by reference to the Form 10-Q filed by the
Registrant on May 15, 1995.
+++ Incorporated by reference to the Form 10-K filed by the
Registrant on March 29, 1996.
++++ Incorporated by reference to Amendment No. 3 to the Form S-1
Registration Statement filed by the Registrant on May 23,
1997.
</TABLE>
<PAGE> 1
EXHIBIT 23.2
We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 10, 1998, in Amendment No. 2 to the
Registration Statement (Form S-3 No. 333-53967) and related Prospectus of ARM
Financial Group, Inc. dated June 17, 1998.
We also consent to the incorporation by reference therein of our reports dated
February 10, 1998 with respect to the consolidated financial statements and
financial statement schedules of ARM Financial Group, Inc. included in the
Annual Report (Form 10-K) for 1997 filed with the Securities and Exchange
Commission.
/s/ Ernst & Young LLP
Louisville, Kentucky
June 16, 1998
