Table of Contents
As filed with the Securities and Exchange Commission on March 8, 2007
Registration333-
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SAFECO CORPORATION
(Exact name of registrant as specified in its charter)
Washington | 91-0742146 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Safeco Plaza
Seattle, WA 98185
(206) 545-5000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Arthur Chong
Executive Vice President and Chief Legal Officer
Safeco Plaza
Seattle, WA 98185
(206) 545-5000
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Evelyn Sroufe
Perkins Coie LLP
1201 Third Avenue, Suite 4800
Seattle, Washington 98101-3099
(206) 359-8000
Approximate date of commencement of proposed sale 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. o
If any of the securities 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. þ
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. o
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. o
If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. þ
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. o
CALCULATION OF REGISTRATION FEE
Amount to be | Proposed maximum | Proposed maximum | Amount of | |||||||||||||||
Title of each class of securities to be registered | registered(2) | offering price per unit(2) | aggregate offering price(2) | registration fee(1) | ||||||||||||||
Common Stock, no par value per share | $ | $ | $ | |||||||||||||||
Preferred Stock, no par value per share | ||||||||||||||||||
Convertible Preferred Stock, no par value per share | ||||||||||||||||||
Debt Securities(3) | ||||||||||||||||||
Convertible Debt Securities(3) | ||||||||||||||||||
Stock Purchase Contracts | ||||||||||||||||||
Units(4) | ||||||||||||||||||
(1) | In accordance with Rules 456(b) and 457(r), the registrant is deferring payment of all of the registration fees, except for $25,300 that has already been paid with respect to $775,000,000 aggregate initial offering price of securities that were previously registered pursuant to the registration statement(No. 333-102298) initially filed by Safeco Corporation on December 30, 2002, and were not sold thereunder. These previously paid registration fees will be applied in lieu of a portion of any registration fees due for this registration statement pursuant to Rule 457(p) under the Securities Act of 1933, as amended. | |
(2) | An indeterminate aggregate initial offering price or number of the securities of each identified class is being registered as may from time to time be offered at indeterminate prices or be issued on exercise, conversion or exchange of other securities issued directly or on settlement of contracts or other agreements. Separate consideration may or may not be received for securities that are issuable on exercise, conversion or exchange of other securities or that are issued pursuant to contracts or other agreements or in units. | |
(3) | Subject to note (2), an indeterminable amount of these securities may be senior or subordinated. | |
(4) | Each unit will be issued under a unit agreement or indenture and will represent an interest in two or more securities, which securities may or may not be separable from one another. |
Table of Contents
PROSPECTUS
![(GRAPH)](https://capedge.com/proxy/S-3ASR/0000950134-07-005223/v28134v2813400.gif)
SAFECO CORPORATION
Common Stock
Preferred Stock
Convertible Preferred Stock
Debt Securities
Convertible Debt Securities
Stock Purchase Contracts
Units
We may offer from time to time common stock, preferred stock, convertible preferred stock, debt securities, convertible debt securities or stock purchase contracts, as well as units that include any of these securities. In addition, selling securityholders named in an accompanying prospectus supplement may offer for resale these classes of securities acquired from us. Certain of these securities may be convertible into or exercisable or exchangeable for common or preferred stock or other securities of Safeco or debt or equity securities of one or more other entities. When we or the selling securityholders decide to sell a particular class of securities, we will provide specific terms of the offered securities, including the amount, in a prospectus supplement. We and the selling securityholders may offer and sell these securities to or through one or more underwriters, dealers, agents, or directly to purchasers, on a continuous or delayed basis. Our common stock is traded on the New York Stock Exchange under the symbol SAF.
You should read this prospectus and any prospectus supplement carefully before you invest. We and any selling securityholders may not use this prospectus to sell securities unless it includes a prospectus supplement.
We will receive no proceeds from any sale by the selling securityholders of the securities covered by this prospectus and any accompanying prospectus supplement, but in some cases we may pay certain registration and offering fees and expenses.
Investing in our securities involves risk. See the section entitled “Forward-Looking Information” in this prospectus, as well as the sections entitled “Forward-Looking Information” and “Risk Factors” or similarly titled sections that may appear in or be incorporated into the prospectus supplement accompanying this prospectus prior to investing in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is March 8, 2007.
Table of Contents
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the Commission, using a shelf registration process. Under this shelf process, we or the selling securityholders may sell common stock, preferred stock, convertible preferred stock, debt securities, convertible debt securities, stock purchase contracts or units, described in this prospectus in one or more offerings. This prospectus provides you with a general description of some of the securities we or the selling securityholders may offer. Each time we or the selling securityholders offer securities, we will provide a prospectus supplement that will describe the specific amounts, prices and terms of the offered securities, and disclose whether Safeco or selling securityholders are offering the securities. The prospectus supplement may also add, update or change information contained in this prospectus. You should read carefully both this prospectus and any prospectus supplement together with additional information described below under “Information Incorporated By Reference.”
This prospectus does not contain all the information provided in the registration statement we filed with the Commission. For further information about us or the securities offered hereby, you should refer to that registration statement, which you can obtain from the Commission as described below under “Where You Can Find More Information.”
You should rely only on the information contained or incorporated by reference in this prospectus or a prospectus supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the Commission and incorporated by reference, is accurate as of the date stated in those documents only. Our business, financial condition, results of operations and prospects, as well as other information, may have changed since those dates.
SAFECO CORPORATION
We are a Washington State corporation with headquarters in Seattle, Washington. We had 7,208 employees at February 16, 2007. We have been in business since 1923 serving the insurance needs of drivers, home owners and small- and mid-sized businesses. We also are a top-tier surety carrier. Our business helps people protect what they value and deal with the unexpected.
As a customer-focused property and casualty company, we are intent on offering a competitive mix of insurance products and fulfilling our promise of indemnity when a loss occurs. In recent years, we have extended our market reach by expanding the number of price segments for our products and our geographic presence. We sell our insurance products principally through independent agents.
Our principal executive offices are located at Safeco Plaza, Seattle, Washington 98185, and our telephone number is(206) 545-5000. Our website is http://www.safeco.com. Information contained on our website does not constitute a part of this prospectus.
FORWARD-LOOKING INFORMATION
Our disclosure and analysis in this prospectus, in any prospectus supplement, in the documents incorporated by reference and in some of our other public statements contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. This Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will,” or the negative of those terms, or comparable terminology.
1
Table of Contents
Any or all of our forward-looking statements in this prospectus, in any prospectus supplement, in the documents incorporated by reference and in any other public statements we make may turn out to be inaccurate. Forward-looking statements reflect our current expectations or forecasts of future events or results and are inherently uncertain. Inaccurate assumptions we might make and known or unknown risks and uncertainties can affect the accuracy of our forward-looking statements. Consequently, no forward-looking statement can be guaranteed and future events and actual or suggested results may differ materially.
We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make in our annual reports onForm 10-K, quarterly reports onForm 10-Q and current reports onForm 8-K, as well as in any prospectus supplement relating to this prospectus, including in any “Risk Factors” section.
INFORMATION INCORPORATED BY REFERENCE
The Commission allows us to “incorporate by reference” the information we file with it into this prospectus, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and the information that we file later with the Commission will automatically update and, where applicable, supersede this information. We incorporate by reference the documents listed below and any additional documents filed by us with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, on or after the date of this prospectus (other than information “furnished” under any current report or otherwise “furnished” to the Commission), until this offering is terminated:
• | our annual report onForm 10-K for the year ended December 31, 2006; | |
• | our current reports onForm 8-K, including amendments thereto, as filed with the Commission on: (i) January 5, 2007 and (ii) February 13, 2007; and | |
• | the description of our common stock contained in our registration statement onForm 8-A as filed with the Commission on November 28, 2006, and any amendments or reports filed with the purpose of updating such description. |
You can obtain any of the documents incorporated by reference through us, the Commission or the Commission’s website as described below. Any person, including any beneficial owner, to whom this prospectus is delivered, may obtain documents incorporated by reference in, but not delivered with, this prospectus by requesting them orally or in writing at the following address:
Safeco Corporation
Attn: Safeco Investor Relations
Safeco Plaza
Seattle, Washington 98185
(206) 545-5000
Documents incorporated by reference are available from us without charge, excluding exhibits to those documents unless we have specifically incorporated by reference such exhibits into those documents.
WHERE YOU CAN FIND MORE INFORMATION
We are required to file annual, quarterly and current reports, as well as registration and proxy statements and other information, with the Commission. These documents may be read and copied at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You can get further information about the Commission’s Public Reference Room by calling1-800-SEC-0330. The Commission also maintains a website at http://www.sec.gov that contains reports, registration statements and other information regarding registrants like Safeco that file electronically with the Commission. In addition, our filings with the Commission may be available through the New York Stock Exchange, 20 Broad Street, New York, New York, 10005, on which our common stock is listed.
2
Table of Contents
This prospectus is part of a registration statement onForm S-3 filed by us with the Commission under the Securities Act of 1933, as amended, or the Securities Act. As permitted by the Commission, this prospectus does not contain all the information in the registration statement filed with the Commission. For a more complete understanding of this offering, you should refer to the complete registration statement, including exhibits, onForm S-3 that may be obtained as described above. Statements contained in this prospectus or in any prospectus supplement about the contents of any contract or other document are not necessarily complete. If we have filed any contract or other document as an exhibit to the registration statement or any other document incorporated by reference in the registration statement, you should read the exhibit for a more complete understanding of the document or matter involved. Each statement regarding a contract or other document is qualified in its entirety by reference to the actual document.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement, we expect to use the net proceeds from our sale of offered securities for general corporate purposes, which may include, among other things, the refinancing of outstanding debt and the funding of acquisitions and other business development. Pending the use of any net proceeds, we intend to invest the net proceeds in interest-bearing, investment-grade securities. We will describe any specific allocation of the proceeds to a particular purpose that has been made at the date of any prospectus supplement in the applicable prospectus supplement.
We will not receive any of the proceeds from any resales of securities from time to time by any selling securityholders.
RATIO OF EARNINGS TO FIXED CHARGES
For purposes of computing the ratio of earnings to fixed charges, earnings represent income from continuing operations before income taxes, plus fixed charges net of capitalized interest. Fixed charges include interest expense (including interest on deposit contracts), amortization of deferred debt expense, the proportion, in our opinion, deemed representative of the interest factor of rent expense and distributions on capital securities. The following table sets forth our ratios of earnings to fixed charges for each period indicated:
Year Ended December 31, | ||||||||||||||||||||
2006 | 2005 | 2004 | 2003 | 2002 | ||||||||||||||||
Ratio of Earnings to Fixed Charges | 14.56 | 12.13 | 9.25 | 3.98 | 3.26 |
DESCRIPTION OF CAPITAL STOCK
General
Our authorized capital stock consists of 300,000,000 shares of common stock, no par value, and 10,000,000 shares of preferred stock, no par value. As of February 16, 2007, there were issued and outstanding 105,567,542 shares of common stock and no shares of preferred stock.
The following is a summary description of our capital stock.
Common Stock
The holders of our common stock have one vote per share on all matters submitted to a vote of our shareholders. There are no cumulative voting rights for the election of directors. Holders of common stock are entitled to receive ratably such dividends as may be declared by the board of directors out of legally available funds, subject to preferences that may be applicable to any outstanding preferred stock. In the event of a liquidation, dissolution, or winding up of the company, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any outstanding preferred stock. Holders of shares of our common stock have no preemptive, subscription, redemption, sinking fund, or conversion rights.
3
Table of Contents
The transfer agent and registrar for our common stock is The Bank of New York, Shareholder Relations, Church Street Station, P.O. Box 11258, New York, New York 10286.
Preferred Stock
Our restated articles of incorporation permit our board of directors, without further shareholder authorization, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the terms and provisions of each series, including, but not limited to:
• | dividend rights and preferences over dividends on our common stock; | |
• | conversion rights or exchange rights, if any; | |
• | voting rights, if any (in addition to those provided by law); | |
• | redemption rights, if any, and any sinking fund provision made for that purpose; and | |
• | rights on liquidation, including preferences over the common stock. |
Each series of preferred stock will be entitled to receive an amount payable upon liquidation, dissolution or winding up, as fixed for such series, plus all dividends accumulated to the date of final distribution, if any, before any payment or distribution of our assets is made on our common stock. Currently, we have no shares of preferred stock outstanding.
Antitakeover Effects of Certain Provisions in Our Articles, Bylaws and Washington Law
Some provisions of our restated articles of incorporation, our bylaws, as amended, and Washington law may be deemed to have an antitakeover effect and may collectively operate to delay, defer or prevent a tender offer or takeover attempt that a shareholder might consider in his or her best interest, including those attempts that might result in a premium over the market price for the shares held by our shareholders. These provisions include:
Preferred Stock Authorization. As noted above, our board of directors, without shareholder approval, has the authority under our restated articles of incorporation to issue preferred stock with rights superior to the rights of the holders of common stock. As a result, preferred stock could be issued quickly and easily, could adversely affect the rights of holders of common stock and could be issued with terms calculated to delay or prevent a change of control of Safeco or make removal of management more difficult.
Election of Directors. Our restated articles of incorporation provide for the division of our board of directors into three classes, as nearly equal in number as possible, with the directors in each class serving three-year terms and one class being elected each year by our shareholders. Vacancies on the board of directors are filled by the board of directors. Any amendment to our restated articles of incorporation that would affect the number of directors on our board, the classification of our board, or the manner in which vacancies on the board are filled requires the favorable vote of at least 67% of the outstanding shares entitled to vote. Because this system of electing directors and filling vacancies generally makes it more difficult for shareholders to replace a majority of the board of directors, it may tend to discourage a third party from making a tender offer or otherwise attempting to gain control of Safeco.
Shareholder Meetings; Consents. Our bylaws, as amended, establish advance notice procedures with respect to business brought before the annual meeting by a shareholder and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee of the board. Under our bylaws, as amended, special meetings of the shareholders may be called only by our board of directors. No business other than that stated in the notice of meeting may be transacted at any special meeting. In addition, under Washington law, shareholder actions taken without a shareholder meeting or a vote must be taken by unanimous written consent of the shareholders. These provisions may have the effect of delaying, or preventing, consideration of certain shareholder proposals until the next annual meeting, if at all, unless a special meeting is called by the board of directors.
Washington Law. Chapter 23B.19 of the Washington Business Corporation Act, with limited exceptions, prohibits a “target corporation” from engaging in certain “significant business transactions” for a period of five years after the share acquisition by an acquiring person, unless the prohibited transaction or the acquiring person’s
4
Table of Contents
purchase of shares was approved by a majority of the members of the target corporation’s board of directors prior to the acquiring person’s share acquisition. An “acquiring person” is defined as a person or group of persons that beneficially owns 10% or more of the voting securities of the target corporation. Such prohibited transactions include, among other things:
• | certain mergers or consolidations with, dispositions of assets to, or issuances of stock to or redemptions of stock from, the acquiring person; | |
• | termination of 5% or more of the employees of the target corporation as a result of the acquiring person’s acquisition of 10% or more of the shares; | |
• | allowing the acquiring person to receive any disproportionate benefit as a shareholder; and | |
• | liquidating or dissolving the target corporation. |
After the five-year period, certain “significant business transactions” are permitted, as long as they comply with certain “fair price” provisions of the statute or are approved by a majority of the outstanding shares other than those of which the acquiring person has beneficial ownership. A corporation may not “opt out” of this statute.
This statute may have the effect of deterring offers and delaying or preventing a change of control of Safeco.
Insurance Regulations Concerning Change of Control
State insurance laws intended primarily for the protection of policyholders contain certain requirements that must be met prior to any change of control of an insurance company or insurance holding company that is domiciled, or in some cases, having such substantial business that it is deemed commercially domiciled, in that state. These requirements may include the advance filing of specific information with the state insurance commission, a public hearing on the matter, and review and approval of the change of control by the state agencies. We have property and casualty insurance subsidiaries domiciled or deemed to be commercially domiciled in Washington, Indiana, Oregon, Illinois, Texas, Missouri and California. In these states, “control” is generally presumed to exist through the ownership of 10% of more of the voting securities of an insurance company or any company that controls the insurance company. Any purchase of our shares that would result in the purchaser owning 10% or more of our voting securities will be presumed to result in the acquisition of control of our insurance subsidiaries. Such an acquisition requires prior regulatory approval unless the insurance commissioner in each state in which our insurance subsidiaries are domiciled or deemed to be commercially domiciled determines otherwise. In addition, many states require prenotification to the state regulatory agencies of a change of control of a nondomestic insurance company licensed in that state if specific market concentration thresholds would be triggered by the acquisition. While those prenotification statutes do not authorize the state agency to disapprove the change of control, they do authorize the agency to issue a cease and desist order with respect to the nondomestic insurance company if certain conditions, such as undue market concentration, exist. These insurance regulatory requirements may deter, delay or prevent transactions affecting control of Safeco or the ownership of our voting securities, including transactions that could be advantageous to our shareholders.
DESCRIPTION OF DEBT SECURITIES
The following summary of the terms of the debt securities describes general terms that apply to the debt securities. The debt securities offered pursuant to this prospectus will be unsecured obligations and will be either senior debt or subordinated debt. The particular terms of any debt securities will be described more specifically in each prospectus supplement relating to those debt securities. Where any provision in an accompanying prospectus supplement is inconsistent with any provision in this summary, the prospectus supplement will control.
Senior debt securities will be issued under a debt indenture, and subordinated debt securities will be issued under a subordinated debt indenture. We summarize these indentures below. Where we make no distinction in our summary between senior debt securities and subordinated debt securities or between the debt indenture and the subordinated debt indenture, the applicable information refers to any debt securities and either of the indentures.
5
Table of Contents
Since this is only a summary, it does not contain all of the information that may be important to you. An indenture relating to the senior debt securities, the indenture for debt securities between J.P. Morgan, National Association and Safeco, dated as of August 23, 2002, along with a form of senior debt securities, and a form of indenture relating to the subordinated debt securities, along with a form of subordinated debt securities, are exhibits to the registration statement of which this prospectus is a part. We encourage you to read those documents.
General
The indenture does not limit the aggregate principal amount of debt securities we may issue and provides that we may issue debt securities thereunder from time to time in one or more series. The indenture does not limit the amount of other indebtedness or debt securities, other than certain secured indebtedness as described below, which we or our subsidiaries may issue. Under the indenture, the terms of the debt securities of any series may differ and we, without the consent of the holders of the debt securities of any series, may reopen a previous series of debt securities and issue additional debt securities of the series or establish additional terms of the series.
Unless otherwise provided in a prospectus supplement, the senior debt securities will be our unsecured obligations and will rank equally with all of our other unsecured and senior indebtedness, and the subordinated debt securities will be unsecured obligations of ours and, as set forth below under “— Subordinated Debt Securities,” will be subordinated in right of payment to all of our senior indebtedness.
Because we are a holding company, our rights and the rights of our creditors (including the holders of debt securities) and shareholders to participate in any distribution of assets of any subsidiary upon the subsidiary’s liquidation or reorganization or otherwise would be subject to the prior claims of the subsidiary’s creditors, except to the extent that we may be a creditor with recognized claims against the subsidiary. The right of our creditors (including the holders of debt securities) to participate in the distribution of stock owned by us in certain of our subsidiaries, including our insurance subsidiaries, may also be subject to approval by certain insurance regulatory authorities having jurisdiction over such subsidiaries.
You should refer to the prospectus supplement that accompanies this prospectus for a description of the specific series of debt securities we are offering by that prospectus supplement. The terms may include:
• | the title and specific designation of the debt securities, including whether they are senior debt securities or subordinated debt securities; | |
• | any limit on the aggregate principal amount of the debt securities or the series of which they are a part; | |
• | whether the debt securities are to be issuable as registered securities, as bearer securities or alternatively as bearer securities and registered securities, and if as bearer securities, whether interest on any portion of a bearer security in global form will be paid to any clearing organizations; | |
• | the currency or currencies, or composite currencies, in which the debt securities will be denominated and in which we will make payments on the debt securities; | |
• | the date or dates on which we must pay principal; | |
• | the rate or rates at which the debt securities will bear interest or the manner in which interest will be determined, if any interest is payable; | |
• | the date or dates from which any interest will accrue, the date or dates on which we must pay interest and the record date for determining who is entitled to any interest payment; | |
• | the place or places where we must pay the debt securities and where any debt securities issued in registered form may be sent for transfer or exchange; | |
• | the terms and conditions on which we may, or may be required to, redeem the debt securities; | |
• | the terms and conditions of any sinking fund; | |
• | if other than denominations of $1,000, the denominations in which we may issue the debt securities; | |
• | the amount we will pay if the maturity of the debt securities is accelerated; |
6
Table of Contents
• | whether we will issue the debt securities in the form of one or more global securities and, if so, the identity of the depositary for the global security or securities; | |
• | any addition to or changes in the events of default or covenants that apply to the debt securities; | |
• | whether the debt securities will be defeasible; and | |
• | any other terms of the debt securities and any other deletions from or modifications or additions to the indenture in respect of the debt securities, including those relating to the subordination of any debt securities. |
Unless the applicable prospectus supplement specifies otherwise, the debt securities will not be listed on any securities exchange.
Unless the applicable prospectus supplement specifies otherwise, we will issue the debt securities in fully registered form without coupons. If we issue debt securities of any series in bearer form, the applicable prospectus supplement will describe the special restrictions and considerations, including special offering restrictions and special federal income tax considerations, applicable to those debt securities and to payment on and transfer and exchange of those debt securities. Debt securities issued in bearer form will be transferable by delivery.
Unless otherwise stated in the prospectus supplement, we will pay principal, premium, interest and additional amounts, if any, on the debt securities at the office or agency we maintain for that purpose (initially the corporate trust office of the trustee). We may pay interest on debt securities issued in registered form by check mailed to the address of the persons entitled to the payments or we may pay by transfer to their U.S. bank accounts. Interest on debt securities issued in registered form will be payable on any interest payment date to the registered owners of the debt securities at the close of business on the regular record date for the interest payment. We will name in the prospectus supplement all paying agents we initially designate for the debt securities. We may designate additional paying agents, rescind the designation of any paying agent or approve a change in the office through which any paying agent acts, but we must maintain a paying agent in each place where payments on the debt securities are payable.
Unless otherwise stated in the prospectus supplement, the debt securities may be presented for transfer (duly endorsed or accompanied by a written instrument of transfer, if we or the security registrar so requires) or exchanged for other debt securities of the same series (containing identical terms and provisions, in any authorized denominations, and in the same aggregate principal amount) at the office or agency we maintain for that purpose (initially the corporate trust office of the trustee). There will be no service charge for any transfer or exchange, but we may require payment sufficient to cover any tax or other governmental charge or expenses payable in connection with the transfer or exchange. We will not be required to:
• | issue, register the transfer of, or exchange, debt securities during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any such debt securities and ending at the close of business on the day of such mailing or | |
• | register the transfer of or exchange any debt security selected for redemption in whole or in part, except the unredeemed portion of any debt security being redeemed in part. |
We shall appoint the trustee as security registrar. Any transfer agent (in addition to the security registrar) we initially designate for any debt securities will be named in the related prospectus supplement. We may designate additional transfer agents, rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, but we must maintain a transfer agent in each place where any payments on the debt securities are payable.
Unless otherwise stated in the prospectus supplement, we will issue the debt securities only in fully registered form, without coupons, in minimum denominations of $1,000 and integral multiples of $1,000. The debt securities may be represented in whole or in part by one or more global debt securities. Each global security will be registered in the name of a depositary or its nominee and the global security will bear a legend regarding the restrictions on exchanges and registration of transfer. Interests in a global security will be shown on records maintained by the depositary and its participants, and transfers of those interests will be made as described below. Provisions relating to the use of global securities are more fully described below in the section entitled “Use of Global Securities.”
7
Table of Contents
We may issue the debt securities as original issue discount securities (bearing no interest or bearing interest at a rate which at the time of issuance is below market rates) to be sold at a substantial discount below their principal amount. We will describe certain special U.S. federal income tax and other considerations applicable to any debt securities that are issued as original issue discount securities in the applicable prospectus supplement.
If the purchase price of any debt securities is payable in one or more foreign currencies or currency units, or if any debt securities are denominated in one or more foreign currencies or currency units, or if any payments on the debt securities are payable in one or more foreign currencies or currency units, we will describe the restrictions, elections, certain U.S. federal income tax considerations, specific terms and other information about the debt securities and the foreign currency or currency units in the prospectus supplement.
We will comply with Section 14(e) under the Exchange Act, and any other tender offer rules under the Exchange Act that may then be applicable, in connection with any obligation to purchase debt securities at the option of the holders. Any such obligation applicable to a series of debt securities will be described in the related prospectus supplement.
Unless otherwise described in a prospectus supplement relating to any debt securities, other than as described below under “— Limitation on Mortgages and Liens,” the indenture does not limit our ability to incur debt or give holders of debt securities protection in the event of a sudden and significant decline in our credit quality or a takeover, recapitalization or highly leveraged or similar transaction involving us. Accordingly, we could in the future enter into transactions that could increase the amount of indebtedness outstanding at that time or otherwise affect our capital structure or credit rating. You should refer to the prospectus supplement relating to a particular series of debt securities for information regarding any changes in the events of default described below or covenants contained in the indenture, including any addition of a covenant or other provisions providing event risk or similar protection.
Subordinated Debt Securities
Unless otherwise provided in the applicable prospectus supplement, the following provisions will apply for subordinated debt securities.
Before we pay the principal of, premium, if any, and interest on, the subordinated debt securities, we must be current and not in default on payment in full of all of our senior indebtedness. Senior indebtedness includes all of our indebtedness as described below, except for:
• | obligations issued or assumed as the deferred purchase price of property; | |
• | conditional sale obligations; | |
• | obligations arising under any title retention agreements; | |
• | indebtedness relating to the applicable subordinated debt securities; | |
• | indebtedness owed to one of our subsidiaries; and | |
• | indebtedness that, by its terms, is subordinate in right of payment to or equal with the applicable subordinated debt securities. |
Generally indebtedness means:
• | the principal of, premium, if any, and interest on indebtedness for money borrowed; |
• | the principal of, premium, if any, and interest on indebtedness evidenced by notes, debentures, bonds or other similar instruments; | |
• | capitalized lease obligations; | |
• | obligations issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations arising under any title retention agreements; |
8
Table of Contents
• | obligations for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to certain letters of credit securing obligations entered into in the ordinary course of business); | |
• | obligations of the type referred to in the bullet points above assumed for another party and dividends of another party for the payment of which, in either case, one is responsible or liable as obligor, guarantor or otherwise; and | |
• | obligations assumed of the types referred to in the bullet points above for another party secured by any lien on any of one’s property or assets. |
Indebtedness does not include amounts owed pursuant to trade accounts arising in the ordinary course of business.
Generally, we may not pay the principal of, premium, if any, or interest on the subordinated debt securities if, at the time of payment (or immediately after giving effect to such payment):
• | there exists under any senior indebtedness, or any agreement under which any senior indebtedness is issued, any default, which default results in the full amount of the senior indebtedness being declared due and payable; or | |
• | the trustee has received written notice from a holder of senior indebtedness stating that there exists under the senior indebtedness, or any agreement under which the senior indebtedness is issued, a default, which default permits the holders of the senior indebtedness to declare the full amount of the senior indebtedness due and payable, |
unless, among other things, in either case:
• | the default has been cured or waived; or |
• | full payment of amounts then due for principal and interest and of all other obligations then due on all senior indebtedness has been made or duly provided for under the terms of any instrument governing senior indebtedness. |
Limited subordination periods apply in the event of non-payment defaults relating to senior indebtedness in situations where there has not been an acceleration of senior indebtedness.
A failure to make any payment on the subordinated debt securities as a result of the foregoing provisions will not affect our obligations to the holders of the subordinated debt securities to pay the principal of, premium, if any, and interest on the subordinated debt securities as and when such payment obligations become due.
The holders of senior indebtedness will be entitled to receive payment in full of all amounts due or to become due on senior indebtedness, or provisions will be made for such payment, before the holders of the subordinated debt securities are entitled to receive any payment or distribution of any kind relating to the subordinated debt securities or on account of any purchase or other acquisition of the subordinated debt securities by us or any of our subsidiaries, in the event of:
• | insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case, relating to us or our assets; | |
• | any liquidation, dissolution or other winding up of Safeco, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or | |
• | any assignment for the benefit of our creditors or any other marshalling of our assets and liabilities. |
In addition, the rights of the holders of the subordinated debt securities will be subrogated to the rights of the holders of senior indebtedness to receive payments and distributions of cash, property and securities applicable to the senior indebtedness until the principal of, premium, if any, and interest on the subordinated debt securities are paid in full.
9
Table of Contents
Because of these subordination provisions, our creditors who hold senior indebtedness or other unsubordinated indebtedness may recover a greater percentage of the debt owed to them than the holders of the subordinated debt securities.
The subordinated debt indenture will not limit the aggregate amount of senior indebtedness that we may issue. If this prospectus is being delivered in connection with the offering of a series of subordinated debt securities, the accompanying prospectus supplement or the information incorporated in this prospectus by reference will set forth the approximate amount of senior debt outstanding as of a recent date.
Certain Restrictions
Limitations on Mortgages and Liens. Neither we nor any of our restricted subsidiaries (as defined below) will be permitted to issue, assume or guarantee certain types of secured debt, without securing the debt securities on an equal and ratable basis with any such debt. These limits apply to debt secured by mortgages, pledges, liens and other encumbrances, which together we refer to as liens. These limits will not apply to:
• | liens that existed on the date of the indenture; | |
• | liens on real estate (including liens that existed on property when we acquired it) not exceeding 100% of the fair value of the property at the time the debt is incurred; | |
• | liens arising from the acquisition of a business as a going concern or to which assets we acquire in satisfaction of secured debt are subject; | |
• | liens to secure extensions, renewals and replacements of debt secured by any of the liens referred to above, without increasing the amount of the debt; or | |
• | certain mechanics, landlords, tax or other statutory liens, including liens and deposits required or provided for under state insurance laws and similar regulatory statutes. |
Limitations on Sales of Capital Stock of Restricted Subsidiaries. Neither we nor any of our restricted subsidiaries will be permitted to issue, sell, transfer or dispose of (except to one of our restricted subsidiaries) all or any portion of the capital stock of a restricted subsidiary, unless such capital stock is disposed of for cash or property which, in the opinion of our board of directors, is at least equal to the fair value of such capital stock.
For the purposes of the indenture, “restricted subsidiary” means a subsidiary, including subsidiaries of any subsidiary, which meets any of the following conditions:
(1) Our and our other subsidiaries’ investments in and advances to the subsidiary exceed 10% of our total consolidated assets as of the end of the most recently completed fiscal year;
(2) Our and our other subsidiaries’ proportionate share of the total assets (after inter-company eliminations) of the subsidiary exceeds 10% of our total consolidated assets as of the end of the most recently completed fiscal year; or
(3) Our and our other subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle of the subsidiary exceeds 10% of such income for us and our consolidated subsidiaries for the most recently completed fiscal year.
For purposes of making the income test in clause (3) of the preceding sentence, when a loss has been incurred by either us and our subsidiaries consolidated or the tested subsidiary, but not both, the equity in the income or loss of the tested subsidiary will be excluded from our consolidated income for purposes of the computation and if our consolidated income for the most recent fiscal year is at least 10% lower than the average of the income for the last five fiscal years, the average income will be substituted for purposes of the computation and any loss years will be omitted for purposes of computing average income.
10
Table of Contents
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge into any other person or convey or transfer or lease our properties and assets substantially as an entirety to any person unless:
(1) if we consolidate with or merge into another corporation or convey or transfer our properties and assets substantially as an entirety to any person, the successor is organized under the laws of the United States, or any state, and assumes our obligations under the debt securities;
(2) immediately after the transaction, no event of default occurs and continues; and
(3) we meet certain other conditions specified in the indenture.
Modification and Waiver
We and the trustee may modify and amend the indenture without the consent of the holders of the outstanding debt securities of each affected series, in order to, among other things:
• | evidence the succession of another corporation to us and the assumption of all of our obligations under the debt securities, any related coupons and our covenants by a successor; | |
• | add to our covenants for the benefit of holders of debt securities or surrender any of our rights or powers; | |
• | add additional events of default for any series; | |
• | add, change or eliminate any provision affecting debt securities that are not yet issued; | |
• | secure certain debt securities; | |
• | establish the form or terms of debt securities not yet issued; | |
• | make provisions with respect to conversion or exchange rights of holders of debt securities; | |
• | evidence and provide for successor trustees; | |
• | permit payment in respect of debt securities in bearer form in the United States, if allowed without penalty under applicable laws and regulations; or | |
• | correct or supplement any inconsistent provisions, cure any ambiguity or mistake, or add any other provisions, on the condition that this action does not adversely affect the interests of any holder of debt securities of any series issued under the indenture in any material respect. |
In addition, we and the trustee may modify and amend the indenture with the consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each affected series. However, without the consent of each holder, we cannot modify or amend the indenture in a way that would:
• | change the stated maturity of the principal of, or any installment of principal or interest on, any debt security; | |
• | reduce the principal or interest on any debt security; | |
• | change the place or currency of payment of principal or interest on any debt security; | |
• | impair the right to sue to enforce any payment on any debt security after it is due; or | |
• | reduce the percentage in principal amount of outstanding debt securities necessary to modify or amend the indenture, to waive compliance with certain provisions of the indenture or to waive certain defaults. |
The holders of at least a majority in aggregate principal amount of outstanding debt securities may waive our compliance with certain restrictive covenants of the indenture. The holders of at least a majority in principal amount of the outstanding debt securities of any series may waive any past default under the indenture with respect to outstanding debt securities of that series, which will be binding on all holders of debt securities of that series, except a default in the payment of principal or interest on any debt security of that series or in respect of a provision of the indenture that cannot be modified or amended without each holder’s consent.
11
Table of Contents
Events of Default
Each of the following will be an event of default:
(1) default for 30 days in the payment of any interest;
(2) default in the payment of principal;
(3) default in the deposit of any sinking fund payment;
(4) default in the performance of any other covenant in the indenture for 60 days after written notice;
(5) a failure to pay when due or a default that results in the acceleration of maturity of any other debt of ours or our restricted subsidiaries in an aggregate amount of $25 million or more, unless (a) the acceleration is rescinded, stayed or annulled, or (b) the debt has been discharged or, in the case of debt we are contesting in good faith, we set aside a bond, letter of credit, escrow deposit or other cash equivalent sufficient to discharge the debt within 10 days after written notice of default is given to us; and
(6) certain events in bankruptcy, insolvency or reorganization.
We are required to furnish the trustee annually a statement as to our fulfillment of our obligations under the indenture. The trustee may withhold notice of any default to the holders of debt securities of any series (except for a default on principal or interest payments on debt securities of that series) if it considers it in the interest of the holders to do so.
If an event of default occurs and continues, either the trustee or the holders of not less than 25% in principal amount of the outstanding debt securities of the series in default may declare the principal amount immediately due and payable by written notice to us (and to the trustee if given by the holders). Upon any such declaration, the principal amount will become immediately due and payable. However, the holders of a majority in principal amount of the outstanding debt securities of that series may, under certain circumstances, rescind and annul the acceleration.
Except for certain duties in case of an event of default, the trustee is not required to exercise any of its rights or powers at the request or direction of any of the holders, unless the holders offer the trustee reasonable security or indemnity. If the holders provide this security or indemnity, the holders of a majority in principal amount of the outstanding debt securities of a series may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or powers conferred on the trustee with respect to the debt securities of that series.
No holder of a debt security may bring any lawsuit or other proceeding with respect to the indenture or for any remedy under the indenture, unless:
• | the holder first gives the trustee written notice of a continuing event of default, | |
• | the holders of at least 25% in principal amount of the outstanding debt securities of the series in default give the trustee a written request to bring the proceeding and offer the trustee reasonable security or indemnity, and | |
• | the trustee fails to institute the proceeding within 60 days of the written request and has not received from holders of a majority in principal amount of the outstanding debt securities of the series in default a direction inconsistent with that request. |
However, the holder of any debt security has the absolute right to receive payment of the principal of and any interest on the debt security on or after the stated due dates and to take any action to enforce any such payment.
Discharge, Defeasance and Covenant Defeasance
We may discharge certain obligations to holders of any series of debt securities that have not already been delivered to the trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the trustee, in trust, funds in U.S. dollars or in the foreign currency in which such debt securities are payable in an amount sufficient to pay the
12
Table of Contents
principal and any premium, interest and additional amounts on such debt securities to the date of deposit (if the debt securities have become due and payable) or to the maturity date, as the case may be.
Unless a prospectus supplement states that the following provisions do not apply to the debt securities of that series, we may elect either:
• | to defease and be discharged from any and all obligations with respect to such debt securities (except for, among other things, the obligation to pay additional amounts, if any, upon the occurrence of certain events of taxation, assessment or governmental charge with respect to payments on the debt securities and other obligations to register the transfer or exchange of such debt securities, to replace temporary or mutilated, destroyed, lost or stolen debt securities, to maintain an office or agency with respect to such debt securities and to hold moneys for payment in trust), such an action a “defeasance” or | |
• | to be released from our obligations under the indenture with respect to the debt securities as described above under “— Certain Restrictions” and as may be further described in any prospectus supplement, and our failure to comply with these obligations will not constitute an event of default with respect to such debt securities, such an action a “covenant defeasance.” |
Defeasance or covenant defeasance is conditioned on our irrevocable deposit with the trustee, in trust, of an amount in cash or government securities, or both, sufficient to pay the principal of, any premium and interest on, and any additional amounts with respect to, the debt securities on the scheduled due dates. Additional conditions to defeasance or covenant defeasance require that:
(1) the applicable defeasance or covenant defeasance does not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which we are a party or by which we are bound,
(2) no event of default has occurred and continues on the date the trust is established and, with respect to defeasance only, at any time during the period ending on the 123rd day after that date, and
(3) we have delivered to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant defeasance and will be subject to U.S. federal income tax for the same amounts, in the same manner and at the same times as would have been the case if the defeasance or covenant defeasance had not occurred. This opinion, in the case of defeasance, must refer to and be based upon a letter ruling we have received from the Internal Revenue Service, a Revenue Ruling published by the Internal Revenue Service, or a change in applicable U.S. federal income tax law occurring after the date of the indenture.
If we accomplish covenant defeasance on debt securities of certain holders, those holders can still look to us for repayment of their debt securities in the event of any shortfall in the trust deposit. If one of the remaining events of default occurred, such as our bankruptcy, and the debt securities became immediately due and payable, there may be a shortfall. Depending on the event causing the default, such holders may not be able to obtain payment of the shortfall.
In the case of subordinated debt securities, the subordination provisions described under “— Subordinated Debt Securities” above are made subject to the provisions for defeasance and covenant defeasance. In other words, if we accomplish defeasance or covenant defeasance on any subordinated debt securities, such securities would cease to be so subordinated.
Governing Law
The indentures and the debt securities will be governed by and interpreted under the laws of the state of New York.
DESCRIPTION OF CONVERTIBLE DEBT SECURITIES
The following summary of the terms of the convertible debt securities describes general terms that apply to the convertible debt securities. The convertible debt securities offered pursuant to this prospectus will be unsecured
13
Table of Contents
obligations and will be either convertible senior debt or convertible subordinated debt. The particular terms of any convertible debt securities will be described more specifically in each prospectus supplement relating to those convertible debt securities. Where any provision in an accompanying prospectus supplement is inconsistent with any provision in this summary, the prospectus supplement will control.
Convertible senior debt securities will be issued under a convertible debt indenture, and convertible subordinated debt securities will be issued under a convertible subordinated debt indenture. We summarize these indentures below. Where we make no distinction in our summary between convertible senior debt securities and convertible subordinated debt securities or between the convertible debt indenture and the convertible subordinated debt indenture, the applicable information refers to any convertible debt securities and either of the indentures. Since this is only a summary, it does not contain all of the information that may be important to you. A form of indenture relating to the convertible senior debt securities, along with a form of convertible senior debt securities, and a form of indenture relating to the convertible subordinated debt securities, along with a form of convertible subordinated debt securities, are exhibits to the registration statement of which this prospectus is a part. We encourage you to read those documents.
General
The indenture does not limit the aggregate principal amount of convertible debt securities we may issue and provides that we may issue convertible debt securities thereunder from time to time in one or more series. The indenture does not limit the amount of other indebtedness or convertible debt securities, other than certain secured indebtedness as described below, which we or our subsidiaries may issue. Under the indenture, the terms of the convertible debt securities of any series may differ and we, without the consent of the holders of the convertible debt securities of any series, may reopen a previous series of convertible debt securities and issue additional convertible debt securities of the series or establish additional terms of the series.
Unless otherwise provided in a prospectus supplement, the convertible senior debt securities will be our unsecured obligations and will rank equally with all of our other unsecured and senior indebtedness, and the convertible subordinated debt securities will be unsecured obligations of ours and, as set forth below under “— Subordinated Debt Securities,” will be subordinated in right of payment to all of our senior indebtedness.
Because we are a holding company, our rights and the rights of our creditors (including the holders of convertible debt securities) and shareholders to participate in any distribution of assets of any subsidiary upon the subsidiary’s liquidation or reorganization or otherwise would be subject to the prior claims of the subsidiary’s creditors, except to the extent that we may be a creditor with recognized claims against the subsidiary. The right of our creditors (including the holders of debt securities) to participate in the distribution of stock owned by us in certain of our subsidiaries, including our insurance subsidiaries, may also be subject to approval by certain insurance regulatory authorities having jurisdiction over such subsidiaries.
You should refer to the prospectus supplement that accompanies this prospectus for a description of the specific series of convertible debt securities we are offering by that prospectus supplement. The terms may include:
• | the title and specific designation of the convertible debt securities, including whether they are convertible senior debt securities or convertible subordinated debt securities; | |
• | any limit on the aggregate principal amount of the convertible debt securities or the series of which they are a part; | |
• | whether the convertible debt securities are to be issuable as registered securities, as bearer securities or alternatively as bearer securities and registered securities, and if as bearer securities, whether interest on any portion of a bearer security in global form will be paid to any clearing organizations; | |
• | the currency or currencies, or composite currencies, in which the convertible debt securities will be denominated and in which we will make payments on the convertible debt securities; | |
• | the date or dates on which we must pay principal; |
14
Table of Contents
• | the rate or rates at which the convertible debt securities will bear interest or the manner in which interest will be determined, if any interest is payable; | |
• | the date or dates from which any interest will accrue, the date or dates on which we must pay interest and the record date for determining who is entitled to any interest payment; | |
• | the place or places where we must pay the convertible debt securities and where any convertible debt securities issued in registered form may be sent for transfer, conversion or exchange; | |
• | the terms and conditions on which we may, or may be required to, redeem the convertible debt securities; | |
• | the terms and conditions of any sinking fund; | |
• | if other than denominations of $1,000, the denominations in which we may issue the convertible debt securities; | |
• | the terms and conditions upon which conversion of the convertible debt securities may be effected, including the conversion price, the conversion period and other conversion provisions; | |
• | the amount we will pay if the maturity of the convertible debt securities is accelerated; | |
• | whether we will issue the convertible debt securities in the form of one or more global securities and, if so, the identity of the depositary for the global security or securities; | |
• | any addition to or changes in the events of default or covenants that apply to the convertible debt securities; | |
• | whether the convertible debt securities will be defeasible; and | |
• | any other terms of the convertible debt securities and any other deletions from or modifications or additions to the indenture in respect of the convertible debt securities, including those relating to the subordination of any convertible debt securities. |
Unless the applicable prospectus supplement specifies otherwise, the convertible debt securities will not be listed on any securities exchange.
Unless the applicable prospectus supplement specifies otherwise, we will issue the convertible debt securities in fully registered form without coupons. If we issue convertible debt securities of any series in bearer form, the applicable prospectus supplement will describe the special restrictions and considerations, including special offering restrictions and special federal income tax considerations, applicable to those convertible debt securities and to payment on and transfer and exchange of those convertible debt securities. Convertible debt securities issued in bearer form will be transferable by delivery.
Unless otherwise stated in the prospectus supplement, we will pay principal, premium, interest and additional amounts, if any, on the convertible debt securities at the office or agency we maintain for that purpose (initially the corporate trust office of the trustee). We may pay interest on convertible debt securities issued in registered form by check mailed to the address of the persons entitled to the payments or we may pay by transfer to their U.S. bank accounts. Interest on convertible debt securities issued in registered form will be payable on any interest payment date to the registered owners of the convertible debt securities at the close of business on the regular record date for the interest payment. We will name in the prospectus supplement all paying agents we initially designate for the convertible debt securities. We may designate additional paying agents, rescind the designation of any paying agent or approve a change in the office through which any paying agent acts, but we must maintain a paying agent in each place where payments on the convertible debt securities are payable.
Unless otherwise stated in the prospectus supplement, the convertible debt securities may be presented for transfer (duly endorsed or accompanied by a written instrument of transfer, if we or the security registrar so requires) or exchanged for other convertible debt securities of the same series (containing identical terms and provisions, in any authorized denominations, and in the same aggregate principal amount) at the office or agency we maintain for that purpose (initially the corporate trust office of the trustee). There will be no service charge for any
15
Table of Contents
transfer or exchange, but we may require payment sufficient to cover any tax or other governmental charge or expenses payable in connection with the transfer or exchange. We will not be required to:
• | issue, register the transfer of, or exchange, convertible debt securities during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any such convertible debt securities and ending at the close of business on the day of such mailing or | |
• | register the transfer of or exchange any debt security selected for redemption in whole or in part, except the unredeemed portion of any debt security being redeemed in part. We shall appoint the trustee as security registrar. |
Any transfer agent (in addition to the security registrar) we initially designate for any convertible debt securities will be named in the related prospectus supplement. We may designate additional transfer agents, rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, but we must maintain a transfer agent in each place where any payments on the convertible debt securities are payable.
Unless otherwise stated in the prospectus supplement, we will issue the convertible debt securities only in fully registered form, without coupons, in minimum denominations of $1,000 and integral multiples of $1,000. The convertible debt securities may be represented in whole or in part by one or more global debt securities. Each global security will be registered in the name of a depositary or its nominee and the global security will bear a legend regarding the restrictions on exchanges and registration of transfer. Interests in a global security will be shown on records maintained by the depositary and its participants, and transfers of those interests will be made as described below. Provisions relating to the use of global securities are more fully described below in the section entitled “Use of Global Securities.”
We may issue the convertible debt securities as original issue discount securities (bearing no interest or bearing interest at a rate which at the time of issuance is below market rates) to be sold at a substantial discount below their principal amount. We will describe certain special U.S. federal income tax and other considerations applicable to any convertible debt securities that are issued as original issue discount securities in the applicable prospectus supplement.
If the purchase price of any convertible debt securities is payable in one or more foreign currencies or currency units, or if any convertible debt securities are denominated in one or more foreign currencies or currency units, or if any payments on the convertible debt securities are payable in one or more foreign currencies or currency units, we will describe the restrictions, elections, certain U.S. federal income tax considerations, specific terms and other information about the convertible debt securities and the foreign currency or currency units in the prospectus supplement.
We will comply with Section 14(e) under the Exchange Act, and any other tender offer rules under the Exchange Act that may then be applicable, in connection with any obligation to purchase convertible debt securities at the option of the holders. Any such obligation applicable to a series of convertible debt securities will be described in the related prospectus supplement.
Unless otherwise described in a prospectus supplement relating to any convertible debt securities, other than as described below under “— Limitation on Mortgages and Liens,” the indenture does not limit our ability to incur debt or give holders of convertible debt securities protection in the event of a sudden and significant decline in our credit quality or a takeover, recapitalization or highly leveraged or similar transaction involving us. Accordingly, we could in the future enter into transactions that could increase the amount of indebtedness outstanding at that time or otherwise affect our capital structure or credit rating. You should refer to the prospectus supplement relating to a particular series of convertible debt securities for information regarding any changes in the events of default described below or covenants contained in the indenture, including any addition of a covenant or other provisions providing event risk or similar protection.
Conversion Rights
An applicable prospectus supplement will set forth the terms on which the convertible debt securities of any series are convertible into common stock. Those terms will address whether conversion is mandatory, at the option
16
Table of Contents
of the holder or at our option. The terms may also provide that the number of shares of our common stock to be received by the holders of the convertible debt securities will be calculated according to the market price of our common stock as of a time stated in the prospectus supplement or otherwise.
Convertible Subordinated Debt Securities
Unless otherwise provided in the applicable prospectus supplement, the following provisions will apply for convertible subordinated debt securities.
Before we pay the principal of, premium, if any and interest on, the convertible subordinated debt securities, we must be current and not in default on payment in full of all of our senior indebtedness. Senior indebtedness includes all of our indebtedness as described below, except for:
• | obligations issued or assumed as the deferred purchase price of property; | |
• | conditional sale obligations; | |
• | obligations arising under any title retention agreements; | |
• | indebtedness relating to the applicable convertible subordinated debt securities; | |
• | indebtedness owed to one of our subsidiaries; and | |
• | indebtedness that, by its terms, is subordinate in right of payment to or equal with the applicable convertible subordinated debt securities. |
Generally indebtedness means:
• | the principal of, premium, if any, and interest on indebtedness for money borrowed; | |
• | the principal of, premium, if any, and interest on indebtedness evidenced by notes, debentures, bonds or other similar instruments; | |
• | capitalized lease obligations; | |
• | obligations issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations arising under any title retention agreements; | |
• | obligations for the reimbursement of any obligor on any letter of credit, banker’s acceptance or similar credit transaction (other than obligations with respect to certain letters of credit securing obligations entered into in the ordinary course of business); | |
• | obligations of the type referred to in the bullet points above assumed for another party and dividends of another party for the payment of which, in either case, one is responsible or liable as obligor, guarantor or otherwise; and | |
• | obligations assumed of the types referred to in the bullet points above for another party secured by any lien on any of one’s property or assets. |
Indebtedness does not include amounts owed pursuant to trade accounts arising in the ordinary course of business.
Generally, we may not pay the principal of, premium, if any, or interest on the convertible subordinated debt securities if, at the time of payment (or immediately after giving effect to such payment):
• | there exists under any senior indebtedness, or any agreement under which any senior indebtedness is issued, any default, which default results in the full amount of the senior indebtedness being declared due and payable; or | |
• | the trustee has received written notice from a holder of senior indebtedness stating that there exists under the senior indebtedness, or any agreement under which the senior indebtedness is issued, a default, which default permits the holders of the senior indebtedness to declare the full amount of the senior indebtedness due and payable, |
17
Table of Contents
unless, among other things, in either case:
• | the default has been cured or waived; or | |
• | full payment of amounts then due for principal and interest and of all other obligations then due on all senior indebtedness has been made or duly provided for under the terms of any instrument governing senior indebtedness. |
Limited subordination periods apply in the event of non-payment defaults relating to senior indebtedness in situations where there has not been an acceleration of senior indebtedness.
A failure to make any payment on the convertible subordinated debt securities as a result of the foregoing provisions will not affect our obligations to the holders of the convertible subordinated debt securities to pay the principal of, premium, if any, and interest on the convertible subordinated debt securities as and when such payment obligations become due.
The holders of senior indebtedness will be entitled to receive payment in full of all amounts due or to become due on senior indebtedness, or provisions will be made for such payment, before the holders of the convertible subordinated debt securities are entitled to receive any payment or distribution of any kind relating to the convertible subordinated debt securities or on account of any purchase or other acquisition of the convertible subordinated debt securities by us or any of our subsidiaries, in the event of:
• | insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case, relating to us or our assets; | |
• | any liquidation, dissolution or other winding up of Safeco, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or | |
• | any assignment for the benefit of our creditors or any other marshalling of our assets and liabilities. |
In addition, the rights of the holders of the convertible subordinated debt securities will be subrogated to the rights of the holders of senior indebtedness to receive payments and distributions of cash, property and securities applicable to the senior indebtedness until the principal of, premium, if any, and interest on the convertible subordinated debt securities are paid in full.
Because of these subordination provisions, our creditors who hold senior indebtedness or other unsubordinated indebtedness may recover a greater percentage of the debt owed to them than the holders of the convertible subordinated debt securities.
The convertible subordinated debt indenture will not limit the aggregate amount of senior indebtedness that we may issue. If this prospectus is being delivered in connection with the offering of a series of convertible subordinated debt securities, the accompanying prospectus supplement or the information incorporated in this prospectus by reference will set forth the approximate amount of senior debt outstanding as of a recent date.
Certain Restrictions
Limitations on Mortgages and Liens. Neither we nor any of our restricted subsidiaries (as defined below) will be permitted to issue, assume or guarantee certain types of secured debt, without securing the convertible debt securities on an equal and ratable basis with any such debt. These limits apply to debt secured by mortgages, pledges, liens and other encumbrances, which together we refer to as liens. These limits will not apply to:
• | liens that existed on the date of the indenture; | |
• | liens on real estate (including liens that existed on property when we acquired it) not exceeding 100% of the fair value of the property at the time the debt is incurred; | |
• | liens arising from the acquisition of a business as a going concern or to which assets we acquire in satisfaction of secured debt are subject; | |
• | liens to secure extensions, renewals and replacements of debt secured by any of the liens referred to above, without increasing the amount of the debt; or |
18
Table of Contents
• | certain mechanics, landlords, tax or other statutory liens, including liens and deposits required or provided for under state insurance laws and similar regulatory statutes. |
Limitations on Sales of Capital Stock of Restricted Subsidiaries.Neither we nor any of our restricted subsidiaries will be permitted to issue, sell, transfer or dispose of (except to one of our restricted subsidiaries) all or any portion of capital stock of a restricted subsidiary, unless such capital stock is disposed of for cash or property which, in the opinion of our board of directors, is at least equal to the fair value of such capital stock.
For the purposes of the indenture, “restricted subsidiary” means a subsidiary, including subsidiaries of any subsidiary, which meets any of the following conditions:
(1) Our and our other subsidiaries’ investments in and advances to the subsidiary exceed 10% of our total consolidated assets as of the end of the most recently completed fiscal year;
(2) Our and our other subsidiaries’ proportionate share of the total assets (after inter-company eliminations) of the subsidiary exceeds 10% of our total consolidated assets as of the end of the most recently completed fiscal year; or
(3) Our and our other subsidiaries’ equity in the income from continuing operations before income taxes, extraordinary items and cumulative effect of a change in accounting principle of the subsidiary exceeds 10% of such income for us and our consolidated subsidiaries for the most recently completed fiscal year.
For purposes of making the income test in clause (3) of the preceding sentence, when a loss has been incurred by either us and our subsidiaries consolidated or the tested subsidiary, but not both, the equity in the income or loss of the tested subsidiary will be excluded from our consolidated income for purposes of the computation and if our consolidated income for the most recent fiscal year is at least 10% lower than the average of the income for the last five fiscal years, the average income will be substituted for purposes of the computation and any loss years will be omitted for purposes of computing average income.
Consolidation, Merger and Sale of Assets
We may not consolidate with or merge into any other person or convey or transfer or lease our properties and assets substantially as an entirety to any person unless:
(1) if we consolidate with or merge into another corporation or convey or transfer our properties and assets substantially as an entirety to any person, the successor is organized under the laws of the United States, or any state, and assumes our obligations under the convertible debt securities;
(2) immediately after the transaction, no event of default occurs and continues; and
(3) we meet certain other conditions specified in the indenture.
Modification and Waiver
We and the trustee may modify and amend the indenture without the consent of the holders of the outstanding convertible debt securities of each affected series, in order to, among other things:
• | evidence the succession of another corporation to us and the assumption of all of our obligations under the convertible debt securities, any related coupons and our covenants by a successor; | |
• | add to our covenants for the benefit of holders of convertible debt securities or surrender any of our rights or powers; | |
• | add additional events of default for any series; | |
• | add, change or eliminate any provision affecting convertible debt securities that are not yet issued; | |
• | secure certain convertible debt securities; | |
• | establish the form or terms of convertible debt securities not yet issued; | |
• | make provisions with respect to conversion or exchange rights of holders of convertible debt securities; |
19
Table of Contents
• | evidence and provide for successor trustees; | |
• | permit payment in respect of convertible debt securities in bearer form in the United States, if allowed without penalty under applicable laws and regulations; or | |
• | correct or supplement any inconsistent provisions, cure any ambiguity or mistake, or add any other provisions, on the condition that this action does not adversely affect the interests of any holder of convertible debt securities of any series issued under the indenture in any material respect. |
In addition, we and the trustee may modify and amend the indenture with the consent of the holders of at least a majority in aggregate principal amount of the outstanding convertible debt securities of each affected series. However, without the consent of each holder, we cannot modify or amend the indenture in a way that would:
• | change the stated maturity of the principal of, or any installment of principal or interest on, any debt security; | |
• | reduce the principal or interest on any debt security; | |
• | change the place or currency of payment of principal or interest on any debt security; | |
• | impair the right to sue to enforce any payment on any debt security after it is due; or | |
• | reduce the percentage in principal amount of outstanding convertible debt securities necessary to modify or amend the indenture, to waive compliance with certain provisions of the indenture or to waive certain defaults. |
The holders of at least a majority in aggregate principal amount of outstanding convertible debt securities may waive our compliance with certain restrictive covenants of the indenture. The holders of at least a majority in principal amount of the outstanding convertible debt securities of any series may waive any past default under the indenture with respect to outstanding convertible debt securities of that series, which will be binding on all holders of convertible debt securities of that series, except a default in the payment of principal or interest on any debt security of that series or in respect of a provision of the indenture that cannot be modified or amended without each holder’s consent.
Events of Default
Each of the following will be an event of default:
(1) default for 30 days in the payment of any interest;
(2) default in the payment of principal;
(3) default in the deposit of any sinking fund payment;
(4) default in the performance of any other covenant in the indenture for 60 days after written notice;
(5) a failure to pay when due or a default that results in the acceleration of maturity of any other debt of ours or our restricted subsidiaries in an aggregate amount of $25 million or more, unless (a) the acceleration is rescinded, stayed or annulled, or (b) the debt has been discharged or, in the case of debt we are contesting in good faith, we set aside a bond, letter of credit, escrow deposit or other cash equivalent sufficient to discharge the debt within 10 days after written notice of default is given to us; and
(6) certain events in bankruptcy, insolvency or reorganization.
We are required to furnish the trustee annually a statement as to our fulfillment of our obligations under the indenture. The trustee may withhold notice of any default to the holders of convertible debt securities of any series (except for a default on principal or interest payments on convertible debt securities of that series) if it considers it in the interest of the holders to do so.
If an event of default occurs and continues, either the trustee or the holders of not less than 25% in principal amount of the outstanding convertible debt securities of the series in default may declare the principal amount immediately due and payable by written notice to us (and to the trustee if given by the holders). Upon any such declaration, the principal amount will become immediately due and payable. However, the holders of a majority in
20
Table of Contents
principal amount of the outstanding convertible debt securities of that series may, under certain circumstances, rescind and annul the acceleration.
Except for certain duties in case of an event of default, the trustee is not required to exercise any of its rights or powers at the request or direction of any of the holders, unless the holders offer the trustee reasonable security or indemnity. If the holders provide this security or indemnity, the holders of a majority in principal amount of the outstanding convertible debt securities of a series may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or powers conferred on the trustee with respect to the convertible debt securities of that series.
No holder of a convertible debt security may bring any lawsuit or other proceeding with respect to the indenture or for any remedy under the indenture, unless:
• | the holder first gives the trustee written notice of a continuing event of default, | |
• | the holders of at least 25% in principal amount of the outstanding convertible debt securities of the series in default give the trustee a written request to bring the proceeding and offer the trustee reasonable security or indemnity, and | |
• | the trustee fails to institute the proceeding within 60 days of the written request and has not received from holders of a majority in principal amount of the outstanding convertible debt securities of the series in default a direction inconsistent with that request. |
However, the holder of any convertible debt security has the absolute right to receive payment of the principal of and any interest on the convertible debt security on or after the stated due dates and to take any action to enforce any such payment.
Discharge, Defeasance and Covenant Defeasance
We may discharge certain obligations to holders of any series of convertible debt securities that have not already been delivered to the trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the trustee, in trust, funds in U.S. dollars or in the foreign currency in which such convertible debt securities are payable in an amount sufficient to pay the principal and any premium, interest and additional amounts on such convertible debt securities to the date of deposit (if the convertible debt securities have become due and payable) or to the maturity date, as the case may be.
Unless a prospectus supplement states that the following provisions do not apply to the convertible debt securities of that series, we may elect either:
• | to defease and be discharged from any and all obligations with respect to such convertible debt securities (except for, among other things, the obligation to pay additional amounts, if any, upon the occurrence of certain events of taxation, assessment or governmental charge with respect to payments on the convertible debt securities and other obligations to provide for the conversion rights of the holders of such convertible debt securities, to register the transfer or exchange of such convertible debt securities, to replace temporary or mutilated, destroyed, lost or stolen convertible debt securities, to maintain an office or agency with respect to such convertible debt securities and to hold moneys for payment in trust), such an action a “defeasance” or | |
• | to be released from our obligations under the indenture with respect to the convertible debt securities as described above under “— Certain Restrictions” and as may be further described in any prospectus supplement, and our failure to comply with these obligations will not constitute an event of default with respect to such convertible debt securities, such an action a “covenant defeasance”. |
Defeasance or covenant defeasance is conditioned on our irrevocable deposit with the trustee, in trust, of an amount in cash or government securities, or both, sufficient to pay the principal of, any premium and interest on, and any
21
Table of Contents
additional amounts with respect to, the convertible debt securities on the scheduled due dates. Additional conditions to defeasance or covenant defeasance require that:
(1) the applicable defeasance or covenant defeasance does not result in a breach or violation of, or constitute a default under, the indenture or any other material agreement or instrument to which we are a party or by which we are bound,
(2) no event of default has occurred and continues on the date the trust is established and, with respect to defeasance only, at any time during the period ending on the 123rd day after that date, and
(3) we have delivered to the trustee an opinion of counsel to the effect that the holders of such convertible debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant defeasance and will be subject to U.S. federal income tax for the same amounts, in the same manner and at the same times as would have been the case if the defeasance or covenant defeasance had not occurred. This opinion, in the case of defeasance, must refer to and be based upon a letter ruling we have received from the Internal Revenue Service, a Revenue Ruling published by the Internal Revenue Service, or a change in applicable U.S. federal income tax law occurring after the date of the indenture.
If we accomplish covenant defeasance on convertible debt securities of certain holders, those holders can still look to us for repayment of their convertible debt securities in the event of any shortfall in the trust deposit. If one of the remaining events of default occurred, such as our bankruptcy, and the convertible debt securities became immediately due and payable, there may be a shortfall. Depending on the event causing the default, such holders may not be able to obtain payment of the shortfall.
In the case of convertible subordinated debt securities, the subordination provisions described under “— Convertible Subordinated Debt Securities” above are made subject to the provisions for defeasance and covenant defeasance. In other words, if we accomplish defeasance or covenant defeasance on any convertible subordinated debt securities, such securities would cease to be so subordinated.
Governing Law
The indentures and the convertible debt securities will be governed by and interpreted under the laws of the state of New York.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
We may issue stock purchase contracts representing contracts obligating holders to purchase from us, and us to sell to the holders, a specified number of shares of our common stock (or a range of numbers of shares pursuant to a predetermined formula) at a future date or dates. The price per share of common stock and the number of shares of common stock may be fixed at the time the stock purchase contracts are issued or may be determined by reference to a specific formula set forth in the stock purchase contracts.
The stock purchase contracts may be issued separately or as a part of units consisting of a stock purchase contract and either:
• | our debt securities, subordinated debt securities, convertible debt securities or convertible subordinated debt securities; or | |
• | debt obligations of third parties, including U.S. Treasury securities; |
securing the holders’ obligations to purchase the common stock under the stock purchase contracts.
The stock purchase contracts may require us to make periodic payments to the holders of the stock purchase units or vice versa, and such payments may be unsecured or prefunded on some basis. The stock purchase contracts may require holders to secure their obligations in a specified manner, and in certain circumstances we may deliver newly issued prepaid stock purchase contracts, often known as prepaid securities, upon release to a holder of any collateral securing such holder’s obligations under the original stock purchase contract.
22
Table of Contents
The applicable prospectus supplement will describe the terms of any stock purchase contracts, and, if applicable, prepaid securities, in greater detail than this summary, although the description in the applicable prospectus supplement may not contain all of the information that you may find useful. For more information, you should review the stock purchase contracts, the collateral arrangements and depositary arrangements, and, if applicable, the prepaid securities and the document pursuant to which the prepaid securities will be issued. These documents will be filed with the Commission in connection with the offering of the stock purchase contracts, as necessary. Material United States federal income tax consideration applicable to the stock purchase contracts will also be discussed in the applicable prospectus supplement.
DESCRIPTION OF UNITS
We may, from time to time, issue units comprised of one or more of the other securities that may be offered under this prospectus, in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Accordingly, the holder of a unit will have the rights and obligations of a holder of each included security.
The units will be issued under unit agreements to be entered into between us and likely a bank or trust company, as agent, all to be set forth in the applicable prospectus supplement relating to the units with respect to which this prospectus is being delivered. A copy of each form of unit agreement with respect to any particular unit offering will be filed with the Commission and incorporated by reference as an exhibit to the registration statement of which this prospectus is a part. The particular terms of units to which any prospectus supplement may relate and the extent, if any, to which the general provisions in this section may apply to the units so offered will be described in the applicable prospectus supplement. We encourage you to read the applicable unit agreement and certificate for additional information before you purchase any of our units.
Any applicable prospectus supplement relating to units may describe, among other things:
• | the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; | |
• | any material provisions relating to the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; | |
• | any special United States federal income tax considerations applicable to the units; and | |
• | any material provisions of the governing unit agreement that differ from those described above. |
USE OF GLOBAL SECURITIES
The debt securities or convertible debt securities of any series may be issued in whole or in part in the form of one or more global debt securities that will be deposited with a depositary or its nominee identified in the series prospectus supplement.
The specific terms of the depositary arrangement covering debt securities or convertible debt securities will be described in the prospectus supplement relating to that series. We anticipate that the following provisions or similar provisions will apply to depositary arrangements relating to debt securities or convertible debt securities, although to the extent the terms of any arrangement differs from those described in this section, the terms of the arrangement shall supersede those in this section. In this section, the term debt securities will refer to both debt securities and convertible debt securities.
Upon the issuance of a global security, the depositary for the global security or its nominee will credit, to accounts in its book-entry registration and transfer system, the principal amounts of the debt securities represented by the global security. These accounts will be designated by the underwriters or agents with respect to such debt securities or by us if such debt securities are offered and sold directly by us. Only institutions that have accounts with the depositary or its nominee, and persons who hold beneficial interests through those participants, may own beneficial interests in a global security. Ownership of beneficial interests in a global security will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by the depositary, its
23
Table of Contents
nominee or any such participants. The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. These laws may prevent you from transferring your beneficial interest in a global security.
As long as the depositary or its nominee is the registered owner of a global security, the depositary or nominee will be considered the sole owner or holder of the debt securities represented by the global security. Except as described below, owners of beneficial interests in a global security will not be entitled to have debt securities registered in their names and will not be entitled to receive physical delivery of the debt securities in definitive form.
We will make all payments of principal of, any premium and interest on, and any additional amounts with respect to, debt securities issued as global securities to the depositary or its nominee. Neither we nor the trustee, any paying agent or the security registrar assumes any responsibility or liability for any aspect of the depositary’s or any participant’s records relating to, or for payments made on account of, beneficial interests in a global security.
We expect that the depositary for a series of debt securities or its nominee, upon receipt of any payment with respect to such debt securities, will credit immediately participants’ accounts with payments in amounts proportionate to their respective beneficial interest in the principal amount of the global security for such debt securities as shown on the records of such depositary or its nominee. We also expect that payments by participants to owners of beneficial interests in such global security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in “street name,” and will be the responsibility of such participants.
The indenture provides that if:
• | the depositary notifies us that it is unwilling or unable to continue as depositary for a series of debt securities, or if the depositary is no longer legally qualified to serve in that capacity, and we have not appointed a successor depositary within 90 days of written notice, | |
• | we determine that a series of debt securities will no longer be represented by global securities and we execute and deliver an order to that effect to the trustee, or | |
• | an event of default with respect to a series of debt securities occurs and continues, |
the global securities for that series will be exchanged for registered debt securities in definitive form. The definitive debt securities will be registered in the name or names the depositary instructs the trustee. We expect that these instructions may be based upon directions the depositary receives from participants with respect to ownership of beneficial interests in global securities.
SELLING SECURITYHOLDERS
Selling securityholders are persons or entities that, directly or indirectly, have acquired or will acquire from us from time to time common stock, preferred stock, convertible preferred stock, debt securities, convertible debt securities, stock purchase contracts, units, or a combination of the foregoing, in various unregistered transactions. Such selling securityholders may be parties to registration rights agreements with us, or we otherwise may have agreed or will agree to register their securities for resale. The initial purchasers of our securities, as well as their transferees, pledgees, donees or successors, all of whom we refer to as selling securityholders, may from time to time offer and sell the securities pursuant to this prospectus and any applicable prospectus supplement.
The selling securityholders may offer all or some portion of the securities they hold. To the extent that any of the selling securityholders are broker or dealers, they are deemed to be, under interpretations of the Commission, “underwriters” within the meaning of the Securities Act.
The applicable prospectus supplement will set forth the name of each of the selling securityholders and the number and classes of our securities beneficially owned by such selling securityholders that are covered by such prospectus supplement. The applicable prospectus supplement will also disclose whether any of the selling securityholders has held any position or office with, has been employed by or otherwise has had a material relationship with us during the three years prior to the date of the prospectus supplement.
24
Table of Contents
PLAN OF DISTRIBUTION
We and the selling securityholders may sell common stock, preferred stock, convertible preferred stock, debt securities, convertible debt securities or stock purchase contracts, as well as units that include any of these securities, to or through underwriters or dealers, through agents, directly to other purchasers, or through a combination of these methods, on a continuous or delayed basis. We will describe the details of any such offering and any changes to the plan of distribution of Safeco or the selling securityholders described below, in a supplement to this prospectus or other offering material.
Safeco Distribution
We may distribute securities from time to time in one or more transactions at:
• | a fixed price or prices, which may be changed; | |
• | market prices prevailing at the time of sale; | |
• | prices related to the prevailing market prices at the time of sale; or | |
• | negotiated prices. |
The applicable prospectus supplement will describe the specific terms of the offering of the securities, including:
• | the name or names of any underwriters and managing underwriters, and, if required, any dealers or agents; | |
• | the purchase price of the securities and the proceeds we will receive from the sale; | |
• | any underwriting discounts and commissions and other items constituting underwriters’ compensation; | |
• | any initial public offering price; | |
• | any discounts or concessions allowed or reallowed or paid to dealers; | |
• | any commission paid to agents; and | |
• | any securities exchange or market on which the securities may be listed. |
Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
If underwriters are used in a sale, the 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 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. Unless otherwise set forth in the applicable prospectus supplement, 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.
If a dealer is used in the sale of any of the securities, we or an underwriter will sell the securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the prospectus supplement the name of the dealer and the terms of any such transactions.
Agents may from time to time be used to solicit offers to purchase the securities. If required, we will name in the applicable prospectus supplement any agent involved in the offer or sale of the securities and set forth the terms of any such transactions. Unless otherwise indicated in the prospectus supplement, any agent will be acting on a best efforts basis for the period of its appointment.
Underwriters or agents could make sales in privately negotiated transactions or any other method permitted by law, including sales deemed to be an“at-the-market” offering as defined under the Securities Act, which includes sales made directly on the New York Stock Exchange, the existing trading market for our common stock, or sales
25
Table of Contents
made to or through a market maker other than on an exchange. We are not making an offer of securities in any state or jurisdiction that does not permit such an offer.
We may directly solicit offers to purchase the securities and we may make sales of securities directly to institutional investors or others. To the extent required, the prospectus supplement will describe the terms of any such sales, including the terms of any bidding or auction process used.
In connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the securities for whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional investors or others that purchase securities directly and then resell the securities, may be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the securities by them may be deemed to be underwriting discounts and commissions under the Securities Act.
We may provide indemnification to underwriters, dealers, agents and others who participate in the distribution of the securities with respect to some liabilities, including liabilities arising under the Securities Act, and provide contribution with respect to payments that they may be required to make in connection with such liabilities.
If indicated in the applicable prospectus supplement, we may authorize underwriters or agents to solicit offers by specific institutions to purchase the securities from us pursuant to contracts providing for payment and delivery on a future date. Institutions with which these contracts may be made include, among others:
• | commercial and savings banks; | |
• | insurance companies; | |
• | pension funds; | |
• | investment companies; and | |
• | educational and charitable institutions. |
In all cases, we must approve the contracting institutions. The obligations of any purchaser under any payment and delivery contract will be subject to the condition that the purchase of the securities is not, at the time of delivery, prohibited by applicable law.
Unless otherwise indicated in the applicable prospectus supplement or the securities are already trading on a national securities exchange or market, we do not intend to apply for the listing of any class of securities on a national securities exchange or market. If any of the securities of any series are sold to or through underwriters, the underwriters may make a market in those securities, as permitted by applicable laws and regulations. No underwriter is obligated, however, to make a market in those securities, and any market-making that is done may be discontinued at any time at the sole discretion of the underwriters. No assurance can be given as to the liquidity of, or trading markets for, any of the securities.
In connection with an offering of securities, underwriters may engage in stabilizing and syndicate covering transactions in accordance with applicable law. Underwriters may over-allot the offered securities in connection with an offering, creating a short position in their account. Syndicate covering transactions involve purchases of the offered securities by underwriters in the open market after the distribution has been completed in order to cover syndicate short positions. Stabilizing and syndicate covering transactions may cause the price of the offered securities to be higher than it would otherwise be in the absence of these transactions. These transactions, if commenced, may be discontinued at any time.
Some of the underwriters, dealers or agents, or their affiliates, may engage in transactions with or perform services for us in the ordinary course of business.
26
Table of Contents
Selling Securityholders Distribution
Pursuant to this registration, we intend to provide applicable selling securityholders with freely tradable securities, although the registration of these securities does not necessarily mean that securities will be offered or sold by such selling securityholders under this prospectus.
We will not receive any proceeds from the sale of the securities by the selling securityholders, but we may in certain cases, pay fees and expenses relating to the registration or an offering of such securities, such as registration and filing fees, fees and expenses for complying with federal and state securities laws and NASD rules and regulations and fees and expenses incurred in connection with a listing, if any, of any of the securities on any securities exchange or association.
The selling securityholders may from time to time sell the securities covered by this prospectus and any accompanying prospectus supplement directly to purchasers. Alternatively, the selling securityholders may from time to time offer such securities through dealers or agents, who may receive compensation in the form of commissions from the selling securityholders and for the purchasers of such securities for whom they may act as agent. The securities may be sold in one or more transactions at fixed prices, at prevailing market prices, at prices related to the prevailing market prices, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in cross, block or other types of transactions:
• | on any national securities exchange or U.S. inter-dealer system of a registered national securities association on which the securities may be listed or quoted at the time of sale; | |
• | in theover-the-counter market; | |
• | in transactions otherwise than on these exchanges or systems or in theover-the-counter market; | |
• | through the writing of options, whether the options are listed on an options exchange or otherwise; | |
• | through the settlement of short sales; or | |
• | through any other legally available means. |
The selling securityholders and any dealers or agents that participate in the distribution of such securities may be deemed to be “underwriters” within the meaning of the Securities Act and any profit on the resale of the securities by them and any commissions received by any of these dealers or agents might be deemed to be underwriting commissions under the Securities Act.
In connection with distribution of the securities covered by this prospectus:
• | the selling securityholders may enter into hedging transactions with brokers or dealers; | |
• | the brokers and dealers may engage in short sales of the securities in the course of hedging the positions they assume with the selling securityholders; | |
• | the selling securityholders may sell the securities short and deliver the securities to close out these short positions; | |
• | the selling securityholders may enter into option or other transactions with broker and dealers that involve the delivery of the securities to the broker and dealers, who may then resell or otherwise transfer the securities; and | |
• | the selling securityholders may loan or pledge the securities to a broker or dealer or other person or entity and the broker or dealer or other person or entity may sell the securities so loaned or upon a default may sell or otherwise transfer the pledged securities. |
Persons participating in the distribution of the securities offered by this prospectus may engage in transactions that stabilize the price of the securities. The anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of the securities in the market and to the activities of the selling securityholders.
27
Table of Contents
To the extent required, the securities to be sold, the names of the selling securityholders, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is a part.
LEGAL MATTERS
Unless otherwise stated in any applicable prospectus supplement, in connection with particular offerings of the securities under this prospectus in the future, the validity of the common stock, preferred stock, convertible preferred stock, debt securities, convertible debt securities, stock purchase contracts or units will be passed upon for us by Perkins Coie LLP, Seattle, Washington. In addition, certain legal matters with respect to any securities that may be offered under this prospectus may be passed on by counsel for any selling securityholders, underwriters, dealers or agents, each of whom would be named in the related prospectus supplement.
EXPERTS
Ernst & Young LLP, Independent Registered Public Accounting Firm, has audited our consolidated financial statements and schedules included in our Annual Report onForm 10-K for the year ended December 31, 2006, and management’s assessment of the effectiveness of our internal control over financial reporting as of December 31, 2006, as set forth in their reports, which are incorporated by reference in this prospectus and elsewhere in the registration statement. Our consolidated financial statements, schedules and management’s assessment are incorporated by reference in reliance on Ernst & Young LLP’s reports, given on their authority as experts in accounting and auditing.
28
Table of Contents
![(SAFECO)](https://capedge.com/proxy/S-3ASR/0000950134-07-005223/v28134v2813400.gif)
SAFECO CORPORATION
Common Stock
Preferred Stock
Convertible Preferred Stock
Debt Securities
Convertible Debt Securities
Stock Purchase Contracts
Units
PROSPECTUS
March 8, 2007
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. | Other Expenses of Issuance and Distribution |
The expenses in connection with the issuance and distribution of the securities being registered, other than underwriting discounts and commissions, are set forth in the following table.
SEC registration fee(1) | $ | * | ||
Listing fees | * | |||
Blue sky fees and expenses | * | |||
Printing and engraving expenses | * | |||
Legal fees and expenses | * | |||
Accounting fees and expenses | * | |||
Trustee fees and expenses | * | |||
Rating agency fees | * | |||
Transfer agent and registrar fees | * | |||
Miscellaneous | * | |||
— | ||||
Total | $ | * | ||
(1) | In accordance with Rules 456(b) and 457(r), the registrant is deferring payment of all of the registration fees, except for $25,300 that has already been paid with respect to $775,000,000 aggregate initial offering price of securities that were previously registered pursuant to the registration statement(No. 333-102298) initially filed by Safeco Corporation on December 30, 2002, and were not sold thereunder. These previously paid registration fees will be applied in lieu of a portion of any registration fees due for this registration statement pursuant to Rule 457(p) under the Securities Act of 1933, as amended (the “Securities Act”). | |
* | To be provided by amendment or in a filing, or exhibit thereto, with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated herein by reference. |
Item 15. | Indemnification of Directors and Officers |
Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation Act (“WBCA”) authorize a court to award, or a corporation’s board of directors to grant, indemnification to directors and officers on terms sufficiently broad to permit indemnification under certain circumstances for liabilities arising under the Securities Act. Article VIII of Safeco’s restated articles of incorporation and Article XII of Safeco’s bylaws, as amended, generally provide for indemnification of our directors, officers, employees and agents to the maximum extent permitted by Washington law.
Section 23B.08.320 of the WBCA authorizes a corporation to eliminate or limit a director’s personal liability to the corporation or its shareholders for monetary damages for conduct as a director, except liability for (i) acts or omissions involving intentional misconduct by a director or knowing violations of law by a director, (ii) distributions illegal under Washington law, or (iii) any transaction from which the director will personally receive a benefit in money, property or services to which the director is not legally entitled. Article VIII of our restated articles of incorporation contains provisions implementing, to the fullest extent permitted by Washington law, those limitations on a director’s liability to Safeco and its shareholders.
Our officers and directors are covered by insurance (with certain exceptions and limitations) that indemnifies them against losses and liabilities arising from certain alleged “wrongful acts,” including alleged errors or misstatements and certain other alleged wrongful acts or omissions constituting neglect or breach of duty.
II-1
Table of Contents
The above discussion of the WBCA and our restated articles and bylaws, as amended, is not intended to be exhaustive and is qualified in its entirety by reference to the WBCA and our restated articles and bylaws, as amended.
In addition, any underwriting or similar agreements entered into in connection with any offering under this registration statement may contain provisions whereby the underwriters, dealers or agents agree to indemnify Safeco, our directors, certain of our officers and other persons, and are incorporated herein by reference. Further, pursuant to arrangements Safeco and any selling securityholders may agree to indemnify each other against, or to make contributions towards, certain liabilities and expenses arising out of or based upon the information contained in this registration statement, the related prospectus and any prospectus supplement, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in that Act and is therefore unenforceable.
Item 16. | Exhibits |
The following exhibits are filed as part of this registration statement:
Exhibit | ||||
Number | Description | |||
1 | .1* | Form of Underwriting Agreement for Common Stock, Preferred Stock and Convertible Preferred Stock of Safeco. | ||
1 | .2* | Form of Underwriting Agreement for Debt Securities and Convertible Debt Securities of Safeco. | ||
1 | .3* | Form of Underwriting Agreement for Stock Purchase Contracts of Safeco. | ||
1 | .4* | Form of Underwriting Agreement for Units of Safeco. | ||
3 | .1 | Bylaws (as last amended February 2, 2005), filed as Exhibit 3.1 to Safeco’s Annual Report onForm 10-K for the fiscal year ended December 31, 2004 (FileNo. 1-6563), are incorporated herein by reference. | ||
3 | .2 | Restated Articles of Incorporation (as amended May 7, 1997), filed as Exhibit 3.2 to Safeco’s Quarterly Report onForm 10-Q for the quarter ended June 30, 1997 (FileNo. 1-6563), are incorporated herein by reference. | ||
4 | .1 | Indenture for Debt Securities between J.P. Morgan Trust Company, National Association and Safeco, dated as of August 23, 2002, filed as Exhibit 4.11 to Safeco’s Current Report onForm 8-K dated January 28, 2003 (FileNo. 1-6563), is incorporated herein by reference. | ||
4 | .2 | Form of Subordinated Debt Indenture of Safeco, filed as Exhibit 4.4 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .3 | Form of Convertible Debt Indenture of Safeco, filed as Exhibit 4.5 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .4 | Form of Convertible Subordinated Debt Indenture of Safeco, filed as Exhibit 4.6 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .5 | Form of Debt Securities of Safeco, filed as Exhibit 4.7 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .6 | Form of Subordinated Debt Securities of Safeco, filed as Exhibit 4.8 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .7 | Form of Convertible Debt Securities of Safeco, filed as Exhibit 4.9 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .8 | Form of Convertible Subordinated Debt Securities of Safeco, filed as Exhibit 4.10 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .9* | Form of Stock Purchase Contract Agreement (including form of related securities certificate) of Safeco. | ||
4 | .10* | Form of Pledge Agreement for Stock Purchase Contract and Units of Safeco. | ||
4 | .11* | Form of Unit Agreement (including form of unit certificate) of Safeco. |
II-2
Table of Contents
Exhibit | ||||
Number | Description | |||
5 | .1 | Opinion of Perkins Coie LLP. | ||
12 | .1 | Computation of Ratio of Earnings to Fixed Charges of Safeco, filed as Exhibit 12 to Safeco’s Annual Report onForm 10-K for the fiscal year ended December 31, 2006 (FileNo. 1-6563), is incorporated herein by reference. | ||
23 | .1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. | ||
23 | .2 | Consent of Perkins Coie LLP (included in Exhibit 5.1). | ||
24 | .1 | Powers of Attorney (included on signature page). | ||
25 | .1 | Form T-1 Statement of Eligibility of J.P. Morgan Trust Company, National Association to act as trustee relating to senior debt, filed as Exhibit 25.1 to Safeco’s current report onForm 8-K filed January 30, 2003 (FileNo. 1-6563), is incorporated herein by reference. | ||
25 | .2* | Form T-1 Statement of Eligibility of Trustee under Subordinated Debt Indenture of Safeco. | ||
25 | .3* | Form T-1 Statement of Eligibility of Trustee under Convertible Debt Indenture of Safeco. | ||
25 | .4* | Form T-1 Statement of Eligibility of Trustee under Convertible Subordinated Debt Indenture of Safeco. |
* | To be filed by amendment or as an exhibit to a filing with the SEC pursuant to the Exchange Act and incorporated herein by reference. |
Item 17. | Undertakings |
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided,however, that paragraphs (1)(i), (1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be this initialbona fideoffering 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.
II-3
Table of Contents
(4) That, for the purpose of determining liability under the Securities Act to any purchaser:
(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof.Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fideoffering thereof.
(7) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled
II-4
Table of Contents
by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
(8) To file an application for the purpose of determining the eligibility of the trustees to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Trust Indenture Act.
II-5
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing onForm S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Seattle, state of Washington, on the 8th day of March 2007.
SAFECO CORPORATION
By: | /s/ PAULA ROSPUT REYNOLDS |
Name: Paula Rosput Reynolds
Title: | President and Chief Executive Officer |
Each person whose signature appears below hereby constitutes and appoints Paula Rosput Reynolds and Arthur Chong, and each of them, his or her true and lawfulattorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments), and any and all additions to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to each of suchattorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that each of saidattorneys-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities indicated below and on March 8, 2007.
Signature | Title | |||
/s/ PAULA ROSPUT REYNOLDS Paula Rosput Reynolds | President, Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ ROSS J. KARI Ross J. Kari | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | |||
/s/ JOSEPH W. BROWN Joseph W. Brown | Chairman of the Board | |||
/s/ ROBERT S. CLINE Robert S. Cline | Director | |||
/s/ PETER L.S. CURRIE Peter L.S. Currie | Director | |||
/s/ MARIA S. EITEL Maria S. Eitel | Director | |||
/s/ JOSHUA GREEN III Joshua Green III | Director |
II-6
Table of Contents
Signature | Title | |||
/s/ JOHN S. HAMLIN John S. Hamlin | Director | |||
/s/ KERRY KILLINGER Kerry Killinger | Director | |||
/s/ GARY F. LOCKE Gary F. Locke | Director | |||
/s/ WILLIAM G. REED, JR. William G. Reed, Jr. | Director | |||
/s/ JUDITH M. RUNSTAD Judith M. Runstad | Director |
II-7
Table of Contents
INDEX TO EXHIBITS
Exhibit | ||||
Number | Description | |||
1 | .1* | Form of Underwriting Agreement for Common Stock, Preferred Stock and Convertible Preferred Stock of Safeco. | ||
1 | .2* | Form of Underwriting Agreement for Debt Securities and Convertible Debt Securities of Safeco. | ||
1 | .3* | Form of Underwriting Agreement for Stock Purchase Contracts of Safeco. | ||
1 | .4* | Form of Underwriting Agreement for Units of Safeco. | ||
3 | .1 | Bylaws (as last amended February 2, 2005), filed as Exhibit 3.1 to Safeco’s Annual Report onForm 10-K for the fiscal year ended December 31, 2004 (FileNo. 1-6563), are incorporated herein by reference. | ||
3 | .2 | Restated Articles of Incorporation (as amended May 7, 1997), filed as Exhibit 3.2 to Safeco’s Quarterly Report onForm 10-Q for the quarter ended June 30, 1997 (FileNo. 1-6563), are incorporated herein by reference. | ||
4 | .1 | Indenture for Debt Securities between J.P. Morgan Trust Company, National Association and Safeco, dated as of August 23, 2002, filed as Exhibit 4.11 to Safeco’s Current Report onForm 8-K dated January 28, 2003 (FileNo. 1-6563), is incorporated herein by reference. | ||
4 | .2 | Form of Subordinated Debt Indenture of Safeco, filed as Exhibit 4.4 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .3 | Form of Convertible Debt Indenture of Safeco, filed as Exhibit 4.5 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .4 | Form of Convertible Subordinated Debt Indenture of Safeco, filed as Exhibit 4.6 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .5 | Form of Debt Securities of Safeco, filed as Exhibit 4.7 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .6 | Form of Subordinated Debt Securities of Safeco, filed as Exhibit 4.8 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .7 | Form of Convertible Debt Securities of Safeco, filed as Exhibit 4.9 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .8 | Form of Convertible Subordinated Debt Securities of Safeco, filed as Exhibit 4.10 to Safeco’s registration statement onForm S-3 (FileNo. 333-102298), is incorporated herein by reference. | ||
4 | .9* | Form of Stock Purchase Contract Agreement (including form of related securities certificate) of Safeco. | ||
4 | .10* | Form of Pledge Agreement for Stock Purchase Contract and Units of Safeco. | ||
4 | .11* | Form of Unit Agreement (including form of unit certificate) of Safeco. | ||
5 | .1 | Opinion of Perkins Coie LLP. | ||
12 | .1 | Computation of Ratio of Earnings to Fixed Charges of Safeco, filed as Exhibit 12 to Safeco’s Annual Report onForm 10-K for the fiscal year ended December 31, 2006 (FileNo. 1-6563), is incorporated herein by reference. | ||
23 | .1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. | ||
23 | .2 | Consent of Perkins Coie LLP (included in Exhibit 5.1). | ||
24 | .1 | Powers of Attorney (included on signature page). | ||
25 | .1 | Form T-1 Statement of Eligibility of J.P. Morgan Trust Company, National Association to act as trustee relating to senior debt, filed as Exhibit 25.1 to Safeco’s current report onForm 8-K filed January 30, 2003 (FileNo. 1-6563), is incorporated herein by reference. | ||
25 | .2* | Form T-1 Statement of Eligibility of Trustee under Subordinated Debt Indenture of Safeco. | ||
25 | .3* | Form T-1 Statement of Eligibility of Trustee under Convertible Debt Indenture of Safeco. | ||
25 | .4* | Form T-1 Statement of Eligibility of Trustee under Convertible Subordinated Debt Indenture of Safeco. |
* | To be filed by amendment or as an exhibit to a filing with the SEC pursuant to the Exchange Act and incorporated herein by reference. |
II-8