AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 16, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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UNUM CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
2211 CONGRESS STREET, PORTLAND, MAINE 04122
(207) 770-2211
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DELAWARE 01-0405657
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION
NUMBER)
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KEVIN J. TIERNEY
SENIOR VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
UNUM CORPORATION
2211 CONGRESS STREET
PORTLAND, MAINE 04122
(207) 770-2211
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
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COPIES TO:
JOHN-PAUL DEROSA PHYLLIS G. KORFF WILLIAM D. TORCHIANA
UNUM CORPORATION SKADDEN, ARPS, SLATE, SULLIVAN & CROMWELL
2211 CONGRESS STREET MEAGHER & FLOM 125 BROAD STREET
PORTLAND, MAINE 04122 919 THIRD AVENUE NEW YORK, NEW YORK 10004
NEW YORK, NEW YORK 10022
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by market conditions.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. / /
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CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE(1) REGISTRATION FEE
Debt Securities(3)....... 100%
Preferred Stock, $.10 par --
value(3)................
Common Stock, $.10 par $404,500,000(5) -- $404,500,000(5)(6) $139,484
value(3)(4).............
Warrants(7).............. --
(1) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies.
(2) Estimated solely for the purpose of computing the registration fee.
(3) Also includes such indeterminate number of Debt Securities and shares of
Common Stock and Preferred Stock as may be issued upon conversion or
exchange of any Debt Securities or Preferred Stock that provide for
conversion or exchange into other Securities or upon exercise of Warrants
for such Securities.
(4) Includes Share Purchase Rights. Prior to the occurrence of certain events,
the Rights will not be exercisable or evidenced separately from the Common
Stock.
(5) Such amount represents the principal amount of any Debt Securities issued at
their principal amount, the issue price rather than the principal amount of
any Debt Securities issued at an original issue discount, the liquidation
preference of any Preferred Stock, the amount computed pursuant to Rule
457(c) for any Common Stock, the issue price of any Warrants and the
exercise price of any Securities issuable upon exercise of Warrants.
(6) No separate consideration will be received for the Debt Securities,
Preferred Stock or Common Stock issuable upon conversion of or in exchange
for Debt Securities or Preferred Stock.
(7) Warrants may be sold separately or with Debt Securities, Preferred Stock or
Common Stock.
Pursuant to Rule 429 under the Securities Act of 1933 the Prospectus
included herein also relates to $95,500,000 of securities registered as Debt
Securities, Preferred Stock, Common Stock and Warrants under Registration
Statement No. 33-69132, which was declared effective on October 8, 1993. In the
event any of such previously registered Securities are offered prior to the
effective date of this Registration Statement, the amount of such Securities
will not be included in any Prospectus hereunder. The amount of Securities being
registered, together with the remaining Securities registered under Registration
Statement No. 33-69132, represents the maximum amount of Securities which are
expected to be offered for sale.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JULY 16, 1996
UNUM CORPORATION
DEBT SECURITIES, PREFERRED STOCK,
COMMON STOCK AND WARRANTS
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UNUM Corporation may from time to time offer, together or separately, its
(i) debt securities (the "Debt Securities") which may be either senior debt
securities (the "Senior Debt Securities") or subordinated debt securities (the
"Subordinated Debt Securities"); (ii) shares of its preferred stock, $.10 par
value (the "Preferred Stock"); (iii) shares of its common stock, $.10 par value
(the "Common Stock"); and (iv) warrants to purchase Debt Securities, Preferred
Stock, Common Stock or other securities of the Company as shall be designated by
the Company at the time of offering (the "Warrants"), in amounts, at prices and
on terms to be determined at the time of offering. The Debt Securities,
Preferred Stock, Common Stock and Warrants are collectively called the
"Securities."
The Securities offered pursuant to this Prospectus may be issued in one or
more series or issuances and will be limited to $500,000,000 aggregate public
offering price (or its equivalent (based on the applicable exchange rate at the
time of sale) in one or more foreign currencies, currency units or composite
currencies as shall be designated by the Company). Certain specific terms of the
particular Securities in respect of which this Prospectus is being delivered are
set forth in the accompanying Prospectus Supplement (the "Prospectus
Supplement"), including, where applicable, (i) in the case of Debt Securities,
the specific title, aggregate principal amount, whether such Debt Securities are
Senior Debt Securities or Subordinated Debt Securities, maturity date, initial
public offering or purchase price, interest rate or rates (which may be fixed,
floating or adjustable) and timing of payments thereof, yield, provision for
redemption or sinking fund requirements, if any, currencies of denomination or
currencies otherwise applicable thereto, terms for any conversion or exchange
into Common Stock or other securities or property of the Company, in the case of
Subordinated Debt Securities, any other variable terms, any listing on a
securities exchange and methods of distribution; (ii) in the case of Preferred
Stock, the specific title, the aggregate amount, any dividend (including the
method of calculating payment of dividends), liquidation, redemption, voting and
other rights, any terms for any conversion or exchange into Common Stock or
other securities or property of the Company, methods of distribution and the
initial public offering or purchase price and other special terms; (iii) in the
case of Common Stock, the methods of distribution and the public offering or
purchase price; and (iv) in the case of Warrants, the securities of the Company
which are issuable upon exercise of the Warrants, the exercise period, the
methods of distribution, the initial public offering or purchase price and the
exercise price and detachability of such Warrants if issued with other
securities. All or a portion of the Debt Securities of a series may be issuable
in temporary or permanent global form. The Company's Common Stock is listed on
the New York Stock Exchange and the Pacific Stock Exchange under the trading
symbol "UNM." Any Common Stock sold pursuant to a Prospectus Supplement will be
listed on such exchanges, subject to official notice of issuance.
The Debt Securities will be unsecured. Unless otherwise specified in a
Prospectus Supplement, the Senior Debt Securities will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. The Subordinated
Debt Securities will be subordinated in right of payment to all Senior
Indebtedness of the Company (as hereinafter defined).
The Prospectus Supplement may contain information concerning certain United
States Federal income tax considerations applicable to the Securities offered
therein.
The Securities may be sold by the Company directly or through agents,
underwriters or dealers, as designated from time to time or through a
combination of such methods. If agents of the Company or any dealers or
underwriters are involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the names of such agents, dealers or underwriters
and any applicable commissions or discounts will be set forth in or may be
calculated from the Prospectus Supplement with respect to such Securities. See
"Plan of Distribution."
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS , 1996.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITERS, DEALERS OR AGENTS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
NORTH CAROLINA
The Commissioner of Insurance of the State of North Carolina has not
approved or disapproved this offering nor has the commissioner passed upon the
accuracy or adequacy of this Prospectus.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the following Regional Offices of the Commission: Midwest Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and Northeast Regional Office, 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549at prescribed rates. The Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Reports, proxy and information statements and other information
concerning the Company may also be inspected at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and the Pacific
Stock Exchange, 301 Pine Street, San Francisco, California 94104, on which
certain of the Company's securities are listed.
The Company has filed with the Commission a registration statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities offered hereby (the "Registration Statement"). This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is made to the Registration Statement
and to the exhibits relating thereto for further information with respect to the
Company and the Securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995 (except for Items 7 and 8 of Part II and Item 14 of Part IV), Quarterly
Report on Form 10-Q for the three-month period ended March 31, 1996, and Current
Report on Form 8-K dated January 24, 1996, filed by the Company under the
Exchange Act, and the description of the Company's Common Stock and Share
Purchase Rights Plan contained in its Registration Statements filed pursuant to
Section 12 of the Exchange Act and any amendment or report filed for the purpose
of updating those descriptions, are incorporated herein by reference.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and
prior to the termination of the offering of the Securities shall hereby be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or in
the accompanying Prospectus Supplement modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on written or oral request of such person, a copy of
any or all of the foregoing documents incorporated by reference into this
Prospectus (without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies should
be directed to the office of the Secretary, UNUM Corporation, 2211 Congress
Street, Portland, Maine, 04122, telephone number (207) 770-4319.
2
THE COMPANY
UNUM Corporation ("the Company") is a Delaware corporation organized in 1985
as an insurance holding company. The Company and its subsidiaries ("UNUM") are
the leading providers of group long term disability insurance ("group LTD") in
the United States and the United Kingdom. UNUM is also a major provider of
employee benefits, individual disability insurance and special risk reinsurance.
UNUM also markets long term care and retirement income products. UNUM is based
in Portland, Maine and through its affiliates has offices in North America, the
United Kingdom and the Pacific Rim. The Company's principal executive offices
are located at 2211 Congress Street, Portland, Maine 04122 and its telephone
number is (207) 770-2211.
The operations of the following subsidiaries account for substantially all
of UNUM's consolidated assets and revenues: UNUM Life Insurance Company of
America ("UNUM America"), the leading provider of group disability insurance in
the nation and a provider of employee benefits, long term care and retirement
products; First UNUM Life Insurance Company (New York state only) ("First
UNUM"); Commercial Life Insurance Company, a leader in special risk insurance
and professional association insurance marketing; UNUM Limited, the leading
group disability insurance provider in the United Kingdom; Duncanson & Holt,
Inc., a leading accident and health reinsurance underwriting manager; Colonial
Life & Accident Insurance Company ("Colonial"), a leader in payroll-deducted
voluntary employee benefits offered to employees at their worksites; and UNUM
Japan Accident Insurance Company Limited.
BUSINESS SEGMENTS
UNUM reports its operations principally in four business segments:
Disability Insurance, Special Risk Insurance, Colonial Products and Retirement
Products. Corporate includes transactions that are generally non-insurance
related and interest expense on corporate borrowings.
DISABILITY INSURANCE SEGMENT. The Disability Insurance segment, which in
1995 accounted for 60.0% of UNUM's revenues and 56.8% of its income before
income taxes, includes disability products offered in North America, the United
Kingdom and Japan including: group LTD, individual disability, group short term
disability, association group disability, disability reinsurance and long term
care insurance.
Group LTD is the Disability Insurance segment's principal product. UNUM
America and First UNUM target sales of group LTD to executive, administrative
and management personnel, and other professionals. Since 1976, UNUM America and
First UNUM combined have been the United States' leading provider of group LTD
according to EMPLOYEE BENEFIT PLAN REVIEW, a recognized industry publication.
UNUM Limited targets group LTD sales to management personnel, other
professionals, and technical and skilled artisans. UNUM Limited was the leading
provider for 1995 of group LTD insurance in the United Kingdom, as reported by
Employers Re. International.
SPECIAL RISK INSURANCE SEGMENT. The Special Risk Insurance segment in 1995
accounted for 18.2% of UNUM's revenues and 15.8% of its income before income
taxes. The Special Risk Insurance segment includes group life, special risk
accident insurance, non-disability reinsurance operations, reinsurance
underwriting management operations and other special risk insurance products.
COLONIAL PRODUCTS SEGMENT. The Colonial Products segment in 1995 accounted
for 12.8% of UNUM's revenues and 23.0% of its income before income taxes. The
Colonial Products segment includes Colonial and affiliates. Colonial, the
principal subsidiary, markets a broad line of payroll-deducted, voluntary
benefits to employees at their worksites, while focusing on accident and
sickness, cancer and life products.
RETIREMENT PRODUCTS SEGMENT. The Retirement Products segment accounted for
8.7% of UNUM's revenues and 11.9% of its income before income taxes in 1995.
This segment markets and services tax-
3
sheltered annuities in UNUM America and First UNUM. This segment also includes
guaranteed investment contracts, deposit administration accounts, 401(k) plans,
individual life and group medical insurance, all of which are no longer actively
marketed by UNUM.
RECENT DEVELOPMENTS
During the first quarter of 1996, UNUM America and First UNUM entered into
an agreement for the sale of their respective group tax-sheltered annuity
("TSA") businesses to The Lincoln National Life Insurance Company ("Lincoln
Life"), a part of Lincoln National Corporation, and to a new New York insurance
subsidiary of Lincoln Life. The sale, which is subject to regulatory approvals,
involves approximately 1,700 group contractholders and assets under management
of approximately $3 billion. The agreement initially contemplates the
reinsurance of these contracts under an indemnity reinsurance arrangement. These
contracts will then be reinsured pursuant to an assumption reinsurance
arrangement upon consent of the TSA contractholders and/or participants. The
purchase price (ceding commission) at closing is expected to be approximately
$70 million. It is anticipated that it will take several months to obtain the
necessary approvals and otherwise close the sale. There is no guarantee that the
sale will close.
On February 7, 1996, UNUM announced plans to merge Commercial Life Insurance
Company into UNUM America to accelerate growth of its special risk business,
increase its commitment to the association group business and to improve
operating and capital efficiencies. The merger is expected to become effective
on December 31, 1996, subject to regulatory approvals.
On December 29, 1993, UNUM filed suit in the United States District Court
for the District of Maine, seeking a federal income tax refund. The suit is
based on a claim for a deduction in certain prior tax years, for $652 million in
cash and stock distributed to policyholders in connection with the 1986
conversion of Union Mutual Life Insurance Company to a stock company. UNUM has
fully paid, and provided for in prior years' financial statements, the tax at
issue in this litigation. On May 23, 1996, the District Court issued its
decision that the distribution in question was not a deductible expenditure.
UNUM believes its claims are meritorious, and expects to appeal the decision to
the Court of Appeals for the First Circuit. The ultimate recovery, if any,
cannot be determined at this time.
INVESTMENTS
DECEMBER 31, 1995 DECEMBER 31, 1994
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CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
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(DOLLARS IN MILLIONS)
Fixed maturities:
Available for sale......................................... $ 9,135.4 $ 9,135.4 $ 1,640.6 $ 1,640.6
Held to maturity........................................... -- -- 6,227.2 6,168.6
Equity securities available for sale......................... 25.2 25.2 627.9 627.9
Mortgage loans............................................... 1,163.4 1,274.9 1,216.3 1,265.4
Real estate.................................................. 222.2 190.8
Policy loans................................................. 219.2 219.2 201.0 201.0
Other long-term investments.................................. 30.4 38.1
Short-term investments....................................... 896.7 896.7 291.9 291.9
----------- -----------
Total investments...................................... $ 11,692.5 $ 10,433.8
----------- -----------
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UNUM's investment portfolio is concentrated in investment grade bonds. UNUM
evaluates total expected return after consideration of associated expenses and
losses, within criteria established for each product line. Product line
investment strategies are developed to complement business risks by meeting the
liquidity and solvency requirements of each product. UNUM purchases assets with
maturities, expected cash flows and prepayment conditions that are consistent
with these strategies. The
4
nature and quality of the types of investments comply with policies established
by management, which are more stringent overall than the statutes and
regulations imposed by the jurisdictions in which UNUM's insurance subsidiaries
are licensed. UNUM's investments are reported in the consolidated financial
statements at net realizable value or net of any applicable allowances for
probable losses.
During the second quarter of 1995, UNUM sold virtually all of the common
stock portfolio of its United States subsidiaries, primarily due to
consideration of statutory capital requirements associated with investment in
common stocks and to increase future investment income. UNUM has reinvested the
proceeds from the sale of the common stock portfolio primarily in investment
grade fixed income assets. Dependent on capital considerations and market
conditions, UNUM may invest in equity securities in the future.
In November 1995, the FASB issued "A Guide to Implementation of Statement
115 on Accounting for Certain Investments in Debt and Equity Securities," which
provided a one-time opportunity to reassess the appropriateness of the
classifications of securities described in FAS 115, and to reclassify fixed
maturities from the held to maturity category without calling into question the
intent to hold other debt securities to maturity in the future. On December 31,
1995, UNUM reassessed its fixed maturity portfolio and, as allowed under the
implementation guidance, reclassified fixed maturities with an amortized cost of
$6,082.8 million and a related net unrealized gain of $393.0 million from the
held to maturity category to available for sale.
At December 31, 1995, the fixed maturity portfolio included $139.4 million
of below investment grade bonds (below "Baa") recorded at fair value, which
represented 1.5% of the fixed maturity portfolio, and had an associated
amortized cost of $133.8 million. At December 31, 1994, the carrying value of
below investment grade bonds included in the fixed maturity portfolio was $193.8
million, which represented 2.5% of the fixed maturity portfolio, and had an
associated market value of $193.4 million. The percentage of mortgage loans
delinquent 60 days or more on a contract delinquency basis was 0.2% and 1.8% at
December 31, 1995, and 1994, respectively.
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SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY
YEAR ENDED DECEMBER 31,
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1995 1994 1993 1992 1991
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(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
INCOME STATEMENT DATA
Revenues
Premiums.................................................. $ 3,018.2 $ 2,721.3 $ 2,474.1 $ 2,142.4 $ 1,938.9
Net investment income (a)................................. 1,031.4 815.8 839.8 850.7 811.6
Fees and other income..................................... 73.3 75.5 83.1 55.4 34.0
---------- ---------- ---------- ---------- ----------
Total revenues.............................................. 4,122.9 3,612.6 3,397.0 3,048.5 2,784.5
Benefits and expenses
Benefits to policyholders................................. 2,493.0 2,239.0 1,775.7 1,532.6 1,387.1
Interest credited......................................... 227.4 242.7 281.0 328.4 357.7
Operating expenses........................................ 728.2 713.0 675.6 590.9 554.8
Commissions............................................... 369.9 355.9 326.8 298.9 258.8
Increase in deferred policy acquisition costs............. (114.7) (155.3) (135.1) (111.7) (104.8)
Interest expense.......................................... 37.2 18.7 12.7 10.9 11.3
---------- ---------- ---------- ---------- ----------
Total benefits and expenses............................. 3,741.0 3,414.0 2,936.7 2,650.0 2,464.9
---------- ---------- ---------- ---------- ----------
Income before income taxes and cumulative effects of
accounting changes......................................... 381.9 198.6 460.3 398.5 319.6
Income taxes................................................ 100.8 43.9 148.3 107.3 74.3
---------- ---------- ---------- ---------- ----------
Income before cumulative effects of accounting changes...... 281.1 154.7 312.0 291.2 245.3
Cumulative effects of accounting changes.................... -- -- (12.1) -- --
---------- ---------- ---------- ---------- ----------
Net Income.............................................. $ 281.1 $ 154.7 $ 299.9 $ 291.2 $ 245.3
---------- ---------- ---------- ---------- ----------
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BALANCE SHEET DATA
(at end of period)
Assets...................................................... $ 14,787.8 $ 13,127.2 $ 12,437.3 $ 11,959.8 $ 11,310.9
Short-term debt............................................. $ 126.5 $ 246.6 $ 110.0 $ 122.7 $ 150.1
Long-term debt.............................................. $ 457.3 $ 182.1 $ 128.6 $ 77.2 $ 51.5
Stockholders' equity........................................ $ 2,302.9 $ 1,915.4 $ 2,102.7 $ 2,010.9 $ 1,755.5
OTHER DATA
Earnings per share.......................................... $ 3.87 $ 2.09 $ 3.81(b) $ 3.71 $ 3.15
Dividends paid per share.................................... $ 1.035 $ 0.92 $ 0.765 $ 0.625 $ 0.49
Book value per share........................................ $ 31.54 $ 26.45 $ 27.67 $ 25.44 $ 22.46
Number of shares (millions):
Shares outstanding........................................ 73.0 72.4 76.0 79.1 78.2
Weighted average shares outstanding....................... 72.7 74.2 78.8 78.5 77.8
Ratio of earnings to fixed charges (c)...................... 9.0 7.7 20.0 19.1 14.0
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(a) Net investment income is comprised of investment income (net of expenses)
and net realized investment gains.
(b) Earnings per share before cumulative effects of accounting changes was
$3.96. Effective January 1, 1993, the Company adopted Financial Accounting
Standard No. 106, "Employers' Accounting for Postretirement Benefits Other
than Pensions," which decreased net income by $32.1 million, or $0.40 per
share, and Financial Accounting Standard No. 109, "Accounting for Income
Taxes," which increased net income by $20.0 million, or $0.25 per share.
(c) For purposes of computing the ratio of earnings to fixed charges, earnings
as adjusted consist of income from continuing operations before income taxes
plus fixed charges. Fixed charges consist of interest expense and the
estimated interest portion of rent expense.
6
SELECTED CONSOLIDATED SEGMENT INCOME STATEMENT DATA OF THE COMPANY
YEAR ENDED DECEMBER 31,
---------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS)
Premiums and other income:
Disability Insurance Segment.............................. $1,879.9 $1,716.2 $1,547.9 $1,339.8 $1,214.6
Special Risk Insurance Segment............................ 702.3 607.1 559.4 432.8 368.5
Colonial Products Segment................................. 475.1 441.3 407.4 371.9 325.4
Retirement Products Segment 34.1 31.4 42.5 52.5 64.4
Corporate................................................. 0.1 0.8 -- 0.8 --
-------- -------- -------- -------- --------
Total premiums and other income......................... 3,091.5 2,796.8 2,557.2 2,197.8 1,972.9
-------- -------- -------- -------- --------
Net investment income: (a)
Disability Insurance Segment.............................. 592.9 400.3 369.8 370.5 333.8
Special Risk Insurance Segment............................ 48.4 40.7 34.8 32.2 26.5
Colonial Products Segment................................. 52.2 32.6 41.4 35.4 38.5
Retirement Products Segment............................... 323.7 338.0 387.6 408.7 411.3
Corporate................................................. 14.2 4.2 6.2 3.9 1.5
-------- -------- -------- -------- --------
Total net investment income............................. 1,031.4 815.8 839.8 850.7 811.6
-------- -------- -------- -------- --------
Total revenues.......................................... 4,122.9 3,612.6 3,397.0 3,048.5 2,784.5
-------- -------- -------- -------- --------
Benefits and expenses:
Disability Insurance Segment.............................. 2,255.8 2,060.3 1,603.6 1,446.6 1,306.4
Special Risk Insurance Segment............................ 690.4 581.9 555.3 418.7 355.2
Colonial Products Segment................................. 439.6 411.2 378.4 346.8 306.4
Retirement Products Segment 312.3 327.4 375.8 427.5 484.4
Corporate................................................. 42.9 33.2 23.6 10.4 12.5
-------- -------- -------- -------- --------
Total benefits and expenses............................. 3,741.0 3,414.0 2,936.7 2,650.0 2,464.9
-------- -------- -------- -------- --------
Income (loss) before income taxes and cumulative effects of
accounting changes:
Disability Insurance Segment.............................. 217.0 56.2 314.1 263.7 242.0
Special Risk Insurance Segment............................ 60.3 65.9 38.9 46.3 39.8
Colonial Products Segment................................. 87.7 62.7 70.4 60.5 57.5
Retirement Products Segment............................... 45.5 42.0 54.3 33.7 (8.7)
Corporate................................................. (28.6) (28.2) (17.4) (5.7) (11.0)
-------- -------- -------- -------- --------
Total income before income taxes and cumulative effects
of accounting changes.................................. 381.9 198.6 460.3 398.5 319.6
-------- -------- -------- -------- --------
Income taxes................................................ 100.8 43.9 148.3 107.3 74.3
-------- -------- -------- -------- --------
Cumulative effects of accounting changes.................... -- -- (12.1)(b) -- --
-------- -------- -------- -------- --------
Net income.............................................. $ 281.1 $ 154.7 $ 299.9 $ 291.2 $ 245.3
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
- ----------
(a) Net investment income is comprised of investment income (net of expenses)
and net realized investment gains.
(b) Effective January 1, 1993, the Company adopted Financial Accounting Standard
No. 106, "Employers' Accounting for Postretirement Benefits Other than
Pensions," which decreased net income by $32.1 million, or $0.40 per share,
and Financial Accounting Standard No. 109, "Accounting for Income Taxes,"
which increased net income by $20.0 million, or $0.25 per share.
7
USE OF PROCEEDS
Except as set forth in a Prospectus Supplement, the Company intends to use
the net proceeds from the sale of the Securities for general corporate purposes,
including working capital, capital expenditures, investment in subsidiaries,
refinancing of debt, possible future business acquisitions and for the
repurchase of its Common Stock. The Company does not have any present plans, and
is not engaged in any negotiations, for the use of any such proceeds, or the
issuance of Common Stock, in any future acquisition. Any proposal to use
proceeds from any offering of Securities in connection with an acquisition will
be disclosed in the Prospectus Supplement relating to such offering.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Senior Debt Securities are to be issued under an Indenture, dated as of
September 15, 1990 (the "Senior Indenture"), between UNUM Corporation (for
purposes of this "Description of Debt Securities," exclusive of its
subsidiaries, the "Company") and The Chase Manhattan Bank, N.A., as trustee. The
Subordinated Debt Securities are to be issued under a separate Indenture dated
as of May 1, 1995 (the "Subordinated Indenture") between the Company and Mellon
Bank, N.A., as trustee. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures." Copies of the Senior
Indenture and the Subordinated Indenture are filed or incorporated by reference
as exhibits to the Registration Statement of which this Prospectus is a part.
The Chase Manhattan Bank, N.A. and Mellon Bank, N.A. are hereinafter referred to
as the "Trustee." The following summaries of certain provisions of the Senior
Debt Securities, the Subordinated Debt Securities and the Indentures do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indentures applicable to a particular
series of Debt Securities, including the definitions therein of certain terms.
Wherever particular Sections, Articles or defined terms of the Indentures are
referred to, such Sections, Articles or defined terms are incorporated herein by
reference. Article and Section references used herein are references to the
applicable Indenture. Except as otherwise indicated, the terms of the Senior
Indenture and the Subordinated Indenture are identical. Capitalized terms not
otherwise defined herein shall have the meaning given in the Indentures.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and each Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more series. The
Debt Securities will be unsecured. Unless otherwise specified in the Prospectus
Supplement, the Senior Debt Securities when issued will be unsubordinated
obligations of the Company and will rank equally and ratably with all other
unsecured and unsubordinated indebtedness of the Company. The Subordinated Debt
Securities when issued will be subordinated in right of payment to the prior
payment in full of all Senior Indebtedness (as defined below) of the Company, as
described under "Subordination of Subordinated Debt Securities" and in the
Prospectus Supplement applicable to an offering of Subordinated Debt Securities.
Since the Company is a holding company, the right of the Company, and hence the
right of creditors of the Company (including the Holders of Debt Securities), to
participate in any distribution of the assets of any subsidiary upon its
liquidation or reorganization or otherwise is necessarily subject to the prior
claims of creditors of the subsidiary, except to the extent that claims of the
Company itself as a creditor of the subsidiary may be recognized.
Reference is made to the Prospectus Supplement relating to the particular
Debt Securities offered thereby (the "Offered Debt Securities") which sets forth
whether the Offered Debt Securities shall be
8
Senior Debt Securities or Subordinated Debt Securities, and further sets forth
the following terms, where applicable, of the Offered Debt Securities: (1) the
title of the Offered Debt Securities; (2) any limit on their aggregate principal
amount; (3) whether they are to be issuable in temporary or permanent global
form; (4) the price(s) (expressed as a percentage of the aggregate principal
amount thereof) at which they will be issued; (5) the date(s) on which they will
mature; (6) the rate(s) (which may be fixed, floating or adjustable) at which
they will bear interest, if any, and the date from which such interest will
accrue; (7) the dates on which such interest will be payable and the Regular
Record Dates for such Interest Payment Dates; (8) any mandatory or optional
sinking fund or analogous provisions; (9) any index or formula used to determine
the amount of payments of principal of and premium, if any, and interest; (10)
the date, if any, after which and the price(s) at which the Company may redeem
them at its option; (11) the currency or currencies (including composite
currencies) of payment of principal of and premium, if any, and interest thereon
if other than U.S. dollars (the "Specified Currency"); (12) the terms and
conditions, if any, pursuant to which the Subordinated Debt Securities are
convertible into or exchangeable for Common Stock or other securities or
property of the Company; (13) the Person to whom any interest on the Offered
Debt Securities will be payable, if other than the Person in whose name such
Offered Debt Securities are registered on any Regular Record Date; (14) the
place or places where principal of (and premium, if any) and interest, if any,
on Offered Debt Securities will be payable; (15) if other than denominations of
$1,000 and any integral multiple thereof, the denominations in which the Offered
Debt Securities will be issuable; (16) any event or events of default applicable
with respect to the Offered Debt Securities in addition to those provided in the
applicable Indenture; (17) any other covenant or warranty included for the
benefit of the Offered Debt Securities in addition to (and not inconsistent
with) those included in the applicable Indenture for the benefit of Debt
Securities of all series, or any other covenant or warranty included for the
benefit of the Offered Debt Securities in lieu of any covenant or warranty
included in the Indentures for the benefit of Debt Securities of all series or
any provision that any covenant or warranty included in the applicable Indenture
for the benefit of Debt Securities of all series shall not be for the benefit of
the Offered Debt Securities, or any combination of such covenants, warranties or
provisions; and (18) any other terms. (Section 301) Debt Securities may also be
issued under the Indentures upon the exercise of Warrants. See "Description of
Warrants."
The Indentures do not contain any provisions that afford Holders of the Debt
Securities protection in the event of a highly leveraged or similar transaction
involving the Company.
Offered Debt Securities may be issued at a substantial discount to their
principal amount (the "Original Issue Discount Securities"). Certain United
States Federal income tax and other considerations applicable to Original Issue
Discount Securities, and to Offered Debt Securities that are denominated in
other than U.S. dollars, will be described in the applicable Prospectus
Supplement.
The Indentures provide the Company with the ability, in addition to the
ability to issue Offered Debt Securities with terms different from those of Debt
Securities previously issued, to "reopen" a previous issue of a series of Debt
Securities and issue additional Offered Debt Securities of such series. (Section
301)
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise provided in an applicable Prospectus Supplement with
respect to a series of Offered Debt Securities, Offered Debt Securities
denominated in U.S. dollars will be issued only in denominations of $1,000 or
any integral multiple thereof without coupons. The Prospectus Supplement
relating to a series of Offered Debt Securities denominated in a foreign or
composite currency will specify the denominations thereof. (Section 302) Offered
Debt Securities of any series will be exchangeable for other Offered Debt
Securities of the same series containing identical terms and provisions and of a
like aggregate principal amount and containing identical terms and provisions of
different authorized denominations. (Section 305) Offered Debt Securities may be
issuable under the Indentures in temporary or permanent global form. (Section
202) See "Global Securities."
9
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's Paying Agent for payments with respect to Debt Securities. Any
other Paying Agents in the United States initially designated by the Company for
the Offered Debt Securities will be named in the related Prospectus Supplement.
The Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agents or approve a change in the office through which
any Paying Agent acts, except that the Company will be required to maintain a
Paying Agent in each Place of Payment for such series. All monies paid by the
Company to a Paying Agent for the payment of principal of and premium, if any,
and interest, if any, on any Debt Security which remains unclaimed at the end of
two years after such principal, premium or interest shall have become due and
payable will be repaid to the Company, and the Holder of such Offered Debt
Security will thereafter look only to the Company for payment thereof. (Section
1003)
GLOBAL SECURITIES
If any Offered Debt Securities are issuable in temporary or permanent global
form, the applicable Prospectus Supplement will describe the circumstances, if
any, under which beneficial owners of interests in any such permanent global
Debt Security may exchange such interests for definitive Offered Debt Securities
of such series and of like tenor and principal amount in any authorized form and
denomination. Principal of and any premium and interest on a permanent global
Debt Security will be payable in the manner described in the applicable
Prospectus Supplement.
CERTAIN COVENANTS IN THE INDENTURES
LIMITATIONS ON SALES OF RESTRICTED SUBSIDIARIES' CAPITAL STOCK. The Company
will not sell, transfer or otherwise dispose of any shares of capital stock of a
Restricted Subsidiary (other than directors' qualifying shares or sales to
Restricted Subsidiaries), and it will not permit any Restricted Subsidiary to
sell, transfer or otherwise dispose of any shares of capital stock of any other
Restricted Subsidiary (other than for directors' qualifying shares or sales or
other transfers to the Company or to a Restricted Subsidiary), unless the entire
capital stock of such Restricted Subsidiary at the time owned by the Company and
its Restricted Subsidiaries shall be disposed of at the same time for a
consideration consisting of cash or other property, which, in the opinion of the
Board of Directors of the Company, is at least equal to the fair value thereof.
(Section 1006)
For purposes of the Indentures, "Restricted Subsidiary" means each of UNUM
Life Insurance Company of America, First UNUM Life Insurance Company, and
Colonial Companies, Inc., as well as any successor to all or a principal part of
the business of any such subsidiary, any subsidiary which owns or holds capital
stock of any such subsidiary and any other subsidiary which the Company's Board
of Directors designates as a Restricted Subsidiary. (Section 101) The Restricted
Subsidiaries accounted for approximately 90% of the consolidated revenues of the
Company during 1995 and approximately 91% of the consolidated assets of the
Company at December 31, 1995.
LIMITATIONS ON LIENS ON RESTRICTED SUBSIDIARIES' CAPITAL STOCK.
The Company will not, and it will not permit any Restricted Subsidiary at
any time directly or indirectly to, create, assume, incur, or permit to exist
any indebtedness secured by a pledge, lien, or other encumbrance on the capital
stock of any Restricted Subsidiary without making effective provision whereby
the Debt Securities then outstanding (and, if the Company so elects, any other
indebtedness ranking on a parity with the Debt Securities) shall be equally and
ratably secured with such secured indebtedness so long as such other
indebtedness shall be secured. (Section 1007)
CONVERSION RIGHTS
The terms on which Subordinated Debt Securities of any series are
convertible into or exchangeable for Common Stock or other securities or
property of the Company will be set forth in the Prospectus Supplement relating
thereto. Such terms shall include provisions as to whether conversion or
exchange is mandatory, at the option of the Holder or at the option of the
Company, and may include provisions
10
pursuant to which the number of shares of Common Stock or other securities of
the Company to be received by the Holders of Subordinated Debt Securities would
be calculated according to the market price of Common Stock or other securities
of the Company as of a time stated in the Prospectus Supplement. The conversion
price of any Subordinated Debt Securities of any series that is convertible into
Common Stock of the Company may be adjusted for any stock dividends, stock
splits, reclassification, combinations or similar transactions, as set forth in
the applicable Prospectus Supplement. (Article Fourteen).
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities.
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all Senior Indebtedness. Upon any payment or distribution of assets
to creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshalling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of the Company, the Holders of
Senior Indebtedness will first be entitled to receive payment in full of
principal of (and premium, if any) and interest, if any, on such Senior
Indebtedness before the Holders of the Subordinated Debt Securities will be
entitled to receive or retain any payment in respect of the principal of (and
premium, if any) or interest, if any, on the Subordinated Debt Securities.
(Section 1302)
By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company may recover less, ratably, than Holders of Senior
Indebtedness and may recover more, ratably, than the Holders of the Subordinated
Debt Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the Holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
amounts due thereon before the Holders of the Subordinated Debt Securities will
be entitled to receive any payment upon the principal of (or premium, if any) or
interest, if any, on the Subordinated Debt Securities. (Section 1303)
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default. (Section 1304) For
purposes of the subordination provisions, the payment, issuance and delivery of
cash, property or securities (other than stock and certain subordinated
securities of the Company) upon conversion of a Subordinated Debt Security will
be deemed to constitute payment on account of the principal of such Subordinated
Debt Security.
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Indebtedness, which may include indebtedness that is senior to
the Subordinated Debt Securities, but subordinate to other obligations of the
Company. The Senior Debt Securities constitute Senior Indebtedness under the
Subordinated Indenture.
"Senior Indebtedness" is defined to include all amounts due on and
obligations in connection with any of the following, whether outstanding at the
date of execution of the Subordinated Indenture or thereafter incurred or
created:
(a) indebtedness, obligations and other liabilities (contingent or
otherwise) of the Company for money borrowed, or evidenced by bonds, debentures,
notes or similar instruments;
11
(b) reimbursement obligations and other liabilities (contingent or
otherwise) of the Company with respect to letters of credit, bankers'
acceptances issued for the account of the Company or with respect to interest
rate protection agreements or currency exchange or purchase agreements;
(c) obligations and liabilities (contingent or otherwise) in respect of
leases by the Company as lessee which, in conformity with generally accepted
accounting principles, are accounted for as capitalized lease obligations on the
balance sheet of the Company;
(d) all direct or indirect guarantees or similar agreements in respect of,
and obligations or liabilities (contingent or otherwise) to purchase or
otherwise acquire or otherwise to assure a creditor against loss of the Company
in respect of, indebtedness, obligations or liabilities of another Person
described in clauses (a) through (c);
(e) any indebtedness described in clauses (a) through (d) secured by any
mortgage, pledge, lien or other encumbrance existing on property which is owned
or held by the Company, regardless of whether the indebtedness secured thereby
shall have been assumed by the Company; and
(f) any and all deferrals, renewals, extensions and refundings of, or
amendments, modifications or supplements to, any indebtedness, obligation or
liability of the kind described in clauses (a) through (e); unless in any case
in the instrument creating or evidencing such indebtedness, obligation,
liability, guaranty, assumption, deferral, renewal, extension or refunding, it
is provided that such indebtedness, obligation, liability, guaranty, assumption,
deferral, renewal, extension or refunding involved is not senior in right of
payment to the Subordinated Debt Securities or that such indebtedness is PARI
PASSU with or junior to the Subordinated Debt Securities. (Section 101)
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding Debt
Securities, may consolidate or merge with or into any Person, or transfer or
lease its assets substantially as an entirety to any Person, or may acquire or
lease the assets of any Person, provided that: (a) the successor formed by such
consolidation or into which the Company is merged or which acquires or leases
the assets of the Company substantially as an entirety is organized under the
laws of any United States jurisdiction and assumes the Company's obligations on
the Debt Securities and under the applicable Indenture; (b) after giving effect
to the transaction, no Event of Default (and no event which, after notice or
lapse of time or both, would become an Event of Default) shall have happened and
be continuing; and (c) certain other conditions are met. (Article Eight)
EVENTS OF DEFAULT
Under the Indentures, the following will be Events of Default with respect
to Debt Securities of a particular series: (a) the Company defaults in the
payment of interest on any Debt Security of that series when due and payable and
the Default continues for a period of 30 days; (b) the Company defaults in the
payment of any principal of and premium, if any, on any Debt Security of that
series when due and payable at maturity, upon redemption or otherwise, or in the
deposit of any sinking fund payment when due by the terms of a Debt Security of
that series; (c) the Company fails to comply with or perform any of its other
agreements, covenants or warranties in the Debt Securities of that series or the
Indenture in respect of Debt Securities of that series and the Default continues
for 60 days after written notice as provided in the applicable Indenture; (d)
there shall be a default by the Company or any Restricted Subsidiary under any
(i) debt for money borrowed (including Debt Securities of any series other than
that series), (ii) mortgage, indenture or other instrument under which there may
be issued or may be secured or evidenced any indebtedness for money borrowed,
(iii) guarantee of payment for money borrowed or (iv) debt evidenced by bonds,
debentures, notes or other similar instruments (excluding trade accounts payable
or accrued liabilities arising in the normal course of business which are not
overdue by more
12
than 90 days or which are being contested in good faith) and such default shall
result in such indebtedness becoming due prior to its stated maturity; PROVIDED,
HOWEVER, a default shall exist under this clause (d) only if all such defaults
relate to such indebtedness or such guarantees with an aggregate principal
amount in excess of $5,000,000, the acceleration of which has not been rescinded
or annulled within 10 days after written notice as provided in the applicable
Indenture; (e) certain events of bankruptcy, insolvency or reorganization of the
Company or any Restricted Subsidiary; and (f) any other Event of Default
provided with respect to Debt Securities of that series. (Section 501) The
applicable Trustee or the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series (each series acting as a separate
class) may declare all unpaid principal of and accrued interest (or such lesser
amount as may be provided for in the Debt Securities of that series) on all then
Outstanding Debt Securities of that series to be due and payable immediately if
an Event of Default (other than one in (e) above) with respect to Debt
Securities of such series shall occur and be continuing at the time of
declaration. If an Event of Default as specified in (e) above occurs, all unpaid
principal and accrued interest (or such lesser amount as may be provided for in
the Debt Securities of that series) shall IPSO FACTO become and be immediately
due and payable without any other declaration or act on the part of the Trustee
or any Holder. (Section 502)
At any time after a declaration of acceleration has been made with respect
to Debt Securities of any series, the Holders of a majority in principal amount
of the Outstanding Debt Securities of that series may rescind any declaration of
acceleration with respect to the Debt Securities of that series and its
consequences, (a) if the rescission would not conflict with any judgment or
decree; (b) if all existing Events of Defaults with respect to Debt Securities
of that series have been cured or waived except non-payment of principal or
interest on Debt Securities of that series that has become due solely because of
the acceleration; and (c) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed therefore in such
Debt Securities has been paid. (Section 502) Any Event of Default with respect
to Debt Securities of any series may be waived by the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series, except in a
case of failure to pay principal or premium, if any, or interest on, or deposit
of any sinking fund payment with respect to, any Debt Security of that series
for which payment or deposit had not been subsequently made or in respect of a
covenant or provision which cannot be modified or amended without the consent of
the Holder of each Outstanding Debt Security of such series affected. (Section
504)
If any event which is, or after notice or lapse of time or both would become
an Event of Default (a "Default") occurs with respect to Debt Securities of any
series and it is known to the applicable Trustee, the Trustee shall mail to
Holders of Debt Securities of that series a notice of Default within 90 days
after it occurs unless such Default shall have been cured or waived, PROVIDED
that except in the case of a Default in the payment of the principal of or
premium, if any, or interest on, any Debt Security of any series or in the
making of any sinking fund payment payable with respect to Debt Securities of
any series, the Trustee may withhold the notice if and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determines that withholding
the notice is in the interests of Holders of Debt Securities of that series and
PROVIDED, FURTHER, that in the case of any Default of the character specified in
clause (c) under "Events of Default" with respect to Debt Securities of any
series, no notice to Holders shall be given until at least 30 days after the
occurrence thereof. (Section 602)
Reference is made to the Prospectus Supplement relating to any series of
Debt Securities which are Original Issue Discount Securities for the particular
provisions relating to the principal amount of such Original Issue Discount
Securities due upon the occurrence of any Event of Default and the continuation
thereof.
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
power conferred on the Trustee with respect to Debt Securities of such series,
13
PROVIDED that the Trustee may refuse to follow any directions that conflict with
any law or the Indenture, are unduly prejudicial to the rights of other Holders
of that series, or would involve the Trustee in personal liability. (Section
505)
In case an Event of Default shall occur and be continuing, the Trustee shall
exercise such of its rights and powers under the applicable Indenture and use
the same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.
(Section 601) Before proceeding to exercise any right or power under the
applicable Indenture at the direction of such Holders, the Trustee will be
entitled to receive from such Holders security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
complying with any such direction. (Section 603)
MODIFICATION AND WAIVER
With certain exceptions, modification or amendment of the Indentures or the
rights of Holders of the Debt Securities of any series may be effected by the
Company and the Trustee with the consent of the Holders of at least 66 2/3% in
principal amount of the Outstanding Debt Securities of each series affected
thereby, PROVIDED that no such modification or amendment may, without the
written consent of the Holder of each Outstanding Debt Security affected
thereby, (a) change the Stated Maturity of the principal of, or any installment
of principal of, or interest on, any Debt Security; (b) reduce the principal
amount of, or the interest on, any Debt Security or any premium payable upon the
redemption thereof or reduce the amount of principal of an Original Issue
Discount Security which could be declared due and payable upon an acceleration;
(c) change the Place of Payment or coin or currency of any payment of principal,
any premium or interest on any Debt Security; (d) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt Security;
(e) reduce the percentage in principal amount of the Outstanding Debt Securities
of any series, the consent of whose Holders is required to approve any
supplemental indenture, to waive compliance with certain provisions of the
applicable Indenture or certain defaults thereunder and their consequences, or
to reduce quorum or voting requirements applicable to meetings of Holders; (f)
in the case of Subordinated Debt Securities, adversely change the right to
convert or exchange, including decreasing the conversion rate or increasing the
conversion price of such Subordinated Debt Securities; (g) in the case of the
Subordinated Indenture, modify the subordination provisions in a manner adverse
to the Holders of any Subordinated Debt Securities; or (h) modify the foregoing
requirements in (a) through (g) above, requiring the consent of each Holder of
each Outstanding Debt Security affected thereby, or the percentage of such
Holders required to waive past defaults, or the percentage of such Holders that
may rescind an acceleration, except to increase any such percentage, and except
to provide that other provisions of the Indentures cannot be modified or waived
without the consent of the Holder of each Outstanding Debt Security affected
thereby. (Section 902) Except with respect to certain fundamental provisions,
the Holders of at least a majority in principal amount of Outstanding Debt
Securities of any series may, with respect to such series, waive past defaults
under the Indentures and waive compliance by the Company with certain provisions
of the Indentures. (Section 513)
SATISFACTION AND DISCHARGE OF INDENTURES
The Indentures generally provide that the Company may terminate certain of
its obligations under the Debt Securities of any series and under the Indentures
(with respect to such series) if (i) all the Debt Securities of such series
previously authenticated and delivered (other than lost, destroyed or stolen
Debt Securities that have been replaced or paid or for whose payment money has
been deposited in trust) have been delivered to the Trustee for cancellation and
the Company has paid all sums payable by it thereunder, (ii) such Debt
Securities of such series have matured or will mature within one year or all of
them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption and the Company
irrevocably deposits with the Trustee money or U.S. Government Obligations
sufficient to pay principal of, premium, if any, and interest on the Outstanding
Debt Securities of such series that are due or will become due upon redemption
or maturity, as the case
14
may be, and to pay all other sums payable by it thereunder or (iii) upon
compliance with certain conditions specified in the Indentures, 123 days after
the Company makes the deposit with the Trustee of money or U.S. Government
Obligations specified in clause (ii). In such case, Holders of the Debt
Securities must look to the deposited money for payment. (Section 401)
The Indentures further provide that if the Company has made the election
provided by clause (iii) above, it may elect either (a) to defease and be
discharged from any and all obligations with respect to the Debt Securities of
such series, except for the 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 in respect of the Debt
Securities, and to hold moneys for payment in trust ("legal defeasance") or (b)
to be released from its obligations with respect to the Debt Securities of such
series under the covenant default (except with respect to the covenant to pay
principal and interest) and cross-acceleration provisions under "Events of
Default" and from the restrictions described under certain covenants in the
Indentures, including "Limitations on Sales of Restricted Subsidiaries' Capital
Stock" and "Limitations on Liens on Restricted Subsidiaries' Capital Stock,"
and, in the case of Subordinated Debt Securities, the provisions described under
"Subordination of Subordinated Debt Securities" ("covenant defeasance"). As a
condition to legal defeasance or covenant defeasance, the Company must deliver
to the Trustee an opinion of counsel (as specified in the Indentures) to the
effect that the Holders of the Debt Securities of such series will not recognize
income, gain or loss for United States Federal income tax purposes as a result
of such legal defeasance or covenant defeasance and will be subject to United
States Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such legal defeasance or covenant
defeasance had not occurred. In the case of legal defeasance under clause (a) or
covenant defeasance under clause (b) above, a ruling of the Internal Revenue
Service may be delivered in lieu of such opinion. (Section 401)
Under current United States Federal income tax law, legal defeasance would
likely be treated as a taxable exchange of such Debt Securities for interests in
the defeasance trust. As a consequence, a Holder would recognize gain or loss
equal to the difference between the Holder's tax basis for such Debt Securities
and the value of the Holder's interest in the defeasance trust, and thereafter
would be required to include in income its share of the income, gain and loss of
the defeasance trust. Under current Federal income tax law, covenant defeasance
would likely not be treated as a taxable exchange of such Debt Securities.
Purchasers of such Debt Securities should consult their tax advisors with
respect to the more particular tax consequences to them of such legal defeasance
and covenant defeasance, including the applicability and effect of United States
Federal income and other tax law.
The Company may exercise its legal defeasance option with respect to the
Debt Securities of such series, notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its legal defeasance
option, payment of such Debt Securities may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option,
payment of such Debt Securities may not be accelerated because of the covenant
default (except with respect to the covenant to pay principal and interest) and
cross-acceleration provisions or certain of the covenants, including those noted
under clause (b) above. However, if such an acceleration were to occur because
of other defaults, the realizable value at the acceleration date of the money
and U.S. Government Obligations in the defeasance trust could be less than the
principal and interest then due on such Debt Securities, because the required
deposit in the defeasance trust is based upon scheduled cash flows rather than
market value, which will vary depending upon interest rates and other factors.
(Section 401)
The term "U.S. Government Obligations" is defined to mean direct obligations
of the United States for the payment of which its full faith and credit is
pledged, or obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act) as custodian with
15
respect to any such U.S. Government Obligations or a specific payment of
principal of or interest on any such U.S. Government Obligations held by such
custodian for the account of the holder of such depositary receipt, PROVIDED
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depositary receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depositary receipt. (Section 101)
CONCERNING THE TRUSTEES
The Company maintains banking relationships in the ordinary course of
business with The Chase Manhattan Bank, N.A. and Mellon Bank, N.A. In addition,
Mellon Bank, N.A. is a participant in the Company's $500 million revolving
credit facility entered into as of December 13, 1994.
DESCRIPTION OF CAPITAL STOCK
The following descriptions and the descriptions contained in "Description of
Preferred Stock" and "Description of Common Stock" are summaries, and reference
is herein made to the detailed provisions of the following documents, copies of
which are filed as exhibits to the Registration Statement: (i) the Company's
Certificate of Incorporation, as amended (the "Certificate of Incorporation");
(ii) the Company's By-Laws (the "By-Laws"); and (iii) the Rights Agreement
between the Company and First Chicago Trust Company of New York, as Rights Agent
(the "Rights Agreement"), pursuant to which shares of Junior Participating
Preferred Stock, Series A ("Junior Participating Preferred Stock") are issuable.
The authorized capital stock of the Company consists of: (i) 120,000,000
shares of Common Stock, par value $0.10 per share, and (ii) 10,000,000 shares of
Preferred Stock, par value $0.10 per share, of which 1,000,000 are designated as
Junior Participating Preferred Stock.
As of March 31, 1996, there were outstanding: (a) 73,274,752 shares of
Common Stock (as well as the same number of rights to purchase shares of Junior
Participating Preferred Stock, pursuant to the Rights Agreement) and (b)
employee stock options to purchase an aggregate of 5,835,464 shares of Common
Stock.
DESCRIPTION OF PREFERRED STOCK
The following description sets forth certain general terms and provisions of
the Preferred Stock to which any Prospectus Supplement may relate. Certain other
terms of a particular series of Preferred Stock will be described in the
Prospectus Supplement relating to that series. If so indicated in the Prospectus
Supplement, the terms of any such series may differ from the terms set forth
below. The description of certain provisions of the Preferred Stock set forth
below and in any Prospectus Supplement does not purport to be complete and is
subject to and qualified in its entirety by reference to the Company's
Certificate of Incorporation and the certificate of designation relating to each
such series of Preferred Stock, which will be filed with the Commission in
connection with the offering of such series of Preferred Stock.
GENERAL
Under the Company's Certificate of Incorporation, the Board of Directors is
authorized to fix and determine the terms, limitations and relative rights and
preferences of any class of preferred stock, including, without limitation, any
voting rights thereof, to divide and issue any of the classes of preferred stock
in series, and to fix and determine the variations among series to the extent
permitted by law. The Company has authorized 1,000,000 shares of Junior
Participating Preferred Stock for issuance upon
16
exercise of certain preferred share purchase rights associated with each share
of outstanding Common Stock as provided in the Rights Agreement. See
"Description of Common Stock--Share Purchase Rights Plan,--Description of Junior
Participating Preferred Stock."
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of Preferred Stock. Reference is made
to the Prospectus Supplement relating to a particular series of Preferred Stock
offered thereby for specific terms including: (1) the designation and the number
of shares offered; (2) the amount of liquidation preference per share; (3) the
price at which such Preferred Stock will be issued; (4) the dividend rate (or
method of calculation), the dates on which dividends will be payable, whether
such dividends will be cumulative or noncumulative and, if cumulative, the dates
from which dividends will commence to cumulate; (5) any redemption or sinking
fund provisions; (6) any conversion or exchange rights; and (7) any additional
voting, dividend, liquidation, redemption, sinking fund and other rights,
preferences, privileges, limitations and restrictions.
The Preferred Stock offered hereby will be issued in one or more series. The
holders of Preferred Stock will have no preemptive rights. Any shares of
Preferred Stock sold hereunder will be fully paid and nonassessable upon
issuance against full payment of the purchase price therefor. Unless otherwise
specified in the Prospectus Supplement relating to a particular series of
Preferred Stock, each series of Preferred Stock will rank on a parity as to
dividends and liquidation rights in all respects with each other series of
Preferred Stock (other than the Junior Participating Preferred Stock).
DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors of the Company, out of funds
legally available therefor, cash dividends at such rates and on such dates as
are set forth in the Prospectus Supplement relating to such series of Preferred
Stock. Different series of the Preferred Stock may be entitled to dividends at
different rates or based upon different methods of determination. Such rate may
be fixed or variable or both. Each such dividend will be payable to the holders
of record as they appear on the stock books of the Company on such record dates
as will be fixed by the Board of Directors of the Company or a duly authorized
committee thereof. Dividends on any series of the Preferred Stock may be
cumulative or noncumulative, as provided in the Prospectus Supplement relating
thereto.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock will be
entitled to receive out of assets of the Company available for distribution to
stockholders, before any distribution of assets is made to holders of Common
Stock or any other class of stock ranking junior to such series of the Preferred
Stock upon liquidation, liquidating distributions in the amount set forth in the
Prospectus Supplement relating to such series of Preferred Stock plus an amount
equal to accrued and unpaid dividends for the then current dividend period and,
if such series of the Preferred Stock is cumulative, for all dividend periods
prior thereto, all as set forth in the Prospectus Supplement with respect to
such shares.
REDEMPTION
The terms, if any, on which shares of a series of Preferred Stock may be
subject to optional or mandatory redemption, in whole or in part, will be set
forth in the Prospectus Supplement relating to such series.
CONVERSION
The terms, if any, on which shares of any series of Preferred Stock are
convertible into Common Stock will be set forth in the Prospectus Supplement
relating thereto. Such terms may include provisions
17
for conversion, either mandatory, at the option of the holder, or at the option
of the Company, in which case the number of shares of Common Stock to be
received by the holders of Preferred Stock would be calculated as of a time and
in the manner stated in the Prospectus Supplement.
TRANSFER AGENT AND REGISTRAR
The transfer agent, registrar and dividend disbursement agent for the
Preferred Stock will be designated in the applicable Prospectus Supplement. The
registrar for shares of Preferred Stock will send notices to shareholders of any
meetings at which holders of the Preferred Stock have the right to elect
directors of the Company or to vote on any other matter.
VOTING RIGHTS
The holders of Preferred Stock of a series offered hereby will not be
entitled to vote except as indicated in the Prospectus Supplement relating to
such series of Preferred Stock or as required by applicable law.
DESCRIPTION OF COMMON STOCK
GENERAL
Subject to the rights of the holders of any shares of the Company's
Preferred Stock which may at the time be outstanding, holders of Common Stock
are entitled to such dividends as the Board of Directors may declare out of
funds legally available therefor. The holders of Common Stock will possess
exclusive voting rights in the Company, except to the extent the Board of
Directors specifies voting power with respect to any Preferred Stock issued.
Except as hereinafter described, holders of Common Stock are entitled to one
vote for each share of Common Stock, but will not have any right to cumulate
votes in the election of directors. In the event of liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to receive,
after payment of all of the Company's debts and liabilities and of all sums to
which holders of any Preferred Stock may be entitled, the distribution of any
remaining assets of the Company. Holders of the Common Stock will not be
entitled to preemptive rights with respect to any shares which may be issued.
Any shares of Common Stock sold hereunder will be fully paid and non-assessable
upon issuance against full payment of the purchase price therefor. First Chicago
Trust Company of New York is the transfer agent for the Common Stock. The Common
Stock is listed on the New York Stock Exchange and the Pacific Stock Exchange
under the symbol "UNM."
CERTAIN PROVISIONS
The provisions of the Company's Certificate of Incorporation and By-Laws
which are summarized below may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a stockholder
might consider in such stockholder's best interest, including those attempts
that might result in a premium over the market price for the shares held by
stockholders.
CLASSIFIED BOARD. The Board of Directors is divided into three classes that
are elected for staggered three-year terms. A director may be removed by the
stockholders, but only for cause, and only by the affirmative vote of the
holders, voting as a single class, of 80% or more of the total number of votes
entitled to be cast by all holders of the voting stock which shall include all
capital stock of the Company which by its terms may vote on all matters
submitted to stockholders of the Company generally.
ISSUANCE OF PREFERRED STOCK. Pursuant to the Certificate of Incorporation,
the Board of Directors by resolution may establish one or more series of
Preferred Stock having such number of shares, designation, relative voting
rights, dividend rates, liquidation and other rights, preferences and
limitations as may be fixed by the Board of Directors without any further
stockholder approval. Such rights, preferences, privileges and limitations as
may be established could have the effect of impeding or discouraging the
acquisition of control of the Company.
18
BUSINESS COMBINATIONS. In addition, the Certificate of Incorporation and
By-Laws of the Company contain supermajority voting provisions relating to the
approval of business combinations with certain stockholders. Pursuant to the
Company's Certificate of Incorporation, any Business Combination (as defined
therein, which term includes a merger, sale of all or substantially all its
assets, the adoption of a plan of liquidation and similar extraordinary
corporate transactions) with (i) any person (other than the Company, its
subsidiaries, certain employee benefit plans of the Company and the trustees of
such plans) who is the beneficial owner of 10% or more of the UNUM Voting Stock
(as defined below) or (ii) any person who is an Affiliate or Associate (as
defined in Rule 12b-2 of the Exchange Act) of the Company and who was the
beneficial owner of 10% or more of the UNUM Voting Stock at any time in the two
years prior to the date in question (each such person, a "UNUM Interested
Stockholder") must be approved by a supermajority vote, unless the Business
Combination has been approved by the vote of a majority of the Continuing
Directors (as defined below) of the Company's Board of Directors. "UNUM Voting
Stock" means all capital stock of the Company which by its terms may vote on all
matters submitted to stockholders of the Company generally. "Continuing
Director" means any Board of Directors member who while serving as a Board of
Directors member is not an Affiliate or Associate or representative of the UNUM
Interested Stockholder and who was a Board of Directors member before the UNUM
Interested Stockholder became such and includes certain successors to such Board
of Directors members. The required supermajority vote consists of the
affirmative vote of the holders of (i) 80% or more of the UNUM Voting Stock,
voting together as a single class, and (ii) at least a majority of the shares of
UNUM Voting Stock not held by the UNUM Interested Stockholder, voting together
as a single class.
AMENDMENTS TO THE CERTIFICATE OF INCORPORATION. Under the Certificate of
Incorporation, the amendment of, repeal of or adoption of any provision
inconsistent with certain provisions of the Certificate of Incorporation
relating to (i) the election of the Board of Directors, its powers and related
matters requires the affirmative vote of the holders of at least 80% of the
outstanding UNUM Voting Stock, voting together as a single class, and (ii)
Business Combinations with UNUM Interested Stockholders and the required votes
for amendments of the Certificate of Incorporation requires the affirmative vote
of the holders specified in clause (i) above and the affirmative vote of the
holders of at least a majority of the outstanding UNUM Voting Stock which is not
beneficially owned by any UNUM Interested Stockholder, voting together as a
single class. The above supermajority voting requirements do not apply to any
amendment, repeal or adoption recommended by the Board of Directors of the
Company if a majority of the Board of Directors of the Company then in office
consists of persons who would be eligible to serve as Continuing Directors.
AMENDMENTS TO THE BY-LAWS. The Certificate of Incorporation provides that
the By-Laws may be amended by the affirmative vote of a majority of directors
present at a meeting of the Board of Directors at which a quorum is present or
by the affirmative vote of the holders of at least 80% of all outstanding UNUM
Voting Stock, voting together as a single class.
STOCKHOLDER PROPOSAL PROCEDURES. The By-Laws require any stockholder who
wants to present a proposal for action by the stockholders at an annual meeting
to deliver a written notice to the Secretary of the Company. To be timely, a
stockholder's notice must be delivered to, or mailed and received at, the
principal executive offices of the Company, not less than 60 days nor more than
90 days prior to the date of the annual meeting, unless less than 75 days'
notice or prior public disclosure of the date of such meeting has been given or
made to the stockholders, in which case a stockholder's notice must be received
no later than the close of business on the 15th day following the day on which
such notice was mailed or such disclosure was made.
SHARE PURCHASE RIGHTS PLAN
On March 13, 1992, the Board of Directors of the Company adopted a
stockholder rights plan and declared a dividend distribution of one right (a
"Right") for each outstanding share of Common Stock to
19
stockholders of record at the close of business on March 23, 1992. Each Right
entitles the registered holder to purchase from the Company a unit consisting of
one one-hundredth of a share (a "Unit") of Junior Participating Preferred Stock,
at a purchase price of $150 per Unit, subject to adjustment (the "Purchase
Price"). The terms of the Junior Participating Preferred Stock are such that one
Unit is essentially equivalent to one share of Common Stock. The description and
terms of the Rights are set forth in a Rights Agreement, dated as of March 13,
1992 and amended as of June 19, 1996 (as amended, the "Rights Agreement"),
between the Company and First Chicago Trust Company of New York, as rights agent
(the "Rights Agent").
Initially, the Rights are attached to all outstanding Common Stock
certificates, and no separate certificates evidencing Rights ("Rights
Certificates") are distributed. The Rights will separate from the Common Stock
and a "Distribution Date" will occur upon the earlier of (i) ten (10) days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 10% or more of the outstanding shares of
Common Stock, except for persons or a group of affiliated or associated persons
who become the beneficial owner of 10% or more of the outstanding shares of
Common Stock solely as a result of a reduction in the number of shares of Common
Stock outstanding due to a repurchase of shares by the Company unless such
person or group thereafter acquires additional shares representing 1% or more of
the outstanding Common Stock (the "Stock Acquisition Date") or (ii) ten (10)
business days (or such later date as may be determined by the Board of
Directors) following the announcement of a tender offer or exchange offer that
would result in a person or group beneficially owning 10% or more of such
outstanding shares of Common Stock. However, if the Board of Directors of the
Company determines that any person who would otherwise be an Acquiring Person
has become such inadvertently, then such person will not become an Acquiring
Person if certain conditions are satisfied, including divestiture by such person
of beneficial ownership of the shares of Common Stock that would have otherwise
caused such person to become an Acquiring Person.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after March 23, 1992
contain a notation incorporating the Rights Agreement by reference, and (iii)
the surrender for transfer of any certificates for Common Stock outstanding will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificates. The Rights are not exercisable until the
Distribution Date and will expire at the close of business on March 13, 2002,
unless earlier redeemed by the Company as described below (the "Expiration
Date").
In the event that (i) a Person becomes an Acquiring Person (except pursuant
to an offer for all outstanding shares of Common Stock which at least a majority
of the members of the Board of Directors who are not officers of the Company and
who are not representatives, nominees, affiliates or associates of an Acquiring
Person determine to be fair to and otherwise in the best interests of the
Company and its stockholders (a "Fair Offer")) or (ii) an Acquiring Person or
any of its affiliates or associates shall merge into or otherwise combine with
the Company in a transaction in which the Company is the surviving corporation
and the Common Stock remains outstanding and unchanged, each holder of a Right
will thereafter have the right to receive, upon exercise, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company or a
reduction in the Purchase Price) having a value equal to two times the exercise
price of the Right. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person or an associate or affiliate of an
Acquiring Person will be null and void. However, Rights are not exercisable
following the occurrence of any of the events set forth in this paragraph until
such time as the Rights are no longer redeemable by the Company as set forth
below.
In the event that, at any time following the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation
20
(other than a merger described in the preceding paragraph or a merger which
follows, and is at the same price as, a Fair Offer), or (ii) 50% or more of
UNUM's assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have become null and void as set forth above)
shall thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right. The events set forth in this paragraph and in the preceding paragraph are
referred to as the "Triggering Events."
At any time after there is an Acquiring Person and prior to the acquisition
by such Acquiring Person of 50% or more of the outstanding Common Stock, the
Board of Directors may exchange the Rights (other than Rights owned by the
Acquiring Person which have become null and void), in whole or in part, at an
exchange ratio of one share of Common Stock or one Unit of Junior Participating
Preferred Stock (or a share or unit of another series of the Company's preferred
stock having equivalent rights, preferences and privileges) per Right (subject
to adjustment).
At any time until ten (10) days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"), which is payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
The Purchase Price payable, and the number of shares of Junior Participating
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends. Stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) or for common stock of the
acquiring company as set forth above.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner which causes the Rights to become exercisable unless the offer is
conditioned on substantially all the Rights being acquired. This potential
dilution may have the effect of delaying, deferring or discouraging attempts to
acquire control of the Company which are not approved by the Company's Board of
Directors. However, the Rights should not interfere with any merger or other
business combination approved by the Company's Board of Directors.
DESCRIPTION OF JUNIOR PARTICIPATING PREFERRED STOCK
GENERAL. In connection with the Rights Agreement, 1,000,000 shares of
Junior Participating Preferred Stock have been reserved and authorized for
issuance by the Board of Directors of the Company. No shares of Junior
Participating Preferred Stock are outstanding as of the date of this Prospectus.
The following statements with respect to the Junior Participating Preferred
Stock do not purport to be complete and are subject to the detailed provisions
of the Certificate of Incorporation and the certificate of designation relating
to the Junior Participating Preferred Stock (the "Certificate of Designation"),
which are filed as exhibits to the Registration Statement of which this
Prospectus is a part.
RANKING. The Junior Participating Preferred Stock shall rank junior to all
other series of the Company's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall provide
otherwise.
DIVIDENDS AND DISTRIBUTIONS. Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Junior Participating Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for
21
that purpose, quarterly dividends payable in cash on the 19th day of February,
May, August and November in each year (each such date being referred to herein
as "Quarterly Dividend Payment Date") commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Junior Participating Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $5.00 or (b) (subject to adjustment
upon certain dilutive events) 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Junior Participating Preferred Stock.
The Company shall declare a dividend or distribution on the Junior
Participating Preferred Stock immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $5.00 per share on the Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
VOTING RIGHTS. The holders of shares of Junior Participating Preferred
Stock shall have the following voting rights: (a) subject to adjustment upon
certain dilutive events, each share of Junior Participating Preferred Stock
shall entitle the holder thereof to 100 votes on all matters submitted to a vote
of the stockholders of the Company; (b) except as otherwise provided by the
Certificate of Designation or by law, the holders of shares of Junior
Participating Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of stockholders of
the Company; and (c) if at any time dividends on any Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6) quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "default period") which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Junior
Participating Preferred Stock then outstanding shall have been declared and paid
or set apart for payment. During each default period, all holders of Preferred
Stock (including holders of the Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two (2)
Directors, until the expiration of a default period.
LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation (voluntary or
otherwise), dissolution or winding up of the Company, no distribution shall be
made to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Junior
Participating Preferred Stock shall have received $250 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation Preference,
no additional distributions shall be made to the holders of shares of Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 100 (as appropriately adjusted to reflect such events as
stock splits, stock dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii) immediately above being referred to as the
"Adjustment Number"). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Junior Participating Preferred Stock and Common Stock, respectively,
holders of Junior Participating Preferred Stock and
22
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to one (1) with respect to such Preferred Stock and Common Stock, on a
per share basis, respectively.
In the event, however, that there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
CONSOLIDATION, MERGER, ETC. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case, the shares of Junior
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to adjustment upon certain dilutive
events) equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged.
REDEMPTION. The outstanding shares of Junior Participating Preferred Stock
may be redeemed at the option of the Board of Directors in whole, but not in
part, at any time, or from time to time, at a cash price per share equal to 105
percent of (i) the product of the Adjustment Number times the Average Market
Value (as such term is hereinafter defined) of the Common Stock, plus (ii) all
dividends which on the redemption date have accrued on the shares to be redeemed
and have not been paid, or declared and a sum sufficient for the payment thereof
set apart, without interest. The "Average Market Value" is the average of the
closing sale prices of the Common Stock during the 30-day period immediately
preceding the date before the redemption date on the Composite Tape for New York
Stock Exchange Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Exchange Act, on which such stock is listed, or, if such stock is not listed
on any such exchange, the average of the closing sale prices with respect to a
share of Common Stock during such 30-day period, as quoted on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or, if no such quotations are available, the fair market
value of the Common Stock as determined by the Board of Directors in good faith.
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities, Preferred Stock, Common Stock or other securities of the Company.
Warrants may be issued independently or together with any such securities of the
Company and may be attached to or separate from such securities of the Company.
The Warrants are to be issued under warrant agreements (each a "Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as warrant agent (the "Warrant Agent"), all as shall be set forth in the
Prospectus Supplement relating to Warrants being offered pursuant thereto.
WARRANTS
The applicable Prospectus Supplement will describe the terms of Warrants
offered thereby, the Warrant Agreement relating to such Warrants and the warrant
certificates representing such Warrants, including the following: (1) the title
of such Warrants; (2) the securities of the Company for which such Warrants are
exercisable; (3) the aggregate number of such Warrants; (4) the price or prices
at which such Warrants will be issued; (5) the currency or currencies, including
composite currencies or currency units, in which the price of such Warrants may
be payable; (6) the procedures and conditions relating to
23
the exercise of such Warrants; (7) the designation and terms of any related
securities of the Company with which such Warrants are issued, and the number of
such Warrants issued with each such security; (8) the date, if any, on and after
which such Warrants and the related securities of the Company will be separately
transferable; (9) the date on which the right to exercise such Warrants shall
commence, and the date on which such right shall expire; (10) the maximum or
minimum number of such Warrants which may be exercised at any time; (11) a
discussion of material United States Federal income tax considerations, if any;
(12) any other terms of such Warrants and terms, procedures and limitations
relating to the exercise of such Warrants; and (13) the terms of the securities
of the Company purchasable upon exercise of such Warrants.
Warrant certificates will be exchanged for new warrant certificates of
different denominations, and Warrants may be exercised at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement. Prior to the exercise of their Warrants, holders of Warrants
exercisable for Debt Securities will not have any of the rights of holders of
the Debt Securities purchasable upon such exercise and will not be entitled to
payments of principal (or premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise. Prior to the exercise of their
Warrants for shares of Preferred Stock or Common Stock, holders of such Warrants
will not have any rights of holders of the Preferred Stock or Common Stock
purchasable upon such exercise and will not be entitled to dividend payments, if
any, or voting rights of the Preferred Stock or Common Stock purchasable upon
such exercise.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder of Warrants to purchase for cash such
principal amount or such number of securities of the Company at such exercise
price as shall in each case be set forth in, or be determinable as set forth in,
the Prospectus Supplement relating to the Warrants offered thereby. After the
close of business on the expiration date, unexercised Warrants will become void.
Warrants may be exercised as set forth in the Prospectus Supplement relating
to the Warrants offered thereby. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the Warrant Agent or any other office indicated in the Prospectus Supplement,
the Company will, as soon as practicable, forward the securities purchasable
upon such exercise. If less than all of the Warrants represented by such warrant
certificate are exercised, a new warrant certificate will be issued for the
remaining Warrants.
FOREIGN CURRENCY RISKS
GENERAL
EXCHANGE RATES AND EXCHANGE CONTROLS. An investment in Debt Securities
denominated in other than U.S. dollars entails significant risks that are not
associated with a similar investment in a security denominated in U.S. dollars.
Such risks include, without limitation, the possibility of significant changes
in rates of exchange between the U.S. dollar and the various foreign currencies
or composite currencies, and the possibility of the imposition or modification
of foreign exchange controls by either the U.S. or foreign governments. Such
risks generally depend on economic and political events over which the Company
has no control. In recent years, rates of exchange between the U.S. dollar and
certain foreign currencies have been highly volatile, and such volatility may be
expected to continue in the future. Fluctuations in any particular exchange rate
that have occurred in the past are not necessarily indicative, however, of
fluctuations in the rate that may occur during the term of any Debt Security.
Depreciation of the Specified Currency other than U.S. dollars against the U.S.
dollar would result in a decrease in the effective yield of such Debt Security
below its coupon rate, and in certain circumstances could result in a loss to
the investor on a U.S. dollar basis.
Governments have imposed from time to time and may in the future impose
exchange controls that could affect exchange rates as well as the availability
of a specified foreign currency at a Debt Security's
24
maturity. Even if there are no actual exchange controls, it is possible that the
Specified Currency for any particular Debt Security would not be available at
such Debt Security's maturity. In that event, the Company will repay such Debt
Security at maturity in U.S. dollars on the basis of the most recently available
Exchange Rate.
This Prospectus does not describe all the risks of an investment in Debt
Securities denominated in other than U.S. dollars. Prospective investors should
consult their own financial and legal advisors as to the risks entailed by an
investment in Debt Securities denominated in other than U.S. dollars. Debt
Securities denominated in other than U.S. dollars are not an appropriate
investment for investors who are unsophisticated about foreign currency
transactions.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into certain foreign currencies, and vice versa.
Unless otherwise specified in the Prospectus Supplement, Debt Securities
denominated in other than U.S. dollars or European currency units will not be
sold in, or to residents of, the country issuing the Specified Currency in which
particular Debt Securities are denominated. The information set forth in this
Prospectus is directed to prospective purchasers who are United States
residents, and the Company disclaims any responsibility to advise prospective
purchasers who are residents of countries other than the United States as to any
matters that may affect the purchase, holding, or receipt of payments of
principal of and interest on the Debt Securities. Such persons should consult
their own financial and legal advisors with regard to such matters.
GOVERNING LAW AND JUDGMENTS. The Debt Securities will be governed by and
construed in accordance with the laws of the State of New York. Under the
Judiciary Law of the State of New York, a judgment in an action based upon an
obligation denominated in a currency other than U.S. dollars will be rendered in
the foreign currency of the underlying obligation and converted into U.S.
dollars at the rate of exchange prevailing on the date of the entry of the
judgment or decree.
EXCHANGE RATE AND CONTROLS FOR SPECIFIED CURRENCIES
For any Debt Security denominated in other than U.S. dollars, the Prospectus
Supplement relating to such Debt Securities will contain information concerning
exchange rates. The information concerning exchange rates will be furnished as a
matter of information only and should not be regarded as indicative of the rate
of or trends in future fluctuations in currency exchange rates.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters, and also may
sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities, for whom they
may act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers, and agents that participate in the distribution
of Securities may be deemed to be underwriters, and any discounts or commissions
they receive from the Company, and any profit on the resale of Securities they
realize may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent will be identified, and any such
compensation received from the Company will be described, in the Prospectus
Supplement.
25
Each series of Securities will be a new issue with no established trading
market, other than the Common Stock which is listed on the New York Stock
Exchange and the Pacific Stock Exchange. Any Common Stock sold pursuant to a
Prospectus Supplement will be listed on such exchanges, subject to official
notice of issuance. The Company may elect to list any series of Debt Securities,
Preferred Stock or Warrants on an exchange, but is not obligated to do so. It is
possible that one or more underwriters may make a market in a series of
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of the trading market for the Securities.
Under agreements the Company may enter into, underwriters, dealers, and
agents who participate in the distribution of Securities maybe entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, the Company in the ordinary course of
business.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which such
purchaser is subject. The underwriters and such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
VALIDITY OF THE SECURITIES
The validity of the Securities will be passed upon for the Company by
Skadden, Arps, Slate, Meagher & Flom, New York, New York. The validity of the
Securities in connection with any offering thereof will be passed upon for the
Company by Kevin J. Tierney, Senior Vice President, Secretary and General
Counsel of the Company and by Skadden, Arps, Slate, Meagher & Flom, New York,
New York with respect to certain matters of New York law, and for the
underwriters or agents by Sullivan & Cromwell, New York, New York. Mr. Tierney
owns less than one percent of the Company's Common Stock.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1995, have been incorporated herein by reference in reliance upon the report
of Coopers & Lybrand L.L.P, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses in connection with the issuance
and distribution of the Securities being registered. All amounts except the SEC
registration fee and the rating agency fees are estimates.
SEC registration fee............................................. $ 139,484
Fees and expenses of accountants................................. 90,000
Fees and expenses of counsel..................................... 100,000
Blue sky fees and expenses....................................... 23,000
Fees and expenses of Trustee..................................... 20,000
Printing and engraving expenses.................................. 75,000
Rating agency fees............................................... 125,000
Miscellaneous.................................................... 5,000
---------
Total.................................................... $ 577,484
---------
---------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article Thirteenth of the Company's Certificate of Incorporation provides
for the elimination of personal monetary liabilities of directors of the Company
for breaches of certain of their fiduciary duties to the full extent permitted
by Section 102(b)(7) of the General Corporation Law of Delaware (the "GCL").
Section 102(b)(7) of the GCL enables a corporation in its certificate of
incorporation to eliminate or limit the personal liability of members of its
board of directors to the corporation or its stockholders for monetary damages
for violations of a director's fiduciary duty of care. Such a provision has no
effect on the availability of equitable remedies, such as an injunction or
rescission, for breach of fiduciary duty. In addition, no such provision may
eliminate or limit the liability of a director for breaching his duty of
loyalty, failing to act in good faith, engaging in intentional misconduct or
knowingly violating the law, paying an unlawful dividend or approving an illegal
stock repurchase, or obtaining an improper personal benefit.
Article VIII of the Company's By-Laws provides that directors and certain
other personnel of the Company shall be indemnified against expenses and certain
other liabilities arising out of legal actions brought or threatened against
them for their conduct on behalf of the Company, subject to certain
qualifications and provided that each such person acted in good faith and in a
manner that such person reasonably believed was in the Company's best interest.
The Company has entered into indemnification agreements with each director and
certain officers of the Company and one of its subsidiaries providing that (a)
the Company agrees to comply in all respects with each and every provision of
Article VIII of the By-Laws in effect on the date of the agreement, (b) no
amendment to Article VIII or the agreement will eliminate, reduce or affect any
such directors' or officers' rights under Article VIII or the agreement with
respect to indemnification, and (c) no legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company against the
indemnified party after the expiration of two years from the date of accrual of
such cause of action.
The Company maintains directors, and officers, liability insurance which
insures against liabilities that directors or officers of the Company may incur
in such capacities.
II-1
ITEM 16. LIST OF EXHIBITS.
The following exhibits are filed as part of this Registration Statement.
EXHIBIT NO. DESCRIPTION OF EXHIBITS
- ----------- ------------------------------------------------------------------------------------------------
1.1 -- Form of Underwriting Agreement for the Securities.
1.2 -- Form of Distribution Agreement for Medium-Term Notes, Series C.
3.1 -- Certificate of Incorporation of UNUM Corporation, as amended; incorporated herein by reference
to UNUM Corporation's Annual Report on Form 10-K dated March 25, 1992.
3.2 -- By-Laws of UNUM Corporation; incorporated herein by reference to UNUM Corporation's Annual
Report on Form 10-K dated March 25, 1992.
4.1(a) -- Rights Agreement; incorporated herein by reference to UNUM Corporation's Form 8-K dated March
18, 1992.
4.1(b) -- First Amendment, dated as of June 19, 1996, to Rights Agreement, incorporated herein by
reference to UNUM Corporation's Form 8-A dated June 21, 1996.
4.2 -- Form of Certificate for shares of Common Stock; incorporated herein by reference to UNUM
Corporation's Registration Statement on Form S-4 (File No. 33-55870).
4.3 -- Indenture dated as of September 15, 1990 between UNUM Corporation and The Chase Manhattan Bank
(National Association), as Trustee (including the form of the Senior Debt Securities);
incorporated herein by reference to UNUM Corporation's Registration Statement on Form S-3 (File
No. 33-36873).
4.4 -- Indenture dated as of May 1, 1995 between UNUM Corporation and Mellon Bank, N.A., as Trustee
(including the form of the Subordinated Debt Securities); incorporated by reference to UNUM
Corporation's Form 8-K dated May 1, 1995.
5 -- Opinion of Skadden, Arps, Slate, Meagher & Flom.
12 -- Statements re: Computation of Ratio of Earnings to Fixed Charges.
15 -- Letter re: Unaudited Interim Financial Information.
23.1 -- Consent of Skadden, Arps, Slate, Meagher & Flom (included as part of Exhibit 5).
23.2 -- Consent of Coopers & Lybrand L.L.P.
24 -- Powers of Attorney, included as part of the signature page hereof.
25.1 -- Form T-1 Statement of Eligibility of The Chase Manhattan Bank (National Association) under the
Trust Indenture Act of 1939.
25.2 -- Form T-1 Statement of Eligibility of Mellon Bank, N.A. under the Trust Indenture Act of 1939.
ITEM 17. UNDERTAKINGS.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
II-2
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Company
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the Securities being registered which remain unsold at the termination of the
offering.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions referred to an Item 15 of this Registration
Statement, or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company 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 Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Portland and State of Maine, on the 12th day of July,
1996.
UNUM CORPORATION
By: /s/ JAMES F. ORR III
-----------------------------------
JAMES F. ORR III
CHAIRMAN OF THE BOARD,
PRESIDENT, AND CHIEF
EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Kevin J. Tierney and John-Paul DeRosa his true
and lawful attorneys-in-fact and agents, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments to this Registration
Statement, including post-effective amendments, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, and hereby ratifies and
confirms all his said attorneys-in-fact and agents, each acting alone, or his
substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 12th day of July, 1996.
SIGNATURE TITLE
- ------------------------------------------------------ ---------------------------------------------------------
/s/ JAMES F. ORR III
------------------------------------------- Chairman of the Board, President and Chief Executive
JAMES F. ORR III Officer
/s/ ROBERT W. CRISPIN
------------------------------------------- Executive Vice President and Chief Financial Officer
ROBERT W. CRISPIN
/s/ STEPHEN D. ROBERTS
------------------------------------------- Vice President and Corporate Controller
STEPHEN D. ROBERTS
/s/ GAYLE O. AVERYT
------------------------------------------- Director
GAYLE O. AVERYT
II-4
SIGNATURE TITLE
- ------------------------------------------------------ ---------------------------------------------------------
/s/ ROBERT E. DILLON, JR.
------------------------------------------- Director
ROBERT E. DILLON, JR.
/s/ GWAIN H. GILLESPIE
------------------------------------------- Director
GWAIN H. GILLESPIE
/s/ RONALD E. GOLDSBERRY
------------------------------------------- Director
RONALD E. GOLDSBERRY
/s/ DONALD W. HARWARD
------------------------------------------- Director
DONALD W. HARWARD
/s/ GEORGE J. MITCHELL
------------------------------------------- Director
GEORGE J. MITCHELL
/s/ CYNTHIA A. MONTGOMERY
------------------------------------------- Director
CYNTHIA A. MONTGOMERY
/s/ JAMES L. MOODY, JR.
------------------------------------------- Director
JAMES L. MOODY, JR.
/s/ LAWRENCE R. PUGH
------------------------------------------- Director
LAWRENCE R. PUGH
/s/ LOIS DICKSON RICE
------------------------------------------- Director
LOIS DICKSON RICE
/s/ JOHN W. ROWE
------------------------------------------- Director
JOHN W. ROWE
II-5
EXHIBIT INDEX
EXHIBIT NO.
- -----------
1.1 -- Form of Underwriting Agreement for the Securities.
1.2 -- Form of Distribution Agreement for Medium-Term Notes, Series C.
3.1 -- Certificate of Incorporation of UNUM Corporation, as amended, incorporated herein by
reference to UNUM Corporation's Annual Report on Form 10-K dated March 25, 1992.
3.2 -- By-Laws of UNUM Corporation; incorporated herein by reference to UNUM Corporation's
Annual Report on Form 10-K dated March 25, 1992.
4.1(a) -- Rights Agreement; incorporated herein by reference to UNUM Corporation's Form 8-K dated
March 18, 1992.
4.1(b) -- First Amendment, dated as of June 19, 1996, to Rights Agreement; incorporated herein by
reference to UNUM Corporation's Form 8-A dated June 21, 1996.
4.2 -- Form of Certificate for shares of Common Stock; incorporated herein by reference to
UNUM Corporation's Registration Statement on Form S-4 (File No. 33-55870).
4.3 -- Indenture dated as of September 15, 1990 between UNUM Corporation and The Chase
Manhattan Bank (National Association), as Trustee (including the form of the Senior
Debt Securities): incorporated herein by reference to UNUM Corporation's Registration
Statement on Form S-3 (File No. 33-36873).
4.4 -- Indenture dated as of May 1, 1995 between UNUM Corporation and Mellon Bank, N.A., as
Trustee (including the form of the Subordinated Debt Securities); incorporated by
reference to UNUM Corporation's Form 8-K dated May 1, 1995.
5 -- Opinion of Skadden, Arps, Slate, Meagher & Flom.
12 -- Statements re: Computation of Ratio of Earnings to Fixed Charges.
15 -- Letter re: Unaudited Interim Financial Information.
23.1 -- Consent of Skadden, Arps, Slate, Meagher & Flom (included as part of Exhibit 5).
23.2 -- Consent of Coopers & Lybrand L.L.P.
24 -- Powers of Attorney, included as part of the signature page hereof.
25.1 -- Form T-1 Statement of Eligibility of The Chase Manhattan Bank (National Association)
under the Trust Indenture Act of 1939.
25.2 -- Form T-1 Statement of Eligibility of Mellon Bank, N.A. under the Trust Indenture Act of
1939.
II-6