1
Filed Pursuant to Rule 424(b)(4)
Registration No. 333-56283
PROSPECTUS SUPPLEMENT
FEBRUARY 22, 2001
(TO PROSPECTUS DATED JUNE 24, 1998)
[HARTFORD LIFE LOGO]
$400,000,000
HARTFORD LIFE, INC.
7.375% SENIOR NOTES DUE MARCH 1, 2031
------------------------------
We are offering $400,000,000 principal amount of 7.375% senior notes due
March 1, 2031. We will pay interest on these notes semi-annually on March 1 and
September 1 of each year, beginning on September 1, 2001. We may redeem the
senior notes at any time at the redemption price described on page S-9.
------------------------------
The senior notes have been approved for listing on the New York Stock
Exchange subject to official notice of issuance.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Per Note Total
-------- -----
Price to public............................................ 99.260% $397,040,000
Underwriting discount...................................... 0.875% $ 3,500,000
Proceeds, before expenses, to Hartford Life................ 98.385% $393,540,000
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Delivery of the senior notes in book-entry form only will be made through
The Depository Trust Company on or about March 1, 2001, against payment in
immediately available funds.
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JOINT BOOK-RUNNING MANAGERS
BANC OF AMERICA SECURITIES LLC JPMORGAN
FIRST UNION SECURITIES, INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
WELLS FARGO
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TABLE OF CONTENTS
PAGE
PROSPECTUS SUPPLEMENT ----
Hartford Life, Inc. ........................................ S-3
Recent Developments......................................... S-4
Use of Proceeds............................................. S-5
Capitalization.............................................. S-6
Ratio of Earnings to Fixed Charges.......................... S-7
Selected Financial Information.............................. S-8
Description of the Notes.................................... S-9
Underwriting................................................ S-11
Validity of the Notes....................................... S-12
Experts..................................................... S-12
Forward-Looking Statements.................................. S-12
PROSPECTUS
PROSPECTUS SUPPLEMENT ----
Available Information....................................... 3
Forward-Looking Statements.................................. 4
Financial Statements of the Trusts.......................... 4
Incorporation of Certain Documents by Reference............. 4
Hartford Life, Inc. ........................................ 5
Certain Provisions of the Certificate of Incorporation and
By-Laws of Hartford Life.................................. 6
The Trusts.................................................. 10
Use of Proceeds............................................. 11
Ratio of Earnings to Fixed Charges and Combined Fixed
Charges and Preferred Stock Dividends..................... 11
Description of Debt Securities.............................. 12
Description of Capital Stock................................ 22
Description of Warrants..................................... 28
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 29
Description of Junior Subordinated Debt Securities and
Corresponding Junior Subordinated Debt Securities......... 29
Description of Preferred Securities......................... 33
Description of Guarantee.................................... 35
Plan of Distribution........................................ 38
Legal Opinions.............................................. 39
Experts..................................................... 39
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You should rely only on the information contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus. We have
not, and the underwriters have not, authorized anyone to provide you with
additional or different information. If anyone provides you with additional or
different information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information contained in this prospectus supplement or the accompanying
prospectus is accurate only as of the date on the front of the document and that
any information we have incorporated by reference is accurate only as of the
date of the document incorporated by reference. Our business, financial
condition, results of operations and prospects may have changed since those
dates.
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HARTFORD LIFE, INC.
We are a leading financial services and insurance holding company that,
through our consolidated subsidiaries, provides:
- investment products, including variable annuities, fixed market value
adjusted annuities, mutual funds and retirement plan services for the
savings and retirement needs of over 1.5 million customers,
- individual life insurance for income protection and estate planning to
approximately 500,000 customers,
- group benefits products such as group life and group disability insurance
for the benefit of millions of individuals, and
- corporate owned life insurance, or COLI.
According to the latest publicly available data, we were the leading writer of
individual variable annuities in the United States based on sales for the year
ended December 31, 2000, the third largest writer of group disability insurance
based on sales for the nine months ended September 30, 2000 and the third
largest consolidated life insurance group based on statutory assets as of
December 31, 1999. In addition, we offer the fastest growing non-proprietary
family of mutual funds. Our strong position in each of our core businesses
provides an opportunity to increase the sale of our products and services as
individuals increasingly save and plan for retirement, protect themselves and
their families against disability or death and engage in estate planning.
In June 2000, we became an indirect wholly-owned subsidiary of The Hartford
Financial Services Group, Inc. following its cash tender offer for all of our
common shares not already owned by it at a price of $50.50 per share. The
Hartford had owned a majority of our common shares following our initial public
offering on May 22, 1997. Prior to that date we were a wholly-owned subsidiary
of The Hartford.
As a holding company that is separate and distinct from our insurance
subsidiaries, we have no significant business operations of our own. Therefore,
we rely on the dividends from our insurance company subsidiaries, which are
primarily domiciled in Connecticut, as the principal source of cash flow to meet
our obligations. These obligations include payments on our debt securities and
the payment of dividends on our capital stock, including preferred stock. The
Connecticut insurance holding company laws limit the payment of dividends by
Connecticut-domiciled insurers. Under these laws, the insurance subsidiaries may
only make their dividend payments out of earned surplus. In addition, the state
insurance commissioner must give approval to those subsidiaries paying us
dividends if the dividend and other dividends or distributions made within the
preceding twelve months exceeds the greater of:
- 10% of the insurer's policyholder surplus as of December 31 of the
preceding year, or
- net gain from operations for the previous calendar year, in each case
determined under statutory insurance accounting principles.
The insurance holding company laws of the other jurisdictions in which our
insurance subsidiaries are incorporated generally contain similar, and in some
instances more restrictive, limitations on the payment of dividends. Our
insurance subsidiaries are permitted to pay us up to a maximum of approximately
$310 million in dividends in 2001 without prior regulatory approval.
Our rights to participate in any distribution of assets of any of our
subsidiaries, for example upon their liquidation or reorganization, and the
ability of holders of our securities to benefit indirectly from a distribution,
are subject to the prior claims of creditors of the applicable subsidiary,
except to the extent that we may be a creditor of that subsidiary. Claims on
these subsidiaries by persons other than us include, as of December 31, 2000,
claims by policyholders for benefits payable amounting to $22.9 billion, claims
by separate account holders of $114.0 billion and other liabilities, including
claims of trade creditors, claims from guaranty associations and claims from
holders of debt obligations amounting to $3.5 billion.
Our principal executive offices are located at 200 Hopmeadow Street,
Simsbury, Connecticut 06089, and our telephone number is (860) 547-5000.
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RECENT DEVELOPMENTS
RESULTS FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999
The following table sets forth selected consolidated financial data for the
years ended December 31, 2000 and 1999.
YEAR ENDED DECEMBER 31,
------------------------
2000 1999
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(UNAUDITED) (AUDITED)
(IN MILLIONS)
Net income.................................................. $ 575 $ 467
Core earnings(1)............................................ $ 632 $ 467
Total revenues.............................................. $5,990 $5,536
AS OF DECEMBER 31,
------------------------
2000 1999
----------- ---------
(UNAUDITED) (AUDITED)
(IN MILLIONS)
Total assets................................................ $143,621 $139,033
Total assets under management(2)............................ $155,053 $145,407
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(1) We define "core earnings" as after-tax operational results excluding, as
applicable, net realized capital gains or losses, the cumulative effect of
accounting changes and certain other items. Core earnings should only be
analyzed in conjunction with, and not instead of, net income and may not be
comparable to other performance measures used by our competitors.
(2) Includes mutual fund assets managed by us.
For the year ended December 31, 2000, our net income was up 23 percent from
a year ago. The increase was primarily driven by our Investment Products segment
in which net income increased $94 million, or 28 percent, due principally to
higher fee income. Additionally, net income from each of our other three
operating segments increased 10 percent or more from a year ago. Also included
in our 2000 results were favorable federal and state tax settlements of $32
million. Core earnings and revenues for the year increased 35 percent and 8
percent, respectively, from a year ago. This increase was primarily due to
growth across each of our primary operating segments, particularly the
Investment Products and Group Benefits segments. The revenue growth in the
Investment Products segment was primarily driven by higher fee income in our
individual annuity and mutual fund operations, as average assets in 2000 were
higher than 1999. The Group Benefits segment had higher earned premiums as a
result of strong sales and favorable persistency.
ACQUISITION OF FORTIS FINANCIAL GROUP
On January 25, 2001, we agreed to acquire, for $1.12 billion in cash, the
U.S. individual life, annuity, and mutual fund businesses of Fortis, Inc., which
operates as Fortis Financial Group, or FFG. The transaction, which is subject to
insurance regulatory approval and other customary conditions, is expected to be
completed in the second quarter of 2001. We will effect the acquisition through
the purchase of 100 percent of the stock of Fortis Advisers, Inc. and Fortis
Investors, Inc., wholly-owned subsidiaries of FFG. In addition, we will assume,
through several reinsurance agreements, business written by several subsidiaries
of FFG.
The transaction increases our scale in three strategically important
businesses: individual life insurance, annuities and mutual funds. It will also
broaden our sales platform by providing retail distribution capabilities through
the addition of FFG's retail broker-dealer consisting of approximately 3,000
registered representatives.
In the individual life business, we will nearly double the number of life
insurance contracts we have in force after the transaction. We expect to realize
from the transaction increased scale to our operations, which will reduce the
average cost to maintain business already on our books, and lower the cost to
acquire new business. The transaction also enables us to broaden our reach in
the emerging affluent market. We believe
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this new business sales capability will be complementary to our own capability
and will move us to being the third largest writer of variable life insurance in
the United States.
In the individual annuity business, the transaction provides us with the
opportunity to utilize our low-cost operating platform across the FFG business.
The transaction also will add FFG's investment management business, which had
approximately $11 billion of assets under management, including approximately $4
billion of mutual fund assets under management, at December 31, 2000. This will
increase our mutual fund assets under management by over 30 percent.
We expect to finance the acquisition through the $615 million of net
proceeds received from The Hartford from its offering of common stock, the
proceeds we receive from this offering of senior notes and the proceeds we
receive from our anticipated offering of trust preferred securities.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of our senior notes in this
offering, estimated to be approximately $393.4 million after deduction of
underwriting discounts and expenses, to finance a portion of the $1.12 billion
purchase price for our acquisition of FFG. The remainder of the purchase price
will be financed from the net proceeds received from The Hartford from its
recently completed offering of common stock, and our anticipated offering of
trust preferred securities.
You may find more information about our acquisition of FFG under the
heading "Recent Developments -- Acquisition of Fortis Financial Group" above.
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CAPITALIZATION
The following table sets forth our consolidated capitalization as of
December 31, 2000. The following data are qualified in their entirety by our
financial statements and other information contained elsewhere in this
prospectus supplement and the accompanying prospectus, or incorporated by
reference.
The "As Adjusted" column reflects our issuance of the senior notes
contemplated by this prospectus supplement and our receipt of proceeds of
approximately $400 million from this offering, The Hartford's contribution of
$615 million to us from the net proceeds from its recently completed offering of
common stock and our anticipated offering of $200 million in liquidation amount
of trust preferred securities, and the use of the proceeds of those offerings
for the acquisition of FFG. See "Recent Developments -- Acquisition of Fortis
Financial Group" in this prospectus supplement.
AS OF
DECEMBER 31, 2000
------------------
AS
ACTUAL ADJUSTED
------ --------
(UNAUDITED,
IN MILLIONS)
Long-Term Debt.............................................. 650 1,050
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trusts Holding Solely Parent
Junior Subordinated Debentures (TRUPS).................... 250 450
Equity, excluding net unrealized capital gains on
securities, net of tax.................................... 3,167 3,782
Net unrealized capital gains on securities, net of tax...... 40 40
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Total Stockholders' Equity........................ 3,207 3,822
Total Capitalization(1)........................... $4,067 $5,282
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(1) Excludes net unrealized capital gains on securities, net of tax.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of consolidated earnings to fixed
charges for the years and the periods indicated:
YEAR ENDED DECEMBER 31,
--------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Ratio of Consolidated Earnings to Total Fixed Charges(1).... 11.1 9.8 9.6 8.2 1.5
Ratio of Consolidated Earnings to Total Fixed Charges,
including interest credited to contractholders(2)......... 1.7 1.5 1.4 1.4 1.0
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(1) The 1996 ratio of earnings to total fixed charges, excluding charges of $348
million, before-tax, primarily related to the recognition of losses in our
guaranteed investment contract business, was 6.9.
(2) The 1996 ratio of earnings to total fixed charges including interest
credited to contractholders, excluding charges of $348 million, before-tax,
primarily related to the recognition of losses in our guaranteed investment
contract business, was 1.3.
For purposes of computing the ratio of consolidated earnings to total fixed
charges, "earnings" consists of income from continuing operations before federal
income taxes and fixed charges. "Total Fixed Charges" consists of interest
expense, amortization of debt expense and an imputed interest component for
rental expense. "Total Fixed Charges, including interest credited to
contractholders" also includes all interest paid or credited to the holders of
policies, annuities and investment contracts.
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SELECTED FINANCIAL INFORMATION
The selected consolidated financial data for each of the four fiscal years
in the period ended December 31, 1999 were derived from our audited consolidated
financial statements as of and for the years ended December 31, 1999, 1998, 1997
and 1996. The data presented for the year ended December 31, 2000 were derived
from our unaudited consolidated financial statements as of and for the year
ended December 31, 2000 and include all adjustments, consisting of normal
recurring accruals, which we consider necessary for a fair presentation of our
financial position and results of operations as of that date and for that
period.
You should read the following information in conjunction with our
consolidated financial statements and the related notes that are incorporated in
this prospectus supplement and the accompanying prospectus by reference.
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
2000 1999 1998 1997 1996
----------- -------- -------- -------- -------
(UNAUDITED)
(IN MILLIONS)
INCOME STATEMENT DATA
Revenues(1).......................... $ 5,990 $ 5,536 $ 5,788 $ 4,699 $ 4,384
======== ======== ======== ======== =======
Net income........................... $ 575 $ 467 $ 386 $ 306 $ 24
======== ======== ======== ======== =======
BALANCE SHEET DATA
Assets............................... $143,621 $139,033 $122,022 $100,980 $79,933
======== ======== ======== ======== =======
Long-term debt....................... $ 650 $ 650 $ 650 $ 650 $ --
Company obligated mandatorily
redeemable preferred securities of
subsidiary trusts holding solely
parent junior subordinated
debentures (TRUPS)................ 250 250 250 -- --
Total Stockholders' Equity........... $ 3,207 $ 2,306 $ 2,493 $ 2,144 $ 1,274
======== ======== ======== ======== =======
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(1) 1998 includes $541 million related to the recapture of an in force block of
COLI business from MBL Life Assurance Co. of New Jersey.
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DESCRIPTION OF THE NOTES
GENERAL
The notes will initially be limited to $400,000,000 in aggregate principal
amount and will mature on March 1, 2031. We may in the future and without the
consent of any then-existing holders of notes issue additional notes having the
same terms as the notes offered hereby. These additional notes will be deemed
part of the same series as the notes offered hereby.
The notes will bear interest at the rate of 7.375% per annum, from March 1,
2001. We will pay interest semi-annually on March 1 and September 1, commencing
September 1, 2001, to the record holders on the preceding February 15 or August
15. Interest will be computed on the basis of a 360-day year, consisting of
twelve 30-day months.
The notes will be issued in fully registered form only in minimum
denominations of $1,000 and multiples of $1,000. The accompanying prospectus
describes additional provisions of the notes and of the indenture under which we
will issue the notes.
REDEMPTION
We may redeem the notes at any time. We may make redemptions of notes in
minimum denominations of $1,000 and multiples of $1,000. The redemption price
will equal any accrued and unpaid interest plus the greater of:
- 100% of the principal amount of the notes being redeemed, and
- an amount equal to the discounted remaining fixed amount payments.
The discounted remaining fixed amount payments will equal the sum of the
current values of the amounts of interest and principal that would have been
payable by us on each interest payment date after the redemption date and at
stated maturity of the final payment of principal of the notes. In making this
calculation, we will assume that we have not redeemed the notes prior to the
stated maturity.
The current value of any amount is the present value of that amount on the
redemption date after discounting that amount on a semiannual basis from the
originally scheduled date for payment. We will use the treasury rate plus 10
basis points to calculate this present value.
The treasury rate is a per annum rate, determined on the redemption date to
be the per annum rate equal to the semiannual bond equivalent yield to maturity
for United States Treasury securities maturing at the stated maturity of the
final payment of principal of the notes redeemed. We will determine this rate by
reference to the weekly average yield to maturity for United States Treasury
securities maturing on that stated maturity, if reported in the most recent
Statistical Release H.15(519) of the Board of Governors of the Federal Reserve
or a successor release. If no such securities mature at the stated maturity, but
the release or any successor release continues to be published, we will
determine the rate by interpolation between the most recent weekly average
yields to maturity for two series of United States Treasury securities, (1) one
maturing as close as possible to, but earlier than, the stated maturity and (2)
the other maturing as close as possible to, but later than, the stated maturity,
in each case as published in the most recent Statistical Release H.15(519) of
the Board of Governors of the Federal Reserve or a successor release. If the
Board of Governors of the Federal Reserve ceases publication of the weekly
average yield to maturity for United States Treasury securities in Statistical
Release H.15(519) or any successor release, then the treasury rate will be
determined by a primary U.S. Government securities dealer in The City of New
York selected by us.
Notice of any redemption will be mailed at least 30 but not more than 60
days before the redemption date to each holder of notes to be redeemed at the
holder's registered address. Unless we default in payment of the redemption
price, interest will cease to accrue on the notes called for redemption on and
after the redemption date.
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DEFEASANCE
The provisions of the indenture relating to defeasance, which are described
under the caption "Description of Debt Securities -- Defeasance" in the
accompanying prospectus, will apply to the notes.
SINKING FUND
The notes will not be entitled to the benefit of any sinking fund.
BOOK-ENTRY SECURITIES
The notes will be issued in the form of global securities. The global
securities will be deposited with, or on behalf of, The Depository Trust
Company, and registered in the name of DTC or a nominee.
DTC has advised us as follows: DTC is a limited purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC was created to hold securities
of its participants and to facilitate the clearance and settlement of securities
transactions among its participants in the securities through electronic
book-entry changes in participants' accounts, eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers, banks, trust companies, clearing corporations and other
organizations, some of whom, or their representatives, own DTC. Access to DTC's
book-entry system also is available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly. The rules applicable to DTC are on
file with the Securities and Exchange Commission.
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UNDERWRITING
Subject to the terms and conditions of the underwriting agreement and
pricing agreement dated the date of this prospectus supplement, we have agreed
to sell to each of the underwriters named below, severally, and each of the
underwriters has severally agreed to purchase, the principal amount of the notes
set forth opposite its name below. Banc of America Securities LLC and Chase
Securities Inc. are the representatives of the underwriters.
UNDERWRITERS PRINCIPAL AMOUNT OF NOTES
- ------------------------------------------------------------ -------------------------
Banc of America Securities LLC.............................. $140,000,000
Chase Securities Inc........................................ 140,000,000
First Union Securities, Inc................................. 30,000,000
Goldman, Sachs & Co......................................... 30,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 30,000,000
Wells Fargo Brokerage Securities, LLC....................... 30,000,000
Total........................................... $400,000,000
============
Under the terms and conditions of the underwriting agreement, if the
underwriters take any of the notes, then the underwriters are obligated to take
and pay for all of the notes.
The senior notes have been approved for listing on the New York Stock
Exchange subject to official notice of issuance.
The notes are a new issue of securities with no established trading market.
The underwriters have advised us that they intend to make a market for the
notes, but they have no obligation to do so and may discontinue market making at
any time without providing any notice. No assurance can be given as to the
liquidity of any trading market for the notes. Expenses associated with this
offering, to be paid by us, are estimated to be $125,000.
The underwriters initially propose to offer part of the notes directly to
the public at the price to public described on the cover page and part to
certain dealers at a price that represents a concession not in excess of 0.50%
of the principal amount of the notes. An underwriter may allow, and any such
dealer may reallow, a concession not in excess of 0.25% of the principal amount
of the notes to certain other dealers. After the initial offering of the notes,
the representatives may from time to time vary the offering price and other
selling terms.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments which the underwriters may be required to make in respect
of any such liabilities.
In connection with the offering of the notes, the underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
notes. Specifically, the underwriters may overallot in connection with the
offering of the notes, creating a syndicate short position. In addition, the
underwriters may bid for, and purchase, notes in the open market to cover
syndicate short positions or to stabilize the price of the notes. Finally, the
underwriting syndicate may reclaim selling concessions allowed for distributing
the notes in the offering of the notes, if the syndicate repurchases previously
distributed notes in syndicate covering transactions, stabilization transactions
or otherwise. Any of these activities may stabilize or maintain the market price
of the notes above independent market levels. The underwriters are not required
to engage in any of these activities, and may end any of them at any time.
In the ordinary course of their respective businesses, the underwriters and
their affiliates have engaged, and may in the future engage, in commercial
banking and/or investment banking transactions with us and our affiliates.
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VALIDITY OF THE NOTES
The validity of the notes offered in this offering will be passed upon for
us by Debevoise & Plimpton, New York, New York, and by C. Michael O'Halloran,
our Vice President, and for the underwriters by Sullivan & Cromwell, New York,
New York. This statement supersedes the "Legal Opinions" section in the
accompanying prospectus.
EXPERTS
The audited consolidated financial statements and schedules of Hartford
Life, Inc. and subsidiaries incorporated by reference in this prospectus
supplement and accompanying prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated by reference in this prospectus supplement and accompanying
prospectus in reliance upon the authority of said firm as experts in accounting
and auditing in giving said report. This statement supersedes the section
entitled "Experts" in the accompanying prospectus.
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus supplement and the
accompanying prospectus, other than statements of historical fact, are
forward-looking statements. These forward-looking statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995 and include estimates and assumptions related to economic, competitive and
legislative developments. These forward-looking statements are subject to change
and uncertainty which are, in many instances, beyond our control and have been
made based upon management's expectations and beliefs concerning future
developments and their potential effect upon Hartford Life. There can be no
assurance that future developments will be in accordance with management's
expectations or that the effect of future developments on Hartford Life will be
those anticipated by management. Actual results could differ materially from
those expected by Hartford Life, depending on the outcome of various factors.
These factors include:
- the possibility of general economic and business conditions that are less
favorable than anticipated, including the possibility of less favorable
conditions than anticipated for the financing of the FFG transaction;
- less success in integrating the operations of FFG than anticipated;
- changes in interest rates or the stock markets;
- stronger than anticipated competitive activity;
- unfavorable legislative developments; and
- other factors described in the forward-looking statements in this
prospectus supplement and the accompanying prospectus.
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PROSPECTUS
HARTFORD LIFE, INC.
DEBT SECURITIES
PREFERRED STOCK
CLASS A COMMON STOCK
DEPOSITARY SHARES
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
HARTFORD LIFE CAPITAL I
HARTFORD LIFE CAPITAL II
HARTFORD LIFE CAPITAL III
PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
HARTFORD LIFE, INC.
[HARTFORD LOGO]
HARTFORD LIFE
Hartford Life, Inc., a Delaware corporation ("Hartford Life"), may from time
to time offer together or separately its (a) debt securities, in one or more
series, which may be either Senior Debt Securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities", including the Junior Subordinated Debt Securities (as defined
below) and, together with the Senior Debt Securities, the "Debt Securities")
consisting of debentures, notes or other evidences of indebtedness, (b) shares
of its preferred stock, par value $.01 per share (the "Preferred Stock"), which
may be issued in the form of Depositary Shares (as defined herein) evidenced by
Depositary Receipts (as defined herein), (c) shares of its Class A common stock,
par value $.01 per share (the "Class A Common Stock"), (d) warrants to purchase
any of the foregoing Debt Securities, Preferred Stock or Class A Common Stock
which may be designated by Hartford Life at the time of the offering thereof
(the "Warrants"), (e) Stock Purchase Contracts (the "Stock Purchase Contracts")
to purchase Preferred Stock or Class A Common Stock, (f) Stock Purchase Units
(the "Stock Purchase Units"), each representing ownership of a Stock Purchase
Contract and Debt Securities, preferred securities of a Trust (as defined
herein) or debt obligations of third parties, including U.S. Treasury
securities, securing the holder's obligation to purchase Preferred Stock or
Class A Common Stock under the Stock Purchase Contract, and (g) junior
subordinated deferrable interest debentures, in one or more series (the "Junior
Subordinated Debt Securities"), in each case in amounts, at prices and on terms
to be determined at the time or times of offering.
Hartford Life Capital I, Hartford Life Capital II and Hartford Life Capital
III, each a trust created under the laws of the State of Delaware (each, a
"Trust" and collectively, the "Trusts"), may severally offer, from time to time,
its respective preferred securities, which may be designated as preferred
securities or capital securities representing preferred undivided beneficial
interests in the assets of each of the Trusts (the "Preferred Securities"). The
Debt Securities, Preferred Stock, Class A Common Stock, Warrants, Stock Purchase
Contracts, Stock Purchase Units, Junior Subordinated Debt Securities and
Preferred Securities are referred to herein collectively as the "Offered
Securities". The aggregate initial public offering price of the securities to be
offered by this Prospectus shall not exceed $1,000,000,000.
Hartford Life will be the owner of the common securities (the "Common
Securities", and together with the Preferred Securities, the "Trust Securities")
of each Trust. The payment of periodic cash distributions ("Distributions") with
respect to the Preferred Securities and payments on liquidation or redemption
with respect to such Preferred Securities, in each case out of funds of the
Trusts, are irrevocably guaranteed by Hartford Life to the extent described
herein (the "Guarantees"). See "Description of Guarantee". The obligations of
Hartford Life under the Guarantees will rank subordinate and junior in right of
payment to all other liabilities of Hartford Life and pari passu with the most
senior preferred or preference stock now or hereafter issued by Hartford Life
and with any guarantee now or hereafter entered into by Hartford Life in respect
of any preferred or preference stock of Hartford Life. Concurrently with the
issuance by a Trust of its Preferred Securities, such Trust will invest the
proceeds thereof and any contributions made in respect of the Common Securities
in a corresponding series of Junior Subordinated Debt Securities (the
"Corresponding Junior Subordinated Debt Securities") with terms corresponding to
the terms of such Preferred Securities. The Corresponding Junior Subordinated
Debt Securities will be the sole assets of each Trust and payments thereunder
will be the only revenue of each Trust. To the extent set forth in the
accompanying Prospectus Supplement, Hartford Life may redeem the Corresponding
Junior Subordinated Debt Securities and
(continued on next page)
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS JUNE 24, 1998.
14
(Continued from previous page)
cause the redemption of the Trust Securities or may dissolve the Trust and,
after satisfaction of liabilities to creditors of the Trust as provided by
applicable law, cause the Corresponding Junior Subordinated Debt Securities to
be distributed to the holders of Preferred Securities in liquidation of their
interest in the Trust.
Specific terms of the particular Offered Securities in respect of which this
Prospectus is being delivered will be set forth in an accompanying Prospectus
Supplement (the "Prospectus Supplement"), which will describe, without
limitation and where applicable, the following: (a) in the case of the Debt
Securities, the specific designation, aggregate principal amount, authorized
denominations, maturity, premium, if any, interest rate (which may be fixed or
variable) or method of calculating interest, if any, place or places where
principal, premium, if any, and interest, if any, will be payable, currency in
which principal, premium, if any, and interest, if any, will be payable, any
terms of redemption, any sinking fund provisions, ranking as senior or
subordinated, the right of Hartford Life, if any, to defer interest payments and
the maximum length of any such deferral period, terms for any conversion or
exchange into other Offered Securities, initial public offering or purchase
price, methods of distribution and other special terms, (b) in the case of
Preferred Stock, the specific designation, stated value and liquidation
preference per share and number of shares offered, dividend rate (which may be
fixed or variable) or method of calculating dividends, place or places where
dividends will be payable, any terms of redemption, any sinking fund provisions,
terms for any conversion or exchange into other Offered Securities, initial
public offering or purchase price, methods of distribution and other special
terms, (c) in the case of Class A Common Stock, the number of shares offered,
initial public offering or purchase price, methods of distribution and other
special terms, (d) in the case of Warrants, the duration, purchase price,
exercise price and detachability of such Warrants and a description of the
securities for which each Warrant is exercisable, (e) in the case of Depositary
Shares, the fractional share of Preferred Stock represented by each such
Depositary Share, (f) in the case of Stock Purchase Contracts, the designation
and number of shares of Preferred Stock or Class A Common Stock issuable
thereunder, the purchase price of the Preferred Stock or Class A Common Stock,
the date or dates on which the Preferred Stock or Class A Common Stock is
required to be purchased by the holders of the Stock Purchase Contracts, any
periodic payments required to be made by Hartford Life to the holders of the
Stock Purchase Contracts or vice versa, and the terms of the offering and sale
thereof, (g) in the case of Stock Purchase Units, the specific terms of the
Stock Purchase Contracts and any Debt Securities, Preferred Securities or debt
obligations of third parties securing the holder's obligation to purchase the
Preferred Stock or Common Stock under the Stock Purchase Contracts, and the
terms of the offering and sale thereof, (h) in the case of the Junior
Subordinated Debt Securities, the specific designation, aggregate principal
amount, denominations, maturity, interest payment dates, interest rate (which
may be fixed or variable) or method of calculating interest, if any, applicable
interest sinking fund provisions, the right of Hartford Life, if any, to defer
interest payments and the maximum length of any such deferral period, terms for
any conversion or exchange into other securities, initial offering or purchase
price, methods of distribution and any other special terms, and (i) in the case
of the Preferred Securities, the specific title, aggregate amount, stated
liquidation preference, number of securities, distribution rate or method of
calculating such rate, the right of the related trust, if any, to defer
distribution payments and the maximum length of any such deferral period, place
or places where distributions will be payable, any terms of redemption, initial
offering or purchase price, methods of distribution and any other special terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States federal income tax considerations relating to the
Offered Securities.
The Debt Securities will be unsecured. Unless otherwise specified in an
applicable Prospectus Supplement, the Senior Debt Securities will rank equally
with all other unsecured and unsubordinated indebtedness of Hartford Life. The
Subordinated Debt Securities and the Junior Subordinated Debt Securities will be
subordinated in right of payment to all Senior Indebtedness (as defined herein)
of Hartford Life to the extent described herein and in the applicable Prospectus
Supplement relating thereto. As a non-operating holding company, substantially
all of the assets of Hartford Life and its consolidated subsidiaries are owned
by such subsidiaries and Hartford Life relies primarily on dividends from such
subsidiaries to meet its obligations for payment of principal, interest and
related expenses on its outstanding debt obligations. Accordingly, the Debt
Securities and Junior Subordinated Debt Securities will be effectively
subordinated to all existing and future liabilities of Hartford Life's
subsidiaries, including liabilities under contracts of insurance and annuities
written by Hartford Life's insurance subsidiaries, and holders thereof should
look only to the assets of Hartford Life for payments of interest and principal
and premium, if any.
Hartford Life's Class A Common Stock is traded on the New York Stock
Exchange (the "NYSE") under the symbol "HLI".
The Offered Securities may be sold to or through underwriters, through
dealers, remarketing firms or agents or directly to purchasers. See "Plan of
Distribution". The names of any underwriters, dealers, remarketing firms or
agents involved in the sale of Offered Securities in respect of which this
Prospectus is being delivered and any applicable fee, commission or discount
arrangements with them will be set forth in a Prospectus Supplement. The
Prospectus Supplement will state whether the Offered Securities will be listed
on any national securities exchange. If the Offered Securities are not listed on
any national securities exchange, there can be no assurance that there will be a
secondary market for the Offered Securities.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
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No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained in this
Prospectus, any accompanying Prospectus Supplement or the documents incorporated
or deemed incorporated by reference herein, and any information or
representations not contained herein or therein must not be relied upon as
having been authorized by Hartford Life or any agent, underwriter or dealer.
This Prospectus and the applicable Prospectus Supplement do not constitute an
offer to sell any securities other than those to which they relate, or an offer
to sell or a solicitation of an offer to buy those to which they relate in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus and/or the
applicable Prospectus Supplement at any time does not imply that the information
herein or therein is correct as of any time subsequent to its date.
------------------------
State insurance holding company laws and regulations applicable to Hartford
Life generally provide that no person may acquire control of Hartford Life, and
thus indirect control of its insurance subsidiaries, unless such person has
provided certain required information to, and such acquisition is approved (or
not disapproved) by, the appropriate insurance regulatory authorities.
Generally, any person acquiring beneficial ownership of 10% or more of Hartford
Life's common stock would be presumed to have acquired such control, unless the
appropriate insurance regulatory authorities upon advance application determine
otherwise.
AVAILABLE INFORMATION
Hartford Life 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"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates by writing to the Public Reference Section of the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. The Commission
maintains a Web Site that contains reports, proxy and information statements and
other information regarding registrants such as Hartford Life that file
electronically with the Commission. The address of such site is
http://www.sec.gov. In addition, such reports, proxy statements and other
information concerning Hartford Life can be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005.
Hartford Life has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the Offered Securities. This Prospectus does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
For further information with respect to Hartford Life and the Offered
Securities, reference is made to the Registration Statement and the exhibits and
the financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete, and in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.
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FORWARD LOOKING STATEMENTS
This Prospectus contains and incorporates by reference certain forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 with respect to the results of operations and businesses of
Hartford Life. These forward looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially from
those contemplated or projected, forecast, estimated or budgeted in such forward
looking statements include, among others, the following possibilities: (i) The
Hartford's (as defined herein) control of Hartford Life through its beneficial
ownership of approximately 95.6% of the combined voting power of all the
outstanding common stock and approximately 81.4% of the economic interest in
Hartford Life; (ii) Hartford Life's primary reliance, as a holding company, on
dividends from its subsidiaries to meet debt payment obligations and the
applicable regulatory restrictions on the ability of Hartford Life's
subsidiaries to pay such dividends; (iii) the potential impact on Hartford
Life's reported net income that could result from the adoption of certain
accounting standards by the Financial Accounting Standards Board; (iv) tax law
changes impacting the tax treatment of life insurance and investment products;
(v) heightened competition, including specifically the intensification of price
competition, the entry of new competitors and the development of new products by
new and existing competitors; (vi) adverse state and federal legislation and
regulation, including limitations on premium levels, increases in minimum
capital and reserves, and other financial viability requirements; (vii) failure
to develop multiple distribution channels in order to obtain new customers or
failure to retain existing customers; (viii) inability to carry out marketing
and sales plans, including, among others, changes to certain products and
acceptance of the revised products in the market; (ix) loss of key executives;
(x) changes in interest rates causing a reduction of investment income or
reduction in the value of Hartford Life's investment portfolio; (xi) general
economic and business conditions which are less favorable than expected; (xii)
unanticipated changes in industry trends and ratings assigned by nationally
recognized statistical organizations; (xiii) inaccuracies in assumptions
regarding future morbidity, persistency, mortality and interest rates used in
calculating reserve amounts; and (xiv) failure to continue improvement of the
claims management process.
FINANCIAL STATEMENTS OF THE TRUSTS
No separate financial statements of any of the Trusts have been included
herein. Hartford Life does not consider that such financial statements would be
material to holders of Preferred Securities because (i) all of the voting
securities of each of the Trusts will be owned, directly or indirectly by
Hartford Life, a reporting company under the Exchange Act, (ii) each of the
Trusts has no independent operations but exists for the sole purpose of issuing
securities representing undivided beneficial interests in the assets of such
Trust and investing the proceeds thereof in Corresponding Junior Subordinated
Debt Securities issued by Hartford Life, and (iii) Hartford Life's obligations
described herein and in any accompanying Prospectus Supplement under the
Declaration of each Trust, the Guarantee issued with respect to the Preferred
Securities issued by that Trust, the Corresponding Junior Subordinated Debt
Securities purchased by that Trust and the related Subordinated Indenture, taken
together, constitute a full and unconditional guarantee of payments due on the
Trust Securities. See "Description of Junior Subordinated Debt Securities and
Corresponding Junior Subordinated Debt Securities" and "Description of
Guarantee."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Hartford Life with the Commission are
incorporated into this Prospectus by reference:
1. Hartford Life's Annual Report on Form 10-K for the year ended
December 31, 1997; and
2. Hartford Life's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998.
Each document or report filed by Hartford Life pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering described herein shall be deemed to be incorporated
by reference into this Prospectus and to be a part of this Prospectus from the
date of filing of such document. Any statement contained herein, or in a
document all or a portion of which is
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incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of the Registration Statement and this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of the Registration Statement or this Prospectus.
Hartford Life will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference herein (other
than exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents should be directed to: Hartford Life,
Inc., 200 Hopmeadow Street, Simsbury, Connecticut 06089, Attention: Investor
Relations Department (telephone: 860-843-7716).
HARTFORD LIFE, INC.
Hartford Life is a leading insurance and financial services company that,
through its consolidated subsidiaries, provides (i) annuity products such as
individual variable annuities and fixed market value adjusted ("MVA") annuities,
deferred compensation plan services and mutual funds for savings and retirement
needs to over 1 million customers, (ii) life insurance for income protection and
estate planning to approximately 500,000 customers and (iii) employee benefits
products such as group life and group disability insurance for the benefit of
over 15 million individuals. Hartford Life is a holding company formed in
December 1996, which holds virtually all the investment products, individual
life insurance and employee benefits operations of The Hartford Financial
Services Group, Inc. (formerly known as ITT Hartford Group, Inc.) ("The
Hartford"). Hartford Life is a direct subsidiary of Hartford Accident and
Indemnity Company and an indirect subsidiary of The Hartford. The Hartford is
among the largest domestic and international providers of commercial
property-casualty insurance, property-casualty reinsurance and personal lines
(including homeowners and auto) coverages. On December 19, 1995, ITT Industries,
Inc. (formerly ITT Corporation) ("ITT") distributed all the outstanding shares
of capital stock of The Hartford to ITT stockholders of record on such date (the
transactions relating to such distribution are referred to herein as the "ITT
Spin-Off"). As a result of the ITT Spin-Off, The Hartford became an independent
publicly traded company.
As a holding company with no significant business operations of its own,
Hartford Life relies on dividends from its subsidiaries, which are primarily
domiciled in the State of Connecticut, as the principal source of cash to meet
its obligations, including the payment of principal of and premium, if any, and
interest on debt obligations of Hartford Life, and the payment of dividends to
holders of its capital stock. The payment of dividends by Connecticut-domiciled
life insurers is limited under the insurance holding company laws of
Connecticut, which require notice to and approval by the Connecticut Insurance
Commissioner for the declaration or payment of any dividend which, together with
other dividends or distributions made within the preceding twelve months,
exceeds the greater of (i) 10% of the insurer's policyholder surplus as of
December 31 of the preceding year or (ii) net gain from operations for the
twelve-month period ending on the December 31 last preceding, in each case
determined under statutory insurance accounting practices. In addition, if any
dividend of a Connecticut-domiciled insurer exceeds the insurer's earned
surplus, it requires the approval of the Connecticut Insurance Commissioner.
Hartford Life is a Delaware corporation. Hartford Life's principal
executive offices are located at 200 Hopmeadow Street, Simsbury, Connecticut
06089, and its telephone number is (860) 843-7716.
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CERTAIN PROVISIONS OF THE
CERTIFICATE OF INCORPORATION AND
BY-LAWS OF HARTFORD LIFE
TRANSACTIONS WITH INTERESTED PARTIES
Hartford Life's Certificate of Incorporation includes certain provisions
addressing potential conflicts of interest between Hartford Life and The
Hartford and regulating and defining the conduct of certain affairs of Hartford
Life as they may involve The Hartford and its subsidiaries, directors and
officers. The Certificate of Incorporation provides that no contract, agreement,
arrangement or transaction (or amendment, modification or termination thereof)
between Hartford Life and The Hartford or any of its subsidiaries (other than
Hartford Life and its subsidiaries) or between Hartford Life and any entity in
which any of Hartford Life's directors has a financial interest (a "Related
Entity"), or between Hartford Life and any director or officer of Hartford Life,
The Hartford or any subsidiary of Hartford Life or The Hartford or any Related
Entity will be void or voidable for the reason that The Hartford or any
subsidiary thereof, Related Entity or any director or officer of Hartford Life,
The Hartford or any subsidiary of Hartford Life or The Hartford or any Related
Entity is a party thereto, or because any such director or officer is present
at, participates in or votes at a meeting of the Board of Directors or a
committee thereof which authorizes such contract, agreements, arrangement or
transaction (or amendment, modification or termination thereof), if:
(i) the material facts as to such contract, agreement, arrangement or
transaction (or amendment, modification or termination thereof) are
disclosed or are known to the Board of Directors or the committee thereof
that authorizes such contract, agreement, arrangement or transaction (or
amendment, modification or termination thereof) and the Board of Directors
or such committee in good faith authorizes, approves or ratifies such
contract, agreement, arrangement or transaction (or amendment, modification
or termination thereof) by the affirmative vote of a majority of the
Disinterested Directors (as defined below), even though the number of
Disinterested Directors voting may be less than a quorum;
(ii) the material facts as to such contract, agreement, arrangement or
transaction (or amendment, modification or termination thereof) are
disclosed or are known to the holders of Common Stock entitled to vote
thereon, and the contract, agreement, arrangement or transaction (or
amendment, modification or termination thereof) is specifically approved or
ratified in good faith by a majority of the votes entitled to be cast by
all then outstanding shares of Common Stock present in person or
represented by proxy and not owned by The Hartford or any subsidiary
thereof or a Related Entity, as the case may be; or
(iii) such contract, agreement, arrangement or transaction (or
amendment, modification or termination thereof) is fair to Hartford Life at
the time it is authorized, approved or ratified by the Board of Directors,
a committee thereof or the stockholders of Hartford Life.
For purposes hereof, "Disinterested Directors" means the directors of
Hartford Life who are not (i) officers of either Hartford Life or The Hartford
or any of their respective subsidiaries or (ii) directors of The Hartford or any
subsidiary thereof (other than Hartford Life).
CORPORATE OPPORTUNITIES
The Certificate of Incorporation further provides that, subject to any
contract to which Hartford Life is a party and subject to applicable law, The
Hartford or any subsidiary thereof (other than Hartford Life and any subsidiary
thereof) will have the right to: (i) engage in the same or similar business
activities or lines of business as Hartford Life or any subsidiary thereof; (ii)
do business with any client or customer of Hartford Life or any subsidiary
thereof; and (iii) employ or otherwise engage any officer or employee of
Hartford Life or any subsidiary thereof. In addition, in the event that The
Hartford or any of its subsidiaries (other than Hartford Life and its
subsidiaries) or Hartford Life or any of its subsidiaries acquires knowledge of
a potential transaction or matter that may be a corporate opportunity for both
The Hartford and Hartford Life, such person shall have no duty, other than
pursuant to the laws of the State of Delaware, to communicate or present such
corporate opportunity to Hartford Life or The Hartford, as applicable.
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CERTAIN AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
Until The Hartford ceases to beneficially own, directly or indirectly, more
than 20% of the number of outstanding shares of Common Stock, the Certificate of
Incorporation requires the affirmative vote of the holders of 80% or more of the
combined voting power of the Common Stock then outstanding, voting together as a
single class, to alter, amend or repeal, or adopt any provision of the
Certificate of Incorporation which is inconsistent with, any provision of the
Certificate of Incorporation (whether directly or indirectly through any merger
of Hartford Life with any other entity) relating to transactions with interested
parties and corporate opportunities (each as described above), as well as the
provision requiring such 80% vote to effect such an alteration, amendment,
repeal or adoption. Thereafter, under the General Corporation Law of the State
of Delaware (the "DGCL"), an affirmative vote of 50% or more of the combined
voting power of the Common Stock then outstanding would be required to effect
such an alteration, amendment, repeal or adoption. Accordingly, so long as The
Hartford beneficially owns more than 20% of the number of outstanding shares of
Common Stock, it can prevent any such alteration, amendment, repeal or adoption.
In addition, the Certificate of Incorporation requires the affirmative vote
of the holders of at least 80% of the combined voting power of all the then
outstanding shares of Common Stock, voting together as a single class, to alter,
amend or repeal, or adopt any provision of the Certificate of Incorporation
(whether directly or indirectly through any merger of Hartford Life with any
other entity) which is inconsistent with, any provision of the Certificate of
Incorporation relating to the classification of the Board of Directors, the
filling of vacancies on the Board of Directors, the prohibition on the taking of
actions by stockholders by written consent in lieu of a meeting and the calling
of a special meeting of stockholders, as well as the provision requiring such an
80% vote to effect such an alteration, amendment, repeal or adoption.
POTENTIAL LIMITS ON CHANGE OF CONTROL
Certain provisions of the Certificate of Incorporation and By-laws may
delay, defer or prevent a tender offer, proxy contest or other takeover attempt
involving Hartford Life. It is believed that such provisions will enable
Hartford Life to develop its business in a manner that will foster its long-term
growth without disruption caused by the threat of a takeover not deemed by its
Board of Directors to be in the best interests of Hartford Life and its
stockholders. In addition, these provisions also are intended to ensure that the
Board of Directors will have sufficient time to act in what the Board of
Directors believes to be in the best interests of Hartford Life and its
stockholders. However, such provisions could have the effect of making it more
difficult for a third party to undertake, or discouraging a third party from
undertaking, an unsolicited takeover bid or otherwise attempting to obtain
control of Hartford Life or the Board of Directors, although such proposals, if
made, might be considered desirable by a majority of Hartford Life's
stockholders. Such provisions also may have the effect of making it more
difficult for third parties to cause the replacement of the current management
of Hartford Life without the concurrence of the Board of Directors. These
provisions include (i) the availability of shares of Preferred Stock for
issuance from time to time, and with such voting rights and other designations
as may be determined, at the discretion of the Board of Directors; (ii)
prohibitions against stockholders calling a special meeting of stockholders or
acting by written consent in lieu of a meeting; (iii) the classification of the
Board of Directors into three classes, each of which will serve for different
three-year periods; (iv) a requirement, pursuant to Section 141 of the DGCL,
that, due to the classification of the Board of Directors, directors of Hartford
Life may only be removed for cause; (v) a requirement that certain provisions of
the Certificate of Incorporation may be amended only with the approval of the
holders of at least 80% of the combined voting power of the Common Stock then
outstanding; (vi) requirements for advance notice for raising business or making
nominations at stockholders' meetings; and (vii) the ability of the Board of
Directors to increase the size of the board and to appoint directors to fill
newly created directorships. The Hartford, as owner of more than 80% of the
combined voting power of all classes of voting stock, could sell or otherwise
dispose of a substantial portion of its holdings and still be able to block any
tender offer, proxy contest or other takeover attempt by any third party and
certain other material transactions and matters.
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LIMITATION ON LIABILITY
To the fullest extent permitted by applicable law as then in effect, no
director of Hartford Life shall be personally liable to Hartford Life or any of
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to Hartford Life or its stockholders; (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) under Section 174 of the DGCL; or (iv) for any transaction from which
the director derived an improper personal benefit.
While the Certificate of Incorporation provides directors with protection
from awards for monetary damages for breaches of their duty of care, it does not
eliminate such duty. Accordingly, the Certificate of Incorporation should have
no effect on the availability of equitable remedies such as an injunction or
recession based on a director's breach of his or her duty of care and does not
eliminate or limit a director's liability arising in connection with causes of
action brought under the federal securities laws. This provision, however, may
discourage or deter stockholders or management from bringing a lawsuit against a
director for a breach of his or her fiduciary duty, though such an action, if
successful, might otherwise have benefited Hartford Life and its stockholders.
The By-laws provide that Hartford Life, to the fullest extent permitted by
applicable law as then in effect, will indemnify any person who was or is
involved in any manner or is threatened to be made so involved in any
threatened, pending or completed investigation, claim, action, suit or
proceeding, by reason of the fact that such person was or is a director,
officer, employee or agent of Hartford Life or was or is serving at the request
of Hartford Life as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against all
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such investigation, claim,
action, suit or proceeding. To receive such indemnification under the DGCL as
currently in effect, such a person must have been successful in such
investigation, claim, action, suit or proceeding or acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of Hartford Life.
DELAWARE STATUTE
Hartford Life is a Delaware corporation subject to Section 203 of the DGCL.
Section 203 provides that, subject to certain exceptions specified therein, a
corporation may not engage in any business combination, including mergers or
consolidations or acquisitions of assets or additional shares of the
corporation, with any "interested stockholder" for a period of three years
following the time that such stockholder became an interested stockholder unless
(i) prior to such time, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder, (ii) upon consummation of the
transaction which resulted in the stockholder becoming an interested
stockholder, the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced (excluding
certain shares) or (iii) on or subsequent to such time, the business combination
is approved by the board of directors of the corporation and authorized at an
annual or special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder. Except as otherwise specified in
Section 203 of the DGCL, an "interested stockholder" is defined to include (x)
any person that is the owner of 15% or more of the outstanding voting stock of
the corporation or is an affiliate or associate of the corporation and was the
owner of 15% or more of the outstanding voting stock of the corporation at any
time within the three-year period immediately prior to the relevant date and (y)
the affiliates and associates of any such person. Under certain circumstances,
Section 203 of the DGCL makes it more difficult for an interested stockholder to
effect various business combinations with a corporation for the above-
referenced three-year period, although the stockholders may elect to exclude a
corporation from the restrictions imposed thereunder. By virtue of its
beneficial ownership of the Class B Common Stock, The Hartford is in a position
to elect to exclude Hartford Life from the restrictions under Section 203 of the
DGCL, although it currently has no intention to do so.
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RESTRICTIONS ON OWNERSHIP UNDER INSURANCE LAWS
Although the Certificate of Incorporation and By-laws of Hartford Life do
not contain any provision restricting ownership as a result of the application
of various state insurance laws, such laws will be a significant deterrent to
any person interested in acquiring control of Hartford Life. The insurance
holding company laws of each of the jurisdictions in which Hartford Life's
insurance subsidiaries are incorporated or commercially domiciled (as well as
state corporation laws) govern any acquisition of control of such insurance
subsidiaries or of Hartford Life. In general, such laws provide that no person
or entity may directly or indirectly acquire control of an insurance company
unless such person or entity has received the prior approval of the insurance
regulatory authorities. Such acquisition of control would be presumed in the
case of any person or entity who purchases 10% or more of Hartford Life's
outstanding Common Stock unless the applicable insurance regulatory authorities
determine otherwise.
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THE TRUSTS
Each Trust is a statutory business trust created under Delaware law
pursuant to (i) a declaration of trust, dated as of June 3, 1998, executed by
Hartford Life, as sponsor (the "Sponsor") of such Trust, and the trustees of
such Trust named therein (as described below), and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware on
June 4, 1998. Each declaration will be amended and restated in its entirety (as
so amended and restated, a "Declaration") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each Declaration will be qualified as an indenture under the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"). Upon issuance of the Preferred
Securities of a Trust, the purchasers thereof will own all of the Preferred
Securities for that Trust. Hartford Life will, directly or indirectly, acquire
the Common Securities in aggregate liquidation amount equal to 3% of the total
capitalization of each Trust. The Trusts exist for the exclusive purposes of (i)
issuing the Trust Securities representing undivided beneficial interests in the
assets of the Trusts, (ii) investing the gross proceeds of the Trust Securities
in the Corresponding Junior Subordinated Debt Securities and (iii) engaging in
only those other activities necessary or incidental thereto.
Each Trust has a term of approximately 55 years but may dissolve earlier,
as provided in the Declaration. Each Trust's business and affairs are conducted
by its trustees, each appointed by Hartford Life as holder of the Common
Securities. Pursuant to each Declaration, the number of trustees of each Trust
will be four: Wilmington Trust Company, a Delaware banking corporation with its
principal place of business in the State of Delaware, as the Delaware trustee
(the "Delaware Trustee") and as institutional trustee (the "Institutional
Trustee"), and two individual trustees (the "Regular Trustees" and, together
with the Delaware Trustee and the Institutional Trustee, the "Hartford Life
Capital Trustees") who are employees or officers of, or who are affiliated with,
Hartford Life. The Institutional Trustee will act as the sole indenture trustee
under the Declaration for purposes of compliance with the Trust Indenture Act
until removed or replaced by the holder of the Common Securities. Wilmington
Trust Company will also act as Trust Indenture Act trustee (the "Guarantee
Trustee") under the Guarantee, and as Trust Indenture Act trustee (the
"Subordinated Indenture Trustee") under the Subordinated Indenture pursuant to
which the Corresponding Junior Subordinated Debt Securities are issued. See
"Description of Guarantee" and "Description of Debt Securities."
The Institutional Trustee will hold title to the Corresponding Junior
Subordinated Debt Securities for the benefit of the holders of the Trust
Securities and, in its capacity as the holder, the Institutional Trustee will
have the power to exercise all rights, powers and privileges under the
Subordinated Indenture. In addition, the Institutional Trustee will maintain
exclusive control of a segregated non-interest bearing bank account (the
"Property Account") to hold all payments made in respect of the Junior
Subordinated Debt Securities for the benefit of the holders of the Trust
Securities. The Institutional Trustee will make payments of distributions and
payments on liquidation, redemption and otherwise to the holders of the Trust
Securities out of funds from the Property Account. The Guarantee Trustee will
hold the Guarantee for the benefit of the holders of the Preferred Securities.
Hartford Life, as the direct or indirect holder of all the Common Securities,
will have the right, subject to certain restrictions contained in the
Declaration, to appoint, remove or replace any Hartford Life Capital Trustee and
to increase or decrease the number of Hartford Life Capital Trustees. Hartford
Life will pay all fees and expenses related to the Trusts and the offering of
the Trust Securities.
The principal place of business of each Trust shall be c/o Hartford Life,
Inc., 200 Hopmeadow Street, Simsbury, Connecticut 06089, and its telephone
number is (860) 843-7716.
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USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement,
Hartford Life intends to use the net proceeds from the sale of Debt Securities,
Preferred Stock, Class A Common Stock, Depositary Shares, Warrants, Stock
Purchase Contracts, Stock Purchase Units and Junior Subordinated Debt Securities
for general corporate purposes, including working capital, capital expenditures,
investments in or loans to subsidiaries, acquisitions, refinancing of debt,
including outstanding commercial paper and other short term bank indebtedness,
the satisfaction of other obligations or for such other purposes as may be
specified in the applicable Prospectus Supplement; and each Trust will use the
net proceeds from the sale of its Preferred Securities to invest in
Corresponding Junior Subordinated Debt Securities of Hartford Life. A more
detailed description of the use of proceeds of any specific offering of Offered
Securities will be set forth in the Prospectus Supplement pertaining to such
offering.
RATIOS OF EARNINGS TO FIXED CHARGES
AND COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth ratio of earnings to fixed charges and ratio
of earnings to combined fixed charges and Preferred Stock dividends for Hartford
Life and its consolidated subsidiaries for the periods indicated:
FOR THE
THREE
MONTHS
ENDED
FOR THE YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------ ------------
1993 1994 1995 1996 1997 1997 1998
---- ---- ---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges.......... 7.1 7.0 6.3 1.5 8.2 6.5 9.6
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends............. 7.1 7.0 6.3 1.5 8.2 6.5 9.6
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consists of income from continuing operations before federal income
taxes and fixed charges. "Fixed charges" consists of interest expense and an
imputed interest component for rental expense. There were no shares of Preferred
Stock outstanding during the periods included above.
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DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities offered hereby are to be issued in one or more
series under the Senior Indenture, dated as of May 19, 1997, as supplemented
from time to time (as so supplemented, the "Senior Indenture"), between Hartford
Life and Citibank, N.A., as trustee (the "Senior Indenture Trustee"). The
Subordinated Debt Securities offered hereby are to be issued in one or more
series under a Subordinated Indenture, as supplemented from time to time (as so
supplemented, the "Subordinated Indenture" and, together with the Senior
Indenture, the "Indentures"), to be entered into between Hartford Life and
Wilmington Trust Company (the "Subordinated Indenture Trustee" and, together
with the Senior Indenture Trustee, the "Indenture Trustees"). Copies of the
Senior Indenture and the form of Subordinated Indenture have been filed as
exhibits to the Registration Statement of which this Prospectus forms a part.
The statements herein relating to the Debt Securities and the following
summaries of certain provisions of 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 (as they may be amended or supplemented from time
to time) and the Trust Indenture Act. Whenever particular sections or defined
terms of the Indentures (as they may be amended or supplemented from time to
time) are referred to herein or in a Prospectus Supplement, such sections or
defined terms are incorporated herein or therein by reference.
GENERAL
The Debt Securities will be unsecured obligations of Hartford Life. The
Senior Debt Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated obligations of Hartford Life. The
Subordinated Debt Securities will be subordinate and junior in right of payment
to the extent and in the manner set forth in the Subordinated Indenture to all
Senior Indebtedness (as defined below) of Hartford Life. See "-- Subordination
under the Subordinated Indenture." The Indentures are substantially identical
except for the provisions contained in the Subordinated Indenture relating to
subordination and certain covenants contained in the Senior Indenture only,
including the limitation on incurring certain liens. As a holding company with
no significant business operations of its own, most of the operating assets of
Hartford Life and its consolidated subsidiaries are owned by such subsidiaries
and Hartford Life relies on dividends from such Subsidiaries to meet its
obligations for payment of principal of and premium, if any, and interest on its
outstanding debt obligations and corporate expenses. Accordingly, the Debt
Securities will be effectively subordinated to all existing and future
liabilities of Hartford Life's Subsidiaries, and holders of Debt Securities
should look only to the assets of Hartford Life for payments on the Debt
Securities. The payment of dividends by Hartford Life's insurance company
subsidiaries, is limited under the insurance holding company laws of the states
in which such subsidiaries are incorporated or commercially domiciled. The
Indentures do not limit the aggregate amount of Debt Securities that may be
issued thereunder. Except as otherwise provided in the applicable Prospectus
Supplement, the Indentures, as they apply to any series of Debt Securities, do
not limit the incurrence or issuance of secured or other unsecured debt of
Hartford Life, whether under either of the Indentures, any other indenture that
Hartford Life may enter into in the future or otherwise. See "-- Subordination
under the Subordinated Indenture" and the Prospectus Supplement relating to any
offering of Subordinated Debt Securities.
The Debt Securities will be issuable in one or more series pursuant to an
indenture supplemental to the Senior Indenture or the Subordinated Indenture, as
the case may be, or a resolution of Hartford Life's Board of Directors or a
committee thereof and set forth in an Officer's Certificate.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debt Securities: (1) the title of the Debt
Securities and the classification as senior or subordinated; (2) any limit upon
the aggregate principal amount of the Debt Securities; (3) the date or dates on
which the principal of the Debt Securities is payable or the method of
determination thereof; (4) the rate or rates, if any, at which the Debt
Securities shall bear interest, the Interest Payment Dates on which any such
interest shall be payable, the right, if any, of Hartford Life to defer or
extend an Interest Payment Date, and the Regular Record Date for any interest
payable on any Interest Payment Date or the method by which any of the foregoing
shall be determined; (5) the place or places where, subject to the terms of the
Indenture as described below under
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"Payment and Paying Agents," the principal of and premium, if any, and interest
on the Debt Securities will be payable and where, subject to the terms of the
Indenture as described below under "Denominations, Registration and Transfer,"
the Debt Securities may be presented for registration of transfer or exchange
and the place or places where notices and demands to or upon Hartford Life in
respect of the Debt Securities and the Indentures may be made ("Place of
Payment"); (6) any period or periods within or date or dates on which, the price
or prices at which and the terms and conditions upon which Debt Securities may
be redeemed, in whole or in part, at the option of Hartford Life; (7) the
obligation or the right, if any, of Hartford Life to redeem, purchase or repay
the Debt Securities pursuant to any sinking fund, amortization or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which, the currency or currencies (including
currency unit or units) in which and the other terms and conditions upon which
the Debt Securities shall be redeemed, repaid or purchased, in whole or in part,
pursuant to such obligation; (8) the denominations in which any Debt Securities
shall be issuable if other than denominations of $1,000 and any integral
multiple thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of and premium, if
any, and interest, if any, on the Debt Securities shall be payable, or in which
the Debt Securities shall be denominated; (10) any additions, modifications or
deletions, in the Events of Default or covenants of Hartford Life specified in
the Indenture with respect to the Debt Securities; (11) if other than the
principal amount thereof, the portion of the principal amount of Debt Securities
that shall be payable upon declaration or acceleration of the Maturity thereof;
(12) any additions or changes to the Indenture with respect to a series of Debt
Securities as shall be necessary to permit or facilitate the issuance of such
series in bearer form, registrable or not as to principal, and with or without
interest coupons; (13) any index or indices used to determine the amount of
payments of principal of and premium, if any, and interest, if any, on the Debt
Securities and the manner in which such amounts will be determined; (14) the
issuance of a temporary Global Security representing all of the Debt Securities
of such series and exchange of such temporary Global Security for definitive
Debt Securities of such series; (15) subject to the terms described under
"Global Debt Securities," whether the Debt Securities of the Series shall be
issued in whole or in part in the form of one or more Global Securities and, in
such case, the Depositary for such Global Securities, which Depositary shall be
a clearing agency registered under the Exchange Act; (16) the appointment of any
Paying Agent or Agents; (17) in the case of the Subordinated Indenture, the
relative degree, if any, to which such Debt Securities of the series shall be
senior to or be subordinated to other series of such Debt Securities in right of
payment, whether such other series of Debt Securities are outstanding; and (18)
any other terms of the Debt Securities not inconsistent with the provisions of
the Indentures. (Section 3.01.)
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain federal income tax consequences and
special considerations if applicable to any Debt Securities will be described in
the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is payable in one or
more foreign currencies or currency units or if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debt Securities is
payable in one or more foreign currencies or currency units, the restrictions,
elections, certain federal income tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such foreign
currency or currency units will be set forth in the applicable Prospectus
Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Debt Securities, special federal
income tax, accounting and other considerations applicable thereto will be
described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Debt Securities will be issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. (Section 3.02.) Debt
Securities of any series will be exchangeable for other Debt Securities of the
same issue
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and series, of any authorized denominations, of a like aggregate principal
amount, of the same Original Issue Date and Stated Maturity and otherwise having
the same terms. (Section 3.05.)
Debt Securities may be presented for exchange as provided above, and may be
presented for registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly executed), at
the office of the Securities Registrar or at the office of any transfer agent
designated by Hartford Life for such purpose with respect to any series of Debt
Securities and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the Indenture. Hartford Life will appoint the Indenture Trustees as
Securities Registrars under the Indentures. (Section 3.05) If a Prospectus
Supplement refers to any transfer agents (in addition to the Securities
Registrar) initially designated by Hartford Life with respect to any series of
Debt Securities, Hartford Life may at any time rescind the designation of any
such transfer agent or approve a change in the location through which any such
transfer agent acts, provided that Hartford Life maintains a transfer agent in
each Place of Payment for such series. Hartford Life may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 10.02.)
In the event of any redemption, neither Hartford Life nor the Indenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Debt Securities of any series during the period beginning at the opening of
business 15 days before the day of selection for redemption of Debt Securities
of that series and ending at the close of business on the day of mailing of the
relevant notice of redemption or (ii) transfer or exchange any Debt Securities
so selected for redemption, except, in the case of any Debt Securities being
redeemed in part, any portion thereof not to be redeemed. (Section 3.05.)
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Debt Securities that will be deposited with, or on
behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Debt Securities may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Debt Security may not be transferred except as a
whole by the Depositary for such Global Debt Security to a nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or any
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. Hartford Life anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Debt Security, and the deposit of such Global
Debt Security with or on behalf of the Depositary, the Depositary for such
Global Debt Security or its nominee will credit on its book-entry registration
and transfer system the respective principal amounts of the individual Debt
Securities represented by such Global Debt Security to the accounts of persons
that have accounts with such Depositary ("Participants"). Such accounts shall be
designated by the dealers, underwriters or agents with respect to such Debt
Securities or by Hartford Life if such Debt Securities are offered and sold
directly by Hartford Life. Ownership of beneficial interests in a Global Debt
Security will be limited to Participants or persons that may hold interests
through Participants. Ownership of beneficial interests in such Global Debt
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The laws
of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Debt Security.
So long as the Depositary for a Global Debt Security, or its nominee, is
the registered owner of such Global Debt Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Debt Securities represented by such Global Debt Security for all purposes under
the Indenture governing such Debt Securities. Except as provided below, owners
of beneficial interests in a Global Debt Security will not be entitled to have
any of the individual Debt Securities of the series
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represented by such Global Debt Security registered in their names, will not
receive or be entitled to receive physical delivery of any such Debt Securities
of such series in definitive form and will not be considered the owners or
holders thereof under the Indentures governing such Debt Securities.
Payments of principal of and premium, if any, and interest on individual
Debt Securities represented by a Global Debt Security registered in the name of
a Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner of the Global Debt Security
representing such Debt Securities. None of Hartford Life, the Indenture Trustee
for such Debt Securities, any Paying Agent, or the Securities Registrar for such
Debt Securities will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests of the Global Debt Security for such Debt Securities or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Hartford Life expects that the Depositary for a series of Debt Securities
or its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Debt Security representing any of such Debt
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the principal
amount of such Global Debt Security for such Debt Securities as shown on the
records of such Depositary or its nominee. Hartford Life also expects that
payments by Participants to owners of beneficial interests in such Global Debt
Security held through such Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Debt Securities is at any time unwilling, unable or
ineligible to continue as Depositary and a successor Depositary is not appointed
by Hartford Life within 90 days, Hartford Life will issue individual Debt
Securities of such series in exchange for the Global Debt Security representing
such series of Debt Securities. In addition, Hartford Life may at any time and
in its sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of such series represented by one or more Global Debt Securities and,
in such event, will issue individual Debt Securities of such series in exchange
for the Global Debt Security or Global Debt Securities representing such series
of Debt Securities. Further, if Hartford Life so specifies with respect to the
Debt Securities of a series, an owner of a beneficial interest in a Global Debt
Security representing Debt Securities of such series may, on terms acceptable to
Hartford Life, the Indenture Trustee and the Depositary for such Global Debt
Security, as described in the applicable Prospectus Supplement, receive
individual Debt Securities of such series in exchange for such beneficial
interests in a Global Debt Security. In any such instance, an owner of a
beneficial interest in a Global Debt Security will be entitled to physical
delivery of Individual Debt Securities of the series represented by such Global
Debt Security equal in principal amount to such beneficial interest and to have
such Debt Securities registered in its name. Individual Debt Securities of such
series so issued will be issued in denominations, unless otherwise specified by
Hartford Life in an indenture supplemental to the relevant Indenture, of $1,000
and integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium, if any, and any interest on Debt Securities will be
made at the office of the Indenture Trustee for such Debt Securities in the City
of New York, or at an office in a place of payment of such Paying Agent or
Paying Agents as Hartford Life may designate from time to time in an applicable
Prospectus Supplement, as well as such additional methods of payment as may be
specified in an applicable Prospectus Supplement. Unless otherwise indicated in
an applicable Prospectus Supplement, payment of any interest on Debt Securities
will be made to the person in whose name such Debt Security is registered at the
close of business on the Regular Record Date for such interest, except in the
case of Defaulted Interest. Hartford Life may at any time designate additional
Paying Agents or rescind the designation of any Paying Agent; however, Hartford
Life will at all times be required to maintain a Paying Agent in each Place of
Payment for each series of Debt Securities. (Sections 3.01, 3.07 and 10.02.)
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Any moneys deposited with the Indenture Trustee or any Paying Agent, or
then held by Hartford Life in trust, for the payment of the principal of and
premium, if any, or interest on any Debt Security and remaining unclaimed for
two years after such principal and premium, if any, or interest has become due
and payable shall (unless otherwise required by applicable law), at the request
of Hartford Life, be repaid to Hartford Life or be discharged from such trust
and the Holder of such Debt Security shall thereafter look, as a general
unsecured creditor, only to Hartford Life for payment thereof. (Section 10.03.)
REDEMPTION
Unless otherwise indicated in an applicable Prospectus Supplement, Debt
Securities will not be subject to any sinking fund and will not be redeemable
prior to their Stated Maturity.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Indentures provide that Hartford Life shall not consolidate with or
merge into any other corporation or convey, transfer or lease its properties and
assets substantially as an entirety to any Person (as defined), and no Person
shall consolidate with or merge into Hartford Life or convey, transfer or lease
its properties and assets substantially as an entirety to Hartford Life, unless
(i) in case Hartford Life consolidates with or merges into another corporation
or conveys or transfers its properties and assets substantially as an entirety
to any Person, the successor corporation is organized under the laws of the
United States of America or any state or the District of Columbia, and such
successor corporation expressly assumes Hartford Life's obligations on the Debt
Securities issued under the related Indenture; (ii) immediately after giving
effect thereto, 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 (iii) certain other conditions as prescribed in the Indentures
are met. (Sections 8.01 and 8.02.)
LIMITATIONS UPON LIENS
The Senior Indenture provides that Hartford Life will not, nor will it
permit any Restricted Subsidiary to, issue, assume or guarantee any indebtedness
for money borrowed if such indebtedness is secured by a Lien (as defined) upon
any Principal Property of Hartford Life or any Restricted Subsidiary or on any
shares of stock of any Restricted Subsidiary (whether such Principal Property or
shares of stock are now owned or hereafter acquired) without in any such case
effectively providing that the Senior Debt Securities of any series Outstanding
(as defined) which are entitled to the benefits of such provision of the Senior
Indenture (together with, if Hartford Life shall so determine, any other
indebtedness of or indebtedness guaranteed by Hartford Life or such Restricted
Subsidiary entitled thereto, subject to applicable priority of payment) shall be
secured equally and ratably with or prior to such indebtedness, except that the
foregoing restriction shall not apply to (i) Liens on property or shares of
stock of any corporation existing at the time such corporation becomes a
Restricted Subsidiary; (ii) Liens on property existing at the time of
acquisition thereof, or Liens on property which secure the payment of the
purchase price of such property, or Liens on property which secure indebtedness
incurred or guaranteed for the purpose of financing the purchase price of such
property or the construction of such property (including improvements to
existing property), which indebtedness is incurred or guaranteed within 180 days
after the latest of such acquisition or completion of such construction or
commencement of operation of such property; (iii) Liens securing indebtedness
owing by any Restricted Subsidiary to Hartford Life or a wholly owned Restricted
Subsidiary; (iv) Liens on property of a corporation existing at the time such
corporation is merged into or consolidated with Hartford Life or a Restricted
Subsidiary or at the time of a purchase, lease or other acquisition of the
properties of a corporation or other Person as an entirety or substantially as
an entirety by Hartford Life or a Restricted Subsidiary; (v) Liens on property
of Hartford Life or a Restricted Subsidiary in favor of the United States of
America or any State thereof or any agency, instrumentality or political
subdivision thereof, or in favor of any other country, or any political
subdivision thereof, to secure any indebtedness incurred or guaranteed for the
purpose of financing all or any part of the purchase price or the cost of
construction of the property subject to such Liens within 180 days after the
latest of the acquisition, completion of construction or commencement of
operation of such property; and (vi) any extension, renewal or replacement (or
successive extensions, renewals or replacements),
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in whole or in part, of any Lien referred to in the foregoing clauses (i) to
(v), inclusive. Notwithstanding the above, Hartford Life and one or more
Restricted Subsidiaries may, without securing the Senior Debt Securities, issue,
assume or guarantee secured indebtedness which would otherwise be subject to the
foregoing restrictions, provided that after giving effect thereto, the aggregate
amount of such indebtedness issued pursuant to such exception at such time does
not exceed 10% of Consolidated Net Tangible Assets. In computing the aggregate
amount of indebtedness outstanding for purposes of the foregoing sentence, there
shall not be included in the calculation any indebtedness issued, assumed or
guaranteed pursuant to clauses (i) through (vi) above. (Section 10.08 of the
Senior Indenture.)
Certain Definitions
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all liabilities (excluding any thereof which are by their terms
extendible or renewable at the option of the obligor thereon to a time more than
12 months after the time as of which the amount thereof is being computed) and
(ii) all segregated goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as set forth on the most
recent balance sheet of Hartford Life and its consolidated Subsidiaries
("Subsidiary" being defined as any corporation where more than 50% of its voting
stock is owned by Hartford Life or by another Subsidiary) and prepared in
accordance with generally accepted accounting principles. (Section 1.01 of the
Senior Indenture.)
"Principal Property" means all land, buildings, machinery and equipment,
and leasehold interests and improvements in respect of the foregoing, which
would be reflected on a consolidated balance sheet of Hartford Life and its
Subsidiaries prepared in accordance with generally accepted accounting
principles, excluding all such tangible property located outside the United
States of America and excluding any such property which, in the opinion of the
Board of Directors set forth in a Board Resolution, is not material to Hartford
Life and its consolidated Subsidiaries taken as a whole. (Section 1.01 of the
Senior Indenture.)
"Restricted Subsidiary" is defined as any Subsidiary which is incorporated
under the laws of any state of the United States or of the District of Columbia,
and which is a regulated insurance company principally engaged in the property
casualty or life insurance business; provided, however, that no Subsidiary shall
be a Restricted Subsidiary (i) if the total assets of such Subsidiary are less
than 10% of the total assets of Hartford Life and its consolidated Subsidiaries
(including such Subsidiary) in each case as set forth on the most recent fiscal
year-end balance sheets of such Subsidiary and Hartford Life and its
consolidated Subsidiaries, respectively, and computed in accordance with
generally accepted accounting principles, or (ii) if in the judgment of the
Board of Directors, as evidenced by a Board Resolution, such Subsidiary is not
material to the financial condition of Hartford Life and its Subsidiaries taken
as a whole. (Section 1.01.) As of the date of this Prospectus, the Subsidiaries
of Hartford Life which meet the definition of Restricted Subsidiaries are the
following: Hartford Life Insurance Company, Hartford Life & Accident Insurance
Company and Hartford Life and Annuity Insurance Company.
MODIFICATION AND WAIVER
Modification and amendments of each Indenture may be made by Hartford Life
and the Indenture Trustee without the consent of the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected thereby; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Debt Security affected
thereby, (i) change the Stated Maturity of the principal of, or any installment
of interest on, any Outstanding Debt Security; (ii) reduce the principal amount
of, or the rate of interest on, or any premium payable upon the redemption of,
or the amount of principal of an Original Issue Discount Security that would be
due and payable upon a declaration of acceleration of the Maturity of, any
Outstanding Debt Security; (iii) change the Place of Payment, or the coin or
currency in which any Outstanding Debt Security or the interest thereon is
payable; (iv) impair the right to institute suit for the enforcement of any
payment on or with respect to any Outstanding Debt Security after the Stated
Maturity; or (v) change the provisions of the Indentures relating to amendments
of the Indentures requiring the consent of the affected Holders for waiver of
compliance with
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certain provisions of the Indentures or waiver of past defaults, except to
increase the percentage of the Holders whose consent is required. (Section
9.02.)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of each series may on behalf of the Holders of all Debt Securities of
that series waive, insofar as the series is concerned, compliance by Hartford
Life with certain restrictive covenants of the relevant Indenture. (Section
10.09 of the Senior Indenture; Section 10.08 of the Subordinated Indenture.)
Except in certain circumstances under the Subordinated Indenture, the Holders of
not less than a majority in principal amount of the Outstanding Debt Securities
of any series may on behalf of the Holders of that series waive any past default
under the relevant Indenture with respect to that series of Debt Securities,
except a default in the payment of the principal of, or any interest on, any
Debt Security of that series or in respect of a provision which under such
Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of that series affected. (Section 5.13.)
EVENTS OF DEFAULT
Each Indenture provides that the following shall constitute Events of
Default with respect to any series of Debt Securities: (i) default for 30 days
in the payment of any interest when due; (ii) default in the payment of
principal or premium, if any, at Maturity; (iii) default in the performance of
any other covenant or warranty in the relevant Indenture for 60 days in the case
of the Senior Indenture and 90 days in the case of the Subordinated Indenture
after written notice thereof; (iv) certain events in bankruptcy, insolvency or
reorganization; (v) with respect to Senior Debt Securities only, acceleration or
default in the payment of indebtedness for borrowed money in excess of
$25,000,000, which acceleration or default shall not have been rescinded or
annulled within 30 days after notice; or (vi) any other Event of Default
provided in the applicable Board Resolution or supplemental indenture under
which such series of Debt Securities is issued. (Section 5.01.) Hartford Life is
required to furnish the Indenture Trustees annually with a statement as to the
fulfillment by Hartford Life of its obligations under the Indenture. (Section
10.06.) Each Indenture provides that the Indenture Trustee may withhold notice
to the Holders of the Debt Securities of any default (except in respect of the
payment of principal or interest on the Debt Securities) if it considers it in
the interest of the Holders to do so. (Section 6.02.)
If an Event of Default with respect to Outstanding Debt Securities of any
series occurs and is continuing, then and in every such case the Indenture
Trustee or the Holders of not less than 10% in the case of the Senior Indenture
and 25% in the case of the Subordinated Indenture in principal amount of the
Outstanding Debt Securities of that series may declare the principal amount (or,
if the Debt Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series) of all the Debt Securities of that series to be due and payable
immediately, by a notice in writing to Hartford Life (and to the Indenture
Trustee if given by Holders), and upon any such declaration such principal shall
become immediately due and payable. However, at any time after a declaration or
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree for payment of the money due has been obtained, the
Holders of a majority in principal amount of Outstanding Debt Securities of that
series may, subject to certain conditions, rescind and annul such declaration.
(Section 5.02.)
Subject to the provisions of the Indentures relating to the duties of the
Indenture Trustee, in case an Event of Default shall occur and be continuing,
the Indenture Trustee shall be under no obligation to exercise any of its rights
or powers under the Indenture at the request, order or direction of any of the
Holders, unless such Holders shall have offered to the Indenture Trustee
reasonable security or indemnity and satisfied certain other conditions.
(Section 6.03.) Subject to such provisions for the security or indemnification
of the Indenture Trustee, the Holders of a majority in principal amount of the
Outstanding Debt Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for, and remedy available
to, the Indenture Trustee, or exercising any trust or power conferred on the
Indenture Trustee with respect to the Debt Securities of that series. (Section
5.12.)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the
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Indenture Trustee written notice of a continuing Event of Default with respect
to Debt Securities of that series and unless the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Indenture Trustee
to institute such proceeding as Indenture Trustee, and, within 60 days following
the receipt of such notice, the Indenture Trustee shall not have received from
the Holders of a majority in principal amount of the Outstanding Debt Securities
of that series a direction inconsistent with such request, and the Indenture
Trustee shall have failed to institute such proceeding. (Section 5.07.) However,
the Holder of any Debt Security will have an absolute right to receive payment
of the principal of and premium, if any, and subject to Section 3.07, interest
on such Debt Security on or after the due dates expressed in such Debt Security
and to institute a suit for the enforcement of any such payment. (Section 5.08.)
SATISFACTION AND DISCHARGE OF THE INDENTURES
Each Indenture provides that when, among other things, all Debt Securities
not previously delivered to the Indenture Trustee for cancellation (i) have
become due and payable or (ii) will become due and payable at their Stated
Maturity within one year and Hartford Life deposits or causes to be deposited
with the Indenture Trustee as trust funds in trust for such purpose an amount in
the currency or currencies in which the Debt Securities are payable sufficient
to pay and discharge the entire indebtedness on the Debt Securities not
previously delivered to the Indenture Trustee for cancellation, for the
principal and premium, if any, and interest to the date of the deposit or to the
Stated Maturity, as the case may be, then the Indenture will cease to be of
further effect (except as to certain surviving rights of the Holders, the rights
and obligations of the Indenture Trustee and Hartford Life's obligations to the
Indenture Trustee to pay all other sums due pursuant to the Indenture and to
provide the Officers' Certificates and Opinions of Counsel described therein),
and Hartford Life will be deemed to have satisfied and discharged the Indenture.
(Section 4.01.)
DEFEASANCE
Except as may otherwise be provided in the applicable Prospectus Supplement
with respect to the Debt Securities of any series, each Indenture provides that
Hartford Life shall be deemed to have paid and discharged the entire
indebtedness on all the Debt Securities of a series at any time prior to the
Stated Maturity or redemption thereof when (i) Hartford Life has irrevocably
deposited or caused to be deposited with the Indenture Trustee, in trust, either
(a) sufficient funds to pay and discharge the entire indebtedness on the Debt
Securities of such series for the principal and premium, if any, and interest to
the Stated Maturity or any redemption date or (b) such amount of Government
Obligations (as defined) as will, in the written opinion of independent public
accountants delivered to the Indenture Trustee, together with predetermined and
certain income to accrue thereon, without consideration of any reinvestment
thereof, be sufficient to pay and discharge when due the entire indebtedness on
the Debt Securities of such series for principal and premium, if any, and
interest to the Stated Maturity or any redemption date, (ii) Hartford Life has
paid or caused to be paid all other sums payable with respect to the Debt
Securities of such series, (iii) Hartford Life has delivered to the Indenture
Trustee an officer's certificate and an opinion of counsel to the effect that
(a) Hartford Life has received from, or there has been published by, the
Internal Revenue Service a ruling, or (b) since the date of execution of the
applicable Indenture, there has been a change in the applicable Federal income
tax law, in either case to the effect that, and based thereon such opinion
confirms that, the deposit and related defeasance would not cause the Holders of
the Debt Securities of such series to recognize income, gain or loss for Federal
income tax purposes and such opinion is accompanied by a ruling to such effect
received from or published by the United States Internal Revenue Service, (iv)
Hartford Life has delivered to the Indenture Trustee an opinion of counsel that
neither Hartford Life nor the trust held by such Indenture Trustee will
immediately after the deposit just described be an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940 and (v) Hartford Life has delivered to the
Indenture Trustee such other Officer's Certificates and Opinions of Counsel as
may be required by the Indenture, each stating that all conditions precedent
provided for therein relating to the satisfaction and discharge of the entire
indebtedness on all Debt Securities of such series have been complied with.
(Section 4.03.)
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With respect to the Subordinated Indenture, in order to be discharged as
described above, no default in the payment of principal of or premium, if any,
or interest on any Senior Indebtedness shall have occurred and be continuing or
no other Event of Default with respect to the Senior Indebtedness shall have
occurred and be continuing and shall have resulted in such Senior Indebtedness
becoming or being declared due and payable prior to the date it would have
become due and payable.
SUBORDINATION UNDER THE SUBORDINATED INDENTURE
In the Subordinated Indenture, Hartford Life has covenanted and agreed that
any Subordinated Debt Securities issued thereunder are subordinate and junior in
right of payment to all Senior Indebtedness to the extent provided in the
Subordinated Indenture. Upon any payment or distribution of assets to creditors
upon any liquidation, dissolution, winding up, reorganization, assignment for
the benefit of creditors, marshalling of assets or any bankruptcy, insolvency,
debt restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of Hartford Life, 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
Subordinated Debt Securities will be entitled to receive or retain any payment
in respect of the principal of and premium, if any, or interest, if any, on the
Subordinated Debt Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
amounts due thereon (including any amounts due upon acceleration) before the
holders of Subordinated Debt Securities will be entitled to receive any payment
upon the principal of or premium, if any, or interest, if any, on the
Subordinated Debt Securities.
No payments on account of principal or premium, if any, or interest, if
any, in respect of the Subordinated Debt Securities may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or any 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.
"Senior Indebtedness" means, with respect to Hartford Life, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of
Hartford Life for money borrowed and (B) indebtedness evidenced by securities,
notes, debentures, bonds or other similar instruments issued by Hartford Life;
(ii) all capital lease obligations of Hartford Life; (iii) all obligations of
Hartford Life issued or assumed as the deferred purchase price of property, all
conditional sale obligations of Hartford Life and all obligations of Hartford
Life under any conditional sale or title retention agreement (but excluding
trade accounts payable and accrued liabilities in the ordinary course of
business); (iv) all obligations, contingent or otherwise, of Hartford Life in
respect of any letters of credit, banker's acceptance, security purchase
facilities or similar credit transactions; (v) all obligations in respect of
interest rate swap, cap, floor, collar or other agreements, interest rate future
or option contracts, currency swap agreements, currency future or option
contracts and other similar agreements; (vi) all obligations of the type
referred to in clauses (i) through (v) of other Persons for the payment of which
Hartford Life is responsible or liable as obligor, guarantor or otherwise; and
(vii) all obligations of the type referred in clauses (i) through (vi) of other
Persons secured by any lien on any property or asset of Hartford Life (whether
or not such obligation is assumed by Hartford Life), except for (1) any such
indebtedness that is by its terms subordinated or pari passu with the
Subordinated Debt Securities and (2) any indebtedness between or among Hartford
Life or its Affiliates, including all other debt securities and guarantees in
respect of those debt securities, issued to (a) any Hartford Life subsidiary
trust or trustee of such trust (including but not limited to the Trusts) and (b)
any other trust, or a trustee of such trust, partnership or other entity
affiliated with Hartford Life that is a financing vehicle of Hartford Life (a
"Financing Entity") in connection with the issuance by such Financing Entity of
preferred securities or other securities that rank pari passu with, or junior
to, the Preferred Securities.
Hartford Life is a holding company with no significant business operations
of its own, and most of the assets of Hartford Life are owned by its
Subsidiaries. Accordingly, the Debt Securities will be effectively
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subordinated to all existing and future liabilities of Hartford Life's
Subsidiaries, including liabilities under contracts of insurance and annuities
written by Hartford Life's insurance subsidiaries. Holders of Debt Securities
should look only to the assets of Hartford Life for payments of interest and
principal and premium, if any.
The Subordinated Indenture will place no limitation on the amount of
additional Senior Indebtedness that may be incurred by Hartford Life. Hartford
Life expects from time to time to incur additional indebtedness constituting
Senior Indebtedness.
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated Debt
Securities, may be changed prior to such issuance. Any such change would be
described in the Prospectus Supplement relating to such Subordinated Debt
Securities.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York (without regard to principles
of conflicts of laws). (Section 1.12.)
CONCERNING THE INDENTURE TRUSTEES
Each of the Indenture Trustees acts as depository for funds of, makes loans
to, and performs other services for, Hartford Life and its subsidiaries in the
normal course of business.
The Indenture Trustees shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Indenture Trustees are under no
obligation to exercise any of the powers vested in it by the Indentures at the
request of any holder of Debt Securities, unless offered reasonable indemnity by
such holder against the costs, expenses and liabilities which might be incurred
thereby. Each of the Indenture Trustees is not required to expend or risk its
own funds or otherwise incur personal financial liability in the performance of
its duties if the Indenture Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
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DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of Hartford Life consists of 600,000,000
shares of Class A Common Stock, par value $.01 per share and, 600,000,000 shares
of Class B Common Stock, par value $.01 per share (the "Class B Common Stock"
and together with the Class A Common Stock, the "Common Stock"), and 50,000,000
shares of Preferred Stock. As of March 31, 1998, there were 26,028,242 shares of
Class A Common Stock outstanding and 114,000,000 are reserved for issuance upon
conversion of Class B Common Stock into Class A Common Stock. The 114,000,000
shares of Class B Common Stock outstanding are held by The Hartford or one of
its directly or indirectly wholly owned subsidiaries. No shares of Preferred
Stock are outstanding. A description of various provisions of Hartford Life's
Certificate of Incorporation and By-laws affecting the rights of the Class A
Common Stock, Class B Common stock and Preferred Stock is set forth below. This
description is intended as a summary and is qualified in its entirety by
reference to the form of Hartford Life's Certificate of Incorporation and
By-Laws filed as exhibits to the Registration Statement of which this Prospectus
forms a part.
CLASS A COMMON STOCK AND CLASS B COMMON STOCK
Dividends
Holders of Class A Common Stock and Class B Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Board of
Directors out of funds legally available therefor, subject to any preferential
dividend rights of any outstanding Preferred Stock. Cash dividends may be
declared and paid to the holders of Class A Common Stock only if at such time
cash dividends in the same amount per share are declared and paid to the holders
of Class B Common Stock, and vice versa. Dividends payable other than in cash or
Class A Common Stock (or in rights, options, warrants or securities convertible
into or exchangeable for Class A Common Stock) will be declared and paid to
holders of Class A Common Stock and Class B Common Stock on a pro rata per share
basis. Dividends, consisting of shares of Common Stock, or of rights, options,
warrants or other securities convertible into or exchangeable for such shares,
may be declared and paid only as follows: (i) shares of Class A Common Stock, or
any rights, options, warrants or securities convertible into or exchangeable for
Class A Common Stock, may be declared and paid only to holders of shares of
Class A Common Stock, and shares of Class B Common Stock, or any rights,
options, warrants or securities convertible into or exchangeable for Class B
Common Stock, may be declared and paid only to holders of Class B Common Stock
and (ii) such shares, or such rights, options, warrants or securities
convertible into or exchangeable for such shares, will be declared and paid
proportionately with respect to each outstanding share of a Class A Common Stock
and Class B Common Stock. Hartford Life may not reclassify, subdivide or combine
the shares of either class of Common Stock without at the same time
proportionately reclassifying, subdividing or combining the shares of the other
class.
Voting Rights
Holders of Class A Common Stock and Class B Common Stock generally have
identical voting rights and vote together (and not as separate classes), except
that holders of Class A Common Stock are entitled to one vote per share while
holders of Class B Common Stock are entitled to five votes per share and the
shares of Class B Common Stock maintain certain conversion rights and transfer
restrictions as described below. Except as required by law, all matters to be
voted on by stockholders must be approved by a majority (or, in the case of the
election of directors, by a plurality) of the shares present in person or by
proxy by all shares of Class A Common Stock and Class B Common Stock, voting
together as a single class, subject to any voting rights granted to holders of
any Preferred Stock. Holders of shares of Class A Common Stock and Class B
Common Stock are not entitled to cumulate their votes in the election of
directors. Except as otherwise provided by law, and subject to any voting rights
granted to holders of any outstanding Preferred Stock, amendments to the
Certificate of Incorporation (including any such amendment to increase or
decrease the authorized shares of any class) must be approved by a majority of
the votes entitled to be cast in person or by proxy by all shares of Class A
Common Stock and Class B Common Stock, voting together as a single
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class, except that certain provisions of the Certificate of Incorporation may be
amended only with the approval of the holders of at least 80% of the combined
voting power of the Common Stock then outstanding. See "Certain Provisions of
the Certificate of Incorporation and By-laws of Hartford Life -- Corporate
Opportunities." However, amendments to the Certificate of Incorporation that
would change the powers, preferences and relative participating, optional or
other special rights of the Class A Common Stock or the Class B Common Stock
also must be approved by a majority of the outstanding shares of such class
voting as a separate class. The superior voting rights of the Class B Common
Stock may discourage unsolicited tender offers and merger proposals.
Conversion
Each share of Class B Common Stock is convertible at any time by the holder
thereof or a Class B Transferee (as defined below), if any, at the option of
such holder, into one share of Class A Common Stock, except as provided herein.
Subject to the exceptions described in the following sentence, upon any sale or
transfer of shares of Class B Common Stock, such that any person or persons
other than the holder thereof or any of its affiliates (within the meaning of
the rules and regulations under the Exchange Act), including a Class B
Transferee (as defined below), will have beneficial ownership thereof, such
shares will automatically convert into an equal number of shares of Class A
Common Stock (with the same rights and restrictions as shares of Class A Common
Stock generally). However, if shares of Class B Common Stock representing 50% or
more of all the then outstanding shares of Common Stock (calculated without
regard to the difference in voting rights between the classes of Common Stock)
are transferred by the holder thereof in a single transaction, or series of
related transactions, to any person or persons not affiliated with such
transferor (a "Class B Transferee"), such shares of Class B Common Stock so
transferred will not automatically convert into shares of Class A Common Stock
upon such transfer. Each share of Class B Common Stock retained by such
transferor following any such transfer will automatically convert into a share
of Class A Common Stock upon such transfer. In addition, each share of Class B
Common Stock will automatically convert into one share of Class A Common Stock
on the date on which the number of shares of Class B Common Stock then
outstanding is less than 50% of the aggregate number of shares of Common Stock
then outstanding.
The provisions of Hartford Life's Certificate of Incorporation described
above under "Conversion" are generally designed so that, were The Hartford to
reduce its ownership of the Class B Common Stock to shares of Common Stock
representing less than 50% of the economic interest in Hartford Life represented
by Common Stock, all shares of Class B Common Stock will be automatically
converted into Class A Common Stock, thereby resulting in all holders of Common
Stock having identical voting rights. However, The Hartford (and any subsequent
Class B Transferee) is permitted to transfer shares of Class B Common Stock
representing 50% or more of the economic interest in Hartford Life represented
by Common Stock to a Class B Transferee with the effect that such Class B
Transferee will succeed to ownership of the Class B Common Stock and thus
control of Hartford Life.
Other
Upon the liquidation, dissolution or winding up of Hartford Life, whether
voluntary or involuntary, and subject to the rights of the holders of the
Preferred Stock, the net assets of Hartford Life available for distribution to
stockholders of Hartford Life shall be distributed pro rata to the holders of
the Common Stock in accordance with their respective rights and interests and
the Class B Common Stock shall rank pari passu with the Class A Common Stock as
to such distribution.
No shares of either class of Common Stock are subject to redemption or have
preemptive rights to purchase additional shares of Common Stock.
The outstanding shares of Class A Common Stock and Class B Common Stock are
fully paid and non-assessable.
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PREFERRED STOCK
The authorized Preferred Stock of Hartford Life is available for issuance
from time to time at the discretion of the Board of Directors without
stockholder approval. The Board of Directors has the authority to prescribe for
each series of the Preferred Stock it establishes the number of shares in that
series, any voting, dividend and conversion rights applicable thereto and the
other designations, powers, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations or restrictions
thereof. The issuance of Preferred Stock could be used, under certain
circumstances, as a method of delaying or preventing a change of control of
Hartford Life, thereby making removal of the present management of Hartford Life
more difficult, and could have a detrimental effect on the rights of holders of
Class A Common Stock, including loss of voting control and restrictions upon the
payment of dividends and other distributions.
The particular terms of any series of Preferred Stock offered hereby will
be set forth in the Prospectus Supplement relating thereto. The rights,
preferences, privileges and restrictions, including dividend rights, voting
rights, terms of redemption and liquidation preferences, of the Preferred Stock
of each series will be fixed or designated pursuant to a certificate of
designation adopted by the Board of Directors or a duly authorized committee
thereof. The description of the terms of a particular series of Preferred Stock
that will be set forth in a Prospectus Supplement shall not purport to be
complete and shall be qualified in its entirety by reference to the certificate
of designation relating to such series.
DEPOSITARY SHARES
General
Hartford Life may, at its option, elect to offer fractional interests
("Depositary Shares") in Preferred Stock, rather than full shares of Preferred
Stock. In such event, receipts ("Depositary Receipts") for Depositary Shares,
each of which will represent a fraction (to be set forth in the Prospectus
Supplement relating to a particular series of Preferred Stock) of a share of a
particular series of Preferred Stock, will be issued as described below.
The shares of any series of Preferred Stock represented by Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement") to
be entered into between Hartford Life and a depositary to be named by Hartford
Life in a Prospectus Supplement (the "Depositary"). Subject to the terms of the
Deposit Agreement, each owner of a Depositary Share will be entitled, in
proportion to the applicable fraction of a share of Preferred Stock represented
by such Depositary Share, to all the rights and preferences of the Preferred
Stock represented thereby (including dividend, voting, redemption, subscription
and liquidation rights). The following summary of certain provisions of the
Deposit Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Deposit
Agreement, including the definitions therein of certain terms. Whenever
particular sections of the Deposit Agreement are referred to, it is intended
that such sections shall be incorporated herein by reference. Copies of the
forms of Deposit Agreement and Depositary Receipt will be filed, as exhibits to
a Current Report on Form 8-K incorporated herein by reference to be filed prior
to any offering of Depositary Shares.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares in
an equitable manner, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
Hartford Life, adopt such method as it deems equitable and practicable for the
purpose of effecting such distribution, including sale (at public or private
sale) of such property and distribution of the net proceeds from such sale to
such holders.
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The amount so distributed to record holders of Depositary Receipts in any
of the foregoing cases will be reduced by any amount required to be withheld by
Hartford Life or the Depositary on account of taxes.
Conversion and Exchange
If any series of Preferred Stock underlying the Depositary Shares is
subject to provisions relating to its conversion or exchange, as set forth in
the applicable Prospectus Supplement relating thereto, each record holder of
Depositary Receipts will have the right or obligation to convert or exchange the
Depositary Shares represented by such Depositary Receipts pursuant to the terms
thereof.
Redemption of Depositary Shares
If a series of Preferred Stock represented by Depositary Shares is subject
to redemption, the Depositary Shares will be redeemed from the proceeds received
by the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The redemption price per
Depositary Share will be equal to the applicable fraction of the redemption
price per share payable with respect to such series of Preferred Stock. Whenever
Hartford Life redeems shares of Preferred Stock held by the Depositary, the
Depositary will redeem as of the same redemption date the number of Depositary
Shares representing shares of Preferred Stock so redeemed. If fewer than all the
Depositary Shares are to be redeemed, the Depositary Shares to be redeemed will
be selected by lot, pro rata or by any other equitable method as may be
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
redemption price upon such redemption. Any funds deposited by Hartford Life with
the Depositary for any Depositary Shares which the holders thereof fail to
redeem shall be returned to Hartford Life after a period of two years from the
date such funds are so deposited.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the amount of the Preferred Stock represented
by such holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the amount of the Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and Hartford Life will
agree to take all reasonable action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holder of Depositary Shares representing
such Preferred Stock.
Record Date
Whenever (i) any cash dividend or other cash distribution shall become
payable, any distribution other than cash shall be made, or any rights,
preferences or privileges shall be offered with respect to the Preferred Stock,
or (ii) the Depositary shall receive notice of any meeting at which holders of
Preferred Stock are entitled to vote or of which holders of Preferred Stock are
entitled to notice, or of the mandatory conversion of, or any election on the
part of Hartford Life to call for the redemption of, any Preferred Stock, the
Depositary shall in each such instance fix a record date (which shall be the
same as the record date for the Preferred Stock) for the determination of the
holders of Depositary Receipts (x) that shall be entitled to receive such
dividend, distribution, rights, preferences or privileges or the net proceeds of
the sale thereof or (y) that shall be entitled to give instructions for the
exercise of voting rights at any such meeting or to receive notice of such
meeting or of such redemption or conversion, subject to the provisions of the
Deposit Agreement.
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Withdrawal of Preferred Stock
Upon surrender of Depositary Receipts at the principal office of the
Depositary, upon payment of any unpaid amount due the Depositary, and subject to
the terms of the Deposit Agreement, the owner of the Depositary Shares evidenced
thereby is entitled to delivery of the number of whole shares of Preferred Stock
and all money and other property, if any, represented by such Depositary Shares.
Partial shares of Preferred Stock will not be issued. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares. Holders of Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Receipts evidencing Depositary Shares therefor.
Amendment and Termination of the Deposit Agreement
The Deposit Agreement will provide that the form of Depositary Receipt and
any provision of the Deposit Agreement may at any time be amended by agreement
between Hartford Life and the Depositary. However, any amendment which imposes
or increases any fees, taxes or other charges payable by the holders of
Depositary Receipts (other than taxes and other governmental charges, fees and
other expenses payable by such holders as stated under "Charges of Depositary"),
or which otherwise prejudices any substantial existing right of holders of
Depositary Receipts, will not take effect as to outstanding Depositary Receipts
until the expiration of 90 days after notice of such amendment has been mailed
to the record holders of outstanding Depositary Receipts.
Whenever so directed by Hartford Life, the Depositary will terminate the
Deposit Agreement by mailing notice of such termination to the record holders of
all Depositary Receipts then outstanding at least 30 days prior to the date
fixed in such notice for such termination. The Depositary may likewise terminate
the Deposit Agreement if at any time 60 days shall have expired after the
Depositary shall have delivered to Hartford Life a written notice of its
election to resign and a successor depositary shall not have been appointed and
accepted its appointment. If any Depositary Receipts remain outstanding after
the date of termination, the Depositary thereafter will discontinue the transfer
of Depositary Receipts, will suspend the distribution of dividends to the
holders thereof, and will not give any further notices (other than notice of
such termination) or perform any further acts under the Deposit Agreement except
as provided below and except that the Depositary will continue (i) to collect
dividends on the Preferred Stock and any other distributions with respect
thereto and (ii) to deliver the Preferred Stock together with such dividends and
distributions and the net proceeds of any sales of rights, preferences,
privileges or other property, without liability for interest thereon, in
exchange for Depositary Receipts surrendered. At any time after the expiration
of two years from the date of termination, the Depositary may sell the Preferred
Stock then held by it at public or private sales, at such place or places and
upon such terms as it deems proper, and may thereafter hold the net proceeds of
any such sale, together with any money and other property then held by it,
without liability for interest thereon, for the pro rata benefit of the holders
of Depositary Receipts which have not been surrendered.
Charges of Depositary
Hartford Life will pay all charges of the Depositary, including charges in
connection with the initial deposit of the Preferred Stock, the initial issuance
of the Depositary Receipts, the distribution of information to the holders of
Depositary Receipts with respect to matters on which Preferred Stock is entitled
to vote, withdrawals of the Preferred Stock by the holders of Depositary
Receipts or redemption or conversion of the Preferred Stock, except for taxes
(including transfer taxes, if any) and other governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be at the expense
of holders of Depositary Receipts or persons depositing Preferred Stock.
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Miscellaneous
The Depositary will make available for inspection by holders of Depositary
Receipts, at its Corporate Office and its New York Office, all reports and
communications from Hartford Life which are delivered to the Depositary as the
holder of Preferred Stock.
Neither the Depositary nor Hartford Life will be liable if it is prevented
or delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Depositary under
the Deposit Agreement are limited to performing its duties thereunder without
negligence or bad faith. The obligations of Hartford Life under the Deposit
Agreement are limited to performing its duties thereunder in good faith. Neither
Hartford Life nor the Depositary is obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. Hartford Life and the Depositary are
entitled to rely upon advice of or information from counsel, accountants or
other persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to Hartford Life notice
of its election to do so, and Hartford Life may at any time remove the
Depositary, any such resignation or removal to take effect upon the appointment
of a successor Depositary and its acceptance of such appointments. Such
successor Depositary must be appointed within 60 days after delivery of the
notice of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
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DESCRIPTION OF WARRANTS
Hartford Life may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), Preferred Stock, Class A Common Stock or other of
its securities. Warrants may be issued independently or together with any such
securities of Hartford Life and may be attached to or separate from such
securities of Hartford Life. The Warrants are to be issued under warrant
agreements (each a "Warrant Agreement") to be entered into between Hartford Life
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. The description of the terms of the Warrants that are
set forth below and that will be set forth in the applicable Prospectus
Supplement do not purport to be complete and are qualified in their entirety by
reference to the Warrant Agreement and warrant certificate relating to such
Warrants. A copy of the form of Warrant Agreement will be filed as an exhibit to
a Current Report on Form 8-K incorporated herein by reference to be filed prior
to any offering of Warrants.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the warrant certificates representing such Debt Warrants, including the
following: (i) the title of such Debt Warrants; (ii) the Debt Securities of
Hartford Life for which such Debt Warrants are exercisable; (iii) the aggregate
number of such Debt Warrants; (iv) the principal amount of Debt Securities
purchasable upon exercise of each Debt Warrant, and the price or prices at which
such Debt Warrants will be issued; (v) the procedures and conditions relating to
the exercise of such Debt Warrants; (vi) the designation and terms of any
related Debt Securities of Hartford Life with which such Debt Warrants are
issued, and the number of such Debt Warrants issued with each such Debt
Security; (vii) the date, if any, on and after which such Debt Warrants and the
related securities of Hartford Life will be separately transferable; (viii) the
date on which the right to exercise such Debt Warrants shall commence, and the
date on which such right shall expire; (ix) the maximum or minimum number of
such Debt Warrants which may be exercised at any time; (x) if applicable, a
discussion of material United States federal income tax considerations; (xi) any
other terms of such Debt Warrants and terms, procedures and limitations relating
to the exercise of such Debt Warrants; and (xii) the terms of the securities of
Hartford Life purchasable upon exercise of such Debt Warrants.
Debt Warrant certificates may be exchanged for new Debt Warrant
certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Warrant Agent or any other office indicated in
the applicable Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants exercisable for Debt Securities will not have
any of the rights of holders of the Debt Securities purchasable upon such
exercise and will not be entitled to payments of principal (or premium, if any)
or interest, if any, on the Debt Securities purchasable upon such exercise.
OTHER WARRANTS
Hartford Life may issue other Warrants. The applicable Prospectus
Supplement will describe the following terms of any such other Warrants in
respect of which this Prospectus is being delivered: (i) the title of such
Warrants; (ii) the securities (which may include Preferred Stock or Class A
Common Stock) for which such Warrants are exercisable; (iii) the price or prices
at which such Warrants will be issued; (iv) if applicable, the designation and
terms of the Preferred Stock or Class A Common Stock with which such Warrants
are issued, and the number of such Warrants issued with each such share of
Preferred Stock or Class A Common Stock; (v) if applicable, the date on and
after which such Warrants and the related Preferred Stock or Class A Common
Stock will be separately transferable; (vi) if applicable, a discussion of
material United States federal income tax considerations; and (vii) any other
terms of such Warrants, including terms, procedures and limitations relating to
the exchange and exercise of such Warrants. The applicable Prospectus Supplement
will also set forth (a) the amount of securities called for by such Warrants,
and if applicable, the amount of Warrants outstanding, and (b) information
relating to provisions, if any, for a change in the exercise price or the
expiration date of such Warrants and the kind, frequency and timing of any
notice to be given. Prior to the exercise of their Warrants for shares of
Preferred Stock or Class A
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Common Stock, holders of such Warrants will not have any rights of holders of
the Preferred Stock or Class A Common Stock purchasable upon such exercise and
will not be entitled to dividend payments, if any, or voting rights of the
Preferred Stock or Class A Common Stock purchasable upon such exercise.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase for cash such
principal amount or such number of securities of Hartford Life 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. Warrants may
be exercised as set forth in the Prospectus Supplement relating to the Warrants
offered thereby at any time up to the close of business on the expiration date
set forth in such Prospectus Supplement. After the close of business on the
expiration date (or such later expiration date as may be extended by Hartford
Life), unexercised Warrants will become void.
Upon receipt of payment and the warrant certificate properly completed and
duly executed at the corporate trust office of the Warrant Agent or any other
office indicated in the applicable Prospectus Supplement, Hartford Life will, as
soon as practicable, forward the securities purchasable upon such exercise. If
less than all of the Warrants represented by such warrant certificate are
exercised, a new warrant certificate will be issued for the remaining Warrants.
DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
Hartford Life may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from Hartford Life, and Hartford Life to sell to
the holders, a specified number of shares of Class A Common Stock or Preferred
Stock at a future date or dates. The price per share of Preferred Stock or Class
A Common Stock may be fixed at the time the Stock Purchase Contracts are issued
or may be determined by reference to a specific formula set forth in the Stock
Purchase Contracts. The Stock Purchase Contracts may be issued separately or as
a part of units ("Stock Purchase Units") consisting of a Stock Purchase Contract
and Debt Securities, Preferred Securities or debt obligations of third parties,
including U.S. Treasury securities, securing the holders' obligations to
purchase the Preferred Stock or the Class A Common Stock under the Purchase
Contracts. The Stock Purchase Contracts may require Hartford Life to make
periodic payments to the holders of the Stock Purchase Units or vice versa, and
such payments may be unsecured or prefunded on some basis. The Stock Purchase
Contracts may require holders to secure their obligations thereunder in a
specified manner and in certain circumstances Hartford Life may deliver newly
issued prepaid Stock Purchase Contracts ("Prepaid Securities") upon release to a
holder of any collateral securing such holder's obligations under the original
Stock Purchase Contract.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units and, if applicable, Prepaid
Securities. The description in the Prospectus Supplement will not purport to be
complete and will be qualified in its entirety by reference to the Stock
Purchase Contracts, and, if applicable, collateral arrangements and depositary
arrangements, relating to such Stock Purchase Contracts or Stock Purchase Units.
Copies of the form of Stock Purchase Contract, and, if applicable, collateral
arrangements and depositary arrangements relating to such Stock Purchase
Contracts will be filed as an exhibit to a Current Report on Form 8-K
incorporated herein by reference to be filed prior to any offering of Stock
Purchase Contracts.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
AND CORRESPONDING JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities are to be issued in one or more
series under the Subordinated Indenture, as supplemented from time to time,
between Hartford Life and the Subordinated Indenture Trustee. This summary of
certain terms and provisions of the Junior Subordinated Debt Securities and the
Subordinated Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by
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reference to, the Subordinated Indenture, the form of which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
to the Trust Indenture Act. Whenever particular defined terms of the
Subordinated Indenture (as supplemented or amended from time to time) are
referred to herein or in a Prospectus Supplement, such defined terms are
incorporated herein or therein by reference.
The following description sets forth certain general terms and provisions
of the Junior Subordinated Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Junior Subordinated Debt Securities
offered by any Prospectus Supplement, including any Corresponding Junior
Subordinated Debt Securities that are issued to a Trust (see "Description of
Preferred Securities"), and the extent, if any, to which such general provisions
may apply to the Junior Subordinated Debt Securities so offered will be
described in the Prospectus Supplement relating to such Junior Subordinated Debt
Securities. Except to the extent set forth below or in the related Prospectus
Supplement, the Junior Subordinated Debt Securities shall have the terms and
provisions applicable to Subordinated Debt Securities as described under
"Description of Debt Securities".
GENERAL
Each series of Junior Subordinated Debt Securities will be direct,
unsecured obligations of Hartford Life. The Junior Subordinated Debt Securities
will be issuable in one or more series pursuant to an indenture supplemental to
the Subordinated Indenture or a resolution of Hartford Life's Board of Directors
or a committee thereof and set forth in an Officer's Certificate.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Junior Subordinated Debt Securities: (i) the
designation, priority, aggregate principal amount and authorized denominations;
(ii) the percentage of their principal amount at which such Junior Subordinated
Debt Securities will be issued; (iii) the date on which such Junior Subordinated
Debt Securities will mature; (iv) the rate per annum at which such Junior
Subordinated Debt Securities will bear interest or the method of determination
of such rate; (v) the dates on which such interest will be payable; (vi) the
rights, if any, to defer payments of interest on the Junior Subordinated Debt
Securities by extending the interest payment period (an "Extension Period"), and
the maximum duration of such extensions; (vii) the place or places where
payments on such Junior Subordinated Debt Securities shall be made; (viii) any
redemption terms or sinking fund provisions; (ix) the terms of subordination of
Junior Subordinated Debt Securities; (x) whether Junior Subordinated Debt
Securities issued in fully registered form will be represented by either a
global security delivered to a depositary and recorded in a book-entry system
maintained by such depositary or by a certificate delivered to the Holder; (xi)
the restrictions, if any, applicable to the exchange of Junior Subordinated Debt
Securities of a series of one form for another of such series and to the offer,
sale and delivery of the Junior Subordinated Debt Securities; (xii) whether and
under what circumstances Hartford Life will pay additional amounts in the event
of certain developments with respect to United States withholding tax or
information reporting laws; or (xiii) other specific terms.
Junior Subordinated Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. Certain federal income tax
consequences and special considerations applicable to any such Junior
Subordinated Debt Securities will be described in the applicable Prospectus
Supplement.
SUBORDINATED INDENTURE EVENTS OF DEFAULT
The Subordinated Indenture provides that any one or more of the following
described events with respect to a series of Junior Subordinated Debt Securities
that has occurred and is continuing constitutes an Event of Default with respect
to such series of Junior Subordinated Debt Securities:
(i) failure for 30 days to pay any interest on such series of the
Junior Subordinated Debt Securities when due (subject to the deferral of
any due date in the case of an Extension Period);
(ii) failure to pay any principal or premium, if any, on such series
of Junior Subordinated Debt Securities when due whether at maturity, upon
redemption, by declaration or otherwise;
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(iii) failure to observe or perform in any material respect certain
other covenants contained in the Subordinated Indenture for 90 days after
written notice to Hartford Life from the Subordinated Indenture Trustee or
the Holders of at least 25% in principal amount of such series of
Outstanding Junior Subordinated Debt Securities;
(iv) certain events in bankruptcy, insolvency or reorganization of
Hartford Life;
(v) with respect to Junior Subordinated Debt Securities issued to a
Trust, the dissolution of such Trust; or
(vi) any other Event of Default with respect to Junior Subordinated
Debt Securities of that series.
Hartford Life is required to furnish the Subordinated Indenture Trustee
annually with a statement as to the fulfillment by Hartford Life of its
obligations under the Subordinated Indenture. The Subordinated Indenture
provides that the Subordinated Indenture Trustee may withhold notice to the
Holders of the Junior Subordinated Debt Securities of any default (except in
respect of the payment of principal or interest on the Junior Subordinated Debt
Securities) if it considers it in the interest of the Holders to do so.
If an Event of Default with respect to Junior Subordinated Debt Securities
of any series occurs and is continuing, then and in every such case the
Subordinated Indenture Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Junior Subordinated Debt Securities of that series may
declare the principal amount (or, if the Junior Subordinated Debt Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Junior Subordinated Debt Securities of that series to be due and payable
immediately, by a notice in writing to Hartford Life (and to the Subordinated
Indenture Trustee if given by Holders), and upon any such declaration such
principal shall become immediately due and payable. However, at any time after a
declaration or acceleration with respect to Junior Subordinated Debt Securities
of any series has been made, but before a judgment or decree for payment of the
money due has been obtained, the Holders of a majority in principal amount of
Outstanding Junior Subordinated Debt Securities of that series may, subject to
certain conditions, rescind and annul such declaration.
Subject to the provisions of the Subordinated Indenture relating to the
duties of the Subordinated Indenture Trustee, in case an Event of Default shall
occur and be continuing, the Subordinated Indenture Trustee shall be under no
obligation to exercise any of its rights or powers under the Subordinated
Indenture at the request, order or direction of any of the Holders, unless such
Holders shall have offered to the Subordinated Indenture Trustee reasonable
security or indemnity and satisfied certain other conditions. Subject to such
provisions for the security or indemnification of the Subordinated Indenture
Trustee, the Holders of a majority in principal amount of the Outstanding Junior
Subordinated Debt Securities of any series shall have the right to direct the
time, method and place of conducting any proceeding for, and remedy available
to, the Subordinated Indenture Trustee, or exercising any trust or power
conferred on the Subordinated Indenture Trustee with respect to the Junior
Subordinated Debt Securities of that series.
No Holder of any Junior Subordinated Debt Security of any series will have
any right to institute any proceeding with respect to the Subordinated Indenture
or for any remedy thereunder, unless such Holder shall have previously given to
the Subordinated Indenture Trustee written notice of a continuing Event of
Default with respect to Junior Subordinated Debt Securities of that series and
unless the Holders of at least 25% in principal amount of the Outstanding Junior
Subordinated Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Subordinated Indenture Trustee to institute
such proceeding as Subordinated Indenture Trustee, and, within 90 days following
the receipt of such notice, the Subordinated Indenture Trustee shall not have
received from the Holders of a majority in principal amount of the Outstanding
Junior Subordinated Debt Securities of that series a direction inconsistent with
such request, and the Subordinated Indenture Trustee shall have failed to
institute such proceeding. However, the Holder of any Junior Subordinated Debt
Security will have an absolute right to receive payment of the principal of and
premium, if any, and interest on such Junior Subordinated Debt Security on or
after the due dates expressed in such Junior Subordinated Debt Security and to
institute a suit for the enforcement of any such payment. Each holder of
Preferred Securities of a Trust will, during the continuance of a default in the
payment of
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interest when due (subject to any right of Hartford Life to defer payment), have
the right to bring suit directly against Hartford Life for the enforcement of
payment in an amount equal to the aggregate liquidation amount of Preferred
Securities of such holder.
CONVERSION OR EXCHANGE
The specific terms on which Junior Subordinated Debt Securities of any
series may be so converted or exchanged for other securities or property of
Hartford Life will be set forth in the applicable Prospectus Supplement. Such
terms may include provisions for conversion or exchange, either mandatory, at
the option of the Holder, or at the option of Hartford Life, in which case the
number of shares of Preferred Securities or other securities or amount of other
property to be received by the Holders of Junior Subordinated Debt Securities
would be calculated as of a time and in the manner stated in the applicable
Prospectus Supplement.
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DESCRIPTION OF PREFERRED SECURITIES
Each Trust's Preferred Securities will represent preferred undivided
beneficial interests in the assets of the related Trust and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of the related Trust, as well as other benefits as described in the
Declaration. This summary of certain provisions of the Declaration does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of each Declaration, including the definitions
therein of certain terms, and the Trust Indenture Act. Wherever particular
defined terms of the Declaration are referred to, such defined terms are
incorporated herein by reference. The form of the Declaration has been filed as
an exhibit to the Registration Statement of which this Prospectus forms a part.
Each Trust may issue, from time to time, only one series of Preferred
Securities having such terms including distributions, redemption, voting,
liquidation rights or such restrictions as shall be set forth in the Prospectus
Supplement relating thereto. The Declaration authorizes a Trust to issue one
series of Preferred Securities. The Declaration will be qualified as an
indenture under the Trust Indenture Act. The Institutional Trustee, an
independent trustee, will act as indenture trustee for the Preferred Securities
for purposes of compliance with the provisions of the Trust Indenture Act.
The Preferred Securities will have such terms, including distributions,
redemption, voting, liquidation rights and such other preferred, deferred and
other special rights or such restrictions as shall be set forth in the
Declaration or made part of the Declaration by the Trust Indenture Act, and will
have the same terms as the Corresponding Junior Subordinated Debt Securities
issued to and held by the related Trust as described in the applicable
Prospectus Supplement. Reference is made to any Prospectus Supplement relating
to the Preferred Securities for specific terms, including: (i) the distinctive
designation of such Preferred Securities, (ii) the number of Preferred
Securities issued by the related Trust, (iii) the annual distribution rate (or
method of determining such rate) for Preferred Securities issued by such Trust
and the date or dates upon which such distributions shall be payable (provided,
however, that distributions on such Preferred Securities shall, subject to any
deferral provisions, and any provisions for payment of defaulted distributions,
be payable on a quarterly basis to holders of such Preferred Securities as of a
record date in each quarter during which such Preferred Securities are
outstanding), (iv) any right of a Trust to defer quarterly distributions on
Preferred Securities as a result of an interest deferral right exercised by
Hartford Life on the Corresponding Junior Subordinated Debt Securities held by
such Trust, (v) whether distributions on Preferred Securities shall be
cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions of Preferred Securities shall be cumulative, (vi)
the amount or amounts which shall be paid out of the assets of such Trust to
holders of Preferred Securities upon voluntary or involuntary dissolution,
winding-up or termination of such Trust, (vii) the obligation, or option, if
any, of such Trust to purchase or redeem Preferred Securities issued by such
Trust and the price or prices at which, the period or periods within which and
the terms and conditions upon which Preferred Securities issued by such Trust
shall be purchased or redeemed, in whole or in part, pursuant to such obligation
or option, (viii) the voting rights, if any, of Preferred Securities issued by
such Trust in addition to those required by law, including the number of votes
per Preferred Security and any requirement for the approval by the holders of
Preferred Securities, as a condition to specified action or amendments to the
Declaration, (ix) the terms, if any, upon which Corresponding Junior
Subordinated Debt Securities of Hartford Life held by such Trust can be
distributed to the holders of Preferred Securities, and (x) any other relevant
rights, preferences, privileges, limitations or restrictions of Preferred
Securities issued by such Trust consistent with the Declaration or with
applicable law. All Preferred Securities offered hereby will be guaranteed by
Hartford Life to the extent described below under "Description of Guarantee".
Certain United States federal income tax considerations applicable to any
offering of Preferred Securities will be described in the Prospectus Supplement
relating thereto.
In connection with the issuance of Preferred Securities, each Trust will
issue one series of Common Securities. The Declaration authorizes the Trust to
issue one series of Common Securities having such terms including distributions,
redemption, voting , liquidation rights or such restrictions as shall be set
forth therein. The terms of the Common Securities issued by a Trust will be
substantially identical to the terms of the
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Preferred Securities issued by such Trust and the Common Securities will rank
pari passu, and payments will be made thereon pro rata of such Preferred
Securities, except that, upon an Event of Default under the Declaration, the
rights of the holders of such Common Securities to payment in respect of
distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of such Preferred Securities. Except
in certain limited circumstances, the Common Securities will also carry the
right to vote and to appoint, remove or replace any of the Trustees. All of the
Common Securities will be directly or indirectly owned by Hartford Life.
If an Event of Default with respect to the Declaration occurs and is
continuing, then the holders of Preferred Securities of the related Trust would
rely on the enforcement by the Institutional Trustee of its rights as a holder
of the Corresponding Junior Subordinated Debt Securities against Hartford Life.
In addition, the holders of a majority in liquidation amount of such Preferred
Securities will have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee under such Declaration, including the right to direct the Institutional
Trustee to exercise the remedies available to it as a holder of the
Corresponding Junior Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Corresponding Junior Subordinated Debt
Securities, any holder of such Preferred Securities may to the fullest extent
permitted by law, directly institute a legal proceeding against Hartford Life to
enforce the Institutional Trustee's rights under the Corresponding Junior
Subordinated Debt Securities without first instituting any legal proceeding
against the Institutional Trustee or any other person or entity. If an Event of
Default with respect to the Declaration has occurred and is continuing and such
event is attributable to the failure of Hartford Life to pay interest or
principal on the Corresponding Junior Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a holder of related Preferred Securities may also
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Corresponding Junior Subordinated Debt
Securities having a principal amount equal to the aggregate liquidation amount
of such Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the Corresponding Junior Subordinated Debt
Securities without first (i) directing the Institutional Trustee to enforce the
terms of the Corresponding Junior Subordinated Debt Securities or (ii)
instituting a legal proceeding against Hartford Life to enforce the
Institutional Trustee's rights under the Corresponding Junior Subordinated Debt
Securities. In connection with such Direct Action, Hartford Life will be
subrogated to the rights of such holder of such Preferred Securities under the
Declaration to the extent of any payment made by Hartford Life to such holder of
such Preferred Securities in such Direct Action. Consequently, Hartford Life
will be entitled to payments of amounts that a holder of Preferred Securities
receives in respect of an unpaid distribution that resulted in the bringing of a
Direct Action to the extent that such holder receives or has already received
full payment with respect to such unpaid distribution from the Trust. The
holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Corresponding Junior Subordinated Debt
Securities.
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DESCRIPTION OF GUARANTEE
Set forth below is a summary of information concerning each Guarantee that
will be executed and delivered by Hartford Life for the benefit of the holders
of the related Preferred Securities. Each Guarantee will be qualified as an
indenture under the Trust Indenture Act. Wilmington Trust Company will act as
indenture trustee under each Guarantee (the "Guarantee Trustee"). The terms of
each Guarantee will be those set forth in the Guarantee and those made part of
the Guarantee by the Trust Indenture Act. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Guarantee, which is filed as an
exhibit to the Registration Statement of which this Prospectus forms a part, and
the Trust Indenture Act. Each Guarantee will be held by the Guarantee Trustee
for the benefit of the holders of the Preferred Securities.
GENERAL
Pursuant to and to the extent set forth in each Guarantee, Hartford Life
will irrevocably and unconditionally agree to pay in full to the holders of the
related Preferred Securities (except to the extent paid by a Trust), as and when
due, regardless of any defense, right of set-off or counterclaim which a Trust
may have or assert, the following payments (the "Guarantee Payments"), without
duplication: (i) any accrued and unpaid distributions that are required to be
paid on the related Preferred Securities, to the extent the related Trust has
funds available therefor, and (ii) the redemption price per Preferred Security
set forth in the applicable Prospectus Supplement plus all accrued and unpaid
distributions (the "Redemption Price"), to the extent the related Trust has
funds available therefor, with respect to any Preferred Securities called for
redemption by the related Trust, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the related Trust (other than in
connection with the distribution of Corresponding Junior Subordinated Debt
Securities to the holders of Preferred Securities or the redemption of all the
Preferred Securities) the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on the related Preferred Securities to
the date of payment or (b) the amount of assets of the related Trust remaining
for distribution to holders of the Preferred Securities in liquidation of such
Trust. Hartford Life's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by Hartford Life to the holders of the
related Preferred Securities or by causing the related Trust to pay such amounts
to such holders.
Each Guarantee will be a guarantee on a subordinated basis with respect to
the related Preferred Securities from the time of issuance of the Preferred
Securities but will not apply to any payment of distributions or Redemption
Price, or to payments upon the dissolution, winding-up or termination of the
related Trusts, except to the extent the related Trust shall have funds
available therefor. If Hartford Life does not make interest payments on the
Corresponding Junior Subordinated Debt Securities, the applicable Trust will not
pay distributions on the Preferred Securities and will not have funds available
therefor. See "Description of Junior Subordinated Debt Securities and
Corresponding Junior Subordinated Debt Securities." Each Guarantee, when taken
together with Hartford Life's obligations under the Corresponding Junior
Subordinated Debt Securities, the Indenture and the Declaration, including its
obligations to pay costs, expenses, debts and liabilities of the related Trust
(other than with respect to Trust Securities), will provide a full and
unconditional guarantee on a subordinated basis by Hartford Life of payments due
on the Preferred Securities.
Hartford Life has also agreed to guarantee the obligations of each Trust
with respect to the Common Securities (the "Common Guarantee") issued by such
Trust to the same extent as the Guarantee, except that, if an Event of Default
under the Subordinated Indenture with respect to the related Corresponding
Junior Subordinated Debt Securities has occurred and is continuing, holders of
Preferred Securities under the Guarantee shall have priority over holders of the
Common Securities under the Common Guarantee with respect to distributions and
payments on liquidation, redemption or otherwise.
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CERTAIN COVENANTS OF HARTFORD LIFE
In each Guarantee, Hartford Life will covenant that, so long as any
Preferred Securities remain outstanding, if there shall have occurred any event
that would constitute an Event of Default under such Guarantee or the
Declaration, then (a) Hartford Life shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of Hartford Life in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of employees, officers, directors or consultants, (ii) as a
result of an exchange or conversion of any class or series of Hartford Life's
capital stock for any other class or series of Hartford Life's capital stock,
(iii) the purchase of fractional interests in shares of Hartford Life's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, or (iv) distributions of rights under
any shareholders rights plan adopted by Hartford Life) and (b) Hartford Life
shall not make any payment of interest on, or principal of (or premium, if any,
on), or repay, repurchase or redeem, any debt securities issued by Hartford Life
which rank pari passu with or junior to the Corresponding Junior Subordinated
Debt Securities or make any guarantee payment with respect thereto. Each
Guarantee, however, will except from the foregoing any stock dividends paid by
Hartford Life where the dividend stock is the same stock as that on which the
dividend is being paid.
MODIFICATION OF GUARANTEE; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required),
each Guarantee may be amended only with the prior approval of the holders of not
less than a majority in aggregate liquidation amount of the outstanding
Preferred Securities. The manner of obtaining any such approval of holders of
such Preferred Securities will be as set forth in an accompanying Prospectus
Supplement. All guarantees and agreements contained in each Guarantee shall bind
the successors, assignees, receivers, trustees and representatives of Hartford
Life and shall inure to the benefit of the holders of the Preferred Securities
then outstanding.
EVENTS OF DEFAULT
An Event of Default under each Guarantee will occur upon the failure of
Hartford Life to perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate liquidation amount of the related Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Guarantee. If the Guarantee Trustee fails to enforce
the Guarantee Trustee's rights under the Guarantee, any holder of related
Preferred Securities may directly institute a legal proceeding against Hartford
Life to enforce the Guarantee Trustee's rights under the Guarantee without first
instituting a legal proceeding against the Trusts, the Guarantee Trustee or any
other person or entity. A holder of Preferred Securities may also directly
institute a legal proceeding against Hartford Life to enforce such holder's
right to receive payment under the Guarantee without first (i) directing the
Guarantee Trustee to enforce the terms of the Guarantee or (ii) instituting a
legal proceeding against related Trust or any other person or entity.
Hartford Life will be required to provide annually to the Guarantee Trustee
a statement as to the performance by Hartford Life of certain of its obligations
under the related Guarantee and as to any default in such performance.
TERMINATION OF THE GUARANTEE
Each Guarantee will terminate as to the related Preferred Securities upon
full payment of the Redemption Price of all such Preferred Securities, upon
distribution of the Corresponding Junior Subordinated Debt Securities to the
holders of such Preferred Securities or upon full payment of the amounts payable
in accordance with the Declaration upon liquidation of the related Trust. Each
Guarantee will continue to be
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effective or will be reinstated, as the case may be, if at any time any holder
of the related Preferred Securities must restore payment of any sums paid under
such Preferred Securities or such Guarantee.
STATUS OF THE GUARANTEE
Each Guarantee will constitute an unsecured obligation of Hartford Life and
will rank (i) subordinate and junior in right of payment to all other
liabilities of Hartford Life, including Senior Indebtedness (ii) pari passu with
the most senior preferred or preference stock now or hereafter issued by
Hartford Life and with any guarantee now or hereafter entered into by Hartford
Life in respect of any preferred or preference stock of any subsidiary of
Hartford Life and (iii) senior to Hartford Life's common stock. The terms of the
related Preferred Securities provide that each holder of Preferred Securities by
acceptance thereof agrees to the subordination provisions and other terms of the
related Guarantee.
Each Guarantee will constitute a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under the Guarantee without instituting a
legal proceeding against any other person or entity).
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
a Guarantee, undertakes to perform only such duties as are specifically set
forth in such Guarantee and, after default with respect to such Guarantee, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by a
Guarantee at the request of any holder of the related Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
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PLAN OF DISTRIBUTION
Hartford Life may sell any Debt Securities, Preferred Stock, Class A Common
Stock, Stock Purchase Contracts, Stock Purchase Units and Junior Subordinated
Debt Securities and the Trusts may sell any of the Preferred Securities being
offered hereby in any one or more of the following ways from time to time: (i)
through agents; (ii) to or through underwriters; (iii) through dealers; and (iv)
directly by Hartford Life or the Trusts, as the case may be, to purchasers.
The Prospectus Supplement with respect to the Offered Securities will set
forth the terms of the offering of the Offered Securities, including the name or
names of any underwriters, dealers or agents; the purchase price of the Offered
Securities and the proceeds to Hartford Life and/or the Trusts from such sale;
any underwriting discounts and commissions or agency fees and other items
constituting underwriters' or agents' compensation; any initial public offering
price and any discounts or concession allowed or reallowed or paid to dealers;
and any securities exchange on which such Offered Securities may be listed. Any
initial public offering price, discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices.
Sales of Class A Common Stock offered hereby may be effected from time to
time in one or more transactions on the NYSE or in negotiated transactions or a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at other negotiated
prices.
Offers to purchase Offered Securities may be solicited by agents designated
by Hartford Life and/or the Trusts from time to time. Any such agent involved in
the offer or sale of the Offered Securities in respect of which this Prospectus
is delivered will be named, and any commissions payable by Hartford Life and/or
the Trusts to such agent, will be set forth in the applicable Prospectus
Supplement. Unless otherwise indicated in such Prospectus Supplement, any such
agent will be acting on a reasonable best efforts basis for the period of its
appointment. Any such agent may be deemed to be an underwriter, as that term is
defined in the Securities Act, of the Offered Securities so offered and sold.
If Offered Securities are sold by means of an underwritten offering,
Hartford Life and/or the Trusts will execute an underwriting agreement with an
underwriter or underwriters at the time an agreement for such sale is reached,
and the names of the specific managing underwriter or underwriters, as well as
any other underwriters, the respective amounts underwritten and the terms of the
transaction, including commissions, discounts and any other compensation of the
underwriters and dealers, if any, will be set forth in the applicable Prospectus
Supplement which will be used by the underwriters to make resales of the Offered
Securities in respect of which this Prospectus is being delivered to the public.
If underwriters are utilized in the sale of any Offered Securities in respect of
which this Prospectus is being delivered, such Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at fixed
public offering prices or at varying prices determined by the underwriters at
the time of sale. Offered Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters or directly by the
managing underwriters. If any underwriter or underwriters are utilized in the
sale of the Offered Securities, unless otherwise indicated in the applicable
Prospectus Supplement, the underwriting agreement will provide that the
obligations of the underwriters are subject to certain conditions precedent and
that the underwriters with respect to a sale of Offered Securities will be
obligated to purchase all such Offered Securities if any are purchased.
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, Hartford Life and/or the Trusts will sell
such Offered Securities to the dealer as principal. The dealer may then resell
such Offered Securities to the public at varying prices to be determined by such
dealer at the time of resale. Any such dealer may be deemed to be an
underwriter, as such term is defined in the
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Securities Act, of the Offered Securities so offered and sold. The name of the
dealer and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Offers to purchase Offered Securities may be solicited directly by Hartford
Life and/or the Trusts and the sale thereof may be made by Hartford Life and/or
the Trusts directly to institutional investors or others, who may be deemed to
be underwriters within the meaning of the Securities Act with respect to any
resale thereof. The terms of any such sales will be described in the Prospectus
Supplement relating thereto.
Offered Securities may also be offered and sold, if so indicated in the
applicable Prospectus Supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more firms ("remarketing firms"), acting as principals
for their own accounts or as agents for Hartford Life. Any remarketing firm will
be identified and the terms of its agreement, if any, with Hartford Life and/or
the Trusts and its compensation will be described in the applicable Prospectus
Supplement. Remarketing firms may be deemed to be underwriters, as that term is
defined in the Securities Act, in connection with the Offered Securities
remarketed thereby.
If so indicated in the applicable Prospectus Supplement, Hartford Life
and/or the Trusts may authorize agents and underwriters to solicit offers by
certain institutions to purchase Offered Securities from Hartford Life at the
public offering price set forth in the applicable Prospectus Supplement pursuant
to delayed delivery contracts providing for payment and delivery on the date or
dates stated in the applicable Prospectus Supplement. Such delayed delivery
contracts will be subject to only those conditions set forth in the applicable
Prospectus Supplement. A commission indicated in the applicable Prospectus
Supplement will be paid to underwriters and agents soliciting purchases of
Offered Securities pursuant to delayed delivery contracts accepted by Hartford
Life and/or the Trusts.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements with Hartford Life to indemnification by Hartford Life
against certain liabilities, including liabilities under the Securities Act, or
to contribution with respect to payments which such agents, underwriters,
dealers and remarketing firms may be required to make in respect thereof.
Each series of Offered Securities will be a new issue and, other than the
Class A Common Stock which is listed on the NYSE, will have no established
trading market. Hartford Life and/or the Trusts may elect to list any series of
Offered Securities on an exchange, and in the case of the Class A Common Stock,
on any additional exchange, but, unless otherwise specified in the applicable
Prospectus Supplement, Hartford Life and/or the Trusts shall not be obligated to
do so.
Agents, underwriters, dealers, and remarketing firms may be customers of,
engage in transactions with, or perform services for, Hartford Life and its
subsidiaries in the ordinary course of business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters will be passed upon for Hartford Life by Lynda Godkin, General
Counsel of Hartford Life and for the Trusts by Richards, Layton & Finger, P.A.,
special Delaware counsel to Hartford Life and the Trusts and for any
underwriters or agents by counsel to be named in the applicable Prospectus
Supplement.
EXPERTS
The audited consolidated financial statements and schedules of Hartford
Life, Inc. and subsidiaries as of December 31, 1996 and 1997 and for the three
years in the period ended December 31, 1997 incorporated by reference herein and
in the Registration Statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein and in the Registration
Statement in reliance upon the authority of said firm as experts in giving said
report.
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$400,000,000
[HARTFORD LIFE LOGO]
HARTFORD LIFE, INC.
7.375% SENIOR NOTES DUE MARCH 1, 2031
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PROSPECTUS SUPPLEMENT
FEBRUARY 22, 2001
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JOINT BOOK-RUNNING MANAGERS
BANC OF AMERICA SECURITIES LLC
JPMORGAN
FIRST UNION SECURITIES, INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
WELLS FARGO
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