As filed with the Securities and Exchange Commission on September 25, 1996.
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM S-3 REGISTRATION STATEMENT
AND
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3 REGISTRATION STATEMENT
(NO. 33-98014)
UNDER
THE SECURITIES ACT OF 1933
-------------------------------
HARTFORD CAPITAL II
HARTFORD CAPITAL III
ITT HARTFORD GROUP, INC. HARTFORD CAPITAL IV
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in Trust Agreements)
Delaware Delaware
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization
of each registrant)
06-6431733
(Hartford Capital II)
06-6431735
(Hartford Capital III)
13-3317783 06-6431736
(I.R.S. Employer Identification Number) (Hartford Capital IV)
(I.R.S. Employer Identification Numbers)
c/o ITT Hartford Group, Inc.
Hartford Plaza Hartford Plaza
Hartford, Connecticut 06115 Hartford, Connecticut 06115
(860) 547-5000 (860) 547-5000
(Address, including zip code, and telephone number, including (Address, including zip code, and telephone number, including
area code, of each registrant's principal executive offices) area code, of each registrant's principal executive offices)
----------------------
MICHAEL S. WILDER
General Counsel
ITT Hartford Group, Inc.
Hartford Plaza
Hartford, Connecticut 06115
(860) 547-5000
(Name, address, including zip code, and
telephone number, including area code, of agent
for service of each registrant)
----------------------
Please address a copy of all communications to:
JAMES C. SCOVILLE
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
(212) 909-6000
----------------------
Approximate date of commencement of proposed sale to the public: From time
to time as determined by market conditions and other factors, after the
effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.|_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.|_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.|_|
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price aggregate Amount of
securities being registered registered per unit(1) offering price(1) registration fee(2)
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Debt Securities of ITT Hartford Group,
Inc.(3)..............................
Preferred Stock of ITT Hartford
Group, Inc., par value $.01 per
share(4).............................
Common Stock of ITT Hartford
Group, Inc., par value $.01 per
share(5).............................
Depositary Shares of ITT Hartford
Group, Inc.(6).......................
Warrants of ITT Hartford Group,
Inc.(7)..............................
Stock Purchase Contracts of ITT
Hartford Group, Inc.(8)..............
Stock Purchase Units of ITT Hartford
Group, Inc.(9).......................
Junior Subordinated Deferrable
Interest Debentures of ITT
Hartford Group, Inc.(10).............
Preferred Securities of Hartford
Capital II(11).......................
Preferred Securities of Hartford
Capital III(11)......................
Preferred Securities of Hartford
Capital IV(11).......................
Guarantees with respect to Preferred
Securities of Hartford Capital II,
Hartford Capital III and Hartford
Capital IV by ITT Hartford Group,
Inc.(12).............................
Total....................... $1,250,000,000(13) 100% $1,250,000,000(13)(14) $431,035
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(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933 and exclusive of accrued
interest and dividends, if any.
(2) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933 in respect of the $1,250,000,000 of
previously unregistered securities registered hereunder. An additional
registration fee of $172,414 was paid by ITT Hartford Group, Inc. on
October 11, 1995 in connection with an aggregate of $500,000,000 Debt
Securities, Preferred Stock and Depositary Shares of ITT Hartford Group,
Inc. registered and not yet sold pursuant to its Registration Statement on
Form S-3 (No. 33-98014).
(3) Subject to note (13) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time by ITT Hartford Group, Inc., including sales upon the exercise of
Warrants. Also includes such indeterminate principal amount of Debt
Securities as may be issued upon conversion of or exchange for any
securities being registered hereunder that provide for conversion or
exchange into Debt Securities.
(4) Subject to note (13) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold from time
to time by ITT Hartford Group, Inc., including sales upon the exercise of
Warrants. Also includes such indeterminate number of shares of Preferred
Stock as may be issued upon conversion of or exchange for any securities
being registered hereunder that provide for conversion or exchange into
Preferred Stock.
(5) Includes Preferred Share Purchase Rights. Prior to the occurrence of
certain events, such Rights will not be exercisable or evidenced separately
from the Common Stock. Subject to note (13) below, there is being
registered hereunder an indeterminate number of shares of Common Stock as
may be sold from time to time by ITT Hartford Group, Inc., including sales
upon the exercise of Warrants. Also includes such indeterminate number of
shares of Common Stock as may be issued upon conversion of or exchange for
any securities being registered hereunder that provide for conversion or
exchange into Common Stock.
(6) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event ITT Hartford
Group, Inc. elects to offer to the public fractional interests in shares of
the Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests and
shares of Preferred Stock will be issued to the Depositary under the
Deposit Agreement. No separate consideration will be received for the
Depositary Shares.
(7) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Warrants, as may be sold from time to
time by ITT Hartford Group, Inc., representing rights to purchase Debt
Securities, Preferred Stock or Common Stock. Warrants may be sold
separately or with Debt Securities, Preferred Stock or Common Stock.
(8) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Contracts as may be sold
from time to time by ITT Hartford Group, Inc., representing rights to
purchase Preferred Stock or Common Stock.
(9) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Units as may be sold from
time to time by ITT Hartford Group, Inc., representing ownership of Stock
Purchase Contracts and Debt Securities or debt obligations of third
parties, including U.S. Treasury Securities.
(10) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Junior Subordinated Deferrable Interest Debentures
as may be sold from time to time by ITT Hartford Group, Inc.
(11) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Preferred Securities as may be sold severally from
time to time by Hartford Capital II, III and IV.
(12) This registration statement is deemed to include the obligations of ITT
Hartford Group, Inc. under the Junior Subordinated Deferrable Interest
Debentures, the related Indenture, the Trust Agreements, the Preferred
Securities, the Guarantees and the Expense Agreements as described in the
Registration Statement.
(13) Prospectuses included herein relate to $1,750,000,000 of Securities. Such
amount represents the principal amount of any Debt Securities or Junior
Subordinated Deferrable Interest Debentures issued at their principal
amount, the issue price rather than the principal amount of any Debt
Securities or Junior Subordinated Deferrable Interest Debentures issued at
an original issue discount, the liquidation preference of any Preferred
Stock, the amount computed pursuant to Rule 457(c) for any Common Stock,
the issue price of any Warrants, the exercise price of any Offered
Securities issuable upon the exercise of Warrants and the initial public
offering price of any Preferred Securities. Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(14) No separate consideration will be received for the Debt Securities,
Preferred Stock, Common Stock or the Depositary Shares issuable upon
conversion of or in exchange for any securities registered hereunder that
provide for conversion or exchange into such securities. No separate
consideration will be received for any Junior Subordinated Deferrable
Interest Debentures if issued to evidence a loan by Hartford Capital II,
III or IV to ITT Hartford Group, Inc., or for any related Guarantee or
Expense Agreement.
-------------------------------
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement includes a Prospectus which may relate to a total of $500,000,000 of
Debt Securities, Preferred Stock and Depositary Shares previously registered by
ITT Hartford Group, Inc. under its Registration Statement on Form S-3 (No.
33-98014), which was declared effective on October 20, 1995. In the event any of
such previously registered and unsold Debt Securities, Preferred Stock or
Depositary Shares are offered and sold prior to the effective date of this
Registration Statement, the amount of such Debt Securities, Preferred Stock or
Depositary Shares will not be included in such Prospectus hereunder. This
Registration Statement also constitutes Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (No. 33-98014). Such Post-Effective Amendment
shall hereafter become effective concurrently with the effectiveness of this
Registration Statement in accordance with Section 8(c) of the Securities Act of
1933.
The Registrant hereby amends this Registration Statement and Post-Effective
Amendment on such date or dates as may be necessary to delay their effective
date until the Registrant shall file a further amendment which specifically
states that this Registration Statement and Post-Effective Amendment shall
thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until this Registration Statement and Post-Effective Amendment
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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EXPLANATORY NOTE
This Registration Statement contains two forms of prospectuses to be used
in connection with offerings of the following securities:
(1) Debt Securities, Preferred Stock, Common Stock and Depositary
Shares of ITT Hartford Group, Inc., Warrants of ITT Hartford
Group, Inc. to purchase any of the foregoing and Stock Purchase
Contracts and Stock Purchase Units of ITT Hartford Group, Inc.
(2) Preferred Securities of Hartford Capital II, Hartford Capital III
and Hartford Capital IV, severally, Junior Subordinated
Debentures of ITT Hartford Group, Inc. and Guarantees by ITT
Hartford Group, Inc. with respect to Preferred Securities issued
by Hartford Capital II, III or IV.
Each offering of securities made under this Registration Statement will be
made pursuant to one of these Prospectuses, with the specific terms of the
securities offered thereby set forth in an accompanying Prospectus Supplement.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
- --------------------------------------------------------------------------------
SUBJECT TO COMPLETION, DATED SEPTEMBER 25, 1996
ITT HARTFORD GROUP, INC.
Debt Securities
Preferred Stock
Common Stock
Depositary Shares
Warrants
Stock Purchase Contracts
Stock Purchase Units
ITT Hartford Group, Inc., a Delaware corporation ("ITT Hartford"), 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"
and, together with the Senior Debt Securities, the "Debt Securities"), (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 common
stock, par value $.01 per share (the "Common Stock"), (d) warrants to purchase
securities of ITT Hartford as shall be designated by ITT Hartford at the time of
the offering (the "Warrants"), (e) Stock Purchase Contracts (the "Stock Purchase
Contracts") to purchase Preferred Stock or Common Stock, and (f) Stock Purchase
Units (the "Stock Purchase Units"), each representing ownership of a Stock
Purchase Contract and Debt Securities or debt obligations of third parties,
including U.S. Treasury securities, securing the holder's obligation to purchase
Preferred Stock or Common Stock under the Stock Purchase Contract, in each case
in amounts, at prices and on terms to be determined at the time or times of
offering. The Debt Securities, Preferred Stock, Common Stock, Warrants, Stock
Purchase Contracts and Stock Purchase Units are referred to herein collectively
as the "Offered Securities". By separate prospectus, the form of which is
included in the Registration Statement of which this Prospectus forms a part,
three Delaware statutory business trusts (the "Trusts") sponsored by ITT
Hartford may from time to time severally offer Preferred Securities guaranteed
by ITT Hartford to the extent set forth therein and ITT Hartford may offer from
time to time Junior Subordinated Deferrable Interest Debentures. The aggregate
initial public offering price of the securities to be offered by this Prospectus
and such other prospectus shall not exceed $1,750,000,000.
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,
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, 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 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 Common Stock issuable thereunder, the purchase
price of the Preferred Stock or Common Stock, the date or dates on which the
Preferred Stock or Common Stock is required to be purchased by the holders of
the Stock Purchase Contracts, any periodic payments required to be made by the
Company to the holders of the Stock Purchase Contracts or vice versa, and the
terms of the offering and sale thereof, and (g) in the case of Stock Purchase
Units, the specific terms of the Stock Purchase Contracts and any Debt
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.
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 and, because ITT Hartford is a
non-operating holding company, will be effectively subordinated to all
liabilities of ITT Hartford's subsidiaries, including liabilities under
contracts of insurance and annuities written by ITT Hartford's insurance
subsidiaries. Accordingly, holders of the Debt Securities should look only to
the assets of ITT Hartford for payments of interest and principal and premium,
if any. Unless otherwise specified in an applicable Prospectus Supplement, the
Senior Debt Securities will rank equally with all other unsecured and
unsubordinated
indebtedness of ITT Hartford. The Subordinated Debt Securities will be
subordinated in right of payment to all Senior Debt (as defined herein) of ITT
Hartford to the extent described herein and in the applicable Prospectus
Supplement relating thereto. The Debt Securities may be denominated in United
States dollars or, at the option of ITT Hartford if so specified in the
applicable Prospectus Supplement, in one or more foreign currencies or currency
units. The Debt Securities may only be issued in registered form or in the form
of one or more global debt securities unless otherwise specified in the
applicable Prospectus Supplement. If so specified in the applicable Prospectus
Supplement, Debt Securities of a series may be issued in whole or in part in the
form of one or more temporary or permanent global debt securities.
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.
------------------------------------
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 , 1996.
No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained in this
Prospectus and the applicable Prospectus Supplement, and if given or made such
information or representations must not be relied upon as having been authorized
by ITT Hartford or any agent, underwriter or dealer. This Prospectus and the
applicable Prospectus Supplement do not constitute an offer of 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.
------------------------------------
FOR NORTH CAROLINA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA, NOR
HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF
THIS DOCUMENT.
AVAILABLE INFORMATION
ITT Hartford 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. In addition,
such reports, proxy statements and other information concerning ITT Hartford can
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
ITT Hartford 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 securities offered hereby. 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 ITT Hartford and the
securities offered hereby, 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.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by ITT Hartford with the Commission are
incorporated into this Prospectus by reference:
1. ITT Hartford's Annual Report on Form 10-K for the year ended December
31, 1995;
2
2. ITT Hartford's Quarterly Report on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996; and
3. Description of ITT Hartford's Common Stock and its Rights associated
with the Common Stock contained in its Registration Statement on Form
8-A, dated September 18, 1995 (as amended by the Form 8-A/A filed on
November 15, 1995).
Each document or report filed by ITT Hartford 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 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.
ITT Hartford 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: ITT Hartford
Group, Inc., Hartford Plaza, Hartford, Connecticut 06115, Attention: Secretary
(telephone: 860-547-5000).
ITT HARTFORD GROUP
ITT Hartford Group, Inc. ("ITT Hartford" and, together with its
subsidiaries, "ITT Hartford Group") is a holding company that owns, directly or
indirectly, a number of insurance companies, including Hartford Fire Insurance
Company ("Hartford Fire"). ITT Hartford Group, a diversified international
organization founded in 1810, is the seventh largest property and casualty
insurer and the twelfth largest life insurer in the United States, with total
assets of $100.2 billion and equity of $4.4 billion at June 30, 1996.
The North American property and casualty operations, with premiums written
of $5.7 billion as of December 31, 1995, provide a wide range of personal,
commercial, specialty and reinsurance coverages. In personal lines, ITT Hartford
Group ranks among the 10 largest carriers and is the endorsed provider of
automobile and homeowners coverages to members of the American Association of
Retired Persons ("AARP"). Commercial insurance, the property and casualty
company's largest line with $2.8 billion in written premiums as of December 31,
1995, offers an array of products to address customer needs, including
commercial multi-peril, general liability and workers' compensation. Specialty
lines provides the expertise necessary to meet the needs of customers with
sophisticated insurance, service or risk financing requirements. ITT Hartford
Group is also a major reinsurer, with subsidiaries and operations located in
Hong Kong, Spain, the United States, the United Kingdom and Canada.
ITT Hartford Group also provides property and casualty and life products in
the European insurance market. The largest operations are London and Edinburgh
in the United Kingdom, Zwolsche Algemeene in The Netherlands and ITT Ercos in
Spain.
ITT Hartford Group's life insurance operations, with assets exceeding $68.0
billion at June 30, 1996, provide individual and group life and disability
insurance, asset accumulation products and financial services for individuals,
corporations and government entities. ITT Hartford Group ranks among the top
providers of retirement planning products and services for corporations and
government entities, and, with $7.0 billion in new fixed and variable annuity
deposits in 1995, it continues to rank among industry leaders in the sale of
these products.
3
As a holding company with no significant business operations of its own,
ITT Hartford relies on dividends from its insurance company subsidiaries, which
are primarily domiciled in Connecticut, as the principal source of cash to meet
its obligations, including the payment of principal of (and premium, if any) and
any interest on debt obligations of ITT Hartford (including the Debt
Securities), and to pay dividends to holders of its capital stock (including the
Preferred Stock). The payment of dividends by Connecticut-domiciled insurers is
limited under the insurance holding company laws of Connecticut which require
notice to and approval by the state 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 income for the twelve-month period ending on the thirty-first day of
December last preceding, in each case determined under statutory insurance
accounting policies. The insurance holding company laws of the other
jurisdictions in which ITT Hartford's insurance subsidiaries are incorporated
generally contain similar (although in certain instances somewhat more
restrictive) limitations on the payment of dividends.
ITT Hartford is a Delaware corporation. ITT Hartford's principal executive
offices are located at Hartford Plaza, Hartford, Connecticut 06115, and its
telephone number is (860) 547-5000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, ITT
Hartford intends to use the net proceeds from the sale of the Offered 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. A more detailed description
of the use of proceeds of any specific offering of Offered Securities shall be
set forth in the Prospectus Supplement pertaining to such offering.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth ITT Hartford's ratios of earnings to fixed
charges for the years and periods indicated:
Six Months
Ended June 30, Year Ended December 31,
--------------- ---------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
Ratio of Consolidated Earnings to Fixed
Charges............................... 4.3 5.3 5.8 7.4 6.8 (3.1) 5.0
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consists of income from operations before Federal income taxes and
fixed charges. "Fixed charges" consists of interest expense, capitalized
interest, amortization of debt expense, an imputed interest component for rental
expense and dividend requirements on preferred stock of Hartford Fire.
4
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 October 20, 1995, as supplemented
from time to time (as so supplemented, the "Senior Indenture"), between ITT
Hartford and The Chase Manhattan Bank (National Association), 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"), between ITT Hartford
and a trustee to be named in the Prospectus Supplement (the "Subordinated
Indenture Trustee" and, together with the Senior Indenture Trustee, the
"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 of 1939, as amended (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 ITT Hartford. The
Senior Debt Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated obligations of ITT Hartford. 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 Debt (as
defined below) of ITT Hartford. See "--Subordination under the Subordinated
Indenture". As a non-operating holding company, most of the operating assets of
ITT Hartford and its consolidated subsidiaries are owned by such subsidiaries,
and ITT Hartford relies primarily on dividends from such subsidiaries to meet
its obligations for payment of principal 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 ITT
Hartford's subsidiaries, and holders of Debt Securities should look only to the
assets of ITT Hartford for payments on the Debt Securities. The payment of
dividends by ITT Hartford's insurance company subsidiaries, including Hartford
Fire, is limited under the insurance holding company laws in which such
subsidiaries are domiciled. See "ITT Hartford Group". 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 other secured or unsecured debt of ITT Hartford,
whether under either of the Indentures, any other indenture that ITT Hartford
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 ITT Hartford's Board of Directors or a
committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Debt Securities: (1) the title of the Debt
Securities; (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 ITT
Hartford 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 "Payment and
Paying Agents", the principal of
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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 ITT Hartford 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 ITT Hartford; (7) the obligation or the right, if any, of ITT
Hartford 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 ITT Hartford 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 of 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 registrable 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, 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 terms and conditions of any obligation
or right of ITT Hartford to convert or exchange the Subordinated Debt Securities
into other Offered Securities or at the option of a Holder thereof; (18) 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 or not; and (19) any other terms of the Debt
Securities not inconsistent with the provisions of the Indentures. (Section
301.) Debt Securities may also be issued under the Indentures upon the exercise
of the Warrants. See "--Description of Warrants".
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 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.
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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. Debt Securities of
any series will be exchangeable for other Debt Securities of the same issue and
series, of any authorized denominations, of a like aggregate principal amount,
of the same Original Issue Date and Stated Maturity and bearing the same
interest rate. (Section 305.)
Debt Securities may be presented for exchange as provided above, and may be
presented for registration of transfer (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 ITT Hartford 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. ITT Hartford will appoint the Trustees as Securities
Registrars under the Indentures. (Section 305.) If the applicable Prospectus
Supplement refers to any transfer agents (in addition to the Securities
Registrar) initially designated by ITT Hartford with respect to any series of
Debt Securities, ITT Hartford 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 ITT Hartford maintains a transfer agent in
each Place of Payment for such series. ITT Hartford may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 1002.)
In the event of any redemption, neither ITT Hartford nor the Trustee shall
be required to (i) issue, register the transfer of or exchange Debt Securities
of any series during a 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 305.)
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 a nominee of such Depositary to such Depositary or another
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. ITT Hartford 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 ITT Hartford if such Debt Securities are offered and sold
directly by ITT Hartford. 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
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(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 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 Indenture 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 ITT Hartford, the 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 interest
of the Global Debt Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
ITT Hartford 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. ITT Hartford 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 ITT Hartford within 90 days, ITT Hartford will issue individual Debt
Securities of such series in exchange for the Global Debt Security representing
such series of Debt Securities. In addition, ITT Hartford 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 Securities representing such series of Debt
Securities. Further, if ITT Hartford 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
ITT Hartford, the Trustee and the Depositary for such Global Debt Security,
receive individual Debt Securities of such series in exchange for such
beneficial interests, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities. 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
ITT Hartford, of $1,000 and integral multiples thereof.
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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 Trustee for such Debt Securities in the City of New
York or at the office of such Paying Agent or Paying Agents as ITT Hartford may
designate from time to time in an applicable Prospectus Supplement, except that
at the option of ITT Hartford payment of any interest may be made (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Securities Register or (ii) by transfer to an account maintained
by the Person entitled thereto as specified in the Securities Register, provided
that proper transfer instructions have been received by the Regular Record Date.
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. ITT Hartford may at
any time designate additional Paying Agents or rescind the designation of any
Paying Agent; however ITT Hartford will at all times be required to maintain a
Paying Agent in each Place of Payment for each series of Debt Securities.
(Sections 301, 307 and 1002.)
Any moneys deposited with the Trustee or any Paying Agent, or then held by
ITT Hartford in trust, for the payment of the principal of (and premium, if any)
or interest on any Debt Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall, at the request of ITT Hartford, be repaid to ITT Hartford and the Holder
of such Debt Security shall thereafter look, as a general unsecured creditor,
only to ITT Hartford for payment thereof. (Section 1003.)
Redemption
Unless otherwise indicated in an applicable Prospectus Supplement, Debt
Securities will not be subject to any sinking fund and will not be redeemable
prior to their Stated Maturity except as described below.
ITT Hartford may, at its option, redeem the Debt Securities of any series
on any Interest Payment Date with respect thereto in whole at any time or in
part from time to time. Debt Securities in denominations larger than $1,000 may
be redeemed in part but only in integral multiples of $1,000. Except as
otherwise specified in the applicable Prospectus Supplement, the redemption
price for any Debt Security so redeemed shall equal any accrued and unpaid
interest thereon to the redemption date, plus the greater of (a) the principal
amount thereof and (b) an amount equal to (i) in respect of Debt Securities of
any series bearing interest at a fixed rate, the Discounted Remaining Fixed
Amount Payments or (ii) in respect of Debt Securities of any series bearing
interest determined by reference to a floating rate, the Discounted Swap
Equivalent Payments (calculated as described below to determine any redemption
premium based upon the value of interest payable on an equivalent fixed rate
debt security). (Section 1107.) For purposes of this redemption provision, the
following terms have the meanings set forth below:
"Discounted Remaining Fixed Amount Payments" means, in respect of a Debt
Security of any series bearing interest at a fixed rate, an amount equal to the
sum of the Current Values of the amounts of interest and principal that would
have been payable by ITT Hartford pursuant to the terms of such Debt Security on
each Interest Payment Date after the redemption date and at Stated Maturity of
the final payment of principal thereof (taking into account any required sinking
fund payments but otherwise assuming that ITT Hartford had not redeemed such
Debt Security prior to such Stated Maturity).
"Current Value" means, in respect of any amount, the present value of that
amount on the redemption date after discounting that amount on a semiannual
basis from the originally scheduled date for payment on the basis of the
Treasury Rate.
"Treasury Rate" means a per annum rate (expressed as a decimal and, in the
case of United States Treasury bills, converted to a per annum yield) determined
on the redemption date to be the per annum rate equal to the semiannual bond
equivalent yield to maturity for United States Treasury securities maturing at
the
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Stated Maturity of the final payment of principal of any series of Debt
Securities redeemed pursuant to the provisions described above, as determined by
reference to the weekly average yield to maturity for United States Treasury
securities maturing on such Stated Maturity if reported in the most recent
Statistical Release H.15(519) of the Board of Governors of the Federal Reserve,
or, if no such securities mature at such Stated Maturity, by interpolation
between the most recent weekly average yields to maturity for two series of
United States Treasury securities, (i) one maturing as close as possible to, but
earlier than, such Stated Maturity and (ii) the other maturing as close as
possible to, but later than, such Stated Maturity, in each case as published in
the most recent Statistical Release H.15(519) of the Board of Governors of the
Federal Reserve.
"Discounted Swap Equivalent Payments" means, in respect of a Debt Security
of any series bearing interest determined by reference to a floating rate, an
amount equal to the sum of (i) the Current Value of the amount of principal that
would have been payable by ITT Hartford pursuant to the terms of such Debt
Security at Stated Maturity of the final payment of the principal thereof
(taking into effect any required sinking fund payments but otherwise assuming
that ITT Hartford had not redeemed such Debt Security prior to such Stated
Maturity and (ii) the sum of the Current Values of the fixed rate payments that
leading interest rate swap dealers would require to be paid by an assumed fixed
rate payer having the same credit standing as ITT Hartford against floating rate
payments to be made by such leading dealers equal to the interest payments on
the Debt Security being redeemed (taking into effect any required sinking fund
payment but otherwise assuming ITT Hartford had not redeemed such Debt Security
prior to such Stated Maturity) under a standard interest rate swap agreement
having a notional principal amount equal to the principal amount of such Debt
Security, a termination date set at the Stated Maturity of such Debt Security
and payment dates for both fixed and floating rate payers set at each Interest
Payment Date of such Debt Security. The amount of such fixed rate payments will
be based on quotations received by the Trustee (or an agent appointed for such
purpose) from four leading interest rate swap dealers or, if quotations from
four leading interest rate swap dealers are not obtainable, three such dealers.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Debt Securities to be
redeemed at his registered address. Unless ITT Hartford defaults in payment of
the redemption price, on and after the redemption date interest ceases to accrue
on such Debt Securities or portions thereof called for redemption.
Consolidation, Merger and Sale of Assets
The Senior and Subordinated Indentures provide that ITT Hartford 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, and
no Person shall consolidate with or merge into ITT Hartford or convey, transfer
or lease its properties and assets substantially as an entirety to ITT Hartford,
unless (i) in case ITT Hartford 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 ITT Hartford'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 Indenture
are met. (Sections 801 and 802.)
Limitations upon Liens
The Senior and Subordinated Indentures provide that ITT Hartford 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 ITT Hartford 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 Debt Securities of any
series Outstanding which are entitled to the benefits of such provision of the
Indenture
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(together with, if ITT Hartford shall so determine, any other indebtedness of or
guaranteed by ITT Hartford 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 ITT Hartford 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 ITT Hartford 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 ITT Hartford or a
Restricted Subsidiary; (v) Liens on property of ITT Hartford 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), in whole or
in part, of any Lien referred to in the foregoing clauses (i) to (v), inclusive.
Notwithstanding the above, ITT Hartford and one or more Restricted Subsidiaries
may, without securing the Debt Securities, issue, assume or guarantee secured
indebtedness which would otherwise be subject to the 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 1008.)
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 current 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 ITT Hartford and its consolidated
Subsidiaries ("Subsidiary" being defined as any corporation where more than 50%
of its voting stock is owned by ITT Hartford or by another Subsidiary) and
prepared in accordance with generally accepted accounting principles. (Section
101.)
"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 ITT Hartford 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 ITT
Hartford and its consolidated Subsidiaries taken as a whole. (Section 101.)
"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 one or more of
the property, casualty and life insurance businesses; 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 ITT Hartford 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 ITT
Hartford and its consolidated Subsidiaries, respectively, and computed in
accordance with generally accepted accounting principles, or (ii)
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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 ITT
Hartford and its Subsidiaries taken as a whole. (Section 101.) As of the date
of this Prospectus, the subsidiaries of ITT Hartford which meet the definition
of Restricted Subsidiaries are the following: Hartford Fire, Hartford Accident &
Indemnity Company, Hartford Life Insurance Company, Hartford Life and Accident
Insurance Company, ITT Hartford Life and Annuity Insurance Company, ITT Hartford
International, Inc. (U.S.), London & Edinburgh Insurance Group, Limited
(England), Nutmeg Insurance Company and Zwolsche Algemeene N.V. (Netherlands).
Modification and Waiver
Modification and amendments of each Indenture may be made by ITT Hartford
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of each series affected
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 Indenture relating to amendments of the Indenture
requiring the consent of the affected Holders for waiver of compliance with
certain provisions of the Indenture or waiver of past defaults. (Section 902.)
The Holders of a majority in principal amount of the Outstanding Debt
Securities of each series may on behalf of the Holders of all Debt Securities of
that series waive, insofar as the series is concerned, compliance by ITT
Hartford with certain restrictive covenants of the Indenture. (Section 1009.)
The Holders of not less than a majority in principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of that series waive
any past default under the Indenture with respect to that series of Debt
Securities, except a default in the payment of the principal of, or any interest
on, any Debt Security of that series or in respect of a provision which under
the Indenture cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of that series affected. (Section 513.)
Events of Default
Each Indenture provides that the following shall constitute Events of
Default with respect to any series of Debt Securities: (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 in the Indenture for 60 days after written notice thereof;
(iv) certain events in bankruptcy, insolvency or reorganization; (v)
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 501.) ITT
Hartford is required to furnish the Trustee annually with a statement as to the
fulfillment by ITT Hartford of its obligations under the Indenture. (Section
1006.) Each Indenture provides that the Trustee may withhold notice to the
Holders of the Debt Securities of any default (except in respect of the payment
of principal or interest on the Debt Securities) if it considers it in the
interest of the Holders to do so. (Section 602.)
If an Event of Default with respect to Outstanding Debt Securities of any
series occurs and is continuing, then and in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Debt Securities of that series to be due and payable immediately, by a
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notice in writing to ITT Hartford (and to the Trustee if given by Holders), and
upon any such declaration such principal shall become immediately due and
payable. However, at any time after a declaration or acceleration with respect
to Debt Securities of any series has been made, but before a judgment or decree
for payment of the money due has been obtained, the Holders of a majority in
principal amount of Outstanding Debt Securities of that series may, subject to
certain conditions, rescind and annul such declaration. (Section 502.)
Subject to the provisions of the Indentures relating to the duties of the
Trustee, in case an Event of Default shall occur and be continuing the Trustee
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 Trustee reasonable security or indemnity.
(Section 603.) Subject to such provisions for the security or indemnification of
the Trustee, the Holders of a majority in principal amount of the Outstanding
Debt Securities of any series shall have the right to direct the time, method
and place of conducting any proceeding for and remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee with respect to the
Debt Securities of that series. (Section 512.)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of that series and unless the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and, within 60 days following the receipt of such notice, the Trustee
shall not have received from the Holders of a majority in principal amount of
the Outstanding Debt Securities of that series a direction inconsistent with
such request, and the Trustee shall have failed to institute such proceeding.
(Section 507.) However, the Holder of any Debt Security will have an absolute
right to receive payment of the principal of (and premium, if any) and interest
on such Debt Security on or after the due dates expressed in such Debt Security
and to institute a suit for the enforcement of any such payment. (Section 508.)
Satisfaction and Discharge of the Indentures
Each Indenture provides that when, among other things, all Debt Securities
not previously delivered to the Trustee for cancellation (i) have become due and
payable or (ii) will become due and payable at their Stated Maturity within one
year and ITT Hartford deposits or causes to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency or currencies in
which the Debt Securities are payable sufficient to pay and discharge the entire
indebtedness on the Debt Securities not previously delivered to the Trustee for
cancellation, for the principal (and premium, if any) and interest to the date
of the deposit or to the Stated Maturity, as the case may be, then the Indenture
will cease to be of further effect (except as to ITT Hartford's obligations to
pay all other sums due pursuant to the Indenture and to provide the Officers'
Certificates and Opinions of Counsel described therein), and ITT Hartford will
be deemed to have satisfied and discharged the Indenture. (Section 401.)
Defeasance
Except as may otherwise be provided in the applicable Prospectus Supplement
with respect to the Debt Securities of any series, each Indenture provides that
ITT Hartford 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) ITT Hartford has irrevocably deposited or caused
to be deposited with the 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
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) ITT Hartford has paid or caused to be paid all other sums
payable with
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respect to the Debt Securities of such series, (iii) ITT Hartford has delivered
to the Trustee an officer's certificate and an opinion of counsel to the effect
that (a) ITT Hartford 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)
ITT Hartford has delivered to the Trustee an opinion of counsel that neither ITT
Hartford nor the trust held by such Trustee will immediately after the deposit
just described be an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940
and (v) ITT Hartford has delivered to the Trustee such other Officer's
Certificates and Opinions of Counsel as may be required by the Indenture, each
stating that all conditions precedent therein provided for relating to the
satisfaction and discharge of the entire indebtedness on all Debt Securities of
such series have been complied with. (Section 403.)
With respect to the Subordinated Indenture, in order to be discharged as
described above, no default in the payment of principal of (or premium, if any)
or interest on any Senior Debt shall have occurred and be continuing or no other
Event of Default with respect to the Senior Debt shall have occurred and be
continuing and shall have resulted in such Senior Debt becoming or being
declared due and payable prior to the date it would have become due and payable.
Conversion or Exchange
Unless otherwise indicated in an applicable Prospectus Supplement, the
Subordinated Debt Securities of any series may be convertible or exchangeable
into Common Stock or other Offered Securities. The specific terms on which
Subordinated Debt Securities of any series may be so converted or exchanged 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 ITT Hartford, in which case the number of shares of
Common Stock or other Offered Securities to be received by the Holders of
Subordinated Debt Securities would be calculated as of a time and in the manner
stated in the applicable Prospectus Supplement.
Subordination under the Subordinated Indenture
In the Subordinated Indenture, ITT Hartford has covenanted and agreed that
any Subordinated Debt Securities issued thereunder are subordinate and junior in
right of payment to all Senior Debt to the extent provided in the Subordinated
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of ITT Hartford, the holders of Senior Debt will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Subordinated Debt
Securities will be entitled to receive or retain any payment in respect of the
principal of (and premium, if any) or interest, if any, on the Subordinated Debt
Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the holders of all Senior Debt outstanding at the time of 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
Debt, or an event of default with respect to any Senior Debt resulting in the
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acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to ITT Hartford whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Subordinated Indenture or
thereafter incurred, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Subordinated Debt
Securities or to other Debt which is pari passu with, or subordinated to, the
Subordinated Debt Securities; provided, however, that Senior Debt shall not be
deemed to include (a) any Debt of ITT Hartford which when incurred and without
respect to any election under Section 1111(b) of the Bankruptcy Code, was
without recourse to ITT Hartford, (b) any Debt of ITT Hartford to any of its
subsidiaries, (c) Debt to any employee of ITT Hartford, (d) any liability for
taxes and (e) indebtedness or monetary obligations to trade creditors or assumed
by ITT Hartford or any of its subsidiaries in the ordinary course of business in
connection with the obtaining of materials or services.
ITT Hartford is a non-operating holding company, and most of the assets of
ITT Hartford are owned by its subsidiaries. Accordingly, the Debt Securities
will be effectively subordinated to all existing and future liabilities of ITT
Hartford's subsidiaries, including liabilities under contracts of insurance and
annuities written by ITT Hartford's insurance subsidiaries. Holders of Debt
Securities should look only to the assets of ITT Hartford for payments of
interest and principal and premium if any.
The Subordinated Indenture places no limitation on the amount of additional
Senior Debt that may be incurred by ITT Hartford. ITT Hartford expects from time
to time to incur additional indebtedness constituting Senior Debt.
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated Debt
Securities, may be changed prior to 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. (Section 112.)
Concerning the Trustees
Each of the Trustees acts as depository for funds of, makes loans to, and
performs other services for, ITT Hartford and its subsidiaries in the normal
course of business.
15
DESCRIPTION OF CAPITAL STOCK OF ITT HARTFORD
Authorized and Outstanding Capital Stock
Pursuant to the Restated Certificate of Incorporation of ITT Hartford, the
authorized capital stock of ITT Hartford is 250,000,000 shares, consisting of:
(a) 50,000,000 shares of Preferred Stock, par value $.01 per share
(the "Preferred Stock"), of which 300,000 shares were designated as Series
A Participating Cumulative Preferred Stock; and
(b) 200,000,000 shares of Common Stock, par value $.01 per share (the
"Common Stock").
As of June 30, 1996, ITT Hartford had outstanding 117,278,662 shares of
Common Stock. Holders of Common Stock have received a dividend of ITT Hartford
Rights (as defined under "--ITT Hartford Rights Agreement"), entitling the
holders, when exercisable, to purchase shares of Series A Participating
Cumulative Preferred Stock in certain circumstances pursuant to the Rights
Agreement (as defined under "--ITT Hartford Rights Agreement"). See "--ITT
Hartford Rights Agreement". No shares of Preferred Stock are currently
outstanding.
No holders of any class of ITT Hartford's capital stock are entitled to
preemptive rights.
In general, the classes of authorized capital stock are afforded
preferences with respect to dividends and liquidation rights in the order listed
above. The Board of Directors of ITT Hartford is empowered, without approval of
the stockholders, to cause the Preferred Stock to be issued in one or more
series, with the numbers of shares of each series and the rights, preferences
and limitations of each series to be determined by it. The specific matters that
may be determined by the Board of Directors include the dividend rights, voting
rights, redemption rights, liquidation preferences, if any, conversion and
exchange rights, retirement and sinking fund provisions and other rights,
qualifications, limitations and restrictions of any wholly unissued series of
Preferred Stock (or of the entire class of Preferred Stock if none of such
shares have been issued), the number of shares constituting such series and the
terms and conditions of the issue thereof. The descriptions set forth below do
not purport to be complete and are qualified in their entirety by reference to
the (i) Restated Certificate of Incorporation of ITT Hartford, as such is
amended at the time of the issuance of the Preferred Stock (the "Restated
Certificate of Incorporation") and (ii) the By-laws of ITT Hartford as in effect
at such time (the "By-laws").
Common Stock
Subject to any preferential rights of any Preferred Stock created by the
Board of Directors, each outstanding share of Common Stock is entitled to such
dividends as the Board of Directors may declare from time to time out of funds
legally available therefor. The holders of Common Stock possess exclusive voting
rights in ITT Hartford, except to the extent the Board of Directors specifies
voting power with respect to any Preferred Stock issued. Except as hereinafter
described, holders of Common Stock are entitled to one vote for each share of
Common Stock, but do not have any right to cumulate votes in the election of
directors. In the event of liquidation, dissolution or winding-up of ITT
Hartford, holders of Common Stock will be entitled to receive on a pro-rata
basis any assets remaining after provision for payment of creditors and after
payment of any liquidation preferences to holders of Preferred Stock. The Common
Stock is listed on the New York Stock Exchange under the symbol "HIG".
The Common Stock Transfer Agent and Registrar is The Bank of New York.
Preferred Stock
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,
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voting rights, terms of redemption, retirement and sinking fund provisions and
liquidation preferences, if any, of the Preferred Stock of each series will be
fixed or designated pursuant to a certificate of designation adopted by the
Board of Directors or a duly authorized committee thereof. The terms, if any, on
which shares of any series of Preferred Stock are convertible or exchangeable
into Common Stock will also be set forth in the Prospectus Supplement relating
thereto. Such terms may include provisions for conversion or exchange, either
mandatory, at the option of the holder, or at the option of ITT Hartford, in
which case the number of shares of Common Stock to be received by the holders of
Preferred Stock would be calculated as of a time and in the manner stated in the
applicable Prospectus Supplement. The description of the terms of a particular
series of Preferred Stock that will be set forth in the applicable Prospectus
Supplement does not purport to be complete and is qualified in its entirety by
reference to the certificate of designation relating to such series.
On October 10, 1995, the Board of Directors of ITT Hartford declared a
dividend of ITT Hartford Rights to holders of record of Common Stock outstanding
as of the close of business on December 19, 1995, when exercisable, to purchase
shares of Series A Participating Cumulative Preferred Stock in certain
circumstances pursuant to the Rights Agreement. See "--ITT Hartford Rights
Agreement".
Depositary Shares
General
ITT Hartford may, at its option, elect to offer receipts for 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")
between ITT Hartford and a depositary to be named by ITT Hartford 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 are filed as exhibits to the Registration
Statement of which this Prospectus is a part, and the following summary is
qualified in its entirety by reference to such exhibits.
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 sell such property and
distribute the net proceeds from such sale to such holders.
17
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 the Preferred Stock.
Whenever ITT Hartford 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.
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 ITT Hartford 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.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between ITT Hartford and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding. The Deposit Agreement will
only terminate if (i) all outstanding Depositary Shares have been redeemed or
(ii) there has been a final distribution in respect of the Preferred Stock,
including in connection with any liquidation, dissolution or winding up of ITT
Hartford and such distribution has been distributed to the holders of Depositary
Receipts.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to ITT Hartford notice
of its election to do so, and ITT Hartford 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.
Charges of Depositary
ITT Hartford will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. ITT Hartford
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and issuance of Depositary Receipts, all withdrawals of shares
of Preferred Stock by owners of the Depositary Shares and any redemption of the
Preferred Stock. Holders of Depositary Receipts will pay other transfer and
other taxes and governmental charges and such other charges as they are
expressly provided in the Deposit Agreement to be for their accounts.
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Miscellaneous
The Depositary will forward all reports and communications from ITT
Hartford which are delivered to the Depositary and which ITT Hartford is
required or otherwise determines to furnish to the holders of the Preferred
Stock.
Neither the Depositary nor ITT Hartford will be liable under the Deposit
Agreement to holders of Depositary Receipts other than for its gross negligence,
willful misconduct or bad faith. Neither ITT Hartford nor the Depositary will be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished.
ITT Hartford and the Depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting Preferred Stock
for deposit, holders of Depositary Receipts or other persons believed to be
competent and on documents believed to be genuine.
Provisions of Restated Certificate of Incorporation and By-laws
Certain provisions of the Restated Certificate of Incorporation and By-laws
of ITT Hartford may delay or make more difficult unsolicited acquisitions or
changes of control of ITT Hartford. It is believed that such provisions will
enable ITT Hartford 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 ITT Hartford and
its shareholders. Such provisions could have the effect of discouraging third
parties from making proposals involving an unsolicited acquisition or change of
control of ITT Hartford, although such proposals, if made, might be considered
desirable by a majority of ITT Hartford's shareholders. Such provisions may also
have the effect of making it more difficult for third parties to cause the
replacement of the current management of ITT Hartford without the concurrence of
the Board of Directors. These provisions include (i) the availability of capital
stock for issuance from time to time at the discretion of the Board of Directors
(see "--Authorized and Outstanding Capital Stock" and "--Preferred Stock"), (ii)
prohibitions against shareholders calling a special meeting of shareholders or
acting by written consent in lieu of a meeting, (iii) requirements for advance
notice for raising business or making nominations at shareholders' meetings and
(iv) the ability of the Board of Directors to increase the size of the board and
to appoint directors to fill newly created directorships.
No Shareholder Action by Written Consent; Special Meetings
The Restated Certificate of Incorporation and By-laws of ITT Hartford
provide that shareholder action can be taken only at an annual or special
meeting and cannot be taken by written consent in lieu of a meeting. The
Restated Certificate of Incorporation and By-laws also provide that special
meetings of the shareholders can be called only by the Chairman of the Board of
Directors or by a vote of the majority of the entire Board of Directors.
Furthermore, the By-laws of ITT Hartford provide that only such business as is
specified in the notice of any such special meeting of shareholders may come
before such meeting.
Advance Notice for Raising Business or Making Nominations at Meetings
The By-laws of ITT Hartford establish an advance notice procedure for
shareholder proposals to be brought before an annual meeting of shareholders and
for nominations by shareholders of candidates for election as directors at an
annual or special meeting at which directors are to be elected. Only such
business may be conducted at an annual meeting of shareholders as has been
brought before the meeting by, or at the direction of, the Board of Directors,
or by a shareholder who has given to the Secretary of ITT Hartford timely
written notice, in proper form, of the shareholder's intention to bring that
business before the meeting. The chairman of such meeting will have the
authority to make such determinations. Only persons who are nominated by, or at
the direction of, the Board of Directors, or who are nominated by a shareholder
who has given timely written notice, in proper form, to the Secretary prior to a
meeting at which directors are to be elected will be eligible for election as
directors of ITT Hartford.
19
To be timely, notice of business to be brought before an annual meeting or
nominations of candidates for election as directors at an annual meeting is
required to be received by the Secretary of ITT Hartford not later than 90 days
in advance of the anniversary date for the immediately preceding annual meeting
(or not more than 10 days after the first public disclosure of the originally
scheduled date of such annual meeting, whichever is earlier). Similarly, notice
of nominations to be brought before a special meeting of shareholders for the
election of directors is required to be delivered to the Secretary no later than
the close of business on the seventh day following the day on which notice of
the date of the special meeting of shareholders is given.
The notice of any nomination for election as a director is required to set
forth the name and address of the shareholder who intends to make the nomination
and of the person or persons to be nominated; a representation that the
shareholder is a holder of record of stock of ITT Hartford entitled to vote at
such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; a description of all
arrangements or understandings between the shareholder and each nominee and any
other person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the shareholder, such other
information regarding each nominee proposed by such shareholder as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had each nominee been nominated,
or intended to be nominated, by the Board of Directors; and the consent of each
nominee to serve as a director if so elected.
Number of Directors; Filling of Vacancies
The Restated Certificate of Incorporation and By-laws of ITT Hartford
provide that newly created directorships resulting from any increase in the
authorized number of directors (or any vacancy) may be filled by a vote of a
majority of directors then in office, subject to the requirement provided in the
By-laws that the majority of directors holding office immediately after such
election must be "independent directors" (as defined). Accordingly, the Board of
Directors of ITT Hartford may be able to prevent any shareholder from obtaining
majority representation on the Board of Directors by increasing the size of the
board and filling the newly created directorships with its own nominees.
ITT Hartford Rights Agreement
ITT Hartford Rights
On October 10, 1995, the Board of Directors of ITT Hartford declared a
dividend of one right (the "ITT Hartford Rights") for each share of Common Stock
outstanding as of the close of business on December 19, 1995 (the "Issuance
Date"), and with respect to Common Stock issued thereafter until the
Distribution Date (as defined below), and, in certain circumstances, with
respect to Common Stock issued after the Distribution Date. Each ITT Hartford
Right, when it becomes exercisable as described below, will entitle the
registered holder to purchase from ITT Hartford one one-thousandth (1/1000th) of
a share of Series A Participating Cumulative Preferred Stock, par value $.01 per
Share, of ITT Hartford (the "Preferred Shares") at a price of $2.20 with respect
to each Right, subject to adjustment in certain circumstances (the "Purchase
Price"). The description and terms of the ITT Hartford Rights are set forth in
the Rights Agreement, dated as of November 1, 1995 (the "Rights Agreement"),
between ITT Hartford and The Bank of New York, as Rights Agent. The ITT Hartford
Rights will not be exercisable until the Distribution Date and will expire on
the tenth annual anniversary of the Rights Agreement (the "Expiration Date"),
unless earlier redeemed by ITT Hartford as described below. Until an ITT
Hartford Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of ITT Hartford including, without limitation, the right to vote
or to receive dividends with respect to the ITT Hartford Rights or the Preferred
Shares relating thereto. A copy of the Rights Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
description set forth below does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement.
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Distribution Date
Under the Rights Agreement, the Distribution Date is the earlier of (i)
such time as ITT Hartford learns that a person or group (including any affiliate
or associate of such person or group) has acquired, or has obtained the right to
acquire, beneficial ownership of more than 15% of the outstanding shares of
Common Stock (such person or group being an "Acquiring Person"), unless
provisions preventing accidental triggering of the distribution of the ITT
Hartford Rights apply, and (ii) the close of business on such date, if any, as
may be designated by the Board of Directors of ITT Hartford following the
commencement of, or first public disclosure of an intent to commence, a tender
or exchange offer for more than 15% or more of the outstanding shares of Common
Stock. A person or group (or any affiliate or associate of such person or
group), however, that inadvertently acquires more than 15% of the outstanding
shares of Common Stock will not be deemed to be an Acquiring Person provided
that such person or group reduces the percentage of beneficial ownership to less
than 15% of the outstanding shares of Common Stock by the close of business on
the fifth business day after notice from the Company that such person's or
group's ownership interests exceeds 15% of his outstanding shares of Common
Stock. Such person or group will be deemed to be an Acquiring Person at the end
of such five business day period absent such reduction.
Evidence of ITT Hartford Rights
Until the Distribution Date, the ITT Hartford Rights will be evidenced by
the certificates for Common Stock registered in the names of the holders thereof
(which certificates for Common Stock shall also be deemed to be ITT Hartford
Right Certificates, as defined below) rather than separate ITT Hartford Right
Certificates. Therefore, on and after the Issuance Date and until the
Distribution Date, the ITT Hartford Rights will be transferred with and only
with the Common Stock and each transfer of Common Stock also will transfer the
associated ITT Hartford Rights. As soon as practicable following the
Distribution Date, separate certificates evidencing the ITT Hartford Rights
("ITT Hartford Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date (and to each
initial record holder of certain Common Stock originally issued after the
Distribution Date), and such separate ITT Hartford Right Certificates alone will
thereafter evidence the ITT Hartford Rights.
Adjustments
The number of Preferred Shares or other securities issuable upon exercise
of the ITT Hartford Rights, the Purchase Price, the Redemption Price (as defined
below) and the number of ITT Hartford Rights associated with each share of
Common Stock are all subject to adjustment from time to time in the event of any
change in the Common Stock or the Preferred Shares, whether by reason of stock
dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization or any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Stock or Preferred Shares.
ITT Hartford may, but is not required to, issue fractions of ITT Hartford
Rights or distribute ITT Hartford Right Certificates which evidence fractional
ITT Hartford Rights. In lieu of such fractional ITT Hartford Rights, ITT
Hartford may make a cash payment based on the market price of such rights. In
addition, ITT Hartford may, but is not required to, issue fractions of shares
upon the exercise of the ITT Hartford Rights or distribute certificates which
evidence fractional Preferred Shares. In lieu of fractional Preferred Shares,
ITT Hartford may utilize a depository arrangement as provided by the terms of
the Preferred Shares and, in the case of fractions other than one one-thousandth
(1/1000th) of a Preferred Share or integral multiples thereof, may make a cash
payment based on the market price of such shares.
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Triggering Event and Effect of Triggering Event
At such time as there is an Acquiring Person, the ITT Hartford Rights will
entitle each holder (other than such Acquiring Person) of an ITT Hartford Right
to purchase, for the Purchase Price, that number of one one-thousandths
(1/1000ths) of a Preferred Share equivalent to the number of shares of Common
Stock which at the time of such event would have a market value of twice the
Purchase Price.
In the event ITT Hartford is acquired in a merger or other business
combination by an Acquiring Person or an affiliate or associate of an Acquiring
Person that is a publicly traded corporation or 50% or more of ITT Hartford's
assets or assets representing 50% or more of ITT Hartford's revenues or cash
flow are sold, leased, exchanged or otherwise transferred (in one or more
transactions) to an Acquiring Person or an affiliate or associate of an
Acquiring Person that is not a publicly traded corporation, each ITT Hartford
Right will entitle its holder (subject to the next paragraph) to purchase, for
the Purchase Price, that number of common shares of such corporation which at
the time of the transaction would have a market value of twice the Purchase
Price. In the event ITT Hartford is acquired in a merger or other business
combination by an Acquiring Person or an affiliate or associate of an Acquiring
Person that is not a publicly traded entity or 50% or more of ITT Hartford's
assets or assets representing 50% or more of ITT Hartford's revenues or cash
flow are sold, leased, exchanged or otherwise transferred (in one or more
transactions) to an Acquiring Person or an affiliate or associate of an
Acquiring Person that is not a publicly traded entity, each ITT Hartford Right
will entitle its holder (subject to the next paragraph) to purchase, for the
Purchase Price, at such holder's option, (i) that number of shares of the
surviving corporation in the transaction with such entity (which surviving
corporation could be ITT Hartford) which at the time of the transaction would
have a book value of twice the Purchase Price, (ii) that number of shares of
such entity which at the time of the transaction would have a book value of
twice the Purchase Price or (iii) if such entity has an affiliate which has
publicly traded common shares, that number of common shares of such affiliate
which at the time of the transaction would have market value of twice the
Purchase Price.
Any ITT Hartford Rights that are at any time beneficially owned by an
Acquiring Person (or any affiliate or associate of an Acquiring Person) will be
null and void and nontransferable and any holder of any such ITT Hartford Right
(including any purported transferee or subsequent holder) will be unable to
exercise or transfer any such ITT Hartford Right.
Redemption
At any time prior to the earlier of (i) such time as a person or group
becomes an Acquiring Person and (ii) the Expiration Date, the Board of Directors
of ITT Hartford may redeem the ITT Hartford Rights in whole, but not in part, at
a price (in cash or Common Stock or other securities of ITT Hartford deemed by
the Board of Directors to be at least equivalent in value) of $.01 per ITT
Hartford Right (which amount shall be subject to adjustment as provided in the
Rights Agreement) (the "Redemption Price"). Immediately upon the action of the
Board of Directors of ITT Hartford ordering the redemption of the ITT Hartford
Rights, and without any further action and without any notice, the right to
exercise the ITT Hartford Rights will terminate and the only right of the
holders of ITT Hartford Rights will be to receive the Redemption Price. Within
10 business days after the action of the Board of Directors ordering the
redemption of the ITT Hartford Rights, ITT Hartford will give notice of such
redemption to the holders of the then outstanding ITT Hartford Rights by mail.
Each such notice of redemption will state the method by which payment of the
Redemption Price will be made.
In addition, at any time after there is an Acquiring Person, the Board of
Directors of ITT Hartford may elect to exchange each ITT Hartford Right (other
than ITT Hartford Rights that have become null and void and nontransferable as
described above) for consideration per ITT Hartford Right consisting of one-half
of the securities that would be issuable at such time upon exercise of one ITT
Hartford Right pursuant to the terms of the Rights Agreement.
22
Amendment
At any time prior to the Distribution Date, ITT Hartford may, without the
approval of any holder of any ITT Hartford Rights, supplement or amend any
provision of the Rights Agreement (including, without limitation, the date on
which the Distribution Date shall occur, the definition of Acquiring Person, the
time during which the ITT Hartford Rights may be redeemed or the terms of the
Preferred Shares), except that no supplement or amendment shall be made which
reduces the Redemption Price (other than pursuant to certain adjustments
therein) or provides for an earlier Expiration Date. From and after the
Distribution Date and subject to applicable law, ITT Hartford may amend the
Rights Agreement without the approval of any holders of ITT Hartford Right
Certificates (i) to cure any ambiguity or to correct or supplement any provision
contained in the Rights Agreement which may be defective or inconsistent with
any other provision of the Rights Agreement or (ii) to make any other provisions
which ITT Hartford may deem necessary or desirable and which shall not adversely
affect the interests of the holders of ITT Hartford Right Certificates (other
than an Acquiring Person or an affiliate or associate of an Acquiring Person).
Any supplement or amendment adopted during any period after any person or group
has become an Acquiring Person but prior to the Distribution Date shall be null
and void unless such supplement or amendment could have been adopted under the
prior sentence from and after the Distribution Date.
Certain Effects of the ITT Hartford Rights Agreement
The Rights Agreement is designed to protect shareholders of ITT Hartford in
the event of unsolicited offers to acquire ITT Hartford and other coercive
takeover tactics which, in the opinion of the Board of Directors of ITT
Hartford, could impair its ability to represent shareholder interests. The
provisions of the Rights Agreement may render an unsolicited takeover of ITT
Hartford more difficult or less likely to occur or might prevent such a
takeover, even though such takeover may offer ITT Hartford's shareholders the
opportunity to sell their stock at a price above the prevailing market rate and
may be favored by a majority of the shareholders of ITT Hartford.
Restrictions on Ownership Under Insurance Laws
Although the Restated Certificate of Incorporation and By-laws of ITT
Hartford 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 ITT Hartford. The
insurance holding company laws of each of the jurisdictions in which ITT
Hartford'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 ITT Hartford. 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 ITT Hartford's
outstanding Common Stock (5% or more, in the case of the Florida insurance
holding company laws) unless the applicable insurance regulatory authorities
determine otherwise.
Delaware General Corporation Law
The terms of Section 203 of the Delaware General Corporation Law apply to
ITT Hartford since it is a Delaware corporation. Pursuant to Section 203, with
certain exceptions, a Delaware corporation may not engage in any of a broad
range of business combinations, such as mergers, consolidations and sales of
assets, with an "interested stockholder" for a period of three years from the
date that such person became an interested stockholder unless (a) the
transaction that results in the person's becoming an interested stockholder or
the business combination is approved by the board of directors of the
corporation before the person becomes an interested stockholder, (b) upon
consummation of the transaction which results in the shareholder becoming an
interested stockholder, the interested stockholder owns 85% or more of the
voting stock of the corporation outstanding at the time the transaction
commenced, excluding shares owned by persons who are directors and
23
also officers and shares owned by certain employee stock plans or (c) on or
after the date the person becomes an interested stockholder, the business
combination is approved by the corporation's board of directors and by holders
of at least two-thirds of the corporation's outstanding voting stock, excluding
shares owned by the interested stockholder, at a meeting of shareholders. Under
Section 203, an "interested stockholder" is defined as any person, other than
the corporation and any direct or indirect majority-owned subsidiary, that is
(a) the owner of 15% or more of the outstanding voting stock of the corporation
or (b) an affiliate or associate of the corporation and was the owner of 15% or
more of the outstanding voting stock of the corporation at any time within the
three-year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder. Section 203 does
not apply to a corporation that so provides in an amendment to its certificate
of incorporation or by-laws passed by a majority of its outstanding shares at
any time. Such stockholder action does not become effective for 12 months
following its adoption and would not apply to persons who were already
interested stockholders at the time of the amendment. The Restated Certificate
of Incorporation does not exclude ITT Hartford from the restrictions imposed
under Section 203.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period, although the
shareholders may elect to exclude a corporation from the restrictions imposed
thereunder. The provisions of Section 203 may encourage companies interested in
acquiring ITT Hartford to negotiate in advance with ITT Hartford's Board of
Directors, because the shareholder approval requirement would be avoided if a
majority of the directors then in office approve either the business combination
or the transaction which results in the shareholder becoming an interested
shareholder. Such provisions also may have the effect of preventing changes in
the management of ITT Hartford. It is further possible that such provisions
could make it more difficult to accomplish transactions which shareholders may
otherwise deem to be in their best interest.
DESCRIPTION OF WARRANTS
ITT Hartford may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), Preferred Stock, Common Stock or other of its
securities. Warrants may be issued independently or together with any such
securities of ITT Hartford and may be attached to or separate from such
securities of ITT Hartford. The Warrants are to be issued under warrant
agreements (each a "Warrant Agreement") to be entered into between ITT Hartford
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.
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 ITT
Hartford 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 ITT Hartford 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 ITT Hartford 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
24
such Debt Warrants; and (xii) the terms of the securities of ITT Hartford
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
ITT Hartford 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 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 Common Stock with which such Warrants are issued, and the number of such
Warrants issued with each such share of Preferred Stock or Common Stock; (v) if
applicable, the date on and after which such Warrants and the related Preferred
Stock or 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 Common Stock, holders of such
Warrants will not have any rights of holders of the Preferred Stock or Common
Stock purchasable upon such exercise and will not be entitled to dividend
payments, if any, or voting rights of the Preferred Stock or Common Stock
purchasable upon such exercise.
Exercise of Warrants
Each Warrant will entitle the holder thereof to purchase for cash such
principal amount or such number of securities of ITT Hartford 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 ITT
Hartford), 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, ITT Hartford 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
ITT Hartford may issue Stock Purchase Contracts, including contracts
obligating holders to purchase from ITT Hartford, and ITT Hartford to sell to
the holders, a specified number of shares of Common Stock or Preferred Stock at
a future date or dates. The price per share of Preferred Stock or Common Stock
may be fixed at the time the Stock Purchase Contracts are issued or may be
determined by reference to a specific
25
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 or debt obligations
of third parties, including U.S. Treasury securities, securing the holders'
obligations to purchase the Preferred Stock or the Common Stock under the
Purchase Contracts. The Stock Purchase Contracts may require ITT Hartford 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.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the Prospectus
Supplement will not purport to be complete and will be qualified in its entirety
by reference to the Stock Purchase Contracts, and, if applicable, collateral
arrangements and depositary arrangements, relating to such Stock Purchase
Contracts or Stock Purchase Units.
PLAN OF DISTRIBUTION
ITT Hartford may sell any of the Offered 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 ITT
Hartford to purchasers.
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 Common Stock offered hereby may be effected from time to time in
one or more transactions on the New York Stock Exchange 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 ITT Hartford 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 ITT Hartford 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, ITT
Hartford 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.
26
If a dealer is utilized in the sale of the Offered Securities in respect of
which this Prospectus is delivered, ITT Hartford 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 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 ITT
Hartford and the sale thereof may be made by ITT Hartford 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 ITT Hartford. Any remarketing firm will
be identified and the terms of its agreement, if any, with ITT Hartford 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, ITT Hartford may
authorize agents and underwriters to solicit offers by certain institutions to
purchase Offered Securities from ITT Hartford 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 ITT Hartford.
Agents, underwriters, dealers and remarketing firms may be entitled under
relevant agreements with ITT Hartford to indemnification by ITT Hartford 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
Common Stock which is listed on the New York Stock Exchange, will have no
established trading market. ITT Hartford may elect to list any series of Offered
Securities on an exchange, and in the case of the Common Stock, on any
additional exchange, but, unless otherwise specified in the applicable
Prospectus Supplement, ITT Hartford 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, ITT Hartford and its
subsidiaries in the ordinary course of business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of any Offered Securities offered hereby will be passed upon for ITT
Hartford by Michael S. Wilder, General Counsel of ITT Hartford, and for any
underwriters or agents by counsel to be named in the applicable Prospectus
Supplement.
27
EXPERTS
The audited consolidated financial statements and schedules of ITT Hartford
Group, Inc. and subsidiaries 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 accounting and auditing in giving
said report. Reference is made to said report, which includes an explanatory
paragraph with respect to the changes in the methods of accounting for certain
investments in debt and equity securities and discounting certain workers'
compensation liabilities as discussed in the notes to consolidated financial
statements.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 25, 1996
ITT HARTFORD GROUP, INC. HARTFORD CAPITAL II
HARTFORD CAPITAL III
Junior Subordinated Deferrable HARTFORD CAPITAL IV
Interest Debentures
Preferred Securities guaranteed to the extent
the Issuer has funds as set forth herein by
ITT HARTFORD GROUP, INC.
ITT Hartford Group, Inc., a Delaware corporation ("ITT Hartford"), may from
time to time offer in one or more series or issuances its junior subordinated
deferrable interest debentures (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures will be unsecured and subordinate and junior in
right to payment to Senior Debt (as defined in "Description of Junior
Subordinated Debentures -- Subordination") of ITT Hartford. If provided in an
accompanying Prospectus Supplement, ITT Hartford will have the right to defer
payments of interest on any series of Junior Subordinated Debentures by
extending the interest payment period thereon at any time or from time to time
for such number of consecutive interest payment periods (which shall not extend
beyond the maturity of the Junior Subordinated Debentures) with respect to each
deferral period as may be specified in such Prospectus Supplement (each, an
"Extension Period"). See "Description of Junior Subordinated Debentures --
Option to Extend Interest Payments".
Hartford Capital II, Hartford Capital III and Hartford Capital IV, each a
trust formed under the laws of the State of Delaware (each, an "Issuer", and
collectively, the "Issuers"), may severally offer, from time to time, its
respective preferred securities (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of each Issuer. ITT
Hartford will be the owner of the common securities (the "Common Securities",
and together with the Preferred Securities, the "Trust Securities") of each
Issuer. The payment of periodic cash distributions ("Distributions") with
respect to the Preferred Securities of each Issuer and payments on liquidation
or redemption with respect to such Preferred Securities, in each case out of
funds held by such Issuer, are each irrevocably guaranteed by ITT Hartford to
the extent described herein (each, a "Guarantee"). See "Description of
Guarantee". The obligations of ITT Hartford under each Guarantee will be
subordinate and junior in right of payment to all Senior Debt of ITT Hartford.
Concurrently with the issuance by an Issuer of its Preferred Securities, such
Issuer will invest the proceeds thereof and any contributions made in respect of
the Common Securities in a corresponding series of ITT Hartford's Junior
Subordinated Debentures (the "Corresponding Junior Subordinated Debentures")
with terms corresponding to the terms of that Issuer's Preferred Securities. The
Corresponding Junior Subordinated Debentures will be the sole assets of each
Issuer, and payments under the Corresponding Junior Subordinated Debentures and
the related Expense Agreement (as defined herein) will be the only revenue of
each Issuer. Upon the occurrence of certain events as are described herein and
in the accompanying Prospectus Supplement, ITT Hartford may redeem the
Corresponding Junior Subordinated Debentures and cause the redemption of the
Trust Securities or may terminate each Issuer and cause the Corresponding Junior
Subordinated Debentures to be distributed to the holders of Preferred Securities
in liquidation of their interest in such Issuer. See "Description of Preferred
Securities -- Liquidation Distribution Upon Termination".
Holders of the Preferred Securities will be entitled to receive
preferential cumulative cash Distributions accruing from the date of original
issuance and payable periodically as specified in an accompanying Prospectus
Supplement. If provided in an accompanying Prospectus Supplement, ITT Hartford
will have the right to defer payments of interest on any series of Corresponding
Junior Subordinated Debentures by extending the interest payment period thereon
at any time or from time to time for one or more Extension Periods (which shall
not extend beyond the maturity of the Junior Subordinated Debentures). If
interest payments are so deferred, Distributions on the corresponding series of
Preferred Securities will also be deferred and ITT Hartford will not be
permitted, subject to certain exceptions set forth herein, to declare or pay any
cash distributions with respect to ITT Hartford's capital stock or debt
securities that rank pari passu with or junior to the Corresponding Junior
Subordinated Debentures. During an Extension Period, Distributions will continue
to accumulate (and the Preferred Securities will accumulate additional
Distributions thereon at the rate per annum set forth in the related Prospectus
Supplement). See "Description of Preferred Securities -- Distributions".
By separate prospectus, the form which is included in the Registration
Statement of which this Prospectus is a part, the Company may offer from time
to time debt securities (both senior and subordinated), Preferred Stock,
Common Stock, Depositary Shares, Warrants to purchase any of the foregoing,
Stock Purchase Contracts or Stock Purchase Units. The aggregate initial public
offering price of the securities to be offered by this Prospectus and such other
prospectus shall not exceed $1,750,000,000. Certain specific terms of the Junior
Subordinated Debentures or Preferred Securities in respect of which this
Prospectus is being delivered will be described in an accompanying Prospectus
Supplement, including without limitation and where applicable and to the extent
not set forth herein, (a) in the case of Junior Subordinated Debentures, 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 Extension Period or interest
deferral terms, if any, place or places where principal, premium, if any, and
interest, if any, will be payable, any terms of redemption, any sinking fund
provisions, terms for any conversion or exchange into other securities, initial
offering or purchase price, methods of distribution and any other special terms,
and (b) in the case of Preferred Securities, the identity of the Issuer,
specific title, aggregate amount, stated liquidation preference, number of
securities, Distribution rate or method of calculating such rate, applicable
Extension Period or Distribution deferral terms, if any, 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
Junior Subordinated Debentures or Preferred Securities.
The Junior Subordinated Debentures and Preferred 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
Junior Subordinated Debentures or Preferred 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 Junior Subordinated Debentures or
Preferred Securities will be listed on any national securities exchange. If the
Junior Subordinated Debentures or Preferred Securities are not listed on any
national securities exchange, there can be no assurance that there will be a
secondary market for the Junior Subordinated Debentures or Preferred Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Preferred Securities unless accompanied by a Prospectus
Supplement.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------
The date of this Prospectus is , 1996.
No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained in this
Prospectus and the applicable Prospectus Supplement, and if given or made such
information or representations must not be relied upon as having been authorized
by ITT Hartford or any agent, underwriter or dealer. This Prospectus and the
applicable Prospectus Supplement do not constitute an offer of 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.
----------------------
FOR NORTH CAROLINA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA, NOR
HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF
THIS DOCUMENT.
AVAILABLE INFORMATION
ITT Hartford 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. In addition,
such reports, proxy statements and other information concerning ITT Hartford can
be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
ITT Hartford and the Issuers have 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 securities offered hereby. 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 ITT
Hartford and the securities offered hereby, 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.
No separate financial statements of any Issuer have been included herein.
ITT Hartford and the Issuers do not consider that such financial statements
would be material to holders of the Preferred Securities because each Issuer is
a newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any activity
other than its holding as trust assets the Corresponding Junior Subordinated
Debentures of ITT Hartford and its issuance of the Preferred and Common
Securities. See "The Issuers", "Description of the Preferred Securities",
"Description of Guarantee" and "Description of Corresponding Junior Subordinated
Debentures".
2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by ITT Hartford with the Commission are
incorporated into this Prospectus by reference:
1. ITT Hartford's Annual Report on Form 10-K for the year ended December
31, 1995; and
2. ITT Hartford's Quarterly Report on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996.
Each document or report filed by ITT Hartford 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 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.
ITT Hartford 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: ITT Hartford
Group, Inc., Hartford Plaza, Hartford, Connecticut 06115, Attention: Secretary
(telephone: 860-547-5000).
ITT HARTFORD GROUP
ITT Hartford Group, Inc. ("ITT Hartford" and, together with its
subsidiaries, "ITT Hartford Group") is a holding company that owns, directly or
indirectly, a number of insurance companies, including Hartford Fire Insurance
Company ("Hartford Fire"). ITT Hartford Group, a diversified international
organization founded in 1810, is the seventh largest property and casualty
insurer and the twelfth largest life insurer in the United States, with total
assets of $100.2 billion and equity of $4.4 billion at June 30, 1996.
The North American property and casualty operations, with premiums written
of $5.7 billion as of December 31, 1995, provide a wide range of personal,
commercial, specialty and reinsurance coverages. In personal lines, ITT Hartford
Group ranks among the 10 largest carriers and is the endorsed provider of
automobile and homeowners coverages to members of the American Association of
Retired Persons ("AARP"). Commercial insurance, the property and casualty
company's largest line with $2.8 billion in written premiums as of December 31,
1995, offers an array of products to address customer needs, including
commercial multi-peril, general liability and workers' compensation. Specialty
lines provides the expertise necessary to meet the needs of customers with
sophisticated insurance, service or risk financing requirements. ITT Hartford
Group is also a major reinsurer, with subsidiaries and operations located in
Hong Kong, Spain, the United States, the United Kingdom and Canada.
ITT Hartford Group also provides property and casualty and life products in
the European insurance market. The largest operations are London and Edinburgh
in the United Kingdom, Zwolsche Algemeene in The Netherlands and ITT Ercos in
Spain.
ITT Hartford Group's life insurance operations, with assets exceeding $68.0
billion at June 30, 1996, provide individual and group life and disability
insurance, asset accumulation products and financial services
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for individuals, corporations and government entities. ITT Hartford Group ranks
among the top providers of retirement planning products and services for
corporations and government entities, and, with $7.0 billion in new fixed and
variable annuity deposits in 1995, it continues to rank among industry leaders
in the sale of these products.
As a holding company with no significant business operations of its own,
ITT Hartford relies on dividends from its insurance company subsidiaries, which
are primarily domiciled in Connecticut, as the principal source of cash to meet
its obligations, including the payment of principal of (and premium, if any) and
any interest on debt obligations of ITT Hartford (including the Junior
Subordinated Debentures), and to pay dividends to holders of its capital stock.
The payment of dividends by Connecticut-domiciled insurers is limited under the
insurance holding company laws of Connecticut which require notice to and
approval by the state 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 income
for the twelve-month period ending on the thirty-first day of December last
preceding, in each case determined under statutory insurance accounting
policies. The insurance holding company laws of the other jurisdictions in which
ITT Hartford's insurance subsidiaries are incorporated generally contain similar
(although in certain instances somewhat more restrictive) limitations on the
payment of dividends.
ITT Hartford is a Delaware corporation. ITT Hartford's principal executive
offices are located at Hartford Plaza, Hartford, Connecticut 06115, and its
telephone number is (860) 547-5000.
THE ISSUERS
Each Issuer is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement executed by ITT Hartford, as sponsor of the
Issuer, and the Delaware Trustee (as defined herein) of such Issuer and (ii) the
filing of a certificate of trust with the Delaware Secretary of State. Each
trust agreement will be amended and restated in its entirety (each, as so
amended and restated, a "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each Trust Agreement will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer exists for the
exclusive purposes of (i) issuing and selling its Preferred Securities and
Common Securities, (ii) using the proceeds from the sale of such Preferred
Securities and Common Securities to acquire a corresponding series of
Corresponding Junior Subordinated Debentures issued by ITT Hartford and (iii)
engaging in only those other activities necessary, convenient or incidental
thereto. Accordingly, the Corresponding Junior Subordinated Debentures will be
the sole assets of each Issuer, and payments under the Corresponding Junior
Subordinated Debentures and the related Expense Agreement will be the sole
revenue of each Issuer.
All of the Common Securities of each Issuer will be owned by ITT Hartford.
The Common Securities of an Issuer will rank pari passu, and payments will be
made thereon pro rata, with the Preferred Securities of such Issuer, except that
upon the occurrence and continuance of an event of default under a Trust
Agreement, the rights of ITT Hartford as holder of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption or
otherwise will be subordinated to the rights of the holders of the Preferred
Securities of such Issuer. See "Description of Preferred Securities --
Subordination of Common Securities". ITT Hartford will acquire Common Securities
in an aggregate liquidation amount equal to not less than 3% of the total
capital of each Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 45 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, each appointed by ITT Hartford as holder of the
Common Securities: Wilmington Trust Company as the Property Trustee (the
"Property Trustee") and as the Delaware Trustee (the "Delaware Trustee"), and
two individual trustees (the "Administrative Trustees") who are
4
employees or officers of or affiliated with ITT Hartford (collectively, the
"Issuer Trustees"). Wilmington Trust Company, as Property Trustee, will act as
sole indenture trustee under each Trust Agreement for purposes of compliance
with the Trust Indenture Act. Wilmington Trust Company will also act as trustee
under the Guarantee and the Indenture (each as defined herein). See "Description
of Guarantee" and "Description of Junior Subordinated Debentures". The holder of
the Common Securities of an Issuer, or the holders of a majority in liquidation
preference of the Preferred Securities if an event of default under the Trust
Agreement for such Issuer has occurred and is continuing, will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee of
such Issuer. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees; such
voting rights are vested exclusively in the holder of the Common Securities. The
duties and obligations of each Issuer Trustee are governed by the applicable
Trust Agreement. ITT Hartford will pay all fees and expenses related to each
Issuer and the offering of the Preferred Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of each Issuer. The
principal executive office of each Issuer is Hartford Plaza, Hartford,
Connecticut 06115, Attention: Secretary, and its telephone number is (860)
547-5000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement, ITT
Hartford intends to use the proceeds from the sale of its Junior Subordinated
Debentures (including Corresponding Junior Subordinated Debentures issued to the
Issuers in connection with the investment by the Issuers of all of the proceeds
from the sale of Preferred 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.
A more detailed description of the use of proceeds of any specific offering
shall be set forth in the Prospectus Supplement pertaining to such offering.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth ITT Hartford's ratios of earnings to fixed
charges for the years and periods indicated:
Six Months
Ended June 30, Year Ended December 31,
--------------- ----------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
Ratio of Consolidated Earnings to Fixed
Charges............................... 4.3 5.3 5.8 7.4 6.8 (3.1) 5.0
For purposes of computing the ratio of earnings to fixed charges,
"earnings" consists of income from operations before Federal income taxes and
fixed charges. "Fixed charges" consists of interest expense, capitalized
interest, amortization of debt expense, an imputed interest component for rental
expense and dividend requirements on preferred stock of Hartford Fire.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more series
under a Junior Subordinated Indenture, as supplemented from time to time (as so
supplemented, the "Indenture"), between ITT Hartford and Wilmington Trust
Company, as a trustee (the "Debenture Trustee"). This summary of certain
5
terms and provisions of the Junior Subordinated Debentures and the Indenture
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to the 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 of 1939, as amended (the "Trust Indenture Act"). Whenever
particular defined terms of the 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.
General
Each series of Junior Subordinated Debentures will rank pari passu with the
7.70% Junior Subordinated Deferrable Interest Debentures, Series A, Due February
28, 2015 and with all other series of Junior Subordinated Debentures, and will
be unsecured and subordinate and junior in right of payment to the extent and in
the manner set forth in the Indenture to all Senior Debt (as defined below) of
ITT Hartford. See "-- Subordination". As a non-operating holding company, most
of the operating assets of ITT Hartford and its consolidated subsidiaries are
owned by such subsidiaries, and ITT Hartford relies primarily on dividends from
such subsidiaries to meet its obligations for payment of principal and interest
on its outstanding debt obligations and corporate expenses. Accordingly, the
Junior Subordinated Debentures will be effectively subordinated to all existing
and future liabilities of ITT Hartford's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of ITT Hartford for
payments on the Junior Subordinated Debentures. The payment of dividends by ITT
Hartford's insurance company subsidiaries, including Hartford Fire, is limited
under the insurance holding company laws in which such subsidiaries are
domiciled. See "ITT Hartford Group". Except as otherwise provided in the
applicable Prospectus Supplement, the Indenture does not limit the incurrence or
issuance of other secured or unsecured debt of ITT Hartford, whether under the
Indenture, any other indenture that ITT Hartford may enter into in the future or
otherwise. See "-- Subordination" and the Prospectus Supplement relating to any
offering of Securities.
The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of ITT
Hartford's Board of Directors or a committee thereof.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Junior Subordinated Debentures: (1) the
title of the Junior Subordinated Debentures; (2) any limit upon the aggregate
principal amount of the Junior Subordinated Debentures; (3) the date or dates on
which the principal of the Junior Subordinated Debentures is payable or the
method of determination thereof; (4) the rate or rates, if any, at which the
Junior Subordinated Debentures shall bear interest, the Interest Payment Dates
on which any such interest shall be payable, the right, if any, of ITT Hartford
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 "Payment and Paying Agents", the
principal of and premium, if any, and interest on the Junior Subordinated
Debentures will be payable and where, subject to the terms of the Indenture as
described below under "Denominations, Registration and Transfer", the Junior
Subordinated Debentures may be presented for registration of transfer or
exchange and the place or places where notices and demands to or upon ITT
Hartford in respect of the Junior Subordinated Debentures 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
Junior Subordinated Debentures may be redeemed, in whole or in part, at the
option of ITT Hartford or a holder thereof; (7) the obligation or the right, if
any, of ITT Hartford or a holder thereof to redeem, purchase or repay the Junior
Subordinated Debentures 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 Junior Subordinated
Debentures shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation; (8) the denominations in which any Junior Subordinated
Debentures shall be issuable if other than denominations of $25 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 Junior Subordinated Debentures shall be
payable,
6
or in which the Junior Subordinated Debentures shall be denominated; (10) any
additions, modifications or deletions in the Events of Default or covenants of
ITT Hartford specified in the Indenture with respect to the Junior Subordinated
Debentures; (11) if other than the principal amount thereof, the portion of the
principal amount of Junior Subordinated Debentures that shall be payable upon
declaration of acceleration of the maturity thereof; (12) any additions or
changes to the Indenture with respect to a series of Junior Subordinated
Debentures as shall be necessary to permit or facilitate the issuance of such
series in bearer form, registrable or not registrable as to principal, and with
or without interest coupons; (13) any index or indices used to determine the
amount of payments of principal of and premium, if any, on the Junior
Subordinated Debentures and the manner in which such amounts will be determined;
(14) the terms and conditions relating to the issuance of a temporary Global
Security representing all of the Junior Subordinated Debentures of such series
and exchange of such temporary Global Security for definitive Junior
Subordinated Debentures of such series; (15) subject to the terms described
under "Global Junior Subordinated Debentures", whether the Junior Subordinated
Debentures 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) the terms
and conditions of any obligation or right of ITT Hartford or a holder to convert
or exchange the Junior Subordinated Debentures into Preferred Securities or
other securities; (18) the relative degree, if any, to which such Junior
Subordinated Debentures of the series shall be senior to or be subordinated to
other series of such Junior Subordinated Debentures or other indebtedness of ITT
Hartford in right of payment, whether such other series of Junior Subordinated
Debentures or other indebtedness are outstanding or not; and (19) any other
terms of the Junior Subordinated Debentures not inconsistent with the provisions
of the Indentures.
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain Federal income tax
consequences and special considerations applicable to any such Junior
Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures are denominated in one or more foreign currencies or
currency units or if the principal of, premium, if any, or interest, if any, on
any Junior Subordinated Debentures is payable in one or more foreign currencies
or currency units, the restrictions, elections, certain Federal income tax
considerations, specific terms and other information with respect to such issue
of Junior Subordinated Debentures 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 Junior Subordinated Debentures,
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
Junior Subordinated Debentures will be issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. Junior
Subordinated Debentures of any series will be exchangeable for other Junior
Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same Original Issue
Date and Stated Maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate Securities Registrar or at the
office of any transfer agent designated by ITT Hartford for such purpose with
respect to any series of Junior Subordinated Debentures and referred to in the
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indenture. ITT Hartford
will
7
appoint the Trustees as Securities Registrars under the Indentures. If the
applicable Prospectus Supplement refers to any transfer agents (in addition to
the Securities Registrar) initially designated by ITT Hartford with respect to
any series of Junior Subordinated Debentures, ITT Hartford 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 ITT Hartford
maintains a transfer agent in each Place of Payment for such series. ITT
Hartford may at any time designate additional transfer agents with respect to
any series of Junior Subordinated Debentures.
In the event of any redemption, neither ITT Hartford nor the Debenture
Trustee shall be required to (i) issue, register the transfer of or exchange
Junior Subordinated Debentures of any series during a period beginning at the
opening of business 15 days before the day of selection for redemption of Junior
Subordinated Debentures of that series and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) transfer or
exchange any Junior Subordinated Debentures so selected for redemption, except,
in the case of any Junior Subordinated Debentures being redeemed in part, any
portion thereof not to be redeemed.
Global Junior Subordinated Debentures
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more Global Junior Subordinated Debentures that will
be deposited with, or on behalf of, a depositary (the "Depositary") identified
in the Prospectus Supplement relating to such series. Global Junior Subordinated
Debentures 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 Junior Subordinated Debentures represented thereby, a Global Junior
Subordinated Debenture may not be transferred except as a whole by the
Depositary for such Global Junior Subordinated Debenture to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
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 Junior Subordinated Debentures will be described in the Prospectus Supplement
relating to such series. ITT Hartford anticipates that the following provisions
will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the
deposit of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or its
nominee will credit on its book-entry registration and transfer system, the
respective principal amounts of the individual Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture 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
Junior Subordinated Debentures or by ITT Hartford if such Junior Subordinated
Debentures are offered and sold directly by ITT Hartford. Ownership of
beneficial interests in a Global Junior Subordinated Debenture will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Junior Subordinated Debenture
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depositary or its nominee (with
respect to interests of Participants) and the records of Participants (with
respect to interests of persons who hold through Participants). The laws of some
states require that 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 Junior Subordinated
Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or
its nominee, is the registered owner of such Global Junior Subordinated
Debenture, such Depositary or such nominee, as the case may be, will be
considered the sole owner or holder of the Junior Subordinated Debentures
represented by such Global Junior Subordinated Debenture for all purposes under
the Indenture governing such Junior Subordinated Debentures. Except as provided
below, owners of beneficial interests in a Global Junior Subordinated Debenture
8
will not be entitled to have any of the individual Junior Subordinated
Debentures of the series represented by such Global Junior Subordinated
Debenture registered in their names, will not receive or be entitled to receive
physical delivery of any such Junior Subordinated Debentures of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made to
the Depositary or its nominee, as the case may be, as the registered owner of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures. None of ITT Hartford, the Debenture Trustee, any Paying Agent, or
the Securities Registrar for such Junior Subordinated Debentures will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interest of the Global Junior
Subordinated Debenture for such Junior Subordinated Debentures or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
ITT Hartford expects that the Depositary for a series of Junior
Subordinated Debentures or its nominee, upon receipt of any payment of
principal, premium or interest in respect of a permanent Global Junior
Subordinated Debenture representing any of such Junior Subordinated Debentures,
immediately will credit Participants' accounts with payments in amounts
proportionate to their respective beneficial interest in the principal amount of
such Global Junior Subordinated Debenture for such Junior Subordinated
Debentures as shown on the records of such Depositary or its nominee. ITT
Hartford also expects that payments by Participants to owners of beneficial
interests in such Global Junior Subordinated Debenture held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility of
such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by ITT Hartford within 90 days, ITT Hartford will
issue individual Junior Subordinated Debentures of such series in exchange for
the Global Junior Subordinated Debenture representing such series of Junior
Subordinated Debentures. In addition, ITT Hartford may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Junior Subordinated Debentures, determine not to
have any Junior Subordinated Debentures of such series represented by one or
more Global Junior Subordinated Debentures and, in such event, will issue
individual Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture or Securities representing such series of
Junior Subordinated Debentures. Further, if ITT Hartford so specifies with
respect to the Junior Subordinated Debentures of a series, an owner of a
beneficial interest in a Global Junior Subordinated Debenture representing
Junior Subordinated Debentures of such series may, on terms acceptable to ITT
Hartford, the Debenture Trustee and the Depositary for such Global Junior
Subordinated Debenture, receive individual Junior Subordinated Debentures of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Junior
Subordinated Debentures. In any such instance, an owner of a beneficial interest
in a Global Junior Subordinated Debenture will be entitled to physical delivery
of individual Junior Subordinated Debentures of the series represented by such
Global Junior Subordinated Debenture equal in principal amount to such
beneficial interest and to have such Junior Subordinated Debentures registered
in its name. Individual Junior Subordinated Debentures of such series so issued
will be issued in denominations, unless otherwise specified by ITT Hartford, of
$25 and integral multiples thereof.
Payment and Paying Agents
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Junior Subordinated
Debentures will be made at the office of the Debenture Trustee in the City of
New York or at the office of such Paying Agent or Paying Agents as ITT
9
Hartford may designate from time to time in the applicable Prospectus
Supplement, except that at the option of ITT Hartford payment of any interest
may be made (i) except in the case of Global Junior Subordinated Debentures, by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Securities Register or (ii) by transfer to an account maintained
by the Person entitled thereto as specified in the Securities Register, provided
that proper transfer instructions have been received by the Regular Record Date.
Unless otherwise indicated in the applicable Prospectus Supplement, payment of
any interest on Junior Subordinated Debentures will be made to the Person in
whose name such Junior Subordinated Debenture is registered at the close of
business on the Regular Record Date for such interest, except in the case of
Defaulted Interest. ITT Hartford may at any time designate additional Paying
Agents or rescind the designation of any Paying Agent; however, ITT Hartford
will at all times be required to maintain a Paying Agent in each Place of
Payment for each series of Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by ITT Hartford in trust, for the payment of the principal of (and
premium, if any) or interest on any Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall, at the request of ITT Hartford, be repaid to
ITT Hartford and the holder of such Junior Subordinated Debenture shall
thereafter look, as a general unsecured creditor, only to ITT Hartford for
payment thereof.
Redemption
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, ITT
Hartford may, at its option, redeem the Junior Subordinated Debentures of any
series on any Interest Payment Date with respect thereto in whole at any time or
in part from time to time. Junior Subordinated Debentures in denominations
larger than $25 may be redeemed in part but only in integral multiples of $25.
Except as otherwise specified in the applicable Prospectus Supplement, the
redemption price for any Junior Subordinated Debenture so redeemed shall equal
any accrued and unpaid interest thereon to the redemption date, plus the greater
of (a) the principal amount thereof and (b) an amount equal to (i) in respect of
Junior Subordinated Debentures of any series bearing interest at a fixed rate,
the Discounted Remaining Fixed Amount Payments or (ii) in respect of Junior
Subordinated Debentures of any series bearing interest determined by reference
to a floating rate, the Discounted Swap Equivalent Payments (calculated as
described below to determine any redemption premium based upon the value of
interest payable on an equivalent fixed rate Junior Subordinated Debenture). For
purposes of this redemption provision, the following terms have the meanings set
forth below:
"Discounted Remaining Fixed Amount Payments" means, in respect of a Junior
Subordinated Debenture of any series bearing interest at a fixed rate, an amount
equal to the sum of the Current Values of the amounts of interest and principal
that would have been payable by ITT Hartford pursuant to the terms of such
Junior Subordinated Debenture on each Interest Payment Date after the redemption
date and at Stated Maturity of the final payment of principal thereof (taking
into account any required sinking fund payments but otherwise assuming that ITT
Hartford had not redeemed such Junior Subordinated Debenture prior to such
Stated Maturity).
"Current Value" means, in respect of any amount, the present value of that
amount on the redemption date after discounting that amount on a monthly,
quarterly or semiannual basis (whichever corresponds to the Interest Payment
Date periods of the related series of Junior Subordinated Debentures) from the
originally scheduled date for payment on the basis of the Treasury Rate.
"Treasury Rate" means a per annum rate (expressed as a decimal and, in the
case of United States Treasury bills, converted to a per annum yield) determined
on the redemption date to be the per annum rate equal to the semiannual bond
equivalent yield to maturity (adjusted to reflect monthly or quarterly
compounding
10
in the case of Junior Subordinated Debentures having monthly or quarterly
Interest Payment Dates, respectively) for United States Treasury securities
maturing at the Stated Maturity of the final payment of principal of any series
of Junior Subordinated Debentures redeemed pursuant to the provisions described
above, as determined by reference to the weekly average yield to maturity for
United States Treasury securities maturing on such Stated Maturity if reported
in the most recent Statistical Release H.15(519) of the Board of Governors of
the Federal Reserve, or, if no such securities mature at such Stated Maturity,
by interpolation between the most recent weekly average yields to maturity for
two series of United States Treasury securities, (i) one maturing as close as
possible to, but earlier than, such Stated Maturity and (ii) the other maturing
as close as possible to, but later than, such Stated Maturity, in each case as
published in the most recent Statistical Release H.15(519) of the Board of
Governors of the Federal Reserve.
"Discounted Swap Equivalent Payments" means, in respect of a Junior
Subordinated Debenture of any series bearing interest determined by reference to
a floating rate, an amount equal to the sum of (i) the Current Value of the
amount of principal that would have been payable by ITT Hartford pursuant to the
terms of such Junior Subordinated Debenture at Stated Maturity of the final
payment of the principal thereof (taking into effect any required sinking fund
payments but otherwise assuming that ITT Hartford had not redeemed such Junior
Subordinated Debenture prior to such Stated Maturity and (ii) the sum of the
Current Values of the fixed rate payments that leading interest rate swap
dealers would require to be paid by an assumed fixed rate payer having the same
credit standing as ITT Hartford against floating rate payments to be made by
such leading dealers equal to the interest payments on the Junior Subordinated
Debenture being redeemed (taking into effect any required sinking fund payment
but otherwise assuming ITT Hartford had not redeemed such Junior Subordinated
Debenture prior to such Stated Maturity) under a standard interest rate swap
agreement having a notional principal amount equal to the principal amount of
such Junior Subordinated Debenture, a termination date set at the Stated
Maturity of such Junior Subordinated Debenture and payment dates for both fixed
and floating rate payers set at each Interest Payment Date of such Junior
Subordinated Debenture. The amount of such fixed rate payments will be based on
quotations received by the Trustee (or an agent appointed for such purpose) from
four leading interest rate swap dealers or, if quotations from four leading
interest rate swap dealers are not obtainable, three such dealers.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Debenture Tax Event (as defined below) in respect of a series of Junior
Subordinated Debentures shall occur and be continuing, ITT Hartford may, at its
option, redeem such series of Junior Subordinated Debentures in whole (but not
in part) on any Interest Payment Date within 90 days of the occurrence of such
Debenture Tax Event, at a redemption price equal to 100% of the principal amount
of such Junior Subordinated Debentures then outstanding plus accrued and unpaid
interest to the date fixed for redemption.
"Debenture Tax Event" means the receipt by ITT Hartford of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such pronouncement or decision is announced on or after the date of
issuance of the applicable series of Junior Subordinated Debentures under the
Indenture, there is more than an insubstantial risk that interest payable by ITT
Hartford on such series of Junior Subordinated Debentures is not, or within 90
days of the date thereof, will not be, deductible, in whole or in part, for
United States Federal income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Junior Subordinated
Debentures to be redeemed at his registered address. Unless ITT Hartford
defaults in payment of the redemption price, on and after the redemption date
interest ceases to accrue on such Junior Subordinated Debentures or portions
thereof called for redemption.
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Possible Tax Law Changes
On December 7, 1995, President Clinton proposed certain tax law changes
that, among other things, would deny interest deductions to corporate issuers of
debt under certain circumstances. As described in the President's proposal,
corporate issuers of debt would generally be denied interest deductions if the
debt instrument has a term exceeding 20 years and is not reflected as
indebtedness on the issuer's consolidated balance sheet. The same proposal was
included in President Clinton's Budget Plan, released on March 19, 1996.
However, the Chairman of the House Ways and Means Committee and the Senate
Finance Committee, as well as the Ranking Minority Member of the House Ways and
Means Committee, have publicly indicated their intent that the proposals, if
enacted, would not apply to debt issued prior to the date of "appropriate
Congressional action". No such Congressional action has yet occurred or is
expected to occur prior to the issuance of the Junior Subordinated Debentures.
Nevertheless, no assurance can be given that a Tax Event will not occur. If ITT
Hartford were to issue Junior Subordinated Debentures having these
characteristics and President Clinton's proposal was subsequently enacted in its
present form, ITT Hartford would be prevented from deducting interest on such
Junior Subordinated Debentures; this in turn would give rise to a Tax Event,
which would permit ITT Hartford to cause a redemption of the related Preferred
Securities or a distribution of such Junior Subordinated Debentures in
liquidation of the related Issuer, as described more fully under "Description of
Preferred Securities -- Redemption -- Special Event Redemption or Distribution".
The effect of such proposal, if any, on the Junior Subordinated Debentures and
related Preferred Securities will be described in the applicable Prospectus
Supplement.
Option to Extend Interest Payment Date
If provided in the applicable Prospectus Supplement, ITT Hartford shall
have the right at any time and from time to time during the term of any series
of Junior Subordinated Debentures to extend the interest payment period for such
number of consecutive interest payment periods with respect to each deferred
period as may be specified in the applicable Prospectus Supplement (each, an
"Extension Period"), subject to the terms, conditions and covenants, if any,
specified in such Prospectus Supplement, provided that such Extension Period may
not extend beyond the maturity of the Junior Subordinated Debentures. Certain
Federal income tax consequences and special considerations applicable to any
such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
In the event that ITT Hartford exercises this right, during such Extension
Period ITT Hartford may not, and may not permit any subsidiary of ITT Hartford
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of ITT Hartford's
capital stock or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities that rank pari passu
with or junior in interest to the Corresponding Junior Subordinated Debentures
or make any guarantee payments with respect to the foregoing (other than (a)
dividends or distributions in common stock of ITT Hartford, (b) redemptions or
purchases of any rights pursuant to ITT Hartford's Rights Plan, or any successor
to such Rights Plan, and the declaration of a dividend of such rights in the
future, and (c) payments under any Guarantee).
Modification of Indenture
From time to time ITT Hartford and the Debenture Trustee may, without the
consent of the holders of any series of Junior Subordinated Debentures, amend,
waive or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of any
series of Junior Subordinated Debentures or, in the case of Corresponding Junior
Subordinated Debentures, the holders of the corresponding series of Preferred
Securities so long as they remain outstanding) and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting ITT Hartford and the Debenture Trustee, with the
consent of the holders of not less than a majority in principal amount of each
outstanding series of Junior Subordinated Debentures affected, to modify the
Indenture in a manner affecting
12
the rights of the holders of such series of the Junior Subordinated Debentures;
provided, that no such modification may, without the consent of the holder of
each outstanding Junior Subordinated Debenture so affected, (i) change the
stated maturity of any series of Junior Subordinated Debentures, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon (except such extension as is contemplated hereby) or (ii)
reduce the percentage of principal amount of Junior Subordinated Debentures of
any series, the holders of which are required to consent to any such
modification of the Indenture, provided that, in the case of Corresponding
Junior Subordinated Debentures, so long as any of the corresponding series of
Preferred Securities remain outstanding, no such modification may be made that
adversely affects the holders of such Preferred Securities, and no termination
of the Indenture may occur, and no waiver of any Debenture Event of Default or
compliance with any covenant under the Indenture may be effective, without the
prior consent of the holders of at least a majority of the aggregate liquidation
preference of such Preferred Securities unless and until the principal of the
Corresponding Junior Subordinated Debentures and all accrued and unpaid interest
thereon have been paid in full and certain other conditions are satisfied.
In addition, ITT Hartford and the Debenture Trustee may execute, without
the consent of any holder of Junior Subordinated Debentures, any supplemental
Indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of the
Junior Subordinated Debentures, when due (subject to the deferral of any
due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series
of Junior Subordinated Debentures when due whether at maturity, upon
redemption, by declaration or otherwise; or
(iii)failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after written notice
to ITT Hartford from the Debenture Trustee or the holders of at least 25%
in principal amount of such series of outstanding Junior Subordinated
Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of ITT
Hartford.
The holders of a majority in outstanding principal amount of such series of
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of such series of Junior Subordinated Debentures
may declare the principal due and payable immediately upon a Debenture Event of
Default, and, in the case of Corresponding Junior Subordinated Debentures,
should the Debenture Trustee or such holders of such Corresponding Junior
Subordinated Debentures fail to make such declaration, the holders of at least
25% in aggregate liquidation preference of the corresponding series of Preferred
Securities shall have such right. The holders of a majority in aggregate
outstanding principal amount of such series of Junior Subordinated Debentures
may annul such declaration and waive the default if the default (other than the
non-payment of the principal of such series of Junior Subordinated Debentures
which has become due solely by such acceleration) has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
13
The holders of a majority in outstanding principal amount of the Junior
Subordinated Debentures affected thereby may, on behalf of the holders of all
the Junior Subordinated Debentures, waive any past default, except a default in
the payment of principal or interest (unless such default has been cured and a
sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Junior Subordinated Debenture. ITT Hartford is required to file annually with
the Debenture Trustee a certificate as to whether or not ITT Hartford is in
compliance with all the conditions and covenants applicable to it under the
Indenture.
In case a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding Junior Subordinated Debentures, the Property Trustee
will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Subordinated
Debentures.
Enforcement of Certain Rights by Holders of Preferred Securities
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of ITT Hartford to pay interest or
principal on the corresponding Junior Subordinated Debentures on the date such
interest or principal is otherwise payable, a holder of Preferred Securities may
institute a legal proceeding directly against ITT Hartford for enforcement of
payment to such holder of the principal of or interest on such corresponding
Junior Subordinated Debentures having a principal amount equal to the aggregate
Liquidation Amount of the related Preferred Securities of such holder (a "Direct
Action"). ITT Hartford may not amend the Indenture to remove the foregoing right
to bring a Direct Action without the prior written consent of the holders of all
of the Preferred Securities. If the right to bring a Direct Action is removed,
the applicable issue may become subject to the reporting obligations under the
Securities Exchange Act of 1934, as amended. ITT Hartford shall have the right
under the Indenture to set-off any payment made to such holder of Preferred
Securities by ITT Hartford in connection with a Direct Action. The holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the corresponding Junior Subordinated Debentures.
The holders of the Preferred Securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Junior Subordinated Debentures unless there
shall have been an Event of Default under the Trust Agreement.
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that ITT Hartford 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, and no Person shall
consolidate with or merge into ITT Hartford or convey, transfer or lease its
properties and assets substantially as an entirety to ITT Hartford, unless (i)
in case ITT Hartford 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 or any state or the District of Columbia, and such successor corporation
expressly assumes ITT Hartford's obligations on the Junior Subordinated
Debentures issued under the Indenture; (ii) immediately after giving effect
thereto, no Debenture Event of Default, and no event which, after notice or
lapse of time or both, would become a Debenture Event of Default, shall have
happened and be continuing; (iii) in the case of Corresponding Junior
Subordinated Debentures, such transaction is permitted under the related Trust
Agreement or Guarantee and does not give rise to any breach or violation of the
related Trust Agreement or Hartford Guarantee, and (iv) certain other conditions
as prescribed in the Indenture are met.
14
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving ITT Hartford that may adversely affect holders of the
Junior Subordinated Debentures.
Satisfaction and Discharge
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at their Stated Maturity within one year, and ITT Hartford deposits or causes to
be deposited with the Debenture Trustee trust funds, in trust, for the purpose
an amount in the currency or currencies in which the Junior Subordinated
Debentures are payable sufficient to pay and discharge the entire indebtedness
on the Junior Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation, for the principal (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 ITT Hartford's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and ITT
Hartford will be deemed to have satisfied and discharged the Indenture.
Conversion or Exchange
Unless otherwise indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or exchangeable
into Preferred Securities or other securities. The specific terms on which
Junior Subordinated Debentures of any series may be so converted or exchanged
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 ITT Hartford, in which case the number of
shares of Preferred Securities or other securities to be received by the Holders
of Junior Subordinated Debentures would be calculated as of a time and in the
manner stated in the applicable Prospectus Supplement.
Subordination
In the Indenture, ITT Hartford has covenanted and agreed that any Junior
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior Debt to the extent provided in the Indenture.
Upon any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of ITT Hartford, the holders of Senior Debt will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Junior Subordinated
Debentures or, in the case of Corresponding Junior Subordinated Debentures, the
Property Trustee on behalf of the holders, will be entitled to receive or retain
any payment in respect of the principal of (and premium, if any) or interest, if
any, on the Junior Subordinated Debentures.
In the event of the acceleration of the maturity of any Junior Subordinated
Debentures, the holders of all Senior Debt outstanding at the time of 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
Junior Subordinated Debentures will be entitled to receive any payment upon the
principal of (or premium, if any) or interest, if any, on the Junior
Subordinated Debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there shall
have occurred and be continuing a default in any payment with respect to Senior
Debt, or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof, or if any judicial proceeding shall be
pending with respect to any such default.
15
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; and (vi) every
obligation of the type referred to in clauses (i) through (v) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to ITT Hartford whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Junior Subordinated Debentures or to other
Debt which is pari passu with, or subordinated to, the Junior Subordinated
Debentures; provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of ITT Hartford which when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy code, was without recourse to
ITT Hartford, (ii) any Debt of ITT Hartford to any of its subsidiaries, (iii)
Debt to any employee of ITT Hartford, (iv) any liability for taxes, (v)
indebtedness or monetary obligations to trade creditors or assumed by ITT
Hartford or any of its subsidiaries in the ordinary course of business in
connection with the obtaining of materials or services, and (vi) and other debt
securities issued pursuant to the Indenture.
ITT Hartford is a non-operating holding company, and most of the assets of
ITT Hartford are owned by its subsidiaries. Accordingly, the Junior Subordinated
Debentures will be effectively subordinated to all existing and future
liabilities of ITT Hartford's subsidiaries, including liabilities under
contracts of insurance and annuities written by ITT Hartford's insurance
subsidiaries. Holders of Junior Subordinated Debentures should look only to the
assets of ITT Hartford for payments of interest and principal and premium, if
any.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by ITT Hartford. ITT Hartford expects from time to time to
incur additional indebtedness constituting Senior Debt.
The Indenture provides that the foregoing subordination provisions, insofar
as they relate to any particular issue of Junior Subordinated Debentures, may be
changed prior to such issuance. Any such change would be described in the
Prospectus Supplement relating to such Junior Subordinated Debentures.
Governing Law
The Indenture and the Junior Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of New York.
Information Concerning the Debenture Trustee
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to
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expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer
Trustees on behalf of such Issuer will issue the Preferred Securities and the
Common Securities. The Preferred Securities of a particular issue will represent
preferred undivided beneficial interests in the assets of the related Issuer 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 such Issuer, as well as other benefits as
described in the corresponding Trust Agreement. This summary of certain
provisions of each Trust Agreement does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, all the provisions
of each Trust Agreement, including the definitions therein of certain terms, and
the Trust Indenture Act. Wherever particular defined terms of the Trust
Agreement are referred to, such defined terms are incorporated herein by
reference. The form of the Trust Agreement has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. Each of the
Issuers is a legally separate entity and the assets of one are not available to
satisfy the obligations of any of the others.
General
The Preferred Securities of an Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Issuer except
as described under "-- Subordination of Common Securities". Legal title to the
Corresponding Junior Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the related Preferred
Securities and Common Securities. Each Guarantee Agreement executed by ITT
Hartford for the benefit of the holders of an Issuer's Preferred Securities
(each, the "Guarantee") will be a guarantee on a subordinated basis with respect
to the related Preferred Securities but will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of such Preferred
Securities when the related Issuer does not have funds on hand available to make
such payments. See "Description of Guarantee".
Distributions
Each Issuer's Preferred Securities represent preferred undivided beneficial
interests in the assets of such Issuer, and the Distributions on each Preferred
Security will be payable at a rate specified in the Prospectus Supplement for
such Preferred Securities. The amount of Distributions payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months unless
otherwise specified in the applicable Prospectus Supplement. Distributions that
are in arrears may bear interest on the amount thereof at the rate per annum if
and as specified in the applicable Prospectus Supplement ("Additional Amounts").
The term "Distributions" as used herein includes any Additional Amounts unless
otherwise stated.
Distributions on the Preferred Securities will be cumulative, will accrue
from the date of original issuance and will be payable on such dates as
specified in the applicable Prospectus Supplement. In the event that any date on
which Distributions are payable on the Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect to any such delay) except that, if such Business Day
is in the next succeeding calendar year, payment of such Distribution shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the Property Trustee or the Debenture Trustee (as defined herein) is closed for
business.
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If provided in the applicable Prospectus Supplement, ITT Hartford has the
right under the Indenture, pursuant to which it will issue the Corresponding
Junior Subordinated Debentures, to extend the interest payment period at any
time and from time to time on any series of the Corresponding Junior
Subordinated Debentures, to a period which will be specified in such Prospectus
Supplement relating to such series (each, an "Extension Period"), provided that
such Extension Period may not extend beyond the maturity of the Junior
Subordinated Debentures. As a consequence of any such extension, Distributions
on the corresponding Preferred Securities would be deferred (but would continue
to accumulate additional Distributions thereon at the rate per annum set forth
in the Prospectus Supplement for such Preferred Securities) by the Issuer of
such Preferred Securities during any such Extension Period. In the event that
ITT Hartford exercises this right, during such Extension Period ITT Hartford may
not, and may not permit any subsidiary of ITT Hartford to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of ITT Hartford's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities that rank pari passu with or junior in
interest to the Corresponding Junior Subordinated Debentures or make any
guarantee payments with respect to the foregoing (other than (a) dividends or
distributions in common stock of ITT Hartford, (b) redemptions or purchases of
any rights pursuant to ITT Hartford's Rights Plan, or any successor to such
Rights Plan, and the declaration of a dividend of such rights in the future, and
(c) payments under any Guarantee).
It is anticipated that the revenue of each Issuer available for
distribution to holders of its Preferred Securities will be limited to payments
under the Corresponding Junior Subordinated Debentures in which the Issuer will
invest the proceeds from the issuance and sale of its Preferred Securities and
its Common Securities. See "Description of Corresponding Junior Subordinated
Debentures". If ITT Hartford does not make interest payments on such
Corresponding Junior Subordinated Debentures, the Property Trustee will not have
funds available to pay Distributions on the corresponding Preferred Securities.
The payment of Distributions (if and to the extent the Issuer has funds legally
available for the payment of such Distributions and cash sufficient to make such
payments) is guaranteed on a limited basis as set forth herein under
"Description of Guarantee".
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Issuer on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry form,
will be one Business Day prior to the relevant Distribution Date. Subject to any
applicable laws and regulations and the provisions of the applicable Trust
Agreement, each such payment will be made as described under "-- Book-Entry
Issuance". In the event any Preferred Securities are not in book-entry form, the
relevant record date for such Preferred Securities shall be the date 15 days
prior to the relevant Distribution Date.
Redemption
Mandatory Redemption. Upon the repayment or redemption, in whole or in
part, of any Corresponding Junior Subordinated Debentures, whether at maturity
or upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the corresponding Preferred Securities, upon
not less than 30 nor more than 60 days notice, at a redemption price (the
"Redemption Price") equal to the aggregate liquidation preference of such
Preferred Securities plus accumulated and unpaid Distributions thereon to the
date of Redemption (the "Redemption Date") and the related amount of the
premium, if any, paid by ITT Hartford upon the concurrent redemption of such
Corresponding Junior Subordinated Debentures. See "Description of Corresponding
Junior Subordinated Debentures -- Optional Redemption". If less than all of any
series of Corresponding Junior Subordinated Debentures are to be repaid or
redeemed on a Redemption Date, then the proceeds from such repayment or
redemption shall be allocated to the redemption pro rata of the Preferred
Securities and the Common Securities. The amount of premium, if any, paid by ITT
Hartford upon the redemption of all or any part of any series of any
Corresponding Junior Subordinated Debentures to be repaid or redeemed on a
Redemption Date shall be allocated to the redemption pro rata of the Preferred
Securities and the Common Securities.
ITT Hartford will have the right to redeem any series of Corresponding
Junior Subordinated Debentures (i) in whole at any time or in part from time to
time, subject to the conditions described under "Description of
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Corresponding Junior Subordinated Debentures -- Optional Redemption", or (ii) at
any time, in whole (but not in part), upon the occurrence of a Tax Event or an
Investment Company Event (each as defined below, a "Special Event") and subject
to the further conditions described under "Description of Corresponding Junior
Subordinated Debentures -- Optional Redemption", or (iii) as may be otherwise
specified in the applicable Prospectus Supplement.
Special Event Redemption or Distribution. If a Special Event in respect of
a series of Preferred Securities and Common Securities shall occur and be
continuing, ITT Hartford has the right to (i) redeem the Corresponding Junior
Subordinated Debentures in whole (but not in part) and therefore cause a
mandatory redemption of such Preferred Securities and Common Securities in whole
(but not in part) at the Redemption Price within 90 days following the
occurrence of such Special Event, or (ii) terminate the related Issuer and cause
such Corresponding Junior Subordinated Debentures to be distributed to the
holders of such Preferred Securities and Common Securities in liquidation of the
Issuer. If at any time an Issuer is not or will not be taxed as a grantor trust
but a Tax Event in respect of the related Preferred Securities has not occurred,
ITT Hartford has the right to terminate the Issuer and cause the Corresponding
Junior Subordinated Debentures to be distributed to the holders of the Preferred
Securities in liquidation of the Issuer. If ITT Hartford does not elect either
option (i) or (ii) above, the applicable series of Preferred Securities will
remain outstanding and, in the event a Tax Event has occurred and is continuing,
Additional Sums (as defined below) will be payable on the Corresponding Junior
Subordinated Debentures.
Extension of Maturity of Corresponding Junior Subordinated Debentures. If
provided in the applicable Prospectus Supplement, ITT Hartford shall have the
right to extend or shorten the maturity of any series of Corresponding Junior
Subordinated Debentures at the time that ITT Hartford exercises its right to
elect to terminate the related Issuer and cause such Corresponding Junior
Subordinated Debentures to be distributed to the holders of such Preferred
Securities and Common Securities in liquidation of the Issuer, provided that it
can extend the maturity only if certain conditions specified in the applicable
Prospectus Supplement are met at the time such election is made and at the time
of such extension.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by an Issuer on the
outstanding Preferred Securities and Common Securities of the Issuer shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which the Issuer has become subject as a result of a Tax Event.
"Tax Event" means the receipt by the Issuer of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to,
or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) the Issuer is, or will be within 90 days of the date
thereof, subject to United States Federal income tax with respect to income
received or accrued on the corresponding series of Corresponding Junior
Subordinated Debentures, (ii) interest payable by ITT Hartford on such series of
Corresponding Junior Subordinated Debentures is not, or within 90 days of the
date thereof, will not be, deductible, in whole or in part, for United States
Federal income tax purposes, or (iii) the Issuer is, or will be within 90 days
of the date thereof, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Investment Company Event" means the occurrence of a change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
"Change in 1940 Act Law") to the effect that the applicable Issuer is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), which
Change in 1940 Act Law becomes effective on or after the date of original
issuance of the series of Preferred Securities issued by the Issuer.
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"Like Amount" means (i) with respect to a redemption of any series of
Preferred Securities, Preferred Securities of such series having a Liquidation
Amount (as defined below) equal to that portion of the principal amount of
Corresponding Junior Subordinated Debentures to be contemporaneously redeemed in
accordance with the Indenture and the proceeds of which will be used to pay the
Redemption Price of such Preferred Securities, and (ii) with respect to a
distribution of Corresponding Junior Subordinated Debentures to holders of any
series of Preferred Securities in connection with a dissolution or liquidation
of the related Hartford Trust, Corresponding Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of the Preferred
Securities of the holder to whom such Corresponding Junior Subordinated
Debentures are distributed. "Liquidation Amount" means the stated amount of $25
per Preferred Security and Common Security.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities (i) such
series of Preferred Securities will no longer be deemed to be outstanding, (ii)
The Depository Trust Company ("DTC") or its nominee, as the record holder of
such series of Preferred Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing such series of Preferred Securities not held by DTC or its nominee
will be deemed to represent the Corresponding Junior Subordinated Debentures
having a principal amount equal to the stated liquidation preference of such
series of Preferred Securities, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on such series of Preferred
Securities until such certificates are presented to the Administrative Trustees
or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of an Issuer were to occur. Accordingly, the Preferred Securities
that an investor may purchase, or the Corresponding Junior Subordinated
Debentures that the investor may receive on dissolution and liquidation of an
Issuer, may trade at a discount to the price that the investor paid to purchase
the Preferred Securities offered hereby.
Redemption Procedures
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be payable
on each Redemption Date only to the extent that the related Issuer has funds on
hand available for the payment of such Redemption Price. See also "--
Subordination of Common Securities".
If an Issuer gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date, to
the extent funds are available, the Property Trustee will deposit irrevocably
with the DTC funds sufficient to pay the applicable Redemption Price and will
give DTC irrevocable instructions and authority to pay the Redemption Price to
the holders of such Preferred Securities. See "-- Book-Entry Issuance". If such
Preferred Securities are no longer in book-entry form, the Issuer, to the extent
funds are available, will irrevocably deposit with the paying agent for such
Preferred Securities funds sufficient to pay the applicable Redemption Price and
will give such paying agent irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their certificates
evidencing such Preferred Securities. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Preferred
Securities called for redemption shall be payable to the holders of such
Preferred Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of such
Preferred Securities so called for redemption will cease, except the right of
the holders of such Preferred Securities to receive the Redemption Price, but
without interest on such Redemption Price, and such Preferred Securities will
cease to be outstanding. In the event that any date fixed for redemption of
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding
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day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding Business
Day. In the event that payment of the Redemption Price in respect of Preferred
Securities called for redemption is improperly withheld or refused and not paid
either by the Issuer or by ITT Hartford pursuant to the Guarantee as described
under "Description of Guarantee", Distributions on such Preferred Securities
will continue to accrue at the then applicable rate, from the Redemption Date
originally established by the Issuer for such Preferred Securities to the date
such Redemption Price is actually paid, in which case the actual payment date
will be the date fixed for redemption for purposes of calculating the Redemption
Price.
Subject to applicable law (including, without limitation, United States
federal securities law), ITT Hartford or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Preferred Securities are not in book-entry form, the relevant record date for
such Preferred Securities shall be the date 15 days prior to the Redemption Date
or liquidation date, as applicable.
If less than all of the Preferred Securities and Common Securities issued
by an Issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata among the Preferred Securities and the
Common Securities. The particular Preferred Securities to be redeemed shall be
selected on a pro rata basis not more than 60 days prior to the Redemption Date
by the Property Trustee from the outstanding Preferred Securities not previously
called for redemption, by such method as the Property Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination larger than $25.
The Property Trustee shall promptly notify the trust registrar in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of each Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Preferred Securities
shall relate, in the case of any Preferred Securities redeemed or to be redeemed
only in part, to the portion of the aggregate Liquidation Amount of Preferred
Securities which has been or is to be redeemed.
Subordination Of Common Securities
Payment of Distributions (including Additional Amounts, if applicable) on,
and the Redemption Price of, each Issuer's Preferred Securities and Common
Securities, as applicable, shall be made pro rata based on the Liquidation
Amount of such Preferred Securities and Common Securities; provided, however,
that if on any Distribution Date or Redemption Date a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any of the
Issuer's Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions (including
Additional Amounts, if applicable) on all of the Issuer's outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all of the Issuer's outstanding Preferred Securities, shall have been
made or provided for, and all funds available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or Redemption Price of, the Issuer's
Preferred Securities then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, ITT Hartford as holder of such Issuer's Common Securities will be
deemed to have waived any right to act with respect to any such
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Event of Default under the Trust Agreement until the effect of all such Events
of Default with respect to such Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under the Trust Agreement
with respect to the Preferred Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
such Preferred Securities and not on behalf of ITT Hartford as holder of the
Issuer's Common Securities, and only the holders of such Preferred Securities
will have the right to direct the Property Trustee to act on their behalf.
Liquidation Distribution upon Termination
Pursuant to the Trust Agreement, each Issuer shall automatically terminate
upon expiration of its term and shall be terminated by ITT Hartford on the first
to occur of: (i) the occurrence of certain events of bankruptcy, dissolution or
liquidation of ITT Hartford; (ii) the distribution of a Like Amount of the
Corresponding Junior Subordinated Debentures to the holders of its Preferred
Securities and Common Securities following the occurrence of a Special Event or
in the event the Issuer is not or will not be taxed as a grantor trust but a Tax
Event has not occurred and in each case ITT Hartford as Depositor has given
written direction to the Property Trustee to terminate such Issuer within 45
days of such event (which direction is optional and wholly within the discretion
of ITT Hartford as Depositor); (iii) the redemption of all of the Issuer's
Preferred Securities; and (iv) an order for the dissolution of the Issuer shall
have been entered by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of such Issuer as provided by applicable law, to the
holders of such Preferred Securities and Common Securities a Like Amount of the
Corresponding Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of the Issuer available
for distribution to holders, after satisfaction of liabilities to creditors of
such Issuer as provided by applicable law, an amount equal to, in the case of
holders of Preferred Securities, the aggregate of the Liquidation Amount plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because such Issuer has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by such Issuer on its Preferred Securities shall be paid on a pro rata
basis. The holder(s) of such Issuer's Common Securities will be entitled to
receive distributions upon any such liquidation pro rata with the holders of its
Preferred Securities, except that if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities. A supplemental Indenture may provide that if an early
termination occurs as described in clause (iv) above, the Corresponding Junior
Subordinated Debentures may be subject to optional redemption in whole (but not
in part).
Events of Default; Notice
Any one of the following events constitutes an "Event of Default" under
each Trust Agreement (an "Event of Default") with respect to the Preferred
Securities issued thereunder (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Junior Subordinated Debentures -- Debenture Events of
Default"); or
(ii) default by the Property Trustee in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days; or
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(iii) default by the Property Trustee in the payment of any Redemption
Price of any Preferred Security or Common Security when it becomes due and
payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 10% in aggregate Liquidation
Amount of the outstanding Preferred Securities of the applicable Issuer, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under such
Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by ITT Hartford to appoint
a successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer's Preferred
Securities, the Administrative Trustees and ITT Hartford, as Depositor, unless
such Event of Default shall have been cured or waived. ITT Hartford, as
Depositor, and the Administrative Trustees are required to file annually with
the Property Trustee a certificate as to whether or not they are in compliance
with all the conditions and covenants applicable to them under the Trust
Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
termination of each Issuer as described above. See "-- Liquidation Distribution
Upon Termination". The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.
Removal of Issuer Trustees
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in ITT Hartford as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment of
a successor trustee shall be effective until the acceptance of appointment by
the successor trustee in accordance with the provisions of the Trust Agreement.
Co-trustees and Separate Property Trustee
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property may
at the time be located, ITT Hartford, as the holder of the Common Securities,
and the Administrative Trustees shall have power to appoint one or more persons
either to act as a co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such person or persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Trust Agreement. In case a Debenture Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
such appointment.
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Merger or Consolidation of Issuer Trustees
Any corporation into which the Property Trustee, the Delaware Trustee or
any Administrative Trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Trustee, shall be the successor of such Trustee under the
Trust Agreements, provided such corporation shall be otherwise qualified and
eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Issuers
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described below. An Issuer may, at the request of ITT Hartford, with the consent
of the Administrative Trustees and without the consent of the holders of the
Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to a trust organized as such under the laws of any State;
provided, that (i) such successor entity either (a) expressly assumes all of the
obligations of such Issuer with respect to the Preferred Securities or (b)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so long
as the Successor Securities rank the same as the Preferred Securities rank in
priority with respect to distributions and payments upon liquidation, redemption
and otherwise, (ii) ITT Hartford expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Corresponding Junior Subordinated Debentures, (iii) the Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Preferred Securities are then listed, if any, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose identical to that of the Issuer, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease ITT
Hartford has received an opinion from independent counsel to the Issuer
experienced in such matters to the effect that (a) such merger, consolidation,
amalgamation, replacement conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease neither the Issuer nor such successor entity will be required
to register as an investment company under the Investment Company Act and (viii)
ITT Hartford or any permitted successor or assignee owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, an Issuer shall not, except
with the consent of holders of 100% in Liquidation Amount of the Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Issuer or the successor entity to be classified as
other than a grantor trust for Federal income tax purposes.
Voting Rights; Amendment of Trust Agreement
Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and each Trust Agreement, the
holders of the Preferred Securities will have no voting rights.
The Trust Agreement may be amended from time to time by ITT Hartford and
the Issuer Trustees, without the consent of the holders of the Preferred
Securities (i) to cure any ambiguity, correct or supplement any provisions in
the Trust Agreement which may be inconsistent with any other provision, or to
make any
24
other provisions with respect to matters or questions arising under the Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement, or (ii) to modify, eliminate or add to any provisions of the
Trust Agreement to such extent as shall be necessary to ensure that the Issuer
will be classified for Federal income tax purposes as a grantor trust at all
times that any Preferred Securities and Common Securities are outstanding or to
ensure that the Issuer will not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (i), such action shall not adversely affect in any material respect
the interests of any holder of Preferred Securities or Common Securities, and
any amendments of the Trust Agreement shall become effective when notice thereof
is given to the holders of Preferred Securities and Common Securities. A Trust
Agreement may be amended by the Issuer Trustees and ITT Hartford with (i) the
consent of holders representing not less than a majority (based upon Liquidation
Amounts) of the outstanding Preferred Securities and Common Securities and (ii)
receipt by the Issuer Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer Trustees in
accordance with such amendment will not affect the Issuer's status as a grantor
trust for Federal income tax purposes or the Issuer's exemption from status of
an "investment company" under the Investment Company Act, provided that without
the consent of each holder of Preferred Securities and Common Securities, the
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Preferred Securities and Common Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Preferred Securities and Common Securities as of a specified date or (ii)
restrict the right of a holder of Preferred Securities and Common Securities to
institute suit for the enforcement of any such payment on or after such date.
So long as any Corresponding Junior Subordinated Debentures are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Property Trustee with
respect to such Corresponding Junior Subordinated Debentures, (ii) waive any
past default that is waiveable under Section 513 of the Indenture, (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Junior Subordinated Debentures shall be due and payable or (iv) consent to
any amendment, modification or termination of the Indenture or such
Corresponding Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in aggregate Liquidation Amount of all outstanding Preferred
Securities; provided, however, that where a consent under the Indenture would
require the consent of each holder of Corresponding Junior Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior consent of each holder of the corresponding Preferred
Securities. The Issuer Trustees shall not revoke any action previously
authorized or approved by a vote of the Preferred Securities except by
subsequent vote of the holders of the Preferred Securities. The Property Trustee
shall notify all holders of the Preferred Securities of any notice of default
with respect to the Corresponding Junior Subordinated Debentures. In addition to
obtaining the foregoing approvals of the holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Issuer Trustees shall obtain
an opinion of counsel experienced in such matters to the effect that the Issuer
will not be classified as a corporation or partnership for United States Federal
income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or pursuant
to written consent. The Property Trustee will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be given
to each holder of record of Preferred Securities in the manner set forth in each
Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Issuer to redeem and cancel its Preferred Securities in accordance with
the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote
or consent under any of the circumstances described above, any of the Preferred
Securities that are owned by ITT Hartford, the Issuer
25
Trustees or any affiliate of ITT Hartford or any Issuer Trustees, shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
Global Preferred Securities
The Preferred Securities of a series may be issued in whole or in part in
the form of one or more Global Preferred Securities that will be deposited with,
or on behalf of, the Depositary identified in the Prospectus Supplement relating
to such series. Unless otherwise indicated in the applicable Prospectus
Supplement for such series, the Depositary will be DTC. Global Preferred
Securities may be issued only in fully registered form and in either temporary
or permanent form. Unless and until it is exchanged in whole or in part for the
individual Preferred Securities represented thereby, a Global Preferred Security
may not be transferred except as a whole by the Depositary for such Global
Preferred Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another 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 Preferred Securities will be described in the Prospectus Supplement relating
to such series, ITT Hartford anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-entry
registration and transfer system, the respective aggregate Liquidation Amounts
of the individual Preferred Securities represented by such Global Preferred
Securities to the accounts of Participants. Such accounts shall be designated by
the dealers, underwriters or agents with respect to such Preferred Securities or
by ITT Hartford if such Preferred Securities are offered and sold directly by
ITT Hartford. Ownership of beneficial interests in a Global Preferred Security
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Preferred
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the applicable Depositary or its nominee
(with respect to interests of Participants) and the records of Participants
(with respect to interests of persons who hold through Participants). The laws
of some states require that 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 Preferred
Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Preferred Securities represented by such Global Preferred Security for all
purposes under the indenture governing such Preferred Securities. Except as
provided below, owners of beneficial interests in a Global Preferred Security
will not be entitled to have any of the individual Preferred Securities of the
series represented by such Global Preferred Security registered in their names,
will not receive or be entitled to receive physical delivery of any such
Preferred Securities of such series in definitive form and will not be
considered the owners of holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Preferred Securities represented by a Global Preferred Security registered in
the name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Preferred
Security representing such Preferred Securities. None of ITT Hartford, the
Property Trustee, any Paying Agent, or the Securities Registrar for such
Preferred Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
ITT Hartford expects that the Depositary for a series of Preferred
Securities or its nominee, upon receipt of any payment of Liquidation Amount,
premium or Distributions in respect of a permanent Global
26
Preferred Security representing any of such Preferred Securities, immediately
will credit Participants' accounts with payments in amounts proportionate to
their respective beneficial interest in the aggregate Liquidation Amount of such
Global Preferred Security for such Preferred Securities as shown on the records
of such Depositary or its nominee ITT Hartford also expects that payments by
Participants to owners of beneficial interests in such Global Preferred 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 Preferred Securities is at any time unwilling, unable
or ineligible to continue as a depositary and a successor depositary is not
appointed by ITT Hartford within 90 days, ITT Hartford will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security representing such series of Preferred Securities. In addition, ITT
Hartford may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Preferred Securities,
determine not to have any Preferred Securities of such series represented by one
or more Global Preferred Securities and, in such event, will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security or Securities representing such series of Preferred Securities.
Further, if ITT Hartford so specifies with respect to the Preferred Securities
of a series, an owner of a beneficial interest in a Global Preferred Security
representing Preferred Securities of such series may, on terms acceptable to ITT
Hartford, the Property Trustee and the Depositary for such Global Preferred
Security, receive individual Preferred Securities of such series in exchange for
such beneficial interests, subject to any limitations described in the
Prospectus Supplement relating to such Preferred Securities. In any such
instance, an owner of a beneficial interest in a Global Preferred Security will
be entitled to physical delivery of individual Preferred Securities of the
series represented by such Global Preferred Security equal in principal amount
to such beneficial interest and to have such Preferred Securities registered in
its name. Individual Preferred Securities of such series so issued will be
issued in denominations, unless otherwise specified by ITT Hartford, of $25 and
integral multiples thereof.
Payment and Paying Agency
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution Dates
or, if any Issuer's Preferred Securities are not held by DTC, such payments
shall be made by check mailed to the address of the holder entitled thereto as
such address shall appear on the Register. Unless otherwise specified in the
applicable Prospectus Supplement, the paying agent (the "Paying Agent") shall
initially be the Property Trustee and any co-paying agent chosen by the Property
Trustee and acceptable to the Administrative Trustees and ITT Hartford. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustees and ITT Hartford. In the event that the Property
Trustee shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company acceptable to the Administrative Trustees and ITT Hartford).
Book-entry Issuance
DTC will act as securities depositary for all of the Preferred Securities.
The Preferred Securities will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more
fully-registered global certificates will be issued for the Preferred Securities
of each Issuer, representing in the aggregate the total number of such Issuer's
Preferred Securities, and will be deposited with DTC.
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 Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized
27
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations ("Direct Participants"). DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc. (the
"New York Stock Exchange"), the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in Preferred Securities, except in the event that use
of the book-entry system for the Preferred Securities of such Issuer is
discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the Preferred Securities. If less than all of an Issuer's Preferred Securities
are being redeemed, DTC's current practice is to determine by lot the amount of
the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities is limited to the
holders of record of the Preferred Securities, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities. Under its usual procedures, DTC would mail an
omnibus proxy (the "Omnibus Proxy") to the Property Trustee as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Direct Participants to whose accounts such Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the
Property Trustee to DTC. DTC's practice is to credit Direct Participants'
accounts on the relevant payment date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of DTC, the
Property Trustee, the Issuer thereof or ITT Hartford, subject to any statutory
or regulatory requirements as may be in effect from time to time. Payment of
Distributions to DTC is the responsibility of the Property Trustee, disbursement
of such payments to Direct Participants is the responsibility of DTC, and
disbursements of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
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DTC may discontinue providing its services as securities depositary with
respect to any of the Preferred Securities at any time by giving reasonable
notice to the Property Trustee and ITT Hartford. In the event that a successor
securities depositary is not obtained, definitive Preferred Security
certificates representing such Preferred Securities are required to be printed
and delivered. ITT Hartford, at its option, may decide to discontinue use of the
system of book-entry transfers through DTC (or a successor depositary). After a
Debenture Event of Default, the holders of a majority in liquidation preference
of Preferred Securities may determine to discontinue the system of book-entry
transfers through DTC. In any such event, definitive certificates for such
Issuer's Preferred Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuers and ITT Hartford believe to be
accurate, but the Issuers and ITT Hartford assume no responsibility for the
accuracy thereof. Neither the Issuers nor ITT Hartford has any responsibility
for the performance by DTC or its Participants of their respective obligations
as described herein or under the rules and procedures governing their respective
operations.
Registrar and Transfer Agent
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuers will not be required to register or cause to be registered
the transfer of their Preferred Securities after such Preferred Securities have
been called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreements and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
Property Trustee is under no obligation to exercise any of the powers vested in
it by the Trust Agreement at the request of any holder of Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Event of Default has occurred
and is continuing and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in a Trust Agreement
or is unsure of the application of any provision of a Trust Agreement, and the
matter is not one on which holders of Preferred Securities are entitled under
the Trust Agreement to vote, then the Property Trustee shall take such action as
is directed by ITT Hartford and if not so directed, shall take such action as it
deems advisable and in the best interests of the holders of the Preferred
Securities and the Common Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that no Issuer will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or taxed as a corporation for Federal income tax purposes
and so that the Corresponding Junior Subordinated Debentures will be treated as
indebtedness of ITT Hartford for United States Federal income tax purposes. In
this connection, ITT Hartford and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of each Issuer or each Trust Agreement, that ITT Hartford and the Administrative
Trustees determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the holders of the related Preferred Securities.
29
Holders of the Preferred Securities have no preemptive or similar rights.
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
DESCRIPTION OF GUARANTEE
Each Guarantee will be executed and delivered by ITT Hartford concurrently
with the issuance by each Issuer of its Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. The Wilmington Trust
Company will act as indenture trustee ("Guarantee Trustee") under each Guarantee
for the purposes of compliance with the Trust Indenture Act and each Guarantee
will be qualified as an Indenture under the Trust Indenture Act. This summary of
certain provisions of the Guarantees does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all of the provisions
of each Guarantee Agreement, including the definitions therein of certain terms,
and the Trust Indenture Act. The form of the Guarantee has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Reference in this summary to Preferred Securities means that Issuer's Preferred
Securities to which a Guarantee relates. The Guarantee Trustee will hold each
Guarantee for the benefit of the holders of the related Issuer's Preferred
Securities.
General
ITT Hartford will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any defense,
right of set-off or counterclaim that such Issuer may have or assert other than
the defense of payment. The following payments with respect to the Preferred
Securities, to the extent not paid by or on behalf of the related Issuer (the
"Guarantee Payments"), will be subject to the Guarantee: (i) any accumulated and
unpaid Distributions required to be paid on such Preferred Securities, to the
extent that such Issuer has funds on hand available therefor, (ii) the
Redemption Price with respect to any Preferred Securities called for redemption
to the extent that such Issuer has funds on hand available therefor, or (iii)
upon a voluntary or involuntary dissolution, winding up or liquidation of such
Issuer (unless the Corresponding Junior Subordinated Debentures are distributed
to holders of such Preferred Securities), the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of such Issuer remaining available for
distribution to holders of Preferred Securities. ITT Hartford's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by ITT Hartford to the holders of the applicable Preferred Securities or
by causing the Issuer to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer's obligations under the Preferred Securities, but will apply
only to the extent that such related Issuer has funds sufficient to make such
payments, and is not a guarantee of collection.
If ITT Hartford does not make interest payments on the Corresponding Junior
Subordinated Debentures held by the Issuer, it is expected that the Issuer will
not pay Distributions on the Preferred Securities and will not have funds
legally available therefor. Each Guarantee will rank subordinate and junior in
right of payment to all Senior Debt. See "-- Status of Guarantee". As a
non-operating holding company, most of the operating assets of ITT Hartford and
its consolidated subsidiaries are owned by such subsidiaries, and ITT Hartford
relies primarily on dividends from such subsidiaries to meet its obligations for
payment of principal and interest on its outstanding debt obligations and
corporate expenses. Accordingly, ITT Hartford's obligations under the Guarantees
will be effectively subordinated to all existing and future liabilities of ITT
Hartford's subsidiaries, and claimants should look only to the assets of ITT
Hartford for payments thereunder. The payment of dividends by ITT Hartford's
insurance company subsidiaries, including Hartford Fire, is limited under the
insurance holding company laws in which such subsidiaries are domiciled. See
"ITT Hartford Group". Except as otherwise provided in the applicable Prospectus
Supplement, the Guarantees do not limit the incurrence or issuance of other
secured or unsecured debt of ITT Hartford, whether under the Indenture, any
other indenture
30
that ITT Hartford may enter into in the future or otherwise. See the Prospectus
Supplement relating to any offering of Preferred Securities.
ITT Hartford has, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of the Issuer's
obligations under the Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations under the Preferred Securities. See "Relationship Among the
Preferred Securities, the Junior Subordinated Debentures and the Guarantee --
General".
Status of the Guarantee
Each Guarantee will constitute an unsecured obligation of ITT Hartford and
will rank subordinate and junior in right of payment to all Senior Debt.
Each Guarantee will rank pari passu with the Guarantee issued by ITT
Hartford in respect of the 7.70% Cumulative Quarterly Income Preferred
Securities, Series A and with all other Guarantees issued by ITT Hartford. Each
Guarantee will constitute a guarantee of payment and not of collection (i.e.,
the guaranteed party may institute a legal proceeding directly against the
Guarantor to enforce its rights under the Guarantee without first instituting a
legal proceeding against any other person or entity). Each Guarantee will be
held for the benefit of the holders of the related Preferred Securities. Each
Guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not paid by the Issuer or upon distribution to the holders of
the Preferred Securities of the Corresponding Junior Subordinated Debentures.
None of the Guarantees places a limitation on the amount of additional Senior
Debt that may be incurred by ITT Hartford. ITT Hartford expects from time to
time to incur additional indebtedness constituting Senior Debt.
Amendments and Assignment
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related Preferred Securities (in which case no vote
will be required), no Guarantee may be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of such
outstanding Preferred Securities. The manner of obtaining any such approval will
be as set forth under "Description of the Preferred Securities -- Voting Rights;
Amendment of Trust Agreement". All guarantees and agreements contained in each
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of ITT Hartford and shall inure to the benefit of the holders of
the related Preferred Securities then outstanding.
Events of Default
An event of default under each Guarantee will occur upon the failure of ITT
Hartford to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
related Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Guarantee Trustee
in respect of such Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against ITT Hartford to enforce its rights under such Guarantee without
first instituting a legal proceeding against the Issuer, the Guarantee Trustee
or any other person or entity.
31
ITT Hartford, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not ITT Hartford is in compliance with
all the conditions and covenants applicable to it under the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of
a default by ITT Hartford in performance of any Guarantee, undertakes to perform
only such duties as are specifically set forth in each Guarantee and, after
default with respect to any Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by any Guarantee at the request of
any holder of any Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
Termination of the Guarantee
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer or
upon distribution of Corresponding Junior Subordinated Debentures to the holders
of the related Preferred Securities. Each Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the related Preferred Securities must restore payment of any sums paid under
such Preferred Securities or such Guarantee.
Governing Law
Each Guarantee will be governed by and construed in accordance with the
laws of the state of New York.
The Expense Agreement
Pursuant to the Expense Agreement entered into by ITT Hartford under the
Trust Agreement (the "Expense Agreement"), ITT Hartford will irrevocably and
unconditionally guarantee to each person or entity to whom the Issuer becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
the Issuer, other than obligations of the Issuer to pay to the holders of any
Preferred Securities or other similar interests in the Issuer the amounts due
such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be.
DESCRIPTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures are to be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of the related Preferred Securities. See "Description
of Junior Subordinated Debentures". This summary of certain terms and provisions
of relating to Corresponding Junior Subordinated Debentures and the Indenture
does not purport to be complete and is subject to, and is qualified in its
entirety by reference to the 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 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.
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General
Concurrently with the issuance of each Issuer's Preferred Securities, the
Issuer will invest the proceeds thereof and the consideration paid by ITT
Hartford for the Common Securities in a series of Corresponding Junior
Subordinated Debentures issued by ITT Hartford to the Issuer. Each series of
Corresponding Junior Subordinated Debentures will be in the principal amount
equal to the aggregate stated Liquidation Amount of the related Preferred
Securities plus ITT Hartford's concurrent investment in the Common Securities
and will rank pari passu with the 7.70% Junior Subordinated Deferrable Interest
Debentures, Series A, Due February 28, 2016 and with all other series of Junior
Subordinated Debentures. The Corresponding Junior Subordinated Debentures will
be unsecured and subordinate and junior in right of payment to the extent and in
the manner set forth in the Indenture to all Senior Debt of ITT Hartford. See
"Description of Junior Subordinated Debentures -- Subordination" and the
Prospectus Supplement relating to any offering of corresponding Preferred
Securities.
Optional Redemption
Unless otherwise specified in the applicable Prospectus Supplement, ITT
Hartford may, at its option, redeem the Corresponding Junior Subordinated
Debentures of any series on any Interest Payment Date (as defined herein) with
respect thereto, in whole at any time or in part from time to time. Except as
otherwise set forth in the applicable Prospectus Supplement, the redemption
price for any Corresponding Junior Subordinated Debentures so redeemed shall be
equal to any accrued and unpaid interest thereon to the date fixed for
redemption, plus the greater of (i) the principal amount thereof and (ii) an
amount equal to the Discounted Remaining Fixed Amount Payments. See "Description
of Junior Subordinated Debentures -- Redemption".
If a Special Event in respect of an Issuer shall occur and be continuing,
ITT Hartford may, at its option, redeem the Corresponding Junior Subordinated
Debentures on any Interest Payment Date falling within 90 days of the occurrence
of such Special Event, in whole but not in part, subject to the provisions of
the Indenture. The redemption price for any Corresponding Junior Subordinated
Debentures shall be equal to 100% of the principal amount of such Corresponding
Junior Subordinated Debentures then outstanding plus accrued and unpaid interest
to the date fixed for redemption.
For so long as the applicable Issuer is the holder of all the outstanding
series of Corresponding Junior Subordinated Debentures, the proceeds of any such
redemption will be used by the Issuer to redeem the corresponding Preferred
Securities in accordance with their terms. ITT Hartford may not redeem a series
of Corresponding Junior Subordinated Debentures in part unless all accrued and
unpaid interest has been paid in full on all outstanding Corresponding Junior
Subordinated Debentures of such series for all interest periods terminating on
or prior to the Redemption Date.
Certain Covenants of ITT Hartford
ITT Hartford will covenant in the Indenture as to each series of
Corresponding Junior Subordinated Debentures, that if and so long as (i) the
Issuer of the corresponding series of Preferred Securities and Common Securities
is the holder of all such Corresponding Junior Subordinated Debentures, (ii) a
Tax Event in respect of such Issuer has occurred and is continuing and (iii) ITT
Hartford has elected, and has not revoked such election, to pay Additional Sums
in respect of such Preferred Securities and Common Securities, ITT Hartford will
pay to such Issuer such Additional Sums. ITT Hartford will also covenant, as to
each series of Corresponding Junior Subordinated Debentures, that it will not,
and will not permit any subsidiary of ITT Hartford to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of ITT Hartford's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities (including other Corresponding Junior
Subordinated Debentures) that rank pari passu with or junior in interest to the
Corresponding Junior Subordinated Debentures or make any guarantee payments with
respect to the foregoing (other than (a) dividends or distributions in common
stock of ITT Hartford, (b) redemptions or purchases of any rights pursuant to
ITT Hartford's Rights Plan, or any successor to such Rights Plan, and the
declaration of a dividend of such rights in the future, and (c) payments under
any Guarantee) if at such time (i) there shall have
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occurred any event of which ITT Hartford has actual knowledge that (a) with the
giving of notice or the lapse of time, or both, would constitute an "Event of
Default" under the Indenture with respect to Corresponding Junior Subordinated
Debentures of such series and (b) in respect of which ITT Hartford shall not
have taken reasonable steps to cure, (ii) ITT Hartford shall be in default with
respect to its payment of any obligations under the Guarantee relating to the
Preferred Securities of the Issuer to which Corresponding Junior Subordinated
Debentures of such series have been issued or (iii) ITT Hartford shall have
given notice of its selection of an Extension Period as provided in the
Indenture with respect to Corresponding Junior Subordinated Debentures of such
series and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing. ITT Hartford will also covenant, as
to each series of Corresponding Junior Subordinated Debentures, (i) to maintain
directly or indirectly 100% ownership of the Common Securities of the Issuer to
which Corresponding Junior Subordinated Debentures have been issued, provided
that certain successors which are permitted pursuant to the Indenture may
succeed to ITT Hartford's ownership of the Common Securities, (ii) not to
voluntarily terminate, wind-up or liquidate any Issuer, except (a) in connection
with a distribution of Corresponding Junior Subordinated Debentures to the
holders of the Preferred Securities in liquidation of such Issuer, or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the related Trust Agreement and (iii) to use its reasonable efforts, consistent
with the terms and provisions of the related Trust Agreement, to cause such
Issuer to remain a business trust and not to be classified as an association
taxable as a corporation for United States Federal income tax purposes.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on
each series of Corresponding Junior Subordinated Debentures, such payments will
be sufficient to cover Distributions and other payments due on the corresponding
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to the
sum of the aggregate stated liquidation amount of the corresponding Preferred
Securities and corresponding Common Securities; (ii) the interest rate and
interest and other payment dates on each series of Corresponding Junior
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the corresponding Preferred Securities; (iii) ITT
Hartford shall pay for all and any costs, expenses and liabilities of such
Issuer except the Issuer's obligations to holders of its Preferred Securities
under such Preferred Securities; and (iv) each Trust Agreement further provides
that the Issuer will not engage in any activity that is not consistent with the
limited purposes of such Issuer.
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by ITT Hartford as and to the extent
set forth under "Description of Guarantee". Taken together, ITT Hartford's
obligations under each series of Junior Subordinated Debentures, the Indenture,
the related Trust Agreement, the related Expense Agreement, and the related
Guarantee provide a full, irrevocable and unconditional guarantee of payments of
distributions and other amounts due on the related series of Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Issuer's obligations under the
Preferred Securities. If and to the extent that ITT Hartford does not make
payments on any series of Corresponding Junior Subordinated Debentures, such
Issuer will not pay Distributions or other amounts due on its Preferred
Securities.
Notwithstanding anything to the contrary in the Indenture, ITT Hartford has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent ITT Hartford has theretofore made, or is concurrently on
the date of such payment making, a payment under the related Guarantee.
34
A holder of any related Preferred Security may institute a legal proceeding
directly against ITT Hartford to enforce its rights under the related Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
related Issuer or any other person or entity.
Each Issuer's Preferred Securities evidence the rights of the holders
thereof to the benefits of such Issuer, and each Issuer exists for the sole
purpose of issuing its Preferred Securities and Common Securities and investing
the proceeds thereof in Corresponding Junior Subordinated Debentures. A
principal difference between the rights of a holder of a Preferred Security and
a holder of a Corresponding Junior Subordinated Debenture is that a holder of a
Corresponding Junior Subordinated Debenture will accrue, and (subject to the
permissible extension of the interest period) is entitled to receive, interest
on the principal amount of Corresponding Junior Subordinated Debentures held,
while a holder of Preferred Securities is only entitled to receive Distributions
if and to the extent the Issuer has funds available for the payment of such
Distributions.
Upon any voluntary or involuntary termination, winding-up or liquidation of
any Issuer involving the liquidation of the Corresponding Junior Subordinated
Debentures, the holders of Preferred Securities will be entitled to receive, out
of assets held by such Issuer, the Liquidation Distribution in cash. See
"Description of Preferred Securities -- Liquidation Distribution Upon
Termination". Upon any voluntary or involuntary liquidation or bankruptcy of ITT
Hartford, the Property Trustee, as holder of the Corresponding Junior
Subordinated Debentures, would be a subordinated creditor of ITT Hartford,
subordinated in right of payment to all Senior Debt, but entitled to receive
payment in full of principal and interest, before any stockholders of ITT
Hartford receive payments or distributions. Since ITT Hartford is the guarantor
under each Guarantee and has agreed to pay for all costs, expenses and
liabilities of each Issuer (other than the Issuer's obligations to the holders
of its Preferred Securities), the positions of a holder of such Preferred
Securities and a holder of such Corresponding Junior Subordinated Debentures
relative to other creditors and to stockholders of ITT Hartford in the event of
liquidation or bankruptcy of ITT Hartford would be substantially the same.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Indenture. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Corresponding Junior Subordinated Debentures until such Senior Debt has been
paid in full or any payment default thereunder has been cured or waived. Failure
to make required payments on any series of Corresponding Junior Subordinated
Debentures would constitute an event of default under the Indenture.
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures and the Preferred Securities may be sold
in a public offering to or through underwriters or dealers designated from time
to time. ITT Hartford and each Issuer may sell its Junior Subordinated
Debentures and Preferred Securities as soon as practicable after effectiveness
of the Registration Statement of which the Prospectus is a part. The names of
any underwriters or dealers involved in the sale of the Junior Subordinated
Debentures and Preferred Securities in respect of which this Prospectus is
delivered, the amount or number of Junior Subordinated Debentures and Preferred
Securities to be purchased by any such underwriters and any applicable
commissions or discounts will be set forth in the Prospectus Supplement.
Underwriters may offer and sell Junior Subordinated Debentures and
Preferred Securities at a fixed price or prices, which may be changed, or from
time to time at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. In connection with the
sale of Preferred Securities, underwriters may be deemed to have received
compensation from ITT Hartford and/or the applicable Issuer in the form of
underwriting discounts or commissions and may also receive commissions.
Underwriters may sell Junior Subordinated Debentures and Preferred Securities to
or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters.
35
Any underwriting compensation paid by ITT Hartford and/or the applicable
Issuer to underwriters in connection with the offering of Junior Subordinated
Debentures and Preferred Securities, and any discounts, concessions or
commissions allowed by such underwriters to participating dealers, will be set
forth in a Prospectus Supplement. Underwriters and dealers participating in the
distribution of Junior Subordinated Debentures and Preferred Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of such Junior Subordinated Debentures
and Preferred Securities may be deemed to be underwriting discounts and
commissions, under the Securities Act. Underwriters and dealers may be entitled,
under agreement with ITT Hartford and the applicable Issuer, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Securities Act, and to reimbursement by ITT Hartford for certain
expenses.
In connection with the offering of the Preferred Securities of any Issuer,
such Issuer may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set forth
in the accompanying Prospectus Supplement. If such Issuer grants any
over-allotment option, the terms of such over-allotment option will be set forth
in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, ITT Hartford and/or the applicable Issuer and/or any of their
affiliates in the ordinary course of business.
The Junior Subordinated Debentures and the Preferred Securities will be a
new issue of securities and will have no established trading market. Any
underwriters to whom Junior Subordinated Debentures and Preferred Securities are
sold for public offering and sale may make a market in such Junior Subordinated
Debentures and Preferred Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. Such
Junior Subordinated Debentures and Preferred Securities may or may not be listed
on a national securities exchange. No assurance can be given as to the liquidity
of or the existence of trading markets for any Junior Subordinated Debentures or
Preferred Securities.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters will be passed upon for ITT Hartford and the Issuers by Michael S.
Wilder, General Counsel of ITT Hartford and for the Issuers by Richards, Layton
& Finger, special Delaware counsel to ITT Hartford, 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 ITT Hartford
Group, Inc. and subsidiaries 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 accounting and auditing in giving
said report. Reference is made to said report, which includes an explanatory
paragraph with respect to the changes in the methods of accounting for certain
investments in debt and equity securities, and discounting certain workers'
compensation liabilities as discussed in the notes to consolidated financial
statements.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth those expenses to be incurred by ITT
Hartford in connection with the issuance and distribution of the securities
being registered. Except for the Securities and Exchange Commission filing fee,
all amounts shown are estimates.
Securities and Exchange Commission filing fee................ $431,035
Fees and expenses of Trustee................................. $ 15,000
Blue Sky and legal investment fees and expenses.............. $ 20,000
Printing and engraving expenses.............................. $ 75,000
Accountant's fees and expenses............................... $ 50,000
Legal fees and expenses...................................... $150,000
Miscellaneous expenses....................................... $ 50,000
--------
Total................................................. $791,035
========
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law, as amended, provides
in regards to indemnification of directors and officers as follows:
145. Indemnification of Officers, Directors, Employees and Agents;
Insurance.
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
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upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
section. Such determination shall be made (1) by a majority vote of the
directors who were not parties to such action, suit or proceeding even though
less than a quorum, or (2) if there are no such directors, or, if such directors
so direct, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the corporation as authorized in this section. Such expenses (including
attorneys' fees) incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under this section with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants or
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beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in this
section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Article 4 of ITT Hartford's By-laws provides in regard to indemnification
of directors and officers as follows:
4.1(a) Right to Indemnification. The Corporation, to the fullest
extent permitted by applicable law as then in effect, shall indemnify any
person who is or was a Director or officer of the Corporation and who is or
was involved in any manner (including, without limitation, as a party or a
witness) or is threatened to be made so involved in any threatened, pending
or completed investigation, claim, action, suit or proceeding, whether
civil, criminal, administrative or investigative (including, without
limitation, any action, suit or proceeding by or in the right of the
Corporation to procure a judgment in its favor) (a "Proceeding") by reason
of the fact that such person is or was a Director, officer, employee or
agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary or agent of another
corporation, partnership, joint venture, trust or other enterprise
(including, without limitation, any employee benefit plan) (a "Covered
Entity"), against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
such person in connection with such Proceeding; provided, however, that the
foregoing shall not apply to a Director or officer of the Corporation with
respect to a Proceeding that was commenced by such Director or officer
prior to a Change in Control (as defined in Section 4.4(e)(i) of this
Article 4). Any Director or officer of the Corporation entitled to
indemnification as provided in this Section 4.1(a) is hereinafter called an
"Indemnitee". Any right of an Indemnitee to indemnification shall be a
contract right and shall include the right to receive, prior to the
conclusion of any Proceeding, payment of any expenses actually and
reasonably incurred by the Indemnitee in connection with such Proceeding,
consistent with the provisions of applicable law as then in effect and the
other provisions of this Article 4.
(b) Effect of Amendments. Neither the amendment or repeal of, nor the
adoption of a provision inconsistent with, any provision of this Article 4
(including, without limitation, this Section 4.1(b)) shall adversely affect
the rights of any Director or officer under this Article 4 (i) with respect
to any Proceeding commenced or threatened prior to such amendment, repeal
or adoption of an inconsistent provision or (ii) after the occurrence of a
Change in Control, with respect to any Proceeding arising out of any action
or omission occurring prior to such amendment, repeal or adoption of an
inconsistent provision, in either case without the written consent of such
Director or officer.
4.2 Insurance, Contracts and Funding. The Corporation may purchase and
maintain insurance to protect itself and any indemnified person against any
expenses, judgments, fines and amounts paid in settlement as specified in
Section 4.1(a) or Section 4.5 of this Article 4 or incurred by any
indemnified person in connection with any Proceeding referred to in such
Sections, to the fullest extent permitted by applicable law as then in
effect. The Corporation may enter into contracts with any Director,
officer, employee or agent of the Corporation or any director, officer,
employee, fiduciary or agent of any Covered Entity in furtherance of the
provisions of this Article 4 and may create a trust fund or use other means
(including, without limitation, a letter of credit) to ensure the payment
of such amounts as may be necessary to effect indemnification as provided
in this Article 4.
4.3 Indemnification; Not Exclusive Right. The right of indemnification
provided in this Article 4 shall not be exclusive of any other rights to
which any indemnified person may otherwise be entitled, and the provisions
of this Article 4 shall inure to the benefit of the heirs and legal
representatives of any
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indemnified person under this Article 4 and shall be applicable to
Proceedings commenced or continuing after the adoption of this Article 4,
whether arising from acts or omissions occurring before or after such
adoption.
4.4 Advancement of Expenses; Procedures; Presumptions and Effect of
Certain Proceedings; Remedies. In furtherance, but not in limitation, of
the foregoing provisions, the following procedures, presumptions and
remedies shall apply with respect to the advancement of expenses and the
right to indemnification under this Article 4:
(a) Advancement of Expenses. All reasonable expenses incurred by
or on behalf of the Indemnitee in connection with any Proceeding shall
be advanced to the Indemnitee by the Corporation within 20 days after
the receipt by the Corporation of a statement or statements from the
Indemnitee requesting such advance or advances from time to time,
whether prior to or after final disposition of such Proceeding. Any
such statement or statements shall reasonably evidence the expenses
incurred by the Indemnitee and shall include any written affirmation
or undertaking required by applicable law in effect at the time of
such advance.
(b) Procedures for Determination of Entitlement to
Indemnification. (i) To obtain indemnification under this Article 4,
an Indemnitee shall submit to the Secretary of the Corporation a
written request, including such documentation and information as is
reasonably available to the Indemnitee and reasonably necessary to
determine whether and to what extent the Indemnitee is entitled to
indemnification (the "Supporting Documentation"). The determination of
the Indemnitee's entitlement to indemnification shall be made not
later than 60 days after receipt by the Corporation of the written
request for indemnification together with the Supporting
Documentation. The Secretary of the Corporation shall, promptly upon
receipt of such a request for indemnification, advise the Board in
writing that the Indemnitee has requested indemnification.
(ii) The Indemnitee's entitlement to indemnification under this
Article 4 shall be determined in one of the following ways: (A) by a
majority vote of the Disinterested Directors (as hereinafter defined),
if they constitute a quorum of the Board; (B) by a written opinion of
Independent Counsel as hereinafter defined) if (x) a Change in Control
(as hereinafter defined) shall have occurred and the Indemnitee so
requests or (y) a quorum of the Board consisting of Disinterested
Directors is not obtainable or, even if obtainable, a majority of such
Disinterested Directors so directs; (C) by the stockholders of the
Corporation (but only if a majority of the Disinterested Directors, if
they constitute a quorum of the Board, presents the issue of
entitlement to indemnification to the stockholders for their
determination); or (D) as provided in Section 4.4(c) of this
Article 4.
(iii) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to
Section 4.4(b)(ii), a majority of the Disinterested Directors shall
select the Independent Counsel, but only an Independent Counsel to
which the Indemnitee does not reasonably object; provided, however,
that if a Change in Control shall have occurred, the Indemnitee shall
select such Independent Counsel, but only an Independent Counsel to
which a majority of the Disinterested Directors does not reasonably
object.
(c) Presumptions and Effect of Certain Proceedings. Except as
otherwise expressly provided in this Article 4, if a Change in Control
shall have occurred, the Indemnitee shall be presumed to be entitled
to indemnification under this Article 4 (with respect to actions or
failures to act occurring prior to such Change in Control) upon
submission of a request for indemnification together with the
Supporting Documentation in accordance with Section 4.4(b) of this
Article 4, and thereafter the Corporation shall have the burden of
proof to overcome that presumption in reaching a contrary
determination. In any event, if the person or persons empowered under
Section 4.4(b) of this Article 4 to determine entitlement to
indemnification shall not have been appointed or shall not have made a
determination within 60 days after receipt by the Corporation of the
request therefor together with
II-4
the Supporting Documentation, the Indemnitee shall be deemed to be,
and shall be, entitled to indemnification unless (A) the Indemnitee
misrepresented or failed to disclose a material fact in making the
request for indemnification or in the Supporting Documentation or (B)
such indemnification is prohibited by law. The termination of any
Proceeding described in Section 4.1 of this Article 4, or of any
claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, adversely affect the right of the Indemnitee to
indemnification or create a presumption that the Indemnitee did not
act in good faith and in a manner which the Indemnitee reasonably
believed to be in or not opposed to the best interests of the
Corporation or, with respect to any criminal Proceeding, that the
Indemnitee had reasonable cause to believe that his or her conduct was
unlawful.
(d) Remedies of Indemnitee. (i) In the event that a determination
is made pursuant to Section 4.4(b) of this Article 4 that the
Indemnitee is not entitled to indemnification under this Article 4,
(A) the Indemnitee shall be entitled to seek an adjudication of his or
her entitlement to such indemnification either, at the Indemnitee's
sole option, in (x) an appropriate court of the state of Delaware or
any other court of competent jurisdiction or (y) an arbitration to be
conducted by a single arbitrator pursuant to the rules of the American
Arbitration Association; (B) any such judicial proceeding or
arbitration shall be de novo and the Indemnitee shall not be
prejudiced by reason of such adverse determination; and (C) if a
Change in Control shall have occurred, in any such judicial proceeding
or arbitration the Corporation shall have the burden of proving that
the Indemnitee is not entitled to indemnification under this Article 4
(with respect to actions or failures to act occurring prior to such
Change in Control).
(ii) If a determination shall have been made or deemed to have
been made, pursuant to Section 4.4(b) or (c) of this Article 4, that
the Indemnitee is entitled to indemnification, the Corporation shall
be obligated to pay the amounts constituting such indemnification
within five days after such determination has been made or deemed to
have been made and shall be conclusively bound by such determination
unless (A) the Indemnitee misrepresented or failed to disclose a
material fact in making the request for indemnification or in the
Supporting Documentation or (B) such indemnification is prohibited by
law. In the event that (x) advancement of expenses is not timely made
pursuant to Section 4.4(a) of this Article 4 or (y) payment of
indemnification is not made within five days after a determination of
entitlement to indemnification has been made or deemed to have been
made pursuant to Section 4.4(b) or (c) of this Article 4, the
Indemnitee shall be entitled to seek judicial enforcement of the
Corporation's obligation to pay to the Indemnitee such advancement of
expenses or indemnification. Notwithstanding the foregoing, the
Corporation may bring an action, in an appropriate court in the state
of Delaware or any other court of competent jurisdiction, contesting
the right of the Indemnitee to receive indemnification hereunder due
to the occurrence of an event described in Subclause (A) or (B) of
this Clause (ii) (a "Disqualifying Event"); provided, however, that in
any such action the Corporation shall have the burden of proving the
occurrence of such Disqualifying Event.
(iii) The Corporation shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section
4.4(d) that the procedures and presumptions of this Article 4 are not
valid, binding and enforceable and shall stipulate in any such court
or before any such arbitrator that the Corporation is bound by all the
provisions of this Article 4.
(iv) In the event that the Indemnitee, pursuant to this Section
4.4(d), seeks a judicial adjudication of or an award in arbitration to
enforce his or her rights under, or to recover damages for breach of,
this Article 4, the Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the Corporation against, any
expenses actually and reasonably incurred by the Indemnitee if the
Indemnitee prevails in such judicial adjudication or arbitration. If
it shall be determined in such judicial adjudication or arbitration
that the Indemnitee is entitled to receive part
II-5
but not all of the indemnification or advancement of expenses sought,
the expenses incurred by the Indemnitee in connection with such
judicial adjudication or arbitration shall be prorated accordingly.
(e) Definitions. For purposes of this Article 4:
(i) "Change in Control" means a change in control of the
Corporation of a nature that would be required to be reported in
response to Item 6(e) (or any successor provision) of Schedule 14A of
Regulation 14A (or any amendment or successor provision thereto)
promulgated under the Securities Exchange Act of 1934 (the "Act"),
whether or not the Corporation is then subject to such reporting
requirement; provided that, without limitation, such a change in
control shall be deemed to have occurred if (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act), directly
or indirectly, of securities of the Corporation representing 20% or
more of the voting power of all outstanding shares of stock of the
Corporation entitled to vote generally in an election of Directors
without the prior approval of at least two-thirds of the members of
the Board in office immediately prior to such acquisition; (B) the
Corporation is a party to any merger or consolidation in which the
Corporation is not the continuing or surviving corporation or pursuant
to which shares of the Corporation's common stock would be converted
into cash, securities or other property, other than a merger of the
Corporation in which the holders of the Corporation's common stock
immediately prior to the merger have the same proportionate ownership
of common stock of the surviving corporation immediately after the
merger, (C) there is a sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, the assets of the Corporation, or liquidation or
dissolution of the Corporation; (D) the Corporation is a party to a
merger, consolidation, sale of assets or other reorganization, or a
proxy contest, as a consequence of which members of the Board in
office immediately prior to such transaction or event constitute less
than a majority of the Board thereafter; or (E) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board (including for this purpose any new Director
whose election or nomination for election by the stockholders was
approved by a vote of at least two-thirds of the Directors then still
in office who were Directors at the beginning of such period) cease
for any reason to constitute at least a majority of the Board.
(ii) "Disinterested Director" means a Director who is not or was
not a party to the proceeding in respect of which indemnification is
sought by the Indemnitee.
(iii)"Independent Counsel" means a law firm or a member of a law
firm that neither presently is, nor in the past five years has been,
retained to represent: (a) the Corporation or the Indemnitee in any
matter material to either such party or (b) any other party to the
Proceeding giving rise to a claim for indemnification under this
Article 4. Notwithstanding the foregoing, the term "Independent
Counsel" shall not include any person who, under applicable standards
of professional conduct, would have a conflict of interest in
representing either the Corporation or the Indemnitee in an action to
determine the Indemnitee's rights under this Article 4.
4.5 Indemnification of Employees and Agents. Notwithstanding any other
provision of this Article 4, the Corporation, to the fullest extent
permitted by applicable law as then in effect, may indemnify any person
other than a Director or officer of the Corporation who is or was an
employee or agent of the Corporation and who is or was involved in any
manner (including, without limitation, as a party or a witness) or is
threatened to be made so involved in any threatened, pending or completed
Proceeding by reasons of the fact that such person is or was an employee or
agent of the Corporation or, at the request of the Corporation, a director,
officer, employee, fiduciary or agent of a Covered Entity against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in connection
with such Proceeding. The Corporation may also advance expenses
II-6
incurred by such employee, fiduciary or agent in connection with any such
Proceeding, consistent with the provisions of applicable law as then in
effect.
4.6 Severability. If any of this Article 4 shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (i) the
validity, legality and enforceability of the remaining provisions of this
Article 4 (including, without limitation, all portions of any Section of
this Article 4 containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby; and (ii) to the
fullest extent possible, the provisions of this Article 4 (including,
without limitation, all portions of any Section of this Article 4
containing any such provision held to be invalid, illegal or unenforceable,
that are not themselves invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.
Section 102(b)(7) of the Delaware General Corporation Law, as amended,
provides in regard to the limitation of liability of directors and officers as
follows:
(b) In addition to the matters required to be set forth in the
certificate of incorporation by subsection (a) of this section, the
certificate of incorporation may also contain any or all of the following
matters:
* * * *
(7) A provision eliminating or limiting the personal liability of
a director to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided that such
provision shall not eliminate or limit the liability of a director (i)
for any breach of the director's duty of loyalty to the corporation or
its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct of a knowing violation of law,
(iii) under section 174 of this Title, or (iv) for any transaction
from which the director derived an improper personal benefit. No such
provision shall eliminate or limit the liability of a director for any
act or omission occurring prior to the date when such provision
becomes effective. All references in this paragraph to a director
shall also be deemed to refer (x) to a member of the governing body of
a corporation which is not authorized to issue capital stock, and (y)
to such other person or persons, if any, who, pursuant to a provision
of the certificate of incorporation in accordance with subsection (a)
of sec. 141 of this title, exercise or perform any of the powers or
duties otherwise conferred or imposed upon the board of directors by
this title.
Article SIXTH of ITT Hartford's Restated Certificate of Incorporation
provides in regard to the limitation of liability of directors and officers as
follows:
To the fullest extent permitted by applicable law as then in effect,
no director or officer shall be personally liable to the Corporation or any
of its stockholders for damages for breach of fiduciary duty as a director
or officer, except for liability (a) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (b) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under Section 174 of the Delaware General
Corporation Law, (d) for any transaction from which the director derived an
improper personal benefit or (e) for any act or omission occurring prior to
the effective date of this ARTICLE SIXTH. Any repeal or modification of
this ARTICLE SIXTH by the stockholders of the Corporation shall not
adversely affect any right or protection of a director or officer of the
Corporation existing at the time of such repeal or modification with
respect to acts or omissions occurring prior to such repeal or
modification.
ITT Hartford, as Depositor, has agreed to indemnify the Issuer
Trustees for, and to hold the Issuer Trustees harmless against, any loss,
damage, claims, liability, penalty or expense incurred without negligence
or bad faith on the part of any Issuer Trustee, arising out of or in
connection with the
II-7
acceptance or administration of the Trust Agreement, including the costs
and expenses of any Issuer Trustee of defending itself against any claim
or liability in connection with the exercise and performance of any of its
powers or duties under the Trust Agreement.
Item 16. Exhibits.
1.01 Proposed form of Underwriting Agreement (Equity).*
1.02 Proposed form of Underwriting Agreement (Debt).
1.03 Proposed form of Underwriting Agreement (Preferred Securities).
1.04 Proposed form of Underwriting Agreement (Stock Purchase Contracts).
4.01 Amended and Restated Certificate of Incorporation of ITT Hartford
(incorporated herein by reference to Exhibit 3.1 to ITT Hartford's
Registration Statement on Form 8-A, dated September 18, 1995, as amended
by the Form 8-A/A, filed on November 15, 1995).
4.02 By-Laws of ITT Hartford effective October 25, 1995 (incorporated herein
by reference to Exhibit 3.2 to ITT Hartford's Registration Statement on
Form 8-A, dated September 18, 1995, as amended by the Form 8-A/A, filed
on November 15, 1995).
4.03 Senior Indenture, dated as of October 20, 1995, between ITT Hartford and
The Chase Manhattan Bank (National Association) as Trustee (incorporated
herein by reference to Exhibit 4.03 to ITT Hartford's Registration
Statement on Form S-3 (Registration No. 33-98014), filed on October 11,
1995).
4.04 Form of Subordinated Indenture.
4.05 Form of Junior Subordinated Indenture.
4.06 Certificate of Trust of Hartford Capital II (incorporated herein by
reference to Exhibit 4.11 to the Registration Statement on Form S-3 of
ITT Hartford, Hartford Capital I, Hartford Capital II, Hartford Capital
III and Hartford Capital IV, filed on January 19, 1996).
4.07 Trust Agreement of Hartford Capital II (incorporated herein by reference
to Exhibit 4.12 to the Registration Statement on Form S-3 of ITT
Hartford, Hartford Capital I, Hartford Capital II, Hartford Capital III
and Hartford Capital IV, filed on January 19, 1996).
4.08 Certificate of Trust of Hartford Capital III (incorporated herein by
reference to Exhibit 4.13 to the Registration Statement on Form S-3 of
ITT Hartford, Hartford Capital I, Hartford Capital II, Hartford Capital
III and Hartford Capital IV, filed on January 19, 1996).
4.09 Trust Agreement of Hartford Capital III (incorporated herein by
reference to Exhibit 4.14 to the Registration Statement on Form S-3 of
ITT Hartford, Hartford Capital I, Hartford Capital II, Hartford Capital
III and Hartford Capital IV, filed on January 19, 1996).
4.10 Certificate of Trust of Hartford Capital IV (incorporated herein by
reference to Exhibit 4.15 to the Registration Statement on Form S-3 of
ITT Hartford, Hartford Capital I, Hartford Capital II, Hartford Capital
III and Hartford Capital IV, filed on January 19, 1996).
4.11 Trust Agreement of Hartford Capital IV (incorporated herein by reference
to Exhibit 4.16 to the Registration Statement on Form S-3 of ITT
Hartford, Hartford Capital I, Hartford Capital II, Hartford Capital III
and Hartford Capital IV, filed on January 19, 1996).
4.12 Form of Amended and Restated Trust Agreement for Hartford Capital Trust
II.
4.13 Form of Preferred Security Certificate for Hartford Capital II (included
as Exhibit E of Exhibit 4.12).
4.14 Form of Guarantee Agreement in respect of Hartford Capital II.
4.15 Form of Amended and Restated Trust Agreement for Hartford Capital III.
4.16 Form of Preferred Security Certificate for Hartford Capital III
(included as Exhibit E of Exhibit 4.15).
4.17 Form of Guarantee Agreement in respect of Hartford Capital III.
II-8
4.18 Form of Amended and Restated Trust Agreement for Hartford Capital IV.
4.19 Form of Preferred Security Certificate for Hartford Capital IV (included
as Exhibit E of Exhibit 4.18).
4.20 Form of Guarantee Agreement in respect of Hartford Capital IV.
4.21 Form of Depositary Receipt.*
4.22 Form of Depositary Agreement.*
4.23 Rights Agreement, dated as of November 1, 1995, between ITT Hartford and
The Bank of New York, as Rights Agent (incorporated herein by reference
to Exhibit 4.4 to ITT Hartford's Registration Statement on Form 8-A,
dated September 18, 1995, as amended by Form 8-A/A, filed on November
15, 1995).
4.24 Form of Certificate of the Designations, Voting Powers, Preferences and
Relative, Participating, Optional and Other Special Rights and
Qualifications, Limitations or Restrictions of Series A Participating
Cumulative Preferred Stock of ITT Hartford (attached as Exhibit A to the
Rights Agreement filed as Exhibit 4.23 hereto).
4.25 Form of Right Certificate (attached as Exhibit B to the Rights Agreement
filed as Exhibit 4.23 hereto).
4.26 Form(s) of Warrant Agreement(s), including form of Warrant.*
4.27 Specimen Common Share Certificate (incorporated herein by reference to
Exhibit 4.1 to ITT Hartford's Registration Statement on Form 8-A, dated
September 18, 1995, as amended by the Form 8-A/A, filed on November 15,
1995).
4.28 Form of Purchase Contract Agreement.
4.29 Form of Pledge Agreement.
4.30 Supplemental Indenture, dated as of February 28, 1996, between ITT
Hartford and Wilmington Trust Company, as Debenture Trustee, with
respect to ITT Hartford's 7.70% Junior Subordinated Deferrable Interest
Debentures, Series A, Due February 28, 2016 (incorporated herein by
reference to Exhibit 4.10 of ITT Hartford's Annual Report on Form 10-K
for the year ended December 31, 1995, as filed on March 29, 1996).
4.31 Specimen of ITT Hartford's 7.70% Junior Subordinated Deferrable Interest
Debenture, Series A, Due February 28, 2016.
4.32 Amended and Restated Trust Agreement, dated as of February 29, 1996, of
Hartford Capital I, relating to the 7.70% Cumulative Quarterly Income
Preferred Securities Series A (incorporated herein by reference to
Exhibit 4.12 of ITT Hartford's Annual Report on Form 10-K for the year
ended December 31, 1995, as filed on March 29, 1996).
4.33 Specimen of Hartford Capital I's 7.70% Cumulative Quarterly Income
Preferred Securities, Series A.
4.34 Guarantee Agreement, dated as of February 28, 1996, between ITT Hartford
and Wilmington Trust Company, in respect of Hartford Capital I
(incorporated herein by reference to Exhibit 4.15 of ITT Hartford's
Annual Report on Form 10-K for the year ended December 31, 1995, as
filed on March 29, 1996).
4.35 Junior Subordinated Indenture, dated as of February 28, 1996, between
ITT Hartford and Wilmington Trust Company, as Debenture Trustee
(incorporated herein by reference to Exhibit 4.09 to ITT Hartford's
Annual Report on Form 10-K for the year ended December 31, 1995, as
filed on March 29, 1996).
5.01 Opinion of Michael S. Wilder.
5.02 Opinion of Richards, Layton & Finger, special Delaware counsel, relating
to the legality of the Preferred Securities of Hartford Capital II,
Hartford Capital III and Hartford Capital IV.
12.01 Statement Re: Computation of Ratio of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred Stock Dividends.
23.01 Consent of Arthur Andersen LLP.
23.02 Consent of Michael S. Wilder (included in Exhibit 5.01 hereto).
23.03 Consent of Richards, Layton & Finger, special Delaware counsel (included
in Exhibit 5.02 hereto).
24.01 Powers of Attorney of certain officers and directors of ITT Hartford.
II-9
25.01 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Wilmington Trust Company, as Trustee for the Junior
Subordinated Indenture.
25.02 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Wilmington Trust Company, as Property Trustee for the Amended
and Restated Trust Agreement of Hartford Capital Trust II.
25.03 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Wilmington Trust Company, as Guarantee Trustee for the
Guarantee for Hartford Capital Trust II (incorporated herein by
reference to Exhibit 25.05 to Amendment No. 1 to the Registration
Statement on Form S-3 of ITT Hartford, Hartford Capital I, Hartford
Capital II, Hartford Capital III and Hartford Capital IV, filed on
February 7, 1996).
25.04 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Wilmington Trust Company, as Property Trustee for the Amended
and Restated Trust Agreement of Hartford Capital Trust III.
25.05 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Wilmington Trust Company, as Guarantee Trustee for the
Guarantee for Hartford Capital Trust III (incorporated herein by
reference to Exhibit 25.07 to Amendment No. 1 to the Registration
Statement on Form S-3 of ITT Hartford, Hartford Capital I, Hartford
Capital II, Hartford Capital III and Hartford Capital IV, filed on
February 7, 1996).
25.06 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Wilmington Trust Company, as Property Trustee for the Amended
and Restated Trust Agreement of Hartford Capital Trust IV.
25.07 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of Wilmington Trust Company, as Guarantee Trustee for the
Guarantee for Hartford Capital Trust IV (incorporated herein by
reference to Exhibit 25.09 to Amendment No. 1 to the Registration
Statement on Form S-3 of ITT Hartford, Hartford Capital I, Hartford
Capital II, Hartford Capital III and Hartford Capital IV, filed on
February 7, 1996).
25.08 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of The Chase Manhattan Bank (National Association), as Trustee
for the Senior Debt Securities (incorporated herein by reference to
Exhibit 25.01 to ITT Hartford's Registration Statement on Form S-3
(Registration No. 33-98014), filed October 11, 1995).
25.09 Statement of Eligibility and Qualification under the Trust Indenture Act
of 1939 of the Subordinated Trustee, as Trustee for the Subordinated
Debt Securities.*
28.01 Information from reports furnished to state insurance regulatory
authorities (incorporated herein by reference to Exhibit 28.01 to ITT
Hartford's Annual Report on Form 10-K for the year ended December 31,
1995, as filed on March 29, 1996).
- ----------
* To be filed by amendment or by a report on Form 8-K pursuant to Item 601
of Regulation S-K.
Item 17. Undertakings.
(a) Rule 415 Offering.
Each undersigned registrant hereby undertakes:
II-10
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by such registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference.
Each undersigned registrant hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933, each filing of such
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Acceleration of Effectiveness.
Insofar as indemnifications for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person, if any, of such
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
II-11
the securities being registered, such registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(d) Rule 430A Offering.
Each undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) of
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(e) Equity Offerings of nonreporting registrants.
Each undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
(f) Qualification of Trust Indentures for Delayed Offerings.
Each undersigned registrant hereby undertakes to file an application for
the purpose of determining eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Act.
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, ITT Hartford
Group, Inc. (i) certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and (ii) has duly caused
this Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to
the Registration Statement on Form S-3 (No. 33-98014) to be signed on its behalf
by the undersigned, thereunto duly authorized, in Hartford, Connecticut, on this
25th day of September 1996.
ITT HARTFORD GROUP, INC.
By: /s/ MICHAEL O'HALLORAN
--------------------------------------------
Michael O'Halloran
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (No. 33-98014) has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
*
- -------------------------------------- Chairman, President, September 25, 1996
Donald R. Frahm Chief Executive Officer
and Director
*
- -------------------------------------- Executive Vice President September 25, 1996
Ramani Ayer and Director
*
- -------------------------------------- Executive Vice President September 25, 1996
Lowndes A. Smith and Director
*
- -------------------------------------- Executive Vice President September 25, 1996
David K. Zwiener and Chief Financial
Officer
*
- -------------------------------------- Senior Vice President and September 25, 1996
James J. Westervelt Group Controller
*
- -------------------------------------- Director September 25, 1996
Bette B. Anderson
II-13
Signature Title Date
--------- ----- ----
*
- -------------------------------------- Director September 25, 1996
Rand V. Araskog
*
- -------------------------------------- Director September 25, 1996
Robert A. Burnett
*
- -------------------------------------- Director September 25, 1996
Arthur A. Hartman
*
- -------------------------------------- Director September 25, 1996
Paul G. Kirk, Jr.
*
- -------------------------------------- Director September 25, 1996
H. Patrick Swygert
*
- -------------------------------------- Director September 25, 1996
DeRoy C. Thomas
*
- -------------------------------------- Director September 25, 1996
Gordon I. Ulmer
*By: /s/ MICHAEL O'HALLORAN
--------------------------------
Michael O'Halloran
as Attorney-in-Fact
II-14
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Hartford
Capital II (i) certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) has duly caused this
Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (No. 33-98014) to be signed on its behalf by
the undersigned, thereunto duly authorized, in Hartford, Connecticut, on
this 25th day of September, 1996.
HARTFORD CAPITAL II
By ITT HARTFORD GROUP, INC., as Depositor
By /s/ J. RICHARD GARRETT
----------------------------------------
J. Richard Garrett
Vice President and Treasurer
II-15
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Hartford
Capital III (i) certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and (ii) has duly caused
this Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to
the Registration Statement on Form S-3 (No. 33-98014) to be signed on its behalf
by the undersigned, thereunto duly authorized, in Hartford, Connecticut, on
this 25th day of September, 1996.
HARTFORD CAPITAL III
By ITT HARTFORD GROUP, INC., as Depositor
By /s/ J. RICHARD GARRETT
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J. Richard Garrett
Vice President and Treasurer
II-16
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Hartford
Capital IV (i) certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) has duly caused this
Registration Statement on Form S-3 and Post-Effective Amendment No. 1 to the
Registration Statement on Form S-3 (No. 33-98014) to be signed on its behalf by
the undersigned, thereunto duly authorized, in Hartford, Connecticut, on
this 25th day of September, 1996.
HARTFORD CAPITAL IV
By ITT HARTFORD GROUP, INC., as Depositor
By /s/ J. RICHARD GARRETT
----------------------------------------
J. Richard Garrett
Vice President and Treasurer
II-17