As filed with the Securities and Exchange Commission on May 23, 2000
Registration No. 333-96425
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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MUTUAL RISK MANAGEMENT LTD.
(Exact name of registrant as specified in its charter)
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Bermuda N/A
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
44 Church Street John Kessock, Jr.
Hamilton HM 12 Bermuda c/o Commonwealth Risk Services, L.P.
(441) 295-5688 One Logan Square, Suite 1500
(Address, including zip code, and Philadelphia, PA 19103
telephone number, including area code, (215) 963-1600
of Registrant's principal executive (Name, address, including zip code, and
offices) telephone number, including area code,
of agent for service)
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MUTUAL GROUP LTD.
(Exact name of registrant as specified in its charter)
Delaware 51-0239964
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
One Logan Square, Suite 1500 John Kessock, Jr.
Philadelphia, PA 19103 c/o Commonwealth Risk Services, L.P.
(215) 963-1600 One Logan Square, Suite 1500
(Address, including zip code, and Philadelphia, PA 19103
telephone number, including area code, (215) 963-1600
of Registrant's principal executive (Name, address, including zip code, and
offices) telephone number, including area code,
of agent for service)
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MRM CAPITAL TRUST I
MRM CAPITAL TRUST II
MRM CAPITAL TRUST III
(Exact name of registrant as specified in its certificate of trust)
Delaware Each Applied for
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
One Logan Square, Suite 1500 John Kessock, Jr.
Philadelphia, PA 19103 c/o Commonwealth Risk Services, L.P.
(215) 963-1600 One Logan Square, Suite 1500
(Address, including zip code, and Philadelphia, PA 19103
telephone number, (215) 963-1600
including area code, of registrant's (Name, address, including zip code, and
principal executive offices) telephone number,
including area code, of agent for
service)
Copies to:
Richard E. O'Brien, Esq. Richard Warren Shepro, John M. Vasily, Esq.
Senior Vice President & Esq. Peter J. Loughran, Esq.
General Counsel Carol S. Rivers, Esq. Debevoise & Plimpton
Mutual Risk Management Mayer, Brown & Platt 875 3rd Avenue
Ltd. 190 South LaSalle Street New York, NY 10022
44 Church Street Chicago, Illinois 60603- (212) 909-6000
Hamilton, Bermuda HM 12 3441
(441) 295-5688 (312) 782-0600
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Approximate date of commencement of the proposed sale to the public: From
time to time after this Registration Statement becomes effective.
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
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Proposed
maximum
Amount aggregate Amount of
Title of each class of securities to be offering registration
to be registered (1) registered (1) price (2) fee
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Mutual Risk Management Ltd. Senior Notes............
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Mutual Group Ltd. Senior Notes......................
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Mutual Risk Management Ltd. Junior Subordinated
Notes..............................................
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Mutual Group Ltd. Junior Subordinated Notes.........
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MRM Capital Trust I Preferred Securities............
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MRM Capital Trust II Preferred Securities...........
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MRM Capital Trust III Preferred Securities..........
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Mutual Risk Management Ltd. Guarantee of Mutual
Group Ltd. Senior
Notes (3)..........................................
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Mutual Risk Management Ltd. Guarantee of Mutual
Group Ltd. Junior Subordinated Notes (3)...........
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Mutual Risk Management Ltd. Guarantees of MRM
Capital Trust I, MRM Capital Trust II and MRM
Capital Trust III Preferred Securities (4).........
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Mutual Group Ltd. Guarantees of MRM Capital Trust I,
MRM Capital Trust II and MRM Capital Trust III
Preferred Securities (4)...........................
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Mutual Risk Management Ltd. Guarantees of Mutual
Group Ltd. Guarantees of MRM Capital Trust I, MRM
Capital Trust II and MRM Capital Trust III
Preferred Securities (3)...........................
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Total............................................... $500,000,000 $500,000,000 $132,000(5)
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(1) An indeterminate principal amount of senior or junior subordinated notes of
Mutual Risk Management Ltd. and senior or junior subordinated notes of
Mutual Group Ltd. and an indeterminate number of preferred securities of
MRM Capital Trust I, MRM Capital Trust II and MRM Capital Trust III as may
from time to time be issued at indeterminate prices, with an aggregate
offering price not to exceed $500,000,000. Junior subordinated notes may be
issued and sold to MRM Capital Trust I, MRM Capital Trust II and MRM
Capital Trust III in which event the junior subordinated notes may later be
distributed to the holders of preferred securities.
(2) Estimated solely for the purpose of calculating the registration fee, which
is calculated in accordance with Rule 457(o) of the rules and regulations
under the Securities Act of 1933. Rule 457(o) permits the registration fee
to be calculated on the basis of the maximum offering price of all of the
securities listed and, therefore, the table does not specify by each class
information as to the amount to be registered, the proposed maximum
offering price per unit or the proposed maximum aggregate offering price.
(3) Pursuant to Rule 457(n) of the rules and regulations under the Securities
Act of 1933, no separate consideration will be received for the guarantees.
(4) Includes the rights of holders of the preferred securities under the
applicable guarantees of preferred securities, the obligations of Mutual
Group Ltd. under the applicable trust agreement of each of MRM Capital
Trust I, MRM Capital Trust II and MRM Capital Trust III and the obligations
of Mutual Risk Management Ltd. or Mutual Group Ltd. under the indenture for
the junior subordinated notes and any related supplemental indenture, all
of which are described in this Registration Statement. No separate
consideration will be received for any of such guarantees or obligations.
(5) Previously paid.
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The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a) may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. These securities may not be sold until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+preliminary prospectus is not an offer to sell nor does it seek an offer to +
+buy these securities in any jurisdiction where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, Dated May 23, 2000.
PROSPECTUS
$500,000,000
MUTUAL RISK MANAGEMENT LTD.
SENIOR NOTES
JUNIOR SUBORDINATED NOTES
MUTUAL GROUP LTD.
SENIOR NOTES
JUNIOR SUBORDINATED NOTES
Guaranteed by Mutual Risk Management Ltd.
MRM CAPITAL TRUST I
MRM CAPITAL TRUST II
MRM CAPITAL TRUST III
PREFERRED SECURITIES
Guaranteed by Mutual Risk Management Ltd.
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We may offer and sell any combination of the securities described in this
prospectus in one or more offerings up to a total dollar amount of
$500,000,000. This prospectus provides you with a general description of the
securities that we may offer. Each time we offer securities, we will provide a
prospectus supplement that will accompany this prospectus. This prospectus may
not be used to sell these securities unless accompanied by a prospectus
supplement. The prospectus supplement will contain specific information about
the terms of the securities being offered at that time. You should read both
this prospectus and any prospectus supplement, including the documents we have
referred to under the heading "Where You Can Find More Information," to make
your investment decision.
Before investing in our securities, you should review the section of this
prospectus called "Risk Factors" beginning on page 5.
If we decide to list any of these securities on a national securities
exchange upon issuance, the applicable supplement to this prospectus will
identify the exchange and the date when we expect trading to begin.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
We may offer these securities through underwriters or agents or directly to
institutional investors. The applicable supplement to this prospectus will
provide the specific terms of the plan of distribution.
ABOUT THIS PROSPECTUS
This prospectus is part of a "shelf" registration statement that we filed
with the SEC. By using this shelf registration statement, we may sell up to
$500,000,000 of any combination of the securities described in this prospectus
from time to time and in one or more offerings. This prospectus only provides
you with a general description of the securities that we may offer. Each time
we sell securities, we will provide a supplement to this prospectus that
contains specific information about the terms of the securities. Before
purchasing any securities, you should carefully read both this prospectus and
any supplement, together with the additional information described under the
heading "Where You Can Find More Information."
MRM Capital Trust I, MRM Capital Trust II and MRM Capital Trust III, each of
which is referred to in this prospectus as a trust and all of which are
collectively referred to as the trusts, have no independent function other than
to issue securities and to purchase junior subordinated notes. Mutual Group
Ltd., referred to in this prospectus as Mutual Group, is a wholly-owned
subsidiary of Mutual Risk Management Ltd., referred to in this prospectus as
MRM. This prospectus does not contain separate financial statements for Mutual
Group or the trusts. MRM files consolidated financial information with the SEC
that includes condensed consolidating information regarding Mutual Group and
will include other financial information regarding the trusts.
You should rely only on the information contained or incorporated by
reference in this prospectus and in any supplement. "Incorporate by reference"
means that we can disclose important information to you by referring you to
another document filed separately with the SEC. We have not authorized any
other person to provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely on it. We will
not make an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in
this prospectus and any supplement to this prospectus is current only as of the
dates on their covers. Our business, financial condition, results of operations
and prospects may have changed since that date.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the information incorporated
by reference in them may contain forward-looking statements within the meaning
of the federal securities laws. MRM intends these forward-looking statements to
be covered by the safe harbor provisions for forward-looking statements in
these sections. In some cases, you can identify these statements by our use of
forward-looking words such as "may," "will," "should," "anticipate,"
"estimate," "expect," "plan," "believe," "predict," "potential" and "intend."
You should be aware that these statements and any other forward-looking
statements in these documents only reflect our expectations and are not
guarantees of performance. These statements involve risks, uncertainties and
assumptions. Actual events or results may differ materially from our
expectations. Important factors that could cause our actual results to be
materially different from our expectations include those discussed in any of
these documents under the caption "Risk Factors." The safe harbor provisions
for forward-looking statements only apply to companies that have previously
offered securities to the public. Because Mutual Group's offer of the senior
notes and junior subordinated notes and each trust's offer of the preferred
securities constitutes Mutual Group's and each trust's initial public offering
of securities, the safe harbor provisions of the federal securities laws do not
apply to Mutual Group or the trusts. We undertake no obligation to update or
revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
2
MUTUAL RISK MANAGEMENT LTD.
We provide risk management services to clients in the United States, Canada
and Europe that seek alternatives to traditional commercial insurance for risk
exposures. In addition, we provide financial services to offshore mutual funds
and other companies. We are a Bermuda-based insurance holding company that was
incorporated in 1977. We primarily focus on the "alternative market," which
involves clients self-insuring a significant amount of their loss exposure and
transferring only the unpredictable excess risk to insurers. Although revenue
earned from premiums is substantial, our principal source of profits is from
fees received for the various insurance and other services provided to clients
in connection with our programs. Income from fees is derived from four distinct
business segments:
Program Business--The largest of our business segments. In this segment, we
replace traditional insurers as the conduit between producers of specialty
books of business and reinsurers wishing to write that business. We provide
a range of services for a fee and the underwriting profit is shared between
the producer and the reinsurers.
Corporate Risk Management--Our original business segment. Corporate Risk
Management involves providing services to businesses and associations
seeking to insure a portion of their risk in a loss sensitive alternative
market structure. We earn our fees by designing and implementing risk
financing and loss control programs for medium-size and large companies
that seek to insure a portion of their insurable risk.
Specialty Brokerage--Our Specialty Brokerage segment specializes in placing
reinsurance for captive insurance companies, placing coverage with excess
liability and corporate officers' and directors' liability carriers and
placing reinsurance in connection with our Program and Corporate Risk
Management businesses.
Financial Services--Our Financial Services segment started in 1996 with the
acquisition of The Hemisphere Group Limited. The Financial Services segment
provides administrative services to offshore mutual funds and other
companies and offers a proprietary family of mutual funds as well as asset
accumulation life insurance products for the high net worth market.
The structure of our programs places most of the underwriting risk with the
client or our reinsurers. For regulatory and other reasons, however, we are
required to assume a limited amount of risk. We seek to limit our risk to the
minimum level feasible. This approach to risk distinguishes us from typical
property/casualty companies that assume significant levels of underwriting risk
as part of their businesses. We do not seek to earn income from underwriting
risk, but rather from fees for services provided.
MRM's principal executive offices are located at 44 Church Street, Hamilton
HM 12 Bermuda and its telephone number is (441) 295-5688.
MUTUAL GROUP LTD.
Mutual Group is a holding company for our U.S. operations. Its principal
operating subsidiaries are Legion Insurance Company, Legion Indemnity Company
and Villanova Insurance Company. Mutual Group was incorporated in 1979. Its
principal executive offices are located at One Logan Square, Suite 1500,
Philadelphia, Pennsylvania 19103 and its telephone number is (215) 963-1600.
3
THE TRUSTS
Mutual Group created each trust as a statutory Delaware business trust
pursuant to a trust agreement. Mutual Group will enter into an amended and
restated trust agreement for each trust, which will state the terms and
conditions for the trust to issue and sell its preferred securities and common
securities.
Each trust exists solely to:
. issue and sell to the public preferred securities, representing undivided
beneficial interests in the assets of the trust;
. issue and sell to Mutual Group common securities, representing undivided
beneficial interests in the assets of the applicable trust;
. use the gross proceeds from the sale of its preferred and common
securities to purchase a series of junior subordinated notes;
. distribute the cash payments it receives from the junior subordinated
notes it owns to the holders of the preferred and common securities; and
. engage in other activities that are necessary or incidental to these
purposes.
Mutual Group will purchase all of the common securities of each trust. The
common securities will represent an aggregate liquidation amount equal to at
least 3% of each trust's total capitalization. The preferred securities will
represent the remaining approximately 97% of each trust's total capitalization.
The common securities will have terms substantially identical to, and will rank
equal in priority of payment with, the preferred securities. Payments will be
made on both the common securities and the preferred securities when payments
of interest are made on the junior subordinated notes, upon redemption of the
junior subordinated notes or in some circumstances upon liquidation of the
trust. However, if a default on the payments on the related junior subordinated
notes occurs, then cash distributions and redemption, liquidation and other
amounts payable on the common securities will be subordinate in priority of
payment to the amounts payable on the preferred securities.
Each of the trusts is a legally separate entity and the assets of one are
not available to satisfy the obligations of any of the others.
The preferred securities will be guaranteed by MRM as described later in
this prospectus.
We have appointed five trustees to conduct each trust's business and
affairs:
. The Chase Manhattan Bank, which will act as the property trustee;
. Chase Manhattan Bank Delaware, which will act as the Delaware trustee;
and
. Three Mutual Group officers, who will act as the administrative trustees.
Mutual Group and MRM will pay all fees and expenses related to each trust
and the offering of the preferred securities and will pay all ongoing costs,
expenses and liabilities of each trust, except the trusts' obligations under
the preferred and common securities.
The trusts will not have separate financial statements. The statements would
not be material to holders of the preferred securities because the trusts will
not have any independent operations and exist solely for the reasons summarized
above.
The principal offices of each trust will be located at One Logan Square,
Suite 1500, Philadelphia, Pennsylvania 19103, and the telephone number of each
trust will be (215) 963-1600.
4
RISK FACTORS
You should carefully consider the following risk factors, in addition to the
other information provided in this prospectus and the accompanying prospectus
supplement, before you purchase any securities.
New insurance legislation in some states has increased competition, which has
reduced our fee revenues and made sales and renewals more difficult.
Beginning in 1993, legislative reforms designed to reduce the cost of
workers' compensation insurance in some important workers' compensation markets
caused competition to increase significantly. This heightened level of
competition has persisted. Increased competition has lowered the premium rates
that we may charge, which has reduced our fee revenue. Increased competition
also has made sales and renewals of our programs more difficult. Workers'
compensation reform, to the extent it reduces premiums and introduces relative
stability in the traditional workers' compensation market, may reduce the
appeal of alternative market products such as those offered by us.
If we are unable to purchase reinsurance and transfer risk to reinsurers, our
net income would be reduced or we could incur a loss.
A significant feature of our risk management programs is the utilization of
reinsurance to transfer all or a portion of risk not retained by the insured.
The availability and cost of reinsurance is subject to market conditions, which
are outside of our control. As a result, we may not be able to successfully
purchase reinsurance and transfer risk through reinsurance arrangements. A lack
of available reinsurance would adversely affect the marketing of our programs
and/or force us to retain all or a part of the risk that cannot be reinsured.
If we were required to retain these risks and ultimately pay claims with
respect to these risks, our net income would be reduced or we could incur a
loss. In addition, we are subject to credit risk with respect to our reinsurers
because the transfer of risk to a reinsurer does not relieve us of our
liability to the insured. The failure of a reinsurer to honor its obligations
would reduce our net income or could cause us to incur a loss.
If the issuers of letters of credit and clients fail to honor their
obligations, our net income would be reduced or we could incur a loss.
Each of our clients chooses a level of risk retention, which is reinsured
either by one of our foreign reinsurance subsidiaries or by the client's
captive insurance company. This retention is generally also supported by
letters of credit. In addition, we rely extensively on letters of credit issued
or confirmed by a bank in order to secure a portion of the client's obligation
to reimburse us for losses on a program. The failure of a bank to honor its
letter of credit or the inability of a client to honor its uncollateralized
reimbursement obligation would reduce our net income or could cause us to incur
a loss.
If tax laws prevent our IPC Program participants from deducting premiums paid
to us, we would be unable to competitively market this program.
One of our major products is the Insurance Profit Center Program, referred
to in this prospectus as the IPC Program. The IPC Program, frequently referred
to as a "rent-a-captive," was designed to provide clients some of the benefits
available through captive insurance companies without the administrative cost
and capital commitment necessary to establish and operate a captive insurance
company. The tax treatment of this program is not clear and varies
significantly with the circumstances of each IPC Program participant. However,
some participants deduct the premiums paid to us for federal income tax
purposes. A determination that a significant portion of the IPC Program
participants are not entitled to deduct the premiums paid to us without a
similar determination as to competing products would adversely affect the
marketability of the IPC Program.
5
If our loss reserves are inadequate to meet our actual losses, our net income
would be reduced or we could incur a loss.
We are required to maintain reserves to cover our estimated ultimate
liability losses and loss adjustment expenses for both reported and unreported
claims incurred. These reserves are only estimates of what we think the
settlement and administration of claims will cost based on facts and
circumstances then known to us. Because of the uncertainties that surround
estimating loss reserves and loss adjustment expenses, we cannot be certain
that ultimate losses will not exceed these estimates of loss and loss
adjustment reserves. If our reserves are insufficient to cover our actual
losses and loss adjustment expenses, we would have to increase our reserves and
our net income would be reduced or we could incur a loss.
Insurance laws and regulations restrict our ability to operate.
We are subject to extensive regulation under state and foreign insurance
laws. These laws limit the amount of dividends that can be paid by our
operating subsidiaries, impose restrictions on the amount and type of
investments that they can hold, prescribe solvency standards that must be met
and maintained by them and require them to maintain reserves. These laws also
require disclosure of material transactions by MRM and require prior approval
of certain "extraordinary" transactions. These "extraordinary" transactions
include declaring dividends that exceed statutory maximums from operating
subsidiaries to MRM or purchases of an operating subsidiary's capital stock.
These laws also generally require approval of changes of control. Our failure
to comply with these laws could subject us to fines and penalties and restrict
us from conducting business. The application of these laws could affect our
liquidity and ability to pay distributions and make payments on our debt
securities and could restrict our ability to expand our business operations
through acquisitions involving our insurance subsidiaries.
Our holding company structure could prevent us from paying distributions and
making payments on our debt securities.
MRM is a holding company with no assets other than the stock of Mutual Group
and other holding companies. Mutual Group is a holding company with no assets
other than the stock of its operating subsidiaries. Our ability to meet our
obligations on our securities will be dependent on the earnings and cash flows
of our subsidiaries and the ability of the subsidiaries to pay dividends or to
advance or repay funds to us. Payment of dividends and advances and repayments
from our operating subsidiaries are regulated by state and foreign insurance
laws and regulatory restrictions, including minimum solvency and liquidity
thresholds. Accordingly, our operating subsidiaries may not be able to pay
dividends or advance or repay funds to us in the future, which could prevent us
from paying distributions and making payments on our debt securities.
Our ability to generate the cash needed to pay distributions and make payments
on our debt securities depends on many factors beyond our control.
Our ability to pay distributions and make payments on our debt securities
will depend on our ability to generate cash and to secure financing in the
future. This ability is subject to general economic, financial, competitive,
regulatory and other factors beyond our control. If our business does not
generate sufficient cash flow from operations, and sufficient future borrowings
are not available to us, we may not be able to pay distributions and make
payments on our debt securities.
Our investment objectives may not be realized.
The success of our investment objectives is affected by general economic
conditions that are outside of our control. General economic conditions can
adversely affect the markets for interest-rate-sensitive securities, including
the extent and timing of investor participation in those markets, the level and
volatility of interest rates and, consequently, the value of fixed income
securities. We may not be able to realize our investment objectives, which
could reduce our net income or cause us to incur a loss.
6
Our industry is highly competitive and we may not be able to compete
successfully in the future.
Our industry is highly competitive and has experienced severe price
competition over the last several years. We compete in the United States and
international markets with domestic and international insurance companies. Some
of these competitors have greater financial resources than we do, have been
operating for longer than we have and have established long-term and continuing
business relationships throughout the industry, which can be a significant
competitive advantage. In addition, we expect to face further competition in
the future. We may not be able to compete successfully in the future.
We are dependent on our key personnel.
Our success has been, and will continue to be, dependent on our ability to
retain the services of our existing key executive officers and to attract and
retain additional qualified personnel in the future. The loss of the services
of any of our key executive officers or the inability to hire and retain other
highly qualified personnel in the future could adversely affect our ability to
conduct our business.
You may not be able to recover damages from MRM and some of its directors,
officers and experts named in this prospectus if you sue them.
MRM is organized under the laws of Bermuda. Some of its directors and
officers, as well as some of the experts named in this prospectus, may reside
outside the United States. A substantial portion of the assets of MRM and its
directors and officers are or may be located in jurisdictions outside the
United States. You may not be able to effect service of process within the
United States on directors and officers of MRM and those experts who reside
outside the United States. You also may not be able to recover against them or
MRM on judgments of U.S. courts or to obtain original judgments against them or
MRM in Bermuda courts, including judgments predicated upon civil liability
provisions of the U.S. federal securities laws.
If U.S. tax law changes, our net income may be reduced.
Some members of Congress have recently expressed concern over a competitive
advantage that foreign-controlled insurers and reinsurers may have over U.S.-
controlled insurers and reinsurers due to the purchase of reinsurance by U.S.
insurers from affiliates operating in some foreign jurisdictions, including
Bermuda. Legislation has been proposed that would increase the U.S. tax burden
on some of these transactions. We do not know whether this legislation will
ever be enacted into law. If it were enacted, the U.S. tax burden on some
business ceded from our licensed U.S. insurance subsidiaries, including Legion
Insurance Company, Legion Indemnity Ltd. and Villanova Insurance Company, to
some offshore reinsurers could be increased. This could reduce our net income.
7
USE OF PROCEEDS
We may sell all or a portion of the $500,000,000 of securities described in
this prospectus. Unless stated otherwise in the applicable prospectus
supplement, the net proceeds from the sale of the securities offered by each
trust will be used by the trust to purchase a series of junior subordinated
notes. Unless stated otherwise in the applicable prospectus supplement, MRM and
Mutual Group will use the net proceeds for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
MRM for each of the periods indicated:
Year Ended December 31,
------------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges(1).................. 6.6 9.6 8.4 7.1 13.9
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(1) For purposes of computing the consolidated ratio of earnings to fixed
charges, "earnings" represents income before income taxes, minority
interest, extraordinary items and fixed charges, and "fixed charges"
includes gross interest expense, the proportion deemed representative of
the interest factor of rent expense and preferred share dividend
requirements of consolidated subsidiary companies.
ACCOUNTING TREATMENT
Each trust will be treated as a wholly-owned subsidiary of MRM for financial
reporting purposes. Accordingly, each trust's financial statements will be
included in the consolidated financial statements of MRM. The preferred
securities of each trust will be presented as a separate line item in the
consolidated statements of financial position of MRM under the caption
"Minority Interest--Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trust Holding Solely Junior Subordinated Notes of the
Company" and appropriate disclosures about the preferred securities will be
included in the notes to the consolidated financial statements. Specifically,
MRM will record distributions payable on the preferred securities as minority
interest in the consolidated statements of operations of MRM, include in a
footnote to its financial statements disclosure that the sole assets of each
trust are the junior subordinated notes and specify the principal amount,
interest rate and maturity date of the junior subordinated notes held.
The Financial Accounting Standards Board is in the process of drafting a
proposed exposure draft on liabilities and equity. The proposed exposure draft,
if issued, could alter the accounting treatment described above by requiring
the preferred securities of each trust to be classified as debt on the
consolidated statements of financial position of MRM and the related
distributions payable as a component of interest expense in the consolidated
statements of operations of MRM.
8
DESCRIPTION OF THE SENIOR NOTES AND THE MRM SENIOR NOTE GUARANTEES
The senior notes of MRM will be issued pursuant to a senior indenture, as
supplemented from time to time, between MRM and The Chase Manhattan Bank, as
the senior indenture trustee. The senior notes of Mutual Group will be issued
pursuant to a senior indenture, as supplemented from time to time, among Mutual
Group, MRM, as guarantor, and The Chase Manhattan Bank, as senior indenture
trustee. We have filed the base senior indentures as exhibits to the
registration statement of which this prospectus is a part. You also may request
a copy of the senior indentures from the senior indenture trustee at its
corporate trust office in New York, New York. Each senior indenture will be
qualified under the Trust Indenture Act of 1939. The terms of each series of
senior notes will include those stated in the senior indenture for that series
and those made part of the senior indenture by reference to the Trust Indenture
Act.
MRM and Mutual Group, each referred to as the issuing company, may each
issue series of senior notes from time to time by entering into supplemental
indentures with the senior indenture trustee or pursuant to resolutions of its
board of directors or a duly authorized committee of its board. Any
supplemental indenture or resolutions of either its board of directors or a
duly authorized committee of its board will be executed at the time the issuing
company issues any senior notes and will be filed with the SEC on Form 8-K or
by a post-effective amendment to the registration statement of which this
prospectus is a part.
General
The base senior indentures do not limit the aggregate principal amount of
senior notes that the issuing company may issue. The senior notes of a series
need not be issued at the same time, bear interest at the same rate or mature
on the same date.
The applicable prospectus supplement and the applicable supplemental
indenture or resolutions for a particular series of senior notes will set forth
the following terms of that series:
. the title of the series;
. any limit on the aggregate principal amount of the senior notes of the
series;
. the date or dates on which the principal of any of the senior notes of
the series will be payable or the method for determining the date or
dates;
. whether the issuing company may shorten or extend the date on which the
principal of any senior notes of the series is payable and, if so, the
terms and conditions of any extension;
. the rate or rates at which any of the senior notes of the series will
bear interest, if any, or the method for determining the rate or rates,
and the date or dates from which any interest will accrue;
. the interest payment dates on which any interest will be payable and the
regular record date, if any, for any interest payable on any interest
payment date;
. whether the senior notes will be secured or unsecured;
. the place or places where payments on any of the senior notes of the
series will be payable, if other than the principal corporate trust
office of the senior indenture trustee;
. the issuing company's obligation, if any, to redeem or purchase the
senior notes of the series pursuant to any sinking fund, amortization or
analogous provision and the terms and conditions on which any of the
senior notes may be redeemed or purchased pursuant to any obligation;
. the terms and conditions, if any, on which the senior notes of the series
may be redeemed at the issuing company's option or at the option of the
holder;
. any index or formula for determining the amount of principal or any
premium or interest on any of the senior notes of the series and the
manner of determining those amounts;
. the currency, currencies or currency units in which payments on any of
the senior notes of the series will be payable, if other than U.S.
dollars, and the manner of determining the equivalent of those amounts in
U.S. dollars for any purpose;
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. if the payments on the senior notes of the series are payable, at the
issuing company's option or the option of the holder of the senior notes,
in one or more currencies or currency units other than those in which the
senior notes are stated to be payable, the currency, currencies or
currency units in which the payments on the senior notes may be payable
and the terms and conditions of the option;
. the portion of the principal amount of any of the senior notes of the
series that will be payable upon declaration of acceleration of maturity,
if other than the entire principal amount;
. whether any of the terms of the senior indenture described below under
"--Defeasance and Covenant Defeasance" will not apply to any of the
senior notes of the series;
. whether any of the senior notes of the series will be issuable as global
securities and, if so, the depositary and any provisions for the transfer
or exchange of any such global securities, if different from those
described below under "--Global Securities";
. any addition to, deletion from or change in events of default or
covenants with respect to any of the senior notes of the series and any
change in the right of the senior indenture trustee or the holders of the
senior notes to accelerate the maturity of the senior notes; and
. any other terms of the senior notes of the series.
Unless the applicable prospectus supplement states otherwise, the issuing
company will issue the senior notes only in fully registered form, without
coupons, and there will be no service charge for any registration of transfer
or exchange of the senior notes. The issuing company may, however, require
payment to cover any tax or other governmental charge payable in connection
with the registration of transfer or exchange.
The issuing company may offer and sell the senior notes at a substantial
discount below their principal amount and the senior indenture does not provide
any limit on the amount by which the issuing company may discount the senior
notes. The applicable prospectus supplement will describe the special United
States federal income tax and other considerations, if any, applicable to any
discounted senior notes. In addition, the applicable prospectus supplement may
describe certain special United States federal income tax or other
considerations, if any, applicable to any senior notes that are denominated in
a currency or currency unit other than U.S. dollars.
Ranking
Unless the applicable prospectus supplement provides otherwise, the senior
notes will be unsecured indebtedness of the issuing company. The senior notes
will be equal in right of payment with any other senior indebtedness of the
issuing company and senior in right of payment to any subordinated indebtedness
of the issuing company. The senior notes will be effectively subordinated to
any secured indebtedness of the issuing company to the extent of the value of
the assets securing the secured indebtedness. As a result, in the event of the
issuing company's bankruptcy, liquidation or reorganization or upon
acceleration of the senior notes due to an event of default, the issuing
company's assets will be available to pay its obligations on the senior notes
only after all secured indebtedness has been paid in full in cash or other
payment satisfactory to the holders of the secured indebtedness has been made.
There may not be sufficient assets remaining to pay amounts due on any or all
of the senior notes then outstanding. The senior notes will also effectively be
subordinated to the indebtedness and other liabilities of the issuing company's
subsidiaries. The senior indentures do not prohibit or limit the incurrence of
secured or senior indebtedness or the incurrence of other indebtedness and
liabilities by the issuing company or its subsidiaries other than as described
below. The incurrence of additional senior indebtedness and other liabilities
by the issuing company or its subsidiaries could adversely affect the issuing
company's ability to pay the obligations on the senior notes.
MRM Senior Note Guarantee
Unless provided otherwise in a prospectus supplement, MRM will fully and
unconditionally guarantee all obligations with respect to each series of senior
notes issued by Mutual Group. Unless provided otherwise in a
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prospectus supplement, each MRM senior note guarantee will be unsecured
indebtedness of MRM and will be equal in right of payment to all of MRM's
existing and future senior indebtedness and senior in right of payment to any
subordinated indebtedness of MRM. Each MRM senior note guarantee will be
effectively subordinated to any secured indebtedness of MRM to the extent of
the value of the assets securing the secured indebtedness. Each MRM senior note
guarantee will also rank equally with any other MRM senior note guarantee of
any series of senior notes issued by Mutual Group. As a result, in the event of
MRM's bankruptcy, liquidation or reorganization or upon acceleration of any
series of senior notes due to an event of default, MRM's assets will be
available to pay MRM's obligations on an MRM senior note guarantee only after
all secured indebtedness of MRM has been paid in full in cash or other payment
satisfactory to the holders of the secured indebtedness of MRM has been made.
There may not be sufficient assets remaining to pay amounts due on any or all
of the MRM senior note guarantees. Each MRM senior note guarantee will also be
effectively subordinated to the indebtedness and other liabilities of MRM's
subsidiaries. Each MRM senior note guarantee does not prohibit or limit the
incurrence of secured or additional senior indebtedness or the incurrence of
other indebtedness and liabilities by MRM or its subsidiaries. The incurrence
of additional secured and senior indebtedness and other liabilities by MRM or
its subsidiaries could adversely affect MRM's ability to pay its obligations on
an MRM senior note guarantee.
Each MRM senior note guarantee will constitute a guarantee of payment and not
of collection. This means that the holder of the guaranteed security may sue
MRM to enforce its rights under the MRM senior note guarantee without first
suing any other person or entity.
Additional Amounts
MRM will make all payments on any series of senior notes issued by MRM and
all payments under each MRM senior note guarantee without withholding or
deduction for any taxes, fees, duties, assessments or governmental charges
imposed or levied by Bermuda or any other jurisdiction in which MRM or any
successor is organized or resident for tax purposes or any political
subdivision or taxing authority of Bermuda or any of those other jurisdictions.
If any withholding or deduction is required by law, MRM will pay to the holder
of the senior notes additional amounts as may be necessary so that every net
payment made to the holder after the withholding or deduction will not be less
than the amount provided for in the applicable senior note and the senior
indenture. MRM will not be required to pay any additional amounts as a result
of:
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the senior note was a resident or national of or had
other specified connections with the relevant taxing jurisdiction or
presented the senior note for payment in the relevant taxing jurisdiction
unless it could not have been presented elsewhere;
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the senior note presented the senior note for payment
more than 30 days after it was due and payable;
. any estate, inheritance, gift, sale, transfer, personal property or
similar tax, fee, duty, assessment or other governmental charge; or
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the senior note failed to comply, within 90 days,
with any reasonable request by MRM addressed to the holder or beneficial
owner relating to the provision of information or the making of a
declaration required by the taxing jurisdiction as a precondition to
exemption from all or part of the tax, fee, duty, assessment or
governmental charge.
In addition, MRM will not be required to pay additional amounts with respect
to any payment to any holder of a senior note where the beneficial owner of the
senior note is a fiduciary or partnership to the extent that such payment would
be required to be included in the income for tax purposes of a beneficiary with
respect to such fiduciary or a partner of such partnership that would not have
been entitled to such additional amounts if it had been the holder of the
senior note.
Global Securities
Some or all of the senior notes of a series may be represented in whole or
in part by one or more global securities deposited with or on behalf of one or
more depositaries. The applicable prospectus supplement will describe the terms
of any depositary arrangement. Unless the applicable prospectus supplement
states otherwise, the following provisions will apply to all depositary
arrangements for any senior notes represented by global securities.
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Senior notes represented by a global security deposited with or on behalf of
a depositary will be registered in the name of that depositary or its nominee.
Upon the issuance of a global security in registered form, the depositary for
the global security will credit, on its book-entry registration and transfer
system, the respective principal amounts of the senior notes represented by the
global security to the accounts of institutions that have accounts with the
depositary or its nominee. These institutions are generally brokers, dealers,
banks and other financial institutions and are often referred to as
participants. The accounts to be credited will be designated by the
underwriters or agents of the senior notes or by the issuing company if the
senior notes are offered and sold directly by the issuing company. Ownership of
beneficial interests in the global securities will be limited to participants
or persons that may hold interests through participants. Any person who holds a
brokerage account with a participant may purchase the senior notes through the
participant. Ownership of beneficial interests by participants in the global
securities will be shown on, and the transfer of any ownership interest will be
effected only through, records maintained by the depositary or its nominee for
the global security. Ownership of beneficial interests in global securities by
persons that hold through participants will be effected only through records
maintained by the applicable participant. Some insurance companies and other
institutions are required by law to hold their investment securities in
definitive form, so an investor may not be able to sell its senior notes to
those entities.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or the nominee, as the
case may be, will be considered the sole owner or holder of the senior notes
represented by the global security for all purposes under the senior indenture.
Except as set forth below, owners of beneficial interests in the global
security will not be entitled to have the senior notes represented by the
global security registered in their names, will not receive or be entitled to
receive physical delivery of the senior notes in definitive form and will not
be considered the owners or holders of the senior notes under the senior
indenture.
Payments on senior notes registered in the name of or held by a depositary
or its nominee will be made in immediately available funds to the depositary or
its nominee, as the case may be, as the registered owner or the holder of the
global security representing the senior notes. None of the issuing company,
MRM, as guarantor, if applicable, the senior indenture trustee, any paying
agent or the registrar and transfer agent for the senior notes will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in a global
security for the senior notes or for maintaining, supervising or reviewing any
records relating to the beneficial ownership interests.
We expect that a depositary for the senior notes of a series, upon receipt
of any payments in respect of a global security, will immediately credit
participants' accounts with payment in amounts proportionate to their
respective beneficial interests in the principal amount of the global security
as shown on the records of the depositary. We also expect that payments by
participants to owners of beneficial interests in the global security held
through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in "street name," and will be the responsibility of
each participant.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be entitled to direct the actions of the senior indenture
trustee upon an event of default. However, we expect that a depositary for the
senior notes of a series, upon receiving notice of an event of default, will
immediately solicit the participants regarding any action to be taken. We also
expect that the participants will act in accordance with standing instructions
and customary practices, as is now the case with securities held for the
accounts of customers registered in "street name," and will, in turn, solicit
the owners of the beneficial interests regarding any action to be taken upon
any event of default.
A global security may not be transferred, in whole or in part, except by the
depositary for the global security to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any nominee to a successor depositary or a
nominee of the successor
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depositary. If a depositary for the senior notes of a series is at any time
unwilling or unable to continue as depositary and a qualified successor
depositary is not appointed by the issuing company within 90 days or if at any
time the depositary ceases to be a clearing agency registered under the
Exchange Act when the depositary is required to be registered to act as the
depositary and no qualified successor is appointed by the issuing company
within 90 days or if an event of default has occurred and is continuing, then
the issuing company will issue the senior notes in definitive registered form
in exchange for the global security or global securities representing the
senior notes. In addition, the issuing company may, at any time, determine not
to have any senior notes represented by one or more global securities and, in
that event, will issue the senior notes in definitive registered form in
exchange for the global securities representing the senior notes. In any of
these instances, an owner of a beneficial interest in a global security will be
entitled to physical delivery in definitive form of the senior notes
represented by the global security equal in principal amount to its beneficial
interest and to have the senior notes registered in its name.
Covenants in the Senior Indenture
The issuing company and, in the case of senior notes issued by Mutual Group
and guaranteed by MRM, MRM will not sell, transfer or otherwise dispose of any
shares of capital stock of a significant subsidiary, and the issuing company
and, in the case of senior notes issued by Mutual Group and guaranteed by MRM,
MRM will not permit any significant subsidiary to sell, transfer or otherwise
dispose of any shares of capital stock of any other significant subsidiary,
unless the entire capital stock of the significant subsidiary at the time owned
by MRM or Mutual Group, as the case may be, and its significant subsidiaries is
disposed of at the same time for consideration consisting of cash or other
property, which, in the opinion of MRM's or Mutual Group's board of directors,
as the case may be, determined in good faith, is at least equal to the fair
market value of the significant subsidiary and the transaction is in compliance
with the merger provisions described below.
The issuing company and, in the case of senior notes issued by Mutual Group
and guaranteed by MRM, MRM will not, and the issuing company and, in the case
of senior notes issued by Mutual Group and guaranteed by MRM, MRM will not
permit any significant subsidiary at any time directly or indirectly to,
create, assume, incur or otherwise permit to exist any indebtedness secured by
a pledge, lien or other encumbrance on any shares of the capital stock of any
significant subsidiary, other than existing indebtedness that is so secured and
any renewals, extensions or refundings of that indebtedness, without making
effective provision whereby the senior notes then outstanding and any related
guarantee, and, if MRM or Mutual Group, as the case may be, elects, any other
indebtedness ranking equally with the senior notes and any related guarantee,
will be secured equally and ratably with or prior to that other indebtedness so
long as that other indebtedness is secured.
"Significant subsidiary" means any subsidiary of MRM or Mutual Group, as the
case may be, the assets of which constitute at least 10% of MRM's or Mutual
Group's, as the case may be, consolidated total assets or the income before
income taxes and minority interest of which accounts for at least 10% of MRM's
or Mutual Group's, as the case may be, consolidated income before income taxes
and minority interest.
Events of Default
The following will be events of default under the senior indenture with
respect to the senior notes of any series unless the particular event of
default is not applicable to the particular series or is modified or deleted in
a supplemental indenture as stated in the applicable prospectus supplement:
. the issuing company fails to pay principal of or any premium on any
senior note of that series, or any additional amounts related to
principal or premium, on its due date;
. the issuing company fails to pay any interest on any senior note of that
series, or any additional amounts related to interest, within 30 days
from its due date;
. the issuing company fails to make any sinking fund payment on its due
date;
13
. the issuing company or, in the case of senior notes issued by Mutual
Group and guaranteed by MRM, MRM fails to perform any of its covenants in
the senior indenture, excluding a covenant not applicable to the affected
series, for 30 days after the senior indenture trustee or the holders of
at least 25% in principal amount of the outstanding senior notes of that
series give the issuing company and MRM, as guarantor, if applicable,
written notice of the default and require that the issuing company and
MRM, as guarantor, if applicable, remedy the breach. However, the 30-day
period may be extended by either the senior indenture trustee or the
senior indenture trustee and the holders of at least the same principal
amount of the outstanding senior notes of that series that had given
notice of the default;
. the issuing company or, in the case of senior notes issued by Mutual
Group and guaranteed by MRM, MRM defaults under any (1) indebtedness for
any money borrowed, including any other series of debt securities, (2)
mortgage, indenture or other instrument under which there may be issued
or may be secured or evidenced any indebtedness for money borrowed or (3)
guarantee of payment for money borrowed, and any default consists of a
payment default at the stated maturity of the indebtedness, after giving
effect to any applicable grace period, or results in the indebtedness
becoming due or being declared due prior to its stated maturity;
provided, that a default shall exist under this clause only if the
aggregate principal amount outstanding under all of the indebtedness that
is so in default or that has become due or been declared due prior to its
stated maturity, as the case may be, exceeds $40,000,000 and the default
has not been cured, the indebtedness or accelerated indebtedness has not
been discharged or the acceleration of the indebtedness has not been
rescinded or annulled, in each case, within 10 days after the senior
indenture trustee or the holders of at least 25% in principal amount of
the senior notes give the issuing company and MRM, as guarantor, if
applicable, written notice of the default and require that the issuing
company and MRM, as guarantor, if applicable, remedy the breach;
. the issuing company or, in the case of senior notes issued by Mutual
Group and guaranteed by MRM, MRM fails within 60 days to pay, bond or
otherwise discharge any uninsured judgment or court order for the payment
of money in excess of $40,000,000, which is not stayed on appeal or is
not otherwise being appropriately contested in good faith;
. the issuing company or, in the case of senior notes issued by Mutual
Group and guaranteed by MRM, MRM files for bankruptcy or other events of
bankruptcy, insolvency or reorganization occur;
. in the case of senior notes issued by Mutual Group and guaranteed by MRM,
the guarantee ceases to be in full force and effect; and
. any other event of default specified in the applicable prospectus
supplement occurs.
If the issuing company or, in the case of senior notes issued by Mutual
Group and guaranteed by MRM, MRM files for bankruptcy or other events of
bankruptcy, insolvency or reorganization occur, all unpaid principal and
accrued interest, premium and additional amounts on the senior notes will
automatically be immediately due and payable. If any other event of default
with respect to the senior notes of a series occurs and is continuing, then the
senior indenture trustee or the holders of not less than 25% in principal
amount of the outstanding senior notes of that series may, by notice to the
issuing company and, in the case of senior notes issued by Mutual Group and
guaranteed by MRM, MRM and to the senior indenture trustee if given by the
holders, declare to be immediately due and payable all unpaid principal and
accrued interest, premium and additional amounts on all senior notes of that
series.
At any time after a declaration of acceleration has been made with respect
to the senior notes of a series and before a judgment or decree for payment of
the money due has been obtained, the holders of not less than a majority in
principal amount of the outstanding senior notes may rescind any declaration of
acceleration with respect to the senior notes and its consequences if:
. the issuing company or, in the case of senior notes issued by Mutual
Group and guaranteed by MRM, MRM deposits with the senior indenture
trustee funds sufficient to pay all overdue principal of and any premium,
interest and additional amounts due on the senior notes, any amounts due
to the senior note trustee and, to the extent that payment of the
interest is lawful, interest on the overdue interest and additional
amounts; and
14
. all existing events of default with respect to the senior notes have been
cured or waived except non-payment of principal on the senior notes that
has become due solely because of the acceleration.
The holders of not less than a majority in principal amount of the
outstanding senior notes of any series have the right to direct the time,
method and place of conducting any proceedings for any remedy available to the
senior indenture trustee or to direct the exercise of any trust or power
conferred on the senior indenture trustee with respect to the senior notes of
that series.
No holder of a senior note of any series will have any right to institute a
proceeding with respect to the senior indenture for the appointment of a
receiver or for any remedy under the senior indenture unless:
. that holder has previously given the senior indenture trustee written
notice that an event of default with respect to the senior notes of that
series has occurred and is continuing;
. the holders of not less than a majority in principal amount of the
outstanding senior notes of that series have made written request to
institute the proceeding;
. the holder or holders have offered reasonable indemnity to the senior
indenture trustee;
. the senior indenture trustee has failed to institute the proceeding for
60 days after receipt of the notice and offer of indemnity; and
. the senior indenture trustee has not received from the holders of not
less than a majority in principal amount of the outstanding senior notes
of that series a direction inconsistent with the written request.
Notwithstanding the foregoing, the holder of any senior note will have an
absolute and unconditional right to receive payment of the principal of and any
premium, interest and additional amounts on that senior note on its maturity
date, or, in the case of redemption, the date of redemption, and to institute
suit for the enforcement of any payment against the issuing company and MRM, as
guarantor, if applicable.
Notice of Default
If an event occurs which is or would become an event of default with respect
to any series of the senior notes, and the senior indenture trustee knows of
the event, the senior indenture trustee shall mail to the holders of the
affected senior notes a notice of the default within 90 days, unless the
default has been cured or waived by the holders of the affected senior notes.
However, except in the case of a default in the payment of any amounts due on
senior notes of any series, the senior indenture trustee may withhold the
notice if and so long as the directors and/or responsible officers of the
senior indenture trustee determine in good faith that withholding the notice is
in the interest of the holders of the affected senior notes.
The issuing company and, in the case of senior notes issued by Mutual Group
and guaranteed by MRM, MRM are required to furnish annually to the senior
indenture trustee an officers' certificate to the effect that, to the best
knowledge of the officers providing the certificate, the issuing company or
MRM, as guarantor, if applicable, is not in default under the senior indenture
or, if there has been a default, specifying the default and its status.
Consolidation, Merger, Conveyance or Transfer
The Mutual Group senior indenture provides that Mutual Group may consolidate
or merge with or into another entity, or convey, transfer or lease its
properties and assets substantially as an entirety to any entity or permit an
entity to convey, transfer or lease its properties and assets substantially as
an entirety to it; provided, that:
. the successor, if any, is a corporation organized and existing under the
laws of the United States of America, any State of the United States or
the District of Columbia and expressly assumes by supplemental indenture
all of Mutual Group's obligations under the Mutual Group senior indenture
and the related senior notes;
15
. immediately after giving effect to the transaction, no event of default,
or event which after notice or lapse of time or both would become an
event of default, will have occurred and be continuing; and
. Mutual Group delivers an officers' certificate and an opinion of counsel
to the senior indenture trustee, each stating that the transaction
complies with the Mutual Group senior indenture and all conditions
precedent in the Mutual Group senior indenture relating to the
consolidation, merger, conveyance or transfer have been complied with.
Upon the assumption by the successor of Mutual Group's obligations under the
senior indenture and the senior notes, the successor will succeed to and be
substituted for Mutual Group under the Mutual Group senior indenture, and
Mutual Group will be relieved of all of its obligations under the Mutual Group
senior indenture and the related senior notes, except as otherwise specified in
any applicable prospectus supplement.
Each senior indenture provides that MRM may consolidate or merge with or
into another entity, or convey, transfer or lease its properties and assets
substantially as an entirety to any entity or permit an entity to convey,
transfer or lease its properties and assets substantially as an entirety to it;
provided, that:
. the successor, if any, is a corporation existing under the laws of the
United States of America, any State of the United States, the District of
Columbia or Bermuda and expressly assumes by supplemental indenture all
of MRM's obligations under the applicable senior indenture and the
related senior notes or the MRM senior note guarantee, as the case may
be;
. immediately after giving effect to the transaction, no event of default,
or event which after notice or lapse of time or both would become an
event of default, will have occurred and be continuing; and
. MRM delivers an officers' certificate and an opinion of counsel to the
senior indenture trustee, each stating that the transaction complies with
the applicable senior indenture and all conditions precedent in the
applicable senior indenture relating to the consolidation, merger,
conveyance or transfer have been complied with.
Upon the assumption by the successor of MRM's obligations under the
applicable senior indenture, the senior notes and the MRM senior note
guarantees, if applicable, the successor will succeed to and be substituted for
MRM under the applicable senior indenture, and MRM will be relieved of all of
its obligations under the senior indenture and the related senior notes and the
MRM senior note guarantees, if applicable, except as otherwise specified in the
applicable prospectus supplement.
Registration and Transfer
If the senior notes of a series are to be redeemed, the issuing company will
not be required to:
. issue, register the transfer of or exchange any senior notes of that
series during the 15 days immediately preceding the date notice is mailed
identifying the senior notes that are called for redemption; or
. register the transfer of or exchange any senior note selected for
redemption, in whole or in part, except for the unredeemed portion of a
senior note being redeemed in part.
Denominations
The senior notes will be issuable in denominations of $1,000 and any
integral multiples of $1,000, without coupons, unless the applicable prospectus
supplement states otherwise.
Payment and Paying Agent
Principal of the senior notes will be paid only against surrender of the
senior notes as specified in the senior indenture. Unless the applicable
prospectus supplement states otherwise, interest on the senior notes will be
payable, at the issuing company's option, (1) by check mailed to the address of
the person entitled to the interest as the address appears in the security
register for the senior notes or (2) by wire transfer to an account at a
banking institution in the United States that the person entitled to the
interest designates in writing to the senior indenture trustee at least 10
business days prior to the date of payment.
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Unless the applicable prospectus supplement states otherwise, the senior
indenture trustee will act as paying agent for the senior notes, and the
principal corporate trust office of the senior indenture trustee will serve as
the office through which the paying agent acts. The issuing company may
designate additional paying agents, rescind the designation of any paying
agents and/or approve a change in the office through which any paying agent
acts.
Modification of the Senior Indentures
The issuing company, MRM, as guarantor, if applicable, and the senior
indenture trustee may amend or modify the senior indentures with the consent of
the holders of at least a majority in aggregate principal amount of the
outstanding senior notes of each series of the senior notes affected by the
amendment or modification voting as a class. No amendment or modification may,
however, without the consent of the holder of each outstanding senior note
affected by the amendment or modification:
. change the stated maturity of the principal of, or any premium, interest
or additional amounts on, any senior note;
. reduce the amount due and payable upon acceleration of the maturity of
the senior note;
. reduce the principal amount of, the rate of interest on or any premium
payable upon the redemption of any senior note, modify the calculation of
the rate of interest or change the date on which any senior note may be
redeemed;
. change MRM's obligations to pay any additional amounts;
. change the place of payment or currency of any payment on any senior
note;
. impair the right to institute suit for the enforcement of any payment on
any senior note on or after the stated maturity of the payment or date of
redemption;
. reduce the percentage in principal amount of the senior notes of any
series, the consent of whose holders is required to amend or modify the
senior indenture, to waive compliance with specific provisions of the
senior indenture or to waive specific defaults;
. modify the provisions of the MRM senior note guarantee; or
. modify any of the above provisions.
In addition, the issuing company, MRM, as guarantor, if applicable, and the
senior indenture trustee may, without the consent of any of the holders of the
senior notes, execute supplemental indentures to:
. create new series of senior notes;
. cure any ambiguity, correct or supplement any provision which may be
inconsistent with any other provision or make provisions not inconsistent
with any other provisions with respect to matters or questions arising
under the applicable senior indenture, in each case to the extent that
the amendment does not adversely affect the interests of any holder of
the senior notes in any material respect; and
. make other changes that do not adversely affect the interests of the
holders of the senior notes in any material respect;
as well as for various other purposes.
Waiver of Covenants and Defaults
The holders of not less than a majority in aggregate principal amount of the
outstanding senior notes of any series may waive, for that series, the issuing
company's and/or, in the case of senior notes issued by Mutual Group and
guaranteed by MRM, MRM's compliance with any restrictive covenants described in
this prospectus or in any prospectus supplement or included in any supplemental
indenture. The holders of not less than a majority in aggregate principal
amount of the outstanding senior notes of any series with respect to
17
which a default has occurred and is continuing may waive that default for that
series, other than a default in any payment on any senior note of that series
or a default with respect to a covenant or provision that cannot be amended or
modified without the consent of the holder of each outstanding senior note
affected.
Defeasance and Covenant Defeasance
The senior indentures provide, unless the terms of the particular series of
senior notes provide otherwise, that:
. the issuing company may be discharged from its obligations with respect
to any senior notes or series of senior notes, and, in the case of senior
notes issued by Mutual Group and guaranteed by MRM, MRM may be discharged
from its obligations with respect to the related MRM senior note
guarantee, each of which we refer to as "defeasance;" and/or
. the issuing company and MRM, as guarantor, if applicable, may be released
from their obligations under any restrictive covenants described in any
prospectus supplement or included in any supplemental indenture with
respect to any senior notes or series of senior notes and the related MRM
senior note guarantee, which we refer to as "covenant defeasance."
The senior indentures permit defeasance with respect to any senior notes of
a series even if a prior covenant defeasance has occurred with respect to the
senior notes of that series. Following a defeasance, payment of the senior
notes defeased and the MRM senior note guarantee, if applicable, may not be
accelerated because of an event of default. Following a covenant defeasance,
payment of the senior notes and the MRM senior note guarantee, if applicable,
may not be accelerated by reference to the covenants affected by the covenant
defeasance. However, if an acceleration were to occur, the realizable value at
the acceleration date of the money and government obligations in the defeasance
trust could be less than the amounts then due on the senior notes, since the
required deposit in the defeasance trust would be based upon scheduled cash
flows rather than market value, which would vary depending upon interest rates
and other factors.
Upon a defeasance, the following rights and obligations will continue: (1)
the rights of the holders of the senior notes of any series to receive from the
defeasance trust any amounts due on the senior notes when payments are due; (2)
the issuing company's obligations regarding the registration, transfer and
exchange of the senior notes of any series; (3) the obligation of the issuing
company and MRM, as guarantor, if applicable, to maintain an office or agency
in each place of payment; and (4) the survival of the senior indenture
trustee's rights, powers, trusts, duties and immunities under the senior
indenture.
In connection with any defeasance or covenant defeasance, the issuing
company or MRM, as guarantor, if applicable, must irrevocably deposit with the
senior indenture trustee, in trust, money and/or government obligations which,
through the scheduled payment of principal and interest on those obligations,
would provide sufficient moneys to pay all amounts due on the senior notes on
the maturity dates or upon redemption. The issuing company must also deliver to
the trustee an opinion of counsel to the effect that the holders of the senior
notes will not recognize income, gain or loss for United States federal income
tax purposes as a result of the defeasance or covenant defeasance and will be
subject to United States federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if the defeasance or
covenant defeasance had not occurred, and the opinion of counsel, in the case
of defeasance, must refer to and be based upon a letter ruling of the Internal
Revenue Service received by the issuing company, a Revenue Ruling published by
the Internal Revenue Service or a change in applicable United States federal
income tax law occurring after the date of the senior indenture.
Information Concerning the Senior Indenture Trustee
If an event of default shall occur and be continuing, the senior indenture
trustee shall exercise its rights and powers under the senior indenture in the
same manner and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the same circumstances in the
conduct of his or her
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own affairs. Before proceeding to exercise any right or power under the senior
indenture at the direction of the holders, the senior indenture trustee will be
entitled to receive from the holders reasonable security or indemnity against
the costs, expenses and liabilities that might be incurred by it in complying
with any direction of the holders.
The Chase Manhattan Bank, which is the senior indenture trustee under each
senior indenture, also serves as the subordinated indenture trustee under each
subordinated indenture described below and as property trustee and guarantee
trustee with respect to the preferred securities issued by each trust. Chase
Manhattan Bank Delaware, an affiliate of The Chase Manhattan Bank, serves as
the Delaware trustee for each trust.
Governing Law
The senior indentures, the senior notes and the MRM senior note guarantees
will be governed by the laws of the State of New York, without regard to the
conflict of law provisions thereof.
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DESCRIPTION OF THE JUNIOR SUBORDINATED NOTES AND
THE MRM JUNIOR SUBORDINATED NOTE GUARANTEES
The junior subordinated notes of MRM will be issued pursuant to a
subordinated indenture, as supplemented from time to time, between MRM and The
Chase Manhattan Bank, as the subordinated indenture trustee. The junior
subordinated notes of Mutual Group will be issued pursuant to a subordinated
indenture, as supplemented from time to time, among Mutual Group, MRM, as
guarantor, and The Chase Manhattan Bank, as subordinated indenture trustee. We
have filed the base subordinated indentures as exhibits to the registration
statement of which this prospectus is a part. You also may request a copy of
the subordinated indentures from the subordinated indenture trustee at its
corporate trust office in New York, New York. Each subordinated indenture will
be qualified under the Trust Indenture Act of 1939. The terms of each series of
junior subordinated notes will include those stated in the applicable
subordinated indenture and those made part of the applicable subordinated
indenture by reference to the Trust Indenture Act.
MRM and Mutual Group, each referred to as the issuing company, may each
issue series of junior subordinated notes from time to time by entering into
supplemental indentures with the subordinated indenture trustee or pursuant to
resolutions of its board of directors or a duly authorized committee of its
board. Any supplemental indenture or resolutions of either its board of
directors or a duly authorized committee of its board will be executed at the
time the issuing company issues any junior subordinated notes and will be filed
with the SEC on Form 8-K or by a post-effective amendment to the registration
statement of which this prospectus is a part.
General
The base subordinated indentures do not limit the aggregate principal amount
of junior subordinated notes that the issuing company may issue. The junior
subordinated notes of a series need not be issued at the same time, bear
interest at the same rate or mature on the same date.
The issuing company will issue the junior subordinated notes under the
applicable subordinated indenture as one or more series of unsecured junior
debt securities. The junior subordinated notes will be unsecured and
subordinated in right of payment to all of the issuing company's existing and
future senior indebtedness and will rank equal in priority with all of the
issuing company's other unsecured and subordinated indebtedness.
The applicable prospectus supplement and the applicable supplemental
indenture for a particular series of junior subordinated notes will set forth
the following terms of that series:
. the title of the series;
. any limit on the aggregate principal amount of the junior subordinated
notes of the series;
. the date or dates on which the principal of the junior subordinated notes
of the series will be payable or the method for determining the date or
dates;
. whether the issuing company may shorten or extend the date on which the
principal of any junior subordinated notes of the series is payable and,
if so, the terms and conditions of any extension;
. the rate or rates at which the junior subordinated notes of the series
will bear interest, if any, or the method for determining the rate or
rates, and the date or dates from which any interest will accrue;
. the interest payment dates on which any interest will be payable and the
regular record date, if any, for any interest payable on any interest
payment date;
. whether any of the terms of the applicable subordinated indenture
described below under "--Option to Extend Interest Payment Date" will not
apply to the junior subordinated notes of the series;
. the place or places where payments on the junior subordinated notes of
the series will be payable, if other than the principal corporate trust
office of the subordinated indenture trustee;
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. the issuing company's obligation, if any, to redeem or purchase the
junior subordinated notes of the series pursuant to any sinking fund,
amortization or analogous provision and the terms and conditions on which
the junior subordinated notes may be redeemed or purchased pursuant to
any obligation;
. the terms and conditions, if any, on which the junior subordinated notes
of the series may be redeemed at the issuing company's option or at the
option of the holder;
. any index or formula for determining the amount of principal or any
premium or interest on the junior subordinated notes of the series and
the manner of determining those amounts;
. the currency, currencies or currency units in which payments on the
junior subordinated notes of the series will be payable, if other than
U.S. dollars, and the manner of determining the equivalent of those
amounts in U.S. dollars for any purpose;
. if the payments on the junior subordinated notes of the series are
payable at the issuing company's option or the option of the holders of
the junior subordinated notes, in one or more currencies or currency
units other than those in which the junior subordinated notes are stated
to be payable, the currency, currencies or currency units in which the
payments on the junior subordinated notes may be payable and the terms
and conditions of the option;
. the portion of the principal amount of the junior subordinated notes of
the series that will be payable upon declaration of acceleration of
maturity, if other than the entire principal amount;
. whether any of the terms of the applicable subordinated indenture
described below under "--Defeasance and Covenant Defeasance" will not
apply to the junior subordinated notes of the series;
. whether any of the junior subordinated notes of the series will be
issuable as global securities and, if so, the depositary and any
provisions for the transfer or exchange of the global securities, if
different from those described below under "--Global Securities";
. any addition to, deletion from or change in events of default or
covenants with respect to the junior subordinated notes of the series and
any change in the right of the subordinated indenture trustee or the
holders of the junior subordinated notes to accelerate the maturity of
the junior subordinated notes; and
. any other terms of the junior subordinated notes of the series.
Unless the applicable prospectus supplement states otherwise, the issuing
company will issue the junior subordinated notes only in fully registered form,
without coupons, and there will be no service charge for any registration of
transfer or exchange of the junior subordinated notes. The issuing company may,
however, require payment to cover any tax or other governmental charge payable
in connection with the registration of transfer or exchange.
The issuing company may offer and sell the junior subordinated notes at a
substantial discount below their principal amount and the subordinated
indentures do not provide any limit on the amount by which the issuing company
may discount the junior subordinated notes. The applicable prospectus
supplement will describe the special United States federal income tax and other
considerations, if any, applicable to any discounted junior subordinated notes.
In addition, the applicable prospectus supplement may describe certain special
United States federal income tax or other considerations, if any, applicable to
any junior subordinated notes that are denominated in a currency or currency
unit other than U.S. dollars.
The interest rate and interest and other payment dates of each series of
junior subordinated notes issued to a trust will correspond to those of the
applicable preferred securities of the trust.
MRM Junior Subordinated Note Guarantees
Unless provided otherwise in a prospectus supplement, MRM will fully and
unconditionally guarantee all obligations with respect to each series of junior
subordinated notes issued by Mutual Group. Unless provided otherwise in a
prospectus supplement, each MRM junior subordinated note guarantee will be
unsecured indebtedness of MRM and will be subordinated in right of payment to
all of MRM's existing and future senior
21
indebtedness. Each MRM junior subordinated note guarantee will be effectively
subordinated to any secured indebtedness of MRM to the extent of the value of
the assets securing the secured indebtedness. Each MRM junior subordinated note
guarantee will also rank equally with any other MRM junior subordinated note
guarantee of any series of junior subordinated notes issued by Mutual Group. As
a result, in the event of MRM's bankruptcy, liquidation or reorganization or
upon acceleration of any series of junior subordinated notes due to an event of
default, MRM's assets will be available to pay MRM's obligations on an MRM
junior subordinated note guarantee only after all secured and senior
indebtedness of MRM has been paid in full in cash or other payment satisfactory
to the holders of the secured and senior indebtedness of MRM has been made.
There may not be sufficient assets remaining to pay amounts due on any or all
of the MRM junior subordinated note guarantees. Each MRM junior subordinated
note guarantee will also be effectively subordinated to the indebtedness and
other liabilities of MRM's subsidiaries. Each MRM junior subordinated note
guarantee does not prohibit or limit the incurrence of secured or senior
indebtedness or the incurrence of other indebtedness and liabilities by MRM or
its subsidiaries. The incurrence of additional secured and senior indebtedness
and other liabilities by MRM or its subsidiaries could adversely affect MRM's
ability to pay its obligations on an MRM junior subordinated note guarantee.
Each MRM junior subordinated note guarantee will constitute a guarantee of
payment and not of collection. This means that the holder of the guaranteed
security may sue MRM to enforce its rights under the MRM junior subordinated
note guarantee without first suing any other person or entity.
Additional Amounts
MRM will make all payments on any series of junior subordinated notes issued
by MRM and all payments under each MRM junior subordinated note guarantee
without withholding or deduction for any taxes, fees, duties, assessments or
governmental charges imposed or levied by Bermuda or any other jurisdiction in
which MRM or any successor is organized or resident for tax purposes or any
political subdivision or taxing authority of Bermuda or any of those other
jurisdictions. If any withholding or deduction is required by law, MRM will pay
to the holder of the junior subordinated notes additional amounts as may be
necessary so that every net payment made to the holder after the withholding or
deduction will not be less than the amount provided for in the applicable
junior subordinated note and the applicable subordinated indenture. MRM will
not be required to pay any additional amounts as a result of:
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the junior subordinated note, other than a trust, was
a resident or national of or had other specified connections with the
relevant taxing jurisdiction or presented the junior subordinated note
for payment in the relevant taxing jurisdiction unless it could not have
been presented elsewhere;
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the junior subordinated note, other than a trust,
presented the junior subordinated note for payment more than 30 days
after it was due and payable;
. any estate, inheritance, gift, sale, transfer, personal property or
similar tax, fee, duty, assessment or other governmental charge; or
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the junior subordinated note, other than a trust,
failed to comply, within 90 days, with any reasonable request by MRM
addressed to the holder or beneficial owner relating to the provision of
information or the making of a declaration required by the taxing
jurisdiction as a precondition to exemption from all or part of the tax,
fee, duty, assessment or governmental charge.
In addition, MRM will not be required to pay additional amounts with respect
to any payment to any holder of a junior subordinated note where the beneficial
owner of the junior subordinated note, other than a trust, is a fiduciary or
partnership to the extent that such payment would be required to be included in
the income for tax purposes of a beneficiary with respect to such fiduciary or
a partner of such partnership that would not have been entitled to such
additional amounts if it had been the holder of the junior subordinated note.
Subordination
Each series of the junior subordinated notes will be unsecured indebtedness
of the issuing company and will be subordinated in right of payment to all of
the issuing company's existing and future senior indebtedness.
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The junior subordinated notes will be effectively subordinated to any secured
indebtedness of the issuing company to the extent of the value of the assets
securing the secured indebtedness. As a result, in the event of the issuing
company's bankruptcy, liquidation or reorganization or upon acceleration of the
junior subordinated notes due to an event of default, the issuing company's
assets will be available to pay its obligations on the junior subordinated
notes only after all senior indebtedness has been paid in full in cash or other
payment satisfactory to the holders of the senior indebtedness has been made.
In addition, any assets securing secured indebtedness will be available to pay
the issuing company's obligations under the junior subordinated notes only
after all secured indebtedness has been paid in full in cash or other payment
satisfactory to the holders of the secured indebtedness has been made. There
may not be sufficient assets remaining to pay amounts due on any or all of the
junior subordinated notes then outstanding. The junior subordinated notes will
also be effectively subordinated to the indebtedness and other liabilities of
the issuing company's subsidiaries.
No payment with respect to the junior subordinated notes of any series may
be made if any senior indebtedness of the issuing company is not paid when due
and any applicable grace period with respect to the default has ended and the
default has not been cured or waived or ceased to exist. If the maturity of any
senior indebtedness has been accelerated because of a default, payments on the
junior subordinated notes may not be made until the accelerated indebtedness
has been paid in full or the acceleration rescinded.
Except as otherwise provided in the applicable prospectus supplement, the
subordinated indentures do not prohibit or limit the incurrence of secured or
senior indebtedness or the incurrence of other indebtedness and liabilities by
the issuing company or its subsidiaries. The incurrence of additional secured
and senior indebtedness and other liabilities by the issuing company or its
subsidiaries could adversely affect the issuing company's ability to pay its
obligations on the junior subordinated notes.
The term "senior indebtedness" is defined in each subordinated indenture to
mean, with respect to any issuing company of junior subordinated notes, the
principal of, and any premium and interest on and any other payment in respect
of, indebtedness due pursuant to any of the following, whether outstanding at
the date of execution of each subordinated indenture or incurred after the date
of execution:
. all indebtedness of the applicable issuing company for money borrowed or
evidenced by debt securities, acquisition obligations, reimbursement
obligations, deferred purchase price obligations, capital lease
obligations and derivative products;
. all indebtedness of others of the kinds described in the preceding clause
and all dividends of other persons guaranteed in any manner by the
applicable issuing company; and
. all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding clauses;
unless the instrument creating or evidencing the same or pursuant to which the
same is outstanding provides that the indebtedness, renewal, extension or
refunding is not superior in right of payment to or is equal in right of
payment with or subordinated to each series of the junior subordinated notes.
Any senior indebtedness will continue to be senior indebtedness and be entitled
to the benefits of the subordination provisions in each subordinated indenture
irrespective of any amendment, modification or waiver of any term of the senior
indebtedness.
Global Securities
Some or all of the junior subordinated notes of a series may be represented
in whole or in part by one or more global securities deposited with or on
behalf of one or more depositaries. The applicable prospectus supplement will
describe the terms of any depositary arrangement. Unless the applicable
prospectus supplement states otherwise, the following provisions will apply to
all depositary arrangements for any junior subordinated notes represented by
global securities.
Each series of the junior subordinated notes that are to be represented by a
global security deposited with or on behalf of a depositary will be represented
by a global security registered in the name of that depositary or its nominee.
Upon the issuance of a global security in registered form, the depositary for
the global security
23
will credit, on its book-entry registration and transfer system, the respective
principal amount of the applicable junior subordinated notes represented by the
global security to the accounts of institutions that have accounts with the
depositary or its nominee. These institutions are generally brokers, dealers,
banks and other financial institutions, and are referred to as participants.
The accounts to be credited will be designated by the underwriters or agents of
the applicable junior subordinated notes or by the issuing company if the
applicable junior subordinated notes are offered and sold directly by the
issuing company. Ownership of beneficial interests in the global securities
will be limited to participants or persons that may hold interests through
participants. Any person who holds a brokerage account with a participant may
purchase the junior subordinated notes through the participant. Ownership of
beneficial interests by participants in the global securities will be shown on,
and the transfer of any ownership interest will be effected only through,
records maintained by the depositary or its nominee for the global security.
Ownership of beneficial interests in global securities by persons that hold
through participants will be effected only through records maintained by the
applicable participant. Some insurance companies and other institutions are
required by law to hold their investment securities in definitive form, so an
investor may not be able to sell its junior subordinated notes to those
entities.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or nominee, as the case
may be, will be considered the sole owner or holder of the junior subordinated
notes represented by the global security for all purposes under the
subordinated indenture. Except as set forth below, owners of beneficial
interests in the global security will not be entitled to have the junior
subordinated notes represented by the global security registered in their
names, will not receive or be entitled to receive physical delivery of the
junior subordinated notes in definitive form and will not be considered the
owners or holders of the junior subordinated notes under the subordinated
indenture.
Payments on junior subordinated notes registered in the name of or held by a
depositary or its nominee will be made in immediately available funds to the
depositary or its nominee, as the case may be, as the registered owner or the
holder of the global security representing the junior subordinated notes. None
of the issuing company, MRM, as guarantor, if applicable, the subordinated
indenture trustee, any paying agent or the registrar and transfer agent for the
applicable series of junior subordinated notes will have any responsibility or
liability for any aspect of the records relating to, or payments made on
account of, beneficial ownership interests in a global security for the
applicable series of junior subordinated notes or for maintaining, supervising
or reviewing any records relating to the beneficial ownership interests.
We expect that a depositary for each series of junior subordinated notes,
upon receipt of any payments in respect of a global security, will immediately
credit participants' accounts with payment in amounts proportionate to their
respective beneficial interests in the principal amount of the global security
as shown on the records of the depositary. We also expect that payments by
participants to owners of beneficial interests in the global security held
through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in "street name," and will be the responsibility of
each participant.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be entitled to direct the actions of the subordinated
indenture trustee upon an event of default. However, we expect that a
depositary for each series of the junior subordinated notes upon receiving
notice of an event of default, will immediately solicit the participants
regarding any action to be taken. We also expect that the participants will act
in accordance with standing instructions and customary practices, as is now the
case with securities held for the accounts of customers registered in "street
name," and will, in turn, solicit the owners of the beneficial interests
regarding any action to be taken upon any event of default.
A global security may not be transferred, in whole or in part, except by the
depositary for the global security to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any nominee to a successor depositary or a
nominee of the successor
24
depositary. If a depositary for the junior subordinated notes of a series is at
any time unwilling or unable to continue as depositary and a qualified
successor depositary is not appointed by the applicable issuing company within
90 days or if at any time the depositary ceases to be a clearing agency
registered under the Exchange Act when the depositary is required to be
registered to act as the depositary and no qualified successor is appointed by
the applicable issuing company within 90 days or an event of default has
occurred and is continuing, then the applicable issuing company will issue the
junior subordinated notes in definitive registered form in exchange for the
global security or global securities representing the applicable junior
subordinated notes. In addition, the issuing company may, at any time,
determine not to have any junior subordinated notes represented by one or more
global securities and, in that event, will issue the applicable junior
subordinated notes in definitive registered form in exchange for the global
securities representing the applicable junior subordinated notes. In any of
these instances, an owner of a beneficial interest in a global security will be
entitled to physical delivery in definitive form of the applicable junior
subordinated notes represented by the global security equal in principal amount
to its beneficial interest and to have the applicable junior subordinated notes
registered in its name.
Option to Extend Interest Payment Date
If provided in the related prospectus supplement, the issuing company will
have the right at any time and from time to time during the term of any series
of junior subordinated notes issued to a trust to defer payment of interest for
the number of consecutive interest payment periods as may be specified in the
related prospectus supplement, subject to the terms, conditions and covenants,
if any, specified in the prospectus supplement. No interest deferral period,
however, may extend beyond the stated maturity of the series of junior
subordinated notes. The United States federal income tax consequences and
special considerations related to a deferral will be described in the related
prospectus supplement.
Events of Default
The following will be events of default under each subordinated indenture
with respect to each series of junior subordinated notes unless the particular
event of default is not applicable to the particular series of junior
subordinated notes or unless the particular event of default is deleted or
modified in a supplemental indenture as stated in the applicable prospectus
supplement:
. the issuing company fails to pay principal of or any premium on any
junior subordinated note of that series, or any additional amounts
related to principal or premium, on its due date;
. the issuing company fails to pay any interest on any junior subordinated
note of that series, or any additional amounts related to interest,
within 30 days from its due date, after taking into account any permitted
deferral of interest payments by the issuing company under the terms of
the junior subordinated notes;
. the issuing company fails to make any sinking fund payment on its due
date;
. the issuing company or, in the case of junior subordinated notes issued
by Mutual Group and guaranteed by MRM, MRM fails to perform any of its
covenants in the subordinated indenture, excluding a covenant not
applicable to the affected series, for 30 days after the subordinated
indenture trustee or the holders of at least 25% in principal amount of
the outstanding junior subordinated notes of that series give the issuing
company and MRM, as guarantor, if applicable, written notice of the
default and require that the issuing company or MRM, as guarantor, if
applicable, remedy the breach. However, the 30-day period may be extended
by either the subordinated indenture trustee or the subordinated
indenture trustee and the holders of at least the same principal amount
of junior subordinated notes of that series that had given notice of
default;
. the issuing company or MRM, in the case of junior subordinated notes
issued by Mutual Group and guaranteed by MRM, defaults under any (1)
indebtedness for any money borrowed, including any other series of debt
securities, (2) mortgage, indenture or other instrument under which there
may be issued or
25
may be secured or evidenced any indebtedness for money borrowed or (3)
guarantee of payment for money borrowed, and any default consists of a
payment default at the stated maturity of the indebtedness, after giving
effect to any applicable grace period, or results in the indebtedness
becoming due or being declared due prior to its stated maturity; provided,
that a default shall exist under this clause only if the aggregate
principal amount outstanding under all of the indebtedness that is so in
default or that has become due or been declared due prior to its stated
maturity, as the case may be, exceeds $40,000,000 and the default has not
been cured, the indebtedness or accelerated indebtedness has not been
discharged or the acceleration of the indebtedness has not been rescinded
or annulled, in each case, within 10 days after the subordinated indenture
trustee or the holders of at least 25% in principal amount of the junior
subordinated notes give the issuing company and MRM, as guarantor, if
applicable, written notice of the default and require that the issuing
company or MRM, as guarantor, if applicable, remedy the breach;
. the issuing company or, in the case of junior subordinated notes issued
by Mutual Group and guaranteed by MRM, MRM fails within 60 days to pay,
bond or otherwise discharge any uninsured judgment or court order for the
payment of money in excess of $40,000,000, which is not stayed on appeal
or is not otherwise being appropriately contested in good faith;
. the issuing company or, in the case of junior subordinated notes issued
by Mutual Group and guaranteed by MRM, MRM files for bankruptcy or other
events of bankruptcy, insolvency or reorganization occur;
. in the case of junior subordinated notes issued by Mutual Group and
guaranteed by MRM, the guarantee ceases to be in full force and effect;
and
. any other event of default specified in the applicable prospectus
supplement occurs.
If the issuing company or, in the case of junior subordinated notes issued
by Mutual Group and guaranteed by MRM, MRM files for bankruptcy or other events
of bankruptcy, insolvency or reorganization occur, all unpaid principal and
accrued interest, premium and additional amounts on the junior subordinated
notes will automatically be immediately due and payable. If any other event of
default with respect to the junior subordinated notes of a series occurs and is
continuing, then the subordinated indenture trustee or the holders of not less
than 25% in principal amount of the outstanding junior subordinated notes of
that series may, by notice to the issuing company, and, in the case of junior
subordinated notes issued by Mutual Group and guaranteed by MRM, MRM and to the
subordinated indenture trustee if given by the holders, declare to be
immediately due and payable all unpaid principal and accrued interest, premium
and additional amounts on all junior subordinated notes of that series.
At any time after a declaration of acceleration has been made with respect
to the junior subordinated notes of a series and before a judgment or decree
for payment of the money due has been obtained, the holders of not less than a
majority in principal amount of the outstanding junior subordinated notes may
rescind any declaration of acceleration with respect to the junior subordinated
notes and its consequences if:
. the issuing company or, in the case of junior subordinated notes issued
by Mutual Group and guaranteed by MRM, MRM deposits with the subordinated
indenture trustee funds sufficient to pay all overdue principal of and
any premium, interest and additional amounts on the applicable junior
subordinated notes, any other amounts due to the subordinated indenture
trustee and, to the extent that payment of the interest is lawful,
interest on the overdue interest and additional amounts; and
. all existing events of default with respect to the applicable junior
subordinated notes have been cured or waived except non-payment of
principal on the junior subordinated notes that has become due solely
because of the acceleration.
The holders of not less than a majority in principal amount of the
outstanding junior subordinated notes of any series have the right to direct
the time, method and place of conducting any proceedings for any remedy
available to the subordinated indenture trustee or to direct the exercise of
any trust or power conferred on the subordinated indenture trustee with respect
to the junior subordinated notes of that series.
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No holder of a junior subordinated note of any series will have any right to
institute a proceeding with respect to the applicable subordinated indenture or
for any remedy under the applicable subordinated indenture unless:
. that holder has previously given the subordinated indenture trustee
written notice that an event of default with respect to the junior
subordinated notes of that series has occurred and is continuing;
. the holders of not less than a majority in principal amount of the
outstanding junior subordinated notes of that series have made written
request to institute the proceeding;
. the holder or holders have offered reasonable indemnity to the
subordinated indenture trustee;
. the subordinated indenture trustee has failed to institute the proceeding
for 60 days after receipt of the notice and offer of indemnity; and
. the subordinated indenture trustee has not received from the holders of
not less than a majority in principal amount of the outstanding junior
subordinated notes of that series a direction inconsistent with the
written request.
Notwithstanding the foregoing, the holder of any junior subordinated note
will have an absolute and unconditional right to receive payment of the
principal of and any premium, interest and additional amounts on that junior
subordinated note on its maturity date, or, in the case of redemption, the date
of redemption, and to institute suit for the enforcement of any payment against
the issuing company and MRM, as guarantor, if applicable.
Notice of Default
If an event occurs which is or would become an event of default with respect
to any series of the junior subordinated notes, and the subordinated indenture
trustee knows of the event, the subordinated indenture trustee shall mail to
the holders of the affected junior subordinated notes a notice of the default
within 90 days, unless the default has been cured or waived by the holders of
the affected junior subordinated notes. However, except in the case of a
default in the payment of any amounts due on junior subordinated notes of any
series, the subordinated indenture trustee may withhold the notice if and so
long as the directors and/or responsible officers of the subordinated indenture
trustee determine in good faith that withholding the notice is in the interest
of the holders of the affected junior subordinated notes.
The issuing company and, in the case of junior subordinated notes issued by
Mutual Group and guaranteed by MRM, MRM are required to furnish annually to the
subordinated indenture trustee an officers' certificate to the effect that, to
the best knowledge of the officers providing the certificate, it is not in
default under the applicable subordinated indenture or, if there has been a
default, specifying the default and its status.
Consolidation, Merger, Conveyance or Transfer
The Mutual Group subordinated indenture provides that Mutual Group may
consolidate or merge with or into another entity, or convey, transfer or lease
its properties and assets substantially as an entirety to any entity or permit
an entity to convey, transfer or lease its properties and assets substantially
as an entirety to it; provided, that:
. the successor, if any, is a corporation organized and existing under the
laws of the United States of America, any State of the United States or
the District of Columbia and expressly assumes by supplemental indenture
all of Mutual Group's obligations under the Mutual Group subordinated
indenture and the related junior subordinated notes;
. immediately after giving effect to the transaction, no event of default,
or event which after notice or lapse of time or both would become an
event of default, will have occurred and be continuing; and
. Mutual Group delivers an officers' certificate and an opinion of counsel
to the subordinated indenture trustee, each stating that the transaction
complies with the Mutual Group subordinated indenture and all conditions
precedent in the Mutual Group subordinated indenture relating to the
consolidation, merger, conveyance or transfer have been complied with.
27
Upon the assumption by the successor of Mutual Group's obligations under the
subordinated indenture and the junior subordinated notes, the successor will
succeed to and be substituted for Mutual Group under the Mutual Group
subordinated indenture, and Mutual Group will be relieved of all of its
obligations under the Mutual Group subordinated indenture and the related
junior subordinated notes, except as otherwise specified in any applicable
prospectus supplement.
Each subordinated indenture provides that MRM may consolidate or merge with
or into another entity, or convey, transfer or lease its properties and assets
substantially as an entirety to any entity or permit an entity to convey,
transfer or lease its properties and assets substantially as an entirety to it;
provided, that:
. the successor, if any, is a corporation organized and existing under the
laws of the United States of America, any State of the United States, the
District of Columbia or Bermuda and expressly assumes by supplemental
indenture all of MRM's obligations under the applicable subordinated
indenture and the related junior subordinated notes or the MRM junior
subordinated note guarantees, as the case may be;
. immediately after giving effect to the transaction, no event of default,
or event which after notice or lapse of time or both would become an
event of default, will have occurred and be continuing; and
. MRM delivers an officers' certificate and an opinion of counsel to the
subordinated indenture trustee, each stating that the transaction
complies with the applicable subordinated indenture and all conditions
precedent in the applicable subordinated indenture relating to the
consolidation, merger, conveyance or transfer have been complied with.
Upon the assumption by the successor of MRM's obligations under the
subordinated indenture, the junior subordinated notes and the MRM junior
subordinated note guarantees, if applicable, the successor will succeed to and
be substituted for MRM under the applicable subordinated indenture, and MRM
will be relieved of all of its obligations under the applicable subordinated
indenture, the related junior subordinated notes and the MRM junior
subordinated note guarantees, if applicable, except as otherwise specified in
any applicable prospectus supplement.
Registration and Transfer
If the junior subordinated notes of a series are to be redeemed, the issuing
company will not be required to:
. issue, register the transfer of or exchange any junior subordinated notes
of that series during the 15 days immediately preceding the date notice
is mailed identifying the junior subordinated notes that are called for
redemption; or
. register the transfer of or exchange any junior subordinated note
selected for redemption, in whole or in part, except for the unredeemed
portion of any junior subordinated note being redeemed in part.
Denominations
Each series of the junior subordinated notes will be issuable in
denominations of $1,000 and any integral multiples of $1,000, without coupons,
unless the applicable prospectus supplement states otherwise.
Payment and Paying Agent
Principal of each series of the junior subordinated notes will be paid only
against surrender of the applicable junior subordinated notes as specified in
the applicable subordinated indenture. Unless the applicable prospectus
supplement states otherwise, interest on each series of the junior subordinated
notes will be payable, at the issuing company's option, (1) by check mailed to
the address of the person entitled to the interest as the address appears in
the security register for the applicable junior subordinated notes or (2) by
wire transfer to an account at a banking institution in the United States that
the person entitled to the interest designates in writing to the subordinated
indenture trustee at least 10 business days prior to the date of payment.
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Unless the applicable prospectus supplement states otherwise, the
subordinated indenture trustee will act as paying agent for each series of the
junior subordinated notes, and the principal corporate trust office of the
subordinated indenture trustee will serve as the office through which the
paying agent acts. The issuing company may designate additional paying agents,
rescind the designation of any paying agents and/or approve a change in the
office through which any paying agent acts.
All moneys that the issuing company has paid to a paying agent for payment
of principal of or interest on each series of the junior subordinated notes
that remain unclaimed at the end of two years after the principal or interest
has become due and payable will be repaid to the issuing company at its
request. Holders will thereafter look only to the issuing company for any
payments.
Modification of the Subordinated Indenture
The issuing company, MRM, as guarantor, if applicable, and the subordinated
indenture trustee may amend or modify the subordinated indenture with the
consent of the holders of at least a majority in aggregate principal amount of
the outstanding junior subordinated notes of each series of the junior
subordinated notes affected by the amendment or modification voting as a class.
No amendment or modification may, however, without the consent of the holder of
each outstanding junior subordinated note affected by the amendment or
modification:
. change the stated maturity of the principal of, or any premium, interest
or additional amounts on, any junior subordinated note;
. reduce the amount due and payable upon acceleration of the maturity of
the junior subordinated note;
. reduce the principal amount of, the rate of interest on or any premium
payable upon the redemption of any junior subordinated note, modify the
calculation of the rate of interest or change the date on which any
junior subordinated note may be redeemed;
. change the place of payment or currency of any payment on any junior
subordinated note;
. change MRM's obligations to pay any additional amounts;
. impair the right to institute suit for the enforcement of any payment on
any junior subordinated note on or after the stated maturity of the
payment or date of redemption;
. alter the subordination provisions in a manner that would adversely
affect the interests of any holder of the junior subordinated notes in
any material respect;
. reduce the percentage in principal amount of the junior subordinated
notes of any series, the consent of whose holders is required to amend or
modify the subordinated indenture, to waive compliance with specific
provisions of the subordinated indenture or to waive specific defaults;
. modify the provisions of the MRM junior subordinated note guarantee; or
. modify any of the above provisions.
In addition, the issuing company, MRM, as guarantor, if applicable, and the
subordinated indenture trustee may execute supplemental indentures to:
. create new series of junior subordinated notes;
. cure any ambiguity, correct or supplement any provision which may be
inconsistent with any other provision or make provisions not inconsistent
with any other provisions with respect to matters on questions arising
under the applicable subordinated indenture, in each case to the extent
that the amendment does not adversely affect the interests of any holder
of the junior subordinated notes in any material respect; and
. make other changes that do not adversely affect the interests of the
holders of the junior subordinated notes in any material respect;
as well as for various other purposes.
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In addition, the subordinated indentures may not be amended to alter the
subordination of any junior subordinated notes without the written consent of
each holder of senior indebtedness then outstanding that would be adversely
affected by the alteration.
Waiver of Covenants and Defaults
The holders of not less than a majority in aggregate principal amount of the
outstanding junior subordinated notes of any series may waive, for that series,
the issuing company's and/or, in the case of junior subordinated notes issued
by Mutual Group and guaranteed by MRM, MRM's compliance with any restrictive
covenants described in any prospectus supplement or included in any
supplemental indenture. The holders of not less than a majority in aggregate
principal amount of the outstanding junior subordinated notes of any series
with respect to which a default has occurred and is continuing may waive that
default for that series, other than a default in any payment on any junior
subordinated note of that series or a default with respect to a covenant or
provision that cannot be amended or modified without the consent of the holder
of each outstanding junior subordinated note affected.
Defeasance and Covenant Defeasance
The subordinated indentures provide, unless the terms of the particular
series of junior subordinated notes provide otherwise, that:
. the issuing company may be discharged from its obligations with respect
to any junior subordinated notes or series of junior subordinated notes
and, in the case of junior subordinated notes issued by Mutual Group and
guaranteed by MRM, MRM may be discharged from its obligations with
respect to the related MRM junior subordinated note guarantee, each of
which we refer to as "defeasance;" and/or
. the issuing company and MRM, as guarantor, if applicable, may be released
from their obligations under any restrictive covenants described in any
prospectus supplement or included in any supplemental indenture with
respect to any junior subordinated notes or series of junior subordinated
notes and the related MRM junior subordinated note guarantee, which we
refer to as "covenant defeasance."
The subordinated indentures permit defeasance with respect to any junior
subordinated notes of a series even if a prior covenant defeasance has occurred
with respect to the junior subordinated notes of that series. Following a
defeasance, payment of the junior subordinated notes defeased and the MRM
junior subordinated note guarantee, if applicable, may not be accelerated
because of an event of default. Following a covenant defeasance, payment of the
junior subordinated notes defeased and the MRM junior subordinated note
guarantee, if applicable, may not be accelerated by reference to the covenants
affected by the covenant defeasance. However, if an acceleration were to occur,
the realizable value at the acceleration date of the money and government
obligations in the defeasance trust could be less than the amounts then due on
the junior subordinated notes since the required deposit in the defeasance
trust would be based upon scheduled cash flows rather than market value, which
would vary depending upon interest rates and other factors.
Upon a defeasance, the following rights and obligations will continue: (1)
the rights of the holders of the junior subordinated notes of any series to
receive from the defeasance trust payments due on the junior subordinated notes
when payments are due, (2) the issuing company's obligations regarding the
registration, transfer and exchange of the junior subordinated notes of any
series, (3) the obligation of the issuing company and MRM, as guarantor, if
applicable, to maintain an office or agency in each place of payment and (4)
the survival of the subordinated indenture trustee's rights, powers, trusts,
duties and immunities under the applicable subordinated indenture.
In connection with any defeasance or covenant defeasance, the issuing
company or MRM, as guarantor, if applicable, must irrevocably deposit with the
subordinated indenture trustee, in trust, money and/or government obligations
which, through the scheduled payment of principal and interest on those
obligations, would provide sufficient moneys to pay all amount due on the
junior subordinated notes on the maturity dates or upon redemption. The issuing
company must also deliver to the trustee an opinion of counsel to the effect
that the
30
holders of the junior subordinated notes will not recognize income, gain or
loss for United States federal income tax purposes as a result of the
defeasance or covenant defeasance and will be subject to United States federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if the defeasance or covenant defeasance had not
occurred, and the opinion of counsel, in the case of defeasance, must refer to
and be based upon a letter ruling of the Internal Revenue Service received by
the issuing company or MRM, as guarantor, a Revenue Ruling published by the
Internal Revenue Service or a change in applicable United States federal income
tax law occurring after the date of the subordinated indenture.
Information Concerning the Subordinated Indenture Trustee
In case an event of default shall occur and be continuing, the subordinated
indenture trustee shall exercise its rights and powers under the applicable
subordinated indenture in the same manner and use the same degree of care and
skill in its exercise as a prudent person would exercise or use under the same
circumstances in the conduct of his or her own affairs. Before proceeding to
exercise any right or power under the applicable subordinated indenture at the
direction of the holders, the subordinated indenture trustee will be entitled
to receive from the holders reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in complying with any
direction of the holders.
The Chase Manhattan Bank, which is the subordinated indenture trustee under
each subordinated indenture, also serves as the senior indenture trustee under
each senior indenture described above and as property trustee and guarantee
trustee with respect to the preferred securities issued by each trust. Chase
Manhattan Bank Delaware, an affiliate of The Chase Manhattan Bank, serves as
the Delaware trustee for each trust.
Governing Law
The subordinated indentures, the junior subordinated notes and the MRM
junior subordinated note guarantees will be governed by the laws of the State
of New York, without regard to the conflict of laws provisions thereof.
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DESCRIPTION OF THE PREFERRED SECURITIES
The preferred securities of each trust will be issued pursuant to a trust
agreement for that trust, as subsequently amended and restated, among Mutual
Group, the issuer of the related junior subordinated notes, The Chase Manhattan
Bank, as the property trustee, Chase Manhattan Bank Delaware, as the Delaware
trustee, the three administrative trustees and the holders from time to time of
the applicable trust's preferred and common securities. We have filed the trust
agreements and forms of each amended and restated trust agreement as exhibits
to the registration statement of which this prospectus is a part. You also may
request a copy of the trust agreements from the property trustee at its
corporate trust office in New York, New York. Each trust agreement will be
qualified under the Trust Indenture Act of 1939. The terms of the preferred
securities of a trust will include those stated in the applicable trust
agreement and those made part of the trust agreement by reference to the Trust
Indenture Act. The amended and restated trust agreement for a trust will be
executed at the time the trust issues any preferred securities and will be
filed with the SEC on Form 8-K or by a post-effective amendment to the
registration statement of which this prospectus is a part.
General
The trust agreement for each trust authorizes the administrative trustees to
issue on behalf of the trust preferred securities that have the terms described
in this prospectus and in the applicable prospectus supplement. The preferred
securities will represent undivided beneficial interests in the assets of the
applicable trust. The proceeds from the sale of each trust's preferred and
common securities will be used by the trust to purchase a series of junior
subordinated notes issued by Mutual Group or MRM, as the case may be. The
junior subordinated notes will be held in trust by the property trustee for the
benefit of the holders of the preferred and common securities of the applicable
trust.
The terms of the preferred securities of each trust will mirror the terms of
the junior subordinated notes held by the applicable trust. If interest
payments on the junior subordinated notes held by the applicable trust are
deferred as described above, distributions on the preferred securities will
also be deferred. The assets of the trust available for distribution to the
holders of its preferred securities generally will be limited to payments under
the series of junior subordinated notes held by the trust and under the related
MRM junior subordinated note guarantee, if applicable.
Under the preferred securities guarantee for each trust, the issuing company
will agree to make payments of distributions and payments on redemption or
liquidation with respect to the trust's preferred securities, but only to the
extent the trust has funds available to make those payments and has not made
the payments. If Mutual Group issues junior subordinated notes to a trust, MRM
will also guarantee Mutual Group's obligations under its preferred securities
guarantee. See "Description of the Preferred Securities Guarantees and the MRM
Trust Guarantees." The issuing company's obligations under the applicable
preferred securities guarantee, trust agreement, subordinated indenture and
related junior subordinated notes and, if applicable, MRM's obligations under
the MRM junior subordinated note guarantee and the MRM trust guarantee will
provide a full, irrevocable and unconditional guarantee by MRM of amounts due
on the preferred securities issued by each trust.
The prospectus supplement relating to the preferred securities of each trust
will describe the specific terms of the preferred securities, including:
. the name of the preferred securities;
. the dollar amount and number of preferred securities issued;
. the annual distribution rate, or method of determining the rate, of
distributions on the preferred securities, and date or dates from which
any distributions will accrue;
. the payment date and the record date used to determine the holders who
are to receive distributions on the preferred securities;
. the right, if any, to defer distributions on the preferred securities
upon extension of the interest payment periods of the related junior
subordinated notes;
32
. the applicable trust's obligation, if any, to redeem or purchase the
preferred securities and the terms and conditions on which the preferred
securities may be redeemed or purchased pursuant to any obligation;
. the terms and conditions, if any, on which the preferred securities may
be redeemed at the applicable trust's option or at the option of the
holders;
. the terms and conditions, if any, upon which the related junior
subordinated notes may be distributed to holders of the preferred
securities;
. the voting rights, if any, of the holders of the preferred securities;
. whether the preferred securities are to be issued in book-entry form and
represented by one or more global securities and, if so, the depository
and any provisions for the transfer or exchange of the global securities,
if different from those described below under "--Global Securities;" and
. any other relevant rights, preferences, privileges, limitations or
restrictions of the preferred securities.
The prospectus supplement will describe various United States federal income
tax considerations applicable to the purchase, holding and disposition of the
series of preferred securities.
Global Securities
Some or all of the preferred securities of a series may be represented in
whole or in part by one or more global securities deposited with or on behalf
of one or more depositaries. The applicable prospectus supplement will describe
the terms of any depositary arrangement. Unless the applicable prospectus
supplement states otherwise, the following provisions will apply to all
depositary arrangements for any preferred securities represented by global
securities.
Preferred securities represented by a global security deposited with or on
behalf of a depositary will be registered in the name of that depositary or its
nominee. Upon the issuance of a global security in registered form, the
depositary for the global security will credit, on its book-entry registration
and transfer system, the respective principal amounts of the preferred
securities represented by the global security to the accounts of institutions
that have accounts with the depositary or its nominee. These institutions are
generally brokers, dealers, banks and other financial institutions and are
often referred to as participants. The accounts to be credited will be
designated by the underwriters or agents of the preferred securities or by the
applicable trust, if the preferred securities are offered and sold directly by
the trust. Ownership of beneficial interests in the global securities will be
limited to participants or persons that may hold interests through
participants. Any person who holds a brokerage account with a participant may
purchase the preferred securities through the participant. Ownership of
beneficial interests by participants in the global securities will be shown on,
and the transfer of any ownership interest will be effected only through,
records maintained by the depositary or its nominee for the global security.
Ownership of beneficial interests in global securities by persons that hold
through participants will be effected only through records maintained by the
applicable participant. Some insurance companies and other institutions are
required by law to hold their investment securities in definitive form, so an
investor may not be able to sell its preferred securities to those entities.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or the nominee, as the
case may be, will be considered the sole owner or holder of the preferred
securities represented by the global security for all purposes under the
applicable trust agreement. Except as set forth below, owners of beneficial
interests in the global security will not be entitled to have the preferred
securities represented by the global security registered in their names, will
not receive or be entitled to receive physical delivery of the preferred
securities in definitive form and will not be considered the owners or holders
of the preferred securities under the applicable trust agreement.
Payments on preferred securities registered in the name of or held by a
depositary or its nominee will be made in immediately available funds to the
depositary or its nominee, as the case may be, as the registered owner or the
holder of the global security representing the preferred securities. None of
MRM, Mutual Group,
33
the trusts, the property trustee, the Delaware trustee, any paying agent or the
registrar and transfer agent for the 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 in a global
security for the preferred securities or for maintaining, supervising or
reviewing any records relating to the beneficial ownership interests.
We expect that a depositary for the preferred securities of a series, upon
receipt of any payments in respect of a global security, will immediately
credit participants' accounts with payment in amounts proportionate to their
respective beneficial interests in the principal amount of the global security
as shown on the records of the depositary. We also expect that payments by
participants to owners of beneficial interests in the global security held
through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers registered in "street name," and will be the responsibility of
each participant.
So long as the depositary for a global security or its nominee is the
registered owner of the global security, the depositary or its nominee, as the
case may be, will be entitled to direct the actions of the property trustee
upon an event of default. However, we expect that a depositary for the
preferred securities of a series, upon receiving notice of an event of default,
will immediately solicit the participants regarding any action to be taken. We
also expect that the participants will act in accordance with standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street name," and will, in turn,
solicit the owners of the beneficial interests regarding any action to be taken
upon any event of default.
A global security may not be transferred, in whole or in part, except by the
depositary for the global security, to a nominee of the depositary or by a
nominee of the depositary to the depositary or another nominee of the
depositary or by the depositary or any nominee to a successor depositary or a
nominee of the successor depositary. If a depositary for the preferred
securities of a series is at any time unwilling or unable to continue as
depositary and a qualified successor depositary is not appointed by the
administrative trustees within 90 days or if at any time the depositary ceases
to be a clearing agency registered under the Exchange Act when the depositary
is required to be registered to act as the depositary and no qualified
successor is appointed by the administrative trustees within 90 days or if an
event of default has occurred and is continuing, then the applicable trust will
issue the preferred securities in definitive registered form in exchange for
the global security or global securities representing the preferred securities.
In addition, the administrative trustees may, at any time, determine not to
have any preferred securities represented by one or more global securities and,
in that event, the applicable trust will issue the preferred securities in
definitive registered form in exchange for the global securities representing
the preferred securities. In any of these instances, an owner of a beneficial
interest in a global security will be entitled to physical delivery in
definitive form of the preferred securities represented by the global security
equal in principal amount to its beneficial interest and to have the preferred
securities registered in its name.
Liquidation Distribution Upon Dissolution
Unless otherwise specified in an applicable prospectus supplement, each
trust agreement will provide that the trust will be dissolved:
. upon the expiration of the term of the trust;
. upon the bankruptcy, dissolution or liquidation of Mutual Group or MRM;
. upon the direction of Mutual Group to the property trustee to dissolve
the trust and distribute the related junior subordinated notes directly
to the holders of the preferred and common securities of the trust;
. upon the redemption of all of the common and preferred securities of the
trust in connection with the redemption of all of the related junior
subordinated notes; or
. upon entry of a court order for the dissolution of the trust.
Unless otherwise specified in an applicable prospectus supplement, in the
event of a dissolution as described above other than in connection with
redemption, after the trust satisfies all liabilities to its creditors
34
as provided by applicable law, each holder of the preferred or common
securities of a trust will be entitled to receive:
. the related junior subordinated notes in an aggregate principal amount
equal to the aggregate liquidation amount of the preferred or common
securities held by the holder; or
. if any distribution of the related junior subordinated notes is
determined by the property trustee not to be practical, cash equal to the
aggregate liquidation amount of the preferred or common securities held
by the holder, plus accumulated and unpaid distributions to the date of
payment.
If a trust cannot pay the full amount due on its preferred and common
securities because insufficient assets are available for payment, then the
amounts payable by the trust on its preferred and common securities will be
paid on a pro rata basis. However, if an event of default under the
subordinated indenture has occurred and is continuing with respect to any
related junior subordinated notes, the total amounts due on the preferred
securities of the trust will be paid before any distribution on the common
securities of the trust is made.
Events of Default
The following will be events of default under each trust agreement:
. an event of default under the subordinated indenture occurs with respect
to any related junior subordinated notes;
. the trust fails to pay any redemption price on any preferred securities
on its due date;
. the trust fails to pay any distribution on the preferred securities
within 30 days from its due date;
. the trustees fail to perform any of the covenants in the trust agreement,
other than the covenants in the two prior bullet points, for 30 days
after the holders of at least 25% of the aggregate liquidation amount of
the outstanding preferred securities give Mutual Group, the issuing
company and the trustees written notice of the default and require that
they remedy the breach. However, the 30-day period may be extended by the
holders of at least the same aggregate liquidation amount of the
outstanding preferred securities that had initially given notice of the
default; or
. the property trustee files for bankruptcy or other events of bankruptcy,
insolvency or reorganization occur with respect to the property trustee
and a successor property trustee is not appointed within 90 days.
If an event of default with respect to related junior subordinated notes
occurs and is continuing under the applicable subordinated indenture, and the
subordinated indenture trustee or the holders of not less than 25% in principal
amount of the related junior subordinated notes outstanding fail to declare the
unpaid principal of and all other amounts with respect to all of the related
junior subordinated notes to be immediately due and payable, the holders of at
least 25% in aggregate liquidation amount of the outstanding preferred
securities will have the right to declare the unpaid principal of and all other
amounts with respect to the related junior subordinated notes immediately due
and payable by providing notice to Mutual Group, the issuing company, the
property trustee and the subordinated indenture trustee.
At any time after a declaration of acceleration has been made with respect
to a series of related junior subordinated notes and before a judgment or
decree for payment of the money due has been obtained, the holders of a
majority in aggregate liquidation amount of the preferred securities may
rescind any declaration of acceleration with respect to the related junior
subordinated notes and its consequences:
. if the issuing company deposits with the trustee funds sufficient to pay
all overdue principal of and premium, interest and additional amounts on
the related junior subordinated notes and any other amounts due to the
subordinated indenture trustee and the property trustee; and
35
. if all existing events of default with respect to the related junior
subordinated notes have been cured or waived except non-payment of
principal on the related junior subordinated notes that has become due
solely because of the acceleration.
The holders of a majority in liquidation amount of the preferred securities
of a trust may waive any past default under the subordinated note indenture
with respect to the related junior subordinated notes, other than a default in
any payment on any related junior subordinated notes or a default with respect
to a covenant or provision that cannot be amended or modified without the
consent of the holder of each outstanding related junior subordinated note
affected. In addition, the holders of at least a majority in liquidation amount
of the preferred securities of a trust may waive any past default under the
trust agreement.
The holders of a majority in liquidation amount of the preferred securities
of a trust shall have the right to direct the time, method and place of
conducting any proceedings for any remedy available to the property trustee or
to direct the exercise of any trust or power conferred on the property trustee
under the applicable trust agreement.
A holder of preferred securities of a trust may institute a legal proceeding
directly against the issuing company of the related junior subordinated notes
without first instituting a legal proceeding against the property trustee or
any other person or entity, for enforcement of payment to the holder of the
principal of and any premium, interest or additional amounts on related junior
subordinated notes having a principal amount equal to the aggregate liquidation
amount of the preferred securities of the holder if the issuing company fails
to pay any amounts on the related junior subordinated notes when payable. The
issuing company and the subordinated indenture trustee may not amend or modify
the subordinated indenture to eliminate the preferred securities holders' right
to institute a direct legal action without the consent of the holders of each
outstanding preferred security.
Notice of Default
If an event occurs which is or would become an event of default with respect
to any preferred securities, and the property trustee knows of the event, the
property trustee shall mail to the holders of the affected preferred securities
a notice of the default within 90 days, unless the default has been cured or
waived by the holders of the affected preferred securities. However, except in
the case of a default in the payment of any amounts due on preferred
securities, the property trustee may withhold the notice if and so long as the
directors and/or responsible officers of the property trustee determine in good
faith that withholding the notice is in the interest of the holders of the
affected preferred securities.
Mutual Group, the issuing company and the administrative trustees of each
trust are required to furnish annually to the property trustee an officers'
certificate to the effect that, to the best knowledge of the officers providing
the certificate, it is not in default under the applicable trust agreement or,
if there has been a default, specifying the default and its status.
Consolidation, Merger or Amalgamation of the Trust
None of the trusts may consolidate or merge with or into, or be replaced by
or convey, transfer or lease its properties and assets substantially as an
entirety to any entity, except as described below. A trust may, without the
consent of the holders of the outstanding preferred securities, consolidate or
merge with or into, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized under
the laws of any State if:
. the successor entity either:
. expressly assumes all of the obligations of the trust relating to its
preferred securities; or
. substitutes for the trust's preferred securities other securities
having substantially the same terms as the preferred securities, so
long as the substituted successor securities rank the same as the
preferred securities for distributions and payments upon liquidation,
redemption and otherwise;
36
. a trustee of the successor entity who has substantially the same powers
and duties as the property trustee of the trust is appointed;
. the preferred securities are listed or traded, or any substituted
successor securities will be listed upon notice of issuance, on the same
national securities exchange or other organization on which the preferred
securities are then listed or traded;
. the event does not cause the preferred securities or any substituted
successor securities to be downgraded by any national rating agency;
. the event does not adversely affect the rights, preferences and
privileges of the holders of the preferred securities or any substituted
successor securities in any material respect;
. the successor entity has a purpose substantially identical to that of the
trust;
. prior to the merger event, Mutual Group has received an opinion of
counsel from a nationally recognized law firm stating that:
. the event does not adversely affect the rights, preferences and
privileges of the holders of the trust's preferred securities or any
successor securities in any material respect;
. following the event, neither the trust nor the successor entity will
be required to register as an investment company under the Investment
Company Act of 1940; and
. neither the trust nor the successor entity will be taxable as a
corporation or classified other than as a grantor trust for United
States federal income tax purposes; and
. Mutual Group or its permitted transferee owns all of the common
securities of the successor entity and the substituted successor
securities are guaranteed at least to the extent provided under the
preferred securities guarantee.
In addition, unless all of the holders of the preferred securities of a
trust approve otherwise, the trust may not 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 the
transaction would cause the trust or the successor entity to be taxable as a
corporation or classified other than as a grantor trust for United States
federal income tax purposes.
Voting Rights
Unless otherwise specified in the prospectus supplement, the holders of the
preferred securities of a trust will have no voting rights except as discussed
below and under "--Events of Default," "--Amendment of the Trust Agreement,"
"--Removal and Replacement of Trustees" and "Description of the Preferred
Securities Guarantees and the MRM Trust Guarantees--Amendments and Assignment,"
and as otherwise required by law.
If any proposed amendment to a trust agreement provides for, or the
administrative trustees of a trust otherwise propose to effect:
. any action that would adversely affect the powers, preferences or special
rights of the preferred securities of the trust in any material respect,
whether by way of amendment to the applicable trust agreement or
otherwise; or
. the dissolution, winding-up or termination of the trust other than
pursuant to the terms of the applicable trust agreement,
then the holders of the preferred securities of the trust as a class will be
entitled to vote on the amendment or proposal. In that case, the amendment or
proposal will be effective only if approved by the holders of at least a
majority in aggregate liquidation amount of the preferred securities of the
trust.
Without obtaining the prior approval of the holders of at least a majority
in aggregate liquidation amount of the preferred securities of a trust, the
trustees of a trust may not:
. direct the time, method and place of conducting any proceeding for any
remedy available to the subordinated indenture trustee for any related
junior subordinated notes or direct the exercise of any trust or power
conferred on the property trustee with respect to the preferred
securities of the trust;
37
. waive any default that is waivable under the subordinated indenture with
respect to any related junior subordinated notes;
. cancel an acceleration of the principal of any related junior
subordinated notes; or
. consent to any amendment, modification or termination of the subordinated
indenture or any related junior subordinated notes where consent is
required.
However, if a consent under the subordinated indenture requires the consent of
each affected holder of the related junior subordinated notes, then the
property trustee must obtain the prior consent of each holder of the preferred
securities of the trust. In addition, before taking any of the foregoing
actions, the property trustee shall obtain an opinion of counsel experienced in
such matters to the effect that, as a result of such actions, the trust will
not be taxable as a corporation or classified as other than a grantor trust for
United States federal income tax purposes.
The property trustee will notify all preferred securities holders of the
trust of any notice of default received from the subordinated indenture trustee
with respect to the junior subordinated notes held by the trust.
Any required approval of the holders of the preferred securities of a trust
may be given at a meeting of the holders of the preferred securities convened
for the purpose or pursuant to written consent. The property trustee will cause
a notice of any meeting at which holders of securities are entitled to vote to
be given to each holder of record of the preferred securities at the holder's
registered address, or to any other address which has been specified in
writing, at least 15 days and not more than 90 days before the meeting.
Notwithstanding that the holders of the preferred securities of a trust are
entitled to vote or consent under any of the circumstances described above, any
of the preferred securities that are owned by MRM, Mutual Group, the trustees
of the trust or any affiliate of MRM, Mutual Group or any trustees of the
trust, shall, for purposes of any vote or consent, be treated as if they were
not outstanding.
Amendment of the Trust Agreement
Each trust agreement may be amended from time to time by Mutual Group, the
issuing company, the property trustee and the administrative trustees of the
trust without the consent of the holders of the preferred securities of the
trust to:
. cure any ambiguity, correct or supplement any provision which may be
inconsistent with any other provision or make provisions not inconsistent
with any other provisions with respect to matters or questions arising
under the applicable trust agreement,
. modify, eliminate or add to any provisions to the extent necessary to
ensure that the trust will not be taxable as a corporation or classified
as other than a grantor trust for United States federal income tax
purposes, to ensure that the junior subordinated notes held by the trust
are treated as indebtedness for United States federal income tax purposes
or to ensure that the trust will not be required to register as an
investment company under the Investment Company Act, or
. to add to the covenants, restrictions or obligations of Mutual Group or
the issuing company,
in each case to the extent that the amendment does not adversely affect the
interests of any holder of the preferred securities of the trust in any
material respect.
Other amendments to a trust agreement may be made by Mutual Group, the
issuing company, the property trustee and the administrative trustees of a
trust upon approval of the holders of at least a majority in aggregate
liquidation amount of the outstanding preferred securities of the trust and
receipt by the trustees of an opinion of counsel to the effect that the
amendment will not cause the trust to be taxable as a corporation or classified
as other than a grantor trust for United States federal income tax purposes,
affect the treatment of the junior subordinated notes held by the trust as
indebtedness for United States federal income tax purposes or affect the
trust's exemption from the Investment Company Act.
38
Notwithstanding the foregoing, without the consent of each affected holder
of common or preferred securities of a trust, the applicable trust agreement
may not be amended to:
. change the amount or timing of any distribution on the common or
preferred securities of the trust or otherwise adversely affect the
amount of any distribution required to be made in respect of the
securities as of a specified date;
. restrict the right of a holder of any securities to institute suit for
the enforcement of any payment on or after the distribution date; or
. reduce the percentage of preferred securities required to waive
compliance with provisions of or defaults under the trust agreement.
In addition, no amendment may be made to a trust agreement if the amendment
would:
. cause the applicable trust to be taxable as a corporation or
characterized as other than a grantor trust for United States federal
income tax purposes;
. cause the junior subordinated notes held by the applicable trust to not
be treated as indebtedness for United States federal income tax purposes;
. cause the applicable trust to be deemed to be an investment company
required to be registered under the Investment Company Act; or
. impose any additional obligation on any trustee of the applicable trust
without its consent.
Removal and Replacement of Trustees
The holder of a trust's common securities may remove or replace any of the
administrative trustees and, unless an event of default has occurred and is
continuing under the applicable subordinated indenture, the property trustee
and the Delaware trustee of the trust. If an event of default has occurred and
is continuing under the applicable subordinated indenture, only the holders of
a trust's preferred securities may remove or replace the property trustee and
the Delaware trustee. The resignation or removal of any trustee will be
effective only upon the acceptance of appointment by the successor trustee in
accordance with the provisions of the applicable trust agreement.
Registration and Transfer
If the preferred securities of a series are to be redeemed, the applicable
trust will not be required to:
. issue, register the transfer of or exchange any preferred securities of
that series during the 15 days immediately preceding the date notice is
mailed identifying the preferred securities that are called for
redemption; or
. register the transfer of or exchange any preferred security selected for
redemption, in whole or in part, except for the unredeemed portion of a
preferred security being redeemed in part.
Payment and Paying Agent
Unless the applicable prospectus supplement states otherwise, distributions
on the preferred securities will be payable, at the applicable trust's option,
(1) by check mailed to the address of the person entitled to the distribution
as the address appears in the security register for the preferred securities or
(2) by wire transfer to an account specified by the holder in accordance with
procedures established by the administrative trustees and acceptable to the
paying agent. Payments upon the redemption of the preferred securities will be
paid only against surrender of the preferred securities.
Unless the applicable prospectus supplement states otherwise, the property
trustee will act as paying agent for the preferred securities, and the
principal corporate trust office of the property trustee will serve as the
office through which the paying agent acts. The applicable trust may designate
additional paying agents, rescind the designation of any paying agents and/or
approve a change in the office through which any paying agent acts.
39
Information Concerning the Property Trustee
For matters relating to compliance with the Trust Indenture Act, the
property trustee will have all of the duties and responsibilities of an
indenture trustee under the Trust Indenture Act. In case an event of default
shall occur and be continuing, the property trustee must use the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Before proceeding to exercise any right or power under any
trust agreement at the direction of the holders of the preferred securities,
the property trustee will be entitled to receive from the holders reasonable
security or indemnity against the costs, expenses and liabilities that it might
incur.
The Chase Manhattan Bank, which is the property trustee for each trust, also
serves as the senior indenture trustee under each senior indenture, the
subordinated indenture trustee under each subordinated indenture and the
guarantee trustee under each preferred securities guarantee described below.
Chase Manhattan Bank Delaware, an affiliate of The Chase Manhattan Bank, serves
as the Delaware trustee for each trust.
Miscellaneous
The administrative trustees of each trust are authorized and directed to
conduct the affairs of and to operate the trust in such a way that:
. it will not be taxable as a corporation or classified as other than a
grantor trust for United States federal income tax purposes;
. the junior subordinated notes held by it will be treated as indebtedness
of the issuing company for United States federal income tax purposes; and
. it will not be deemed to be an investment company required to be
registered under the Investment Company Act.
Mutual Group and the trustees of each trust are authorized to take any
action, so long as it is consistent with applicable law, the applicable
certificate of trust or trust agreement, that Mutual Group and the trustees of
the trust determine to be necessary or desirable for the above purposes.
Holders of the preferred securities of the trusts have no preemptive or
similar rights.
None of the trusts may incur indebtedness or place a lien on any of its
assets.
Governing Law
Each trust agreement and the preferred securities of each trust will be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflict of laws provisions thereof.
40
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEES
AND THE MRM TRUST GUARANTEES
MRM's preferred securities guarantee for each trust will be issued pursuant
to a guarantee agreement between MRM and The Chase Manhattan Bank, as the
guarantee trustee. Mutual Group's preferred securities guarantee for each trust
and the related MRM trust guarantee will be issued pursuant to a guarantee
agreement among Mutual Group, MRM and The Chase Manhattan Bank, as the
guarantee trustee. We have filed forms of the guarantee agreements as exhibits
to the registration statement of which this prospectus is a part. You also may
request a copy of the guarantee agreements from the guarantee trustee at its
corporate trust office in New York, New York. Each guarantee agreement will be
qualified under the Trust Indenture Act of 1939. The terms of a preferred
securities guarantee will include those stated in the applicable guarantee
agreement and those made part of the guarantee agreement by reference to the
Trust Indenture Act. A guarantee agreement will be executed at the time any
trust issues any preferred securities and will be filed with the SEC on a Form
8-K or by a post-effective amendment to the registration statement of which
this prospectus is a part.
Each guarantee agreement will be held by the guarantee trustee for the
benefit of the holders of the preferred securities of the applicable trust.
General
The issuing company will irrevocably and unconditionally agree to pay in
full to the holders of the preferred securities of each trust the guarantee
payments described below, except to the extent previously paid. The issuing
company will pay the guarantee payments when and as due, regardless of any
defense, right of set-off or counterclaim that the applicable trust may have or
assert. The following payments, to the extent not paid by a trust, will be
covered by the applicable preferred securities guarantee:
. any accumulated and unpaid distributions required to be paid on the
preferred securities of the trust, to the extent that the trust has funds
available to make the payment;
. the redemption price, including all accumulated and unpaid distributions,
to the extent that the trust has funds available to make the payment; and
. upon a voluntary or involuntary dissolution, termination, winding-up or
liquidation of the trust, other than in connection with a distribution of
related junior subordinated notes to holders of the preferred securities,
the lesser of:
. the aggregate of the liquidation amounts specified in the prospectus
supplement for each preferred security of the trust plus all
accumulated and unpaid distributions on the preferred security of the
trust to the date of payment, to the extent the trust has funds
available to make the payment; and
. the amount of assets of the trust remaining available for distribution
to holders of its preferred securities upon liquidation of the trust.
The issuing company's obligation to make a guarantee payment with respect to
the preferred securities of a trust may be satisfied by directly paying the
required amounts to the holders of the preferred securities of the trust or by
causing the trust to pay the amounts to the holders.
Each preferred securities guarantee will be subject to the subordination
provisions described below and will not apply to the payment of distributions
and other payments on the preferred securities of a trust when the trust does
not have sufficient funds legally and immediately available to make the
distributions or other payments.
MRM Trust Guarantee
Unless provided otherwise in a prospectus supplement, MRM will fully and
unconditionally guarantee all obligations with respect to each preferred
securities guarantee issued by Mutual Group. Unless provided otherwise in a
prospectus supplement, each MRM trust guarantee will be unsecured indebtedness
of MRM and will be subordinated in right of payment to all of MRM's existing
and future senior indebtedness. Each MRM
41
trust guarantee will be effectively subordinated to any secured indebtedness of
MRM to the extent of the value of the assets securing the secured indebtedness.
Each MRM trust guarantee will also rank equally with any other MRM trust
guarantee of any preferred securities guarantee issued by Mutual Group. As a
result, in the event of MRM's bankruptcy, liquidation or reorganization or upon
an event of default by Mutual Group of its obligations under any of its
preferred securities guarantees, or upon a default by MRM under any of its
trust guarantees, MRM's assets will be available to pay MRM's obligations on an
MRM trust guarantee only after all secured and senior indebtedness of MRM has
been paid in full in cash or other payment satisfactory to the holders of the
secured and senior indebtedness has been made. There may not be sufficient
assets remaining to pay amounts due on any or all of the MRM trust guarantees.
Each MRM trust guarantee will also be effectively subordinated to the
indebtedness and other liabilities of MRM's subsidiaries. Each MRM trust
guarantee does not prohibit or limit the incurrence of secured or senior
indebtedness or the incurrence of other indebtedness and liabilities by MRM or
its subsidiaries. The incurrence of additional secured and senior indebtedness
and other liabilities by MRM or its subsidiaries could adversely affect MRM's
ability to pay its obligations on an MRM trust guarantee.
Each MRM trust guarantee will constitute a guarantee of payment and not of
collection. This means that the holder of the guaranteed security may sue MRM
to enforce its rights under the MRM trust guarantee without first suing any
other person or entity.
Additional Amounts
MRM will make all payments under each of its preferred securities guarantees
and all payments under each of its MRM trust guarantees without withholding or
deduction for any taxes, fees, duties, assessments or governmental charges
imposed or levied by Bermuda or any other jurisdiction in which MRM or any
successor is organized or resident for tax purposes or any political
subdivision or taxing authority of Bermuda or any of those other jurisdictions.
If any withholding or deduction is required by law, MRM will pay to the holder
of the preferred securities additional amounts as may be necessary so that
every net payment made to the holder after the withholding or deduction will
not be less than the amount provided for in the applicable preferred securities
guarantee. MRM will not be required to pay any additional amounts as a result
of:
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the preferred securities was a resident or national
of or had other specified connections with the relevant taxing
jurisdiction or presented the preferred securities for payment in the
relevant taxing jurisdiction unless it could not have been presented
elsewhere;
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the preferred securities presented the preferred
security for payment more than 30 days after it was due and payable;
. any estate, inheritance, gift, sale, transfer, personal property or
similar tax, fee, duty, assessment or other governmental charge; or
. the imposition of any tax, fee, duty, assessment or governmental charge
that would not have been imposed but for the fact that the holder or
beneficial owner of the preferred securities failed to comply, within 90
days, with any reasonable request by MRM addressed to the holder or
beneficial owner relating to the provision of information or the making
of a declaration required by the taxing jurisdiction as a precondition to
exemption from all or part of the tax, fee, duty, assessment or
governmental charge.
In addition, MRM will not be required to pay additional amounts with respect
to any payment to any holder of a preferred security where the beneficial owner
of the preferred security is a fiduciary or partnership to the extent that such
payment would be required to be included in the income for tax purposes of a
beneficiary with respect to such fiduciary or a partner of such partnership
that would not have been entitled to such additional amounts if it had been the
holder of the preferred security.
Subordination
Each preferred securities guarantee will be unsecured indebtedness of the
issuing company and will be subordinated in right of payment to all of the
issuing company's existing and future senior indebtedness. Each preferred
securities guarantee will be effectively subordinated to any secured
indebtedness of the issuing
42
company to the extent of the value of the assets securing the secured
indebtedness. Each preferred securities guarantee will also rank equally with
any other preferred securities guarantee issued by the issuing company. As a
result, in the event of the issuing company's bankruptcy, liquidation or
reorganization or upon an event of default under any of its preferred
securities guarantees, the issuing company's assets will be available to pay
its obligations on the preferred securities guarantee only after all secured
and senior indebtedness of the issuing company has been paid in full in cash or
other payment satisfactory to the holders of the secured and senior
indebtedness has been made. There may not be sufficient assets remaining to pay
amounts due on any or all of its preferred securities guarantees. Each
preferred securities guarantee will also be effectively subordinated to the
indebtedness and other liabilities of the issuing company's subsidiaries. The
incurrence of additional secured and senior indebtedness and other liabilities
by the issuing company or its subsidiaries could adversely affect the issuing
company's ability to pay its obligations on the preferred securities
guarantees.
Each preferred securities guarantee will constitute a guarantee of payment
and not of collection. This means that the holder of the guaranteed security
may sue the issuing company to enforce its rights under the preferred
securities guarantee without first suing any other person or entity.
Amendments and Assignment
No consent of the holders of the preferred securities of a trust will be
required with respect to any changes to the preferred securities guarantee that
do not adversely affect the rights of the holders of the preferred securities
of the applicable trust in any material respect. Other amendments to the
preferred securities guarantee may be made only with the prior approval of the
holders of at least a majority in aggregate liquidation amount of the preferred
securities of the applicable trust. All guarantees and agreements contained in
the preferred securities guarantee will be binding on the issuing company's
successors, assigns, receivers, trustees and representatives and are for the
benefit of the holders of the preferred securities of the applicable trust.
Events of Default
An event of default under a preferred securities guarantee occurs if the
issuing company:
. fails to make any required payments; or
. fails to perform any of its other obligations under the preferred
securities guarantee and such failure continues for 30 days.
The holders of at least a majority in aggregate liquidation amount of the
preferred securities of a trust will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
guarantee trustee relating to the preferred securities guarantee of the trust
or to direct the exercise of any trust or power given to the guarantee trustee
under the preferred securities guarantee of the trust.
If and to the extent that the issuing company does not make payments on the
related junior subordinated notes and, if applicable, MRM does not make
payments on the MRM junior subordinated note guarantee, the trust will not have
funds available to make payments of distributions or other amounts due on its
preferred securities. In those circumstances, a holder of the preferred
securities of the trust will not be able to rely upon the applicable preferred
securities guarantee or the MRM trust guarantee, if applicable, for payment of
these amounts. Instead, the holder may directly sue the issuing company under
the junior subordinated notes or MRM under the MRM junior subordinated note
guarantee, if applicable, to collect its pro rata share of payments owed. If a
holder so sues MRM or Mutual Group to collect payment, then MRM or Mutual
Group, as the case may be, will assume the holder's rights as a holder of
preferred securities under the applicable trust agreement to the extent MRM or
Mutual Group makes a payment to the holder in any legal action.
The holders of at least a majority in liquidation amount of preferred
securities of a trust may waive any past event of default and its consequences.
43
Information Concerning Guarantee Trustee
In case an event of default shall occur and be continuing, the guarantee
trustee 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. Before
proceeding to exercise any right or power under any guarantee agreement at the
direction of the holders of preferred securities, the guarantee trustee will be
entitled to receive from the holders reasonable security and indemnity against
the costs, expenses and liabilities that it might incur.
The Chase Manhattan Bank, which is the guarantee trustee, also serves as the
senior indenture trustee under each senior indenture, the subordinated
indenture trustee under each subordinated indenture and the property trustee
for each trust. Chase Manhattan Bank Delaware, an affiliate of The Chase
Manhattan Bank, serves as the Delaware trustee for each trust.
Termination of the Preferred Securities Guarantees and MRM Trust Guarantees
Each preferred securities guarantee and MRM trust guarantee will terminate
once the preferred securities of the applicable trust are paid in full or
redeemed in full or upon distribution of the related junior subordinated notes
to the holders of the preferred securities of the trust in accordance with the
applicable trust agreement. Each preferred securities guarantee and MRM trust
guarantee will continue to be effective or will be reinstated if at any time
any holder of preferred securities of the applicable trust must restore payment
of any sums paid under the preferred securities, the preferred securities
guarantee or the MRM trust guarantee for the applicable trust.
Governing Law
Each preferred securities guarantee and MRM trust guarantee will be governed
by and construed in accordance with the laws of the State of New York, without
regard to the conflict of laws provisions thereof.
44
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
PREFERRED SECURITIES GUARANTEES
AND JUNIOR SUBORDINATED NOTES HELD BY THE TRUSTS
Payments due on the preferred securities of a trust, to the extent the
applicable trust has funds available for the payments, will be guaranteed by
the issuing company and by MRM, if applicable, to the extent described under
"Description of the Preferred Securities Guarantees and the MRM Trust
Guarantees." Payments due on junior subordinated notes issued by Mutual Group
to a trust will be guaranteed by MRM to the extent described under "Description
of the Junior Subordinated Notes and the MRM Junior Subordinated Note
Guarantees." No single document executed by MRM or Mutual Group in connection
with the issuance of the preferred securities of a trust will provide for a
full, irrevocable and unconditional guarantee of the preferred securities of
the trust. It is only the combined operation of the issuing company's
obligations under the applicable preferred securities guarantee, trust
agreement, subordinated indenture and related junior subordinated notes and, if
applicable, MRM's obligations under the MRM junior subordinated note guarantee
and the MRM trust guarantee, that has the effect of providing a full,
irrevocable and unconditional guarantee by MRM of each trust's obligations
under its preferred securities.
As long as the issuing company makes payments of interest and other payments
when due on the junior subordinated notes held by a trust, the payments will be
sufficient to cover the payment of distributions and redemption and liquidation
payments due on the preferred securities of the trust, primarily because:
. the aggregate principal amount of the junior subordinated notes held by
the trust will be equal to the sum of the aggregate liquidation amounts
of the trust's preferred and common securities;
. the interest rate and interest and other payment dates on the junior
subordinated notes held by the trust will match the distribution rate and
distribution and other payment dates for the trust's preferred
securities;
. the issuing company has agreed to pay for any and all costs, expenses and
liabilities of the trust except the trust's obligations under its
preferred securities; and
. the applicable trust agreement provides that the trust will not engage in
any activity that is inconsistent with the limited purposes of the trust.
45
PLAN OF DISTRIBUTION
MRM or Mutual Group may sell its senior notes or its junior subordinated
notes and each trust may sell its preferred securities in one or more of the
following ways from time to time:
. to underwriters for resale to the public or to institutional investors;
. through agents to the public or to institutional investors; or
. directly to institutional investors.
The prospectus supplement for each series of senior notes, junior
subordinated notes or preferred securities will set forth the terms of the
offering of those senior notes, junior subordinated notes or preferred
securities, including the name or names of any underwriters or agents. The
prospectus supplement for each series of senior notes, junior subordinated
notes or preferred securities will also set forth the purchase price of the
senior notes, junior subordinated notes or preferred securities, the proceeds
to MRM, Mutual Group or the applicable trust from the sale, any underwriting
discounts or agency fees and other items constituting underwriters' or agents'
compensation, the initial public offering price, any discounts or concessions
allowed or reallowed or paid to dealers and the securities exchange, if any, on
which the senior notes, junior subordinated notes or preferred securities may
be listed.
If underwriters participate in the sale, the senior notes, junior
subordinated notes or preferred securities will be acquired by the underwriters
for their own account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale.
Unless the applicable prospectus supplement states otherwise, the
obligations of the underwriters to purchase any series of senior notes, junior
subordinated notes or preferred securities will be subject to conditions
precedent and the underwriters will be obligated to purchase all of the series
of senior notes, junior subordinated notes or preferred securities if any are
purchased.
Underwriters and agents may be entitled under agreements entered into with
MRM, Mutual Group and/or a trust to indemnification against specific civil
liabilities, including liabilities under the Securities Act. Underwriters and
agents may engage in transactions with, or perform services for, us in the
ordinary course of business.
Each series of senior notes, junior subordinated notes or preferred
securities will be a new issue of securities and will have no established
trading market. Any underwriters to whom the senior notes, junior subordinated
notes or preferred securities are sold for public offering and sale may make a
market in those senior notes, junior subordinated notes or preferred
securities. However, those underwriters will not be obligated to do so and may
discontinue any market making at any time without notice.
EXPERTS
Ernst & Young, independent auditors, have audited MRM's consolidated
financial statements and schedules included in its Annual Report on Form 10-K,
as amended by its Annual Report on Form 10-K/A, for the year ended December 31,
1999, as set forth in their report, which is incorporated by reference in this
prospectus and registration statement. MRM's financial statements and schedules
are incorporated by reference in reliance on Ernst & Young's report, given on
their authority as experts in accounting and auditing.
VALIDITY OF THE SECURITIES
Richards, Layton & Finger, P.A., Wilmington, Delaware, will pass upon the
validity of the preferred
securities for each trust. Mayer, Brown & Platt, Chicago, Illinois, will pass
upon the validity of the senior notes, the junior subordinated notes and the
preferred securities guarantees for Mutual Group. Conyers Dill & Pearman,
46
Hamilton, Bermuda, will pass upon the validity of the senior notes, the junior
subordinated notes, the MRM senior note guarantee, the MRM junior subordinated
note guarantee, the MRM trust guarantee and the preferred securities guarantee
for MRM. David J. Doyle, an associate with Conyers Dill & Pearman, is a
director of MRM. Debevoise & Plimpton, New York, New York, will pass on certain
legal matters for the agents or underwriters.
ENFORCEMENT OF CIVIL LIABILITIES
MRM is organized under the laws of Bermuda. In addition, some of its
directors and officers, as well as some of the experts named in this
prospectus, reside outside of the United States. A substantial portion of their
assets are located outside of the United States. If may be difficult for you to
effect service of process within the United States upon MRM's directors,
officers and experts who reside outside the United States or to enforce in the
United States judgments of U.S. courts obtained in actions against MRM or its
directors and officers, as well as the experts named in this prospectus, who
reside outside the United States.
We have been informed by Conyers Dill & Pearman, our legal advisor in
Bermuda, that the United States and Bermuda do not have a treaty providing for
reciprocal recognition and enforcement of judgments in civil and commercial
matters. A final judgment for the payment of money rendered by any federal or
state court in the United States based on civil liability, whether or not
predicted solely upon the federal securities laws, would, therefore, not be
automatically enforceable in Bermuda. A Bermuda court may impose civil
liability on MRM, or its directors or officers who reside in Bermuda, in a suit
brought in The Supreme Court of Bermuda against them with respect to a
violation of federal securities law, provided that the facts surrounding such
violation would constitute or give rise to a cause of action under Bermuda law.
WHERE YOU CAN FIND MORE INFORMATION
Available Information
This prospectus is part of a registration statement that we filed with the
SEC. The registration statement, including the attached exhibits, contains
additional relevant information about MRM, Mutual Group and the trusts. The
rules and regulations of the SEC allow us to omit some of the information
included in the registration statement from this prospectus. In addition, MRM
files reports, proxy statements and other information with the SEC under the
Exchange Act. You can read and copy any of this information at the following
locations of the SEC:
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-
2551
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. You may obtain information on the operation of
the SEC's Public Reference Room in Washington, D.C. by calling the SEC at 1-
800-SEC-0330.
The SEC also maintains an Internet web site that contains reports, proxy
statements and other information about issuers, like MRM, that file
electronically with the SEC. The address of that site is http://www.sec.gov.
The SEC file number for documents filed by MRM under the Exchange Act is 1-
10760.
MRM common stock is listed on the New York Stock Exchange and its stock
symbol is "MM." You can inspect reports, proxy statements and other information
concerning MRM at the offices of the New York Stock Exchange at 20 Broad
Street, New York, New York 10005.
47
Incorporation by Reference
The rules of the SEC allow us to incorporate by reference information into
this prospectus. The information incorporated by reference is considered to be
a part of this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. This prospectus
incorporates by reference the documents listed below:
(a) MRM's Annual Report on Form 10-K, as amended by its Annual Report on
Form 10-K/A, for the year ended December 31, 1999;
(b) MRM's Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
(c) All documents filed by MRM pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus shall be
deemed to be incorporated by reference and to be a part of this
prospectus from the respective dates of filing of those documents.
Upon request, we will provide without charge to each person to whom a copy
of this prospectus has been delivered a copy of any and all of these filings.
You may request a copy of these filings by writing or telephoning us at:
Investor Relations Department
Mutual Risk Management
44 Church Street
P.O. Box HM 2064
Hamilton HM 12 Bermuda
(441) 295-5688
----------------
For North Carolina residents: MRM debt 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 adequacy of
this document.
Except as expressly provided in an underwriting agreement, no offered
securities may be offered or sold in Bermuda, although offers may be made from
outside Bermuda, and offers may only be accepted from persons resident in
Bermuda, for Bermuda exchange control purposes, where such offers have been
delivered outside of Bermuda. Persons resident in Bermuda, for Bermuda exchange
control purposes, may require the prior approval of the Bermuda Monetary
Authority in order to acquire any offered securities.
48
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses of issuance and distribution, other than underwriting
discounts and commissions, to be borne by us are as follows:
Securities and Exchange Commission registration fee............. $132,000
Trustee fees and expenses....................................... 15,000
Printing expenses............................................... 170,000
Legal fees and expenses......................................... 250,000
Accounting fees and expenses.................................... 300,000
Blue Sky fees and expenses...................................... 15,000
Miscellaneous................................................... 68,000
--------
Total....................................................... $950,000
========
Item 15. Indemnification of Officers and Directors.
MRM's Bye-Laws provide that it shall indemnify, subject to the proviso
below, every director, officer of MRM and member of a committee thereof out of
the funds of MRM against all civil liabilities, loss, damage or expense
(including but not limited to liabilities under contract, tort and statute or
any applicable foreign law or regulation and all reasonable legal and other
costs and expenses properly payable) incurred or suffered by him as such
director, officer or committee member and any person acting as a director,
officer or committee member in the reasonable belief that he has been so
appointed or elected notwithstanding any defect in such appointment or election
provided always that the indemnity contained by the Bye-Laws shall not extend
to any matter which would render it void pursuant to the Bermuda Companies
Acts. To the extent that any director, officer or member of a committee duly
constituted under the Bye-Laws is entitled to claim an indemnity pursuant to
the Bye-Laws in respect of amounts paid or discharged by him, the relative
indemnity shall take effect as an obligation of MRM to reimburse the person
making such payment or effecting such discharge. Expenses incurred in defending
a civil or criminal action, suit or proceeding may be paid by MRM in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of a director or officer to repay such amount,
unless it shall be ultimately determined that he is entitled to be indemnified
by MRM as authorized in the Bye-Laws or otherwise pursuant to applicable laws.
Mutual Group's By-Laws provide that it shall indemnify its officers,
directors, employees and agents to the extent permitted by the Delaware General
Corporation Law, referred to in this document as the DGCL. Under the DGCL, a
corporation may indemnify a director or officer who becomes a party to an
action, suit or proceeding because of his or her position as a director or
officer if (1) the director or officer acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interest of the
corporation and (2) if the action or proceeding involves a criminal offense,
the director or officer had no reasonable cause to believe his or her conduct
was unlawful.
II-1
Item 16. Exhibits.
1.1 Form of Underwriting Agreement (Senior Notes of Mutual Group).
*1.2 Form of Underwriting Agreement (Senior Notes of MRM and Junior
Subordinated Notes of MRM and Mutual Group).
*1.3 Form of Underwriting Agreement (Preferred Securities).
3.1 Memorandum of Association of MRM (incorporated by reference to MRM's
Registration Statement on Form S-1 (No. 33-40152)).
3.2 Bye-Laws of MRM (incorporated by reference to MRM's Registration Statement
on Form S-1 (No. 33-40152)).
**3.3 Certificate of Incorporation of Mutual Group Ltd.
**3.4 Bylaws of Mutual Group Ltd.
**3.5 Certificate of Trust of MRM Capital Trust I.
**3.6 Certificate of Trust of MRM Capital Trust II.
**3.7 Certificate of Trust of MRM Capital Trust III.
4.1 Form of Indenture for Senior Notes issued by MRM.
4.2 Form of Indenture for Senior Notes issued by Mutual Group.
4.3 Form of Indenture for Junior Subordinated Notes issued by MRM.
4.4 Form of Indenture for Junior Subordinated Notes issued by Mutual Group.
4.5 Form of Senior Note issued by MRM (included in Exhibit 4.1).
4.6 Form of Senior Note issued by Mutual Group (included in Exhibit 4.2).
4.7 Form of Junior Subordinated Note issued by MRM (included in Exhibit 4.3).
4.8 Form of Junior Subordinated Note issued by Mutual Group (included in
Exhibit 4.4).
**4.9 Trust Agreement of MRM Capital Trust I.
**4.10 Trust Agreement of MRM Capital Trust II.
**4.11 Trust Agreement of MRM Capital Trust III.
4.12 Removal and Appointment of Trustee of MRM Capital Trust I.
4.13 Removal and Appointment of Trustee of MRM Capital Trust II.
4.14 Removal and Appointment of Trustee of MRM Capital Trust III.
4.15 Form of Amended and Restated Trust Agreement of MRM Capital Trust I, MRM
Capital Trust II and MRM Capital Trust III.
4.16 Form of Preferred Security (included in Exhibit 4.15).
4.17 Form of Preferred Securities Guarantee Agreement of MRM with respect to
the preferred securities issued by MRM Capital Trust I, MRM Capital Trust
II and MRM Capital Trust III.
4.18 Form of Preferred Securities Guarantee Agreement of Mutual Group with
respect to the preferred securities issued by MRM Capital Trust I, MRM
Capital Trust II and MRM Capital Trust III.
5.1 Opinions of Richards, Layton & Finger, P.A., special Delaware counsel for
MRM, Mutual Group and each Trust.
5.2 Opinion of Mayer, Brown & Platt, counsel for Mutual Group.
5.3 Opinion of Conyers Dill & Pearman, counsel for MRM.
II-2
23.1 Consent of Ernst & Young.
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.1).
23.3 Consent of Mayer, Brown & Platt (included in Exhibit 5.2).
23.4 Consent of Conyers Dill & Pearman (included in Exhibit 5.3).
**24.1 Powers of Attorney.
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Trustee under the Indenture (Senior Notes
issued by MRM).
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Trustee under the Indenture (Senior Notes
issued by Mutual Group).
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Trustee under the Indenture (Junior
Subordinated Notes issued by MRM).
25.4 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Trustee under the Indenture (Junior
Subordinated Notes issued by Mutual Group).
25.5 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Property Trustee for the Amended and
Restated Trust Agreement of MRM Capital Trust I.
25.6 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Property Trustee for the Amended and
Restated Trust Agreement of MRM Capital Trust II.
25.7 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Property Trustee for the Amended and
Restated Trust Agreement of MRM Capital Trust III.
25.8 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Guarantee Trustee under the Guarantee
Agreement of MRM for the benefit of the holders of Preferred Securities of
MRM Capital Trust I.
25.9 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Guarantee Trustee under the Guarantee
Agreement of MRM for the benefit of the holders of Preferred Securities of
MRM Capital Trust II.
25.10 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Guarantee Trustee under the Guarantee
Agreement of MRM for the benefit of the holders of Preferred Securities of
MRM Capital Trust III.
25.11 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Guarantee Trustee under the Guarantee
Agreement of Mutual Group for the benefit of the holders of Preferred
Securities of MRM Capital Trust I.
25.12 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Guarantee Trustee under the Guarantee
Agreement of Mutual Group for the benefit of the holders of Preferred
Securities of MRM Capital Trust II.
25.13 Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939
of The Chase Manhattan Bank, as Guarantee Trustee under the Guarantee
Agreement of Mutual Group for the benefit of the holders of Preferred
Securities of MRM Capital Trust III.
- --------
* To be filed as an exhibit to a report on Form 8-K pursuant to Item 601 of
Regulation S-K
** Previously filed
II-3
Item 17. Undertakings.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) 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 the 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 SEC 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; and
(c) 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 (a) and (b) 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 SEC by the registrants pursuant
to Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered in the post-
effective amendment, and the offering of those securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of MRM's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered in this registration statement, and the
offering of those securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) To file an application for the purpose of determining the
eligibility of the trustees to act under subsection (a) of Section 310 of
the Trust Indenture Act in accordance with the rules and regulations
prescribed by the SEC under Section 305(b)(2) of the Securities Act.
(6) To provide to the underwriter at the closing specified in the
underwriting agreements certificates in such denominations and registered
in the names as required by the underwriter to permit prompt delivery to
each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the provisions described under Item 15 above, or
otherwise, the registrants have been advised that in the opinion of the SEC
this type of indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against these types of liabilities (other than the payment by a
registrant of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by any director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether the asserted indemnification
by it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of the issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Mutual Risk
Management Ltd. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
amendment to registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Hamilton, Bermuda on the 22nd day of
May, 2000.
Mutual Risk Management Ltd.
By: /s/ James C. Kelly
___________________________________
James C. Kelly
Senior Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on behalf
of the Registrant and in the capacities and on the 22nd day of May, 2000.
Signature Title
--------- -----
/s/ Robert A. Mulderig* Chairman and Chief Executive Officer
___________________________________________ (Principal Executive Officer)
Robert A. Mulderig
/s/ John Kessock, Jr.* President, Director and Authorized
___________________________________________ U.S. Representative
John Kessock, Jr.
/s/ Richard G. Turner* Executive Vice President and Director
___________________________________________
Richard G. Turner
/s/ Glenn R. Partridge* Executive Vice President and Director
___________________________________________
Glenn R. Partridge
/s/ James C. Kelly Senior Vice President and Chief Financial
___________________________________________ Officer
James C. Kelly (Principal Financial and Accounting
Officer)
/s/ Roger E. Dailey* Director
___________________________________________
Roger E. Dailey
/s/ David J. Doyle* Director
___________________________________________
David J. Doyle
/s/ Arthur E. Engel* Director
___________________________________________
Arthur E. Engel
/s/ Allan W. Fulkerson* Director
___________________________________________
Allan W. Fulkerson
/s/ William F. Galtney, Jr.* Director
___________________________________________
William F. Galtney, Jr.
II-5
Signature Title
--------- -----
/s/ Jerry S. Rosenbloom* Director
___________________________________________
Jerry S. Rosenbloom
/s/ Joseph D. Sargent* Director
___________________________________________
Joseph D. Sargent
/s/ Norman L. Rosenthal* Director
___________________________________________
Norman L. Rosenthal
/s/ James C. Kelly
*By: ________________________________
James C. Kelly, Attorney-in-Fact
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Mutual Group
Ltd. certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this amendment to
registration statement to be signed on its behalf by the undersigned, therewith
duly authorized, in Hamilton, Bermuda on the 22nd day of May, 2000.
Mutual Group Ltd.
/s/ James C. Kelly
By: _________________________________
James C. Kelly
Vice President and Controller
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on behalf
of the registrant and in the capacities and on the 22nd day of May, 2000.
Signature Title
--------- -----
/s/ John Kessock, Jr.* President & Director
___________________________________________ (Principal Executive Officer)
John Kessock, Jr.
/s/ James C. Kelly Vice President & Controller
___________________________________________ (Principal Financial and Accounting
James C. Kelly Officer)
/s/ Robert A. Mulderig* Director
___________________________________________
Robert A. Mulderig
/s/ Richard G. Turner* Director
___________________________________________
Richard G. Turner
/s/ James C. Kelly
*By: ________________________________
James C. Kelly, Attorney-in-Fact
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of MRM
Capital Trust I, MRM Capital Trust II and MRM Capital Trust III certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this amendment to registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Hamilton, Bermuda, on the 22nd day of May, 2000.
MRM Capital Trust I
By: Mutual Group Ltd. as Depositor
/s/ James C. Kelly
By: _________________________________
James C. Kelly Vice President and
Controller
MRM Capital Trust II
By: Mutual Group Ltd. as Depositor
/s/ James C. Kelly
By: _________________________________
James C. Kelly
Vice President and Controller
MRM Capital Trust III
By: Mutual Group Ltd. as Depositor
/s/ James C. Kelly
By: _________________________________
James C. Kelly
Vice President and Controller
II-8
EXHIBIT INDEX
1.1 Form of Underwriting Agreement (Senior
Notes of Mutual Group).
*1.2 Form of Underwriting Agreement (Senior
Notes of MRM and Junior Subordinated Notes
of MRM and Mutual Group).
*1.3 Form of Underwriting Agreement (Preferred
Securities).
3.1 Memorandum of Association of MRM
(incorporated by reference to MRM's
Registration Statement on Form S-1 (No. 33-
40152)).
3.2 Bye-Laws of MRM (incorporated by reference
to MRM's Registration Statement on Form S-1
(No. 33-40152)).
**3.3 Certificate of Incorporation of Mutual
Group Ltd.
**3.4 Bylaws of Mutual Group Ltd.
**3.5 Certificate of Trust of MRM Capital Trust
I.
**3.6 Certificate of Trust of MRM Capital Trust
II.
**3.7 Certificate of Trust of MRM Capital Trust
III.
4.1 Form of Indenture for Senior Notes issued
by MRM.
4.2 Form of Indenture for Senior Notes issued
by Mutual Group.
4.3 Form of Indenture for Junior Subordinated
Notes issued by MRM.
4.4 Form of Indenture for Junior Subordinated
Notes issued by Mutual Group.
4.5 Form of Senior Note issued MRM (included in
Exhibit 4.1).
4.6 Form of Senior Note issued by Mutual Group
(included in Exhibit 4.2).
4.7 Form of Junior Subordinated Note issued by
MRM (included in Exhibit 4.3).
4.8 Form of Junior Subordinated Note issued by
Mutual Group (included in Exhibit 4.4).
**4.9 Trust Agreement of MRM Capital Trust I.
**4.10 Trust Agreement of MRM Capital Trust II.
**4.11 Trust Agreement of MRM Capital Trust III.
4.12 Removal and Appointment of Trustee of MRM Capital Trust I.
4.13 Removal and Appointment of Trustee of MRM Capital Trust II.
4.14 Removal and Appointment of Trustee of MRM Capital Trust III.
4.15 Form of Amended and Restated Trust
Agreement of MRM Capital Trust I, MRM
Capital Trust II and MRM Capital Trust III.
4.16 Form of Preferred Security (included in
Exhibit 4.15).
4.17 Form of Preferred Securities Guarantee
Agreement of MRM with respect to the
preferred securities issued by MRM Capital
Trust I, MRM Capital Trust II and MRM
Capital Trust III.
4.18 Form of Preferred Securities Guarantee
Agreement of Mutual Group with respect to
the preferred securities issued by MRM
Capital Trust I, MRM Capital Trust II and
MRM Capital Trust III.
5.1 Opinions of Richards, Layton & Finger,
P.A., special Delaware counsel for MRM,
Mutual Group and each Trust.
II-9
5.2 Opinion of Mayer, Brown & Platt, counsel for Mutual Group.
5.3 Opinion of Conyers Dill & Pearman, counsel for MRM.
23.1 Consent of Ernst & Young
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5.1).
23.3 Consent of Mayer, Brown & Platt (included in Exhibit 5.2).
23.4 Consent of Conyers Dill & Pearman (included in Exhibit 5.3)
**24.1 Powers of Attorney.
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Trustee under the
Indenture (Senior Notes of MRM).
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Trustee under the
Indenture (Senior Notes issued by Mutual Group).
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Trustee under the
Indenture (Junior Subordinated Notes issued by MRM).
25.4 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Trustee under the
Indenture (Junior Subordinated Notes issued by Mutual Group).
25.5 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Property Trustee for
the Amended and Restated Trust Agreement of MRM Capital Trust I.
25.6 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Property Trustee for
the Amended and Restated Trust Agreement of MRM Capital Trust
II.
25.7 Statement of Eligibility, on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Property Trustee for
the Amended and Restated Trust Agreement of MRM Capital Trust
III.
25.8 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Guarantee Trustee
under the Guarantee Agreement of MRM for the benefit of the
holders of Preferred Securities of MRM Capital Trust I.
25.9 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Guarantee Trustee
under the Guarantee Agreement of MRM for the benefit of the
holders of Preferred Securities of MRM Capital Trust II.
25.10 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Guarantee Trustee
under the Guarantee Agreement of MRM for the benefit of the
holders of Preferred Securities of MRM Capital Trust III.
25.11 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Guarantee Trustee
under the Guarantee Agreement of Mutual Group for the benefit of
the holders of Preferred Securities of MRM Capital Trust I.
25.12 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Guarantee Trustee
under the Guarantee Agreement of Mutual Group for the benefit of
the holders of Preferred Securities of MRM Capital Trust II.
25.13 Statement of Eligibility on Form T-1 under the Trust Indenture
Act of 1939 of The Chase Manhattan Bank, as Guarantee Trustee
under the Guarantee Agreement of Mutual Group for the benefit of
the holders of Preferred Securities of MRM Capital Trust III.
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* To be filed as an exhibit to a report on Form 8-K pursuant to Item 601 of
Regulation S-K
**Previously filed
II-10