AS FILED WITH SECURITIES AND EXCHANGE COMMISSION ON APRIL 4, 2003
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE CHUBB CORPORATION CHUBB CAPITAL TRUST I
(Exact name of registrant as specified in its charter) CHUBB CAPITAL TRUST II
NEW JERSEY CHUBB CAPITAL TRUST III
(State or other jurisdiction of incorporation or (Exact name of each registrant as specified in its charter)
organization)
DELAWARE
(State or other jurisdiction of incorporation or
organization of each registrant)
(Chubb Capital Trust I)
38-3677366
(Chubb Capital Trust II)
36-4527365
(Chubb Capital Trust III)
13-2595722 36-4527366
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Numbers)
C/O THE CHUBB CORPORATION
15 MOUNTAIN VIEW ROAD 15 MOUNTAIN VIEW ROAD
P.O. BOX 1615 P.O. BOX 1615
WARREN, NEW JERSEY 07061-1615 WARREN, NEW JERSEY 07061-1615
(908) 903-2000 (908) 903-2000
(Address, including zip code, and telephone number, (Address, including zip code, and telephone number,
including area code, of registrant's principal executive including area code, of registrants' principal executive
offices) offices)
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JOANNE L. BOBER Please address a copy of all communications to:
SENIOR VICE PRESIDENT AND GENERAL COUNSEL NICHOLAS F. POTTER, ESQ.
THE CHUBB CORPORATION STEVEN J. SLUTZKY, ESQ.
15 MOUNTAIN VIEW ROAD DEBEVOISE & PLIMPTON
WARREN, NEW JERSEY 07061-1615 919 THIRD AVENUE
(908) 903-2000 NEW YORK, NEW YORK 10022
(Name, address, including zip code, and telephone number, (212) 909-6000
including area code, of agent for service of each
registrant)
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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.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, 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,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
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Common Stock of The Chubb Corporation, par value $1 per
share(3)..................................................
Debt Securities of The Chubb Corporation(4).................
Preferred Stock of The Chubb Corporation, par value $1 per
share(5)..................................................
Depositary Shares of The Chubb Corporation(6)...............
Warrants of The Chubb Corporation(7)........................
Stock Purchase Contracts of The Chubb Corporation(8)........
Stock Purchase Units of The Chubb Corporation(9)............
Junior Subordinated Deferrable Interest Debentures of The
Chubb Corporation(10).....................................
Preferred Securities of Chubb Capital Trust I(11)...........
Preferred Securities of Chubb Capital Trust II(11)..........
Preferred Securities of Chubb Capital Trust III(11).........
Guarantees with respect to Preferred Securities of Chubb
Capital Trust I, Chubb Capital Trust II and Chubb Capital
Trust III by The Chubb Corporation(12)....................
Total................................................... $2,500,000,000(13)(14) $202,250
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(Footnotes on next page)
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 AND
POST-EFFECTIVE AMENDMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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(Footnotes from cover page)
(1) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933 and exclusive of accrued
interest and dividends, if any.
(2) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933.
(3) Includes Series B Participating Cumulative Preferred Stock Purchase Rights.
Prior to the occurrence of certain events, such Rights will not be
exercisable or evidenced separately from the Common Stock. Subject to note
(13) below, there is being registered hereunder an indeterminate number of
shares of Common Stock as may be sold from time to time by The Chubb
Corporation, including sales upon the exercise of Warrants or delivery upon
settlement of Stock Purchase Contracts. Also includes such indeterminate
number of shares of Common Stock as may be issued upon conversion of or
exchange for any securities being registered hereunder that provide for
conversion or exchange into Common Stock.
(4) Subject to note (13) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time by The Chubb Corporation, including sales upon the exercise of
Warrants or delivery upon settlement of Stock Purchase Contracts. Also
includes such indeterminate principal amount of Debt Securities as may be
issued upon conversion of or exchange for any securities being registered
hereunder that provide for conversion or exchange into Debt Securities.
(5) Subject to note (13) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold from time
to time by The Chubb Corporation, including sales upon the exercise of
Warrants or delivery upon settlement of Stock Purchase Contracts. Also
includes such indeterminate number of shares of Preferred Stock as may be
issued upon conversion of or exchange for any securities being registered
hereunder that provide for conversion or exchange into Preferred Stock.
(6) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event The Chubb
Corporation elects to offer to the public fractional interests in Debt
Securities, Junior Subordinated Deferrable Interest Debentures or shares of
the Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests and Debt
Securities, Junior Subordinated Deferrable Interest Debentures or shares of
Preferred Stock, as the case may be, will be issued to the Depositary under
the Deposit Agreement. No separate consideration will be received for the
Depositary Shares.
(7) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Warrants as may be sold from time to
time by The Chubb Corporation, representing rights to purchase Debt
Securities, Preferred Stock or Common Stock. Warrants may be sold
separately or with Debt Securities, Preferred Stock or Common Stock.
(8) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Contracts as may be sold
from time to time by The Chubb Corporation, representing rights to purchase
Preferred Stock or Common Stock.
(9) Subject to note (13) below, there is being registered hereunder an
indeterminate amount and number of Stock Purchase Units as may be sold from
time to time by The Chubb Corporation, representing ownership of Stock
Purchase Contracts and Debt Securities, Preferred Securities, Junior
Subordinated Deferrable Interest Debentures or debt obligations of third
parties, including United States Treasury securities.
(10) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Junior Subordinated Deferrable Interest Debentures
as may be sold from time to time by The Chubb Corporation.
(11) Subject to note (13) below, there is being registered hereunder an
indeterminate number of Preferred Securities as may be sold severally from
time to time by Chubb Capital Trust I, Chubb Capital Trust II and Chubb
Capital Trust III.
(12) This registration statement is deemed to include the obligations of The
Chubb Corporation under the Junior Subordinated Deferrable Interest
Debentures, the related Indenture, the Trust Agreements, the Preferred
Securities, the Guarantees and the Expense Agreements as described in the
Registration Statement.
(13) The prospectus included herein relates to $2,500,000,000 of Securities.
Such amount represents the principal amount of any Debt Securities or
Junior Subordinated Deferrable Interest Debentures issued at their
principal amount, the issue price rather than the principal amount of any
Debt Securities or Junior Subordinated Deferrable Interest Debentures
issued at an original issue discount, the liquidation preference of any
Preferred Stock, the amount computed pursuant to Rule 457(c) for any Common
Stock, the issue price of any Warrants, the exercise price of any offered
Securities issuable upon the exercise of Warrants and the initial public
offering price of any Preferred Securities. Any securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
(14) No separate consideration will be received for the Debt Securities,
Preferred Stock, Common Stock, Junior Subordinated Deferrable Interest
Debentures or the Depositary Shares issuable upon conversion of or in
exchange for any securities registered hereunder that provide for
conversion or exchange into such securities. No separate consideration will
be received for any Junior Subordinated Deferrable Interest Debentures if
issued to evidence a loan by Chubb Capital Trust I, Chubb Capital Trust II
or Chubb Capital Trust III to The Chubb Corporation, or for any related
Guarantee or expense agreement.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED APRIL 4, 2003
PROSPECTUS
(CHUBB LOGO)
The Chubb Corporation
DEBT SECURITIES
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
WARRANTS
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
Chubb Capital Trust I
Chubb Capital Trust II
Chubb Capital Trust III
PREFERRED SECURITIES GUARANTEED
BY THE CHUBB CORPORATION
By this prospectus, we may offer from time to time up to $2,500,000,000 of
any combination of the securities described in this prospectus.
We will provide specific terms of the securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest. A supplement may also change or update information contained in this
prospectus.
We will not use this prospectus to confirm sales of any of our securities
unless it is attached to a prospectus supplement.
Unless we state otherwise in a prospectus supplement, we will not list any
of these securities on any securities exchange.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION, NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is , 2003
TABLE OF CONTENTS
PAGE
----
About This Prospectus....................................... ii
Forward-Looking Statements.................................. iii
The Chubb Corporation....................................... 1
The Chubb Capital Trusts.................................... 2
Use of Proceeds............................................. 4
Ratio of Consolidated Earnings to Fixed Charges............. 4
Description of Debt Securities.............................. 5
Description of Junior Subordinated Debentures............... 15
Description of Capital Stock of The Chubb Corporation....... 26
Description of Depositary Shares............................ 30
Description of Warrants..................................... 33
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 35
Description of Preferred Securities......................... 36
Description of Guarantees................................... 49
Description of Corresponding Junior Subordinated
Debentures................................................ 52
Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the
Guarantees................................................ 55
Plan of Distribution........................................ 57
Legal Opinions.............................................. 58
Experts..................................................... 58
Where You Can Find More Information......................... 58
Incorporation By Reference.................................. 58
i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, or the SEC, using a shelf registration
process. Under this shelf process, we may sell the securities described in this
prospectus from time to time. This prospectus provides you with a general
description of the securities we may offer. We may also add, update or change
information contained in this prospectus through one or more supplements to this
prospectus. Any statement that we make in this prospectus will be modified or
superseded by any statement made by us in a prospectus supplement. 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. See "Incorporation by Reference."
You should read both this prospectus and any prospectus supplement together
with additional information described under the heading "Where You Can Find More
Information."
No person has been authorized to give any information or to make any
representations, other than those contained or incorporated by reference in this
prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by Chubb, or any underwriter, agent,
dealer or remarketing firm. Neither the delivery of this prospectus nor any sale
made hereunder shall under any circumstances create any implication that there
has been no change in the affairs of Chubb since the date hereof or that the
information contained or incorporated by reference herein is correct as of any
time subsequent to the date of such information. This prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
by anyone in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make such offer or
solicitation.
References to "Chubb," "we," "us" and "our" in this prospectus are
references to The Chubb Corporation and its consolidated subsidiaries.
Chubb Capital Trust I, Chubb Capital Trust II and Chubb Capital Trust III,
each of which is referred to in this prospectus as a trust and which are
collectively referred to as the trusts, have no independent function other than
to issue preferred securities and common securities and to purchase junior
subordinated debentures as described in this prospectus. This prospectus does
not contain separate financial statements for the trusts. Chubb files
consolidated financial information with the SEC that will include financial
information regarding the trusts.
ii
FORWARD-LOOKING STATEMENTS
This prospectus, any prospectus supplement and the documents and
information incorporated by reference in them contain "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 and include
estimates and assumptions related to economic, competitive and legislative
developments. These include statements relating to trends in, or representing
management's beliefs about, our future strategies, operations and financial
results, as well as other statements including words such as "anticipate,"
"believe," "plan," "estimate," "expect," "intend," "may," "should" and other
similar expressions. Forward-looking statements are made based upon management's
current expectations and beliefs concerning trends and future developments and
their potential effects on the company. They are not guarantees of future
performance. Actual results may differ materially from those suggested by
forward-looking statements as a result of risks and uncertainties which include,
among others:
- the availability of primary and reinsurance coverage;
- global political conditions and the occurrence of any terrorist attacks,
including any nuclear, biological or chemical events;
- the effects of ongoing military conflict in Iraq;
- the outbreak of war other than with Iraq;
- premium price increases and profitability or growth estimates overall or
by lines of business, or geographic area and related expectations with
respect to the timing and terms of any required regulatory approvals;
- our expectations with respect to cash flow projections and investment
income and with respect to other income;
- the adequacy of loss reserves including:
- our expectations relating to insurance losses from the September 11
attack and related reinsurance recoverables;
- our estimates relating to ultimate asbestos liabilities and related
reinsurance recoverables;
- any impact from the bankruptcy protection sought by various asbestos
producers and other related businesses;
- developments in judicial decisions or legislative actions relating to
coverage and liability for asbestos and toxic waste claims; and
- developments in judicial decisions or regulatory actions relating to
coverage and liability for mold claims;
- the impact of the current economic climate on companies on whose behalf
we have issued surety bonds, and in particular, on those companies that
have experienced deterioration in creditworthiness;
- the effects of disclosures by and investigations of public companies
relating to possible accounting irregularities, practices in the energy
industry and other corporate governance issues, including:
- the effects on the energy markets and the companies that participate in
them, and in particular as they may relate to concentrations of risk in
our surety business;
- the effects on the capital markets and the markets for directors and
officers and errors and omissions insurance;
iii
- claims and litigation arising out of accounting and other corporate
governance disclosures by other companies;
- claims and litigation arising out of investment banking practices; and
- legislative or regulatory proposals or changes, including the changes in
law required under the Sarbanes-Oxley Act of 2002;
- the occurrence of significant weather-related or other natural or
human-made disasters;
- any downgrade in our claims-paying, financial strength or credit ratings;
- general economic conditions including:
- changes in interest rates, market credit spreads and the performance of
the financial markets, generally and as they relate to credit risks
assumed by our Chubb Financial Solutions unit in particular;
- changes in domestic and foreign laws, regulations and taxes;
- changes in competition and pricing environments;
- regional or general changes in asset valuations;
- the occurrence of significant weather-related or other natural or
human-made disasters;
- the inability to reinsure certain risks economically;
- changes in the litigation environment; and
- general market conditions.
We undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
iv
THE CHUBB CORPORATION
The Chubb Corporation is a holding company for a family of property and
casualty insurance companies known informally as the Chubb Group of Insurance
Companies ("Chubb Group"). Since 1882, the Chubb Group has provided property and
casualty insurance to businesses and individuals around the world. At December
31, 2002, we had total assets of $34.1 billion and shareholders' equity of $6.9
billion. According to A.M. Best, the Chubb Group is the 13th largest U.S.
property and casualty insurance group based on 2001 net written premiums. With
more than 13,000 employees, the Chubb Group serves commercial and personal
customers through 8,000 independent agents and brokers worldwide.
Our property and casualty operations are divided into three strategic
business units. Chubb Commercial Insurance offers a full range of commercial
customer insurance products, including coverage for multiple peril, casualty,
workers' compensation and property and marine. Chubb Commercial Insurance is
known for writing niche business, where our expertise can add value for our
agents, brokers and policyholders. Chubb Specialty Insurance offers a wide
variety of specialized executive protection and professional liability products
for privately and publicly owned companies, financial institutions, professional
firms and healthcare organizations. Chubb Personal Insurance offers products for
individuals with fine homes and possessions who require more coverage choices
and higher limits than standard insurance policies.
In addition to our three strategic insurance business units, in 2000 we
organized Chubb Financial Solutions to engage in developing and providing
risk-financing services through the capital and insurance markets. In February
2003, we announced that we are reviewing our strategic alternatives with respect
to Chubb Financial Solutions.
As a holding company, our ability to continue to pay dividends to
shareholders and to satisfy our obligations, including the payment of interest
and principal on debt obligations, relies on the availability of liquid assets
at the holding company, which is dependent in large part on the dividend paying
ability of our property and casualty insurance subsidiaries. Various state
insurance laws restrict our property and casualty insurance subsidiaries as to
the amount of dividends they may pay to us without the prior approval of
regulatory authorities. The restrictions are generally based on net income and
on certain levels of policyholders' surplus as determined in accordance with
statutory accounting practices. Dividends in excess of such thresholds are
considered "extraordinary" and require prior regulatory approval. The maximum
dividend distribution that may be made by our property and casualty subsidiaries
to us during 2003 without prior approval is approximately $445 million.
Our principal executive offices are located at 15 Mountain View Road,
Warren, New Jersey 07061-1615, and our telephone number is (908) 903-2000.
RECENT DEVELOPMENTS
On March 24, 2003, Standard & Poor's ("S&P") lowered our long-term
counterparty credit and senior debt ratings from A+ to A and removed us from
CreditWatch. In the same action, S&P lowered its counterparty credit and
financial strength ratings on our operating insurance companies from AA+ to AA
and removed them from CreditWatch. S&P's outlook on these ratings is currently
stable.
THE CHUBB CAPITAL TRUSTS
We created each trust as a Delaware statutory trust pursuant to a trust
agreement. We 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. We will amend and restate each
trust agreement in its entirety substantially in the form filed as an exhibit to
the registration statement which includes this prospectus. Each trust agreement
will be qualified as an indenture under the Trust Indenture Act of 1939, as
amended, which we refer to in this prospectus as the "Trust Indenture Act."
Each trust exists for the exclusive purposes of:
- issuing and selling to the public preferred securities, representing
undivided beneficial interests in the assets of the trust;
- issuing and selling to us common securities, representing undivided
beneficial interests in the assets of the trust;
- using the proceeds from the sale of the preferred securities and common
securities to acquire a corresponding series of our junior subordinated
deferrable interest debentures, which we refer to in this prospectus as
the corresponding junior subordinated debentures;
- distributing the cash payments it receives from the corresponding junior
subordinated debentures it owns to you and the other holders of preferred
securities and to us as the holder of common securities; and
- engaging in other activities that are necessary, convenient, or
incidental to these purposes.
Accordingly, the corresponding junior subordinated debentures will be the
sole assets of each trust, and payments under the corresponding junior
subordinated debentures and a related expense agreement will be the sole revenue
of each trust.
We will own all of the common securities of each trust. The common
securities of a trust will rank equally with and payments will be made pro rata
with the preferred securities of the trust, except that if an event of default
under a trust agreement then exists, our rights as holder of the common
securities to payment of distributions and payments upon liquidation or
redemption will be subordinated to your rights as a holder of the preferred
securities of the trust. See "Description of Preferred Securities --
Subordination of Common Securities."
Unless we state otherwise in a prospectus supplement, each trust has a term
of approximately 45 years. A trust may also terminate earlier. The trustees of
each trust will conduct its business and affairs. As holder of the common
securities we will appoint the trustees. Initially, the trustees will be:
- Bank One Trust Company, N.A., which will act as property trustee; and
- Bank One Delaware, Inc., which will act as Delaware trustee; and
- Two of our employees or officers, who will act as administrative
trustees.
Bank One Trust Company, N.A. as property trustee, will act as sole
indenture trustee under each trust agreement for purposes of compliance with the
provisions of the Trust Indenture Act. Bank One Trust Company, N.A. will also
act as trustee under the guarantee and the junior subordinated indenture
pursuant to which we will issue the corresponding junior subordinated
debentures. See "Description of Junior Subordinated Debentures" and "Description
of Guarantee."
The holder of the common securities of a trust, or the holders of a
majority in liquidation preference of the preferred securities, if an event of
default under the trust agreement has occurred and is continuing, will be
entitled to appoint, remove or replace the property trustee and/or the Delaware
trustee of the trust. You will not have the right to vote to appoint, remove or
replace the administrative trustees. Only we, as the holder of the common
securities, will have those voting rights.
2
The duties and obligations of the trustees are governed by the applicable trust
agreement. We will pay all fees and expenses related to the trusts and any
offering of the preferred securities and will pay, directly or indirectly, all
ongoing costs, expenses and liabilities of the trusts, except for payments made
on the preferred securities or the common securities, subject to the guarantee.
The principal executive office of each trust is c/o The Chubb Corporation,
15 Mountain View Road, Warren, New Jersey 07061-1615, Attention: Secretary, and
the telephone number of each trust is (908) 903-2000.
3
USE OF PROCEEDS
Unless we state otherwise in a prospectus supplement, we intend to use the
proceeds from the sale of the securities offered by this prospectus for general
corporate purposes. We will include a more detailed description of the use of
proceeds of any specific offering of securities in the prospectus supplement
relating to that offering.
RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of consolidated earnings to fixed
charges for each of the five years in the period ended December 31, 2002:
FOR THE YEAR ENDED DECEMBER 31,
---------------------------------------
1998 1999 2000 2001 2002
----- ----- ----- ------ ------
Ratio of Earnings to Fixed Charges........... 16.03 10.40 11.48 0.49(1) 2.59(2)
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(1) For the year ended December 31, 2001, consolidated earnings were not
sufficient to cover fixed charges by $46.0 million. Consolidated earnings
for the period, as defined, reflect a $635.0 million loss before income
taxes from the September 11 attack in the United States and net surety bond
losses before income taxes of $220.0 million arising from the bankruptcy of
Enron Corp.
(2) Consolidated earnings, as defined, for the year ended December 31, 2002
reflect net losses of $700.0 million before income taxes recognized in the
third and fourth quarters related to asbestos and toxic waste claims and a
reduction in net surety losses of $88.0 million before income taxes
resulting from the settlement of litigation related to Enron.
For the purpose of computing the above ratios of consolidated earnings to
fixed charges, consolidated earnings consist of income from continuing
operations before income taxes excluding income or loss from equity investees,
plus those fixed charges that were charged against income and distributions from
equity investees. Fixed charges consist of interest expense before reduction for
capitalized interest and the portion of rental expense (net of rental income
from subleased properties) which is considered to be representative of the
interest factors in the leases.
4
DESCRIPTION OF DEBT SECURITIES
We may offer unsecured senior debt securities or subordinated debt
securities. We refer to the senior debt securities and the subordinated debt
securities together in this prospectus as the debt securities. We will issue the
senior debt securities in one or more series under an indenture, which we refer
to as the senior indenture, as supplemented from time to time between us and
Bank One Trust Company, N.A., as successor in interest to the First National
Bank of Chicago, as trustee. We will issue the subordinated debt securities in
one or more series under an indenture, which we refer to as the subordinated
indenture, as supplemented from time to time between us and Bank One Trust
Company, N.A., as successor in interest to the First National Bank of Chicago,
as trustee. We refer to the senior indenture and the subordinated indenture
together as the indentures.
The following description of the terms and provisions of the debt
securities and the indentures is a summary. It summarizes only those terms of
the debt securities and portions of the indentures which we believe will be most
important to your decision to invest in our debt securities. You should keep in
mind, however, that it is the indentures, and not this summary, which define
your rights as a debtholder. There may be other provisions in the indentures
which are also important to you. You should read the indentures for a full
description of the terms of the debt. The senior indenture and the subordinated
indenture are incorporated by reference as exhibits to the registration
statement that includes this prospectus. See "Where You Can Find More
Information" for information on how to obtain copies of the senior indenture and
the subordinated indenture.
RANKING
Our debt securities will be unsecured obligations. Our senior debt
securities will rank equally with all of our other unsecured and unsubordinated
obligations. Our subordinated debt securities will be subordinate and junior in
right of payment to all of our senior debt. See "-- Subordination Under the
Subordinated Indenture."
Since we are a non-operating holding company, most of our operating assets
are owned by our subsidiaries. We rely primarily on dividends from these
subsidiaries to meet our obligations for payment of principal and interest on
our outstanding debt obligations and corporate expenses. Accordingly, the debt
securities will be effectively subordinated to all existing and future
liabilities of our subsidiaries, and you should rely only on our assets for
payments on the debt securities. The amount of dividend distributions to us from
our insurance subsidiaries may be restricted by state insurance laws and
regulations as administered by state insurance departments. See "The Chubb
Corporation."
Unless we state otherwise in the applicable prospectus supplement, the
indentures do not limit us from incurring or issuing other secured or unsecured
debt under either of the indentures or any other indenture that we may have
entered into or enter into in the future. See "-- Subordination Under the
Subordinated Indenture" and the prospectus supplement relating to any offering
of subordinated debt securities.
TERMS OF THE DEBT SECURITIES
We may issue debt securities in one or more series, through an indenture
that supplements the senior indenture or the subordinated indenture or through a
resolution of our board of directors or an authorized committee of our board of
directors.
You should refer to the applicable prospectus supplement for the specific
terms of the debt securities. These may include the following:
- classification as senior or subordinated debt securities;
- the title, designation and purchase price;
- any limit upon the aggregate principal amount;
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- maturity date(s) or the method of determining maturity date(s);
- the interest rate(s), if any, and the method for calculating the interest
rate(s), if any;
- the interest payment dates and the record dates for the interest
payments;
- circumstances, if any, in which interest may be deferred;
- dates from which interest will accrue and the method of determining those
dates;
- dates on which premium, if any, will be paid;
- place(s) where we will pay principal, premium, if any, and interest and
where you may present the debt securities for registration of transfer or
exchange;
- place(s) where notices and demands relating to the debt securities and
the indentures may be made;
- authorized denominations, if other than denominations of $1,000;
- currency or currencies, if other than the currency of the United States,
in which principal, premium, if any, and interest will be paid or in
which the debt securities will be denominated;
- if the amount of payments of principal, premium, if any, and interest on
the debt securities may be determined with reference to an index and how
such amounts will be determined;
- any special United States federal income tax consequences of the debt
securities;
- any special accounting considerations applicable to the debt securities;
- any mandatory or optional redemption terms or prepayment or sinking fund
provisions;
- any additions, modifications or deletions in the events of default or
covenants specified in the indenture relating to the debt securities;
- if other than the principal amount of debt securities, the portion of the
principal amount of the debt securities that is payable upon declaration
of acceleration of maturity;
- whether the debt securities will be issued in whole or in part in the
form of one or more global securities;
- whether a temporary global security is issued and the terms upon which
temporary debt securities may be exchanged for definitive debt
securities;
- appointment of any trustees, authenticating or paying agent(s), transfer
agent(s) or any other agents with respect to a series of debt securities;
- the terms and conditions of any obligation or right we would have or any
option you would have to convert or exchange the debt securities into
other securities, cash or property of Chubb;
- in the case of the subordinated indenture, any provisions regarding
subordination; and
- other specific terms, not inconsistent with the provisions of the
indentures.
(Section 2.3 of each indenture)
Debt securities may also be issued under the indentures upon exercise of
warrants or delivery upon settlement of Stock Purchase Contracts. See
"Description of Warrants."
SPECIAL PAYMENT TERMS OF THE DEBT SECURITIES
We may issue one or more series of debt securities at a substantial
discount below their stated principal amount. These may bear no interest or
interest at a rate which at the time of issuance is below market rates. We will
describe United States federal income tax consequences and special
considerations relating to any series in the applicable prospectus supplement.
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The purchase price of any of the debt securities may be payable in one or
more foreign currencies or currency units. The debt securities may be
denominated in one or more foreign currencies or currency units, or the
principal of, premium, if any, or interest on any debt securities may be payable
in one or more foreign currencies or currency units. We will describe the
restrictions, elections, United States federal income tax considerations,
specific terms and other information relating to the debt securities and any
foreign currencies or foreign currency units in the applicable prospectus
supplement.
If we use any index to determine the amount of payments of principal of,
premium, if any, or interest on any series of debt securities, we will also
describe in the applicable prospectus supplement the special United States
federal income tax, accounting and other considerations applicable to the debt
securities.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless we state otherwise in the applicable prospectus supplement, we will
issue the debt securities in fully registered form without coupons and in
denominations of $1,000 and integral multiples of $1,000. (Section 2.7 of each
indenture)
Except as we may describe in the applicable prospectus supplement, debt
securities of any series will be exchangeable for other debt securities of the
same issue and series, in any authorized denominations, of a like aggregate
principal amount and bearing the same interest rate. You may present debt
securities for exchange as described above, or for registration of transfer, at
the office of the securities registrar or at the office of any transfer agent we
designate for that purpose. You will not incur a service charge but you will be
required to pay any taxes and other governmental charges as described in the
indentures. We will appoint the trustees as securities registrar under the
indentures. We may at any time rescind the designation of any transfer agent
that we initially designate or approve a change in the location through which
the transfer agent acts. We will specify the transfer agent in the applicable
prospectus supplement. We may at any time designate additional transfer agents.
(Sections 2.7 and 2.8 of each indenture)
REDEMPTION
Unless we state otherwise in the applicable prospectus supplement, debt
securities will not be subject to any sinking fund.
Unless we state otherwise in the applicable prospectus supplement, we may,
at our option and at any time, redeem any series of debt securities, in whole or
in part, at a redemption price equal to 100% of the principal amount plus
accrued and unpaid interest up to but not including the redemption date. We may
redeem debt securities in denominations larger than $1,000 but only in integral
multiples of $1,000 (or such other authorized denomination thereof). (Section
12.2 of each indenture)
We will mail notice of any redemption of your debt securities at least 30
days but not more than 60 days before the redemption date to you at your
registered address. Unless we default in payment of the redemption price, on and
after the redemption date interest will cease to accrue on the debt securities
or the portions called for redemption. (Section 12.2 of each indenture)
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with, merge into or sell, convey or lease all or
substantially all of our assets to any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof, nor
permit
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any such entity to consolidate with, merge into or sell, convey or lease all or
substantially all of its assets to us unless:
- we are the surviving corporation or the successor corporation is a
corporation organized under the laws of any domestic jurisdiction and
assumes our obligations on the debt securities and under the indentures;
- after giving effect to such transaction no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default will have occurred and be continuing; and
- Chubb or the surviving entity will have delivered to the trustee an
officers' certificate and opinion of counsel stating that the transaction
or series of transactions and a supplemental indenture, if any, complies
with this covenant and that all conditions precedent in the indenture
relating to the transaction or series of transactions have been
satisfied.
This covenant would not apply to the direct or indirect conveyance,
transfer or lease of all or any portion of the stock, assets or liabilities of
any of our wholly owned subsidiaries to us or to our other wholly owned
subsidiaries. This covenant also would not apply to any recapitalization
transaction, a change of control of Chubb or a highly leveraged transaction
unless such transaction or change of control were structured to include a merger
of consolidation by us or the conveyance, transfer or lease of our assets
substantially as an entirety. (Sections 9.1, 9.2 and 9.3 of each indenture)
EVENTS OF DEFAULT
These are "Events of Default" under the indentures with respect to each
series of debt securities:
(1) failure to pay principal, or premium, if any, when due;
(2) failure to pay any interest when due, continued for 30 days;
(3) default in the payment of any sinking fund installment when due and
payable;
(4) failure to perform any covenant or warranty of Chubb contained in the
applicable indentures for 60 days under the senior debt indenture, and
90 days under the subordinated debt indenture, after written notice;
(5) certain events of bankruptcy, insolvency or reorganization of Chubb;
and
(6) any other event of default described in the applicable board resolution
or supplemental indenture under which the series of debt securities is
issued.
If an Event of Default occurs and is continuing, the trustee may, and at
the written request of holders of a majority in aggregate principal amount of
the securities of each series affected by the Event of Default and upon the
trustee's receipt of indemnification to its satisfaction will, proceed to
protect and enforce its rights and those of the holders of such securities.
If an Event of Default, other than an Event of Default specified in clause
(5), occurs and is continuing, with respect to the debt securities of any
series, then the trustee or the holders of at least 25% in principal amount of
the outstanding debt securities of that series (each series acting as a separate
class) may require us to repay immediately the entire principal amount of the
outstanding debt securities of that series, or such lesser amount as may be
provided in the terms of the securities, together with all accrued and unpaid
interest and premium, if any. (Sections 5.1 and 5.10 of each indenture)
If an Event of Default under an indenture specified in clause (4), occurs
and is continuing with respect to all series of debt securities then outstanding
under the relevant indenture or an Event of Default specified in clause (5)
occurs and is continuing, then the trustee or the holders of at least 25% in
principal amount of all of the debt securities then outstanding under the
relevant indenture (treated as one class) may require us to repay immediately
the entire principal amount of the outstanding debt
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securities, or such lesser amount as may be provided in the terms of the
securities, together with all accrued and unpaid interest. (Sections 5.1 and
5.10 of each indenture)
Any Event of Default with respect to a particular series of debt securities
under the relevant indenture may be waived by the holders of a majority of the
aggregate principal amount of the outstanding debt securities of such series, or
of all the outstanding debt securities under the relevant indenture, as the case
may be, except in each case a failure to pay principal of or premium, if any, or
interest on such debt security. (Sections 5.1 and 5.10 of each indenture)
The trustee will, within 90 days of the occurrence of an Event of Default
that has not been cured, provide notice to the holders of any series of debt
securities effected. The trustee may withhold notice to the holders of any
default, except in the payment of principal of or interest or premium on, or
sinking fund payment in respect of, the securities, if the trustee considers it
in the interest of the holders to do so. (Section 5.11 of each indenture)
We are required to furnish to the trustee an annual statement as to
compliance with all conditions and covenants under the indenture. (Section 3.5
of each indenture)
MODIFICATION OF THE INDENTURES
We may generally amend the indenture with the consent of the holders of a
majority in aggregate principal amount of debt securities affected by the
amendment. However, we may not amend the indentures without the consent of each
holder affected, in order to, among other things:
- extend the final maturity of any debt security;
- reduce the principal amount of any debt security;
- reduce the rate or extend the time of payment of interest on any debt
security;
- reduce the amount payable on redemption of any debt security, or reduce
the amount of principal of an original issue discount debt security that
would be due and payable on an acceleration of the maturity of such debt
security or the amount of such debt security provable in bankruptcy;
- change the currency of payment of principal of or interest on any debt
security;
- extend the time or reduce the amount of any payment to any sinking fund
or analogous obligation relating to any debt security;
- impair or affect the right of any security holder to institute suit for
payment on such security or any right of repayment at the option of the
security holder;
- reduce the percentage of debt securities of any series that must consent
to an amendment to an indenture;
- reduce the percentage of debt securities of any series necessary to
consent to waive any past default under an indenture to less than a
majority; or
- modify any of the provisions of the sections of such indenture relating
to supplemental indentures with the consent of the holders of debt
securities, except to increase the percentage of holders or to provide
that provisions of the indenture cannot be modified or waived without the
consent of the holder of each affected debt security. (Section 8.2 of
each indenture)
A supplemental indenture which changes or eliminates any covenant or other
provision of an indenture which has expressly been included solely for the
benefit of one or more particular series of debt securities, or which modifies
the rights of the holders of debt securities of such series with respect to such
covenant or other provision, will not affect the rights under the indenture of
the holders of the debt securities of any other series. (Section 8.2 of each
indenture)
9
We and the trustee may amend the indentures without the consent of any
holder of debt securities in order to:
- secure any debt securities issued under such indenture;
- provide for the succession of another corporation and assumption of our
obligations in the case of a merger or consolidation;
- add to the covenants of Chubb or add additional events of default;
- cure ambiguities, defects or inconsistencies, provided that such action
does not adversely affect any holders of securities issued under such
indenture;
- establish the form and terms of debt securities of any series;
- provide for a successor trustee with respect to one or more series of
securities issued under such indenture or to provide for or facilitate
the administration of the trusts under the indenture by more than one
trustee;
- permit or facilitate the issuance of securities in bearer form or provide
for uncertificated securities to be issued under such indenture; or
- change or eliminate any provision of such indenture, provided that any
such change or elimination will become effective only when there is no
security outstanding of any series created prior to the execution of such
supplemental indenture which is entitled to the benefit of such
provision. (Section 8.1 of each indenture)
SATISFACTION AND DISCHARGE
Each indenture provides that when, among other things, all debt securities
not previously delivered to the trustee for cancellation:
- have become due and payable; or
- will become due and payable at their stated maturity within one year; or
- are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in our name and at our expense,
and we deposit or cause to be deposited with the trustee, in trust, an amount in
the currency or currencies in which the debt securities are payable sufficient
to pay and discharge the entire indebtedness on the debt securities not
previously delivered to the trustee for cancellation, for the principal,
premium, if any, and interest to the date of the deposit or to the stated
maturity, as the case may be, then the indenture will cease to be of further
effect, other than as to certain transfers and exchanges and other rights
identified in the indenture, and we will be deemed to have satisfied and
discharged the indenture. However, we will continue to be obligated to pay all
other sums due under the indenture and to provide the officers' certificates and
opinions of counsel described in the indenture. (Section 10.1 of each indenture)
DEFEASANCE
Unless we state otherwise in the applicable prospectus supplement, each
indenture provides that we will be deemed to have discharged all of our
obligations, other than as to certain transfers and exchanges, if, among other
things:
- we irrevocably deposit with the trustee cash or United States government
obligations or a combination thereof, as trust funds in an amount
certified to be sufficient to pay on each date that they become due and
payable, the principal of and interest on, all outstanding debt
securities of such series;
10
- we deliver to the trustee an opinion of counsel to the effect that:
- the holders of the debt securities will not recognize income, gain or
loss for United States federal income tax purposes as a result of the
defeasance; and
- the defeasance will not otherwise alter those holders' United States
federal income tax treatment of principal and interest payments on the
debt securities; this opinion must be based on a ruling of the Internal
Revenue Service or a change in United States federal income tax law
occurring after the date of this prospectus, since that result would not
occur under current tax law; and
- no event of default under the indenture has occurred and is continuing.
(Section 10.1 of each indenture)
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depositary
identified in a prospectus supplement. Unless it is exchanged for debt
securities in definitive form, a global certificate may generally be transferred
only as a whole unless it is being transferred to certain nominees of the
depositary. Unless otherwise stated in the prospectus supplement the Depository
Trust Company, New York, New York, or DTC, will act as depositary.
We will describe the specific terms of the depositary arrangement in the
applicable prospectus supplement. We expect that the following provisions will
generally apply to these depositary arrangements.
BENEFICIAL INTERESTS IN A GLOBAL SECURITY
Ownership of beneficial interests in a registered global security will be
limited to persons, called participants, that have accounts with the depositary
or persons that may hold interests through participants. Upon the issuance of a
registered global security, the depositary will credit, on its book-entry
registration and transfer system, the participants' accounts with the respective
principal or face amounts of the securities beneficially owned by the
participants. Any dealers, underwriters or agents participating in the
distribution of the securities will designate the accounts to be credited.
Ownership of beneficial interests in a registered global security will be shown
on, and the transfer of ownership interests will be effected only through,
records maintained by the depositary, with respect to interests of participants,
and on the records of participants, with respect to interests of persons holding
through participants. The laws of some states may require that some purchasers
of securities take physical delivery of these securities in definitive form.
These laws may impair your ability to own, transfer or pledge beneficial
interests in registered global securities.
So long as the depositary, or its nominee, is the registered owner of a
registered global security, that depositary or its nominee, as the case may be,
will be considered the sole owner or holder of the securities represented by the
registered global security for all purposes under the applicable indenture.
Except as described below, you:
- will not be entitled to have the securities represented by the registered
global security registered in your names;
- will not receive or be entitled to receive physical delivery of the
securities in definitive form; and
- will not be considered the owners or holders of the securities under the
indenture.
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PAYMENTS OF PRINCIPAL, PREMIUM AND INTEREST
We will make principal, premium, if any, and interest payments on a
registered global security to the depositary that is the registered holder of
the global security or its nominee. The depositary for the global security will
be solely responsible and liable for all payments made on account of your
beneficial ownership interests in the registered global security and for
maintaining, supervising and reviewing any records relating to your beneficial
ownership interests.
We expect that the depositary or its nominee, upon receipt of principal,
premium, if any, or interest payment, immediately will credit participants'
accounts with amounts in proportion to their respective beneficial interests in
the principal amount of the registered global security as shown on the records
of the depositary or its nominee. We also expect that payments by participants
to you, as an owner of a beneficial interest in the registered global security
held through those participants, will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." These payments will be
the responsibility of those participants.
ISSUANCE OF DEFINITIVE DEBT SECURITIES
Unless we state otherwise in an applicable prospectus supplement, if the
depositary for a series of registered global securities is at any time unwilling
or unable to continue as depositary or ceases to be a clearing agency registered
under the Securities Exchange Act of 1934, and a successor depositary registered
as a clearing agency under the Securities Exchange Act of 1934 is not appointed
by us within 90 days, we will issue securities in definitive form in exchange
for the registered global security that had been held by the depositary. In
addition, we may at any time and in our sole discretion decide not to have any
of the securities represented by one or more registered global securities. If we
make that decision, we will issue securities in definitive form in exchange for
all of the registered global securities or securities representing those
securities.
PAYMENT AND PAYING AGENTS
Unless we state otherwise in an applicable prospectus supplement, we will
pay principal of, premium, if any, and interest on your debt securities at the
office of the trustee in the City of New York or at the office of any paying
agent that we may designate.
Unless we state otherwise in the applicable prospectus supplement, we will
pay any interest on debt securities to the registered owner of the debt security
at the close of business on the regular record date for the interest, except in
the case of defaulted interest. (Section 2.7 of each indenture) We may at any
time designate additional paying agents or rescind the designation of any paying
agent. We must maintain a paying agent in each place of payment for the debt
securities. (Section 3.2 of each indenture)
Any moneys deposited with the trustee or any paying agent, or then held by
us in trust, for the payment of the principal of, premium, if any, and interest
on any debt security that remain unclaimed for three years after the principal,
premium or interest has become due and payable will, at our request, be repaid
to us. After repayment to us, you are entitled to seek payment only from us as a
general unsecured creditor. (Section 10.4 of each indenture)
CONVERSION OR EXCHANGE
The subordinated debt indenture permits us to issue debt securities that we
may convert or exchange into common stock or other securities. We will describe
the specific terms on which the debt securities may be converted or exchanged in
the applicable prospectus supplement. The conversion or exchange may be
mandatory, at your option, or at our option, as specified in the applicable
prospectus supplement. The applicable prospectus supplement will describe the
manner in which the shares of common stock or other securities you would receive
would be converted or exchanged.
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SUBORDINATION UNDER THE SUBORDINATED INDENTURE
The debt securities we issue under the subordinated debt indenture will
constitute part of the subordinated debt of Chubb. These subordinated debt
securities will be subordinate and junior in right of payment, to the extent and
in the manner set forth in the subordinated debt indenture, to all "senior
indebtedness" of Chubb. The subordinated debt indenture defines "senior
indebtedness" as the principal of, premium, if any, and unpaid interest on the
following, whether outstanding at the date of the subordinated debt indenture or
later incurred or created:
- indebtedness of Chubb for money borrowed, including purchase money
obligations, evidenced by notes or other written obligations;
- indebtedness of Chubb evidenced by notes, debentures, bonds or other
securities issued under the provisions of an indenture or similar
instrument;
- obligations of Chubb as lessee under capitalized leases and leases of
property made as part of any sale and leaseback transactions;
- indebtedness of others of any of the kinds described in the preceding
clauses assumed or guaranteed by Chubb; and
- renewals, extensions and refundings of, and indebtedness and obligations
of a successor corporation issued in exchange or in replacement of,
indebtedness or obligations described in the preceding clauses unless
such indebtedness or obligation, renewal, extension or refunding
expressly provides that it is not superior in right of payment to the
subordinated debt securities;
provided, that senior indebtedness does not include any indebtedness issued
under the subordinated debt indenture or any indebtedness or obligation if the
terms of such indebtedness or obligation expressly provide that such
indebtedness or obligation is not senior in right of payment to the debt
securities issued under the subordinated debt indenture or expressly provide
that such indebtedness or obligation is pari passu with or junior to the debt
securities.
The subordinated debt indenture does not limit the amount of senior
indebtedness that we may incur. (Subordinated debt indenture section 14.1)
No payment of the principal or interest on the indebtedness evidenced by
the subordinated debt securities may be made if, at the time of such payment or
immediately after giving effect thereto, there exists any default with respect
to any senior indebtedness and the default is the subject of judicial
proceedings or if Chubb receives notice of the default from any holder of senior
indebtedness or a trustee for such senior indebtedness. Upon any acceleration of
the maturity of the subordinated debt securities resulting from an event of
default, as further discussed below, Chubb must give notice of the acceleration
to holders of the senior indebtedness and may not pay holders of the
subordinated debt securities until 120 days after the acceleration and then only
if such payment is otherwise permitted at that time. In the event of any payment
or distribution of assets or securities upon any dissolution, winding up, total
or partial liquidation or reorganization or similar proceeding relating to
Chubb, all principal of, premium, if any, and interest due on all senior
indebtedness must be paid in full before holders of the subordinated debt
securities are entitled to receive or retain any payment. As a result of such
subordination, in the event of insolvency, creditors of Chubb who are holders of
senior indebtedness and general creditors of Chubb, may recover more, ratably,
than holders of the subordinated debt securities. (Subordinated debt indenture
sections 14.1, 14.2, 14.3)
If this prospectus is being delivered in connection with a series of
subordinated debt securities, the accompanying prospectus supplement or the
information incorporated in this prospectus by reference will set forth the
approximate amount of senior indebtedness outstanding as of the end of the most
recent fiscal quarter.
Since we are a non-operating holding company, most of our operating assets
are owned by our subsidiaries. We rely primarily on dividends from these
subsidiaries to meet our obligations for
13
payment of principal and interest on our outstanding debt obligations and
corporate expenses. Accordingly, the subordinated debt securities will be
effectively subordinated to all existing and future liabilities of our
subsidiaries, and you should rely only on our assets for payments on the debt
securities. The amount of dividend distributions to us from our insurance
subsidiaries may be restricted by state insurance laws and regulations as
administered by state insurance departments. See "The Chubb Corporation."
GOVERNING LAW
The debt securities and each indenture will be governed by and construed in
accordance with the laws of the State of New York.
INFORMATION CONCERNING THE TRUSTEES
The trustee under each indenture will have all the duties and
responsibilities of an indenture trustee specified in the Trust Indenture Act.
Neither trustee is required to expend or risk its own funds or otherwise incur
personal financial liability in performing its duties or exercising its rights
and powers if it reasonably believes that it is not reasonably assured of
repayment or adequate indemnity. (Section 6.1 of each indenture.)
Bank One Trust Company, N.A. is the trustee under the senior debt indenture
and will be the trustee under the subordinated debt indenture. The trustee's
current address is 153 West 51st Street, New York, New York 10019. Bank One is
acting as the successor to the original trustee, The First National Bank of
Chicago.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
We will issue the junior subordinated deferrable interest debentures, which
we refer to as the junior subordinated debentures, in one or more series under
an indenture, which we refer to as the junior subordinated indenture, as
supplemented from time to time, between us and Bank One Trust Company, N.A., as
debenture trustee.
The following description of the terms of the junior subordinated
debentures and the junior subordinated indenture is a summary. It summarizes
only those terms of the junior subordinated debentures and the junior
subordinated indenture which we believe will be most important to your decision
to invest in our junior subordinated debentures. You should keep in mind,
however, that it is the junior subordinated indenture, and not this summary,
which defines your rights as a holder of our junior subordinated debentures.
There may be other provisions in the junior subordinated indenture which are
also important to you. You should read the junior subordinated indenture for a
full description of the terms of the junior subordinated debentures. The junior
subordinated indenture is filed as an exhibit to the registration statement that
includes this prospectus. See "Where You Can Find More Information" for
information on how to obtain a copy of the junior subordinated indenture.
RANKING
Our junior subordinated debentures will be unsecured obligations. Each
series of junior subordinated debentures will rank equally with all other series
of junior subordinated debentures. Our junior subordinated debentures will be
subordinate and junior in right of payment, as described in the junior
subordinated indenture, to all of our debt other than debt which ranks equally
with or junior to the junior subordinated debentures. See "-- Subordination
under the Junior Subordinated Indenture."
Since we are a non-operating holding company, most of our operating assets
are owned by our subsidiaries. We rely primarily on dividends from these
subsidiaries to meet our obligations for payment of principal and interest on
our outstanding debt obligations and corporate expenses. Accordingly, the junior
subordinated debentures will be effectively subordinated to all existing and
future liabilities of our subsidiaries, and you should rely only on our assets
for payments on the junior subordinated debentures. The amount of dividend
distributions to us from our insurance subsidiaries may be restricted by state
insurance laws and regulations as administered by state insurance departments.
See "The Chubb Corporation."
Unless we state otherwise in the applicable prospectus supplement, the
junior subordinated indenture does not limit us from incurring or issuing other
secured or unsecured debt under the junior subordinated indenture or any other
indenture that we may have entered into or enter into in the future. See
"-- Subordination under the Junior Subordinated Indenture" and the prospectus
supplement relating to any offering of junior subordinated debentures.
TERMS OF THE JUNIOR SUBORDINATED DEBENTURES
We may issue the junior subordinated debentures in one or more series,
through an indenture that supplements the junior subordinated indenture or
through a resolution of our board of directors or an authorized committee of our
board of directors.
You should refer to the applicable prospectus supplement for the specific
terms of the junior subordinated debentures. These may include the following:
- the title, designation and purchase price;
- any limit upon the aggregate principal amount;
- maturity date(s) or the method of determining the maturity date(s);
- the interest rate(s), if any, and the method for calculating the interest
rate(s) if any;
- the interest payment dates, and the record dates for the interest
payments;
15
- circumstances, if any, in which interest may be deferred;
- dates from which interest will accrue and the method of determining those
dates;
- dates on which premium, if any, will be paid;
- place(s) where we may pay principal, premium, if any, and interest and
where you may present the junior subordinated debentures for registration
of transfer or exchange;
- place(s) where notices and demands relating to the junior subordinated
debentures and the junior subordinated indenture may be made;
- authorized denominations, if other than denominations of $25;
- currency or currencies, if other than the currency of the United States,
in which principal, premium, if any, and interest will be paid or in
which the junior subordinated debentures will be denominated;
- if the amount of payments of principal, premium, if any, and interest on
the junior subordinated debentures may be determined with reference to an
index and how such amounts will be determined;
- any special United States federal income tax consequences of the junior
subordinated debentures;
- any special accounting considerations applicable to the junior
subordinated debentures;
- any mandatory or optional redemption terms or prepayment or sinking fund
provisions;
- any additions, modifications or deletions in the events of default or
covenants specified in the junior subordinated indenture;
- if other than the principal amount of the junior subordinated debentures,
the portion of the principal amount of junior subordinated debentures
that is payable upon declaration of acceleration of maturity;
- whether the junior subordinated debentures will be issued in whole or in
part in the form of one or more global securities;
- whether a temporary global security is issued and the terms upon which
temporary junior subordinated debentures may be exchanged for definitive
junior subordinated debentures;
- appointment of any trustees, authenticating or paying agent(s), transfer
agent(s) or any other agents with respect to a series of junior
subordinated debentures;
- the terms and conditions of any obligation or right we would have or any
option you would have to convert or exchange the junior subordinated
debentures into preferred securities or other securities; and
- other specific terms, not inconsistent with the provisions of the junior
subordinated indenture.
(Section 301)
Junior subordinated debentures may also be issued under the junior
subordinated indenture upon the exercise of warrants. See "Descriptions of
Warrants."
SPECIAL PAYMENT TERMS OF THE JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
We may issue one or more series of junior subordinated debentures at a
substantial discount below their stated principal amount. These may bear no
interest or interest at a rate which at the time of issuance is below market
rates. We will describe United States federal income tax consequences and
special considerations relating to any series in the applicable prospectus
supplement.
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The purchase price of any of the junior subordinated debentures may be
payable in one or more foreign currencies or currency units. The junior
subordinated debentures may be denominated in one or more foreign currencies or
currency units, or the principal of, premium, if any, or interest on any junior
subordinated debentures may be payable in one or more foreign currencies or
currency units. We will describe the restrictions, elections, United States
federal income tax considerations, specific terms and other information relating
to the junior subordinated debentures and any foreign currencies or foreign
currency units in the applicable prospectus supplement.
If we use any index to determine the amount of payments of principal of,
premium, if any, or interest on any series of junior subordinated debentures, we
will also describe in the applicable prospectus supplement the special United
States federal income tax, accounting and other considerations applicable to the
junior subordinated debentures.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless we state otherwise in the applicable prospectus supplement, we will
issue the junior subordinated debentures in fully registered form without
coupons in denominations of $25 and integral multiples of $25. (Section 302)
Except as we may describe in the applicable prospectus supplement, junior
subordinated debentures of any series will be exchangeable for other junior
subordinated debentures of the same issue and series, in any authorized
denominations, of a like aggregate principal amount, of the same original issue
date and stated maturity and bearing the same interest rate. You may present
junior subordinated debentures for exchange as described above, or for
registration of transfer, at the office of the securities registrar or at the
office of any transfer agent we designate for that purpose. You will not incur a
service charge but you will be required to pay any taxes and other governmental
charges as described in the junior subordinated indenture. We will appoint the
debenture trustee as securities registrar under the junior subordinated
indenture. We may at any time rescind the designation of any transfer agent that
we initially designate or approve a change in the location through which the
transfer agent acts. We will specify the transfer agent in the applicable
prospectus supplement. We may at any time designate additional transfer agents.
(Section 305)
If we redeem any junior subordinated debentures, neither we nor the
debenture trustee will be required to:
- issue, register the transfer of, or exchange junior subordinated
debentures during a period beginning at the opening of business 15 days
before the day of selection for redemption of the junior subordinated
debentures and ending at the close of business on the day of mailing of
the relevant notice of redemption; or
- transfer or exchange any junior subordinated debentures selected for
redemption, except for any portion not redeemed of any junior
subordinated debenture that is being redeemed in part.
REDEMPTION
Unless we state otherwise in the applicable prospectus supplement, junior
subordinated debentures will not be subject to any sinking fund.
Unless we state otherwise in the applicable prospectus supplement, we may,
at our option and at any time, redeem any series of junior subordinated
debentures, in whole or in part at a redemption price equal to 100% of the
principal amount plus accrued and unpaid interest up to but not including the
redemption date. We may redeem junior subordinated debentures in part only in
the amount of $25 or integral multiples of $25 (or such other authorized
denomination thereof). (Section 1101)
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NOTICE OF REDEMPTION
We will mail notice of any redemption of your junior subordinated
debentures at least 30 days but not more than 60 days before the redemption date
to you at your registered address. Unless we default in payment of the
redemption price, on and after the redemption date interest will cease to accrue
on the junior subordinated debentures or the portions called for redemption.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable prospectus supplement, we will have the right
during the term of any series of junior subordinated debentures to extend the
interest payment period for a specified number of interest payment periods,
subject to the terms, conditions and covenants specified in the applicable
prospectus supplement. However, we may not extend these interest payments beyond
the maturity of the junior subordinated debentures. We will describe the United
States federal income tax consequences and special considerations relating to
any junior subordinated debentures in the applicable prospectus supplement.
If we exercise this right, during the extension period we and our
subsidiaries may not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment on, any of our capital stock; or
- make any payment of principal of, premium, if any, or interest on, or
repay, repurchase or redeem any debt securities that rank equally with or
junior in interest to the junior subordinated debentures or make any
related guarantee payments,
other than:
- dividends or distributions in our common stock;
- redemptions or purchases of any rights pursuant to our rights plan, or
any successor to our rights plan, and the declaration of a dividend of
these rights in the future; and
- payments under any Chubb Guarantee.
(Section 311)
CONSOLIDATION, MERGER AND SALE OF ASSETS
We may not consolidate with, merge into or sell, convey or lease all or
substantially all of our assets to any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof, nor
permit any such entity to consolidate with, merge into or sell, convey or lease
all or substantially all of its assets to us unless:
- we are the surviving corporation or the successor corporation is a
corporation organized under the laws of any domestic jurisdiction and
assumes our obligations on the junior subordinated debentures and under
the junior indenture;
- after giving effect to such transaction no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default will have occurred and be continuing;
- in the case of corresponding junior subordinated debentures, the
transaction is permitted under the related trust agreement or guarantee
and does not give rise to any breach or violation of the related trust
agreement or guarantee;
- Chubb or the surviving entity will have delivered to the trustee an
officers' certificate and opinion of counsel stating that the transaction
or series of transactions and a supplemental indenture, if any, complies
with this covenant and that all conditions precedent in the indenture
relating to the transaction or series of transactions have been
satisfied.
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This covenant would not apply to the direct or indirect conveyance,
transfer or lease of all or any portion of the stock, assets or liabilities of
any of our wholly owned subsidiaries to us or to our other wholly owned
subsidiaries. This covenant also would not apply to any recapitalization
transaction, a change of control of Chubb or a highly leveraged transaction
unless such transaction or change of control were structured to include a merger
of consolidation by us or the conveyance, transfer or lease of our assets
substantially as an entirety. (Section 801)
DEBENTURE EVENTS OF DEFAULT
These are "Events of Default" under the junior subordinated indenture with
respect to the junior subordinated debentures:
(1) failure to pay principal, or premium, if any, when due;
(2) failure to pay any interest when due, continued for 30 days;
(3) default in the payment of any sinking fund installment when due and
payable;
(4) failure to perform any covenant or warranty of Chubb contained in the
indenture for 90 days, after written notice;
(5) certain events of bankruptcy, insolvency or reorganization of Chubb;
and
(6) any other event of default described in the applicable board resolution
or supplemental indenture under which the series of junior subordinated
debentures is issued.
If an Event of Default occurs and is continuing, the trustee may, and at
the written request of holders of a majority in aggregate principal amount of
the securities of each series affected by the Event of Default and upon the
trustee's receipt of indemnification to its satisfaction will, proceed to
protect and enforce its rights and those of the holders of such securities.
If an Event of Default, other than an Event of Default specified in clause
(5), occurs and is continuing, with respect to the junior subordinated
debentures of any series, then the trustee or the holders of at least 25% in
principal amount of the outstanding junior subordinated debentures of that
series (each series acting as a separate class) may require us to repay
immediately the entire principal amount of the outstanding junior subordinated
debentures of that series, or such lesser amount as may be provided in the terms
of the securities, together with all accrued and unpaid interest and premium, if
any. In the case of corresponding junior subordinated debentures, if the
debenture trustee or the holders of the corresponding junior subordinated
debentures fail to make this declaration, the holders of at least 25% in
aggregate liquidation preference of the corresponding series of preferred
securities will have that right. (Section 502)
If an Event of Default specified in clause (4), occurs and is continuing
with respect to all series of junior subordinated debentures then outstanding
under the junior subordinated indenture or an Event of Default specified in
clause (5) occurs and is continuing, then the trustee or the holders of at least
25% in principal amount of all of the junior subordinated debentures then
outstanding under the junior subordinated indenture (treated as one class) may
require us to repay immediately the entire principal amount of the outstanding
junior subordinated debentures, or such lesser amount as may be provided in the
terms of the securities, together with all accrued and unpaid interest. In the
case of corresponding junior subordinated debentures, if the debenture trustee
or the holders of the corresponding junior subordinated debentures fail to make
this declaration, the holders of at least 25% in aggregate liquidation
preference of the corresponding series of preferred securities will have that
right. (Section 502)
Any Event of Default with respect to a particular series of junior
subordinated debentures under the junior subordinated indenture may be waived by
the holders of a majority of the aggregate principal amount of the outstanding
junior subordinated debentures of such series, or of all the outstanding junior
subordinated debentures under the junior subordinated indenture, as the case may
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be, except in each case a failure to pay principal of or premium, if any, or
interest on such junior subordinated debenture. (Section 502)
The trustee will, within 90 days of the occurrence of an Event of Default
that has not been cured, provide notice to the holders of any series of junior
subordinated debentures effected. The trustee may withhold notice to the holders
of any default, except in the payment of principal of or interest or premium on,
or sinking fund payment in respect of, the securities, if the trustee considers
it in the interest of the holders to do so.
We are required to furnish to the trustee an annual statement as to
compliance with all conditions and covenants under the junior subordinated
indenture. (Section 1005)
DIRECT ACTIONS BY PREFERRED SECURITY HOLDERS
If a debenture event of default is attributable to our failure to pay
interest or principal on the corresponding junior subordinated debentures on the
date the interest, premium, if any, or principal is payable, you, as a holder of
preferred securities, may institute a legal proceeding directly against us,
which we refer to in this prospectus as a "direct action," for enforcement of
payment to you of the principal, of, premium, if any, or interest on the
corresponding junior subordinated debentures having a principal amount equal to
the aggregate liquidation amount of your related preferred securities. (Section
508)
We may not amend the junior subordinated indenture to remove the right to
bring a direct action without the prior written consent of the holders of all of
the preferred securities. If the right to bring a direct action is removed, the
applicable issue may become subject to the reporting obligations under the
Securities Exchange Act of 1934. We have the right under the junior subordinated
indenture to set-off any payment made to you as a holder of preferred securities
by us in connection with a direct action. You will not be able to exercise
directly any other remedy available to holders of the corresponding junior
subordinated debentures.
You will not be able to exercise directly any remedies other than those
described in the preceding paragraph available to holders of the junior
subordinated debentures unless there has been an event of default under the
trust agreement.
MODIFICATION OF THE JUNIOR SUBORDINATED INDENTURE
We and the debenture trustee may, without the consent of the holders of
junior subordinated debentures, amend, waive or supplement the junior
subordinated indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies. However, no action may
materially adversely affect the interests of holders of any series of junior
subordinated debentures or, in the case of corresponding junior subordinated
debentures, the holders of the related series of preferred securities so long as
they remain outstanding. We may also amend the junior subordinated indenture to
maintain the qualification of the junior subordinated indenture under the Trust
Indenture Act.
We and the debenture trustee may modify and amend the junior subordinated
indenture in a manner affecting the rights of the holders of junior subordinated
debentures with the consent of the holders of not less than a majority in
aggregate principal amount of the series of junior subordinated debentures
affected. However, no modification or amendment may, without the consent of the
holder of each outstanding junior subordinated debenture affected:
- change the stated maturity of the junior subordinated debentures;
- reduce the principal amount of the junior subordinated debentures;
- reduce the rate or, except as permitted by the junior subordinated
indenture and the terms of the series of junior subordinated debentures,
extend the time of payment of interest on the junior subordinated
debentures; or
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- reduce the percentage of the holders of outstanding junior subordinated
debentures necessary to modify or amend the junior subordinated
indenture.
(Section 902)
In the case of corresponding junior subordinated debentures, so long as any
of the related series of preferred securities remain outstanding:
- no such modification may be made that adversely affects the holders of
the related series of preferred securities;
- no termination of the junior subordinated indenture may occur; and
- no waiver of any debenture event of default or compliance with any
covenant under the junior subordinated indenture may be effective,
without the prior consent of the holders of at least a majority of the aggregate
liquidation preference of the related series of preferred securities unless the
principal of, and premium, if any, on, the corresponding junior subordinated
debentures and all accrued and unpaid interest on the corresponding junior
subordinated debentures have been paid in full and other conditions are
satisfied.
In addition, we and the debenture trustee may execute, without your
consent, any supplemental indenture for the purpose of creating any new series
of junior subordinated debentures.
SATISFACTION AND DISCHARGE
The junior subordinated indenture provides that when, among other things,
all junior subordinated debentures not previously delivered to the debenture
trustee for cancellation:
- have become due and payable; or
- will become due and payable at their stated maturity within one year; or
- are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in our name and at our expense;
and we deposit or cause to be deposited with the debenture trustee, in trust, an
amount in the currency or currencies in which the junior subordinated debentures
are payable sufficient to pay and discharge the entire indebtedness on the
junior subordinated debentures not previously delivered to the debenture trustee
for cancellation, for the principal, premium, if any, and interest to the date
of the deposit or to the stated maturity, as the case may be, then the junior
subordinated indenture will cease to be of further effect and we will be deemed
to have satisfied and discharged the junior subordinated indenture. However, we
will continue to be obligated to pay all other sums due under the junior
subordinated indenture and to provide the officers' certificates and opinions of
counsel described in the junior subordinated indenture. (Section 403)
DEFEASANCE
Unless we state otherwise in the applicable prospectus supplement, the
junior subordinated indenture provides that we will be deemed to have discharged
all of our obligations, other than as to certain transfers and exchanges, if,
among other things:
- we irrevocably deposit with the trustee cash or United States government
obligations or a combination thereof, as trust funds in an amount
certified to be sufficient to pay on each date that they become due and
payable, the principal of and interest on, all outstanding junior
subordinated debentures of such series;
- we deliver to the trustee an opinion of counsel to the effect that:
- the holders of the junior subordinated debentures will not recognize
income, gain or loss for United States federal income tax purposes as a
result of the defeasance; and
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- the defeasance will not otherwise alter those holders' United States
federal income tax treatment of principal and interest payments on the
debt securities; this opinion must be based on a ruling of the Internal
Revenue Service or a change in United States federal income tax law
occurring after the date of this prospectus, since that result would not
occur under current tax law; and
- no event of default under the junior subordinated indenture has occurred
and is continuing.
(Section 403)
GLOBAL JUNIOR SUBORDINATED DEBENTURES
The junior subordinated debentures of a series may be issued in whole or in
part in the form of one or more global junior subordinated debentures that will
be deposited with a depositary identified in a prospectus supplement. Unless it
is exchanged for junior subordinated debentures in definitive form, a global
junior subordinated debenture may not be transferred unless it is being
transferred to certain nominees of the depositary. Unless otherwise stated in
the prospectus supplement, the Depositary Trust Company, New York, New York, or
DTC, will act as depositary. We will issue global junior subordinated debentures
only in registered form and in either temporary or permanent form.
We will describe the specific terms of the depositary arrangement in the
applicable prospectus supplement. We expect that the following provisions will
generally apply to these depositary arrangements.
BENEFICIAL INTERESTS IN A GLOBAL JUNIOR SUBORDINATED DEBENTURE
Ownership of beneficial interests in a registered global junior
subordinated debenture will be limited to persons, called participants, that
have accounts with the depositary or persons that may hold interests through
participants. Upon the issuance of a registered junior subordinated debenture,
the depositary will credit, on its book-entry registration and transfer system,
the participants' accounts with the respective principal or face amounts of the
debentures beneficially owned by the participants. Any dealers, underwriters or
agents participating in the distribution of the debentures will designate the
accounts to be credited, or we will designate such accounts if the junior
subordinated debentures are issued directly by us. Ownership of beneficial
interests in a registered global junior subordinated debenture will be shown on,
and the transfer of ownership interests will be effected only through, records
maintained by the depositary, with respect to interests of participants, and on
the records of participants, with respect to interests of persons holding
through participants. The laws of some states may require that some purchasers
of debentures take physical delivery of these debentures in definitive form.
These laws may impair your ability to own, transfer or pledge beneficial
interests in registered global junior subordinated debenture.
So long as the depositary or its nominee is the registered owner of the
global junior subordinated debenture, the depositary or nominee will be
considered the sole owner or holder of the junior subordinated debentures
represented by the global junior subordinated debenture for all purposes under
the junior subordinated indenture. Except as provided below, you
- will not be entitled to have any of the individual junior subordinated
debentures represented by the global junior subordinated debenture
registered in your name;
- will not receive or be entitled to receive physical delivery of any
junior subordinated debentures in definitive form; and
- will not be considered the owner or holder of the junior subordinated
debentures under the junior subordinated indenture.
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PAYMENTS OF PRINCIPAL, PREMIUM AND INTEREST
We will make principal, premium, if any, and interest payments on a
registered global junior subordinated debenture to the depositary that is the
registered holder of the global junior subordinated debenture or its nominee.
The depositary for the global junior subordinated debentures will be solely
responsible and liable for all payments made on account of your beneficial
ownership interests in the registered global junior subordinated debenture and
for maintaining, supervising and reviewing any records relating to your
beneficial ownership interests.
We expect that the depositary or its nominee, upon receipt of principal,
premium, if any, or interest payment, immediately will credit participants'
accounts with amounts in proportion to their respective beneficial interests in
the principal amount of the registered global junior subordinated debenture as
shown on the records of the depositary or its nominee. We also expect that
payments by participants to you, as an owner of a beneficial interest in the
registered global junior subordinated debenture held through those participants,
will be governed by standing instructions and customary practices, as is now the
case with securities held for the accounts of customers in bearer form or
registered in "street name." These payments will be the responsibility of those
participants.
ISSUANCE OF DEFINITIVE JUNIOR SUBORDINATED DEBENTURES
Unless we state otherwise in an applicable prospectus supplement, if the
depositary for a series of registered junior subordinated debentures is at any
time unwilling or unable to continue as depositary or ceases to be a clearing
agency registered under the Securities Exchange Act of 1934, and a successor
depositary registered as a clearing agency under the Securities Exchange Act of
1934 is not appointed by us within 90 days, we will issue securities in
definitive form in exchange for the registered junior subordinated debentures
that had been held by the depositary. In addition, we may at any time and in our
sole discretion decide not to have any of the junior subordinated debentures
represented by one or more registered junior subordinated debentures. If we make
that decision, we will issue junior subordinated debentures in definitive form
in exchange for all of the registered junior subordinated debentures or
securities representing those securities. (Section 305)
PAYMENT AND PAYING AGENTS
Unless we state otherwise in the applicable prospectus supplement, we will
pay principal of, premium, if any, and interest on your junior subordinated
debentures at the office of the debenture trustee in the City of New York or at
the office of any paying agent that we may designate.
Unless we state otherwise in the applicable prospectus supplement, we will
pay any interest on junior subordinated debentures to the registered owner of
the junior subordinated debenture at the close of business on the regular record
date for the interest, except in the case of defaulted interest. (Section 307)
We may at any time designate additional paying agents or rescind the designation
of any paying agent. We must maintain a paying agent in each place of payment
for the junior subordinated debentures. (Section 1002)
Any moneys deposited with the debenture trustee or any paying agent, or
then held by us in trust, for the payment of the principal of, premium, if any,
and interest on any junior subordinated debenture that remain unclaimed for two
years after the principal, premium or interest has become due and payable will,
at our request, be repaid to us. After repayment to us, you are entitled to seek
payment only from us as a general unsecured creditor. (Section 1003)
CONVERSION OR EXCHANGE
The junior subordinated indenture permits us to issue junior subordinated
debentures that we may convert or exchange into preferred securities or other
securities. We will describe the specific terms on which junior subordinated
debentures may be converted or exchanged in the applicable prospectus
supplement. The conversion or exchange may be mandatory, at your option or at
our
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option. The applicable prospectus supplement will state the manner in which the
preferred securities or other securities you would receive would be converted or
exchanged.
SUBORDINATION UNDER THE JUNIOR SUBORDINATED INDENTURE
The junior subordinated debentures we issue under the junior subordinated
indenture will constitute part of the subordinated debt of Chubb. These junior
subordinated debentures will be subordinate and junior in right of payment, to
the extent and in the manner set forth in the junior subordinated indenture, to
all "senior indebtedness" of Chubb. The junior subordinated indenture defines
"senior indebtedness" as the principal of, premium, if any, and unpaid interest
on the following, whether outstanding at the date of the junior subordinated
indenture or later incurred or created:
- indebtedness of Chubb for money borrowed, including purchase money
obligations, evidenced by notes or other written obligations;
- indebtedness of Chubb evidenced by notes, debentures, bonds or other
securities issued under the provisions of an indenture or similar
instrument;
- obligations of Chubb as lessee under capitalized leases and leases of
property made as part of any sale and leaseback transactions;
- indebtedness of others of any of the kinds described in the preceding
clauses assumed or guaranteed by Chubb; and
- renewals, extensions and refundings of, and indebtedness and obligations
of a successor corporation issued in exchange or in replacement of,
indebtedness or obligations described in the preceding clauses unless
such indebtedness or obligation, renewal, extension or refunding
expressly provides that it is not superior in right of payment to the
subordinated debt securities;
provided, that senior indebtedness does not include any indebtedness issued
under the junior subordinated indenture or any indebtedness or obligation if the
terms of such indebtedness or obligation expressly provide that such
indebtedness or obligation is not senior in right of payment to the junior
subordinated debentures issued under the junior subordinated indenture or
expressly provide that such indebtedness or obligation is pari passu with or
junior to the.
The junior subordinated indenture does not limit the amount of senior
indebtedness that we may incur.
No payment of the principal or interest on the indebtedness evidenced by
the junior subordinated debentures may be made if, at the time of such payment
or immediately after giving effect thereto, there exists any default with
respect to any senior indebtedness and the default is the subject of judicial
proceedings or if Chubb receives notice of the default from any holder of senior
indebtedness or a trustee for such senior indebtedness. (Section 1304)
Upon any acceleration of the maturity of the junior subordinated debentures
resulting from an event of default, as further discussed below, Chubb must give
notice of the acceleration to holders of the senior indebtedness and may not pay
holders of the junior subordinated debentures until 120 days after the
acceleration and then only if such payment is otherwise permitted at that time.
In the event of any payment or distribution of assets or securities upon any
dissolution, winding up, total or partial liquidation or reorganization or
similar proceeding relating to Chubb, all principal of, premium, if any, and
interest due on all senior indebtedness must be paid in full before holders of
the junior subordinated debentures are entitled to receive or retain any
payment. As a result of such subordination, in the event of insolvency,
creditors of Chubb who are holders of senior indebtedness and general creditors
of Chubb, may recover more, ratably, than holders of the junior subordinated
debentures. (Section 1303)
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If this prospectus is being delivered in connection with a series of junior
subordinated debentures, the accompanying prospectus supplement or the
information incorporated in this prospectus by reference will set forth the
approximate amount of senior indebtedness outstanding as of the end of the most
recent fiscal quarter.
Since we are a non-operating holding company, most of our operating assets
are owned by our subsidiaries. We rely primarily on dividends from these
subsidiaries to meet our obligations for payment of principal and interest on
our outstanding debt obligations and corporate expenses. Accordingly, the junior
subordinated debentures will be effectively subordinated to all existing and
future liabilities of our subsidiaries, and you should rely only on our assets
for payments on the junior subordinated debentures. The amount of dividend
distributions to us from our insurance subsidiaries may be restricted by state
insurance laws and regulations as administered by state insurance departments.
See "The Chubb Corporation."
GOVERNING LAW
The junior subordinated indenture and the junior subordinated debentures
will be governed by and construed in accordance with the laws of the State of
New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The trustee under the junior subordinated indenture will have all the
duties and responsibilities of an indenture trustee specified in the Trust
Indenture Act. The debenture trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in performing its duties
or exercising its rights and powers if it reasonably believes that it is not
reasonably assured of repayment or adequate indemnity.
Bank One Trust Company, N.A. is the debenture trustee under the junior
subordinated indenture. The trustee's current address is 153 West 51st Street,
New York, New York 10019.
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DESCRIPTION OF CAPITAL STOCK OF
THE CHUBB CORPORATION
GENERAL
Our restated certificate of incorporation, as amended, authorizes us to
issue 600,000,000 shares of common stock, par value $1.00 per share, and
4,000,000 shares of preferred stock, par value $1.00 per share. As of December
31, 2002 there were issued 180,296,834 shares of common stock, of which
9,095,162 were treasury shares and 171,201,672 were outstanding, and we had no
preferred stock issued or outstanding. Holders of common stock have received a
right entitling them, when the right becomes exercisable to purchase shares of
Series B Participating Cumulative Preferred Stock. See "-- Shareholders Rights
Plan."
In November 2002, we issued 24 million mandatorily exercisable warrants to
purchase shares of our common stock. The warrants were issued as part of our 7%
equity units and must be exercised on or prior to November 16, 2005. For further
discussion of the warrants and equity units, including the number of common
shares issuable thereunder, see our Annual Report on Form 10-K for the year
ended December 31, 2002 and the related notes thereto, incorporated herein by
reference.
The following description of our capital stock is a summary. It summarizes
only those aspects of our capital stock which we believe will be most important
for your decision to invest in our capital stock. You should keep in mind,
however, that it is our restated certificate of incorporation, as amended, our
bylaws, as amended, and the New Jersey Business Corporation Act, and not this
summary, which define your rights as a securityholder. There may be other
provisions in these documents which are also important to you. You should read
these documents for a full description of the terms of our capital stock. Our
restated certificate of incorporation, as amended, and our bylaws, as amended,
are incorporated by reference as exhibits to the registration statement that
includes this prospectus. See "Where You Can Find More Information" for
information on how to obtain copies of these documents.
COMMON STOCK
The holders of common stock, subject to the provisions of law and the
preferential rights of the holders of any shares of preferred stock, are
entitled to dividends when and as declared by the board of directors. The
holders of common stock have one vote per share on all matters submitted to a
vote of the shareholders, and the right to the net assets of Chubb in
liquidation after payment of any amounts due to creditors and in respect of our
preferred stock. Holders of shares of common stock are not entitled as a matter
of right to any preemptive or subscription rights and are not entitled to
cumulative voting for directors. All outstanding shares of common stock are, and
the shares of common stock issued under this prospectus, will be, fully paid and
non-assessable.
Our common stock is listed on the New York Stock Exchange under the symbol
"CB".
Under New Jersey law, the affirmative vote of two-thirds of the votes cast
is required for shareholder approval of any merger or any plan of consolidation
as well as for any sale, lease, exchange or other disposition of all, or
substantially all, of the assets of Chubb, if not in the usual and regular
course of its business, and for any liquidation, dissolution or amendment of the
certificate of incorporation. All other shareholder action is decided by a
majority of the votes cast at a meeting of shareholders.
Our bylaws, as amended, provide that the annual meeting of shareholders
will be held on such date and at such time as shall be designated by the board
of directors and as stated in a written notice which is mailed or delivered to
each shareholder at least ten days, but not more than sixty days, prior to any
shareholder meeting. Our bylaws, as amended, provide that shareholder meetings
may be held in the State of New Jersey or at such other place as may be
designated by the board of directors and stated in the written notice of
meeting.
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Our restated certificate of incorporation, as amended, further provides
that the board of directors has the power, except as provided by statute, in its
discretion, to use or apply any funds of Chubb lawfully available therefor for
the purchase or acquisition of shares of the capital stock or bonds or other
securities of Chubb:
- in the market or otherwise, at such price as may be fixed by the board;
26.1
- to such extent and in such manner and for such purposes and upon such
terms as the board may deem expedient; and
- as may be permitted by law.
The transfer agent and registrar for the common stock is EquiServe Trust
Company, N.A., 525 Washington Boulevard, Jersey City, New Jersey 07303.
PREFERRED STOCK
Under our restated certificate of incorporation, as amended, we are
authorized to issue up to 4,000,000 shares of preferred stock.
Shares of preferred stock of Chubb may be issued in one or more series and
the shares of all series will rank pari passu and be identical in all respects,
except that with respect to each series the board of directors may fix, among
other things:
- the rate of dividends payable on the preferred stock;
- the time and prices of redemption;
- the amount payable upon voluntary redemption;
- the retirement or sinking fund, if any;
- the conversion rights, if any;
- the voting rights, if any (in addition to the voting right described
below);
- the restrictions, if any, on:
- the creation of indebtedness of Chubb or any subsidiary of Chubb; or
- the issuance of stock ranking on a parity with or senior to the shares
of preferred stock either as to dividends or on liquidation;
- the restrictions, if any, on:
- the payment of dividends on common stock;
- the acquisition of common stock; or
- any other class or classes of stock of Chubb, other than preferred
stock, ranking on a parity with or junior to the shares of preferred
stock either as to dividends or on liquidation; and
- the number of shares to comprise such series.
Each series of preferred stock will be entitled to receive an amount
payable on liquidation, dissolution or winding up, fixed for each series, plus
all dividends accumulated to the date of final distribution, before any payment
or distribution of assets of Chubb is made on common stock. Shares of preferred
stock that have been issued and reacquired in any manner by Chubb, including
shares redeemed, shares purchased and retired and shares that have been
converted into shares of another series or class, may be reissued as part of the
same or another series of preferred stock. In accordance with our restated
certificate of incorporation, as amended, the 4,000,000 authorized but unissued
shares of preferred stock may be issued pursuant to resolution of the board of
directors without the vote of the holders of any capital stock of Chubb.
SHAREHOLDERS RIGHTS PLAN
We have a shareholder rights agreement under which each shareholder has a
right for each share of common stock held. Each right entitles the registered
holder to purchase from Chubb a unit consisting of one one-thousandth of a share
of Series B Participating Cumulative Preferred Stock, par value $1.00 per share,
at a purchase price of $240 per unit. The rights are subject to adjustment to
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prevent dilution of the interests represented by each right. The description and
terms of the rights are set forth in a rights agreement between Chubb and
EquiServe Trust Company, N.A., as rights agent. We have summarized portions of
the rights agreement. The summary is not complete. The rights agreement has been
filed as an exhibit to the registration statement that we have filed with the
SEC and that includes this prospectus. You should read the rights agreement for
the provisions that may be important to you.
The shareholder rights plan is reviewed and evaluated at least once each
year by a committee of independent directors to determine if the maintenance of
the shareholder rights plan continues to be in the best interest of Chubb, its
shareholders and any other relevant constituencies of Chubb. Following a review,
the committee of independent directors will communicate its conclusions to the
full board of directors, including any recommendation as to whether the
shareholder rights plan should be modified or the rights should be redeemed.
DISTRIBUTION DATE
The rights are attached to all outstanding shares of common stock and trade
with the common stock until the rights become exercisable, and no separate
rights certificates will be distributed. The rights will separate from the
common stock and a distribution date will occur upon the earlier of either of
the following:
- 10 days following the date of any public announcement that a person or
group of affiliated or associated persons, referred to in this prospectus
as an acquiring person, has acquired beneficial ownership of 20% or more
of the outstanding shares of common stock; or
- 10 business days following the commencement of a tender offer or exchange
offer that would result in a person or group becoming an acquiring
person.
The rights are not exercisable until the distribution date and will expire
at the close of business on March 12, 2009 unless previously redeemed by Chubb
as described below.
EVIDENCE OF RIGHTS
Until the distribution date, or earlier redemption or expiration of the
rights:
- the rights will be evidenced by the common stock certificates and will be
transferred with and only with such common stock certificates;
- new common stock certificates issued after March 31, 1999 will contain a
notation incorporating the rights agreement by reference; and
- the surrender for transfer of any certificates for common stock will also
constitute the transfer of the rights associated with the common stock
represented by such certificates.
As soon as practicable after the distribution date, rights certificates
will be mailed to holders of record of common stock as of the close of business
on the distribution date and, thereafter the separate rights certificates alone
will represent the rights. Except as otherwise determined by the board of
directors, only shares of common stock issued prior to the distribution date
will be issued with rights.
TRIGGERING EVENT AND EFFECT OF TRIGGERING EVENT
If any person becomes an acquiring person:
- proper provision will be made so that each holder of a right, other than
rights that are, or (under the circumstances specified in the rights
agreement) were, beneficially owned by an acquiring person (which will
thereafter be void), will have the right to receive upon exercise the
number of shares of common stock having a market value of two times the
exercise price of the right; or
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- at the option of our board of directors, at any time until such acquiring
person becomes the beneficial owner of 50% or more of the shares of
common stock, Chubb may exchange the rights, other than rights that are,
or (under the circumstances specified in the rights agreement) were,
beneficially owned by an acquiring person (which will thereafter be
void), for shares of common stock at an exchange ratio of one share of
common stock per right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction. If, at any time following
the date of any public announcement that an acquiring person has acquired
beneficial ownership of 20% or more of the outstanding shares of common
stock, Chubb is acquired in a merger or other business combination
transaction, or 50% or more of Chubb's assets or earning power is sold,
each holder of a right shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to
two times the exercise price of the right. The events described in this
paragraph are referred to as triggering events.
ADJUSTMENTS
The purchase price payable, and the number of units of preferred stock or
other securities or property issuable, upon exercise of the rights are subject
to adjustment from time to time to prevent dilution upon the occurrence of one
of the following:
- in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the preferred stock;
- if holders of the preferred stock are granted rights or warrants to
subscribe for preferred stock, or convertible securities at less than the
current market price of the preferred stock; or
- upon the distribution to holders of the preferred stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
No adjustment in the purchase price will be required until cumulative
adjustments amount to at least 1% of the purchase price. No fractional units
will be issued and, in lieu of fractional units, an adjustment in cash will be
made based on the market price of the preferred stock on the last trading date
prior to the date of exercise.
REDEMPTION
The rights may be redeemed in whole, but not in part, at a price of $.01
per right by the board of directors at any time prior to the earlier of:
- a person or group of persons becoming an acquiring person; and
- March 12, 2009.
Immediately upon the action of the board of directors ordering redemption
of the rights, the rights will terminate and thereafter the only right of the
holders of rights will be to receive the redemption price.
Until a right is exercised, the holder will have no rights as a shareholder
of Chubb (beyond those as an existing shareholder), including the right to vote
or to receive dividends. As long as the rights are attached to the common stock,
Chubb will issue one right with each new share of common stock issued.
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DESCRIPTION OF DEPOSITARY SHARES
We may elect to offer depositary shares representing receipts for
fractional interests in debt securities, junior subordinated debentures or
preferred stock. In this case, we will issue receipts for depositary shares,
each of which will represent a fraction of a debt security, junior subordinated
debenture or share of a particular series of preferred stock, as the case may
be.
We will deposit the debt securities, junior subordinated debentures or
shares of any series of preferred stock represented by depositary shares under a
deposit agreement between us and a depositary which we will name in the
applicable prospectus supplement. Subject to the terms of the deposit agreement,
as an owner of a depositary share you will be entitled, in proportion to the
applicable fraction of a debt security, junior subordinated debenture or share
of preferred stock represented by the depositary share, to all the rights and
preferences of the debt security, junior subordinated debenture or preferred
stock, as the case may be, represented by the depositary share, including, as
the case may be, interest, dividend, voting, redemption, sinking fund, repayment
at maturity, subscription and liquidation rights.
The following description of the terms of the deposit agreement is a
summary. It summarizes only those terms of the deposit agreement which we
believe will be most important to your decision to invest in our depositary
shares. You should keep in mind, however, that it is the deposit agreement, and
not this summary, which defines your rights as a holder of depositary shares.
There may be other provisions in the deposit agreement which are also important
to you. You should read the deposit agreement for a full description of the
terms of the depositary shares. The form of the deposit agreement is filed as an
exhibit to the registration statement that includes this prospectus. See "Where
You Can Find More Information" for information on how to obtain a copy of the
deposit agreement.
INTEREST, DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all payments of interest, cash dividends or
other cash distributions received on the debt securities, junior subordinated
debentures or preferred stock, as the case may be, to you in proportion to the
number of depositary shares that you own.
In the event of a payment of interest or distribution other than in cash,
the depositary will distribute property received by it to you in an equitable
manner, unless the depositary determines that it is not feasible to make a
distribution. In that case the depositary may sell the property and distribute
the net proceeds from the sale to you.
REDEMPTION OF DEPOSITARY SHARES
If we redeem a series of debt securities, junior subordinated debentures or
preferred stock represented by depositary shares, the depositary will redeem
your depositary shares from the proceeds received by the depositary resulting
from the redemption. The redemption price per depositary share will be equal to
the applicable fraction of the redemption price per debt security, junior
subordinated debenture or share of preferred stock, as the case may be, payable
in relation to the redeemed series of debt securities, junior subordinated
debentures or preferred stock. Whenever we redeem debt securities, junior
subordinated debentures or shares of preferred stock held by the depositary, the
depositary will redeem as of the same redemption date the number of depositary
shares representing, as the case may be, the debt securities, junior
subordinated debentures or shares of preferred stock redeemed. If fewer than all
the depositary shares are to be redeemed, the depositary shares to be redeemed
will be selected by lot, proportionately or by any other equitable method as the
depositary may determine.
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VOTING THE PREFERRED STOCK OR EXERCISE OF RIGHTS UNDER THE INDENTURES OR THE
JUNIOR SUBORDINATED INDENTURE
Upon receipt of notice of any meeting at which you are entitled to vote, or
of any request for instructions or directions from you as holder of debentures
or junior subordinated debentures, the depositary will mail to you the
information contained in that notice. Each record holder of the depositary
shares on the record date will be entitled to instruct the depositary how to
vote the amount of the preferred stock represented by that holder's depositary
shares or how to give instructions or directions with respect to the debentures
or junior subordinated debentures, as the case may be, represented by that
holder's depository shares. The record date for the depositary shares will be
the same date as the record date for the preferred stock, debentures or junior
subordinated debentures, as the case may be. The depositary will endeavor, to
the extent practicable, to vote the amount of the preferred stock, or to give
instructions or directions with respect to the debentures or junior subordinated
debentures, as the case may be, represented by the depositary shares in
accordance with those instructions. We will agree to take all reasonable action
which the depositary may deem necessary to enable the depositary to do so. The
depositary will abstain from voting shares of the preferred stock or giving
instructions or directions with respect to the debentures or junior subordinated
debentures, as the case may be, if it does not receive specific instructions
from you.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
We and the depositary may amend the form of depositary receipt evidencing
the depositary shares and any provision of the deposit agreement at any time.
However, any amendment which materially and adversely alters the rights of the
holders of the depositary shares will not be effective unless the amendment has
been approved by the holders of at least a majority of the depositary shares
then outstanding.
The deposit agreement will terminate if:
- all outstanding depositary shares have been redeemed; or
- there has been a final distribution in respect of the preferred stock,
including in connection with our liquidation, dissolution or winding up,
or a complete repayment or redemption of the debentures or junior
subordinated debentures and the distribution, repayment or redemption
proceeds, as the case may be, have been distributed to you.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to us notice of its
election to do so. We also may, at any time, remove the depositary. Any
resignation or removal will take effect upon the appointment of a successor
depositary and its acceptance of such appointment. We must appoint the successor
depositary within 60 days after delivery of the notice of resignation or
removal. The successor depositary must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50,000,000.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will pay charges of
the depositary in connection with the initial deposit of the preferred stock,
debentures or junior subordinated debentures, as the case may be, and issuance
of depositary receipts, all withdrawals of shares of preferred stock, debentures
or junior subordinated debentures, as the case may be, by you and any repayment
or redemption of the preferred stock, debentures or junior subordinated
debentures, as the case may be. You will pay other transfer and other taxes and
governmental charges, as well as the other charges that are expressly provided
in the deposit agreement to be for your account.
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MISCELLANEOUS
The depositary will forward all reports and communications from us which
are delivered to the depositary and which we are required or otherwise determine
to furnish to holders of debentures, junior subordinated debentures or preferred
stock, as the case may be.
Neither we nor the depositary will be liable under the deposit agreement to
you other than for the depositary's gross negligence, willful misconduct or bad
faith. Neither we nor the depositary will be obligated to prosecute or defend
any legal proceedings relating to any depositary shares, debentures, junior
subordinated debentures or preferred stock unless satisfactory indemnity is
furnished. We and the depositary may rely upon written advice of counsel or
accountants, or upon information provided by persons presenting debentures,
junior subordinated debentures or shares of preferred stock for deposit, you or
other persons believed to be competent and on documents which we and the
depositary believe to be genuine.
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DESCRIPTION OF WARRANTS
We may issue warrants, including warrants to purchase debt securities,
preferred stock or common stock. We may issue warrants independently or together
with any other securities, and they may be attached to or separate from those
securities. We will issue the warrants under warrant agreements between us and a
bank or trust company, as warrant agent, that we will describe in the prospectus
supplement relating to the warrants that we offer.
The following description of the terms of the warrants is a summary. It
summarizes only those terms of the warrants and the warrant agreement which we
believe will be most important to your decision to invest in our warrants. You
should keep in mind, however, that it is the warrant agreement and the warrant
certificate relating to the warrants, and not this summary, which defines your
rights as a warrantholder. There may be other provisions in the warrant
agreement and the warrant certificate relating to the warrants which are also
important to you. You should read these documents for a full description of the
terms of the warrants. Forms of these documents are filed as exhibits to the
registration statement that includes this prospectus. See "Where You Can Find
More Information" for information on how to obtain copies of these documents.
DEBT WARRANTS
We will describe in the applicable prospectus supplement the specific terms
of warrants to purchase debt securities that we may offer, the warrant agreement
relating to the debt warrants and the warrant certificates representing the debt
warrants.
You should refer to the applicable prospectus supplement for the specific
terms of the warrants. These may include the following:
- the title of the debt warrants;
- the debt securities for which the debt warrants are exercisable;
- the aggregate number of the debt warrants;
- the principal amount of debt securities that you may purchase upon
exercise of each debt warrant, and the price or prices at which we will
issue the debt warrants;
- the procedures and conditions relating to the exercise of the debt
warrants;
- the designation and terms of any related debt securities issued with the
debt warrants, and the number of debt warrants issued with each debt
security;
- the date, if any, from which you may separately transfer the debt
warrants and the related securities;
- the date on which your right to exercise the debt warrants commences, and
the date on which your right expires;
- the maximum or minimum number of the debt warrants which you may exercise
at any time;
- any special United States federal income tax consequences of the debt
warrants;
- any special accounting considerations applicable to the debt warrants;
- any other terms of the debt warrants and terms, procedures and
limitations relating to your exercise of the debt warrants; and
- the terms of the securities you may purchase upon exercise of the debt
warrants.
We will also describe in the applicable prospectus supplement any
provisions for a change in the exercise price or expiration date of the warrants
and the kind, frequency and timing of any notice to be given. You may exchange
debt warrant certificates for new debt warrant certificates of different
denominations and may exercise debt warrants at the corporate trust office of
the warrant agent or any
33
other office that we indicate in the applicable prospectus supplement. Prior to
exercise, you will not have any of the rights of holders of the debt securities
purchasable upon that exercise and will not be entitled to payments of
principal, premium, if any, or interest on the debt securities purchasable upon
the exercise.
OTHER WARRANTS
We may issue other warrants. You should refer to the applicable prospectus
supplement for the specific terms of those warrants. These may include the
following:
- the title of the warrants;
- the securities, which may include preferred stock or common stock, for
which you may exercise the warrants;
- the aggregate number of the warrants;
- the number of securities that you may purchase upon exercise of each
warrant, and the price or prices at which we will issue the warrants;
- the procedures and conditions relating to the exercise of the warrants;
- the designation and terms of any related securities issued with the
warrants, and the number of warrants issued with each security;
- the date, if any, from which you may separately transfer the warrants and
the related securities;
- the date on which your right to exercise the warrants commences, and the
date on which your right expires;
- the maximum or minimum number of the warrants which you may exercise at
any time;
- any special United States federal income tax consequences of the
warrants;
- any special accounting considerations applicable to the warrants;
- any other terms of the warrants and terms, procedures and limitations
relating to your exercise of the warrants; and
- the designation and terms of the common stock, preferred stock or other
securities you may purchase upon exercise of the warrants.
We will also describe in the applicable prospectus supplement any
provisions for a change in the exercise price or expiration date of the warrants
and the kind, frequency and timing of any notice to be given. You may exchange
warrant certificates for new warrant certificates of different denominations and
may exercise warrants at the corporate trust office of the warrant agent or any
other office that we indicate in the applicable prospectus supplement. Prior to
the exercise of your warrants, you will not have any of the rights of holders of
the preferred stock, common stock or other securities purchasable upon that
exercise and will not be entitled to dividend payments, if any, or voting rights
of the preferred stock, common stock or other securities purchasable upon the
exercise.
EXERCISE OF WARRANTS
We will describe in the applicable prospectus supplement the principal
amount or the number of our securities that you may purchase for cash upon
exercise of a warrant, and the exercise price. You may exercise a warrant as
described in the applicable prospectus supplement at any time up to the close of
business on the expiration date stated in the prospectus supplement. Unexercised
warrants will become void after the close of business on the expiration date, or
any later expiration date that we determine.
We will forward the securities purchasable upon the exercise as soon as
practicable after receipt of payment and the properly completed and executed
warrant certificate at the corporate trust office of the warrant agent or other
office stated in the applicable prospectus supplement. If you exercise less than
all of the warrants represented by the warrant certificate, we will issue you a
new warrant certificate for the remaining warrants.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating you
to purchase from us, and us to sell to you, a specific number of shares of
common stock or preferred stock at a future date or dates. The price per share
of preferred stock or common stock may be fixed at the time the stock purchase
contracts are issued or may be determined by reference to a specific formula
described in the stock purchase contracts. We may issue stock purchase contracts
separately or as a part of units each consisting of a stock purchase contract
and debt securities, preferred securities or debt obligations of third parties,
including United States Treasury securities, securing your obligations to
purchase the preferred stock or the common stock under the stock purchase
contract. The stock purchase contracts may require us to make periodic payments
to you or vice versa and the payments may be unsecured or prefunded on some
basis. The stock purchase contracts may require you to secure your obligations
in a specified manner. We will describe in the applicable prospectus supplement
the terms of any stock purchase contracts or stock purchase units.
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DESCRIPTION OF PREFERRED SECURITIES
The trustees of each trust will issue on behalf of the trust preferred
securities and common securities of the trust. The preferred securities will
represent preferred undivided beneficial interests in the assets of the related
trust. As a holder of preferred securities of the trust, you will generally be
entitled to a preference with respect to distributions and amounts payable on
redemption or liquidation over the common securities of the trust, as well as
other benefits as described in the corresponding trust agreement. 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 following description of the terms of the preferred securities and form
of trust agreement is a summary. It summarizes only those features of the
preferred securities and terms of the form of trust agreement which we believe
will be most important to your decision to invest in the preferred securities.
You should keep in mind, however, that it is the applicable trust agreement and
form of amended and restated trust agreement and not this summary, which define
your rights as a holder. There may be other provisions in the trust agreement
and form of amended and restated trust agreement which are also important to
you. You should read these documents for a full description of the terms of the
preferred securities. They are filed as exhibits to the registration statement
that includes this prospectus. See "Where You Can Find More Information" for
information on how to obtain copies of these documents.
Each trust agreement will be qualified under the Trust Indenture Act. The
terms of the preferred securities of each 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 each trust will be executed at the time the trust issues any preferred
securities and will be filed with the Securities and Exchange Commission on Form
8-K or by a post-effective amendment to the registration statement that includes
this prospectus. You should also read the applicable prospectus supplement,
which will contain additional information and may update or change some of the
information below.
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
corresponding junior subordinated debentures that we issue. The corresponding
junior subordinated debentures 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 corresponding junior subordinated debentures held by the applicable
trust. If interest payments on the corresponding junior subordinated debentures
held by the applicable trust are deferred as described below, 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 corresponding junior
subordinated debentures held by the trust.
Under the guarantee agreement related to each trust, we 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. Our obligations
under the applicable guarantee, expense agreement, trust agreement, junior
subordinated indenture and corresponding junior subordinated debentures will
provide a full, irrevocable and unconditional commitment by us regarding amounts
due on the preferred securities issued by each trust. See "Relationship Among
the Preferred Securities, the Corresponding Junior Subordinated Debentures and
the Guarantees."
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RANKING OF PREFERRED SECURITIES
The preferred securities of a trust will rank equally, and we will make
payments proportionately with the common securities of the trust except as
described under "-- Subordination of Common Securities." The preferred
securities of each trust represent preferred undivided beneficial interests in
the assets of the trust. The property trustee will hold legal title to the
corresponding junior subordinated debentures in trust for the benefit of the
holders of the related preferred securities and common securities.
Each guarantee agreement that we execute for your benefit, as a holder of
preferred securities of a trust, will be a guarantee on a subordinated basis
with respect to the related preferred securities. However, our guarantee will
not guarantee payment of distributions or amounts payable on redemption or
liquidation of the preferred securities when the related trust does not have
funds on hand available to make such payments. See "Description of Guarantee."
DISTRIBUTIONS ON THE PREFERRED SECURITIES
Each trust will pay the distributions on the preferred securities and
common securities at a rate specified in the applicable prospectus supplement.
The amount of distributions the trust must pay for any period will be
computed on the basis of a 360-day year of twelve 30-day months unless we
otherwise specify in the applicable prospectus supplement. Distributions that
are in arrears may bear interest at the rate per annum specified in the
applicable prospectus supplement. The term "distributions" as we use it in this
prospectus includes any additional amounts provided in the trust agreement.
Distributions on the preferred securities will be cumulative, will accrue
from the date of original issuance and will be payable on the dates specified in
the applicable prospectus supplement. If any date on which distributions are
payable on the preferred securities is not a business day, the trust will
instead make the payment on the next succeeding day that is a business day, and
without any interest or other payment on account of the delay. However, if that
business day is in the next succeeding calendar year, the trust will make the
payment on the immediately preceding business day. In each case payment will be
made with the same force and effect as if made on the date the payment was
originally due. When we use the term "business day" in this prospectus, we mean
any day other than a Saturday or a Sunday, or a day on which banking
institutions in the City of New York are authorized or required by law or
executive order to remain closed or a day on which the corporate trust office of
the property trustee or the debenture trustee is closed for business.
If provided in the applicable prospectus supplement, we have the right
under the junior subordinated indenture, which is the contract that provides the
terms for the corresponding junior subordinated debentures, to extend the
interest payment period for a specified number of periods. However, we may not
extend these interest payments beyond the maturity of the corresponding junior
subordinated debentures. As a consequence of any extension, distributions on the
related preferred securities would be deferred by the trust during the extension
period. These distributions would continue to accumulate additional
distributions at the rate per annum set forth in the prospectus supplement.
If we exercise this right, during the extension period we and our
subsidiaries may not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment on, any of our capital stock; or
- make any payment of principal, premium, if any, or interest on or repay,
repurchase or redeem any debt securities that rank equally with or junior
in interest to the corresponding junior subordinated debentures or make
any related guarantee payments,
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other than:
- dividends or distributions in our common stock;
- redemptions or purchases of any rights pursuant to our rights plan, or
any successor to our rights plan, and the declaration of a dividend of
these rights in the future; and
- payments under any guarantee.
We anticipate that the revenue of each trust available for distribution to
you, as a holder of preferred securities, will be limited to payments under the
corresponding junior subordinated debentures in which the trust will invest the
proceeds from the issuance and sale of its preferred securities and its common
securities. See "Description of Junior Subordinated Debentures."
If we do not make interest payments on the corresponding junior
subordinated debentures, the property trustee will not have funds available to
pay distributions on the related preferred securities. The payment of
distributions, if and to the extent the trust has funds legally available for
the payment of these distributions is guaranteed by us on a limited basis as set
forth under "Description of Guarantees."
The trust will pay distributions on the preferred securities to you
provided you are entered in the register of the trust on the relevant record
dates. As long as the preferred securities remain in book-entry form, the record
date will be one business day prior to the relevant distribution date. If any
preferred securities are not in book-entry form, the record date for the
preferred securities will be the date 15 days prior to the relevant distribution
date.
REDEMPTION AND VOLUNTARY DISTRIBUTION
REDEMPTION UPON REPAYMENT OR REDEMPTION OF THE CORRESPONDING JUNIOR
SUBORDINATED DEBENTURES
Upon the repayment or redemption, in whole or in part, of any corresponding
junior subordinated debentures, the property trustee must apply the proceeds
from that repayment or redemption to redeem a like amount of the preferred
securities and common securities of the related trust. This redemption must be
made upon not less than 30 nor more than 60 days' notice to you. Unless we state
otherwise in the applicable prospectus supplement, the redemption price will be
equal to 100% of the aggregate liquidation amount of the preferred and common
securities redeemed, plus accumulated and unpaid distributions on the preferred
and common securities redeemed up to but not including the date of redemption.
See "Description of Junior Subordinated Debentures -- Redemption."
If less than all of any series of corresponding junior subordinated
debentures are repaid or redeemed, then the proceeds from the repayment or
redemption will be allocated to redeem a proportionate amount of each of the
preferred securities and the common securities. The amount of premium, if any,
paid by us upon the redemption of all or any part of any series of any
corresponding junior subordinated debentures repaid or redeemed will be
allocated proportionately to the redemption of the preferred securities and the
common securities.
We must repay the principal of the corresponding junior subordinated
debentures when they are due. In addition, unless we state otherwise in the
applicable prospectus supplement, we may, at our option and at any time, redeem
any series of corresponding junior subordinated debentures
- in whole or in part, subject to the conditions we describe under
"Description of Junior Subordinated Debentures -- Redemption"; or
- as we may otherwise specify in the applicable prospectus supplement.
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When we use the term "like amount," we mean:
- with respect to a redemption of any series of preferred securities,
preferred securities having a liquidation amount equal to that portion of
the principal amount of corresponding junior subordinated debentures to
be contemporaneously redeemed, the proceeds of which will be used to pay
the redemption price of the preferred securities; and
- with respect to a distribution of corresponding junior subordinated
debentures to you, as a holder of preferred securities in connection with
a dissolution or liquidation of the related trust, corresponding junior
subordinated debentures having a principal amount equal to the
liquidation amount of your preferred securities.
When we use the term "liquidation amount," we mean the stated amount of $25
per preferred security and common security.
VOLUNTARY DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
Unless we provide otherwise in the applicable prospectus supplement, we may
elect, at any time, to terminate the trust and cause the corresponding junior
subordinated debentures to be distributed to you, as a holder of the preferred
securities, and us, as the holder of the common securities, in liquidation of
the trust.
After the liquidation date fixed for any distribution of corresponding
junior subordinated debentures for any series of preferred securities:
- the series of preferred securities will no longer be deemed to be
outstanding;
- DTC or its nominee, as the record holder of the series of preferred
securities, will receive a registered global certificate or certificates
representing the corresponding junior subordinated debentures to be
delivered upon that distribution; and
- any certificates representing the series of preferred securities not held
by DTC or its nominee will be deemed to represent the corresponding
junior subordinated debentures having a principal amount equal to the
stated liquidation preference of the series of preferred securities, and
bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid distributions on the series of preferred securities until you
present the certificates to the administrative trustees or their agent
for transfer or reissuance.
We can make no assurance as to what the market prices would be for the
preferred securities or the corresponding junior subordinated debentures that
may be distributed to you in exchange for your preferred securities if a
dissolution and liquidation of a trust were to occur. Accordingly, the preferred
securities that you purchase, or the corresponding junior subordinated
debentures that you receive on dissolution and liquidation of a trust, may trade
at a discount to the price that you paid to purchase the preferred securities.
REDEMPTION PROCEDURES
The trust will redeem the preferred securities and common securities on
each redemption date at the redemption price with the applicable proceeds from
the contemporaneous redemption of the corresponding junior subordinated
debentures. The trust will make redemptions of the preferred securities and pay
the redemption price only to the extent that it has funds available for the
payment of the redemption price. See "-- Subordination of Common Securities."
If a trust gives notice to you of redemption of your preferred securities,
then by 12:00 noon, New York City time, on the redemption date, to the extent
funds are available, the property trustee will irrevocably deposit with DTC
funds sufficient to pay the applicable redemption price and will give DTC
irrevocable instructions and authority to pay the redemption price to you. See
"-- Global Preferred Securities."
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If the preferred securities are no longer in book-entry form, the trust, to
the extent funds are available, will irrevocably deposit with the paying agent
for the preferred securities funds sufficient to pay the applicable redemption
price to you and will give the paying agent irrevocable instructions and
authority to pay the redemption price to you upon surrender of your
certificates.
The trust will pay any distributions payable on or prior to the redemption
date for any preferred securities called for redemption to you on the relevant
record dates for the distribution. If the trust has given notice of redemption
and has deposited the required funds, then upon the date of the deposit, all
your rights will cease, except your right to receive the redemption price,
without interest on that redemption price, and your preferred securities will
cease to be outstanding. If any date fixed for redemption of preferred
securities is not a business day, then the trust will pay the redemption price
on the next succeeding day which is a business day, and without any interest or
other payment on account of the delay. However, if the business day falls in the
next calendar year, the trust will make the payment on the immediately preceding
business day. If payment of the redemption price is improperly withheld or
refused and not paid either by the trust or by us pursuant to the guarantee as
described under "Description of Guarantees," distributions on the preferred
securities will continue to accrue at the then applicable rate, from the
redemption date originally established by the trust for the preferred securities
to the date the redemption price is actually paid. In this case the actual
payment date will be the date fixed for redemption for purposes of calculating
the redemption price.
Subject to applicable law, including the United States federal securities
laws, we or our subsidiaries may at any time purchase outstanding preferred
securities by tender, in the open market or by private agreement.
The trust will make payment of the redemption price on the preferred
securities and any distribution of corresponding junior subordinated debentures
to the applicable record holders as they appear on the register for the
preferred securities on the relevant record date. This date will generally be
one business day prior to the relevant redemption date or liquidation date.
However, if any preferred securities are not in book-entry form, the relevant
record date for the preferred securities will be the date 15 days prior to the
redemption date or liquidation date.
If less than all of the preferred securities and common securities issued
by a trust are to be redeemed on a redemption date, then the aggregate
liquidation amount of the preferred securities and common securities to be
redeemed will be allocated proportionately among the preferred securities and
the common securities. The property trustee will select the particular preferred
securities to be redeemed on a proportionate basis not more than 60 days prior
to the redemption date from the outstanding preferred securities not previously
called for redemption, by any method that the property trustee deems fair and
appropriate. This method may provide for the selection for redemption of
portions, equal to $25 or an integral multiple of $25, of the liquidation amount
of preferred securities. The property trustee will promptly notify the trust
registrar in writing of the preferred securities selected for redemption and, in
the case of any preferred securities selected for partial redemption, the
liquidation amount of the preferred securities to be redeemed.
SUBORDINATION OF COMMON SECURITIES
The trust will make payment of distributions, any additional amounts and
the redemption price on the preferred securities and common securities
proportionately based on the liquidation amount of the preferred securities and
common securities. However, if on any distribution date or redemption date a
debenture event of default exists, the trust will not make any payment on the
common securities unless
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payment in full in cash of all accumulated and unpaid distributions, any
additional amounts and the full amount of the redemption price on all of the
outstanding preferred securities of the trust, has been made or provided for.
The property trustee will apply all available funds first to the payment in full
in cash of all distributions on the preferred securities then due and payable.
If any event of default resulting from a debenture event of default exists,
we, as holder of the common securities of the trust, will be deemed to have
waived any right to act with respect to the event of default under the trust
agreement until the effect of all those events of default with respect to the
preferred securities has been cured, waived or otherwise eliminated. Until any
events of default under the trust agreement with respect to the preferred
securities have been so cured, waived or otherwise eliminated, the property
trustee will act solely on your behalf, as a holder of the preferred securities,
and not on our behalf as holder of the common securities, and only you acting
with the other holders will have the right to direct the property trustee to act
on your behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Each trust will automatically terminate upon expiration of its term or the
redemption of all of the preferred securities of the trust. In addition, we will
terminate the trust on the first to occur of:
- our bankruptcy, dissolution or liquidation;
- the distribution of a like amount of corresponding junior subordinated
debentures to the holders of the trust's preferred securities and common
securities; and
- the entry of an order for the dissolution of the trust by a court of
competent jurisdiction.
If an early termination occurs as described in the clauses above, the
trustees will liquidate the trust as expeditiously as the trustees determine to
be possible by distributing, after satisfaction of liabilities to creditors of
the trust as provided by applicable law, to the holders of the preferred
securities and common securities a like amount of corresponding junior
subordinated debentures. If the property trustee determines that this
distribution is not practical, you will be entitled to receive out of the assets
of the trust available for distribution, after satisfaction of liabilities to
creditors of the trust as provided by applicable law, an amount equal to the
aggregate of the liquidation amount plus accrued and unpaid distributions up to
but not including the date of payment. We refer to this liquidation amount in
this prospectus as the "liquidation distribution." If the trust can make the
liquidation distribution only in part because it has insufficient assets
available to pay the full aggregate liquidation distribution, then it will pay
the amounts on a proportionate basis. We, as the holder of the common
securities, will be entitled to receive distributions upon any liquidation
proportionately with you, and the other holders of the preferred securities,
except that if an event exists that constitutes a debenture event of default,
the preferred securities will have a priority over the common securities. A
supplemental indenture may provide that if an early termination occurs as
described in the third clause above, the corresponding junior subordinated
debentures may be subject to optional redemption in whole, but not in part.
EVENTS OF DEFAULT; NOTICE
Under the terms of the trust agreements, each of the following constitutes
an event of default for a series of preferred securities:
- the occurrence of a debenture event of default under the corresponding
junior subordinated indenture (see "Description of Junior Subordinated
Debentures -- Debenture Events of Default");
- default by the property trustee in the payment of any distribution when
it becomes due and payable, and continuation of that default for a period
of 30 days;
- default by the property trustee in the payment of any redemption price of
the preferred securities or common securities when it becomes due and
payable;
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- default in the performance, or breach, in any material respect, of any
covenant or warranty of the trustees in the trust agreement, other than a
covenant or warranty a default in the performance of which or the breach
of which is dealt with in the second and third clauses above, and
continuation of the default or breach for a period of 60 days after there
has been given to the defaulting trustee or trustees by the holders of at
least 10% in aggregate liquidation amount of the outstanding preferred
securities, a written notice specifying the default or breach and
requiring it to be remedied and stating that the notice is a notice of
default under such trust agreement; or
- the bankruptcy or insolvency of the property trustee and our failure to
appoint a successor property trustee within 60 days of that event.
Within five business days after the occurrence of any event of default
actually known to the property trustee, the property trustee will transmit
notice of the event of default to you, the administrative trustees and us, as
depositor, unless the event of default has been cured or waived. We, as
depositor, and the administrative trustees are required to file annually with
the property trustee a certificate as to whether or not we are and they are in
compliance with all the conditions and covenants applicable to them and to us
under the trust agreement.
If a debenture event of default then exists, the preferred securities will
have a preference over the common securities upon termination of the trust. See
"-- Liquidation Distribution upon Termination."
The existence of an event of default does not entitle you to accelerate the
maturity of the corresponding junior subordinated debentures.
MODIFICATION OF THE JUNIOR SUBORDINATED INDENTURE
In the case of corresponding junior subordinated debentures, so long as any
of the related series of preferred securities remain outstanding:
- no modification of the junior subordinated indenture may be made that
adversely affects the holders of the preferred securities;
- no termination of the junior subordinated indenture may occur; and
- no waiver of any debenture event of default or compliance with any
covenant under the junior subordinated indenture may be effective,
without the prior consent of the holders of at least a majority of the aggregate
liquidation preference of the related preferred securities unless the principal
of, and premium, if any on, the corresponding junior subordinated debentures and
all accrued and unpaid interest on the corresponding junior subordinated
debentures have been paid in full and other conditions are satisfied.
REMOVAL OF TRUSTEES
Unless a debenture event of default exists, the holder of the common
securities may remove any trustee. If a debenture event of default exists, the
holders of a majority in liquidation amount of the outstanding preferred
securities may remove the property trustee and the Delaware trustee. In no event
will you have the right to vote to appoint, remove or replace the administrative
trustees. These voting rights are vested exclusively in us as the holder of the
common securities. No resignation or removal of a trustee and no appointment of
a successor trustee will be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the trust agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an event of default then exists, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any jurisdiction in which
any part of the trust property may be located, we, as the holder of the common
securities, and the administrative trustees will have power to appoint one
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or more persons either to act as a co-trustee, jointly with the property
trustee, of all or any part of the trust property, or to act as separate
trustee. These persons will have the powers provided in the instrument of
appointment, and we may vest in that person or persons any property, title,
right or power deemed necessary or desirable, subject to the provisions of the
trust agreement. If a debenture event of default exists, the property trustee
alone will have power to make that appointment.
MERGER OR CONSOLIDATION OF TRUSTEES
Any corporation into which the property trustee, the Delaware trustee or
any administrative trustee that is not a natural person may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the trustee is a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the trustee, will be the successor of such trustee under the trust
agreements, provided that the corporation is otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUSTS
A trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other body, except as described below.
A trust may, at our request, with the consent of the administrative
trustees and without your consent, merge with or into, consolidate, amalgamate,
or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized under the laws of any state.
However, the following conditions must be satisfied:
- the successor entity must either:
- expressly assume all of the obligations of the trust relating to the
preferred securities; or
- substitute for the preferred securities other securities having
substantially the same terms and the same ranking as the preferred
securities;
- we must expressly appoint a trustee of the successor entity possessing
the same powers and duties as the property trustee as the holder of the
corresponding junior subordinated debentures;
- the successor securities must be listed upon notification of issuance, on
any national securities exchange or other organization on which the
preferred securities are then listed;
- the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease must not cause the preferred securities, including any
successor securities, to be downgraded by any nationally recognized
statistical rating organization;
- the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease must not adversely affect the rights, preferences and
privileges of holders of the preferred securities, including any
successor securities, in any material respect;
- the successor entity must have a purpose identical to that of the trust;
- prior to the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease we must have received an opinion from
independent counsel to the trust experienced in such matters to the
effect that:
- the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of holders of the preferred securities, including any
successor securities, in any material respect; and
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- following the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease neither the trust nor the successor entity
will be required to register as an investment company under the
Investment Company Act; and
- we or any permitted successor or assignee must own all of the common
securities of the successor entity and guarantee the obligations of such
successor entity under the successor securities at least to the extent
provided by the guarantee.
However, a trust may not, except with the consent of holders of 100% in
liquidation amount of the preferred securities, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if it would
cause the trust or the successor entity to be classified as other than a grantor
trust for federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF TRUST AGREEMENT
Except as provided below and under "Description of Guarantees-Amendments
and Assignment" and as otherwise required by law and the applicable trust
agreement, you will have no voting rights.
We and the trustees may amend a trust agreement without your consent:
- to cure any ambiguity, correct or supplement any provisions in the trust
agreement which may be inconsistent with any other provision, or to make
any other provisions with respect to matters or questions arising under
the trust agreement, which are not inconsistent with the other provisions
of the trust agreement; or
- to modify, eliminate or add to any provisions of the trust agreement to
the extent necessary to ensure that the trust will be classified for
federal income tax purposes as a grantor trust at all times that any
preferred securities and common securities are outstanding, or to ensure
that the trust will not be required to register as an investment company
under the Investment Company Act.
However, in the case of the first clause above, the action may not adversely
affect in any material respect the interests of the holders of the preferred
securities or our interests, as the holder of the common securities. Any
amendments of the trust agreement will become effective when notice is given to
you and us.
We and the trustees may also amend a trust agreement with:
- the consent of holders representing not less than a majority, based upon
liquidation amounts, of the outstanding preferred securities and common
securities; and
- receipt by the trustees of an opinion of counsel to the effect that the
amendment or the exercise of any power granted to the trustees under the
amendment will not affect the status of the trust as a grantor trust for
federal income tax purposes or its exemption from the status of an
"investment company" under the Investment Company Act.
Without both your and our consent a trust agreement may not be amended to:
- change the amount or timing of any distribution on the preferred
securities and common securities or otherwise adversely affect the amount
of any distribution of the preferred securities and common securities as
of a specified date; or
- restrict your or our right to institute suit for the enforcement of any
payment on or after that date.
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So long as any corresponding junior subordinated debentures are held by the
property trustee, the trustees may not:
- direct the time, method and place of conducting any proceeding for any
remedy available to the debenture trustee, or for executing any trust or
power conferred on the property trustee with respect to the corresponding
junior subordinated debentures;
- waive any past default that is waiveable under specified sections of the
junior subordinated indenture;
- exercise any right to rescind or annul a declaration that the principal
of all the junior subordinated debentures is due and payable; or
- consent to any amendment, modification or termination of the junior
subordinated indenture or the corresponding junior subordinated
debentures, where that consent is required
without, in each case, obtaining the prior approval of the holders of a majority
in aggregate liquidation amount of all outstanding preferred securities.
However, where a consent under the junior subordinated indenture would require
the consent of each holder of corresponding junior subordinated debentures
affected by the consent, no consent may be given by the property trustee without
the prior consent of each holder of the related preferred securities.
The trustees may not revoke any action previously authorized or approved by
a vote of the preferred securities except by subsequent vote of the holders of
the preferred securities. The property trustee will notify you of any notice of
default with respect to the corresponding junior subordinated debentures. In
addition to obtaining the approval of the holders of the preferred securities
prior to taking any of these actions, the trustees must obtain an opinion of
counsel experienced in these matters to the effect that the trust will not be
classified as a corporation or partnership for United States federal income tax
purposes on account of the action.
Any required approval of holders of preferred securities may be given at a
meeting of holders of preferred securities convened for that purpose or through
a written consent. The property trustee will cause a notice of any meeting at
which you are entitled to vote, or of any matter upon which action by written
consent is to be taken, to be given to each holder of record of preferred
securities in the manner set forth in the trust agreement.
Your vote or consent is not required for a trust to redeem and cancel the
preferred securities under the applicable trust agreement.
Any preferred securities that are owned by us, the trustees or any of our
affiliates or any affiliate of the trustees, will, for purposes of a vote or
consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
Each trust may issue a series of preferred securities in the form of one or
more global preferred securities that will be deposited with a depositary
identified in a prospectus supplement. Unless otherwise stated in the applicable
prospectus supplement, the Depositary Trust Company, New York, New York, or DTC,
will act as depositary. The trusts will issue global preferred securities only
in fully registered form and in either temporary or permanent form. Unless it is
exchanged for individual preferred securities, a global preferred security may
not be transferred unless it is being transferred to certain nominees of the
depositary.
We will describe the specific terms of the depositary arrangement in the
applicable prospectus supplement. We expect that the following provisions will
generally apply to these depositary arrangements.
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BENEFICIAL INTERESTS IN A GLOBAL PREFERRED SECURITY
If a trust issues a global preferred security, the depositary for the
global preferred security or its nominee will credit on its book-entry
registration and transfer system the aggregate liquidation amounts of the
individual preferred securities represented by the global preferred securities
to the accounts of participants. The accounts will be designated by the dealers,
underwriters or agents for the preferred securities, or by us if the preferred
securities are offered and sold directly by the trust. Ownership of beneficial
interests in a global preferred security will be limited to participants or
persons that may hold the trust interests through participants. Ownership and
transfers of beneficial interests in the global preferred security will be shown
on, and effected only through, records maintained by the applicable depositary
or its nominee, for interests of participants, and the records of participants,
for interests of persons who hold through participants. The laws of some states
may require that you take physical delivery of the securities in definitive
form. These limits and laws may impair your ability to transfer beneficial
interests in a global preferred security.
So long as the depositary or its nominee is the registered owner of the
global preferred security, the depositary or nominee will be considered the sole
owner or holder of the preferred securities represented by the global preferred
security for all purposes under the trust agreement. Except as provided below,
you:
- will not be entitled to have any of the individual preferred securities
represented by the global preferred security registered in your name;
- will not receive or be entitled to receive physical delivery of any
preferred securities in definitive form; and
- will not be considered the owner or holder of the preferred security
under the trust agreement.
PAYMENTS OF DISTRIBUTIONS
The trust will pay distributions on global preferred securities to the
depositary that is the registered holder of the global security, or its nominee.
The depositary for the preferred securities will be solely responsible and
liable for all payments made on account of your beneficial ownership interests
in the global preferred security and for maintaining, supervising and reviewing
any records relating to your beneficial ownership interests.
We expect that the depositary or its nominee, upon receipt of any payment
of liquidation amount, premium or distributions, immediately will credit
participants' accounts with amounts in proportion to their respective beneficial
interests in the aggregate liquidation amount of the global preferred security
as shown on the records of the depositary or its nominee. We also expect that
payments by participants to owners of beneficial interests in the global
preferred security held through those participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
These payments will be the responsibility of those participants.
ISSUANCE OF DEFINITIVE PREFERRED SECURITIES
Unless otherwise provided in the applicable prospectus supplement, if a
depositary for a series of preferred securities is at any time unwilling, unable
or ineligible to continue as a depositary and the trust does not appoint a
successor depositary within 90 days, the trust will issue definitive preferred
securities in exchange for the global preferred security. In addition, the trust
may at any time and in its sole discretion, subject to any limitations described
in the prospectus supplement relating to the preferred securities, determine not
to have any preferred securities represented by one or more global preferred
securities. If that occurs, the trust will issue definitive preferred securities
in exchange for the global preferred security.
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Further, the trust may specify that you may, on terms acceptable to us, the
property trustee and the depositary for the global preferred security, receive
definitive preferred securities in exchange for your beneficial interests in a
global preferred security, subject to any limitations described in the
prospectus supplement relating to the preferred securities. In that instance,
you will be entitled to physical delivery of definitive preferred securities
equal in liquidation amount to that beneficial interest and to have the
preferred securities registered in your name. Unless otherwise provided in the
applicable prospectus supplement, those definitive preferred securities will be
issued in denominations of $25 and integral multiples of $25.
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the applicable prospectus supplement, each
trust will make payments on the preferred securities to DTC, which will credit
the relevant accounts at DTC on the applicable distribution dates. However, if
any preferred securities are not held by DTC, the trust will make the payments
by check mailed to the address of the holder entitled to the payment as shown on
the register. Unless otherwise provided in the applicable prospectus supplement,
the paying agent will initially be the property trustee, together with any
co-paying agent chosen by the property trustee and acceptable to the
administrative trustees and us. The paying agent may resign as paying agent upon
30 days' written notice to the property trustees and us. If the property trustee
ceases to be the paying agent, the administrative trustees will appoint a
successor to act as paying agent. The successor must be a bank or trust company
acceptable to the administrative trustees and us.
REGISTRAR AND TRANSFER AGENT
Unless otherwise provided in the applicable prospectus supplement, the
property trustee will act as registrar and transfer agent for the preferred
securities.
The trust will register transfers of preferred securities without charge,
but upon your payment of any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The trust will not be
required to register the transfer of its preferred securities after the
preferred securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, unless an event of default then exists, will be
required to perform only those duties that are specifically set forth in the
applicable trust agreement. After an event of default, the property 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. However, the property trustee is
under no obligation to exercise any of the powers vested in it by the trust
agreement at your request unless you offer reasonable indemnity against the
costs, expenses and liabilities that it might incur. If no event of default then
exists and the property trustee is required to decide between alternative causes
of action, construe ambiguous provisions in a trust agreement or is unsure of
the application of any provision of a trust agreement, and the matter is not one
on which holders are entitled under the trust agreement to vote, then the
property trustee will take such action as is directed by us. If it is not so
directed, the property trustee will take such action as it deems advisable and
in the best interests of the holders of the preferred securities and the holder
of the common securities and will have no liability except for its own bad
faith, negligence or willful misconduct.
MISCELLANEOUS
Each trust agreement authorizes and directs the administrative trustees to
operate the trust in such a way that the trust will not be deemed to be an
investment company required to be registered under the Investment Company Act or
taxed as a corporation for federal income tax purposes, and in such a way that
the corresponding junior subordinated debentures will be treated as our
indebtedness for United States federal income tax purposes. We and the
administrative trustees are authorized to
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take any action, not inconsistent with applicable law, the certificate of trust
or the trust agreement, that we and the administrative trustees determine in our
discretion to be necessary or desirable for these purposes, as long as the
action does not materially adversely affect the interests of the holders of the
preferred securities.
You have no preemptive or similar rights as a holder of preferred
securities. No trust may borrow money or issue debt or mortgage or pledge any of
its assets.
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DESCRIPTION OF GUARANTEES
At the same time as the issuance by a trust of its preferred securities, we
will execute and deliver a guarantee for your benefit as a holder of the
preferred securities. Bank One Trust Company, N.A. will act as indenture trustee
under each guarantee for the purposes of compliance with the Trust Indenture
Act. Each guarantee will be qualified as an indenture under the Trust Indenture
Act.
The following description of the terms of the guarantees is a summary. It
summarizes only those portions of the guarantees which we believe will be most
important to your decision to invest in the preferred securities. You should
keep in mind, however, that it is the guarantees, and not this summary, which
define your rights. There may be other provisions in the guarantees which are
also important to you. You should read each guarantee itself for a full
description of its terms. The guarantees are filed as exhibits to the
registration statement that includes this prospectus. See "Where You Can Find
More Information" for information on how to obtain copies of the guarantees. The
terms of each guarantee will include those stated in the applicable guarantee
and those made part of the guarantee by reference to the Trust Indenture Act.
Each guarantee will be executed at the time the related 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 that includes this prospectus.
When we refer in this summary to preferred securities, we mean the preferred
securities issued by a trust to which a guarantee relates.
GENERAL TERMS OF THE GUARANTEES
We will irrevocably agree to pay in full on a subordinated basis, to the
extent described below, the guarantee payments, as defined below, to you, as and
when due, regardless of any defense, right of set-off or counterclaim that the
trust may have or assert other than the defense of payment.
The following payments, which we refer to in this prospectus as the
"guarantee payments," to the extent not paid by or on behalf of the related
trust, will be subject to the guarantees:
- any accrued and unpaid distributions required to be paid to you on the
related preferred securities, to the extent that the trust has funds
available for the payments;
- the redemption price, including all accrued and unpaid distribution to
the date of redemption with respect to any preferred securities called
for redemption by the trust, to the extent that the trust has funds
available for the payments; or
- upon a voluntary or involuntary dissolution, winding-up or liquidation of
the trust, unless the corresponding junior subordinated debentures are
distributed to you, the lesser of:
- the liquidation distribution; and
- the amount of assets of the trust remaining available for distribution
to you.
Our obligation to make a guarantee payment may be satisfied by us directly
paying to you the required amounts or by causing the trust to pay the amounts to
you.
Each guarantee will be an irrevocable guarantee on a subordinated basis of
the related trust obligations under the preferred securities, but will apply
only to the extent that the related trust has funds sufficient to make the
payments. It is not a guarantee of collection.
If we do not make interest payments on the corresponding junior
subordinated debentures held by the trust, we expect that the trust will not pay
distributions on the preferred securities and will not have funds legally
available for those payments. The guarantees will rank subordinate and junior in
right of payment to all of our debt other than debt which ranks equally with or
junior to the guarantees. See "-- Status of the Guarantees."
As a non-operating holding company, most of our operating assets and the
assets of our consolidated subsidiaries are owned by our subsidiaries. We rely
primarily on dividends from our
49
subsidiaries to meet our obligations for payment of principal and interest on
our outstanding debt obligations and corporate expenses. Accordingly, our
obligations under the guarantees will be effectively subordinated to all
existing and future liabilities of our subsidiaries. You should rely only on our
assets for payments we owe. The payment of dividends by our insurance company
subsidiaries may be restricted by state insurance laws and regulations as
administered by state insurance departments. See "The Chubb Corporation."
Unless we state otherwise in the applicable prospectus supplement, the
guarantees do not limit the amount of secured or unsecured debt that we may
incur. We expect from time to time to incur additional senior debt.
We have, through the guarantees, the trust agreements, the junior
subordinated debentures, the junior subordinated indenture and related expense
agreements, taken together, fully, irrevocably and unconditionally guaranteed
all of the obligations of the trusts under the preferred securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes a guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the obligations of the trust under the preferred
securities. See "Relationship Among the Preferred Securities, the Corresponding
Junior Subordinated Debentures and the Guarantees."
STATUS OF THE GUARANTEES
The guarantees will constitute unsecured obligations of Chubb and will rank
subordinate and junior in right of payment to all its senior debt. Senior debt
for this purpose has the same meaning as for the junior subordinated debentures.
Unless we state otherwise in the applicable prospectus supplement, the
guarantee of a series of preferred securities will rank equally with the
guarantees relating to all other series of preferred securities that we may
issue. A guarantee will constitute a guarantee of payment and not of collection,
which means that the guaranteed party may institute a legal proceeding directly
against us to enforce its rights under the guarantee without first instituting a
legal proceeding against the trust, the guarantee trustee or any other person or
entity. The property trustee of the related trust will hold the guarantees for
your benefit. The guarantees will not be discharged except by payment of the
guarantee payments in full to the extent not paid by the trust or upon
distribution of the corresponding junior subordinated debentures to you.
AMENDMENTS AND ASSIGNMENT
We may not amend a guarantee without the prior approval of the holders of
not less than a majority of the aggregate liquidation amount of outstanding
preferred securities, except for any changes which do not materially adversely
affect the rights of the holders of the preferred securities, in which case no
vote will be required. The manner of obtaining any approval will be as set forth
under "Description of Preferred Securities -- Voting Rights; Amendment of Trust
Agreement."
All guarantees and agreements contained in a guarantee will bind our
successors, assigns, receivers, trustees and representatives and will inure to
the benefit of the holders of the related preferred securities then outstanding.
EVENTS OF DEFAULT
An event of default under a guarantee will occur when we fail to perform
any of our payment or other obligations under the guarantee. The holders of not
less than a majority in aggregate liquidation amount of the related preferred
securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the guarantee trustee under the guarantee
or to direct the exercise of any trust or power conferred upon the guarantee
trustee under the guarantee.
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You may institute a legal proceeding directly against us to enforce your
rights under a guarantee without first instituting a legal proceeding against
the trust, the guarantee trustee or any other person or entity.
We, as guarantor, are required to file annually with each guarantee trustee
a certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to us under the guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, unless a default by us in the performance of the
guarantee then exists, is required to perform only those duties that are
specifically set forth in the guarantee. After a default under the guarantee,
the guarantee trustee must exercise the same degree of care and skill as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs. However, the guarantee trustee is under no obligation to
exercise any of the powers vested in it by the guarantee at your request unless
you offer reasonable indemnity against the costs, expenses and liabilities that
it might incur.
TERMINATION OF THE GUARANTEES
Each guarantee will terminate and be of no further force and effect upon:
- full payment of the redemption price of the related preferred securities;
- full payment of the amounts payable upon liquidation of the related
trust; or
- the distribution of corresponding junior subordinated debentures to the
holders in exchange for the related preferred securities.
The guarantee will continue to be effective or will be reinstated if at any
time you must restore payment of any sums paid under the preferred securities or
the guarantees.
GOVERNING LAW
The guarantees will be governed by and construed in accordance with the
laws of the State of New York.
EXPENSE AGREEMENTS
We will enter into an expense agreement with each trust. Under each expense
agreement, we will irrevocably and unconditionally guarantee to each person or
entity to whom the relevant trust becomes indebted or liable, the full payment
of any costs, expenses or liabilities of the trust, other than obligations of
the trust to pay to you the amounts due to you under the terms of the preferred
securities.
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DESCRIPTION OF CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The corresponding junior subordinated debentures are to be issued in one or
more series under the junior subordinated indenture, with terms corresponding to
the terms of the related preferred securities. The terms of the junior
subordinated debentures and the junior subordinated indenture are generally
described under "Description of Junior Subordinated Debentures." The following
summary describes the terms of the corresponding junior subordinated debentures
and the junior subordinated indenture that will apply in the specific case of
our issuing junior subordinated debentures to a trust in the context of that
trust issuing related preferred securities to you.
The following description of the terms of the corresponding junior
subordinated debentures and the junior subordinated indenture is a summary. It
summarizes only those portions of the junior subordinated indenture which we
believe will be most important to your decision to invest in the preferred
securities. You should keep in mind, however, that it is the junior subordinated
indenture, and not this summary, which defines your rights. There may be other
provisions in the junior subordinated indenture which are also important to you.
You should read the form of the junior subordinated indenture itself for a full
description of its terms. The junior subordinated indenture is filed as an
exhibit to the registration statement that includes this prospectus. See "Where
You Can Find More Information" for information on how to obtain a copy of the
junior subordinated indenture.
GENERAL TERMS OF THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
At the same time a trust issues preferred securities, the trust will invest
the proceeds from the sale of the preferred securities and the consideration
paid by us for the common securities in a series of corresponding junior
subordinated debentures issued by us to the trust. Each series of corresponding
junior subordinated debentures will be in the principal amount equal to the
aggregate stated liquidation amount of the related preferred securities plus our
investment in the common securities and, unless we state otherwise in the
applicable prospectus supplement, will rank equally with all other series of
corresponding junior subordinated debentures. The corresponding junior
subordinated debentures will be unsecured and subordinate and junior in right of
payment to the extent and in the manner set forth in the junior subordinated
indenture to all our senior debt. See "Description of Junior Subordinated
Debentures -- Subordination" and the prospectus supplement relating to any
offering of related preferred securities.
REDEMPTION
Unless we state otherwise in the applicable prospectus supplement, we may,
at our option and at any time, redeem any series of corresponding junior
subordinated debentures, in whole or in part, at a redemption price equal to
100% of the principal amount plus accrued and unpaid interest up to but not
including the redemption date. We may redeem corresponding junior subordinated
debentures in denominations larger than $25 but only in integral multiples of
$25.
We will mail notice of any redemption of your junior subordinated
debentures at least 30 days but not more than 60 days before the redemption date
to you at your registered address. Unless we default in payment of the
redemption price, on and after the redemption date interest will cease to accrue
on the debt securities or the portions called for redemption.
If an event occurs that constitutes a tax event or an investment company
event we will have the right to redeem the corresponding junior subordinated
debentures in whole, but not in part, within 90 days following the occurrence of
the tax event or the investment company event, subject to the provisions of the
junior subordinated indenture. The redemption price for any corresponding junior
subordinated debentures will be equal to 100% of the principal amount plus
accrued and unpaid interest up to but not including the redemption date. Events
that constitute a tax event or an investment company event are described under
"Description of Preferred Securities -- Redemption-Redemption or Distribution
Upon the Occurrence of a Tax Event or an Investment Company Event".
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For so long as the applicable trust is the holder of all the outstanding
series of corresponding junior subordinated debentures, the trust will use the
proceeds of any redemption to redeem the corresponding preferred securities. We
may not redeem a series of corresponding junior subordinated debentures in part
unless all accrued and unpaid interest has been paid in full on all outstanding
corresponding junior subordinated debentures of the series for all interest
periods terminating on or prior to the redemption date.
COVENANTS OF THE CHUBB CORPORATION
We will covenant in the junior subordinated indenture for each series of
corresponding junior subordinated debentures that we will pay additional sums to
the trust if:
- the trust that has issued the corresponding series of preferred
securities and common securities is the holder of all of the
corresponding junior subordinated debentures;
- a tax event exists; and
- we have not redeemed the corresponding junior subordinated debentures or
terminated the trust.
We will also covenant, for each series of corresponding junior subordinated
debentures, that we and our subsidiaries will not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment on any of our capital stock; or
- make any payment of principal of, interest or premium, if any, on or
repay or repurchase or redeem any debt securities, including other
corresponding junior subordinated debentures, that rank equally with or
junior in interest to the corresponding junior subordinated debentures or
make any related guarantee payments,
other than:
- dividends or distributions in our common stock;
- redemptions or purchases of any rights pursuant to our rights plan, or
any successor to our rights plan, and the declaration of a dividend of
these rights in the future; and
- payments under any guarantee of preferred securities,
if at that time:
- there has occurred any event of which we have actual knowledge that with
the giving of notice or the lapse of time, or both, would constitute an
event of default under the junior subordinated indenture for that series
of corresponding junior subordinated debentures which we have not taken
reasonable steps to cure;
- we are in default on our payment of any obligations under the related
guarantee; or
- we have given notice of our selection of an extension period as provided
in the junior subordinated indenture for that series of corresponding
junior subordinated debentures and have not rescinded that notice, or the
extension period, or any extension, is continuing.
We will also covenant, for each series of corresponding junior subordinated
debentures:
- to maintain, by ourselves or our permitted successors, directly or
indirectly 100% ownership of the common securities of the trust to which
corresponding junior subordinated debentures have been issued;
- not to voluntarily terminate, wind-up or liquidate any trust, except in
connection with a distribution of corresponding junior subordinated
debentures to you in liquidation of the trust,
53
or in connection with mergers, consolidations or amalgamations permitted
by the related trust agreement; and
- to use our reasonable efforts, consistent with the terms and provisions
of the related trust agreement, to cause the trust to remain a statutory
trust and not to be classified as an association taxable as a corporation
for United States federal income tax purposes.
When we use the term "additional sums," we mean the additional amounts that
may be necessary in order that the amount of distributions then due and payable
by a trust on its outstanding preferred securities and common securities will
not be reduced as a result of any additional taxes, duties and other
governmental charges to which the trust has become subject as a result of a tax
event.
RIGHTS OF PREFERRED SECURITYHOLDERS
If a debenture event of default is attributable to our failure to pay
interest or principal on the corresponding junior subordinated debentures on the
date the interest or principal is payable, you, as a holder of related preferred
securities may institute a legal proceeding directly against us, which we refer
to in this prospectus as a direct action, for enforcement of payment to you of
the principal of or interest on the corresponding junior subordinated debentures
having a principal amount equal to the aggregate liquidation amount of your
related preferred securities.
We may not amend the junior subordinated indenture to remove the right to
bring a direct action without the prior written consent of the holders of all of
the related preferred securities. If the right to bring a direct action is
removed, the applicable issue may become subject to the reporting obligations
under the Securities Exchange Act of 1934. We have the right under the junior
subordinated indenture to set-off any payment made to you as a holder of
preferred securities by us in connection with a direct action.
If an event of default under the junior subordinated indenture with respect
to the outstanding junior subordinated debentures occurs and is continuing, and
if the debenture trustee or the holders of not less than 25% in aggregate
principal amount of the outstanding junior subordinated debentures fail to
declare the principal amount of all of the junior subordinated debentures to be
due and payable immediately, the holders of 25% in aggregate liquidation amount
of the related series of preferred securities may by written notice thereof to
us and to the debenture trustee declare the principal amount of the junior
subordinated debentures to be due and payable.
You will not be able to exercise directly any remedies other than those
described in the preceding three paragraphs available to holders of the junior
subordinated debentures unless there has been an event of default under the
trust agreement.
DISTRIBUTION OF THE CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
If provided in the applicable prospectus supplement, we will have the right
to extend or shorten the maturity of any series of corresponding junior
subordinated debentures at the time that we exercise our right to elect to
terminate the related trust and cause the corresponding junior subordinated
debentures to be distributed to the holders of the preferred securities and
common securities in liquidation of the trust.
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RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEES
As long as payments of interest and other payments are made when due on
each series of corresponding junior subordinated debentures, these payments will
be sufficient to cover distributions and other payments due on the related
preferred securities, primarily because:
- the aggregate principal amount of each series of corresponding junior
subordinated debentures will be equal to the sum of the aggregate stated
liquidation amount of the corresponding preferred securities and
corresponding common securities;
- the interest rate and interest and other payment dates on each series of
corresponding junior subordinated debentures will match the distribution
rate and distribution and other payment dates for the corresponding
preferred securities;
- we will pay for all and any costs, expenses and liabilities of the trust
except the obligations of the trust to holders of its preferred
securities under the preferred securities; and
- each trust agreement further provides that the trust will not engage in
any activity that is not consistent with the limited purposes of the
trust.
We will irrevocably guarantee payments of distributions and other amounts
due on the preferred securities, to the extent the trust has funds available for
the payment of such distributions, as set forth under "Description of
Guarantees."
Taken together, our obligations under each series of junior subordinated
debentures, the junior subordinated indenture, the related trust agreement, the
related expense agreement and the related guarantee provide a full, irrevocable
and unconditional guarantee by us of payments of distributions and other amounts
due on the related series of preferred securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes the guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the obligations of the trust under the preferred securities. If and to the
extent that we do not make payments on any series of corresponding junior
subordinated debentures, the related trust will not pay distributions or other
amounts due on its preferred securities.
Notwithstanding anything to the contrary in the junior subordinated
indenture, we have the right to set-off any payment we are otherwise required to
make under the junior subordinated indenture with and to the extent we have made
or are making a payment under the related guarantee.
You may institute a legal proceeding directly against us to enforce your
rights under the related guarantee without first instituting a legal proceeding
against the guarantee trustee, the related trust or any other person or entity.
The preferred securities of each trust evidence your rights to the benefits
of the trust. Each trust exists for the sole purpose of issuing its preferred
securities and common securities, investing the proceeds from the sale of such
securities in corresponding junior subordinated debentures and related purposes.
A principal difference between your rights as a holder of a preferred
security and the rights of a holder of a corresponding junior subordinated
debenture is that a holder of a corresponding junior subordinated debenture will
accrue, and, subject to the permissible extension of the interest period, is
entitled to receive, interest on the principal amount of corresponding junior
subordinated debentures held, while you are only entitled to receive
distributions if and to the extent the trust has funds available for the payment
of those distributions.
Upon any voluntary or involuntary termination, winding-up or liquidation of
any trust involving the liquidation of the corresponding junior subordinated
debentures, you will be entitled to receive, out of assets held by the trust,
the liquidation distribution in cash. See "Description of Preferred
Securities -- Liquidation Distribution upon Termination."
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Upon any voluntary or involuntary liquidation or bankruptcy of Chubb, the
property trustee, as holder of the corresponding junior subordinated debentures,
would be a subordinated creditor. In this case, the property trustee would be
subordinated in right of payment to all senior debt, but entitled to receive
payment in full of principal and interest, before any of our stockholders
receive payments or distributions. Since we are the guarantor under each
guarantee and have agreed to pay for all costs, expenses and liabilities of each
trust, your position as a holder of the preferred securities and the position of
a holder of the corresponding junior subordinated debentures relative to other
creditors and to our stockholders in the event of liquidation or bankruptcy of
our company would be substantially the same.
A default or event of default under any senior debt would not constitute a
default or event of default under the junior subordinated indenture. However, in
the event of payment defaults under, or acceleration of, senior debt, the
subordination provisions of the junior subordinated indenture provide that we
may not make payments on the corresponding junior subordinated debentures until
the senior debt has been paid in full or any payment default under the senior
debt has been cured or waived. Our failure to make required payments on any
series of corresponding junior subordinated debentures would constitute an event
of default under the junior subordinated indenture.
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PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus through agents,
underwriters or dealers, or directly to purchasers.
Agents who we designate may solicit offers to purchase the securities.
- We will name any agent involved in offering or selling securities, and
disclose any commissions that we will pay to the agent, in the applicable
prospectus supplement.
- Unless we indicate otherwise in the applicable prospectus supplement, our
agents will act on a best efforts basis for the period of their
appointment.
- Our agents may be deemed to be underwriters under the Securities Act of
1933, as amended, of any of the securities that they offer or sell.
We may use an underwriter or underwriters in the offer or sale of our
securities.
- If we use an underwriter or underwriters, we will execute an underwriting
agreement with the underwriter or underwriters at the time that we reach
an agreement for the sale of the securities.
- We will include the names of the specific managing underwriter or
underwriters, as well as the names of any other underwriters, and the
terms of the transactions, including the compensation the underwriters
and dealers will receive, in the applicable prospectus supplement.
- The underwriters will use the applicable prospectus supplement to sell
the securities.
We may use a dealer to sell the securities.
- If we use a dealer, we, as principal, will sell the securities to the
dealer.
- The dealer will then sell the securities to the public at varying prices
that the dealer will determine at the time it sells our securities.
- We will include the name of the dealer and the terms of our transactions
with the dealer in the applicable prospectus supplement.
We may solicit directly offers to purchase the securities, and we may
directly sell the securities to institutional or other investors. We will
describe the terms of our direct sales in the applicable prospectus supplement.
We may also offer and sell securities, if so indicated in the applicable
prospectus supplement, in connection with a remarketing upon their purchase, in
accordance with a redemption or repayment pursuant to their terms, or otherwise,
by one or more firms referred to as remarketing firms, acting as principals for
their own accounts or as our agents. Any remarketing firm will be identified and
the terms of its agreement, if any, with us, and its compensation will be
described in the applicable prospectus supplement. Remarketing firms may be
deemed to be underwriters under the Securities Act in connection with the
securities they remarket.
We may indemnify agents, underwriters, dealers and remarketing firms
against certain liabilities, including liabilities under the Securities Act. Our
agents, underwriters, and dealers, or their affiliates, may be customers of,
engage in transactions with or perform services for us, in the ordinary course
of business.
We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase the securities at the public offering price under
delayed delivery contracts.
- If we use delayed delivery contracts, we will disclose that we are using
them in the applicable prospectus supplement and will tell you when we
will demand payment and delivery of the securities under the delayed
delivery contracts.
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- These delayed delivery contracts will be subject only to the conditions
that we describe in the applicable prospectus supplement.
- We will describe in the applicable prospectus supplement the commission
that underwriters and agents soliciting purchases of the securities under
delayed contracts will be entitled to receive.
LEGAL OPINIONS
Unless we state otherwise in the applicable prospectus supplement, the
validity of any securities offered by us under this prospectus, other than any
preferred securities will be passed upon for us by Debevoise & Plimpton, New
York, New York. Such counsel may rely on the opinion of Drinker Biddle & Reath,
LLP, Florham Park, New Jersey, as to matters of New Jersey law. The validity of
any preferred securities will be passed upon for the trusts by Richards, Layton
& Finger, P.A., Wilmington, Delaware. The validity of any securities will be
passed upon for any underwriters or agents by counsel that we will name in the
applicable prospectus supplement.
EXPERTS
The consolidated financial statements and schedules of The Chubb
Corporation appearing in The Chubb Corporation's Annual Report (Form 10-K) for
the year ended December 31, 2002 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of said firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE 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 us and the trusts. The rules of the SEC
allow us to omit from this prospectus some of the information included in the
registration statement. This information may be inspected and copied at, or
obtained at prescribed rates from the Public Reference Section of the SEC at 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. Please call the SEC
at 1-800-SEC-0330 for further information on the operation of these public
reference facilities. The SEC maintains an Internet site, http://www.sec.gov,
that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC. This URL is intended to
be an inactive textual reference only. It is not intended to be an active
hyperlink to the SEC's website. The information on the SEC's website, which
might be accessible through a hyperlink resulting from this URL, is not and is
not intended to be part of this prospectus and is not incorporated into this
prospectus by reference.
We are subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. We fulfill our obligations with respect to such
requirements by filing periodic reports and other information with the SEC.
These reports and other information are available as provided above and may also
be inspected at the offices of the NYSE at 20 Broad Street, New York, New York
10005.
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:
- our Annual Report on Form 10-K for the year ended December 31, 2002;
- our amendment to our Annual Report on Form 10-K for the year ended
December 31, 2002 on Form 10-K/A as filed with the SEC on March 13, 2003;
58
- our Current Report on Form 8-K dated January 21, 2003 and our Current
Report on Form 8-K filed on March 11, 2003;
- the information under the captions indicated in Part III of our Annual
Report on Form 10-K on pages 3 through 11, 14 through 25 and 38 our
definitive Proxy Statement dated March 28, 2003; and
- all documents filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d)
of the Securities Exchange Act of 1934 after the date of this prospectus.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of this prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents referred to above
which have been or may be incorporated by reference in this prospectus. You
should direct requests for those documents to The Chubb Corporation, 15 Mountain
View Road, P.O. Box 1615, Warren, New Jersey 07061-1615, Attention: Secretary
(telephone: 908-903-2000).
59
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth those expenses to be incurred by Chubb in
connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission filing fee, all
amounts shown are estimates.
Securities and Exchange Commission filing fee............... $202,250
Fees and expenses of trustee................................ *
Printing and engraving expenses............................. *
Accountant's fees and expenses.............................. *
Legal fees and expenses..................................... *
Miscellaneous expenses...................................... *
--------
Total.................................................. $ *
========
---------------
* To be provided by amendment
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Chubb Corporation is organized under the laws of the State of New
Jersey. The New Jersey Business Corporation Act, as amended (the "NJBCA"),
provides that a New Jersey corporation has the power generally to indemnify its
directors, officers, employees and other agents against expenses and liabilities
in connection with any proceeding involving such person by reason of his or her
being or having been a corporate agent, other than a proceeding by or in the
right of the corporation, if such person acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, such person had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action brought by or in the right of the corporation, indemnification of
directors, officers, employees and other agents against expenses is permitted if
such person acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation; however, no
indemnification is permitted in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation,
unless and only to the extent that the New Jersey Superior Court, or the court
in which such proceeding was brought, shall determine upon application that
despite the adjudication of liability, but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to such indemnification.
Expenses incurred by a director, officer, employee or other agent in connection
with a proceeding may be, under certain circumstances, paid by the corporation
in advance of the final disposition of the proceeding as authorized by the board
of directors. The power to indemnify and advance expenses under the NJBCA does
not exclude other rights to which a director, officer, employee or other agent
of the corporation may be entitled to under the certificate of incorporation,
by-laws, agreement, vote of stockholders, or otherwise, provided that no
indemnification is permitted to be made to or on behalf of such person if a
judgment or other final adjudication adverse to such person establishes that his
or her acts or omissions were in breach of his or her duty of loyalty to the
corporation or its shareholders, were not in good faith or involved a violation
of the law, or resulted in the receipt by such person of an improper personal
benefit.
Under the NJBCA, a New Jersey corporation has the power to purchase and
maintain insurance on behalf of any director, officer, employee or other agent
against any expenses incurred in any proceeding and any liabilities asserted
against him or her by reason of his or her being or having been a corporate
agent, whether or not the corporation has the power to indemnify him or her
against such expenses and liabilities under the NJBCA. All of the foregoing
powers of indemnification granted to a New Jersey corporation may be exercised
by such corporation notwithstanding the absence of any
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provision in its certificate of incorporation or by-laws authorizing the
exercise of such powers. However, a New Jersey corporation may, with certain
limitations, provide in its certificate of incorporation that a director or
officer shall not be personally liable, or shall be liable only to the extent
therein provided, to the corporation or its shareholders for damages for breach
of a duty owed to the corporation or its shareholders.
Reference is made to Sections 14A:3-5 and 14A:2-7(3) of the NJBCA in
connection with the above summary of indemnification, insurance and limitation
of liability.
Article XII of the Restated Certificate of Incorporation of Chubb reads as
follows:
TWELFTH:
SECTION A. A Director or Officer of the Corporation shall not be
personally liable to the Corporation or its stockholders for damages for breach
of any duty owed to the Corporation or its stockholders, except for liability
for any breach of duty based upon an act or omission (i) in breach of such
Director's or Officer's duty of loyalty to the Corporation or stockholders, (ii)
not in good faith or involving a knowing violation of law or (iii) resulting in
receipt by such Director or Officer of an improper personal benefit. The
provisions of this section shall be effective as and to the fullest extent that,
in whole or in part, they shall be authorized or permitted by the laws of the
State of New Jersey. No repeal or modification of the foregoing provisions of
this Section A nor, to the fullest extent permitted by law, any modification of
law shall adversely affect any right or protection of a Director or Officer of
the Corporation which exists at the time of such repeal or modification.
SECTION B.
1. As used in this Section B:
(a) "corporate agent" means any person who is or was a director,
officer, or employee of the Corporation and any person who is or was
director, officer, trustee or employee of any other enterprise, serving, or
continuing to serve, as such at the written request of the Corporation,
signed by the Chairman or the President or pursuant to a resolution of the
Board of Directors, or the legal representative of any such person;
(b) "other enterprise" means any domestic or foreign corporation,
other than the Corporation, and any partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, whether
or not for profit, served by a corporate agent;
(c) "expenses" means reasonable costs, disbursements and counsel fees;
(d) "liabilities" means amounts paid or incurred in satisfaction of
settlements, judgments, fines and penalties;
(e) "proceeding" means any pending, threatened or completed civil,
criminal, administrative or arbitrative action, suit or proceeding, and any
appeal therein and any inquiry or investigation which could lead to such
action, suit or proceeding, and shall include any proceeding as so defined
existing at or before, and any proceedings relating to facts occurring or
circumstances existing at or before, the adoption of this Section B.
2. Each corporate agent shall be indemnified by the Corporation against
his expenses and liabilities in connection with any proceeding involving the
corporate agent by reason of his having been such corporate agent to the fullest
extent permitted by applicable law as the same exists or may hereafter be
amended or modified. The right to indemnification conferred by this paragraph 2
shall also include the right to be paid by the Corporation the expenses incurred
in connection with any such proceeding in advance of its final disposition to
the fullest extent authorized by applicable law as the same exists or may
hereafter be amended or modified. The right to indemnification conferred in this
paragraph 2 shall be a contract right.
II-2
3. The Corporation may purchase and maintain insurance on behalf of any
corporate agent against any expenses incurred in any proceedings and any
liabilities asserted against him by reason of his having been a corporate agent,
whether or not the Corporation would have the power to indemnify him against
such expenses and liabilities under applicable law as the same exists or may
hereafter be amended or modified. The Corporation may purchase such insurance
from, or such insurance may be reinsured in whole or in part by, an insurer
owned by or otherwise affiliated with the Corporation, whether or not such
insurer does business with other insureds.
The rights and authority conferred in this Section B shall not exclude any
other right to which any person may be entitled under this Certificate of
Incorporation, the By-Laws, any agreement, vote of stockholders or otherwise. No
repeal or modification of the foregoing provisions of this Section B nor, to the
fullest extent permitted by law, any modification of law, shall adversely affect
any right or protection of a corporate agent which exists at the time of such
repeal or modification.
Chubb is insured against liabilities which it may incur by reason of
Article XII of Chubb's Restated Certificate of Incorporation. In addition,
directors and officers of Chubb are insured at the expense of Chubb against
certain liabilities which might arise out of their service and not be subject to
indemnification.
ITEM 16. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
------- -----------
1.1 Form of Underwriting Agreement relating to the Debt
Securities (incorporated herein by reference to Exhibit 1.1
to The Chubb Corporation's Registration Statement on Form
S-3 (No. 33-59111)).
1.2 Form of Underwriting Agreement relating to the Common Stock,
Preferred Stock and Convertible Subordinated Debt Securities
of The Chubb Corporation (incorporated by reference to
Exhibit 1.3 to The Chubb Corporation's Registration
Statement on Form S-3 (No. 33-591111)).
*1.3 Form of Underwriting Agreement (Preferred Securities of
Chubb Capital Trust I, Chubb Capital Trust II and Chubb
Capital Trust III).
*1.4 Form of Underwriting Agreement (Stock Purchase Contracts of
The Chubb Corporation).
*1.5 Form of Underwriting Agreement (Stock Purchase Units of The
Chubb Corporation).
*1.6 Form of Underwriting Agreement (Warrants of The Chubb
Corporation).
3.1 Restated Certificate of Incorporation of The Chubb
Corporation (incorporated by reference to Exhibit 3 of The
Chubb Corporation's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1996, filed on August 14,
1996 (No. 1-8661)).
3.2 Certificate of Amendment to the Restated Certificate of
Incorporation of The Chubb Corporation (incorporated by
reference to Exhibit 3 of The Chubb Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998,
filed on March 29, 1999 (No. 1-8661)).
3.3 Certificate of Correction of Certificate of Amendment to the
Restated Certificate of Incorporation of The Chubb
Corporation (incorporated by reference to Exhibit 3 of The
Chubb Corporation's Annual Report on Form 10-K for the year
ended December 31, 1998, filed on March 29, 1999 (No.
1-8661)).
3.4 Restated By-laws of The Chubb Corporation (incorporated by
reference to Exhibit 3 of The Chubb Corporation's first
amendment to its Annual Report on Form 10-K for the year
ended December 31, 2002, filed on March 13, 2003 (No.
1-8661)).
4.1 Indenture dated as of October 25, 1989, between The Chubb
Corporation and Bank One Trust Company, N.A., as successor
in interest to The First National Bank of Chicago relating
to Senior Debt Securities (incorporated by reference to
Exhibit 4(a) to The Chubb Corporation's Registration
Statement on Form S-3 (No. 33-31796)).
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EXHIBIT
NO. DESCRIPTION
------- -----------
*4.2 Indenture between The Chubb Corporation and Bank One Trust
Company, N.A., as successor in interest to The First
National Bank of Chicago relating to Subordinated Debt
Securities.
*4.3 Indenture between The Chubb Corporation and Bank One Trust
Company, N.A. relating to Junior Subordinated Debentures.
4.4 Certificate of Trust of Chubb Capital Trust I.
4.5 Trust Agreement of Chubb Capital Trust I.
4.6 Certificate of Trust of Chubb Capital Trust II.
4.7 Trust Agreement of Chubb Capital Trust II.
4.8 Certificate of Trust of Chubb Capital Trust III.
4.9 Trust Agreement of Chubb Capital Trust III.
*4.10 Form of Amended and Restated Trust Agreement for Chubb
Capital Trust I.
*4.11 Form of Preferred Security Certificate for Chubb Capital
Trust I (included as Exhibit E of Exhibit 4.10).
*4.12 Form of Agreement as to Expenses and Liabilities for Chubb
Capital Trust I (included as Exhibit D of Exhibit 4.10).
*4.13 Form of Guarantee Agreement in respect of Chubb Capital
Trust I.
*4.14 Form of Amended and Restated Trust Agreement for Chubb
Capital Trust II.
*4.15 Form of Preferred Security Certificate for Chubb Capital
Trust II (included as Exhibit E of Exhibit 4.14).
*4.16 Form of Agreement as to Expenses and Liabilities for Chubb
Capital Trust II (included as Exhibit D of Exhibit 4.14).
*4.17 Form of Guarantee Agreement in respect of Chubb Capital
Trust II.
*4.18 Form of Amended and Restated Trust Agreement for Chubb
Capital Trust III.
*4.19 Form of Preferred Security Certificate for Chubb Capital
Trust III (included as Exhibit E of Exhibit 4.18).
*4.20 Form of Agreement as to Expenses and Liabilities for Chubb
Capital Trust III (included as Exhibit D of Exhibit 4.18).
*4.21 Form of Guarantee Agreement in respect of Chubb Capital
Trust III.
4.22 Form of Deposit Agreement (incorporated by reference to
Exhibit 4.10 to The Chubb Corporation's Registration
Statement on Form S-3 (No. 33-59111)).
4.23 Form of Depositary Receipt for The Chubb Corporation
Depository Shares (included in Exhibit 4.22).
4.24 Rights Agreement, dated as of March 12, 1999, between The
Chubb Corporation and EquiServe Trust Company, N.A. as
Rights Agent (incorporated by reference to Exhibit 1 to The
Chubb Corporation's Registration Statement on Form 8-A (No.
1-08661)).
4.25 Form of The Chubb Corporation Common Stock and Preferred
Stock Warrant Agreement (incorporated herein by reference to
Exhibit 4.12 to The Chubb Corporation's Registration
Statement on form S-3 (No. 33-59111)).
4.26 Form of The Chubb Corporation Debt Warrant Agreement
(incorporated herein by reference to Exhibit 4.13 to The
Chubb Corporation's Registration Statement on Form S-3 (No.
33-59111)).
*4.27 Form of Purchase Contract Agreement.
*4.28 Form of Pledge Agreement.
*5.1 Opinion of Debevoise & Plimpton.
*5.2 Opinion of Drinker Biddle & Reath, LLP.
*5.3 Opinion of Richards, Layton & Finger, P.A. relating to the
legality of the Preferred Securities of Chubb Capital Trust
I.
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EXHIBIT
NO. DESCRIPTION
------- -----------
*5.4 Opinion of Richards, Layton & Finger, P.A. relating to the
legality of the Preferred Securities of Chubb Capital Trust
II.
*5.5 Opinion of Richards, Layton & Finger, P.A. relating to the
legality of the Preferred Securities of Chubb Capital Trust
III.
*12.1 Statement Re: Computation of Ratio of Earnings to
Consolidated Fixed Charges and Earnings to Combined
Consolidated Fixed Charges and Preferred Stock Dividends of
The Chubb Corporation.
23.1 Consent of Ernst & Young LLP.
*23.2 Consent of Debevoise & Plimpton (included in Exhibit 5.1
hereto).
*23.3 Consent of Drinker Biddle & Reath, LLP (included in Exhibit
5.2 hereto).
*23.4 Consent of Richards, Layton & Finger, P.A. special Delaware
counsel (included in Exhibits 5.3, 5.4 and 5.5 hereto).
24.1 Powers of Attorney for the directors and certain officers of
The Chubb Corporation.
*25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Trustee for the Junior Subordinated Indenture.
*25.2 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Trustee for the Subordinated Indenture.
*25.3 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Trustee for the Senior Indenture.
*25.4 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Property Trustee for the Amended and Restated Trust
Agreement of Chubb Capital Trust I.
*25.5 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Guarantee Trustee for the Guarantee for Chubb Capital Trust
I.
*25.6 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Property Trustee for the Amended and Restated Trust
Agreement of Chubb Capital Trust II.
*25.7 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Guarantee Trustee for the Guarantee for Chubb Capital Trust
II.
*25.8 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Property Trustee for the Amended and Restated Trust
Agreement of Chubb Capital Trust III.
*25.9 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Bank One Trust Company, N.A., as
Guarantee Trustee for the Guarantee for Chubb Capital Trust
III.
---------------
* To be filed by amendment or as an exhibit to a report on Form 8-K pursuant to
Item 601 of Regulation S-K.
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering.
Each undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the
II-5
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by such registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
Each undersigned registrant hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933, each filing of such
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Acceleration of Effectiveness.
Insofar as indemnifications for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person, if any, of such
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
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(d) Equity Offerings of nonreporting registrants.
Each undersigned registrant that is not a reporting company under the
Securities Exchange Act of 1934 hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
(e) Qualification of Trust Indentures for Delayed Offerings.
Each undersigned registrant hereby undertakes to file an application for
the purpose of determining eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act ("Act") in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Act.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Chubb
Corporation (i) certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and (ii) has duly caused
this Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Warren, State of New
Jersey, on this 4th day of April, 2003.
THE CHUBB CORPORATION
By: /s/ HENRY G. GULICK
------------------------------------
Henry G. Gulick
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
* President, Chief Executive Officer April 4, 2003
------------------------------------------------ and Director
John D. Finnegan (Principal Executive Officer)
* Vice Chairman and April 4, 2003
------------------------------------------------ Chief Financial Officer
Michael O'Reilly (Principal Financial Officer)
* Senior Vice President and April 4, 2003
------------------------------------------------ Chief Accounting Officer
Henry B. Schram (Principal Accounting Officer)
* Director April 4, 2003
------------------------------------------------
Zoe Baird
* Director April 4, 2003
------------------------------------------------
John C. Beck
* Director April 4, 2003
------------------------------------------------
Sheila P. Burke
* Director April 4, 2003
------------------------------------------------
James I. Cash, Jr.
* Chairman and Director April 4, 2003
------------------------------------------------
Joel J. Cohen
* Director April 4, 2003
------------------------------------------------
James M. Cornelius
II-8
SIGNATURE TITLE DATE
--------- ----- ----
* Director April 4, 2003
------------------------------------------------
David H. Hoag
* Director April 4, 2003
------------------------------------------------
Klaus J. Mangold
* Director April 4, 2003
------------------------------------------------
Warren B. Rudman
* Director April 4, 2003
------------------------------------------------
David G. Scholey
* Director April 4, 2003
------------------------------------------------
Raymond G.H. Seitz
* Director April 4, 2003
------------------------------------------------
Lawrence M. Small
* Director April 4, 2003
------------------------------------------------
Karen Hastie Williams
* Director April 4, 2003
------------------------------------------------
James M. Zimmerman
* Director April 4, 2003
------------------------------------------------
Alfred W. Zollar
By: /s/ HENRY G. GULICK
-----------------------------------------
Henry G. Gulick, Attorney-in-Fact
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Chubb Capital
Trust I (i) certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Warren, State of New
Jersey, on this 4th day of April, 2003.
CHUBB CAPITAL TRUST I
By: THE CHUBB CORPORATION,
as Depositor
By: /s/ HENRY G. GULICK
------------------------------------
Name: Henry G. Gulick
Title: Vice President and
Secretary
II-10
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Chubb Capital
Trust II (i) certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Warren, State of New
Jersey, on this 4th day of April, 2003.
CHUBB CAPITAL TRUST II
By: THE CHUBB CORPORATION,
as Depositor
By: /s/ HENRY G. GULICK
------------------------------------
Name: Henry G. Gulick
Title: Vice President and
Secretary
II-11
SIGNATURE
Pursuant to the requirements of the Securities Act of 1933, Chubb Capital
Trust III (i) certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and (ii) has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of Warren, State of New
Jersey on this 4th day of April, 2003.
CHUBB CAPITAL TRUST III
By: THE CHUBB CORPORATION,
as Depositor
By: /s/ HENRY G. GULICK
------------------------------------
Name: Henry G. Gulick
Title: Vice President and
Secretary
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