As filed with the Securities and Exchange Commission on May 9, 2002.
Registration No. [ ]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------
UNITRIN, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 6331 95-4255452
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification No.)
organization) Code Number)
One East Wacker Drive
Chicago, Illinois 60601
(312) 661-4500
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
-----------------
Scott Renwick, Esq.
Senior Vice President, General Counsel and Secretary
Unitrin, Inc.
One East Wacker Drive
Chicago, Illinois 60601
(312) 661-4500
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copy to:
Brian W. Duwe, Esq.
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
(312) 407-0700
-----------------
Approximate date of commencement of proposed sale
to the public: From time to time after the effective date of this
Registration Statement as determined by the
registrant
-----------------
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, check the
following box. /_/
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. /_/
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. /_/
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. /_/
------------------
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum Amount of
Securities Aggregate Offering Price Registration Fee
to be Registered (1) (2)
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Debt Securities (3) __ __
------------------------------------------------------------------------------
Preferred Stock (4) __ __
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Common Stock (5) __ __
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Warrants __ __
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TOTAL $500,000,000 $46,000
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended
and exclusive of accrued interest, distributions and dividends, if
any. The aggregate public offering price of all securities registered
hereby will not exceed $500,000,000 or the equivalent thereof on the
date of issuance in one or more foreign currencies, foreign currency
units or composite currencies. Such amount represents the issue price
rather than the principal amount of any debt securities issued at an
original issue discount.
(2) Not specified as to each class of securities to be registered
hereunder pursuant to General Instruction II(D) to Form S-3.
(3) Including such indeterminate principal amount of debt securities as
may, from time, be issued (i) at indeterminate prices or (ii) upon
conversion or exchanges of securities registered hereunder to the
extent any such securities are, by their terms, convertible into or
exchangeable for debt securities.
(4) Including such indeterminate number of shares of preferred stock as
may, from time to time, be issued (i) at indeterminate prices or (ii)
upon conversion or exchange of securities registered hereunder, to the
extent any such securities are, by their terms, convertible into or
exchangeable for preferred stock.
(5) Including such indeterminate number of shares of common stock as may,
from time to time, be issued (i) at indeterminate prices or (ii) upon
conversion or exchange of securities registered hereunder, to the
extent any such securities are, by their terms, convertible into or
exchangeable for common stock.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this registration statement shall thereafter become effective in accordance
with section 8(a) of the Securities Act of 1933 or until this registration
statement shall become effective on such date as the Commission, acting
pursuant to said section 8(a), may determine.
SUBJECT TO COMPLETION, DATED MAY 8, 2002
[FLAG]
The information in this prospectus is not complete and may be changed.
Unitrin, Inc. 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 it is not
soliciting an offer to buy these securities in any state where the offer or
sale is not permitted. [END FLAG]
Prospectus
$500,000,000
Unitrin, Inc.
Debt Securities, Preferred Stock, Common Stock, Warrants
Unitrin, Inc. may offer, issue and sell, together or separately, its:
o debt securities, which may be senior debt securities or
subordinated debt securities
o shares of its preferred stock
o shares of its common stock
o warrants
Unitrin, Inc. will provide the specific terms of these securities
in supplements to this prospectus. The prospectus supplements may also add,
update or change information contained in this prospectus. You should read
this prospectus and the accompanying prospectus supplement carefully before
you make your investment decision.
This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
Unitrin, Inc. may offer securities through underwriting syndicates
managed or co-managed by one or more underwriters, or directly to
purchasers. The prospectus supplement for each offering of securities will
describe in detail the plan of distribution for that offering. For general
information about the distribution of securities offered, please see "Plan
of Distribution" in this prospectus.
Unitrin, Inc.'s common stock is listed on the New York Stock
Exchange under the trading symbol "UTR."
None of the Securities and Exchange Commission, any state
securities commission, or any other regulatory body has approved or
disapproved of these securities or determined if this prospectus or the
accompanying prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this prospectus is , 2002
TABLE OF CONTENTS
Page
----
ABOUT THIS PROSPECTUS......................................................1
WHERE YOU CAN FIND MORE INFORMATION........................................1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS..........................3
UNITRIN, INC...............................................................4
USE OF PROCEEDS............................................................4
RATIO OF EARNINGS TO FIXED CHARGES.........................................5
DESCRIPTION OF SECURITIES..................................................5
DESCRIPTION OF DEBT SECURITIES.............................................5
DESCRIPTION OF CAPITAL STOCK..............................................15
DESCRIPTION OF WARRANTS...................................................20
PLAN OF DISTRIBUTION......................................................20
LEGAL MATTERS.............................................................23
EXPERTS...................................................................23
i
ABOUT THIS PROSPECTUS
Unless otherwise stated or the context otherwise requires,
references in this prospectus to "Unitrin," "we," "our," or "us" refer to
Unitrin, Inc.
This prospectus is part of a registration statement that we filed
with the SEC using a "shelf" registration process. Under this shelf
process, we may, from time to time, sell any combination of debt
securities, preferred stock, common stock and warrants, as described in
this prospectus, in one or more offerings up to a total dollar amount of
$500,000,000 or the equivalent thereof on the date of issuance in one or
more foreign currencies, foreign currency units or composite currencies.
This prospectus provides you with a general description of the securities
we may offer. Each time that securities are sold, a prospectus supplement
that will contain specific information about the terms of that offering
will be provided. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional
information described under the heading "Where You Can Find More
Information."
You should rely only on the information contained or incorporated
by reference in this prospectus. We have not authorized anyone to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not making an
offer to sell these securities in any jurisdiction where the offer or sale
is not permitted.
You should assume that the information in this prospectus is
accurate as of the date of the prospectus. Our business, financial
condition, results of operations and prospects may have changed since that
date.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the
SEC. These reports, proxy statements and other information, including the
registration statement of which this prospectus is a part, can be read and
copied at the SEC's public reference room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference room. The SEC
maintains an internet site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding companies
that file electronically with the SEC, including Unitrin, Inc. Our common
stock is listed and traded on the New York Stock Exchange under the trading
symbol "UTR". These reports, proxy statements and other information can
also be read at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
The SEC allows "incorporation by reference" into this prospectus
of information that we file with the SEC. This permits us to disclose
important information to you by referencing these filed documents. Any
information referenced this way is considered part of this prospectus, and
any information filed by us with the SEC subsequent to the date of this
prospectus will automatically be deemed to update and supersede this
information. We incorporate by reference the following documents which have
been filed with the SEC:
o Annual Report on Form 10-K for the year ended December
31, 2001;
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o Proxy Statement for the Annual Meeting of Shareholders
held on May 1, 2002;
o Quarterly Report on Form 10-Q for the period ended March
31, 2002;
o Current Report on Form 8-K dated May 1, 2002; and
o Current Report on Form 8-K dated May 7, 2002.
We incorporate by reference the documents listed above and any
future filings made with the SEC in accordance with Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934 until we file a
post-effective amendment which indicates the termination of the offering of
the securities made by this prospectus.
We will provide without charge upon written or oral request, a
copy of any or all of the documents which are incorporated by reference
into this prospectus, other than exhibits which are specifically
incorporated by reference into those documents. Requests should be directed
to Unitrin, Inc., One East Wacker Drive, Chicago, Illinois 60601 (telephone
number (312) 661-4500). You may also obtain some of the documents
incorporated by reference into this document at our website,
http://www.unitrin.com. You should be aware that the information contained
on our website is not a part of this document.
2
SPECIAL NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This prospectus and the accompanying prospectus supplement may
contain or incorporate by reference information that includes or is based
upon forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act. Forward-looking
statements give expectations or forecasts of future events. You can
identify these statements by the fact that they do not relate strictly to
historical or current facts. They use words such as "anticipate,"
"estimate," "expect," "project," "intend," "plan," "believe," and other
words and terms of similar meaning in connection with a discussion of
future operating or financial performance. In particular, these include
statements relating to future actions, prospective services or products,
future performance or results of current and anticipated services or
products, sales efforts, expenses, the outcome of contingencies such as
legal proceedings, trends in operations and financial results.
Any or all forward-looking statements may turn out to be wrong.
They can be affected by inaccurate assumptions or by known or unknown risks
and uncertainties. Many such factors will be important in determining our
actual future results. These statements are based on current expectations
and the current economic environment. They involve a number of risks and
uncertainties that are difficult to predict. These statements are not
guarantees of future performance, and there are no guarantees about the
performance of any securities offered by this prospectus. Actual results
could differ materially from those expressed or implied in the
forward-looking statements. Among factors that could cause actual results
to differ materially are:
o changes in general economic conditions, including the performance of
financial markets and interest rates;
o heightened competition, including with respect to pricing, entry of
new competitors and the development of new products by new and
existing competitors;
o the number and severity of insurance claims (including those
associated with catastrophe losses);
o changes in industry trends;
o regulatory approval of insurance premium rates, license applications
and similar matters;
o regulatory, accounting or tax changes that may affect the cost of, or
demand for, our products or services;
o downgrades in our ratings;
o investor interest in insurance services;
o absolute and relative performance of the products or services our
subsidiaries offer;
o other risks and uncertainties described from time to time in our
filings with the SEC; and
o the risk factors or uncertainties listed herein or listed from time
to time in prospectus supplements or any document incorporated by
reference herein.
We do not undertake any obligation to publicly correct or update
any forward-looking statement if we become aware that it is not likely to
be achieved. You are advised, however, to consult any further disclosures
we make on related subjects in reports to the SEC.
3
UNITRIN, INC.
We are a holding company which, through our subsidiaries, serves
the basic financial needs of individuals, families and small businesses by
providing property and casualty insurance, life and health insurance, and
consumer finance services. Our property and casualty insurance business
operations are conducted through the following segments: Multi Lines
Insurance (primarily consisting of preferred and standard risk automobile,
homeowners, fire, commercial liability and workers compensation insurance),
Specialty Lines Insurance (including nonstandard personal and commercial
automobile, motorcycle and specialty watercraft insurance) and Unitrin
Direct (a direct marketing automobile insurance unit, marketing personal
automobile insurance through direct mail, radio and television advertising
and the Internet). The Unitrin Life and Health Insurance companies mainly
focus on providing individual life and health insurance products to
customers who desire fundamental protection for themselves and their
families. The leading product of the Unitrin Life and Health Insurance
segment is ordinary life insurance, including permanent and term insurance.
Finally, the Consumer Finance segment operates primarily in the financing
of used automobiles through the purchase of retail installment contracts
from automobile dealers and making personal loans, mostly secured by
automobiles.
Our subsidiaries employ over 7,700 full-time associates of which
approximately 1,220 are employed in the Multi Lines Insurance segment, 760
in the Specialty Lines Insurance segment, 290 in the Unitrin Direct
segment, 4,700 in the Life and Health Insurance segment, and 670 in the
Consumer Finance segment.
We are a holding company whose primary source of funds for the
payment of interest on our obligations or dividends to our stockholders is
dividends from our subsidiaries. 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.
We were incorporated in Delaware in 1990. Our principal executive
offices are located at One East Wacker Drive, Chicago, Illinois 60601, and
the telephone number is (312) 661-4500.
USE OF PROCEEDS
Unless otherwise set forth in a prospectus supplement, we intend
to use the proceeds of any securities sold for general corporate purposes,
including repayment of existing indebtedness, working capital and the
expansion of our business through new insurance product offerings, enhanced
distribution and marketing of existing insurance products and strategic
acquisitions as opportunities arise.
4
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed
charges(1) for the periods indicated:
Year Ended December 31,
Three Months Ended ---------------------------------------------
March 31, 2002 2001 2000 1999 1998 1997
------------------------- ------ ------- ------- -------- -------
Ratio of Earnings to Fixed Charges,
Excluding Interest on Universal Life
and Annuity Accounts and Investment
Certificates and Savings Accounts 9.3x 52.3x 11.1x 38.3x 103.9x 21.6x
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Ratio of Earnings to Fixed Charges, 2.4x 10.6x 3.7x 6.8x 17.8x 4.1x
Including Interest on Universal Life
and Annuity Accounts and Investment
Certificates and Savings Accounts
(1) The ratios of earnings to fixed charges have been computed on a
consolidated basis by dividing earnings before income taxes and fixed
charges by fixed charges. Fixed charges consist of interest on debt
(including or excluding interest on Universal Life and Annuity Accounts and
Investment Certificates and Savings Accounts depending on the caption
presented above) and a factor for interest included in rent expense.
Earnings before Income Taxes and Fixed Charges consists of Income before
Income Taxes and Equity in Net Income (Loss) of Investees as set forth in
our consolidated statement of income included in our report on Form 10-K
for the year ended December 31, 2001, plus dividends from investees plus
applicable fixed charges.
DESCRIPTION OF SECURITIES
This prospectus contains summary descriptions of the debt
securities, common stock, preferred stock and warrants that we may sell
from time to time. These summary descriptions are not meant to be complete
descriptions of each security. However, this prospectus and the
accompanying prospectus supplement contain the material terms of the
securities being offered.
DESCRIPTION OF DEBT SECURITIES
As used in this prospectus, debt securities means the debentures,
notes, bonds and other evidences of indebtedness that we may issue from
time to time. The debt securities will either be senior debt securities or
subordinated debt securities. Senior debt securities will be issued under a
"Senior Indenture" and subordinated debt securities will be issued under a
"Subordinated Indenture." This prospectus sometimes refers to the Senior
Indenture and the Subordinated Indenture collectively as the "Indentures."
The forms of Indentures are filed as exhibits to the registration
statement. The statements and descriptions in this prospectus or in any
prospectus supplement regarding provisions of the Indentures and debt
securities are summaries thereof, do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all of the
provisions of the Indentures and the debt securities, including the
definitions therein of certain terms.
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General
The debt securities will be direct unsecured obligations of ours.
The senior debt securities will rank equally with all of our other senior
and unsubordinated debt. The subordinated debt securities will be
subordinate and junior in right of payment to all of our present and future
senior indebtedness.
Because we are principally a holding company, our right to
participate in any distribution of assets of any subsidiary, upon the
subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of the subsidiary, except to the extent we may be
recognized as a creditor of that subsidiary. Accordingly, our obligations
under the debt securities will be effectively subordinated to all existing
and future indebtedness and liabilities of our subsidiaries and holders of
debt securities should look only to our assets for payment thereunder.
Furthermore, our ability to pay principal and interest on the debt
securities is, to a large extent, dependent upon dividends or other
payments to us from our subsidiaries.
The Indentures do not limit the aggregate principal amount of debt
securities that we may issue and provide that we may issue debt securities
from time to time in one or more series, in each case with the same or
various maturities, at par or at a discount. We may issue additional debt
securities of a particular series without the consent of the holders of the
debt securities of such series outstanding at the time of the issuance. Any
such additional debt securities, together with all other outstanding debt
securities of that series, will constitute a single series of debt
securities under the applicable Indenture. The Indentures also do not limit
our ability to incur other debt.
Each prospectus supplement will describe the terms relating to the
specific series of debt securities being offered. These terms will include
some or all of the following:
o the title of debt securities and whether they are
subordinated debt securities or senior debt securities;
o any limit on the aggregate principal amount of the debt
securities;
o the price or prices at which we will sell the debt
securities;
o the maturity date or dates of the debt securities;
o the rate or rates of interest, if any, which may be fixed or
variable, at which the debt securities will bear interest,
or the method of determining such rate or rates, if any;
o the date or dates from which any interest will accrue or the
method by which such date or dates will be determined;
o the right, if any, to extend the interest payment periods
and the duration of any such deferral period, including the
maximum consecutive period during which interest payment
periods may be extended;
o whether the amount of payments of principal of (and premium,
if any) or interest on the debt securities may be determined
with reference to any index, formula or other method,
6
such as one or more currencies, commodities, equity indices or
other indices, and the manner of determining the amount of
such payments;
o the dates on which we will pay interest on the debt
securities and the regular record date for determining who
is entitled to the interest payable on any interest payment
date;
o the place or places where the principal of (and premium, if
any) and interest on the debt securities will be payable;
o if we possess the option to do so, the periods within which
and the prices at which we may redeem the debt securities,
in whole or in part, pursuant to optional redemption
provisions, and the other terms and conditions of any such
provisions;
o our obligation, if any, to redeem, repay or purchase debt
securities by making periodic payments to a sinking fund or
through an analogous provision or at the option of holders
of the debt securities, and the period or periods within
which and the price or prices at which we will redeem, repay
or purchase the debt securities, in whole or in part,
pursuant to such obligation, and the other terms and
conditions of such obligation;
o the denominations in which the debt securities will be
issued, if other than denominations of $1,000 and integral
multiples of $1,000;
o the portion, or methods of determining the portion, of the
principal amount of the debt securities which we must pay
upon the acceleration of the maturity of the debt securities
in connection with an Event of Default (as described below),
if other than the full principal amount;
o the currency, currencies or currency unit in which we will
pay the principal of (and premium, if any) or interest, if
any, on the debt securities, if not United States dollars;
o provisions, if any, granting special rights to holders of
the debt securities upon the occurrence of specified events;
o any deletions from, modifications of or additions to the
Events of Default or our covenants with respect to the
applicable series of debt securities, and whether or not
such Events of Default or covenants are consistent with
those contained in the applicable Indenture;
o the application, if any, of the terms of the Indenture
relating to defeasance and covenant defeasance (which terms
are described below) to the debt securities;
o whether the subordination provisions summarized below or
different subordination provisions will apply to the debt
securities;
o the terms, if any, upon which the holders may convert or
exchange the debt securities into or for our common stock,
preferred stock or other securities or property;
7
o whether any of the debt securities will be issued in global
form and, if so, the terms and conditions upon which global
debt securities may be exchanged for certificated debt
securities;
o any change in the right of the trustee or the requisite
holders of debt securities to declare the principal amount
thereof due and payable because of an Event of Default;
o the depositary for global or certificated debt securities;
o any special tax implications of the debt securities;
o any trustees, authenticating or paying agents, transfer
agents or registrars or other agents with respect to the
debt securities; and
o any other terms of the debt securities.
Unless otherwise specified in the applicable prospectus
supplement, the debt securities will not be listed on any securities
exchange.
Unless otherwise specified in the applicable prospectus
supplement, debt securities will be issued in fully-registered form without
coupons.
Debt securities may be sold at a substantial discount below their
stated principal amount, bearing no interest or interest at a rate which at
the time of issuance is below market rates. The applicable prospectus
supplement will describe the federal income tax consequences and special
considerations applicable to any such debt securities. The debt securities
may also be issued as indexed securities or securities denominated in
foreign currencies, currency units or composite currencies, as described in
more detail in the prospectus supplement relating to any of the particular
debt securities. The prospectus supplement relating to specific debt
securities will also describe any special considerations and certain
additional tax considerations applicable to such debt securities.
Subordination
The prospectus supplement relating to any offering of subordinated
debt securities will describe the specific subordination provisions.
However, unless otherwise noted in the prospectus supplement, subordinated
debt securities will be subordinate and junior in right of payment to all
of our Senior Indebtedness, to the extent and in the manner set forth in
the Subordinated Indenture.
Under the Subordinated Indenture, "Senior Indebtedness" means all
obligations of ours in respect of any of the following, whether outstanding
at the date of execution of the Subordinated Indenture or thereafter
incurred or created:
o the principal of (and premium, if any) and interest due on
indebtedness of ours for borrowed money;
o all obligations guaranteed by us for the repayment of
borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments;
8
o all obligations guaranteed by us evidenced by bonds,
debentures, notes or similar written instruments, including
obligations assumed or incurred in connection with the
acquisition of property, assets or businesses (provided,
however, that the deferred purchase price of any other
business or property or assets shall not be considered
indebtedness if the purchase price thereof is payable in
full within 90 days from the date on which such indebtedness
was created);
o any obligations of ours as lessee under leases required to
be capitalized on the balance sheet of the lessee under
generally accepted accounting principles;
o all obligations of ours for the reimbursement on any letter
of credit, banker's acceptance, security purchase facility
or similar credit transaction;
o all obligations of ours in respect of interest rate swap,
cap or other agreements, interest rate future or options
contracts, currency swap agreements, currency future or
option contracts and other similar agreements;
o all obligations of the types referred to above of other
persons for the payment of which we are responsible or
liable as obligor, guarantor or otherwise; and
o all obligations of the types referred to above of other
persons secured by any lien on any property or asset of ours
(whether or not such obligation is assumed by us).
Senior Indebtedness does not include:
o indebtedness or monetary obligations to trade creditors
created or assumed by us in the ordinary course of business
in connection with the obtaining of materials or services;
o indebtedness that is by its terms subordinated to or ranks
equal with the subordinated debt securities; and
o any indebtedness of ours to our affiliates (including all
debt securities and guarantees in respect of those debt
securities issued to any trust, partnership or other entity
affiliated with us that is a financing vehicle of ours in
connection with the issuance by such financing entity of
preferred securities or other securities guaranteed by us)
unless otherwise expressly provided in the terms of any such
indebtedness.
Senior Indebtedness shall continue to be Senior Indebtedness and
be entitled to the benefits of the subordination provisions irrespective of
any amendment, modification or waiver of any term of such Senior
Indebtedness.
Unless otherwise noted in the accompanying prospectus supplement,
if we default in the payment of any principal of (or premium, if any) or
interest on any Senior Indebtedness when it becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration or
otherwise, then, unless and until such default is cured or waived or ceases
to exist, we will make no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) in respect of the principal of or
9
interest on the subordinated debt securities or in respect of any
redemption, retirement, purchase or other acquisition of any of the
subordinated debt securities.
In the event of the acceleration of the maturity of any
subordinated debt securities, the holders of all senior debt securities
outstanding at the time of such acceleration will first be entitled to
receive payment in full of all amounts due on the senior debt securities
before the holders of the subordinated debt securities will be entitled to
receive any payment of principal (and premium, if any) or interest on the
subordinated debt securities.
If any of the following events occurs, we will pay in full all
Senior Indebtedness before we make any payment or distribution under the
subordinated debt securities, whether in cash, securities or other
property, to any holder of subordinated debt securities:
o any dissolution or winding-up or liquidation or
reorganization of ours, whether voluntary or involuntary or
in bankruptcy, insolvency or receivership;
o any general assignment by us for the benefit of creditors; or
o any other marshaling of our assets or liabilities.
In such event, any payment or distribution under the subordinated
debt securities, whether in cash, securities or other property, which would
otherwise (but for the subordination provisions) be payable or deliverable
in respect of the subordinated debt securities, will be paid or delivered
directly to the holders of Senior Indebtedness in accordance with the
priorities then existing among such holders until all Senior Indebtedness
has been paid in full. If any payment or distribution under the
subordinated debt securities is received by the trustee of any subordinated
debt securities in contravention of any of the terms of the Subordinated
Indenture and before all the Senior Indebtedness has been paid in full,
such payment or distribution or security will be received in trust for the
benefit of, and paid over or delivered and transferred to, the holders of
the Senior Indebtedness at the time outstanding in accordance with the
priorities then existing among such holders for application to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay
all such Senior Indebtedness in full.
The Subordinated Indenture does not limit the issuance of
additional Senior Indebtedness.
Consolidation, Merger, Sale of Assets and Other Transactions
We may not (i) merge with or into or consolidate with another
corporation or sell, assign, transfer, lease or convey all or substantially
all of our properties and assets to, any other corporation other than a
direct or indirect wholly-owned subsidiary of ours, and (ii) no corporation
may merge with or into or consolidate with us or, except for any of our
direct or indirect wholly-owned subsidiaries, sell, assign, transfer, lease
or convey all or substantially all of its properties and assets to us, unless:
o We are the surviving corporation or the corporation formed
by or surviving such merger or consolidation or to which
such sale, assignment, transfer, lease or conveyance has
been made, if other than us, has expressly assumed by
supplemental indenture all our obligations under the debt
securities and the Indentures;
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o immediately after giving effect to such transaction, no
default or Event of Default has occurred and is continuing;
and
o we deliver to the trustee an officers' certificate and an
opinion of counsel, each stating that the supplemental
indenture complies with the applicable Indenture.
Events of Default, Notice and Waiver
Unless an accompanying prospectus supplement states otherwise, the
following shall constitute "Events of Default" under the Indentures with
respect to each series of debt securities:
o our failure to pay any interest on any debt security of such
series when due and payable, continued for 30 days;
o our failure to pay principal (or premium, if any) on any
debt security of such series when due, regardless of whether
such payment became due because of maturity, redemption,
acceleration or otherwise, or is required by any sinking
fund established with respect to such series;
o our failure to observe or perform any other of our covenants
or agreements with respect to such debt securities for 90
days after we receive notice of such failure; and
o certain events of bankruptcy, insolvency or reorganization.
If an Event of Default with respect to any debt securities of any
series outstanding under either of the Indentures shall occur and be
continuing, the trustee under such Indenture or the holders of at least 25%
in aggregate principal amount of the debt securities of that series
outstanding may declare, by notice as provided in the applicable Indenture,
the principal amount (or such lesser amount as may be provided for in the
debt securities of that series) of all the debt securities of that series
outstanding to be due and payable immediately; provided that, in the case
of an Event of Default involving certain events in bankruptcy, insolvency
or reorganization, acceleration is automatic; and, provided further, that
after such acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of
the outstanding debt securities of that series may, under certain
circumstances, rescind and annul such acceleration if all Events of
Default, other than the nonpayment of accelerated principal, have been
cured or waived. Upon the acceleration of the maturity of original issue
discount securities, an amount less than the principal amount thereof will
become due and payable. Reference is made to the prospectus supplement
relating to any original issue discount securities for the particular
provisions relating to acceleration of maturity thereof.
Any past default under either Indenture with respect to debt
securities of any series, and any Event of Default arising therefrom, may
be waived by the holders of a majority in principal amount of all debt
securities of such series outstanding under such Indenture, except in the
case of (i) default in the payment of the principal of (or premium, if any)
or interest on any debt securities of such series or (ii) default in
respect of a covenant or provision which may not be amended or modified
without the consent of the holder of each outstanding debt security of such
series affected.
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The trustee is required, within 90 days after the occurrence of a
default (which is known to the trustee and is continuing), with respect to
the debt securities of any series (without regard to any grace period or
notice requirements), to give to the holders of the debt securities of such
series notice of such default; provided, however, that, except in the case
of a default in the payment of the principal of (and premium, if any) or
interest, or in the payment of any sinking fund installment, on any debt
securities of such series, the trustee shall be protected in withholding
such notice if it in good faith determines that the withholding of such
notice is in the interests of the holders of the debt securities of such series.
The trustee, subject to its duties during default to act with the
required standard of care, may require indemnification by the holders of
the debt securities of any series with respect to which a default has
occurred before proceeding to exercise any right or power under the
Indentures at the request of the holders of the debt securities of such
series. Subject to such right of indemnification and to certain other
limitations, the holders of a majority in principal amount of the
outstanding debt securities of any series under either Indenture may direct
the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee with respect to the debt securities of such series.
No holder of a debt security of any series may institute any
action against us under either of the Indentures (except actions for
payment of overdue principal of (and premium, if any) or interest on such
debt security or for the conversion or exchange of such debt security in
accordance with its terms) unless (i) the holder has given to the trustee
written notice of an Event of Default and of the continuance thereof with
respect to the debt securities of such series specifying an Event of
Default, as required under the applicable Indenture, (ii) the holders of at
least 25% in aggregate principal amount of the debt securities of that
series then outstanding under such Indenture shall have requested the
trustee to institute such action and offered to the trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities
to be incurred in compliance with such request and (iii) the trustee shall
not have instituted such action within 60 days of such request.
We are required to furnish annually to the trustee statements as
to our compliance with all conditions and covenants under each Indenture.
Discharge, Defeasance and Covenant Defeasance
If indicated in the applicable prospectus supplement, we may
discharge or defease our obligations under each Indenture as set forth below.
We may discharge certain obligations to holders of any series of
debt securities issued under either the Senior Indenture or the
Subordinated Indenture which have not already been delivered to the trustee
for cancellation and which have either become due and payable or are by
their terms due and payable within one year (or scheduled for redemption
within one year) by irrevocably depositing with the trustee cash or, in the
case of debt securities payable only in U.S. dollars, U.S. government
obligations (as defined in either Indenture), as trust funds in an amount
certified to be sufficient to pay when due, whether at maturity, upon
redemption or otherwise, the principal of (and premium, if any) and
interest on such debt securities.
If indicated in the applicable prospectus supplement, we may elect
either (i) to defease and be discharged from any and all obligations with
respect to the debt securities of or within any series (except
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as otherwise provided in the relevant Indenture) ("defeasance") or (ii) to
be released from its obligations with respect to certain covenants
applicable to the debt securities of or within any series ("covenant
defeasance"), upon the deposit with the relevant Indenture trustee, in
trust for such purpose, of money and/or government obligations which
through the payment of principal and interest in accordance with their
terms will provide money in an amount sufficient, without reinvestment, to
pay the principal of (and premium, if any) or interest on such debt
securities to maturity or redemption, as the case may be, and any mandatory
sinking fund or analogous payments thereon. As a condition to defeasance or
covenant defeasance, we must deliver to the trustee an opinion of counsel
to the effect that the holders of such debt securities will not recognize
income, gain or loss for federal income tax purposes as a result of such
defeasance or covenant defeasance and will be subject to federal income tax
on the same amounts and in the same manner and at the same times as would
have been the case if such defeasance or covenant defeasance had not
occurred. Such opinion of counsel, in the case of defeasance under clause
(i) above, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable federal income tax law occurring after
the date of the relevant Indenture. In addition, in the case of either
defeasance or covenant defeasance, we shall have delivered to the trustee
(i) an officers' certificate to the effect that the relevant debt
securities exchange(s) have informed it that neither such debt securities
nor any other debt securities of the same series, if then listed on any
securities exchange, will be delisted as a result of such deposit and (ii)
an officers' certificate and an opinion of counsel, each stating that all
conditions precedent with respect to such defeasance or covenant defeasance
have been complied with.
We may exercise our defeasance option with respect to such debt
securities notwithstanding our prior exercise of our covenant defeasance
option.
Modification and Waiver
Under the Indentures, we and the applicable trustee may supplement
the Indentures for certain purposes which would not materially adversely
affect the interests or rights of the holders of debt securities of a
series without the consent of those holders. We and the applicable trustee
may also modify the Indentures or any supplemental indenture in a manner
that affects the interests or rights of the holders of debt securities with
the consent of the holders of a least a majority in aggregate principal
amount of the outstanding debt securities of each affected series issued
under the Indenture. However, the Indentures require the consent of each
holder of debt securities that would be affected by any modification which
would:
o extend the fixed maturity of any debt securities of any
series, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon,
or reduce any premium payable upon the redemption thereof;
o reduce the amount of principal of an original issue discount
debt security or any other debt security payable upon
acceleration of the maturity thereof;
o change the currency in which any debt security or any
premium or interest is payable;
o impair the right to institute suit for any payment on or
with respect to any debt security;
o reduce the percentage in principal amount of outstanding
debt securities of any series, the consent of whose holders
is required for modification or amendment of the Indentures or
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for waiver of compliance with certain provisions of the
Indentures or for waiver of certain defaults;
o reduce the requirements contained in the Indentures for
quorum or voting; or
o modify any of the above provisions.
The Indentures permit the holders of at least a majority in
aggregate principal amount of the outstanding debt securities of any series
issued under the Indenture which is affected by the modification or
amendment to waive our compliance with certain covenants contained in the
Indentures.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus
supplement, payment of interest on a debt security on any interest payment
date will be made to the person in whose name a debt security is registered
at the close of business on the record date for the interest.
Unless otherwise indicated in the applicable prospectus
supplement, principal, interest and premium on the debt securities of a
particular series will be payable at the office of such paying agent or
paying agents as we may designate for such purpose from time to time.
Notwithstanding the foregoing, at our option, payment of any interest may
be made by check mailed to the address of the person entitled thereto as
such address appears in the security register.
Unless otherwise indicated in the applicable prospectus
supplement, a paying agent designated by us and located in the Borough of
Manhattan, The City of New York will act as paying agent for payments with
respect to debt securities of each series. All paying agents initially
designated by us for the debt securities of a particular series will be
named in the applicable prospectus supplement. We may at any time designate
additional paying agents or rescind the designation of any paying agent or
approve a change in the office through which any paying agent acts, except
that we will be required to maintain a paying agent in each place of
payment for the debt securities of a particular series.
Denominations, Registrations and Transfer
Unless an accompanying prospectus supplement states otherwise,
debt securities will be represented by one or more global certificates
registered in the name of a nominee for The Depository Trust Company, or
DTC. In such case, each holder's beneficial interest in the global
securities will be shown on the records of DTC and transfers of beneficial
interests will only be effected through DTC's records.
A holder of debt securities may only exchange a beneficial
interest in a global security for certificated securities registered in the
holder's name if:
o DTC notifies us that it is unwilling or unable to continue
serving as the depositary for the relevant global securities
or DTC ceases to maintain certain qualifications under the
Securities Exchange Act of 1934 and no successor depositary
has been appointed for 90 days; or
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o We determine, in our sole discretion, that the global
security shall be exchangeable.
If debt securities are issued in certificated form, they will only
be issued in the minimum denomination specified in the accompanying
prospectus supplement and integral multiples of such denomination.
Transfers and exchanges of such debt securities will only be permitted in
such minimum denomination. Transfers of debt securities in certificated
form may be registered at the trustee's corporate office or at the offices
of any paying agent or trustee appointed by us under the Indentures.
Exchanges of debt securities for an equal aggregate principal amount of
debt securities in different denominations may also be made at such
locations.
Governing Law
The Indentures and debt securities will be governed by, and
construed in accordance with, the internal laws of the State of New York,
without regard to its principles of conflicts of laws.
Concerning the Trustee
We anticipate appointing the trustee under the Indenture as the
paying agent, conversion agent, registrar and custodian with regard to the
debt securities. The trustee and/or its affiliates may in the future
provide banking and other services to us in the ordinary course of their
respective businesses.
Conversion or Exchange Rights
The prospectus supplement will describe the terms, if any, on
which a series of debt securities may be convertible into or exchangeable
for our common stock, preferred stock or other debt securities. These terms
will include provisions as to whether conversion or exchange is mandatory,
at the option of the holder or at our option. These provisions may allow or
require the number of shares of our common stock or other securities to be
received by the holders of such series of debt securities to be adjusted.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 100,000,000 shares of
Common Stock and 20,000,000 shares of Preferred Stock, of which 100,000
shares have been designated Series A preferred stock. No Preferred Stock is
outstanding as of the date of this prospectus. Of the 100,000,000 shares of
Common Stock authorized, 67,670,950 shares were outstanding as of March 31,
2002, and 10,705,294 shares have been reserved for issuance pursuant to
certain employee benefits plans as of May 3, 2002. The following is a
summary description of all material terms and provisions relating to our
capital stock, Certificate of Incorporation (the "Certificate of
Incorporation") and Amended and Restated By-Laws (the "By-Laws"), but is
qualified by reference to the Certificate of Incorporation and By-Laws,
copies of which are filed as exhibits to the registration statement of
which this prospectus forms a part.
Common Stock
Voting Rights. Each holder of shares of our common stock is
entitled to attend all special and annual meetings of our stockholders. The
holders of our common stock have one vote for each share held on all
matters voted upon by our stockholders, including the election of directors.
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Dividends. Except for any preferential rights of holders of any
preferred stock that may then be issued and outstanding and any other class
or series of stock having a preference over the common stock, holders of
our common stock are entitled to receive dividends when declared by our
board of directors, from legally available funds.
Other Rights. On our liquidation, dissolution or winding up, after
payment in full of the amounts required to be paid to holders of preferred
stock, if any, all holders of common stock are entitled to share ratably in
any assets available for distribution to holders of shares of common stock.
No shares of common stock are subject to redemption or have preemptive
rights to purchase additional shares of common stock.
Listing. The common stock is listed on the New York Stock Exchange
under the symbol "UTR."
Transfer Agent and Registrar. The transfer agent and registrar for
the common stock is First Union National Bank.
Preferred Stock
As of the date of this prospectus, no shares of preferred stock
are outstanding. 100,000 shares have been designated Series A preferred
stock. The Board of Directors may authorize the issuance of preferred stock
in one or more series and may determine, with respect to any such series,
the powers, preferences and rights of such series, and its qualifications,
limitations and restrictions, including, without limitation,
(i) the designation of the series;
(ii) the number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the
designations for such series) increase or decrease (but not below the
number of shares of such series then outstanding);
(iii) whether dividends, if any, will be cumulative or noncumulative
and the dividend rate of the series;
(iv) the conditions upon which and the dates at which dividends,
if any, will be payable, and the relation that such dividends, if any, will
bear to the dividends payable on any other class or classes of Stock;
(v) the redemption rights and price or prices, if any, for shares of
the series;
(vi) the terms and amounts of any sinking fund provided for the
purchase or redemption of shares of the series;
(vii) the amounts payable on and the preferences, if any, of
shares of the series, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of Unitrin, Inc.;
(viii) whether the shares of the series will be convertible or
exchangeable into shares of any other class or series, or any other
security of ours or any other entity, and, if so, the specification of such
16
other class or series or such other security, the conversion price or
prices or exchange rate or rates, any adjustments thereof, the date or
dates as of which such shares will be convertible or exchangeable and all
other terms and conditions upon which such conversion or exchange may be
made; and
(ix) the voting rights, in addition to the voting rights provided
by law, if any, of the holders of shares of such series.
The authorized shares of preferred stock will be available for
issuance without further action by our shareholders unless such action is
required by applicable law or the rules of any stock exchange or automated
quotation system on which our securities may be listed or traded. The NYSE
currently requires shareholder approval as a prerequisite to listing shares
in several circumstances, including where the present or potential issuance
of shares could result in an increase in the number of shares of common
stock outstanding, or in the amount of voting securities outstanding, of at
least 20%.
Although the Board of Directors has no current intention of doing
so, it could issue a series of preferred stock that could, depending on the
terms of such series, impede the completion of a merger, tender offer or
other takeover attempt. The Board of Directors will make any determination
to issue such shares based on its judgment as to the best interests of
Unitrin and its shareholders. The Board of Directors, in so acting, could
issue preferred stock having terms that could discourage a potential
acquirer from making, without first negotiating with the Board of
Directors, an acquisition attempt through which such acquirer may be able
to change the composition of the Board of Directors, including a tender
offer or other transaction that some, or a majority, of our shareholders
might believe to be in their best interests or in which shareholders might
receive a premium for their stock over the then current market price of
such stock.
Provisions With Possible Anti-Takeover Effects
Various provisions of the Delaware General Corporation Law and our
Certificate of Incorporation and By-Laws, as well as the shareholder rights
plan adopted by us and described below, may make more difficult the
acquisition of control of us by means of a tender offer, open market
purchases, a proxy fight or other means that are not approved by our board
of directors but that a shareholder might consider to be in such
shareholder's best interest.
The summary set forth below describes certain provisions of the
Certificate of Incorporation and By-Laws. The summary is qualified in its
entirety by reference to the provisions of the Certificate of Incorporation
and By-Laws, copies of which are filed as exhibits to the registration
statement of which this prospectus forms a part.
Charter and By-Law Provisions
Article Six of the Certificate of Incorporation and Article II of
the By-Laws provide that a special meeting of the shareholders may be
called only by the Chairman of the Board or by a majority of the Board of
Directors then in office.
Article Six of the Certificate of Incorporation also provides that
shareholders may not take any action by written consent.
17
Article II of the By-Laws requires that any nomination for
election to the Board of Directors by a shareholder must be delivered to
the Secretary not less than sixty (60) nor more than ninety (90) days prior
to the anniversary of the preceding year's annual meeting.
Business Combinations
Article Seven of the Certificate of Incorporation places certain
restrictions on the following transactions with a direct or indirect
beneficial owner (including certain former beneficial owners and successors
to such beneficial owners) of more than 15% of the voting power of
Unitrin's outstanding voting stock (an "interested shareholder"):
(i) any merger or consolidation of Unitrin or any subsidiary with
any interested shareholder or any other person (whether or not itself an
interested shareholder) which is, or after such merger or consolidation
would be, an affiliate of an interested shareholder; or
(ii) any sale, lease exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
interested shareholder or any affiliate of any interested shareholder of
any assets of Unitrin or any subsidiary having an aggregate fair market
value of $10,000,000 or more; or
(iii) the issuance or transfer by Unitrin or any subsidiary (in
one transaction or a series of transactions) of any securities of Unitrin
or any subsidiary to any interested shareholder or any affiliate of any
interested shareholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate fair market value of
$10,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of Unitrin proposed by or on behalf of any interested
shareholder or any affiliate of any interested shareholder; or
(v) any reclassification of securities (including any reverse
stock split or recapitalization of Unitrin) or any merger or consolidation
of Unitrin with any of its subsidiaries or any other transaction (whether
or not with or into or otherwise involving any interested shareholder)
which has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of equity or
convertible securities of Unitrin or any subsidiary beneficially owned by
any interested shareholder or any affiliate of any interested shareholder.
We may only enter into one of the transactions described above if :
(i) the transaction has been approved by a majority of our
"continuing directors," being (1) members of our original Board of
Directors, (2) persons unaffiliated with an interested shareholder who were
members of the Board of Directors prior to such person or entity becoming
an interested shareholder, or (3) successors of continuing directors who
were recommended to succeed continuing directors by a majority of
continuing directors then on the Board; or
(ii) the transaction has been approved by the affirmative vote of
75% of the voting power of our outstanding voting stock, voting together as
a single class, the consideration to be received by the holders of each
class or series of our capital stock equals the highest price paid by the
Interested Shareholder for any shares of such class or series during the
preceding 24 months and is either in cash or in the form of
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consideration previously used by the Interested Shareholder to acquire the
largest number of shares of such class or series previously acquired by
such Interested Shareholder and certain other conditions have been met.
Business Combination Statute
As a Delaware corporation, we are subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents an
interested stockholder (defined generally as a person owning 15% or more of
our outstanding voting stock) from engaging in a business combination with
us for three years following the date that person became an interested
stockholder unless:
o before that person became an interested stockholder, our
board of directors approved the transaction in which the
interested stockholder became an interested stockholder or
approved the business combination;
o upon completion of the transaction that resulted in the
interested stockholder becoming an interested stockholder,
the interested stockholder owned at least 85% of our
outstanding voting stock at the time the transaction
commenced (excluding stock held by persons who are both
directors and officers or by certain employee stock plans); or
o on or following the date on which that person became an
interested stockholder, the business combination is approved
by our Board of Directors and authorized at a meeting of
stockholders by the affirmative vote of the holders of at
least 66 2/3% of our outstanding voting stock (excluding
shares held by the interested stockholder).
A business combination includes mergers, assets sales and certain
other transactions resulting in a financial benefit to the interested
stockholder.
Shareholder Rights Plan
On August 3, 1994, our Board of Directors declared a dividend
distribution of one preferred share purchase right (a "Right") for each
outstanding share of Common Stock pursuant to a Rights Agreement bearing
that date (the "Rights Agreement").
Among other provisions of the Rights Agreement, if any person or
group becomes the beneficial owner of 15% or more of our outstanding Common
Stock (an "acquiring person"), then each shareholder (other than the
acquiring person), upon exercise of a Right, would be entitled to buy
Common Stock having a market price equal to twice the exercise price of the
Right. The exercise price of a Right is $62.50. Unless and until a person
or group becomes an acquiring person or commences a tender or exchange
offer that would result in such person or group becoming an acquiring
person (either such event is referred to as a "triggering event"), the
Rights will not be evidenced by separate certificates and will trade with
the Common Stock (i.e., the transfer of a share of Common Stock will also
constitute the transfer of a Right). Upon the occurrence of a triggering
event, separate certificates evidencing the Rights will be mailed to each
shareholder of record. The Rights are not exercisable until a triggering
event occurs and will expire on August 3, 2004 unless earlier redeemed by us.
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The Rights may be redeemed by us at any time prior to the earlier
of a person becoming an acquiring person and the expiration of the Rights
at a redemption price of $.01 per Right.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities, preferred stock
or common stock (collectively, the "underlying warrant securities"), and
such warrants may be issued independently or together with any such
underlying warrant securities and may be attached to or separate from such
underlying warrant securities. Each series of warrants will be issued under
a separate warrant agreement to be entered into between us and a warrant
agent. The warrant agent will act solely as our agent in connection with
the warrants of such series and will not assume any obligation or
relationship of agency for or with holders or beneficial owners of warrants.
The applicable prospectus supplement will describe the specific
terms of any warrants offered thereby, including: (i) the title of such
warrants; (ii) the aggregate number of such warrants; (iii) the price or
prices at which such warrants will be issued; (iv) the currency or
currencies, including composite currencies, in which the exercise price of
such warrants may be payable; (v) the designation and terms of the
Underlying warrant securities purchasable upon exercise of such warrants;
(vi) the price at which the Underlying warrant securities purchasable upon
exercise of such warrants may be purchased; (vii) the date on which the
right to exercise such warrants shall commence and the date on which such
right shall expire; (viii) whether such warrants will be issued in
registered form or bearer form; (ix) if applicable, the minimum or maximum
amount of such warrants which may be exercised at any one time; (x) if
applicable, the designation and terms of the underlying warrant securities
with which such warrants are issued and the number of such warrants issued
with each such underlying warrant security; (xi) if applicable, the date on
and after which such warrants and the related underlying warrant securities
will be separately transferable; (xii) information with respect to
book-entry procedures, if any; (xiii) if applicable, a discussion of
certain United States federal income tax considerations; and (xiv) any
other terms of such warrants, including terms, procedures and limitations
relating to the exchange and exercise of such warrants.
PLAN OF DISTRIBUTION
We may sell the common stock, preferred stock, any series of debt
securities and warrants being offered hereby in one or more of the
following ways from time to time:
o to underwriters or dealers for resale to the public or to
institutional investors;
o directly to institutional investors; or
o through agents to the public or to institutional investors.
The prospectus supplement with respect to each series of
securities will state the terms of the offering of the securities, including:
o the name or names of any underwriters or agents;
o the purchase price of the securities and the proceeds to be
received by us from the sale;
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o any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation;
o any initial public offering price;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
o any securities exchange on which the securities may be listed.
If we use underwriters in the sale, the securities will be
acquired by the underwriters for their own account and may be resold from
time to time in one or more transactions, including:
o negotiated transactions;
o at a fixed public offering price or prices, which may be
changed;
o at market prices prevailing at the time of sale;
o at prices related to prevailing market prices; or
o at negotiated prices.
If dealers are utilized in the sale of offered securities, we will
sell such offered securities to the dealers as principals. The dealers may
then resell such offered securities to the public at varying prices to be
determined by such dealers at the time of resale. The names of the dealers
and the terms of the transaction will be set forth in the prospectus
supplement relating to that transaction.
We may solicit offers to purchase securities directly from the
public from time to time. We may also designate agents from time to time to
solicit offers to purchase securities from the public on our behalf. The
prospectus supplement relating to any particular offering of securities
will name any agents designated to solicit offers, and will include
information about any commissions we may pay the agents, in that offering.
Agents may be deemed to be "underwriters" as that term is defined in the
Securities Act.
We may sell securities from time to time to one or more
underwriters, who would purchase the securities as principal for resale to
the public, either on a firm-commitment or best-efforts basis. If we sell
securities to underwriters, we may execute an underwriting agreement with
them at the time of sale and will name them in the applicable prospectus
supplement. In connection with those sales, underwriters may be deemed to
have received compensation from us in the form of underwriting discounts or
commissions and may also receive commissions from purchasers of the
securities for whom they may act as agents. Underwriters may resell the
securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from purchasers for whom they may act as
agents. The applicable prospectus supplement will include any required
information about underwriting compensation we pay to underwriters, and any
discounts, concessions or commissions underwriters allow to participating
dealers, in connection with an offering of securities.
21
As one of the means of direct issuance of offered securities, we
may utilize the service of an entity through which it may conduct an
electronic "dutch auction" or similar offering of the offered securities
among potential purchasers who are eligible to participate in the action or
offering of such offered securities, if so described in the applicable
prospectus supplement.
If so indicated in the applicable prospectus supplement, we will
authorize agents, underwriters or dealers to solicit offers from certain
types of institutions to purchase offered securities from us at the public
offering price set forth in such prospectus supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date
in the future. Such contracts will be subject only to those conditions set
forth in the prospectus supplement and the prospectus supplement will set
forth the commission payable for solicitation of such contracts.
The securities may also be offered and sold, if so indicated in
the 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 remarketing firms, acting as principals
for their own accounts or as agents for us. The prospectus supplement will
identify any remarketing firm and will describe the terms of its agreement,
if any, with us and its compensation.
In connection with an offering of securities hereunder and under
the applicable supplementary prospectus, the underwriters may purchase and
sell shares of common stock in the open market. These transactions may
include short sales, stabilizing transactions and purchases to cover
positions created by short sales. Shorts sales involve the sale by the
underwriters of a greater number of shares than they are required to
purchase in the offering. "Covered" short sales are sales made in an amount
not greater than the underwriters' option to purchase additional shares
from us in the offering. The underwriters may close out any covered short
position by either exercising their option to purchase additional shares or
purchasing shares in the open market. In determining the source of shares
to close out the covered short position, the underwriters will consider,
among other things, the price of shares available for purchase in the open
market as compared to the price at which they may purchase shares through
the overallotment option. "Naked" short sales are any sales in excess of
such option. The underwriters must close out any naked short position by
purchasing shares in the open market. A naked short position is more likely
to be created if the underwriters are concerned that there may be downward
pressure on the price of the common stock in the open market after pricing
that could adversely affect investors who purchase in the offering.
Stabilizing transactions consist of various bids for or purchases of common
stock made by the underwriters in the open market prior to the completion
of the offering.
The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the
underwriting discount received by it because the representatives have
repurchased shares sold by or for the account of such underwriter in
stabilizing or short covering transactions.
Purchases to cover a short position and stabilizing transactions
may have the effect of preventing or retarding a decline in the market
price of our stock, and together with the imposition of the penalty bid,
may stabilize, maintain or otherwise affect the market price of the common
stock. As a result, the price of the common stock may be higher than the
price that otherwise might exist in the open market. If these activities
are commenced, they may be discontinued at any time. These transactions may
be effected on the New York Stock Exchange, in the over-the-counter market
or otherwise.
22
Underwriters, dealers, agents and remarketing firms may be
entitled under agreements entered into with us to indemnification by us
against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which the
underwriters, dealers, agents and remarketing firms may be required to
make. Underwriters, dealers, agents and remarketing agents may be customers
of, engage in transactions with, or perform services in the ordinary course
of business for us and/or our affiliates.
Each series of securities will be a new issue of securities and
will have no established trading market other than the common stock which
is listed on the New York Stock Exchange. Any common stock sold will be
listed on the New York Stock Exchange, upon official notice of issuance.
The securities, other than the common stock, may or may not be listed on a
national securities exchange. Any underwriters to whom securities are sold
by us for public offering and sale may make a market in the securities, but
such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given as to
the liquidity or trading market for any of the securities.
Unless otherwise indicated in the applicable prospectus supplement
or confirmation of sale, the purchase price of the securities will be
required to be paid in immediately available funds in New York City.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus
supplement, Skadden, Arps, Slate, Meagher & Flom (Illinois), Chicago,
Illinois, will act as counsel to Unitrin.
EXPERTS
The consolidated financial statements of Unitrin, Inc. appearing
in its Annual Report on Form 10-K for the year ended December 31, 2001,
have been audited by KPMG 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 such firm as experts in
accounting and auditing.
23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
------------------------------------------------------
The expenses relating to the registration of the securities will
be borne by the registrant. Such expenses are estimated to be as follows:
Securities and Exchange Commission Registration Fee...... $ 46,000.00
NASD Filing Fee.......................................... *
Trustees' Fees and Expenses.............................. *
Printing and Engraving Fees and Expenses................. *
Accounting Fees and Expenses............................. *
Legal Fees............................................... *
Miscellaneous............................................ *
------------
Total...................................................
============
* To be provided by amendment.
Item 15. Indemnification of Directors and Officers.
----------------------------------------------------
Under Delaware law, a corporation may indemnify any person who was
or is a party or is threatened to be made a party to an action (other than
an action by or in the right of the corporation) by reason of his service
as a director, officer, employee or agent of the corporation, or his
service, at the corporation's request, as a director, officer, employee or
agent of another corporation or other enterprise, against expenses
(including attorneys' fees) that are actually and reasonably incurred by
him ("Expenses"), and judgments, fines and amounts paid in settlement that
are actually and reasonably incurred by him, in connection with the defense
or settlement of such action, provided that he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's
best interests, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe that his conduct was unlawful. Although
Delaware law permits a corporation to indemnify any person referred to
above against Expenses in connection with the defense or settlement of an
action by or in the right of the corporation, provided that he acted in
good faith and in a manner he reasonably believed to be in or not opposed
to the corporation's best interests, if such person has been judged liable
to the corporation, indemnification is only permitted to the extent that
the Court of Chancery (or the court in which the action was brought)
determines that, despite the adjudication of liability, such person is
entitled to indemnity for such Expenses as the court deems proper. Delaware
law also provides for mandatory indemnification of any director, officer,
employee or agent against Expenses to the extent such person has been
successful in any proceeding covered by the statute. In addition, Delaware
law provides the general authorization of advancement of a director's or
officer's litigation expenses in lieu of requiring the authorization of
such advancement by the Board of Directors in specific cases, and that
indemnification and advancement of expenses provided by the statute shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement or otherwise.
The Certificate of Incorporation of Unitrin provides for the broad
indemnification of the directors and officers of Unitrin and for
advancement of litigation expenses to the fullest extent permitted by
current Delaware law.
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The Certificate of Incorporation of Unitrin eliminates the
personal liability of a director to Unitrin or its shareholders, under
certain circumstances, for monetary damages for breach of fiduciary duty as
a director.
Unitrin maintains a directors and officers liability insurance
policy insuring the directors and officers of Unitrin and its subsidiaries
in certain instances.
Item 16. List of Exhibits.
---------------------------
The Exhibits to this registration statement are listed in the
Index to Exhibits on page II-6.
Item 17. Undertakings.
-----------------------
The 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 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 1(i) and 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 the 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.
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The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 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 herein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions set forth
in Item 15, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the 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, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee
to act under subsection (a) of Section 310 of the Trust Indenture Act in
accordance with the rules and regulations prescribed by the Commission
under Section 305(b)(2) of the Act.
The undersigned registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
The undersigned registrant hereby undertakes that for the purpose
of determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago, State of Illinois on
May 8, 2002.
UNITRIN, INC.
By /s/ Eric J. Draut
----------------------------
Name: Eric J. Draut
Title: Chief Financial Officer
and Executive Vice
President
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Eric J. Draut and Scott Renwick and each of them, his true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him or her in his or her name, place and stead, in any
and all capacities, to sign any and all amendments to this registration
statement and any additional registration statement pursuant to Rule 462(b)
under the Securities Act of 1933 and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities
and Exchange Commission, and hereby grants to such attorney-in-fact and
agent, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Richard C. Vie Chairman of the Board of Directors and Chief
------------------------------- Executive Officer (principal executive officer) May 8, 2002
Richard C. Vie
/s/ Eric J. Draut Executive Vice President, Chief Financial
------------------------------- Officer and Director (principal financial officer) May 8, 2002
Eric J. Draut
/s/ Richard Roeske Vice President and Chief Accounting Officer
------------------------------- (principal accounting officer) May 8, 2002
Richard Roeske
II-4
/s/ Donald G. Southwell President, Chief Operating Officer
------------------------------- and Director May 8, 2002
Donald G. Southwell
/s/ James E. Annable
------------------------------- Director May 8, 2002
James E. Annable
/s/ Douglas G. Geoga
------------------------------- Director May 8, 2002
Douglas G. Geoga
/s/ Rueben L. Hedlund
------------------------------- Director May 8, 2002
Rueben L. Hedlund
/s/ Jerrold V. Jerome
------------------------------- Director May 8, 2002
Jerrold V. Jerome
/s/ William E. Johnston
------------------------------- Director May 8, 2002
William E. Johnston
/s/ Fayez S. Sarofim
------------------------------- Director May 8, 2002
Fayez S. Sarofim
/s/ Ann E. Ziegler
------------------------------- Director May 8, 2002
Ann E. Ziegler
II-5
EXHIBIT INDEX
Exhibit
No. Description of Exhibits
-------- -----------------------
1.1 Form of Underwriting Agreement for debt securities to be filed
as an exhibit to a Current Report of Unitrin, Inc. on Form 8-K
and incorporated by reference herein.
1.2 Form of Underwriting Agreement for preferred stock to be filed
as an exhibit to a Current Report of Unitrin, Inc. on Form 8-K
and incorporated by reference herein.
1.3 Form of Underwriting Agreement for common stock to be filed as
an exhibit to a Current Report of Unitrin, Inc. on Form 8-K and
incorporated by reference herein.
3.1 Certificate of Incorporation of Unitrin, Inc.
3.2 Amended and Restated By-Laws of Unitrin, Inc. (incorporated by
reference to Exhibit 3.2 to Unitrin's Quarterly Report on Form
10-Q for the quarter ended March 31, 2002).
4.1 Form of Senior Indenture.
4.2 Form of Subordinated Indenture.
4.3 Form of any Senior Note with respect to each particular series
of Senior Notes issued hereunder to be filed as an exhibit to a
Current Report of Unitrin, Inc on Form 8-K and incorporated by
reference herein.
4.4 Form of any Subordinated Note with respect to each particular
series of Subordinated Notes issued hereunder to be filed as an
exhibit to a Current Report of Unitrin, Inc on Form 8-K and
incorporated by reference herein.
4.5 Form of any certificate of designation, preferences and rights
with respect to any preferred stock issued hereunder to be filed
as an exhibit to a Current Report of Unitrin, Inc on Form 8-K
and incorporated by reference herein.
4.6 Form of Debt Warrant Agreement to be filed as an exhibit to a
Current Report of Unitrin, Inc on Form 8-K and incorporated by
reference herein.
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4.7 Form of Debt Warrant Certificate (included in Exhibit 4.6)
4.8 Form of Stock Warrant Agreement to be filed as an exhibit to a
Current Report of Unitrin, Inc on Form 8-K and incorporated by
reference herein.
4.9 Form of Stock Warrant Certificate (included in Exhibit 4.8)
4.10 Rights Agreement, dated as of August 3, 1994, as amended October
12, 2000, between Unitrin, Inc. and First Union National Bank as
Rights Agent, which includes: as Exhibit A thereto, the Form of
Certificate of Amendment of Certificate of Designation,
Preferences and Rights of Series A Preferred Stock of Unitrin,
Inc.; as Exhibit B thereto, the Form of Right Certificate; and,
as Exhibit C thereto, the Summary of Rights to Purchase Series A
Preferred Stock.
5.1 Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois) to be
filed as an exhibit to a Current Report of Unitrin, Inc. on Form
8-K and incorporated by reference herein.
12.1 Statement Re: Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of KPMG LLP, independent accountants.
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(included in Exhibit 5.1).
24.1 Powers of Attorney (included on the signature pages hereto).
25.1 Statement of Eligibility on Form T-1 of the Trustee under the
Senior Indenture to be filed as an exhibit to a Current Report
of Unitrin, Inc on Form 8-K and incorporated by reference herein.
25.2 Statement of Eligibility on Form T-1 of the Trustee under the
Subordinated Indenture to be filed as an exhibit to a Current
Report of Unitrin, Inc on Form 8-K and incorporated by reference
herein.
II-7