PROSPECTUS
SUPPLEMENT
(To
Prospectus Dated August 17, 2006)
$250,000,000
CIGNA
Corporation
6.150%
Senior Notes due 2036
___________________
We
are
offering $250,000,000 of our 6.150% senior notes due 2036 (the “Notes”). The
Notes will bear interest at the rate of 6.150% per year. Interest on the Notes
is payable on May 15 and November 15 of each year, beginning May 15, 2007.
The
Notes will mature on November 15, 2036. We may redeem the Notes at any time,
and
from time to time, in whole or in part, at the redemption price described in
this prospectus supplement.
The
Notes
will be senior obligations of our company and will rank equally with all of
our
other existing and future unsecured senior indebtedness.
The
Notes
will be issued only in registered form in denominations of $2,000 and multiples
of $1,000 in excess thereof.
Investing
in the Notes involves certain risks. See “Risk Factors” beginning on page 28 in
our Annual Report on Form 10-K for the year ended December 31, 2005, and page
54
in our Quarterly Report on Form 10-Q for the fiscal quarter ended September
30,
2006, which are incorporated by reference herein.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
___________________
|
Per
Note
|
Total
|
|
|
Public
Offering Price(1)
|
99.456%
|
$248,640,000
|
|
Underwriting
Discount
|
0.875%
|
$
2,187,500
|
|
Proceeds,
before expenses, to CIGNA Corporation
|
98.581%
|
$246,452,500
|
|
______________
|
(1)
Plus
accrued interest, if any, from November 10, 2006, to date of
delivery.
The
Notes
will be ready for delivery in book-entry form only through The Depository Trust
Company on or about November 10, 2006.
|
___________________
|
||
|
Joint
Book-Running Managers
|
||
|
Barclays
Capital
|
JPMorgan
|
|
|
___________________
|
||
|
Co-Managers
|
||
|
Daiwa
Securities America Inc.
|
||
|
Lazard
Capital Markets
|
||
|
UBS
Investment Bank
|
||
|
Wachovia
Securities
|
||
|
HSBC
|
||
|
Wells
Fargo Securities
|
||
November
7, 2006
CALCULATION
OF REGISTRATION FEE
|
Title
Of Each Class Of Securities
To
Be Registered
|
Amount
To Be
Registered
|
Maximum
Aggregate
Offering
Price
|
Amount
of
Registration
Fee(1)
|
|
6.150%
Senior Notes due 2036
|
$250,000,000
|
99.456%
|
$26,750
|
(1)
Calculated in accordance with Rule 457(r) of the Securities Act of
1933.
You
should rely only on the information contained in or incorporated by reference
in
this prospectus supplement and the accompanying prospectus and in any free
writing prospectus filed by the Company with the Securities and Exchange
Commission. If information in this prospectus supplement is inconsistent with
the accompanying prospectus, you should rely on the prospectus supplement.
We
and the underwriters have not authorized anyone to provide you with information
that is different. This prospectus supplement and the accompanying prospectus
may only be used where it is legal to sell these securities. The information
in
this prospectus supplement and the accompanying prospectus may only be accurate
as of the date of this prospectus supplement, the accompanying prospectus or
the
information incorporated by reference herein or therein, and the information
in
any free writing prospectus may only be accurate as of the date of such free
writing prospectus. Our business, financial condition, results of operations
and/or prospects may have changed since those dates.
TABLE
OF CONTENTS
|
Prospectus
Supplement
|
|
|
Page
|
|
|
Prospectus
|
|
____________________
Unless
otherwise mentioned or unless the context requires otherwise, when used in
this
prospectus supplement and accompanying prospectus, the terms “CIGNA,” “we,”
“our” and “us” refer to CIGNA Corporation and its consolidated subsidiaries, and
the term the “Company” refers to CIGNA Corporation, not including its
consolidated subsidiaries. The “underwriters” refers to the financial
institutions named in the “Underwriting” section of this prospectus
supplement.
S-1
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK
FACTORS
We
have
made forward-looking statements in the accompanying prospectus and the documents
incorporated by reference in the accompanying prospectus. Forward-looking
statements may contain information about financial prospects, economic
conditions, trends and other uncertainties. These forward-looking statements
are
based on management’s beliefs and assumptions and on information available to
management at the time the statements are or were made. Forward-looking
statements include but are not limited to the information concerning possible
or
assumed future business strategies, financing plans, competitive position,
potential growth opportunities, potential operating performance improvements,
trends, and, in particular, CIGNA’s cost reduction programs and activities,
litigation and other legal matters, operational improvement in the health care
operations, and the outlook for CIGNA’s results. Forward-looking statements
include all statements that are not historical facts and can be identified
by
the use of forward-looking terminology such as the words “believe,” “expect,”
“plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,”
“should” or similar expressions.
You
should not place undue reliance on these forward-looking statements. CIGNA
cautions that actual results could differ materially from those that management
expects, depending on the outcome of certain factors. Some factors that could
cause actual results to differ materially from the forward-looking statements
include:
| 1. |
increased
medical costs that are higher than anticipated in establishing premium
rates in CIGNA’s health care operations, including increased use and costs
of medical services;
|
| 2. |
increased
medical, administrative, technology or other costs resulting from
new
legislative and regulatory requirements imposed on CIGNA’s employee
benefits businesses;
|
| 3. |
challenges
and risks associated with implementing the improvement initiatives
in the
health care operations, the organizational realignment and the reduction
of overall CIGNA and health care cost structure, including that
operational efficiencies and medical cost benefits do not emerge
as
expected and that medical membership does not grow as
expected;
|
| 4. |
risks
associated with pending and potential state and federal class action
lawsuits, purported securities class action lawsuits, disputes regarding
reinsurance arrangements, other litigation and regulatory actions
challenging CIGNA’s businesses and the outcome of pending government
proceedings and federal tax audits;
|
| 5. |
heightened
competition, particularly price competition, which could reduce product
margins and constrain growth in CIGNA’s businesses, primarily the health
care business;
|
| 6. |
significant
changes in interest rates;
|
| 7. |
downgrades
in the financial strength ratings of CIGNA’s insurance subsidiaries, which
could, among other things, adversely affect new sales and retention
of
current business;
|
| 8. |
limitations
on the ability of CIGNA’s insurance subsidiaries to dividend capital to
the parent company as a result of downgrades in the subsidiaries’
financial strength ratings, changes in statutory reserve or capital
requirements or other financial
constraints;
|
| 9. |
inability
of the program adopted by CIGNA to substantially reduce equity market
risks for reinsurance contracts that guarantee minimum death benefits
under certain variable annuities (including possible market difficulties
in entering into appropriate futures contracts and in matching such
contracts to the underlying equity
risk);
|
| 10. |
adjustments
to the reserve assumptions (including lapse, partial surrender, mortality,
interest rates and volatility) used in estimating CIGNA’s liabilities for
reinsurance contracts that guarantee minimum death benefits under
certain
variable annuities;
|
| 11. |
adjustments
to the assumptions (including annuity election rates and reinsurance
recoverables) used in estimating CIGNA’s assets and liabilities for
reinsurance contracts that guarantee minimum income benefits under
certain
variable annuities;
|
S-2
| 12. |
significant
stock market declines, which could, among other things, result in
increased pension expenses in CIGNA’s pension plan in future periods and
the recognition of additional pension
obligations;
|
| 13. |
unfavorable
claims experience related to workers’ compensation and personal accident
exposures of the run-off reinsurance business, including losses
attributable to the inability to recover claims from
retrocessionaires;
|
| 14. |
significant
deterioration in economic conditions, which could have an adverse
effect
on CIGNA’s operations and
investments;
|
| 15. |
changes
in federal laws, such as amendments to income tax laws, which could
affect
the taxation of employer provided benefits, and pension legislation,
which
could increase pension cost;
|
| 16. |
potential
public health epidemics and bio-terrorist activity, which could,
among
other things, cause our covered medical and disability expenses,
pharmacy
costs and mortality experience to rise significantly, and cause
operational disruption, depending on the severity of the event and
number
of individuals affected;
|
| 17. |
risks
associated with security or interruption of information systems,
which
could, among other things, cause operational disruption;
|
| 18. |
challenges
and risks associated with the successful management of CIGNA’s outsourcing
projects or key vendors, including the agreement with IBM for provision
of
technology infrastructure and related services;
and
|
| 19. |
risk
factors detailed in our Annual Report on Form 10-K for the year ended
December 31, 2005 and Quarterly Report on Form 10-Q for the fiscal
quarter
ended September 30, 2006, including the Cautionary Statement in
Management’s Discussion and Analysis and our other filings with the
SEC.
|
This
list
of important factors is not intended to be exhaustive. Other sections of our
most recent Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q,
including the “Risk Factors” sections, and other documents filed with the
Securities and Exchange Commission, include both expanded discussion of these
factors and additional risk factors and uncertainties that could preclude CIGNA
from realizing the forward-looking statements. CIGNA does not assume any
obligation to update any forward-looking statements, whether as a result of
new
information, future events or otherwise, except as required by law.
S-3
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). You may read and copy all or any portion of this information at
the SEC’s principal office in Washington, D.C., and copies of all or any part
thereof may be obtained from the Public Reference Section of the SEC, 100 F
Street, N.E., Washington, D.C. 20549 after payment of fees prescribed by the
SEC. Please call the SEC at 1-800-SEC-0330 for further information about the
public reference room.
The
SEC
also maintains an Internet website that contains reports, proxy statements
and
other information about issuers, like CIGNA, who file electronically with the
SEC. The address of that site is www.sec.gov.
Our
Internet website address is www.cigna.com. This reference to our website is
intended to be an inactive textual reference only. Our website and the
information contained therein or connected thereto are not incorporated by
reference into this prospectus supplement.
This
prospectus supplement is part of the registration statement and does not contain
all of the information included in the registration statement. Whenever a
reference is made in this prospectus supplement to any contract or other
document of CIGNA, the reference may not be complete and you should refer to
the
exhibits that are a part of the registration statement for a copy of the
contract or document.
The
SEC
allows us to “incorporate by reference” information into this prospectus, which
means that we can disclose important information to you by referring you to
another document filed separately with the SEC. The information incorporated
by
reference is deemed to be part of this prospectus supplement, except for any
information that is superseded by subsequent incorporated documents or by
information that is contained directly in this prospectus supplement. This
prospectus supplement incorporates by reference the documents set forth below
that CIGNA has previously filed with the SEC and that are not delivered with
this prospectus supplement. These documents contain important information about
CIGNA and its financial condition.
|
CIGNA
SEC Filings (File No. 1-08323)
|
Period
|
|
Annual
Report on Form 10-K
|
Fiscal
year ended December 31, 2005
|
|
Quarterly
Reports on Form 10-Q
|
Quarterly
periods ended March 31, 2006,
June
30, 2006 and September 30, 2006
|
|
Current
Reports on Form 8-K
|
Filed
on February 28, March 24, May 12,
September
20, October 4, and October 30, 2006
|
All
documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act (excluding any information furnished under Item 2.02 or 7.01 in
any
Current Report on Form 8-K) between the date of this prospectus supplement
and
the termination of the offering of securities under this prospectus supplement
shall also be deemed to be incorporated herein by reference. Any statement
contained in any document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
prospectus supplement to the extent that a statement contained in this
prospectus supplement or in any other subsequently filed document which also
is
or is deemed to be incorporated by reference in this prospectus supplement
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this prospectus supplement.
To
obtain
a copy of these filings at no cost, you may write or telephone us at the
following address:
CIGNA
Corporation
Two
Liberty Place, 1601 Chestnut Street
Philadelphia,
PA 19192
Attention:
Investor Relations
(215)
761-1000
Exhibits
to the filings will not be sent, however, unless those exhibits have
specifically been incorporated by reference into such document.
S-4
|
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights selected information about CIGNA Corporation and
this
offering. It does not contain all of the information that may be
important
to you in deciding whether to purchase the Notes. We encourage you
to read
the entire prospectus supplement, the accompanying prospectus and
the
documents that we have filed with the SEC that are incorporated by
reference prior to deciding whether to purchase the Notes.
The
Company
CIGNA
Corporation and its subsidiaries constitute one of the largest
investor-owned health care and related benefits organizations in
the
United States. Our subsidiaries are major providers of health care
and
related benefits offered through the workplace, including health
care
products and services, group disability, life and accident insurance,
and
disability and workers’ compensation case management and related services.
CIGNA’s major insurance subsidiary, Connecticut General Life Insurance
Company (“CG Life”), traces its origins to 1865. CIGNA Corporation was
incorporated in the State of Delaware in 1981. CIGNA Corporation
had
consolidated shareholders’ equity of $4.3 billion and assets of $42.2
billion as of September 30, 2006, and revenues of $12.3 billion for
the
nine months ended September 30, 2006.
CIGNA
Corporation is a holding company and is not an insurance company.
Its
subsidiaries conduct various businesses, which are described in our
most
recent Annual Report on Form 10-K.
CIGNA
Corporation’s principal executive offices are located at Two Liberty
Place, 1601 Chestnut Street, Philadelphia, PA 19192. Our telephone
number
is (215) 761-1000.
For
additional information concerning CIGNA, please see our most recent
Annual
Report on Form 10-K and our other filings with the SEC. See “Where You Can
Find More Information.”
|
S-5
|
The
Offering
The
offering terms of the Notes are summarized below solely for your
convenience. This summary is not a complete description of the
Notes. You
should read the full text and more specific details contained elsewhere
in
this prospectus supplement and the accompanying prospectus. For
a more
detailed description of the Notes, see the discussion under the
caption
“Description of the Notes” beginning on page S-9 of this prospectus
supplement.
|
|
|
Issuer
|
CIGNA
Corporation
|
|
Securities
Offered
|
$250,000,000
aggregate principal amount of 6.150% senior notes due 2036 (the
“Notes”).
|
|
Maturity
|
The
Notes will mature on November 15, 2036.
|
|
Interest
Payment Dates
|
Interest
on the Notes will accrue from November 10, 2006 and will be payable
on May
15 and November 15 of each year, beginning May 15,
2007.
|
|
Optional
Redemption
|
We
may redeem the Notes at any time, and from time to time, in whole
or in
part, at the redemption prices described in this prospectus supplement.
We
are not required to establish a sinking fund to retire or repay
the
Notes.
|
|
Ranking
|
The
Notes will be our senior unsecured and unsubordinated obligations
and will
rank equally with all of our existing and future senior unsecured
indebtedness and senior to all of our subordinated indebtedness.
See
“Description of the Notes.”
|
|
Use
of Proceeds
|
We
will use the estimated $245,702,500 in net proceeds from this offering,
after deducting underwriting discounts and estimated offering expenses,
for general corporate purposes, which may include working capital,
repurchases of our common stock and repayment of some or all of
our $85
million outstanding 8.25% notes due January 1, 2007. See “Use of
Proceeds.”
|
|
Covenants
|
The
Senior Indenture for the Notes contains limitations on liens on
common
stock of our Designated Subsidiaries (as defined in the Senior
Indenture)
and limits our ability to consolidate with or merge with or into
any other
person (other than in a merger or consolidation in which we are
the
surviving person) or sell our property or assets as, or substantially
as,
an entirety to any person. These covenants are subject to important
qualifications and limitations. See “Description of Debt Securities —
Limitations on Liens on Common Stock of Designated Subsidiaries” and “—
Consolidation, Merger and Sale of Assets” in the accompanying
prospectus.
|
|
Minimum
Denominations
|
The
Notes will be issued and may be transferred only in minimum denominations
of $2,000 and multiples of $1,000 in excess thereof.
|
|
Risk
Factors
|
For
a discussion of factors you should carefully consider before deciding
to
purchase the Notes, see “Risk Factors” beginning on page 28 in our Annual
Report on Form 10-K for the year ended December 31, 2005, and page
54 in
our Quarterly Report on Form 10-Q for the fiscal quarter ended
September
30, 2006, as updated in any subsequent filings with the SEC that
are
incorporated by reference in this prospectus
supplement.
|
S-6
|
Selected
Financial Information
The
following table sets forth our selected consolidated financial
data for
the five years ended December 31, 2005 and the nine-month periods
ended
September 30, 2006 and September 30, 2005. The financial data for
the
nine-month periods ended September 30, 2006 and September 30, 2005
is
derived from our unaudited financial statements. The unaudited
financial
statements reflect all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of our financial
position
and results of operations during that period and as of that date.
Operating results for the nine months ended September 30, 2006
are not
necessarily indicative of those to be expected for the full fiscal
year.
The
following information should be read in conjunction with “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
and our consolidated financial statements and related notes included
in
our Quarterly Report on Form 10-Q for the fiscal quarter ended
September
30, 2006 and our Annual Report on Form 10-K for the fiscal year
ended
December 31, 2005, each filed with the SEC and incorporated by
reference
in this prospectus supplement. See “Where You Can Find More Information”
in this prospectus supplement.
|
||||||||||||||||||||||
|
Nine
Months Ended
September
30,
|
Years
Ended December 31,
|
|||||||||||||||||||||
|
2006
|
2005
|
2005
|
2004
|
2003
|
2002
|
2001
|
||||||||||||||||
|
(in
millions)
|
||||||||||||||||||||||
|
INCOME
STATEMENT DATA:
|
||||||||||||||||||||||
|
Premiums
and fees
|
$
|
10,070
|
$
|
10,151
|
$
|
13,695
|
$
|
14,236
|
$
|
15,460
|
$
|
15,703
|
$
|
14,860
|
||||||||
|
Net
investment income
|
924
|
995
|
1,359
|
1,643
|
2,594
|
2,716
|
2,842
|
|||||||||||||||
|
Other
revenues
|
1,150
|
1,300
|
1,637
|
1,774
|
603
|
1,167
|
1,080
|
|||||||||||||||
|
Realized
investment gains (losses)
|
198
|
28
|
(7
|
)
|
523
|
151
|
(238
|
)
|
(175
|
)
|
||||||||||||
|
Total
revenues
|
12,342
|
12,474
|
16,684
|
18,176
|
18,808
|
19,348
|
18,607
|
|||||||||||||||
|
Health
care medical claims expense
|
4,536
|
4,633
|
6,305
|
6,616
|
8,068
|
8,244
|
n/a*
|
|||||||||||||||
|
Other
benefit expenses
|
2,356
|
2,481
|
3,341
|
3,648
|
4,152
|
6,070
|
11,976*
|
|||||||||||||||
|
Other
operating expenses**
|
4,068
|
3,875
|
5,245
|
5,537
|
5,740
|
5,679
|
5,239
|
|||||||||||||||
|
Total
benefits and expenses
|
10,960
|
10,989
|
14,891
|
15,801
|
17,960
|
19,993
|
17,215
|
|||||||||||||||
|
Income
(loss) from continuing operations before income taxes
(benefits)
|
1,382
|
1,485
|
1,793
|
2,375
|
848
|
(645
|
)
|
1,392
|
||||||||||||||
|
Income
taxes (benefits)
|
455
|
419
|
517
|
798
|
264
|
(199
|
)
|
471
|
||||||||||||||
|
Income
(loss) from continuing operations
|
927
|
1,066
|
1,276
|
1,577
|
584
|
(446
|
)
|
921
|
||||||||||||||
|
Income
(loss) from discontinued operations, net of taxes
|
(4
|
)
|
349
|
349
|
-
|
48
|
(1
|
)
|
18
|
|||||||||||||
|
Income
(loss) before cumulative effect of accounting change
|
923
|
1,415
|
1,625
|
1,577
|
632
|
(447
|
)
|
939
|
||||||||||||||
|
Cumulative
effect of accounting change, net of taxes
|
-
|
-
|
-
|
(139
|
)
|
-
|
-
|
-
|
||||||||||||||
|
Net
income (loss)
|
$
|
923
|
$
|
1,415
|
$
|
1,625
|
$
|
1,438
|
$
|
632
|
$
|
(447
|
)
|
$
|
939
|
|||||||
|
BALANCE
SHEET DATA (AT PERIOD END):
|
||||||||||||||||||||||
|
Total
assets
|
$
|
42,189
|
$
|
45,897
|
$
|
44,863
|
$
|
81,059
|
$
|
90,199
|
$
|
89,019
|
$
|
91,639
|
||||||||
|
Debt:
|
||||||||||||||||||||||
|
Short-term
|
455
|
100
|
100
|
-
|
-
|
130
|
49
|
|||||||||||||||
|
Long-term
|
1,028
|
1,338
|
1,338
|
1,438
|
1,500
|
1,500
|
1,626
|
|||||||||||||||
|
Shareholders’
Equity
|
$
|
4,257
|
$
|
5,658
|
$
|
5,360
|
$
|
5,203
|
$
|
4,607
|
$
|
3,936
|
$
|
5,105
|
||||||||
|
In
2004, CIGNA adopted the fair value method of accounting for stock
options.
Prior periods were restated.
|
||||||||||||||||||||||
|
*
We
did not report Health Care medical claims expense as a separate
income
statement caption for the year ended December 31, 2001. These expenses
are
included in Other benefit expenses.
|
||||||||||||||||||||||
|
**Other
operating expenses includes policy acquisition costs.
|
||||||||||||||||||||||
S-7
USE
OF
PROCEEDS
The
net
proceeds from this offering are estimated to be approximately $245,702,500
after
deducting underwriting discounts and estimated offering expenses. We will use
these net proceeds for general corporate purposes, which may include working
capital, repurchases of our common stock and repayment of some or all of our
$85
million outstanding 8.25% notes due January 1, 2007. We may invest funds that
we
do not immediately require in short-term marketable securities.
The
following table shows our capitalization on a consolidated basis as of September
30, 2006 (unaudited) and as adjusted for the sale of $250,000,000 aggregate
principal amount of Notes offered by this prospectus supplement and the
application of the net proceeds from that sale. You should read this table
in
conjunction with our consolidated financial statements and the related notes
which are incorporated by reference in this prospectus supplement and the
accompanying prospectus.
|
At
September 30, 2006
|
|||||||
|
Actual
|
As
Adjusted
|
||||||
|
(in
millions)
|
|||||||
|
Short-term
debt
|
$
|
455
|
$
|
455
|
|||
|
Long-term
debt
|
1,028
|
1,278
|
|||||
|
|
|||||||
|
Shareholders’
equity
|
|||||||
|
Common
stock ($0.25 par value; 600,000,000 shares authorized, 160,028,461
shares
issued, 102,567,908 shares outstanding)
|
40
|
40
|
|||||
|
Additional
paid-in capital
|
2,440
|
2,440
|
|||||
|
Net
unrealized appreciation on investments
|
195
|
195
|
|||||
|
Net
translation of foreign currencies
|
27
|
27
|
|||||
|
Minimum
pension liability adjustment
|
(725
|
)
|
(725
|
)
|
|||
|
Retained
earnings
|
5,974
|
5,974
|
|||||
|
Treasury
stock, at cost
|
(3,694
|
)
|
(3,694
|
)
|
|||
|
Total
shareholders’ equity
|
$
|
4,257
|
$
|
4,257
|
|||
|
Total
capitalization
|
$
|
5,740
|
$
|
5,990
|
|||
We
expect
our ratio of earnings to fixed charges to decrease after giving effect to the
sale of the Notes offered by this prospectus supplement and the application
of
the net proceeds from that sale.
S-8
DESCRIPTION
OF THE NOTES
The
Notes
offered by this prospectus supplement are “senior debt securities” as described
in the accompanying prospectus. This description supplements the description
of
the general terms and provisions of the debt securities found in the
accompanying prospectus.
Capitalized
terms used and not otherwise defined below or elsewhere in this prospectus
supplement or the accompanying prospectus are used with the respective meanings
given thereto in the Senior Indenture, dated as of August 16, 2006, between
CIGNA Corporation and U.S. Bank National Association (the “Trustee”), as
supplemented by Supplemental Indenture No. 1, to be dated as of the closing
date, between CIGNA Corporation and the Trustee (collectively, the “Senior
Indenture”). Any reference to the “Notes” contained in this prospectus
supplement refers to the 6.150% Senior Notes due 2036 unless the context
indicates otherwise.
The
Senior Indenture does not restrict our ability to incur additional indebtedness,
other than certain indebtedness secured by liens on common stock of our
Designated Subsidiaries (as defined in the Senior Indenture). The Senior
Indenture contains negative covenants that apply to us; however, the limitation
on liens and the limitation on consolidation, merger and sale of assets contain
important exceptions. See “Description of Debt Securities — Limitations on Liens
on Common Stock of Designated Subsidiaries” and “— Consolidation, Merger and
Sale of Assets” in the accompanying prospectus.
General
The
Notes
initially will be limited to $250,000,000 aggregate principal amount. We may,
without the consent of the holders of the Notes, increase such principal amounts
in the future, on the same terms and conditions (except that the issue price
and
the issue date may vary) and with the same CUSIP number as the Notes being
offered by this prospectus supplement.
Interest;
Maturity; No Sinking Fund
The
Notes
will mature on November 15, 2036 and will bear interest at a rate of 6.150%
per
year. Interest on the Notes will accrue from November 10, 2006 or from the
most
recent interest payment date to which interest has been paid or duly provided
for. The
Notes
are not subject to any sinking fund provision.
In each
case, we:
| · |
will
pay interest on the Notes semi-annually in arrears on May 15 and
November
15 of each year, beginning May 15,
2007;
|
| · |
will
pay interest to the person in whose name a Note is registered at
the close
of business on the fifteenth calendar day prior to such interest
payment
date;
|
| · |
will
compute interest on the basis of a 360-day year consisting of twelve
30-day months;
|
| · |
will
make payments on the Notes at the offices of the Trustee;
and
|
| · |
may
make payments by wire transfer for Notes held in book-entry form
or by
check mailed to the address of the person entitled to the payment
as it
appears in the note register.
|
If
any
interest payment date or maturity or redemption date falls on a day that is
not
a business day, the required payment shall be made on the next business day
as
if it were made on the date such payment was due and no interest shall accrue
on
the amount so payable from and after such interest payment date or maturity
or
redemption date, as the case may be, to such next business day. “Business day”
means any day other than a Saturday, Sunday or other day on which banking
institutions in The City of New York are authorized or obligated by law or
executive order to close.
We
will
issue the Notes only in fully registered form, without coupons, in denominations
of $2,000 and multiples of $1,000 in excess thereof.
S-9
Ranking
The
Notes
will be our senior unsecured general obligations, and rank on a parity with
all
of our existing and future unsecured and unsubordinated indebtedness.
Because
a
significant part of our operations are conducted through subsidiaries, a
significant portion of our cash flow, and consequently, our ability to service
debt, including the Notes, is dependent upon the earnings of our subsidiaries
and the transfer of funds by those subsidiaries to us in the form of dividends
or other transfers.
In
addition, holders of the Notes will have a junior position to claims of
creditors against our subsidiaries, including policy holders, trade creditors,
debtholders, secured creditors, taxing authorities, guarantee holders and any
preferred shareholders, except to the extent that we are recognized as a
creditor of our subsidiary. Any claims of CIGNA as the creditor of its
subsidiary would be subordinate to any security interest in the assets of such
subsidiary and any indebtedness of such subsidiary senior to that held by us.
In
addition to general state law restrictions on payments of dividends and other
distributions to shareholders applicable to all corporations, HMOs and insurance
companies, including some of CIGNA’s direct and indirect subsidiaries, are
subject to further state regulations that, among other things, may require
those
companies to maintain certain levels of equity, and restrict the amount of
dividends and other distributions that may be paid to CIGNA.
Optional
Redemption
We
may
redeem the Notes at any time, and from time to time, in whole or in part, at
a
redemption price equal to the greater of:
| · |
100%
of the principal amount of the Notes to be redeemed,
and
|
| · |
the
sum of the present values of the remaining scheduled payments of
principal
and interest (excluding interest accrued to the redemption date)
on the
Notes being redeemed from the redemption date to the maturity date
discounted to the date of redemption on a semi-annual basis (assuming
a
360-day year consisting of twelve 30-day months) at the applicable
Treasury Rate (as defined below) plus 25 basis points,
|
plus
accrued and unpaid interest on the principal amount being redeemed to the
redemption date.
“Treasury
Rate” means, with respect to any redemption date, (1) the yield, under the
heading which represents the average for the immediately preceding week,
appearing in the most recently published statistical release designated
“H.15(519)” or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption “Treasury Constant Maturities,” for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months before
or after the maturity date for the Notes, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue will
be
determined and the Treasury Rate shall be interpolated or extrapolated from
those yields on a straight line basis, rounding to the nearest month), or (2)
if
the release referred to in clause (1) (or any successor release) is not
published during the week preceding the calculation date or does not contain
the
yields referred to above, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price
for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for that redemption
date.
The
Treasury Rate will be calculated on the third business day preceding the
redemption date.
“Comparable
Treasury Issue” means the United States Treasury security selected by an
“Independent Investment Banker” as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term
of the Notes to be redeemed. “Independent Investment Banker” means one of the
Reference Treasury Dealers appointed by the Trustee after consultation with
us.
S-10
“Comparable
Treasury Price” means, with respect to any redemption date for any Notes, the
average of all Reference Treasury Dealer Quotations (as defined below)
obtained.
“Reference
Treasury Dealer” means each of Barclays Capital Inc. and its successors and J.P.
Morgan Securities Inc. and its successors. If any Reference Treasury Dealer
ceases to be a primary U.S. government securities dealer in New York City (a
“Primary Treasury Dealer”), we will substitute another Primary Treasury Dealer
for that dealer.
“Reference
Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee,
of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by that Reference Treasury Dealer at 5:00 p.m. on the third Business Day
preceding the redemption date.
Notice
of
any redemption will be mailed at least 30 days but no more than 60 days before
the redemption date to each holder of Notes to be redeemed.
Unless
we
default in payment of the redemption price, interest will cease to accrue on
the
Notes or portions of the Notes called for redemption on and after the redemption
date.
Defeasance
and Covenant Defeasance
The
full
defeasance and covenant defeasance provisions of the Senior Indenture described
in the accompanying prospectus under “Description of Debt Securities —
Defeasance and Covenant Defeasance” will apply to the Notes.
Global
Notes; Book-Entry System
Global
Notes
The
Notes
will be issued initially in book-entry form and will be represented by one
or
more global notes in fully registered form without interest coupons which will
be deposited with the Trustee as custodian for The Depository Trust Company,
which we refer to as “DTC”, and registered in the name of Cede & Co. or
another nominee designated by DTC. Except as set forth below, the global notes
may be transferred, in whole and not in part, only to DTC or another nominee
of
DTC or to a successor of DTC or its nominee. Beneficial interests in the global
notes may not be exchanged for certificated Notes except in the limited
circumstances described below.
All
interests in the global notes will be subject to the rules and procedures of
DTC.
Certain
Book-Entry Procedures for the Global Notes
The
descriptions of the operations and procedures of DTC set forth below are
provided solely as a matter of convenience. These operations and procedures
are
solely within the control of DTC and are subject to change by DTC from time
to
time. Neither we nor the underwriters take any responsibility for these
operations or procedures, and investors are urged to contact DTC or its
participants directly to discuss these matters.
DTC
has
advised us that it is:
| · |
a
limited-purpose trust company organized under the laws of the State
of New
York;
|
| · |
a
“banking organization” within the meaning of the New York Banking
Law;
|
| · |
a
member of the Federal Reserve
System;
|
| · |
a
“clearing corporation” within the meaning of the New York Uniform
Commercial Code, as amended; and
|
| · |
a
“clearing agency” registered pursuant to Section 17A of the Exchange
Act.
|
S-11
DTC
was
created to hold securities for its participants and to facilitate the clearance
and settlement of securities transactions between participants through
electronic book-entry changes to the accounts of its participants, thereby
eliminating the need for physical transfer and delivery of certificates. DTC’s
participants include securities brokers and dealers (including one or more
of
the underwriters), banks and trust companies, clearing corporations and certain
other organizations. Indirect access to DTC’s system is also available to other
entities such as banks, brokers, dealers and trust companies, which we refer
to
collectively as the “indirect participants,” that clear through or maintain a
custodial relationship with a participant either directly or indirectly.
Investors who are not participants may beneficially own securities held by
or on
behalf of DTC only through participants or indirect participants.
We
expect
that, pursuant to procedures established by DTC:
| · |
upon
deposit of each global note, DTC will credit, on its book-entry
registration and transfer system, the accounts of participants designated
by the underwriters with an interest in the global note;
and
|
| · |
ownership
of beneficial interests in the global notes will be shown on, and
the
transfer of ownership of beneficial interests in the global notes
will be
effected only through, records maintained by DTC (with respect to
the
interests of participants) and the participants and the indirect
participants (with respect to the interests of persons other than
participants).
|
The
laws
of some jurisdictions may require that some purchasers of securities take
physical delivery of those securities in definitive form. Accordingly, the
ability to transfer beneficial interests in the Notes represented by a global
note to those persons may be limited. In addition, because DTC can act only
on
behalf of its participants, who in turn act on behalf of persons who hold
interests through participants, the ability of a person holding a beneficial
interest in a global note to pledge or transfer that interest to persons or
entities that do not participate in DTC’s system, or to otherwise take actions
in respect of that interest, may be affected by the lack of a physical security
in respect of that interest.
So
long
as DTC or its nominee is the registered owner of a global note, DTC or that
nominee, as the case may be, will be considered the sole legal owner or holder
of the Notes represented by that global note for all purposes of the Notes
and
the Senior Indenture. Except as provided below, owners of beneficial interests
in a global note will not be entitled to have the Notes represented by that
global note registered in their names, will not receive or be entitled to
receive physical delivery of certificated Notes and will not be considered
the
owners or holders of the Notes represented by that beneficial interest under
the
Senior Indenture for any purpose, including with respect to the giving of any
direction, instruction or approval to the Trustee. Accordingly, each holder
owning a beneficial interest in a global note must rely on the procedures of
DTC
and, if that holder is not a participant or an indirect participant, on the
procedures of the participant through which that holder owns its interest,
to
exercise any rights of a holder of Notes under the Senior Indenture or that
global note. We understand that under existing industry practice, in the event
that we request any action of holders of Notes, or a holder that is an owner
of
a beneficial interest in a global note desires to take any action that DTC,
as
the holder of that global note, is entitled to take, DTC would authorize the
participants to take that action and the participants would authorize holders
owning through those participants to take that action or would otherwise act
upon the instruction of those holders. Neither we nor the Trustee will have
any
responsibility or liability for any aspect of the records relating to or
payments made on account of Notes by DTC or for maintaining, supervising or
reviewing any records of DTC relating to the Notes.
Payments
with respect to the principal of and interest on a global note will be payable
by the Trustee to or at the direction of DTC or its nominee in its capacity
as
the registered holder of the global note under the Senior Indenture. Under
the
terms of the Senior Indenture, we and the Trustee may treat the persons in
whose
names the Notes, including the global notes, are registered as the owners
thereof for the purpose of receiving payment thereon and for any and all other
purposes whatsoever. Accordingly, neither we nor the Trustee has or will have
any responsibility or liability for the payment of those amounts to owners
of
beneficial interests in a global note. Payments by the participants and the
indirect participants to the owners of beneficial interests in a global note
will be governed by standing instructions and customary industry practice and
will be the responsibility of the participants and indirect participants and
not
of DTC.
Transfers
between participants in DTC will be effected in accordance with DTC’s procedures
and will be settled in same-day funds.
S-12
Although
DTC has agreed to the foregoing procedures to facilitate transfers of interests
in the global notes among participants in DTC, it is under no obligation to
perform or to continue to perform those procedures, and those procedures may
be
discontinued at any time. Neither we nor the Trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
We
obtained the information in this section and elsewhere in this prospectus
supplement concerning DTC and its book-entry system from sources that we believe
are reliable, but we take no responsibility for the accuracy of any of this
information.
Certificated
Notes
We
will
issue certificated notes to each person that DTC identifies as the beneficial
owner of the Notes represented by the global securities upon surrender by DTC
of
the global securities only if:
| · |
DTC
notifies us that it is no longer willing or able to act as a depository
for the global securities, and we have not appointed a successor
depository within 90 days of that
notice;
|
| · |
an
event of default has occurred and is continuing;
or
|
| · |
we
determine not to have the Notes represented by a global
security.
|
Neither
we nor the Trustee will be liable for any delay by DTC, its nominee or any
direct or indirect participant in identifying the beneficial owners of the
related Notes. We and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from DTC or its nominee for all purposes,
including with respect to the registration and delivery, and the respective
principal amounts, of the Notes to be issued in certificated form.
S-13
CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The
following discussion is based upon the provisions of the Internal Revenue Code
of 1986, as amended, or the Code, the applicable Treasury Regulations
promulgated and proposed thereunder, judicial authority and current
administrative rulings and practice, all of which are subject to change,
possibly with retroactive effect. The discussion does not purport to deal with
all aspects of U.S. federal income taxation that might be relevant to particular
holders in light of their personal investment circumstances or status, nor
does
it discuss the U.S. federal income tax consequences to holders that may be
subject to special treatment under U.S. federal income tax laws, such as:
| · |
financial
institutions;
|
| · |
insurance
companies;
|
| · |
dealers
in securities;
|
| · |
tax-exempt
organizations;
|
| · |
certain
expatriates;
|
| · |
partnerships
or other entities treated as partnerships for U.S. federal income
tax
purposes, and persons holding Notes through such partnerships or
other
entities;
|
| · |
persons
holding Notes as part of a “straddle,” “hedge” or “conversion
transaction;” and
|
| · |
“U.S.
Holders” (as defined below) whose functional currency is not the U.S.
dollar.
|
Except
as
otherwise indicated below, this discussion assumes that the Notes are held
as
capital assets (as defined in Section 1221 of the Code) by the holders thereof.
The discussion is limited to the U.S. federal income tax consequences to holders
acquiring Notes at original issue for cash at the initial offering price. The
effect of any applicable state, local or foreign tax laws is not discussed.
We
will treat the Notes as indebtedness for U.S. federal income tax purposes,
and
this discussion is based on the assumption that such treatment will be
respected.
PROSPECTIVE
HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE FEDERAL,
STATE, LOCAL AND OTHER TAX CONSEQUENCES TO THEM OF THE ACQUISITION, OWNERSHIP
AND DISPOSITION OF THE NOTES.
U.S.
Holders
For
purposes of the following discussion, the term “U.S. Holder” is used to refer to
a beneficial owner of a Note who or which is, for U.S. federal income tax
purposes:
| · |
a
citizen or resident of the United States;
|
| · |
a
corporation (or other entity treated as a corporation for U.S. federal
income tax purposes) created or organized under the laws of the United
States, or any political subdivision
thereof;
|
| · |
an
estate the income of which is subject to U.S. federal income taxation
regardless of its source; or
|
| · |
a
trust if a U.S. court is able to exercise primary supervision over
the
administration of the trust and one or more U.S. persons have the
authority to control all substantial decisions of the trust, or if
the
trust has made a valid election to be treated as a United States
person.
|
Interest
on Notes
Interest
on the Notes generally will be included in income by a U.S. Holder as ordinary
interest income when received or accrued in accordance with the U.S. Holder’s
regular method of accounting for U.S. federal income tax purposes.
S-14
Sale,
Exchange, Redemption or Other Disposition of Notes
A
sale,
exchange, redemption or other disposition of a Note will generally be a taxable
event for U.S. federal income tax purposes. In such event, a U.S. Holder will
recognize gain or loss equal to the difference between:
| · |
the
amount of cash plus the fair market value of any property received
(except
to the extent that amounts received are attributable to accrued interest,
which portion of the consideration would be taxed as ordinary income
to
the extent not previously included in income); and
|
| · |
the
U.S. Holder’s adjusted tax basis in the Note, which will generally equal
the price paid for the Note.
|
Such
gain
or loss will be capital gain or loss and will be long-term capital gain or
loss
if the Note has been held for more than one year at the time of disposition.
For
non-corporate taxpayers, net long term capital gains are generally subject
to
tax at preferential rates. The deductibility of capital losses is subject to
certain limitations.
Non-U.S.
Holders
For
purposes of the following discussion, the term “non-U.S. Holder” refers to a
beneficial owner of a Note who or which is for U.S. federal income tax purposes
an individual, corporation, estate or trust that is not a U.S.
Holder.
Interest
on Notes
Interest
paid to a non-U.S. Holder in respect of the Notes generally will not be subject
to withholding of U.S. federal income tax provided that:
| · |
the
non-U.S. Holder does not directly or indirectly, actually or
constructively, own 10% or more of the total combined voting power
of all
classes of our voting stock;
|
| · |
the
beneficial owner is not a “controlled foreign corporation” with respect to
which we are a “related person” within the meaning of the
Code;
|
| · |
the
beneficial owner is not a bank receiving interest on an extension
of
credit made pursuant to a loan agreement in the ordinary course of
its
trade or business; and
|
| · |
the
non-U.S. Holder satisfies certain certification requirements. A beneficial
owner will generally satisfy such certification requirements if it
certifies, under penalties of perjury, that it is not a United States
person and provides its name and
address.
|
Even
if
the above conditions are not met, a non-U.S. Holder may be entitled to a
reduction in or an exemption from withholding of U.S. federal income tax on
interest on the Notes if it is entitled to benefits under a tax treaty between
the United States and the non-U.S. Holder's country of residence and satisfies
certain certification requirements.
If
a
non-U.S. Holder is engaged in a trade or business in the United States and
interest on the Notes is effectively connected with the conduct of that trade
or
business (and, if required by an applicable tax treaty, the interest is
attributable to a permanent establishment or fixed base maintained by the
non-U.S. Holder in the United States), the non-U.S. Holder will be subject
to
U.S. federal income tax on the interest on a net income basis in the same manner
as if such non-U.S. Holder were a U.S. Holder. Any such interest income will
not
be subject to withholding of U.S. federal income tax if the non-U.S. Holder
satisfies certain certification requirements. A non-U.S. Holder that is a
foreign corporation that is engaged in a trade or business in the United States
may also be subject to a 30% (or, if a tax treaty applies, such lower rate
as
the treaty provides) branch profits tax.
Sale,
Exchange, Redemption or Other Disposition of Notes
A
non-U.S. Holder generally will not be subject to U.S. federal income tax on
any
gain recognized upon a sale, exchange, redemption or other disposition of a
Note
unless:
S-15
| · |
that
gain is effectively connected with the non-U.S. Holder's conduct
of a
trade or business in the United States (and, if required by an applicable
tax treaty, the gain is attributable to a permanent establishment
or fixed
base maintained by the non-U.S. Holder within the United States);
or
|
| · |
the
non-U.S. Holder is an individual who is present in the United States
for
183 days or more in the taxable year of the disposition and certain
other
conditions are met.
|
Backup
Withholding and Information Reporting
Information
returns may be filed with the IRS in connection with payments on the Notes
and
the proceeds from a sale or other disposition of the Notes. A U.S. Holder may
be
subject to United States backup withholding tax on these payments if it fails
to
provide its taxpayer identification number to the paying agent and comply with
certification procedures or otherwise establish an exemption from backup
withholding. A Non-U.S. Holder may be subject to United States backup
withholding tax on these payments unless the Non-U.S. Holder complies with
certification procedures to establish that it is not a U.S. person. The
certification procedures required of Non-U.S. Holders to claim the exemption
from withholding tax on certain payments on the Notes, described in general
terms above, will satisfy the certification requirements necessary to avoid
the
backup withholding tax as well. The amount of any backup withholding from a
payment will be allowed as a credit against the holder’s U.S. federal income tax
liability and may entitle the holder to a refund, provided that the required
information is timely furnished to the IRS.
S-16
Barclays
Capital Inc. and J.P. Morgan Securities Inc. are acting as book-running managers
of the offering and as representatives of the underwriters named
below.
Subject
to the terms and conditions stated in the underwriting agreement dated the
date
of this prospectus supplement, each underwriter named below has agreed to
purchase, and we have agreed to sell to that underwriter, the principal amount
of Notes set forth opposite the underwriter’s name.
|
Underwriter
|
Principal
Amount
of
Notes
|
|||
|
Barclays
Capital Inc.
|
$
|
87,500,000
|
||
|
J.P.
Morgan Securities Inc.
|
87,500,000
|
|||
|
Daiwa
Securities America Inc.
|
15,000,000
|
|||
|
Lazard
Capital Markets LLC
|
15,000,000
|
|||
|
UBS
Securities LLC
|
15,000,000
|
|||
|
Wachovia
Capital Markets, LLC
|
15,000,000
|
|||
|
HSBC
Securities (USA) Inc.
|
7,500,000
|
|||
|
Wells
Fargo Securities, LLC
|
7,500,000
|
|||
|
Total
|
$
|
250,000,000
|
||
The
underwriting agreement provides that the obligations of the underwriters to
purchase the Notes included in this offering are subject to the receipt of
legal
opinions by counsel covering the validity of the Notes and to other conditions.
The underwriters are obligated to purchase all the Notes if they purchase any
of
the Notes.
The
underwriters propose to offer some of the Notes directly to the public at the
offering price set forth on the cover page of this prospectus supplement and
some of the Notes to dealers at the offering price less a concession not to
exceed 0.500% of the principal amount of the Notes. The underwriters may allow,
and dealers may reallow, a concession not to exceed 0.250% of the principal
amount of the Notes on sales to other dealers. After the initial offering of
the
Notes to the public, the representatives may change the offering price and
other
selling terms.
The
Notes
are a new issue of securities with no established trading market. The Notes
will
not be listed on any securities exchange or automated quotation system. We
have
been advised by the underwriters that they intend to make a market in the Notes,
but the underwriters are not obligated to do so and may discontinue market
making at any time without notice. We can give no assurance as to the liquidity
of, or the trading market for, the Notes.
The
following table shows the underwriting discounts and commissions that we are
to
pay to the underwriters in connection with this offering (expressed as a
percentage of the principal amount of the Notes).
|
Paid
by
CIGNA
Corporation
|
|
|
Per
Note
|
0.875%
|
In
connection with the offering, one or more of the underwriters may purchase
and
sell Notes in the open market. These transactions may include over-allotment,
syndicate covering transactions and stabilizing transactions. Over-allotment
involves syndicate sales of Notes in excess of the principal amount of Notes
to
be purchased by the underwriters in the offering, which creates a syndicate
short position. Syndicate covering transactions involve purchases of the Notes
in the open market after the distribution has been completed in order to cover
syndicate short positions. Stabilizing transactions consist of certain bids
or
purchases of Notes made for the purpose of preventing or retarding a decline
in
the market price of the Notes while the offering is in progress.
The
underwriters also may impose a penalty bid. Penalty bids permit the underwriters
to reclaim a selling concession from a syndicate member when the underwriter
responsible for stabilizing activities on behalf of the
S-17
syndicate,
in covering syndicate short positions or making stabilizing purchases,
repurchases Notes originally sold by that syndicate member.
We
estimate that our total expenses for this offering will be
$750,000.
Any
of
these activities may have the effect of preventing or retarding a decline in
the
market price of the Notes. They may also cause the price of the Notes to be
higher than the price that otherwise would exist in the open market in the
absence of these transactions. The underwriters may conduct these transactions
in the over-the-counter market or otherwise. If the underwriters commence any
of
these transactions, they may discontinue them at any time.
The
underwriters have performed investment and commercial banking and advisory
services for us from time to time for which they have received customary fees
and expenses. The underwriters may, from time to time, engage in transactions
with and perform services for us in the ordinary course of their
business.
We
have
agreed to indemnify the underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, or to contribute to payments
the
underwriters may be required to make because of any of those
liabilities.
In
relation to each member state of the European Economic Area which has
implemented the Prospectus Directive (each, a “relevant member state”), each
underwriter has represented and agreed that it has not made and will not make
an
offer of the Notes to the public in that relevant member state, except that
it
may make an offer of the Notes to the public in that relevant member state
at
any time under the following exemptions under the Prospectus Directive (as
defined below), if they have been implemented in that relevant member state:
(i)
to legal entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is solely
to invest in securities; (ii) to any legal entity which has two or more of
(1)
an average of at least 250 employees during the last financial year, (2) a
total
balance sheet of more than €43,000,000 and (3) an annual net turnover of more
than €50,000,000, as shown in its last annual or consolidated accounts; (iii) to
fewer than 100 natural or legal persons (other than qualified investors as
defined in the Prospectus Directive) subject to obtaining the prior consent
of
the representatives for any such offer; or (iv) in any other circumstances
falling within Article 3(2) of the Prospectus Directive, provided that no such
offer of Notes shall result in a requirement for the publication by the company
or any underwriter of a prospectus pursuant to Article 3 of the Prospectus
Directive.
For
the
purposes of the preceding paragraph, the expression an “offer of the Notes to
the public” in relation to any Notes in any relevant member state means the
communication in any form and by any means of sufficient information on the
terms of the offer and the Notes to be offered so as to enable an investor
to
decide to purchase or subscribe to the Notes, as the same may be varied in
that
member state by any measure implementing the Prospectus Directive in that member
state, and references to the “Prospectus Directive” means Directive 2003/71/EC
and includes any relevant implementing measure in each relevant member state.
Lazard
Capital Markets LLC has entered into an agreement with Mitsubishi UFJ Securities
(USA), Inc. (“MUS (USA)”) pursuant to which MUS (USA) provides certain advisory
and/or other services to Lazard Capital Markets LLC, including in respect of
this offering. In return for this provision of such services by MUS (USA) to
Lazard Capital Markets LLC, Lazard Capital Markets LLC will pay to MUS (USA)
a
mutually agreed upon fee.
Daiwa
Securities America Inc. (“DSA”) has entered into an agreement with SMBC
Securities, Inc. (“SMBCSI”) pursuant to which SMBCSI provides certain advisory
and/or other services to DSA, including services with respect to this offering.
In return for the provision of such services by SMBCSI to DSA, DSA will pay
to
SMBCSI a mutually agreed upon fee.
S-18
VALIDITY
OF THE NOTES
The
validity of the Notes offered hereby will be passed upon for us by Wilmer Cutler
Pickering Hale and Dorr LLP, Washington, D.C. and for the underwriters by Davis
Polk & Wardwell, New York, New York.
The
consolidated financial statements and management’s assessment of the
effectiveness of internal control over financial reporting (which is included
in
Management’s Report on Internal Control over Financial Reporting) incorporated
in this prospectus supplement by reference to the Annual Report on Form 10-K
for
the year ended December 31, 2005 have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing
and
accounting.
BENEFIT
PLAN INVESTOR CONSIDERATIONS
Each
fiduciary of a pension, profit-sharing or other employee benefit plan subject
to
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (a
“Plan”) should consider the fiduciary standards of ERISA in the context of the
Plan’s particular circumstances before authorizing an investment in the debt
securities. Accordingly, among other factors, the fiduciary should consider
whether the investment would satisfy the prudence and diversification
requirements of ERISA and would be consistent with the documents and instruments
governing the Plan.
In
addition, CIGNA and certain of its affiliates, including Connecticut General
Life Insurance Company and Life Insurance of North America, may each be
considered a “party in interest” within the meaning of ERISA, or a “disqualified
person” within the meaning of the Code, with respect to many Plans, as well as
many individual retirement accounts and Keogh plans (also “Plans”). ERISA
Section 406 and Code Section 4975 generally prohibit transactions between plans
and parties in interest or disqualified persons. Prohibited transactions within
the meaning of ERISA or the Code would likely arise, for example, if the debt
securities are acquired by or with the assets of a Plan with respect to which
CIGNA or any of its affiliates is a service provider or other party in interest,
unless the debt securities are acquired pursuant to an exemption from the
“prohibited transaction” rules. A violation of these prohibited transaction
rules could result in an excise tax or other liabilities under ERISA and/or
Section 4975 of the Code for such persons, unless exemptive relief is available
under an applicable statutory or administrative exemption.
Section
408(b)(17) of ERISA and five prohibited transaction class exemptions (“PTCEs”)
issued by the U.S. Department of Labor may provide exemptive relief for direct
or indirect prohibited transactions resulting from the purchase or holding
of
the debt securities. Those class exemptions are PTCE 96-23 (for certain
transactions determined by in-house asset managers), PTCE 95-60 (for certain
transactions involving insurance company general accounts), PTCE 91-38 (for
certain transactions involving bank collective investment funds), PTCE 90-1
(for
certain transactions involving insurance company separate accounts), and PTCE
84-14 (for certain transactions determined by independent qualified asset
managers).
Because
CIGNA or its affiliates may be considered a party in interest with respect
to
many Plans, the debt securities may not be purchased, held or disposed of by
any
Plan, any entity whose underlying assets include “plan assets” by reason of any
Plan’s investment in the entity (a “Plan Asset
Entity”) or any person investing “plan assets” of any Plan, unless purchase,
holding or disposition is eligible for exemptive relief, including relief
available under Section 408(b)(17) of ERISA or PTCE 96-23, 95-60, 91-38, 90-1,
or 84-14. Any purchaser, including any fiduciary purchasing on behalf of a
Plan,
transferee or holder of the debt securities will be deemed to have represented,
in its corporate and fiduciary capacity, by its purchase and holding of the
debt
securities that either (a) it is not a Plan or a Plan Asset Entity and is not
purchasing such securities on behalf of or with “plan assets” of any Plan or
with any assets of a governmental, church or non-U.S. plan that is subject
to
any federal, state, local or non-U.S. law that is substantially similar to
the
provisions of Section 406 of ERISA or Section 4975 of the Code (“Similar Laws”)
or (b) its purchase, holding and disposition are eligible for exemptive relief
or such purchase, holding and disposition are not prohibited by ERISA or Section
4975 of the Code (or in the case of a governmental, church or non-U.S. plan,
any
Similar Laws).
S-19
In
addition to considering the consequences of holding the debt securities, Plans
(or other governmental, church or non-U.S. plans subject to Similar Laws)
purchasing the debt securities should also consider the possible implications
of
owning any underlying security that an investor may receive upon an optional
or
mandatory exchange of the debt securities at maturity or otherwise. Purchasers
of the debt securities have exclusive responsibility for ensuring that their
purchase, holding and disposition of the debt securities do not violate the
prohibited transaction rules of ERISA or the Code or any Similar
Laws.
Due
to
the complexity of these rules and the penalties that may be imposed upon persons
involved in non-exempt prohibited transactions, it is particularly important
that fiduciaries or other persons considering purchasing the debt securities
on
behalf of or with “plan assets” of any Plan or plan subject to Similar Laws
consult with their counsel regarding the availability of exemptive relief under
Section 408(b)(17) of ERISA or PTCEs 96-23, 95-60, 91-38, 90-1 or 84-14 or
similar exemptions from Similar Law. Purchasers of the debt securities have
exclusive responsibility for ensuring that their purchase and holding of the
debt securities do not violate the fiduciary or prohibited transaction rules
of
ERISA, the Code or any Similar Laws. The sale of any debt securities to a
Plan or plan subject to Similar Law is in no respect a representation by CIGNA
or any of its affiliates or representatives that such an investment meets all
relevant legal requirements with respect to investments by any such plan
generally or any particular plan, or that such investment is appropriate for
such plans generally or any particular plan.
S-20
PROSPECTUS
CIGNA
Corporation
Debt
Securities
Common
Stock
Preferred
Stock
Warrants
Purchase
Contracts
Units
CIGNA
Corporation may offer and sell the securities listed above from time to time
in
one or more classes or series and in amounts, at prices and on terms that we
may
determine at the time of the offering. We will provide the specific terms of
the
securities in supplements to this prospectus. The debt securities, preferred
stock, warrants and purchase contracts may be convertible into or exercisable
or
exchangeable for common or preferred stock or other securities of the Company
or
debt or equity securities of one or more other entities. You should read this
prospectus and any related prospectus supplement carefully before you invest
in
our securities.
Our
common stock is listed on the New York Stock Exchange under the symbol
“CI”.
We
may
offer and sell these securities to or through one or more underwriters, dealers
and agents, or directly to purchasers, on a continuous or delayed
basis.
You
should carefully consider the risk factors included in our periodic reports
filed with the Securities and Exchange Commission under the Securities Exchange
Act of 1934, as amended, before you invest in any of our
securities.
Neither
the Securities and Exchange Commission nor any state securities regulator 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 August 17, 2006.
You
should not assume that the information in this prospectus, any prospectus
supplement, or any document incorporated by reference, is truthful or complete
at any date other than the date mentioned on the cover page of those
documents.
Unless
otherwise mentioned or unless the context requires otherwise, when used in
this
prospectus, the terms “CIGNA,” “we,” “our” and “us” refer to CIGNA Corporation
and its consolidated subsidiaries, and the term the “Company” refers to CIGNA
Corporation, not including its consolidated subsidiaries.
TABLE
OF CONTENTS
|
|
Page
|
2
This
prospectus is part of a registration statement on Form S-3 that we filed with
the Securities and Exchange Commission, which we refer to as the “SEC,” using a
“shelf” registration process. Under this shelf registration process, we may
offer and sell any combination of the securities described in this prospectus
in
one or more offerings. This prospectus provides you with a general description
of the securities we may offer. Each time we use this prospectus to offer
securities, we will provide a prospectus supplement and, if applicable, a
pricing supplement. The prospectus supplement and any applicable pricing
supplement will describe the specific amounts, prices and other material terms
of the securities being offered at that time. The prospectus supplement and
any
applicable pricing supplement may also add, update or change the information
in
this prospectus. You should read this prospectus, the applicable prospectus
supplement and any applicable pricing supplement, together with the information
contained in the documents referred to under the heading “Where You Can Find
More Information.”
When
acquiring any securities discussed in this prospectus, you should rely only
on
the information contained or incorporated by reference in this prospectus,
any
prospectus supplement and any “free writing prospectus” that we authorize to be
delivered to you. Neither we, nor any underwriters or agents, have authorized
anyone to provide you with different information. We are not offering the
securities in any jurisdiction in which an offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make an offer or
solicitation.
STATEMENTS
AND RISK FACTORS
We
have
made forward-looking statements in this prospectus and the documents
incorporated by reference in this prospectus. Forward-looking statements may
contain information about financial prospects, economic conditions, trends
and
other uncertainties. These forward-looking statements are based on management’s
beliefs and assumptions and on information available to management at the time
the statements are or were made. Forward-looking statements include but are
not
limited to the information concerning, possible or assumed future business
strategies, financing plans, competitive position, potential growth
opportunities, potential operating performance improvements, trends, and in
particular, CIGNA's cost reduction programs and activities, litigation and
other
legal matters, operational improvement in the health care operations, and the
outlook for CIGNA's results. Forward-looking statements include all statements
that are not historical facts and can be identified by the use of
forward-looking terminology such as the words “believe,” “expect,” “plan,”
“intend,” “anticipate,” “estimate,” “predict,” “potential,” “may,” “should” or
similar expressions.
You
should not place undue reliance on these forward-looking statements. CIGNA
cautions that actual results could differ materially from those that management
expects, depending on the outcome of certain factors. Some factors that could
cause actual results to differ materially from the forward-looking statements
include:
|
1.
|
increased
medical costs that are higher than anticipated in establishing premium
rates in CIGNA’s health care operations, including increased use and costs
of medical services;
|
|
2.
|
increased
medical, administrative, technology or other costs resulting from
new
legislative and regulatory requirements imposed on CIGNA’s employee
benefits businesses;
|
|
3.
|
challenges
and risks associated with implementing the improvement initiatives
in the
health care operations, the organizational realignment and the reduction
of overall CIGNA and health care cost structure, including that
operational efficiencies and medical cost benefits do not emerge
as
expected and that medical membership does not grow as
expected;
|
|
4.
|
risks
associated with the amount and timing of gain recognition on the
sale of
CIGNA’s retirement benefits
business;
|
3
|
5.
|
risks
associated with pending and potential state and federal class action
lawsuits, purported securities class action lawsuits, disputes regarding
reinsurance arrangements, other litigation and regulatory actions
challenging CIGNA’s businesses and the outcome of pending government
proceedings and federal tax audits;
|
|
6.
|
heightened
competition, particularly price competition, which could reduce product
margins and constrain growth in CIGNA’s businesses, primarily the health
care business;
|
|
7.
|
significant
changes in interest rates;
|
|
8.
|
downgrades
in the financial strength ratings of CIGNA’s insurance subsidiaries, which
could, among other things, adversely affect new sales and retention
of
current business;
|
|
9.
|
limitations
on the ability of CIGNA’s insurance subsidiaries to dividend capital to
the parent company as a result of downgrades in the subsidiaries’
financial strength ratings, changes in statutory reserve or capital
requirements or other financial constraints;
|
|
10.
|
inability
of the program adopted by CIGNA to substantially reduce equity market
risks for reinsurance contracts that guarantee minimum death benefits
under certain variable annuities (including possible market difficulties
in entering into appropriate futures contracts and in matching such
contracts to the underlying equity risk);
|
|
11.
|
adjustments
to the reserve assumptions (including lapse, partial surrender, mortality,
interest rates and volatility) used in estimating CIGNA’s liabilities for
reinsurance contracts that guarantee minimum death benefits under
certain
variable annuities;
|
|
12.
|
adjustments
to the assumptions (including annuity election rates and reinsurance
recoverables) used in estimating CIGNA’s assets and liabilities for
reinsurance contracts that guarantee minimum income benefits under
certain
variable annuities;
|
|
13.
|
significant
stock market declines, which could, among other things, result in
increased pension expenses in CIGNA’s pension plan in future periods and
the recognition of additional pension obligations;
|
|
14.
|
unfavorable
claims experience related to workers’ compensation and personal accident
exposures of the run-off reinsurance business, including losses
attributable to the inability to recover claims from
retrocessionaires;
|
|
15.
|
significant
deterioration in economic conditions, which could have an adverse
effect
on CIGNA’s operations and investments;
|
|
16.
|
changes
in federal laws, such as amendments to income tax laws, which could
affect
the taxation of employer provided benefits, and pension legislation,
which
could increase pension cost;
|
|
17.
|
potential
public health epidemics and bio-terrorist activity, which could,
among
other things, cause operational disruption, depending on the severity
of
the event and number of individuals affected;
|
|
18.
|
risks
associated with security or interruption of information systems,
which
could, among other things, cause operational disruption; and
|
|
19.
|
risk
factors detailed in our most recent Annual Report on Form 10-K, including
the Cautionary Statement in Management’s Discussion and Analysis and our
other filings with the SEC.
|
This
list
of important factors is not intended to be exhaustive. Other sections of our
most recent Annual Report on Form 10-K, including the “Risk Factors” section and
other documents filed with the Securities and Exchange Commission include both
expanded discussion of these factors and additional risk factors and
uncertainties that could preclude CIGNA from realizing the forward-looking
statements. CIGNA does not assume any obligation to update any forward-looking
statements, whether as a result of new information, future events or otherwise,
except as required by law.
4
We
file
annual, quarterly and current reports, proxy statements and other information
with the SEC under the Securities Exchange Act of 1934. You may read and copy
all or any portion of this information at the SEC’s principal office in
Washington, D.C., and copies of all or any part thereof may be obtained from
the
Public Reference Section of the SEC, 100 F Street, N.E., Washington, D.C. 20549
after payment of fees prescribed by the SEC. Please call the SEC at
1-800-SEC-0330 for further information about the public reference
room.
The
SEC
also maintains an Internet website that contains reports, proxy statements
and
other information about issuers, like CIGNA, who file electronically with the
SEC. The address of that site is www.sec.gov.
Our
Internet website address is www.cigna.com. This reference to our website is
intended to be an inactive textual reference only. Our website and the
information contained therein or connected thereto are not incorporated by
reference into this prospectus.
This
prospectus is part of the registration statement and does not contain all of
the
information included in the registration statement. Whenever a reference is
made
in this prospectus to any contract or other document of CIGNA, the reference
may
not be complete and you should refer to the exhibits that are a part of the
registration statement for a copy of the contract or document.
The
SEC
allows us to “incorporate by reference” information into this prospectus, which
means that we can disclose important information to you by referring you to
another document filed separately with the SEC. The information incorporated
by
reference is deemed to be part of this prospectus, except for any information
that is superseded by subsequent incorporated documents or by information that
is contained directly in this prospectus or any prospectus supplement. This
prospectus incorporates by reference the documents set forth below that CIGNA
has previously filed with the SEC and that are not delivered with this
prospectus. These documents contain important information about CIGNA and its
financial condition.
|
CIGNA
SEC Filings (File No. 1-08323)
|
|
Period
|
|
Annual
Report on Form 10-K
|
|
Fiscal
year ended December 31, 2005
|
|
|
|
|
|
Quarterly
Reports on Form 10-Q
|
|
Quarterly
periods ended March 31, 2006 and
June
30, 2006
|
|
|
|
|
|
Current
Reports on Form 8-K
|
|
Filed
on February 28, March 24 and May 12, 2006
|
|
|
|
|
|
The
description of CIGNA common stock as set forth in its Registration
Statement on Form 8-B, including all amendments and reports filed
for the
purpose of updating such description
|
|
Filed
on March 22, 1982
|
|
|
|
|
|
The
description of CIGNA rights to purchase preferred stock as set forth
in
its Registration Statement on Form 8-A, including all amendments
and
reports filed for the purpose of updating such description
|
|
Filed
on July 23, 1997
|
All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 (excluding any information furnished under
Items
2.02 or 7.01 in any Current Report on Form 8-K) between the date of this
prospectus and the termination of the offering of securities under this
prospectus shall also be deemed to be incorporated herein by reference. Any
statement contained in any document incorporated or deemed to be incorporated
by
reference herein shall be deemed to be modified or superseded for purposes
of
this prospectus to the extent that a statement contained in this prospectus
or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this
prospectus.
5
To
obtain
a copy of these filings at no cost, you may write or telephone us at the
following address:
CIGNA
Corporation
Two
Liberty Place, 1601 Chestnut Street
Philadelphia,
PA 19192
Attention:
Investor Relations
(215)
761-1000
Exhibits
to the filings will not be sent, however, unless those exhibits have
specifically been incorporated by reference into such document.
6
CIGNA
Corporation had consolidated shareholders’ equity of $5.4 billion and assets of
$44.9 billion as of December 31, 2005, and revenues of $16.7 billion for the
year then ended. CIGNA Corporation and its subsidiaries constitute one of the
largest investor-owned health care and related benefits organizations in the
United States. Our subsidiaries are major providers of health care and related
benefits offered through the workplace, including health care products and
services, group disability, life and accident insurance, and disability and
workers’ compensation case management and related services. CIGNA’s major
insurance subsidiary, Connecticut General Life Insurance Company, traces its
origins to 1865. CIGNA Corporation was incorporated in the State of Delaware
in
1981.
CIGNA
Corporation is a holding company and is not an insurance company. Its
subsidiaries conduct various businesses, which are described in our most recent
Annual Report on Form 10-K.
CIGNA
Corporation’s principal executive offices are located at Two Liberty Place, 1601
Chestnut Street, Philadelphia, PA 19192. Our telephone number is (215)
761-1000.
For
additional information concerning CIGNA, please see our most recent Annual
Report on Form 10-K and our other filings with the SEC. See “Where You Can Find
More Information.”
7
Unless
we
inform you otherwise in a prospectus supplement or “free writing prospectus”,
the net proceeds from the sale of the securities will be added to CIGNA’s
general funds and used for general corporate purposes, including the repayment
of indebtedness.
8
This
prospectus describes certain general terms and provisions of the debt
securities. When we offer to sell a particular series of debt securities, we
will describe the specific terms of the debt securities in a supplement to
this
prospectus. The prospectus supplement will also indicate whether the general
terms and provisions described in this prospectus apply to a particular series
of debt securities.
The
senior debt securities are to be issued under an indenture (the “Senior
Indenture”) entered into between CIGNA Corporation and U.S. Bank, National
Association, as trustee. The subordinated debt securities are to be issued
under
a separate indenture (the “Subordinated Indenture”) also between CIGNA
Corporation and U.S. Bank, National Association, as trustee. The Senior
Indenture and the Subordinated Indenture are sometimes referred to individually
as an “Indenture” or collectively as the “Indentures.”
We
sometimes refer below to specific sections of one or both of the Indentures.
When we do so, we indicate where you can find the relevant section in the
Indentures by noting the section number in parentheses. When we do refer to
specific sections contained in the Indentures or terms defined in the
Indentures, including important terms, which we capitalize here, we use them
in
this prospectus in the same way we use them in the Indentures, and you should
refer to the Indentures themselves for detailed, specific, legal descriptions.
In this section, “Description of Debt Securities,” when we refer to “CIGNA,” we
refer to CIGNA Corporation, not including its consolidated
subsidiaries.
We
have
summarized some terms of the Indentures. The summary is not complete. The
Indentures were filed as exhibits to the registration statement of which this
prospectus is a part. You should read the Indentures for a complete statement
of
the provisions summarized in this prospectus and for provisions that may be
important to you. The Indentures are subject to and governed by the Trust
Indenture Act of 1939, as amended.
Ranking
The
debt
securities will be our direct, unsecured obligations. The senior debt securities
will rank equally with all of our other senior and unsecured, unsubordinated
debt. The subordinated debt securities will have a junior position to all of
our
senior debt.
Because
a
significant part of our operations are conducted through subsidiaries, a
significant portion of our cash flow, and consequently, our ability to service
debt, including the debt securities, is dependent upon the earnings of our
subsidiaries and the transfer of funds by those subsidiaries to us in the form
of dividends or other transfers.
In
addition, holders of the debt securities will have a junior position to claims
of creditors against our subsidiaries, including policy holders, trade
creditors, debtholders, secured creditors, taxing authorities, guarantee holders
and any preferred shareholders, except to the extent that we are recognized
as a
creditor of our subsidiary. Any claims of CIGNA as the creditor of its
subsidiary would be subordinate to any security interest in the assets of such
subsidiary and any indebtedness of such subsidiary senior to that held by
us.
In
addition to general state law restrictions on payments of dividends and other
distributions to shareholders applicable to all corporations, HMOs and insurance
companies, including some of CIGNA’s direct and indirect subsidiaries, are
subject to further state regulations that, among other things, may require
those
companies to maintain certain levels of equity, and restrict the amount of
dividends and other distributions that may be paid to CIGNA.
Terms
of the Debt Securities to be Described in the Prospectus
Supplement
The
Indentures do not limit the amount of debt securities that we may issue under
them. We may issue debt securities under the Indentures up to an aggregate
principal amount as we may authorize from time to time. The prospectus
supplement will describe the terms of any debt securities being offered,
including:
9
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whether
the debt securities will be senior debt securities or subordinated
debt
securities;
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any
limit on the aggregate principal amount of the debt
securities;
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the
date or dates on which the principal will be
payable;
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the
interest rate, if any, and the method for calculating the interest
rate;
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the
interest payment dates and the record dates for interest
payments;
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our
right, if any, to defer payment of interest and the maximum length
of this
deferral period;
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any
mandatory or optional redemption terms or prepayment or sinking fund
provisions;
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the
place where we will pay principal, interest and any
premium;
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the
currency or currencies, if other than the currency of the United
States,
in which principal, interest and any premium will be
paid;
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if
other than denominations of $1,000 or multiples of $1,000, the
denominations in which the debt securities will be
issued;
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whether
the debt securities will be issued in the form of global
securities;
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additional
provisions, if any, relating to the discharge of our obligations
under the
debt securities;
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whether
the amount of payment of principal (or premium, if any) or interest,
if
any, will be determined with reference to one or more
indices;
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the
portion of the principal amount of the debt securities to be paid
upon
acceleration of maturity thereof;
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any
authenticating or paying agents, registrars or other agents;
and
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other
specific terms, including any additional events of default, covenants
or
warranties. (Section 301)
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Events
of Default and Notice Thereof
When
we
use the term “Event of Default” with respect to debt securities of any series we
mean:
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we
fail to pay principal (including any sinking fund payment) of, or
premium
(if any) on, any debt security of that series when
due;
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we
fail to pay interest, if any, on any debt security of that series
when due
and the failure continues for a period of 30
days;
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we
fail to perform in any material respect any covenant in an Indenture
not
specified in the previous two bullets (other than a covenant included
in
an Indenture solely for the benefit of a different series of debt
securities) and the failure to perform continues for a period of
90 days
after receipt of a specified written notice to us;
and
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certain
events of bankruptcy, insolvency, reorganization, receivership or
liquidation of CIGNA. (Section 501)
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10
An
Event
of Default with respect to debt securities of a particular series may not
constitute an Event of Default with respect to debt securities of any other
series of debt securities.
If
an
Event of Default under an Indenture occurs with respect to the debt securities
of any series and is continuing, then the Trustee or the holders of at least
25%
in principal amount of the Outstanding securities of that series may require
us
to repay immediately the entire principal amount (or, if the debt securities
of
that series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all
Outstanding securities of that series; provided, however, that under certain
circumstances the holders of a majority in aggregate principal amount of
Outstanding securities of that series may rescind or annul such acceleration
and
its consequences. (Section 502)
Each
of
the Indentures contains a provision entitling the Trustee, subject to the duty
of the Trustee during a default to act with the required standard of care
(Section 601), to be indemnified by the holders of debt securities before
proceeding to exercise any right or power under that Indenture at the request
of
such holders. (Section 603) Subject to these provisions in the Indentures for
the indemnification of the Trustee and certain other limitations, the holders
of
a majority in aggregate principal amount of the debt securities of each affected
series then Outstanding 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. (Sections 512 and 513)
Each
of
the Indentures provides that the Trustee may withhold notice to the holders
of
the debt securities of any default (except in payment of principal (or premium,
if any) or interest, if any) if the Trustee considers it in the interest of
the
holders of the debt securities to do so. (Section 602)
Each
of
the Indentures provides that holders of at least 25% in aggregate principal
amount of the Outstanding securities of any series may seek to institute a
proceeding with respect to the Indentures or for any remedy thereunder only
after:
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such
holders have made a written request to the
Trustee,
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such
holders have offered an indemnity reasonably satisfactory to the
Trustee
to institute a proceeding, and
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the
Trustee shall not have received from the holders of a majority in
aggregate principal amount of the Outstanding securities of that
series a
direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section
507)
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These
limitations do not apply, however, to a suit instituted by a Holder of a debt
security for enforcement of payment of the principal of (or premium, if any)
or
interest, if any, on or after the respective due dates expressed in such debt
security. (Section 508)
Each
of
the Indentures contains a covenant under which we are required to furnish to
the
Trustee an annual statement as to the compliance with all conditions and
covenants of the Indentures. (Section 1008)
Modification
and Waiver
Each
of
the Indentures (Section 901) provides that we, together with the Trustee, may
enter into supplemental indentures without the consent of the holders of debt
securities to:
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evidence
the assumption by another person of our
obligations;
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add
covenants for the benefit of the holders of all or any series of
debt
securities;
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add
any additional Events of Default;
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add
or change an Indenture to permit or facilitate the issuance of debt
securities in bearer form;
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add
to, change or eliminate a provision of an Indenture if such addition,
change or elimination does not apply to a debt security created prior
to
the execution of such supplemental indenture or modify the rights
of a
Holder of any debt security with respect such
provision;
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secure
any debt security;
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establish
the form or terms of debt securities of any
series;
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evidence
the acceptance of appointment by a successor
Trustee;
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add
to any provision of an Indenture to the extent necessary to permit
defeasance and discharge of any series of debt securities if such
action
does not adversely affect the interests of the holders of debt securities
in any material respect;
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cure
any ambiguity or correct any inconsistency in an Indenture or make
other
changes, provided that any such action does not adversely affect
the
interests of the holders of debt securities of any affected series
in any
material respect; or
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conform
an Indenture to any mandatory provision of
law.
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Other
amendments and modifications of an Indenture may be made with the consent of
the
holders of not less than a majority of the aggregate principal amount of each
series of the Outstanding securities affected by the amendment or modification.
However, no modification or amendment may, without the consent of the Holder
of
each Outstanding security affected:
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change
the stated maturity of the principal of (or premium, if any) or any
installment of principal or interest, if any, on any such debt
security;
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reduce
the principal amount of (or premium, if any) or the interest rate,
if any,
on any such debt security or the principal amount due upon acceleration
of
an Original Issue Discount
Security;
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change
the place or currency of payment of principal of (or premium if any)
or
the interest, if any, on any such debt
security;
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impair
the right to institute suit for the enforcement of any such payment
on or
with respect to any such debt
security;
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reduce
the percentage of holders of debt securities necessary to modify
or amend
an Indenture;
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in
the case of the Subordinated Indenture, modify the subordination
provisions in a manner adverse to the holders of the subordinated
debt
securities; or
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modify
the foregoing requirements or reduce the percentage of Outstanding
securities necessary to waive compliance with certain provisions
of an
Indenture or for waiver of certain defaults. (Section
902)
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The
holders of at least a majority of the aggregate principal amount of the
Outstanding securities of any series may, on behalf of all holders of that
series, waive our required compliance with certain restrictive provisions of
an
Indenture and may waive any past default under an Indenture, except a default
in
the payment of principal, premium or interest or in the performance of certain
covenants. (Sections 1009 and 513)
12
Limitations
on Liens on Common Stock of Designated Subsidiaries
Each
of
the Indentures provides that so long as any of the debt securities issued under
that Indenture remains outstanding, we will not, and we will not permit any
of
our Designated Subsidiaries to, issue, assume, incur or guarantee any
indebtedness for borrowed money secured by a mortgage, pledge, lien or other
encumbrance, directly or indirectly, on any of the common stock of a Designated
Subsidiary owned by us or by any of our Designated Subsidiaries, unless our
obligations under the debt securities and, if we so elect, any other of our
indebtedness ranking on a parity with, or prior to, the debt securities, shall
be secured equally and ratably with, or prior to, such secured indebtedness
for
borrowed money so long as it is outstanding and is so secured. (Section
1006)
“Designated
Subsidiary” means Connecticut General Life Insurance Company and Life Insurance
Company of North America, so long as it remains a Subsidiary, or any Subsidiary
which is a successor of such Designated Subsidiary. (Section 101)
Consolidation,
Merger and Sale of Assets
We
may
not consolidate with or merge with or into any other person (other than in
a
merger or consolidation in which we are the surviving person) or sell our
property and assets as, or substantially as, an entirety to any person
unless:
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the
person formed by the consolidation or with or into which we are merged
or
the person that purchases our properties and assets as, or substantially
as, an entirety is a corporation, partnership or trust organized
and
validly existing under the laws of the United States of America,
any State
or the District of Columbia, and any such successor or purchaser
expressly
assumes CIGNA’s obligations on the debt securities under a supplemental
indenture satisfactory to the
Trustee;
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immediately
after giving effect to the transaction no Event of Default shall
have
occurred and be continuing; and
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a
specified officers’ certificate and opinion of counsel are delivered to
the Trustee. (Section 801)
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Upon
compliance with the foregoing provisions, the successor or purchaser will
succeed to, and be substituted for CIGNA under the Indentures with the same
effect as if such successor or purchaser had been the original obligor under
the
debt securities, and thereafter CIGNA will be relieved of all obligations and
covenants under the Indentures and the debt securities. (Section
802)
Defeasance
and Covenant Defeasance
If
we
deposit, in trust, with the Trustee (or other qualifying trustee), sufficient
cash or specified government obligations to pay the principal of (and premium,
if any) and interest and any other sums due on the scheduled due date for the
debt securities of a particular series, then at our option and subject to
certain conditions (including the absence of an Event of Default):
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we
will be discharged from our obligations with respect to the debt
securities of such series (which we refer to in this prospectus as
a
“legal defeasance”), or
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we
will no longer be under any obligation to comply with the covenants
described above under “Limitations on Liens on Common Stock of Designated
Subsidiaries” and “Consolidation, Merger and Sale of Assets”, an Event of
Default relating to any failure to comply with such covenants will
no
longer apply to us, and, for subordinated debt securities, the
subordination provisions will no longer apply to us (which we refer
to in
this prospectus as a “covenant
defeasance”).
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If
we
exercise our legal defeasance option, payment of such debt securities may not
be
accelerated because of an Event of Default. If we exercise our covenant
defeasance option, payment of such debt securities may not be
13
accelerated
by reference to the covenants from which we have been released or pursuant
to
Events of Default referred to above which are no longer applicable. If we fail
to comply with our remaining obligations with respect to such debt securities
under an Indenture after we exercise the covenant defeasance option and such
debt securities are declared due and payable because of the occurrence of any
Event of Default, the amount of money and government obligations on deposit
with
the Trustee may be insufficient to pay amounts due on the debt securities of
such series at the time of the acceleration resulting from such Event of
Default. However, we will remain liable for such payments. (Section
1007)
Under
current United States federal income tax laws, a legal defeasance would be
treated as an exchange of the relevant debt securities in which holders of
those
debt securities might recognize gain or loss. Unless accompanied by other
changes in the terms of the debt securities, a covenant defeasance generally
should not be treated as a taxable exchange. In order to exercise our defeasance
options, we must deliver to the Trustee an opinion of counsel to the effect
that
the deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for Federal income tax
purposes.
Subordination
of Subordinated Debt Securities
Unless
otherwise indicated in the prospectus supplement, the following provisions
will
apply to the subordinated debt securities.
The
subordinated debt securities will, to the extent set forth in the Subordinated
Indenture, be subordinate in right of payment to the prior payment in full
of
all Senior Debt (as defined below) of CIGNA, including the senior debt
securities. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of CIGNA, the holders of Senior Debt of CIGNA will first
be entitled to receive payment in full of principal of (and premium, if any)
and
interest, if any, on such Senior Debt of CIGNA before the holders of the
subordinated debt securities will be entitled to receive or retain any payment
in respect of the principal of (and premium, if any) or interest, if any, on
the
subordinated debt securities. (Subordinated Indenture Section 1402)
If
the
maturity of any subordinated debt securities is accelerated, the holders of
all
Senior Debt of CIGNA outstanding at the time of such acceleration will first
be
entitled to receive payment in full of all amounts due thereon before the
holders of subordinated debt securities will be entitled to receive any payment
upon the principal of (or premium, if any) or interest, if any, on the
subordinated debt securities. (Subordinated Indenture Section 1403)
No
payments on account of principal (or premium, if any) or interest, if any,
in
respect of the subordinated debt securities may be made if there shall have
occurred and be continuing.
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a
default in the payment of principal of (or premium, if any) or interest
on
Senior Debt of CIGNA, or
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an
event of default with respect to any Senior Debt of CIGNA resulting
in the
acceleration of the maturity thereof, or if any judicial proceeding
shall
be pending with respect to any such default. (Subordinated Indenture
Section 1404)
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“Debt”
means (without duplication and without regard to any portion of principal amount
that has not accrued and to any interest component thereof (whether accrued
or
imputed) that is not due and payable) with respect to any person, whether
recourse is to all or a portion of the assets of such person and whether or
not
contingent:
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every
obligation of such person for money borrowed;
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every
obligation of such person evidenced by bonds, debentures, notes or
other
similar instruments;
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every
reimbursement obligation of such person with respect to letters of
credit,
bankers’ acceptances or similar facilities issued for the account of such
person;
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every
obligation of such person issued or assumed as the deferred purchase
price
of property or services (but excluding trade accounts payable or
accrued
liabilities arising in the ordinary course of business);
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every
capital lease obligation of such person; and
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14
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every
obligation of the type referred to in the previous five bullets of
another
person and all dividends of another person the payment of which,
in either
case, such person has guaranteed or is responsible or liable for,
directly
or indirectly, as obligor or otherwise. (Subordinated Indenture Section
101)
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“Senior
Debt” means with respect to any person the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of
any
petition in bankruptcy or for reorganization relating to such person to the
extent that such claim for post-petition interest is allowed in such
proceeding), on Debt of such person, whether incurred on or prior to the date
of
the Subordinated Indenture or thereafter incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it
is provided that such obligations are not superior in right of payment to the
subordinated debt securities or to other Debt of such person which is pari
passu
with, or subordinated to, the subordinated debt securities; provided, however,
that Senior Debt does not include (i) the subordinated debt securities or (ii)
any other debt securities issued to any other trusts, partnerships or other
entity affiliated with CIGNA which is a financing vehicle of CIGNA (“Financing
Entity”) in connection with the issuance of preferred securities of such
Financing Entity. (Subordinated Indenture Section 101)
The
Subordinated Indenture does not limit or prohibit the incurrence of additional
Senior Debt of CIGNA, which may include indebtedness that is senior to the
subordinated debt securities, but subordinate to other obligations of CIGNA.
The
senior debt securities, when issued, will constitute Senior Debt of
CIGNA.
At
June
30, 2006, the Company had $1.326 billion of Senior Debt outstanding and no
subordinated debt securities outstanding.
The
prospectus supplement may further describe the provisions, if any, applicable
to
the subordination of the subordinated debt securities of a particular
series.
Concerning
our Relationship with the Trustee
U.S.
Bank, National Association, will act as Trustee under our Senior Indenture
and
our Subordinated Indenture. We maintain customary banking relationships in
the
ordinary course of business with the Trustee and its affiliates.
Governing
Law
Each
of
the Indentures is governed by and shall be construed in accordance with the
internal laws of the State of New York.
15
Each
debt
security will be represented either by a certificate issued in definitive form
to a particular investor or by one or more global securities representing the
entire issuance of securities. Certificated securities in definitive form and
global securities will be issued in registered form. Definitive securities
name
you or your nominee as the owner of the security, and in order to transfer
or
exchange these securities or to receive payments other than interest or other
interim payments, you or your nominee must physically deliver the securities
to
the Trustee. Global securities name a depositary or its nominee as the owner
of
the debt securities represented by these global securities.
We
may
issue the debt securities in the form of one or more fully registered global
securities that will be deposited with a depositary or its nominee identified
in
the applicable prospectus supplement and registered in the name of that
depositary or nominee. In those cases, one or more global securities will be
issued in a denomination or aggregate denominations equal to the portion of
the
aggregate principal or face amount of the securities to be represented by global
securities. Unless and until it is exchanged in whole for securities in
definitive registered form, a global security may not be transferred except
as a
whole by and among the depositary for the global security, the nominees of
the
depositary or any successors of the depositary or those nominees.
If
not
described below, any specific terms of the depositary arrangement with respect
to any securities to be represented by a global security will be described
in
the prospectus supplement relating to those securities. (Sections 204 and 305)
We anticipate that the following provisions will apply to all depositary
arrangements.
Ownership
of beneficial interests in a global security will be limited to persons, called
participants, that have accounts with the depositary. Upon the issuance of
a
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 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 global
securities.
So
long
as the depositary, or its nominee, is the registered owner of a 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 global security for all
purposes under the applicable Indenture. Except as described below, owners
of
beneficial interests in a global security will not be entitled to have the
securities represented by the global security registered in their 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 applicable Indenture. Accordingly, each person owning
a
beneficial interest in a global security must rely on the procedures of the
depositary for that global security and, if that person is not a participant,
on
the procedures of the participant through which the person owns its interest,
to
exercise any rights of a holder under the applicable Indenture. We understand
that under existing industry practices, if we request any action of holders
or
if an owner of a beneficial interest in a global security desires to give or
take any action that a holder is entitled to give or take under the applicable
Indenture, the depositary for the global security would authorize the
participants holding the relevant beneficial interests to give or take that
action, and the participants would authorize beneficial owners owning through
them to give or take that action or would otherwise act upon the instructions
of
beneficial owners holding through them.
Principal
(or premium, if any) and interest payments on debt securities represented by
a
global security registered in the name of a depositary or its nominee will
be
made to the depositary or its nominee, as the case may be, as the registered
owner of the global security. Neither CIGNA nor the Trustee nor any agent of
CIGNA or the Trustee will have any responsibility or liability for any aspect
of
the records relating to payments made on account of beneficial ownership
interests in the global security or for maintaining, supervising or reviewing
any records relating to those beneficial ownership interests.
16
We
expect
that the depositary for any of the securities represented by a global security,
upon receipt of any payment of principal, premium, interest or other
distribution of underlying securities or other property to holders of that
global security, will immediately credit participants’ accounts in amounts
proportionate to their respective beneficial interests in that global security
as shown on the records of the depositary. We also expect that payments by
participants to owners of beneficial interests in a global security held through
participants will be governed by standing customer 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,” and will be the responsibility of
those participants.
If
the
depositary for any of these securities represented by a global security 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 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
global securities. If we make that decision, we will issue securities in
definitive form in exchange for all of the global security or securities
representing those securities. Any securities issued in definitive form in
exchange for a global security will be registered in the name or names that
the
depositary gives to the Trustee or relevant agent of ours or theirs. It is
expected that the depositary’s instructions will be based upon directions
received by the depositary from participants with respect to ownership of
beneficial interests in the global security that had been held by the
depositary.
17
DESCRIPTION
OF CAPITAL STOCK
Description
of Common Stock
The
Company is authorized to issue 600,000,000 shares of common stock, par value
$0.25 per share, of which 160,028,461 shares were issued and 110,894,350 were
outstanding at June 30, 2006.
Holders
of common stock are entitled to receive such dividends as the board of directors
of the Company may from time to time declare. Payment of dividends on the common
stock will at all times be subject to, among other things, prior satisfaction
of
dividend and sinking fund requirements, if any, of any series of preferred
stock
that may then be outstanding, and the availability of funds to the Company,
which in turn may be subject to fixed payment obligations which the Company
may
incur in the future, and the ability of the Company's insurance subsidiaries
to
declare and pay dividends under applicable insurance regulatory requirements.
No
shares of preferred stock are outstanding as of the date of this
prospectus.
The
Company's board of directors is divided into three classes, each elected for
a
term of three years. Directors may be removed only for cause. Holders of common
stock have one vote per share and have no cumulative voting rights. Subject
to
the rights of creditors and the liquidation preferences of holders of preferred
stock, the holders of common stock are entitled to share ratably in the
remaining assets of the Company in the event of its voluntary or involuntary
liquidation or dissolution. Holders of common stock have no preemptive rights.
All shares of common stock presently outstanding are, and all such shares to
be
issued pursuant to this prospectus will be, fully paid and
nonassessable.
Under
the
Company's shareholder rights plan, a Preferred Stock Purchase Right (a “Right”)
attaches to each outstanding share of common stock. The Rights trade with the
common stock until the Rights become exercisable. They are exercisable only
if a
party acquires, or announces a tender offer to acquire, 10% or more of the
outstanding common stock, unless CIGNA's board of directors approves the
transaction. Each Right entitles the shareholder to buy, for a $260 exercise
price, 1/1000 of a share of Junior Participating Preferred Stock, Series D,
having dividend and voting rights approximately equal to one share of common
stock. Upon the acquisition of 10% or more of the outstanding common stock
by an
acquirer, all Rights holders except the acquirer may, except under certain
circumstances, purchase shares of common stock worth twice the exercise price.
If, after the acquisition of 10% or more of the outstanding common stock, the
Company is acquired in a merger or other business combination transaction,
Rights holders may purchase the acquirer's shares at a similar discount. The
Company may redeem the Rights for $0.0033 each at any time before an acquirer
acquires 10% of its outstanding common stock, and thereafter under certain
circumstances.
Certain
mergers and other business combinations must be approved by holders of at least
80% of the outstanding common stock and any preferred stock entitled to vote
generally, voting together as a single class, except where the transaction
is
approved by a majority of the Company's board of directors, or certain minimum
price criteria and procedural conditions are met as specified in the Company's
Restated Certificate of Incorporation. A similar 80% vote of the outstanding
common stock and any preferred stock entitled to vote generally, voting together
as a single class, is required for the Company's shareholders to amend, repeal
or adopt any charter provision inconsistent with such provisions or to adopt,
amend or repeal the Company's by-laws. Such provisions could inhibit a change
of
control in situations that the board of directors determines are not adequate
or
in the best interests of shareholders, or that do not meet specified fair price
criteria and procedural conditions. In some circumstances, some or all
shareholders could be denied the opportunity to realize a premium over the
then-prevailing market price for the shares.
Description
of Preferred Stock
The
Company's Restated Certificate of Incorporation authorizes the issuance of
25,000,000 shares of preferred stock, par value $1.00 per share. No shares
of
preferred stock are outstanding as of the date of this prospectus, but the
Company has reserved for issuance 6,000,000 shares of its Junior Participating
Preferred Stock, Series D, issuable pursuant to the Company's shareholder rights
plan, a description of which has been incorporated by reference herein. The
Company's preferred stock may be issued from time to time in one or more series,
without shareholder approval, when authorized by the board
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of
directors. Subject to limitations prescribed by law, the board of directors
is
authorized to determine the voting powers (if any), designation, preferences
and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, for each series of preferred stock that
may
be issued, and to fix the number of shares of each such series.
Section
203 of the Delaware General Corporation Law
Section
203 of the Delaware General Corporation Law prohibits a defined set of
transactions between a Delaware corporation, such as us, and an interested
stockholder. An interested stockholder is defined as a person who, together
with
any affiliates or associates of such person, beneficially owns, directly or
indirectly, 15% or more of the outstanding voting shares of a Delaware
corporation. This provision may prohibit business combinations between an
interested stockholder and a corporation for a period of three years after
the
date the interested stockholder becomes an interested stockholder. The term
business combination is broadly defined to include mergers, consolidations,
sales or other dispositions of assets having a total value in excess of 10%
of
the consolidated assets of the corporation, and some other transactions that
would increase the interested stockholder’s proportionate share ownership in the
corporation.
This
prohibition is effective unless:
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the
business combination is approved by the corporation’s board of directors
prior to the time the interested stockholder becomes an interested
stockholder;
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the
interested stockholder acquired at least 85% of the voting stock
of the
corporation, other than stock held by directors who are also officers
or
by qualified employee stock plans, in the transaction in which it
becomes
an interested stockholder; or
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the
business combination is approved by a majority of the board of directors
and by the affirmative vote of two-thirds of the outstanding voting
stock
that is not owned by the interested
stockholder.
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In
general, the prohibitions do not apply to business combinations with persons
who
were shareholders before we became subject to Section 203.
Special
By-Laws Provisions
Our
by-laws divide our board of directors into three classes of directors serving
staggered, three-year terms. Vacancies, and newly-created directorships
resulting from any increase in the size of our board, must be filled by our
board, even if the directors then on the board do not constitute a quorum or
only one director is left in office. These provisions, together with the
provisions of Section 203 of the Delaware General Corporation Law, could have
the effect of delaying, deferring or preventing a change in control or the
removal of existing management, of deterring potential acquirors from making
an
offer to our shareholders and of limiting any opportunity to realize premiums
over prevailing market prices for our common stock in connection therewith.
This
could be the case notwithstanding that a majority of our shareholders might
benefit from such a change in control or offer.
Transfer
Agent and Registrar
Mellon
Investor Services serves as the registrar and transfer agent for the common
stock.
Stock
Exchange Listing
Our
common stock is listed on the New York Stock Exchange under the trading symbol
“CI”.
19
PLAN
OF DISTRIBUTION
General
Any
of
the securities being offered hereby and any accompanying prospectus supplement
may be sold in any one or more of the following ways from time to
time.
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directly
to purchasers;
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through
agents;
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to
or through underwriters;
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through
dealers;
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directly
to our shareholders; or
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through
a combination of any such methods of
sale.
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We
may
also issue the securities as a dividend or distribution to our
shareholders.
In
addition, we may enter into derivative transactions with third parties, or
sell
securities not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement indicates,
in
connection with such a transaction, the third parties may, pursuant to this
prospectus and the applicable prospectus supplement, sell securities covered
by
this prospectus and the applicable prospectus supplement. If so, the third
party
may use securities borrowed from us or others to settle such sales and may
use
securities received from us to close out any related short positions. We may
also loan or pledge securities covered by this prospectus and the applicable
prospectus supplement to third parties, who may sell the loaned securities
or,
in an event of default in the case of a pledge, sell the pledged securities
pursuant to this prospectus and the applicable prospectus
supplement.
The
distribution of the securities may be effected from time to time in one or
more
transactions at a fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices.
We
may
solicit offers to purchase directly. Offers to purchase securities also may
be
solicited by agents designated by us from time to time. Any such agent involved
in the offer or sale of the securities in respect of which this prospectus
is
delivered will be named, and any commissions payable by us to such agent will
be
set forth, in the applicable prospectus supplement. Unless otherwise indicated
in such prospectus supplement, any such agent will be acting on a reasonable
best efforts basis for the period of its appointment. Any such agent may be
deemed to be an underwriter, as that term is defined in the Securities Act
of
1933, of the securities so offered and sold.
If
securities are sold by means of an underwritten offering, we will execute an
underwriting agreement with an underwriter or underwriters at the time an
agreement for such sale is reached, and the names of the specific managing
underwriter or underwriters, as well as any other underwriters, the respective
amounts underwritten and the terms of the transaction, including commissions,
discounts and any other compensation of the underwriters and dealers, if any,
will be set forth in the applicable prospectus supplement which will be used
by
the underwriters to make resales of the securities in respect of which this
prospectus is being delivered to the public. If underwriters are utilized in
the
sale of any securities in respect of which this prospectus is being delivered,
such securities will be acquired by the underwriters for their own account
and
may be resold from time to time in one or more transactions, including
negotiated transactions, at fixed public offering prices or at varying prices
determined by the underwriters at the time of sale. Securities may be offered
to
the public either through underwriting syndicates represented by managing
underwriters or directly by one or more underwriters. If any underwriter or
underwriters are utilized in the
20
sale
of
securities, unless otherwise indicated in the applicable prospectus supplement,
the underwriting agreement will provide that the obligations of the underwriters
are subject to certain conditions precedent and that the underwriters with
respect to a sale of such securities will be obligated to purchase all such
securities if any are purchased.
We
may
grant to the underwriters options to purchase additional securities, to cover
over-allotments, if any, at the initial public offering price (with additional
underwriting commissions or discounts), as may be set forth in the prospectus
supplement relating thereto. If we grant any over-allotment option, the terms
of
such over-allotment option will be set forth in the prospectus supplement for
such securities.
If
a
dealer is used in the sale of the securities in respect of which this prospectus
is delivered, we will sell such securities to the dealer, as principal. The
dealer may then resell such securities to the public at varying prices to be
determined by such dealer at the time of resale. Any such dealer may be deemed
to be an underwriter, as such term is defined in the Securities Act, of the
securities so offered and sold. The name of the dealer and their terms of the
transaction will be set forth in the prospectus supplement relating
thereto.
Offers
to
purchase securities may be solicited directly by us and the sale thereof may
be
made by us directly to institutional investors or others, who may be deemed
to
be underwriters within the meaning of the Securities Act of 1933 with respect
to
any resale thereof. We may also offer securities through agents in connection
with a distribution to our shareholders of rights to purchase such securities.
The terms of any such sales will be described in the prospectus supplement
relating thereto.
We
may
offer our equity securities into an existing trading market on the terms
described in the applicable prospectus supplement. Underwriters and dealers
who
may participate in any at-the-market offerings will be described in the
prospectus supplement relating thereto.
Pursuant
to any standby underwriting agreement entered into in connection with a
subscription rights offering to our shareholders, persons acting as standby
underwriters may receive a commitment fee for all securities underlying the
subscription rights that the underwriter commits to purchase on a standby basis.
Additionally, prior to the expiration date with respect to any subscription
rights, any standby underwriters in a subscription rights offering to our
shareholders may offer such securities on a when-issued basis, including
securities to be acquired through the purchase and exercise of subscription
rights, at prices set from time to time by the standby underwriters. After
the
expiration date with respect to such subscription rights, the underwriters
may
offer securities of the type underlying the subscription rights, whether
acquired pursuant to a standby underwriting agreement, the exercise of the
subscription rights or the purchase of such securities in the market, to the
public at a price or prices to be determined by the underwriters. The standby
underwriters may thus realize profits or losses independent of the underwriting
discounts or commissions paid by us. If we do not enter into a standby
underwriting arrangement in connection with a subscription rights offering
to
our shareholders, we may elect to retain a dealer-manager to manage such a
subscription rights offering for us. Any such dealer-manager may offer
securities of the type underlying the subscription rights acquired or to be
acquired pursuant to the purchase and exercise of subscription rights and may
thus realize profits or losses independent of any dealer-manager fee paid by
us.
Securities
may also be offered and sold, if so indicated in the applicable prospectus
supplement, in connection with a remarketing upon their purchase, in accordance
with a redemption or repayment pursuant to their terms, or otherwise, by one
or
more firms (“remarketing firms”) acting as principals for their own accounts or
as agents for us. 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, as that term is defined in the Securities Act of 1933, in
connection with the securities remarketed thereby.
If
so
indicated in the applicable prospectus supplement, we may authorize agents,
dealers or underwriters to solicit offers by certain institutions to purchase
securities from us at the public offering price set forth in the applicable
prospectus supplement pursuant to delayed delivery contracts providing for
payment and delivery on the date or dates stated in the applicable prospectus
supplement. Such delayed delivery contracts will be subject to only those
conditions set forth in the applicable
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prospectus
supplement. A commission indicated in the applicable prospectus supplement
will
be paid to underwriters and agents soliciting purchases of securities pursuant
to delayed delivery contracts accepted by us.
Agents,
underwriters, dealers and remarketing firms may be entitled under relevant
agreements with us to indemnification by us against certain liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments which such agents, underwriters, dealers and remarketing firms
may
be required to make in respect thereof.
Any
underwriter may engage in stabilizing and syndicate covering transactions in
accordance with Rule 104 under Regulation M. Rule 104 permits stabilizing bids
to purchase the underlying security so long as the stabilizing bids do not
exceed a specified maximum. The underwriters may over-allot shares of the
securities in connection with an offering of securities, thereby creating a
short position in the underwriters’ account. Syndicate covering transactions
involve purchases of the securities in the open market after the distribution
has been completed in order to cover syndicate short positions. Stabilizing
and
syndicate covering transactions may cause the price of the securities to be
higher than it would otherwise be in the absence of such transactions. These
transactions, if commenced, may be discontinued at any time.
Unless
otherwise specified in the applicable prospectus supplement, each series of
securities, other than our common stock that is listed on the New York Stock
Exchange, will be a new issue and will have no established trading market.
We
may elect to list any series of securities on an exchange but, unless otherwise
specified in the applicable prospectus supplement, we shall not be obligated
to
do so. In addition, underwriters will not be obligated to make a market in
any
securities. No assurance can be given as to the liquidity of, or activity in,
the trading market for any of the securities.
Agents,
underwriters, dealers and remarketing firms may be customers of, engage in
transactions with, or perform services for, us, our subsidiaries in the ordinary
course of business.
The
anticipated date of delivery of securities will be set forth in the applicable
prospectus supplement relating to each offer.
Unless
otherwise indicated in the applicable prospectus supplement, the validity of
our
debt securities, common stock, preferred stock, warrants, purchase contracts
and
units will be passed upon for us by Wilmer Cutler Pickering Hale and Dorr
LLP.
The
consolidated financial statements and management’s assessment of the
effectiveness of internal control over financial reporting (which is included
in
Management’s Report on Internal Control over Financial Reporting) incorporated
in this prospectus by reference to the Annual Report on Form 10-K for the year
ended December 31, 2005 have been so incorporated in reliance on the report
of
PricewaterhouseCoopers LLP, an independent registered public accounting firm,
given on the authority of said firm as experts in auditing and
accounting.
CIGNA
and
certain of its affiliates, including Connecticut General Life Insurance Company
and Life Insurance Company of North America, may each be considered a “party in
interest” within the meaning of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), or a “disqualified person” within the meaning of the
Code, with respect to many employee benefit plans. Prohibited transactions
within the meaning of ERISA or the Code may arise, for example, if debt
securities are acquired by an employee benefit plan with respect to which CIGNA
or any of its affiliates is a service provider, unless such debt securities
are
acquired pursuant to an exemption for transactions effected on behalf of such
plan by a “qualified professional asset manager” or pursuant to any other
available exemption. Any such employee benefit plan proposing to invest in
the
debt securities should consult with its legal counsel.
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$250,000,000
CIGNA
Corporation
6.150%
Senior Notes due 2036
___________________
PROSPECTUS
SUPPLEMENT
November 7,
2006
___________________
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