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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.1)*
ENHANCE FINANCIAL SERVICES GROUP INC.
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
293310 10 8
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(CUSIP Number)
F. SEDGWICK BROWNE, ESQ. MORGAN, LEWIS & BOCKIUS LLP
101 PARK AVENUE, NEW YORK NY 10178
(212) 309-6000
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
MAY 22, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP NO. 293310 10 8 PAGE 2 OF PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SWISS REINSURANCE COMPANY
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or (e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
SWITZERLAND
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7 SOLE VOTING POWER
1,000,000 SHARES OF COMMON STOCK
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0 SHARES OF COMMON STOCK
OWNED BY ----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,000,000 SHARES OF COMMON STOCK
PERSON ----------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0 SHARES OF COMMON STOCK
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,000,000 SHARES OF COMMON STOCK
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6%**
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14 TYPE OF REPORTING PERSON*
IC
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Based on 17,903,000 shares of Common Stock outstanding as of May 3, 1996.
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STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
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This Amendment and Restatement No.1 amends and restates a Schedule
13D dated February 14, 1996 (the "Initial Schedule 13D") filed by Swiss
Reinsurance Company, in connection with the Common Stock, $0.10 par value, of
Enhance Financial Services Group, Inc. (the "Company") as follows:
Item 1. Security and Issuer
This Schedule 13D relates to the Common Stock, $0.10 par value
("Common Stock"), of Enhance Financial Services Group Inc., a corporation
organized under the laws of the State of New York (the "Company"). The principal
executive offices of the Company are located at 335 Madison Avenue, 25th Floor,
New York, New York 10017-4605.
Item 2. Identity and Background
This Schedule 13D is filed by Swiss Reinsurance Company (the
"Reporting Person"), a corporation organized under the laws of Switzerland.
The Reporting Person is principally engaged in the business of
reinsurance. The address of the Reporting Person's principal business and of its
principal office is Mythenquai 50/60, 8022 Zurich, Switzerland.
Attached as Appendix A to Item 2 is information concerning the
executive officers and directors of the Reporting Person as is required to be
disclosed in response to Item 2 and General Instruction C to Schedule 13D.
Neither the Reporting Person nor any of the persons referred to in
Appendix A to Item 2 has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent
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jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree, or final order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or state securities laws or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The Reporting Person entered into a Stock Purchase Agreement, dated
February 9, 1996, by and among the Company, the Reporting Person, ManuLife
(International) Limited ("ManuLife") and The Manufacturers Life Insurance
Company (the "Stock Purchase Agreement"), attached hereto as Exhibit A, which
provides, among other things, for the purchase by the Reporting Person of an
aggregate of 1,000,000 shares of Common Stock at $24.48 per share. The funds
required by the Reporting Person to pay the purchase price for the Common Stock
came from working capital available for investment.
Item 4. Purpose of Transactions
Pursuant to the terms of the Stock Purchase Agreement, the Reporting
Person has acquired, in two separate transactions which took place on February
23, 1996 and March 20, 1996, (i) 600,000 shares of Common Stock from the Company
at a price of $24.48 per share and (ii) 400,000 shares of Common Stock from
ManuLife at a price of $24.48 per share.
The Reporting Person has beneficial ownership of the shares of Common
Stock to which this Statement on Schedule 13D relates as a result of the
Reporting Person's execution and delivery, and the transactions contemplated by,
the Stock Purchase Agreement. Although such shares were acquired as part of a
strategy for the Company and the Reporting Person to work more closely on joint
products and ventures, such shares were acquired by the Reporting Person for
investment purposes and not with the purpose of changing control of the issuer.
In connection with this strategy, an employee of the Reporting Person, Mr.
Adrian Sulzer, was elected to the Board of Directors of the Company. Moreover,
pursuant to the terms of the Stock Purchase Agreement, the Reporting Person has
the right to send an observer to meetings of the Board of Directors of the
Company. Such observer shall not have the right to vote or otherwise functions
as a Director of the Company.
Pursuant to the terms of the Stock Purchase Agreement, the following
agreements were executed and delivered:
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(a) An amendment dated February 23, 1996, attached hereto as Exhibit D, to
the Subscribers' Registration Rights Agreement, dated as of October 31,
1986, as amended, attached to the Initial Schedule 13D as Exhibit B (such
amendment to be henceforth referred to as the "Subscribers' Registration
Rights Agreement Amendment"), pursuant to which the Reporting Person was
granted certain registration rights with respect to the shares of Common
Stock that it acquired pursuant to the Stock Purchase Agreement; and
(b) An amendment dated February 23, 1996, attached hereto as Exhibit E, to
the Shareholders' Agreement, dated May 10, 1988, as amended, attached to
the Initial Schedule 13D as Exhibit C (such amendment to be henceforth
referred to as the "Shareholders' Agreement Amendment"), pursuant to which
the Reporting Person (and the shares of Common Stock acquired by the
Reporting Person under the Stock Purchase Agreement) was exempted from all
of the voting and other provisions of the Shareholders' Agreement.
Except for restrictions on the Reporting Person's transfer of shares
of Common Stock acquired pursuant to the Stock Purchase Agreement and on the
Reporting Person's ability to acquire additional securities of the Company, in
each case as set forth in the Stock Purchase Agreement, the Reporting Person may
change any of its current intentions, acquire additional shares of Common Stock
or sell or otherwise dispose of all or any part of the Common Stock beneficially
owned by the Reporting Person, or take any other action with respect to the
Company or any of its securities in any manner permitted by law.
Except as described in this Item 4 and elsewhere in this Schedule
13D, neither the Reporting Person nor any of the persons named on Appendix A to
Item 2 of this Schedule 13D has formulated any plans or proposals which relate
to or would result in: (a) the acquisition by any person of additional
securities of the Company, or the disposition of securities of the Company; (b)
an extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries; (d) any change in the present Board of Directors or management of
the Company, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Company; (f) any
other material change in the Company's business or corporate structure; (g)
changes in the Company's charter, by-laws or instruments corresponding thereto
or other actions which may impede the acquisition of control of the
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Company by any person; (h) causing a class of securities of the Company to be
delisted from a national securities exchange or cease to be authorized to be
quoted in an interdealer quotation system of a registered national securities
association; (i) causing a class of equity securities of the Company to become
eligible for termination of registration pursuant to Section 12(g)(4) of the
Act, as amended; or (j) any action similar to those enumerated above.
Item 5. Interest in Securities of the Company
(a) The aggregate number of shares of Common Stock that are beneficially
owned by the Reporting Person as of the date hereof is 1,000,000 shares, or
approximately 5.6% of the class of securities identified in Item 1 based on
information from the Company that there were 17,903,000 shares of Common Stock
outstanding as of May 3, 1996 (which figure includes the 1,000,000 shares of
Common Stock subject to the Stock Purchase Agreement). None of the persons named
in Appendix A beneficially own any shares of Common Stock.
(b) The number of shares of Common Stock as to which the Reporting Person
may be deemed to (i) have sole power to vote or to direct the vote, (ii) shared
power to vote or to direct the vote, (iii) sole power to dispose or direct the
disposition, or (iv) shared power to dispose or direct the disposition is set
forth in the cover page and such information is incorporated herein by
reference.
(c) Except as reported in Item 4 herein, there have been no reportable
transactions with respect to the Common Stock within the last 60 days by the
Reporting Person and persons named in Appendix A.
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to
the Securities of the Issuer
With the exception of (i) the Stock Purchase Agreement and (ii) the
amendment to the Registration Rights Agreement referred to in Item 4 herein,
upon its effectiveness, no contracts, arrangements, understandings or
relationships (legal or otherwise) exist among the persons named in Item 2 or
between such persons and any other person with respect to any securities of the
Company, including but not limited to transfer or voting of any such securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, divisions of profits or loss, or the giving or
withholding of proxies.
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Item 7. Material to be Filed as Exhibits
1. Exhibit A - The Stock Purchase Agreeement Page
2. Exhibit B - The Registration Rights Agreement Page
3. Exhibit C - The Shareholders' Agreement Page
4. Exhibit D - The Subscribers' Registration Page
Rights Agreement Amendment
5. Exhibit E - The Shareholders' Agreement Amendment Page.
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SIGNATURE
After reasonable inquiry and to the best of their knowledge and
belief, the undersigned certify that the information set forth in this
amendment and restatement is true, complete and correct.
Dated: May 22, 1996
SWISS REINSURANCE COMPANY
BY: /s/ B. Porro
---------------------------------
Name: B. Porro
Title: Member of Executive Board
BY: /s/ A. Sulzer
-----------------------------------
Name: A. Sulzer
Title: Member of Senior Management
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APPENDIX A TO ITEM 2
The following sets forth information with respect to the executive
officers and directors of the Reporting Person.
Ulrich Bremi is a Swiss citizen and his principal occupation is to
act as Chairman of the Board of Directors and member of the Committee of
Directors of the Reporting Person. Mr. Bremi's business address is Mythenquai
50/60, 8022 Zurich, Switzerland.
Rainer E. Gut is a Swiss citizen and his principal
occupation is to act as Chairman of the Board of Directors of CS
Holding. Mr. Gut is a member of the Board of Directors of the
Reporting Person. Mr. Gut's business address is Paradeplatz,
8070 Zurich, Switzerland.
Lukas Muehlemann is a Swiss citizen and his principal occupation is
to act as Managing Director, member of the Board of Directors, member of the
Committee of Directors and President of the Executive Board of the Reporting
Person. Mr. Muehlemann's business address is Mythenquai 50/60, 8022 Zurich,
Switzerland.
Urs Baerlocher is a Swiss citizen and his principal occupation is to
act as Chairman of the Board of Supervisors of Sandoz Deutschland GmbH. Mr.
Baerlocher is a member of the Board of Directors of the Reporting Person. Mr.
Baerlocher's business address is Spittlertorgraben 27, 90429 Nurnberg, Germany.
Thomas W. Bechtler is a Swiss citizen and his principal occupation is
to act as Managing Director of Hesta AG. Mr. Bechtler is a member of the Board
of Directors of the Reporting Person. Mr. Bechtler's business address is
Seestrasse 21, P.O. Box 1510, 8700 Kuesnacht, Switzerland .
Hans Buehlmann is a Swiss citizen and his principal occupation is as
Professor at the Federal Institute of Technology in Zurich. Mr. Buehlmann is a
member of the Board of Directors of the Reporting Person. Mr. Buehlmann's
business address is the Federal Institute of Technology, 8092 Zurich,
Switzerland.
Peter Forstmoster is a Swiss citizen and his principal occupation is
as Professor at the University of Zurich. Mr. Forstmoster is a member of the
Board of Directors of the Reporting Person. Mr. Forstmoster's business address
is Bahnhofstrasse 13, 8001 Zurich, Switzerland.
Benedict G. F. Hentsch is a Swiss citizen and his principal
occupation is to act as a Partner of Darier Hentsch &
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Cie. Mr. Hentsch is a member of the Board of Directors of the Reporting Person.
Mr. Hentsch's business address is rue Saussure 4, P.O. Box 5045, 1211 Geneva 11,
Switzerland.
Ernesto Jutzi is a Swiss citizen and his principal occupation is to
act as member of the Board of Directors of the Reporting Person. Mr. Jutzi's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
John R. Coomber is a British citizen and his principal occupation is
to act as member of the Executive Board of the Reporting Person. Mr. Coomber's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Christoph Dorschel is a German citizen and his principal occupation
is to act as member of the Executive Board of the Reporting Person. Mr.
Dorschel's business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Peter P. Huegle is a Swiss citizen and his principal occupation is to
act as member of the Executive Board of the Reporting Person. Mr. Huegle's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Heidi Hutter is a U.S. citizen and her principal occupation is to act
as member of the Executive Board of the Reporting Person. Ms. Hutter's business
address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Rudolf Kellenberger is a Swiss citizen and his principal occupation
is to act as member of the Executive Board of the Reporting Person. Mr.
Kellenberger's business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Walter B. Kielholz is a Swiss citizen and his principal occupation is
to act as member of the Executive Board of the Reporting Person. Mr. Kielholz's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Bruno Laube is a Swiss citizen and his principal occupation is to act
as member of the Executive Board of the Reporting Person. Mr. Laube's business
address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Stefan Lippe is a German citizen and his principal occupation is to
act as member of the Executive Board of the Reporting Person. Mr. Lippe's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
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Bruno Porro is a Swiss citizen and his principal occupation is to act
as member of the Executive Board of the Reporting Person. Mr. Porro's business
address is Mythenquai 50/60, 8022 Zurich, Switzerland.
Urs H. Winter is a Swiss citizen and his principal occupation is to
act as member of the Executive Board of the Reporting Person. Mr. Winter's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
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EXHIBIT INDEX
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Exhibit No. Description
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Exhibit A The Stock Purchase Agreeement
Exhibit B The Registration Rights Agreement
Exhibit C The Shareholders' Agreement
Exhibit D The Subscribers' Registration
Rights Agreement Amendment
Exhibit E The Shareholders' Agreement Amendment
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EXHIBIT D
AMENDMENT NO. 6
TO
SUBSCRIBERS' REGISTRATION RIGHTS AGREEMENT
DATED AS OF FEBRUARY 23, 1996
WHEREAS, Enhance Financial Services Group Inc., a New York
corporation (the "Company"), the parties executing this Amendment on the
signature page hereof (the "Amending Shareholders") and certain other
shareholders of the Company are parties to a Subscribers' Registration Rights
Agreement dated as of October 31, 1986, as amended by (i) Amendment No. 1 dated
as of April 1, 1987, (ii) Amendment No. 2 dated as of May 10, 1988, (iii)
Combined Amendment No. 1 dated as of June 29, 1990; (iv) Amendment No. 4 dated
as of December 19, 1991 and (v) Letter Agreement dated October 3, 1995 between
the Company and The Manufacturers Life Insurance Company (as so amended,
collectively the "Agreement"); and
WHEREAS, the Company and the Amending Shareholders deem it in
the best interest of the Company and its shareholders for Swiss Reinsurance
Company, a Swiss corporation ("SwissRe") to purchase an aggregate of 1,000,000
shares of the Company's common stock, par value $.10 per share, from the Company
and an existing shareholder of the Company, ManuLife (International) Limited, a
Bermuda corporation (the "Seller"), and a wholly-owned subsidiary of The
Manufacturers Life Insurance Company, a Canadian Federal corporation
("ManuLife"), pursuant to a stock purchase agreement between the Company,
ManuLife, the Seller and SwissRe. To induce SwissRe to purchase such shares
under such stock purchase agreement and as a condition to SwissRe's obligation
to do so, the Company and the Amending Shareholders, who own in the aggregate
100% of the Shares (as defined in the Agreement), desire to amend the Agreement
in certain respects.
NOW, THEREFORE, the parties hereto agree as follows:
1. Except as otherwise expressly provided herein, capitalized
terms used herein which are defined in the Agreement shall have the meanings
specified for such terms in the Agreement (as amended by this Amendment No. 6).
2. Reference herein to a specific sentence included in a
Section of the Agreement shall be after giving effect to this Amendment No. 6.
3. The Agreement is hereby amended to add SwissRe as a
"Subscriber" thereunder.
4. Section 1 of the Agreement is hereby amended by:
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(a) adding the following capitalized terms in
appropriate alphabetical sequence:
"'ManuLife Registrable Shares': All Shares owned or
acquired by The Manufacturers Life Insurance Company which are
Restricted Shares."
"'ManuLife Residual Shares': Any ManuLife Registrable
Shares that are registered on behalf of The Manufacturers Life
Insurance Company ("ManuLife") (or any entity controlled by
it) pursuant to the ManuLife Demand hereunder in connection
with the issuance by ManuLife (or such other entity) of debt
or other securities exchangeable for, or payable in, shares of
Common Stock owned by ManuLife or such other entity ("ManuLife
DECS"), and which have not been disposed of and which continue
to be held by ManuLife or any such other entity after full
payment of such ManuLife DECS or after provision for full
payment of such ManuLife DECS has been made, provided such
shares are Restricted Shares."
"'SwissRe Shares': The shares of Common Stock
originally acquired by Swiss Reinsurance Company from the
Company and ManuLife (International) Limited (the "Seller")
pursuant to the Stock Purchase Agreement dated as of February
9, 1996 among the Company, the Seller, The Manufacturers Life
Insurance Company and Swiss Reinsurance Company (and any
capital stock or other securities into which such Common Stock
shall have been changed)."
"'USWFS Residual Shares': The shares of Common Stock
that are Restricted Shares and that were registered on behalf
of U S WEST Financial Services, Inc., a Colorado corporation
("USWFS") pursuant to a Demand Registration hereunder in
connection with the issuance by U S WEST, Inc. of debt
exchangeable for Common Stock owned by USWFS and which have
not been disposed of and which continue to be held by USWFS
(or any entity controlled by U S WEST, Inc.) after full
payment of such USWFS DECS or after provision for full payment
of such USWFS DECS has been made; provided the number of USWFS
Residual Shares shall not exceed 830,000 shares of Common
Stock (as such number may be adjusted as a result of any stock
dividend, stock split, recapitalization, combination or
exchange of shares, or consolidation or otherwise)."
"'SwissRe Registrable Shares': All SwissRe Shares
which are Restricted Shares."; and
(b) changing the definition therein of the term
"Shares" to read in its entirety as follows:
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"The shares of Common Stock delivered and, unless the
context otherwise indicates, deliverable pursuant to the terms
of the Subscription Agreements (or such Shares transferred
between Subscribers); the shares of Common Stock purchased by
USWFS from the Company pursuant to the Stock Purchase
Agreement dated May 10, 1988 between the Company and USWFS;
the shares of Common Stock issued in the merger effected with
Asset Guaranty Inc., a New York corporation ("AGI"), pursuant
to the Agreement and Plan of Merger dated as of June 5, 1990,
as amended, between the Company and AGI; and the SwissRe
Shares, together in each case with all shares of common stock
of the Company or other securities distributed in respect of
the Shares, whether by reason of any stock dividend, stock
split, recapitalization, combination or exchange of shares, or
consolidation or otherwise."
5. Section 2 of the Agreement is hereby amended by deleting
the second paragraph of such Section in its entirety and inserting the following
in lieu thereof:
"Shares are deemed to be Restricted Shares (i) until
such time as such Shares have been disposed pursuant to an
effective Registration Statement under the Securities Act,
(ii) until such time as such Shares have been sold under Rule
144 promulgated under the Securities Act (or any successor
provision) pursuant to a "brokers transaction" (as defined in
clauses (i) and (ii) of paragraph (g) of such Rule 144) at a
time when shares of the Company's Common Stock are registered
pursuant to Section 12 of the Exchange Act or (iii) unless, at
the time of determination, such Shares may be transferred and
a new certificate or other evidence of ownership for them not
bearing a legend restricting transfer under the Securities Act
has been delivered by or on behalf of Company and no stock
transfer order or other restriction on transfer exist."
6. Section 3 of the Agreement is hereby amended by:
(a) deleting the first three sentences of Section
3(a) in their entirety and inserting the following language in lieu thereof:
"The Manufacturers Life Insurance Company
and any entities it controls (so long as such persons
hold Registrable Shares) will be entitled in the
aggregate to request one Demand Registration with
respect to ManuLife Registrable Shares (the "ManuLife
Demand") (with respect to which the Company shall pay
all Registration Expenses). In addition, the holders
of SwissRe Registrable Shares will be entitled to
request one Demand Registration with respect to
SwissRe Registrable Shares (the "SwissRe Demand")
(with respect to which the Company shall pay all
Registration Expenses) if either (i) the registration
of Shares pursuant to the ManuLife Demand shall not
have been effected on or prior to January 31, 1998 or
(ii) the ManuLife Demand shall have been effected
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<PAGE> 4
and the holder(s) of the SwissRe Registrable Shares
is (are) unable to sell for any reason,or such
holder(s) decide(s) in its (their) sole discretion
not to sell, in such Demand Registration all of the
SwissRe Registrable Shares then outstanding. In
addition to the foregoing, each of (i) USWFS (and any
entities controlled by U S WEST, Inc. that hold USWFS
Residual Shares) and (ii) The Manufacturers Life
Insurance Company (and any entities it controls that
hold ManuLife Residual Shares) will be entitled to
request one Demand Registration with respect only to
USWFS Residual Shares or ManuLife Residual Shares, as
the case may be (a "Residual Demand");provided,
however, that notwithstanding anything to the
contrary herein, the Company shall have no obligation
to pay any Registration Expenses in connection with a
Residual Demand; provided further, however, that no
Residual Demand may be made until 90 days after the
date that the holders of SwissRe Registrable Shares
are first entitled to request the SwissRe Demand
pursuant to clause (i) or clause (ii) of the
preceding sentence; provided further, however, that
no Residual Demand may be made after the SwissRe
Demand has been requested pursuant to Section 3(b)
for a period equal to the shorter of (1) six months
after the effective date of the registration
statement filed pursuant thereto, or such longer
period (not to exceed 8 months) as may be reasonably
requested by the managing underwriter or underwriters
of such offering so as not to adversely affect such
offering or (2) eighteen months from the date of the
SwissRe Demand; and provided further, however, that
no Residual Demand may be made prior to the time that
SwissRe Demand has been requested pursuant to Section
3(b) unless each holder of shares who intends to make
such Residual Demand (collectively, a "Residual
Holder") has complied with the procedures set forth
in the following two sentences. Any Residual Holder
who intends to make a Residual Demand prior to the
SwissRe Demand being requested shall give the holders
of SwissRe Registrable Shares at least 30 days prior
written notice thereof, during which period such
holders of SwissRe Registrable Shares shall have the
option, in their discretion (exercisable by the
holders of at least a majority of the SwissRe
Registrable Shares), to either (i) consent in writing
to the making of such Residual Demand or (ii) make
the SwissRe Demand. In the event the holders of at
least a majority of the SwissRe Registrable Shares so
make the SwissRe Demand, the right of such Residual
Holder to make a Residual Demand shall be suspended
for a period equal to the shorter of (1) six months
after the effective date of the registration
statement filed pursuant to such SwissRe Demand, or
such longer period (not to exceed 8 months) as may be
reasonably requested by the managing underwriter or
underwriters of such offering so as not to adversely
affect such offering or (2) eighteen months from the
date of the SwissRe Demand. Each Demand Registration
pursuant to this Section 3
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shall be filed within 90 days after the date any
holder of the Registrable Shares makes the first
written request to the Company for registration under
Section 3(b). The Registration Statement shall, if
requested by (i) the holders of at least a majority
of the ManuLife Registrable Shares requesting
registration in the case of the ManuLife Demand, (ii)
the holders of at least a majority of ManuLife
Residual Shares requesting registration in the case
of the ManuLife Residual Demand, (iii) the holders of
at least a majority of the SwissRe Registrable Shares
requesting registration in the case of the SwissRe
Demand and (iv) the holders of at least a majority of
the USWFS Residual Shares requesting registration in
the case of the USWFS Residual Demand, be a shelf
registration under Rule 415 (so long as Rule 415 or
similar or successor rule that may be adopted by the
SEC shall be available to the Company with respect to
the Shares), and the Company shall use it best
efforts to keep the Registration Statement
continuously effective (by amendment thereto or
otherwise) until the last day on which a Registrable
Share is outstanding but in no event more than nine
months following the date the Registration Statement
was declared effective."
(b) inserting the language "(i)" immediately before
the words "the holders of" where such words first appear in the fifth sentence
of Section 3(a); inserting the language "ManuLife" before the words "Registrable
Shares" where such words appear in the second instance in the fifth sentence of
Section 3(a); and deleting the words "50% of all Registrable Shares so included"
where such words first appear in the fifth sentence of Section 3(a) and
inserting in lieu thereof the following language:
"a majority of the ManuLife Registrable Shares so
included in such Registration Statement in the case of the
ManuLife Demand, (ii) the holders of at least a majority of
the ManuLife Residual Shares included in such Registration
Statement in the case of the ManuLife Residual Demand, (iii)
the holders of at least a majority of the SwissRe Registrable
Shares included in such Registration Statement in the case of
the SwissRe Demand and (iv) the holders of at least a majority
of the USWFS Residual Shares included in such Registration
Statement in the case of the USWFS Residual Demand";
(c) deleting the words "Section 3(a)" where such
words first appear in the second sentence of Section 3(b) and inserting in lieu
thereof the language "Sections 3(a) and (c)";
(d) inserting the language "(i)" immediately before
the words "the holders of" where such words last appear in Section 3(b);
inserting the language "ManuLife" immediately before the words "Registrable
Shares" where such words last appear in Section 3(b); and inserting at the end
of Section 3(b) the following language:
- 5 -
<PAGE> 6
"in the case of the ManuLife Demand (ii) the holders
of at least a majority of the ManuLife Residual Shares
requested to be included in such registration in the case of
the ManuLife Residual Demand, (iii) the holders of at least a
majority of the SwissRe Registrable Shares requested to be
included in such registration in the case of the SwissRe
Demand and (iv) the holder of at least a majority of the USWFS
Residual Shares requested to be included in such registration
in the case of the USWFS Residual Demand";
(e) deleting the words "Section 3(a)" where such
words first appear in the first sentence of Section 3(c) and inserting in lieu
thereof the following language "Sections 3(a) and (b)";
(f) deleting the last two sentences of Section 3(c)
in their entirety and inserting the following language in lieu thereof:
"In the case of the ManuLife Demand or (subject to
Section 3(a)) the ManuLife Residual Demand, the holders of the
28,608 Registrable Shares originally issued to The
Manufacturers Life Insurance Company (as adjusted for any
stock dividend, stock split, recapitalization, combination,
exchange of shares or consolidation, (the "Original ManuLife
Shares") shall have the priority right over other holders of
Registrable Shares to sell in such offering the Original
ManuLife Shares, and to the extent additional Registrable
Shares may be included in such offering such additional
Registrable Shares shall be allocated pro rata among the
holders of Registrable Shares on the basis of the aggregate
number of Registrable Shares proposed to be registered by each
such holder. In the case of the SwissRe Demand, the holders of
SwissRe Registrable Shares (the "SwissRe Holders") shall have
the priority right over other holders of Registrable Shares
(the "Other Holders") to sell in such offering the Registrable
Shares held by such SwissRe Holders, and to the extent
additional Registrable Shares may be included in such offering
such additional Registrable Shares shall be allocated pro rata
among the Other Holders on the basis of the aggregate number
of Registrable Shares proposed to be registered by each such
Other Holders. In the case of the USWFS Residual Demand,
subject to Section 3(a), the holders of USWFS Residual Shares
(the "USWFS Holders") shall have the priority right over other
holders of other Registrable Shares to sell in such offering
the USWFS Residual Shares held by such USWFS Holders, and to
the extent additional Registrable Shares may be included in
such offering, such additional Registrable Shares shall be
allocated pro rata among the holders of Registrable Shares on
the basis of the aggregate number of Registrable Shares
proposed to be registered by each such holders. In the event
of any such underwriter cutbacks in the case of the ManuLife
Demand or the ManuLife Residual Demand, the holders of a
majority of the Registrable Shares to be registered may elect
to withdraw the request for such Demand Registration, in which
case such Demand Registration shall not count as a Demand
Registration
- 6 -
<PAGE> 7
but the Company shall not pay any Registration Expenses
relating to such ManuLife Demand (no Registration Expenses
being payable by the Company in the case of the ManuLife
Residual Demand). In the event of any underwriter cutbacks in
the case of the SwissRe Demand, the holders of a majority of
the SwissRe Registrable Shares to be registered may elect to
withdraw the request for such Demand Registration, in which
case such Demand Registration shall not count as a Demand
Registration, but the Company shall not pay any Registration
Expenses relating thereto. In the event of any underwriter
cutbacks in the case of the USWFS Residual Demand, the holders
of the majority of the USWFS Residual Shares to be registered
may elect to withdraw the request for such Demand
Registration, in which case such Demand Registration shall not
count as a Demand Registration (no Registration Expenses being
payable by the Company in the case of the USWFS Residual
Demand). Any holder of Registrable Shares desiring to
participate in the ManuLife Demand, the ManuLife Residual
Demand, the SwissRe Demand or the USWFS Residual Demand shall,
as a condition to such participation, provide any information
and deliver any documents required in connection with such
holders's sale of its Shares in connection with such Demand
Registration in a timely manner in order to satisfy any
scheduling requirements applicable to such Demand
Registration.";
(g) inserting the following language immediately
prior to the first sentence of Section 3(d):
"The Company or any of its securityholders (other
than the holders of Registrable Shares in such capacity) may
propose including Common Stock to be publicly offered and sold
by it in any Registration Statement to be filed pursuant to a
Demand Registration. If, in the written opinion of
underwriters selected for the Demand Registration, the
inclusion of securities proposed to be offered and sold by the
Company, such other securityholders and the holders of
Registrable Shares would jeopardize the success of the
offering, the selling holders of Registrable Shares may elect
to exclude the amount of securities (up to all of the
securities) proposed to be sold by the Company and such other
securityholders which, in the opinion of such underwriters,
would jeopardize the success of the offering of the
Registrable Shares.";
(h) deleting the last sentence of Section 3(d) and
inserting the following language in lieu thereof:
"The Company represents and covenants that it has not
granted, except to the holders of Registrable Shares pursuant
to this agreement, and shall not grant, (i) demand
registration rights to any Person unless such Person shall
agree (1) that its right to exercise such demand registration
rights is subject to the same conditions as set forth in the
second, third and fourth provisos to the
- 7 -
<PAGE> 8
third sentence of Section 3(a) hereof with respect to a
Residual Demand and (2) that holders of Registrable Shares
hereunder will have piggyback registration rights in respect
of any registration effected pursuant to such Person's demand
to the same extent as though such demand were a Demand
Registration hereunder, (ii) piggyback registration rights to
any Person that are inconsistent with Section 3(d) hereof or
(iii) any registration rights to any Person which would
diminish or restrict the rights of holders of Shares under, or
otherwise conflict or be inconsistent with, the provisions of
this agreement."; and
(i) inserting the language "(i)" immediately before
the words "the holders of" where such words first appear in Section 3(e);
inserting the language "ManuLife" immediately before the words "Registrable
Shares" where such words last appear in Section 3(e); and inserting after the
words "included in such offering" where such words first appear in Section 3(e)
the following language:
"in the case of the ManuLife Demand, (ii) the holders
of a majority of the ManuLife Residual Shares included in such
offering in the case of the ManuLife Residual Demand, (iii)
the holders of a majority of the SwissRe Registrable Shares
included in such offering in the case of the SwissRe Demand
and (iv) the holders of a majority of the USWFS Residual
Shares included in such offering in the case of the USWFS
Residual Demand"
7. Section 4 of the Agreement is hereby amended by:
(a) deleting the language "a demand registration on
behalf of other securities holders whose registration rights prohibit or
restrict piggyback rights," where such language appears in the first sentence of
Section 4(b);
(b) deleting the language "Sections 4(e) and (f)"
where such language first appears in the second sentence of Section 4(b) and
inserting in lieu thereof the language "Sections 3(c) and 4(e)";
(c) inserting after the words "on the same terms and
conditions" where such words appear in the third sentence of Section 4(b) the
following language:
"regarding pricing, timing and location of sales";
and
(d) deleting Section 4(d) in its entirety and
inserting the following language in lieu thereof:
"(d) [INTENTIONALLY OMITTED]"
8. Section 5 of the Agreement is hereby amended by:
- 8 -
<PAGE> 9
(a) inserting the language "and Section 4" after the
words "under Section 3" in the lead-in to Section 5(A);
(b) inserting the language "(w)" immediately after
the words "the selling holders of" where such words appear in clause (ii) of
Section 5(A)(a); inserting the language "ManuLife" immediately before the words
"Registrable Shares" in clause (ii) of Section 5(A)(a); and inserting
immediately after the words "covered by such Registration Statement" where such
words appear in clause (ii) of Section 5(A)(a) the following language:
"in the case of the ManuLife Demand, (x) the holders
of a majority of the ManuLife Residual Shares covered by such
Registration Statement in the case of the ManuLife Residual
Demand, (y) the holders of a majority of the SwissRe
Registrable Shares covered by such Registration Statement in
the case of the SwissRe Demand and (z) the holders of a
majority of the USWFS Residual Shares covered by such
Registration Statement in the case of the USWFS Residual
Demand"; and
(c) deleting Section 5(B)(a) in its entirety and
inserting the following language in lieu thereof:
"(a) [INTENTIONALLY OMITTED]"
9. Section 6(b) of the Agreement is hereby amended by
inserting the language "(i)" immediately after the words "The holders of" in the
last sentence of such Section; inserting the language "ManuLife" immediately
before the words "Registrable Shares" in the last sentence of Section 6(b); and
inserting after the words "Registrable Shares" in the last sentence of such
Section 6(b) the following language:
"in the case of the ManuLife Demand, (ii) the holders
of a majority of the ManuLife Residual Shares in the case of
the ManuLife Residual Demand, (iii) the holders of a majority
of the SwissRe Registrable Shares in the case of the SwissRe
Demand and (iv) the holders of a majority of the USWFS
Residual Shares in the case of the USWFS Residual Demand"
10. Section 7 of the Agreement is hereby amended by deleting
the language "In any Piggyback Registration in the circumstances set forth in
Section 5(B)(f)(iii):" at the beginning of such Section.
11. Section 11 of the Agreement is hereby amended by:
(a) inserting after the words "written consent of"
where such words first appear in Section 11(b) the following language:
- 9 -
<PAGE> 10
"each of (i) the holders of at least a majority of
the SwissRe Registrable Shares, (ii) the holders of at least a
majority of the ManuLife Registrable Shares, (iii) the holders
of at least a majority of the ManuLife Residual Shares or, if
the ManuLife DECS remain outstanding, ManuLife (iv) the
holders of at least a majority of the USWFS Residual Shares
or, if the USWFS DECS remain outstanding, USWFS and (v)"; and
(b) adding the following language immediately after
the proviso to the last sentence of Section 11(b):
", provided, further, that if any such waiver or
consent would effect the rights of holders of SwissRe
Registrable Shares, ManuLife Registrable Shares, ManuLife
Residual Shares, or USWFS Residual Shares, the waiver or
consent of the holders of at least a majority of the SwissRe
Registrable Shares, the ManuLife Registrable Shares, ManuLife
Residual Shares (or ManuLife if the ManuLife DECS remain
outstanding), or USWFS Residual Shares (or USWFS if the USWFS
DECS remain outstanding), as the case may be, shall be
required under this sentence in addition to any other
holders."
12. The Agreement shall, except as amended hereby, continue in
full force and effect.
13. This Amendment No. 6 may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and all signatures need
not appear on any one counterpart.
- 10 -
<PAGE> 11
IN WITNESS WHEREOF, each party hereto has executed this
Amendment No. 6 by its duly authorized officer as of the date first written
above.
ENHANCE FINANCIAL SERVICES GROUP INC.
By: /s/ Samuel Bergman
------------------------------------
Name: Samuel Bergman
Title: Executive Vice President
Address SWISS REINSURANCE COMPANY
c/o Swiss Re Atrium
Corporation
12 East 49th Street By: /s/ B. Porro
------------------------------------
31st Floor Name: B. Porro
New York, NY 10017 Title: Member of Executive Board
By: /s/ A. Sulzer
------------------------------------
Name: A. Sulzer
Title: Member of Senior Management
Amending Shareholders
US WEST FINANCIAL SERVICES, INC.
By: /s/ Richard A. Post
------------------------------------
Name: Richard A. Post
Title: President
THE MANUFACTURERS LIFE INSURANCE
COMPANY
By: /s/ Peter H. Rubenovitch
------------------------------------
Name: Peter H. Rubenovitch
Title: Senior Vice President
- 11 -
<PAGE> 1
EXHIBIT E
AMENDMENT TO
SHAREHOLDERS' AGREEMENT
DATED AS OF FEBRUARY 23, 1996
WHEREAS, Enhance Financial Services Group Inc., a New York
corporation (the "Company"), and the parties executing this Amendment on the
signature page hereof (the "Amending Shareholders") are parties to a
Shareholders' Agreement dated as of May 10, 1988, as amended by (i) Amendment
No. 1 dated as of April 7, 1989 and (ii) Amendment No. 2 dated as of April 5,
1993 (as so amended, the "Agreement"); and
WHEREAS, the Company and the Amending Shareholders deem it in
the best interest of the Company and its shareholders for Swiss Reinsurance
Company, a Swiss corporation ("SwissRe"), to purchase 600,000 shares of the
Company's common stock, par value $0.10 per share (the "Common Stock"), from the
Company and 400,000 shares of Common Stock from an existing shareholder of the
Company, ManuLife (International) Limited, a Bermuda corporation (the "Seller"),
and a wholly-owned subsidiary of The Manufacturers Life Insurance Company, a
Canadian Federal corporation ("ManuLife"), pursuant to a stock purchase
agreement dated February 9, 1996 among the Company, ManuLife, the Seller and
SwissRe. To induce SwissRe to purchase such shares under such stock purchase
agreement and as a condition to SwissRe's obligation to do so, the Company and
the Amending Shareholders desire to amend the Agreement to provide that all of
such shares being purchased by SwissRe under such stock purchase agreement shall
not be subject to the terms and conditions of the Agreement (including without
limitation any transfer or voting restrictions).
NOW, THEREFORE, the parties hereto agree as follows:
1. Except as otherwise expressly provided herein, capitalized
terms used herein which are defined in the Agreement shall have the meanings
specified for such terms in the Agreement (as amended by this Amendment).
2. The Agreement is hereby amended by adding a new Section
8.14 thereto to read as follows:
"8.14 Non-Applicability of Agreement to Certain
Shares
Notwithstanding any other provisions of this
Agreement, each party hereto hereby (i) agrees that the terms
and provisions of this Agreement (including without limitation
any such terms or provisions restricting transfer or providing
for any agreement to vote on any matter) shall not apply to
any shares (or to any holder of such shares) of common stock
acquired by Swiss Reinsurance Company pursuant to that certain
Stock Purchase Agreement dated February 9, 1996, as amended
from time to time, among the Company,
<PAGE> 2
The Manufacturers Life Insurance Company, ManuLife
(International) Limited and Swiss Reinsurance Company (or to
any shares of common stock or other securities distributed in
respect of such shares, whether by reason of any stock
dividend, stock split, recapitalization, combination, exchange
consolidation or otherwise) and (ii) waives any rights under
the Agreement in connection with the issuance and sale of such
shares pursuant to such stock purchase agreement.
Notwithstanding the provisions of Section 8.08 or any other
Section of this Agreement, this Agreement may not be amended
or otherwise modified with respect to the subject matter of
this Section 8.14 without the written consent of Swiss
Reinsurance Company."
3. Except as amended herein, the Agreement shall continue in
full force and effect.
4. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, and all signatures need
not appear on any one counterpart.
<PAGE> 3
IN WITNESS WHEREOF, each party hereto has executed this
Amendment by its duly authorized officer as of the date first written above.
ENHANCE FINANCIAL SERVICES GROUP INC.
By: /s/ Daniel Gross
-----------------------------------
Name: Daniel Gross
Title: President
Amending Shareholders
U S WEST FINANCIAL SERVICES, INC.
By: /s/ Richard A. Post
-----------------------------------
Name: Richard A. Post
Title: President
THE MANUFACTURERS LIFE INSURANCE
COMPANY
By: /s/ Peter H. Rubenovitch
-----------------------------------
Name: Peter H. Rubenovitch
Title: Senior Vice President
