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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. 2)*
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
---------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
APRIL 16, 1997
---------------------------------------------
(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 22 PAGES
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<C> <S> <C> <C>
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
1,700,000 SHARES OF COMMON STOCK
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0 SHARES OF COMMON STOCK
OWNED BY
EACH ------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,700,000 SHARES OF COMMON STOCK
WITH
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10 SHARED DISPOSITIVE POWER
0 SHARES OF COMMON STOCK
- ---------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,700,000 SHARES OF COMMON STOCK
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- ---------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.07%**
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14 TYPE OF REPORTING PERSON*
IC
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</TABLE>
* SEE INSTRUCTIONS BEFORE FILLING OUT!
** Based on 18,741,554 shares of Common Stock outstanding as of April 16,
1997.
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PAGE 3 OF 22 PAGES
STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
================================================================================
The Statement on Schedule 13D filed by Swiss Reinsurance Company (the
"Reporting Person") with the Securities and Exchange Commission (the
"Commission") on February 20, 1996 (the "Initial 13D"), as amended by Amendment
No. 1 on May 22, 1996 ("13D Amendment No. 1"), is hereby amended by this
Amendment No. 2 (the Schedule 13D, as amended, is hereinafter referred to as the
"Schedule 13D"). Unless otherwise indicated, all capitalized terms used herein
have the meanings ascribed to them in the Schedule 13D.
Item 2. Identity and Background
Appendix A to Item 2 is hereby amended and restated in its entirety by
Appendix A attached hereto. Appendix A sets forth 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.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 is hereby amended and supplemented by the following
information:
On April 17, 1997, the Reporting Person, Merrill Lynch, Pierce, Fenner
& Smith, Inc. (the "Seller") and the Company entered into a letter agreement
(the "Letter Agreement"; filed herewith as Exhibit F) pursuant to which the
Reporting Person agreed to purchase 700,000 shares of Common Stock from the
Seller at $39.00 per share. The funds required by the Reporting Person to pay
the purchase price for such Common Stock came from working capital available for
investment.
Item 4. Purpose of the Transaction
Item 4 is hereby amended and restated in its entirety by the following
information:
Pursuant to the terms of the Stock Purchase Agreement, the Reporting
Person 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)
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PAGE 4 OF 22 PAGES
400,000 shares of Common Stock from ManuLife at a price of $24.48 per share (the
shares referred to in (i) and (ii), collectively, the "Initial Shares").
On February 23, 1996, the Company, the Reporting Person and the other
parties to the Subscribers' Registration Rights Agreement dated as of October
31, 1986, as amended (the "Registration Rights Agreement"; filed as Exhibit B to
the Initial 13D), entered into Amendment No. 6 to the Registration Rights
Agreement ("Registration Rights Amendment No. 6"; filed as Exhibit D to 13D
Amendment No. 1), pursuant to which the Reporting Person has been granted
certain registration rights with respect to the Initial Shares. Registration
Rights Amendment No. 6 was entered into in satisfaction of a condition set forth
in the Stock Purchase Agreement.
Also on February 23, 1996, in satisfaction of a condition set forth in
the Stock Purchase Agreement, the Company and the other parties to the
Shareholders' Agreement dated May 10, 1988, as amended (the "Shareholders'
Agreement"; filed as Exhibit C to the Initial 13D), entered into Amendment No. 3
to the Shareholders' Agreement ("Shareholders' Agreement Amendment No. 3"; filed
as Exhibit E to 13D Amendment No. 1), pursuant to which the Reporting Person and
the Initial Shares acquired pursuant to the Stock Purchase Agreement are
exempted from all of the voting and other provisions of the Shareholders'
Agreement.
On April 17, 1997, the Reporting Person entered into the Letter
Agreement pursuant to which it agreed to purchase an additional 700,000 shares
of Common Stock from the Seller at a price of $39.00 per share (collectively,
the "Additional Shares").
In connection with the Letter Agreement, on April 16, 1997, the
Company, the Reporting Person and the other parties to the Registration Rights
Agreement entered into Amendment No. 7 to the Registration Rights Agreement
("Registration Rights Amendment No. 7"; filed herewith as Exhibit G), pursuant
to which, among other things, (i) the Reporting Person was granted certain
registration rights with respect to the Additional Shares to be acquired
pursuant to the Letter Agreement, and (ii) the Reporting Person was granted an
additional Demand Registration (as defined in the Registration Rights
Agreement).
The Reporting Person has beneficial ownership of the Initial Shares
and the Additional Shares as a result of the Reporting Person's execution and
delivery of, and the transactions contemplated by, the Stock Purchase Agreement
and the Letter Agreement. Although such Initial Shares were acquired, and such
Additional Shares will be acquired, as part of a strategy for the Company and
the Reporting Person to work more closely on joint products and ventures, such
Initial Shares were acquired, and such Additional Shares are being acquired, by
the Reporting Person for investment purposes and not with the purpose of
changing control of the Company. 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 function as a Director of the Company.
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PAGE 5 OF 22 PAGES
Except for restrictions on the Reporting Person's transfer of Initial
Shares or Additional Shares as set forth in the Stock Purchase Agreement and on
the Reporting Person's ability to acquire additional securities of the Company
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 deemed 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 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
Clause (a) of Item 5 is hereby amended and restated in its entirety by
the following information:
(a) The aggregate number of shares of Common Stock that are
beneficially owned by the Reporting Person as of the date hereof is 1,700,000
shares, or approximately 9.07% of the class of securities identified in Item 1
based on information from the Company that there were 18,741,554 shares of
Common Stock outstanding as of April 16, 1997 (which figure includes the
1,000,000 shares of Common Stock subject to the Stock Purchase Agreement and the
700,000 shares of Common Stock subject to the Letter Agreement). None of the
persons named in Appendix A beneficially own any shares of Common Stock of the
Company.
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PAGE 6 OF 22 PAGES
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to the Securities of the Issuer
With the exception of (i) the Stock Purchase Agreement, (ii) the Letter
Agreement, (iii) Registration Rights Amendment No. 6, and (iv) Registration
Rights Amendment No. 7, 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.
Item 7. Material to be Filed as Exhibits
1. Exhibit F - Letter Agreement, dated April 17, 1997.
2. Exhibit G - Registration Rights Amendment No. 7, dated April 16, 1997.
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PAGE 7 OF 22 PAGES
SIGNATURE
After reasonable inquiry and to the best of their knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: April 22, 1997
SWISS REINSURANCE COMPANY
By: /s/ Peter P. Hugle
_________________________________________
Name: Peter P. Hugle
Title: Member of Executive Board and CIO
By: /s/ Adrian Sulzer
_________________________________________
Name: Adrian Sulzer
Title: Member of Senior Management
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PAGE 8 OF 22 PAGES
APPENDIX A TO ITEM 2
The following sets forth information with respect to the executive
officers and directors of the Reporting Person.
The Reporting Person is a corporation organized under the laws of
Switzerland. The principal executive offices of the Reporting Person are located
at Mythenquai 50/60, 8022 Zurich, Switzerland.
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.
Lukas Muhlemann is a Swiss citizen and his principal occupation is to
act as Chief Executive Officer of Credit Suisse Group. Mr. Muhlemann is the
Deputy Chairman of the Board of Directors and member of the Committee of
Directors of the Reporting Person. Mr. Muhlemann's business address is
Paradeplatz 8, 8070 Zurich, Switzerland.
Urs Barlocher is a Swiss citizen and his principal occupation is to act
as Head of Law and Taxes of Novartis (formerly Sandoz AG and Ciba-Geigy AG). Mr.
Barlocher is a member of the Board of Directors of the Reporting Person. Mr.
Barlocher's business address is Lichtstrasse 35, 4002 Basel, Switzerland.
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 Kusnacht, Switzerland.
Hans Buhlmann is a Swiss citizen and his principal occupation is as
Professor at the Federal Institute of Technology in Zurich. Mr. Buhlmann is a
member of the Board of Directors and a member of the Committee of Directors of
the Reporting Person. Mr. Buhlmann's business address is the Federal Institute
of Technology, 8092 Zurich, Switzerland.
George L. Farr is a U.S. citizen and his principal occupation is to act
as Vice Chairman of American Express Company. Mr. Farr is a member of the Board
of Directors of the Reporting Person. Mr. Farr's business address is American
Express Tower, World Financial Center, 200 Vesey Street, 50th Floor, New York,
New York 10285-5007, USA.
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.
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PAGE 9 OF 22 PAGES
Benedict G. F. Hentsch is a Swiss citizen and his principal occupation
is to act as a Partner of Darier Hentsch & 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. Hugle is a Swiss citizen and his principal occupation is to
act as member of the Executive Board of the Reporting Person. Mr. Hugle'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 Chief Executive Officer and as a 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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PAGE 10 OF 22 PAGES
Pierre L. Ozendo is a U.S. citizen and his principal occupation is to
act as member of the Executive Board of the Reporting Person. Mr. Ozendo's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
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.
Christian R. Speiser is a Swiss citizen and his principal occupation is
to act as Chief Financial Officer and member of the Executive Board of the
Reporting Person. Mr. Speiser'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.
Erwin Zimmermann is a German citizen and his principal occupation is to
act as member of the Executive Board of the Reporting Person. Mr. Zimmermann's
business address is Mythenquai 50/60, 8022 Zurich, Switzerland.
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PAGE 11 OF 22 PAGES
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION SEQUENTIALLY NUMBERED
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Exhibit F Letter Agreement, dated April 17, 1997 12
Exhibit G Registration Rights Amendment No. 7, 18
dated April 16, 1997
</TABLE>
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PAGE 12 OF 22 PAGES
EXHIBIT F
April 17, 1997
Swiss Reinsurance Company
c/o Swiss Re Atrium Corporation
12 East 49th Street
31st Floor
New York, NY 10017
Gentlemen:
Merrill Lynch, Pierce, Fenner & Smith, Inc. (the "Seller") wishes to sell to
Swiss Reinsurance Company ("SwissRe") 700,000 shares of common stock, par value
$.10 per share (the "Shares"), of Enhance Financial Services Group Inc. (the
"Company"), upon the terms and conditions set forth herein. In connection with
the sale of the Shares by the Seller to SwissRe, and in order to induce SwissRe
to purchase such Shares, and for other good and valuable consideration received
by the Company in connection with such purchase, the Company and the Seller have
agreed to make the representations, warranties and covenants in favor of SwissRe
set forth below.
In furtherance of the foregoing, the Seller and the Company hereby agree with
SwissRe as follows:
a. Subject to the terms and conditions set forth herein, Swiss Re shall
purchase from the Seller and the Seller shall sell to SwissRe the Shares on
the date hereof. The purchase price per share for the Shares is $39.00.
b. On the settlement date for the trade of the Shares purchased herein (which
shall be the third business day following the date hereof), the Seller
shall transfer and deliver the Shares to a custodian account designated by
SwissRe on Schedule A hereto against payment of the purchase price therefor
to the account designated by Merrill Lynch on Schedule B hereto.
c. The Seller hereby represents and warrants for the benefit of SwissRe that:
1. The sale and delivery of the Shares to SwissRe by the Seller pursuant
to this letter agreement will transfer to SwissRe legal and valid title
to the Shares, free and clear of all liens, claims, charges,
encumbrances and security interests of any kind or nature whatsoever
including, without limitation, any restrictions on the voting or
transfer thereof.
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PAGE 13 OF 22 PAGES
2. The Shares are not "restricted securities" within the meaning of Rule
144 under the Securities Act of 1933, as amended (the "Act"). The
Seller is not acting as an underwriter within the meaning of the Act in
connection with the offer and sale of the Shares to SwissRe. The Seller
has not obtained the Shares from the Company or any person who is or
has been an Affiliate of the Company. For purposes of this letter
agreement, the term "Affiliate" means any person that directly, or
indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with the Company.
3. No consent, approval or authorization of, or any registration, filing,
qualification or declaration with, any federal, state, local or foreign
governmental authority, or any other person, is required on the part of
the Seller, and the Seller is not aware of any such requirement on the
part of the Company, in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated
hereby.
d. The Company hereby represents, warrants and covenants for the benefit of
SwissRe that:
1. The authorized capital stock of the Company consists of 30,000,000
shares of common stock, par value $.10 per share, of which as of April
16, 1997 18,741,554 shares, including the Shares, are issued and
outstanding and 5,000,000 shares of preferred stock, par value $0.01
per share, of which as of the date hereof no such shares are issued and
outstanding. All such outstanding shares, including the Shares, are
duly authorized, validly issued, fully paid and nonassessable.
2. All corporate and other action on the part of the Company necessary for
the authorization, execution, delivery and performance of this letter
agreement has been taken and no other corporate or other action is
required to approve the contemplated transactions contemplated hereby.
This letter agreement constitutes the legal, valid, binding obligation
of the Company enforceable against the Company in accordance with its
terms.
3. The covenants made by the Company in Sections 5.1, 5.2 and 5.3 of that
certain Stock Purchase Agreement, dated February 9, 1996 (the "Stock
Purchase Agreement"), by and among the Company, The Manufacturers Life
Insurance Company, ManuLife (International) Limited and SwissRe,
pursuant to which SwissRe acquired 1,000,000 shares of the common
stock, par value $.10 per share, of the Company, are hereby made by the
Company with respect to the Shares as if such Sections were set forth
in full herein, except that any references to "Company Shares," "Seller
Shares" or "Shares" (as such terms are defined in the Stock Purchase
Agreement) in such Sections shall for purposes of this letter agreement
be deemed to refer to the Shares.
4. No consent, approval or authorization of, or any registration, filing,
qualification or declaration with, any federal, state, local or foreign
governmental authority, or any other
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PAGE 14 OF 22 PAGES
person, is required on the part of the Company in connection with the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
e. SwissRe hereby represents, warrants and covenants for the benefit of the
Seller and the Company that SwissRe is acquiring the Shares for investment
for its own account and not with a view to, or for resale in connection
with, the distribution or other disposition thereof in violation of the
securities laws of the United States or any state thereof.
f. The Seller shall be liable for and shall hold SwissRe harmless against any
transfer, recording, documentary , stamp or similar tax that becomes
payable in connection with the transactions contemplated by this letter
agreement.
g. This letter agreement shall be governed by and construed in accordance with
the laws of the State of New York without giving effect to conflicts of
laws.
h. If any provisions of this letter agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
i. This letter may be executed in any number of counterparts, each of which
will be deemed to be an original, and all of which together will constitute
one and the same instrument, and all signatures need not appear on any one
counterpart.
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PAGE 15 OF 22 PAGES
If the terms this letter agreement are acceptable to SwissRe, please so indicate
by signing where indicated below whereby this letter agreement will be a binding
agreement among the Seller, the Company and SwissRe.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER &
SMITH, INC.
By: /s/ George W. Rhyne
_____________________________________
Name: George W. Rhyne
Title:
ENHANCE FINANCIAL SERVICES
GROUP INC.
By: /s/ Samuel Bergman
_____________________________________
Name: Samuel Bergman
Title: Executive Vice President
Agreed to and accepted as of
the date set forth above
SWISS REINSURANCE COMPANY
By: /s/ Peter P. Hugle
____________________________________
Name: Peter P. Hugle
Title: Member of Executive Board and CIO
By: /s/ Adrian Sulzer
____________________________________
Name: Adrian Sulzer
Title: Member of Senior management
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PAGE 16 OF 22 PAGES
Schedule A
[SwissRe Account Information]
CITIBANK, N.A., New York
ABA # 021000089
Cust # 845457
DTC Clearing: No. 908
Agent Bank # 27602
ID (FIN) # 64292
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PAGE 17 OF 22 PAGES
Schedule B
[Merrill Lynch Wire Instructions]
The Purchase and Sale will settle through Depository Trust Company ("DTC") in
book entry form. The DTC instructions for settlement appear below. SwissRe
should have on deposit with its custody bank, Citibank, the required amount of
US $27,300,000.00, representing 700,000 shares at US $39.00 per share, in same
day funds. If the correct funds are on deposit at Citibank, the funds will be
transferred through the following DTC account to Merrill Lynch:
DTC Account No. 161
Account No. 89205C33
Name of : Swiss Reinsurance Company
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PAGE 18 OF 22 PAGES
EXHIBIT G
AMENDMENT NO. 7
TO
SUBSCRIBERS' REGISTRATION RIGHTS AGREEMENT
DATED AS OF APRIL 16, 1997
WHEREAS, Enhance Financial Services Group Inc., a New York corporation
(the "Company"), and the other parties executing this Amendment on the signature
page hereof (the "Amending Shareholders") are parties to a Subscribers'
Registration Rights Agreement dated as of October 31, 1986, as amended (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, pursuant to a Letter Agreement dated
April 17, 1997 (the "Letter Agreement") among the Company, Merrill Lynch,
Pierce, Fenner & Smith, Inc. ("Merrill Lynch") and SwissRe, an aggregate of
700,000 shares (the "Additional Shares") of the Company's common stock, par
value $.10 per share, from Merrill Lynch connection with the sale by U S West
Financial Services, Inc., a Colorado corporation ("USWFS"), to Merrill Lynch of
call options to acquire from USWFS the USWFS Residual Shares (as defined in the
Agreement). To induce SwissRe to purchase such Additional Shares, 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. 7).
2. Reference herein to a specific sentence included in a Section of the
Agreement shall be after giving effect to this Amendment No. 7.
3. SwissRe and USWFS have been advised by the Company that neither The
Manufacturers Life Insurance Company nor any entity it controls holds any
Shares. Accordingly,
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PAGE 19 OF 22 PAGES
the Agreement is hereby amended to delete (i) references to the terms
"ManuLife", "ManuLife DECS", "ManuLife Registrable Shares", "ManuLife Residual
Shares", "Original ManuLife Shares" and "ManuLife Demand" wherever such terms
appear in the Agreement and (ii) any provisions of the Agreement granting rights
specifically to the holders of any such ManuLife Registrable Shares, Original
ManuLife Shares or ManuLife Residual Shares (but without affecting the rights of
any holder of SwissRe Shares or SwissRe Registrable Shares).
4. Section 1 of the Agreement is hereby amended by:
(a) changing the definition therein of the terms "SwissRe Shares"
and "USWFS Residual Shares" to read in their entirety, respectively, as follows:
"'SwissRe Shares': The shares of Common Stock originally acquired
by Swiss Reinsurance Company from (i) 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) and (ii) Merrill Lynch, Pierce, Fenner &
Smith, Inc. ("Merrill Lynch") pursuant to the Letter Agreement dated
April 17, 1997 among the Company, Merrill Lynch and Swiss Reinsurance
Company (and any capital stock or other securities in to which such
Common Stock shall have been changed)."
"'USWFS Residual Shares': 828,197 shares of Common Stock that are
Restricted Shares and owned by U S WEST Financial Services, Inc., a
Colorado corporation ("USWFS") in connection with the issuance by U S
WEST, Inc. of debt exchangeable for Common Stock owned by USWFS 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; or which are transferred to
the holder of a Call Option pursuant to such Call Option (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)."
(b) adding the following capitalized terms in appropriate
alphabetical sequence:
"Call Option": A call option sold by USWFS or its affiliate
providing for an option to acquire all or a portion of the USWFS
Residual Shares.
"Qualified Residual Offering": A registered offering of the USWFS
Residual Shares which (i) is not an underwritten offering, (ii) is
being made solely in order to enable a holder of a Call Option to
transfer the USWFS Residual Shares received upon exercise of such Call
Option to third parties from whom such holder of the Call Option has
borrowed shares of the Company's Common Stock in order to satisfy such
holder's obligations to return such borrowed shares to such third
parties, provided that (x) such
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PAGE 20 OF 22 PAGES
third parties are not and have not been affiliates of the Company and
(y) such borrowed shares were not "Restricted Securities" within the
meaning of Rule 144 under the Securities Act and were otherwise freely
tradeable without registration under the Securities Act by such third
parties and (iii) which is intended to be consummated prior to December
31, 1998.
5. Section 3 of the Agreement is hereby amended by:
(a) deleting the first six sentences of Section 3(a) in their
entirety and inserting the following language in lieu thereof:
"The holders of SwissRe Registrable Shares will be entitled
to request two separate Demand Registrations with respect to
SwissRe Registrable Shares (each, a or the "SwissRe Demand") (with
respect to which the Company shall pay all Registration Expenses,
provided that the Company shall be required to pay the
Registration Expenses of not more than one Demand Registration for
an offering that is an underwritten offering). In addition to the
foregoing, USWFS (and any entities controlled by U S WEST, Inc.
that hold USWFS Residual Shares) will be entitled to request one
Demand Registration with respect only to the USWFS Residual Shares
(the "Residual Demand"); provided, that notwithstanding anything
to the contrary herein, the Company shall have no obligation to
pay any Registration Expenses in connection with the Residual
Demand; provided further, that, unless the Residual Demand is for
a Qualified Residual Offering, if a SwissRe Demand has been
previously requested pursuant to Section 3(b), the Residual Demand
may not be made until the earlier of (i) 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 (ii) eighteen months from the date of such
SwissRe Demand; and provided further, that, unless the Residual
Demand is for a Qualified Residual Offering, the Residual Demand
may not be made if one or both SwissRe Demands remain unexercised
unless each holder of USWFS Residual 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 the Residual
Demand for a registered offering which is not a Qualified Residual
Offering at the time that one or both SwissRe Demands remain
unexercised 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 a
SwissRe Demand. In the event the holders of at least a majority of
the SwissRe Registrable Shares so make a SwissRe Demand, the right
of such Residual Holder to make the Residual Demand shall be
suspended for
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PAGE 21 OF 22 PAGES
a period equal to the shorter of (x) 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 (y) eighteen months from the date of the SwissRe
Demand."
(b) 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 except as to such registration right granted to Duncan Property
Development Ltd., as to which Swiss Reinsurance Company and USWFS have,
in their capacity as the holders of Registrable Shares, waived their
piggyback registration rights, 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 and third provisos to
the second sentence of Section 3(a) hereof with respect to the 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
6. This Amendment No. 7 shall become effective upon execution and
delivery of the Letter Agreement by the parties thereto, and the performance of
the transactions contemplated thereby.
7. The Agreement shall, except as amended hereby, continue in full
force and effect.
8. This Amendment No. 7 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.
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PAGE 22 OF 22 PAGES
IN WITNESS WHEREOF, each party hereto has executed this Amendment No. 7
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
Amending Shareholders
---------------------
SWISS REINSURANCE COMPANY
By /s/ Peter P. Hugle
________________________________________________
Name: Peter P. Hugle
Title: Member of Executive Board and CIO
By /s/ Adrian Sulzer
________________________________________________
Name: Adrian Sulzer
Title: Member of Senior Management
US WEST FINANCIAL SERVICES, INC.
By /s/ Richard A. Post
________________________________________________
Name: Richard A. Post
Title: President
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