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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
and
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
ALLIED LIFE FINANCIAL CORPORATION
(NAME OF SUBJECT COMPANY)
NATIONWIDE LIFE ACQUISITION CORPORATION
NATIONWIDE MUTUAL INSURANCE COMPANY
(Bidders)
COMMON STOCK, NO PAR VALUE
(Title of Class of Securities)
019246107
(CUSIP Number of Class of Securities)
W. SIDNEY DRUEN
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
NATIONWIDE MUTUAL INSURANCE COMPANY
ONE NATIONWIDE PLAZA
COLUMBUS, OHIO 43215
TELEPHONE: (614) 249-7111
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
WITH A COPY TO:
ERIC M. FOGEL, ESQ.
HAROLD W. NATIONS, ESQ.
HOLLEB & COFF
55 E. MONROE STREET, SUITE 4100
CHICAGO, ILLINOIS 60603
TELEPHONE: (312) 807-4600
CALCULATION OF FILING FEE
TRANSACTION VALUATION* $141,581,580
AMOUNT OF FILING FEE** $28,316
* For purposes of calculating the filing fee only. This calculation
assumes the purchase of 4,719,386 shares of common stock, no par
value (the "Common Shares"), of ALLIED LIFE FINANCIAL CORPORATION
(the "Company") at $30.00 net per share in cash.
** The amount of the filing fee, calculated in accordance with Rule
0-11(d) of the Securities Exchange Act of 1934, as amended, equals
1/50th of one percent of the aggregate value of cash offered by
Nationwide Group Acquisition Corporation for such number of Common
Shares.
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[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
Amount Previously Paid: Not applicable
Filing Party: Not applicable
Form or Registration No.: Not applicable
Date Filed: Not applicable
CUSIP NO. 019246107
1. NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nationwide Mutual Insurance Company (E.I.N.: 31-4177100)
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
[ ] (a)
[ ] (b)
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,521,006 Common Shares
2,330,772 Shares of 6.75% Series Preferred Stock ("Preferred Shares")
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
32.2% of the Common Shares (assuming conversion of Series A ESOP
Convertible Preferred Stock) and 100% of the Preferred Shares
representing 54.6% of the voting securities
10. TYPE OF REPORTING PERSON
IC
2
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CUSIP NO. 019246107
1. NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Nationwide Life Acquisition Corporation (E.I.N.: 31-1598405)
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
[ ] (a)
[ ] (b)
3. SEC USE ONLY
4. SOURCE OF FUNDS
AF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,521,006 Common Shares
2,330,772 Shares of 6.75% Series Preferred Stock ("Preferred Shares")
8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES
9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
32.2% of the Common Shares (assuming conversion of Series A ESOP
Convertible Preferred Stock) and 100% of the Preferred Shares
representing 54.6% of the voting securities
10. TYPE OF REPORTING PERSON
CO
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Allied Life Financial
Corporation, an Iowa corporation (the "Company"). The address of the Company's
principal executive offices is 701 Fifth Avenue, Des Moines, Iowa 50391.
(b) This Tender Offer Statement on Schedule 14D-1 relates to the offer
by Nationwide Life Acquisition Corporation ("Purchaser"), an Ohio corporation
and a wholly owned subsidiary of Nationwide Mutual Insurance Company, an Ohio
corporation ("Parent"), to purchase all outstanding shares of
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common stock, no par value (the "Common Shares"), of the Company, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated June 10,
1998 ("Offer to Purchase"), and in the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") at a purchase price
of $30.00 per Common Share, net to the tendering shareholder in cash, without
interest thereon. The Company has represented to Purchaser that as of June 2,
1998, there were issued and outstanding 4,420,974 Common Shares and 2,330,772
shares of 6.75% Series preferred stock, no par value ("Preferred Shares") and
104,726 shares of Series A ESOP Convertible Preferred Stock, no par value
("Convertible Preferred Shares"), of the Company. In addition, the Company has
represented to Purchaser that as of June 2, 1998, there were 193,686 Common
Shares subject to options under the Company's stock option plan. The information
set forth under "Introduction" in the Offer to Purchase annexed hereto as
Exhibit (a)(1) is incorporated herein by reference.
(c) The information set forth under "Price Range of Shares; Dividends"
in the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d); (g) This Statement is being filed by Purchaser and Parent. The
information set forth under "Introduction" and "Certain Information Concerning
Purchaser and Parent" in the Offer to Purchase and Schedule I thereto is
incorporated herein by reference.
(e)-(f) During the last five years, neither Purchaser, Parent nor any
persons controlling Purchaser, nor, to the best knowledge of Purchaser or
Parent, any of the persons listed on Schedule I to the Offer to Purchase (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which any such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE
SUBJECT COMPANY.
(a)-(b) The information set forth under "Introduction," "Background of
the Offer; Contacts with the Company," "Purpose of the Offer and the Merger;
Plans for the Company; Certain Considerations," "Certain Information Concerning
the Company" and "Certain Information Concerning Purchaser and Parent" in the
Offer to Purchase is incorporated herein by reference.
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ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth under "Introduction" and "Source and
Amount of Funds" in the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE
BIDDER.
(a)-(e) The information set forth under "Introduction," "Background of
the Offer; Contacts with the Company" and "Purpose of the Offer and the Merger;
The Merger Agreement; Certain Considerations" in the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth under "Introduction" and "Effect of
the Offer on the Market for the Common Shares; Exchange Listing and Exchange Act
Registration; Margin Regulations" in the Offer to Purchase is incorporated
herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth under "Introduction," "Certain
Information Concerning Purchaser and Parent," and "Purpose of the Offer and the
Merger; The Merger Agreement; Certain Considerations" in the Offer to Purchase
is incorporated herein by reference.
Pursuant to the irrevocable proxy granted to Purchaser pursuant to the
Shareholder Agreement, dated as of June 3, 1998 between Parent and Allied
Mutual Insurance Company, a copy of which is attached hereto as Exhibit
(c)(4), Purchaser and Parent may be deemed beneficial owners of 2,330,772
shares of 6.75% Series Preferred Stock (the "Preferred Shares") and 1,521,006
shares of Common Stock, no par value (the "Common Shares") (constituting 54.6%
of the outstanding voting securities of the Issuer). None of the persons
identified on Schedule I of the Offer to Purchase (which is incorporated herein
by reference) beneficially owns or has a right to acquire directly or
indirectly any such shares.
Each of the Parent and the Purchaser has sole voting power with respect
to none of the Common Shares; may be deemed to have shared voting power with
respect to 2,830,772 Preferred Shares and 1,521,006 Common Shares; has sole
dispositive power with respect to none of the Common Shares; and has shared
dispositive power with respect to none of the Preferred or Common Shares. Except
as set forth in this Schedule 14D-1, the Parent and the Purchaser do not know of
any other person who has the right to receive or the power to direct the receipt
of dividends from, or the proceeds from the sale of, the Common or Preferred
Shares that may be deemed to be beneficially owned by the Parent or the
Purchaser.
Neither Parent nor Purchaser owns any Common Shares.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth under "Introduction," "Background of the
Offer; Contacts with the Company," "Purpose of the Offer and the Merger; The
Merger Agreement; Certain Considerations" and "Certain Legal Matters; Regulatory
Approvals; Certain Litigation" in the Offer to Purchase is incorporated herein
by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth under "Fees and Expenses" in the Offer to
Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth under "Certain Information Concerning
Purchaser and Parent" in the Offer to Purchase is incorporated herein by
reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
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(b)-(c) The information set forth under "Introduction" and "Certain
Legal Matters; Regulatory Approvals; Certain Litigation" in the Offer to
Purchase is incorporated herein by reference.
(d) The information set forth under "Effect of the Offer on the Market
for the Common Shares; Exchange Listing and Exchange Act Registration; Margin
Regulations" in the Offer to Purchase is incorporated herein by reference.
(e) The information set forth under "Certain Legal Matters; Regulatory
Approvals; Certain Litigation" in the Offer to Purchase is incorporated herein
by reference.
(f) The information set forth in the Offer to Purchase and the Letter
of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and
(a)(2), respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a) (1) Offer to Purchase, dated June 10, 1998.
(2) Letter of Transmittal.
(3) Notice of Guaranteed Delivery.
(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.
(6) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(7) Text of Press Release issued on June 4, 1998:
"Nationwide and Allied Enter Into Definitive
Agreements to Sell Allied Group to Nationwide
and to Merge Allied Mutual Into Nationwide"
(incorporated by reference to Exhibit (a)(27) to the
Tender Offer Statement on Schedule 14D-1/A filed
with the SEC on June 4, 1998 by Nationwide Group
Acquisition Corporation and Parent).
(8) Summary Advertisement.
(b) Not applicable.
(c) (1) Agreement and Plan of Merger dated as of June 3,
1998 among Parent, Purchaser, and the Company
(incorporated by reference to Exhibit 37 to the
Solicitation/Recommendation Statement on Schedule
14D-9/A filed with the SEC on June 4, 1998 by Allied
Group, Inc. (the "Allied Group 14D-9/A").
(2) Agreement and Plan of Merger dated as of June 3,
1998 between Parent and Allied Mutual Insurance
Company (incorporated by reference to Exhibit 36 to
the Allied Group 14D-9/A).
(3) Agreement and Plan of Merger dated as of June 3,
1998 among Parent, Purchaser, and Allied Group, Inc.
(incorporated by reference to Exhibit 35 to the
Allied Group 14D-9/A).
(4) Shareholder Agreement dated as of June 3, 1998
between Parent and Allied Mutual Insurance Company.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: June 10, 1998
NATIONWIDE MUTUAL INSURANCE COMPANY
By: /s/ David A. Diamond
-------------------------------
Name: David A. Diamond
Title: Vice President - Enterprise Controller
NATIONWIDE GROUP ACQUISITION CORPORATION
By: /s/ Mark B. Koogler
-------------------------------
Name: Mark B. Koogler
Title: Vice President - Associate General Counsel
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EXHIBIT INDEX
(a) (1) Offer to Purchase, dated June 10, 1998.
(2) Letter of Transmittal.
(3) Notice of Guaranteed Delivery.
(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.
(6) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(7) Text of Press Release issued on June 4, 1998:
"Nationwide and Allied Enter Into Definitive
Agreements to Sell Allied Group to Nationwide
and to Merge Allied Mutual Into Nationwide"
(incorporated by reference to Exhibit (a)(27) to the
Tender Offer Statement on Schedule 14D-1/A filed with
the SEC on June 4, 1998 by Nationwide Group
Acquisition Corporation and Parent.
(8) Summary Advertisement.
(b) Not applicable.
(c) (1) Agreement and Plan of Merger dated as of June 3,
1998 among Parent, Purchaser, and the Company
(incorporated by reference to Exhibit 37 to the
Solicitation/Recommendation Statement on Schedule
14D-9/A filed with the SEC on June 4, 1998 by Allied
Group, Inc. (the "Allied Group 14D-9/A").
(2) Agreement and Plan of Merger dated as of June 3,
1998 between Parent and Allied Mutual Insurance
Company (incorporated by reference to Exhibit 36 to
the Allied Group 14D-9/A).
(3) Agreement and Plan of Merger dated as of June 3,
1998 among Parent, Purchaser, and Allied Group, Inc.
(incorporated by reference to Exhibit 35 to the
Allied Group 14D-9/A).
(4) Shareholder Agreement dated as of June 3, 1998
between Parent and Allied Mutual Insurance Company.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ALLIED LIFE FINANCIAL CORPORATION
AT
$30.00 NET PER COMMON SHARE
BY
NATIONWIDE LIFE ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NATIONWIDE MUTUAL INSURANCE COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, AUGUST 31, 1998, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF ALLIED LIFE FINANCIAL CORPORATION (THE "COMPANY"),
ACTING ON THE UNANIMOUS RECOMMENDATION OF A COMMITTEE (THE "COMMITTEE")
CONSISTING OF ALL OF THE UNAFFILIATED DIRECTORS, HAS UNANIMOUSLY DETERMINED THAT
THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE
SHAREHOLDERS OF THE COMPANY AND RECOMMENDS THAT ALL SHAREHOLDERS OF THE COMPANY
ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE OFFER AND, IF REQUIRED,
VOTE IN FAVOR OF THE MERGER.
------------------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED TO NATIONWIDE MUTUAL INSURANCE COMPANY ("PARENT") AND NATIONWIDE GROUP
ACQUISITION CORPORATION, A WHOLLY OWNED SUBSIDIARY OF PARENT ("PURCHASER"), AND
NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST 2,000,000
COMMON SHARES OF THE COMPANY, (2) PARENT AND PURCHASER HAVING OBTAINED ALL
INSURANCE REGULATORY APPROVALS NECESSARY FOR THEIR ACQUISITION OF CONTROL OF
THE COMPANY AND ITS INSURANCE SUBSIDIARY ON TERMS AND CONDITIONS REASONABLY
SATISFACTORY TO PURCHASER, AND (3) THE SATISFACTION OF CERTAIN CONDITIONS WITH
RESPECT TO THE MERGER OF ALLIED MUTUAL INSURANCE COMPANY WITH AND INTO PARENT.
SEE SECTIONS 1 AND 14. THE OFFER IS NOT CONDITIONED UPON PURCHASER OBTAINING
FINANCING.
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
Common Shares should either (i) complete and sign the Letter of Transmittal (or
a facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such shareholder's signature thereon guaranteed if required by
Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile thereof) and any other required documents to the
Depositary (as defined herein) and either deliver the certificates for such
Common Shares to the Depositary along with the Letter of Transmittal (or a
facsimile thereof) or deliver such Common Shares pursuant to the procedures for
book-entry transfers set forth in Section 3 prior to the expiration of the Offer
or (ii) request such shareholder's broker, dealer, commercial bank, trust
company or other nominee to effect the transaction for such shareholder. A
shareholder having Common Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if such shareholder
desires to tender such Common Shares.
Any shareholder who desires to tender Common Shares and whose certificates
for such shares are not immediately available, or who cannot comply with the
procedures for book-entry transfers described in this Offer to Purchase on a
timely basis, may tender such Common Shares by following the procedures for
guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials may
be obtained from the Information Agent.
The Dealer Manager for the Offer is:
CREDIT SUISSE FIRST BOSTON
June 10, 1998
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TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION................................................ 1
1. Terms of the Offer; Expiration Date..................... 3
2. Acceptance for Payment and Payment for Common Shares.... 5
3. Procedures for Tendering Common Shares.................. 6
4. Withdrawal Rights....................................... 8
5. Certain Federal Income Tax Consequences................. 9
6. Price Range of Shares; Dividends........................ 10
7. Effect of the Offer on the Market for the Common Shares;
Exchange Listing and Exchange Act Registration; Margin
Regulations............................................. 10
8. Certain Information Concerning the Company.............. 11
9. Certain Information Concerning Purchaser and Parent..... 12
10. Source and Amount of Funds.............................. 14
11. Background of the Offer; Contacts with the Company...... 14
12. Purpose of the Offer and the Merger; The Merger
Agreement; Certain Considerations....................... 15
13. Dividends and Distributions............................. 30
14. Conditions of the Offer................................. 30
15. Certain Legal Matters; Regulatory Approvals; Certain
Litigation................................................ 31
16. Fees and Expenses....................................... 34
17. Miscellaneous........................................... 35
SCHEDULE I.................................................. I-1
</TABLE>
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To the Holders of Common Stock
of Allied Life Financial Corporation:
INTRODUCTION
Nationwide Life Acquisition Corporation ("Purchaser"), an Ohio corporation
and a wholly owned subsidiary of Nationwide Mutual Insurance Company, an Ohio
mutual insurance company ("Parent"), hereby offers to purchase all outstanding
shares of common stock, no par value (the "Common Shares"), of Allied Life
Financial Corporation, an Iowa corporation (the "Company"), at a price of $30.00
per Common Share, net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, as amended
from time to time, together constitute the "Offer").
Tendering shareholders who have shares registered in their own name and who
tender shares directly to the Depositary will not be obligated to pay brokerage
fees or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Common Shares by Purchaser
pursuant to the Offer. Shareholders who hold their shares through a bank or
broker should check with such institution as to whether or not it charges any
fees applicable to a tender of shares. Purchaser will pay all charges and
expenses of Credit Suisse First Boston Corporation, as Dealer Manager ("Credit
Suisse First Boston" or the "Dealer Manager"), ChaseMellon Shareholder Services,
L.L.C., as Depositary (the "Depositary"), and Georgeson & Company Inc., as
Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD"), ACTING ON THE
UNANIMOUS RECOMMENDATION OF THE COMMITTEE, HAS UNANIMOUSLY APPROVED THE OFFER
AND THE MERGER (AS DEFINED BELOW) AND DETERMINED THAT THE OFFER AND THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY AND
RECOMMENDS THAT ALL SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER, TENDER THEIR
COMMON SHARES PURSUANT TO THE OFFER AND, IF REQUIRED, VOTE IN FAVOR OF THE
MERGER.
CERTAIN CONDITIONS TO THE OFFER
The Offer is conditioned upon, among other things, the Minimum Condition
and the Insurance Regulatory Approval Condition, each as defined below. The
Offer is also subject to certain other conditions. See Section 14, which sets
forth the conditions to consummation of the Offer, and Section 15, which
discusses certain legal matters and regulatory consents and approvals.
THE MINIMUM CONDITION. CONSUMMATION OF THE OFFER IS CONDITIONED UPON THERE
BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER AT LEAST 2,000,000 COMMON SHARES OF THE COMPANY (THE "MINIMUM CONDITION").
THE INSURANCE REGULATORY APPROVAL CONDITION. CONSUMMATION OF THE OFFER IS
CONDITIONED UPON PARENT AND PURCHASER HAVING OBTAINED ALL INSURANCE REGULATORY
APPROVALS NECESSARY FOR THEIR ACQUISITION OF CONTROL OF THE COMPANY AND ITS
INSURANCE SUBSIDIARIES ON TERMS AND CONDITIONS REASONABLY SATISFACTORY TO
PURCHASER(THE "INSURANCE REGULATORY APPROVAL CONDITION").
According to the Merger Agreement (as defined below), the Company, which is
domiciled in Iowa, owns a life insurance company domiciled in Iowa. Accordingly,
the acquisition of Common Shares satisfying the Minimum Condition pursuant to
the Offer will require a filing with, and approval of, state insurance
regulatory authorities (the "Insurance Commission" or "Insurance Commissioner")
under the insurance code (the "Insurance Code") of Iowa. Similar filings and
approvals may also be required pursuant to Section 3925.08(D)(2) of the Ohio
Revised Code.
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The Insurance Code of Iowa and the rules that have been promulgated
thereunder contain provisions applicable to the acquisition of "control" of a
domestic insurer, including a presumption of control that arises from the
ownership of ten percent (10%) or more of the voting securities of a domestic
insurer or of a person that controls a domestic insurer. Generally, any person
seeking to acquire voting securities, such as the Common Shares, in an amount
that would result in such person controlling, directly or indirectly, a domestic
insurer must, together with any person ultimately controlling such person, file
with the Insurance Commission certain information concerning the acquisition of
control (generally known as a "Form A") and send a copy of each Form A to the
domestic insurer. As soon as practicable following the date of this Offer to
Purchase, Parent and Purchaser will make a Form A filing, including a copy of
this Offer to Purchase and other related information with respect to the Offer,
with the Iowa Insurance Commission and will send a copy thereof to the relevant
domestic insurer.
In Iowa, the Form A filing triggers public hearing requirements and
commences statutory periods within which decisions must be rendered approving or
disapproving the acquisition of control of the Company by Parent and Purchaser.
The period within which hearings must be commenced or a decision rendered
generally does not begin until the Insurance Commissioner has deemed the Form A
filing complete. The Insurance Commissioner has discretion to request that
additional information be furnished before it deems the Form A filing complete.
The Insurance Code provides certain statutory standards for the approval or the
disapproval of the acquisition of control of the Company. However, the Insurance
Code also permits the Insurance Commissioner discretion in determining whether
such standards have been met.
Section 3925.08(D)(2) of the Ohio Insurance Code requires certain insurance
companies domiciled in Ohio to obtain approval from the Ohio Insurance
Commission for certain investments in the outstanding stocks of a corporation
where such investment exceeds two and one-half percent (2 1/2%) of the total
admitted assets of the company making the investment as of the preceding
December 31.
Certain other conditions to consummation of the Offer are described in
Section 14 and Section 15. Among other things, the Offer is conditioned upon the
satisfaction of certain conditions with respect to the merger of Allied Mutual
Insurance Company ("Allied Mutual") with and into Parent. Purchaser expressly
reserves the right in its sole discretion to waive any one or more of the
conditions to the Offer. See Section 14 and Section 15.
The Offer is being made pursuant to the Agreement and Plan of Merger dated
as of June 3, 1998 (the "Merger Agreement"), among Parent, Purchaser and the
Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, Purchaser will be merged with and
into the Company, with the Company surviving (as such, the "Surviving
Corporation") as a wholly owned subsidiary of Parent (the "Merger"). In the
Merger, each outstanding Common Share (other than Common Shares held by the
Company as treasury stock or by shareholders, if any, who are entitled to and
who properly exercise dissenters' rights under Iowa law) will be converted into
the right to receive $30.00 net per Common Share in cash, without interest
thereon. See Section 12.
Parent, in addition to entering into the Merger Agreement, has entered into
an Agreement and Plan of Merger, dated as of June 3, 1998 (the "Allied Mutual
Merger Agreement") with Allied Mutual Insurance Company ("Allied Mutual"),
providing for the merger of Allied Mutual into Parent (the "Allied Mutual
Merger"). The Allied Mutual Merger Agreement contemplates that, immediately
prior to the consummation of the Allied Mutual Merger, Allied Mutual would make
an extraordinary distribution of $110 million in cash to Allied Mutual's
policyholders. Parent has also entered into an Agreement and Plan of Merger,
dated as of June 3, 1998 (the "Allied Group Merger Agreement") providing for the
merger of a subsidiary of Parent with and into Allied Group, Inc. ("Allied
Group"), with Allied Group being the surviving corporation (the "Allied Group
Merger"). In the Allied Group Merger, the holders of the outstanding shares of
common stock of Allied Group (other than Allied Mutual and holders exercising
dissenters' rights of appraisal) would receive $48.25 per share, net to the
seller, in cash, without interest thereon.
The Merger is subject to a number of conditions, including approval by
shareholders of the Company, if such approval is required by law. In the event
Purchaser acquires 90% or more of the outstanding shares of each class of stock
pursuant to the Offer, Purchaser would be able to effect the Merger pursuant to
the short-
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form merger provisions of the Iowa Business Corporation Act (the "Iowa
Corporation Act") without any action by any other shareholder of the Company.
Allied Mutual, which owns all of the 6.75% Series Preferred Stock, no par value
(the "6.75% Preferred Shares"), has entered into a Shareholder Agreement with
Parent (the "Shareholder Agreement") pursuant to which Allied Mutual has agreed,
among other things, that at any meeting of shareholders of the Company called to
vote upon the Merger and the Merger Agreement, it will vote Common Shares held
by it as well as the 6.75% Preferred Shares held by it in favor of the Merger
and against alternative transactions. Allied Mutual has also agreed that it will
not dispose of any Common Shares or 6.75% Preferred Shares held by it. Under the
Company's Employee Stock Ownership Plan ("ESOP"), State Street Bank and Trust
Company as the ESOP Trustee (the "ESOP Trustee") is required to provide each
participant with the opportunity to direct the ESOP Trustee with regard to the
conversion and tender of the Series A ESOP Convertible Preferred Stock, no par
value (the "ESOP Preferred Shares") allocated to the participant's account,
prior to the Merger, making such shares eligible for tender pursuant to the
Offer. Subject to applicable law, the organizational documents of the ESOP also
provide that the ESOP Trustee may not convert or tender allocated ESOP Preferred
Shares as to which no instructions are received. The Company has represented to
Purchaser that as of the close of business on June 2, 1998, there were 4,420,974
Common Shares and 104,726 ESOP Preferred Shares issued and outstanding. Each
ESOP Preferred Share is convertible into one Common Share. In addition, the
Company has represented to Purchaser that as of June 2, 1998, there were 193,686
Common Shares subject to options under the Company's stock option plans. Based
on the foregoing and assuming that no further options were granted, expired or
exercised after June 2, 1998 and that no Common Shares were issued or acquired
by the Company after June 2, 1998, there would be 4,719,386 Common Shares
outstanding on a fully diluted basis. Therefore, if Purchaser acquires the right
to vote at least 4,247,448 Common Shares pursuant to the Offer or the
Shareholder Agreement, it would control at least 90% of the then outstanding
Common Shares on a fully diluted basis. See Section 12.
The Merger Agreement is more fully described in Section 12. Certain Federal
income tax consequences of the sale of Common Shares pursuant to the Offer and
the exchange of Common Shares for the Merger Consideration pursuant to the
Merger are described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and pay for all Common Shares
which are validly tendered prior to the Expiration Date (as hereinafter defined)
and not properly withdrawn in accordance with Section 4. The term "Expiration
Date" means 5:00 P.M., New York City time, on Monday, August 31, 1998, unless
and until Purchaser, in its sole discretion, shall have extended the period of
time during which the Offer is open, in which event the term "Expiration Date"
shall refer to the latest time and date at which the Offer, as so extended by
Purchaser, shall expire.
The Expiration Date reflects Parent's and Purchaser's current expectation
that the Form A hearing in Iowa (as discussed in Section 15 below) will be held
at the end of July 1998 and will become final and non-appealable thirty (30)
days after the issuance of the Order. Depending on the outcome of the Iowa Form
A hearing, it is possible that the Offer may be extended one or more times,
which time periods may, in the aggregate be significant.
The Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition, the Insurance Regulatory Approval Condition, and certain
conditions with respect to the merger of Allied Mutual with and into Parent.
Purchaser expressly reserves the right to modify the terms of the Offer, except
that, without the consent of Allied, Purchaser shall not (i) reduce the number
of Common Shares subject to the Offer, (ii) reduce the Offer Price, (iii) amend
or add to the conditions to the Offer described in Section 14 (and Exhibit A to
the Merger Agreement), (iv) except as provided in the next sentence, extend the
Offer, (v) change the form of consideration payable in the Offer or (vi) amend
any other term of the Offer in any
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<PAGE> 6
manner adverse to the holders of the Common Shares. Notwithstanding the
foregoing, Purchaser may, without the consent of Allied, (i) extend the Offer,
if at the scheduled or extended expiration date of the Offer any of the Offer
Conditions shall not be satisfied or waived, until such time as such conditions
are satisfied or waived, (ii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer and (iii) extend the Offer for any reason on one or more
occasions for an aggregate period of not more than 10 business days beyond the
latest expiration date that would otherwise be permitted under clause (i) or
(ii) of this sentence.
Subject to the applicable regulations of the SEC and the terms of the
Merger Agreement, Purchaser also expressly reserves the right, in its sole
discretion, at any time and from time to time, (i) to delay acceptance for
payment of, or, regardless of whether such Common Shares were theretofore
accepted for payment, payment for, any Common Shares pending receipt of any
regulatory approval specified in Section 15 or in order to comply in whole or in
part with any other applicable law, (ii) to terminate the Offer and not accept
for payment any Common Shares if any of the conditions referred to in Section 14
has not been satisfied or if any of the events specified in Section 14 has
occurred and (iii) to waive any condition or otherwise amend the Offer in any
respect by giving oral or written notice of such delay, termination, waiver or
amendment to the Depositary and by making a public announcement thereof.
Purchaser acknowledges that (i) Rule 14e-1(c) under the Exchange Act
requires Purchaser to pay the consideration offered or return the Common Shares
tendered promptly after the termination or withdrawal of the Offer, and (ii)
Purchaser may not delay acceptance for payment of, or payment for (except as
provided in clause (i) of the first sentence of the preceding paragraph), any
Common Shares upon the occurrence of any of the conditions specified in Section
14 without extending the period of time during which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be
followed as promptly as practicable by public announcement thereof, with such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date. Subject to applicable law (including Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act, which require that material changes be
promptly disseminated to shareholders in a manner reasonably designed to inform
them of such changes) and without limiting the manner in which Purchaser may
choose to make any public announcement, Purchaser shall have no obligation to
publish, advertise or otherwise communicate any such public announcement, other
than by issuing a press release to the Dow Jones News Service.
If in accordance with the terms of the Merger Agreement and Purchaser makes
a material change in the terms of the Offer or the information concerning the
Offer, or if it waives a material condition of the Offer, Purchaser will
disseminate additional tender offer materials and extend the Offer to the extent
required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The
minimum period during which the Offer must remain open following material
changes in the terms of the Offer or information concerning the Offer, other
than a change in price or a change in percentage of securities sought, will
depend upon the facts and circumstances, including the relative materiality of
the changed terms or information. With respect to a change in price or a change
in percentage of securities sought, a minimum ten (10) business day period is
required to allow for adequate dissemination to shareholders and investor
response. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1 under the Exchange Act. Accordingly, if, prior to the
Expiration Date in accordance with the terms of the Merger Agreement and,
Purchaser decreases the number of Common Shares being sought, or increases or
decreases the consideration offered pursuant to the Offer, and if the Offer is
scheduled to expire at any time earlier than the period ending on the tenth
business day from the date that notice of such increase or decrease is first
published, sent or given to holders of Common Shares, the Offer will be extended
at least until the expiration of such ten (10) business day period.
Pursuant to the Merger Agreement, the Company has agreed to provide
Purchaser with mailing labels and copies of the Company's shareholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Common Shares. Upon Purchaser's receipt of such information, this Offer to
Purchase and the Letter of Transmittal will be mailed to record holders of
Common Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the shareholder lists for subsequent transmittal to beneficial owners
of Common Shares.
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<PAGE> 7
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR COMMON SHARES.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will purchase, by accepting for payment, and will pay
for, all Common Shares which are validly tendered prior to the Expiration Date
(and not properly withdrawn in accordance with Section 4) promptly after the
later to occur of (i) the Expiration Date and (ii) the satisfaction or waiver of
the regulatory conditions set forth in Section 14. Purchaser expressly reserves
the right, in its discretion, to delay acceptance for payment of, or, subject to
applicable rules of the SEC, payment for, Common Shares in order to comply in
whole or in part with any applicable law. Purchaser understands that, in
accordance with the applicable rules of the SEC, any delay in accepting Common
Shares, regardless of cause, may not exceed a reasonable length of time.
Accordingly, if it appears at the time that the Offer is scheduled to expire
that any regulatory approvals specified in Section 14 hereof are not likely to
be obtained within a reasonable length of time thereafter, Purchaser will either
extend or terminate the Offer.
In all cases, payment for Common Shares purchased pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) the certificates
evidencing Common Shares (the "Common Share Certificates"), or timely
confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such
Common Shares, if such procedure is available, into the Depositary's account at
The Depository Trust Company or Philadelphia Depository Trust Company (each a
"Book-Entry Transfer Facility" and, collectively, "Book-Entry Transfer
Facilities") pursuant to the procedures set forth in Section 3, (ii) the Letter
of Transmittal (or facsimile thereof), properly completed and duly executed, or,
in the case of a book-entry transfer, an Agent's Message (as defined below) and
(iii) any other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Common Shares that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against the participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Common Shares validly tendered and not properly
withdrawn if, as and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Common Shares for payment. Payment
for Common Shares accepted pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payments from Purchaser and
transmitting payments to such tendering shareholders. Under no circumstances
will interest on the purchase price for Common Shares be paid by Purchaser,
regardless of any delay in making such payment. Upon the deposit of funds with
the Depositary for the purpose of making payments to tendering shareholders,
Purchaser's obligation to make such payment shall be satisfied and tendering
shareholders must thereafter look solely to the Depositary for payment of
amounts owed to them by reason of the acceptance for payment of Common Shares
pursuant to the Offer. Purchaser will pay any stock transfer taxes incident to
the transfer to it of validly tendered Common Shares, except as otherwise
provided in Instruction 6 of the Letter of Transmittal, as well as any charges
and expenses of the Depositary and the Information Agent.
If any tendered Common Shares are not accepted for payment for any reason
pursuant to the terms and conditions of the Offer because of an invalid tender
or otherwise, Common Share Certificates evidencing unpurchased Common Shares
will be returned, without expense to the tendering shareholder (or, in the case
of Common Shares tendered by book-entry transfer into the Depositary's account
at a Book-Entry Transfer Facility pursuant to the procedure set forth in Section
3, such Common Shares will be credited to an account maintained at such
Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid per Common Share pursuant to the Offer, Purchaser will pay such
increased consideration for all such Common Shares purchased
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<PAGE> 8
pursuant to the Offer, whether or not such Common Shares were tendered prior to
such increase in consideration.
3. PROCEDURES FOR TENDERING COMMON SHARES.
Valid Tender of Common Shares. In order for Common Shares to be validly
tendered pursuant to the Offer, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or an Agent's Message (in the case of any book-entry transfer) and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either (i) the Common Share Certificates evidencing tendered
Common Shares must be received by the Depositary at one of such addresses or
Common Shares must be tendered pursuant to the procedure for book-entry transfer
described below and a Book-Entry Confirmation must be received by the
Depositary, in each case prior to the Expiration Date, or (ii) the tendering
shareholder must comply with the guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF COMMON SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE SOLE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Common Shares at each Book-Entry Transfer Facility for purposes of the
Offer within two (2) business days after the date of this Offer to Purchase, and
any financial institution that is a participant in either of the Book-Entry
Transfer Facilities' systems may make book-entry delivery of Common Shares by
causing a Book-Entry Transfer Facility to transfer such Common Shares into the
Depositary's account at a Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Common Shares may be effected through book-entry transfer at a
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message in connection with a book-entry delivery of Common Shares,
and any other required documents must, in any case, be transmitted to and
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date or the tendering
shareholder must comply with the guaranteed delivery procedures described below.
DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH
BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Signature Guarantee. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a bank, broker, dealer, credit union, savings
association or other entity that is a member in good standing of the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (each, an
"Eligible Institution"), unless the Common Shares are tendered (i) by a
registered holder of Common Shares who has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If a Common Share Certificate is registered in the name of a person other
than the signer of the Letter of Transmittal, or if payment is to be made, or a
Common Share Certificate not accepted for payment or not tendered is to be
returned, to a person other than the registered holder(s), then the Common Share
Certificate must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name(s) of the registered holder(s) appear on
the Common Share Certificate, with the signature(s) on such Common Share
Certificate or stock powers guaranteed as described above. See Instructions 1
and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Common Shares
pursuant to the Offer and such shareholder's Common Share Certificates are not
immediately available or time will not permit all required documents to reach
the Depositary prior to the Expiration Date or the procedure for book-entry
transfer
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<PAGE> 9
cannot be completed on a timely basis, such Common Shares may nevertheless be
tendered if all the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, is
received by the Depositary as provided below prior to the Expiration Date;
and
(iii) in the case of a guarantee of Common Shares, the Common Share
Certificates for all tendered Common Shares, in proper form for transfer,
or a Book-Entry Confirmation, together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile thereof) with
any required signature guarantee (or, in the case of a book-entry transfer,
an Agent's Message) and any other documents required by such Letter of
Transmittal, are received by the Depositary within three (3) New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of the
Notice of Guaranteed Delivery. A trading day is any day on which securities
are traded on the NYSE.
Any Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
IN ALL CASES, COMMON SHARES SHALL NOT BE DEEMED VALIDLY TENDERED UNLESS A
PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL (OR A FACSIMILE
THEREOF) IS RECEIVED BY THE DEPOSITARY.
Notwithstanding any other provision hereof, payment for Common Shares
purchased pursuant to the Offer will, in all cases, be made only after timely
receipt by the Depositary of (i) the Common Share Certificates, evidencing such
Common Shares, or a Book-Entry Confirmation of the delivery of such Common
Shares, if available, (ii) a properly completed and duly executed Letter of
Transmittal (or manually signed facsimile thereof) (or in the case of a
book-entry transfer, an Agent's Message) and (iii) any other documents required
by the Letter of Transmittal.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Common Shares pursuant to any of the procedures described above will be
determined by Purchaser in its sole discretion, whose determination will be
final and binding on all parties. Purchaser reserves the absolute right to
reject any or all tenders of any Common Shares determined by it not to be in
proper form or if the acceptance for payment of, or payment for, such Shares
may, in the opinion of Purchaser's counsel, be unlawful. Purchaser also reserves
the absolute right, in its sole discretion, to waive any of the conditions of
the Offer, to the extent permitted by the Merger Agreement and applicable laws
or any defect or irregularity in any tender with respect to Common Shares of any
particular shareholder, whether or not similar defects or irregularities are
waived in the case of other shareholders. No tender of Common Shares will be
deemed to have been validly made until all defects and irregularities have been
cured or waived.
Purchaser's interpretation of the terms and conditions of the Offer
(including the Letter of Transmittal and the instructions thereto) will be final
and binding. None of Parent, Purchaser, the Dealer Manager, the Depositary, the
Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or will incur any
liability for failure to give any such notification.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of Purchaser as
such shareholder's proxies, each with full power of substitution, to the full
extent of such shareholder's rights with respect to the Common Shares tendered
by such shareholder and accepted for payment by Purchaser (and any and all
noncash dividends, distributions, rights, other Common Shares, or other
securities issued or issuable in respect of such Common Shares on or after the
date of this Offer to Purchase). All such proxies shall be considered coupled
with an interest in the tendered Common Shares. This appointment will be
effective if, when, and only to the extent that, Purchaser accepts such Common
Shares for payment pursuant to the Offer. Upon such acceptance for payment, all
prior proxies given by such shareholder with respect to such Common Shares and
other securities will, without further
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<PAGE> 10
action, be revoked, and no subsequent proxies may be given. The designees of
Purchaser will, with respect to the Common Shares and other securities for which
the appointment is effective, be empowered to exercise all voting and other
rights of such shareholder as they in their sole discretion may deem proper at
any annual, special, adjourned or postponed meeting of the Company's
shareholders, by written consent or otherwise, and Purchaser reserves the right
to require that, in order for Common Shares or other securities to be deemed
validly tendered, immediately upon Purchaser's acceptance for payment of such
Common Shares, Purchaser must be able to exercise full voting rights with
respect to such Common Shares.
To prevent backup Federal income tax withholding with respect to payment to
certain shareholders of the purchase price for Common Shares purchased pursuant
to the Offer, each such shareholder must provide the Depositary with such
shareholder's correct Taxpayer Identification Number and certify that such
shareholder is not subject to backup Federal income tax withholding by
completing the substitute Form W-9 in the Letter of Transmittal. If backup
withholding applies with respect to a shareholder, the Depositary is required to
withhold thirty-one percent (31%) of any payments made to such shareholder. See
Instruction 10 of the Letter of Transmittal.
Common Shares Owned by ESOP. According to the Merger Agreement, as of the
close of business on June 2, 1998, there were 104,726 ESOP Preferred Shares, all
held of record by the ESOP Trustee. According to the Certificate of Designations
Series A ESOP Convertible Preferred Stock, the ESOP Trustee, as the holder of
the ESOP Preferred Shares, may elect at any time to convert the ESOP Preferred
Shares into Common Shares at a ratio of one-to-one. After conversion, these
Common Shares are eligible for tender pursuant to the Offer.
Pursuant to the organizational documents of the ESOP, in the case of a
tender or exchange offer with respect to Company Common Stock that does not
apply to ESOP Preferred Shares, the ESOP Trustee is required to request
instructions from each ESOP participant as to whether the Common Shares into
which the ESOP Preferred Shares allocated to such participant's account are
convertible should be tendered in response to the Offer. The ESOP Trustee must
then convert and tender, or continue to hold or not tender such ESOP Preferred
Shares in accordance with such instructions. Subject to applicable law, the
organizational documents of the ESOP also provide that the ESOP Trustee may not
convert or tender allocated ESOP Preferred Shares as to which no instructions
are received.
ESOP participants should contact the ESOP Trustee to instruct it whether to
tender their Common Shares into which their ESOP Preferred Shares are
convertible. Under applicable law and the organizational documents of the ESOP,
a participant's direction to the ESOP Trustee is confidential.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (the "Company 1997 10-K"), the ESOP is a non-leveraged
defined contribution plan. Accordingly, there are no unallocated ESOP Preferred
Shares, with the possible exception of forfeited ESOP Preferred Shares.
Purchaser's acceptance for payment of Common Shares tendered pursuant to
the Offer will constitute a binding agreement between the tendering shareholder
and Purchaser upon the terms and subject to the conditions of the Offer.
4. WITHDRAWAL RIGHTS.
Tenders of Common Shares made pursuant to the Offer are irrevocable except
that such Common Shares may be withdrawn at any time prior to the Expiration
Date and, unless theretofore accepted for payment by Purchaser pursuant to the
Offer, may also be withdrawn at any time after Saturday, August 8, 1998.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Common Shares or is unable to accept Common Shares for payment pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer, the Depositary may, nevertheless, on behalf of Purchaser, retain tendered
Common Shares, and such Common Shares may not be withdrawn except to the extent
that tendering shareholders are entitled to withdrawal rights as described in
this Section 4. Any such delay will be by an extension of the Offer to the
extent required by law.
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<PAGE> 11
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person who
tendered the Common Shares to be withdrawn, the number of Common Shares to be
withdrawn, and the name of the registered holder, if different from that of the
person who tendered such Common Shares. If Common Share Certificates evidencing
Common Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Common Share
Certificates, the serial numbers shown on such Common Share Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution, unless such Common Shares have
been tendered for the account of an Eligible Institution. If Common Shares have
been tendered pursuant to the procedure for book-entry transfer as set forth in
Section 3, any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Common Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding. None of Parent, Purchaser, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Any Common Shares properly withdrawn will thereafter be deemed not to have
been validly tendered for purposes of the Offer. However, withdrawn Common
Shares may be retendered at any time prior to the Expiration Date by following
the procedures described in Section 3.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The following discussion is a summary of the material Federal income tax
consequences of the Offer and the Merger to holders of Common Shares who hold
their Common Shares as capital assets. This summary is based upon laws,
regulations, rulings and decisions in effect on the date hereof, all of which
are subject to change, retroactively or prospectively, and to possibly differing
interpretations. The discussion set forth below is for general information only
and may not apply to certain categories of holders of Common Shares subject to
special treatment under the Internal Revenue Code of 1986, as amended (the
"Code"), including, but not limited to, broker-dealers, banks, tax-exempt
organizations, insurance companies, holders who are not United States persons
(as defined in Section 7701(a)(30) of the Code) and holders who acquired such
Common Shares pursuant to the exercise of employee stock options or otherwise as
compensation. In addition, the discussion does not address the state, local or
foreign tax consequences of the Offer and the Merger.
EACH HOLDER OF COMMON SHARES IS URGED TO CONSULT SUCH HOLDER'S TAX ADVISOR
WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
OFFER AND THE MERGER.
General Tax Consequences of the Offer and the Merger. The receipt of cash
for Common Shares pursuant to the Offer or the Merger will be a taxable
transaction for Federal income tax purposes and may also be a taxable
transaction under applicable state, local, foreign and other tax laws. For
Federal income tax purposes, each selling shareholder would generally recognize
gain or loss equal to the difference between the amount of cash received and
such shareholder's adjusted tax basis for the sold Common Shares. Such gain or
loss will be capital gain or loss (assuming the Common Shares are held as a
capital asset) and any such capital gain or loss will be long term if, as of the
date of sale, the Common Shares were held for more than one year or will be
short term if, as of such date, the Common Shares were held for one year or
less.
The Taxpayer Relief Act of 1997 (the "1997 Act") created several new
categories of capital gains applicable to noncorporate taxpayers. Under prior
law, noncorporate taxpayers were generally taxed at a maximum rate of
twenty-eight percent (28%) on net capital gain (generally, the excess of net
long-term capital gain over net short-term capital loss). Noncorporate taxpayers
are now generally taxed at a maximum rate of twenty percent (20%) on net capital
gain attributable to the sale of property held for more than eighteen months,
and a maximum rate of twenty-eight percent (28%) on net capital gain
attributable to the
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<PAGE> 12
sale of property held for more than one year but not more than eighteen months.
The 1997 Act did not affect the treatment of short-term capital gain or loss
(generally, gain or loss attributable to capital assets held for one year or
less) and did not affect the taxation of capital gains in the hands of corporate
taxpayers.
Backup Withholding. Unless a shareholder of the Company complies with
certain reporting or certification procedures or is an "exempt recipient" (i.e.,
in general, corporations and certain other entities) under applicable provisions
of the Code and Treasury Regulations promulgated thereunder, such shareholder
may be subject to withholding tax of thirty-one percent (31%) with respect to
the cash payments received pursuant to the Offer and/or the Merger. Shareholders
should consult their brokers or the Depositary to ensure compliance with such
procedures. A foreign shareholder of the Company should consult its tax advisor
with respect to the application of withholding rules to it with respect to the
cash payments received pursuant to the Offer and/or the Merger.
6. PRICE RANGE OF SHARES; DIVIDENDS.
According to the Company 1997 10-K, the Common Shares have been listed and
principally traded on The Nasdaq Stock Market, and quoted under the symbol
"ALFC" according to published financial sources. The following table sets forth,
for the quarters indicated, the high and low sales prices per Common Share on
The Nasdaq Stock Market and the amount of cash dividends paid per Common Share,
as reported in the Company 1997 10-K for periods in 1996 and 1997, and as
reported by published financial sources with respect to periods in 1998:
<TABLE>
<CAPTION>
CASH
HIGH LOW DIVIDENDS
---- --- ---------
<S> <C> <C> <C>
1996:
First Quarter............................................. 18 1/4 16 1/2 .05
Second Quarter............................................ 21 1/2 15 .05
Third Quarter............................................. 20 15 1/4 .05
Fourth Quarter............................................ 18 3/4 15 3/4 .06
1997:
First Quarter............................................. 19 17 .06
Second Quarter............................................ 20 15 3/4 .06
Third Quarter............................................. 23 3/4 18 3/4 .06
Fourth Quarter............................................ 24 19 3/4 .07
1998:
First Quarter............................................. 22 1/2 21 .07
Second Quarter (through June 9)........................... 29 22 .07
</TABLE>
On Tuesday, June 2, 1998, the last trading day prior to the Company's
announcement that the Company Board was willing to recommend, subject to certain
limitations, the acquisition of the outstanding Common Shares by Parent for $30
per Common Share, the reported closing price of the Common Shares on The Nasdaq
Stock Market was $26 per Common Share. On Tuesday, June 9, 1998, the last
trading day before commencement of the Offer, the last reported closing price on
The Nasdaq Stock Market was $28 7/8 per Common Share. SHAREHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE COMMON SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON SHARES; EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS.
The purchase of Common Shares pursuant to the Offer will reduce the number
of Common Shares that might otherwise trade publicly and could reduce the number
of holders of Common Shares, which could adversely affect the liquidity and
market value of the remaining Common Shares held by the public. Following
consummation of the Offer, a large percentage of the outstanding Common Shares
will be owned by Purchaser.
10
<PAGE> 13
According to the National Association of Securities Dealers' ("NASD")
published guidelines, The Nasdaq Stock Market would consider delisting the
Common Shares if, among other things, the number of shareholders of round lots
should fall below 400, or the number of publicly held Common Shares (exclusive
of holdings of officers, directors and their families and other concentrated
holdings of ten percent (10%) or more ("Nasdaq Excluded Holdings")) should fall
below 750,000 or the aggregate market value of publicly held Common Shares
(exclusive of Nasdaq Excluded Holdings) should fall below $5,000,000. If, as a
result of the purchase of Common Shares pursuant to the Offer or otherwise, the
Common Shares no longer meet the requirements of The Nasdaq Stock Market for
continued listing and the listing of the Common Shares is discontinued, the
market for the Common Shares could be adversely affected.
If The Nasdaq Stock Market were to delist the Common Shares, it is possible
that the Common Shares would continue to trade on another securities exchange or
in the over-the-counter market and that price or other quotations would be
reported by such exchange or other sources. The extent of the public market
therefor and the availability of such quotations would depend, however, upon
such factors as the number of shareholders and/or the aggregate market value of
such securities remaining at such time, the interest in maintaining a market in
the Common Shares on the part of securities firms, the possible termination of
registration under the Exchange Act as described below and other factors.
Purchaser cannot predict whether the reduction in the number of Common Shares
that might otherwise trade publicly would have an adverse or beneficial effect
on the market price for or marketability of the Common Shares or whether it
would cause future market prices to be higher or lower than the Offer Price.
The Common Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the SEC if the
Common Shares are not listed on a national securities exchange and there are
fewer than 300 record holders of the Common Shares. In such case, the Common
Shares would no longer continue to be "margin securities." The termination of
registration of the Common Shares under the Exchange Act would substantially
reduce the information required to be furnished by the Company to holders of
Common Shares and to the SEC and would make certain provisions of the Exchange
Act, such as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement in connection with shareholders'
meetings pursuant to Section 14(a), and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions, no longer applicable
to the Common Shares. In addition, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability to
dispose of such securities pursuant to Rule 144 promulgated under the Securities
Act.
The Common Shares are currently "margin securities," as such term is
defined under the rules of the Board of Governors of the Federal Reserve System,
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of such securities. It is likely that the Common Shares will
continue to be "margin securities" following consummation of the Offer.
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The information concerning the Company contained in this Offer to Purchase,
including financial information, has been taken from or based upon the Company
1997 10-K and other publicly available documents and records on file with the
SEC and other public sources. None of Parent, Purchaser, the Dealer Manager, the
Depositary or the Information Agent assumes any responsibility for the accuracy
or completeness of the information concerning the Company contained in such
documents and records or for any failure by the Company to disclose events which
may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Parent, Purchaser, the Dealer Manager, the
Depositary or the Information Agent.
According to information filed by the Company with the SEC, the Company is
an Iowa corporation whose principal executive offices are located at 701 Fifth
Avenue, Des Moines, Iowa 50391. As of December 31, 1997, the Company had 126
employees according to the 1997 Annual Report.
11
<PAGE> 14
The Company, through its subsidiary, underwrites, markets and distributes a
select portfolio of life insurance and annuity products to individuals who live
primarily in rural and suburban areas of the United States.
Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the financial statements contained in the Company
1997 10-K, the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1998 (the "Company 1998 10-Q") and other documents filed by the
Company with the SEC. More comprehensive financial information is included in,
and the financial information that follows is qualified in its entirety by
reference to, the Company 1997 10-K, the Company 1998 10-Q and such other
documents filed by the Company with the SEC. The Company 1997 10-K, the Company
1998 10-Q and such other documents may be examined at and copies may be obtained
from the offices of the SEC or the NASD in the manner set forth below.
ALLIED LIFE FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER COMMON SHARE AMOUNTS)
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31, AT OR FOR THE
-------------------------------------- THREE MONTHS ENDED
1995 1996 1997 MARCH 31, 1998
---------- ---------- ---------- ------------------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues........................... $ 75,311 $ 80,710 $ 90,252 $ 24,157
Net income............................... 9,712 8,073 10,473 1,342
Earnings per share (diluted)............. 1.75 1.39 1.94 .20
Dividends per Common Share............... .17 .21 .25 .07
BALANCE SHEET DATA:
Total investments........................ 660,926 722,339 787,985 821,611
Total assets............................. 759,947 835,600 904,457 943,002
Total liabilities........................ 658,264 735,658 790,300 827,853
Total stockholders' equity............... 101,682 99,942 114,157 115,149
</TABLE>
The Company is subject to the information and reporting requirements of the
Exchange Act and is required to file reports and other information with the SEC
relating to its business, financial condition and other matters. Information, as
of particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities, any material interests of such persons in transactions
with the Company and other matters is required to be disclosed in proxy
statements distributed to the Company's shareholders and filed with the SEC.
These reports, proxy statements and other information should be available for
inspection at the public reference facilities of the SEC located in Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and also should be
available for inspection and copying at prescribed rates at the following
regional offices of the SEC: Seven World Trade Center, New York, New York 10048;
and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this
material may also be obtained by mail, upon payment of the SEC's customary fees,
from the SEC's principal office at 450 Fifth Street, N.W., Washington, D.C.
20549. The SEC also maintains an Internet web site at http://www.sec.gov that
contains reports, proxy statements and other information. Reports, proxy
statements and other information concerning the Company should also be available
for inspection at the offices of The Nasdaq Stock Market, 1735 K Street, N.W.,
Washington, D.C. 20006.
12
<PAGE> 15
9. CERTAIN INFORMATION CONCERNING PURCHASER AND PARENT.
Purchaser. Purchaser is a newly incorporated Ohio corporation organized in
connection with the Offer and the Proposed Merger and has not carried on any
activities other than in connection with the Offer and the Proposed Merger. The
principal offices of Purchaser are located at One Nationwide Plaza, Columbus,
Ohio 43215. The Purchaser is a wholly owned subsidiary of Parent. Until
immediately prior to the time that Purchaser will purchase Common Shares
pursuant to the Offer, it is not expected that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Proposed Merger. Because Purchaser is newly formed and has
minimal assets and capitalization, no meaningful financial information regarding
Purchaser is available.
Parent. Parent is an Ohio mutual insurance company with its principal
executive offices located at One Nationwide Plaza, Columbus, Ohio 43215. Parent
is the controlling company of the Nationwide Insurance Enterprise, an insurance
and financial services organization (the "Enterprise"). In 1997, Parent had $5.1
billion of net written premium. Parent is a party to the Nationwide Intercompany
Pooling Agreement (the "Nationwide Pooling Agreement") with 12 other property
and casualty insurance companies within the Enterprise which provides that
Parent shares in a specified percentage of the combined underwriting results and
dividends to policyowners incurred by such companies (the "Nationwide Pool").
The insurance companies comprising the Nationwide Pool were the sixth largest
property and casualty insurance group and were the fourth largest automobile
insurance group in the United States, with approximately $8.4 billion in total
net written premium at December 31, 1997 and approximately a 3.3% market share.
The principal lines of business of the Pool based on net written premium for the
year ended December 31, 1997 were personal auto (approximately 53.9%),
commercial operations (approximately 29.4%) and homeowners (approximately
12.9%).
Parent was originally chartered in the State of Ohio in 1925 as the Farm
Bureau Mutual Automobile Insurance Company and it adopted its present name in
1955. At December 31, 1997, the Enterprise employed approximately 28,000
employees and Parent had more than 4,300 exclusive career agents who market the
Enterprise's core property and casualty products, individual life insurance and
annuity products as well as other financial services.
As an Ohio mutual insurance company, Parent is not subject to the
information and reporting requirements of the Exchange Act and is not required
to file reports and other information with the SEC relating to its business,
financial condition and other matters. However, Parent reports financial and
other information to the Ohio Department of Insurance on at least an annual
basis and is subject to periodic reviews by that Department. Information should
be on file and available for inspection at the offices of the Ohio Department of
Insurance, 2100 Stella Court, Columbus, Ohio 43266-0566.
Set forth below are certain supplemental financial highlights relating to
Parent. Additional financial information is included in other documents filed by
Parent with the Ohio Department of Insurance. The financial information summary
set forth below is qualified in its entirety by reference to such other
documents which have been filed with the Department, including the financial
information and related notes contained therein, which are incorporated herein
by reference. These documents may be inspected at and copies may be obtained
from the offices of the Department in the manner set forth above.
13
<PAGE> 16
NATIONWIDE MUTUAL INSURANCE COMPANY (1)
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31, AT OR FOR THE
----------------------------------------- THREE MONTHS ENDED
1995 1996 1997 MARCH 31, 1998
----------- ----------- ----------- ------------------
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues................... $4,518,290 $4,923,700 $4,992,363 $1,274,857
Net income....................... 75,664 153,021 1,627,008 147,260
BALANCE SHEET DATA:
Investments...................... 11,751,662 12,204,878 15,639,331 16,253,582
Total assets..................... 13,217,223 13,771,825 17,200,711 17,886,518
Policy and claim liabilities..... 8,084,377 8,207,715 8,120,629 8,086,505
Total liabilities................ 8,978,862 9,134,962 9,121,280 8,999,356
Policyholders' surplus........... 4,238,361 4,636,863 8,079,430 8,867,161
</TABLE>
10. SOURCE AND AMOUNT OF FUNDS.
Purchaser estimates that the total amount of funds required to purchase
Common Shares pursuant to the Offer (exclusive of those Common Shares held by
Allied Mutual) and to pay all related costs and expenses, will be approximately
$96 million. See also Section 16. Purchaser plans to obtain all funds needed for
the Offer through a capital contribution from Parent. Parent plans to obtain
such funds entirely from existing cash accounts. Parent has in excess of $7.0
billion available for such purpose.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
During the summer of 1997, representatives of Parent tentatively identified
the Company as a possible acquisition candidate. Parent enlisted the assistance
of Credit Suisse First Boston in connection with its analysis of the Company as
a possible acquisition candidate. That analysis continued over several months.
On January 26, 1998, Dimon R. McFerson, Chairman and Chief Executive
Officer - Nationwide Insurance Enterprise, telephoned John E. Evans, Chairman of
the Company, to express Parent's interest in a possible transaction with the
Company, Allied Mutual and Allied Group, Inc. (collectively, "Allied"). On
January 28, 1998, Parent's representatives met with representatives of the
Company in Des Moines, Iowa to discuss Parent's interest in acquiring the
business and assets of Allied via a statutory merger. Mr. Evans and Douglas L.
Andersen, President and Chief Executive Officer of Allied Group, Inc., expressed
interest in a possible transaction, but indicated several concerns associated
with obtaining regulatory approvals from the Iowa Insurance Commission. After
the January 28, 1998 meeting, Parent forwarded a draft confidentiality agreement
to Mr. Andersen to facilitate further discussions.
On February 10, 1998, at the request of Allied, Parent sent a letter
enclosing draft merger agreements to Allied contemplating a transaction whereby
Parent's wholly owned subsidiaries would acquire Allied Group, Inc. and the
Company and Parent would merge with Allied Mutual Insurance Company. The letter
stated that Parent was prepared to immediately conduct due diligence and to
finalize the draft merger agreements. The draft merger agreements provided for
the purchase of all outstanding shares of the Company for $47 per share and the
purchase of all outstanding shares of Allied Life Financial Corporation for $30
per share, subject to the satisfaction of certain conditions. On February 10,
1998, Mr. Andersen forwarded to Parent Allied's own draft confidentiality
agreement.
At the request of Mr. Evans made during the parties' meeting of January 28,
1998, Parent's representatives met with the Iowa Insurance Commissioner on
February 13, 1998 to express Parent's interest in acquiring Allied and to
discuss the regulatory framework applicable to such an acquisition. Based upon
those discussions, Parent reiterated its continued interest in moving forward
with a possible transaction.
14
<PAGE> 17
Mr. Andersen in turn told Parent's representatives that Parent's interest
in acquiring Allied would be presented to the respective boards of directors of
Allied. Parent's offer to appear before the respective boards to answer
questions and to more fully explain its proposal was rejected by Mr. Andersen.
To the best of Parent's knowledge, the respective boards of directors of Allied
met jointly on February 7, 1998 and rejected Parent's indication of interest. At
this point Parent and Allied had not yet reached agreement on the terms of a
confidentiality agreement primarily because of Allied's insistence on including
a standstill agreement in such confidentiality agreement. On February 20, 1998,
Mr. Andersen informed Mr. McFerson via telephone that the respective boards of
Allied had rejected Parent's indication of interest and that neither Mr.
Andersen nor anyone else at Allied had the authority to discuss the matter
further.
On February 20, 1998, Parent telefaxed to Allied a letter indicating that
Parent was terminating its attempt to negotiate a modified confidentiality
agreement since Allied had refused to sign the confidentiality agreement
provided by Parent.
On May 4, 1998, Mr. McFerson telephoned Mr. Evans to express Parent's
renewed interest in exploring the possibility of a transaction between Parent
and Allied. Mr. Evans said Allied was not interested in pursuing such
discussions and that any future inquiries should be directed to Mr. Andersen,
but not for at least another 30 days.
On May 18, 1998, Parent announced its intention to commence a tender offer
for all the shares of Allied Group common stock (the "Allied Group Offer"). On
May 19, 1998, Purchaser commenced the Allied Group Offer. Also on May 18 and 19,
1998, Parent announced an offer to merge with Allied Mutual, which owns a
controlling interest in the Company.
On May 28, 1998, Parent entered into separate confidentiality agreements
with the Company, Allied Mutual, and Allied Group. From May 28 through May 31,
1998, representatives of Parent's financial advisor met with representatives of
the Company's financial advisors and the financial advisors to Allied Mutual and
Allied Group to discuss the various potential transactions involving Parent and
Allied.
On May 31, 1998, a representative of the Company's outside legal advisor
discussed with a representative of Parent certain legal issues including, among
others, issues relating to the Allied Joint Marketing Agreement.
On June 2, 1998, Parent delivered a draft merger agreement providing for,
among other things, a $30 per Common Share purchase price, an unspecified
minimum tender offer condition, and a $5 million termination fee payable by the
Company under specified conditions. Negotiations between representatives of the
Company and representatives of Parent commenced in the afternoon of June 2,
1998.
On June 3, 1998, representatives of the Company continued negotiations with
representatives of Parent with respect to various provisions of the proposed
merger agreement. On the evening of June 3, 1998, after having satisfactorily
resolved all issues, the Company, Parent and the Purchaser executed the Merger
Agreement.
12. PURPOSE OF THE OFFER AND THE MERGER; THE MERGER AGREEMENT; CERTAIN
CONSIDERATIONS.
General. Pursuant to the Merger, each then outstanding Common Share (other
than Common Shares owned by Parent or Common Shares held by shareholders who
perfect any appraisal rights under the Iowa Corporation Act) would be converted
into the right to receive $30.00 net per Common Share in cash.
Except in the case of a "short-form" merger as described below, under the
Iowa Corporation Act, the approval of the Company Board and the affirmative vote
of the holders of a majority of the outstanding Common Shares, 6.75% Preferred
Shares and ESOP Preferred Shares (including any shares owned by Parent or
Purchaser), voting together as a single class, would be required to approve the
Merger. If Purchaser acquires through the Offer or the Shareholder Agreement the
right to vote at least a majority of the voting securities of the Company, and
if the Insurance Regulatory Approval Condition and the conditions relating to
the merger of Allied Mutual with and into Parent were each satisfied, Purchaser
would have sufficient voting power to ensure approval of the Proposed Merger by
holders of the Common Shares.
15
<PAGE> 18
The Iowa Corporation Act also provides that if a parent corporation owns at
least ninety percent (90%) of the outstanding shares of each class of stock of a
subsidiary, the parent company can effect a "short-form" merger with that
subsidiary without a shareholder vote. Accordingly, if Purchaser were to acquire
at least ninety percent (90%) of the outstanding Common Shares (including the
ESOP Preferred Shares after conversion to Common Shares) and 6.75% Preferred
Shares, respectively, and if the Insurance Regulatory Approval Condition and
other applicable conditions were satisfied, then Purchaser could, and intends
to, effect the Merger without any action by any other shareholder of the
Company.
The Merger Agreement
Pursuant to the Merger Agreement and following the consummation of the
Offer, Parent, Purchaser and the Company have agreed to effect the Merger in
accordance with the provisions of the Merger Agreement as promptly as
practicable following the satisfaction or waiver of certain conditions to the
Merger. Set forth below is a description of the material provisions of the
Merger Agreement.
The Offer. In the Merger Agreement, Purchaser has agreed, subject to
certain conditions, and among other things, to offer $30.00 per Common Share net
to the seller in cash without interest thereon. The Merger Agreement provides
that, without the consent of the Company, the Purchaser shall not (a) reduce the
number of Common Shares sought in the Offer, (b) reduce the Offer Price to a
price less than $30.00 per Common Share, (c) amend or add to the conditions set
forth below under Section 14, (d) except as provided in the next sentence,
extend the Offer, (e) change the form of consideration payable in the Offer, (f)
waive the Minimum Condition or the Insurance Regulatory Condition without the
Company's consent, or (g) amend any other term of the Offer in any manner
adverse to the holders of the Common Shares.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, (A) extend the Offer, if at the scheduled or extended expiration date
of the Offer any of the conditions to the Purchaser's obligation to purchase the
Common Shares shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (B) extend the Offer for any period required
by any rule, regulation, interpretation or position of the SEC or the staff
thereof applicable to the Offer and (C) extend the Offer for any reason on one
or more occasions for an aggregate period of not more than 10 Business Days (for
all such extensions) pursuant to this clause (C) beyond the latest expiration
date that would otherwise be permitted under clause (A) or (B) of this sentence.
Subject to the terms and conditions of the Offer and the Merger Agreement,
Purchaser shall, and Parent shall cause Purchaser to accept for payment, and pay
for, all Common Shares validly tendered and not withdrawn pursuant to the Offer
that Purchaser becomes obligated to accept for payment, and pay for, pursuant to
the Offer as soon as practicable after the expiration of the Offer.
Allied Actions. In the Merger Agreement, the Company approves of and
consents to the Offer and represents that the Board of Directors of the Company,
at a meeting duly called and held, duly and unanimously adopted resolutions
adopting the Merger Agreement, approving the Offer and the Merger (and effecting
the other actions referred to herein), determining that the terms of the Offer
and the Merger are fair to, and in the best interests of, the Company's
shareholders, recommending that the Company's shareholders accept the Offer,
tender their shares pursuant to the Offer and approve the Merger Agreement (if
required) and approving the acquisition of Common Shares by Purchaser pursuant
to the Offer and the other transactions contemplated by the Merger Agreement.
On the date the Offer Documents are filed with the SEC, the Company shall
file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with
respect to the Offer (as amended from time to time, the "Schedule 14D-9")
containing the recommendation described in the above paragraph and shall mail
the Schedule 14D-9 to the shareholders of the Company. The Company agrees that
the Schedule 14D-9 shall comply (and, as amended from time to time, shall
comply) as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder and, on the
date filed with the SEC and on the date first published, sent or given to the
Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no covenant is made by
the Company with respect to
16
<PAGE> 19
information supplied by Parent or Purchaser specifically for inclusion in the
Schedule 14D-9. Each of the Company, Parent and Purchaser agrees promptly to
correct any information provided by it for use in the Schedule 14D-9 if and to
the extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps necessary to
amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so
amended or supplemented to be filed with the SEC and disseminated to the
Company's shareholders, in each case as and to the extent required by applicable
federal securities laws. Parent and its counsel shall be given reasonable
opportunity to review and comment upon the Schedule 14D-9 prior to its filing
with the SEC or dissemination to shareholders of the Company. The Company agrees
to provide Parent and its counsel any comments the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt of such comments.
In connection with the Offer and the Merger and simultaneously with the
execution of the Merger Agreement, the Company shall cause its transfer agent to
furnish Purchaser promptly with mailing labels containing the names and
addresses of the record holders of Common Shares as of a recent date and of
those persons becoming record holders subsequent to such date, together with
copies of all lists of shareholders, security position listings and computer
files and all other information in the Company's possession or control regarding
the beneficial owners of Common Shares, and shall furnish to Purchaser such
information and assistance (including updated lists of shareholders, security
position listings and computer files) as Parent may reasonably request in
communicating the Offer and any and all amendments thereto to the Company's
shareholders. The Company further agrees that copies of any and all amendments
to the Schedule 14D-9 shall be disseminated to the Company's shareholders by
Parent and Purchaser. Subject to the requirements of applicable law, and except
for such steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Merger, Parent and Purchaser and their
agents shall hold in confidence the information contained in any such labels,
listings and files, will use such information only in connection with the Offer
and the Merger and, if the Merger Agreement shall be terminated, will, upon
request, deliver, and will use their reasonable efforts to cause their agents to
deliver, to the Company all copies and any extracts or summaries from such
information then in their possession or control.
The Merger. The Merger Agreement provides that, following the satisfaction
or waiver of the conditions set forth therein, Purchaser will be merged with and
into the Company, with the Company continuing as the Surviving Corporation, and
each Common Share then outstanding (other than Common Shares owned by Parent or
Purchaser shares held as treasury shares by the Company and Dissenting Shares)
will, by virtue of the Merger and without any action by the holder thereof, be
converted into the right to receive $30.00 per Common Share, net to the seller
in cash, without interest thereon, upon the surrender of the Certificate
formerly representing such Common Shares.
Representations and Warranties. The Merger Agreement contains
representations and warranties by the Company with respect to, among other
things, the organization, qualification and capitalization of the Company, the
subsidiaries of the Company, the authority of the Company relative to the Merger
Agreement, the absence of violations of law, required governmental filings, the
statutory financial statements and other financial statements of the Company's
insurance company subsidiaries and their actuarial reserves, the SEC filings of
the Company the absence of certain changes or events and of any undisclosed
liabilities, the inapplicability of state takeover statutes, compliance with
applicable law, the assets of the Company, environmental matters, contracts of
the Company, taxes and tax returns, benefit plans, labor relations and
employment, insurance issued by Allied Insurers, cancellations, operations
insurance, the properties of the Company, intellectual property, transactions
with affiliates, voting requirements applicable to the Merger and the status of
the Company's subsidiaries as regulated investment companies.
The Merger Agreement also contains representations and warranties of Parent
and Purchaser with respect to, among other things, their organization and
qualification, their authority relative to the Merger Agreement, the absence of
violations of law, and required governmental filings.
Covenants of the Company. In the Merger Agreement, the Company has
covenanted and agreed that, among other things, during the period from the date
of the Merger Agreement until the effective time of the Merger (the "Effective
Time"), unless Parent shall otherwise agree in writing, or except as otherwise
17
<PAGE> 20
contemplated in the Merger Agreement, (a) the Company and its subsidiaries shall
conduct their business only in the ordinary course of business and in the same
manner as conducted since December 31, 1997, and shall use all reasonable
efforts to preserve its services to and relationships with policyholders,
insurers, agents, sales and distribution organizations, underwriters, investment
customers, brokers, suppliers and all others so as to not impair its ongoing
business in any material respect; (b) the Company and its subsidiaries shall not
make a change in their dividend, underwriting, pricing, claims, risk retention,
investment or reinsurance practices or polices in any material respect, and
shall notify Parent of any material transactions involving a purchase or sale
(excluding investment transactions in the ordinary course of business consistent
with past practice, but including transactions involving the securitization of
assets or of any subsidiary and transactions involving derivative securities);
(c) the Company and its subsidiaries shall not make any material change in their
accounting practices, including changes in respect to establishment of reserves
for unearned premiums, losses, loss adjustment expenses, or depreciation or
amortization policies or rates; (d) the Company shall not, and shall not permit
any subsidiary to, (i) amend its charter or by-laws (unless contemplated
hereby), (ii) incur any individual Liability or series of related Liabilities in
excess of $1,000,000 other than in the ordinary course of business consistent
with past practice, (iii) incur any indebtedness for money borrowed in the
aggregate for the Company and the subsidiaries in excess of $10,000,000 for any
such indebtedness having a maturity of 90 days or less or $1,000,000 for any
such indebtedness having a maturity of more than 90 days, (iv) agree to any
merger, consolidation, demutualization, acquisition, redomestication, sale of
all or a substantial portion of its Assets, bulk or assumption reinsurance
arrangement or other similar reorganization, arrangement or business
combination, (v) prior to notifying Parent, enter into any partnership, joint
venture or profit sharing Contract, (vi) enter into any Contract limiting the
ability of the Company or of any subsidiary to engage in any Business, to
compete with any Person, to do business with any Person or in any location or to
employ any Person or limiting the ability of any Person to compete with such
party or any of the subsidiaries, (vii) enter into any Contract relating to the
direct or indirect guarantee of any obligation of any Person in respect of
indebtedness for borrowed money or other financial obligation of any Person
other than in the ordinary course of business consistent with past practice,
(viii) incur any material deterioration in its ability to maintain, access and
update policyholder records which deterioration is not reasonably reparable,
(ix) enter into any Contract that could materially and adversely affect the
consummation of the transactions contemplated hereby, or (x) modify any Contract
with respect to the subject of the foregoing clauses; (e) the Company shall not
permit any subsidiary to issue or sell any shares of or interests in, or rights
of any kind to acquire any shares of or interests in, or to receive any payment
based on the value of, the capital stock of or other equity interests in or any
securities convertible into shares of any capital stock of or other equity
interests in any subsidiary, or otherwise take any actions that would alter the
information set forth in the Allied Disclosure Schedule other than in the
ordinary course of business consistent with existing agreements and
arrangements; (f) except (x) as set forth in the Allied Disclosure Schedule, (y)
in the ordinary course of business consistent with past practice, or (z) as
required by the terms of agreements or plans already in effect, applicable Law
or as envisioned in the Statement of Operating Principles, the Company shall
not, and shall not permit any subsidiary to (i) adopt or implement, or commit to
adopt or implement, or materially amend, any collective bargaining,
compensation, employment, consulting, pension, profit sharing, bonus, incentive,
group insurance, termination, retirement or other employee benefit Contract,
plan or policy, (ii) enter into or materially amend any severance Contract,
(iii) increase in any manner the compensation of, or enter into any Contract
relating to the borrowing of money by, its directors, officers or other
employees, except pursuant to the terms of agreements or plans as currently in
effect and except for annual employee compensation increases made in the
ordinary course of business consistent with past practices; provided that in no
event shall any such individual increase in annual compensation exceed $400,000
per year, (iv) increase by more than 0.5% the aggregate number of its employees,
(v) pay or agree to pay any pension, retirement allowance or other employee
benefit not required by the current terms of any existing plan, agreement or
arrangement to any director, officer or other employee, whether past or present,
(vi) voluntarily recognize, or involuntarily become subject to, any labor
organization or any other Person as a collective bargaining representative of
one or more bargaining units comprising a material number of employees, or (vii)
other than obligations that arise by operation of law or under the by-laws of a
party as they exist on the date of the Merger Agreement, enter into, adopt or
increase any indemnification or hold harmless arrangements with any directors,
officers or other employees or agents of such party or any of the subsidiaries
or any other Person; (g) other than in the ordinary course of business
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<PAGE> 21
consistent with past practice, the Company shall not, and shall not permit any
subsidiary to, make any capital expenditures or expenditures or commitments for
expenditures for the purchase or lease of any products or services or group of
products or services (other than with respect to Investment Assets) which in one
or a series of related transactions exceed $500,000 or which in the aggregate
for the Company and the Allied subsidiaries taken as a whole exceed $2,500,000,
except for expenditures relating to the Merger Agreement and the consummation of
the transactions contemplated hereby, and expenditures required to be made
pursuant to existing Contracts to which the Company or any subsidiary is a
party, which Contracts are set forth in the Allied Disclosure Schedule; (h)
other than in the ordinary course of business consistent with past practice or
in connection with the redemption of outstanding guaranteed investment contracts
in the exercise of the Company's reasonable judgment, the Company shall not, and
shall not permit any subsidiary to, waive any rights with a value in excess of
$100,000 or any other rights which are material to any Contract or make any
payment, direct or indirect, of any Liability in excess of $100,000 before the
same comes due in accordance with its terms, in each case, including, but not
limited to, any provision of any Insurance Contract to permit a cash-out
thereof; (i) the Company and its subsidiaries shall not (i) sell, lease,
mortgage or otherwise grant any interest in or dispose of any of its Assets
which, individually or in the aggregate, are material to the financial condition
of the Company or of its subsidiaries taken as a whole, and, in the case of
Liens, for Permitted Liens and Liens not individually in excess of $500,000 and
not aggregating in excess of $2,000,000 or (ii) restructure, amend, modify or
otherwise affect any Investment Asset or any Contract relating thereto which is
material to the financial condition of the Company or its subsidiaries, and
described in clauses (i) and (ii), only in accordance with the statement of
investment policy set forth in the Company Disclosure Statement; and the Company
shall furnish to Parent a monthly report, in detail reasonably acceptable to
Parent, of all such transactions or other changes (other than changes in market
values or ordinary course changes such as interest payments, maturities, etc.)
affecting Investment Assets of the Company or its subsidiaries which took place
since the last such report; (j) the Company and its subsidiaries agree that they
shall not, other than pursuant to the operation of separate accounts involved in
real estate in the ordinary course, make any equity real estate investments
(other than through restructuring or foreclosure or pursuant to commitments
existing at the date hereof or to protect the value of existing investments in
the exercise of reasonable business judgment) and that neither the Company nor
its subsidiaries shall take any action, other than in the exercise of reasonable
business judgment and following discussion with Parent, which results,
individually or in the aggregate, in (i) the realization of any gross capital
loss or losses in an amount of $10,000,000 or more or (ii) an adverse impact on
the surplus of the Company or its subsidiary in an amount of $10,000,000 or
more; (k) other than in the ordinary course of business consistent with past
practice, or as required by applicable regulations, the Company shall not permit
any Company subsidiary to, enter into, waive, or amend any material Contract
which would involve the payment by the Company or any subsidiary of $500,000 or
more; (l) other than in the ordinary course of business consistent with past
practice, the Company shall not, and shall not permit any subsidiary to settle
or compromise any claim in any action, proceeding or investigation which could
result in an expenditure for the Company or its subsidiaries in excess of
$1,000,000; (m) the Company shall not, and shall not permit any subsidiary to,
purchase or otherwise acquire, except pursuant to a contract in effect on the
date of the Merger Agreement, (i) any controlling equity interest in any Person
(other than Investment Assets), (ii) any non-publicly traded securities in
excess of $5,000,000 per transaction or $5,000,000 per issuer or credit, (iii)
any investments in fixed income securities rated in NAIC Class 4, 5 or 6
non-publicly traded equity securities or Assets required to be shown on Schedule
BA of a Person's Annual Statement in excess of $5,000,000 per issuer or credit,
or (iv) any real property or mortgage investments except in the ordinary course
of managing the existing portfolio of real property and mortgage investments,
including foreclosing purchase money mortgages, extensions and refinancings; (n)
the Company shall not, and shall not permit any of its subsidiaries to, enter
into any new, or materially amend any existing, reinsurance Contract or
arrangements, except in accordance with existing reinsurance agreements or in
the ordinary course of business and consistent with past practices; (o) the
Company shall, and shall cause each of its subsidiaries to, maintain
uninterrupted its existing insurance coverage of all types in effect or procure
substantially similar substitute insurance policies with financially sound and
reputable insurance companies in at least such amounts and against such risks as
are currently covered by such policies if such coverage is available; (p) the
Company shall deliver to Parent as promptly as practicable after preparation
thereof, but in no event later than the date of filing with respect to unaudited
or audited, SAP Statements for each Company
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<PAGE> 22
insurer filed by or on behalf of such Company Insurer after the date hereof; (q)
reserved; (r) the Company shall inform Parent regarding the progress of any
material claim, action, suit litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes; (s) neither the Company nor any
subsidiary shall (i) make or rescind any material express or deemed election
relating to taxes, (ii) make a request for a Tax Ruling or enter into a Closing
Agreement, settlement or compromise with respect to any material Tax matter or
(iii) with respect to any material Tax matter, change any of its methods of
reporting income or deductions for federal income Tax purposes from those
employed in the preparation of its federal income Tax return for the taxable
year ending December 31, 1997, except as may be required by law; (t) neither the
Company nor its subsidiaries shall declare, set aside or pay any dividends or
distributions (whether in cash, stock or property) in respect of any capital
stock of any subsidiary (except as consistent with past practices) or redeem,
purchase or otherwise acquire any of such subsidiary's Capital stock; (u) except
as provided in the Company Disclosure Schedule, neither the Company nor any
subsidiary shall settle pending or threatened litigation in an amount exceeding
$1,000,000, other than settlement of pending or threatened litigation with
respect to claims arising under contracts of insurance or reinsurance
underwritten, ceded or assumed by any subsidiary which settlement will not have
a material adverse effect; (v) neither the Company nor any subsidiary shall do
any other act which would cause any representation or warranty of the Company or
any subsidiary to be or become untrue in any material respect unless required by
applicable law; and (w) neither the Company nor any subsidiary shall agree, in
writing or otherwise, to take any of the actions prohibited by the foregoing
clauses (a) through (v).
Acquisition Proposals. Pursuant to the Merger Agreement, the Company has
agreed that, subject to certain exceptions, it will not, and will not permit or
cause any of its subsidiaries or any of the officers or directors of it or its
subsidiaries to, and shall direct its and its subsidiaries' employees, agents
and representatives (including any investment banker, attorney or accountant
retained by it or any of its subsidiaries) not to, directly or indirectly,
initiate, solicit, encourage or otherwise facilitate any inquiries or the making
of any proposal or offer with respect to a merger, reorganization, share
exchange, consolidation or similar transaction involving, or any purchase of 15
percent or more of the assets or any equity securities of, the Company or any of
its Significant Subsidiaries (as defined in Regulation S-X promulgated by the
SEC) other than as set forth in the Company Disclosure Letter, or an other
business combination (any such proposal or offer, an "Acquisition Proposal").
The Merger Agreement further provides that the Company will not, and will
not permit or cause any of its subsidiaries or any of the officers and directors
of it or its subsidiaries to and shall direct it and its subsidiaries'
employees, agents and representatives (including any investment banker, attorney
or accountant retained by it or any of its subsidiaries) to, directly or
indirectly, engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition Proposal, whether made before or after the date of the Merger
Agreement, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; provided, however, that nothing contained in the Merger
Agreement shall prevent the Company or its Board of Directors from (i) complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal or (ii) at any time after 180 days from the date of the Merger
Agreement if the Merger shall not by such date have been approved by the
requisite vote of the Company's shareholders or (iii) at any time after one year
from the date of the Merger Agreement if the Merger shall not by such date have
been approved by the Commissioner of Insurance of the State of Iowa (A)
providing information in response to a request therefor by a Person who has made
an unsolicited bona fide written Acquisition Proposal if the Board of Directors
receives from the Person so requesting such information an executed
confidentiality agreement on terms substantially equivalent to those contained
in the Confidentiality Agreement dated as of May 28, 1998 among Parent,
Purchaser and the Company (the "Confidentiality Agreement"); (B) engaging in any
negotiations or discussions with any Person who has made an unsolicited bona
fide written Acquisition Proposal; or (C) recommending such an Acquisition
Proposal to the shareholders of the Company, if and only to the extent that, (i)
in each such case referred to in clause (A), (B) or (C) above, the Board of
Directors of the Company determines in good faith after consultation with
outside legal counsel that such action is necessary in order for its directors
to comply with their respective fiduciary duties under applicable law and (ii)
in each case referred to in clause (B) or (C) above, the Board of Directors of
the Company determines in good faith (after consultation with its
20
<PAGE> 23
financial advisor) that such Acquisition Proposal, if accepted, is reasonably
likely to be consummated, taking into account all legal, financial and
regulatory aspects of the proposal and the Person making the proposal and would,
if consummated, result in a more favorable transaction than the transaction
contemplated by the Merger Agreement, taking into account the long-term
prospects and interests of the Company and its shareholders. The Company will
immediately cease and cause to be terminated any then existing activities,
discussions or negotiations with any parties conducted prior to the date of the
Merger Agreement with respect to any of the foregoing. The Company agreed that
it will take the necessary steps to promptly inform the individuals or entities
referred to in the first sentence hereof of the obligations undertaken in this
paragraph and under the Merger Agreement. The Company will notify Parent
immediately if any such inquiries, proposals or offers are received by, any such
information is requested from, or any such discussions or negotiations are
sought to be initiated or continued with, any of its representatives indicating,
in connection with such notice, the name of such Person and the material terms
and conditions of any proposals or offers and thereafter shall keep Parent
informed, on a current basis, on the status and terms of any such proposals or
offers and the status of any such negotiations or discussions.
Stockholder Approval; Preparation of Proxy Statement. The Merger Agreement
provides that as soon as practicable following the purchase of the Common Shares
pursuant to the Offer, the Company shall prepare and file with the SEC the Proxy
Statement, if required by applicable law. The Company will use its reasonable
best efforts to cause the Proxy Statement to be mailed to its shareholders as
promptly as practicable. The Company agrees that none of the information
supplied or to be supplied by the Company specifically for inclusion in the
Proxy Statement will, at the date it is first mailed to the Company's
shareholders or at the time of the Shareholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder.
Parent agrees that none of the information supplied or to be supplied by
Parent specifically for inclusion in the Proxy Statement will, at the date it is
first mailed to the Company's shareholders or at the time of the Shareholders
Meeting, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
Subject to the fiduciary obligations of the Company Board, as described
above, the Merger Agreement provides that the Company will take all actions
necessary in accordance with applicable law and its Articles of Incorporation
and By-laws to convene a meeting, if required by applicable law, of its
shareholders (the "Shareholders Meeting") to consider and vote upon the approval
of the Merger Agreement and the Merger. Subject to the fiduciary obligations of
the Company Board, as described above, the Merger Agreement further provides
that the Company will, through its Board of Directors, recommend to its
shareholders approval of the Merger Agreement and the Merger. Without limiting
the generality of the foregoing, the Company has agreed that obligations
pursuant to the first sentence of this paragraph shall not be affected by (i)
the commencement, public proposal, public disclosure or communication to the
Company of any Acquisition Proposal or (ii) the withdrawal or modification by
the Company Board of its approval of the Merger Agreement or the Merger. The
Company will use its reasonable best efforts to hold the Shareholders Meeting as
soon as practicable after the date of the Merger Agreement.
Under certain circumstances, the short-form merger provisions of the Iowa
Corporation Act, could be applicable to the Merger. See the introduction to the
Offer to Purchase.
Access to Information. Pursuant to the Merger Agreement, subject to
applicable law, the Company shall (a) afford to Parent's and Purchaser's
accountants, legal counsel and other advisors ("Representatives") full access
during normal business hours through the period immediately prior to the
Effective Time to all of its and its Significant Subsidiaries' assets, books,
contracts, commitments and records (including, but not limited to, Tax returns),
and (b) during such period, shall furnish promptly to Parent and Purchaser all
such information concerning its business, assets and personnel or those of any
of its affiliates, in either clause (a) or
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(b), as Parent or Purchaser may reasonably request. Information provided by the
Company shall be kept confidential by Parent and Purchaser and shall not be
disclosed unless such information (1) was known to Parent or Purchaser or was in
their possession prior to the date of the Merger Agreement and was not
identified by the Company as being confidential, (2) is or becomes generally
available to the public other than by unauthorized disclosure by Parent or
Purchaser, (3) becomes available to Parent or Purchaser from a third party
authorized to make such disclosure, (4) is independently developed by Parent or
Purchaser, or (5) is required to be disclosed by law or by court order.
Reasonable Efforts. Each of the parties to the Merger Agreement agrees to
use all reasonable efforts to take, or cause to be taken all action, to do, or
cause to be done, and to assist and cooperate with the other parties in doing or
causing to be done, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the transactions
contemplated by the Merger Agreement, including, but not limited to, (i) the
holding of the Shareholders Meeting and the preparation of the Proxy Statement,
(ii) the obtaining of all governmental approvals, and all other necessary
actions or nonactions, waivers, consents and approvals from all appropriate
governmental entities and other persons and the making of all necessary
registrations and filings, (iii) the obtaining of the opinions and other
documents that are conditions to the closing of the Merger, (iv) the resolution
of all organizational and human resources issues relating to the transactions
contemplated by the Merger Agreement, (v) the obtaining or making of all
consents, environmental permits, filings or licenses necessary or desirable to
ensure that the business of the Surviving Corporation may be conducted without
disruption consistent with the past practice of each of the constituent
companies to the Merger and (vi) the defending of any legal proceedings
challenging the Merger Agreement or the consummation of the transactions
contemplated thereby, the defense of which shall, at the request of either the
Company or Parent, be conducted jointly by Parent and the Company on a basis
that is satisfactory to both the Company and Parent. The Company grants Parent
the right to decide for purposes of the insurance regulatory hearings whether to
submit regulatory applications for the Company, Allied Group and Allied Mutual
concurrently or separately, and whether to conduct the regulatory hearing and
approval proceeds concurrently or separately for each of the Company, Allied
Group and Allied Mutual. Both the Company and Parent agree to use all reasonable
efforts to coordinate and cooperate during the regulatory approval process.
Board of Directors; Corporate Governance. Promptly upon acceptance for
payment of the Common Shares by Purchaser pursuant to the Offer, Purchaser shall
be entitled to designate such number of directors on the Board of Directors of
(i) the Company as will give Purchaser, subject to compliance with Section 14(f)
of the Exchange Act, a majority of such directors, and the Company shall, at
such time, cause Purchaser's designees to be so elected by its existing Board of
Directors and (ii) each subsidiary of the Company and each committee of the
Board of Directors of the Company and each such Subsidiary as will give
Purchaser a majority of such directors or committee, and the Company shall, at
such time, cause Purchaser's designees to be so elected. In the event that
Purchaser's designees are elected to the Board of Directors of the Company,
until the Effective Time such Board of Directors shall have at least two
directors who are directors on the date of this Agreement and who are not
officers of the Company or directors of Allied Mutual (the "Independent
Directors"), provided that, in such event, if the number of Independent
Directors shall be reduced below two for any reason whatsoever, the remaining
Independent Director shall designate a person to fill such vacancy who shall be
deemed to be an Independent Director for purposes of the Merger Agreement or, if
no Independent Directors then remain, the other directors shall designate two
persons to fill such vacancies who shall not be officers or affiliates of the
Company or any of its subsidiaries, or officers or affiliates of Nationwide or
any of its subsidiaries, and such persons shall be deemed to be Independent
Directors for purposes of the Merger Agreement.
Subject to applicable law, the Company shall take all action requested by
Parent necessary to effect any such election, including mailing to its
stockholders the Information Statement containing the information required by
Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and the
Company agrees to make such mailing with the mailing of the Schedule 14D-9
(provided that Purchaser shall have provided to the Company on a timely basis
all information required to be included in the Information Statement with
respect to Purchaser's designees). In connection with the foregoing, the Company
will
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promptly, at the option of Parent, either increase the size of the Company's
Board of Directors and/or obtain the resignation of such number of its current
directors as is necessary to enable Purchaser's designees to be elected or
appointed to the Company's Board of Directors as provided above.
Following the election or appointment of the Purchaser's designees and
prior to the Effective Time, the affirmative vote of a majority of the
Independent Directors then in office shall be required by the Company to (i)
amend or terminate the Merger Agreement by the Company, (ii) exercise or waive
any of the Company's rights or remedies under the Merger Agreement or (iii)
extend the time for performance of Parent's and Purchaser's respective
obligations under the Merger Agreement.
Treatment of Stock Options; Certain Benefits. The Company has taken all
necessary action so that, effective as of the Effective Time, (i) cause each
outstanding employee or director stock option (the "Options") to purchase Common
Shares granted under the Allied Life Financial Corporation Executive Stock
Option Plan and the Allied Life Financial Corporation Long-Term Management
Incentive Plan (the "Option Plans"), whether or not then exercisable or vested,
will become fully exercisable and vested, (ii) cause each Option that is then
outstanding to be cancelled and (iii) in consideration of such cancellation
cause the Company (or, at Parent's option, Purchaser) to pay to such holders of
Options an amount in respect thereof equal to the product of (A) the excess, if
any, of the Merger Consideration over the exercise price of each such Option and
(B) the number of Common Shares previously subject to the Option immediately
prior to its cancellation (such payment to be net of withholding taxes). The
Company has agreed to use all commercially reasonable efforts to ensure that (a)
no consent of any holder of an Option is required to effect the transactions
contemplated by Section 2.11 of the Merger Agreement and (b) following the
Effective Time, no Option or any other option, warrant or right will give any
person any right to acquire any securities of the Surviving Corporation.
Indemnification and Insurance. From and after the Effective Time, Parent
agrees that it will indemnify and hold harmless each present and former director
and officer of the Company, (when acting in such capacity or as a member of the
Special Committee) determined as of the Effective Time (each, an Indemnitee and,
collectively, the "Indemnitees"), against any costs or expenses (including
reasonable attorneys' fees), judgements, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters existing or occurring at
or prior to the Effective Time, including without limitation any and all
shareholder lawsuits existing on the date hereof, to the fullest extent that the
Company would have been permitted under Iowa law and its charter or by-laws in
effect on the date hereof to indemnify such Person (and Parent has agreed to
advance expenses as incurred to the fullest extent permitted under applicable
law provided the Person to whom expenses are advanced provides a written
affirmation of his or her good faith belief that the standard of conduct
necessary for indemnification has been met, and an undertaking to repay such
advances if it is ultimately determined that such Person is not entitled to
indemnification).
The Surviving Corporation shall maintain the Company's existing directors'
and officers' liability insurance ("D&O Insurance") or D&O Insurance that is
substantially comparable to the Company's existing D&O Insurance for a period of
two years after the Effective Time so long as the annual premium therefor is not
excess of 200% of the last annual premium paid prior to the date hereof (such
last annual premium being hereinafter referred to as the "Current Premium");
provided, however, that if the existing D&O Insurance or substantially
comparable D&O Insurance cannot be acquired during the two-year period for not
in excess of 200% of the Current Premium, then the Surviving Corporation will
obtain as much D&O Insurance as can be obtained for the remainder of such period
for a premium not in excess (on an annualized basis) of 200% of the Current
Premium. If the D&O Insurance is terminated prior to the end of the sixth
anniversary of the Effective Time, the Surviving Corporation will purchase
extended reporting coverage under D&O Insurance covering claims made during the
remainder of such period with respect to acts which occurred prior to the
Effective Time.
Notification of Certain Other Matters. Pursuant to the Merger Agreement
each party shall promptly notify the other of any change or other event which,
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect including, but not limited to, any of the following: (a) any
written notice of a
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<PAGE> 26
default or event which, with notice or lapse of time or both, would become a
default, received by such party or any of the subsidiaries subsequent to the
date of the Merger Agreement and prior to the Effective Time, under any material
Contract to which such party or any of the subsidiaries is a party or by which
such party or any of the subsidiaries or any of their respective Assets may be
subject or bound; (b) the occurrence of any event which, with notice or lapse of
time or both, is reasonably likely to result in a default under any material
Contract to which such party or any of the subsidiaries is a party; (c) any
written notice from or to any Person alleging that the consent of such Person is
or may be required in connection with the execution of the Merger Agreement or
the consummation of the transactions contemplated hereby, and where the failure
to obtain such a consent is reasonably likely to have a Material Adverse Effect;
(d) any written notice from or to any Governmental Entity in connection with the
Merger Agreement or the transactions contemplated hereby; and (e) any matter
hereafter arising or discovered which, if existing or known at the date hereof,
would have been required to be set forth or described in the Nationwide
Disclosure Schedule or the Allied Disclosure Schedule, as the case may be;
provided, however, that no such supplemental or amended disclosure by any party
shall be deemed to cure any breach of a representation or warranty made as of
the date hereof, unless the other party so agrees in writing.
In furtherance of the foregoing, to the fullest extent permitted under
applicable Law, each party shall provide the other with copies (or, to the
extent written materials are not involved, oral notice) of proposed notices,
applications or any other communications to any Governmental Entity or rating
agency in connection with the Merger Agreement or the transactions contemplated
hereby, including, but not limited to, in respect of the Governmental Approvals,
in each case at least three (3) Business Days prior to dispatch of written
materials (or, to the extent written materials are not involved, prior to
initiation) and neither Parent nor the Company will dispatch (or, to the extent
written materials are not involved, initiate) such notice, application or
communication without the prior consent of the other party, which consent shall
not be unreasonably withheld or delayed.
Conditions to the Merger. The respective obligation of each party to the
Merger Agreement to effect the Merger shall be subject to the satisfaction,
prior to the closing of the transactions contemplated by the Merger Agreement,
of the following conditions: (a) 2,000,000 shares shall have been purchased
pursuant to the Offer; (b) if required by applicable law, the Merger Agreement
and the Merger shall have been approved and adopted by the requisite votes of
the respective shareholders of the Company at the Shareholders Meeting called
for such purpose; (c) the waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated and, other than
the filings provided for in subclauses (a) and (b) of the second sentence of
Section 2.3 of the Merger Agreement, all Governmental Approvals and other
Consents or Filings which the parties have agreed are required to be obtained
prior to the Effective Time shall have been obtained and not rescinded or
adversely modified or limited, if merely required to be filed, such filings
shall have been made and accepted, and all waiting periods prescribed by
applicable Law shall have expired or been terminated in accordance with
applicable Law; provided that no such Governmental Approval or other Consent or
Filing shall contain any conditions or limitations that compel or seek to compel
the Surviving Corporation to dispose of or to hold separately all or any
material portion of the Business or Assets of the parties and their respective
Subsidiaries taken as a whole or that impose or seek to impose any material
limitation on the ability of the Surviving Corporation and the Company
subsidiaries, taken as a whole, to conduct its Business or own its Assets after
the Effective Time in substantially the same manner as the parties and their
respective Subsidiaries presently conduct their Business or own their Assets;
and (d) no order entered or Law promulgated or enacted by any governmental
entity shall be in effect which would prevent the consummation of the Merger or
any other material transactions completed by the Merger Agreement, and no
proceeding brought by a governmental entity shall have been commenced and be
pending which seeks to restrain, enjoin, prevent, or materially delay or
restructure the Merger or any other material transactions contemplated by the
Merger Agreement.
Conditions to Obligation of the Company to Effect the Merger. The
obligations of the Company to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the following conditions, any
one or more of which may be waived by the Company, but only to the extent
permitted by Law: (a) Parent shall have performed and complied in all material
respects with all obligations, covenants and agreements
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<PAGE> 27
required to be performed and complied with by it under the Merger Agreement at
or prior to the Effective Time; and (b) the representations and warranties of
Parent contained in the Merger Agreement shall be true and correct when made and
at and as of the Effective Time as if made at and as of such date and time,
except to the extent that any breaches of such representations and warranties,
individually or in the aggregate, have not resulted, or are not reasonably
likely to result, in (i) losses, damages or expenses in excess of $1,000,000 or
(ii) a material adverse effect on the financial condition of the Surviving
Corporation, and the Company shall have received a certificate dated as of the
Effective Time of the Chairman and Chief Executive Officer, the President or an
Executive Vice President of Parent as to the satisfaction of this condition.
Conditions to Obligation of the Parent to Effect the Merger. The
obligations of the Parent to effect the Merger shall be subject to the
fulfillment at or prior to the Effective Time of the following conditions, any
one or more of which may be waived by the Parent, but only to the extent
permitted by Law: (a) the Company shall have performed and complied in all
material respects with all obligations, covenants and agreements required to be
performed and complied with by it under the Merger Agreement at or prior to the
Effective Time; and (b) the representations and warranties of the Company
contained in the Merger Agreement shall be true and correct in all material
respects when made and at and as of the Effective Time as if made at and as of
such date and time, except to the extent that any breaches of such
representations and warranties, individually or in the aggregate, have not
resulted, or are not reasonably likely to result, in (i) losses, damages or
expenses in excess of $1,000,000 or (ii) a material adverse effect on the
financial condition of the Surviving Corporation, and Parent shall have received
a certificate dated as of the Effective Time by any Vice President of the
Company as to the satisfaction of this condition.
Termination. The Merger Agreement may be terminated and the Merger
abandoned at any time prior to the Effective Time, whether before or after
approval of the Merger by the shareholders of Parent or of the Company: (a) by
mutual consent of Parent and the Company; (b) by Parent if the Board of
Directors of the Company withdraws its recommendation to the Company's
shareholders to approve the Merger; (c) by Parent or the Company if consummation
of the Merger is barred by a permanent injunction which is final and non-
appealable; (d) by the Company if, prior to the purchase of Common Shares
pursuant to the Offer, there is an Acquisition Proposal which the Board of
Directors of the Company determines represents a more favorable transaction to
the Company and its shareholders than the transactions contemplated by the
Merger Agreement, and if the Board of Directors, after consultation with outside
counsel, shall have determined that failure to terminate the Merger Agreement is
reasonably likely to be inconsistent with the fiduciary duties of the Board of
Directors of the Company under applicable law; (e) by the Company prior to the
completion of the Offer, upon a material breach of any representation or
warranty of Parent or Parent's failure to comply in any material respect with
any of its covenants or agreements, or if any representation or warranty of
Parent or Purchaser shall be or become untrue in any material respect, which
breach or failure to comply or untruth is not curable or, if curable, is not
cured within 30 Business Days (as defined in the Merger Agreement) after written
notice thereof has been given to Parent (materiality being construed in light of
the transactions contemplated by the Merger Agreement); (f) by Parent prior to
the completion of the Offer, upon a material breach of any representation, or
warranty of the Company or the Company's failure to comply in any material
respect with any of its covenants or agreements, or if any representation or
warranty of the Company shall be or become untrue in any material respect, which
breach or failure to comply or untruth is not curable or, if curable, is not
cured within 30 Business Days after written notice thereof has been given to the
Company (materiality being construed in light of the transactions contemplated
by the Merger Agreement); or (g) by Parent or by the Company, if Shares shall
not have been purchased pursuant to the Offer by December 31, 1998 (the
"Termination Date"), provided that such right to terminate the Merger Agreement
shall not be available to a party whose failure to fulfill any obligation under
the Merger Agreement has been the cause of the failure of such purchase to occur
by such date.
Effect of Termination. In the event of the termination of the Merger
Agreement by either Parent or the Company, as provided above, the Merger
Agreement shall thereafter become void and, except as provided in Section 8.2(b)
and Section 9.2 of the Merger Agreement, there shall be no Liability on the part
of either party hereto against the other party hereto, or on the part of its
directors, officers, employees, shareholders or agents (or those of any of the
subsidiaries or affiliates), except that any such termination shall be without
prejudice to
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the rights of either party hereto (or any of the subsidiaries or affiliates)
arising out of the willful breach by the other party (or any of the subsidiaries
or affiliates) of any representation or warranty or any covenant or agreement
contained in the Merger Agreement.
In the event of termination of the Merger Agreement by either the Company
or Purchaser pursuant to Section 8.1(b), (d), or (f) the Company shall pay
Purchaser an amount equal to all of the expenses incurred by Purchaser in
connection with the Merger Agreement, the negotiations leading to its execution,
the examination and investigation of Allied, the preparation and negotiation of
the Merger Agreement and related agreements, and in all other ways related to
the Merger, including, but not limited to, all fees and expenses incurred by
investment bankers, accountants, attorneys and other agents, plus the sum of $3
million in cash (the "Termination Payment") as liquidated damages and not as a
penalty, immediately upon such termination, in same-day funds, provided that
Purchaser shall not be in material breach of its obligations under the Merger
Agreement. Moreover, the Company shall pay the Termination Payment if the
Closing does not occur either (i) due to the Company's failure to satisfy a
condition over which it has sole control prior to December 31, 1998; or (ii)
because prior to December 31, 1999, the Company or any subsidiary or affiliate
of the Company or any of their respective shareholders publicly announces,
enters into a letter of intent relating to, enters into a definitive agreement
providing for, or consummates, a transaction, which, as announced, or as
provided in such letter or agreement or as consummated, provides for or relates
to the disposition of a controlling interest in the Company or the sale,
transfer or other distribution of assets constituting a majority (measured by
fair market value) of the consolidated assets of the Company.
Fees and Expenses. The Merger Agreement provides that, if the Merger is
not consummated, all costs and expenses incurred in connection with the Merger
Agreement and the transactions contemplated thereby shall be paid by the party
incurring such costs or expenses, except for expenses incurred in connection
with the printing, mailing and solicitation of proxies from shareholders and all
filing fees and related expenses which shall be borne equally by Parent and the
Company.
Notwithstanding the foregoing provisions, as described under "Acquisition
Proposals", above, if prior to the purchase of Common Shares pursuant to the
Offer, there is an Acquisition Proposal which the Board of Directors determines
represents a more favorable transaction to the Company and its shareholders than
the transactions contemplated by the Merger Agreement, and if the Board of
Directors of the Company, after consultation with outside counsel, shall have
determined that failure to terminate the Merger Agreement is reasonably likely
to be inconsistent with the fiduciary duties of the Board of Directors under
applicable Law, the Company may terminate the Merger Agreement. If the Company
so elects to terminate the Merger Agreement, the Company shall, immediately
prior to any such termination, pay a termination fee in an amount equal to all
of the expenses incurred by Parent in connection with this Merger Agreement, the
negotiations leading to its execution, the examination and investigation of the
Company, the preparation and negotiation of the Merger Agreement and related
agreements, and in all other ways related to the Merger, including, but not
limited to, all fees and expenses incurred by investment bankers, accountants,
attorneys and other agents, plus the sum of $3 million in cash (the "Termination
Payment") as liquidated damages and not as a penalty, immediately upon such
termination, in same-day funds, provided that Parent shall not be in material
breach of its obligations under the Merger Agreement. Moreover, the Company
shall pay the Termination Payment if the Closing does not occur either (i) due
to the Company's failure to satisfy a condition over which it has sole control
prior to December 31, 1998; or (ii) because prior to December 31, 1999, the
Company or any Subsidiary or affiliate of the Company or any of their respective
shareholders publicly announces, enters into a letter of intent relating to,
enters into a definitive agreement providing for, or consummates, a transaction,
which, as announced, or as provided in such letter or agreement or as
consummated, provides for or relates to the disposition of a controlling
interest in the Company or the sale, transfer or other distribution of assets
constituting a majority (measured by fair market value) of the consolidated
assets of the Company.
The Company will also pay a termination fee following the termination of
the Merger Agreement by Parent (i) following a withdrawal by the Board of
Directors of its recommendation that the shareholder approve the Merger
Agreement (other than if the recommendation is withdrawn because the conditions
to the consummation of the Merger cannot be fulfilled for any reason other than
a breach by the Company), or
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(ii)(A) by virtue of an uncured breach of representation or warranty by the
Company or (B) the Company's failure to comply in any material respect with any
of its covenants or agreements.
Amendment. The Merger Agreement may be amended by the parties thereto at
any time before or after the approval of the Merger Agreement by the
shareholders of Parent or of the Company, but after such approval no amendment
or modification shall be made which in any way materially adversely affects the
rights of such shareholders without the further approval of such shareholders.
Any amendment, modification or material waiver of the Merger Agreement shall be
subject to approval of the Ohio Superintendent and the Iowa Commissioner. The
Merger Agreement may not be amended, modified or supplemented except by written
agreement of the parties thereto.
Publicity. So long as this Merger Agreement is in effect, each of the
parties hereto (i) shall not, and shall cause its affiliates not to, issue or
cause the publication of any press release or other announcement to any Person
with respect to the Merger Agreement or the transactions contemplated hereby
without the consent of the other party, which consent shall not be unreasonably
withheld or delayed; provided, however, that nothing contained herein shall (A)
limit the right of each of the parties hereto and their affiliates to make a
legally required filing or communication, provided that, to the extent possible,
such party shall consult with the other party before making such filing or
communication, or responding to any communications initiated by any non-
affiliated Person, including, but not limited to, any rating agency or
Governmental Entity, (B) prohibit either party hereto (or its affiliates) from
initiating communications with, and making presentations to, any rating agency
or Governmental Entity relating to the transactions contemplated hereby if such
party gives prior notice thereof to the other party hereto, or (C) prohibit
Parent or the Company or any of their respective affiliates from communicating
to any third party information in any way relating to the Merger that has been
made known to the general public, other than in violation of the Merger
Agreement, prior to the time of such communication, (ii) shall cooperate fully
with the other party hereto with respect to issuing or publishing any press
release, or other announcement or other written communication to any
non-affiliated Person and preparing written and oral communications to the
employees and agents of each party hereto with the purpose of effectuating the
Merger in the best interests of the respective shareholders of Parent and the
Company and (iii) shall promptly notify the other party of any announcements
which are made to affiliated Persons and any communications received from and
responses provided to non-affiliated Persons, in either case, with respect to
the Merger Agreement or the transactions contemplated hereby.
Nonassignability. The Merger Agreement shall not be assigned by either
party hereto by operation of Law or otherwise without the prior written consent
of the other party hereto.
SHAREHOLDER AGREEMENT
The following summary of the Shareholder Agreement dated as of June 3,
1998, by and among Parent, Purchaser and Allied Mutual with respect to the
Common Shares and Preferred Shares owned by Allied Mutual is summarized below:
Pursuant to the Shareholder Agreement, Allied Mutual agrees (i) not to
sell, transfer, pledge, assign or otherwise dispose of, or enter into any
contract, option or other arrangement (including any profit sharing arrangement)
or understanding with respect to the sale, transfer, pledge, assignment or other
disposition of, the Common Shares or shares of 6.75% Series Preferred Stock held
by Allied Mutual (collectively, the "Securities") to any person other than
Parent or Parent's designee, and (ii) not to enter into any voting arrangement,
whether by proxy, voting agreement, voting, trust, power-of-attorney or
otherwise, with respect to the Securities.
Allied Mutual agrees not to, and agreed not to permit any investment
banker, financial adviser, attorney, accountant or other representative or agent
of Allied Mutual to, directly or indirectly (i) solicit, initiate or knowingly
encourage (including by way of furnishing information), or knowingly facilitate
any inquiries or the making of any proposal which constitutes, or may reasonably
be expected to lead to, any Acquisition Proposal or (ii) participate in any
discussions or negotiations regarding any Acquisition Proposal.
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At any meeting of shareholders of the Company called to vote upon the
Merger and the Merger Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval (including by written
consent) with respect to the Merger and the Merger Agreement is sought, Allied
Mutual agrees to, including by initiating a written consent solicitation if
requested by Parent, vote (or cause to be voted) Allied Mutual's Securities in
favor of the Merger, the adoption of the Merger Agreement and the approval of
the other transactions contemplated by the Merger Agreement. At any meeting of
shareholders of the Company or at any adjournment thereof or in any other
circumstances upon which Allied Mutual's vote, consent or other approval is
sought, Allied Mutual will vote (or cause to be voted) Allied Mutual's
Securities against (i) any merger (other than the Merger), consolidation,
combination, sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or any other
Acquisition Proposal (collectively, "Alternative Transactions") or (ii) any
amendment of the Company's Certificate of Incorporation or by-laws or other
proposal or transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, the Merger, the Merger Agreement or any of the
other transactions contemplated by the Merger Agreement including any consent to
the treatment of any Securities in or in connection with such transaction
(collectively, "Frustrating Transactions").
Subject to governmental approvals, Allied Mutual irrevocably granted to,
and appointed, any individual who shall be designated by Parent as Allied
Mutual's proxy and attorney-in-fact (with full power of substitution), for and
in the name, place and stead of Allied Mutual, to vote Allied Mutual's
Securities, or grant a consent or approval in respect of such Securities, at any
meeting of shareholders of the Company or at any adjournment thereof or in any
other circumstances upon which their vote, consent or other approval is sought,
(i) in favor of the Merger, the adoption by the Company of the Merger Agreement
and the approval of the other transactions contemplated by the Merger Agreement,
and (ii) against any Alternative Transaction or Frustrating Transaction.
Allied Mutual represented that any proxies heretofore given in respect of
Allied Mutual's Securities are not irrevocable, and that any such proxies are
revoked.
Allied Mutual affirms that the proxy set forth in the Shareholder Agreement
is coupled with an interest and is irrevocable until such time as this agreement
terminates in accordance with its terms. The Allied Mutual further affirms that
the irrevocable proxy is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Allied Mutual under this Agreement. Allied Mutual ratifies and
confirms all that such irrevocable proxy may lawfully do or cause to be done by
virtue hereof.
Allied Mutual is not prohibited from providing information in response to
an unsolicited Acquisition Proposal, engaging in negotiations regarding an
unsolicited Acquisition Proposal, or recommending an unsolicited Acquisition
Proposal to its policyholders.
The Shareholder Agreement terminates on the earlier of (i) the termination
of the Merger Agreement (except pursuant to Section 8.1(d) of the Merger
Agreement) in accordance with its terms or (ii) the termination of the Allied
Mutual Merger Agreement.
Allied Mutual made certain representations and warranties regarding its
authority to enter into the Shareholder Agreement, its ownership of the
Securities, broker's fees and Parent's reliance.
Parent made certain representations and warranties regarding its authority
to enter into the Shareholder Agreement and compliance with securities laws.
Certain of the directors and officers of the Company are also directors
and/or officers of Allied Mutual and/or of Allied Group. Two of the Company's
directors, Messrs. Kelly and Milligan (the "Unaffiliated Directors"), are not
officers or directors of, or otherwise affiliated with, either Allied Mutual or
Allied Group.
Except as described in this Schedule 14D-1, there are no material
contracts, agreements, arrangements or understandings or any actual or potential
conflicts of interest between the Company or its affiliates and (i) any
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<PAGE> 31
of the Company's executive officers, directors or affiliates or (ii) Purchaser
and its executive officers, directors or affiliates.
Dissenters' Rights and Other Matters. Holders of Common Shares will not
have dissenters' rights as a result of the Offer. Pursuant to Section 490.1302
of the Iowa Corporation Act, shareholders may have dissenters' rights with
respect to the Proposed Merger. In general, shareholders are entitled to dissent
in the event of the consummation of (i) a plan of merger to which the
corporation is a party if either (a) shareholder approval is required for the
merger under the Iowa Corporation Act or the articles of incorporation and the
shareholder is entitled to vote on the merger, or (b) the corporation is a
subsidiary that has merged with its parent; and (ii) a plan of share exchange to
which the corporation is a party as the corporation whose shares will be
acquired if the shareholder is entitled to vote on the plan. Pursuant to Section
490.1325 of the Iowa Corporation Act, holders of Common Shares who have
dissenters' rights, if any, and who comply with the applicable statutory
procedures (and who have not otherwise agreed with the Company as to the value
of their shares) will be entitled to receive the amount that the corporation
estimates to be the fair value of the dissenter's shares, plus accrued interest.
The foregoing summary of Sections 490.1302 and 490.1325 of the Iowa
Corporation Act does not purport to be complete and is qualified in its entirety
by reference to such statutory sections.
The Merger would have to comply with any applicable Federal law at the time
of its consummation. The SEC has adopted Rule 13e-3 under the Exchange Act which
is applicable to certain "going private" transactions and which may under
certain circumstances be applicable to the Merger. However, Rule 13e-3 would be
inapplicable if (i) the Common Shares are deregistered under the Exchange Act
prior to the Merger or (ii) the Merger is consummated within one year after the
purchase of the Common Shares pursuant to the Offer and the amount paid per
Common Share in the Merger is at least equal to the amount paid per Common Share
in the Offer. If applicable, Rule 13e-3 requires, among other things, that
certain financial information concerning the fairness of the proposed
transaction and the consideration offered to minority shareholders in such
transaction be filed with the SEC and disclosed to shareholders prior to
consummation of the transaction.
The Company Articles and the Company By-Laws. The Company's Articles of
Incorporation dated July 20, 1993, as amended by Articles of Amendment dated
August 3, 1993 and June 21, 1994 (the "Company Articles") and the Company's
By-Laws as amended through December 18, 1997 (the "Company By-Laws") contain
several provisions that may delay a change in control of the Company following
the purchase of Common Shares by Purchaser pursuant to the Offer, including,
among others, (i) a provision that the Company Board shall be classified, with
each class elected for a term of three years and one class elected each year at
the Company's annual meeting of shareholders, (ii) a provision requiring advance
notice to the Company of any shareholder nominations for directors at an annual
meeting of shareholders, (iii) a provision that directors may be removed with or
without cause, but only at a meeting of the shareholders called for that purpose
in the manner prescribed by law, which requires the affirmative vote of holders
of fifty percent (50%) or more of the voting shares, and (iv) a provision that
special meetings of shareholders may be called only by the President of the
Company, the Company Board, or holders of at least fifty percent (50%) of the
votes entitled to be cast on any issue proposed to be considered at the meeting.
Pursuant to Article IV of the Company Articles and Section 3.2 of the
Company By-Laws, the Company Board is divided into three nearly equal classes of
directors, with each class elected for a term of three years. One class is
elected at the Company's annual meeting of shareholders each year. The number of
the Company's directors is currently limited to between three (3) and twenty-one
(21) pursuant to Section 3.1 of the Company By-Laws, and there are currently
five (5) directors. Pursuant to Section 3.5 of the Company By-Laws and Section
490.808 of the Iowa Corporation Act, members of the Company Board may be removed
with or without cause, but only by the affirmative vote of the holders of fifty
percent (50%) or more of the outstanding voting shares.
Pursuant to Section 5 of the Certificate of Designations of the 6.75%
Series Preferred Stock of Allied Life Financial Corporation, in the event of any
assignment, transfer, or other disposition of 6.75% Preferred shares
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<PAGE> 32
to a person other than Allied Mutual or an affiliate or successor thereof, the
Company has the option to redeem some or all of such shares in exchange for a
cash redemption price.
Amendment of the foregoing provisions of the Company Articles requires the
affirmative vote of the holders of at least fifty percent (50%) of the Company's
outstanding voting shares. Amendment of the foregoing provisions of the Company
By-Laws requires a majority vote of the full Company Board or a majority vote of
all shareholders entitled to vote at any meeting of the shareholders of record.
The foregoing description of the Company Articles and the Company By-Laws
is qualified in its entirety by reference to the full text of the Company
Articles and the Company By-Laws, copies of which have been filed by the Company
as exhibits to documents filed with the SEC and may be obtained in the manner
described in Section 8 (except that copies may not be available at regional
offices of the SEC).
13. DIVIDENDS AND DISTRIBUTIONS.
In the event that the Company changes the number of Common Shares issued
and outstanding prior to the Effective Time of the Merger as a result of a
reclassification, stock split (including a reverse split), stock dividend or
distribution, recapitalization, merger, subdivision or other similar
transaction, the Merger Consideration shall be equitably adjusted.
14. CONDITIONS OF THE OFFER.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment, or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Common Shares after the
termination or withdrawal of the Offer), to pay for any Common Shares not
theretofore accepted for payment or paid for (i) unless (A) there are validly
tendered and not properly withdrawn prior to the expiration of the Offer
2,000,000 Common Shares (the "Minimum Condition"), and (B) all insurance
regulatory approvals necessary for Parent and Purchaser's acquisition of control
of the Company and its Subsidiaries are obtained on terms and conditions
reasonably satisfactory to Parent (the "Insurance Regulatory Condition") and any
waiting period applicable to the consummation of the Offer and the Merger under
the HSR Act shall not have expired or been terminated, or (ii) if at any time on
or after the date of the Merger Agreement and at or before the time that the
particular Common Shares are accepted for payment (whether or not any other
Common Shares shall theretofore have been accepted for payment or paid for
pursuant to the Offer) any of the following conditions exists:
(a) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, or (iii) a commencement
of a war, armed hostilities or other international or national calamity
directly involving the United States which has a material adverse effect on
the general economic conditions in the United States;
(b) any statute, rule, regulation, a temporary, preliminary or
permanent order or injunction shall be promulgated, enacted, entered,
enforced or deemed applicable to the Offer, the Merger or performance under
the Merger Agreement, by any state, federal or foreign government or
governmental authority or court or governmental agency of competent
jurisdiction that (i) prohibits the consummation of the Offer or the Merger
or (ii) imposes material limitations on the ability of Purchaser
effectively to exercise full rights of ownership with respect to the Common
Shares, including, without limitation, the right to vote any Common Shares
purchased by it on all matters properly presented to the stockholders of
the Company; provided that the Parent and Purchaser shall have used their
best efforts to have any such decree, order or injunction vacated or
reversed;
(c) the Company shall have entered into an agreement obligating the
Company to enter into an Acquisition Transaction with a person other than
Parent, Purchaser or an affiliate of either;
(d) (i) the Company shall have breached or failed to perform in any
material respect any of its material obligations covenants or agreements
under the Merger Agreement or (ii) there shall have occurred, on the part
of the Company, a breach of any representation or warranty contained in the
Merger
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Agreement as of the date of the Merger Agreement or at the time of the
consummation of the Offer (other than representations and warranties made
as of a specified date prior to the date of the Merger Agreement) which, in
either case, if not cured would reasonably be expected to have a Material
Adverse Effect (as defined in the Merger Agreement) and which is not
curable or, if curable, is not cured with the later of (x) 30 calendar days
after written notice of such breach is given by Parent to the Company of
such breach and (y) the time of satisfaction of all conditions to the Offer
not related to such breach; provided, however, that the representations
contained in Sections 4.2 and 4.4 shall be true as of the consummation of
the Offer.
(e) the Company Board shall have withdrawn its recommendation or
modified its recommendation in a manner adverse to Parent or Purchaser;
(f) the failure to obtain any Governmental Approvals or third party
Consents, which failure, in the aggregate, would have a Material Adverse
Effect;
(g) Any insurance regulatory approval necessary for the merger of
Allied Mutual with and into Parent (the "Mutual Merger") shall not have
been obtained on terms and conditions reasonably satisfactory to Parent;
(h) the requisite vote of Allied Mutual policyholders in support of
the Mutual Merger shall not have been obtained; and
(i) the nominees of Parent to the Allied Mutual Board pursuant to the
Mutual Merger shall not have been duly elected or appointed so as to
constitute a majority of the directors on the Allied Mutual Board.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted by Purchaser regardless of the circumstances giving rise to any such
condition or may be waived by Purchaser in whole or in part at any time and from
time to time in its sole discretion (subject to the terms of the Merger
Agreement). The failure by Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right, the waiver of
any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
15. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; CERTAIN LITIGATION.
General. Except as otherwise disclosed herein, based on a review of
publicly available information filed by the Company with the SEC, neither
Purchaser nor Parent is aware of (i) any license or regulatory permit that
appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the acquisition of Common
Shares and the indirect acquisition of the capital stock of the Company's
insurance subsidiary by Parent or Purchaser pursuant to the Offer or the
Proposed Merger, or (ii) any approval or other action by any governmental,
administrative or regulatory agency or authority, domestic, foreign or
supranational, that would be required for the acquisition or ownership of Common
Shares, or the indirect acquisition of the capital stock of the Company's
insurance subsidiaries by Parent or Purchaser as contemplated herein. Should any
such approval or other action be required, Parent and Purchaser currently
contemplate that such approval or action would be sought. While Purchaser does
not currently intend to delay the acceptance for payment of Common Shares
tendered pursuant to the Offer pending the outcome of any such matter, there can
be no assurance that any such approval or action, if needed, would be obtained
or would be obtained without substantial conditions or that adverse consequences
might not result to the business of the Company, Purchaser or Parent or that
certain parts of the businesses of the Company, Purchaser or Parent might not
have to be disposed of in the event that such approvals were not obtained or any
other actions were not taken. Purchaser's obligation under the Offer to accept
for payment and pay for Common Shares is subject to certain conditions. See
Section 14.
State Insurance Approvals. The acquisition of Common Shares pursuant to
the Offer will require a filing with, and approval of, the Insurance Commission
under the Insurance Code of Iowa, which is the United States jurisdiction in
which the Company and the insurance company owned or otherwise controlled by the
Company are domiciled, and may require the approval of the Insurance
Commissioner in Ohio pursuant to
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Section 3925.08(D)(2) of the Ohio Revised Code. The Insurance Code of Iowa
contains provisions applicable to the acquisition of control of a domestic
insurer, including a presumption of control that arises from the ownership of
ten percent (10%) or more of the voting securities of a domestic insurer or of
any person that controls a domestic insurer.
Generally, a person seeking to acquire voting securities, such as the
Common Shares, in an amount that would result in such person controlling,
directly or indirectly, a domestic insurer must, together with any person
ultimately controlling such person, file a Form A with the relevant Insurance
Commission and send a copy of such Form A to the domestic insurer. Parent and
Purchaser made a Form A filing with the Insurance Commission and sent a copy
thereof to the domestic insurer on the date of this Offer to Purchase. In
addition, Parent is evaluating whether the approvals of any other Insurance
Commissioners are required and, if Parent determines that any such approvals are
required, the Insurance Regulatory Condition will be deemed to include the
receipt of such approvals.
In Iowa, the Form A filing triggers public hearing requirements and a
statutory period within which a decision must be rendered approving or
disapproving the acquisition of control. The period within which a hearing must
be commenced or a decision rendered may not begin until the Insurance
Commissioner has deemed the Form A filing complete, and the Insurance
Commissioner has discretion to request that Parent and Purchaser furnish
additional information before such Insurance Commissioner deems the Form A
filing complete. The Iowa Insurance Code provides that a public hearing must be
commenced within thirty (30) days after the Form A is filed and that the
Insurance Commissioner must make the determination within thirty (30) days after
the conclusion of such hearing. As discussed in Section 1 above, Parent and
Purchaser currently expect that the Iowa Form A hearing will be held in late
July 1998.
The Iowa Insurance Code generally requires the Insurance Commissioner to
approve the application for the acquisition of control unless the Insurance
Commissioner determines, after a public hearing, that such application should be
disapproved on one or more prescribed regulatory grounds. The Iowa Insurance
Code also contains provisions providing generally for judicial review of an
Insurance Commissioner's order.
Section 3925.08(D)(2) of the Ohio Insurance Code requires certain insurance
companies domiciled in Ohio to obtain approval from the Ohio Insurance
Commissioner for certain investments in the outstanding stocks of a corporation
where such investment exceeds two and one-half percent (2 1/2%) of the total
admitted assets of the company making the investment as of the preceding
December 31.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and to the FTC and certain waiting period requirements have been
satisfied. Parent expects to file such information as soon as practicable
following the date hereof. Under the provisions of the HSR Act applicable to the
Offer, the purchase of Common Shares pursuant to the Offer may not be
consummated until the expiration of a 15-calendar day waiting period following
the filing by Parent, unless the Antitrust Division and the FTC terminate the
waiting period prior thereto. If, within such 15-day period, either the
Antitrust Division or the FTC requests additional information or material from
Parent concerning such Offer, the waiting period will be extended and would
expire at 11:59 p.m., New York City time, on the tenth calendar day after the
date of substantial compliance by Parent with such request. Only one extension
of the waiting period pursuant to a request for additional information is
authorized by the HSR Act. Thereafter, such waiting period may be extended only
by court order or with the consent of Parent. Purchaser will not accept for
payment Common Shares tendered pursuant to the Offer unless and until the
waiting period requirements imposed by the HSR Act with respect to the Offer
have been satisfied. See Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as Purchaser's acquisition of Common
Shares pursuant to the Offer. At any time before or after Purchaser's
acquisition of Common Shares, the Antitrust Division or the FTC could take such
action under the antitrust laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Common Shares pursuant
to the Offer or otherwise or seeking divestiture of Common Shares acquired by
Purchaser or divestiture of substantial assets of Parent or its subsidiaries.
Private parties
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<PAGE> 35
and state attorneys general may also bring legal action under the antitrust laws
under certain circumstances. There can be no assurance that a challenge to the
Offer or other acquisition of Common Shares by Purchaser on antitrust grounds
will not be made or, if such a challenge is made, of the result. See Section 14
for certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions.
State Takeover Statutes. Various states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, shareholders, executive offices or places of business in such states. In
Edgar v. Mite Corp., the United States Supreme Court held that the Illinois
Business Takeover Act, which involved state securities laws that made the
takeover of certain corporations more difficult, imposed a substantial burden on
interstate commerce and therefore was unconstitutional. In CTS Corp. v. Dynamics
Corp. of America, however, the United States Supreme Court held that a state
may, as a matter of corporate law and, in particular, those laws concerning
corporate governance, constitutionally disqualify a potential acquirer from
voting on the affairs of a target corporation without prior approval of the
remaining shareholders, provided that such laws were applicable only under
certain conditions.
The State of Iowa has a takeover statute, but it does not apply to an offer
in which the target company is an insurance company or insurance holding company
subject to regulation by the Commissioner of Insurance. Accordingly, Parent and
Purchaser have not complied with the Iowa takeover statute.
Except as described in this Offer to Purchase, neither Purchaser nor Parent
has currently complied with any state takeover statute or regulation. Purchaser
reserves the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer or the Proposed Merger, and nothing in this
Offer to Purchase or any action taken in connection with the Offer or the
Proposed Merger is intended as a waiver of such right. If it is asserted that
any state takeover statute is applicable to the Offer or the Proposed Merger and
an appropriate court does not determine that it is inapplicable or invalid as
applied to the Offer or the Proposed Merger, Purchaser might be required to file
certain information with, or to receive approvals from, the relevant state
authorities, and Purchaser might be unable to accept for payment or pay for
Common Shares tendered pursuant to the Offer, or be delayed in consummating the
Offer or the Proposed Merger. In such case, Purchaser may not be obliged to
accept for payment or pay for any Common Shares tendered pursuant to the Offer.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, shareholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. Purchaser does not know whether any of these
laws will, by their terms, apply to the Offer and has not complied with any such
laws. Should any person seek to apply any state takeover law, Purchaser will
take such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court proceedings.
In the event it is asserted that one or more state takeover laws are applicable,
and an appropriate court does not determine that such law is, or such laws are,
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Common Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer. In such case, Purchaser may not be
obligated to accept for payment any Common Shares tendered. See Section 14.
Certain Litigation
On December 31, 1997, a complaint was filed by Mary M. Rieff, a
policyholder of Allied Mutual, in the Iowa District Court in and for Polk County
Iowa, against Allied Group and certain other individuals who are or were
officers and/or directors of Allied Mutual and Allied Group. The Company is not
a party to this proceeding. The complaint, an alleged policyholder derivative
action brought on behalf of Allied Mutual, asserts, among other things, (a) that
the defendants were responsible for the inappropriate transfer of Allied
Mutual's corporate assets, the seizure of certain corporate opportunities, and
the implementation of an improper de facto demutualization without informing or
compensating policyholders or receiving the
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<PAGE> 36
appropriate approval from regulatory authorities; (b) that this allegedly
wrongful demutualization began on or about January 1, 1985 and was accomplished
through transfers of Allied Mutual's assets to Allied Group and to the
individual defendants for inadequate consideration; (c) that the individual
defendants breached fiduciary duties owed to Allied Mutual, wasted its corporate
assets, and intentionally interfered with its contracts, prospective business
advantage, and business relationships; and (d) that the defendants improperly
transferred substantial ownership of and control over Allied Group and Allied
Mutual's insurance business. The complaint further asserts that as a result of
the foregoing, Allied Mutual and its policyholders have suffered damages in
excess of $500 million. The complaint requests an accounting of the assets
allegedly wrongfully transferred to Allied Group and compensation to Allied
Mutual for the value of such assets, for the seizure of corporate opportunities,
and for the de facto demutualization of Allied Mutual. The complaint also asks
for certain other relief, including attorneys' fees and costs, equitable relief
and interest, and restitution for any assets wrongfully transferred or conveyed.
On June 1, 1998, a motion was filed by Mary M. Rieff seeking to enjoin the
defendant directors of Allied Mutual from considering, negotiating or approving
any transaction on behalf of Allied Mutual with Parent or any third party
because of alleged conflicts of interest of the members of the Board of
Directors of Allied Mutual.
On June 4, 1998, the complaint was amended to include a class action
component.
16. FEES AND EXPENSES.
Except as set forth below, neither Parent nor Purchaser will pay any fees
or commissions to any broker, dealer or other person for soliciting tenders of
Common Shares pursuant to the Offer. Parent and Purchaser have engaged Credit
Suisse First Boston as the Dealer Manager in connection with the Offer and as
financial advisor to Parent in connection with its effort to acquire the
Company. Parent has agreed to pay Credit Suisse First Boston (in its capacity as
Dealer Manager and financial advisor) a fee of $6 million in the aggregate in
connection with the Offer and related transactions in which Parent or a
subsidiary of Parent will merge with Allied Mutual and Allied Group, Inc.
("Allied Group") (of which a non-refundable payment of $500,000 was paid upon
the commencement of the Offer to Purchase Allied Group dated May 19, 1998) upon
the consummation of an acquisition of the Company by Parent. Parent has also
agreed to reimburse Credit Suisse First Boston (in its capacity as Dealer
Manager and financial advisor) for its reasonable out-of-pocket expenses,
including the reasonable fees and expenses of its legal counsel, incurred in
connection with its engagement, and to indemnify Credit Suisse First Boston and
certain related persons against certain liabilities and expenses in connection
with its engagement, including certain liabilities under the Federal securities
laws. Credit Suisse First Boston has rendered various investment banking and
other advisory services to Parent and its affiliates in the past and is expected
to continue to render such services, for which it has received and will continue
to receive customary compensation from Parent and its affiliates. In the
ordinary course of business, Credit Suisse First Boston and its affiliates may
actively trade or hold the securities of the Company and Parent for their own
account or for the account of customers and, accordingly, may at any time hold a
long or short position in such securities.
Purchaser has retained Georgeson & Company Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may provide advice and
consultation concerning the planning and execution of the Offer; assist in the
preparation and placement of newspaper ads; assist in the distribution of Offer
documents to brokers, banks, nominees, institutional investors, and other
shareholders and investment community accounts; answer collect telephone
inquiries from shareholders and their representatives; and call or otherwise
contact individuals who are registered holders. The Information Agent will
receive reasonable and customary compensation for its services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the Federal securities laws.
In addition, ChaseMellon Shareholder Services, L.L.C. has been retained as
the Depositary. The Depositary has not been retained to make solicitations or
recommendations in its role as Depositary. The Depositary will receive
reasonable and customary compensation for its services, will be reimbursed for
certain
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<PAGE> 37
reasonable out-of-pocket expenses and will be indemnified against certain
liabilities and expenses in connection therewith, including certain liabilities
under the Federal securities laws. Brokers, dealers, commercial banks and trust
companies will be reimbursed by Purchaser for customary mailing and handling
expenses incurred by them in forwarding offering material to their customers.
17. MISCELLANEOUS.
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of the Common Shares pursuant thereto,
Purchaser will make a good faith effort to comply with such state statute. If,
after such good faith effort, Purchaser cannot comply with any such state
statute, the Offer will not be made to (nor will tenders be accepted from or on
behalf of) the holders of Common Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers which are licensed under
the laws of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Parent or Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
Parent and Purchaser have filed with the SEC the Schedule 14D-1, together
with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under
the Exchange Act, furnishing certain additional information with respect to the
Offer. The Schedule 14D-1, and any amendments thereto, may be inspected at, and
copies may be obtained from, the same places and in the same manner as set forth
in Section 8 (except that they may not be available at the regional offices of
the SEC).
NATIONWIDE LIFE ACQUISITION CORPORATION
June 10, 1998
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SCHEDULE I
DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years of each
director and executive officer of Parent. Except as noted, each such person is a
citizen of the United States of America. The business address of each such
person is c/o Nationwide Mutual Insurance Company, One Nationwide Plaza,
Columbus, Ohio 43215.
DIRECTORS
The following individuals serve as directors of Parent as of June 10, 1998:
Arden L. Shisler, Chairman
Lewis J. Alphin
A. I. Bell
Richard D. Crabtree
Keith W. Eckel
Willard J. Engel
Fred C. Finney
Charles L. Fuellgraf, Jr.
Dimon R. McFerson
David O. Miller
Yvonne L. Montgomery
James F. Patterson
Robert L. Stewart
Nancy C. Thomas
Harold W. Weihl
Arden L. Shisler, Director of Parent since April 1984. Mr. Shisler has
served as Chairman of the Board of Parent since 1992. Mr. Shisler has served as
the President and Chief Executive Officer of K&B Transport, Inc., a trucking
firm in Dalton, Ohio, since January 1992. He is a Director of the National
Cooperative Business Association.
Lewis J. Alphin, Director of Parent since April 1993. Mr. Alphin has been a
farm owner and operator since 1971.
A. I. Bell, Director of Parent since April 1998. Mr. Bell has owned and
operated Bell Farms since March 1974.
Richard D. Crabtree, Director of Parent since April 1996. Mr. Crabtree has
served as President and Chief Operating Officer of Parent since April 1996. Mr.
Crabtree served as Executive Vice President of Property/Casualty Operations of
Parent from April 1995 to April 1996. He served as Senior Vice President of
Property and Casualty Operations of Parent from May 1994 to April 1995. He
served as Senior Vice President of State Operations of Parent from September
1993 to May 1994. He served as a Vice President Regional Manager of Parent from
December 1985 to September 1993.
Keith W. Eckel, Director of Parent since April 1996. Mr. Eckel is a Partner
of Fred W. Eckel Sons and has served as the President of Eckel Farms, Inc. since
May 1968.
Willard J. Engel, Director of Parent since April 1994. Mr. Engel served as
General Manager of the Lyon County Cooperative Oil Co. from March 1975 until his
retirement in September 1997.
Fred C. Finney, Director of Parent since April 1992. Mr. Finney has been
owner and operator of Moreland Fruit Farm and operator of Melrose Orchard since
January 1985.
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Charles L. Fuellgraf, Jr., Director of Parent since April 1969. Mr.
Fuellgraf has served as the Chief Executive Officer of Fuellgraf Electric
Company, an electrical contractor, of Butler, Pennsylvania, and Nashville,
Tennessee, since 1986.
Dimon R. McFerson, Director of Parent since April 1988. Mr. McFerson has
served as the Chairman and Chief Executive Officer - Nationwide Insurance
Enterprise of Parent since April 1996, and was President and Chief Executive
Officer of Parent from December 1992 to April 1996. He served as Director and
Chief Executive Officer from December 1992 to November 1993, Director and
President and Chief Executive Officer - Nationwide Insurance Enterprise from
November 1993 to April 1996, and Director and Chairman and Chief Executive
Officer - Nationwide Insurance Enterprise from April 1996 to present for the
Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance
Company.
David O. Miller, Director of Parent since April 1985. Mr. Miller is
President of Owen Potato Farm, Inc. since 1962; a partner with M&M Enterprises
in Licking County, Ohio, since 1974; Chairman of the Board of the Wausau
Insurance Companies since May 1992; and Chairman of the Board of Nationwide Life
Insurance Company since April 1998, and Nationwide Life and Annuity Insurance
Company and a director of the National Cooperative Business Association and
International Cooperative Alliance.
Yvonne L. Montgomery, Director of Parent since April 1998. Ms. Montgomery
has served as Senior Vice President/General Manager of Southern Customer
Operations for U.S. Customer Operations of Xerox Corporation since January 1996.
From March 1995 to January 1996, Ms. Montgomery served as Vice President of
Marketing & Strategy Integration, ACO of Xerox Corporation; from August 1993 to
March 1995, Ms. Montgomery served as Executive Assistant to the Chairman/Chief
Executive Officer of Xerox Corporation; and from January 1991 to August 1993,
Ms. Montgomery served as Vice President - New York Area for Xerox Corporation.
James F. Patterson, Director of Parent since April 1989. Mr. Patterson is
President of Patterson Farms, Inc. since December 1991, and Vice President of
Pattersons, Inc. since 1964. Mr. Patterson has served as the Chairman of the
Board of Nationwide Mutual Fire Insurance Company since April 1994. He serves as
director of the National Cooperative Business Association.
Robert L. Stewart, Director of Parent since April 1989. Mr. Stewart is the
owner of Sunnydale Farms since 1960 and owner of Sunnydale Mining since 1989. He
has served as Chairman of the Board of the Farmland Insurance Companies since
May 1994 and also serves as a director of the National Cooperative Business
Association.
Nancy C. Thomas, Director of Parent since April 1986. Mrs. Thomas is a farm
owner and operator of Da-Ma-Lor Farms since December 1958. Mrs. Thomas has
served as the Chairman of the Board of Nationwide Property and Casualty
Insurance Company since April 1989.
Harold W. Weihl, Director of Parent since April 1990. Mr. Weihl has been
farm owner and operator of Weihl Farms since April 1950. Mr. Weihl has served as
Chairman of the Board of Nationwide General Insurance Company since April 1996.
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EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of Parent:
<TABLE>
<CAPTION>
NAME OFFICE OR POSITION HELD
<S> <C>
Dimon R. McFerson...... Chairman and Chief Executive Officer - Nationwide
Insurance Enterprise
Richard D. Crabtree.... President and Chief Operating Officer
Robert A. Oakley....... Executive Vice President - Chief Financial Officer
Robert J. Woodward,
Jr. ................. Executive Vice President - Chief Investment Officer
James E. Brock......... Senior Vice President - Corporate Development
Charles A. Bryan....... Senior Vice President - Chief Actuary of Parent
John R. Cook, Jr....... Senior Vice President - Chief Communications Officer
Thomas L. Crumrine..... Senior Vice President
W. Sidney Druen........ Senior Vice President and General Counsel and Assistant
Secretary
Danny M. Fullerton..... Senior Vice President - Property and Casualty Marketing
Philip C. Gath......... Senior Vice President - Chief Actuary of Parent
Richard D. Headley..... Senior Vice President - Chief Information Technology
Officer
David R. Jahn.......... Senior Vice President - Commercial Insurance
Donna A. James......... Senior Vice President - Human Resources
Richard A. Karas....... Senior Vice President - Sales - Financial Services
Edwin P. McCausland,
Jr. ................. Senior Vice President - Fixed Income Securities
Douglas C. Robinette... Senior Vice President - Life Marketing and Product
Management
James A. Taylor........ Senior Vice President - Property and Casualty Insurance
Richard M. Waggoner.... Senior Vice President - Shared Services
Susan A. Wolken........ Senior Vice President - Life Company Operations
</TABLE>
For biographical information concerning Messrs. McFerson and Crabtree, see
Section 1 above.
Robert A. Oakley has served as Executive Vice President - Chief Financial
Officer of Parent since April 1995. Mr. Oakley served as Senior Vice
President - Chief Financial Officer of Parent from October 1993 to April 1995.
From November 1984 to October 1993, Mr. Oakley served as Vice President and
Corporate Controller of Parent.
Robert J. Woodward, Jr., has served as Executive Vice President - Chief
Investment Officer of Parent since August 1995. From March 1991 to August 1995,
Mr. Woodward served as Senior Vice President - Fixed Income Investments of
Parent.
James E. Brock has served as Senior Vice President - Corporate Development
of Parent since June 1997. Mr. Brock served as Senior Vice President - Life
Company Operations of Parent from April 1996 to June 1997. From November 1990 to
April 1996, Mr. Brock served as Senior Vice President - Investment Product
Operations of Parent.
Charles A. Bryan has served as Senior Vice President - Chief Actuary of
Parent since June 1998. Mr. Bryan served as Chief Operating Officer of Direct
Response Corporation from August 1996 to May 1998. From January 1989 to July
1996, Mr. Bryan served as a Partner at Ernst & Young.
John R. Cook, Jr., has served as Senior Vice President - Chief
Communications Officer of Parent since May 1997. From July 1989 to May 1997, Mr.
Cook served as Senior Vice President - Chief Communications Officer of USAA.
Thomas L. Crumrine has served as President - Nationwide Agencies (appointed
position) and Senior Vice President of Parent since September 1997. He served as
Senior Vice President - Property and Casualty Insurance of Parent from March
1996 to September 1997. Mr. Crumrine served as Senior Vice President of Claims
of Parent from April 1995 to March 1996, Vice President of Claims of Parent from
April 1994 to April 1995, and Vice President - Property and Casualty Claims
Services of Parent from June 1993 to April 1994.
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<PAGE> 41
W. Sidney Druen has served as Senior Vice President and General Counsel and
Assistant Secretary of Parent since September 1994. From October 1989 to
September 1994, Mr. Druen served as Vice President and Deputy General Counsel
and Assistant Secretary of Parent.
Danny M. Fullerton has served as Senior Vice President - Property and
Casualty Marketing of Parent since November 1996. From July 1994 to November
1996, Mr. Fullerton served as Vice President - Agency Operations of Parent. From
December 1990 to July 1994, Mr. Fullerton served as Vice President Regional
Manager of Parent.
Philip C. Gath has served as Senior Vice President - Chief Actuary of
Parent since June 1998. Mr. Gath served as Vice President - Product
Manager-Individual Variable Annuity of Parent from July 1997 to June 1998. From
August 1989 to July 1997, Mr. Gath served as Vice President - Individual Life
Actuary of Parent.
Richard D. Headley has served as Senior Vice President - Chief Information
Technology Officer of Parent since October 1997. From January 1975 to October
1997, Mr. Headley served in various positions in BANK ONE Corporation.
David R. Jahn has served as Senior Vice President-Commercial Insurance of
Parent since March 1998. Mr. Jahn served as Vice President-Resource Management
of Parent from March 1996 to March 1998. From November 1993 to March 1996, Mr.
Jahn served as Vice President-Regional Manager of Parent. From August 1992 to
November 1993, Mr. Jahn served as Vice President of Parent and as Senior Vice
President-South Central Division of EMPLOYERS INSURANCE OF WAUSAU A Mutual
Company.
Donna A. James has served as Senior Vice President - Human Resources of
Parent since December 1997. Ms. James served as Vice President - Human Resources
of Parent from July 1996 to December 1997, Vice President and Assistant to the
Chief Executive Officer of Parent from March 1996 to July 1996, Associate Vice
President and Assistant to CEO of Parent from May 1994 to March 1996, and
Administrative Officer and Executive Assistant to the CEO of Parent from April
1993 to May 1994.
Richard A. Karas has served as Senior Vice President of Sales-Financial
Services of Parent since March 1993.
Edwin P. McCausland, Jr., has served as Senior Vice President-Fixed Income
Securities of Parent since April 1998. Mr. McCausland served as Vice
President-Fixed Income Securities of Parent from February 1997 to April 1998.
From May 1989 to February 1997, Mr. McCausland served as Vice President-Managing
Director of Massachusetts Mutual Life Insurance Company.
Douglas C. Robinette has served as Senior Vice President-Life Marketing and
Product Management of Parent since June 1998. Mr. Robinette served as Executive
Vice President-Customer Services of EMPLOYERS INSURANCE OF WAUSAU A Mutual
Company from September 1996 to May 1998; Executive Vice President-Finance and
Insurance Services from May 1995 to September 1996; Senior Vice
President-Finance and Insurance Services from November 1994 to May 1995; and
Senior Vice President-Finance from May 1993 to November 1994. Mr. Robinette
served as Vice President of Parent from July 1993 to April 1994.
James A. Taylor has served as Senior Vice President - Property and Casualty
Insurance of Parent since March 1996. Mr. Taylor served as Vice President of
North Carolina, Alabama and Georgia operations of Parent from January 1996 to
March 1996; Vice President of North Carolina operations of Parent from October
1994 to January 1996; Vice President - Regional Manager of Parent from May 1994
to October 1994; Senior Vice President - State Operations and Regional Manager
of Parent from September 1993 to May 1994; and Vice President - Regional
Manager of Parent from January 1989 to September 1993.
Richard M. Waggoner has served as Senior Vice President - Shared Services
of Parent since April 1997. Mr. Waggoner served as Executive Vice
President - Standard/Custom Accounts from April 1996 to April 1997, and
Executive Vice President of Division Operations from November 1993 to April 1996
for the Wausau Insurance Companies. He served as Vice President of Parent from
January 1990 to April 1994 and served in the positions of Director, Vice
Chairman, and President and Chief Operating Officer with Colonial Insurance
Company of Wisconsin between 1990 and 1994.
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<PAGE> 42
Susan A. Wolken has served as Senior Vice President - Life Company
Operations of Parent since June 1997. Ms. Wolken served as Senior Vice President
of Enterprise Administration of Parent from July 1996 to June 1997; Senior Vice
President - Human Resources of Parent from April 1995 to July 1996; Vice
President - Human Resources of Parent from September 1993 to April 1995; and
Vice President - Individual Life and Health Operations of Parent from October
1989 to September 1993.
2. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years for each
director and executive officer of Purchaser. Each such person is a citizen of
the United States of America and the business address of each such person is c/o
Nationwide Group Acquisition Corporation, One Nationwide Plaza, Columbus, Ohio
43215.
DIRECTORS
The following individuals serve as directors of Purchaser as of June 10,
1998:
Dimon R. McFerson
Richard D. Crabtree
Robert A. Oakley
For biographical information concerning Messrs. McFerson, Crabtree and
Oakley, see Section 1 above.
EXECUTIVE OFFICERS
The following table sets forth certain information regarding the executive
officers of Purchaser:
<TABLE>
<CAPTION>
NAME OFFICE OR POSITION HELD
<S> <C>
Dimon R. McFerson.................. Chairman and Chief Executive Officer - Nationwide
Insurance Enterprise
Richard D. Crabtree................ President and Chief Operating Officer
Robert A. Oakley................... Executive Vice President - Chief Financial Officer
W. Sidney Druen.................... Senior Vice President and General Counsel and
Assistant Secretary
Duane M. Campbell.................. Vice President - Treasurer
Dennis W. Click.................... Vice President and Secretary
David A. Diamond................... Vice President - Enterprise Controller
Mark B. Koogler.................... Vice President and Associate General Counsel
</TABLE>
For biographical information concerning Messrs. McFerson, Crabtree, Oakley
and Druen, see Section 1 above.
Duane M. Campbell has served as Vice President - Treasurer of Parent since
August 1996. Mr. Campbell served as Assistant Treasurer of Parent from January
1987 to August 1996.
Dennis W. Click has served as Vice President and Secretary of Parent since
December 1997. Mr. Click served as Vice President and Assistant Secretary of
Parent from August 1994 to December 1997. From August 1989 to August 1994, Mr.
Click served as Associate Vice President and Assistant Secretary of Parent.
David A. Diamond has served as Vice President - Enterprise Controller of
Parent since August 1996. Mr. Diamond served as Vice President - Controller of
Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance
Company from October 1993 to August 1996. From April 1991 to October 1993, Mr.
Diamond served as Associate Vice President-Corporate Accounting of Parent.
Mark B. Koogler has served as Vice President-Associate General Counsel of
Parent since September 1997. Mr. Koogler served as Associate Vice
President-Associate General Counsel of Parent from September 1996 to September
1997. From February 1994 to September 1996, Mr. Koogler served as Associate
General Counsel of Parent and from March 1992 to February 1994, Mr. Koogler
served as Assistant General Counsel of Parent.
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[This Page Intentionally Left Blank]
<PAGE> 44
Facsimile copies of the Letter of Transmittal, properly completed and duly
signed, will be accepted. The Letter of Transmittal, certificates for the Common
Shares and any other required documents should be sent by each shareholder of
the Company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary as follows:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier Delivery: By Hand:
Post Office Box 3301 85 Challenger Road -- Mail 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Drop - Reorg New York, NY 10271
Attn: Reorganization Ridgefield Park, NJ 07660 Attn: Reoganization
Department Attn: Reorganization Department
Department
</TABLE>
By Facsimile Transmission:
(201) 329-8936
Confirm by Telephone:
(201) 296-4860
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and locations
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent at its address and telephone numbers set forth below. Holders
of Common Shares may also contact their broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, NY 10005
Bankers and Brokers call collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
INTERNET: World Wide Web http://www.georgeson.com
The Dealer Manager for the Offer is:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, NY 10010
Call Toll Free: (800) 863-6558
<PAGE> 1
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
ALLIED LIFE FINANCIAL CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 10, 1998
BY
NATIONWIDE LIFE ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NATIONWIDE MUTUAL INSURANCE COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON MONDAY, AUGUST 31, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier Delivery: By Hand:
Post Office Box 3301 85 Challenger Road -- Mail 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Drop - Reorg New York, NY 10271
Attn: Reorganization Department Ridgefield Park, NJ 07660 Attn: Reorganization Department
Attn: Reorganization Department
</TABLE>
By Facsimile Transmission:
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE
THE SUBSTITUTE FORM W-9 PROVIDED BELOW. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE COMPLETING THIS LETTER OF
TRANSMITTAL.
- --------------------------------------------------------------------------------
DESCRIPTION OF COMMON SHARES TENDERED
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) COMMON SHARE CERTIFICATE(S) AND
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) COMMON SHARES TENDERED
APPEAR(S) ON COMMON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- -------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF COMMON SHARES
COMMON SHARE REPRESENTED BY
CERTIFICATE COMMON SHARE NUMBER OF COMMON
NUMBER(S)* CERTIFICATE(S)* SHARES TENDERED**
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
TOTAL NUMBER OF
COMMON SHARES
- -------------------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders delivering Common Shares by book-entry transfers.
** Unless otherwise indicated, it will be assumed that all Common Shares evidenced by each Common Share
Certificate delivered to the Depositary are being tendered hereby. See Instruction 4.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
This Letter of Transmittal is to be completed by shareholders either if
certificates ("Common Share Certificates") evidencing shares of common stock, no
par value, of Allied Life Financial Corporation ("Common Shares") are to be
forwarded herewith or, unless an Agent's Message (as defined below) is utilized,
if delivery of Common Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company or Philadelphia Depository
Trust Company (each a "Book-Entry Transfer Facility" and collectively, the
"Book-Entry Transfer Facilities") pursuant to the book-entry transfer procedure
described in "Procedures for Tendering Common Shares" of the Offer to Purchase
(as defined below). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Shareholders whose Common Share Certificates are not immediately available
or who cannot deliver all documents required hereby to the Depositary prior to
the Expiration Date (as defined in the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who wish
to tender their Common Shares must do so pursuant to the guaranteed delivery
procedure described in "Procedures for Tendering Common Shares" of the Offer to
Purchase. See Instruction 2.
[ ] CHECK HERE IF TENDERED COMMON SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING.
Name of Tendering Institution
-----------------------------------------------------------------------------
Check Box of Applicable Book-Entry Transfer Facility:
<TABLE>
<CAPTION>
PHILADELPHIA
THE DEPOSITORY DEPOSITORY
TRUST COMPANY TRUST COMPANY
-------------- -------------
<S> <C> <C>
(CHECK ONE) [ ] [ ]
</TABLE>
Account Number
-----------------------------------------------------------------------------
Transaction Code Number
-----------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED COMMON SHARES ARE BEING TENDERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING.
Name(s) of Registered Holder(s)
-----------------------------------------------------------------------------
Window Ticket No. (if any)
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
-----------------------------------------------------------------------------
Name of Institution which Guaranteed Delivery
-----------------------------------------------------------------------------
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificates representing
Common Shares tendered hereby. The certificates and number of Common Shares that
the undersigned wishes to tender should be indicated in the appropriate boxes.
[ ] CHECK HERE IF TENDER IS BEING MADE PURSUANT TO LOST, STOLEN, DESTROYED OR
MUTILATED SECURITIES. SEE INSTRUCTION 11.
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
2
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to Nationwide Life Acquisition Corporation
("Purchaser"), an Ohio corporation and a wholly owned subsidiary of Nationwide
Mutual Insurance Company ("Parent"), an Ohio mutual insurance company, the
above-described shares of common stock, no par value (the "Common Shares") of
Allied Life Financial Corporation, an Iowa corporation (the "Company"), pursuant
to Purchaser's offer to purchase all outstanding Common Shares, at a price of
$30.00 per share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
June 10, 1998 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which, as amended from time to
time, together constitute the "Offer"). The undersigned understands that
Purchaser reserves the right to transfer or assign, in whole or in part from
time to time, to one or more of its affiliates, the right to purchase all or any
portion of the Common Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Common Shares
tendered herewith, in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, Purchaser all right, title and interest in and to all the Common
Shares that are being tendered hereby and all dividends, distributions
(including, without limitation, distributions of additional Common Shares) and
rights declared, paid or distributed in respect of such Common Shares on or
after June 10, 1998 (collectively, "Distributions"), and irrevocably appoints
ChaseMellon Shareholder Services, L.L.C., (the "Depositary") the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Common Shares
and all Distributions, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (i)
deliver Common Share Certificates evidencing such Common Shares and all
Distributions, or transfer ownership of such Common Shares and all Distributions
on the account books maintained by a Book-Entry Transfer Facility, together, in
either case, with all accompanying evidences of transfer and authenticity, to or
upon the order of Purchaser, (ii) present such Common Shares and all
Distributions for transfer on the books of the Company and (iii) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Common Shares and all Distributions, all in accordance with the terms of the
Offer.
In the event that the Company changes the number of Common Shares issued
and outstanding prior to the Effective Time of the Merger (as defined in the
Offer to Purchase) as a result of a reclassification, stock split (including a
reverse split), stock dividend or distribution, recapitalization, merger,
subdivision or other similar transaction, the Merger Consideration shall be
equitably adjusted.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints David A. Diamond, W. Sidney Druen and Mark B. Koogler, and each of
them, as the attorneys and proxies of the undersigned, each with full power of
substitution, to the full extent of the undersigned's rights with respect to the
Common Shares tendered by the undersigned and accepted for payment by Purchaser
(and any and all Distributions). All such proxies shall be considered coupled
with an interest in the tendered Common Shares. This appointment will be
effective if, when, and only to the extent that Purchaser accepts such Common
Shares for payment pursuant to the Offer. Upon such acceptance for payment, all
prior proxies given by the undersigned with respect to such Common Shares,
Distributions and other securities will, without further action, be revoked, and
no subsequent proxies may be given. The individuals named above as proxies will,
with respect to the Common Shares, Distributions and other securities for which
the appointment is effective, be empowered to exercise all voting and other
rights of the undersigned as they, in their sole discretion, may deem proper at
any annual, special, adjourned or postponed meeting of Company shareholders, by
written consent or otherwise, and Purchaser reserves the right to require that,
in order for Common Shares, Distributions or other securities to be deemed
validly tendered, immediately upon Purchaser's acceptance for payment of such
Common Shares, Purchaser or Purchaser's designees must be able to exercise full
voting rights with respect to such Common Shares.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Common Shares
tendered hereby and all Distributions, that the undersigned own(s) the Common
Shares tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended ("Rule 14e-4"), that such tender of
Common Shares complies with Rule 14e-4 and that when such Common Shares are
accepted for payment by Purchaser, Purchaser will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Common
Shares
3
<PAGE> 4
and Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed by the
Depositary or Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the Common Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchaser all Distributions in respect of the
Common Shares tendered hereby, accompanied by appropriate documentation of
transfer, and, pending such remittance and transfer or appropriate assurance
thereof, Purchaser shall be entitled to all rights and privileges as owner of
each such Distribution and may withhold the entire purchase price of the Common
Shares tendered hereby, or deduct from such purchase price, the amount or value
of such Distribution as determined by Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, executors, personal and legal representatives, administrators,
trustees in bankruptcy, successors and assigns of the undersigned. Except as
stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Common Shares pursuant to any
one of the procedures described in "Procedures for Tendering Common Shares" of
the Offer to Purchase and in the instructions hereto will constitute the
undersigned's acceptance of the terms and conditions of the Offer. Purchaser's
acceptance for payment of Common Shares tendered pursuant to the Offer will
constitute a binding agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Offer. The undersigned recognizes
that under certain circumstances set forth in the Offer to Purchase, Purchaser
may not be required to accept for payment any of the Common Shares tendered
hereby.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price and/or return any
Common Share Certificates evidencing Common Shares not tendered or accepted for
payment, in the name(s) of the registered holder(s) appearing above under
"Description of Common Shares Tendered." Similarly, unless otherwise indicated
in the box entitled "Special Delivery Instructions," please mail the check for
the purchase price of all Common Shares purchased and all Common Share
Certificates evidencing Common Shares not tendered or not purchased (and
accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Common Shares Tendered." In the
event that the boxes entitled "Special Payment Instructions" and "Special
Delivery Instructions" are both completed, please issue the check for the
purchase price and/or return any Common Share Certificates for Common Shares not
purchased or not tendered or accepted for payment in the name(s) of, and mail
such check and/or return such Common Share Certificates to, the person(s) so
indicated. Unless otherwise indicated herein in the box entitled "Special
Payment Instructions," please credit any Common Shares tendered hereby and
delivered by book-entry transfer, but which are not purchased, by crediting the
account at the Book-Entry Transfer Facility designated above. The undersigned
recognizes that Purchaser has no obligation, pursuant to the instructions in the
box entitled "Special Payment Instructions," to transfer any Common Shares from
the name of the registered holder(s) thereof if Purchaser does not purchase any
of the Common Shares tendered hereby.
4
<PAGE> 5
- ------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Common
Shares or Common Share Certificates evidencing Common Shares not tendered
or not purchased are to be issued in the name of someone other than the
undersigned, or if the Common Shares delivered by book-entry transfer
which are not purchased are to be returned by credit to an account
maintained at a Book-Entry Transfer Facility other than that designated
above.
Issue [ ] Check [ ] Common Share Certificate to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
-------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
RECIPIENT'S TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
[ ] Credit unpurchased Common Shares delivered by book-entry transfer to
the Book-Entry Transfer Facility account set forth below:
Check appropriate box:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
------------------------------------------------------------
(ACCOUNT NUMBER)
============================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Common Share Certificates tendered and/or
Common Share Certificates evidencing Common Shares not tendered or not
purchased are to be mailed to someone other than the undersigned, or to
the undersigned at an address other than that shown under "Description of
Common Shares Tendered."
Mail [ ] Check [ ] Common Share Certificates to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
-------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
RECIPIENT'S TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- ------------------------------------------------------------
5
<PAGE> 6
IMPORTANT
SHAREHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated:
- ------------------------1998
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Common
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or other persons acting
in a fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- --------------------------------------------------------------------------------
Address:
================================================================================
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.:
- ----------------------------------------------------------------------
Taxpayer Identification or Social Security No.:
- ----------------------------------------------------------------
(COMPLETE SUBSTITUTE FORM W-9 INCLUDED
HEREIN)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
- --------------------------------------------------------------------------------
Name:
================================================================================
(PLEASE TYPE OR PRINT)
Title:
- --------------------------------------------------------------------------------
Name of Firm:
- --------------------------------------------------------------------------------
Address:
================================================================================
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
- -------------------------------------------------------------------------------
Dated:
- ------------------------, 1998
FOR USE BY FINANCIAL INSTITUTIONS ONLY
FINANCIAL INSTITUTIONS: PLACE MEDALLION GUARANTEE IN SPACE BELOW
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is a
bank, broker, dealer, credit union, savings association or other entity that is
a member in good standing of the Securities Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (each, an "Eligible Institution"). No signature
guarantee is required on this Letter of Transmittal (i) if this Letter of
Transmittal is signed by the registered holder(s) (which term, for purposes of
this document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Common Shares)
of Common Shares tendered herewith, unless such holder(s) has (have) completed
either the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" herein or (ii) if such Common Shares are
tendered for the account of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Common Share Certificates. This
Letter of Transmittal is to be used either if Common Share Certificates are to
be forwarded herewith or if Common Shares are to be delivered by book-entry
transfer pursuant to the procedure set forth in "Procedures for Tendering Common
Shares" of the Offer to Purchase. Common Share Certificates evidencing all
tendered Common Shares, or confirmation of a book-entry transfer of such Common
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities pursuant to the procedures set forth in "Procedures for Tendering
Common Shares" of the Offer to Purchase, together with a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth herein prior to the
Expiration Date. If Common Share Certificates are forwarded to the Depositary in
multiple deliveries, a properly completed and duly executed Letter of
Transmittal must accompany each such delivery.
Shareholders whose Common Share Certificates are not immediately available,
who cannot deliver their Common Share Certificates and all other required
documents to the Depositary prior to the Expiration Date or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis may tender
their Common Shares pursuant to the guaranteed delivery procedure described in
"Procedures for Tendering Common Shares" of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, must be
received by the Depositary prior to the Expiration Date; and (iii) the Common
Share Certificates, in proper form for transfer, or a confirmation of a
book-entry transfer of such Common Shares into the Depositary's account at one
of the Book-Entry Transfer Facilities, together with a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile thereof) with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three (3) New York Stock
Exchange Inc. trading days after the date of execution of the Notice of
Guaranteed Delivery, all as described in "Procedures for Tendering Common
Shares" of the Offer to Purchase.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation (as defined in the Offer to Purchase), which states that
such Book-Entry Transfer Facility has received an express acknowledgment from
the participant in such Book-Entry Transfer Facility tendering the Common Shares
that such participant has received and agrees to be bound by the terms of this
Letter of Transmittal and that Purchaser may enforce such agreement against the
participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, COMMON SHARE
CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY
BOOK-ENTRY TRANSFER FACILITY, IS AT THE SOLE OPTION AND RISK OF THE TENDERING
SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE
7
<PAGE> 8
ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Common Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering shareholders waive any right
to receive any notice of the acceptance of their Common Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Common Shares Tendered" is inadequate, the Common Share Certificate number, the
total number of Common Shares represented by such Common Share Certificates and
the number of Common Shares tendered should be listed on a separate schedule and
attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by book-entry
transfer). If fewer than all the Common Shares evidenced by any Common Share
Certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of shares of Common Shares which are to be tendered in the column
entitled "Number of Common Shares Tendered" in the above "Description of Common
Shares Tendered". In such cases, new Common Share Certificate(s) evidencing the
remainder of the Common Shares that were evidenced by the Common Share
Certificate(s) delivered to the Depositary herewith will be sent to the
person(s) signing this Letter of Transmittal, unless otherwise provided in the
box entitled "Special Delivery Instructions," as soon as practicable after the
expiration or termination of the Offer. All Common Shares evidenced by Common
Share Certificates delivered to the Depositary will be deemed to have been
tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Common
Shares tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Common Share Certificate(s) evidencing
such Common Shares without alteration, enlargement or any other change
whatsoever. DO NOT SIGN THE BACK OF THE COMMON SHARE CERTIFICATES.
If any Common Shares tendered hereby are owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Common Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Common Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Common Shares tendered hereby, no endorsements of Common Share Certificates or
separate stock powers are required, unless payment is to be made to, or Common
Share Certificates evidencing Common Shares not tendered or not purchased are to
be issued in the name of, a person other than the registered holder(s), in which
case, the Common Share Certificate(s) evidencing the Common Shares tendered
hereby must be endorsed or accompanied by appropriate stock powers, in either
case signed exactly as the name(s) of the registered holder(s) appear(s) on such
Common Share Certificate(s). Signatures on such Common Share Certificate(s) and
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Common Shares tendered hereby, the Common Share
Certificate(s) evidencing the Common Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Common Share
Certificate(s). Signatures on such Common Share Certificate(s) and stock powers
must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Common Share Certificates or stock
power is signed by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a fiduciary
or representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to act
must be submitted.
8
<PAGE> 9
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Common Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price of any Common Shares purchased is to be
made to, or Common Share Certificate(s) evidencing Common Shares not tendered or
not purchased are to be issued in the name of, a person other than the
registered holder(s), the amount of any stock transfer taxes (whether imposed on
the registered holder(s), such other person or otherwise) payable on account of
the transfer to such other person will be deducted from the purchase price of
such Common Shares purchased, unless evidence satisfactory to Purchaser of the
payment of such taxes, or exemption therefrom, is submitted. Except as provided
in this Instruction 6, it will not be necessary for transfer tax stamps to be
affixed to the Common Share Certificates evidencing the Common Shares tendered
hereby.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Common Shares tendered hereby is to be issued, or Common Share
Certificate(s) evidencing Common Shares not tendered or not purchased are to be
issued, in the name of a person other than the person(s) signing this Letter of
Transmittal or if such check or any such Common Share Certificate is to be sent
to someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal but at an address other than that
shown in the box entitled "Description of Common Shares Tendered," the
appropriate boxes on this Letter of Transmittal must be completed. Shareholders
tendering Common Shares by book-entry transfer may request that Common Shares
not purchased be credited to such account maintained at a Book-Entry Transfer
Facility as such stockholder may designate in the box entitled "Special Payment
Instructions" hereof. If no such instructions are given, all such Common Shares
not purchased will be returned by crediting the account at the Book-Entry
Transfer Facilities designated herein as the account from which such Common
Shares were delivered.
8. Waiver of Conditions. Purchaser may waive the conditions of the Offer
in its reasonable discretion, except for the Minimum Condition, which may not be
waived without the consent of the Company.
9. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Information Agent or Dealer
Manager at their respective addresses or telephone numbers set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal and other
tender offer materials may be obtained from the Information Agent or the Dealer
Manager, and copies will be furnished promptly at Purchaser's expense. No fees
or commissions will be paid to brokers, dealers or other persons (other than the
Information Agent and the Dealer Manager) for soliciting tenders of Common
Shares pursuant to the Offer.
10. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering shareholder has been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding, such shareholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
shareholder has since been notified by the Internal Revenue Service that such
shareholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering shareholder to
31% federal income tax withholding on the payment of the purchase price of all
Common Shares purchased from such shareholder. If the tendering shareholder has
not been issued a TIN and has applied for one or intends to apply for one in the
near future, such shareholder should write "Applied For" in the space provided
for the TIN in Part 1 of the Substitute Form W-9, and sign and date the
Substitute Form W-9. If "Applied For" is written in Part 1 and the Depositary is
not provided with a TIN within 60 days, the Depositary will withhold 31% on all
payments of the purchase price to such shareholder until a TIN is provided to
the Depositary.
11. Lost, Stolen, Destroyed or Mutilated Common Share Certificates. If any
Common Share Certificates have been lost, destroyed, mutilated or stolen, the
shareholder should promptly notify the Depositary. The shareholder will then be
instructed as to the steps that must be taken in order to replace the Common
Share Certificate(s). This Letter of Transmittal and related documents cannot be
processed until
9
<PAGE> 10
the procedures for replacing lost or destroyed Common Share Certificates have
been followed. In order to facilitate replacement, contact Harris Trust &
Savings Bank at (312) 360-5100.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
COMMON SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER
REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF
GUARANTEED DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE.
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Common
Shares are accepted for payment is required by law to provide the Depositary (as
payer) with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the shareholder
may be subject to a $50 penalty imposed by the Internal Revenue Service and
payments that are made to such shareholder with respect to Common Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%. In
addition, if a shareholder makes a false statement that results in no imposition
of backup withholding, and there was no reasonable basis for such a statement, a
$500 penalty may also be imposed by the Internal Revenue Service.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions. A shareholder should consult his or her tax advisor as
to such shareholder's qualification for an exemption from backup withholding and
the procedure for obtaining such exemption.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the shareholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Common Shares purchased pursuant to the Offer, the shareholder
is required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
(i) such shareholder has not been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding as a result of a failure to
report all interest or dividends or (ii) the Internal Revenue Service has
notified such shareholder that such shareholder is no longer subject to backup
withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Common
Shares tendered hereby. If the Common Shares are in more than one name or are
not in the name of the actual owner, consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidance on which number to report. If the tendering shareholder has
not been issued a TIN and has applied for a number or intends to apply for a
number in the near future, the shareholder should write "Applied For" in the
space provided for the TIN in Part 1, and sign and date the Substitute Form W-9.
If "Applied For" is written in Part 1 and the Depositary is not provided with a
TIN within 60 days, the Depositary will withhold 31% of all payments of the
purchase price to such shareholder until a TIN is provided to the Depositary.
10
<PAGE> 11
ALL TENDERING STOCKHOLDERS MUST COMPLETE THE FOLLOWING:
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1 -- Taxpayer Identification Number -- For -------------------------------
FORM W-9 all accounts, enter your taxpayer Social Security Number
DEPARTMENT OF THE identification number in the box at right. (For OR
TREASURY most individuals, this is your social security
INTERNAL REVENUE SERVICE number. If you do not have a number, see -------------------------------
Obtaining a Number in the enclosed Guidelines Employer Identification Number
PAYER'S REQUEST FOR TAXPAYER for Certification of Taypayer Identification (If awaiting TIN write "Applied For")
IDENTIFICATION NUMBER ("TIN") Number of Substitute Form W-9.) Certify by
signing and dating below. Note: If the account
is in more than one name, see the chart in the
enclosed Guidelines to determine which number
to give the payer.
----------------------------------------------------------------------------------------
PART 2 -- For Payees Exempt From Backup Withholding, see the enclosed Guidelines and
complete as instructed therein.
- -------------------------------------------------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued
to me), and
(2) I am not subject to backup withholding because I have not been notified by the Internal Revenue Service (the "IRS")
that I am subject to backup withholding as a result of failure to report all interest or dividends, or the IRS has
notified me that I am no longer subject to backup withholding.
CERTIFICATE INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are subject
to backup withholding because of underreporting interest or dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you
are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed
Guidelines.)
- -------------------------------------------------------------------------------------------------------------------------
Signature Date __________ , 1998
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WRITE "APPLIED FOR" IN
THE SPACE PROVIDED FOR THE TIN IN PART 1 OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable payments made to me will be withheld.
==============================================================
Signature Date
-------------------------------------------------------------
Name (Please Print)
- --------------------------------------------------------------------------------
<PAGE> 12
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and locations
listed below. Additional copies of the Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent at its address and telephone numbers set forth below. Holders
of Common Shares may also contact their broker, dealer, commercial bank or trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, NY 10005
Bankers and Brokers call collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
INTERNET: World Wide Web http://www.georgeson.com
The Dealer Manager for the Offer is:
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue
New York, NY 10010
Call Toll Free: (800) 863-6558
June 10, 1998
<PAGE> 1
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
ALLIED LIFE FINANCIAL CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if certificates
("Common Share Certificates") evidencing shares of common stock, no par value
(the "Common Shares"), of Allied Life Financial Corporation, an Iowa corporation
(the "Company"), are not immediately available, (ii) if Common Share
Certificates and all other required documents cannot be delivered to ChaseMellon
Shareholder Services, L.L.C., as Depositary (the "Depositary"), prior to the
Expiration Date (as defined in "Section 1. Terms of the Offer; Expiration Date"
of the Offer to Purchase (as defined below)) or (iii) if the procedure for
delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or mail or transmitted by
telegram or facsimile transmission to the Depositary and must include a
guarantee by an Eligible Institution (as defined in the Offer to Purchase) and a
representation that the shareholder owns the Common Shares, and that the tender
of the Common Shares effected thereby complies with Rule 14e-4 under the
Securities Exchange Act of 1934, as amended, each in the form set forth in this
Notice of Guaranteed Delivery. See "Section 3. Procedures for Tendering Common
Shares" of the Offer to Purchase.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Courier Delivery: By Hand:
Post Office Box 3301 85 Challenger Road -- Mail 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Drop - Reorg New York, NY 10271
Attn: Reorganization Ridgefield Park, NJ 07660 Attn: Reorganization
Department Attn: Reorganization Department
Department
</TABLE>
By Facsimile Transmission:
(201) 296-4293
Confirm by Telephone:
(201) 296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
THE GUARANTEE INCLUDED HEREIN MUST BE COMPLETED.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Nationwide Life Acquisition Corporation,
an Ohio corporation and a wholly owned subsidiary of Nationwide Mutual Insurance
Company, an Ohio mutual insurance company, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 10, 1998 (the "Offer to
Purchase") and the related Letter of Transmittal, receipt of each of which is
hereby acknowledged, the number of Common Shares specified below pursuant to the
guaranteed delivery procedure described in "Section 3. Procedures for Tendering
Common Shares" of the Offer to Purchase.
Number of Common Shares:
- ----------------
Common Share
Certificate Nos. (If Available):
- ---------------------------------------------------
- ---------------------------------------------------
[ ]Check box if Common Shares will
be delivered by book-entry transfer
Account No.
- -----------------------------------
- ---------------------------------------------------
- ---------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
Dated: ________ , 1998
Name(s) of Holders:
- ---------------------------------------------------
- ---------------------------------------------------
Please Type or Print
- ---------------------------------------------------
Address
- ---------------------------------------------------
Zip Code
- ---------------------------------------------------
Area Code and Telephone No.
<PAGE> 3
THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a commercial bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution") hereby (a) represents that the above named
person(s) "own(s)" the Common Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (b)
represents that the tender of Common Shares effected hereby complies with Rule
14e-4, and (c) guarantees delivery to the Depositary, at one of its addresses
set forth above, of Common Share Certificates tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Common Shares into the
account maintained by the Depositary at The Depository Trust Company or
Philadelphia Depository Trust Company, in each case with delivery of a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof) with
any required signature guarantees, or an Agent's Message (as defined in "Section
3. Procedures for Tendering Common Shares" of the Offer to Purchase), and any
other documents required by the Letter of Transmittal, within three (3) New York
Stock Exchange, Inc. trading days after the date of execution of this Notice of
Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and the
Common Share Certificates to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
All terms used herein have the meanings set forth in the Offer to Purchase.
(PLEASE PRINT)
Name:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
(Zip Code)
AUTHORIZED SIGNATURE:
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Title:
- --------------------------------------------------------------------------------
Daytime Area Code and Tel. No.:
- --------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
NOTE: DO NOT SEND COMMON SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED
DELIVERY. COMMON SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
<PAGE> 1
Exhibit (a)(4)
[CREDIT SUISSE/FIRST BOSTON LOGO]
CREDIT SUISSE FIRST BOSTON CORPORATION
Eleven Madison Avenue Telephone (212) 325-2000
New York, NY 10010-3829
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ALLIED LIFE FINANCIAL CORPORATION
AT
$30.00 NET PER SHARE
BY
NATIONWIDE LIFE ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NATIONWIDE MUTUAL INSURANCE COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON MONDAY, AUGUST 31, 1998, UNLESS THE OFFER IS EXTENDED.
June 10, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Nationwide Life Acquisition Corporation
("Purchaser"), an Ohio corporation and a wholly owned subsidiary of Nationwide
Mutual Insurance Company, an Ohio mutual insurance company ("Parent"), to act as
Dealer Manager in connection with Purchaser's offer to purchase all outstanding
shares of common stock, no par value (the "Common Shares"), of Allied Life
Financial Corporation, an Iowa corporation (the "Company"), at a price of $30.00
per Common Share, net to the seller in cash, without interest thereon, upon the
terms and subject to the conditions set forth in Purchaser's Offer to Purchase
dated June 10, 1998 (the "Offer to Purchase") and the related Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer") enclosed herewith. Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Common Shares registered in
your name or in the name of your nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST 2,000,000 COMMON SHARES OF THE COMPANY (THE "MINIMUM CONDITION"); (2)
PARENT AND PURCHASER HAVING OBTAINED ALL INSURANCE REGULATORY APPROVALS
NECESSARY FOR THEIR ACQUISITION OF CONTROL OF THE COMPANY AND ITS INSURANCE
SUBSIDIARY ON TERMS AND CONDITIONS REASONABLY SATISFACTORY TO PURCHASER (THE
"INSURANCE REGULATORY APPROVAL CONDITION"); AND (3) THE SATISFACTION OF CERTAIN
CONDITIONS WITH RESPECT TO THE MERGER OF ALLIED MUTUAL INSURANCE COMPANY
("ALLIED MUTUAL") WITH AND INTO PARENT. THE OFFER IS ALSO SUBJECT TO CERTAIN
OTHER TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE.
<PAGE> 2
For your information and for forwarding to your clients for whom you hold
Common Shares registered in your name or in the name of your nominee, or who
hold Common Shares registered in their own names, we are enclosing the following
documents:
1. Offer to Purchase dated June 10, 1998;
2. Letter of Transmittal for your use and for the information of your
clients. Facsimile copies of the Letter of Transmittal may be used to
tender Common Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if a
shareholder's certificates evidencing such shareholder's Common Shares and
all other required documents are not immediately available or cannot be
delivered to ChaseMellon Shareholder Services, L.L.C. (the "Depositary") by
the Expiration Date (as defined in the Offer to Purchase) or if the
procedure for book-entry transfer cannot be completed on a timely basis;
4. A printed form of a letter which may be sent to your clients for
whose accounts you hold Common Shares registered in your name or in the
name of your nominee, with space provided for obtaining such clients'
instructions with regard to the Offer; and
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT
5:00 P.M., NEW YORK CITY TIME, ON MONDAY, AUGUST 31, 1998, UNLESS THE OFFER IS
EXTENDED.
Your attention is invited to the following:
1. The tender price is $30.00 per Common Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer.
2. The Offer is being made for all outstanding Common Shares.
3. The Offer and withdrawal rights will expire at 5:00 P.M., New York
City time, on Monday, August 31, 1998, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, the Minimum
Condition and the Insurance Regulatory Approval Condition. The Offer is
also subject to the satisfaction of certain conditions with respect to the
merger of Allied Mutual with and into Parent and to certain other terms and
conditions set forth in the Offer to Purchase; however, the Offer is not
conditioned upon Purchaser obtaining financing.
5. Except as otherwise provided in Instruction 6 of the Letter of
Transmittal, tendering stockholders will not be obligated to pay stock
transfer taxes with respect to the purchase of Common Shares by Purchaser
pursuant to the Offer. However, backup federal income tax withholding at a
rate of 31% may be required, unless an exemption applies or unless the
required taxpayer identification information is provided. See Instruction
10 of, and "Important Tax Information" in, the Letter of Transmittal.
6. In all cases, payment for Common Shares accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates evidencing such Common Shares (or a confirmation
of a book-entry transfer of such Common Shares into the Depositary's
account at the Book-Entry Transfer Facility (as defined in the Offer to
Purchase)), a Letter of Transmittal (or facsimile thereof) properly
completed and duly executed, with any required signature guarantees, or, in
the case of a book-entry transfer, an Agent's Message (as defined in the
Offer to Purchase), and any other documents required by the Letter of
Transmittal. See "Procedures for Tendering Common Shares" of the Offer to
Purchase.
<PAGE> 3
If holders of Common Shares wish to tender, but it is impracticable for
them to forward their certificates evidencing such Common Shares or other
required documents prior to the Expiration Date or, if applicable, to comply
with the book-entry transfer procedures on a timely basis, a tender may be
effected by following the guaranteed delivery procedure described in "Procedures
for Tendering Common Shares" of the Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager, the Depositary and the Information
Agent as described in the Offer to Purchase) in connection with the solicitation
of tenders of Common Shares pursuant to the Offer. However, Purchaser will
reimburse you for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients. Purchaser will pay or
cause to be paid any stock transfer taxes payable with respect to the transfer
of Common Shares to it, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
Credit Suisse First Boston Corporation, the Dealer Manager, or Georgeson &
Company Inc., the Information Agent, at their respective addresses and telephone
numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Very truly yours,
Credit Suisse First Boston
Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PARENT, THE PURCHASER, THE COMPANY, THE
DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF
ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ALLIED LIFE FINANCIAL CORPORATION
AT
$30.00 NET PER COMMON SHARE
BY
NATIONWIDE LIFE ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NATIONWIDE MUTUAL INSURANCE COMPANY
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON MONDAY, AUGUST 31, 1998, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase dated June 10,
1998 (the "Offer to Purchase") and a related Letter of Transmittal in connection
with the offer by Nationwide Life Acquisition Corporation ("Purchaser"), an Ohio
corporation and a wholly owned subsidiary of Nationwide Mutual Insurance
Company, an Ohio mutual insurance company ("Parent"), to purchase all
outstanding shares of common stock, no par value (the "Common Shares"), of
Allied Life Financial Corporation, an Iowa corporation (the "Company"), at a
price of $30.00 per Common Share, net to the seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal (which, as amended from time
to time, together constitute the "Offer").
Shareholders who desire to tender Common Shares pursuant to the Offer and
whose certificates evidencing such Common Shares are not immediately available
or for whom the procedures for book-entry transfer set forth in the Offer to
Purchase cannot be completed on a timely basis or time will not permit all
required documents to reach ChaseMellon Shareholder Services, L.L.C. (the
"Depositary") prior to the Expiration Date (as defined in the Offer to Purchase)
may nevertheless tender their Common Shares according to the guaranteed delivery
procedures set forth in "Section 3. Procedures for Tendering Common Shares" of
the Offer to Purchase.
We are (or our nominee is) the holder of record of Common Shares held by us
for your account. A TENDER OF SUCH COMMON SHARES CAN BE MADE ONLY BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
COMMON SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Common Shares held by us for your account, upon the
terms and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $30.00 per Common Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer.
2. The Offer is being made for all outstanding Common Shares.
<PAGE> 2
3. The Offer and withdrawal rights will expire at 5:00 P.M., New York
City time, on Monday, August 31, 1998, unless the Offer is extended.
4. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not properly withdrawn prior to the expiration of the
Offer at least 2,000,000 Common Shares of the Company; (2) Parent and
Purchaser having obtained all insurance regulatory approvals necessary for
their acquisition of control of the Company and its insurance subsidiary on
terms and conditions reasonably satisfactory to Purchaser; and (3) the
satisfaction of certain conditions with respect to the merger of Allied
Mutual Insurance Company with and into Parent. The Offer is also subject to
certain other terms and conditions set forth in the Offer to Purchase,
however, the Offer is not conditioned upon Purchaser obtaining financing.
5. Except as otherwise provided in Instruction 6 of the Letter of
Transmittal, tendering shareholders will not be obligated to pay stock
transfer taxes with respect to the purchase of Common Shares by Purchaser
pursuant to the Offer. However, backup federal income tax withholding at a
rate of 31% may be required, unless an exemption applies or unless the
required taxpayer identification information is provided. See Instruction
10 of, and "Important Tax Information" in, the Letter of Transmittal.
6. In all cases, payment for Common Shares purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of
certificates evidencing, or a Book-Entry Confirmation (as defined in the
Offer to Purchase) with respect to, such Common Shares and a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed,
with all required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase), and any
other documents required by the Letter of Transmittal. See "Section 3.
Procedures for Tendering Common Shares" of the Offer to Purchase.
If you wish to have us tender any or all of your Common Shares, please so
instruct us by completing, executing and returning to us the form contained in
this letter. An envelope in which to return your instructions to us is enclosed.
If you authorize the tender of your Common Shares, all such Common Shares will
be tendered unless otherwise specified in your instructions. Your instructions
should be forwarded to us in ample time to permit us to submit a tender on your
behalf prior to the expiration of the Offer.
THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE AND THE RELATED LETTER OF
TRANSMITTAL, AS AMENDED FROM TIME TO TIME, AND IS BEING MADE TO ALL HOLDERS OF
COMMON SHARES.
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Common Shares pursuant thereto,
Purchaser will make a good faith effort to comply with such state statute. If,
after such good faith effort, Purchaser cannot comply with such state statute,
the Offer will not be made to (nor will tenders be accepted from or on behalf
of) the holders of Common Shares in such state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by
Credit Suisse First Boston Corporation or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK OF
ALLIED LIFE FINANCIAL CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated June 10, 1998 and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the offer by
Nationwide Life Acquisition Corporation, an Ohio corporation, and a wholly owned
subsidiary of Nationwide Mutual Insurance Company, an Ohio mutual insurance
company, to purchase all outstanding shares of common stock, no par value (the
"Common Shares"), of Allied Life Financial Corporation, an Iowa corporation, at
a price of $30.00 per Common Share, net to the seller in cash, without interest
thereon.
This will instruct you to tender the number of Common Shares indicated
below (or, if no number is indicated below, all Common Shares) that are held by
you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase.
Number of Common Shares to Be Tendered:
Common Shares*
Dated: , 1998
SIGN HERE
- ---------------------------------------------------
- ---------------------------------------------------
Signature(s)
- ---------------------------------------------------
- ---------------------------------------------------
Please type or print name(s)
- ---------------------------------------------------
- ---------------------------------------------------
Please type or print address
- ---------------------------------------------------
Area Code and Telephone Number
- ---------------------------------------------------
Taxpayer Identification or
Social Security Number
- ------------
* Unless otherwise indicated, it will be assumed that all Common Shares held by
us for your account are to be tendered.
<PAGE> 1
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- --------------------------------------------------------------- ---------------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
SOCIAL SECURITY IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF-- FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- --------------------------------------------------------------- ---------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 9. A valid trust, estate, The legal entity (Do
2. Two or more individuals The actual owner or pension trust not furnish the
(joint account) of the account or, identifying number
if combined funds, of the personal rep-
any one of the indi- resentative or trus-
viduals(1) tee unless the legal
3. Husband and wife The actual owner entity itself is not
(joint account) of the account or, designated in the
if joint funds, account title.)(5)
either person(1) 10. Corporate account The corporation
4. Custodian account of a minor The minor(2) 11. Religious, charitable, or The organization
(Uniform Gift to Minors Act) educational organization account
5. Adult and minor The adult or, 12. Partnership account held in the The partnership
(joint account) if the minor is the name of the business
only contributor, 13. Association, club or other The organization
the minor(1) tax-exempt organization
6. Account in the name of The ward, minor, 14. A broker or registered nominee The broker or
guardian or committee for or incompetent nominee
a designated ward, minor, person(3) 15. Account with the Department The public entity
or incompetent person of Agriculture in the name of a
7. a. The usual revocable savings The grantor- public entity (such as a State or local
trust account (grantor is also trustee(1) government, school district, or prison)
trustee) that receives agricultural program
b. So-called trust account that is The actual owner(1) payments
not a legal or valid trust under
State law
8. Sole proprietorship account The owner(4)
- --------------------------------------------------------------- ---------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) of the Code to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends and patronage dividends that are
not subject to information reporting are also not subject to backup withholding.
For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS -- If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of any
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT
YOUR TAX CONSULTANT OR THE
INTERNAL REVENUE SERVICE.
<PAGE> 1
Exhibit (a)(8)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Common Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase, dated June 10, 1998, and the related Letter of
Transmittal and is being made to all holders of Common Shares. The Offer is not
being made to (nor will tenders be accepted from or on behalf of) holders of
Common Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In those jurisdictions where securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of Purchaser (as defined below) by Credit Suisse
First Boston Corporation ("Credit Suisse First Boston" or the "Dealer Manager")
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
ALLIED LIFE FINANCIAL CORPORATION
AT
$30.00 NET PER COMMON SHARE
BY
NATIONWIDE LIFE
ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
NATIONWIDE MUTUAL
INSURANCE COMPANY
Nationwide Life Acquisition Corporation, an Ohio corporation (the "Purchaser")
and a wholly owned subsidiary of Nationwide Mutual Insurance Company, an Ohio
mutual insurance company (the "Parent"), is offering to purchase all outstanding
shares of Common Stock, no par value (the "Common Shares"), of Allied Life
Financial Corporation, an Iowa corporation (the "Company"), at a purchase price
of $30.00 per Common Share, net to the seller in cash, without interest thereon
(the "Offer Price"), upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated June 10, 1998 (the "Offer to Purchase"), and the
related Letter of Transmittal (which together with the Offer to Purchase and any
amendments or supplements thereto constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON MONDAY, AUGUST 31, 1998, UNLESS THE OFFER IS EXTENDED.
This Offer is being made pursuant to the Agreement and Plan of Merger, dated as
of June 3, 1998 (the "Merger Agreement") among the Parent, the Purchaser and the
Company. The Merger Agreement provides, among other things, for the commencement
of the Offer by the Purchaser, and further provides that, following the purchase
of Common Shares pursuant to the Offer and promptly after the satisfaction or
waiver of certain conditions, the Purchaser will be merged with and into the
Company (the "Merger") with the Company as the surviving corporation in the
Merger. At the effective time of the Merger, each outstanding Common Share
(except for Common Shares held in the treasury of the Company and Common Shares
held by shareholders who properly exercise their dissenters' rights pursuant to
the Iowa Business Corporation Act) will be converted into the right to receive
$30.00 per Common Share (or any higher price per Common Share paid for Common
Shares pursuant to the Offer), net to the shareholder in cash, without interest
thereon.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT
LEAST 2,000,000 COMMON SHARES, (2) PARENT AND PURCHASER HAVING OBTAINED ALL
INSURANCE REGULATORY APPROVALS NECESSARY FOR THEIR ACQUISITION OF CONTROL OF THE
COMPANY AND ITS INSURANCE SUBSIDIARY ON TERMS AND CONDITIONS REASONABLY
SATISFACTORY TO PURCHASER AND (3) THE SATISFACTION OF CERTAIN CONDITIONS WITH
RESPECT TO THE MERGER OF ALLIED MUTUAL INSURANCE COMPANY WITH AND INTO PARENT.
THE OFFER IS NOT CONDITIONED UPON PURCHASER OBTAINING FINANCING.
THE BOARD OF DIRECTORS OF THE COMPANY, ACTING ON THE UNANIMOUS RECOMMENDATION
OF A COMMITTEE CONSISTING OF ALL OF THE UNAFFILIATED DIRECTORS, HAS UNANIMOUSLY
APPROVED THE OFFER AND THE MERGER AND DETERMINED THAT THE OFFER AND THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE COMPANY AND
RECOMMENDS THAT ALL SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER, TENDER THEIR
COMMON SHARES PURSUANT TO THE OFFER AND, IF REQUIRED, VOTE IN FAVOR OF THE
MERGER.
Purchaser expressly reserves the right to modify the terms of the Offer, except
that, without the consent of the Company, Purchaser shall not (i) reduce the
number of Common Shares subject to the Offer, (ii) reduce the Offer Price, (iii)
amend or add to the conditions to the Offer described in Exhibit A to the Merger
Agreement dated June 3, 1998, (iv) except as provided in the next sentence,
extend the Offer, (v) change the form of consideration payable in the Offer or
(vi) amend any other term of the Offer in any manner adverse to the holders of
the Common Shares. Notwithstanding the foregoing, Purchaser may, without the
consent of the Company, (x) extend the Offer, if at the scheduled or extended
expiration date of the Offer any of the Offer Conditions shall not be satisfied
or waived, until such time as such conditions are satisfied or waived, (y)
extend the Offer for any period required by any rule, regulation, interpretation
or position of the Securities and Exchange Commission or the staff thereof
applicable to the Offer and (z) extend the Offer for any reason on one or more
occasions for an aggregate period of not more than 10 business days beyond the
latest expiration date that would otherwise be permitted under clause (x) or (y)
of this sentence. Subject to the terms and conditions of the Offer and the
Merger Agreement, Purchaser shall, and Parent shall cause Purchaser to, accept
for payment, and pay for, all Common Shares validly tendered and not withdrawn
pursuant to the Offer that Purchaser becomes obligated to accept for payment,
and pay for, pursuant to the Offer as promptly as practicable after the
expiration of the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Common Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance of such Common Shares for payment
pursuant to the Offer. In all cases, upon
<PAGE> 2
the terms and subject to the conditions of the Offer, payment for Common Shares
purchased pursuant to the Offer will be made by deposit of the aggregate
purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from Purchaser and
transmitting payment to validly tendering shareholders. Under no circumstances
will interest on the purchase price for Common Shares be paid by Purchaser,
regardless of any delay in making such payment.
In all cases, payment for Common Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates evidencing
Common Shares ("Common Share Certificates"), or timely confirmation of a book-
entry transfer of such Common Shares into the Depositary's account at The
Depository Trust Company or Philadelphia Depository Trust Company (each a
"Book-Entry Transfer Facility"), pursuant to the procedures set forth in Section
3 of the Offer to Purchase, (ii) the Letter of Transmittal (or facsimile
thereof) properly completed and duly executed, with any required signature
guarantees, or an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry transfer, and (iii) any other documents required by
the Letter of Transmittal.
If, for any reason whatsoever, acceptance for payment of any Common Shares
tendered pursuant to the Offer is delayed, or if Purchaser is unable to accept
for payment or pay for Common Shares tendered pursuant to the Offer, then,
without prejudice to Purchaser's rights set forth in the Offer to Purchase, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Common
Shares and such Common Shares may not be withdrawn except to the extent that the
tendering shareholder is entitled to and duly exercises withdrawal rights as
described in Section 4 of the Offer to Purchase. Any such delay will be followed
by an extension of the Offer to the extent required by law.
Except as otherwise provided in Section 4 of the Offer to Purchase, tenders of
Common Shares made pursuant to the Offer are irrevocable except that such Common
Shares may be withdrawn at any time prior to the Expiration Date (as defined
below) and, unless theretofore accepted for payment and paid for by Purchaser
pursuant to the Offer, may also be withdrawn at any time after Saturday, August
8, 1998. The term "Expiration Date" means 5:00 P.M., New York City time, on
Monday, August 31, 1998, or, if Purchaser shall have extended the period of time
for which the Offer is open, at the latest time and date at which the Offer, as
so extended by Purchaser, shall expire. In order for a withdrawal to be
effective, a written, telegraphic, telex or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of the Offer to Purchase. Any such notice of withdrawal
must specify the name of the person who tendered the Common Shares to be
withdrawn, the number of Common Shares to be withdrawn, and the name of the
registered holder, if different from that of the person who tendered such Common
Shares. If Common Share Certificates to be withdrawn have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Common Share Certificates, the serial numbers shown on such Common Share
Certificates must be submitted to the Depositary and the signature on the notice
of withdrawal must be guaranteed by a firm which is a bank, broker, dealer,
credit union, savings association or other entity that is a member in good
standing of the Securities Transfer Agents Medallion Program, the New York Stock
Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion
Program (each an "Eligible Institution"), unless such Common Shares are tendered
(i) by a registered holder of Common Shares who has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of an
Eligible Institution. If Common Shares have been tendered pursuant to the
procedures for book-entry transfer set forth in Section 3 of the Offer to
Purchase, any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Common Shares and otherwise comply with the Book-Entry Transfer Facility's
procedures. Any Common Shares properly withdrawn will thereafter be deemed not
validly tendered for purposes of the Offer. Withdrawn Common Shares may,
however, be retendered by repeating one of the procedures set forth in Section 3
of the Offer to Purchase, at any time prior to the Expiration Date. Purchaser,
in its sole discretion, will determine all questions as to the form and validity
(including time of receipt) of notices of withdrawal, and such determination
will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company is providing to the Purchaser its list of shareholders and security
position listings for the purpose of disseminating the Offer to holders of
Common Shares. The Offer to Purchase, the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Common Shares and
will be furnished to brokers, dealers, commercial banks, trust companies and
similar persons whose names, or the names of whose nominees, appear on the
shareholder lists or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Common Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the Information Agent
or the Dealer Manager at their respective addresses and telephone numbers as set
forth below. Additional copies of the Offer to Purchase, the Letter of
Transmittal, and other tender offer materials may be obtained from the
Information Agent. Such copies will be furnished promptly at Purchaser's
expense. No fees or commissions will be paid to brokers, dealers or other
persons (other than the Information Agent and the Dealer Manager) for soliciting
tenders of Common Shares pursuant to the Offer.
The Information Agent for the Offer is:
[GEORGESON & COMPANY INC. LOGO]
Wall Street Plaza
New York, New York 10005
Bankers and Brokers call collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
Internet: World Wide Web http: //www.georgeson.com
The Dealer Manager for the Offer is:
[CREDIT SUISSE-FIRST BOSTON LOGO]
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free (800) 863-6558
June 10, 1998
<PAGE> 1
Exhibit (c)(4)
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of June 3, 1998, between
Nationwide Mutual Insurance Company, an Ohio mutual insurance company
("Nationwide"), and Allied Mutual Insurance Company, an Iowa mutual insurance
company (the "Securityholder").
WHEREAS, Nationwide, Nationwide Life Acquisition Corporation,
an Ohio corporation and wholly-owned subsidiary of Nationwide ("Sub"), and
Allied Life Financial Corporation, an Iowa corporation (the "Company"), propose
to enter into an Agreement and Plan of Merger, dated the date hereof (as the
same may be amended or supplemented, the "Merger Agreement"), which provides for
a cash tender offer by Sub (as such tender offer may hereafter be amended from
time to time, the "Offer") to purchase all shares of common stock, no par value,
of the Company (the "Common Shares") and, following the consummation of the
Offer, the merger of Sub with the Company (the "Merger");
WHEREAS, the Securityholder is the record and beneficial owner
of the number of (i) Common Shares, and (ii) shares of 6.75% Series Preferred
Stock, no par value, of the Company and (collectively, the "Preferred Shares")
set forth on Schedule A hereto; such securities, as they may be adjusted by
stock dividend, stock split, recapitalization, combination or exchange of
shares, merger, consolidation, reorganization or other change or transaction of
or by the Company, together with securities that may be acquired after the date
hereof by the Securityholder, including Common Shares issuable upon the exercise
of options to purchase Common Shares (as the same may be adjusted as aforesaid),
being collectively referred to herein as the "Securities"; and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Nationwide has requested that the Securityholder enter into
this Agreement (capitalized terms not otherwise defined herein shall have the
meanings set forth in the Merger Agreement);
NOW, THEREFORE, to induce Nationwide to enter into, and in
consideration of it entering into, the Merger Agreement, and in consideration of
the premises and the representations, warranties and agreements contained
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
<PAGE> 2
1. Covenants of the Securityholder. The Securityholder agrees
as follows:
(a) The Securityholder shall not, except as contemplated by
the terms of this Agreement, (i) sell, transfer, pledge, assign or otherwise
dispose of, or enter into any Contract (as defined below), option or other
arrangement (including any profit sharing arrangement) or understanding with
respect to the sale, transfer, pledge, assignment or other disposition of, the
Securities to any person, or (ii) enter into any voting arrangement, whether by
proxy, voting agreement, voting trust, power-of-attorney or otherwise, with
respect to the Securities.
(b) The Securityholder shall not, nor shall the Securityholder
permit any investment banker, financial adviser, attorney, accountant or other
representative or agent of the Securityholder to, directly or indirectly (i)
solicit, initiate or knowingly encourage (including by way of furnishing
information), or knowingly facilitate any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal or (ii) participate in any discussions or negotiations
regarding any Acquisition Proposal.
(c) At any meeting of shareholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment thereof or
in any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, the Securityholder shall, including by initiating a written
consent solicitation if requested by Nationwide, vote (or cause to be voted)
such Securityholder's Securities in favor of the Merger, the adoption of the
Merger Agreement and the approval of the other transactions contemplated by the
Merger Agreement. At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Securityholder's vote, consent or other approval is sought, the Securityholder
shall vote (or cause to be voted) the Securityholder's Securities against (i)
any merger (other than the Merger), consolidation, combination, sale of
substantial assets, reorganization, recapitalization, dissolution, liquidation
or winding up of or by the Company or any other Acquisition Proposal
(collectively, "Alternative Transactions") or (ii) any amendment of the
Company's Certificate of Incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which amendment or
other proposal or transaction would in any manner impede, frustrate, prevent or
nullify, the Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement including any consent to
2
<PAGE> 3
the treatment of any Securities in or in connection with such transaction
(collectively, "Frustrating Transactions").
2. Grant of Irrevocable Proxy Coupled with an Interest;
Appointment of Proxy.
(a) Subject to governmental approvals, the Securityholder
hereby irrevocably grants to, and appoints, any individual who shall be
designated by Nationwide as the Securityholder's proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of the
Securityholder, to vote the Securityholder's Securities, or grant a consent or
approval in respect of such Securities, at any meeting of shareholders of the
Company or at any adjournment thereof or in any other circumstances upon which
their vote, consent or other approval is sought, (i) in favor of the Merger, the
adoption by the Company of the Merger Agreement and the approval of the other
transactions contemplated by the Merger Agreement, and (ii) against any
Alternative Transaction or Frustrating Transaction.
(b) The Securityholder represents that any proxies heretofore
given in respect of the Securityholder's Securities are not irrevocable, and
that any such proxies are hereby revoked.
(c) THE SECURITYHOLDER HEREBY AFFIRMS THAT THE PROXY SET FORTH
IN THIS SECTION 2 IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE UNTIL SUCH TIME
AS THIS AGREEMENT TERMINATES IN ACCORDANCE WITH ITS TERMS. The Securityholder
hereby further affirms that the irrevocable proxy is given in connection with
the execution of the Merger Agreement, and that such irrevocable proxy is given
to secure the performance of the duties of the Securityholder under this
Agreement. The Securityholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof.
3. Acquisition Proposals.
Notwithstanding anything to the contrary contained in this
Agreement, during any period of time that the Securityholder is not prohibited
by the Agreement and Plan of Merger, dated as of the date hereof, by and between
Securityholder and Nationwide (the "Allied Mutual Merger Agreement") from (A)
providing information in response to a request therefor by a Person who has made
an unsolicited bona fide written Acquisition Proposal; (B) engaging in any
negotiations or discussions with any Person who has made an unsolicited bona
fide written
3
<PAGE> 4
Acquisition Proposal; or (C) recommending an Acquisition Proposal to the policy
holders of the Securityholder, the Securityholder's obligations under Sections 1
and 2 of this Agreement shall be deemed inoperative. For purposes of this
Section 3, "Acquisition Proposal" shall have the meaning ascribed thereto in the
Allied Mutual Merger Agreement.
4. Representations and Warranties of the Securityholder. The
Securityholder hereby represents and warrants to Nationwide as follows:
(a) Authority. The Securityholder has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Securityholder. This Agreement has been duly
executed and delivered by the Securityholder and, assuming this Agreement
constitutes a valid and binding obligation of Nationwide, constitutes a valid
and binding obligation of the Securityholder enforceable against the
Securityholder in accordance with its terms, except that (i) such enforcement
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (ii) the remedy of specific performance and injunctive relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. Except for the informational filings with
the Securities and Exchange Commission and except for any state insurance
department approvals or filings, neither the execution, delivery or performance
of this Agreement by the Securityholder nor the consummation by the
Securityholder of the transactions contemplated hereby will (i) require any
filing with, or permit, authorization, consent or approval (collectively,
"Governmental Approvals") of, any federal, state, local or municipal foreign or
other government or subdivision, branch, department or agency thereof or any
governmental or quasi-governmental authority of any nature, including any court
or other tribunal, (a "Governmental Entity"), except where the failure to obtain
any such Governmental Approvals would not be reasonably likely to adversely
affect the transactions contemplated hereby, (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default under, or give rise to any right of termination, amendment, cancellation
or acceleration under, or result in the creation of any lien upon any of the
properties or assets of the Securityholder under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, permit,
concession, franchise, contract, agreement or other instrument or obligation (a
"Contract") to which the Securityholder is a party or by which the
Securityholder or any of the
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<PAGE> 5
Securityholder's properties or assets, including the Securityholder's
Securities, may be bound, except for such violations, breaches, defaults, rights
of termination, amendment, cancellation and acceleration and liens which would
not be reasonably likely to adversely affect the transactions contemplated
hereby or (iii) violate any judgment, order, writ, preliminary or permanent
injunction or decree (an "Order") or any statute, law, ordinance, rule or
regulation of any Governmental Entity (a "Law") applicable to the Securityholder
or any of the Securityholder's properties or assets, including the
Securityholder's Securities, except for such violations which would not be
reasonably likely to adversely affect the transactions contemplated hereby
(b) The Securities. The Securityholder's Securities and the
certificates representing such Securities are now, and at all times during the
term hereof will be, held by such Securityholder, or by a nominee or custodian
for the benefit of such Securityholder, and the Securityholder has good and
marketable title to such Securities, free and-clear of any liens, proxies,
voting trusts or agreements, understandings or arrangements, except for any such
liens or proxies arising hereunder and the agreements made hereby. The
Securityholder owns of record or beneficially no securities of the Company, or
any options, warrants or rights exercisable for securities of the Company, other
than such Securityholder's Securities, as set forth on Schedule A hereto.
(c) Brokers. Except as provided in the Allied Mutual Merger
Agreement, no broker, investment banker, financial advisor or other person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Securityholder.
(d) Merger Agreement. The Securityholder understands and
acknowledges that Nationwide is entering into the Merger Agreement in reliance
upon the Securityholder's execution and delivery of this Agreement.
5. Representations and Warranties of Nationwide. Nationwide
hereby represents and warrants to the Securityholder as follows:
(a) Authority. Nationwide has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Nationwide and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Nationwide.
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<PAGE> 6
This Agreement has been duly executed and delivered by Nationwide and, assuming
this Agreement constitutes a valid and binding obligation of the Securityholder,
constitutes a valid and binding obligation of Nationwide enforceable in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) the remedy
of specific performance and injunctive relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(b) Securities Act. The Securities will be acquired in
compliance with, and Nationwide will not offer to sell or otherwise dispose of
any Securities so acquired by it in violation of any of, the Securities Exchange
Act of 1934, as amended, or the registration requirements of the Securities Act
of 1933, as amended.
6. Further Assurances. Except as otherwise provided in Section
3, the Securityholder will, from time to time, execute and deliver, or cause to
be executed and delivered, such additional or further transfers, assignments,
endorsements, consents and other instruments as Nationwide may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement and to vest the power to vote the
Securityholder's Securities as contemplated by Section 2. Nationwide agrees to
use its best efforts to take, or cause to be taken, all actions necessary to
comply promptly with all legal requirements that may be imposed with respect to
the transactions contemplated by this Agreement.
7. Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate on the earlier of (x) the termination
of the Merger Agreement (except pursuant to Section 8.1(d) of the Merger
Agreement in which case this Agreement shall continue in effect) of in
accordance with its terms and (y) the termination of the Allied Mutual Merger
Agreement. Nothing in this Section 7 shall relieve any party from liability for
willful breach of this Agreement.
8. General Provisions.
(a) Assignment; Binding Effect. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and assigns.
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<PAGE> 7
(b) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(c) Notice. All notices, consents, requests, approvals,
authorizations and other communications (collectively, "Notices") required or
permitted to be given hereunder by one party to another shall only be effective
if in writing. All Notices shall be sent (i) by registered or certified mail
(with return receipt requested), postage prepaid, or (ii) by Federal Express,
U.S. Post Office Express Mail, Airborne or similar overnight courier which
delivers, if requested, only upon signed receipt of the addressee (with such
signed receipt being requested), or (iii) by facsimile transmission, and
addressed or transmitted as follows or at such other address or facsimile
number, and to the attention of such other person, as the parties shall give
notice as herein provided:
If to Nationwide, to:
Nationwide Mutual Insurance Company
One Nationwide Plaza
Columbus, Ohio 43215
Attention: David A. Diamond, Vice President -- Enterprise
Controller
Facsimile: (614) 249-4462
with a copy to:
Nationwide Mutual Insurance Company
One Nationwide Plaza
Columbus, Ohio 43215
Attention: Mark B. Koogler, Vice President and Associate
General Counsel
Roger A. Craig, Counsel
Facsimile: (614) 249-7254
and
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<PAGE> 8
if to the Securityholder, to:
Allied Mutual Insurance Company
701 Fifth Avenue
Des Moines, Iowa 50391-2000
Attention: John E. Evans, Chairman of the Board
Douglas L. Andersen, President and Chief
Executive Officer
Facsimile No.: 515-280-4399
with copies to:
Nyemaster, Goode, Voigts, West, Hansell & O'Brien
A Professional Corporation
700 Walnut Street, Suite 1600
Des Moines, Iowa 50309-3899
Attention: Mark C. Dickinson, Esq.
Facsimile No.: 515-283-3108
and
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
Attention: Jeffrey W. Tindell, Esq.
Facsimile No.: 212-451-7321
A Notice shall be effective upon receipt and shall be deemed to be received, if
sent by registered or certified mail, U.S. Post Office Express Mail, Federal
Express, Airborne or similar overnight courier, on the date of receipt by the
recipient as shown on the return receipt card, or if sent by facsimile, upon
receipt by the sender of an acknowledgment or transmission report generated by
the machine from which the facsimile was sent indicating that the facsimile was
sent in its entirety to the recipient's facsimile number; provided that if a
Notice is received by facsimile on a day which is not a Business Day, or after
5:00 p.m. on any Business Day at the addressee's location, such Notice shall be
deemed to be received by the recipient at 9:00 a.m. on the first Business Day
thereafter. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no Notice was given shall
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<PAGE> 9
be deemed to be receipt of the Notice as of the date of such rejection, refusal
or inability to deliver.
(d) Interpretation. When a reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Wherever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement. The plural of
any defined term shall have a meaning correlative to such defined term, and
words denoting any gender shall include all genders. Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning. A reference to any party to this Agreement or any other agreement or
document shall include such party's successors and permitted assigns. A
reference to any legislation or to any provision of any legislation shall
include any modification or re-enactment thereof, any legislative provision
substituted therefor and all regulations and statutory instruments issued
thereunder or pursuant thereto. For purposes of this Agreement, "Person" shall
mean an individual, corporation, partnership, association, joint stock company,
limited liability company, Governmental Entity, trust, joint venture, labor
union, estate, unincorporated organization or other entity.
(e) Counterparts. This Agreement shall be executed in
duplicate and may be executed in counterparts each of which shall be deemed to
constitute an original and constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Agreement by telecopier
shall be as effective as delivery of a manually executed counterpart of this
Agreement. In proving this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.
(f) Entire Agreement. This Agreement (including the documents
and instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.
(g) No Third-Party Beneficiaries. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or
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<PAGE> 10
implied, is intended to confer on any person other than the parties hereto or
their respective heirs, successors, executors, administrators and assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
(h) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Iowa without regard to any
conflicts or choice of law provisions thereof or of any other jurisdiction.
(i) Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in a court of the United States. This
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto waives any right to trial by
jury with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
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<PAGE> 11
IN WITNESS WHEREOF, each of Nationwide and Securityholder has
caused this Agreement to be signed by its officer thereunto duly authorized, as
of the date first written above.
NATIONWIDE MUTUAL INSURANCE
COMPANY
By: /s/ Mark B. Koogler
---------------------------------------
Name: Mark B. Koogler
Title: Vice President and Associate General
Counsel
ALLIED MUTUAL INSURANCE
COMPANY
By: /s/ George T. Oleson
---------------------------------------
Name: George T. Oleson
Title: Vice President and Corporate Counsel
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<TABLE>
SCHEDULE A
<CAPTION>
Common Preferred
Name and Address Shares Shares Warrants Options
---------------- ------ ------ -------- -------
<S> <C> <C>
Allied Mutual Insurance Company 1,521,006 2,292,093 -- --
</TABLE>
12
