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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-1
(AMENDMENT NO. 32)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AMERICAN BANKERS INSURANCE GROUP, INC.
(NAME OF SUBJECT COMPANY)
SEASON ACQUISITION CORP.
CENDANT CORPORATION
(Bidders)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
024456 10 5
(CUSIP Number of Class of Securities)
JAMES E. BUCKMAN, ESQ.
SENIOR EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
CENDANT CORPORATION
6 SYLVAN WAY
PARSIPPANY, NEW JERSEY 07054
TELEPHONE: (973) 428-9700
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
WITH A COPY TO:
DAVID FOX, ESQ.
ERIC J. FRIEDMAN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 735-3000
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This Amendment No. 32 amends the Tender Offer Statement on Schedule 14D-1
initially filed on January 27, 1998 (as amended, the "Schedule 14D-1") by
Cendant Corporation, a Delaware corporation ("Parent"), and its wholly owned
subsidiary, Season Acquisition Corp., a New Jersey corporation ("Purchaser"),
relating to Purchaser's tender offer for 23,501,260 outstanding shares of
common stock, par value $1.00 per share, of American Bankers Insurance Group,
Inc., a Florida corporation (the "Company") upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated January 27, 1998 (the
"Offer to Purchase"), the Supplement thereto, dated March 16, 1998 (the
"First Supplement"), the Second Supplement thereto, dated March 24, 1998 (the
"Second Supplement"), and the revised Letters of Transmittal (which, together
with any amendments or supplements thereto, constitute the "Offer"). Unless
otherwise defined herein, all capitalized terms used herein shall have the
respective meanings given such terms in the Offer to Purchase, the First
Supplement or the Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
Item 1 is hereby amended and supplemented by the following:
(b) The information set forth in the Introduction and Section 1 ("Terms
of the Offer; Expiration Date") in the Second Supplement annexed hereto as
Exhibit (a)(39) is incorporated herein by reference.
(c) The information set forth in Section 2 ("Price Range of Shares;
Dividends") in the Second Supplement is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
Item 3 is hereby amended and supplemented by the following:
(a)-(b) The information set forth in the Introduction, Section 3
("Background of the Offer; Contacts with the Company,"), and Section 4
("Purpose of the Offer and the Merger; Plans for the Company; Certain
Considerations,") in the Second Supplement is incorporated herein by
reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
Item 5 is hereby amended and supplemented by the following:
The information set forth in the Introduction, Section 3 ("Background of
the Offer; Contacts with the Company") and Section 4 ("Purpose of the Offer
and the Merger; Plans for the Company; Certain Considerations") in the Second
Supplement is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
Item 7 is hereby amended and supplemented by the following:
The information set forth in the Introduction, Section 3 ("Background of
the Offer; Contacts with the Company"), Section 4 ("Purpose of the Offer and
the Merger; Plans for the Company; Certain Considerations") and Section 6
("Certain Legal Matters; Regulatory Approvals; Certain Litigation") in the
Second Supplement is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
Item 10 is hereby amended and supplemented by the following:
(b) The information set forth in Section 6 ("Certain Legal Matters;
Regulatory Approvals; Certain Litigation") in the Second Supplement is
incorporated herein by reference.
(e) The information set forth in Section 6 ("Certain Legal Matters;
Regulatory Approvals; Certain Litigation") in the Second Supplement 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)(39) and
(a)(40), respectively, is incorporated herein by reference.
1
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ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
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(a)(39) Second Supplement to Offer to Purchase, dated March 24, 1998.
(a)(40) Revised Letter of Transmittal.
(a)(41) Revised Notice of Guaranteed Delivery.
(a)(42) Revised Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(43) Revised Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
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2
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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: March 24, 1998 CENDANT CORPORATION
By: /s/ James E. Buckman
Name: James E. Buckman
Title: Senior Executive Vice
President and General Counsel
SEASON ACQUISITION CORP.
By: /s/ James E. Buckman
Name: James E. Buckman
Title: Executive Vice President
3
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EXHIBIT INDEX
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EXHIBIT
NUMBER
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(a)(39) Second Supplemental Offer to Purchase, dated March 24, 1998.
(a)(40) Revised Letter of Transmittal.
(a)(41) Revised Notice of Guaranteed Delivery.
(a)(42) Revised Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(43) Revised Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
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4
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SECOND SUPPLEMENT TO THE OFFER TO PURCHASE FOR CASH
SEASON ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CENDANT CORPORATION
OFFER TO PURCHASE FOR CASH
23,501,260 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
AMERICAN BANKERS INSURANCE GROUP, INC.
FOR
$67.00 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 6, 1998,
UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF AMERICAN BANKERS INSURANCE GROUP, INC. (THE
"COMPANY") HAS APPROVED THE OFFER, DETERMINED THAT THE CONSIDERATION TO
BE PAID FOR COMMON SHARES PURSUANT TO THE OFFER AND THE MERGER DESCRIBED
HEREIN IS FAIR TO AND IN THE BEST INTEREST OF THE COMPANY AND ITS
SHAREHOLDERS AND RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND THE MERGER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF COMMON SHARES WHICH, TOGETHER WITH SHARES OWNED BY CENDANT
CORPORATION ("PARENT") AND SEASON ACQUISITION CORP., A WHOLLY OWNED
SUBSIDIARY OF PARENT ("PURCHASER"), CONSTITUTE AT LEAST 51% OF THE COMMON
SHARES OUTSTANDING ON A FULLY DILUTED BASIS, AND (2) PARENT AND PURCHASER
HAVING OBTAINED ALL INSURANCE REGULATORY APPROVALS NECESSARY FOR THEIR
ACQUISITION OF CONTROL OVER THE COMPANY'S INSURANCE SUBSIDIARIES. SEE THE
INTRODUCTION TO THIS SECOND SUPPLEMENT AND SECTION 5 OF THIS SECOND
SUPPLEMENT.
THE OFFER IS NOT CONDITIONED UPON PURCHASER OBTAINING FINANCING.
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IMPORTANT
Any shareholder desiring to tender all or any portion of such
shareholder's Common Shares should either (i) complete and sign one of the
Letters of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letters of Transmittal, have such shareholder's signature
thereon guaranteed if required by Instruction 1 to the Letters of
Transmittal, mail or deliver one of the Letters of Transmittal (or such
facsimile thereof) and any other required documents to the Depositary and
either deliver the certificates for such Common Shares to the Depositary
along with one of the Letters of Transmittal (or a facsimile thereof) or
deliver such Common Shares pursuant to the procedure for book-entry transfer
set forth in Section 3 of the Offer to Purchase as supplemented by Section 2
of the First Supplement (as defined herein) 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 transfer described in the Offer to Purchase as
supplemented by Section 2 of the First Supplement on a timely basis, may
tender such Common Shares by following the procedures for guaranteed delivery
set forth in Section 3 of the Offer to Purchase as supplemented by Section 2
of the First Supplement.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Managers at their respective addresses and telephone
numbers set forth on the back cover of this Second Supplement. Additional
copies of the Offer to Purchase, the First Supplement, this Second
Supplement, the revised Letters of Transmittal or other tender offer
materials may be obtained from the Information Agent.
The Dealer Managers for the Offer are:
LEHMAN BROTHERS MERRILL LYNCH & CO.
March 24, 1998
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TABLE OF CONTENTS
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PAGE
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INTRODUCTION.............................................................................. 1
1.Terms of the Offer; Expiration Date..................................................... 3
2.Price Range of Shares; Dividends........................................................ 3
3.Background of the Offer; Contacts with the Company...................................... 3
4.Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations ..... 4
5.Conditions of the Offer................................................................. 12
6.Certain Legal Matters; Regulatory Approvals; Certain Litigation......................... 13
7.Miscellaneous........................................................................... 14
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TO THE HOLDERS OF COMMON STOCK OF AMERICAN BANKERS INSURANCE GROUP, INC.:
INTRODUCTION
The following information amends and supplements the Offer to Purchase,
dated January 27, 1998 (the "Offer to Purchase"), as supplemented by the
Supplement to the Offer to Purchase, dated March 16, 1998 (the "First
Supplement"), of Season Acquisition Corp. ("Purchaser"), a New Jersey
corporation and a wholly owned subsidiary of Cendant Corporation, a Delaware
corporation ("Parent"), pursuant to which Purchaser is offering to purchase
23,501,260 outstanding shares of common stock, par value $1.00 per share (the
"Common Shares"), of American Bankers Insurance Group, Inc., a Florida
corporation (the "Company"), including the associated Series C Participating
Preferred Stock Purchase Rights (the "Rights") issued pursuant to the Rights
Agreement, dated as of February 19, 1998, between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (as such agreement may be
amended, the "Rights Agreement"), at a price of $67.00 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, the
First Supplement and this Second Supplement and in the revised Letter of
Transmittal (which, as amended from time to time, together constitute the
"Offer"). Unless the context otherwise requires, all references to Common
Shares shall include the associated Rights, and all references to the Rights
shall include the benefits that may inure to holders of the Rights pursuant
to the Rights Agreement, including the right to receive any payment due upon
redemption of the Rights.
This Second Supplement should be read in conjunction with the Offer to
Purchase and the First Supplement. Except as set forth in this Second
Supplement and the revised Letter of Transmittal, the terms and conditions
previously set forth in the Offer to Purchase, the First Supplement and the
Letters of Transmittal previously mailed to shareholders remain applicable in
all respects to the Offer. Terms used but not defined herein have the meaning
set forth in the Offer to Purchase or the First Supplement.
According to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") filed on March 17, 1998 with the
Securities and Exchange Commission (the "SEC"), the Board of Directors of the
Company (the "Company Board") determined, after consultation with its legal
and financial advisors, and based upon information currently available to it,
that the terms of the Offer as revised to offer cash and stock with a value
of $67.00 per Common Share met the definition of a "Superior Proposal," as
defined in the Amended AIG Merger Agreement. The Company therefore instructed
its legal and financial advisors to commence discussions with Parent with
respect to the Offer, as permitted by the Amended AIG Merger Agreement,
including seeking answers to the questions previously submitted by the
Company to Parent.
On March 17, 1998 and March 18, 1998, representatives of Parent and the
Company, together with their legal counsel and financial advisors, held due
diligence meetings regarding the Company and Parent.
In addition, on March 17, 1998, representatives of Parent, the Company and
AIG, together with their legal counsel, met to discuss a possible settlement
regarding the acquisition of the Company. On March 18, 1998, the Company, AIG
and Parent entered into a settlement agreement (the "Settlement Agreement").
Pursuant to the terms of the Settlement Agreement, AIG agreed to temporarily
waive until 2:00 p.m. on March 23, 1998 certain provisions in the Amended
AIG Merger Agreement which waiver permitted the Company to terminate the
Amended AIG Merger Agreement in order to enter into a definitive acquisition
agreement with Parent.
On March 20, 1998, the Company Board approved the Parent Merger Agreement,
subject to finalizing certain open items.
On March 23, 1998, in accordance with the terms of the Settlement
Agreement, the Company paid to AIG a termination fee of $100 million (the
"Termination Amount") and Parent paid $5 million to AIG in respect of AIG's
expenses (the "Initial Expense Amount"). Concurrently with such payments, the
Company and AIG terminated the Amended AIG Merger Agreement, the Amended AIG
Lockup Option Agreement and the AIG Voting Agreement. Thereafter, Parent,
Purchaser and the Company entered into an Agreement and Plan of Merger, dated
as of March 23, 1998 (the "Parent Merger Agreement"), which provides, among
other things, for (i) the modification of the conditions to the Offer, as
described in Section 5 hereof,
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and (ii) following the consummation of the Offer, the merger of the Company
with and into Purchaser with Purchaser continuing as the surviving
corporation (the "Merger"). Pursuant to the Merger, each Common Share then
outstanding (other than Common Shares owned by Parent, Purchaser or any other
direct or indirect subsidiary of Parent or Common Shares owned by the Company
or any direct or indirect subsidiary of the Company and in each case not held
on behalf of third parties) will be converted into, and become exchangeable
for, that number of shares of common stock, par value $.01 per share, of
Parent ("Parent Common Stock") having a value equal to the amount derived by
dividing $67.00 by the average closing prices of the Parent Common Stock as
reported on the NYSE composite transactions reporting system (as reported in
the New York City edition of the Wall Street Journal) for the ten trading
days ending on the third trading day prior to the date the Merger is
consummated. In addition, pursuant to the Merger, each of the then
outstanding shares of the $3.125 Series B Cumulative Convertible Preferred
Stock, no par value, of the Company (the "Preferred Shares" and, together
with the Common Shares, the "Shares") will be converted into one share of a
new series of convertible preferred stock of Parent (the "Parent Preferred
Stock") having substantially similar terms to the Preferred Shares, except
that such shares shall be convertible into shares of Parent Common Stock in
accordance with the terms of the Preferred Shares.
The Offer is being amended and supplemented pursuant to the terms of the
Parent Merger Agreement. For a more detailed description of the Parent Merger
Agreement, see Section 4 of this Second Supplement.
THE COMPANY BOARD HAS APPROVED THE OFFER, DETERMINED THAT THE
CONSIDERATION TO BE PAID FOR COMMON SHARES PURSUANT TO THE OFFER AND THE
MERGER IS FAIR TO AND IN THE BEST INTEREST OF THE COMPANY AND ITS
SHAREHOLDERS AND RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND THE
MERGER.
Salomon Smith Barney Holdings, Inc. ("Salomon Smith Barney"), financial
advisor to the Company, has delivered its written opinion to the Company
Board that the consideration to be received per Common Share by the holders
thereof, in connection with the Offer and the Merger is fair, from a
financial point of view, to such shareholders. A copy of the opinion of
Salomon Smith Barney is attached as an exhibit to Amendment No. 11 to
Schedule 14D-9, which is being distributed with this Second Supplement to the
shareholders of the Company. Shareholders are urged to read such opinion in
its entirety for a description of the procedures followed, assumptions and
qualifications made, matters considered and limitations on the review
undertaken by Salomon Smith Barney.
In connection with the Parent Merger Agreement, the Company has amended
the Rights Agreement so that the Rights are inapplicable to the Offer.
Accordingly, the Offer is no longer subject to the Rights Condition.
On March 20, 1998, the Company Board approved the terms of the Parent
Merger Agreement and determined that the Offer and the Merger are fair
to and in the best interest of the Company and its shareholders.
Consequently, the supermajority vote requirement of Paragraph A of Article
VIII of the Company's Third Amended and Restated Articles of Incorporation
and the affiliated transaction provisions of Section 607.0901(2) of the
Florida Business Corporation Act have been rendered inapplicable to the
Merger. Accordingly, the Offer is no longer subject to the Supermajority Vote
Condition or the Affiliated Transaction Condition.
The Offer is also no longer subject to the Control Share Condition, as the
Company has agreed in the Parent Merger Agreement not to amend the Company
Bylaws in any respect prior to the Merger, thereby ensuring that the Control
Share Statute remains inapplicable to the Company. In addition, in accordance
with the terms of the Settlement Agreement, the Amended AIG Lockup Option has
been terminated. Consequently the Offer is no longer subject to the Lockup
Termination Condition.
THE OFFER REMAINS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING
VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE
OFFER A NUMBER OF COMMON SHARES WHICH, TOGETHER WITH SHARES OWNED BY PARENT
AND PURCHASER, CONSTITUTE AT LEAST 51% OF THE COMMON SHARES OUTSTANDING ON A
FULLY DILUTED BASIS (THE "MINIMUM CONDITION") AND (2) PARENT AND PURCHASER
HAVING OBTAINED ALL INSURANCE REGULATORY APPROVALS NECESSARY FOR THEIR
ACQUISITION OF CONTROL OVER THE COMPANY'S INSURANCE SUBSIDIARIES. THE OFFER
IS ALSO CONDITIONED UPON CERTAIN OTHER MATTERS. SEE SECTION 5 OF THIS SECOND
SUPPLEMENT.
2
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Based on information received from the Company, Parent and Purchaser
believe that, as of the close of business on March 18, 1998, there were
47,013,775 Common Shares outstanding on a fully diluted basis. Parent
currently owns an aggregate of 371,200 Common Shares and an aggregate of
99,900 Preferred Shares (which are convertible into 199,540 Common Shares)
acquired in open-market transactions. Parent and Purchaser believe that the
Minimum Condition would be satisfied if at least an aggregate of 23,406,285
Common Shares are validly tendered prior to the Expiration Date and not
withdrawn. However, Parent and Purchaser remain willing to accept up to
23,501,260 Common Shares for purchase pursuant to the Offer.
Except as amended and supplemented in this Second Supplement, the terms
and conditions of the Offer remain in full force and effect.
THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT, THIS SECOND SUPPLEMENT AND
THE REVISED LETTERS OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD
BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
This Second Supplement does not constitute a solicitation of proxies for
any meeting of the Company's shareholders. Any such solicitation by Parent or
Purchaser would be made only pursuant to separate proxy materials complying
with the requirements of Section 14(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). In addition, this Second Supplement
does not constitute an offer to sell or solicitation of an offer to buy any
securities of Parent. Such an offer may be made only pursuant to a prospectus
pursuant to the Securities Act of 1933, as amended (the "Securities Act").
THE OFFER TO PURCHASE, THE FIRST SUPPLEMENT, THIS SECOND SUPPLEMENT AND
THE REVISED 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. The discussion set forth in Section 1
of the Offer to Purchase is hereby amended and supplemented as follows:
The term "Expiration Date" has been amended to mean 12:00 Midnight, New
York City time, on Monday, April 6, 1998, unless and until Purchaser, in its
sole discretion, but subject to the terms of the Parent Merger Agreement,
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.
SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED COMMON SHARES PURSUANT
TO THE OFFER AND NOT PROPERLY WITHDRAWN SUCH COMMON SHARES HAVE VALIDLY
TENDERED SUCH COMMON SHARES FOR PURPOSES OF THE OFFER, AS AMENDED, AND NEED
NOT TAKE ANY FURTHER ACTION IN ORDER TO RECEIVE THE PRICE OF $67.00 PER COMMON
SHARE PURSUANT TO THE OFFER.
2. PRICE RANGE OF SHARES; DIVIDENDS. The discussion set forth in Section 6 of
the Offer to Purchase is hereby amended and supplemented as follows:
According to public sources, the high and low closing sale prices per
Common Share on the NYSE for the First Quarter of 1998 (through March 23,
1998) were $65.75 and $45.63 respectively. On March 20, 1998, the last full
trading day prior to the public announcement of the Parent Merger Agreement,
the reported closing sale price per Common Share on the NYSE Composite Tape
was $64.56. Shareholders are urged to obtain a current market quotation for
the Common Shares.
3. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. The discussion set
forth in Section 11 of the Offer to Purchase is hereby amended and
supplemented as follows:
On March 16, 1998, Parent delivered a letter to the Company Board
increasing the value of the Offer from $58.00 per Common Share to $67.00 per
Common Share, representing a premium of $9.00 (or 15.5%) over the value of
the Proposed AIG Merger.
On March 17, 1998, the Company Board determined, after consultation with
its legal and financial advisors, and based upon information currently
available to it, that the terms of the revised Offer met the definition of a
"Superior Proposal," as defined in the Amended AIG Merger Agreement. The
Company therefore instructed its legal and financial advisors to commence
discussions with Parent with respect to the Offer, as permitted by the
Amended AIG Merger Agreement.
3
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On March 17, 1998 and March 18, 1998, representatives of Parent and the
Company, together with their legal counsel and financial advisors, held due
diligence meetings regarding the Company and Parent. In addition, on March
17, 1998, representatives of Parent, the Company and AIG, together with their
legal counsel, met to discuss a possible settlement regarding the acquisition
of the Company. On March 18, 1998, the Company, AIG and Parent entered into
the Settlement Agreement.
On March 20, 1998, the Company Board approved the Parent Merger
Agreement, subject to finalizing certain open items. In addition, at
such meeting, the Company Board resolved to terminate the Amended AIG Merger
Agreement, the Amended AIG Lockup Option Agreement and the AIG Voting
Agreement in accordance with their respective terms and authorized the
payment to AIG of the Termination Amount. The terms of the Parent Merger
Agreement were finalized on March 22, 1998.
On March 23, 1998, the Company paid to AIG the Termination Amount and
Parent paid to AIG the Initial Expense Amount. Concurrently with such
payments, the Company and AIG terminated the Amended AIG Merger Agreement,
the Amended AIG Lockup Option Agreement and the AIG Voting Agreement in
accordance with the terms of the Settlement Agreement. The Company, Parent
and Purchaser subsequently executed the Parent Merger Agreement.
4. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; CERTAIN
CONSIDERATIONS. The discussion set forth in Section 12 of the Offer to
Purchase is hereby amended and supplemented as follows:
Parent Merger Agreement
Pursuant to the Parent Merger Agreement and following the consummation of
the Offer, the Parent, Purchaser and the Company have agreed to effect the
Merger in accordance with the provisions of the Parent 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 Parent Merger Agreement.
The Offer. The purpose of the Offer is for Parent to obtain control of the
Company as a first step in acquiring the entire equity interest in the
Company. Pursuant to the terms of the Parent Merger Agreement, Purchaser may
not, without the Company's consent, decrease the price per Common Share or
change the form of consideration payable in the Offer, decrease the number of
Common Shares sought in the Offer, impose additional conditions to the Offer
or amend any other term of the Offer in any manner adverse to the holders of
Common Shares (including any increase in the number of Common Shares sought
that would cause the Offer and the Merger, taken together, not to qualify as
a tax-free "reorganization" under the federal tax laws). However, if during
the pendency of the Offer, another party makes or proposes an Acquisition
Proposal, Purchaser has the right under the Parent Merger Agreement to
increase the number of Common Shares sought in the Offer up to 100% of the
then outstanding Common Shares (an "Increased Offer"). In the event of an
Increased Offer in which Purchaser acquires more Common Shares than would
satisfy the Minimum Condition, all Common Shares which remain outstanding
immediately prior to the Effective Time will be converted in the Merger into
cash and/or shares of Parent Common Stock, at Purchaser's option, subject to
certain limitations arising out of the federal tax laws. In addition,
Purchaser, at its sole option, may extend the Offer on one or more occasions
and will be obligated to extend the Offer at the request of the Company for
up to 120 days from the date of the Parent Merger Agreement.
The Merger. Pursuant to the terms of the Merger, following the
consummation of the Offer, the Company will be merged with and into Purchaser
with Purchaser continuing as the surviving corporation. Purchaser will
succeed to the business of the Company and will assume the name American
Bankers Insurance Group, Inc. As a result of the Merger, each Common Share
then outstanding (other than Common Shares owned by Parent, Purchaser or any
direct or indirect subsidiary of Parent or Common Shares owned by the Company
or any direct or indirect subsidiary of the Company and in each case not held
on behalf of third parties) will be converted into, and become exchangeable
for, that number of shares of Parent Common Stock having a value equal to the
amount derived by dividing $67.00 by the average closing prices of the Parent
Common Stock as reported on the NYSE composite transactions reporting system
(as reported in the New York City edition of the Wall Street Journal) for the
ten trading days ending on the third trading day prior to the date the Merger
is consummated). In addition, pursuant
4
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to the Merger, each of the then outstanding Preferred Shares will be
converted into one share of Parent Preferred Stock having substantially
similar terms to the Preferred Shares, except that such shares shall be
convertible into shares of Parent Common Stock in accordance with the terms
of the Preferred Shares.
The Parent Merger Agreement provides that the closing of the Merger (the
"Closing") will take place within five business days of the fulfillment or
waiver of all of the conditions to the Merger set forth in the Parent Merger
Agreement, unless the Company and Parent agree otherwise in writing. The
Merger will become effective when the Florida Secretary of State accepts for
filing the Articles of Merger to be filed in Florida by the Company or when
the New Jersey Secretary of State accepts for filing the Certificate of
Merger to be filed in New Jersey by Parent, whichever is later, or at such
later time as agreed by the parties (the "Effective Time").
Conditions of the Merger. The obligation of each of the Company and Parent
to effect the Merger is conditioned on the following: (a) the authorization for
listing on the NYSE upon official notice of issuance of the shares of Parent
Common Stock issuable to holders of Common Shares and the shares of Parent
Preferred Stock issuable to holders of Preferred Shares; (b) no court or
governmental entity of competent jurisdiction having enacted, issued,
promulgated, enforced or entered any law, statute, ordinance, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) that is in effect and restrains, enjoins or otherwise prohibits the
consummation of the Merger; (c) a Registration Statement on Form S-4
("Registration Statement") to give effect to the terms of the Parent Merger
Agreement, having been declared effective and no stop order suspending the
effectiveness of the Registration Statement having been issued, and no
proceedings for that purpose having been initiated or threatened, by the SEC;
(d) Parent having received all state securities and "blue sky" permits and
approvals, if any, necessary to consummate the transactions contemplated by the
Parent Merger Agreement; (e) Purchaser having purchased Common Shares pursuant
to the Offer (except that this condition shall not constitute a condition to
Parent and Purchaser's obligations to consummate the Merger in the event
Purchaser fails to purchase Common Shares pursuant to the Offer in breach of
its or Parent's obligations under the Parent Merger Agreement); (f) Parent
having received a certificate from an executive officer of the Company stating
that the Company has performed all obligations required of it under the Parent
Merger Agreement; (g) Parent having received a letter from each person
identified as an "affiliate" (as such term is defined under the Securities Act)
of the Company; and (h) unless the Merger is restructured as described below
under Alternative Transaction Structure, the receipt by Parent and the Company
of the opinion of its respective tax counsel regarding the treatment of the
Merger as a "reorganization" under the Code.
Conduct of the Company's Business Prior to the Merger. The Company has
convenanted and agreed as to itself and, where indicated, each of its
subsidiaries or insurance subsidiaries that after the date of the Parent
Merger Agreement and prior to the Effective Time (unless Parent shall
otherwise approve in writing and except as otherwise expressly contemplated
by the Parent Merger Agreement or the Company's disclosure schedule thereto,
and except for the acceleration of the vesting of the options outstanding
under the Company's 1997 Equity Incentive Plan) that (a) the Company and
its subsidiaries' businesses shall be conducted in the ordinary and
usual course (it being understood that nothing contained in the Parent
Merger Agreement permits the Company to enter into or engage in (through
acquisition, product extension or otherwise) the business of selling
any products or services materially different from existing products or
services of the Company and its subsidiaries or to enter into or engage in
any new lines of business without Parent's prior written consent); (b) the
Company and its subsidiaries shall use their respective reasonable best
efforts to preserve their business organizations intact and maintain their
existing relations and goodwill with customers, suppliers, reinsurers,
distributors, creditors, lessors, employees and business associates; (c) the
Company shall not issue, sell, pledge, dispose of or encumber any capital
stock owned by it in any of its subsidiaries; (d) the Company shall not amend
or modify the Company Articles or the Company Bylaws or amend, modify or
terminate the Rights Agreement; (e) the Company shall not split, combine or
reclassify its outstanding shares of capital stock; (f) the Company shall not
authorize, declare, set aside or pay any dividend payable in cash, stock or
property in respect of any capital stock other than dividends from
subsidiaries, regular quarterly cash dividends paid by it on the Common
Shares not in excess of $0.11 per Common Share and
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regular quarterly dividends paid by it on the Preferred Shares in accordance
with the Company Articles; (g) the Company shall not repurchase, redeem or
otherwise acquire (except in connection with any of the Company's stock
plans) or permit any of its subsidiaries to purchase or otherwise acquire any
shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock; (h) neither
the Company nor its subsidiaries shall issue, sell, pledge, dispose of or
encumber any shares of, or any securities convertible or exchangeable or
exercisable for, or options, warrants, calls, commitments or rights of any
kind to acquire, any shares of its capital stock of any class or any other
property or assets (other than pursuant to exercise of the Rights and shares
issuable pursuant to options outstanding on the date of the Parent Merger
Agreement under any of the Company's stock plans or upon conversion of the
Preferred Shares); (i) other than in the ordinary and usual course of
business, neither the Company nor any of its subsidiaries shall transfer,
lease, license, guarantee, sell, mortgage, pledge, dispose of or encumber any
other property or assets (including capital stock of its subsidiaries) or
incur or modify any material indebtedness or other liability; (j) neither the
Company nor any of its subsidiaries shall make or authorize or commit for any
capital expenditures other than in amounts not exceeding $5 million in the
aggregate or, by any means, make any acquisition of, or investment in, assets
or stock of any other person or entity, including by way of assumption
reinsurance, in excess of $2 million individually or $5 million in the
aggregate (other than in connection with ordinary course investment
activities); (k) neither the Company nor any of its subsidiaries shall
terminate, establish, adopt, enter into, make any new grants or awards under,
amend or otherwise modify any of its compensation and benefit plans, other
than awards made in the normal course under the Management Incentive Plan in
respect of 1997 performance or increase the salary, wage, bonus or other
compensation of any employees except increases occurring in the ordinary and
usual course of business (which shall include normal periodic performance
reviews and related compensation and benefit increases); (l) neither the
Company nor any of its subsidiaries shall pay, discharge, settle or satisfy
any claims, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge or
satisfaction of claims, liabilities or obligations legally due and payable
and arising in the ordinary and usual course of business, claims arising
under the terms of products, contracts or policies issued by the Company's
insurance subsidiaries in the ordinary and usual course of business and such
other claims, liabilities or obligations as shall not exceed $5 million in
the aggregate; (m) neither the Company nor any of its subsidiaries shall make
or change any tax election, settle any material audit, file any amended tax
returns or permit any insurance policy naming it as a beneficiary or
loss-payable payee to be canceled or terminated except in the ordinary and
usual course of business; (n) neither the Company nor any of its subsidiaries
shall enter into any agreement containing any provision or convenant limiting
in any material respect the ability of the Company or any subsidiary or
affiliate to (A) sell any products or services of or to any other person, (B)
engage in any line of business or (C) compete with or to obtain products or
services from any person or limiting the ability of any person to provide
products or services to the Company or any of its subsidiaries or affiliates;
(o) neither the Company nor any of its subsidiaries shall enter into any new
quota share or other reinsurance transaction (A) which does not contain
standard cancellation and termination provisions, (B) which, except in the
ordinary course of business, materially increases or reduces the Company's
insurance subsidiaries, consolidated ratio of net written premiums to gross
written premiums or (C) pursuant to which $5 million or more in gross written
premiums are ceded by the Company's insurance subsidiaries to any person
other than the Company or any of its subsidiaries; (p) neither the Company
nor any of the Company's insurance subsidiaries shall alter or amend in any
material respect its existing investment guidelines or policies; (q) neither
the Company nor any of its subsidiaries shall take any action or omit to take
any action that would cause any of its representations and warranties herein
to become untrue in any material respect; and (r) neither the Company nor any
of its subsidiaries shall authorize or enter into any agreement to take any
of the foregoing actions.
No Solicitation. In the Parent Merger Agreement, the Company has agreed to
a provision providing that neither the Company, any subsidiary of the
Company, nor any of their respective directors and officers, or employees,
agents and representatives (including any investment banker, attorney or
accountant retained by the Company or its subsidiaries) (collectively,
"Representatives") will, 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
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involving, or any purchase of 15% or more of the assets or any equity
securities of the Company or any of its subsidiaries (any such proposal or
offer, for the purpose of the Parent Merger Agreement being referred to as an
"Acquisition Proposal"). The Company has further agreed to a provision
providing that neither the Company, any subsidiary of the Company, nor any of
their respective directors and officers, or Representatives, 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 Parent Merger Agreement, or
otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal (including, without limitation, by means of an amendment
to the Rights Agreement); provided, however, that nothing contained in the
Parent Merger Agreement shall prevent the Company or the Company Board from
(i) complying with Rule 14e-2 promulgated under the Exchange Act with regard
to an Acquisition Proposal; or (ii) at any time prior to the earlier of (x)
payment for Common Shares pursuant to the Offer or (y) the approval of
the Merger by a majority of the holders of Common Shares and the holders
of Preferred Shares, each voting separately as a class (A) providing
information in response to a request therefor by a person who has made an
unsolicited bona fide written Acquisition Proposal if the Company Board
receives from the Person so requesting such information an executed
confidentiality agreement on terms substantially equivalent to those
contained in the confidentiality agreement (as defined in the Parent Merger
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 its shareholders, if and only to
the extent that, (i) in each such case referred to in clause (A), (B) or (C)
above, the Company Board determines in good faith after consultation with
outside legal counsel that such action is necessary in order for the
Company's 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 Company Board determines in good faith (after consultation with its
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
Merger, taking into account the long-term prospects and interests of it and
its shareholders (any such more favorable Acquisition Proposal being referred
to, for the purpose of the Parent Merger Agreement, as a "Superior
Proposal").
The Company also agreed in the Parent Merger Agreement to immediately
cease and cause to be terminated any activities, discussions or negotiations
with any parties which were being conducted prior to execution of the Parent
Merger Agreement.
The Company also agreed in the Parent Merger Agreement to notify Parent
immediately if it receives from any third party any inquiries, proposals,
offers, requests for information or requests for discussions or negotiations
and to keep Parent informed, on a current basis, regarding the status and
terms of any such proposals or offers and the status of any such negotiations
or discussions.
Corporate Headquarters; School and Day Care Facility. In the Parent Merger
Agreement, Parent has agreed to maintain the Company's corporate headquarters
at the current Miami location for the foreseeable future, and in any event,
for not less than five years from the Effective Time. Parent will also
ensure, to the extent within its reasonable control, that the public school
and day care facility operated on or adjacent to the Company's current Miami
location shall remain in operation at their current locations for so long as
the Company's corporate headquarters are maintained at the Company's current
Miami location.
Employee Benefits. In the Parent Merger Agreement, Parent has agreed that
from the Effective Time until the first anniversary thereof, the employees of
the Company and its subsidiaries will continue to be provided with benefits
under the existing employee benefit plans of the Company and its subsidiaries
(other than plans involving the issuance or award of Common Shares or rights
to acquire Common Shares) that are no less favorable in the aggregate than
those currently provided by the Company and its subsidiaries to such
employees. Any such employees will receive credit under any benefit plans of
Parent or any of its subsidiaries for service with the Company or its
subsidiaries or predecessors prior to the Effective Time for the purpose of
determining eligibility and vesting. Parent also has agreed to cause all
pre-existing condition limitations and eligibility waiting periods under
group health plans of Parent or any
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of its subsidiaries to be waived with respect to such participants and their
eligible dependents. All discretionary awards and benefits under any group
health plans of Parent or any of its subsidiaries shall be subject to the
discretion of the persons or committee administering such plans.
Treatment of Stock Options. The Parent Merger Agreement provides that at
the Effective Time, each outstanding option to purchase shares of Common
Shares under the Company's stock plans, whether vested or unvested, will be
deemed to constitute an option to acquire, on the same terms and conditions,
the same number of shares of Parent Common Stock as the holder of such option
would have been entitled to receive pursuant to the Merger had such holder
exercised such option in full immediately prior to the Effective Time and at
a price per share (rounded up to the nearest whole cent) equal to (y) the
aggregate exercise price for the Common Shares otherwise purchasable pursuant
to such option, divided by (z) the number of full shares of Parent Common
Stock deemed purchasable pursuant to such option; provided that in the case
of any option to which Section 422 of the Code applies, the option price, the
number of shares purchasable pursuant to such option, and the terms and
conditions of the exercise of such option shall be subject to such
adjustments as are necessary in order to satisfy the requirements of Section
424(a) of the Code; provided, further, that to the extent that Common Shares
acquired upon exercise of such option would be subject to vesting or other
restrictions under the terms of the relevant Company stock plan under which
such option was issued ("Company Restricted Shares"), the number of shares of
Parent Common Stock to be issued upon exercise of an assumed option in
accordance with the foregoing that bears the same ratio to the total shares
of Parent Common Stock deemed purchasable pursuant to such assumed option as
the number of Company Restricted Shares bears to the total number of shares
of Common Shares issuable under such option shall be subject to the same
vesting and other restrictions as would be applicable to the Company
Restricted Shares.
At or prior to the Effective Time, the Company shall make all necessary
arrangements with respect to the Company stock plans to permit the assumption
by Parent of the unexercised options to purchase Common Shares in accordance
with the above. Effective at the Effective Time, Parent shall assume each
option to purchase shares of Common Shares under the Company stock plans in
accordance with the terms of the relevant Company stock plan under which the
option was issued and the stock option agreement by which the option is
evidenced.
Special Meetings. The Company has agreed to take all action necessary to
convene the special meeting of the holders of Common Shares and the special
meeting of the holders of Preferred Shares (collectively, the "Special
Meetings") to approve and adopt the Parent Merger Agreement as promptly as
practicable after the Registration Statement on Form S-4 is declared effective.
Subject to fiduciary obligations under applicable law, the Company Board will
recommend approval of the Merger, shall not withdraw or modify such
recommendation and shall take all lawful action to solicit the approval of the
Merger. In the event that the Company Board withdraws or modifies its
recommendation, the Company has agreed that the Special Meetings shall
nevertheless be convened, votes with respect to the Merger will be taken and
the reasons for such withdrawal or modification shall be communicated to the
shareholders of the Company in accordance with the Florida Business Corporation
Act.
Indemnification of Directors and Officers; Directors and Officers'
Insurance. In the Parent Merger Agreement, Parent has agreed to indemnify
each present and former director and officer of the Company from liability
arising out of matters existing or occurring at or prior to the Effective
Time, including any shareholder lawsuits, to the fullest extent that the
Company would have been permitted to indemnify such parties under Florida law
and the Company Articles and the Company Bylaws. Parent also has agreed that
the surviving corporation will maintain the Company's existing officers' and
directors' liability insurance or purchase substantially comparable insurance
for up to six years following the Effective Time, subject to certain maximum
required premium amounts.
Dividends. Parent and the Company have agreed to coordinate the
declaration, setting of record dates and payment dates of dividends on Common
Shares and Preferred Shares to ensure that (i) holders thereof do not receive
dividends in respect of any calendar quarter on both Common Shares and Parent
Common Stock or on both Preferred Shares and Parent Preferred Stock, as
applicable, or (ii) holders thereof do not fail to receive dividends in
respect of any calendar quarter on either Common Shares or Parent Common
Stock or on either Preferred Shares or Parent Preferred Stock, as applicable.
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Affiliates Letters. The Company has agreed to deliver to Parent prior to
the Special Meetings, a list of names and addresses of those persons who will
be deemed to be "affiliates" (as such term is defined under the Securities
Act) of the Company, in the opinion of the Company, as of the time of the
Special Meetings, which list shall be updated with the names of persons who
may be so deemed and are subsequently so identified as affiliates. The
Company has further agreed to use its reasonable best efforts to deliver or
cause to be delivered to Parent prior to the Special Meetings, an Affiliates
Letter from each affiliate identified in the foregoing list. Parent will not
be obligated to maintain the effectiveness of the Registration Statement or
any other registration statement for the purposes of resale by such
affiliates of Parent Common Stock or Parent Preferred Stock.
Listing and Registration. Parent has agreed to use its best efforts to
cause the shares of Parent Common Stock and the shares of Parent Preferred
Stock to be issued in the Merger to be approved for listing on the NYSE
subject to official notice of issuance, prior to the Closing. The surviving
corporation shall use its reasonable best efforts to cause the Common Shares
and the Preferred Shares to be delisted from the NYSE and deregistered under
the Exchange Act as soon as practicable following the Effective Time.
Representations and Warranties. In the Parent Merger Agreement, the
Company, Parent and Purchaser have made representations relating to, among
other things: (a) each of the Company's, Parent's and Purchaser's
capitalization and organization and similar corporate matters; (b)
authorization, execution, delivery, performance and enforceability of the
Parent Merger Agreement and related matters; (c) conflicts under governing
documents, required consents or approvals, and violations of any agreements
or law; (d) documents filed with the SEC and (in the case of the Company)
applicable insurance regulatory authorities and the accuracy of information
contained therein; (e) absence of certain material adverse events, changes or
effects; (f) brokers and finders; and (g) certain tax matters.
The Company has made additional representations to Parent and Purchaser
relating to (a) receipt of an opinion of its financial advisor; (b) ownership
of intellectual property and absence of infringement of third party
intellectual property; (c) litigation and undisclosed liabilities; (d)
compliance with law, including compliance with insurance, tax and
environmental laws and regulations; (e) actions taken in connection with
takeover statutes; (f) the absence of contracts with labor unions or
organizations; (g) the Rights Agreement; (h) retirement and other employee
plans and matters relating to the Employee Retirement Income Security Act of
1974, as amended; (i) compliance with environmental and tax laws and
regulations; (j) compliance with insurance laws and regulations and related
insurance matters; and (k) the disclosure and enforceability of certain
material contracts; and compliance with insurance laws and regulations and
the adequacy of reserves and related matters.
The Rights. The Parent Merger Agreement provides that the Company will
take all actions necessary such that by reason of the execution or
consummation of the transactions contemplated by the Parent Merger Agreement,
Parent will not be deemed to be an Acquiring Person under the Rights
Agreement, the Distribution Date will not be deemed to occur and the Rights
will not separate from the Common Shares.
Termination. The Parent Merger Agreement may be terminated: (i) at any
time prior to the Effective Time, by mutual written consent of the Company
and Parent; (ii) by Parent or the Company if (a) Purchaser shall have
terminated the Offer without purchasing any Common Shares pursuant to the
Offer, (b) the purchase of Common Shares pursuant to the Offer has not been
consummated by December 31, 1998, whether such date is before or after the
approval of the Parent Merger Agreement by the shareholders of the Company,
or (c) any Order permanently restraining, enjoining or otherwise prohibiting
consummation of the Offer or the Merger shall become final and non-appealable
(whether before or after the approval of the Parent Merger Agreement by the
shareholders of the Company or Parent); provided, that the right to terminate
the Parent Merger Agreement pursuant to clause (a) or clause (b) above will
not be available to any party that has materially breached its obligations in
a manner that has contributed to the failure of the Offer or the Merger to be
consummated; (iii) by the Company at any time prior to the earlier of (1)
acceptance for payment of Common Shares pursuant to the Offer or (2) the
approval of the Merger by the holders of a majority of the outstanding shares
of Common
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Shares and the holders of a majority of the outstanding shares of Preferred
Shares, each voting as a separate class, shall have been obtained, if the
Company Board authorizes the Company to enter into a binding written
agreement with respect to a Superior Proposal (subject to (w) there being no
material breach by the Company of the provisions of the Parent Merger
Agreement, (x) the Company giving written notice of such Superior Proposal to
Parent, (y) Parent failing to make, prior to five business days after receipt
of the Company's written notice of its intention to enter into a binding
agreement for a Superior Proposal, an offer that the Company Board
determines, in good faith after consultation with its financial advisors, is
at least as favorable as the Superior Proposal, taking into account the long
term prospects and interests of the Company and its shareholders and (z) the
Company paying to Parent prior to termination of the Parent Merger Agreement
the termination fee (described below); (iv) by the Company or Parent at any
time prior to the Effective Time in the event of a material breach by the
other party of any representation, warranty, covenant or agreement which is
not curable or not cured as provided in the Parent Merger Agreement; (v) by
Parent at any time prior to the earlier of (1) acceptance for payment of
Common Shares pursuant to the Offer or (2) the approval of the Merger by the
holders of a majority of the outstanding Preferred Shares and the holders of
a majority of the outstanding Common Shares, each voting as a separate class,
if the Company enters into a binding agreement for a Superior Proposal or if
the Company Board withdraws or modifies its approval or recommendation of the
Parent Merger Agreement or fails to reconfirm its recommendation within ten
business days after a reasonable written request by Parent to do so.
Expenses and Termination Fee. The Parent Merger Agreement provides that
the surviving corporation shall pay all expenses arising in connection with
the exchange of Common Shares for the Parent Common Stock and the exchange of
Preferred Shares for Parent Preferred Stock. Except as described below,
whether or not the Merger is consummated, all costs and expenses incurred in
connection with the Parent Merger Agreement, the Merger, the Offer and the
other transactions contemplated by the Parent Merger Agreement shall be paid
by the party incurring such expenses, except that the filing fee for the
Registration Statement and expenses incurred in connection with the printing
and mailing of the Proxy Statement/Prospectus, the Offer documents, the
Schedule 14D-1, the Schedule 14D-9, and the Registration Statement shall be
shared equally by Parent and the Company.
The Parent Merger Agreement provides that if it is terminated (1) by the
Company or by Parent in the manner described in clause (ii)(a) or (b) under
"Termination" above (and prior to, or at the time of the Special Meetings
referred to therein any person shall have made an Acquisition Proposal to the
Company or any of its subsidiaries or any of its shareholders shall have
publicly announced an intention to make such an Acquisition Proposal), (2) by
the Company in the manner described in clause (iii) under "Termination" above
or (3) by Parent in the manner described in clause (v) under "Termination"
above, then the Company will, not later than immediately prior to the time of
such termination or, in the case of a termination described in clause (iii)
under "Termination" above, not later than immediately prior to the time that
the Company enters into an agreement concerning a transaction that
constitutes a Superior Proposal, pay Parent a termination fee of $94.9
million plus an amount equal to Parent's expenses incurred in connection with
the Offer and the Merger up to $5 million.
In addition, if the Parent Merger Agreement is terminated by the Company
or Parent pursuant to clause (ii) (a) or (b) under "Termination" above, and
at the time of termination no person is making or proposing an Acquisition
Proposal to the Company, then the Company will, not later than two days after
Parent requests payment of any expenses incurred in connection with the
Merger or Offer, pay to Parent an amount up to $5 million and, if within 18
months of such termination the Company enters into an agreement concerning a
transaction that constitutes an Acquisition Proposal, the Company will pay to
Parent a termination fee of $94.9 million.
Any payment of a termination fee by the Company to Parent pursuant to the
Parent Merger Agreement shall be payable as follows: (i) any amounts up to
the first $70 million shall be payable in cash and (ii) the balance shall be
payable by delivery of a note, which shall (i) bear interest at the prime
rate of The Chase Manhattan Bank in effect from time to time plus two
percent, (ii) have a final maturity of the earlier of the consummation of a
transaction contemplated by an Acquisition Proposal or one year from the date
of termination of the Parent Merger Agreement and (iii) have other customary
terms and conditions.
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Alternative Transaction Structure. The Parent Merger Agreement provides
that if the vote of the holders of a majority of the outstanding shares of
Preferred Shares is not obtained at the Special Meeting of holders of
Preferred Shares or Parent reasonably determines that such vote is not likely
to be obtained, Parent will, subject to the vote of the holders of a majority
of the outstanding Common Shares and the other terms and conditions of the
Parent Merger Agreement (other than the covenant relating to actions that
would disqualify the Merger as a "reorganization" under the Code and the
provisions of opinions of counsel as to the treatment of the Merger as a
"reorganization" under the Code), merge Purchaser with and into the Company
such that the separate corporate existence of Purchaser shall cease and the
Company shall continue as the surviving corporation. The Company agrees to
take all actions reasonably requested by Parent to effect the above
alternative transaction structure, including without limitation, promptly
entering into an amendment to the Parent Merger Agreement to provide, inter
alia, that the Preferred Shares shall remain outstanding after the Merger
pursuant to its current terms and conditions except that it shall be
convertible into Parent Common Stock.
Under the alternative transaction structure described above (the
"Alternative Transaction Structure"), the Merger would not qualify as a
"reorganization" under the Code. Under the Alternative Transaction Structure,
the Offer and the Merger would be a fully taxable transaction with the result
that holders of Common Shares would pay Federal income tax on all consideration
(whether cash or Parent Common Stock) received in the Offer and the Merger.
Thus, a holder of Common Shares who, pursuant to the Offer and the Merger,
exchanged all of the Common Shares owned by such shareholder for cash and
shares of Parent Common Stock would recognize gain or loss equal to the
difference between (i) the amount of cash and the fair market value
(determined as of the Effective Time) of the shares of Parent Common Stock
received and (ii) such shareholder's adjusted tax basis in the Common Shares
surrendered therefor. Such gain or loss would generally be capital gain or
loss if a block of Common Shares is held as a capital asset and would
generally be long-term capital gain or loss to the extent that, at the
Effective Time, the holder has a holding period for federal income tax
purposes in such block of Common Shares of more than one year.
The foregoing discussion of the tax implications of the Alternative
Transaction Structure is based upon the Code, applicable Treasury Regulations
and administrative rulings and judicial authority. All of the foregoing are
subject to change, possibly with retroactive effect. In addition, the
foregoing discussion does not address the tax consequences that may be
relevant to a particular shareholder subject to special treatment under
certain federal income tax laws.
The foregoing description of the Parent Merger Agreement is qualified in
its entirety by reference to the text of the Parent Merger Agreement, a copy
of which has been filed by Parent as an Exhibit to Amendment No. 31 to the
Schedule 14D-1. Copies of such exhibit may be inspected and obtained at the
offices of the SEC as set forth in Section 8 of the Offer to Purchase (except
that copies may not be available at regional offices of the SEC).
Settlement Agreement
On March 18, 1998, Parent, the Company and AIG entered into the Settlement
Agreement. In addition to the provisions regarding termination of the Amended
AIG Merger Agreement, the Amended AIG Lockup Option Agreement and AIG Voting
Agreement and the related payment of the Termination Amount and the Initial
Expense Amount, as described in the Introduction of this Second Supplement,
pursuant to the Settlement Agreement, prior to the consummation of the Offer,
Parent agreed to pay AIG an additional $5 million to cover AIG's expenses.
The Settlement Agreement also provides that the respective officers, directors,
employees, agents or other representatives or advisors of the Company and of
Parent will not (a) take or facilitate the taking of any actions or the making
of any claims which challenge the validity or enforceability of the payments
by the Company and/or by Parent referred to above, or that seek to reduce or
otherwise deprive AIG of such payments or (b) make any oral or written
statements publicly or before any governmental or regulatory authority, court
or other person inconsistent with (a) above.
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Under the Settlement Agreement, AIG has agreed that upon payment of the
Termination Amount and the Initial Expense Amount it will (i) take all
necessary steps to withdraw from any insurance regulatory procedures or
hearings relating to Parent's applications to obtain approval to acquire the
Company, (ii) withdraw any applications that it has pending before any
insurance regulatory authorities to obtain approval to acquire the Company
and (iii) not take any actions or make any statements intended to frustrate
or delay any transaction that may be agreed upon between the Company and
Parent pursuant to the terms of the Settlement Agreement.
Upon termination of the Amended AIG Merger Agreement, each of the parties
to the Settlement Agreement have agreed to release the other parties and
their affiliates, representatives and shareholders from any and all claims
relating to any proposed or actual acquisition of the Company by AIG, AIGF,
Parent or Purchaser, including but not limited to claims asserted in
currently pending litigation.
Pursuant to the Settlement Agreement, AIG has also agreed that for a
period of 90 days following the consummation of the purchase by Parent of a
majority of the then outstanding Common Shares or a merger or other business
combination involving the Company and Parent or an affiliate of Parent, AIG
and its subsidiaries will not hire any employees of the Company or its
subsidiaries as employees or AIG or any of its subsidiaries. In addition, for
a period of one year following the consummation of such a transaction, AIG
and its subsidiaries will not solicit any employee of the Company or any of
its subsidiaries for employment by AIG or its subsidiaries, provided that
such restriction shall not apply to general solicitations of employment by
AIG and its subsidiaries not specifically directed to employees of the
Company or any of its subsidiaries. The foregoing restrictions shall not
apply to employees of the Company or any of its subsidiaries who are not
officers or other executive or managerial employees, or employees of the
Company or its subsidiaries who become former employees and whose employment
has been terminated for at least 30 days.
The foregoing description of the Settlement Agreement is qualified in
its entirety by reference to the text of the Settlement Agreement, a copy
of which has been filed by Parent as an Exhibit to Amendment No. 30 to the
Schedule 14D-1. Copies of such exhibit may be inspected and obtained at the
offices of the SEC as set forth in Section 8 of the Offer to Purchase (except
that copies may not be available at regional offices of the SEC).
5. CONDITIONS OF THE OFFER. The discussion set forth in Section 14 of the
Offer to Purchase is amended and supplemented as follows:
Notwithstanding any other provision of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its reasonable discretion, 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 promptly after
termination or withdrawal of the Offer), pay for, or may delay the acceptance
for payment of or payment for, any tendered Common Shares, or may, in its
reasonable discretion, terminate or amend the Offer as to any Common Shares
not then paid for if (a) prior to the Expiration Date (i) there shall not
have been tendered and not withdrawn at least that number of Common Shares
which, together with Shares owned by Parent or Purchaser, constitute at least
51% of all outstanding Common Shares on a fully diluted basis, (ii) any
waiting period applicable to the consummation of the Offer and the Merger
under the HSR Act shall not have expired or been terminated, (iii) other than
the filing provided for in Section 1.3 of the Parent Merger Agreement, any
notices, reports and other filings required to be made prior to the Effective
Time by the Company or Parent or any of their respective subsidiaries with,
and all consents, registrations, approvals, permits and authorizations
required to be obtained prior to the Effective Time by the Company or Parent
or any of their respective subsidiaries from, any Governmental Entity
(collectively, "Governmental Consents"), in connection with the execution and
delivery of the Parent Merger Agreement and the consummation of the Offer and
the Merger and the other transactions contemplated by the Parent Merger
Agreement shall not have been made or obtained (as the case may be), or (iv)
the Company shall not have obtained the consent or approval of each person
whose consent or approval shall be required under any contract to which the
Company or any of its subsidiaries is a party, except those for which the
failure to obtain such consents or approvals is not, individually or in the
aggregate, reasonably likely to have a material adverse effect on the
financial condition, properties, business or results of operations of the
Company and its subsidiaries taken as a whole ("Company Material Adverse
Effect") or is not, individually or in the aggregate, reasonably likely to
prevent or to materially burden or materially impair the ability of the
Company to consummate the transactions contemplated by the Parent Merger
Agreement; or any such consent or
12
<PAGE>
approval, or any Governmental Consent, imposes any condition or conditions
relating to, or requires changes or restrictions in, the operations of any
asset or businesses of the Company, Parent or their respective subsidiaries
which could, in the judgment of the board of directors of Parent,
individually or in the aggregate, materially and adversely impact the
economic or business benefits to Parent and its subsidiaries of the
transactions contemplated by the Parent Merger Agreement; or (b) at or before
the expiration of the Offer (whether or not any Common Shares have
theretofore been accepted for payment), any of the following events shall
occur:
(i) any court or Governmental Entity of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any law, statute,
ordinance, rule, regulation, judgment, decree, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and
restrains, enjoins or otherwise prohibits consummation of the Offer or the
Merger, or which makes the acceptance for payment of, or payment for, any
Common Shares in the Offer illegal;
(ii) the representations and warranties of the Company set forth in the
Parent Merger Agreement shall not be true and correct in all material
respects as of the date made; or such representations and warranties shall
not be true and correct as of the Expiration Date as though made on and as
of the Expiration Date (except to the extent any such representation or
warranty expressly speaks as of an earlier date (disregarding the
parenthetical clause at the end of the lead-in to Section 5.1 of the
Parent Merger Agreement)) except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
qualifications as to "Company Material Adverse Effect", "material" or
similar qualifications set forth in the Parent Merger Agreement) are not,
individually or in the aggregate, reasonably likely to have a Company
Material Adverse Effect, or Parent shall not have received a certificate
on the Expiration Date signed on behalf of the Company by an executive
officer of the Company to such effect;
(iii) the Company shall not have performed in all material respects all
obligations required to be performed by it under the Parent Merger
Agreement at or prior to the Expiration Date; or
(iv) the Parent Merger Agreement shall have been terminated in accordance
with its terms prior to the Expiration Date; or Parent, Purchaser and the
Company shall have otherwise agreed that Purchaser may amend, terminate or
withdraw the Offer;
which, in the reasonable judgment of Parent and Purchaser, in any such case,
and regardless of the circumstances (including any action or inaction by
Parent or Purchaser) giving rise to any such conditions, makes it inadvisable
to proceed with the Offer and/or with such acceptance for payment of or
payment for Common Shares.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
(including any action or inaction by Parent or Purchaser) giving rise to such
condition or may be waived by Parent or Purchaser by express and specific
action to that effect, in whole or in part at any time or from time to time
in their sole discretion. 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. Any determination by
Parent and Purchaser concerning any event described in this Section 14 shall
be final and binding upon all holders of Common Shares.
6. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; CERTAIN LITIGATION. The
discussion set forth in Section 15 of the Offer to Purchase is amended and
supplemented as follows:
Certain Litigation. On March 20, 1998, pursuant to the terms of the
Settlement Agreement, Parent and Purchaser and AIG and AIGF each agreed to file
motions to dismiss, with prejudice, their respective claims pursuant to the
Amended Complaint and the Amended AIG Complaint.
State Insurance Approvals. On March 17, 1998, AIG presented their
affirmative case to the Florida Department of Insurance (the "Florida
Department") on the AIG Form A Proceedings. At the request
13
<PAGE>
of AIG, the Company and Parent, the Florida Department adjourned the hearing
on the AIG Form A Proceedings for up to two weeks following the announcement
of the Settlement Agreement. Parent reserved the right to introduce evidence
in opposition to the AIG Form A Proceedings if no definitive merger agreement
was reached between Parent and the Company. On March 19, 1998, the Florida
Department held hearings at which representatives of Parent presented their
affirmative case on the Parent Form A Proceedings. At the request of AIG, the
Company and Parent, the Florida Department also adjourned the hearing on the
Parent Form A Proceedings for up to two weeks following the announcement of
the Settlement Agreement. AIG and the Company reserved the right to introduce
evidence in opposition to the Parent Form A Proceedings if no definitive
merger agreement was entered into between Parent and the Company.
Pursuant to the Settlement Agreement, AIG withdrew the AIG Form A
Proceeding with the Florida Department simultaneously with the termination of
the Amended AIG Merger Agreement. AIG notified the Florida Department of
their withdrawal of the AIG Form A Proceeding and AIG's intention not to
oppose the Parent Form A Proceedings. The hearing record for the Parent Form
A Proceeding will close upon the submission of additional information by
Parent as requested by the Florida Department.
7. MISCELLANEOUS.
Parent and Purchaser have filed with the SEC amendments to 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 of the Offer to
Purchase (except that they may not be available at the regional offices of
the SEC).
SEASON ACQUISITION CORP.
March 24, 1998
14
<PAGE>
Facsimile copies of the Letters of Transmittal, properly completed and
duly signed, will be accepted. Either the original Letter of Transmittal or
the revised Letters 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:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
2 BROADWAY
NEW YORK, NEW YORK 10004
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 509-5150
For Information Telephone:
(212) 509-4000 ext. 226
(800) 509-5586
Any questions or requests for assistance may be directed to the
Information Agent or the Dealer Managers at their respective telephone
numbers and locations listed below. Additional copies of the Offer to
Purchase, the First Supplement, this Second Supplement, the revised Letters
of Transmittal and the revised Notices of Guaranteed Delivery may be obtained
from the Information Agent at its address and telephone numbers set forth
below. Holders of 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:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
CALL TOLL-FREE: (888) 750-5834
BANKS AND BROKERS CALL COLLECT: (212) 750-5833
The Dealer Managers for the Offer are:
<TABLE>
<CAPTION>
<S> <C>
LEHMAN BROTHERS MERRILL LYNCH & CO.
3 WORLD FINANCIAL CENTER WORLD FINANCIAL CENTER
NEW YORK, NEW YORK 10285 NORTH TOWER
(212) 526-1849 (CALL COLLECT) NEW YORK, NEW YORK 10281-1305
(212) 449-8971 (CALL COLLECT)
</TABLE>
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
AMERICAN BANKERS INSURANCE GROUP, INC.
PURSUANT TO THE OFFER TO PURCHASE, DATED JANUARY 27, 1998,
THE SUPPLEMENT THERETO, DATED MARCH 16, 1998,
AND
THE SECOND SUPPLEMENT THERETO, DATED MARCH 24, 1997
BY
SEASON ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CENDANT CORPORATION
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 6, 1998, UNLESS THE OFFER IS
EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
2 BROADWAY
NEW YORK, NEW YORK 10004
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 509-5150
For Information Telephone:
(212) 509-4000 ext. 226
(800) 509-5586
DELIVERY OF THIS REVISED 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 REVISED LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE
THE SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS REVISED LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
THIS REVISED LETTER OF TRANSMITTAL IS TO BE COMPLETED BY SHAREHOLDERS OF
AMERICAN BANKERS INSURANCE GROUP, INC. EITHER IF CERTIFICATES EVIDENCING
COMMON SHARES (AS DEFINED BELOW) ARE TO BE FORWARDED HEREWITH, OR IF DELIVERY
OF COMMON SHARES IS TO BE MADE BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S
ACCOUNT AT THE DEPOSITORY TRUST COMPANY (THE "BOOK-ENTRY TRANSFER FACILITY")
PURSUANT TO THE BOOK-ENTRY TRANSFER PROCEDURE DESCRIBED IN "PROCEDURES FOR
TENDERING COMMON SHARES" OF THE OFFER TO PURCHASE AND THE FIRST SUPPLEMENT
(EACH AS DEFINED BELOW). DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER
FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES
DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE>
SHAREHOLDERS WHO HAVE PREVIOUSLY TENDERED COMMON SHARES PURSUANT TO THE
OFFER USING THE PREVIOUSLY CIRCULATED LETTER OF TRANSMITTAL OR THE NOTICE OF
GUARANTEED DELIVERY AND WHO HAVE NOT PROPERLY WITHDRAWN SUCH COMMON SHARES
HAVE VALIDLY TENDERED SUCH COMMON SHARES FOR THE PURPOSES OF THE OFFER, AS
AMENDED, AND NEED NOT TAKE ANY FURTHER ACTION.
SHAREHOLDERS WHOSE CERTIFICATES FOR COMMON SHARES ARE NOT IMMEDIATELY
AVAILABLE OR WHO CANNOT DELIVER SUCH CERTIFICATES AND ALL OTHER DOCUMENTS
REQUIRED HEREBY TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE 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 AND THE FIRST SUPPLEMENT. SEE INSTRUCTION 2.
[ ] CHECK HERE IF TENDERED COMMON SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
----------------------------------------------------------------------
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 Number (if any):
----------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
----------------------------------------------------------------------
Name of Institution which Guaranteed Delivery:
----------------------------------------------------------------------
Account Number:
----------------------------------------------------------------------
Transaction Code Number:
----------------------------------------------------------------------
<TABLE>
<CAPTION>
DESCRIPTION OF COMMON SHARES TENDERED
- -----------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S) COMMON SHARE CERTIFICATE(S) TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ---------------------------- ------------------------------------------------------------
<S> <C> <C> <C>
TOTAL NUMBER OF NUMBER OF
COMMON SHARES COMMON
CERTIFICATE REPRESENTED SHARES
NUMBER(S)* BY CERTIFICATE(S) TENDERED**
-------------------- ------------------- --------------
-------------------- ------------------- --------------
-------------------- ------------------- --------------
-------------------- ------------------- --------------
-------------------- ------------------- --------------
TOTAL COMMON SHARES
- ----------------------- -------------------- ------------------- --------------
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Common Shares being
delivered to the Depositary are being tendered. see Instruction 4.
- -------------------------------------------------------------------------------
</TABLE>
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.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS REVISED LETTER OF TRANSMITTAL
CAREFULLY.
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Season Acquisition Corp., a New Jersey
corporation ("Purchaser") and a wholly owned subsidiary of Cendant
Corporation, a Delaware corporation, the above described shares of common
stock, par value $1.00 per share (the "Common Shares"), of American Bankers
Insurance Group, Inc., a Florida corporation (the "Company"), including the
associated Series C Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of February 19, 1998, between the
Company and ChaseMellon Shareholders Service, L.L.C., as Rights Agent (as
such agreement may be amended, the "Rights Agreement"), pursuant to
Purchaser's offer to purchase 23,501,260 Common Shares, including the
associated Rights, at a price of $67.00 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, dated January 27, 1998 (the
"Offer to Purchase"), the Supplement, dated March 16, 1998 (the "First
Supplement"), the Second Supplement, dated March 24, 1998 (the "Second
Supplement") receipt of which is hereby acknowledged, and in this revised
Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). Unless the context requires otherwise, all
references herein to the Common Shares shall include the associated Rights,
and all references to the Rights shall include the benefits that may inure to
the holders of the Rights pursuant to the Rights Agreement, including the
right to receive any payment due upon redemption of the Rights.
The undersigned understands that Purchaser reserves the right to transfer
or assign, in whole at any time, 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, but any such transfer or assignment
will not relieve Purchaser of its obligations under the Offer and will in no
way prejudice the rights of tendering shareholders to receive payment for
Common Shares validly tendered and accepted for payment 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
any 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 any and
all non-cash dividends, distributions, rights, other Common Shares or other
securities issued or issuable in respect thereof or declared, paid or
distributed in respect of such Common Shares on or after January 27, 1998
(collectively, "Distributions")), and irrevocably appoints 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 certificates for such Common Shares
(individually, a "Common Share Certificate"), and all Distributions, or
transfer ownership of such Common Shares and all Distributions on the account
books maintained by the Book-Entry Transfer Facility, together, in either
case, with all accompanying evidence 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.
If, on or after the date of this Offer to Purchase, the Company should
declare or pay any dividend on the Common Shares, other than regular
quarterly dividends, or make any distribution (including, without limitation,
the issuance of additional Common Shares pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights for
the purchase of any securities) with respect to the Common Shares that is
payable or distributable to shareholders of record on a date prior to the
transfer to the name of Purchaser or its nominee or transferee on the
Company's stock transfer records of the Common Shares purchased pursuant to
the Offer, then, subject to the provisions of Section 13 of the Offer to
Purchase, (i) the purchase price per Common Share payable by Purchaser
pursuant to the Offer will be reduced by the amount of any such cash dividend
or cash distribution and (ii) any such non-cash dividend, distribution or
right to be received by the tendering shareholder will be received and held
by such tendering shareholder for the account of Purchaser and will be
required to be remitted promptly and transferred by each such tendering
shareholder to the Depositary for the account of Purchaser, accompanied by
appropriate documentation of transfer. Pending such remittance and subject to
applicable law, Purchaser will be entitled to all rights and privileges as
owner of any such non-cash dividend, distribution or right and may withhold
the entire purchase price or deduct from the purchase price the amount of
value thereof, as determined by Purchaser in its sole discretion.
By executing this revised Letter of Transmittal, the undersigned
irrevocably appoints James E. Buckman and Michael P. Monaco as 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
<PAGE>
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
designee 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 (the "Exchange Act"),
that such tender of Common Shares complies with Rule 14e-4 under the Exchange
Act, 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 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, provided that Common Shares tendered pursuant to the Offer may
be withdrawn at any time prior to their acceptance for payment.
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, the First Supplement 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, the First Supplement and the Second Supplement,
Purchaser may not be required to accept for payment any of the Common Shares
and Rights 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 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 and/or return any certificates evidencing
Common Shares not tendered or accepted for payment (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 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 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 Special Payment
Instructions, to transfer any Common Shares from the name of the registered
holder(s) thereof if Purchaser does not accept for payment any of the Common
Shares tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS
LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for Common Shares not tendered or not
purchased and/or the check for the purchase price of Common Shares 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 and/or certificate(s) to:
Name
- -----------------------------------------------------------------------------
(PLEASE PRINT)
Address
- -----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
- -----------------------------------------------------------------------------
(TAX 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:
------------------------------------------------------------------------
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS
LETTER OF TRANSMITTAL)
To be completed ONLY if certificates for Common Shares not tendered or not
purchased and/or the check for the purchase price of Common Shares purchased
are to be sent to someone other than the undersigned, or to the undersigned
at an address other than that shown above.
Mail check and/or certificates to:
Name
----------------------------------------------------------------------------
(PLEASE PRINT)
Address
----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
----------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
<PAGE>
SIGN HERE
(COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated: , 1998
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Common Stock 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
others acting in a fiduciary or representative capacity, please provide the
following information. See Instruction 5 of the Letter of Transmittal.)
Name(s):
- -----------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
- -----------------------------------------------------------------------------
Address:
- -----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- -----------------------------------------------------------------------------
Tax Identification or Social Security Number:
- -----------------------------------------------------------------------------
(Complete Substitute Form W-9 on Reverse)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5 OF THIS LETTER OF TRANSMITTAL)
Authorized Signature:
- -----------------------------------------------------------------------------
Name:
- -----------------------------------------------------------------------------
(PLEASE PRINT)
Title:
- -----------------------------------------------------------------------------
Name of Firm:
- -----------------------------------------------------------------------------
Address:
- -----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number:
- -----------------------------------------------------------------------------
Dated: , 1998
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this revised 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 (each, an "Eligible Institution"). No signature guarantee
is required on this revised Letter of Transmittal (a) if this revised 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 completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the
reverse hereof, or (b) if such Common Shares are tendered for the account of
an Eligible Institution. See Instruction 5. If a certificate evidencing
Common Shares (a "Certificate") is registered in the name of a person other
than the signer of this revised Letter of Transmittal, or if payment is to be
made, or a Certificate not accepted for payment or not tendered is to be
returned, to a person other than the registered holder(s), then the
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(s) on the Certificate, with the signature(s) on such Certificate or
stock powers guaranteed as described above. See Instruction 5.
2. Delivery of Letter of Transmittal and Common Share Certificates. This
revised Letter of Transmittal is to be used either if 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 and the First Supplement.
Certificates evidencing all tendered Common Shares, or confirmation of a
book-entry transfer of such Common Shares, if such procedure is available,
into the Depositary's account at the Book-Entry Transfer Facility pursuant to
the procedures set forth in "Procedures for Tendering Common Shares" of the
Offer to Purchase and the First Supplement, 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, as defined below) and any other documents required by
this revised Letter of Transmittal, must be received by the Depositary at its
address set forth on the reverse hereof prior to the Expiration Date (as
defined in "Terms of the Offer; Expiration Date" of the Second Supplement).
If 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 Certificates are not immediately
available, who cannot deliver their 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 and the First Supplement. 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) in the case of a guarantee of Common
Shares, the Certificates, in proper form for transfer, or a confirmation of a
book-entry transfer of such Common Shares, if such procedure is available,
into the Depositary's account at the Book-Entry Transfer Facility, 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 revised Letter of Transmittal, must be received by
the Depositary within three 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 and the
First Supplement. The term "Agent's Message" means a message, transmitted by
the Book-Entry Transfer Facility to, and received by the Depositary and
forming a part of the Book-Entry Confirmation, which states that the
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 revised Letter of Transmittal and that Purchaser may enforce such
agreement against the participant.
THE METHOD OF DELIVERY OF THIS REVISED LETTER OF TRANSMITTAL, CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE 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.
No alternative, conditional or contingent tenders will be accepted and no
fractional Common Shares will be purchased. By execution of this revised
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.
<PAGE>
3. Inadequate Space. If the space provided herein under "Description of
Common Shares Tendered" is inadequate, the Certificate numbers, the number of
Common Shares evidenced by such 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
Certificate delivered to the Depositary herewith are to be tendered hereby,
fill in the number of Common Shares which are to be tendered in the box
entitled "Number of Common Shares Tendered." In such cases, new
Certificate(s) evidencing the remainder
<PAGE>
of the Common Shares that were evidenced by the Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this revised 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 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 revised Letter of Transmittal is signed by the registered holder(s) of
the Common Shares tendered hereby, the signature(s) must correspond with the
name(s) as written on the face of the Certificate(s) evidencing such Common
Shares without alteration, enlargement or any other change whatsoever.
If any Common Shares tendered hereby are owned of record by two or more
persons, all such persons must sign this revised 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
certificates.
If this revised Letter of Transmittal is signed by the registered
holder(s) of the Common Shares tendered hereby, no endorsements of
Certificates or separate stock powers are required, unless payment is to be
made to, or 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 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 Certificate(s). Signatures on such Certificate(s) and stock
powers must be guaranteed by an Eligible Institution.
If this revised 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 Certificate(s).
Signatures on such Certificate(s) and stock powers must be guaranteed by an
Eligible Institution.
If this revised Letter of Transmittal or any Certificate(s) 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.
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 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 CERTIFICATE(S) 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 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 revised Letter of
Transmittal or if such check or any such Certificate is to be sent to someone
other than the person(s) signing this revised Letter of Transmittal or to the
person(s) signing this revised 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 revised 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 the Book-Entry Transfer Facility as such shareholder may
designate in the box entitled "Special Payment Instructions" on the reverse
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 Facility designated on the reverse hereof as the account from which
such Common Shares were delivered.
8. Requests for Assistance or Additional Copies. Requests for assistance
may be directed to the Information Agent or the Dealer Managers at their
respective addresses or telephone numbers set forth below. Additional copies
of the Offer to Purchase, the First Supplement, the Second Supplement, this
revised Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 may be obtained from the Information Agent or the Dealer Managers or
from brokers, dealers, commercial banks or trust companies.
9. 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
<PAGE>
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 or Rights 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 I of the Substitute Form W-9, and sign and date the Substitute Form W-9.
If "Applied For" is written in Part I 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.
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Common Shares has been lost, destroyed 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
certificate(s). This revised Letter of Transmittal and related documents
cannot be processed until the procedures for replacing lost or destroyed
certificates have been followed.
IMPORTANT: THIS REVISED LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF),
PROPERLY COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES,
OR AN AGENT'S MESSAGE (TOGETHER WITH 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 (AS DEFINED IN THE
SECOND SUPPLEMENT).
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Common
Shares or Rights 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. In addition, payments that are made to such
shareholder with respect to Common Shares or Rights purchased pursuant to the
Offer may be subject to backup withholding of 31%.
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.
If backup withholding applies with respect to a shareholder, the
Depositary is required to withhold 31% of any payments made to such
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.
<PAGE>
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 or Rights tendered hereby. If the Common Shares or Rights 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 I, and sign and
date the Substitute Form W-9. If "Applied For" is written in Part I 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.
<TABLE>
<CAPTION>
PAYER'S NAME: CONTINENTAL STOCK TRANSFER & TRUST COMPANY, DEPOSITARY
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ----------------------------
FORM W-9 CERTIFY BY SIGNING AND DATING BELOW. SOCIAL SECURITY NUMBER
Department of the Treasury OR
Internal Revenue Service ----------------------------
EMPLOYER IDENTIFICATION
NUMBER
(IF AWAITING TIN WRITE
"APPLIED FOR")
- ------------------------------ ----------------------------------------------------------- ---------------------------
PAYER'S REQUEST FOR PART 2-- For Payees Exempt from Backup Withholding, see the enclosed Guidelines and
TAXPAYER IDENTIFICATION complete as instructed therein.
NUMBER (TIN) CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or a
Taxpayer Identification Number has not been issued to me and either (a) I have
mailed or delivered an application to receive a Taxpayer Identification Number to
the appropriate Internal Revenue Service ("IRS") or Social Security
Administration office or (b) I intend to mail or deliver an application in the
near future. I understand that if I do not provide a Taxpayer Identification
Number within sixty (60) days, 31% of all reportable payments made to me
thereafter will be withheld until I provide a number), and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, (b) I have not been notified by the IRS that I am subject to backup
withholding as a result of failure to report all interest or dividends or (c) the
IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION 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
------------------------------
NAME:
-----------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</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 WROTE "APPLIED FOR"
IN THE SPACE PROVIDED FOR THE TIN IN PART I 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 , 1998
------------------------------- ------------------------
<PAGE>
Questions and requests for assistance or additional copies of the Offer to
Purchase, the First Supplement, the Second Supplement, the revised Letter of
Transmittal and other tender offer materials may be directed to the
Information Agent or the Dealer Managers as set forth below:
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
CALL TOLL-FREE: (888) 750-5834
Banks and Brokers call collect: (212) 750-5833
The Dealer Managers for the Offer are:
LEHMAN BROTHERS MERRILL LYNCH & CO.
3 World Financial Center World Financial Center
New York, New York 10285 North Tower
(212) 526-1849 (Call Collect) New York, New York 10281-1314
(212) 449-8971 (Call Collect)
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF
COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
AMERICAN BANKERS INSURANCE GROUP, INC.
TO
SEASON ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CENDANT 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) if (i)
certificates ("Share Certificates") evidencing shares of common stock, par
value $1.00 per share (the "Common Shares"), of American Bankers Insurance
Group, Inc., a Florida corporation (the "Company"), including the associated
Series C Preferred Stock Purchase Rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of February 19, 1998, between the Company and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent (as such agreement
may be amended, the "Rights Agreement"), are not immediately available, (ii)
time will not permit all required documents to reach Continental Stock
Transfer & Trust Company, as Depositary (the "Depositary"), prior to the
Expiration Date (as defined in the Second Supplement, dated March 24, 1998
(the "Second Supplement")) or (iii) the procedure for book-entry transfer
cannot be completed on a timely basis. All references herein to the Common
Shares shall include the associated Rights. This Notice of Guaranteed
Delivery may be delivered by hand or transmitted by telegram, facsimile
transmission or mail to the Depositary. See "Procedures for Tendering Common
Shares" of the Offer to Purchase, dated January 27, 1998 (the "Offer to
Purchase") and the First Supplement, dated March 16, 1998 (the "First
Supplement").
The Depositary for the Offer is:
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
2 BROADWAY
NEW YORK, NEW YORK 10004
By Facsimile Transmission:
(for Eligible Institutions Only)
(212) 509-5150
By Information Telephone:
(212) 509-4000 (ext. 226)
(800) 509-5586
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 FORM 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.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Season Acquisition Corp., a New Jersey
corporation and a wholly owned subsidiary of Cendant Corporation, a Delaware
corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase, the First Supplement, the Second Supplement and the
revised Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"), receipt of each of which is hereby acknowledged, the
number of Common Shares specified below pursuant to the guaranteed delivery
procedures described in "Procedures for Tendering Common Shares" of the Offer
to Purchase and the First Supplement.
Number of Common Shares (including the associated Rights):
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Name(s) of Record Holder(s):
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
(Please Type or Print)
Address(es):
- -----------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number:
- -----------------------------------------------------------------------------
Certificate Number(s) (if available):
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Check the box if Common Shares will be tendered by book-entry transfer: [ ]
Signature(s):
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Account Number:
- -----------------------------------------------------------------------------
Dated: , 1998
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member firm of a registered national securities
exchange, a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company having an office or correspondent in the
United States, hereby (a) represents that the tender of Common Shares
effected hereby complies with Rule 14e-4 of the Securities Exchange Act of
1934, as amended, and (b) guarantees delivery to the Depositary, at one of
its addresses set forth above, of certificates evidencing the Common Shares
tendered hereby in proper form for transfer, or confirmation of book-entry
transfer of such Common Shares into the Depositary's account at The
Depository Trust Company, with delivery of a properly completed and duly
executed revised Letter of Transmittal (or facsimile thereof) with any
required signature guarantees, or an Agent's Message (as defined in
"Acceptance for Payment and Payment for Shares; Proration" of the Offer to
Purchase), and any other documents required by the revised Letter of
Transmittal, in the case of Common Shares, within three 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 revised Letter of
Transmittal and certificates for Common Shares to the Depositary within the
time period shown herein. Failure to do so could result in financial loss to
such Eligible Institution.
Name of Firm:
- -----------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Address:
- -----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and
Telephone Number:
- -----------------------------------------------------------------------------
Name:
- -----------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Title:
- -----------------------------------------------------------------------------
Dated: , 1998
NOTE: DO NOT SEND CERTIFICATES FOR COMMON SHARES WITH THIS NOTICE. SUCH
CERTIFICATES SHOULD BE SENT WITH YOUR REVISED LETTER OF TRANSMITTAL.
3
<PAGE>
SEASON ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CENDANT CORPORATION
OFFER TO PURCHASE FOR CASH
23,501,260 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
AMERICAN BANKERS INSURANCE GROUP, INC.
FOR
$67.00 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 6, 1998,UNLESS THE OFFER IS
EXTENDED.
March 24, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by Season Acquisition Corp., a New Jersey corporation
("Purchaser") and a wholly owned subsidiary of Cendant Corporation, a
Delaware corporation ("Parent"), to act as Dealer Managers in connection with
Purchaser's offer to purchase 23,501,260 outstanding shares of common stock,
par value $1.00 per share (the "Common Shares"), of American Bankers
Insurance Group, Inc., a Florida corporation (the "Company"), including the
associated Series C Preferred Stock Purchase Rights (the "Rights") issued
pursuant to the Rights Agreement, dated as of February 19, 1998, between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (as
such agreement may be amended, the "Rights Agreement"), at a price of $67.00
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,
dated January 27, 1998 (the "Offer to Purchase"), the First Supplement, dated
March 16, 1998 (the "First Supplement"), the Second Supplement, dated March
24, 1998 (the "Second Supplement"), and the revised Letter of Transmittal
(which, as amended from time to time, together constitute the "Offer")
enclosed herewith. Unless the context requires otherwise, all references
herein to Common Shares shall include the associated Rights, and all
references to the Rights shall include the benefits that may inure to the
holders of the Rights pursuant to the Rights Agreement, including the right
to receive any payment due upon redemption of the Rights. Shares of $3.125
Series B Cumulative Convertible Preferred Stock, no par value (the "Preferred
Shares" and, together with the Common Shares, the "Shares"), of the Company
may not be tendered pursuant to the Offer. In the event that a holder of
Preferred Shares wants to tender such shares pursuant to the Offer, such
holder must first convert the Preferred Shares into Common Shares pursuant to
the terms of the Preferred Shares and then tender such Common Shares pursuant
to the Offer.
If a shareholder desires to tender Common Shares pursuant to the Offer and
such shareholder's Common Share Certificates (as defined in the Offer to
Purchase) 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 cannot be completed on a timely basis, such
Common Shares may nevertheless be tendered according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase and
Section 2 of the First Supplement. See Instruction 2 of the revised Letter of
Transmittal. Delivery of documents to the Book-Entry Transfer Facility (as
defined in the Offer to Purchase) in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF COMMON SHARES WHICH, TOGETHER WITH SHARES OWNED BY PARENT AND
PURCHASER, CONSTITUTE AT LEAST 51% OF THE COMMON SHARES OUTSTANDING ON A
FULLY DILUTED BASIS, AND (2) PARENT AND
<PAGE>
PURCHASER HAVING OBTAINED ALL INSURANCE REGULATORY APPROVALS NECESSARY FOR
THEIR ACQUISITION OF CONTROL OVER THE COMPANY'S INSURANCE SUBSIDIARIES.
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. Second Supplement, dated March 24, 1998;
2. Revised Letter of Transmittal to be used by holders of shares in
accepting the Offer and tendering Common Shares;
3. Revised Notice of Guaranteed Delivery to be used to accept the Offer
if the certificates evidencing such Common Shares 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 cannot be completed on a timely basis;
4. 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 nominees,
with space provided for obtaining such clients' instructions with regard
to the Offer;
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
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 validly tendered prior to the Expiration
Date promptly after the later to occur of (i) the Expiration Date and (ii)
the satisfaction or waiver of the regulatory conditions set forth in
"Conditions of the Offer" of the Offer to Purchase, as supplemented by the
Second Supplement. For purposes of the Offer, Purchaser will be deemed to
have accepted for payment, and thereby purchased, tendered Common Shares if,
as and when Purchaser gives oral or written notice to the Depositary of
Purchaser's acceptance of such Common Shares for 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) the certificates evidencing
such Common Shares or timely confirmation of a book-entry transfer of such
Common Shares, if such procedure is available, into the Depositary's account
at The Depository Trust Company pursuant to the procedures set forth in
"Procedures for Tendering Common Shares" of the Offer to Purchase, as
supplemented by the First Supplement, (ii) the revised Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, or an Agent's
Message (as defined in the Offer to Purchase) and (iii) any other documents
required by the revised Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
any other person (other than the Dealer Managers and the Information Agent as
described in "Fees and Expenses" of the Offer to Purchase) in connection with
the solicitation of tenders of Common Shares pursuant to the Offer. Purchaser
will, however, upon request, reimburse you for customary mailing and handling
expenses incurred by you in forwarding the enclosed materials to your
clients.
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 revised Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 6, 1998,
UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Common Shares should be
delivered or such Common Shares should be tendered by book-entry transfer,
all in accordance with the Instructions set forth in the revised Letter of
Transmittal, the Second Supplement and the Offer to Purchase.
If holders of Common Shares wish to tender, but it is impracticable for
them to forward their certificates or other required documents prior to the
Expiration Date, a tender may be effected by following the guaranteed
delivery procedures specified under "Procedures for Tendering Common Shares"
of the Offer to Purchase, as supplemented by the First Supplement.
Any inquiries you may have with respect to the Offer should be addressed
to the Dealer Managers or 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 materials may be obtained from Lehman
Brothers at 3 World Financial Center, New York, New York 10285, telephone
(212) 526-1849 (Call Collect), from Merrill Lynch & Co., at World Financial
Center, North Tower, New York, New York
2
<PAGE>
10281-1305, telephone (212) 449-8971 (Call Collect), from the Information
Agent, Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York,
New York 10022, telephone (212) 750-5833 or call toll-free (888) 750-5834, or
from brokers, dealers, commercial banks or trust companies.
Very truly yours,
LEHMAN BROTHERS MERRILL LYNCH & CO.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS AN AGENT OF PARENT, PURCHASER, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGERS, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
SEASON ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CENDANT CORPORATION
OFFER TO PURCHASE FOR CASH
23,501,260 SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
AMERICAN BANKERS INSURANCE GROUP, INC.
FOR
$67.00 NET PER SHARE
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, APRIL 6, 1998, UNLESS
THE OFFER IS EXTENDED.
March 24, 1998
To Our Clients:
Enclosed for your consideration is the Second Supplement, dated March 24,
1998 (the "Second Supplement"), to the Offer to Purchase, dated January 27,
1998 (the "Offer to Purchase") and the Supplement, dated March 16, 1998 (the
"First Supplement"), and the revised Letter of Transmittal (which, as amended
from time to time, together constitute the "Offer") in connection with the
offer by Season Acquisition Corp., a New Jersey corporation ("Purchaser") and
a wholly owned subsidiary of Cendant Corporation, a Delaware corporation
("Parent"), to purchase 23,501,260 outstanding shares of common stock, par
value $1.00 per share (the "Common Shares"), of American Bankers Insurance
Group, Inc., a Florida corporation (the "Company"), including the associated
Series C Preferred Stock Purchase Rights (the "Rights") issued pursuant to
the Rights Agreement, dated as of February 19, 1998, between the Company and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent (as such agreement
may be amended, the "Rights Agreement"), at a price of $67.00 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. Unless context
otherwise requires, all references to the Common Shares shall include the
associated Rights, and all references to the Rights shall include the
benefits that may inure to holders of the Rights pursuant to the Rights
Agreement, including the right to receive any payment due upon redemption of
the Rights. Shares of $3.125 Series B Cumulative Convertible Preferred Stock,
no par value (the "Preferred Shares" and, together with the Common Shares,
the "Shares"), of the Company may not be tendered pursuant to the Offer. In
the event that a holder of Preferred Shares wants to tender such shares
pursuant to the Offer, such holder must first convert the Preferred Shares
into Common Shares pursuant to the terms of the Preferred Shares and then
tender such Common Shares pursuant to the Offer.
If a shareholder desires to tender Common Shares and Rights pursuant to
the Offer and such shareholder's Common Share Certificates (as defined in the
Offer to Purchase) 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 cannot be completed on a timely basis,
such Common Shares may nevertheless be tendered according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase and
Section 2 of the First Supplement. See Instruction 2 of the revised Letter of
Transmittal. Delivery of documents to the Book-Entry Transfer Facility (as
defined in the Offer to Purchase) in accordance with the Book-Entry Transfer
Facility's procedures does not constitute delivery to the Depositary.
THE MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF COMMON SHARES
HELD BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. WE ARE THE
HOLDER OF RECORD OF COMMON SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF
SUCH COMMON SHARES CAN BE MADE
<PAGE>
ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE
REVISED 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 $67.00 per Common Share, net to the seller in
cash, without interest thereon.
2. The Offer, proration period and withdrawal rights will expire at 12:00
Midnight, New York City time, on Monday, April 6, 1998, unless the Offer
is extended.
3. The Offer is being made for 23,501,260 outstanding Common Shares.
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 a number of Common Shares which, together with Shares owned by
Parent and Purchaser, constitute at least 51% of the Common Shares
outstanding on a fully diluted basis, and (2) Parent and Purchaser having
obtained all insurance regulatory approvals necessary for their
acquisition of control over the Company's insurance subsidiaries.
5. Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the revised Letter
of Transmittal, stock transfer taxes on the purchase of Common Shares by
Purchaser pursuant to the Offer.
6. The Board of Directors of the Company has approved the Offer,
determined that the consideration to be paid for Common Shares pursuant to
the Offer and the Merger is fair to and in the best interest of the Company
and its shareholders and recommends that shareholders accept the Offer and
the Merger.
The Offer is made solely by the Offer to Purchase, the Supplement, the
Second Supplement and the revised Letters of Transmittal and is being made to
all holders of Common Shares. Purchaser is not aware of any state 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 the Dealer Managers or one or
more registered brokers or dealers licensed under the laws of such
jurisdiction.
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 instruction 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 on the instruction
form set forth in this letter. 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.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH 23,501,260 OUTSTANDING SHARES
OF COMMON STOCK
OF
AMERICAN BANKERS INSURANCE GROUP, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Second Supplement, dated March 24, 1998, to the Offer to Purchase, dated
January 27, 1998 and the First Supplement, dated March 16, 1998 and the
revised Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"), in connection with the offer by Season Acquisition
Corp., a New Jersey corporation ("Purchaser") and a wholly owned subsidiary
of Cendant Corporation, a Delaware corporation ("Parent"), to purchase
23,501,260 outstanding shares of common stock, par value $1.00 per share
(the "Common Shares"), of American Bankers Insurance Group, Inc., a Florida
corporation (the "Company"), including the associated Series C Preferred
Stock Purchase Rights (the "Rights") issued pursuant to the Rights Agreement,
dated as of February 19, 1998, between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (as such agreement may be amended, the
"Rights Agreement"). Unless the context otherwise requires, all references to
the Common Shares shall include the associated Rights, and all references to
the Rights shall include the benefits that may inure to holders of the Rights
pursuant to the Rights Agreement, including the right to receive any payment
due upon redemption of the Rights.
This will instruct you to tender to Purchaser the number of Common Shares
indicated below (or, if no number is indicated in either appropriate space
below, all Common Shares) held by you for the account of the undersigned,
upon the terms and subject to the conditions set forth in the Offer.
NUMBER OF COMMON SHARES
TO BE TENDERED:*
_______ Common Shares
ACCOUNT NUMBER:
Dated: , 1998
SIGN HERE
----------------------------------------
SIGNATURE(S)
----------------------------------------
PLEASE TYPE OR PRINT NAME(S)
----------------------------------------
PLEASE TYPE OR PRINT ADDRESS(ES) HERE
----------------------------------------
AREA CODE AND TELEPHONE NUMBER
----------------------------------------
TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S)
- ---------------
* Unless otherwise indicated, it will be assumed that all Common Shares held
by us for your account are to be tendered.
