As filed with the Securities and Exchange Commission on October 10, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
USF&G CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-1220567
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
100 Light Street
Baltimore, Maryland 21202
(410) 547-3000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
John A. MacColl, Esq.
Senior Vice President - General Counsel
USF&G Corporation
100 Light Street
Baltimore, Maryland 21202
(410) 547-3000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this
Registration Statement as determined in light of
market conditions and other factors
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /xx/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. /_____/ _____
If this Form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /____/ _____
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. /_____/ _____
This filing contains 11 sequentially numbered pages. Exhibit index
appears on page II-2.
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Each Class Maximum Maximum
of Securities Amount to be Offering Price Aggregate Registration
to be Registered Registered Per Unit(1) Offering Price(2) Fee
Common Stock,
$2.50 par value(2) 5,837,878 $18.75 $109,460,213 $37,742
(1) Estimated for the sole purpose of determining the registration fee and
is based upon the average of the high and low price of the Common Stock
as quoted on the New York Stock Exchange on October 5, 1995.
(2) Includes Preferred Share Purchase Rights. Prior to the occurrence of
certain events, the Rights will not be exercisable or evidenced
separately from the Common Stock.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
5,837,878 Shares
USF&G CORPORATION
COMMON STOCK
($2.50 par value)
All of the shares of USF&G Corporation ("USF&G" or the "Corporation")
Common Stock, par value $2.50 per share (the "Common Stock") being offered
hereby (the "Shares") are outstanding shares or shares issuable upon exercise of
outstanding warrants which may be offered and sold from time to time after the
date of this Prospectus by certain stockholders of the Corporation named herein
under "Selling Stockholders."
The Shares may, from time to time, be offered for sale and sold in
transactions executed on the New York Stock Exchange or other exchanges on which
the shares may be traded, in the over the counter market, in negotiated
transactions or through other means. Sales may be effected at market prices
prevailing at the time of sale or at such other prices as may be negotiated.
The Corporation will not receive any proceeds from the sale of the Shares. The
Corporation's Common Stock is listed on the New York Stock Exchange under the
trading symbol "USF&G." On October 5, 1995, the closing price of the
Corporation's Common Stock, as reported by the New York Stock Exchange was
$18.75 per share.
The Selling Stockholders may effect such transactions by selling Shares
to a dealer affiliated with the Selling Stockholders or to or through other
dealers or directly, and any such dealers may receive compensation in the form
of discounts, concessions or commissions (which compensation, if any, is not
expected to be in excess of customary commissions). The Selling Stockholders
and any dealers that participate with the Selling Stockholders in the sales of
Shares may be deemed to be underwriters, and any compensation received by them
and any profit on the resale of Shares sold by them might be deemed to be
underwriting discounts and commissions under the Securities Act of 1933.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1995.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH
CAROLINA NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY
OR ADEQUACY OF THE PROSPECTUS.
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with the offer contained in this Prospectus and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Corporation or any underwriters, agents or
dealers. This Prospectus does not constitute an offer to sell or solicitation of
an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that there has been no change in the affairs of the Corporation and
its subsidiaries since the date hereof or that the information contained herein
is correct at any time subsequent to the date hereof.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). This
Prospectus contains information concerning the Corporation but does not contain
all of the information set forth in the Registration Statement and exhibits
thereto which the Corporation has filed with the Commission under the Securities
Act of 1933 (the "Securities Act"). Such reports, proxy and information
statements, Registration Statement and exhibits and other information filed by
the Corporation with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth St.,
N.W., Washington, D.C. 20549, and at the Regional Offices of the Commission at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Such reports, proxy
and information statements, Registration Statement and exhibits and other
information concerning the Corporation can also be inspected at the offices of
the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005,
and the Pacific Stock Exchange, Inc., 301 Pine Street, San Francisco, California
94104.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this Prospectus its
(1) Annual Report on Form 10-K for the year ended December 31, 1994, (2)
Quarterly Report on Form 10-Q for the three months ended March 31, 1995, (3)
Quarterly Report on Form 10-Q for the six months ended June 30, 1995, (4)
Current Reports on Form 8-K filed on January 12, 1995, January 20, 1995 and
January 25, 1995, (5) Definitive Proxy Statement filed March 31, 1995, and (6)
the description of the Corporation's Common Stock and Shareholder Rights Plan
contained in its Registration Statements filed pursuant to Section 12 of the
Exchange Act and any amendment or report filed for the purpose of updating those
descriptions.
All documents filed by the Corporation pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Securities shall be deemed
to be incorporated by reference in this Prospectus and made a part hereof
from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other document subsequently
filed with the Commission which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Corporation will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated by reference herein (not including
the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should
be directed to: USF&G Corporation, 100 Light Street, Baltimore, Maryland 21202,
Attention: John F. Hoffen, Jr., Secretary, telephone (410) 547-3000.
THE CORPORATION
USF&G is a holding company whose principal subsidiaries are engaged in
writing property/casualty insurance and life insurance/annuities.
Property/casualty insurance is written primarily by United States Fidelity and
Guaranty Company, founded in 1896, and is sold through independent agents
supported by the Company's underwriting, marketing, administrative and claim
services offices located throughout the United States. Life insurance and
annuities are written primarily by Fidelity and Guaranty Life Insurance Company,
founded in 1959, and are sold throughout the United States through independent
agents, managing general agents and regional and national securities brokerage
firms. The Corporation is incorporated in Maryland, and its principal executive
office is located at 100 Light Street, Baltimore, Maryland 21202, telephone
(410) 547-3000.
DESCRIPTION OF COMMON STOCK
General
The authorized capital stock of the Corporation consists of 240,000,000
shares of common stock, $2.50 par value (the "Common Stock") and 12,000,000
shares of preferred stock, $50.00 par value, of which 4,000,000 shares are
classified as $4.10 Series A Convertible Exchangeable Preferred Stock (the
"Series A Preferred Stock"), 1,300,000 shares are classified as Series B
Cumulative Convertible Preferred Stock (the "Series B Preferred Stock"), and
2,400,000 shares are classified as Junior Participating Preferred Stock (the
"Junior Preferred Stock"). As of September 30, 1995, there were issued and
outstanding 112,357,823 shares of Common Stock, 3,999,910 shares of Series A
Preferred Stock and 1,110,200 shares of Series B Preferred Stock . The shares
of Junior Preferred Stock have been reserved for issuance in connection with the
Corporation's Shareholder Rights Plan and no shares of the Junior Preferred
Stock currently are outstanding. Additional series of Preferred Stock may be
issued by resolution of the Board of Directors. Such shares of Preferred Stock
may be issued with special voting and other rights which could hinder the
completion of any proposed tender offer, merger or other attempt to gain control
of the Corporation which is not approved by the Board of Directors.
The following summary of the terms of the Corporation's common stock
does not purport to be complete and is qualified in its entirety by reference to
the applicable provisions of Maryland law and the Corporation's Articles of
Incorporation, as amended (the "Charter").
The Series A Preferred Stock and Series B Preferred Stock rank on a
parity with each other and rank senior to the Junior Preferred Stock and the
Common Stock as to dividends and upon liquidation.
The Transfer Agent and Registrar for the Corporation's Common Stock,
Series A Preferred Stock, Series B Preferred Stock and Junior Preferred Stock is
The Bank of New York, New York, New York ("Bank of New York").
Voting Rights and Dividends
Each holder of Common Stock is entitled to one vote for each share of
Common Stock held. Cumulative voting for the election of directors is not
provided for in the Charter or the by-laws. Under certain circumstances,
holders of outstanding Series A Preferred Stock and Series B Preferred Stock
voting together, will have the right to elect two directors to the Corporation's
Board of Directors. Subject to the prior rights of the Series A Preferred
Stock, the Series B Preferred Stock and the Junior Preferred Stock and any other
preferred stock which may be classified and issued, the holders of the Common
Stock of the Corporation are entitled to receive, pro-rata, such dividends as
may be declared by the Board of Directors out of funds legally available
therefor, and are also entitled to share, pro-rata, in any other distribution to
stockholders. The Corporation may not declare or pay any dividends or
distributions (other than those payable in Common Stock or other securities
junior to Preferred Stock) unless full cumulative dividends on the Preferred
Stock including the Series A Preferred Stock and Series B Preferred have been
paid. There are no redemption or sinking fund provisions applicable to the
Common Stock. Payment of dividends by the Corporation is not subject to
restrictions under the Maryland Insurance Code. However, payment of dividends
to the Corporation by its insurance subsidiaries is subject to certain
restrictions under Maryland and other state insurance laws. Such restrictions
as well as other contractual restrictions may limit the amount of dividends that
may be paid by the Corporation.
Rights upon Liquidation
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, after payment or providing for the payment of all
liabilities and amounts distributable to holders of any preferred stock, the
holders of Common Stock are entitled to share ratably in all the remaining
assets.
Shareholder Rights Plan
The Corporation has a shareholder rights plan (the "Plan") to deter
coercive or unfair takeover tactics and to prevent a potential purchaser from
gaining control of the Corporation without offering a fair price to all of the
Corporation's stockholders. Under the Plan, each outstanding share of the
Corporation's Common Stock has one preferred share purchase right (a "Right")
expiring in 1997. Each Right entitles the registered holder to purchase 1/100
of a share of Junior Preferred Stock for $140. The Rights cannot be exercised
unless certain events occur that might lead to a concentration in ownership of
Common Stock. At that time, the Rights may be exercised for Common Stock having
a value of twice the exercise price. Under certain conditions, the rights also
become exercisable into shares of Common Stock of a purchaser having a value of
twice the exercise price. The Corporation will generally be entitled to redeem
the Rights, at $.05 per Right, any time before the tenth day after a 20%
position in the Corporation is acquired. The Form 8-A setting forth a
description of the Plan is an exhibit to the Registration Statement of which
this Prospectus is a part and is incorporated by reference herein.
Special Statutory Requirements for Certain Transactions
Business Combination Statute.
The Maryland General Corporation Law establishes special requirements
with respect to "business combinations" between Maryland corporations and
"interested stockholders" unless exemptions are applicable. Among other things,
the law prohibits for a period of five years a merger and other specified or
similar transactions between a company and an interested stockholder and
requires a super-majority vote for such transactions after the end of such five-
year period.
"Interested stockholders" are all persons owning beneficially, directly
or indirectly, more than 10% of the outstanding voting stock of a Maryland
corporation. "Business combinations" include any merger or similar transaction
subject to a statutory vote and additional transactions involving transfers of
assets or securities in specified amounts to interested stockholders or their
affiliates. Unless an exemption is available, transactions of these types may
not be consummated between a Maryland corporation and an interested stockholder
or its affiliates for a period of five years after the date on which the
stockholder first became an interested stockholder and thereafter may not be
consummated unless recommended by the board of directors of the Maryland
corporation and approved by the affirmative vote of at least 80% of the votes
entitled to be cast by all holders of outstanding shares of voting stock and 66-
2/3% of the votes entitled to be cast by all holders of outstanding shares of
voting stock other than the interested stockholder. A business combination with
an interested stockholder which is approved by the board of directors of a
Maryland corporation at any time before an interested stockholder first becomes
an interested stockholder is not subject to the special voting requirements. An
amendment to a Maryland corporation's charter electing not to be subject to the
foregoing requirements must be approved by the affirmative vote of at least 80%
of the votes entitled to be cast by all holders of outstanding shares of voting
stock and 66-2/3% of the votes entitled to be cast by holders of outstanding
shares of voting stock who are not interested stockholders. Any such amendment
is not effective until 18 months after the vote of stockholders and does not
apply to any business combination of a corporation with a stockholder who was an
interested stockholder on the date of the stockholder vote. The Corporation has
not adopted any such amendment to its Charter.
Control Share Acquisition Statute.
The Maryland law imposes limitations on the voting rights in a "control
share acquisition." The Maryland statute defines a "control share acquisition"
at the 20%, 33-1/3% and 50% acquisition levels, and requires a two-thirds
stockholder vote (excluding shares owned by the acquiring person and certain
members of management) to accord voting rights to stock acquired in a control
share acquisition. The statute also requires Maryland corporations to hold a
special meeting at the request of an actual or proposed control share acquiror
generally within 50 days after a request is made with the submission of an
"acquiring person statement," but only if the acquiring person (a) posts a bond
for the cost of the meeting and (b) submits a definitive financing agreement to
the extent that financing is not provided by the acquiring person. In addition,
unless the charter or by-laws provide otherwise, the statute gives the Maryland
corporation, within certain time limitations, various redemption rights if there
is a stockholder vote on the issue and the grant of voting rights is not
approved, or if an "acquiring person statement" is not delivered to the target
within 10 days following a control share acquisition. Moreover, unless the
charter or by-laws provide otherwise, the statute provides that if, before a
control share acquisition occurs, voting rights are accorded to control shares
which results in the acquiring person having majority voting power, then
minority stockholders have appraisal rights. An acquisition of shares may be
exempted from the control share statute provided that a charter or by-law
provision is adopted for such purpose prior to the control share acquisition.
There are no such provisions in the charter or by-laws of the Corporation.
Reference is made to the full text of the foregoing statutes for their
entire terms, and the partial summary contained in this Prospectus is not
intended to be complete.
Insurance Acquisitions Disclosure and Control Act
Under the Maryland Insurance Code, unless certain filings are made with
the State Insurance Commissioner, no person may acquire any voting security or
security convertible into a voting security of an insurance holding company,
such as the Corporation, which controls one or more Maryland insurance companies
if, as a result of such acquisition, such person would "control" such insurance
holding company. The acquisition may not proceed without prior approval of the
State Insurance Commissioner unless, following the required provision of certain
information to the Commissioner, the Commissioner has not disapproved the
acquisition within 60 days. "Control" is presumed to exist if a person,
directly or indirectly, owns or controls 10% or more of the voting securities of
another person. This presumption may be rebutted by establishing by a
preponderance of evidence that control does not exist in fact.
Reference is made to the full text of the statute for its entire terms,
and this partial summary is not intended to be complete.
USE OF PROCEEDS
The Corporation will not receive any proceeds from the sale of the
Shares by the Selling Stockholders. The Corporation will receive approximately
$2,553,000 in proceeds from the exercise of the Warrants (assuming all Warrants
are exercised), which proceeds will be used for general corporate purposes.
SELLING STOCKHOLDERS
The Selling Stockholders acquired the shares of Common Stock to be
offered hereby pursuant to an Agreement and Plan of Merger dated as of January
12, 1995 (the "Merger Agreement") by and among the Corporation, Java Merger
Corp., a Delaware corporation and wholly-owned subsidiary of USF&G ("Java"),
Discover Re Managers, Inc., a Delaware corporation ("Discover Re"), and the
Selling Stockholders. Pursuant to the Merger Agreement, Java was merged with
and into Discover Re on April 13, 1995, all of the issued and outstanding
capital stock of Java was cancelled, and the Corporation issued to the Selling
Stockholders an aggregate of 5,359,888 shares of its Common Stock and warrants
to purchase an aggregate of 477,990 Shares of Common Stock.
Certain of the Selling Stockholders hold warrants issued by the
Corporation which, upon exercise, allow such Selling Stockholders to purchase
shares of Common Stock. Such Selling Stockholders are expected to exercise
their warrants and pay for their shares of Common Stock immediately prior to
offering such shares pursuant to this Prospectus.
The following table sets forth information concerning the number of
shares of Common Stock owned by each of the Selling Stockholders or, in the case
of the Selling Stockholders holding warrants, issuable upon exercise of such
warrants, as of September 30, 1995, the maximum number of shares offered by each
Selling Stockholder pursuant to this Prospectus, and the number of such shares
to be owned by each Selling Stockholder after completion of this offering
assuming that all shares offered hereby are sold.
Shares Shares Shares to be Owned
Beneficially Offered after Completion of
Selling Stockholder Owned(1) Hereby Offering
Allstate Insurance
Company 91,952 91,952 0
John J. Bennett(2)(3) 8,901 8,901 0
Gregory Berg 3,624 3,624 0
Robert D. Byler(2)(3) 24,918 24,918 0
The Charles River
Partnership VI 449,116 449,116 0
The Charles River
Partnership VI-A 79,265 79,265 0
Citicorp Banking
Corporation 652,650 652,650 0
Albert F.
Collings(2)(3)(4) 35,578 35,578 0
Conning Insurance Capital
Limited Partnership II 410,182 410,182 0
Conning Insurance Capital
International Partners II 462,529 462,529 0
Connecticut Future Fund,
Limited Partnership 183,918 183,918 0
CRICO I Limited
Partnership 91,952 91,952 0
Crossroads DPT Limited
Partnership 46,989 46,989 0
Crossroads Capital II
Limited Partnership 40,277 40,277 0
Crossroads SF Limited 40,277 40,277 0
Cullinane & Donnelly
Venture Partners, L.P. 148,125 148,125 0
Scott P. Doyle(2)(3)(4)(5) 257,840 257,840 0
Trust for the Benefit of
Brice C. Doyle 3,020 3,020 0
Trust for the Benefit of
Chase R. Doyle 3,020 3,020 0
Trust for the Benefit of
Tyler G. R. Doyle 3,020 3,020 0
DR Nominee Corporation 36,786 36,786 0
George L. Estes, III
(2)(3)(4)(5) 263,452 263,452 0
Trust for the Benefit of
Derrick R. Estes 10,472 10,472 0
Executive Re Indemnity
Inc. 276,568 276,568 0
Frontenac VI Limited
Partnership 698,875 698,875 0
Hancock Venture Partners
III, L.P. 321,706 321,706 0
ISF Limited Partnership 137,935 137,935 0
Jeflion Investment
Company 6,712 6,712 0
Rhonda K. Miller(2)(3) 16,016 16,016 0
MFA-Masters Limited
Partnership 312,416 312,416 0
New England Asset
Management Pension and
Profit Sharing Plan 6,887 6,887 0
Northington Capital
Markets, Inc. 20,863 20,863 0
Prime Capital II, L.P. 91,872 91,872 0
Primus Capital Fund II
Limited Partnership 229,888 229,888 0
Primus Capital Fund III
Limited Partnership 229,888 229,888 0
Russell J. Renvyle(2)(3) 3,557 3,557 0
Robert D. Schultz(2)(3) 3,557 3,557 0
TRP Partners 1990 13,425 13,425 0
Steven J. Tynan 24,542 24,542 0
Steven J. Tynan IRA
Account 3,356 3,356 0
Williams College Fund 91,952 91,952 0
________________________
(1) Includes, where applicable, shares issuable on exercise of warrants to
purchase shares of Common Stock. Excludes options to purchase shares of Common
Stock held by the following people: Albert Collings (26,851 shares), Robert
Byler (18,795 shares), Rhonda Miller (16,782 shares), Robert Schultz (26,850
shares), Russell Renvyle (18,795 shares).
(2) Serves as Officer of Discover Reinsurance Company, an insurance company
domiciled in Indiana and a wholly-owned subsidiary of Discover Re
Managers, Inc.
(3) Serves as Officer of Discovery Managers, Ltd., a Connecticut corporation
and wholly-owned subsidiary of Discover Re Managers, Inc.
(4) Serves as Executive Officer of Discover Re Managers, Inc., Discover
Reinsurance Company and Discovery Managers, Ltd.
(5) Serves as Director of Discover Re Managers, Inc., Discover Reinsurance
Company and Discovery Managers, Ltd.
PLAN OF DISTRIBUTION
The Shares covered by this Prospectus may, from time to time, be offered
for sale and sold in transactions executed on the New York Stock Exchange or
other exchanges on which the Shares may be traded, in the over-the-counter
market, in negotiated transactions or through other means. Sales may be
effected at market prices prevailing at the time of sale or at such other prices
as may be negotiated.
The Merger Agreement contains various undertakings by the Selling
Stockholders and the Corporation. The Corporation agreed to use its best
efforts to cause the Registration Statement of which this Prospectus is a part
to remain effective until April 13, 1997, unless all of the Shares have
previously been sold. USF&G also agreed to pay the expenses of preparing and
filing the Registration Statement and certain other expenses of offering the
Shares (other than selling concessions or commissions and expenses of the
Selling Stockholders). The Corporation has also agreed to indemnify the Selling
Stockholders against certain liabilities, including liabilities under the
Securities Act.
At the time a particular offering of Shares is made, to the extent
required, a supplemental prospectus will be distributed which will set forth the
aggregate number of Shares offered, the purchase price and aggregate offering
price, the name or names of any agent or underwriter, and any applicable
commissions or discounts.
The Selling Stockholders and any brokers, dealers, or agents that
participate in the distribution of Shares may be deemed to be underwriters under
the Securities Act, and any compensation received by any of them and any profit
on the resale of Shares sold by them may be deemed to be underwriting discounts
and commissions under that Act.
VALIDITY OF SECURITIES
The legal validity of the Securities offered hereby will be passed upon
for the Corporation by Piper & Marbury L.L.P., Baltimore, Maryland. L. P.
Scriggins, a Director of the Corporation, is a partner of Piper & Marbury L.L.P.
As of September 30, 1995 lawyers in the firm of Piper & Marbury L.L.P.
beneficially owned in the aggregate approximately 4,745 shares of Common Stock
or Common Stock equivalents of the Corporation.
EXPERTS
The consolidated financial statements of USF&G Corporation incorporated
in this Prospectus by reference to Form 10-K for the year ended December 31,
1994 have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated by reference herein.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
With respect to the unaudited condensed consolidated interim financial
information for the three-month periods ended March 31, 1995 and 1994, and the
three and six-month periods ended June 30, 1995 and 1994, incorporated by
reference in this Registration Statement, the independent auditors have reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their separate reports
included in USF&G's quarterly reports on Form 10-Q for the quarters ended March
31, 1995 and June 30, 1995, and incorporated herein by reference, state that
they did not audit and they do not express an opinion on that interim financial
information. Accordingly, the degree of reliance on their reports on such
information should be restricted in light of the limited nature of the review
procedures applied. The auditors are not subject to the liability provisions of
Section 11 of the Securities Act for their reports on the unaudited interim
financial information because those reports are not "reports" or a "part" of the
Registration Statement prepared or certified by the auditors within the meaning
of Sections 7 and 11 of the Securities Act.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with
the offering of the Shares (all of which will be borne by USF&G Corporation).
(The Selling Shareholder will pay any sales commissions incurred in connection
with the sale of its Shares.):
SEC Registration Fee $37,742
Blue Sky Fees and Expenses 5,000
Accounting Fees and Expenses 10,000
Legal Fees and Expenses 10,000
Miscellaneous 10,000
TOTAL $72,742
Item 15. Indemnification of Directors and Officers.
The Charter of the Registrant provides for indemnification and
limitation of liability of directors and officers of the Registrant as
follows:
The Corporation shall indemnify (a) it directors to the full extent
provided by the General Laws of the State of Maryland now or hereafter
in force, including the advance of expenses under the procedures
provided by such laws; (b) its officer s to the same extent it shall
indemnify its directors; and (c) its officers who are not directors to
such further extent as shall be authorized by the Board of Directors
and be consistent with law. The foregoing shall not limit the
authority of the Corporation to indemnify other employees and agents
consistent with law.
To the fullest extent permitted by Maryland statutory or decisional
law, as amended or interpreted, no director or officer of this
Corporation shall be personally liable to the Corporation or its
stockholders for money damages. No amendment of the Charter of the
Corporation or repeal of any of its provisions shall limit or eliminate
the benefits provided to directors and officers under this provision
with respect to any act or omission which occurred prior to such
amendment or repeal.
The Maryland General Corporation Law provides that a corporation may
indemnify any director made a party to a proceeding by reason of service in that
capacity unless it is established that: (1) the act or omission of the director
was material to the matter giving rise to the proceeding and (a) was committed
in bad faith or (b) was the result of active and deliberate dishonesty, or (2)
the director actually received an improper personal benefit in money, property
or services, or (3) in the case of any criminal proceeding, the director had
reasonable cause to believe that the act or omission was unlawful. To the
extent that a director has been successful in defense of any proceeding, the
Maryland General Corporation Law provides that he shall be indemnified against
reasonable expenses incurred in connection therewith. A Maryland corporation
may indemnify its officer to the same extent as its directors and to such
further extent as is consistent with law.
Item 16. Exhibits.
Exhibit Number Exhibit
4 Description of Shareholder Rights Plan (incorporated
by reference to Form 8-A, filed September 21, 1987).
5 Opinion and Consent of Piper & Marbury L.L.P. as to
Legality.
15 Acknowledgment of Ernst & Young LLP
23.1 Consent of Ernst & Young LLP
23.2 Consent of Piper & Marbury L.L.P. (included
in Exhibit 5).
24 Power of Attorney of the Board of Directors (included
on the signature page).
28 Information from Reports Furnished to State
Insurance Regulatory Authorities
(incorporated by reference to Exhibit 28
to the Corporation's 1994 Annual Report
on Form 10-K, File No. 1-8233).
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant undertakes hereby that, for purposes
of determining liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Baltimore, State of Maryland, on October 10, 1995.
USF&G CORPORATION
By: /s/Norman P. Blake, Jr.
Norman P. Blake, Jr.
Chairman of the Board, President
and Chief Executive Officer
POWER OF ATTORNEY
The undersigned Officers and Directors of USF&G Corporation, a Maryland
corporation (the "Corporation"), hereby constitute and appoint Norman P. Blake,
Jr., Dan L. Hale and John A. MacColl of Baltimore City, Maryland, and each of
them, the true and lawful agents and attorneys-in-fact of the undersigned with
full power and authority in said agents and attorneys-in-fact, and in any one or
more of them, to sign for the undersigned and in their respective names as
Officers and as Directors of the Corporation, a Registration Statement on Form
S-3 relating to (i) 5,425,000 shares of Common Stock issued in exchange for
shares of common stock of Discover Re Managers, Inc., a Delaware corporation
("Discover Re"), in connection with the merger of Java Merger Corp., a Delaware
corporation and wholly-owned subsidiary of the Corporation, with and into
Discover Re, and (ii) the exercise of outstanding warrants issued on January 31,
1991 by Discover Re (or any and all amendments, including post-effective
amendments, to such Registration Statement) and file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, and with full power of substitution, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on October 10, 1995.
Signature Title
Director, Chairman of the
Board, President and Chief
/s/Norman P. Blake, Jr. Executive Officer
Norman P. Blake, Jr.
Executive Vice President,
Chief Financial Officer and
/s/Dan L. Hale Principal Accounting Officer
Dan L. Hale
/s/H. Furlong Baldwin Director
H. Furlong Baldwin
/s/Michael J. Birck Director
Michael J. Birck
/s/George L. Bunting, Jr. Director
George L. Bunting, Jr.
/s/Robert E. Davis Director
Robert E. Davis
/s/Dale F. Frey Director
Dale F. Frey
/s/Robert E. Gregory, Jr. Director
Robert E. Gregory, Jr.
/s/Robert J. Hurst Director
Robert J. Hurst
/s/Wilbur G. Lewellen Director
Wilbur G. Lewellen
/s/Henry A. Rosenberg, Jr. Director
Henry A. Rosenberg, Jr.
/s/Larry P. Scriggins Director
Larry P. Scriggins
/s/Anne Marie Whittemore Director
Anne Marie Whittemore
/s/R. James Woolsey Director
R. James Woolsey
Exhibit 5.1
PIPER & MARBURY L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET
Baltimore, Maryland 21201-3010
410-539-2530
FAX: 410-539-0489
WASHINGTON NEW YORK PHILADELPHIA
LONDON EASTON, MD
October 10, 1995
USF&G Corporation
100 Light Street
Baltimore, Maryland 21202
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to USF&G Corporation, a Maryland corporation (the
"Company"), in connection with the registration statement on Form S-3 (the
"Registration Statement") which is being filed by the Company under the
Securities Act of 1933, as amended (the "Act") relating to 5,837,878 shares of
Common Stock, par value $2.50 per share, of the Company (the "Shares") to be
offered and sold from time to time following effectiveness of the Registration
Statement by certain stockholders of the Company named in the Registration
Statement (the "Selling Stockholders"), including certain Shares to be sold upon
the exercise of outstanding warrants (the "Warrants") by certain warrantholders
(the "Selling Warrantholders").
We are familiar with the Company's charter and by-laws and with the Registration
Statement, and we have examined and relied upon such corporate records of the
Company and other documents and certificates as to factual matters as we have
deemed necessary or appropriate for the purpose of rendering the opinion
expressed herein. We have assumed, without independent verification, the
genuineness of the signatures on and the authenticity of all documents furnished
to us by the Company.
Based upon the foregoing, we are of the opinion and advise you that:
1. The Shares (other than Shares to be issued upon exercise of the
Warrants) to be sold by the Selling Stockholders have been duly
authorized and are validly and legally issued and fully paid and non-
assessable.
2. The Shares to be sold by the Selling Warrantholders have been duly
authorized and, upon due exercise of the Warrants and payment of the
consideration required thereunder, will have been validly and legally issued and
will be fully paid and non-assessable.
We hereby consent to the filing of this opinion with the Securities and Exchange
Commission as an Exhibit to the Registration Statement and to the use of our
name under the caption "Legal Matters" in the Prospectus included therein.
Very truly yours,
/s/Piper & Marbury L.L.P.
Exhibit 15
Acknowledgment of Independent Auditors
We are aware of the incorporation by reference in the Registration
Statement of USF&G Corporation for the registration of 5,837,878 shares of its
common stock of our reports dated May 12, 1995 and August 9, 1995, relating to
the unaudited condensed consolidated interim financial statements of USF&G
Corporation which are included in its Forms 10-Q for the quarters ended March
31, 1995 and June 30, 1995, respectively.
Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are
not a part of the registration statement prepared or certified by accountants
within the meaning of Section 7 or 11 of the Securities Act of 1933.
/s/Ernst & Young LLP
Baltimore, Maryland
October 6, 1995
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement for the registration of 5,837,878 shares of its
common stock and to the incorporation by reference therein of our report dated
February 24, 1995 , with respect to the consolidated financial statements and
schedules of USF&G Corporation included in its Annual Report (Form 10-K) for the
year ended December 31, 1994, filed with the Securities and Exchange Commission.
/s/Ernst & Young LLP
Baltimore, Maryland
October 6, 1995
