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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
HSB GROUP, INC.
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
40428N109
(CUSIP Number)
Kathleen E. Shannon
Vice President and Secretary
American International Group, Inc.
70 Pine Street
New York, NY 10270
(212) 770-5123
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
August 17, 2000
(Date of Event which Requires Filing of this Statement)
If a filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
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CUSIP NO. 40428N109
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American International Group, Inc.
I.R.S. Identification No. 13-2592361
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
---------------------------------------------------------------
4. SOURCE OF FUNDS
OO
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Organized under the laws of the State of Delaware
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7. SOLE VOTING POWER
NUMBER OF 5,777,272
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 359,950
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 5,777,272
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
359,950
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
6,137,222
---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.1%
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14. TYPE OF REPORTING PERSON
CO, HC
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2
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CUSIP NO. 40428N109
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Home Assurance Company
I.R.S. Identification No. 13-5124990
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
---------------------------------------------------------------
4. SOURCE OF FUNDS
WC
---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
---------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Organized under the laws of the State of New York
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 358,700
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
358,700
---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
358,700
---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.2%
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14. TYPE OF REPORTING PERSON
IC, CO
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3
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CUSIP NO. 40428N109
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Insurance Company of the State of Pennsylvania
I.R.S. Identification No. 13-5540698
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
---------------------------------------------------------------
4. SOURCE OF FUNDS
WC
---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Organized under the laws of the State of Pennsylvania
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7. SOLE VOTING POWER
NUMBER OF 0
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 650
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
650
---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
650
---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.002%
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14. TYPE OF REPORTING PERSON
IC, CO
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4
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CUSIP NO. 40428N109
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Commerce and Industry Insurance Company
I.R.S. Identification No. 13-1938623
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
---------------------------------------------------------------
3. SEC USE ONLY
---------------------------------------------------------------
4. SOURCE OF FUNDS
WC
---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
---------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Organized under the laws of the State of New York
---------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 600
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
600
---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
600
---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
---------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
.002%
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14. TYPE OF REPORTING PERSON
IC, CO
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5
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CUSIP NO. 40428N109
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AIG Global Investment Corp.
I.R.S. Identification No. 06-0178320
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
---------------------------------------------------------------
4. SOURCE OF FUNDS
00
---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d)OR 2(e) [ ]
---------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Organized under the laws of the State of New Jersey
---------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF 0
SHARES -------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 359,950
EACH -------------------------------------------
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 0
WITH -------------------------------------------
10. SHARED DISPOSITIVE POWER
359,950
---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
359,950
---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
---------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.24%
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14. TYPE OF REPORTING PERSON
IA, CO
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6
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CUSIP NO. 40428N109
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ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D relates to the shares of Common
Stock, no par value per share (the "Shares"), of HSB Group, Inc. (the "Issuer").
The address of the principal executive offices of the Issuer is P.O. Box 5024,
One State Street, Hartford, Connecticut 06102-5024.
ITEM 2. IDENTITY AND BACKGROUND
(a)-(c) and (f). This Statement is filed by American
International Group, Inc., a Delaware corporation ("AIG"), on behalf of itself
and its wholly-owned subsidiaries: (i) American Home Assurance Company, a New
York corporation ("American Home"), (ii) The Insurance Company of the State of
Pennsylvania, a Pennsylvania corporation ("ISOP"), (iii) Commerce and Industry
Insurance Company, a New York corporation ("Commerce and Industry"), and (iv)
AIG Global Investment Corp., a New Jersey corporation ("Global Investment"),
which acts as an investment adviser to American Home, ISOP and Commerce and
Industry. The principal executive offices of each of AIG, American Home, ISOP
and Commerce and Industry are located at 70 Pine Street, New York, New York
10270, and the principal executive offices of Global Investment are located at
175 Water Street, New York, New York 10038. AIG is a holding company which
through its subsidiaries is primarily engaged in a broad range of insurance and
insurance-related activities and financial services in the United States and
abroad. AIG's primary activities include both general and life insurance
operations. Other significant activities include financial services and asset
management.
Starr International Company, Inc., a private holding company
incorporated in Panama ("SICO"), The Starr Foundation, a New York not-for-profit
corporation ("The Starr Foundation"), and C.V. Starr & Co., Inc., a Delaware
corporation ("Starr"), have the right to vote approximately 13.70%, 2.81% and
2.04%, respectively, of the outstanding common stock of AIG. The principal
executive offices of SICO are located at 29 Richmond Road, Pembroke, Bermuda.
The principal executive offices of The Starr Foundation and Starr are located at
70 Pine Street, New York, New York 10270. The names of the directors and
executive officers ("Covered Persons") of AIG, American Home, ISOP, Commerce and
Industry, Global Investment, SICO, The Starr Foundation and Starr, their
business addresses and principal occupations are set forth in Annex A attached
hereto, which is incorporated herein by reference in its entirety. The business
address indicated for each Covered Person is also the address of the principal
employer for such Covered Person. Each of the Covered Persons is a citizen of
the United States, except for Messrs. Johnson, Manton, Milton and Tse who are
British subjects, Mr. Danielsson who is a Swedish citzen, Mr. Sakai who is a
Japanese citizen and Messrs. Cohen and McMillan who are Canadian citizens.
(d) and (e). During the last five years, none of AIG, American
Home, ISOP, Commerce and Industry, Global Investment, SICO, The
Starr Foundation or Starr, or any of the Covered Persons, has (i) been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors)
or (ii) been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations
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CUSIP NO. 40428N109
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of, or prohibiting or mandating activities subject to, Federal or State
securities laws or finding any violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Global Investment acts as an investment adviser to American
Home. American Home currently owns 358,700 Shares purchased through open market
transactions on the New York Stock Exchange. American Home used available
working capital to purchase such Shares.
Global Investment acts as an investment adviser to ISOP. ISOP
currently owns 650 Shares purchased through open market transactions on the New
York Stock Exchange. ISOP used available working capital to purchase such
Shares.
Global Investment acts as an investment adviser to Commerce
and Industry. Commerce and Industry currently owns 600 Shares purchased through
open market transactions on the New York Stock Exchange. Commerce and Industry
used available working capital to purchase such Shares.
As described in the response to Item 4 (which response is
incorporated herein by reference), the remaining Shares to which this Statement
on Schedule 13D relates have not been purchased by AIG. In connection with and
as a condition to AIG and the Issuer entering into the Merger Agreement (as
defined below), AIG and the Issuer have entered into a stock option agreement
(the "Stock Option Agreement") under which the Issuer has granted AIG an option
to purchase a number of newly issued Shares equal to approximately 19.9% of the
outstanding number of Shares, exercisable upon the occurrence of certain events.
ITEM 4. PURPOSE OF TRANSACTION
On August 17, 2000, the Issuer, AIG and Engine Acquisition
Corporation, a wholly-owned subsidiary of AIG ("EAC"), entered into an Agreement
and Plan of Merger (the "Merger Agreement") which provides, among other things,
that, subject to the satisfaction of the terms and conditions therein, the
Issuer will merge (the "Merger") with and into EAC. The separate existence of
the Issuer will cease upon consummation of the Merger, EAC will be the surviving
corporation in the Merger and will be renamed "HSB Group, Inc." following the
Merger.
Holders of Shares will receive a portion of a share of common
stock, par value $2.50 per share, of AIG (the "AIG Common Stock"), or, at the
option of AIG, in certain circumstances set forth in the Merger Agreement, a
portion of a share of AIG Common Stock and cash, with a value equal to $41.00
(as determined based on the average of the closing prices per share of AIG
Common Stock on the New York Stock Exchange for the ten consecutive trading days
ending on the fifth trading day prior to the date that the Merger is
consummated) in exchange for each Share.
8
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CUSIP NO. 40428N109
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In connection with the Merger, AIG and the Issuer have entered
into the Stock Option Agreement pursuant to which the Issuer has granted AIG an
option to purchase, subject to the terms of the Stock Option Agreement, up to
5,777,272 Shares at a price per share in cash equal to $41; provided, however,
that the number of Shares for which such option is exercisable will not exceed
19.9% of the Shares issued and outstanding at the time of exercise. The number
of Shares purchasable upon exercise of the option and the option price are
subject to adjustment as set forth in the Stock Option Agreement. AIG's right
to exercise its option under the Stock Option Agreement is subject to the
occurrence of various triggering events and the receipt of insurance and other
required regulatory approvals.
The purpose of the Stock Option Agreement is to enable AIG to
consummate the transactions contemplated under the Merger Agreement. The Stock
Option Agreement also may make it more difficult and expensive for the Issuer to
consummate a business combination with a party other than AIG.
Consummation of the Merger is subject to the satisfaction or
waiver of certain conditions, including, but not limited to, approval of the
Merger by the holders of at least a majority of the outstanding Shares and
certain regulatory approvals and conditions. The Merger Agreement contains
certain customary restrictions on the conduct of the business of the Issuer
pending the Merger, including restrictions relating to the capital stock of the
Issuer. Pursuant to the Merger Agreement, the Issuer has agreed, among other
things, that, after the date of the Merger Agreement and prior to the
consummation of the Merger, it will not make, declare, or pay any dividend or
make any other distribution with respect to any shares of capital stock, other
than regular quarterly cash dividends paid by the Issuer not in excess of $0.44
per Share per quarter.
The Merger Agreement and the Stock Option Agreement are
attached as Exhibits B and C hereto and are incorporated herein by reference in
their entirety. The foregoing summary of the Merger Agreement and the Stock
Option Agreement does not purport to be complete and is qualified in its
entirety by reference to such exhibits.
Upon consummation of the Merger, the Shares would cease to be
listed on the New York Stock Exchange and would become eligible for termination
of registration under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
Except as contemplated by the Merger Agreement and the Stock
Option Agreement or as otherwise set forth in this Item 4, AIG has no present
plans or proposals which relate to or would result in (i) the acquisition by any
person of additional securities of the Issuer, or the disposition of securities
of the Issuer; (ii) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(iii) a sale or transfer of a material amount of assets of the Issuer or any of
its subsidiaries; (iv) any change in the present Board of Directors or
management of the Issuer; (v) any material change in the
9
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CUSIP NO. 40428N109
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present capitalization or dividend policy of the Issuer; (vi) any other material
change in the Issuer's business or corporate structure; (vii) any change in the
Issuer's charter, by-laws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Issuer by any person; (viii)
causing the Shares to cease to be listed on the New York Stock Exchange; (ix)
the Shares becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Exchange Act; or (x) any action similar to any of those actions
set forth in this Paragraph involving the Shares.
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER
(a) and (b). The information required by these paragraphs is
set forth in Items 7 through 11 and 13 of each of the cover pages of this
Schedule 13D and is based upon the number of outstanding Shares as of August
16, 2000 as represented by the Issuer in the Merger Agreement.
5,777,272 Shares are subject to the Stock Option Agreement
which represents approximately 19.9% of the outstanding Shares (based upon the
Shares outstanding as of August 16, 2000 as represented by the Issuer in the
Merger Agreement). The number of Shares purchasable upon exercise of the option
under the Stock Option Agreement is subject to adjustment as set forth in the
Stock Option Agreement.
(c). American Home purchased 100 Shares on June 21, 2000 at a
price per Share of $31.0925 and sold 750 Shares on August 15, 2000 at a price
per Share of $38.5987. Such transactions were effected in open market
transactions on the New York Stock Exchange.
ISOP sold 750 Shares on August 15, 2000 at a price per Share
of $38.5987. Such sale was effected in open market transactions on the New York
Stock Exchange.
Other than such transactions and the Merger Agreement and the
Stock Option Agreement described in the response to Item 4 (which response is
incorporated herein by reference) and the transactions contemplated thereby,
there have been no transactions in Shares by AIG, or, to the best knowledge of
AIG, by any of American Home, ISOP, Commerce and Industry, Global Investment,
SICO, The Starr Foundation or Starr, nor any of the Covered Persons, during the
past 60 days.
(d). None.
(e). Not applicable.
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CUSIP NO. 40428N109
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER
Other than the Merger Agreement and the Stock Option Agreement
described in the response to Item 4 (which response is incorporated herein by
reference) and the transactions contemplated thereby, there are no contracts,
arrangements, understandings or relationships between AIG and any other person,
or, to the best knowledge of AIG, among any of American Home, ISOP, Commerce and
Industry, Global Investment, SICO, The Starr Foundation, Starr or any of the
Covered Persons and any other person, with respect to the Shares.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A Agreement of Joint Filing by and among American
International Group, Inc., American Home Assurance
Company, The Insurance Company of The State of
Pennsylvania, Commerce and Industry Insurance Company
and AIG Global Investment Corp., dated as of
August 21, 2000.
Exhibit B Agreement and Plan of Merger, dated as of August
17, 2000, among the Issuer, AIG and EAC.
Exhibit C Stock Option Agreement, dated as of August 17,
2000, between the Issuer and AIG.
Annex A List of Directors and Executive Officers of American
International Group, Inc., American Home Assurance
Company, The Insurance Company of The State of
Pennsylvania, Commerce and Industry Insurance
Company, AIG Global Investment Corp., Starr
International Company, Inc., The Starr Foundation and
C.V. Starr & Co., Inc.
11
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CUSIP NO. 40428N109
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: August 25, 2000
AMERICAN INTERNATIONAL GROUP, INC.
By: /s/ Kathleen E. Shannon
-----------------------------
Name: Kathleen E. Shannon
Title: Vice President and
Secretary
AMERICAN HOME ASSURANCE COMPANY
By: /s/ Edward E. Matthews
-----------------------------
Name: Edward E. Matthews
Title: Senior Vice President
THE INSURANCE COMPANY OF THE STATE
OF PENNSYLVANIA
By: /s/ Edward E. Matthews
-----------------------------
Name: Edward E. Matthews
Title: Senior Vice President
COMMERCE AND INDUSTRY INSURANCE
COMPANY
By: /s/ Edward E. Matthews
-----------------------------
Name: Edward E. Matthews
Title: Senior Vice President
AIG GLOBAL INVESTMENT CORP.
By: /s/ Win J. Neuger
-----------------------------
Name: Win J. Neuger
Title: Chairman and Chief
Executive Officer
12
