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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
(Amendment No. 4)
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
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ALLIED Group, Inc.
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(Name of Subject Company)
ALLIED Group, Inc.
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(Name of Person(s) Filing Statement)
Common Stock, No Par Value
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(Title of Class of Securities)
019220102
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(CUSIP Number of Class of Securities)
__________
GEORGE OLESON, ESQ.
Vice President and Corporate Counsel
ALLIED Group, Inc.
701 Fifth Avenue
Des Moines, Iowa 50391-2000
(515) 280-4211
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(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person(s) filing)
With a copy to:
STEVEN OSTNER, ESQ.
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
(212) 909-6000
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This amendment ("Amendment No. 4") amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (as from time to time
amended, the "Schedule 14D-9") filed with the Securities and Exchange Commission
(the "Commission") on June 2, 1998 by ALLIED Group, Inc., an Iowa corporation
(the "Company"), with respect to the tender offer by Nationwide Mutual Insurance
Company, an Ohio corporation ("Nationwide"), and Nationwide Group Acquisition
Corporation, an Ohio corporation and wholly owned subsidiary of Nationwide
("Nationwide Sub" and, collectively with Nationwide, the "Bidder"), disclosed in
a tender offer statement on Schedule 14D-1, filed with the Commission on May 19,
1998 (as the same may be amended from time to time, the "Schedule 14D-1"), to
purchase up to 30,634,052 shares (the "Shares"), upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated May 19, 1998 (the
"Offer to Purchase"), and the related Letter of Transmittal (which collectively
constitute the "Initial Offer" and, as amended, the "Offer"). Capitalized terms
used herein without separate definition are used with the meanings specified in
this Schedule
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 45...... Newsletter distributed to the employees of ALLIED Group,
Inc., dated September 23, 1998.
2
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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: September 25, 1998
ALLIED GROUP, INC.
By: /s/Sally J. Malloy
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Name: Sally J. Malloy
Title: Corporate Secretary
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Index to Exhibits
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EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
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45 -- Newsletter distributed to the employees of ALLIED Group,
Inc., dated September 23, 1998.
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EXHIBIT 45
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UPDATE [ALLIED Group, Inc. Logo]
MERGER INFORMATION FOR ALLIED GROUP EMPLOYEES SEPTEMBER 23, 1998
Nationwide's news about the extra week of pay that employees will
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receive this year is an example of identifying two issues - rewarding ALLIED
employees and adjusting to Nationwide's pay schedule - and coming up with an
excellent resolution. I'm very pleased with their program.
We have another program prepared which will help retain valuable
employees in the company even if, as a result of the merger, their jobs are
significantly changed or even eliminated. After discussion with several
managers at Nationwide, I am confident there will be a minimum of jobs
redesigned, but there are a few areas of overlap between Des Moines operations
and those in Columbus. We have a program ready for those situations so we can
reallocate people's skills within the organization. That program is discussed
in today's Update. My thanks to input from Chuck McDonald, Kerry Funke, Jean
Neibergall, Angie Koppen, Jim Burke and Mark Elming for their views on how we
can reallocate skills and provide enhanced opportunities for people.
Marla Franklin, VP Human Resources
DIRECTING HARRIS BANK TO TENDER YOUR SHARES
We have received several questions about tender instructions for Employee Stock
Purchase Plan (ESPP) shares and Dividend Reinvestment and Stock Purchase Plan
(DRP) shares. Since Harris Trust and Savings Bank is the administrator for both
plans, Harris created one form which could be used to tender ESPP and/or DRP
shares (called the "Instructions with Respect to the Offer to Purchase for Cash
All Outstanding Shares of Common Stock of ALLIED Group, Inc"). If you inserted
the word "ALL" in the box which asked for the number of shares to be tendered,
Harris Trust and Savings Bank will tender all of your ESPP shares and DRP shares
- --it is not necessary to complete one form for ESPP and another form for DRP.
If you have any questions about whether you have tendered all of your ESPP
and/or DRP shares, call Harris Trust and Savings Bank at 800-323-6583.
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IF YOU HOLD SHARES OF ALLIED GROUP, INC. COMMON STOCK ON MERGER DATE
If you still hold shares of ALLIED Group, Inc. common stock on the effective
date of the merger (you decided not to tender your shares in Nationwide's tender
offer, currently scheduled to expire on September 30, 1998, or you hold
restricted stock that may not be tendered), when the merger becomes effective,
your shares will be cancelled and (provided you have not effectively exercised
dissenter's rights to appraisal) you will be entitled to receive the $48.25 per
share price. After the merger is effective, Nationwide will obtain a list of
those people who are still stockholders and mail to them a Letter of Transmittal
containing instructions for its completion and return, with your stock
certificates attached, to Nationwide's agent, ChaseMellon, to the address on the
envelope. After receipt and review to confirm it has been properly completed,
ChaseMellon will issue you a check for your shares. While the exact timing of
the merger is not certain, it could be as long as several months after the
closing of the tender offer.
The bottom line is that if you don't tender, you will get your money later
rather than sooner and without interest. ALLIED encourages its shareholders to
tender their shares to Nationwide.
[GRAPHICS LINE]
Q: Now that approval has been received from both the Iowa and Arizona
Insurance Departments, it is my understanding that the only two conditions to
the merger remaining are approval by the Ohio Insurance Department and dismissal
of the lawsuit filed against ALLIED. Is this accurate? If so, what is a
possible date (ball park figure) for the Change in Control?
A: All regulatory conditions have been satisfied to complete the tender offers
for ALLIED Group, Inc. and ALLIED Life Financial Corporation. After the
expiration of the tender offer period (5 p.m. New York time on September 30,
1998), it is anticipated that Nationwide will accept the tendered shares and
that the tender offer will close. Therefore, unless strange and unforeseen
circumstances occur, the Change in Control date is expected to be September 30,
1998. Regulatory approval by the Ohio Department of Insurance was a necessary
condition prior to closing the ALLIED Mutual merger, and was received 9-23-98..
Dismissal of any lawsuit is not a condition of the merger.
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Q: There have been constant references in previous Updates to using a
financial advisor or tax consultant. Does this apply to everyone even if they
only plan to take out a small sum of cash?
A: Termination of a plan and distribution of assets is a very unusual
occurrence. The financial situation, ESPP share sale (if you had ESPP shares),
ESOP and 401(k) decisions, and tax consequences to each of ALLIED's 3,000
employees cannot be assessed and described in general terms in the Update. The
ESPP withholding and tax consequences are particularly complicated as outlined
in the Special Edition Update of 9-17. Unless you fully understand the Special
Edition you probably need a tax advisor's assistance with the ESPP distribution.
Any time an employee chooses to take some of either the ESOP or ALLIED 401(k)
distribution in cash, there will be 20% federal withholding and the required
minimum state withholding. The problem is that any cash you take will be added
to your taxable income for the year in which it is received. It is possible you
will end up in a higher tax bracket and end up owing more tax than the 20%
federal tax that was withheld. The distribution may also be subject to an
additional 10% penalty.
A tax or financial consultant can assist you in determining whether a cash
distribution is the right choice for you.
If you are receiving an ESOP or ALLIED 401(k) distribution that you plan to roll
over, you don't have to worry about tax consequences if you roll into a tax
qualified plan. However, you must address where to roll your account and what to
invest in. A financial advisor can assist you in making these decisions.
As previously announced in the Update of 9-16-98, Nationwide will offer you
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financial planning and tax services at no cost through KPMG Peat Marwick. It is
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entirely your choice whether you take advantage of the KPMG Peat Marwick
financial services, hire some other tax or financial advisor, or make your own
decisions. The situation of each employee is different and your unique situation
may require expertise that you do not have.
Q: Are employees allowed to roll part of the ESOP into an Education IRA?
A: No. When Congress created the Education IRA, it did not provide for
rollover distributions from an ESOP.
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However, under certain circumstances, employees can use the money in a
REGULAR IRA to pay higher education expenses without being subject to the 10%
penalty tax for early distributions. The distribution would remain subject to
income taxes, however. Qualified higher education expenses include tuition,
fees, books, supplies and equipment needed for education furnished by an
educational institution to any of the following individuals: An employee, an
employee's spouse, or the child or grandchild of an employee or employee's
spouse. Such expenses also include room and board if the student is attending
school at least half-time. The amount eligible for distribution without penalty
is reduced by any scholarship, financial aid, or gift earmarked for educational
purposes. Of course, the amount distributed without penalty cannot exceed the
amount of expenses actually paid.
In order to ensure that you receive the funds without penalty, you should
consult your tax advisor because the rules are complex.
Q: In the Update of 9-9-98 there was a reference to an accidental death policy
that was issued to all full time Iowa employees in December of 1997. Why didn't
the employees outside of Iowa receive a similar benefit? Will this policy be
continued for employees following the merger?
A: An expansion of the accidental death plan to employees outside of Iowa was
in the works when the Nationwide merger was initiated. The plan, written
through ALLIED Mutual, will now terminate in December.
TRANSITION NEWS
EXTRA WEEK'S PAY
As announced by Nationwide, ALLIED employees will receive an extra week's
pay because of the merger. ALLIED will pay its usual payroll for the two-week
pay period ending 12-18-98 on Monday, December 21, 1998. The next regular pay
day for full-time employees would have been 1-4-99 for work through 1-1-99.
INSTEAD, ALLIED WILL PAY FOR THE WEEK OF 12-19 THROUGH 12-26 PLUS AN ADDITIONAL
ONE WEEK'S PAY (TO A LIMIT OF $1,000.00) FROM NATIONWIDE. That check will be
paid on 12-30-98.
Part-time employees, paid on Monday, December 21, 1998 for the two-week
pay period ending 12-11-98 will receive their regular two-week check on 12-30-98
instead of
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1-4-98. In addition, part-time employees will receive $200.00 in transition pay
in the 12-30-98 check. Pay for the period 12-27-98 through 1-9-99 will be made
on 1-15-99 through Nationwide's payroll system. Future paychecks will be
received every other Friday from the Nationwide payroll system.
The $100 cash Christmas gift paid in the past will not be distributed this
December.
PURCHASED VACATION PROGRAM ENDS
ALLIED's Purchased Vacation Program will end effective 12-26-98. All
employees with purchased vacation will receive separate explanatory memos and
are encouraged to sell it back now to avoid end of the year complications in
ending this program.
SAVINGS BONDS PROGRAM ENDS
ALLIED's U.S. Savings Bond plan will be discontinued effective November
1, 1998. Bonds or refunds will be delivered before year end.
EMPLOYMENT
TRANSITION PROGRAM
Even before ALLIED began discussions with Nationwide regarding business
plans, we knew that we would need to continue our growth. We also recognized
that it was quite possible we could have some duplications of jobs between Des
Moines and Columbus; we just didn't know what they would be. We combined those
two thoughts into an employment transition program so that, if a job were to be
eliminated or significantly changed, the affected employee and ALLIED would have
an opportunity to stay together.
The program includes an "internal career center" with skill assessment
tools, training programs, interviews, and job development opportunities. As we
continue to identify opportunities within the organization, such opportunities
will be presented to participants in the program. Our goal is to place people in
positions at which they can be successful. What if we ask a person to accept an
internal position for which they have no interest? If it's not a good match for
their skills, pay level and career plans, we'll keep looking for other
possibilities. What if we don't find a good match? That's hard to imagine,
given the variety of opportunities we have and the abilities of most employees,
but the severance
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program announced in an earlier Update would apply. If you remember, it would
pay a minimum of three months' pay for any eligible termination which occurred
within one year after the Change in Control date PLUS a weeks' pay for every
year of employment with the company.
We're not focusing on people leaving the company; we want to focus on
keeping the fine people we already have. Most of us won't be participating in
the employment transition program, but for those who will, we think we have an
excellent transition program in place.
