WHITE MOUNTAINS INSURANCE GROUP LTD, SC TO-I, EX-99.(A)(1)(A), 2000-08-21

WHITE MOUNTAINS INSURANCE GROUP LTD
SC TO-I, EX-99.(A)(1)(A), 2000-08-21
FIRE, MARINE & CASUALTY INSURANCE

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<PAGE>

EXHIBIT (a)(1)(A)

OFFER TO PURCHASE FOR CASH

WHITE MOUNTAINS INSURANCE GROUP, LTD.

FOR UP TO

1,500,000 OF ITS COMMON SHARES

$165.00 NET PER SHARE

----------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY,
SEPTEMBER 18, 2000, UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------------------

White Mountains Insurance Group, Ltd., a company organized under the laws
of Bermuda (the "Company"), is offering to purchase up to 1,500,000 of its own
common shares, par value $1.00 per share (the "Shares"), for $165.00 per Share
net to the seller in cash (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together, as they may be amended from time to time,
constitute the "Offer"), including the proration provisions described herein.
The company reserves the right, in its sole discretion but subject to any
applicable legal requirement, to purchase more than 1,500,000 Shares pursuant to
the Offer although it does not currently intend to do so.

This Offer is not conditioned upon any minimum number of Shares being
tendered. This Offer is subject to certain conditions. See "Section 12. Certain
Conditions to the Offer".

The Shares are listed and traded on the New York Stock Exchange (the
"NYSE") under the symbol "WTM". On August 11, 2000, the last full trading day
before the announcement of the terms of the Offer, the reported closing sales
price of the Shares on the NYSE composite tape was $157 1/16 per Share, and on
August 18, 2000, the last full trading day before the commencement of the Offer,
the reported closing sales price was $163 1/2 per Share.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.

NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY SHAREHOLDER SHOULD TENDER ANY OR ALL OF SUCH SHAREHOLDER'S SHARES
PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE SUCH SHAREHOLDER'S OWN
DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.

<PAGE>

IMPORTANT

Any shareholder desiring to tender all or any portion of such shareholder's
Shares should either (1) complete and sign the enclosed Letter of Transmittal
(or a facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such shareholder's signature thereon guaranteed (if required
by Instruction 1 to the Letter of Transmittal), mail or deliver the Letter of
Transmittal (or a facsimile thereof) and any other required documents to the
Depositary (as defined herein) and either deliver the certificates for such
Shares (the "Certificates") along with the Letter of Transmittal to the
Depositary or tender such Shares pursuant to the procedures for book-entry
transfer set forth in "Section 3. Procedures for Tendering Shares" or (2)
request such shareholder's broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for such shareholder. Any shareholder
whose Shares are 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 to tender such Shares.

Any shareholder who desires to tender Shares and whose Certificates are not
immediately available, or who cannot comply with the procedures for book-entry
transfer described in this Offer to Purchase on a timely basis, or who cannot
deliver all required documents to the Depositary prior to the expiration of the
Offer, may tender such Shares by following the procedures for guaranteed
delivery set forth in "Section 3. Procedures for Tendering Shares".

Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials may
be directed to Equiserve Trust Company (the "Information Agent" and
"Depositary") at the address and telephone number set forth on the back cover of
this Offer to Purchase. Shareholders may also contact their brokers, dealers,
commercial banks or trust companies for assistance concerning the Offer.

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING
SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER
THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL.
IF MADE OR GIVEN, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.

THE SECURITIES AND EXCHANGE COMMISSION ("SEC") HAS NOT APPROVED OR
DISAPPROVED OF THIS TRANSACTION OR PASSED UPON THE FAIRNESS OR MERITS OF SUCH
TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

TABLE OF CONTENTS
<TABLE>
<CAPTION>

<S> <C>
SUMMARY TERM SHEET................................................................................. 1

INTRODUCTION....................................................................................... 5

THE TENDER OFFER................................................................................... 7
1. Terms of the Offer; Expiration Date....................................................... 7
2. Acceptance for Payment and Payment for Shares............................................. 9
3. Procedures for Tendering Shares........................................................... 10
4. Withdrawal Rights......................................................................... 13
5. Certain U.S. Federal Income Tax Consequences.............................................. 13
6. Price Range of Shares; Dividends.......................................................... 16
7. Certain Information Concerning the Company................................................ 17
8. Source and Amount of Funds................................................................ 21
9. Purpose of the Offer; Certain Effects of the Offer........................................ 21
10. Agreements Concerning the Shares.......................................................... 22
11. Fees and Expenses......................................................................... 22
12. Certain Conditions to the Offer........................................................... 23
13. Certain Legal Matters..................................................................... 24
14. Miscellaneous............................................................................. 25

SCHEDULE I
Information Concerning the Directors and Executive Officers of the Company...................... 27

SCHEDULE II
Transactions Concerning the Company's Shares - Most Recent 60 Days.............................. 29

</TABLE>

<PAGE>

SUMMARY TERM SHEET

White Mountains Insurance Group, Ltd. (the "Company" or "White Mountains")
is offering to purchase 1,500,000 of its own Common Shares (the "Shares"), for
$165.00 per Share in cash (the "Offer"). The following are some of the questions
that you, as a shareholder of White Mountains, may have and answers to those
questions. We urge you to carefully read the remainder of this Offer to Purchase
and the accompanying Letter of Transmittal because the information in this
summary is not complete and additional important information is contained in the
remainder of this Offer to Purchase and the accompanying Letter of Transmittal.

WHO IS OFFERING TO BUY MY SECURITIES, AND WHY?

The offer to purchase the Shares is being made by White Mountains, a
company organized under the laws of Bermuda (formerly of Delaware). We intend to
purchase our own outstanding Shares in order to utilize a portion of our excess
capital while providing shareholders with increased liquidity. If you choose to
tender your Shares, you will avoid the usual transaction costs associated with
any market sale. If you choose not to tender your Shares, the Offer will serve
to increase your ownership interest in the Company and thus in the Company's
future earnings and assets, as the Shares purchased pursuant to the Offer will
be retired. See "Section 7. Certain Information Concerning the Company" and
"Section 9. Purpose of the Offer; Certain Effects of the Offer".

WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?

We are offering to purchase 1,500,000 of the Shares. As of August 18, 2000,
there were 5,880,115 Common Shares outstanding. The Shares we are seeking to
purchase through this Offer therefore represent 25.5% of the Shares outstanding
as of such date, and approximately 25.2% of the sum of the Shares outstanding,
plus all Shares which may be issued upon exercise of outstanding options as of
such date. See "INTRODUCTION" and "Section 9. Purpose of the Offer; Certain
Effects of the Offer".

The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. Following the repurchase of
Shares pursuant to the Offer, the Shares not purchased will continue to be
"margin securities" for purposes of the Federal Reserve Board's margin
regulations.

HOW MUCH ARE YOU OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?

We are offering to pay $165.00 per Share, net to you in cash. If you are
the record owner of your Shares and you tender your Shares to us in the Offer,
you will not have to pay brokerage fees or similar expenses to the Information
Agent or the Depositary. If you own your Shares through a broker or other
nominee, and your broker tenders your Shares on your behalf, your broker or
nominee may charge you a fee for doing so. You should consult your broker or
nominee to determine whether any charges will apply. See "INTRODUCTION",
"Section 3. Procedures for Tendering Shares" and "Section 2. Acceptance for
Payment and Payment for Shares".

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2

WHAT WILL HAPPEN IF THE OFFER IS UNDER- OR OVER-SUBSCRIBED?

In the event that less than the requested number of Shares are tendered,
subject to the terms and conditions of this Offer, we will purchase such
tendered Shares.

In the event that more than the requested number of Shares are tendered,
subject to the terms and conditions of this Offer, we will accept Shares for
purchase in the following order of priority:

(a) first, all Shares tendered by "Odd Lot Holders" (i.e., beneficial
owners who, as of the Expiration Date, own an aggregate of fewer than
100 Shares, and tender their entire holdings. Partial tenders will not
qualify for this preference.)

(b) then (after purchase of all Odd Lot Holders' Shares) all other Shares
properly tendered, on a pro rata basis if necessary.

If proration becomes necessary, we will determine the proration factor as
promptly as practicable, and announce the preliminary results of proration by
press release after the Expiration Date. See "Section 1. Terms of the Offer;
Expiration Date" and "Section 2. Acceptance for Payment and Payment for Shares".

DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?

If we purchase 1,500,000 Shares, at $165.00 per Share net to the seller in
cash, the aggregate cost to us will be approximately $247.7 million. We
anticipate meeting this cost with cash generated by the recent disposition of
our subsidiary White Mountains Holdings, Inc. and all our other interests in
Financial Security Assurance Holdings Ltd. (the "Dexia Sale"). See "Section 8.
Source and Amount of Funds".

IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?

We do not think our financial condition is relevant to your decision
whether to tender in the Offer because the form of payment consists solely of
cash and all of our funding will come from the proceeds we received from the
Dexia Sale. See "Section 7. Certain Information Concerning the Company".
Additionally, the Offer is not subject to any financing condition. See "Section
8. Source and Amount of Funds".

HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?

You will have at least until 12:00 midnight, New York City time, on
September 18, 2000, to decide whether to tender your Shares in the Offer.
Further, if you cannot deliver everything that is required in order to make a
valid tender by that time, you may be able to use a guaranteed delivery
procedure, which is described later in this Offer to Purchase. See "Section 3.
Procedures for Tendering Shares".

WILL I STILL BE ENTITLED TO THE DIVIDEND DECLARED BY THE COMPANY ON AUGUST 11,
2000 IF I TENDER MY SHARES?

Yes. Shareholders will still be entitled to the dividend of $0.40 per
Share, which was declared by the Company's Board of Directors on August 11,
2000, even if they tender Shares pursuant to the Offer prior to September 18,
2000. The dividend is payable on September 27,

<PAGE>
3

2000, to shareholders of record as of September 18, 2000. See "Section 6. Price
Range of Shares; Dividends".

CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?

We are reserving the right to extend the Offer at our discretion. Also,
should we, pursuant to the terms and conditions of the Offer, significantly
change the price or quantity of Shares asked for in the Offer, we will ensure
that the Offer remains open long enough to comply with Federal securities
laws or otherwise materially amend the Offer. It is possible that this could
involve an extension of the Offer, up to 10 additional business days in some
cases. See "Section 1. Terms of the Offer; Expiration Date".

HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?

If we extend the Offer, we will inform Equiserve Trust Company (which is
the Information Agent and Depositary for the Offer) of that fact, and will make
a public announcement of the extension, not later than 9:00 a.m., New York City
time, on the next business day after the day on which the offer was scheduled to
expire. See "Section 1. Terms of the Offer; Expiration Date".

HOW DO I TENDER MY SHARES?

To tender your Shares, you must deliver the Certificates evidencing your
Shares, together with a completed Letter of Transmittal with any required
signature guarantees or other required documents, to Equiserve Trust Company,
the Depositary for the Offer, not later than the time the Offer expires. If you
are unable to deliver something that is required to the Depositary by the
expiration of the Offer, you may get a little extra time to do so by having a
broker, bank or other fiduciary who is a member of the Securities Transfer Agent
Medallion Program, The New York Stock Exchange Medallion Program or the Stock
Exchange Medallion Program to guarantee that the missing items will be received
by the Depositary within three NYSE trading days. However, the Depositary must
receive the missing items within that three-day trading period. See "Section 3.
Procedures for Tendering Shares".

UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?

You can withdraw previously tendered Shares at any time until the Offer has
expired. See "Section 4. Withdrawal Rights".

HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?

To withdraw Shares you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the Depositary while you
still have the right to withdraw the Shares. See "Section 4. Withdrawal Rights".

WHAT DOES THE COMPANY'S BOARD OF DIRECTORS THINK OF THE OFFER?

The Board of Directors of the Company makes no recommendation as to whether
you should tender any or all of your Shares, or hold them. Rather, they
encourage you to make your own decision as to whether or not to tender Shares,
and if so, how many to tender.

<PAGE>
4

John J. Byrne, the Chairman of the Company, has informed the Company
that he intends to tender approximately 250,000 Shares pursuant to the Offer.
However, as a large shareholder, Mr. Byrne is subject to complicated tax
rules which, depending upon the number of Shares he sells, which in turn
could depend upon the amount of proration in the Offer, could result in
adverse Federal income tax consequences to him upon tendering Shares. If Mr.
Byrne concludes that the Company's purchase of Shares tendered by him would
be treated for Federal income tax purposes as a dividend rather than as a
sale, Mr. Byrne expects he will either withdraw all Shares tendered by him
or, if tendering additional Shares would permit him to conclude that the
Company's purchase of Shares tendered by him would be treated as a sale
rather than as a dividend, tender additional Shares. See "Section 5. Certain
U.S. Federal Income Tax Consequences".

WHAT DOES THE COMPANY INTEND TO DO WITH THE PURCHASED SHARES AFTER THE OFFER
EXPIRES?

We will retire the Shares. See "Section 9. Purpose of the Offer; Certain
Effects of the Offer".

WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?

On August 11, 2000, the last trading day before the announcement of the
terms of the Offer, the last sales price of the Shares reported on the NYSE was
$157 1/16 per Share. On August 18, 2000, the last full trading day before the
commencement of the Offer, the last sales price of the Shares reported on the
NYSE was $163 1/2 per Share. We advise you to obtain a recent quotation for the
Shares in deciding whether to tender your Shares. See "Section 6. Price Range of
Shares; Dividends".

WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?

You can call Equiserve Trust Company, the Depositary and Information Agent
for the Offer, at 1-888-756-1854. For further contact information, see the back
cover of this Offer to Purchase.

<PAGE>
5

To the Holders of Common Shares
of White Mountains Insurance Group, Ltd.:

INTRODUCTION

White Mountains Insurance Group, Ltd., hereby offers to purchase 1,500,000
of its outstanding Common Shares, par value $1.00 per share, at $165.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal.
The Company reserves the right, in its sole discretion but subject to any
applicable legal requirements, to purchase more than 1,500,000 Shares pursuant
to the Offer, although it does not currently intend to do so.

NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS (THE "BOARD") MAKES ANY
RECOMMENDATION AS TO WHETHER ANY SHAREHOLDER SHOULD TENDER ANY OR ALL OF SUCH
SHAREHOLDER'S SHARES PURSUANT TO THE OFFER. EACH SHAREHOLDER MUST MAKE SUCH
SHAREHOLDER'S OWN DECISION WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES
TO TENDER.

THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE "SECTION 12. CERTAIN
CONDITIONS TO THE OFFER".

As of August 18, 2000, there were 5,880,115 Shares outstanding.
Accordingly, the 1,500,000 Shares which the Company is offering to purchase in
the Offer represent approximately 25.5% of the Shares outstanding as of August
18, 2000, and approximately 25.2% of the sum of the Shares outstanding, plus all
Shares which may be issued upon exercise of outstanding options as of such date.

If before the Expiration Date (as defined in Section 1), a greater number
of Shares is properly tendered and not withdrawn than will be accepted for
purchase by the Company, the Company will, upon the terms and subject to the
conditions of the Offer, accept Shares for purchase:

(i) first, from all Shares properly tendered by any Odd Lot Holder
satisfying the requirements of the Offer, and

(ii) second, from all other Shares properly tendered, on a pro rata
basis.

See "Section 1. Terms of the Offer; Expiration Date" and "Section 2.
Acceptance for Payment and Payment for Shares".

The Company will pay all reasonable charges and expenses of Equiserve Trust
Company, incurred in connection with the Offer. All Shares not purchased
pursuant to the Offer,

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6

including Shares not purchased because of proration, will be returned to the
tendering shareholders at the Company's expense. Tendering shareholders will not
be obligated to pay brokerage commissions, solicitation fees or (subject to
Instruction 6 of the Letter of Transmittal) share transfer taxes on the purchase
of Shares by the Company. See "Section 11. Fees and Expenses".

The Shares are listed and traded on the NYSE under the symbol "WTM". On
August 11, 2000, the last full trading day before the announcement of the terms
of the Offer, the reported closing sales price on the NYSE composite tape was
$157 1/16 per Share, and on August 18, 2000, the last full trading day before
the commencement of the Offer, the reported closing sales price was $163 1/2 per
Share. See "Section 6. Price Range of Shares; Dividends". SHAREHOLDERS ARE URGED
TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.

Shareholders who tender their Shares pursuant to the Offer (even if they
tender their Shares prior to September 18, 2000) will still be entitled to the
dividend of $0.40 per Share, which was declared by the Company's Board of
Directors on August 11, 2000. The dividend is payable on September 27, 2000. See
"Section 6. Price Range of Shares; Dividends".

SHAREHOLDERS ARE URGED TO READ THIS OFFER TO PURCHASE AND THE RELATED
LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER THEIR SHARES.

<PAGE>
7

THE TENDER OFFER

1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), the Company will accept
for payment, and will pay for, up to 1,500,000 Shares validly tendered prior to
the Expiration Date (as hereinafter defined) and not withdrawn as permitted by
"Section 4. Withdrawal Rights". The term "Expiration Date" means 12:00 midnight,
New York City time, on Monday, September 18, 2000, unless and until the Company
shall have extended the period during which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by the Company under this Section 1, shall expire. Subject
to the purchase of Shares properly tendered and not withdrawn by Odd Lot Holders
as set forth in this Section and "Section 2. Acceptance for Payment and Payment
for Shares", if the Offer is oversubscribed, Shares tendered before the
Expiration Date will be subject to proration. The proration period also expires
on the Expiration Date.

Subject to all applicable laws and the terms and conditions of the
Offer, the Company reserves the right, as described in "Section 12. Certain
Conditions to the Offer", to waive conditions thereto, in its sole discretion,
and/or extend, withdraw, terminate, delay, or amend the Offer in any case by
making a public announcement thereof. There can be no assurance, however,
that the Company will exercise its right to extend the Offer.

THE OFFER IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
"SECTION 12. CERTAIN CONDITIONS TO THE OFFER".

All Shares purchased pursuant to the Offer will be purchased at the Offer
Price, net to the seller, in cash.

If the number of Shares properly tendered and not withdrawn before the
Expiration Date is less than or equal to 1,500,000 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company, upon the terms and subject to the conditions of the Offer, will
purchase at the Offer Price all Shares so tendered and not withdrawn.

If the number of Shares properly tendered and not withdrawn before the
Expiration Date is greater than 1,500,000 Shares (or such greater number of
Shares as the Company may elect to purchase pursuant to the Offer), the Company,
upon the terms and subject to the conditions of the Offer, will accept Shares
for purchase in the following order of priority:

(a) first, all Shares properly tendered and not withdrawn before the
Expiration Date by any shareholder who beneficially owned as of the
close of business on August 14, 2000, and who continues to own
beneficially until the Expiration Date an aggregate of fewer than 100
Shares (each an "Odd Lot Holder") who:

(1) tenders all Shares beneficially owned by such Odd Lot Holder
(partial tenders will not qualify for this preference, see
"Section 2. Acceptance for Payment and Payment for Shares"); and

(2) completes the box captioned "Odd Lots" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed
Delivery; and

(b) then, after purchase of all the foregoing Shares, all other Shares
properly tendered and not withdrawn before the Expiration Date on a
pro rata basis, if necessary (with adjustments to avoid purchases of
fractional Shares).

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8

In the event that proration of tendered Shares is required, the Company
will determine the final proration factor as promptly as practicable after the
Expiration Date. Although the Company does not expect that it will be able to
announce the final proration factor until approximately five NYSE trading days
after the Expiration Date, it will announce preliminary results of proration by
press release as promptly as practicable after the Expiration Date. Shareholders
may obtain such preliminary information from the Information Agent and may be
able to obtain such information from their brokers or financial advisors.

All Shares not purchased pursuant to the Offer, including Shares not
purchased because of proration, will be returned to the tendering shareholders
at the Company's expense as promptly as practicable (which, in the event of
proration, is expected to be approximately 12 NYSE trading days) following the
Expiration Date.

Subject to the terms and conditions of the Offer, the Company expressly
reserves the right, in its sole discretion, at any time and regardless of
whether or not any of the events set forth in "Section 12. Certain Conditions to
the Offer" shall have occurred or shall be deemed by the Company to have
occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of any Shares by giving oral or written
notice of such extension to the Depositary and making a public announcement
thereof. During any such extension, all Shares previously tendered and not
purchased or withdrawn will remain subject to the Offer, except to the extent
that such Shares may be withdrawn as set forth in "Section 4. Withdrawal
Rights". The Company also expressly reserves the right, in its sole discretion,
to withdraw or terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for. Additionally, the
Company expressly reserves the right, subject to applicable law, to postpone
payment for Shares under circumstances including but not limited to the
occurrence of any of the conditions specified in "Section 12. Certain Conditions
to the Offer" by notifying the Depositary and making a public announcement
thereof.

If the Company is delayed in its payment for the Shares or is unable to pay
for the Shares pursuant to the Offer for any reason, then, without prejudice to
the Company's rights under the Offer, the Depositary may retain tendered Shares
on behalf of the Company, and such Shares may not be withdrawn except to the
extent tendering shareholders are entitled to withdrawal rights as described in
"Section 4. Withdrawal Rights". However, the ability of the Company to delay the
payment for Shares which the Company has accepted for payment is limited by Rule
13e-4(f)(5) under the Securities Exchange Act of 1934, as amended, which
requires that bidder pay the consideration offered or return the securities
deposited by, or on behalf of, holders of securities promptly after the
termination or withdrawal of the Offer.

Subject to compliance with applicable law, the Company further reserves the
right, in its sole discretion, and regardless of whether or not any of the
events set forth in "Section 12. Certain Conditions to the Offer" shall have
occurred or shall be deemed by the Company to have occurred, to amend the Offer
in any respect (including, without limitation, by decreasing or increasing the
consideration offered in the Offer to owners of Shares or by increasing or
decreasing the number of Shares being sought in the Offer). Amendments to the
Offer may be made at any time, effected by public announcement thereof. Such
announcement, in the case of an extension, is to be issued no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Any disclosure of a material change in the
information published, sent or given to shareholders will be disseminated
promptly to shareholders in a manner reasonably calculated to inform
shareholders of such change to the extent required by Rules 13e-4(d)(2) and
13e-4(e)(3) promulgated under the Exchange Act. Without limiting the manner in
which the Company may choose to make a public announcement pursuant to or
concerning the Offer, except as required by applicable law, the Company shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service.

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9

If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2), and 13e-4(e)(3) under the Exchange Act. The minimum period during
which the Offer must remain open following material changes in the terms of the
Offer or information concerning the Offer, other than a change in price or
change in percentage of Shares sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. In a public release, the SEC has stated its views that an
offer must remain open for a minimum period of time following a material change
in the terms of the Offer and that waiver of a material condition is a material
change in the terms of the Offer. The release states that an offer should remain
open for a minimum of five business days from the date a material change is
first published or sent or given to security holders and that, if material
changes are made with respect to information not materially less significant
than the offer price and the number of shares being sought, a minimum of 10
business days may be required to allow for adequate dissemination to
shareholders and investor response. For purposes of the Offer, a "business day"
means any day other than a Saturday, Sunday or United States Federal holiday and
consists of the time period from 12:01 a.m. through 12:00 midnight, New York
City time. The requirement to extend the Offer does not apply to the extent that
the number of business days remaining between the occurrence of the change and
the then-scheduled Expiration Date equals or exceeds the minimum extension
period that would be required because of such amendment. If, prior to the
Expiration Date, the Company increases the consideration offered to holders of
Shares pursuant to the Offer, such increased consideration will be paid to all
holders whose Shares are purchased in the Offer whether or not such Shares were
tendered prior to such increase.

2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. ODD LOT HOLDERS. 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), the Company will accept for payment without proration, and will pay
for, all Shares validly tendered by or on behalf of Odd Lot Holders as defined
in "Section 1. Terms of the Offer; Expiration Date" (prior to the Expiration
Date and not properly withdrawn), as soon as practicable after the Expiration
Date. To avoid proration, however, any Odd Lot Holder must properly tender all
Shares such Odd Lot Holder beneficially owns. Partial tenders will not qualify
for this preference, nor will owners of 100 or more Shares even if such owners
have separate Certificates for fewer than 100 Shares. Any Odd Lot Holder wishing
to tender all Shares beneficially owned by such shareholder pursuant to the
Offer, and qualifying for this preference, must complete the box captioned "Odd
Lots" on the Letter of Transmittal and, if applicable, on the Notice of
Guaranteed Delivery. See "Section 3. Procedures for Tendering Shares".

ALL OTHER SHAREHOLDERS. 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), the Company will accept for payment, and
will pay for, all other Shares validly tendered (prior to the Expiration Date
and not properly withdrawn), on a pro rata basis if necessary (with adjustments
to avoid purchases of fractional Shares) (see "Section 1. Terms of the Offer;
Expiration Date"), as soon as practicable after the Expiration Date.

GENERAL. Subject to applicable rules of the SEC, the Company expressly
reserves the right to delay acceptance for payment of, or payment for, Shares in
order to comply in whole or in part with any other applicable law.

In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
Certificates or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company ("DTC") pursuant to the procedures set forth in
"Section 3. Procedures for Tendering Shares", (ii) the Letter of Transmittal (or
a facsimile thereof), properly completed and duly executed, with any required
signature guarantees

<PAGE>
10

or, in the case of a book-entry transfer, an Agent's Message (as defined below)
in lieu of the Letter of Transmittal and (iii) any other documents required by
the Letter of Transmittal.

For purposes of the Offer, the Company will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when the Company gives oral or written notice to the
Depositary, as agent for the tendering shareholders, of the Company's acceptance
for payment of such Shares pursuant to the Offer. Upon the terms and subject to
the conditions of the Offer, payment for Shares accepted for payment pursuant to
the Offer will be made by deposit of the Offer Price therefor with the
Depositary, which will act as agent for tendering shareholders for the purpose
of receiving payments from the Company and transmitting such payments to
tendering shareholders whose Shares have been accepted for payment. Under no
circumstances will interest on the Offer Price for Shares be paid, regardless of
any delay in making such payment.

If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer (including those not purchased because
of proration), or if Certificates are submitted evidencing more Shares than are
tendered, Certificates evidencing unpurchased Shares will be returned, without
expense to the tendering shareholder (or, in the case of Shares tendered by
book-entry transfer into the Depositary's account at DTC pursuant to the
procedure set forth in "Section 3. Procedures for Tendering Shares", such Shares
will be credited to an account maintained at DTC), as promptly as practicable
following the expiration or termination of the Offer.

3. PROCEDURES FOR TENDERING SHARES. GENERAL. Except as set forth below, in
order for Shares to be validly tendered pursuant to the Offer, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message in lieu of the Letter of Transmittal) and any other
documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase and either (i) the Certificates evidencing tendered Shares must be
received by the Depositary at such address or such Shares must be tendered
pursuant to the procedure for book-entry transfer described below and a
Book-Entry Confirmation must be received by the Depositary (including an Agent's
Message if the tendering shareholder has not delivered a Letter of Transmittal),
in each case on or prior to the Expiration Date, or (ii) the tendering
shareholder must comply with the guaranteed delivery procedures described below.
No alternative, conditional or contingent tenders will be accepted. The term
"Agent's Message" means a message, transmitted by electronic means to, and
received by, the Depositary and forming a part of a Book-Entry Confirmation that
states that (i) DTC has received an express acknowledgment from the participant
in DTC tendering the Shares that are the subject of such Book-Entry
Confirmation, (ii) such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and (iii) the Company may enforce such
agreement against such participant.

BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect to
the Shares at DTC for purposes of the Offer within two business days after the
date of this Offer to Purchase. Any financial institution that is a participant
in DTC's system may make a book-entry delivery of Shares by causing DTC to
transfer such Shares into the Depositary's account in accordance with DTC's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer at DTC, either the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, together with
any required signature guarantees, or an Agent's Message in lieu of the Letter
of Transmittal, and any other required documents, must, in any case, be received
by the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase prior to the Expiration Date, or the tendering shareholder
must comply with the guaranteed delivery procedure described below. DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

<PAGE>
11

SIGNATURE GUARANTEES. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchanges Medallion Program (each, an "Eligible Institution"), except
in cases where Shares are tendered (i) by a registered holder of Shares who has
not completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or (ii)
for the account of an Eligible Institution. If a Certificate is registered in
the name of a person other than the signatory of the Letter of Transmittal (or a
facsimile thereof), 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 share powers, in either case signed exactly as the name(s) of the
registered holder(s) appear on the Certificate, with the signature(s) on such
Certificate or share powers guaranteed by an Eligible Institution. If the Letter
of Transmittal or share powers are signed or any Certificate is endorsed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted. See Instructions 1 and 5 of the Letter of Transmittal.

GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and the Certificates evidencing such shareholder's Shares are not
immediately available or such shareholder cannot deliver the Certificates and
all other required documents to the Depositary prior to the Expiration Date, or
such shareholder cannot complete the procedure for delivery by book-entry
transfer on a timely basis, such Shares may nevertheless be tendered, provided
that all the following conditions are satisfied:

(i) such tender is made by or through an Eligible Institution;

(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Company, is received
prior to the Expiration Date by the Depositary as provided below; and

(iii) the Certificates (or a Book-Entry Confirmation) evidencing all
tendered Shares, in proper form for transfer, in each case together with
the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees (or, in connection
with a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal are received by the Depositary within
three NYSE trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day" is any day on which the NYSE is open
for business.

The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in the form
of Notice of Guaranteed Delivery made available by the Company.

In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
and any other documents required by the Letter of Transmittal.

THE METHOD OF DELIVERY OF CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH DTC, IS AT THE 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

<PAGE>
12

MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.

DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by the Company in its sole discretion, which
determination shall be final and binding on all parties. The Company reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. The Company also reserves the absolute right to waive any
condition of the Offer or any defect or irregularity in the tender of any
particular Shares or any particular shareholder, whether or not similar defects
or irregularities are waived in the case of other shareholders, and the
Company's interpretation of the terms and conditions of the Offer will be final
and binding on all persons. No tender of Shares will be deemed to have been
validly made until all defects and irregularities have been cured or waived to
the satisfaction of the Company. Neither the Company, nor any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.

OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of the Company as
such shareholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such shareholder's
rights with respect to the Shares tendered by such shareholder and accepted for
payment by the Company (and with respect to any and all other Shares or other
securities issued or issuable in respect of such Shares on or after the date of
this Offer to Purchase). All such proxies shall be considered coupled with an
interest in the tendered Shares. Such appointment will be effective when, and
only to the extent that, the Company accepts such Shares for payment. Upon such
acceptance for payment, all prior proxies given by such shareholder with respect
to such Shares (and such other Shares and securities) will be revoked without
further action, and no subsequent proxies may be given nor any subsequent
written consent executed by such shareholder (and, if given or executed, will
not be deemed to be effective) with respect thereto. The designees of the
Company will, with respect to the Shares for which the appointment is effective,
be empowered to exercise all voting and other rights of such shareholder as they
in their sole discretion may deem proper at any annual or special meeting of the
Company's shareholders or any adjournment or postponement thereof, by written
consent in lieu of any such meeting or otherwise. The Company reserves the right
to require that, in order for Shares to be deemed validly tendered, immediately
upon the Company's payment for such Shares, the Company must be able to exercise
full voting rights with respect to such Shares.

The acceptance for payment by the Company of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering shareholder and the Company upon the terms and subject to the
conditions of the Offer.

TO PREVENT BACKUP U.S. FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO
PAYMENTS MADE TO CERTAIN SHAREHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED
PURSUANT TO THE OFFER, EACH SUCH SHAREHOLDER MUST PROVIDE THE DEPOSITARY WITH
SUCH SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER ("TIN") AND CERTIFY
THAT SUCH SHAREHOLDER IS NOT SUBJECT TO BACKUP U.S. FEDERAL INCOME TAX
WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL.
IF BACKUP WITHHOLDING APPLIES WITH RESPECT TO A SHAREHOLDER, THE DEPOSITARY IS
REQUIRED TO WITHHOLD 31% OF ANY PAYMENTS MADE TO SUCH SHAREHOLDER. SEE
INSTRUCTION 11 OF THE LETTER OF TRANSMITTAL. NON-UNITED STATES HOLDERS MUST
SUBMIT A COMPLETED FORM W-8 OR FORM W-8BEN TO AVOID BACKUP WITHHOLDING. SEE
INSTRUCTION 12 AND THE DISCUSSION UNDER "IMPORTANT TAX INFORMATION"

<PAGE>
13

OF THE LETTER OF TRANSMITTAL. THESE FORMS MAY BE OBTAINED FROM THE DEPOSITARY.

4. WITHDRAWAL RIGHTS. Tenders of the Shares made pursuant to the Offer are
irrevocable except that such Shares may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Company
pursuant to the Offer, may also be withdrawn at any time after October 17, 2000.
If the Company extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to the Company's rights under the Offer, the
Depositary may, nevertheless, on behalf of the Company, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
shareholders are entitled to withdrawal rights as described in this Section 4.

For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to Purchase.
Any such notice of withdrawal must specify the name of the person who tendered
the Shares to be withdrawn, the number of Shares to be withdrawn and the name of
the registered holder of such Shares, if different from that of the person who
tendered such Shares. If Certificates evidencing Shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
physical release of such Certificates, the serial numbers shown on such
Certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer as set
forth in "Section 3. Procedures for Tendering Shares", any notice of withdrawal
must specify the name and number of the account at DTC to be credited with the
withdrawn Shares or must otherwise comply with DTC's procedures.

Withdrawals of tenders of Shares may not be rescinded, and Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following the
procedures described in "Section 3. Procedures for Tendering Shares", at any
time prior to the Expiration Date.

All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by the Company, in its sole
discretion, whose determination will be final and binding. None of the Company,
the Depositary, the Information Agent or any other person will be under duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.

5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES. This is a general summary
of the material U.S. Federal income tax consequences of the sale of Shares
pursuant to the Offer. This discussion is based on the Internal Revenue Code of
1986, as amended (the "Code"), applicable Treasury Regulations and
administrative and judicial interpretations, all of which are subject to change
(possibly on a retroactive basis). This summary does not discuss all the tax
consequences that may be relevant to a particular shareholder in light of the
shareholder's particular circumstances. Different rules which are not discussed
below, may apply to some shareholders such as insurance companies, tax-exempt
persons, financial institutions, regulated investment companies, dealers in
securities or currencies, persons that hold Shares as a position in a "straddle"
or as part of a "hedge", "conversion transaction" or other integrated
investment, persons who received Shares as compensation or persons whose
functional currency is other than the United States dollar. This summary does
not address any state, local or foreign tax considerations that may be relevant
to a shareholder's decision to tender Shares pursuant to the Offer. This summary
assumes Shares are held as capital assets within the meaning of Section 1221 of
the Code.

<PAGE>
14

EACH SHAREHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX ADVISOR WITH
RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL CONSEQUENCES OF PARTICIPATING IN
THE OFFER, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY OTHER
TAXING JURISDICTION.

TAX CONSEQUENCES OF OFFER-DISTRIBUTION VS. SALE TREATMENT. The Company's
purchase of Shares from a shareholder pursuant to the Offer will be treated by
the shareholder either as a sale of the Shares or as a distribution by the
Company. The purchase will be treated as a sale if the shareholder meets any of
the three tests discussed below. It will be treated as a distribution if the
shareholder satisfies none of those tests.

If the purchase of Shares from a shareholder is treated as a sale, the
shareholder will recognize gain or loss equal to the difference between the
amount of cash received by the shareholder and the shareholder's tax basis in
the Shares sold. The gain or loss will be capital gain or loss and will be
long-term capital gain or loss if the Shares were held more than one year. A
shareholder must calculate gain or loss separately for each block of Shares that
he or she owns. A shareholder may be able to designate which blocks and the
order of such blocks of Shares to be tendered pursuant to the Offer.

If the purchase of Shares from a shareholder is treated as a distribution
by the Company, the full amount of cash received by the particular shareholder
for the Shares (without any offset for the shareholder's tax basis in the
purchased Shares) will be treated as a dividend and taxed to the shareholder as
ordinary income to the extent that the Company's current and accumulated
earnings and profits would be allocable to the distribution. The tax basis of
the shareholder's sold Shares will be added to the tax basis of the remaining
Shares. The Company believes that it has sufficient current and accumulated
earnings and profits so that all purchases treated as distributions will be
treated as dividends and therefore taxed as ordinary income. To the extent, if
any, payments made by the Company exceed its current and accumulated earnings
and profits, a tendering shareholder will receive its share of such excess
tax-free to the extent of its basis in its Shares and then as capital gain.

DETERMINATION OF SALE OR DISTRIBUTION TREATMENT. The Company's purchase of
Shares pursuant to the Offer will be treated as a sale of the Shares by a
shareholder if:

(a) the purchase completely terminates the shareholder's equity
interest in the Company;

(b) the receipt of cash by the shareholder is "not essentially
equivalent to a dividend"; or

(c) as a result of the purchase there is a "substantially
disproportionate" reduction in the shareholder's equity interest in the
Company.

If none of these tests are met with respect to a particular shareholder,
then the Company's purchase of Shares from that shareholder pursuant to the
Offer will be treated as a distribution.

In applying these tests, the constructive ownership rules of Section 318 of
the Code apply. Thus, a shareholder is treated as owning not only Shares
actually owned by the shareholder but also Shares actually (and in some cases
constructively) owned by others. Under the constructive ownership rules, a
shareholder will be considered to own Shares owned, directly or indirectly, by
certain members of the shareholder's family and certain entities (such as
corporations, partnerships, trusts and estates) in which the shareholder has an
equity interest, as well as Shares which the shareholder has an option to
purchase.

<PAGE>
15

It may be possible for a tendering shareholder to satisfy one of these
three tests by contemporaneously selling or otherwise disposing of all or some
of the Shares that such shareholder actually or constructively owns that are not
purchased pursuant to the Offer. Correspondingly, a tendering shareholder may
not be able to satisfy one of these three tests because of contemporaneous
acquisitions of Shares by that shareholder or a related party whose Shares would
be attributed to such shareholder. Shareholders should consult their tax
advisors regarding the tax consequences of such sales or acquisitions in their
particular circumstances.

COMPLETE TERMINATION. A purchase of Shares pursuant to the Offer will
result in a "complete termination" of the shareholder's interest in the Company
if, immediately after the sale, either:

(a) the shareholder owns, actually and constructively, no Shares; or

(b) the shareholder actually owns no Shares and constructively owns
only Shares as to which the shareholder is eligible to waive, and does
effectively waive, constructive ownership under the procedures described in
Section 302(c)(2) of the Code. If a shareholder desires to file such a
waiver, the shareholder should consult his or her own tax advisor.

NOT ESSENTIALLY EQUIVALENT TO A DIVIDEND. A purchase of Shares pursuant to
the Offer will be treated as "not essentially equivalent to a dividend" if it
results in a "meaningful reduction" in the selling shareholder's proportionate
interest in the Company. Whether a shareholder meets this test will depend on
relevant facts and circumstances. The Internal Revenue Service (the "IRS") has
held in a published ruling that, under the particular facts of that ruling, a
3.3% reduction in the percentage share ownership of a shareholder constituted a
"meaningful reduction" when the shareholder owned .0001118% of the publicly held
corporation's shares before a redemption, owned .0001081% of the corporation's
shares after the redemption and did not exercise any control over corporate
affairs.

In measuring the change, if any, in a shareholder's proportionate interest
in the Company, the meaningful reduction test is applied by taking into account
all Shares that the Company purchases pursuant to the Offer, including Shares
purchased from other shareholders.

If, taking into account the constructive ownership rules of Section 318 of
the Code, a shareholder owns Shares that constitute only a minimal interest in
the Company and does not exercise any control over the affairs of the Company,
any reduction in the shareholder's percentage ownership interest in the Company
should be a "meaningful reduction". Such selling shareholder should, under these
circumstances, be entitled to treat his or her sale of Shares pursuant to the
Offer as a sale for U.S. Federal income tax purposes. Shareholders should
consult their own tax advisors with respect to the application of the "not
essentially equivalent to a dividend" test to their particular situation and
circumstances.

SUBSTANTIALLY DISPROPORTIONATE. A purchase of Shares pursuant to the Offer
will be "substantially disproportionate" as to a shareholder if immediately
after the purchase the percentage of the then-outstanding Shares that the
shareholder actually and constructively owns is less than 80% of the percentage
of the outstanding Shares that the shareholder actually and constructively owned
immediately before its sale of Shares. Shareholders should consult their own tax
advisors with respect to the application of the "substantially disproportionate"
test to their particular situation and circumstances.

THE COMPANY CANNOT PREDICT WHETHER THERE WILL BE SALE OR DISTRIBUTION
TREATMENT. The Company cannot predict whether the Offer will be oversubscribed.
If the Offer is oversubscribed, proration of tenders pursuant to the Offer will
cause the Company to accept fewer Shares than are tendered. Consequently, the
Company can give no assurance that a

<PAGE>
16

sufficient number of any shareholder's Shares will be purchased pursuant to the
Offer to ensure that such purchase will be treated as a sale, rather than as a
distribution, for U.S. Federal income tax purposes under the rules discussed
above.

CORPORATE DIVIDENDS-RECEIVED DEDUCTION. In the case of a corporate
shareholder, if cash received pursuant to the Offer is treated as a dividend,
the resulting dividend income will not qualify for the dividends-received
deduction otherwise generally available to corporate shareholders, except to the
extent from earnings and profits accumulated before the Company was organized
under the laws of Bermuda in 1999. Corporate shareholders may be eligible for
the dividends-received deduction to the extent dividends are paid out of such
earnings and profits. The dividends-received deduction is subject to certain
limitations and may not be available if the corporate shareholder does not
satisfy certain holding period requirements with respect to the Shares or if the
Shares are treated as "debt financed portfolio stock". Corporate shareholders
are urged to consult with their own tax advisors regarding the availability of
the dividends-received deduction and the likelihood that the dividend would be
treated as an "extraordinary dividend" under Section 1059(a) of the Code, and
the tax consequences to them therefrom.

CONSEQUENCES TO SHAREHOLDERS WHO DO NOT SELL SHARES PURSUANT TO THE OFFER.
Shareholders who do not sell Shares pursuant to the Offer will not incur any tax
liability as a result of the consummation of the Offer.

TAXATION OF NON-US. SHAREHOLDERS. As a general matter, non-U.S.
shareholders will not be subject to U.S. Federal income taxation. The rules
governing U.S. Federal income taxation of the receipt by non-U.S. shareholders
of cash pursuant to the Offer, however, are complex and each non-U.S.
shareholder should consult their own tax advisers concerning the application of
U.S. Federal, state, local and foreign income tax laws to that shareholder.

BACKUP FEDERAL INCOME TAX WITHHOLDING. Payments in connection with the
Offer may be subject to "backup withholding" at a 31% rate. Under the backup
withholding rules, a shareholder may be subject to backup withholding at the
rate of 31% with respect to a payment of cash pursuant to the Offer unless the
shareholder (a) is a corporation or comes within certain other exempt categories
(including financial institutions, tax-exempt organizations and non-U.S.
shareholders) and, when required, demonstrates this fact or (b) provides a TIN,
certifies as to no loss of exemption from backup withholding and otherwise
complies with applicable requirements of the backup withholding rules. A U.S.
shareholder that does not provide the Depositary with a correct TIN may also be
subject to penalties imposed by the IRS.

To prevent backup withholding and possible penalties, each shareholder
should complete the substitute IRS Form W-9 included in the Letter of
Transmittal. In order to qualify for an exemption from backup withholding, a
non-U.S. shareholder must submit a properly executed IRS Form W-8BEN to the
Depositary. Any amount paid as backup withholding will be creditable against the
shareholder's U.S. Federal income tax liability.

ALL SHAREHOLDERS ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS REGARDING
THE U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF EXCHANGING SHARES
FOR CASH PURSUANT TO THE OFFER IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES.

6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and traded on
the NYSE under the symbol "WTM". The following table sets forth, for the
quarters indicated, the high and low sales prices per Share on the NYSE as
reported by published financial sources:

<PAGE>
17

<TABLE>

NYSE: HIGH LOW
<S> <C> <C>
1998:
First Quarter........................................ $137.3125 $119.5
Second Quarter....................................... 150.25 135.5625
Third Quarter........................................ 153.25 119
Fourth Quarter....................................... 144.375 117

1999:
First Quarter........................................ 150 118.5
Second Quarter....................................... 150 129.2813
Third Quarter........................................ 143 129.125
Fourth Quarter....................................... 135.4375 115

2000:
First Quarter........................................ 138.375 101.5625
Second Quarter....................................... 165.75 125
Third Quarter (through August 18).................... 168 162.5625

</TABLE>

Source: IDD Information Services

On August 11, 2000, the last full trading day prior to the initial public
announcement with respect to the proposed Offer, the last sales price per Share
as reported on the NYSE was $157 1/16. On August 18, 2000, the last full trading
day prior to the commencement of the Offer, the last sales price per Share as
reported on the NYSE was $163 1/2.

In 1999, the Board declared and paid total cash dividends of $1.60 per
Share. Historically, dividends have been declared and paid on a quarterly basis.
On August 11, 2000, the Board declared a quarterly dividend of $0.40 per Share,
payable September 27, 2000, to shareholders of record as of September 18, 2000
and announced that it intends to change its dividend policy. The new dividend
policy calls for future dividends to be reduced to $1.00 per Share, payable
annually in the first quarter of each year. However, there can be no assurance
as to when or whether the Board will declare additional dividends on Shares. The
record holders as of September 18, 2000 of all Shares properly tendered to the
Company pursuant to the Offer (regardless of whether such Shares are tendered
prior to or subsequent to September 18, 2000, or are purchased pursuant to the
Offer) will be entitled to receive the dividend payable September 27, 2000.

SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.

7. CERTAIN INFORMATION CONCERNING THE COMPANY. GENERAL. White Mountains
Insurance Group, Ltd. was originally formed as a Delaware corporation in 1980
and became a company organized under the laws of Bermuda during 1999. The
Company's principal operations are conducted through its subsidiaries and
affiliates in the businesses of property and casualty insurance and property and
casualty reinsurance. The Company's headquarters is located at Crawford House,
23 Church Street, Hamilton, Bermuda and its principal executive office is
located at 80 South Main Street, Hanover, New Hampshire 03755-2053.

In June 1999 the Company changed its name from "Fund American Enterprises
Holdings, Inc." to "White Mountains Insurance Group, Inc.".

<PAGE>
18

On October 25, 1999, the Company completed a corporate reorganization
whereby it changed its domicile from Delaware to Bermuda (the
"Redomestication"). The Redomestication was primarily undertaken to improve the
Company's ability to compete in international markets by creating a corporate
structure which is more favorable for the formation and growth of
internationally-based insurance and reinsurance operations and which has an
enhanced ability to pursue business combinations with non-United States
entities. In connection with the Redomestication, the Company's name was further
changed to "White Mountains Insurance Group, Ltd." to comply with Bermuda law.

On July 5, 2000, the Company concluded the Dexia Sale, and received cash
proceeds of $620.4 million.

SELECTED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED). Set
forth below is certain selected financial information relating to the Company
that has been excerpted or derived from the pro forma financial statements
contained in the Company's Quarterly Report on Form 10-Q for the period ended
June 30, 2000 (the "Form 10-Q"). More comprehensive financial information is
included in the Form 10-Q and other documents filed by the Company with the SEC.
The financial information that follows is qualified in its entirety by reference
to such reports and other documents and such reports and other documents may be
examined at, and copies may be obtained from, the offices of the SEC in the
manner set forth below.

On July 5, 2000, the Company concluded its previously announced sale of the
following assets to Dexia S.A. ("Dexia") for cash proceeds of $620.4 million
(the "Dexia Sale"): (i) its indirect, wholly-owned subsidiary, White Mountains
Holdings, Inc. (which controlled a substantial amount of its holdings of FSA);
(ii) all its other holdings of FSA common stock; and (iii) various investment
securities with a fair market value of $50.0 million. In addition to the cash
proceeds received on July 5, 2000, White Mountains is entitled to receive
additional proceeds from Dexia over the next eight and one-half years of an
amount currently valued at $50.0 million. The Dexia Sale had a material effect
on the Company's statement of financial condition and provided the Company with
the liquid assets to effect the Offer.

The following unaudited pro forma balance sheet sets forth the pro forma
effects on the historical financial results of the Company of: (i) the Dexia
Sale; and (ii) the Offer assuming 1,500,000 Shares are purchased in the Offer
for $165.00 per Share (the maximum amount contemplated in the Offer), net to the
seller in cash, at an aggregate cost to the Company of approximately $247.7
million, including estimated related fees and expenses of $.2 million.

The consolidated pro forma balance sheet information as of June 30, 2000
assumes that the Dexia Sale and the Offer had occurred as of June 30, 2000. See
"Notes to Pro Forma Financial Information" in this Section 7 below.

The estimated financial effects of the Dexia Sale and the Offer presented
in the pro forma financial information are not necessarily indicative of the
Company's financial position which would have been obtained had the transactions
described above actually occurred on June 30, 2000, nor are they necessarily
indicative of the results of future operations. The pro forma financial
information should be read in conjunction with the Company's Form 10-K for the
year ended December 31, 1999, Form 10-Q (see Note 7 entitled "Subsequent Event")
and Form 8-K dated March 14, 2000, as amended (see Exhibit 99.4 entitled
"Unaudited Pro Forma Financial Information").

<PAGE>
19

WHITE MOUNTAINS INSURANCE GROUP, LTD.
PRO FORMA CONSOLIDATED BALANCE SHEET INFORMATION

(DOLLARS IN MILLIONS, EXCEPT FOR PER SHARE AMOUNTS)

<TABLE>

June 30, 2000

Pro forma
for Dexia
Pro forma for Sale and
Historical Dexia Sale [1] Dexia Sale Offer [2] Offer
------------- ---------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Fixed maturity investments $ 1,106.4 (5.8)b $ 1,100.6 $ 1,100.6
Common equity securities 219.8 (44.2)b 175.6 175.6
Other investments 71.2 71.2 71.2
Short-term investments 202.4 620.4 a 822.8 (247.7) 575.1
------------- ---------------- --------------- -------------- ---------------
Total investments 1,599.8 570.4 2,170.2 (247.7) 1,922.5
Cash 11.5 11.5 11.5
Investments in unconsolidated insurance affiliates 478.8 (359.1)c 119.7 119.7
Reinsurance recoverable 400.3 400.3 400.3
Other assets 239.8 50.0 a 289.8 289.8
Insurance and reinsurance balances receivable 151.3 151.3 151.3
Deferred acquisition costs 46.6 46.6 46.6
Goodwill 26.6 26.6 26.6
Investment income accrued 18.8 18.8 18.8
Net assets of discontinued operations 16.2 16.2 16.2
------------- ---------------- --------------- -------------- ---------------

Total Assets $ 2,989.7 261.3 $ 3,251.0 (247.7) $ 3,003.3
============= ================ =============== ============== ===============

LIABILITIES AND SHAREHOLDER'S EQUITY
Loss and loss adjustment expense reserves $ 1,600.8 $ 1,600.8 $ 1,600.8
Unearned insurance and reinsurance premiums 195.7 195.7 195.7
Short-term debt 10.0 10.0 10.0
Long-term debt 197.7 197.7 197.7
Deferred credits 121.0 (11.5)d 109.5 109.5
Accounts payable and other liabilities 223.8 26.9 e 250.7 250.7
------------- ---------------- --------------- -------------- ---------------

Total Liabilities 2,349.0 15.4 2,364.4 2,364.4
------------- ---------------- --------------- -------------- ---------------

Common shares at par 5.9 5.9 (1.5) 4.4
Common paid-in capital 66.2 66.2 (16.9) 49.3
Retained earnings 517.0 306.9 g 823.9 (229.3) 594.6
Accumulated other comprehensive net income 51.6 (61.0)f (9.4) (9.4)
------------- ---------------- --------------- -------------- ---------------

Total Shareholders' Equity 640.7 245.9 886.6 (247.7) 638.9
------------- ---------------- --------------- -------------- ---------------

Total Liabilities and Shareholders' Equity $ 2,989.7 261.3 $ 3,251.0 (247.7) $ 3,003.3
============= ================ =============== ============== ===============

ENDING COMMON AND EQUIVALENT SHARES (000'S) 5,961 5,961 (1,500) 4,461

TANGIBLE BOOK VALUE PER SHARE [3] $ 123.21 40.41 $ 163.62 (.51) $ 163.11
============= ================ =============== ============== ===============

BOOK VALUE PER SHARE $ 108.86 41.22 $ 150.08 (5.06) $ 145.02
============= ================ =============== ============== ===============

</TABLE>

<PAGE>
20

NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION (UNAUDITED)

The consolidated pro forma balance sheet information as of June 30, 2000
assumes that the Dexia Sale and the Offer occurred as of June 30, 2000.
Significant assumptions used in deriving the pro forma financial information are
as follows:

1. Represents adjustments recorded in connection with the Dexia Sale,
which closed on July 5, 2000. Amounts presented on the Pro Forma
Consolidated Balance Sheet as of June 30, 2000 related to the Dexia
Sale represent actual amounts recorded by the Company on July 5, 2000.

a. Represents amounts received in connection with the Dexia Sale.
Upon the close of the Dexia Sale, the Company received $620.4
million in cash in exchange for: (i) its wholly owned subsidiary,
White Mountains Holdings, Inc., which held a portion of the
Company's interest in the capital stock of FSA at closing; (ii)
its other holdings of the capital stock of FSA; and (iii) $50.0
million of investment securities (the "Investment Portfolio").
Additionally, over the next eight-and- one-half years, the
Company will be entitled to receive at certain specified
settlement dates a pro-rata portion of the Investment Portfolio
on the applicable settlement date (the "Dexia Receivable"). The
Dexia Receivable was valued at $50.0 million at the close of the
Dexia Sale.

b. Represents the Company's carrying value of the Investment
Portfolio sold pursuant to the Dexia Sale.

c. Represents the Company's carrying value of its investments in FSA
capital stock sold pursuant to the Dexia Sale.

d. Represents the unamortized deferred credit balance associated
with the Company's investment in FSA which was sold and/or
recognized in connection with the Dexia Sale.

e. Represents the accrual of incremental taxes associated with the
Dexia Sale.

f. Represents the reclassification of the Company's cumulative
unrealized gains on its investment in FSA capital stock to
realized gains as a result of the Dexia Sale.

g. Represents the after tax realized gain recorded as a result of
the Dexia Sale.

2. Represents adjustments recorded in connection with the Offer which
assumes that: (i) the $247.7 million of funds used by the Company to
repurchase 1,500,000 Shares pursuant to the Offer and pay related fees
and expenses are paid with a portion of the proceeds from the Dexia
Sale, and (ii) Shares repurchased by the Company pursuant to the Offer
are retired.

3. Represents book value per Share plus unamortized deferred credits per
Share less unamortized goodwill per Share.

THE SHARES ARE REGISTERED UNDER THE EXCHANGE ACT. The Company is subject to
the informational filing requirements of the Exchange Act and, in accordance
therewith, is required to file periodic reports, proxy statements and other
information with the SEC relating to its business, financial condition and other
matters. Such reports, proxy statements and other information can be inspected
and copied at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the SEC's regional
offices located at Seven World Trade Center, Suite 1300, New York, New York
10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Information regarding the public reference facilities may be obtained from the
SEC by telephoning 1-800-SEC-0330. The

<PAGE>
21

Company's filings are also available to the public on the SEC Internet site
(http://www.sec.gov). Copies of such materials may also be obtained by mail from
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549 upon payment of the SEC's customary fees. Certain reports and other
information concerning the Company may also be inspected at the offices of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.

8. SOURCE AND AMOUNT OF FUNDS. If 1,500,000 Shares are purchased by the
Company pursuant to the Offer at $165.00 per Share, net to the seller in cash,
the aggregate cost to the Company, including all related fees and expenses of
the Offer, will be approximately $247.7 million. The Company intends to fund the
purchase of Shares pursuant to the Offer through use of the proceeds from the
Dexia Sale. See "Section 7. Certain Information Concerning the Company". No
alternative means of financing the Offer has been contemplated.

9. PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER. The tender is
primarily being offered to utilize a portion of the Company's excess capital
and to provide shareholders with added liquidity. The Company recognizes that
its Shares are not widely held, not regularly followed by analysts and is
thinly traded. Based on existing circumstances, the Company believes that it
currently has adequate capital to fund the maximum amount contemplated by the
Offer and to meet its ongoing needs. Accordingly, the Board has determined
that it is in the interest of the Company's shareholders to create a selling
opportunity for shareholders through a repurchase by the Company of up to
1,500,000 Shares. The Offer will also afford to shareholders the opportunity
to dispose of Shares without the usual transaction costs associated with any
market sale.

The Offer will further allow qualifying Odd Lot Holders whose Shares are
purchased pursuant to the Offer to avoid the payment of brokerage commissions
and any applicable odd-lot discount payable on a sale of Shares in a transaction
effected on a securities exchange. Shareholders whose Shares are not purchased
in the Offer will obtain an increase in their ownership interest in the Company
and thus in the Company's future earnings and assets following the retirement of
Shares purchased pursuant to the Offer. To the extent the purchase of Shares in
the Offer results in a reduction in the number of shareholders of record, the
costs to the Company for services to shareholders will be reduced.

NEITHER THE COMPANY NOR THE BOARD MAKES ANY RECOMMENDATION AS TO WHETHER ANY
SHAREHOLDER SHOULD TENDER ANY OF OR ALL SUCH SHAREHOLDER'S SHARES PURSUANT TO
THE OFFER. EACH SHAREHOLDER MUST MAKE SUCH SHAREHOLDER'S OWN DECISION WHETHER TO
TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.

At present, the Company's Board has not authorized any future
repurchases of Shares aside from the Offer although, subject to any
applicable legal requirements, it may do so at any time. Future purchases, if
any, may be on the same terms or on terms which are more or less favorable to
shareholders than the terms of the Offer. Any possible future repurchases of
Shares by the Company would depend on many factors, including among others,
the market price of the Shares, the results of the Offer, the Company's
business and financial position (including its liquidity and alternative uses
for the Company's resources) and general economic and market conditions. Rule
13e-4 under the Exchange Act generally prohibits the Company and its
affiliates from purchasing any Shares, other than pursuant to the Offer, for
at least ten business days after the Expiration Date.

Shares acquired by the Company pursuant to the Offer will be retired.
Certain pro forma financial effects of the purchase of 1,500,000 Shares pursuant
to the Offer are described in "Section 7. Certain Information Concerning the
Company".

The purchase of 1,500,000 Shares pursuant to the Offer will not cause the
Shares to be delisted by the NYSE or deregistered under the Exchange Act. See
clause (g) of "Section 12. Certain Conditions to the Offer".

<PAGE>
22

10. AGREEMENTS CONCERNING THE SHARES. Based upon the Company's records and
upon information provided to the Company by its directors and executive
officers, neither the Company nor any of its subsidiaries nor, to the best of
the Company's knowledge, any of the directors or executive officers of the
Company, nor any associates of any of the foregoing, has effected any
transactions in the Shares during the 60 days prior to the date hereof, except
as set forth in Schedule II of this Offer to Purchase.

Except as set forth in this Offer to Purchase, neither the Company nor its
subsidiaries nor, to the best of the Company's knowledge, any of its directors
or executive officers, is a party to any contract, arrangement, agreement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any such securities, joint
ventures, loan or option arrangements, puts or calls, guarantees of loans,
guarantees against loss or the giving or withholding of proxies, consents or
authorizations).

11. FEES AND EXPENSES. Except as set forth below, the Company will not pay
any fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer.

Equiserve Trust Company ("Equiserve") has been retained by the Company as
Depositary and Information Agent in connection with the Offer. The Information
Agent will assist shareholders who request assistance in connection with the
Offer and may request brokers, dealers and other nominee shareholders to forward
material relating to the Offer to beneficial owners for which they act as
nominees. Equiserve Trust Company will receive reasonable and customary
compensation for its services in connection with the Offer and will be
reimbursed for reasonable expenses, including the reasonable fees and expenses
of counsel. The Company has agreed to indemnify Equiserve Trust Company against
certain liabilities which could occur in connection with the Offer, including
certain liabilities under the Federal securities laws. Equiserve Trust Company
has not been retained and is not authorized to make solicitations or
recommendations in connection with the Offer in its role as Depositary or
Information Agent.

The Company will not pay any fees or commissions to any broker, dealer,
commercial bank, trust company or other person for soliciting Shares pursuant to
the Offer. The Company will, however, on request, reimburse such persons for
customary handling and mailing expenses incurred in forwarding materials in
respect of the Offer to the beneficial owners for which they act as nominees. No
broker, dealer, commercial bank or trust company has been authorized to act as
an agent for the Company for the purpose of the Offer. The Company will not pay
(or

<PAGE>
23

cause to be paid) any share transfer taxes on its purchase of Shares pursuant to
the Offer, except as otherwise provided in Instruction 6 of the Letter of
Transmittal.

12. CERTAIN CONDITIONS TO THE OFFER. Notwithstanding any other provision of
the Offer, and in addition to (and not in limitation of) the Company's right to
extend, amend or terminate the Offer as set forth in Section 1, the Company
shall not be required to accept for payment or pay for any Shares tendered, or
may postpone the acceptance for payment of or the payment for Shares tendered,
subject to Rule 13e-4(f) promulgated under the Exchange Act, if, before
acceptance for payment of or payment for any such Shares, any of the following
shall have occurred (or shall have been determined by the Company to have
occurred):

(a) there shall have been threatened, instituted or pending any action
or proceeding by any government or governmental, regulatory or
administrative agency or authority or tribunal or any other person,
domestic or foreign, before any court or governmental, regulatory or
administrative authority, agency or tribunal, domestic or foreign, that
(i) challenges the making of the Offer or the acquisition of Shares
pursuant to the Offer, or otherwise, directly or indirectly, relates in
any manner to the Offer; or (ii) in the reasonable good faith judgment
of the Company, could materially affect the business, condition
(financial or otherwise), income, assets, operations or prospects of the
Company and its subsidiaries, or otherwise materially impair in any way
the contemplated future conduct of the business of the Company or any of
its subsidiaries or materially impair the Offer's contemplated benefits
to the Company;

(b) there shall have been any action threatened, pending or taken, or
approval withheld, or any statute, rule, regulation, judgment, order or
injunction threatened, proposed, sought, promulgated, enacted, entered,
amended, enforced or deemed to be applicable to the Offer or the Company
or any of its subsidiaries, by any court or any government or
governmental, regulatory or administrative authority, agency or
tribunal, domestic or foreign, that, in the Company's reasonable good
faith judgment, would or might directly or indirectly (i) make the
acceptance for payment of, or payment for, some or all the Shares
illegal or otherwise restrict or prohibit consummation of the Offer;
(ii) delay or restrict the ability of the Company, or render the Company
unable, to accept for payment, or pay for, some or all the Shares; (iii)
materially impair the contemplated benefits of the Offer to the Company;
or (iv) materially affect the business, condition (financial or
otherwise), income, assets, operations or prospects of the Company and
its subsidiaries or otherwise materially impair in any way the
contemplated future conduct of the business of the Company or any of its
subsidiaries;

(c) there shall have occurred (i) any general suspension of trading in, or
limitation on prices for, securities on any United States national
securities exchange or in the over-the-counter market (excluding any
coordinated trading halt triggered solely as a result of a specified
decrease in a market index); (ii) the declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States or
Bermuda; (iii) the commencement of a war, armed hostilities or other
international or national crisis directly or indirectly involving the
United States or Bermuda; (iv) any limitation (whether or not mandatory) by
any governmental, regulatory or administrative agency or authority on, or
any event that, in the reasonable good faith judgment of the Company, might
affect, the extension of credit by banks or other lending institutions in
the United States or Bermuda; (v) any significant decrease in the market
price of the Shares; (vi) any change in the general political, market,
economic or financial conditions in the United States or abroad that could,
in the reasonable good faith judgment of the Company, have a material
effect on the business, condition (financial or otherwise), income,
assets, operations or prospects of the Company and its subsidiaries, taken
as a whole, or the trading in the Shares; (vii) in the case of any of the
foregoing existing at the time of the commencement of the Offer, in the
reasonable good faith judgment of the

<PAGE>
24

Company, a material escalation, acceleration or worsening thereof; or
(viii) any decline in either the Dow Jones Industrial Average or the
Standard and Poor's Index of 500 Industrial Companies by an amount in
excess of 10% measured from the close of business on August 18, 2000;

(d) after August 18, 2000, any tender or exchange offer with respect to the
Shares (other than the Offer), or any merger, acquisition, business
combination or other similar transaction with or involving the Company or
any subsidiary, shall have been proposed, announced or made by any person
or entity;

(e) after August 18, 2000, any actual or potential change or development
shall occur or be threatened or be anticipated by the Company with
respect to the business, condition (financial or otherwise), income,
assets, operations or prospects of the Company and its subsidiaries
that, in the reasonable judgment of the Company, is or may be material
to the Company or affects the anticipated benefits to the Company of
acquiring Shares pursuant to the Offer;

(f) (i) any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act) shall have acquired, or proposed to acquire,
beneficial ownership of more than 5% of the outstanding Shares (other than
a person, entity or group which had publicly disclosed such ownership in a
Schedule 13D or 13G (or an amendment thereto) on file with the SEC prior to
August 18, 2000), (ii) any new group shall have been formed that
beneficially owns more than 5% of the outstanding Shares; or (iii) any
person, entity or group shall have filed a Notification and Report Form
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or made a
public announcement reflecting an intent to acquire the Company or any of
its subsidiaries or any of their respective assets or securities; or

(g) there shall be a reasonable likelihood that the purchase of Shares
pursuant to the Offer will cause either (i) the Shares to be held of record
by less than 300 persons; or (ii) the Shares not continuing to be eligible
to be listed on the NYSE;

that, in the sole and reasonable judgment of the Company, in any such case and
regardless of the circumstances (including any action or inaction by the
Company) giving rise to such condition, makes it inadvisable to proceed with the
Offer or with such acceptance for payment or payment.

The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances (including any action or
inaction by the Company) giving rise to any such condition and, except as set
forth in the next sentence, any such condition may be waived by the Company, in
whole or in part, at any time and from time to time in its sole and reasonable
discretion. In certain cases, waiver of a condition to the Offer would require
an extension of the Offer. See "Section 1. Terms of the Offer; Expiration Date".

The Company's failure 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 circumstances shall not be deemed a waiver
with respect to any other facts or circumstances; and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
Any determination by the Company concerning the events described above and any
related judgment by the Company regarding the inadvisability of proceeding with
the acceptance for payment or payment for any tendered Shares will be final and
binding on all parties.

13. CERTAIN LEGAL MATTERS. The Company is not aware of any license or
regulatory permit that appears to be material to its business that might be
adversely affected by its acquisition of Shares as contemplated in the Offer or
of any approval or other action by any government or governmental,
administrative or regulatory authority or agency, domestic or

<PAGE>
25

foreign, that would be required for the Company's acquisition or ownership of
Shares pursuant to the Offer. Should any such approval or other action be
required, the Company currently contemplates that it will seek such approval or
other action. The Company cannot predict whether it may determine that it is
required to delay the acceptance for payment of Shares tendered pursuant to the
Offer pending the outcome of any such matter. There can be no assurance that any
such approval or other action, if needed, would be obtained or would be obtained
without substantial conditions or that the failure to obtain any such approval
or other action might not result in adverse consequences to the Company's
business. The Company intends to make all required filings under the Exchange
Act.

As of the date of this Offer to Purchase, there are no material legal
proceedings relating to the Offer.

The Company's obligation under the Offer to accept Shares for payment is
subject to certain conditions. See "Section 12. Certain Conditions to the
Offer".

14. MISCELLANEOUS. The Offer is being made to all holders of Shares. The
Company is not aware of any jurisdiction where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Company becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, the Company
will make a good faith effort to comply with any such state statute or seek to
have such statute declared inapplicable to the Offer. If, after such good faith
effort, the Company cannot comply with any such state statute, the Offer will
not be made to (nor will tenders be accepted from or on behalf of) the holders
of 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 will be deemed to be made on behalf of the Company by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY NOT CONTAINED IN THIS OFFER TO PURCHASE
OR IN THE RELATED LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

The Company has filed with the SEC a Tender Offer Statement on Schedule TO,
together with all exhibits thereto, pursuant to Regulation M-A under the
Exchange Act, furnishing certain additional information with respect to the
Offer. Such Schedule and any amendments thereto, including exhibits, may be
inspected and copies may be obtained from the offices of the SEC in the manner
set forth in "Section 7. Certain Information Concerning the Company" (except
that they will not be available at the regional offices of the SEC).

White Mountains Insurance Group, Ltd.

August 21, 2000

<PAGE>
26

THE DEPOSITARY AND THE INFORMATION AGENT FOR THE OFFER IS:

EQUISERVE TRUST COMPANY

FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)

(781) 575-4826
or
(781) 575-4827

FOR CONFIRMATION CALL:
(781) 575-4816
<TABLE>

<S> <C> <C>
BY MAIL: BY FEDERAL EXPRESS OR OTHER COURIER: BY HAND:
Equiserve Equiserve Equiserve
P.O. Box 842010 40 Campanelli Drive c/o Securities Transfer and
Boston, MA 0284-2010 Braintree, MA 02184 Reporting Services Inc.
Attn: White Mountains Attn: Corporate Actions
100 William Street, Galleria
New York, NY 10038

FOR INFORMATION:
1-888-756-1854
</TABLE>

Any questions or requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Information Agent. Shareholders may also contact their
broker, dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.

<PAGE>
27

SCHEDULE I

INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF THE COMPANY

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY. Set forth in the table
below are the names, titles, business addresses, telephone numbers, and
beneficial ownership of Shares information of the directors and executive
officers of the Company and certain information regarding the company itself.
Each person identified below, except for the Company and Raymond Barrette
(Canadian citizen), is a United States citizen.

<TABLE>

AGGREGATE NUMBER OF
BENEFICIALLY OWNED
NAME TITLE BUSINESS ADDRESS TELEPHONE NUMBER SHARES/ PERCENTAGE
OF SHARES OWNED
<S> <C> <C> <C> <C>
Raymond Barrette Director, President 80 South Main Street 603-643-1567 28,392/.48%
Hanover, New Hampshire 03755-2053

John Byrne Director, CEO 80 South Main Street 603-643-1567 1,189,030/20.22%
Hanover, New Hampshire 03755-2053

Patrick Byrne Director 700 Bitner Road 435-647-5655 120,395/2.05%
Park City, Utah 84098

Reid T. Campbell Vice President 80 South Main Street 603-643-1567 4,002/.07%
Hanover, New Hampshire 03755

Howard L. Clark Director Lehman Brothers 212-526-0100 1,000/.02%
3 World Financial Center - 16th Floor
New York, New York 10285-1900

Robert P. Cochran Director Financial Security Assurance 212-826-0100 0/.00%
350 Park Avenue
New York, New York 10022

Steven E. Fass Director Folksamerica Reinsurance 201-312-2500 1,446/.02%
One Liberty Plaza
New York, New York 10006

George J. Gillespie, III Director Cravath, Swaine & Moore 212-474-1000 1,000/.02%
825 8th Avenue, 43rd Floor
New York, New York 10019

John D. Gillespie Director Prospector Partners, LLC 860-560-6200 1,676/.03%
37 Trumbull Street
Hartford, CT 06103-2404

K. Thomas Kemp Director 80 South Main Street 603-643-1567 81,690/1.39%
Hanover, New Hampshire 03755

Gordon S. Macklin Director 8212 Burning Tree Road 301-469-9392 15,000/.26%
Bethesda, Maryland 20817

Frank A. Olson Director The Hertz Corporation 201-307-2000 3,000/.05%
One Maynard Drive, Suite 100
Park Ridge, New Jersey 07656

Michael S. Paquette Senior Vice President 80 South Main Street 603-643-1567 12,371/.21%
Hanover, New Hampshire 03755

</TABLE>

<PAGE>
28

<TABLE>

AGGREGATE NUMBER OF
BENEFICIALLY OWNED
NAME TITLE BUSINESS ADDRESS TELEPHONE NUMBER SHARES/ PERCENTAGE
OF SHARES OWNED
<S> <C> <C> <C> <C>
David G. Staples Vice President 80 South Main Street 603-643-1567 4,283/.07%
Hanover, New Hampshire 03755

Arthur Zankel Director High Rise Partners, LP 212-421-7548 11,600/.20%
535 Madison Avenue
New York, New York 10022

</TABLE>

<PAGE>
29

SCHEDULE II

TRANSACTIONS CONCERNING
THE COMPANY'S SHARES - MOST RECENT 60 DAYS

The following table sets forth transactions in the Company's Shares during
the past 60 days by the Company, its affiliates, associates and majority-owned
subsidiaries, their respective directors and executive officers and any pension,
profit-sharing or similar plan of the Company. All transactions listed below
involved open-market purchases or sales of the Company's Shares.

<TABLE>

NUMBER OF
SHARES OF THE PLACE AND
TRANSACTION COMPANY'S PRICE PER MANNER OF
NAME OF PARTY DATE SHARES SHARE ($) TRANSACTION
------------- ------ ------ --------- -----------
<S> <C> <C> <C> <C>
White Mountains 7/11/00 1,830 $ 164.00 *
Insurance Group, Ltd.
White Mountains 7/24/00 2,879 $ 159.875 *
Insurance Group, Ltd.
Reid T. Campbell 7/11/00 500 $ 165.00 open-market sale

</TABLE>

*Purchases effected pursuant to a prearranged program with the Allianz
Asset Accumulation Plan (the "AAAP") whereby the Company has agreed to purchase
Shares offered to it from time to time by the AAAP trustee. The purchase price
of Shares purchased pursuant to such program is equal to the closing price of
Shares, as reported on the NYSE Composite Tape, on the day the transaction is
executed.