SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(PURSUANT TO SECTION 13(e) OF THE
SECURITIES EXCHANGE ACT OF 1934)
SCOR U.S. Corporation
(Name of the Issuer)
SCOR Merger Sub Corporation
SCOR S.A.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.30 PER SHARE
(Title of Class of Securities)
78 4027 10 4
(CUSIP Number of Class of Securities)
John T. Andrews, Jr.
Vice President
General Counsel and Secretary
SCOR U.S. Corporation
Two World Trade Center
New York, New York 10048-0178
(212) 390-5200
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of Person(s) Filing Statement)
Copy to:
Allan M. Chapin Esq.
Sullivan & Cromwell
250 Park Avenue
New York, New York 10177
(212) 558-4000
This statement is filed in connection with (check the appropriate box):
[ ](a) The filing of solicitation materials or an information statement
subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c)
under the Securities Exchange Act of 1934.
[ ](b) The filing of a registration statement under the Securities
Exchange Act of 1933.
[X](c) A tender offer.
[ ](d) None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies. [ ]
Calculation of Filing Fee
Transaction Valuation*: Amount of Filing Fee**:
$70,229,727 $14,046
<PAGE>
* For purposes of calculating the filing fee only. The filing fee was
calculated, pursuant to Section 13(e)(3) of the Securities Exchange Act
of 1934, as amended, and Rule 0-11 thereunder, on the basis of 4,605,228
Common Stock (the number of Common Stock outstanding on the date hereof,
including vested options to acquire Common Stock, but excluding unvested
options to acquire Common Stock and excluding 14,547,756 Common Stock
owned by SCOR S.A., multiplied by the proposed acquisition price U.S.
$15.25 per share.
** 1/50 of 1% of Transaction Valuation.
[x] Check box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
Amount Previously Paid: $14,046
--------------------------
Form or Registration No.: Schedule 14D-1
------------------------
Filing Party: SCOR S.A.
SCOR Merger Sub Corporation
------------------------------------
Date Filed: November 9, 1995
--------------------------------------
<PAGE>
Cross-Reference Sheet
Item in Location of Item(s)
Schedule 13E-3 in Schedule 14D-1
-------------- -------------------
1(a) 1(a)
(b) 1(b)
(c) 1(c)
(d)-(f) *
2(a)-(g) 2(a)-(g)
3(a)(1) 3(a)
3(a)(2) 3(b)
3(b) *
4(a) *
(b) **
5(a)-(g) 5
6(a) 4(a)
(b) *
(c) 4(b)
(d) **
7(a) 5
(b)-(d) *
8(a)-(e) *
(f) **
9 *
10(a)-(b) 6(a)-(b)
11 7
12 *
13(a) *
(b)-(c)
14(a) *
(b) **
- --------------------
* The Item is not required by Schedule 14D-1 of the Exchange
Act.
** The Item is not applicable or the answer thereto is in the
negative.
Page 3 of 12 pages
<PAGE>
Cross-Reference Sheet
Item in Location of Item(s)
Schedule 13E-3 in Schedule 14D-1
-------------- -------------------
15(a) **
(b) 8
16 10(f)
17(a) **
(b) *
(c) *
(d) 11(a)
(e) *
(f) **
____________________________
* The Item is not required by Schedule 14D-1 of the Exchange Act.
** The Item is not applicable or the answer thereto is in the negative.
Page 4 of 12 pages
<PAGE>
This Rule 13E-3 Transaction Statement (the "Schedule 13E-3") is being
filed by SCOR Merger Sub Corporation, a newly organized Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of SCOR S.A., a societe
anonyme organized under the laws of The French Republic ("Parent"), and by
Parent, pursuant to Section 13(e) of the Securities and Exchange Act of 1934,
as amended, and Rule 13e-3 thereunder in connection with the tender offer by
the Purchaser for all of the outstanding shares of Common Stock, par value
$0.30 per share (the "Shares"), of SCOR U.S. Corporation, a Delaware
corporation (the "Company") not currently directly or indirectly owned by
Parent, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase, dated
November 9, 1995 (the "Offer to Purchase") and in the related Letter of
Transmittal (the "Letter of Transmittal", together with the Offer to
Purchase, the "Offer"). This Schedule 13E-3 is intended to satisfy the
reporting requirements of section 13(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Copies of the Offer to Purchase and
the Letter of Transmittal are attached as exhibits to, and incorporated by
reference in, the Tender Offer Statement on Schedule 14D-1 and Schedule
13D/A (Amendment No.4) under the Exchange Act (the "Schedule 14D-1"). The
Schedule 14D-1 was filed by the Purchaser and Parent with the Securities and
Exchange Commission contemporaneously with this Schedule 13E-3 on November 9,
1995. The preceding cross-reference sheet, prepared pursuant to General
Instruction F to Schedule 13E-3 of the Exchange Act shows the location in
the Schedule 14D-1 of the information required to be included in response
to the items of Schedule 13E-3 of the Exchange Act. The information contained
in the Schedule 14D-1, including all exhibits thereto, is expressly and
hereby incorporated herein by reference and the responses to each item are
qualified in their entirety by reference to the information contained in the
Schedule 14D-1 and the exhibits thereto. All cross references in this Schedule
13E-3, other than cross references to the Schedule 14D-1, are to the Offer to
Purchase.
Item 1. Issuer and Class of Security Subject to the Transaction.
(a) The answer to item 1(a) of the Schedule 14D-1 is incorporated herein
by reference.
(b) The information set forth in the "INTRODUCTION" of the Offer to
Purchase is incorporated herein by reference.
(c) The answer to item 1(c) of the Schedule 14D-1 is incorporated
herein by reference.
(d) The information set forth in "THE OFFER - 6. Price Range of Shares;
Dividends" and in "THE OFFER - 14. Dividends and Distributions" of the Offer
to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in "THE OFFER - 9. Certain Information
Concerning Parent and the Purchaser" of the Offer to Purchase is incorporated
herein by reference.
Item 2. Identity and Background.
The answer to item 2 of the Schedule 14D-1 is incorporated herein by
reference.
Page 5 of 12 pages
<PAGE>
Item 3. Past Contacts, Transactions or Negotiations.
(a)-(b) The information set forth in the "INTRODUCTION", in "SPECIAL
FACTORS - 5. Background of the Offer and the Merger", in "THE OFFER - 9.
Certain Information Concerning Parent and the Purchaser", in "THE OFFER -
10. Contacts with the Company" and in "THE OFFER - 11. The Merger Agreement;
Appraisal Rights; Effect on the Debentures" of the Offer to Purchase is
incorporated herein by reference.
Item 4. Terms of the Transaction.
(a) The information set forth in the "INTRODUCTION", in "THE OFFER - 1.
Terms of the Offer and the Merger", in "THE OFFER - 2. Acceptance for Payment
and Payment for Shares", in "THE OFFER - 11. The Merger Agreement; Appraisal
Rights; Effect on the Debentures" and in "THE OFFER - 13. Certain Conditions
of the Offer" of the Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
Item 5. Plans or Proposals of the Issuer or Affiliate.
(a)-(f) The answer to item 5 of the Schedule 14D-1 is incorporated
herein by reference.
(g) The information set forth in "THE OFFER - 7. Effect of the Offer on
Market for the Shares, Stock Exchange Listing, and Exchange Act Registration"
of the Offer to Purchase is incorporated herein by reference.
Item 6. Source and Amount of Funds or Other Consideration.
(a) The answer to item 4(a) of the Schedule 14D-1 is incorporated
herein by reference.
(b) The information set forth in "THE OFFER - 12. Source and Amount of
Funds" and in "THE OFFER - 16. Fees and Expenses" of the Offer to Purchase is
incorporated herein by reference.
(c) Not applicable.
(d) Not applicable.
Item 7. Purpose(s), Alternatives, Reasons and Effects.
(a) The answer to item 5 of the Schedule 14D-1 is incorporated herein
by reference.
(b) The information set forth in "SPECIAL FACTORS - 5. Background of
the Offer and the Merger" of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in "SPECIAL FACTORS - 2. Reasons for the
Offer and the Merger" of the Offer to Purchase is incorporated herein by
reference.
Page 6 of 12 pages
<PAGE>
(d) The information set forth in the "INTRODUCTION", in "SPECIAL
FACTORS - 2. Reasons for the Offer and the Merger", in "SPECIAL FACTORS - 5.
Background of the Offer and the Merger", in "THE OFFER - 5. Certain Federal
Income Tax Consequences of the Offer and the Merger", in "THE OFFER -
10. Contacts with the Company" and in "THE OFFER - 11. The Merger Agreement;
Appraisal Rights; Effect on the Debentures" of the Offer to Purchase is
incorporated herein by reference.
Item 8. Fairness of the Transaction.
(a)-(b) The information set forth in "INTRODUCTION", "SPECIAL
FACTORS - 2. Reasons for the Offer and the Merger", "SPECIAL FACTORS -
3. Fairness of the Offer and the Merger", in "SPECIAL FACTORS - 5. Background
of the Offer and the Merger" and "SPECIAL FACTORS - 6. Recommendation of the
Company's Board of Directors and the Special Committee" of the Offer to
Purchase is incorporated herein by reference.
(c)-(e) The information set forth in "INTRODUCTION", "SPECIAL
FACTORS - 2. Reasons for the Offer and the Merger", "SPECIAL FACTORS -
3. Fairness of the Offer and the Merger", in "SPECIAL FACTORS - 5. Background
of the Offer and the Merger" and "SPECIAL FACTORS - 6. Recommendation of the
Company's Board of Directors and the Special Committee", in "THE OFFER -
1. Terms of the Offer" and in "THE OFFER - 13. Certain Conditions of the
Offer" of the Offer to Purchase is incorporated herein by reference.
(f) Not applicable.
Item 9. Reports, Opinions, Appraisals and Certain Negotiations.
(a)-(b) The information set forth in "INTRODUCTION", "SPECIAL
FACTORS - 2. Reasons for the Offer and the Merger", in "SPECIAL FACTORS -
3. Fairness of the Offer and the Merger", in "SPECIAL FACTORS - 5. Background
of the Offer and the Merger", in "THE OFFER - 11. The Merger Agreement;
Appraisal Rights; Effect on the Debentures" and in "THE OFFER - 16. Fees
and Expenses" of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in "INTRODUCTION", "SPECIAL FACTORS -
2. Reasons for the Offer and the Merger" and in "SPECIAL FACTORS -
5. Background of the Offer and the Merger" of the Offer to Purchase is
incorporated herein by reference.
Item 10. Interest in Securities of the Issuer.
(a)-(b) The answer to item 6 of the Schedule 14D-1 is incorporated
herein by reference.
Item 11. Contracts, Arrangements or Understandings With Respect to the
Issuer's Securities.
The answer to item 7 of the Schedule 14D-1 is incorporated herein
by reference.
Item 12. Present Intention and Recommendation of Certain Persons with Regard
to the Transaction.
(a) The information set forth in "THE OFFER - 9. Certain Information
Concerning Parent and the Purchaser" and in "THE OFFER - 11. The Merger
Agreement; Appraisal Rights; Effect on the Debentures" of the Offer to
Purchase is incorporated herein by reference.
Page 7 of 12 pages
<PAGE>
(b) The information set forth in "SPECIAL FACTORS" - 3. Fairness of the
Offer and the Merger", "SPECIAL FACTORS - 5. Background of the Offer and the
Merger" and "SPECIAL FACTORS - 6. Recommendation of the Company's Board of
Directors and the Special Committee" of the Offer to Purchase is incorporated
herein by reference.
Item 13. Other Provisions of the Transaction.
(a) The information set forth in "THE OFFER - 11. The Merger Agreement;
Appraisal Rights; Effect on the Debentures" in the Offer to Purchase and in
"SCHEDULE II - Appraisal Rights of Dissenting Stockholders under Delaware
Law" of the Offer to Purchase and the information set forth in Exhibit 17(e)
hereto is incorporated herein by reference.
(b)-(c) Not applicable.
Item 14. Financial Information.
(a) The information set forth in "THE OFFER - 8. Certain Information
Concerning the Company" of the Offer to Purchase and the information set
forth in Appendix A and Appendix B to the Offer to Purchase is incorporated
herein by reference.
(b) Not applicable.
Item 15. Persons and Assets Employed, Retained or Utilized.
(a) Not applicable.
(b) The answer to item 8 of the Schedule 14D-1 is incorporated herein
by reference.
Item 16. Additional Information.
The answer to item 10(f) of the Schedule 14D-1 is incorporated herein by
reference.
Item 17. Material to be Filed as Exhibits.
(a) Not applicable.
(b)(1) Goldman Sachs Presentation Book dated September 21, 1995.
(b)(2) Goldman Sachs Update to Presentation Book, prepared on October 24,
1995.
(b)(3) Opinion of Dillon, Read & Co. Inc., dated November 2, 1995.
(c)(1) Agreement and Plan of Merger (the "Merger Agreement"), dated as
of November 2, 1995, among Parent, the Purchaser and the Company.
(c)(2) Letter Agreement to amend the Merger Agreement, dated as
of November 8, 1995.
Page 8 of 12 pages
<PAGE>
(c)(3) SCOR Reinsurance Company 1994 Voting Trust Agreement,
dated as of June 6, 1994, among SCOR Reinsurance Company,
the Company and the Voting Trustees designated therein.
(c)(4) Net Aggregate Excess of Loss Retrocessional Agreement,
dated January 1, 1994, among Parent and SCOR Reinsurance Company.
(c)(5) Interests and Liabilities Agreement to the Catastrophe Excess
of Loss Reinsurance Contract, among SCOR Reinsurance Company and
SCOR S.A., effective date January 1, 1994.
(c)(6) Interests and Liabilities Agreement to the Catastrophe
Excess of Loss Reinsurance Contract,among SCOR Reinsurance
Company and SCOR Reassurance, effective date January 1, 1995.
(c)(7) Credit Agreement U.S. $20 million, dated January 24, 1995
between Parent and the Company.
(c)(8) Loan Agreement U.S. $20 million, dated October 2, 1995
between Parent and the Company.
(d)(1) Offer to Purchase.
(d)(2) Letter of Transmittal (including Guidelines for Certification
of Taxpayer Identification Number on Form W-9).
(d)(3) Letter dated November 9, 1995, to brokers, dealers, commercial
banks, trust companies and nominees.
(d)(4) Letter to be used by brokers, dealers, commercial banks, trust
companies and nominees to their clients.
(d)(5) Press Release issued by Parent, dated September 26, 1995.
(d)(6) Press Release issued by Parent and the Purchaser, dated
November 3, 1995.
(d)(7) Form of newspaper advertisement, dated November 9, 1995.
(d)(8) Notice of Guaranteed Delivery.
(e)(1) Certain provisions of the Delaware General Corporation Law
pertaining to rights of dissenting stockholders.
(f) Not applicable.
(g)(1) Complaint, Howard Sande Feldman, Custodian for Jan Sharona
-----------------------------------------------
Feldman, UGMA v. Jacques P. Blandeau [sic], et al, C.A. No. 14577.
------------- --------------------------------
(g)(2) Complaint, Crandon Capital Partners v. Jacques P. Blondeau, et al,
------------------------ --------------------------
C.A. No. 14579.
(g)(3) Complaint, Daniel Bruno v. Jacques P. Blandeau [sic], et al,
------------ --------------------------------
C.A. No. 14582.
(g)(4) Complaint, Jay Baxt v. Jacques P. Blandeau [sic], et al,
-------- --------------------------------
C.A. No. 14585.
(g)(5) Complaint, Kalter and Kaplan Profit Sharing Plan - Keogh F/B/O
---------------------------------------------------
Ivan Kalter v. Jacques P. Blondeau, et al, C.A. No. 14589.
----------- --------------------------
Page 9 of 12 pages
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement are true, complete and
correct.
Dated: November 9, 1995
SCOR S.A.
By: /s/ Jacques P. Blondeau
--------------------------------------
Name: Jacques P. Blondeau
Title: Chairman and Chief Executive Officer
SCOR Merger Sub Corporation
By: /s/ Jacques P. Blondeau
--------------------------------------
Name: Jacques P. Blondeau
Title: President and Director
Page 10 of 12 pages
<PAGE>
EXHIBIT INDEX
-------------
Exhibit Number Exhibit Name Page Number
- -------------- ------------ -----------
(a) Not applicable.
(b)(1) Goldman Sachs Presentation Book dated
September 21, 1995.
(b)(2) Goldman Sachs Update to Presentation Book, prepared on
October 24, 1995.
(b)(3) Opinion of Dillon, Read & Co. Inc., dated
November 2, 1995.
(c)(1)** Agreement and Plan of Merger (the "Merger
Agreement"), dated as of November 2, 1995,
among Parent, the Purchaser and the Company.
(c)(2)* Letter Agreement to amend the Merger Agreement,
dated as of November 8, 1995.
(c)(3)*** SCOR Reinsurance Company 1994 Voting Trust Agreement,
dated as of June 6, 1994, among SCOR Reinsurance
Company, the Company and the Voting Trustees designated
therein.
(c)(4)*** Net Aggregate Excess of Loss Retrocessional Agreement,
dated January 1, 1994, among Parent and SCOR Reinsurance
Company.
(c)(5)* Interests and Liabilities Agreement to the Catastrophe
Excess of Loss Reinsurance Contract, among SCOR Reinsurance
Company and SCOR S.A., effective date January 1, 1994.
(c)(6)* Interests and Liabilities Agreement to the Catastrophe
Excess of Loss Reinsurance Contract,among SCOR Reinsurance
Company and SCOR Reassurance, effective date January 1, 1995.
(c)(7)* Credit Agreement U.S. $20 million, dated January 24, 1995
between Parent and the Company.
(c)(8)* Loan Agreement U.S. $20 million, dated October 2, 1995
between Parent and the Company.
--------------------
* Incorporated by reference from Parent's and the Purchaser's
Statement on Schedule 14D-1 and Schedule 13D/A (Amendment
No. 4), dated November 9, 1995.
** Incorporated by reference from the Company's Form 8-K, dated
November 6, 1995.
*** Incorporated by reference from the Company's Form 10-K for the period
ended December 31, 1994.
Page 11 of 12 pages
<PAGE>
Exhibit Number Exhibit Name Page Number
- -------------- ------------ -----------
(d)(1)* Offer to Purchase.
(d)(2)* Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification Number
on Form W-9).
(d)(3)* Letter dated November 9, 1995, to brokers, dealers,
commercial banks, trust companies and nominees.
(d)(4)* Letter to be used by brokers, dealers, commercial
banks, trust companies and nominees to their clients.
(d)(5)**** Press Release issued by Parent, dated September 26, 1995.
(d)(6)* Press Release issued by Parent and the Purchaser, dated
November 3, 1995.
(d)(7)* Form of newspaper advertisement, dated November 9, 1995.
(d)(8)* Notice of Guaranteed Delivery.
(e)(1) Certain provisions of the Delaware General Corporation
Law pertaining to rights of dissenting stockholders.
(f) Not applicable.
(g)(1)* Complaint, Howard Sande Feldman, Custodian for Jan Sharona
-----------------------------------------------
Feldman, UGMA v. Jacques P. Blandeau [sic], et al, C.A.
------------- --------------------------------
No. 14577.
(g)(2)* Complaint, Crandon Capital Partners v. Jacques P. Blondeau,
------------------------ --------------------
et al, C.A. No. 14579.
----
(g)(3)* Complaint, Daniel Bruno v. Jacques P. Blandeau [sic], et al,
------------ --------------------------------
C.A. No. 14582.
(g)(4)* Complaint, Jay Baxt v. Jacques P. Blandeau [sic], et al,
-------- --------------------------------
C.A. No. 14585.
(g)(5)* Complaint, Kalter and Kaplan Profit Sharing Plan - Keogh F/B/O
---------------------------------------------------
Ivan Kalter v. Jacques P. Blondeau, et al, C.A. No. 14589.
----------- --------------------------
- --------------------
* Incorporated by reference from Parent's and the Purchaser's Statement on
Schedule 14D-1 and Schedule 13D/A (Amendment No. 4), dated November 9,
1995.
**** Incorporated by reference from Parent's Statement on Schedule 13D/A
(Amendment No. 3), dated September 26, 1995.
Page 12 of 12 pages
Exhibit (b)(1)
CONFIDENTIAL
============
Goldman Discussion Materials
Sachs
Project Arctic
Prepared by
Goldman, Sachs & Co.
September 21, 1995
<PAGE>
Table of Exhibits
Exhibit
I. Executive Summary 1
II. Arctic Financial Performance 2
III. Arctic Market Performance 3
IV. Valuation Analysis 4
<PAGE>
Exhibit 1
Issues to Consider
- Process
- Valuation
- Offer Price
1
<PAGE>
Exhibit 2
ARCTIC FINANCIAL PERFORMANCE
Historical Income Statements
<TABLE><CAPTION>
Year Ended December 31, Year to Date (a) LTM Ended
--------------------------- -----------------
(dollars in millions) 1992 1993 1994 1994 1995 6/30/95
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net premiums written $205.5 $245.4 $231.1 $128.9 $127.0 $229.2
Net premiums earned $192.1 $236.1 $228.2 $117.7 $128.8 $239.4
Losses and loss expenses, net (160.5) (156.3) (191.3) (113.5) (85.5) (163.3)
Underwriting expenses (79.9) (87.7) (85.4) (44.7) (49.7) (90.5)
------ ------ ------ ------ ------ ----
Net underwriting gain (48.4) (7.9) (48.5) (40.5) (6.4) (14.4)
Net investment income 42.9 42.0 41.0 20.2 21.1 41.9
Net realized capital gains 15.0 12.9 1.0 0.7 0.6 0.8
---- ---- --- --- --- ---
Net investment gain 57.9 55.0 42.0 20.9 21.7 42.7
Interest expense (4.6) (8.0) (8.9) (4.5) (4.3) (8.7)
Other expenses (4.3) (4.1) (4.0) (1.5) (0.0) (2.6)
--- --- --- --- --- ---
Income (loss) before taxes and extraordinary items 0.6 35.0 (19.5) (25.6) 10.9 17.0
Income tax expense (benefit) (3.8) 7.0 (11.3) (11.7) 2.2 2.7
Extraordinary gain on sale of debentures, net of tax 0.0 0.0 0.4 0.0 0.6 0.9
Cumulative effect of accounting changes, net of tax 2.8 (2.6) 0.0 0.0 0.0 0.0
--- --- --- --- --- ---
Net income (loss) $7.2 $25.4 $(7.8) $(13.8) $9.2 $15.2
=== ==== ===== ====== === ====
Dividends $5.0 $5.8 $6.5 $3.3 $1.8 $5.1
Loss Ratio 83.6 % 66.2 % 83.8 % 96.5 % 66.4 % 68.2 %
Expense Ratio 41.0 37.4 38.7 35.8 39.2 40.6
Dividend Ratio 2.6 2.5 2.9 2.8 1.4 2.1
--- --- --- --- --- ---
Combined Ratio 127.2 106.0 125.4 135.0 106.9 110.9
Investment Ratio 22.3 17.8 18.0 17.2 16.4 17.5
---- ---- ---- ---- ---- ----
Operating Ratio 104.9 % 88.2 % 107.4 % 117.9 % 90.6 % 93.5 %
Operating Margin 3.8 % 10.8 % (3.4)% (11.7)% 7.2 % 6.4 %
</TABLE>
(a) Six months ended June 30, 1995.
2
<PAGE>
ARCTIC FINANCIAL PERFORMANCE
Historical Balance Sheets
<TABLE><CAPTION>
December 31, At June 30,
------------------
(dollars in millions) 1993 1994 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Invested Assets
Fixed maturities
Available for sale, at fair value $581.1 $563.7 $563.2
Held to maturity, at amortized cost 24.9 22.9 25.8
Equity securities, at fair value 19.0 1.7 0.5
Short-term investments 90.6 83.3 118.5
Other invested assets 1.1 1.2 1.4
--- --- ---
Total Invested assets 716.7 672.8 709.4
Cash 17.1 4.8 11.5
Accrued investment income 10.2 10.3 10.1
Premiums receivable 80.3 72.0 90.7
Reinsurance recoverable on paid losses 36.8 23.8 11.8
Reinsurance recoverable on unpaid losses 221.8 222.7 237.1
Prepaid reinsurance premiums
Affiliates 14.6 10.5 6.6
Other 11.8 8.8 4.5
Deferred policy acquisition costs 24.1 22.8 22.7
Deferred Federal income tax benefits 11.9 34.8 24.4
Investment in affiliates 10.8 11.5 12.6
Other assets 38.0 48.9 46.1
---- ---- ----
$1,194.1 $1,143.7 $1,187.6
======= ======= =======
LIABILITIES
Losses and LAE 562.2 604.8 633.3
Unearned premiums 114.4 110.1 100.1
Long-term debt 106.3 102.4 101.0
Other 226.8 189.5 181.5
----- ----- -----
$903.4 $904.3 $914.9
===== ===== =====
STOCKHOLDERS' EQUITY
Common stock 290.7 239.4 272.7
Preferred stock 0.0 0.0 0.0
$290.7 $239.4 $272.7
===== ===== =====
3
- -------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Exhibit 3
HISTORICAL MARKET PERFORMANCE
Monthly Indexed Common Stock Price History:
1986 - Present
Reinsurance Industry ======================================================
- --------------------
Composite:
- ---------
General Re
American Re
Transatlantic Scor
NAC Re Date US Corp Reinsurance S&P 500
National Re ---- --------- ------------------- ---------
Trenwick Group
Zurich Re 9/30/86 100.000 100 100
10/31/86 97.391304 91.268478 105.47293
11/30/86 86.08696 92.272247 107.73820
12/31/86 83.478264 92.159668 104.69047
1/1/87 97.391304 98.434586 118.48521
2/28/87 99.130432 105.40427 122.86011
3/31/87 109.56522 100.52344 126.10237
4/30/87 95.652176 88.226204 124.65847
5/31/87 78.260872 86.223351 125.41068
6/30/87 92.173912 87.268654 131.42400
7/31/87 93.91304 82.251495 137.75722
8/31/87 100.86957 91.52021 142.57304
9/30/87 83.478264 86.610954 142.57304
10/31/87 52.173912 76.65229 108.84920
11/30/87 64.347824 69.581985 99.559052
12/31/87 64.347824 70.694191 106.81739
1/31/88 57.391304 78.048409 111.13177
2/29/88 57.391304 77.688232 115.77901
3/31/88 62.608696 77.333305 111.91856
4/30/88 62.608696 78.548218 112.97336
5/31/88 59.130436 82.759384 113.33218
6/30/88 54.782608 88.271187 118.23447
7/31/88 54.782608 88.985695 117.59467
8/31/88 54.782608 89.681839 113.05550
9/30/88 53.913044 94.729927 117.54712
10/31/88 56.52174 94.895874 120.59917
11/30/88 48.695652 94.180351 118.32095
12/31/88 63.47826 98.833069 120.05879
1/1/89 56.52174 102.04252 128.59674
2/28/89 57.391304 105.46871 124.87462
3/31/89 60 109.34668 127.47276
4/30/89 60 120.80000 133.85786
5/31/89 59.130436 116.40727 138.56129
6/30/89 60 117.74499 137.46326
7/31/89 62.608696 128.95371 149.61092
8/31/89 72.173912 144.87904 151.93239
9/30/89 85.217392 147.11064 150.93808
10/31/89 85.217392 164.26125 147.13815
11/30/89 92.173912 177.54750 149.57201
12/31/89 98.260872 165.52203 152.77537
1/31/90 80.869568 149.34502 142.26179
2/28/90 82.608696 156.36095 143.47658
3/31/90 81.7391 28 149.63396 146.95659
4/30/90 73.04348 144.79452 143.00536
5/31/90 73.04348 166.15173 156.16029
6/30/90 69.565216 164.88075 154.77260
7/31/90 67.826088 155.07263 153.96420
8/31/90 61.7391 32 131.92732 139.44319
9/30/90 60.869564 125.27144 132.30589
10/31/90 60 134.47366 131.41968
11/30/90 80 155.81903 139.29620
12/31/90 86.08696 163.86333 142.75462
1/1/91 85.217392 166.42462 148.68147
2/28/91 94.782608 181.88431 158.68494
3/31/91 100 191.38438 162.20819
4/30/91 99.130432 196.10689 162.26439
5/31/91 98.260872 193.15184 168.52411
6/30/91 86.95652 189.50565 160.45305
7/31/91 93.04348 193.60390 167.65086
8/31/91 94.782608 185.54352 170.94501
9/30/91 109.56522 179.32993 167.67247
10/31/91 107.82609 185.75618 169.66107
11/30/91 106.95652 184.01003 162.20819
12/31/91 106.95652 214.33855 180.30865
1/31/92 120.86957 206.75487 176.72057
2/29/92 126.08696 207.42914 178.41086
3/31/92 123.47826 194.51637 174.51582
4/30/92 112.17391 180.25714 179.38354
5/31/92 113.91304 180.22928 179.55646
6/30/92 117.39130 182.25078 176.43956
7/31/92 113.91304 195.72369 183.38664
8/31/92 103.47826 198.45435 178.98581
9/30/92 112.17391 235.04269 180.61558
10/31/92 132.17392 270.32129 180.99602
11/30/92 125.21739 267.01315 186.47328
12/31/92 121.73913 280.66949 188.35811
1/1/93 129.56522 302.94806 189.68527
2/28/93 139.13043 296.60886 191.67387
3/31/93 137.39131 301.40573 195.25764
4/30/93 131.30435 301.55255 190.29483
5/31/93 122.60870 281.79242 194.61784
6/30/93 116.52174 281.87524 194.76482
7/31/93 115.65218 289.60071 193.72729
8/31/93 109.56522 300.33533 200.39770
9/30/93 116.52174 292.30957 198.39615
10/31/93 106.08696 268.81906 202.24364
11/30/93 98.260872 255.42137 199.63254
12/31/93 90.434784 254.83379 201.64706
1/31/94 81.739128 255.23187 208.20074
2/28/94 78.260872 237.03886 201.94536
3/31/94 72.173912 234.30518 192.70706
4/30/94 85.217392 238.59853 194.92909
5/31/94 78.260872 265.05127 197.34566
6/30/94 76.521736 252.91299 192.05861
7/31/94 81.739128 252.69917 198.10652
8/31/94 80.869568 248.80762 205.55507
9/30/94 78.260872 241.98091 200.02161
10/31/94 77.391304 240.89282 204.19765
11/30/94 61.739132 238.59822 196.13089
12/31/94 58.260868 273.89551 198.54314
1/1/95 59.130436 275.68790 203.36331
2/28/95 58.260868 288.74335 210.69946
3/31/95 54.782608 285.97424 216.45772
4/30/95 55.652172 296.57468 222.50995
5/31/95 62.608696 296.92847 230.58966
6/30/95 62.608696 302.25738 235.49628
7/31/95 70.434784 314.85586 242.97942
8/31/95 76.521736 325.33105 242.90160
===================================================
Monthly September 30, 1986 to August 31, 1995
\ Arctic \ Reinsurance Industry Composite \ S&P 500
<PAGE>
HISTORICAL MARKET PERFORMANCE
Monthly Indexed Common Stock Price History:
1992 - Present
Reinsurance Industry ==================================================
- --------------------
Composite:
- ---------
General Re
American Re
Transatlantic Date Arctic Reinsurance S&P 500
NAC Re
National Re 11/30/91 100.000 100 100
Trenwick Group 12/31/91 100 112.01035 111.15878
Zurich Re 1/31/92 113.00813 109.09676 108.94675
2/29/92 117.88618 109.07922 109.98881
3/31/92 115.44715 102.18203 107.58755
4/30/92 104.87805 94.853416 110.58845
5/31/92 106.50407 94.835091 110.69506
6/30/92 109.75610 96.278687 108.77352
7/1/92 106.50407 102.50105 113.05634
8/31/92 96.747971 103.62012 110.34326
9/30/92 104.87805 123.98768 111.34801
10/31/92 123.57723 141.69832 111.58253
11/30/92 117.07317 139.75493 114.95923
12/31/92 113.82114 147.57692 116.12121
1/31/93 121.13821 159.94215 116.93939
2/28/93 130.08130 157.41383 118.16534
3/31/93 128.45529 159.70088 120.37472
4/30/93 122.76423 161.60039 117.31518
5/31/93 114.63415 151.64600 119.98028
6/30/93 108.94309 152.22093 120.07089
7/1/93 108.13008 158.33887 119.43127
8/31/93 102.43903 163.81782 123.54352
9/30/93 108.94309 158.32602 122.30958
10/31/93 99.186989 147.33031 124.68152
11/30/93 91.869919 140.76004 123.0718
12/31/93 84.552849 139.13660 124.31374
1/31/94 76.422768 138.02608 128.35403
2/28/94 73.170731 127.82580 124.49764
3/31/94 67.479675 128.79134 118.80230
4/30/94 79.674797 130.71901 120.17217
5/31/94 73.170731 145.91219 121.66196
6/30/94 71.544716 137.80318 118.40253
7/1/94 76.422768 138.83508 122.13102
8/31/94 75.609756 137.58029 126.72298
9/30/94 73.170731 134.04153 123.31166
10/31/94 72.357727 133.00981 125.88615
11/30/94 57.723576 132.06714 120.91306
12/31/94 54.471546 147.66911 122.40019
1/31/95 55.284554 149.16386 125.37179
2/28/95 54.471546 157.21660 129.89447
3/31/95 51.219513 157.82173 133.44438
4/30/95 52.03252 162.2556 137.17552
5/31/95 58.536587 162.44916 142.15660
6/30/95 58.536587 165.36461 145.18149
7/1/95 65.853661 172.25722 149.79478
8/31/95 71.544716 177.98817 149.74681
=========================================================
Monthly December 27, 1991 to August 31, 1995
\ Arctic \ Reinsurance Industry Composite S&P 500
5
<PAGE>
HISTORICAL MARKET PERFORMANCE
Weekly Indexed Common Stock Price History:
1995 Year-to-Date
Reinsurance Industry ==================================================
- --------------------
Composite:
- ---------
General Re
American Re
Transatlantic Date Arctic Reinsurance S&P 500
NAC Re
National Re 12/1/94 100.000 100 100
Trenwick Group 1/6/95 101.49254 99.553741 100.30701
Zurich Re 1/13/95 98.507462 100.37141 101.45884
1/20/95 104.47762 99.829201 101.19973
1/27/95 102.98508 100.11082 102.42124
2/1/95 98.507462 102.69407 104.21757
2/10/95 98.507462 103.75722 104.83158
2/17/95 97.014923 105.22740 104.94263
2/24/95 100 105.20010 106.27953
3/3/95 98.507462 106.14921 105.69383
3/10/95 95.522385 106.33028 106.59743
3/17/95 94.029854 106.67706 107.89296
3/24/95 97.014923 106.32334 109.07963
3/31/95 94.029854 107.02434 109.02302
4/1/95 92.537315 109.37929 110.26630
4/14/95 91.044777 108.82107 110.87814
4/21/95 92.537315 108.41194 110.71701
4/28/95 95.522385 110.02131 112.07134
5/5/95 98.507462 110.57999 113.24929
5/12/95 104.47762 111.98193 114.43160
5/19/95 105.97015 109.22044 113.04679
5/26/95 107.46268 109.82680 114.01791
6/1/95 105.97015 109.68198 115.94705
6/9/95 107.46268 108.88302 114.95200
6/16/95 102.98508 110.31364 117.54089
6/23/95 108.95522 111.74891 119.69213
6/30/95 107.46268 110.79810 118.61214
7/7/95 108.95522 111.16801 121.14225
7/14/95 110.44776 112.59818 121.90868
7/21/95 113.43284 111.72546 120.54347
7/28/95 119.40299 114.80913 120.54347
8/1/95 126.86567 115.14479 121.70184
8/11/95 126.86567 114.8368 120.86790
8/18/95 126.12537 116.21652 121.76063
8/25/95 137.31343 117.73597 121.95441
9/1/95 129.85075 119.20908 122.76875
9/8/95 132.83581 119.46676 124.69353
9/15/95 138.80597 124.07303 127.01679
========================================================
Weekly 12/30/94 to 9/15/95
\ Arctic \ Reinsurance Industry Composite \ S&P 500
6
<PAGE>
HISTORICAL MARKET PERFORMANCE
Monthly Common Stock Price: 1986 - Present
===============================================================================
Close
8/29/86 14.375
9/30/86 14.375
10/31/86 14
11/28/96 12.375
12/31/86 12
1/30/87 14
2/27/87 14.25
3/31/87 15.75
4/30/87 13.75
5/29/87 11.25
6/30/87 13.25
7/31/87 13.5
8/31/87 14.5
9/30/87 12
10/30/87 7.5
11/30/87 9.25
12/31/87 9.25
1/29/88 8.25
2/29/88 8.25
3/31/88 9
4/29/88 9
5/31/88 8.5
6/30/88 7.875
7/29/88 7.875
8/31/88 7.875
9/30/88 7.75
10/31/88 8.125
11/30/88 7
12/30/88 9.125
1/31/89 8.125
2/28/89 8.25
3/31/89 8.625
4/28/89 8.625
5/31/89 8.5
6/30/89 8.625
7/31/89 9
8/31/89 10.375
9/29/89 12.25
10/31/89 12.25
11/30/89 13.25
12/29/89 14.125
1/31/90 11.625
2/28/90 11.875
3/30/90 11.75
4/30/90 10.5
5/31/90 10.5
6/29/90 10
7/31/90 9.75
8/31/90 8.875
9/28/90 8.75
10/31/90 8.625
11/30/90 11.5
12/31/90 12.375
1/31/91 12.375
2/28/91 13.625
3/29/91 14.375
4/30/91 14.25
5/31/91 14.125
6/28/91 12.5
7/31191 13.375
8/30/91 13.625
9/30/91 15.75
10/31/91 15.5
11/29/91 15.375
12/31/91 15.375
1/31/92 17.375
2/28/92 18.125
3/31/92 17.75
4/30/92 16.125
5/29/92 16.375
6/30/92 16.875
7/31/92 16.5
8/31/92 14.875
9/30/92 16.125
10/30/92 19
11/30/92 18
12/31/92 17.5
1/29/93 18.625
2/26/93 20
3/31/93 19.75
4/30/93 18.875
5/31/93 17.625
6/30/93 16.75
7/30/93 16.625
8/31/93 15.75
9/30/93 16.75
10/29/93 15.25
11/30/93 14.125
12/31/93 13
1/31/94 11.75
2/28/94 11.25
3/31/94 10.375
4/29/94 12.25
5/31/94 11.25
6/30/94 11
7/29/94 11.75
8/31/94 11.625
9/30/94 11.25
10/31/94 11.125
11/30/94 8.875
12/30/94 8.375
1/31/95 8.5
2/28/95 8.375
3/31/95 8
4/28/95 8
5/31/95 9
6/30/95 9
7/31/95 10.125
8/31/95 11
===============================================================================
Monthly 12/2/86 TO 8/31/95
7
<PAGE>
HISTORICAL MARKET PERFORMANCE
Monthly Common Stock Price & Trading Volume History: Latest 3 Years
================================================================================
High Low Close Volume
---- --- ----- ------
8/31/92 17 14.75 14.875 145.200
9/30/92 16.25 13.125 16.125 168.600
10/30/92 19 16.25 19 115.100
11/30/92 19.5 18 18 80.000
12/31/92 19 17.375 17.5 111.400
1/29/93 19 17 18.625 44.600
2/26/93 20.625 18.5 20 95.700
3/31/93 20.875 19.75 19.75 104.700
4/30/93 19.75 18.75 18.875 123.300
5/31/93 19.125 17.625 17.625 79.900
6/30/93 17.5 16.125 16.75 106.800
7/30/93 16.75 15.75 16.625 149.000
8/31/93 16.625 14.875 15.75 173.200
9/30/93 16.875 15.125 16.75 313.000
10/29/93 16.75 15 15.25 157.000
11/30/93 15.25 13.5 14.125 281.500
12/31/93 14.25 12.375 13 214.400
1/31/94 13 11.5 11.75 297.400
2/28/94 12.375 11.25 11.25 174.500
3/31/94 11.5 10.25 10.375 398.700
4/29/94 12.25 10.125 12.25 215.000
5/31/94 12.125 10.938 11.25 162.200
6/30/94 11.375 11 11 139.300
7/29/94 11.875 11 11.75 79.700
8/31/94 12.25 11 11.625 242.700
9/30/94 12 11.25 11.25 103.000
10/31/94 11.375 11 11.125 83.000
11/30/94 11.125 8.875 8.875 132.000
12/30/94 9.125 7.5 8.375 2045.300
1/31/95 8.75 7.875 8.5 169.200
2/28/95 8.5 8 8.375 62.000
3/31/95 8.5 7.75 8 103.100
4/28/95 8.125 7.5 8 181.900
5/31/95 9.25 7.875 9 177.100
6/30/95 9.315 8.625 9 71.000
7/31/95 11.5 8.875 10.125 32.700
8/31/95 11.625 10.375 11 112.500
================================================================================
Monthly 8/31/92 to 8/31/95
Volume High Low Close
8
<PAGE>
HISTORICAL MARKET PERFORMANCE
Monthly Common Stock Price & Trading Volume History: 1995 Year-to-Date
================================================================================
High Low Close Volume
1/06/95 8.75 8.375 8.5 0
1/13/95 8.625 7.875 8.25 37.1
1/20/95 8.75 8.25 8.75 30
1/27/95 8.75 8.625 8.625 20.1
2/03/95 8.625 8.125 8.25 77.4
2/10/95 8.375 8.125 8.25 35
2/17/95 8.5 8.125 8.125 16.1
2/24/95 8.375 8 8.375 2
3/03/95 8.375 8.125 8.25 3
3/10/95 8.125 8 8 11.7
3/17/95 8.5 7.875 7.875 21.5
3/24/95 8.125 7.75 8.125 48.2
3/31/95 8.375 7.75 8 21.2
4/07/95 7.875 7.5 7.75 51.3
4/14/95 7.75 7.625 7.625 6.5
4/21/95 7.75 7.625 7.75 19.4
4/28/95 8.125 7.5 8 104.7
5/05/95 8.25 7.875 8.25 22.4
5/12/95 8.875 8.25 8.75 131.4
5/19/95 9.125 8.625 8.875 3.1
5/26/95 9.25 8.75 9 18.4
6/02/95 9.25 8.875 8.875 5.8
6/09/95 9.125 8.75 9 3.7
6/16/95 8.875 8.625 8.625 16.9
6/23/95 9.375 8.625 9.125 15
6/30/95 9.125 8.75 9 31.4
7/07/95 9.375 9 9.125 7
7/14/95 11.5 8.875 9.25 3.4
7/21/95 9.75 9 9.5 8.7
7/28/95 10.125 9.375 10 10.2
8/04/95 10.875 10 10.625 19.4
8/11/95 10.875 10.625 10.625 6.7
8/18/95 10.75 10.375 10.563 18.4
8/25/95 11.625 10.5 11.5 66.2
9/01/95 11.375 10.75 10.875 8.2
9/08/95 11.125 10.875 11.125 5.9
9/15/95 11.625 11 11.5 0
================================================================================
Weekly 1/6/95 to 9/15/95
Volume Close High Low
9
<PAGE>
HISTORICAL MARKET PERFORMANCE
Common Shares Traded at Various Prices: 1986 - Present
================================================================================
Wt. Avg Wt. Avg
Volume Volume
Date (000)
7.000000 to 7.990000 1965700 1965700
8.000000 to 8.990000 992100 992100
9.000000 to 9.990000 287900 287900
10.000000 to 10.990000 829300 829300
11.000000 to 11.990000 1244000 1244000
12.000000 to 12.990000 617400 617400
13.000000 to 13.990000 476200 476200
14.000000 to 14.990000 902800 902800
15.000000 to 15.990000 783600 783600
16.000000 to 16.990000 950300 950300
17.000000 to 17.990000 254900 254900
18.000000 to 18.990000 459300 459300
19.000000 to 19.990000 163800 163800
20.000000 to 20.990000 123400 123400
21.000000 to 21.990000 0 0
================================================================================
Based on Closing Prices From 12/2/86 to 8/31/95
Weighted Average Price: 12.20
Total Shares Traded as Percent
of Shares Outstanding: 55.3%
10
<PAGE>
HISTORICAL MARKET PERFORMANCE
Common Shares Traded at Various Prices: 1992 - Present
================================================================================
Wt. Avg
Volume
Date
7.000000 to 7.990000 1965700
8.000000 to 8.990000 807400
9.000000 to 9.990000 104800
10.000000 to 10.99000 610000
11.000000 to 11.99000 1138300
12.000000 to 12.99000 509200
13.000000 to 13.99000 119700
14.000000 to 14.99000 370500
15.000000 to 15.99000 476600
16.000000 to 16.99000 934500
17.000000 to 17.99000 254900
18.000000 to 18.99000 459300
19.000000 to 19.99000 163800
20.000000 to 20.99000 123400
21.000000 to 21.99000 0
================================================================================
Based on Closing Prices From 1/1/92 to 9/15/95
Weighted Average Price: 12.07
Total Shares Traded as Percent
of Shares Outstanding: 44.3%
11
<PAGE>
HISTORICAL MARKET PERFORMANCE
Common Shares Traded at Various Prices: 1995 Year-to-Date
================================================================================
Wt. Avg.
Date Volume
7.500000 to 7.740000 56300
7.750000 to 7.990000 103800
8.000000 to 8.240000 172900
8.250000 to 8.490000 95000
8.500000 to 8.740000 133600
8.750000 to 8.990000 176200
9.000000 to 9.240000 58000
9.250000 to 9.490000 6900
9.500000 to 9.740000 12700
9.750000 to 9.990000 1000
10.000000 to 10.24000 9700
10.250000 to 10.49000 0
10.500000 to 10.74000 30500
10.750000 to 10.99000 12400
11.000000 to 11.24000 15900
11.250000 to 11.49000 53800
11.500000 to 11.74000 27800
================================================================================
Based on Closing Prices From 1/1/95 to 9/15/95
Weighted Average Price: 8.78
Total Shares Traded as Percent
of Shares Outstanding: 5.3%
12
<PAGE>
COMMON STOCK OWNERSHIP ANALYSIS
Quarterly Change in Institutional Ownership
<TABLE><CAPTION>
9/31/92 12/31/92 3/31/93 6/30/93 9/31/93 12/31/93 3/31/94 6/30/94 9/31/94
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHARE HOLDINGS ('000S)
Tweedy Browne Co. L.P. 0.0 0.0 0.0 0.0 0.0 0.0 194.7 194.7 239.8
Dimensional Fund Advisors 291.9 293.8 283.0 309.2 360.1 588.8 598.4 601.7 549.8
Prudential Insurance Co. 585.2 598.6 621.5 620.8 570.9 570.0 567.4 570.1 606.4
Wilshire Associates 0.0 0.0 0.0 10.0 10.0 47.8 210.3 418.1 429.8
Wells Fargo Institutional Trust 268.9 262.0 260.7 256.6 221.5 193.7 191.6 189.6 185.2
Sanford C. Bernstein 32.5 33.9 35.9 48.9 48.9 57.4 67.1 78.5 113.5
Mellon Bank 51.6 45.8 45.8 47.1 47.1 54.0 55.5 51.4 50.9
J.P. Morgan 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Brandywine Asset Mgmt. 47.6 47.6 47.6 47.6 49.4 51.6 49.6 50.2 52.7
CALSTERS 48.2 48.2 48.2 48.2 48.2 48.2 48.2 50.0 50.0
Bankers Trust 24.2 24.2 45.3 23.1 24.5 46.5 46.2 46.8 46.8
Neville Rodie & Shaw 60.8 60.8 61.5 61.5 59.6 61.1 58.4 52.3 51.9
United States Trust Co. 0.0 0.0 0.0 0.0 0.0 26.2 31.0 33.9 13.1
ANB Investment Mgmt. 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Vanguard Index-Small Cap 13.0 13.0 13.0 13.0 13.0 13.0 15.0 16.0 16.0
Vanguard Total Stock Mkt. 0.0 0.0 0.0 4.3 5.6 5.6 5.6 5.6 5.6
Northern Trust 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 10.2
First Interstate Bancorp 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.0
Weiss Peck & Greer 0.0 0.0 1.7 3.0 137.2 113.2 114.9 154.9 160.9
World Asset Management 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Equitable Life Assurance 0.0 0.0 0.0 0.0 1.9 3.7 4.8 4.8 4.8
Bank of New York 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Percent
of
12/31/94 3/31/95 6/30/95 Common
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARE HOLDINGS ('000S)
Tweedy Browne Co. L.P. 487.7 606.3 949.5 5.1%
Dimensional Fund Advisors 565.8 591.7 611.7 3.3
Prudential Insurance Co. 212.0 213.9 213.9 1.1
Wilshire Associates 434.3 255.1 204.1 1.1
Wells Fargo Institutional Trust 184.6 187.2 184.4 1.0
Sanford C. Bernstein 109.6 108.5 106.6 0.6
Mellon Bank 50.9 231.9 102.8 0.6
J.P. Morgan 0.0 56.0 56.0 0.3
Brandywine Asset Mgmt. 54.5 55.3 53.9 0.3
CALSTERS 50.0 50.9 51.5 0.3
Bankers Trust 46.4 42.6 44.6 0.2
Neville Rodie & Shaw 44.0 41.4 37.9 0.2
United States Trust Co. 33.1 33.1 33.1 0.2
ANB Investment Mgmt. 26.4 27.0 26.8 0.1
Vanguard Index-Small Cap 16.0 16.0 16.0 0.1
Vanguard Total Stock Mkt. 5.6 0.0 10.3 0.1
Northern Trust 10.2 10.2 10.2 0.1
First Interstate Bancorp 9.4 9.4 9.4 0.1
Weiss Peck & Greer 112.6 112.6 4.7 0.0
World Asset Management 0.0 0.0 4.1 0.0
Equitable Life Assurance 2.9 2.9 2.9 0.0
Bank of New York 2.0 2.0 2.0 0.0
---
14.7%
====
- -----------------------------------------------------------------------------
</TABLE>
13
<PAGE>
Exhibit 4
DISCOUNTED CASH FLOW ANALYSIS
NET PRESENT VALUE PER SHARE OF PROJECTED DIVIDENDS
<TABLE><CAPTION>
Net Income Discount Terminal Value Multiples
-----------------------------------------------------------------------
CAGR Rates 8x 9x 10x 11x 12x 13x 14x 15x
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% 12.5% $7 $8 $8 $9 $10 $10 $11 $12
15.0 6 7 8 8 9 9 10 11
10% 12.5% $8 $9 $9 $10 $11 $12 $12 $13
15.0 7 8 9 9 10 11 11 12
15% 12.5% $9 $10 $11 $11 $12 $13 $14 $15
15.0 8 9 10 11 11 12 13 14
- -----------------------------------------------------------------------------------------------------
</TABLE>
Assumptions:
-----------
Cash Flows discounted to December 31, 1995.
Cash Flows represent yearly dividends plus a terminal value at year-end 1999
based on a multiple of 1999 net income.
IBES median estimates for 1995-1996 EPS and assumed growth applied thereafter.
Dividend payout ratio of 34%.
<PAGE>
COMPARISON OF SELECTED REINSURANCE COMPANIES (A)
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE><CAPTION>
Price % of 52 Market EPS (b) P/E Ratio Book Price/ Combined Ratio (c) 1994 Dividend
(9/19/95) Week High Cap 1995E 1996E 1995E 1996E Value Book 1992 1993 1994 ROE Yield
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ARTIC $11.25 93.8% $204 $0.88 $0.95 12.8x 11.8x $15.02 0.75x 123.3% 103.7% 118.8% N.M. 1.8%
DIRECT
- ------
American Re $41.88 97.1% $1,970 $3.00 $3.60 14.0x 11.6x $20.26 2.07x 102.8% 99.5% 103.8% 12.3% 0.8%
General Re 151.88 99.8 12,458 9.25 10.35 16.4 14.7 69.59 2.18 108.4 101.5 101.3 12.9 1.3
National Re 34.13 97.8 576 2.80 3.15 12.2 10.8 20.51 1.66 103.3 99.8 98.4 7.2 0.5
Mean 98.3% 14.2x 12.4x 1.97x 104.8% 100.3% 101.2% 10.8% 0.8%
BROKER
- ------
NAC Re $38.13 99.3% $670 $2.40 $2.80 15.9x 13.6x $2.80 1.65X 126.9% 110.9% 105.7% 9.5% 0.5%
Transatlantic 68.75 97.7 1,577 5.15 6.05 13.3 11.4 6.05 1.76 111.6(d) 107.4(d) 105.7(d) 12.7 0.6
Trenwick 50.88 97.8 330 3.75 4.20 13.6 12.1 4.20 1.51 114.0 102.2 103.1 10.5 2.2
MEAN 98.3% 14.3x 12.4x 1.64x 117.5% 106.8% 104.8% 10.9% 1.1%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) GAAP financial data as of June 30, 1995, except where otherwise noted.
(b) Based on IBES median estimates as of September 7, 1995.
(c) Based on statutory data.
(d) Based on GAAP data.
15
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY SIGNIFICANT
EXISTING SHAREHOLDERS
SUMMARY STATISTICS
<TABLE><CAPTION>
Pre-Announcement
Stock Price as % of Initial Offer Premium to Increase Final Offer Premium to
------------------------- -----------------------
52-Week High Price High in Offer Price High
- -------------------------------------------------------------------------------------------------------------
Average of:
- ----------
<S> <C> <C> <C> <C> <C> <C>
All Buyouts 80.9% 23.4% (1.6)% 9.3% 35.0% 8.0%
Domestic Buyouts by 82.3 19.1 (2.6) 6.9 26.6 4.1
European Parent
Buyouts of Approximately 82.1 16.9 (5.1) 6.6 23.2 0.8
20% Minority Stake
- -------------------------------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE><CAPTION>
Inside
Prior 1 52 week Initial Premium Ownership
Acquiring Company/ day to Date High prior to Over 52 Before the
Acquired Company Ann. of Ann. Ann. Week High Transaction
- -------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
8/95 Societe BIC/BIC Corp. $35.75 5/19/95 $37.50 (2.7)% 78.0%
6/95 Club Mediteranee SA/Club Med 22.63 4/5/95 26.00 1.0 70.8
5/95 GTE Corp/ 17.75 9/08/94 21.25 5.9 90.0
Contel Cellular Inc.
3/95 Siemens AG/ 12.25 1/09/95 16.00 (6.25) 14.2
Pyramid Technology
3/95 Dole Food Co. Inc./ 11.63 8/24/94 15.38 (8.9) 82.8
Castle & Cooke Homes Inc.
1/95 WMX Technologies Inc./ 8.00 7/28/94 10.88 (28.3) 78.5
Chemical Waste Management
1/95 Adia SA/ 26.50 3/23/94 33.25 5.3 81.0
Adia Services Inc.
12/94 Ogden Corp./ 17.38 6/06/94 24.25 (29.2) 83.2
Ogden Services
10/94 National Intergroup Inc./ 13.50 3/01/94 13.75 7.3 80.5
FoxMeyer
9/94 EW Scripps Co./ 78.50 2/17/94 86.00 0.7 86.0
Scripps Howard Broadcasting
7/94 Burlington Resources/ 4.63 4/26/94 6.75 (33.6) 87.1
Diamond Shamrock Offshore
6/94 Colonia Konzern AG/ 1,309 2/28/94 1,335 28.3 57.9(e)
Nordstern Allgemeine
4/94 Triarc Cos/ 15.50 4/26/93 16.50 2.6 71.0
Southeastern Public Service Co.
4/94 Medco Containment Services/ 25.75 10/13/93 36.50 (25.3) 54.2
Medical Marketing Group
4/94 Quartex Corp/CMS/Data Corp 1.63 7/01/93 2.13 30.8 65.0
<CAPTION>
Aggregate Initial
Consideration For Premium Final Premium Percent
Acquiring Company/ Amount Acquired Over Market Over Market Increase
Acquired Company (000's) Initial Bid Price Final Bid Price in Offer
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
8/95 Societe BIC/BIC Corp. $219,000 $36.50 2.1% $40.50 13.3% 11.0%
6/95 Club Mediteranee SA/Club Med 135.6 26.50 16.0 32.00 41.4 21.9
5/95 GTE Corp/ 254.3 22.50 26.8 25.50 43.7 13.3
Contel Cellular Inc.
3/95 Siemens AG/ 261.7 15.00 22.5 16.00 30.6 6.7
Pyramid Technology
3/95 Dole Food Co. Inc./ 81.5 14.00 20.4 15.75 35.4 12.5
Castle & Cooke Homes Inc.
1/95 WMX Technologies Inc./ 397.4 7.80 (2.5) 8.85 10.6 13.5
Chemical Waste Management
1/95 Adia SA/ 83,639 35.02(a) 32.2 N.A. N.A. N.A.
Adia Services Inc.
12/94 Ogden Corp./ 119.0 17.16 (1.3) 18.48 6.3 7.7
Ogden Services
10/94 National Intergroup Inc./ 84,028 14.75(b) 9.3 .904 13.0 3.4
FoxMeyer shares(c)
9/94 EW Scripps Co./ 125,386(d) 3 shares 10.4(d) 3.45 shares 26.9(d) 15.0
Scripps Howard Broadcasting
7/94 Burlington Resources/ 42,600 4.49 (3.1) N.A. N.A. N.A.
Diamond Shamrock Offshore
6/94 Colonia Konzern AG/ 520,969(f) 1,713 30.9 $1,713 30.9 0.0
Nordstern Allgemeine
4/94 Triarc Cos/ 86,140 .55 9.2 .80 shares 65.2 51.2
Southeastern Public Service Co. shares and
$6 note
4/94 Medco Containment Services/ 122,510 27.25 5.5 27.75 7.8 1.8
Medical Marketing Group
4/94 Quartex Corp/CMS/Data Corp 26,740 6.52 400.0 7.00 328.6 7.4
</TABLE>
17
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE><CAPTION>
Initial Inside
Prior 1 52 week Premium Ownership
Acquiring Company/ day to Date High prior Over 52 Before the
Acquired Company Ann. of Ann. to Ann. Week High Transaction
- ------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
2/94 Holderbank Financiere Glaros/ $6.75 1/07/94 $ 7.75 (1.3)% 95.0%
Holham Inc.
1/94 Standard Industries Inc./ 7.00 5/19/93 9.75 (25.6) 88.4
Wellington Leisure Products, Inc.
12/93 Valley Fashions Corp./ 48.88 9/20/93 51.13 (10.0) 95.0
West Point-Pepperell Inc.
10/93 Torchmark/ 26.88 2/22/93 30.25 0.8 83.0
United Investors Management
5/93 Rust International Inc./ 17.88 11/13/92 23.88 (25.1) 56.0
Brand Cos. Inc.
07/92 W.R. Grace & Company/ 15.25 3/02/92 19.00 (13.2) 83.4
Grace Energy Corporation
05/92 Unocal Corp./ 9.88 2/24/92 12.00 (9.8) 95.3%
Unocal Exploration Corp.
05/92 Envirosource Inc./ 9.00 8/2/91 15.00(g) (24.3) 62.5
Envirosafe Services Inc.
Partially BLV Acquisition Corp./ 4.38 3/20/92 5.38 17.1 54.8
Com- Belvedere Corp.
pleted
01/92 Arkla Inc./ 14.25 9/18/91 20.88 (12.3) 82.0
Arkla Exploration Co.
12/91 Siemens AG/ 120.62 10/21/91 N.A. N.A. 78.0(h)
Siemens Nixdorf Information Systems
12/91 Tele-Communications Inc./ 13.50 5/01/91 16.50 (20.4) 57.2
United Artists Entertainment Co.
10/91 LAC Minerals/ N.A. 2/8/91 6.25 N.A. 64.7
Bond International
10/91 Air & Water Technologies/ 15.25 3/1/91 31.50 (37.0) 82.0
Metcalf & Eddy Cos.
<CAPTION>
Aggregate
Consideration For Initial Premium Final Premium Percent
Acquiring Company/ Amount Acquired Initial Over Market Over Market Increase in
Acquired Company (000's) Bid Price Final Bid Price Offer
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
2/94 Holderbank Financiere Glaros/ $51,700 $7.65 13.3% N.A. N.A. N.A.
Holham Inc.
1/94 Standard Industries Inc./ 3,683 7.25 3.6 $7.63 8.9% 5.2%
Wellington Leisure Products, Inc.
12/93 Valley Fashions Corp./ 66,300 46.00 (5.9) N.A. N.A. N.A.
West Point-Pepperell Inc.
10/93 Torchmark/ 216,591 30.50 13.5 31.25 16.3 2.5
United Investors Management
5/93 Rust International Inc./ 185,000 17.88 0.0 18.75 4.9 4.9
Brand Cos. Inc.
07/92 W.R. Grace & Company/ 77,501 16.50 13.8 19.00 31.0 15.2
Grace Energy Corporation
05/92 Unocal Corp./ 120,418 0.5 9.5 0.54 18.3 8.0
Unocal Exploration Corp. shares shares
05/92 Envirosource Inc./ 14,400 2.7 26.2 5.0 29.0 2.2
Envirosafe Services Inc. shares shares
Partially BLV Acquisition Corp./ 16,900 6.30 44.0 N.A. N.A. N.A.
Com- Belvedere Corp.
pleted
01/92 Arkla Inc./ 92,640 0.9 28.5 0.95 35.6 5.6
Arkla Exploration Co. shares shares
12/91 Siemens AG/ 1,302,423(i) 147.52 22.3 147.52 22.3 0.0
Siemens Nixdorf Information Systems
12/91 Tele-Communications Inc./ 1,189,000 .95(j) (2.7) 1.02(k) 3.6 6.5
United Artists Entertainment Co. shares shares
10/91 LAC Minerals/ 85,000 0.53(l) N.A. N.A. N.A. N.A.
Bond International shares
10/91 Air & Water Technologies/ 42,000 0.85 30.1 0.875 33.9 2.9
Metcalf & Eddy Cos. shares shares
</TABLE>
18
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE><CAPTION>
Initial Inside Aggregate
Prior 1 52 week Premium Ownership Consideration For
Acquiring Company/ day to Date High prior Over 52 Before the Amount Acquired
Acquired Company Ann. of Ann. to Ann. Week High Transaction (000's)
- -------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C> <C>
4/91 Murphy Oil Corp/ $16.63 4/06/89 $22.63 (24.8)% 61.0% $366,242
Ocean Drilling & Exploration
4/91 Ogden Corp./ 11.00 10/23/90 14.75 0.0 68.3 38,000
ERC Environmental & Energy Services
3/91 BHP Holdings/ 33.75 2/06/91 44.50 (10.1) 50.1 530,000
Hamilton Oil Corp.
2/91 Paramount Comm./ N.A. 7/12/90 N.A. N.A. 74.8 46,576
TVX Broadcast Group
11/90 National Intergroup Inc./ 2.62 12/20/89 6.75 40.7 44.1(m) 59,063
Permian Partners L.P.
11/90 Pier 1 Imports Inc. 8.75 9/25/90 N.A. N.A. 50.4 20,704
(of Intermarke Inc.)/
Sunbelt Nursery Group Inc.
11/90 Freeport-McMoRan Inc./ 8.00 7/31/90 11.13(o) (5.70) 81.5 239,161
Freeport-McMoRan Oil & Gas
10/90 Primerica Corp./ 9.75 4/18/89 11.38(r) 10.3 82.6 48,752
American Capital Mgmt. & Research
10/90 Renault Vehicules Industrial/ 5.25 7/06/90 21.13 (71.6) 44.5(u) 103,145
Mack Trucks Inc.
09/90 Kansas City Southern 12.75 5/17/90 15.00 (6.7) 87.1 35,000
Industries, Inc./
DST Systems Inc.
09/90 Fuji Heavy Industries/ 5.13 1/16/90 8.50 (29.4) 49.5 208,414
Subaru of America
08/90 Imetal S.A./ 11.50 1/24/90 16.00 (3.1) 55.6 78,1571
Copperweld Corp. Steel
08/90 American Express Company/ 14.50 3/02/90 N.A. N.A. 66.4(v) 393,515
Shearson Lehman Brothers
<CAPTION>
Initial
Premium Over Final Premium Percent
Acquiring Company/ Initial Market Over Market Increase in
Acquired Company Bid Price Final Bid Price Offer
- -----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C> <C> <C>
4/91 Murphy Oil Corp/ $.50 2.3% $.55 12.5% 10.0%
Ocean Drilling & Exploration shares shares
4/91 Ogden Corp./ 14.75 34.1 15.13 37.5 2.7
ERC Environmental & Energy Services
3/91 BHP Holdings/ 40.00 18.5 40.00 18.5 0.0
Hamilton Oil Corp.
2/91 Paramount Comm./ 7.50 N.A. 9.50 N.A. 26.7
TVX Broadcast Group
11/90 National Intergroup Inc./ 4.00 52.4 4.425(n) 68.6 10.6
Permian Partners L.P.
11/90 Pier 1 Imports Inc. 12.00 37.1 12.00 37.1 0.0
(of intermarke Inc.)/
Sunbelt Nursery Group Inc.
11/90 Freeport-McMoRan Inc./ 0.27- 31.2 0.283-0.345 37.5 4.8
Freeport-McMoRan Oil & Gas 0.329 shares(q)
shares(p)
10/90 Primerica Corp./ 0.30 28.7 0.32 37.3 6.7
American Capital Mgmt. & Research shares(s) shares(t)
or 11.50
10/90 Renault Vehicules Industrial/ 6.00 14.3 6.25 19.1 4.2
Mack Trucks Inc.
09/90 Kansas City Southern 14.00 9.8 15.85 24.3 13.2
Industries, Inc./
DST Systems Inc.
09/90 Fuji Heavy Industries/ 6.00 17.1 8.50 65.9 41.7
Subaru of America
08/90 Imetal S.A./ 15.50 34.8 17.00 47.8 9.7
Copperweld Corp. Steel
08/90 American Express Company/ 0.426 0.1 0.48 12.8 12.7
Shearson Lehman Brothers shares(w) shares(x)
</TABLE>
19
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE><CAPTION>
Inside Aggregate
Owner- Conside-
Initial ship ration Initial Final
52 week Premium Before for Premium Premium
Acquiring Prior 1 High Over 52 the Amount Over Over Percent
Company/Acquired day to Date prior Week Trans- Acquired Initial Market Final Market Increase
Company Ann. of Ann. to Ann. High action (000's) Bid Price Bid Price in Offer
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/90 De Georges/LPL $ 11.50 3/19/90 $27.25 (11.9)% 51.0% $ 37,500 $24.00 23.1% $25.00 28.2% 4.2%
Technologies, Inc.
06/90 Esselte 41.83 10/03/89 38.00 14.5 78.5 219,298 43.50 4.0 48.06 14.9 10.5
A.B./Esselte
Business Systems,
Inc.
05/90 Montedison S.p.A./ 31.12 N.A. 32.13 15.2 71.3 465,904 35.00 18.9 37.00 18.9 0.0
Erbamont 2.00(y)
04/90 Anderson Group PLC/ 7.38 2/16/90 8.38 1.5 51.2 21,000 8.50 15.2 8.88 20.3 4.4
National Mine
Service Co.
03/90 Heritage Media 17.00 12/01/88 9.50 115.8 57.0 32,243 20.50 20.6 20.50 20.6 0.0
Corp./Pop Radio
Corp.
02/90 Carlson Companies, 13.25 5/19/89 13.75 5.5 68.0 53,525 14.50 9.5 14.88 12.3 2.6
Inc./TGI Friday's
Inc.
01/90 Dow Jones & Co. 15.13 9/21/89 16.38 9.8 66.2 657,394 $18.00 19.0 $21.00 38.8 16.7
Inc./Telerate,
Inc.
01/90 Montedison 44.13 7/31/89 46.00 6.5 81.0 653,811 47.00 11.1 51.00 15.6 4.1
S.p.A./HIMONT Inc. 2.00(y)
01/90 Tele- 27.00 5/24/89 24.00 32.3 75.0 209,625 31.75 17.5 32.25 19.4 1.6
Communications
Inc./WestMarc
Communications
11/89 Primerica 17.88 6/09/89 21.25(z) (5.9) 69.8 532,795 0.80 11.7 0.82-0.85 33.4 19.4
Corporation/The shares (1) shares(2)
A.L. Williams
Corporation
11/89 Mayfair 17.25 4/03/89 25.25 (6.9) 71.0 193,600 $23.50 36.2 24.70 43.2 5.1
Acquisition
Corp/Mayfair Super
Markets, Inc.
10/89 ENSERCH 11.25 2/15/89 12.75 (13.6) 87.4 151,194 0.50 (2.1) 0.50 10.7 13.0
Corp./ENSERCH shares shares and
Exploration 1.00(3)
Partners
09/89 United Meridian 6.13 1/27/89 9.00 (11.1) 60.1 26,341 $8.00 30.6 $10.50 71.4 31.3
Corporation/
Ensource Inc.
08/89 The Henley Group, 19.25 6/08/89 21.38 (4.1) 80.2 119,801 20.50 23.3 22.25 33.8 8.5
Inc./Fisher
Scientific Group,
Inc.
</TABLE>
20
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
<TABLE><CAPTION>
Inside Aggregate
Owner- Conside-
Initial ship ration Initial Final
52 week Premium Before for Premium Premium
Acquiring Prior 1 High Over 52 the Amount Over Over Percent
Company/Acquired day to Date prior Week Trans- Acquired Initial Market Final Market Increase
Company Ann. of Ann. to Ann. High action (000's) Bid Price Bid Price in Offer
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
06/89 Zayre Corp./The $ 26.38 12/05/88 $27.13 28.5% 83.0% $314,081 1.35 32.3% 1.45 42.0% 7.4%
TJX Companies, shares(4) shares(4)
Inc.
06/89 Allied Irish Banks 25.00 9/12/88 27.68 27.3 49.7 365,000 35.25 41.0 39.25 57.0 11.4
plc/First Maryland
Bancorp.
05/89 Investors 5.25 12/06/88 8.50 (30.9) 69.0 22,083 5.88 6.0 6.50 17.3 10.6
(private-USA)/Sage
Energy Co.
</TABLE>
21
<PAGE>
COMPARISON OF SELECTED BUYOUTS BY
SIGNIFICANT EXISTING SHAREHOLDERS
Footnotes
<TABLE>
<C> <S>
(a) Represents combined share/cash offer.
(b) Common shareholders to receive $14.75 in principal amount of 8.25% senior notes due 2004.
(c) Valued at $15.25; 5,510,000 outstanding shares.
(d) Based on a share price of $28.875.
(e) Purchased 37.35% stake from Union des Assurances de Paris; increased ownership to 95.4%.
(f) $/DM exchange rate = 1.5356; DM 630 million to UAP for 37.35% stake and a further DM 170 million in cash (DM 2,630
per share) to Nordstern independent shareholders.
(g) 1991 high and high since 1989, respectively.
(h) 91% of voting interest.
(i) $/DM exchange rate = 1.5356.
(j) Valued at $15.20.
(k) Valued at $16.19.
(l) Valued at $4.57.
(m) 99.7% voting interest.
(n) Final Bid $3.5625 received in tender offer plus three distributions comprised of $.2875 prior to the closing of the tender.
(o) 1990 high and high since 1988, respectively.
(p) Valued at $10.50.
(q) Valued at $11.00.
(r) 1989 high and high since 1987, respectively.
(s) Number shown represents the number of common shares of Primerica offered. Based on the valuation of the final bid, 0.3
shares of Primerica is approximately a $11.06 value.
(t) Valued at $11.80.
(u) 61.1% ownership on a fully diluted basis.
(v) 60% voting interest.
(w) Number shown represents the number of common shares of AMEX offered. Based on the valuation of the final bid, 0.426 shares
of AMEX is approximately a $11.45 value.
(x) Valued at $12.90.
(y) Warrant valued at $2.00.
(z) 1988 high and high since 1986, respectively.
(1) Number shown represents the number of common shares of Primerica offered. Based on the valuation of the final bid,
0.8 shares of Primerica is approximately a $19.40 value.
(2) Valued at $23.165.
(3) Valued at $7.6875.
(4) Number shown represents the number of common shares of Zayre offered. Based on the valuation of the final bid, 1.35
shares of Zayre is approximately a $32.40 value; final bid valued at $34.80.
</TABLE>
22
<PAGE>
COMPARISON OF RECENT ACQUISITIONS OF U.S.
PROPERTY/CASUALTY REINSURANCE COMPANIES
SUMMARY STATISTICS
<TABLE><CAPTION>
MULTIPLE OF GAAP
----------------------------------------------------------------
LTM NET WRITTEN MULTIPLE OF STATUTORY
-----------------------------------
PREMIUMS LTM NET INCOME TANGIBLE BOOK VALUE NET INCOME BOOK VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
High 1.80x 21.40x 3.10x 27.90x 1.94x
Low 0.48 6.72 0.82 7.69 0.91
Median 1.17 9.91 1.17 10.32 1.13
Mean 1.17 12.88 1.37 12.83 1.26
</TABLE>
23
<PAGE>
COMPARISON OF RECENT ACQUISITIONS OF U.S. PROPERTY/CASUALTY
REINSURANCE COMPANIES
<TABLE><CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Multiple of GAAP Multiple of Statutory
- ----------------------------------------------------------------------------------------------------------------------------------
Acquiring LTM Net
Company/Acquired Written LTM Net Tangible Net Book
Date Company Consideration Premiums Income Book Value Income Value Comments
($mm)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
7/95 Employers Reinsurance/ N.A. N.A. N.A. N.A. N.M. N.M. . Sale of Germany's
Frankona Re fourth largest
insurer to GE
Capital's ERC
creates a global
reinsurer to rival
General Re/Cologne
Re.
5/95 Employers Reinsurance/ $133.2 N.A. N.A. N.A. N.M. N.M. . Employers Re
Aachener Re purchased Aachener
Re, a "AA" rated
reinsurer serving
the European
market, from
Aachener and Munich
Insurance.
4/95 Zurich Reinsurance 203.5(a) 1.54x 17.90x 1.04x 27.90x(b) 1.31x(b) . Zurich Re will
Centre/Re Capital Corp acquire Re
Capital's 7 million
primary shares for
$18.50 a piece,
including 3 million
shares owned by
John Deere
Insurance, and
assume $69mm in
convertible debt.
4/95 USF&G Corp/Discover 78.5 N.A. N.A. N.A. N.M. N.M.(c) . Sale of Discover
Reinsurance Company Re, a provider of
insurance to the
alternative risk
transfer ('ART')
market, for $78.5mm
in common stock and
options.
4/95 Exor America Inc./ 400.0 0.88(b) 12.86(b) 1.00(b) 14.92(b) 1.40(b) . Sale of
Constitution Re Corp. Constitution Re, a
unit of Talegen
Holdings, a wholly
owned subsidiary of
Xerox.
11/94 St. Paul and Employers N.A. N.A. N.A. N.A. N.A. N.A. . Sale of CIGNA's
Re/CIGNA International international
Property-Casualty property/casualty
Reinsurance reinsurance renewal
rights, which
consists of $270
million in gross
written premiums,
to St. Paul and
Employers Re.
6/94 General Re/Colonia 875.0(d) 0.48 21.40 3.10(e) N.A. N.A. . Joint venture
Konzern AG (Colonia between General Re
Konzern AG's 66% stake and Colonia Konzern
in Cologne Re AG, the holding
announced) group of Cologne
Re. This venture
will create the
third largest
reinsurer in the
world with NPW of
$5.3 billion.
</TABLE>
<PAGE>
<TABLE><CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Multiple of GAAP Multiple of Statutory
- ----------------------------------------------------------------------------------------------------------------------------------
Acquiring LTM Net
Company/Acquired Consideration Written LTM Net Tangible Net Book
Date Company ($mm) Premiums Income Book Value Income Value Comments
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
11/93 QBE Insurance Group 59.0 N.A. N.A. N.A. N.M. 1.10 . Sale of the New
Ltd./American Royal York unit of Royal
Reinsurance Co. (Royal Ins. Co. of Canada.
Insurance Holdings)
10/93 Allegheny 201.0(f) 1.45(g) 8.82(h) 1.51x(i) 9.13(j) 1.17(h) . Sale of reinsurance
Corporation/Underwriters LPD owned by
Re Holdings Corp. Continental,
Goldman Sachs and
management.
09/92 Kohlberg Kravis 1,429.5 1.51(k) 9.91(m) 1.39(n) 9.06(n) 1.94(m) . Sale of reinsurance
Roberts/American Re subsidiary of
(Sub. of Aetna) Aetna.
. Continental adverse
loss development
cover transferred
with sale.
06/90 SCOR U.S. Corp./ 64.2 0.80 19.34 0.96 13.28(o) 0.97(o) . Merger between
Rockleigh Management affiliates.
Corp. . Seller provided
significant
protection against
adverse reserve
development.
</TABLE>
24
<PAGE>
<TABLE><CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Multiple of GAAP Multiple of Statutory
- ----------------------------------------------------------------------------------------------------------------------------------
Acquiring LTM Net
Company/Acquired Written LTM Net Tangible Net Book
Date Company Consideration Premiums Income Book Value Income Value Comments
($mm)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
4/90 Putnam Reinsurance Co. 130.7 0.85(p) 6.72(p) 0.95(p) 10.13(p) 1.16(p) . Merger between
(Sub. of Transatlantic affiliates.
Holdings)/Transatlan- . Both companies
tic Reinsurance Co.(q) principally owned
by AIG.
04/90 Keystone/Acadia $390.6(r) 1.61x 9.53x 1.31x(s) 10.51x 1.69x(s) . Sale of reinsurance
Investor subsidiary for
Group/National strategic reasons.
Reinsurance Corp. . Seller provided
(Sub. of Lincoln significant
National Corp.) protection against
adverse reserve
development.
. Clean portfolio was
provided.
10/89 Lawrence Insurance 28.0 1.80 9.46 0.82 7.68(t) 0.92(t) . Sale of reinsurance
Group, Inc./United division for
Republic Reinsurance strategic reasons.
Co.
12/87 Management and Broad 118.0(u) 0.74 N.M. 1.30 N.M. 0.91 . Divestiture of
Street Investment Fund troubled
I, L.P./Underwriters reinsurance
Re Corp. subsidiary.
. Seller provided
significant
protection against
adverse reserve
development.
</TABLE>
<TABLE>
<S> <C> <C> <C>
Median $165.5 1.17x 9.91x 1.17x 10.32x 1.13x
(12 data (10 data (9 data (10 data (8 data (10 data
points) points) points) points) points) points)
</TABLE>
<TABLE>
<C> <S>
(a) Zurich Re will acquire Re Capital's 7 million of primary shares and assume $69.5mm in convertible debt.
(b) Based on year-end 1993 financial data.
(c) Based on year-end 1993 financial data, the book value multiple was 5.12x. (Company completed only third year of operations in
1993.)
(d) Consideration for Colonia Konzern AG's 66% stake in Cologne Re is DM 1.4 billion which results in a valuation of DM 2.1
billion for 100% of Cologne Re. Dollar exchange rate of 1.6 used.
(e) Book value includes DM 177 million of fluctuation reserves.
(f) Aggregate consideration for 93% of Underwriters Re. Multiples based on $216 million.
(g) Twelve months ended March 31, 1993.
(h) Twelve months ended March 31, 1993, net of after-tax gain/loss on net realized gains.
(i) As of March 31, 1993.
(j) Based on year-end 1992 financial data, net of after-tax gain on net realized gains.
(k) Twelve months ended June, 1992.
(l) Twelve months ended June, 1992, net of after-tax gain/loss on net realized gains.
(m) As of June 30, 1992.
(n) Based on year-end 1991 financial data.
(o) Based on year-end 1989 financial data.
(p) Based on year-end 1989 financial data for Transatlantic Holdings, Inc. and Subsidiary (formerly called PREINCO Holdings,
Inc.).
(q) The Transatlantic Holdings transaction was a merger of equals in which Transatlantic Holdings issued 1,957,143 shares. The
stock split 8 for 1 on April 18, 1990.
(r) Aggregate consideration of $390.6 million consisted of $320.1 million in cash, $75 million in Preferred stock of the holding
company, and Lincoln National investing $4.5 in the Holding Company for a common equity interest and a warrant for an
additional 10% of the common equity.
(s) As of April 30, 1990.
(t) Based on year-end 1988 financial data.
(u) Continental received $118 million in cash plus $54 million for selling a reinsurance contract to Underwriters Re.
</TABLE>
25
<PAGE>
Analysis at Various Prices
(dollars in millions except per share amounts)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Consideration per Common Share $11.25(a) $13.00 $13.50 $14.00 $14.50 $14.74(b) $15.01(c) $15.50 $16.00
Price for Common Stock (d) 41 47 49 51 52 53 54 56 58
Price for convertible (e) 76 76 76 76 76 76 76 76 76
-- -- -- -- -- -- -- -- --
Aggregate Consideration $117 $123 $125 $127 $128 $129 $130 $132 $134
=================================================================================================================================
Premium Over Market Price
9/19/95 $11.25 0.0% 15.6% 20.0% 24.4% 28.9% 31.0% 33.4% 37.8% 42.2%
Multiple of EPS
LTM $0.75 15.0x 17.3x 18.0x 18.7x 19.3x 19.7x 20.0x 20.7x 21.3x
1995E(f) 0.88 12.8 14.8 15.3 15.9 16.5 16.8 17.1 17.6 18.2
1996E(f) 0.95 11.8 13.7 14.2 14.7 15.3 15.5 15.8 16.3 16.8
Multiple of Book Value/Share
Stated at 6/30/95 $15.01 0.75x 0.87x 0.90x 0.93x 0.97x 0.98x 1.00x 1.03x 1.07x
Tangible at 6/30/95 14.74 0.76 0.88 0.92 0.95 0.98 1.00 1.02 1.05 1.09
===============================================================================================================================
(a) Equals market value as of 9/19/95.
(b) Equals tangible book value per share as of 6/30/95.
(c) Equals book value per share as of 6/30/95.
(d) Based on acquisition of all 3.6 million publicly traded shares of common stock.
(e) Assumes price for convertible is greater of (i) the par value of the convertible ($76.0 million) or (ii) the value of
the underlying shares to be issued upon conversion.
(f) IBES median estimates as of September 7, 1995.
26
</TABLE>
Exhibit (b)(2)
Discounted Cash Flow Analysis
Net Present Value per Share of Projected Dividends
<TABLE><CAPTION>
Net Income Discount Terminal Value Multiples
--------------------------------------------------------------------------------
CAGR Rates 8x 9x 10x 11x 12x 13x 14x 15x
==========================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% 12.5% $10 $11 $12 $13 $14 $15 $16 $17
15.0 9 10 11 12 13 14 15 15
10% 12.5% $11 $12 $13 $14 $15 $16 $17 $18
15.0 10 11 12 13 14 15 16 17
15% 12.5% $11 $13 $14 $15 $16 $17 $19 $20
15.0 11 12 13 14 15 16 17 18
==========================================================================================================
</TABLE>
Assumptions:
- -----------
Cash Flows discounted to December 31, 1995.
Cash Flows represent yearly dividends plus a terminal value at year-end 1999
based on a multiple of 1999 net income.
Management projections (as of Fall 1995) for 1995-1997 EPS and assumed growth
applied thereafter.
Dividend payout ratio of 34%.
<PAGE>
Analysis at Various Prices
(dollars in millions except per share amounts)
<TABLE><CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Consideration per Common Share $11.25(a) $13.00 $13.50 $14.00 $14.50 $14.83(b) $15.10(c) $15.50 $16.00
Price for Common Stock (d) 41 47 49 51 52 54 55 56 58
Price for Convertible (e) 76 76 76 76 76 76 76 76 76
-- -- -- -- -- -- -- -- --
Aggregate Consideration $117 $123 $125 $127 $128 $130 $131 $132 $134
===================================================================================================================================
<CAPTION>
Premium Over Market Price
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/19/95 $11.25 0.0 % 15.6 % 20.0 % 24.4 % 28.9 % 31.8 % 34.2 % 37.8 % 42.2 %
Multiple of EPS
LTM $0.96 11.7 x 13.5 x 14.1 x 14.6 x 15.1 x 15.4 x 15.7x 16.1 x 16.7x
1995E (f) 1.01 11.1 12.9 13.4 13.9 14.4 14.7 15.0 15.3 15.8
1996E (f) 1.19 9.5 10.9 11.3 11.8 12.2 12.5 12.7 13.0 13.4
Multiple of Book Value/Share
Stated at 9/31/95 $15.10 0.74 x 0.86 x 0.89 x 0.93 x 0.96 x 0.98 x 1.00 x 1.03 x 1.06 x
Tangible at 9/31/95 (g) 14.83 0.76 0.88 0.91 0.94 0.98 1.00 1.02 1.04 1.08
===================================================================================================================================
</TABLE>
(a) Equals market value as of 9/19/95.
(b) Equals tangible book value per share as of 9/31/95.
(c) Equals book value per share as of 9/31/95.
(d) Based on acquisition of all 3.6 million publicly traded shares of common
stock.
(e) Assumes price for convertible is greater of (i) the par value of the
convertible ($76.0 million) or (ii) the value of the underlying shares to
be issued upon conversion.
(f) Projected data from Arctic management's Fall 1995 revision to the Strategic
Profitability Plan.
(g) Assumes 6/30/95 intangibles of approximately $5 million.
Exhibit (b)(3)
[ Dillon, Read & Co. Inc. Letterhead ]
November 2, 1995
SCOR U.S. Corporation
Two World Trade Center, 23rd Floor
New York, New York 10048-0178
Attention: Special Committee of the Board of Directors
Gentlemen:
You have advised us that SCOR S.A. ("SCOR S.A.") proposes to acquire all of the
publicly held outstanding common stock, par value $0.30 per share, (the
"Shares") of SCOR U.S. Corporation (the "Company") not currently held by SCOR
S.A. from the holders thereof (the "Selling Shareholders") at a purchase price
of $15.25 per share (the "Transaction"). You have requested our opinion as to
whether the consideration to be paid pursuant to the Transaction is fair to the
Selling Shareholders, from a financial point of view, as of the date hereof.
In arriving at our opinion, we have, among other things: (i) reviewed certain
publicly available business and financial information relating to the Company;
(ii) reviewed the reported price and trading activity for the Shares of the
Company; (iii) reviewed certain internal financial information and other data
provided to us by the Company relating to the business and prospects of the
Company, including financial projections prepared by the management of the
Company; (iv) conducted discussions with members of the senior management of
the Company; (v) reviewed the financial terms, to the extent publicly
available, of certain acquisition transactions which we considered relevant;
(vi) reviewed publicly available financial and securities market data pertaining
to certain publicly-held companies in lines of business generally comparable
to those of the Company; and (vii) conducted such other financial studies,
analyses and investigations, and considered such other information as we deemed
necessary and appropriate.
In connection with our review, with your consent, we have not assumed any
responsibility for independent verification of any of the foregoing information
and have relied upon it being complete and accurate in all material respects.
We have not been requested to and have not made an independent evaluation
or appraisal of any assets or
<PAGE>
liabilities (contingent or otherwise) of the Company or any of its subsidiaries,
nor have we been furnished with any such evaluation or appraisal. Further, we
have assumed, with your consent, that all of the information, including the
projections provided to us by the Company's management, was prepared in good
faith and was reasonably prepared on a basis reflecting the best currently
available estimates and judgments of the Company's management as to the future
financial performance of the Company, and was based upon the historical
performance and certain estimates and assumptions which were reasonable at the
time made. In addition we have not been asked to, and do not express any opinion
as to the after-tax consequences of the Transaction to any Selling Shareholder.
In addition, our opinion is based on economic, monetary and market conditions
existing on the date hereof.
In rendering this opinion, we are not rendering any opinion as to the value of
the Company or making any recommendation to the Selling Shareholders with
respect to the advisability of voting in favor of the Transaction.
Dillon, Read & Co. Inc. ("Dillon Read"), as part of its investment banking
business, is engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwriting, competitive
biddings, secondary distributions of listed and unlisted securities, private
placements and valuations of estate, corporate and other purposes. Dillon Read
has received a fee for rendering this opinion.
This opinion is being rendered solely to the Special Committee of the Board of
Directors of the Company for its use in evaluating the Transaction and is not
for the benefit of, nor being rendered to, the Selling Shareholders or any
other person.
Based upon and subject to the foregoing, we are of the opinion that the
consideration to be received in the Transaction by the Selling Shareholders is
fair to the Selling Shareholders, from a financial point of view, as of the date
hereof.
Very truly yours,
DILLON, READ & CO. INC.
/s/William P. Powell
By: William P. Powell
Managing Director
Exhibit (e)(1)
APPRAISAL RIGHTS OF DISSENTING STOCKHOLDERS
UNDER DELAWARE LAW
In connection with the Merger, a stockholder may have the right to dissent
from the Merger and, in lieu of receiving $15.25 net in cash per Share, to seek
the "fair value" of all of such stockholder's Shares, as determined in
accordance with the applicable provisions of the Delaware General Corporation
Law ("DGCL"). In order to perfect such appraisal rights, a stock is required to
follow the procedures set forth in Section 262 of the DGCL, as summarized below.
The following discussion of the provisions of Section 262 is not intended to be
a complete statement of its provisions and is qualified in its entirety by
reference to the full text of that section. THE PROCEDURES SET FORTH IN SECTION
262 SHOULD BE STRICTLY COMPLIED WITH. FAILURE TO FOLLOW ANY SUCH PROCEDURES MAY
RESULT IN A TERMINATION OR WAIVER OF APPRAISAL RIGHTS UNDER SECTION 262.
Any stockholder of the Company may elect to dissent from the Merger with
respect to all of the Shares registered in such stockholder's name. If the
Merger is consummated pursuant to a stockholder vote, a stockholder who votes in
favor of the Merger, whether in person or by proxy, shall waive such
stockholder's appraisal rights. However, a stockholder is not required to vote
against the Merger in order to qualify to exercise appraisal rights.
If the Merger is to be consummated pursuant to a stockholder vote, the
Company, not less than 20 days prior to the meeting of stockholders, shall
notify each of its stockholders who was such on the record date for such meeting
that appraisal rights are available. Any stockholder electing to exercise the
appraisal rights must deliver to the Company, before the taking of the vote on
the proposed Merger, a written demand for appraisal of such stockholder's
Shares. Such demand must reasonably inform the Company of the identity of the
stockholder and that the stockholder intends thereby to demand the appraisal of
such stockholder's Shares. Within ten (10) days after the effective date of such
Merger, the surviving or resulting corporation must notify each stockholder of
each constituent corporation who has complied with Section 262(d)(1) and has not
voted in favor of or consented to the Merger of the date that the Merger has
become effective.
FAILURE TO MAKE SUCH WRITTEN DEMAND SHALL CONSTITUTE A WAIVER OF THE
STOCKHOLDER'S APPRAISAL RIGHTS.
If the Merger is to be consummated pursuant to Section 228 or 253 of the
DGCL, the surviving or resulting corporation, either before the effective date
of such Merger or within ten (10) days thereafter, shall notify each of the
stockholders entitled to appraisal rights of the effective date of such Merger
and that appraisal rights are available for any or all of the Shares of the
Company. The notice shall be sent by certified or registered mail, return
receipt requested, addressed to the stockholder, at such stockholder's address
as it appears on the records of the Company. Any stockholder entitled to
appraisal rights may, within twenty (20) days after the date of mailing of the
notice, demand in writing from the surviving or resulting corporation the
appraisal of such stockholder's Shares. Such demand must reasonably inform the
Company of the identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of such stockholder's Shares.
FAILURE TO MAKE SUCH WRITTEN DEMAND SHALL CONSTITUTE A WAIVER OF THE
STOCKHOLDER'S APPRAISAL RIGHTS.
The written demand for appraisal must be made by or for the holder of record
of Shares registered in such holder's name. Accordingly, such demand should be
executed by or for such
<PAGE>
stockholder of record, fully and correctly, as such stockholder's name appears
on such stockholder's stock certificates. If the stock is owned of record in a
fiduciary capacity, such as by a trustee, guardian or custodian, execution of
the demand should be made in such capacity and if the stock is owned of record
by more than one person as in a joint tenancy or tenancy in common, such demand
should be executed by or for all joint owners. An authorized agent, including
one or two or more joint owners, may execute the demand for appraisal for a
stockholder of record. However, the agent must identify the record owner or
owners and expressly disclose the fact that in executing the demand he is acting
as agent for the record owner.
Within 120 days after the day of the effective date of the Merger, any
stockholder who has satisfied the foregoing conditions and who is otherwise
entitled to appraisal rights under Section 262, may file a petition in the
Delaware court of Chancery demanding a determination of the value of the Shares
held by all stockholders entitled to appraisal rights. If no such petition is
filed, appraisal rights will be lost for all stockholders who had previously
demanded appraisal of their shares. Stockholders seeking to exercise appraisal
rights should not assume that the surviving or resulting corporation will file a
petition with respect to the appraisal of the value of their shares or that the
surviving or resulting corporation will initiate any negotiations with respect
to the "fair value" of such shares. ACCORDINGLY, STOCKHOLDERS WHO WISH TO
EXERCISE THEIR APPRAISAL RIGHTS SHOULD REGARD IT AS THEIR OBLIGATION TO TAKE ALL
STEPS NECESSARY TO PERFECT THEIR APPRAISAL RIGHTS IN THE MANNER PRESCRIBED IN
SECTION 262.
Within 120 days after the day of the effective date of the merger, any
stockholder who has complied with the provisions of Section 262 is entitled,
upon written request, to receive from the surviving or resulting corporation a
statement setting forth the aggregate number of Shares not voted in favor of the
Merger and with respect to which demands for appraisal have been received by the
surviving or resulting corporation and the aggregate number of holders of such
Shares. Such statement must be mailed to the stockholder within 10 days after
the written request therefor is received by the surviving or resulting
corporation or within 10 days after expiration of the period for delivery of
demands for appraisal under Section 262, whichever is later.
If a stockholder files the petition for appraisal in a timely manner, the
surviving or resulting corporation must file, within 20 days of service of the
stockholders' petition, a verified list of the names and addresses of all
stockholders who have demanded appraisal for their shares and with whom the
surviving or resulting corporation has not reached an agreement regarding value.
If the surviving or resulting corporation files a petition, it must be
accompanied by a similar list. If so ordered by the Court, the Register of
Chancery is required to provide notice by registered or certified mail of the
hearing to stockholders shown on the list and to provide notice by publication.
If a petition for an appraisal is timely filed, at the hearing on such
petition, the Delaware Court of Chancery will determine the stockholders
entitled to appraisal rights and will appraise the value of the Shares owned by
such stockholders, determining its "fair value" exclusive of any element of
value arising from the accomplishment or expectation of the Merger. The Court
will direct payment of the fair value of such shares together with a fair rate
of interest, if any, on such fair value to stockholders entitled thereto upon
surrender to the surviving or resulting corporation of share certificates. Upon
application of a stockholder, the Court may, in its discretion, order that all
or a portion of the expenses incurred by any stockholder in connection with an
appraisal proceeding, including without limitation, reasonable attorneys' fees
and the fees and expenses of experts, be charged pro rata against the value of
all the shares entitled to appraisal.
Although the Purchaser believes that the price per Share set out in the
offer is fair, it cannot make any representation as to the outcome of the
appraisal of fair value as determined by the Delaware Court of Chancery, and
stockholders should recognize that such an appraisal could result in a
determination of a lower, higher or equivalent value.
<PAGE>
Any stockholder who has duly demanded an appraisal in compliance with
Section 262 will not, after the effective date of the Merger, be entitled to
vote such stockholder's Shares for any purpose nor be entitled to the payment of
any dividends or other distributions on such stockholder's Shares (other than
those payable to stockholders of record as of a date prior to the effective date
of the Merger).
If no petition for an appraisal is filed within the time provided, or if a
stockholder delivers to the surviving or resulting corporation a written
withdrawal of such stockholder's demand for an appraisal and an acceptance of
the Merger, either within 60 days or after the effective date of the Merger or,
with the written approval of the surviving or resulting corporation, thereafter,
then the right of such stockholder to an appraisal will cease and such
stockholder shall be entitled to receive in cash, without interest, the amount
to which he would have been entitled had he not demanded appraisal of such
stockholder's Shares. No appraisal proceeding in the Court of Chancery will be
dismissed as to any stockholder without the approval of the Court, which
approval may be conditioned on such terms as the Court deems just.
Any notice, objection, demand or other written communication required to be
given to the Company by a dissenting stockholder should be delivered to the
Secretary of such respective corporation at the address set forth in the
Schedule 13e-3 or should be delivered as otherwise permitted by law. Although
not specifically required, it is recommended that such written communications be
sent by registered or certified mail, return receipt requested.
IN VIEW OF THE COMPLEXITY OF THESE PROVISIONS OF DELAWARE LAW, ANY
STOCKHOLDER WHO IS CONSIDERING EXERCISING APPRAISAL RIGHTS SHOULD CONSULT SUCH
STOCKHOLDER'S LEGAL ADVISOR.
