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As filed with the Securities and Exchange Commission on March 28, 2000.
Registration No.333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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SAFECO CORPORATION
(Exact name of registrant as specified in its charter)
Washington 91-0742146
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4333 Brooklyn Avenue N.E.
Seattle, Washington 98185
(206) 545-5000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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Janice Oakes Schafer
Assistant General Counsel
SAFECO Corporation
4333 Brooklyn Avenue N.E.
Seattle, Washington 98185
(206) 545-5000
(Name, address and telephone number of agent for service)
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Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[_]
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CALCULATION OF REGISTRATION FEE
===============================================================================================================================
Title of Each Class of Amount to Be Proposed Maximum Proposed Maximum Amount of
Securities to Be Registered Registered Offering Price Aggregate Registration Fee
Per Unit(1) Offering Price(1)
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<S> <C> <C> <C> <C>
Common Stock, no par value 1,000,000 shares $19.659375 $19,659,375 $5,190
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- -------------------------------------------------------------------------------------------------------------------------------
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c), based upon 90% of the average of the high and low sales
prices on March 22, 2000.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
[SAFECO LOGO]
1,000,000 Shares
Common Stock
_________
This prospectus relates to our common stock offered under the SAFECO Agency
Stock Purchase Plan. Each eligible agency may purchase shares under the plan.
In the case of eligible Partnership Plus agencies, the purchase price for a
share of common stock offered under the plan is 90% of the closing price on the
purchase date. In the case of eligible President's Trust agencies, the purchase
price is 80% of the closing price on the purchase date. Shares purchased under
the plan cannot be sold or transferred during a two-year restricted period
beginning on the purchase date. The "closing price" means the price at which
the last trade in our common stock was made before or at 1:00 p.m. Seattle time,
as reported on The Nasdaq National Market.
Our common stock is traded in the over-the-counter market and is quoted on
The Nasdaq National Market under the symbol "SAFC."
The Securities and Exchange Commission and state securities commissions
have not approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is March 28, 2000.
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TABLE OF CONTENTS
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PAGE
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Forward-Looking Statements 3
Where You Can Find More Information 3
SAFECO Corporation 4
Use of Proceeds 5
The Plan 5
Terms of Purchase 7
Shares Available under the Plan 8
Dividends 8
Other Shareholder Rights 8
Plan Committee 9
Plan Custodian 9
Expenses 9
Federal Income Tax Consequences of Purchasing Shares under the Plan 9
Description of the Capital Stock 10
Experts 13
Legal Matters 13
</TABLE>
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FORWARD-LOOKING STATEMENTS
Statements made in documents incorporated by reference in this prospectus that
relate to anticipated financial performance, business prospects and plans,
regulatory developments and similar matters may be considered "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Statements made in those documents that are not historical information are
forward-looking. Such statements are subject to certain risks and uncertainties
that may cause the operations, performance, development and results of our
business to differ materially from those suggested by the forward-looking
statements. The risks and uncertainties include:
. our ability to obtain rate increases and non-renew underpriced insurance
accounts;
. realization of growth and business retention estimates;
. achievement of our premium targets and profitability;
. changes in competition and pricing environments;
. achievement of our expense reduction goals;
. the occurrence of significant natural disasters, including earthquakes;
. weather conditions, including the severity and frequency of storms,
hurricanes, snowfalls, hail and winter conditions;
. driving patterns;
. fluctuations in interest rates;
. performance of financial markets;
. court decisions and trends in litigation;
. legislative and regulatory developments;
. the adequacy of loss reserves;
. the availability and pricing of reinsurance;
. the development of major Year 2000 related claims or liabilities; and
. general economic and market conditions.
In particular, because insurance rates in some jurisdictions are subject to
regulatory review and approval, our achievement of rate increases may occur in
amounts and on a time schedule different than planned, which may affect our
efforts to restore earnings in our property and casualty lines.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (SEC). Our SEC filings
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file with the SEC
at its public reference facilities in Washington, D.C., New York, New York or
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the operation of the public reference facilities. You may also obtain copies
of the documents
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at prescribed rates by writing to the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
the information included and/or incorporated by reference in this prospectus. We
incorporate by reference the documents listed below and any future filings made
with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934 until our offering is completed:
. Annual Report on Form 10-K for the year ended December 31, 1999; and
. The description of our common stock contained in a registration
statement filed with the SEC under Section 12(g) of the Securities
Exchange Act, including any amendments or reports filed for the
purpose of updating that description.
You may request a copy of these filings (other than exhibits, unless that
exhibit is specifically incorporated by reference into that filing) at no cost,
by writing or telephoning us at the following address and phone number:
SAFECO Investor Relations,
SAFECO Corporation
SAFECO Plaza
4333 Brooklyn Avenue N.E.
Seattle, Washington 98185
(206) 545-5000.
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the state does not permit
an offer. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the prospectus.
SAFECO CORPORATION
We are one of the largest diversified financial services companies in the
United States. Through our subsidiaries, we engage in two principal lines:
property and casualty insurance (including surety) and life insurance. Our
property and casualty insurance operation is one of the largest in the United
States and writes personal, commercial and surety lines of insurance through
approximately 8,000 independent agents. We also are one of the independent
agency system's largest insurers of small to medium-sized businesses. Our
principal personal lines are automobile and homeowners insurance, and our
principal commercial product lines are workers' compensation, commercial
multiperil, commercial automobile and surety. Our life and investments
operations offer individual and group insurance products, retirement services
(pension) and annuity products through professional agents in all 50 states and
the District of Columbia. We also conduct
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commercial lending and leasing, investment management, and insurance agency and
financial services distribution operations.
At December 31, 1999, we had stockholders' equity of approximately $4.3
billion and total assets of approximately $30.6 billion. As of December 31,
1999, we had approximately 13,000 employees.
We are a Washington corporation. Our principal executive offices are
located at SAFECO Plaza, 4333 Brooklyn Avenue N.E., Seattle, Washington 98185,
and our telephone number is (206) 545-5000.
USE OF PROCEEDS
Unless we specify otherwise in a prospectus supplement, the net proceeds we
receive from the sale of the shares offered under this prospectus will be used
for general corporate purposes. The net proceeds may be invested temporarily or
applied to repay short-term debt until they are used for their stated purpose.
THE PLAN
General
Our board of directors authorized the adoption of the SAFECO Agency Stock
Purchase Plan to reward key insurance agencies with the opportunity to buy our
common stock at a discount. Our board of directors believes that stock
ownership will motivate our top agencies to contribute to the long-term growth
and success of our enterprise. The plan was adopted on November 3, 1999.
The plan allows agencies that meet certain incentive compensation goals and
are selected for participation to purchase shares of our common stock for cash
at a discount of either 10% or 20% from the closing price of our common stock on
the date of purchase.
Eligibility
Eligibility for the plan is determined on a year-by-year basis. Each
agency that has either a "Partnership Plus" or "President's Trust" incentive
compensation contract directly with us to promote and sell our personal and/or
commercial lines of insurance is eligible to purchase shares on a purchase date
if it has:
. earned $10,000 or more in incentive cash compensation for the calendar
year preceding that purchase date; and
. has been selected for participation on that purchase date by the plan
committee.
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We will notify agencies of their eligibility by providing them with an
election form as described below. Eligible agencies are under no obligation to
participate in the plan.
The plan is for the benefit only of agencies that satisfy the criteria
listed above. No other persons can be direct or indirect beneficiaries or
participants under the plan. Any arrangements or undertakings entered into
between an agency and that agency's producers establish rights and obligations
solely between or among those parties and do not create any obligations on the
part of SAFECO or any of our affiliates. Neither SAFECO nor its affiliates shall
have any liability under those arrangements.
Procedures for Making Purchases
Purchases can be made under the plan on each date designated as a purchase
date. Unless the plan committee determines otherwise, the purchase date each
year will be March 10, or if March 10 is not a business day, the next business
day.
Prior to each purchase date, we will mail a copy of this prospectus and any
applicable prospectus supplement to each eligible agency. The prospectus and any
prospectus supplement will describe the price, purchase date, transfer
restrictions and any other terms and conditions for purchases of shares on that
purchase date.
In February of each year, following our calculation of the cash bonus
amounts payable under agency incentive compensation contracts, we will provide
each eligible agency with an election form. To purchase shares under the plan on
a purchase date, you must:
. complete the election form, indicating the dollar amount that you wish
to apply to the purchase of shares on the purchase date;
. enclose a check for that amount payable to SAFECO Insurance Companies;
and
. mail the election form and check to SAFECO Insurance Companies,
Marketing Department, SAFECO Plaza, Seattle, WA 98185, Attention:
Incentive Plans Administrator.
To be timely, election forms must be delivered to the above address by 4:30
p.m. on the last business day before the purchase date. We will not honor
election forms received after that deadline or election forms that are not
accompanied by full payment of the purchase price. If we receive any election
forms after the deadline for a purchase date, we will promptly return the
enclosed checks to the senders. Funds sent to us to purchase shares under the
plan will not bear interest.
Minimum and Maximum Limits on Purchases
To participate in the plan in any year, the minimum amount an eligible
agency can elect to spend to purchase shares on the purchase date is $5,000. The
maximum an agency can elect to spend
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on share purchases is the amount of the cash bonus the agency earned for the
previous year under its Partnership Plus or President's Trust incentive contract
with us.
Purchase Price; Number of Shares Acquired
In the case of Partnership Plus agencies, the purchase price for a share of
common stock offered under the plan will be 90% of the closing price on the
purchase date. In the case of President's Trust agencies, the purchase price
will be 80% of the closing price on the purchase date. The "closing price"
means the price at which the last trade in our common stock was made before or
at 1:00 p.m. Seattle time as reported on The Nasdaq National Market.
The number of shares that you acquire on any purchase date will equal the
dollar amount paid to purchase shares under the plan divided by the applicable
purchase price. If the number of shares that can be purchased with your payment
is not a whole number, you will be credited with a fractional share carried to
the number of decimal places customarily accounted for by the custodian for the
plan.
Restrictions on Transfer
Shares purchased under the plan will be subject to restrictions on transfer
for a period of two years from the purchase date. During the restricted period,
you will not be allowed to sell, transfer, pledge, assign or otherwise dispose
of the shares or obtain stock certificates. In all other respects, you will be
entitled to the benefits of ownership of the shares as of the purchase date.
There is no risk of forfeiture of your shares during the restricted period.
TERMS OF PURCHASE
We are offering our common stock on the purchase dates, at the purchase
prices and subject to the terms and conditions, including restrictions on
transferability of the shares, established by the plan and in each case as
described in this prospectus and any prospectus supplement. The plan committee
may amend the terms of the plan, including the eligibility criteria, purchase
price, purchase date, and length of the restricted period. If the plan
committee amends the terms of the plan, we will send you a prospectus supplement
describing the revised plan.
During the period your shares are restricted, they will be registered in
your agency name and held in book-entry form by the plan custodian, and you will
not be allowed to sell, transfer, pledge, assign or otherwise dispose of your
shares. During this restricted period, you will bear the risk of loss and
realize the benefits of any gain from changes in the market price of the shares.
Once the restricted period ends, you may:
. ask the plan custodian to send you stock certificates;
. leave your shares in your agency's custodial account;
. or direct the plan custodian to sell or transfer the shares on your
agency's behalf.
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SHARES AVAILABLE UNDER THE PLAN
Our board of directors has authorized 1,000,000 shares of our common
stock for issuance under the plan. These shares will be made available from our
authorized but unissued shares.
In the event that the plan committee determines that:
. any stock dividend,
. extraordinary cash dividend,
. recapitalization,
. reorganization,
. merger,
. consolidation,
. split-up,
. spin-off,
. combination,
. exchange of shares, or
. other similar corporate event
affects our common stock so that an adjustment is required in order to preserve
the benefits or potential benefits intended to be made available under the plan,
then the plan committee may, in its sole discretion, adjust any or all of the
number and kind of shares that may be sold under the plan in any manner the plan
committee may deem equitable.
DIVIDENDS
We pay dividends, as and when declared by our board of directors, to the
record holders of shares of our common stock. As the record holder of shares
purchased under the plan, you will receive dividends, if any, in cash for all
shares registered in your agency name on the record date.
Any dividend payable in common stock or any split shares distributed by
us on shares purchased under the plan and registered in your agency name will be
deposited in the account established for your agency by the plan custodian. Any
shares received as the result of a stock split will be subject to the same
restrictions on transfer as the shares purchased under the plan. Shares
received as dividends will not be subject to any transfer restrictions.
OTHER SHAREHOLDER RIGHTS
If you purchase shares under the plan, you will receive our annual
report and any other periodic or quarterly reports issued to stockholders,
notices of shareholder meetings, proxy statements and Internal Revenue Service
information for reporting dividends.
You will be entitled to vote any shares that are registered in your
agency name on the record date for a meeting of shareholders. You may vote your
shares in person or by proxy.
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PLAN COMMITTEE
The plan committee consists of two or more members appointed from time to
time by our chief executive officer. The members may be SAFECO employees. The
plan committee has broad discretion to administer and interpret the plan. It may
adopt, amend and rescind rules and procedures relating to the plan and delegate
administrative duties as it sees fit. The plan committee may amend the terms of
the plan, including the eligibility criteria, purchase price, purchase date, and
length of the restricted period. However, amendments will not be given effect to
the extent they would adversely affect shares purchased before the date of the
amendment.
PLAN CUSTODIAN
The plan custodian is responsible for establishing and maintaining a
separate account for each agency that has purchased shares under the plan and
for providing reports to participating agencies at least annually. The plan
custodian must be a licensed broker-dealer or have an affiliation with a
licensed broker-dealer. The plan committee has selected The Bank of New York as
the plan custodian. In the event The Bank of New York becomes unwilling or
unable to serve as the plan custodian or the plan committee believes it is in
the best interests of participants to replace the plan custodian, the plan
committee will select a new plan custodian or make other arrangements as it
deems appropriate for handling the duties performed by the plan custodian.
EXPENSES
We will pay all expenses for administration of the plan, including
accounting, legal, and custodial fees. You can purchase our common stock under
the plan without paying any brokerage commission or other charges. The shares
will be issued only in book-entry form until the restricted period expires. If
you request the issuance of stock certificates when the shares are no longer
restricted, you may be charged a stock certificate fee. You will be responsible
for paying any brokerage fees or commissions charged by the plan custodian for
selling or transferring shares that you have acquired under the plan.
FEDERAL INCOME TAX CONSEQUENCES
OF PURCHASING SHARES UNDER THE PLAN
The difference between the fair market value of the shares of common stock
that you acquire on a purchase date and the amount you paid for the shares is
ordinary income to you and recognizable at the time of purchase. For example, if
a President's Trust agency elects to spend $10,000 to purchase common stock, the
agency will receive $12,500 worth of common stock and pay tax on the $2,500
difference.
We believe there are no other federal income tax consequences to you from
purchases under the program. We will be allowed a deduction equal to the amount
of ordinary income that you recognize in the tax year in which you include the
income.
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The tax basis of any shares you acquire under the plan will be their fair
market value on the date the shares were purchased, and the holding period
applicable to the shares will start the next day after the purchase date.
You will have dividend income on receipt of any dividends. You will
recognize gain or loss upon your sale or exchange of the shares. The amount of
the gain or loss will be equal to the difference between the sales price of the
shares and your tax basis in the shares.
The plan in not qualified under Section 401(a) of the Internal Revenue Code
and is not subject to ERISA.
YOU ARE ADVISED TO CONSULT YOUR OWN TAX ADVISOR TO DETERMINE THE PERSONAL
TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN.
DESCRIPTION OF THE CAPITAL STOCK
General
Our authorized capital stock consists of 300,000,000 shares of common
stock, no par value, and 10,000,000 shares of preferred stock, no par value. As
of March 2, 2000, there were issued and outstanding 127,617,967 shares of common
stock and no shares of preferred stock.
The following is a summary description of our capital stock.
Common Stock
The holders of shares of our common stock, subject to the preferential
rights of the holders of any shares of our preferred stock, are entitled to
dividends when and as declared by our board of directors. The holders of our
common stock have one vote per share on all matters submitted to a vote of our
shareholders, and the right to our net assets in liquidation after payment of
any amounts due to creditors and any amounts due to the holders of our preferred
stock. Holders of shares of our common stock are not entitled as a matter of
right to any preemptive, subscription, redemption or conversion rights and are
not entitled to cumulative voting for directors. All outstanding shares of our
common stock are, and the shares of common stock issued under the plan will be,
fully paid and nonassessable.
The transfer agent and registrar for our common stock is The Bank of New
York, P.O. Box 11258, Church Street Station, New York, New York 10286.
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Preferred Stock
Our articles of incorporation permit our board of directors, without
further shareholder authorization, to issue up to 10,000,000 shares of preferred
stock in one or more series and to fix the terms and provisions of each series,
including:
. dividend rights and preferences over dividends on our common stock;
. conversion rights, if any;
. voting rights, if any (in addition to those provided by law);
. redemption rights, if any, and any sinking fund for that purpose; and
. rights on liquidation, including preferences over the common stock.
Each series of preferred stock will be entitled to receive an amount payable
upon liquidation, dissolution or winding up, fixed for each series, plus all
dividends accumulated to the date of final distribution, before any payment or
distribution of our assets is made on our common stock. Currently we have no
shares of preferred stock outstanding.
Antitakeover Effects of Certain Provisions in Our Articles, Bylaws and
Washington Law
Preferred Stock Authorization. As noted above, our board of directors,
without shareholder approval, has the authority under our articles of
incorporation to issue preferred stock with rights superior to the rights of the
holders of common stock. As a result, preferred stock could be issued quickly
and easily, could adversely affect the rights of holders of common stock and
could be issued with terms calculated to delay or prevent a change in control of
SAFECO or make removal of management more difficult.
Election of Directors. Our articles of incorporation provide for the
division of our board of directors into three classes, as nearly equal in number
as possible, with the directors in each class serving for a three-year term and
one class being elected each year by our shareholders. Vacancies on the board
of directors are filled by the board of directors. Any amendment to our
articles of incorporation that would affect the number of directors on our
board, the classification of our board, or the manner in which vacancies on the
board are filled requires the favorable vote of 67% of the outstanding shares
entitled to vote. Because this system of electing directors and filling
vacancies generally makes it more difficult for shareholders to replace a
majority of the board of directors, it may tend to discourage a third party from
making a tender offer or otherwise attempting to gain control of SAFECO.
Shareholder Meetings. Under our bylaws, special meetings of the
shareholders may be called only by our board of directors.
Requirements for Advance Notification of Shareholder Nominations and
Proposals. Our bylaws establish advance notice procedures with respect to
shareholder proposals and the nomination of candidates for election as
directors, other than nominations made by or at the direction of our board of
directors or a committee of the board.
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Washington law. Chapter 23B.19 of the Washington Business Corporation Act,
with limited exceptions, prohibits a "target corporation" from engaging in
certain "significant business transactions" with an "acquiring person" (defined
as a person or group of persons that beneficially owns 10% or more of the voting
securities of the target corporation) for a period of five years after the
acquiring person's share acquisition, unless the prohibited transaction or the
acquiring person's purchase of shares was approved by a majority of the members
of the target corporation's board of directors prior to the acquiring person's
share acquisition. Such prohibited transactions include, among other things,
. a merger or consolidation with, disposition of assets to, or issuance of
stock to or redemption of stock from, the acquiring person;
. termination of 5% or more of the employees of the target corporation as
a result of the acquiring person's acquisition of 10% or more of the
shares; and
. allowing the acquiring person to receive any disproportionate benefit as
a shareholder.
After the five-year period, a "significant business transaction" may occur,
as long as it complies with certain "fair price" provisions of the statute. A
corporation may not "opt out" of this statute.
This statute may have the effect of deterring unfriendly offers and
delaying or preventing a change in control of SAFECO. In so doing, this statute
could deprive shareholders of opportunities to realize a premium on their common
stock. On the other hand, these provisions may induce anyone seeking control of
SAFECO or a business combination with SAFECO to negotiate terms acceptable to
our board of directors.
Insurance Regulations Concerning Change of Control
State insurance laws intended primarily for the protection of policyholders
contain provisions that require advance approval by state agencies of any change
of control of an insurance company or insurance holding company that is
domiciled (or in some cases, having such substantial business that it is deemed
commercially domiciled) in that state. We have property and casualty insurance
subsidiaries domiciled or deemed to be commercially domiciled in Washington,
Indiana, California, Illinois, Texas, Missouri, Pennsylvania and New York. In
these states, "control" is generally presumed to exist through the ownership of
10% of more of the voting securities of an insurance company or any company that
controls the insurance company. Any purchase of our shares that would result in
the purchaser owning 10% or more of our common stock will be presumed to result
in the acquisition of control of our insurance subsidiaries. Such an acquisition
would require prior regulatory approval unless the insurance commissioner in
each state in which our insurance subsidiaries are domiciled or deemed to be
commercially domiciled determines otherwise. In addition, many states require
prenotification to the state regulatory agencies of a change of control of a
nondomestic insurance company licensed in that state if specific market
concentration thresholds would be triggered by the acquisition. While those
prenotification statutes do not authorize the state agency to disapprove the
change of control, they do authorize the agency to issue a cease and desist
order with respect to the
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nondomestic insurance company if certain conditions, such as undue market
concentration, exist. These insurance regulatory requirements may deter, delay
or prevent transactions affecting control of SAFECO or the ownership of our
common stock, including transactions that could be advantageous to our
shareholders.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated
financial statements and financial statement schedules that we incorporated by
reference or included in our Annual Report on Form 10-K for the year ended
December 31, 1999, as set forth in their report dated March 23, 2000. Our Annual
Report on Form 10-K for the year ended December 31, 1999, which includes Ernst &
Young LLP's report, is incorporated by reference in this prospectus. We have
incorporated those financial statements and financial statement schedules by
reference in this prospectus in reliance on Ernst & Young LLP's report, given on
their authority as experts in accounting and auditing.
LEGAL MATTERS
Janice Oakes Schafer, our Assistant General Counsel, will pass upon the
validity of the shares of common stock issuable under the plan for SAFECO.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with
the issuance and distribution of the securities registered under this
registration statement:
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Securities and Exchange Commission registration fee..... $ 5,190
Printing costs.......................................... 12,000
Accounting fees and expenses............................ 10,000
Legal fees and expenses................................. 8,000
Blue Sky fees and expenses.............................. 5,000
Miscellaneous........................................... 3,810
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Total.............................................. $44,000
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All amounts estimated except for registration fees.
Item 15. Indemnification of Officers and Directors.
Sections 23B.08.500 through 23B.08.600 of the Washington Business
Corporation Act ("WBCA") authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933. Article XII of SAFECO's
Bylaws provides for indemnification of SAFECO's directors, officers, employees
and agents to the maximum extent permitted by Washington law.
Section 23B.08.320 of the WBCA authorizes a corporation to eliminate or
limit a director's personal liability to the corporation or its shareholders for
monetary damages for conduct as a director, except liability for (1) acts or
omissions involving intentional misconduct by a director or knowing violations
of law by a director, (2) distributions illegal under Washington law, or (3) any
transaction from which the director will personally receive a benefit in money,
property or services to which the director is not legally entitled. Article VIII
of SAFECO's Restated Articles of Incorporation contains provisions implementing,
to the fullest extent permitted by Washington law, those limitations on a
director's liability to SAFECO and its shareholders.
Officers and directors of SAFECO are covered by insurance (with certain
exceptions and limitations) that indemnifies them against losses and liabilities
arising from certain alleged "wrongful acts," including alleged errors or
misstatements and certain other alleged wrongful acts or omissions constituting
neglect or breach of duty.
II-1
<PAGE>
The above discussion of the WBCA and SAFECO's Bylaws and Articles of
Incorporation is not intended to be exhaustive and is qualified in its entirety
by reference to the WBCA, the Bylaws and the Articles of Incorporation.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
2.1 Election Form
4.1 SAFECO Agency Stock Purchase Plan
5.1 Opinion of Janice Oakes Schafer, Assistant General Counsel, regarding
legality of the shares
23.1 Consent of Ernst & Young LLP
23.2 Consent of Janice Oakes Schafer (included in Exhibit 5.1)
24.1 Powers of Attorney (contained on the signature page hereto)
(b) Financial Statement Schedules
All schedules are omitted because they are inapplicable or the requested
information is shown in the financial statements of the registrant or related
notes thereto.
Item 17. Undertakings
The registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
II-2
<PAGE>
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with the SEC by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; and
(b) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the provisions set forth or described in Item 15 of this
registration statement, or otherwise, the registrant has been informed that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by a
II-3
<PAGE>
registrant of expenses incurred or paid by a director, officer or controlling
person of such registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Seattle,
State of Washington, on the 28th day of March, 2000.
SAFECO CORPORATION
By:/s/ Boh A. Dickey
------------------------------------
Boh A. Dickey
President and Chief Operating Officer
Each person whose individual signature appears below hereby authorizes and
appoints Boh A. Dickey and Rod A. Pierson, and each of them, with full power of
substitution and resubstitution and full power to act without the other, as his
or her true and lawful attorney-in-fact and agent to act in his or her name,
place and stead and to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments, and any registration statement relating to the same offering as this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing, ratifying and confirming all that said attorneys-in-fact
and agents or any of them or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 28th day of March, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Roger H. Eigsti Chairman and Chief Executive Officer
- ---------------------------------------------- (Principal Executive Officer) and Director
Roger H. Eigsti
/s/ Boh A. Dickey President, Chief Operating Officer, Director
- ----------------------------------------------
Boh A. Dickey
/s/ Rod A. Pierson Senior Vice President, Chief Financial Officer and
- ---------------------------------------------- Secretary (Principal Financial Officer)
Rod A. Pierson
/s/ H. Paul Lowber Vice President and Controller (Principal
- ---------------------------------------------- Accounting Officer)
H. Paul Lowber
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C>
/s/ Phyllis J. Campbell Director
- ----------------------------------------------
Phyllis J. Campbell
/s/ Robert S. Cline Director
- ----------------------------------------------
Robert S. Cline
/s/ John W. Ellis Director
- ----------------------------------------------
John W. Ellis
/s/ William P. Gerberding Director
- ----------------------------------------------
William P. Gerberding
/s/ Joshua Green III Director
- ----------------------------------------------
Joshua Green III
/s/ William W. Krippaehne, Jr. Director
- ----------------------------------------------
William W. Krippaehne, Jr.
/s/ William G. Reed, Jr. Director
- ----------------------------------------------
William G. Reed, Jr.
- ---------------------------------------------- Director
Norman B. Rice
/s/ Judith M. Runstad Director
- ----------------------------------------------
Judith M. Runstad
/s/ Paul W. Skinner Director
- ----------------------------------------------
Paul W. Skinner
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
2.1 Election Form
4.1 SAFECO Agency Stock Purchase Plan
5.1 Opinion of Janice Oakes Schafer, Assistant General Counsel, regarding
legality of the shares
23.1 Consent of Ernst & Young LLP
23.2 Consent of Janice Oakes Schafer (included in Exhibit 5.1)
24.1 Powers of Attorney (contained on the signature page hereto)
<PAGE>
EXHIBIT 2.1
[LOGO OF SAFECO]
SAFECO AGENCY STOCK PURCHASE PLAN
STOCK PURCHASE ELECTION FORM
Mail to:
Marketing Department
SAFECO Plaza T-21
Seattle, WA 98185
Attn: Incentive Plans Administrator
Agency Name: ____________________________________________________
Stat Number(s) ____________________________________________________
Mailing Address: ____________________________________________________
Federal Tax I.D. # ____________________________________________________
$____________ Total cash bonus commission earned by agency for the prior year.
The undersigned agency elects to apply $_______________ [minimum is $5,000 and
maximum is the amount of the agency's cash bonus stated above] to the purchase
of shares of SAFECO Corporation common stock which will be restricted for sale
or transfer purposes for 2 years. A check payable to SAFECO Corporation is
enclosed for this amount.
The undersigned agency understands that the purchase date will be _____________,
______ and that the purchase price will be based on the price at which the last
trade in SAFECO Corporation common stock was made before or at 1:00 p.m. Seattle
time on the purchase date, as reported on The Nasdaq National Market (the
"Closing Price"); specifically:
. In the case of Partnership Plus agencies, the purchase price of each
share will be 90% of the Closing Price.
. In the case of President's Trust agencies, the purchase price of each
share will be 80% of the Closing Price.
Signed by: ___________________________________ for the above-named agency.
(print or type name)
Signature: ___________________________________ DATE:____________________
Title: ___________________________________
Please refer to the Prospectus dated ________________, _____ for the complete
description of the stock purchase offer under the SAFECO Agency Stock Purchase
Plan.
Elections to purchase will not be honored unless they are delivered to SAFECO at
the address stated above by 4:30 p.m. Seattle time on ________________, _____
and accompanied by payment in full.
<PAGE>
EXHIBIT 4.1
SAFECO AGENCY STOCK PURCHASE PLAN
1. Purpose
The purpose of the SAFECO Agency Stock Purchase Plan ("Plan") is to reward key
insurance agencies with the opportunity to acquire SAFECO Corporation common
stock at a discount and thereby motivate them to contribute to the long-term
growth and success of the SAFECO group.
2. Eligibility
Each agency that has been designated by the SAFECO property and casualty
insurance companies as a Partnership Plus or President's Trust agency is
eligible to purchase shares if the agency earned a cash bonus of $10,000 or more
for the calendar year preceding the purchase date. Eligibility for the Plan will
be determined on a year-by-year basis. Eligible agencies are under no obligation
to participate in the Plan. The Plan is for the benefit of qualifying agencies
only; no individual producers may participate.
3. Procedures for Making Purchases
(a) Purchase date. Purchases can be made under the Plan on each date
-------------
designated as a purchase date. Unless the Plan Committee (defined
below) determines otherwise, the purchase date each year will be March
10, or if March 10 is not a business day, the next business day.
(b) Election form and payment. In February each year, following SAFECO's
-------------------------
calculation of the cash bonus payable for the prior calendar year,
SAFECO will send an election form to each eligible agency. To make a
purchase under the Plan, an eligible agency must complete the election
form, stating the dollar amount the agency wishes to apply to the
purchase of shares. The agency must return the completed election
form, together with a check for the total purchase price, to SAFECO
Insurance Companies, Marketing Department, SAFECO Plaza T-21, Seattle,
WA 98185, Attention: Incentive Plans Administrator, or such other
person as SAFECO may designate on the election form. Funds deposited
with SAFECO (or SAFECO's designee) for purposes of making stock
purchases will not accrue interest.
(c) Timing of election. Election forms, accompanied by payment, must be
------------------
delivered to SAFECO (or SAFECO's designee) by the close of business
(Seattle time) on the last business day before the purchase date.
SAFECO will not honor election forms received after the deadline.
SAFECO will promptly return untimely election forms and accompanying
payments.
(d) Minimum and maximum purchases. The minimum amount that an eligible
-----------------------------
agency may elect to apply to stock purchases on any purchase date is
$5,000 and
<PAGE>
the maximum is the amount of the cash bonus earned by the agency for
the prior calendar year.
4. Purchase Price
In the case of Partnership Plus agencies, the purchase price of the shares
will equal 90% of the closing price on the purchase date. In the case of
President's Trust agencies, the purchase price will equal 80% of the
closing price on the purchase date. For purposes of the Plan, the "closing
price" means the price at which the last trade in SAFECO Corporation common
stock was made before or at 1:00 p.m. Seattle time as reported on The
Nasdaq National Market. The number of shares acquired by a purchasing
agency on any purchase date will equal the dollar amount deposited with
SAFECO by the agency divided by the applicable purchase price. If the
number of shares that can be purchased with the agency's payment is not a
whole number, the agency will be credited with a fractional share carried
to the number of decimal places customarily accounted for by the custodian
for the Plan.
5. Restrictions on Transfer
Shares purchased under the Plan will be subject to restrictions on transfer
for a period of two years from the purchase date. The shares will be
registered in the purchasing agency's name and held by the Plan custodian
in book-entry form in a separate account in the agency's name. Stock
certificates will not be issued until the restricted period has expired.
During the restricted period, the purchasing agency will not be allowed to
sell, transfer, pledge, assign or otherwise dispose of the shares. At the
end of the restricted period, the agency may request the issuance of stock
certificates, leave the shares in the agency's custodial account, or direct
the custodian to sell or transfer the shares on the agency's behalf.
6. Benefits of Ownership
Commencing on the purchase date and subject only to the restrictions on
transfer discussed above, agencies who have purchased shares will be
entitled to all the benefits of ownership of the shares, including the
right to vote the shares and to receive any dividends declared on SAFECO
Corporation common stock. The shares will not be subject to any risk of
forfeiture during the restricted period or afterward.
7. Plan Committee's Authority
The Plan Committee will consist of two or more members, who may be SAFECO
employees, appointed to govern the Plan by SAFECO's Chief Executive Officer
under the authority granted by the SAFECO Corporation Board of Directors.
The Plan Committee has broad discretion to administer and interpret the
Plan and may adopt, amend and rescind rules and procedures relating to the
Plan. The Plan Committee may delegate administrative duties to such
persons as it deems appropriate (other than persons affiliated with
eligible agencies).
<PAGE>
8. Custodian
The Plan custodian will establish and maintain a separate account for each
agency that purchases shares under the Plan. The Plan Committee is
responsible for selecting the Plan custodian.
9. Expenses
SAFECO will pay all expenses related to administration of the Plan,
including accounting, legal and custodial fees. Participating agencies
that request the issuance of stock certificates after the expiration of the
restricted period may be charged a certificate issuance fee. Participants
in the Plan are responsible for paying any brokerage fees or commissions
charged upon the sale or transfer of shares acquired under the Plan.
10. Amendments
The Plan Committee may amend the terms of the Plan, including without
limitation the purchase date, criteria for eligibility, and the length of
the restricted period. Amendments to the Plan will be not be given effect,
however, to the extent they would adversely affect shares purchased under
the Plan prior to the effective date of the amendment. If the Plan
Committee amends the terms of the Plan, a prospectus supplement describing
the revised Plan will be sent to all eligible agencies.
<PAGE>
Exhibit 5.1
March 28, 2000
SAFECO Corporation
SAFECO Plaza
Seattle, Washington 98185
Ladies and Gentlemen:
As Assistant General Counsel of SAFECO Corporation, a Washington corporation
(the "Company"), I have acted as counsel in connection with the preparation of a
registration statement on Form S-3 (the "Registration Statement"), which you are
filing with the Securities and Exchange Commission under the Securities Act of
1933, as amended, with respect to 1,000,000 shares of the Company's common
stock, no par value (the "Shares") that may be issued under the SAFECO Agency
Stock Purchase Plan (the "Plan").
I have examined the Registration Statement, the Restated Articles of
Incorporation of the Company as amended to date, the Bylaws of the Company as
amended to date, the resolutions of the Company's board of directors approving
the Plan and the issuance of up to 1,000,000 Shares thereunder, and such other
documentation as I have deemed necessary for the purpose of this opinion. In my
examination, I have assumed the genuineness of all signatures, the legal
capacity of natural persons, and the authenticity of all documents submitted to
me as originals.
Based upon the foregoing, I am of the opinion that upon the happening of the
following events:
(a) the effectiveness of the Registration Statement and any amendments
thereto,
(b) due execution by the Company and registration by its registrar of the
Shares,
(c) the offering and sale of the Shares as contemplated by the
Registration Statement, and
(d) receipt by the Company of the consideration required for the Shares as
contemplated by the Registration Statement,
the Shares that may be issued pursuant to the Plan will be duly authorized,
validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to me under the heading "Legal Matters" in the
Registration Statement.
Very truly yours,
/s/ Janice Oakes Schafer
- ------------------------
Janice Oakes Schafer
Assistant General Counsel
<PAGE> EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333- ) and related Prospectus
of SAFECO Corporation for the registration of 1,000,000 shares of its common
stock pertaining to the SAFECO Agency Stock Purchase Plan and to the
incorporation by reference therein of our report dated March 23, 2000, with
respect to the consolidated financial statements of SAFECO Corporation and its
subsidiaries incorporated by reference in its Annual Report on Form 10-K for the
year ended December 31, 1999 and the related financial statement schedules
included therein, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Seattle, Washington
March 27, 2000
