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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT (PURSUANT TO SECTION 13(E)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
------------------------
ST. PAUL FIRE AND MARINE INSURANCE COMPANY
(Name of Issuer)
ST. PAUL FIRE AND MARINE INSURANCE COMPANY
THE ST. PAUL COMPANIES, INC.
(Name of Person(s) Filing Statement)
Zero Coupon Convertible
Subordinated Notes Due 2009
of ST. PAUL FIRE AND MARINE INSURANCE COMPANY
(as successor to USF&G Corporation)
(Title of Class of Securities)
903290-AD6
(CUSIP Number of Class of Securities)
Sandra Ulsaker Wiese
Corporate Secretary
St. Paul Fire and Marine Insurance Company
385 Washington Street
St. Paul, Minnesota 55102
(651) 310-7911
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Person(s) Filing Statement)
Copies to:
BRUCE A. BACKBERG JOSEPH B. FRUMKIN
SENIOR VICE PRESIDENT AND CHIEF LEGAL COUNSEL SULLIVAN & CROMWELL
THE ST. PAUL COMPANIES, INC. 125 BROAD STREET
385 WASHINGTON STREET NEW YORK, NEW YORK 10004
ST. PAUL, MINNESOTA 55102 (212) 558-4000
(651) 310-7911
February 5, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
------------------------
CALCULATION OF FILING FEE
- --------------------------------------- ---------------------------------------
Transaction Valuation* Amount of Filing Fee
- --------------------------------------- ---------------------------------------
$112,160,162 $22,433
- --------------------------------------- ---------------------------------------
/ / 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:
Form or registration no.:
Filing Party:
Date Filed:
____________________
* The transaction value shown is only for the purpose of calculating the
filing fee. The amount shown reflects the cost of purchasing $175,026,000
principal amount at maturity of Notes at the repurchase price of $640.82
per $1,000 principal amount at maturity. The amount of the filing fee is
calculated in accordance with Section 13(e)(3) of the Securities Exchange
Act of 1934, as amended.
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INTRODUCTORY STATEMENT
This Schedule 13E-4 relates to an offer to purchase (the "Offer") by St.
Paul Fire and Marine Insurance Company, a Minnesota corporation ("Fire &
Marine") and a wholly owned subsidiary of The St. Paul Companies, Inc., a
Minnesota corporation ("St. Paul"), for cash, on the terms and subject to the
conditions set forth in the Offer to Purchase dated February 5, 1999 (the "Offer
to Purchase") and the related Letter of Transmittal (the "Letter of
Transmittal"), any and all of the outstanding Zero Coupon Convertible
Subordinated Notes Due 2009 (the "Notes") issued by USF&G Corporation, a
Maryland corporation ("USF&G"). On April 24, 1998, SP Merger Corporation, a
wholly owned subsidiary of St. Paul, merged with and into USF&G, with USF&G
continuing as the surviving corporation and a wholly owned subsidiary of St.
Paul. On February 2, 1999, USF&G merged with and into Fire & Marine with Fire &
Marine continuing as the surviving corporation. The Notes are convertible into
shares of Common Stock, no par value ("St. Paul Common Stock"), of St. Paul at a
conversion rate of 16.6434 shares of St. Paul Common Stock per $1,000 principal
amount at maturity of Notes. Copies of the Offer to Purchase and the related
Letter of Transmittal are filed as exhibits (a)(1) and (a)(2) hereto.
ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the Notes is Fire & Marine, as successor to USF&G. The
address of Fire & Marine's principal executive office is 385 Washington
Street, St. Paul, Minnesota 55102. The Notes are convertible into St. Paul
Common Stock. The address of St. Paul's principal executive office is 385
Washington Street, St. Paul, Minnesota 55102.
(b) The securities which are the subject of the Offer are the Notes. The
Notes are convertible into shares of St. Paul Common Stock at a conversion
rate of 16.6434 shares of St. Paul Common Stock per $1,000 principal amount
at maturity of Notes. St. Paul is a joint and several obligor with Fire &
Marine with respect to the due and punctual payment of the principal of, and
premium, if any, and interest on, the Notes when due and all other monetary
obligations under the terms of the Notes and the Indenture. As of February 4,
1999, there was $175,026,000 aggregate principal amount at maturity of Notes
outstanding. The Offer is for any and all Notes, in denominations of $1,000
principal amount at maturity or integral multiples thereof, at a price equal
to $640.82 per $1,000 principal amount at maturity of Notes. At the election
of Fire & Marine, the Offer is being made in cash only. To the best knowledge
of Fire & Marine and St. Paul, no Notes are being purchased from any officer,
director or affiliate of Fire & Marine or St. Paul.
(c) The information set forth in the section of the Offer to Purchase
entitled "Market Price Information" is incorporated herein by reference.
(d) Fire & Marine and St. Paul are filing this statement. The addresses of
Fire & Marine and St. Paul are set forth in Item 1(a). Fire & Marine is a
wholly owned subsidiary of St. Paul.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the section of the Offer to Purchase
entitled "Sources and Amount of Funds" is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER
OR AFFILIATE.
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The information set forth in the section of the Offer to Purchase
entitled "The Offer--Purpose and Effects of the Offer" is incorporated
herein by reference. Notes repurchased under the Offer by Fire & Marine will
cease to be outstanding and will be delivered to The Chase Manhattan Bank, as
successor to Chemical Bank, as Trustee, for cancellation immediately after
such repurchase.
(a) The information set forth in the section of the Offer to Purchase
entitled "The Offer--General" is incorporated herein by reference.
(b) The information set forth in the section of the Offer to Purchase
entitled "Recent Developments--The USF&G Merger" and "Recent Developments--
The F&M Merger" is incorporated herein by reference.
(c) The information set forth in the section of the Offer to Purchase
entitled "Recent Developments--The USF&G Merger" is incorporated herein by
reference.
(d) None.
(e) None.
(f) None.
(g) None.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Not applicable.
ITEM 5. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO THE ISSUER=S SECURITIES.
The information set forth in the cover page to the Offer to Purchase and
the sections of the Offer to Purchase entitled "The Offer--General", "The
Offer--Purpose and Effects of the Offer" and "Recent Developments" is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the cover page of the Offer to Purchase and
the section of the Offer to Purchase entitled "The Depositary" is incorporated
herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a) The information set forth in the section of the Offer to Purchase
entitled "St. Paul Selected Unaudited Financial Information" is incorporated
by reference herein. The following documents, which have been filed by St.
Paul (File No. 0-3021) with the Commission under the Exchange Act, are
incorporated herein by reference:
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(1) St. Paul's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(2) St. Paul's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1998, June 30, 1998 and September 30, 1998.
(3) St. Paul's Current Reports on Form 8-K dated April 24, 1998, April
27, 1998, May 5, 1998, May 14, 1998, October 6, 1998 and February 3, 1999.
(4) St. Paul's Proxy Statement/Prospectus relating to the USF&G Merger
dated January 27, 1998 and mailed to its stockholders on January 28, 1998.
(5) St. Paul's Proxy Statement relating to its Annual Meeting of
Stockholders on May 5, 1998 dated March 19, 1998.
All documents filed with the Commission by St. Paul pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act on or subsequent to the date
hereof shall be deemed to be incorporated by reference herein and to be a part
hereof from the date any such document is filed.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part hereof.
(b) Not applicable.
ITEM 8. ADDITIONAL INFORMATION.
(a) None.
(b) None, except for compliance with the Exchange Act and the rules and
regulations promulgated thereunder and compliance with applicable requirements
of state securities or "blue sky" laws.
(c) None.
(d) None.
(e) Reference hereby made to the exhibits hereto which are incorporated in
their entirety herein by reference.
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ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) Exhibit (a)(1) Offer to Purchase, dated February 5, 1999.
Exhibit (a)(2) Letter of Transmittal.
Exhibit (a)(3) Notice of Guaranteed Delivery.
Exhibit (a)(4) Letter to clients.
Exhibit (a)(5) Letter to brokers, dealers, commercial banks, trust
companies and other nominees.
(b) Not applicable.
(c)(1) Indenture, dated as of January 28, 1994, between USF&G, as issuer, and
Chemical Bank, as Trustee.
(c)(2) First Supplemental Indenture, dated as of April 24, 1998, among St.
Paul, USF&G, as issuer, and The Chase Manhattan Bank, as successor to
Chemical Bank, as Trustee.
(c)(3) Second Supplemental Indenture, dated as of January 1, 1999, among USF&G,
as issuer, Fire & Marine and The Chase Manhattan Bank as successor to
Chemical Bank, as Trustee.
(c)(4) Form of Note, dated March 3, 1994.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
ST. PAUL FIRE AND MARINE INSURANCE
COMPANY
By: /s/ Bruce A. Backberg
------------------------------
Name: Bruce A. Backberg
Title: Senior Vice President and
Chief Legal Counsel
THE ST. PAUL COMPANIES, INC.
By: /s/ Bruce A. Backberg
------------------------------
Name: Bruce A. Backberg
Title: Senior Vice President and
Chief Legal Counsel
Dated: February 5, 1999
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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(a)(1) Offer to Purchase, dated February 5, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to clients.
(a)(5) Letter to brokers, dealers, commercial banks, trust companies and
other nominees.
(c)(1) Indenture, dated as of January 28, 1994, between USF&G, as issuer, and
Chemical Bank, as Trustee (incorporated by reference to Exhibit 4E to
USF&G's Annual Report on Form 10-K filed with the Commission for the
year ended December 31, 1993).
(c)(2) First Supplemental Indenture, dated as of April 24, 1998, among St.
Paul, USF&G, as issuer, and The Chase Manhattan Bank, as successor to
Chemical Bank, as Trustee (incorporated by reference to Exhibit (c)(2)
to USF&G and St. Paul's Issuer Tender Offer Statement on Schedule 13E-4
filed with the Commission dated May 15, 1998).
(c)(3) Second Supplemental Indenture, dated as of January 1, 1999, among USF&G,
as Issuer, Fire & Marine and The Chase Manhattan Bank as successor to
Chemical Bank, as Trustee.
(c)(4) Form of Note, dated March 3, 1994 (incorporated by reference to
Exhibit 4 to USF&G's Current Report on Form 8-K, dated March 3, 1994).
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Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ANY AND ALL OF THE OUTSTANDING
ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE 2009
ISSUED BY
USF&G CORPORATION
BY
ST. PAUL FIRE AND MARINE INSURANCE COMPANY
(AS SUCCESSOR TO USF&G CORPORATION)
AT $640.82 PER $1,000 PRINCIPAL AMOUNT AT MATURITY
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SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE,
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MARCH 5, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE
LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES TENDERED IN
THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
St. Paul Fire and Marine Insurance Company ("Fire & Marine" or the
"Bidder"), a wholly owned subsidiary of The St. Paul Companies, Inc. ("St.
Paul"), hereby offers (the "Offer") to purchase for cash at $640.82 per
$1,000 principal amount at maturity (the "Repurchase Price"), upon the terms
and subject to the conditions set forth in this Offer to Purchase (this
"Offer to Purchase") and in the accompanying Letter of Transmittal (the
"Letter of Transmittal"), any and all of the outstanding Zero Coupon
Convertible Subordinated Notes Due 2009 (the "Notes") issued by USF&G
Corporation ("USF&G"). This Offer to Purchase constitutes the Company Notice
required by the Notes to be sent to the holders of the Notes. On April 24,
1998, SP Merger Corporation, a wholly owned subsidiary of St. Paul merged
(the "USF&G Merger") with and into USF&G, with USF&G continuing as the
surviving corporation and a wholly owned subsidiary of St. Paul. On February
2, 1999, USF&G merged (the "F&M Merger") with and into Fire & Marine, with
Fire & Marine continuing as the surviving corporation.
The date of this Offer to Purchase is February 5, 1999.
<PAGE>
The Offer is being made pursuant to the terms of the Indenture, dated
as of January 28, 1994, among USF&G and Chemical Bank, as Trustee (the
"Trustee") as amended by a First Supplemental Indenture, dated as of April
24, 1998, among USF&G, St. Paul and The Chase Manhattan Bank, as successor to
Chemical Bank, as Trustee, and a Second Supplemental Indenture, dated as of
January 1, 1999, among Fire & Marine, USF&G and The Chase Manhattan Bank, as
Trustee (as so amended, the "Indenture") and the Notes which provide that, on
March 3, 1999 (the "Payment Date") each holder of Notes has the right, at
such holder's option, to require Fire & Marine (as successor to USF&G) to
repurchase all or a portion of such holder's Notes at the Repurchase Price (a
"Repurchase Right"). Fire & Marine has elected to pay the Repurchase Price in
cash. The Bidder will accept for payment on March 3, 1999 any Notes validly
delivered on or before that date and pay for such Notes in accordance with
the terms of the Notes. The Bidder also agrees for the benefit of holders of
Notes to redeliver to such holders any Notes accepted for payment prior to
the Expiration Date if the holder (i) delivers written notice to the
Depositary prior to the Expiration Date (in the same manner set forth herein
for withdrawal of a tender) specifying the Notes the holder wishes to have
redelivered and (ii) returns to the Bidder's account at the Depositary within
two business days of the Expiration Date all amounts paid by the Bidder in
respect of such Notes. Under the Notes, any purchase by Fire & Marine of
Notes pursuant to the valid exercise of a Repurchase Right must be
consummated by delivery of the cash consideration to be received by the
holder of such Note no later than the second business day following the later
of the Purchase Date and the time of delivery (or transfer by book-entry) of
the Note. In order to comply with certain requirements of the Securities
Exchange Act of 1934, as amended, ("Exchange Act"), the Bidder has set the
initial expiration date of the Offer at 12:00 Midnight, New York City time,
on March 5, 1999. In accordance with the requirements of the Notes, the
Bidder will accept for payment any Notes validly delivered on or before March
3, 1999 and pay for such Notes on or before March 5, 1999.
As of February 4, 1999, there was $175,026,000 aggregate principal
amount at maturity of Notes outstanding. Prior to the consummation of the
USF&G Merger, the Notes were convertible into shares of Common Stock, par
value $2.50 per share, of USF&G ("USF&G Common Stock") at a conversion rate
of 29.499 shares of USF&G Common Stock per $1,000 principal amount at
maturity of Notes. Upon consummation of the USF&G Merger, pursuant to
adjustment mechanisms contained in the Indenture, the Notes became, and are
currently, convertible into shares of Common Stock, no par value, of St. Paul
("St. Paul Common Stock") at, after giving effect to the two-for-one stock
split declared by the Board of Directors of St. Paul on shares of St. Paul
Common Stock held of record as of May 6, 1998 (the "Stock Split"), a
conversion rate of 16.6434 shares of St. Paul Common Stock per $1,000
principal amount at maturity. In connection with the USF&G Merger, St. Paul
agreed to be jointly and severally liable with USF&G for the due and punctual
payment of the principal of, and premium, if any, and interest on, the Notes
when due whether at maturity, by acceleration, by redemption or otherwise,
and all other monetary obligations under the Notes and the Indenture. Payment
by either Fire & Marine or St. Paul of the Redemption Price for Notes validly
tendered and not withdrawn pursuant to the Offer will discharge the
obligation of both Fire & Marine and St. Paul to make such payment. Pursuant
to the Second Supplemental Indenture, Fire & Marine agreed to assume USF&G's
obligations under the Indenture upon consummation of the F&M Merger.
There is no established trading market for the Notes. On February 4,
1999, the closing price per share of St. Paul Common Stock, as reported on
the New York Stock Exchange, Inc. (the "NYSE") Composite Tape, was $30 5/8.
The Bidder has elected to pay the Repurchase Price in cash. A holder may
convert Notes into shares of St. Paul Common Stock until, but not after, such
Note is properly tendered to The Chase Manhattan Bank, as Depositary (the
"Depositary"), unless the tender of such Note is properly withdrawn, there is
a default in payment of the Repurchase Price or the Offer is terminated
without the purchase of Notes. Any Notes which remain outstanding after
consummation of the Offer will continue to be obligations of Fire & Marine
(and, to the extent provided in the Indenture, St. Paul) and will continue to
be convertible at the option of the holder thereof into shares of St. Paul
Common Stock.
Tnders of Notes may be withdrawn at any time prior to the Expiration
Date. In the event of a termination of the Offer, Notes tendered pursuant to
the Offer will be promptly returned to the tendering holders.
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Upon the terms and subject to the conditions of the Offer (including,
if the Offer is extended or amended, the terms and conditions of any such
extension or amendment) and applicable law, the Bidder will promptly
purchase, by accepting for payment, and will pay for, all Notes validly
tendered (and not properly withdrawn) pursuant to the Offer, such payment to
be made by the deposit of immediately available funds by the Bidder or St.
Paul with the Depositary, which will act as agent for tendering holders for
the purpose of receiving payment from the Bidder and transmitting such
payment to tendering holders.
No person has been authorized to give any information or to make any
representations other than those contained in this Offer to Purchase and, if
given or made, such information or representations must not be relied upon as
having been authorized. This Offer to Purchase and related documents do not
constitute an offer to buy or the solicitation of an offer to sell securities
in any circumstances in which such offer or solicitation is unlawful. The
delivery of this Offer to Purchase shall not, under any circumstances, create
any implication that the information contained herein is current as of any
time subsequent to the date of such information.
NEITHER FIRE & MARINE NOR ST. PAUL MAKES ANY RECOMMENDATION AS TO
WHETHER OR NOT HOLDERS SHOULD EXERCISE THEIR REPURCHASE RIGHT AND TENDER
NOTES PURSUANT TO THE OFFER AND NEITHER FIRE & MARINE NOR ST. PAUL IS, OR HAS
AUTHORIZED ANY OTHER PERSON TO, SOLICIT TENDERS OF NOTES IN CONNECTION WITH
THE OFFER (OTHER THAN BY MEANS OF THE NOTICES REQUIRED BY THE NOTES). BASED
ON THE CONVERSION RATE OF 16.6434 SHARES OF ST. PAUL COMMON STOCK PER $1,000
PRINCIPAL AMOUNT AT MATURITY OF NOTES AND THE CLOSING PRICE OF ST. PAUL
COMMON STOCK ON THE NYSE COMPOSITE TAPE ON FEBRUARY 4, 1999 OF $30 5/8, EACH
$1,000 PRINCIPAL AMOUNT AT MATURITY OF NOTES MAY CURRENTLY BE CONVERTED INTO
ST. PAUL COMMON STOCK WORTH APPROXIMATELY $509.70. BASED ON THE FOREGOING,
THE PRICE BEING OFFERED BY THE BIDDER PER $1,000 PRINCIPAL AMOUNT AT MATURITY
OF NOTES (IN ACCORDANCE WITH THE TERMS OF THE NOTES AND THE INDENTURE) IS
CURRENTLY MORE THAN THE CURRENT MARKET VALUE OF THE SHARES OF ST. PAUL COMMON
STOCK ISSUABLE UPON THE CONVERSION OF SUCH NOTES. THERE CAN BE NO ASSURANCE
AS TO THE PRICE AT WHICH ST. PAUL COMMON STOCK MAY NOW OR IN THE FUTURE TRADE
OR BE SOLD. HOLDERS OF NOTES CONTEMPLATING ACCEPTING THE OFFER ARE URGED TO
CONSULT WITH THEIR OWN FINANCIAL ADVISORS BEFORE ACCEPTING THE OFFER.
Any questions or requests for assistance or for additional copies of
this Offer to Purchase or related documents may be directed to the Depositary
at one of its telephone numbers set forth on the last page of this Offer to
Purchase. Any beneficial owner owning interests in Notes may contact such
beneficial owner's broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Offer.
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AVAILABLE INFORMATION
St. Paul is subject to the informational requirements of the Exchange
Act, and in accordance therewith, files, reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information concerning St. Paul can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and
at the Commission's Regional Office at Seven World Trade Center, Suite 1300,
New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511. Copies of such material also can be
obtained, at prescribed rates, from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
maintains a site on the Internet's World Wide Web at http://www.sec.gov. that
contains reports, proxy and information statements and other information
regarding registrants that have filed electronically with the Commission,
including St. Paul. There is no established trading market for the Notes. The
St. Paul Common Stock is listed and traded on the NYSE and such reports,
proxy statements and other information concerning St. Paul may also be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
This Offer to Purchase constitutes a part of an Issuer Tender Offer
Statement on Schedule 13E-4 (the "Schedule 13E-4") filed with the Commission
by St. Paul pursuant to Section 13(e) of the Exchange Act and the rules and
regulations promulgated thereunder. The Schedule 13E-4 and all exhibits
thereto are incorporated in this Offer to Purchase by reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by St. Paul (File No.
0-3021) with the Commission under the Exchange Act, are incorporated herein
by reference:
(a) St. Paul's Annual Report on Form 10-K for the year ended December
31, 1997.
(b) St. Paul's Quarterly Reports of Form 10-Q for the quarterly
periods ended March 31, 1998, June 30, 1998 and September 30, 1998.
(c) St. Paul's Current Reports on Form 8-K dated April 24, 1998,
April 27, 1998, May 5, 1998, May 14, 1998, October 6, 1998 and February 3,
1999.
(d) St. Paul's Proxy Statement/Prospectus relating to the USF&G
Merger dated January 27, 1998 and mailed to its stockholders on January 28,
1998.
(e) St. Paul's Proxy Statement relating to its Annual Meeting of
Stockholders on May 5, 1998 dated March 19, 1998.
All documents filed with the Commission by St. Paul pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act on or subsequent to the date
hereof shall be deemed to be incorporated by reference herein and to be a part
hereof from the date any such document is filed.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein (or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein) modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part hereof.
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THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN (OTHER THAN EXHIBITS
TO SUCH DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE HEREIN)
ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS OFFER TO PURCHASE HAS
BEEN DELIVERED UPON WRITTEN OR ORAL REQUEST TO ST. PAUL FIRE AND MARINE
INSURANCE COMPANY, 385 WASHINGTON STREET, ST. PAUL, MINNESOTA 55102,
ATTENTION: CORPORATE SECRETARY, TELEPHONE: (615)310-7911.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed in this Offer to Purchase (and in the
documents incorporated by reference) contain forward-looking statements. The
forward-looking statements relate to anticipated financial performance,
management's plans and objectives for future operations, business prospects,
market conditions and other matters. St. Paul and Fire & Marine note that a
variety of factors could cause the actual results of the combined company
following the USF&G Merger to differ materially from the anticipated results
expressed in such forward-looking statements. The following discussion is
intended to identify certain factors that could cause future outcomes to
differ materially from those set forth in the forward-looking statements
contained in this Offer to Purchase (and in the documents incorporated by
reference).
Forward-looking statements are statements that include the words
"expects," "anticipates," "intends," "plans," "believes," "estimates," or
similar expressions. Holders of Notes should note that many factors, some of
which are discussed elsewhere in this document and in the documents
incorporated by reference herein, could cause the actual results of the
combined company following the USF&G Merger to differ materially from the
anticipated results set forth or contemplated in such forward-looking
statements. You are cautioned that such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of St. Paul and Fire & Marine to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors may
affect St. Paul's or Fire & Marine's operations, markets, products, services
and prices. Such factors include, among others, the following: general
economic and business conditions, including changes in interest rates, rates
of inflation and the performance of financial markets; changes in domestic
and foreign laws, regulations and taxes; social conditions; judicial
decisions and rulings; the continuing integration of the operations of St.
Paul and USF&G, including the failure to realize synergies from the USF&G
Merger; the loss of any significant customers; insurance claims based on
natural disasters; the frequency and severity of catastrophic events; a
change in the demand for, pricing of, or supply of reinsurance or insurance;
losses due to foreign currency exchange rate fluctuations; and changes in
business strategy or development plans.
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TABLE OF CONTENTS
Page
AVAILABLE INFORMATION..................................................... 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................ 4
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS............................ 5
THE OFFER.................................................................. 8
GENERAL.................................................................... 8
PURPOSE AND EFFECTS OF THE OFFER........................................... 8
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION....................... 9
ACCEPTANCE FOR PAYMENT..................................................... 9
PROCEDURES FOR TENDERING NOTES............................................. 10
TENDERING NOTES............................................................ 10
GUARANTEED DELIVERY PROCEDURES............................................. 12
WITHDRAWAL RIGHTS.......................................................... 13
CERTAIN INFORMATION CONCERNING FIRE & MARINE AND ST. PAUL.................. 15
FIRE & MARINE.............................................................. 15
ST. PAUL................................................................... 15
RECENT DEVELOPMENTS........................................................ 15
THE USF&G MERGER........................................................... 15
THE F&M MERGER............................................................. 15
ST. PAUL'S FOURTH QUARTER AND YEAR-END 1998 EARNINGS RESULTS............... 15
ADJUSTMENT TO CONVERSION PRICE; JOINT AND SEVERAL OBLIGATION............... 17
SOURCES AND AMOUNT OF FUNDS................................................ 17
MARKET PRICE INFORMATION................................................... 18
THE NOTES.................................................................. 18
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ST. PAUL COMMON STOCK...................................................... 18
SELECTED FINANCIAL INFORMATION............................................. 19
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 20
SALE OF NOTES PURSUANT TO THE OFFER........................................ 20
THE DEPOSITARY............................................................. 21
MISCELLANEOUS.............................................................. 21
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THE OFFER
GENERAL
The Bidder hereby offers, upon the terms and subject to the
conditions set forth in this Offer to Purchase, to purchase for cash at the
Repurchase Price any and all Notes that are properly tendered (and not
properly withdrawn) prior to the Expiration Date pursuant to the terms and
conditions set forth herein. The Bidder will accept only tenders of Notes or
a portion thereof which are in an amount equal to $1,000 principal amount at
maturity of Notes or integral multiples thereof. Tenders of Notes may be
withdrawn at any time prior to the Expiration Date. In the event of a
termination of the Offer, the Notes tendered pursuant to the Offer will be
promptly returned to the tendering holders.
Upon the terms and subject to the conditions of the Offer (including,
if the Offer is extended or amended, the terms and conditions of any such
extension or amendment) and applicable law, the Bidder will, promptly
purchase, by accepting for payment, and will pay for, all Notes validly
tendered (and not properly withdrawn) pursuant to the Offer. Such payment
will be made by the deposit of immediately available funds by the Bidder with
the Depositary, which will act as agent for tendering holders for the purpose
of receiving payment from the Bidder and transmitting such payment to
tendering holders. The Bidder will accept for payment on March 3, 1999 any
Notes validly delivered on or before that date and pay for such Notes in
accordance with the terms of the Notes. The Bidder also agrees for the
benefit of holders of Notes to redeliver to such holders any Notes accepted
for payment prior to the Expiration Date if the holder (i) delivers written
notice to the Depositary prior to the Expiration Date (in the same manner set
forth herein for withdrawal of a tender) specifying the Notes the holder
wishes to have redelivered and (ii) returns to the Bidder's account at the
Depositary within two business days of the Expiration Date all amounts paid
by the Bidder in respect of such Notes. Subject to the requirements of the
Indenture and the Notes, the Bidder expressly reserves the right, in its sole
discretion and subject to Rule 13e-4(f)(5) under the Exchange Act, to delay
acceptance for payment of or payment for Notes in order to comply, in whole
or in part, with any applicable law.
If less than all the principal amount of Notes held by a holder is
tendered and accepted pursuant to the Offer, the Bidder shall issue, and the
Trustee shall authenticate and deliver to or on the order of the holder
thereof, at the expense of the Bidder, new Notes of authorized denominations,
in a principal amount equal to the portion of the Notes not tendered or not
accepted, as the case may be, as promptly as practicable after the Expiration
Date.
A Note may be converted into shares of St. Paul Common Stock until,
but not after, such Note is properly tendered to the Depositary unless the
tender of such Note is properly withdrawn, there is a default in payment of
the Repurchase Price or the Offer is terminated without the purchase of Notes.
After the Expiration Date, the Bidder may purchase additional Notes
in the open market, in privately negotiated transactions, through subsequent
tender or exchange offers or otherwise, subject to compliance with applicable
law. Any future purchases may be on the same terms or on terms that may be
more or less favorable to holders than the terms of the Offer. Any future
purchases will depend on various factors at that time.
PURPOSE AND EFFECTS OF THE OFFER
The Offer is being made pursuant to the terms of the Indenture and
the Notes which provide that, on the Payment Date, each holder of Notes has a
Repurchase Right. Fire & Marine has elected to pay the Repurchase Price in
cash. The Bidder will accept for payment on March 3, 1999 any Notes validly
delivered on or before that date and pay for such Notes in accordance with
the terms of the Notes. The Bidder also agrees for the benefit of holders of
Notes to redeliver to such holders any Notes accepted for payment prior to
the Expiration Date if the holder (i) delivers written notice to the
Depositary prior to the Expiration Date (in the same manner set forth herein
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for withdrawal of a tender) specifying the Notes the holder wishes to have
redelivered and (ii) returns to the Bidder's account at the Depositary within
two business days of the Expiration Date all amounts paid by the Bidder in
respect of such Notes. Under the Notes, any purchase by Fire & Marine of
Notes pursuant to the valid exercise of a Repurchase Right must be
consummated by delivery of the cash consideration to be received by the
holder of such Note and no later than the second business day following the
later of the Purchase Date and the time of delivery (or transfer by
book-entry) of the Note. In order to comply with certain requirements of the
Exchange Act, the Bidder has set the initial expiration date of the Offer at
12:00 Midnight, New York City time, on March 5, 1999.
Notes purchased by Fire & Marine pursuant to the Offer will cease to
be outstanding and will be delivered to the Trustee for cancellation
immediately after such purchase. Any Notes which remain outstanding after
consummation of the Offer will continue to be obligations of Fire & Marine as
successor to USF&G (and, to the extent provided in the Indenture, of St.
Paul) and will continue to be convertible at the option of the holder thereof
into shares of St. Paul Common Stock. The Indenture does not contain any
limitations on the ability of the Bidder to incur additional indebtedness.
Holders of Notes that are not tendered pursuant to the Offer will not
have the right after the Expiration Date to exercise their Repurchase Rights
in respect of such Notes arising in respect of the Offer. Depending upon,
among other things, the amount of Notes outstanding after the consummation of
the Offer, the liquidity of untendered Notes may be adversely affected by the
Offer. If there is a market for such Notes following the Offer, such Notes
may trade at a discount compared to present trading prices depending on
prevailing interest rates, the market for securities with similar credit
features, the performance of St. Paul and other factors. Accordingly, there
is no assurance that an active market in such Notes following consummation of
the Offer will exist and no assurance as to the prices at which such Notes
may trade or be sold.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The Offer will expire on the Expiration Date, unless extended
pursuant to the procedures set forth herein. Subject to the requirements of
the Notes and the Indenture, the Bidder expressly reserves the right to
extend the Offer by giving oral or written notice of such extension to the
Depositary. During any extension of the Offer, all Notes previously tendered
pursuant to the Offer (and not properly withdrawn) will remain subject to the
Offer and may be accepted for payment by the Bidder, subject to the
withdrawal rights of holders.
The Bidder also expressly reserves the right, subject to the
requirements of the Indenture, the Notes and Rule 13e-4(f)(5) under the
Exchange Act and other applicable law: (i) to delay acceptance for payment of
or payment for any Notes tendered pursuant to the Offer; and (ii) at any
time, or from time to time, to amend the terms of the Offer in any respect.
Any extension, termination or amendment of the Offer will be followed
as promptly as practicable by a public announcement thereof. Without limiting
the manner in which the Bidder may choose to make a public announcement of
any extension, termination or amendment of the Offer, the Bidder shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement, other than by issuing a release to the Dow Jones News Service,
except in the case of an announcement of an extension of the Offer, in which
case The Bidder shall have no obligation to publish, advertise or otherwise
communicate such announcement other than by issuing a notice of such
extension by press release or other public announcement, which notice shall
be issued no later than 9:00 a.m., New York City time, on the next business
day after the previously scheduled Expiration Date.
ACCEPTANCE FOR PAYMENT
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Upon the terms and subject to the conditions to the Offer (including
if the Offer is extended or amended, the terms of such extension or
amendment) and applicable law, the Bidder will promptly purchase, by
accepting for payment, and pay for all Notes properly tendered (and not
properly withdrawn) pursuant to the Offer. In all cases, payment by the
Depositary to tendering holders will be made only after timely receipt by the
Depositary of the documentation described under "Procedures for Tendering and
Withdrawing Notes-Tendering Notes."
For purposes of the Offer, the Bidder shall be deemed to have
accepted for payment (and thereby to have purchased) tendered Notes as, if
and when the Bidder gives oral or written notice to the Depositary of the
Bidder's acceptance of such Notes for payment. Subject to the terms and
conditions of the Offer, payment for Notes so accepted will be made by
deposit of the consideration therefor with the Depositary. The Depositary
will act as agent for tendering holders for the purpose of receiving payment
from the Bidder and transmitting payment to such tendering holders. The
Bidder will accept for payment on March 3, 1999 any Notes validly delivered
on or before that date and pay for such Notes in accordance with the terms of
the Notes. The Bidder also agrees for the benefit of holders of Notes to
redeliver to such holders any Notes accepted for payment prior to the
Expiration Date if the holder (i) delivers written notice to the Depositary
prior to the Expiration Date (in the same manner set forth herein for
withdrawal of a tender) specifying the Notes the holder wishes to have
redelivered and (ii) returns to the Bidder's account at the Depositary within
two business days of the Expiration Date all amounts paid by the Bidder in
respect of such Notes.
PROCEDURES FOR TENDERING NOTES
TENDERING NOTES
The tender of Notes pursuant to any of the procedures set forth in
this Offer to Purchase and in the Letter of Transmittal will constitute a
binding agreement between the tendering holder and the Bidder upon the terms
and subject to the conditions of the Offer. The tender of Notes will
constitute an agreement to deliver good and marketable title to all tendered
Notes prior to the Expiration Date free and clear of all liens, charges,
claims, encumbrances, interests and restrictions of any kind.
EXCEPT AS PROVIDED IN "-GUARANTEED DELIVERY PROCEDURES", UNLESS THE
NOTES BEING TENDERED ARE DEPOSITED BY THE HOLDER WITH THE DEPOSITARY PRIOR TO
THE EXPIRATION DATE (ACCOMPANIED BY A PROPERLY COMPLETED AND DULY EXECUTED
LETTER OF TRANSMITTAL), THE BIDDER MAY, AT ITS OPTION, REJECT SUCH TENDER.
PAYMENT FOR NOTES WILL BE MADE ONLY AGAINST DEPOSIT OF TENDERED NOTES AND
DELIVERY OF ALL OTHER REQUIRED DOCUMENTS.
Only record holders of Notes are authorized to exercise a Repurchase
Right and tender their Notes pursuant to the Offer. Accordingly, to properly
exercise a Repurchase Right and tender Notes or cause Notes to be tendered,
the following procedures must be followed:
NOTES HELD THROUGH DTC. Each beneficial owner of Notes held through a
participant (a "DTC Participant") of the Depository Trust Company ("DTC")
(i.e., a custodian bank, depositary, broker, trust company or other nominee)
must instruct such DTC Participant to cause its Notes to be tendered in
accordance with the procedures set forth in this Offer to Purchase.
To effectively tender Notes that are held through DTC, DTC
Participants should transmit their acceptance through the Automated Tender
Offer Program ("ATOP"), for which the transaction will be eligible, and DTC
will then edit and verify the acceptance and send an Agent's Message to the
Depositary for its acceptance. Delivery of tendered Notes must be made to the
Depositary pursuant to the book-entry delivery procedures set forth below or
the tendering DTC participant must comply with the guaranteed delivery
procedures set forth below. No Letters of Transmittal will be required to
tender notes through ATOP.
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The depositary will establish an account with respect to the Notes at
DTC for purposes of the Offer within two business days after the date of this
Offer to Purchase, and any financial institution that is a participant in DTC
may make book-entry delivery of the Notes by causing DTC to transfer such
Notes into the Depositary's account in accordance with DTC's procedures for
such transfer. However, although delivery of Notes may be effected through
book-entry transfer into the Depositary's account at DTC, the Letter of
Transmittal (or facsimile thereof), with any required signature guarantees or
an Agent's Message in connection with a book-entry transfer, and any other
required documents, must, in any case, be transmitted to and received by the
Depositary at its address set forth on the last page of this Offer to
Purchase on or prior to the Expiration Date, or the tendering holder must
comply with the guaranteed delivery procedures described below. Delivery of
documents to DTC does not constitute delivery to the Depositary. The
confirmation of a book-entry transfer into the Depositary's account at DTC as
described above is referred to herein as a "Book-Entry Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of the Book-Entry
Confirmation, which states (i) that DTC has received an express
acknowledgment from the participant in DTC described in such Agent's Message,
(ii) the principal amount of Notes which have been tendered by such
participant pursuant to the Offer, (iii) that such participant has received
this Offer to Purchase and the Letter of Transmittal and agrees to be bound
by the terms of this Offer to Purchase and the Letter of Transmittal, and
(iv) that the Company may enforce such agreement against such participant.
NOTES HELD BY RECORD HOLDERS. Each record holder must complete and
sign a Letter of Transmittal, and mail or deliver such Letter of Transmittal,
and any other documents required by the Letter of Transmittal, together
with certificate(s) representing all tendered Notes, to the Depositary at its
address set forth on the last page of this Offer to Purchase, or the Holder
must comply with the guaranteed delivery procedures set forth in this Offer
to Purchase.
All signatures on a Letter of Transmittal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program,
the NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on a Letter of Transmittal need not be
guaranteed if such Notes are tendered for the account of an Eligible
Institution. If a Letter of Transmittal or any Note is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, agent, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person must so indicate when signing, and proper evidence satisfactory
to the Bidder of the authority of such person so to act must be submitted.
No alternative, conditional, irregular or contingent tenders will be
accepted (unless waived). By executing a Letter of Transmittal or
transmitting an acceptance through ATOP, each tendering holder waives any
right to receive any notice of the acceptance for purchase of its Notes.
LOST OR MISSING CERTIFICATES. If a record holder desires to tender
Notes pursuant to the Offer, but the certificates representing such Notes
have been mutilated, lost, stolen or destroyed, such holder should write to
or telephone the Trustee about procedures for obtaining replacement
certificates representing such Notes, arranging for indemnification or about
any other matter which requires handling by such Trustee.
BACKUP FEDERAL INCOME TAX WITHHOLDING. Under the "backup withholding"
provisions of Federal income tax law, unless a tendering holder, or his or
her assignee (in either case, the "Payee"), satisfies the conditions
described in Instruction 5 of the Letter of Transmittal or is otherwise
exempt, the aggregate purchase price may be subject to backup withholding tax
at a rate of 31%. To prevent backup withholding, each Payee should complete
and sign the Substitute Form W-9 provided in the Letter of Transmittal. See
Instruction 5 of the Letter of Transmittal.
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<PAGE>
EFFECT OF LETTER OF TRANSMITTAL. Subject to and effective upon the
acceptance for purchase of and payment for Notes tendered thereby, by
executing and delivering a Letter of Transmittal a tendering holder of Notes
(i) irrevocably sells, assigns and transfers to the Bidder, all right, title
and interest in and to all the Notes tendered thereby and (ii) waives any and
all rights with respect to the Notes (including without limitation any
existing or past defaults and their consequences in respect of the Note and
the Indenture under which the Notes were issued), (iii) releases and
discharges Fire & Marine and St. Paul from any and all claims such holder may
have now, or may have in the future arising out of, or related to, the Notes
including without limitation any claims that such holder is entitled to
receive additional principal or interest payments with respect to the Notes
or to participate in any redemption or defeasance of the Notes and (iv)
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of such holder with respect to any such tendered Notes,
with full power of substitution and resubstitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest) to (a)
deliver certificates representing such Notes, or transfer ownership of such
Notes, on the account books maintained by DTC, together, in any such case,
with all accompanying evidences of transfer and authenticity, to the Bidder,
(b) present such Notes for transfer on the relevant security register and (c)
receive all benefits or otherwise exercise all rights of beneficial ownership
of such Notes (except that the Depositary will have no rights to, or control
over, funds from the Bidder, except as agent for the Bidder, for the purchase
price for any tendered Notes that are purchased by the Bidder), all in
accordance with the terms of the Offer.
All questions as to the validity, form, eligibility (including time
of receipt) and acceptance of tendered Notes will be resolved by the Bidder,
whose determination will be final and binding. The Bidder reserves the
absolute right to reject any or all tenders that are not in proper form or
the acceptance of which may, in the opinion of counsel for the Bidder, be
unlawful. The Bidder also reserves the absolute right to waive any condition
to the Offer and any irregularities or conditions of tender as to particular
Notes. The Bidder' interpretation of the terms and conditions of the Offer
(including the instructions in the Letter of Transmittal) will be final and
binding. Unless waived, any irregularities in connection with tenders must be
cured within such time as the Bidder shall determine. The Bidder and the
Depositary shall not be under any duty to give notification of defects in
such tenders and shall not incur liabilities for failure to give such
notification. Tenders of Notes will not be deemed to have been made until
such irregularities have been cured or waived. Any Notes received by the
Depositary that are not properly tendered and as to which the irregularities
have not been cured or waived will be returned by the Depositary to the
tendering holder, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
LETTERS OF TRANSMITTAL AND NOTES MUST BE SENT ONLY TO THE DEPOSITARY.
DO NOT SEND LETTERS OF TRANSMITTAL OR NOTES TO FIRE & MARINE OR ST. PAUL.
THE METHOD OF DELIVERY OF NOTES AND LETTERS OF TRANSMITTAL, ANY
REQUIRED SIGNATURE GUARANTEES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING
DELIVERY THROUGH DTC AND ANY ACCEPTANCE THROUGH ATOP, IS AT THE ELECTION AND
RISK OF THE PERSONS TENDERING AND DELIVERING ACCEPTANCES OR LETTERS OF
TRANSMITTAL AND, EXCEPT AS OTHERWISE PROVIDED IN THE LETTER OF TRANSMITTAL,
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY.
IF DELIVERY IS BY MAIL, IT IS SUGGESTED THAT THE HOLDER USE PROPERLY INSURED,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, AND THAT THE MAILING BE MADE
SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE.
GUARANTEED DELIVERY PROCEDURES
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DTC PARTICIPANTS. A DTC Participant who wishes to cause its Notes to
be tendered, but who cannot transmit its acceptance through ATOP prior to the
Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act (an "Eligible
Institution"), including (as such terms are defined therein): (i) a bank;
(ii) a broker, dealer, municipal securities dealer, municipal securities
broker, government securities dealer or government securities broker; (iii) a
credit union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings institution that is a
participant in a Securities Transfer Association recognized program; and
(b) prior to 12:00 midnight, New York City time, on the Expiration
Date, the Depositary receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by mail, hand
delivery, facsimile transmission or overnight courier) substantially in the
form provided herewith; and
(c) Book-Entry Confirmation of the transfer into the Depositary's
account at DTC, and all other documents required by the Letter of
Transmittal, are received by the Depositary within three New York Stock
Exchange trading days after the date of receipt by the Depositary of such
Notice of Guaranteed Delivery.
RECORD HOLDERS. A record holder who wishes to tender its Notes but
(x) whose Notes are not immediately available and will not be available for
tendering prior to the Expiration Date, or (y) who cannot deliver its Notes,
the Letter of Transmittal, or any other required documents, to the Depositary
prior to the Expiration Date, may effect a tender if:
(a) the tender is made by or through an Eligible Institution; and
(b) prior to 12:00 midnight, New York City time, on the Expiration
Date, the Depositary receives from such Eligible Institution a properly
completed and duly executed Notice of Guaranteed Delivery (by mail, hand
delivery, facsimile transmission or overnight courier) substantially in the
form provided herewith; and
(c) a properly completed and executed Letter of Transmittal, as well
as the certificate(s) representing all tendered Notes in proper form for
transfer, and all other documents required by the Letter of Transmittal, are
received by the Depositary within three New York Stock Exchange trading days
after the date of receipt by the Depositary of such Notice of Guaranteed
Delivery.
Under no circumstances will interest be paid by the Bidder by reason
of any delay in making payment to any person using the guaranteed delivery
procedures described above.
WITHDRAWAL RIGHTS
Tenders of Notes (or any portion of such Notes in integral multiples
of $1,000 principal amount at maturity) may be withdrawn at any time prior to
the Expiration Date.
NOTES HELD THROUGH DTC. A DTC Participant who has transmitted its
acceptance through ATOP in respect of Notes held through DTC may, prior to
the Expiration Date, withdraw the instruction given thereby by (i)
withdrawing its acceptance through ATOP, or (ii) delivering to the Depositary
by mail, hand delivery or facsimile transmission of notice of withdrawal of
such instruction. Such notice of withdrawal must contain the name and number
of the DTC Participant, the principal amount of Notes to which such
withdrawal relates and the signature of the DTC Participant. Withdrawal of
such an instruction will be effective upon receipt of such notice of
withdrawal by the Depositary.
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<PAGE>
NOTES HELD BY RECORD HOLDERS. A holder may withdraw its tender of
Notes, prior to the Expiration Date, by delivering to the Depositary by mail,
hand delivery or facsimile transmission of notice of withdrawal. Any such
notice of withdrawal must (i) specify the name of the person who tendered the
Notes to be withdrawn, (ii) contain a description of the Notes to be
withdrawn and identify the certificate number or numbers shown on the
particular certificates evidencing such Notes and the aggregate principal
amount at maturity represented by such Notes and (iii) be signed by the
holder of such Notes in the same manner as the original signature on the
Letter of Transmittal by which such Notes were tendered (including any
required signature guarantees), or be accompanied by (x) documents of
transfer in a form acceptable to the Bidder, in its sole discretion and (y) a
properly completed irrevocable proxy that authorized such person to effect
such revocation on behalf of such holder. If the Notes to be withdrawn have
been delivered or otherwise identified to the Depositary, a signed notice of
withdrawal is effective immediately upon receipt by the Depositary even if
physical release is not yet effected. Any Notes properly withdrawn will be
deemed to be not validly tendered for purposes of the Offer.
All signatures on a notice of withdrawal must be guaranteed by a
recognized participant in the Securities Transfer Agents Medallion Program,
the NYSE Medallion Signature Program or the Stock Exchange Medallion Program;
provided, however, that signatures on the notice of withdrawal need not be
guaranteed if the Notes being withdrawn are held for the account of an
Eligible Institution.
A withdrawal of an instruction or a withdrawal of a tender must be
executed by a DTC Participant or a holder, as the case may be, in the same
manner as the person's name appears on its transmission through ATOP or
Letter of Transmittal, as the case may be, to which such withdrawal relates.
If a notice of withdrawal is signed by a trustee, partner, executor,
administrator, guardian, attorney-in-fact, agent, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person
must so indicate when signing and must submit with the revocation appropriate
evidence of authority to execute the notice of withdrawal. A holder or DTC
Participant may withdraw a tender only if such withdrawal complies with the
provisions of this Offer to Purchase.
A withdrawal of an instruction previously given pursuant to the
transmission of an acceptance through ATOP or a withdrawal of a tender by a
holder may be rescinded only by (i) a new transmission of acceptance through
ATOP, or (ii) execution and delivery of a new Letter of Transmittal, as the
case may be, in accordance with the procedures described herein.
The Bidder will accept for payment on March 3, 1999 any Notes validly
delivered on or before that date and pay for such Notes in accordance with
the terms of the Notes. The Bidder also agrees for the benefit of holders of
Notes to redeliver to such holders any Notes accepted for payment prior to
the Expiration Date if the holder (i) delivers written notice to the
Depositary prior to the Expiration Date (in the same manner set forth herein
for withdrawal of a tender) specifying the Notes the holder wishes to have
redelivered and (ii) returns to the Bidder's account at the Depositary within
two business days of the Expiration Date all amounts paid by the Bidder in
respect of such Notes.
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CERTAIN INFORMATION CONCERNING FIRE & MARINE AND ST. PAUL
FIRE & MARINE
Fire & Marine is a wholly owned subsidiary of St. Paul. Fire & Marine
and it subsidiaries underwrites property and liability, and life insurance
and provides insurance-related products and services to commercial,
professional and individual customers throughout the United States,
underwriting insurance through its Specialized Commercial, Commercial,
Personal Insurance, Reinsurance and Life business segments. Fire & Marine's
principal offices are located at 385 Washington Street, St. Paul, Minnesota
55102, and its telephone number is (615) 310-7911.
ST. PAUL
St. Paul and its subsidiaries comprise one of the oldest insurance
organizations in the United States, dating back to 1853. St. Paul is a
management company principally engaged, through its subsidiaries, in property
and liability insurance and reinsurance underwriting and life insurance. St.
Paul also has operations in the asset management industry through its
majority ownership of The John Nuveen Company. As a management company, St.
Paul oversees the operations of its subsidiaries and provides them with
capital, management and administrative services. St. Paul's executive offices
are located at 385 Washington Street, St. Paul, Minnesota 55102, and its
telephone number is (615) 310-7911.
RECENT DEVELOPMENTS
THE USF&G MERGER
On April 24, 1998, the USF&G Merger was consummated with USF&G
continuing as the surviving corporation and a wholly owned subsidiary of St.
Paul. In connection with the USF&G Merger, each outstanding share of USF&G
Common Stock (other than shares held by USF&G and shares held by St. Paul or
any direct or indirect wholly owned subsidiary of St. Paul) was converted
into 0.2821 (or, after giving effect to the Stock Split, 0.5642) of a share
of St. Paul Common Stock.
THE F&M MERGER
On February 2, 1999, the F&M Merger was consummated with F&M
continuing as the surviving corporation.
ST. PAUL'S FOURTH QUARTER AND YEAR-END 1998 EARNINGS RESULTS
1998 operating earnings presented in the following paragraphs include
a $458 million after-tax USF&G Merger-related charge taken in the second
quarter and a $22 million after-tax restructuring charge taken in the fourth
quarter, and exclude realized investment gains.
On January 28, 1999, St. Paul reported operating earnings of $111.2
million for the quarterly period ended December 31, 1998, or $0.44 per share
on a diluted basis, as compared to $206.9 million, or $0.82 per share (on a
diluted basis), for the same period in 1997. St. Paul also reported net
income of $104.0 million for the quarterly period ended December 31, 1998, or
$0.41 per share, as compared to net income of $255.8 million, or $1.01 per
share, for the same period in 1997.
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Operating losses for the year ended December 31, 1998 were $61.9
million, or $0.26 per share (on a diluted basis), compared with 1997
operating earnings of $742.9 million, or $2.95 per share (on a diluted basis)
for the year ended December 31, 1997. Net income was $65.2 million, or $0.22
per share for the year ended December 31, 1998, compared with net income of
$929.3 million, or $3.69 per share for the year ended December 31, 1997.
Consolidated assets of St. Paul as of December 31, 1998, were $38.3 billion,
compared with $37.4 billion as of December 31, 1997. Common shareholders'
equity was $6.6 billion at 1998 year-end, or $28.22. During the fourth
quarter of 1998, St. Paul repurchased 3.8 million of its common shares for a
total cost of $135 million.
-16-
<PAGE>
ADJUSTMENT TO CONVERSION PRICE; JOINT AND SEVERAL OBLIGATION
Prior to the consummation of the USF&G Merger, the Notes were
convertible into shares of USF&G Common Stock at a conversion rate of 29.499
shares of USF&G Common Stock per $1,000 principal amount at maturity of
Notes. Upon consummation of the USF&G Merger, pursuant to adjustment
mechanisms contained in the Indenture, the Notes became, and are currently,
convertible into shares of St. Paul Common Stock at a conversion rate (after
giving effect to the Stock Split) of 16.6434 shares of St. Paul Common Stock
per $1,000 principal amount at maturity of Notes. In connection with the
USF&G Merger, St. Paul irrevocably and unconditionally assumed, jointly
and severally with Fire & Marine, responsibility for the due and punctual
payment for the principal of, and premium, if any, and interest on, the Notes
when due, whether at maturity, by acceleration, by redemption or otherwise,
and all other monetary obligations of Fire & Marine under the Notes and the
Indenture. Payment by either Fire & Marine or St. Paul of the Redemption
Price for the Notes validly tendered and not withdrawn pursuant to the Offer
will discharge the obligation of both Fire & Marine and St. Paul to make such
payment. The obligations of St. Paul in respect of the Notes is subordinate
and junior in right of payment to the Senior Debt (as defined in the
Indenture) of St. Paul to the same extent and in the same manner that the
Notes are subordinate and junior in right of payment to the Senior Debt of
Fire & Marine (as successor to USF&G) pursuant to the Indenture.
SOURCES AND AMOUNT OF FUNDS
The precise amount of funds required by the Bidder to purchase Notes
tendered pursuant to the Offer and to pay the fees and expenses related to
the Offer will not be known until the Expiration Date. If all outstanding
Notes were tendered and purchased, the aggregate amount of funds required to
pay the Repurchase Price would be approximately $112,160,162. Fire & Marine
expects that any funds required to purchase tendered Notes will be available
from working capital, loans from affiliates (including St. Paul) and/or loans
from banks or other traditional third party sources of financing under new or
existing loan or credit agreements. Under the Indenture, St. Paul irrevocably
and unconditionally has assumed, jointly and severally with Fire & Marine,
responsibility for the due and punctual payment for the principal of, and
premium, if any, and interest on, the Notes when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations
of Fire & Marine under the Notes and the Indenture. Payment by either Fire &
Marine or St. Paul of the Repurchase Price for the Notes validly tendered and
not withdrawn pursuant to the Offer will discharge the obligation of both
Fire & Marine and St. Paul to make such payment.
-17-
<PAGE>
MARKET PRICE INFORMATION
THE NOTES
There is no established trading market for the Notes.
HOLDERS CONTEMPLATING ACCEPTING THE OFFER ARE URGED TO CONSULT WITH
THEIR OWN FINANCIAL ADVISORS BEFORE ACCEPTING THE OFFER.
ST. PAUL COMMON STOCK
St. Paul Common Stock is listed and traded on the NYSE under the
symbol "SPC". The following table sets forth the high and low sales prices
per share of St. Paul Common Stock reported on the NYSE Composite Tape, for
the periods indicated, as adjusted for the Stock Split.
St. Paul
Common Stock
-----------------
Calendar Quarter High Low
-------- -------
1996
First Quarter......................................... 30 1/4 26 3/4
Second Quarter........................................ 28 25 1/16
Third Quarter......................................... 27 15/16 25 5/16
Fourth Quarter........................................ 30 26 3/4
1997
First Quarter......................................... 36 5/16 28 13/16
Second Quarter........................................ 40 31 1/22
Third Quarter......................................... 41 13/32 36 9/32
Fourth Quarter........................................ 42 3/4 38 3/4
1998
First Quarter......................................... 47 3/16 37 5/16
Second Quarter........................................ 45 1/8 39 15/16
Third Quarter......................................... 43 5/8 28 1/16
Fourth Quarter........................................ 37 1/2 29 9/16
1999
First Quarter (through February 4, 1999)............. 36 28 1/2
On February 4, 1999, the closing sales price of the St. Paul Common
Stock, as reported on the NYSE Composite Tape, was $305/8 per share.
HOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE ST.
PAUL COMMON STOCK PRIOR TO MAKING ANY DECISION WITH RESPECT TO THE OFFER OR
THE CONVERSION OF THE NOTES.
-18-
<PAGE>
ST. PAUL
SELECTED FINANCIAL INFORMATION
The following table presents selected financial information of St.
Paul after giving effect to the USF&G Merger as a "pooling of interests." St.
Paul's selected historical financial information for each of the two years in
the period ended December 31, 1997 and for the nine month periods ended
September 30, 1998 and September 30, 1997 have been derived from financial
statements filed with the Commission. The following selected financial
information should be read in conjunction with the related historical
combined financial statements and notes thereto incorporated by reference
herein.
<TABLE>
<CAPTION>
(UNAUDITED) (AUDITED)
AS OF OR FOR THE NINE MONTHS AS OF OR FOR THE YEAR ENDED
ENDED SEPTEMBER 30, DECEMBER 31,
-------------------------- --------------------------
1998 1997 1997 1996
----------- ----------- ----------- -----------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total revenues ........................... 6,912,265 7,219,643 9,623,179 9,231,537
----------- ----------- ----------- -----------
Income (loss) from continuing operations $ (38,801) $ 741,282 $ 997,042 $ 840,461
Income (loss) from continuing operations
per common share(1)....................... $ (0.21) $ 2.95 $ 3.96 $ 3.26
BALANCE SHEET DATA:
Total assets................................ $37,504,363 $37,358,828 35,146,236
Total debt.................................. 1,097,742 1,304,008 1,170,676
Company-obligated mandatorily
redeemable preferred securities of
St. Paul Capital L.L.C.................... 502,700 502,700 307,000
Shareholders' equity........................ 6,609,115 6,608,168 5,847,456
Book value per common share(2).............. $ 27.83 $ 28.27 24.39
Number of common shares outstanding(2)...... 236,872 233,130 230,851
</TABLE>
- --------------------
(1) Income from continuing operations per common share for all years
presented is calculated on a "diluted" basis in accordance with SFAS No. 128
(2) Adjusted to reflect the two-for-one stock split on shares of St. Paul
Common Stock held of record as of May 6, 1998.
NOTES TO SELECTED FINANCIAL INFORMATION
1. DESCRIPTION OF TRANSACTIONS AND BASIS OF PRESENTATION
Pursuant to the USF&G Merger each share of USF&G Common Stock was converted
into the right to receive, after giving effect to the Stock Split, 0.5642 of
a Share of St. Paul Common Stock, the assumed Exchange Ratio used in the
preparation of Selected Unaudited Financial Information (the "Exchange
Ratio").
2. RECLASSIFICATIONS
Certain items in USF&G's historical financial statements have been
reclassified to conform to St. Paul's presentation.
3. PER COMMON SHARE DATA
The per common share data has been computed based on the combined historical
income from continuing operations as adjusted for conforming changes in
certain accounting methods of St. Paul and USF&G. For purposes of this
calculation, USF&G's weighted average common shares outstanding were
multiplied by the Exchange Ratio.
-19-
<PAGE>
4. USF&G MERGER-RELATED CHARGE
Relating to the USF&G Merger, St. Paul recorded an after-tax charge of $458
million in the second quarter of 1998, which is reflected in the September
1998 loss from continuing operations.
-20-
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is for general information only and is based
on the federal income tax law now in effect, which is subject to change,
possibly retroactively. This summary does not discuss all aspects of federal
income taxation which may be relevant to any particular holder of the Notes
in light of such holder's individual investment circumstances or to certain
types of holders subject to special tax rules (e.g., financial institutions,
broker-dealers, traders of securities that elect to mark to market insurance
companies, tax-exempt organizations, and foreign taxpayers), nor does it
address specific state, local or foreign tax consequences. This summary
assumes that the holders of the Notes have held their Notes as "capital
assets" under the Internal Revenue Code of 1986, as amended (the "Code").
EACH HOLDER IS URGED TO CONSULT SUCH HOLDER'S TAX ADVISOR REGARDING THE
SPECIFIC FEDERAL, STATE, LOCAL, AND FOREIGN INCOME AND OTHER TAX
CONSEQUENCES OF THE OFFER.
SALE OF NOTES PURSUANT TO THE OFFER
The receipt of cash by a holder of the Notes in exchange for the Notes will
be a taxable transaction for federal income tax purposes and may also be a
taxable transaction under applicable state, local or foreign tax laws. Such
holder will recognize gain or loss in an amount equal to the difference
between (i) the amount of cash received (other than in respect of accrued
interest) and (ii) such holder's adjusted tax basis in the Notes. Subject to
the market discount rules discussed below, such gain or loss will be capital
gain or loss and will be long-term gain or loss if such holder has held such
Notes for more than one year.
The payment of accrued interest with respect to a Note generally will be
treated as ordinary income.
An exception to the capital gains treatment described above applies to a
holder who holds a Note with a "market discount." Market discount is the
amount by which the holder's basis in the Note immediately after its
acquisition is exceeded by the "revised issue price" of the Note (which is
generally equal to the issue price of the Note plus the amount of "original
issue discount" (as defined in the Code) that has accrued on the Note since
its issuance). (However, a Note will be considered to have no market
discount if such excess is less than 3 of 1% of the stated redemption price
of the Note at maturity multiplied by the number of complete years from the
holder's acquisition date of the Note to its maturity date.) The gain
realized by the holder of a market discount Note on its purchase by the
Bidder will be treated as ordinary income to the extent that market discount
has accrued (on a straight line basis or, at the election of the holder, on
a constant interest basis) from the holder's acquisition date to the date of
sale, unless the holder has elected to include market discount in income
currently as it accrues. Gain in excess of such accrued market discount will
be subject to the capital rules described above.
-21-
<PAGE>
THE DEPOSITARY
The Depositary for the Offer is The Chase Manhattan Bank. All deliveries,
correspondence and questions sent or presented to the Depositary relating to
the Offer should be directed to one of the addresses or telephone numbers
set forth on the last page of this Offer to Purchase. Requests for
information or additional copies of the Offer to Purchase and the related
Letter of Transmittal should be directed to the Depositary.
The Bidder will pay the Depositary reasonable and customary compensation for
their services in connection with the Offer, plus reimbursement for
reasonable out-of-pocket expenses. The Bidder will indemnify the Depositary
against certain liabilities and expenses in connection therewith, including
liabilities under the Federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
the Bidder for customary mailing and handling expenses incurred by them in
forwarding material to their customers. The Bidder will not pay any fees or
commissions to any broker, dealer or other person (other than the
Depositary) in connection with the solicitation of tenders of Notes pursuant
to the Offer.
MISCELLANEOUS
The Bidder is not aware of any jurisdiction where the making of the Offer is
not in compliance with the laws of such jurisdiction. If the Bidder becomes
aware of any jurisdiction where the making of the Offer would not be in
compliance with such laws, the Bidder will make a good faith effort to
comply with any such laws or seek to have such laws declared inapplicable to
the Offer. If, after such good faith effort, the Bidder cannot comply with
any such applicable laws, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of the Notes residing in such
jurisdiction.
-22-
<PAGE>
The Letter of Transmittal, properly completed and duly executed, together
with certificates evidencing Notes and any other required documents should
be sent or delivered by holders of Notes or their broker, dealer, commercial
bank, trust company or other nominee to the Depositary at one of its
addresses set forth below.
The Depositary for the Offer is:
THE CHASE MANHATTAN BANK
<TABLE>
<S> <C> <C>
BY COURIER: BY REGISTERED MAIL: BY HAND:
Chase Bank of Texas, N.A. Chase Bank of Texas, N.A. The Chase Manhattan Bank
Corporate Trust Services Corporate Trust Services Corporate Trust-Securities Window
1201 Main Street, 18th floor P O Box 219052 55 Water Street
Dallas, TX 75202 Dallas, TX 75221-9053 Room 234, North Building
New York, NY 10041
</TABLE>
BY FACSIMILE: (214) 672-5932
CONFIRM BY TELEPHONE: (214) 672-5678 or (212) 946-3487
Any questions or requests for assistance or for additional copies of this
Offer to Purchase or related documents may be directed to the Depositary at
one of its telephone numbers set forth above.
-23-
<PAGE>
Exhibit (a)(2)
LETTER OF TRANSMITTAL
To Tender Zero Coupon Convertible Subordinated Notes Due 2009
issued by
USF&G CORPORATION,
Pursuant to the Offer to Purchase
Dated February 5, 1999
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO
PURCHASE, THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12 MIDNIGHT, NEW
YORK CITY TIME, ON MARCH 5, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND
DATE OR THE LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION
DATE"). NOTES TENDERED IN THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO
THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
THE CHASE MANHATTAN BANK (THE "DEPOSITARY")
<TABLE>
<CAPTION>
By Courier: By Registered Mail: By Hand:
---------- ------------------ -------
<S> <C> <C>
Chase Bank of Texas, NA Chase Bank of Texas, NA The Chase Manhattan Bank
Corporate Trust Services Corporate Trust Services Corporate Trust-Securities Window
1201 Main Street, 18th floor P O Box 219052 55 Water Street
Dallas, TX 75202 Dallas, TX 75221-9053 Room 234, North Building
New York, NY 10041
</TABLE>
By Facsimile: (214) 672-5937
Confirm by Telephone: (214) 672-5678 or (214) 672-3487
- --------------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN AND IN THE OFFER TO PURCHASE (AS DEFINED
BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
By execution hereof, the undersigned acknowledges receipt of the Offer to
Purchase, dated February 5, 1999 (as the same may be amended from time to
time, the "Offer to Purchase"), of St. Paul Fire and Marine Insurance
Company ("Fire & Marine" or the "Bidder") and this Letter of Transmittal and
instructions hereto (the "Letter of Transmittal"), which together constitute
the Bidder's offer to purchase (the "Offer") all of the outstanding Zero
Coupon Convertible Subordinated Notes Due 2009 (the "Notes") issued by
USF&G, upon the terms and subject to the conditions set forth in the Offer
to Purchase.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE PAYMENT FOR THE NOTES TO BE
PURCHASED PURSUANT TO THE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW) THEIR
NOTES TO THE DEPOSITARY PRIOR TO THE EXPIRATION DATE.
<PAGE>
This Letter of Transmittal is to be used by holders of the Notes if
certificates representing Notes are to be physically delivered to the
Depositary herewith by holders of Notes. This Letter of Transmittal is also
being supplied for informational purposes only to persons who hold notes in
book-entry form through the facilities of The Depositary Trust Company
("DTC"). Tender of Notes held through DTC must be made pursuant to the
procedures described under "Procedures for Tendering Notes C Tendering Notes
C Notes Held Through DTC" in the Offer to Purchase.
In order to properly complete this Letter of Transmittal, a holder of
Notes must (i) complete the box entitled "Description of Notes Tendered";
(ii) if appropriate, check and complete the boxes relating to guaranteed
delivery, Special Issuance or Payment Instructions and Special Delivery
Instructions; (iii) sign the Letter of Transmittal; and (iv) complete
Substitute Form W-9. Each holder of Notes should carefully read the detailed
Instructions contained herein prior to completing this Letter of
Transmittal.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with
respect to the Offer.
If holders desire to tender Notes pursuant to the Offer and (i)
certificates representing such holder's Notes are not lost but are not
immediately available or time will not permit this Letter of Transmittal,
certificates representing such Notes or other required documents to reach
the Depositary prior to the Expiration Date, or (ii) the procedures for
book-entry transfer cannot be completed prior to the Expiration Date, such
holders may effect a tender of such Notes in accordance with the guaranteed
delivery procedures described under "Procedure for Tendering Notes C
Guaranteed Delivery Procedures" in the Offer to Purchase.
See Instruction 1 below.
All capitalized terms used herein and not defined herein shall have the
meaning ascribed to them in the Offer to Purchase.
Your bank or broker can assist you in completing this form. The instructions
included with this Letter of Transmittal must be followed. Questions and
requests for assistance or for additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery may be
directed to the Depositary.
See Instruction 9 below.
-------------
The Bidder is not aware of any jurisdiction where the making of the Offer
would not be in compliance with applicable laws. If the Bidder becomes aware
of any jurisdiction where the making of the Offer would not be in compliance
with such laws, the Bidder will make a good faith effort to comply with any
such laws or seek to have such laws declared inapplicable to the Offer. If
after such good faith effort, the Bidder cannot comply with any such
applicable laws, the Offer will not be made to, nor will tenders be accepted
from or on behalf of, the holders of Notes residing in such jurisdiction.
-------------
/ / CHECK HERE IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s):
------------------------------------------------
Window Ticket No. (if any):
-----------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------
-2-
<PAGE>
Name of Eligible Institution that Guaranteed Delivery:
--------------------------
List below the Notes to which this Letter of Transmittal relates. If the
space provided below is inadequate, list the certificate numbers and
principal amounts on a separately executed schedule and affix the schedule
to this Letter of Transmittal. Tenders of Notes will be accepted only in
principal amounts at maturity equal to $1,000 or integral multiples thereof.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF NOTES TENDERED
- --------------------------------------------------------------------------------------------------------------------
Aggregate Aggregate
Principal Principal Amount
Amount at Maturity
Name(s) and Address(es) of Registered Holder(s) Certificate at Maturity Tendered**
(Please fill in, if blank) Number* Represented
- ----------------------------------------------------------------- --------------- ---------------- -----------------
<S> <C> <C> <C>
- ----------------------------------------------------------------- --------------- ---------------- -----------------
- ----------------------------------------------------------------- --------------- ---------------- -----------------
- ----------------------------------------------------------------- --------------- ---------------- -----------------
- ----------------------------------------------------------------- --------------- ---------------- -----------------
- ----------------------------------------------------------------- --------------- ---------------- -----------------
- ----------------------------------------------------------------- --------------- ---------------- -----------------
- ----------------------------------------------------------------- --------------- ---------------- -----------------
TOTAL PRINCIPAL AMOUNT AT MATURITY OF NOTES
- ----------------------------------------------------------------- --------------- ---------------- -----------------
</TABLE>
* Need not be completed by holders tendering by book-entry transfer (see
below).
** Unless otherwise indicated in the column labeled "Aggregate Principal Amount
at Maturity Tendered" and subject to the terms and conditions of the Offer
to Purchase, a holder will be deemed to have tendered the entire aggregate
principal amount at maturity represented by the Notes indicated in the
column labeled "Aggregate Principal Amount at Maturity Represented." See
Instruction 2.
-3-
<PAGE>
- --------------------------------------------------------------------------------
SPECIAL ISSUANCE OR
PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 2 THROUGH 6)
To be completed ONLY if certificates for Notes representing principal amount at
maturity not tendered or not purchased and/or the check for the purchase price
for principal amount at maturity of Notes purchased are to be issued to the
order of someone other than the registered holder(s) of the Notes or the name of
the registered holder(s) of the Notes needs to be corrected or changed.
Issue: / / Notes
/ / Checks
(Complete as applicable)
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
(Please Print)
---------------------------------------------------------------------------
Zip Code
---------------------------------------------------------------------------
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 herein)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 2 THROUGH 6)
To be completed ONLY if certificates for Notes representing principal amount at
maturity not tendered and/or the check for the purchase price for principal
amount at maturity of Notes purchased are to be sent to an address different
from that shown in the box entitled "Description of Notes Tendered" within this
Letter of Transmittal.
Deliver: / / Notes
/ / Checks
(Complete as applicable)
Name:
---------------------------------------------------------------------------
(Please Print)
Address:
------------------------------------------------------------------------
(Please Print)
---------------------------------------------------------------------------
Zip Code
---------------------------------------------------------------------------
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 herein)
- --------------------------------------------------------------------------------
-4-
<PAGE>
HOLDERS WHO WISH TO ACCEPT THE OFFER AND TENDER THEIR NOTES MUST COMPLETE
THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Offer, the undersigned
hereby tenders to the Bidder the principal amount at maturity of Notes
indicated above.
Subject to and effective upon the acceptance for purchase of and payment for
Notes tendered hereby, by executing and delivering a Letter of Transmittal,
a tendering holder of Notes (i) irrevocably sells, assigns and transfers to
the Bidder, all right, title and interest in and to all the Notes tendered
hereby, (ii) waives any and all rights with respect to the Notes (including
without limitation any existing or past defaults and their consequences in
respect of the Note and the Indenture under which the Notes were issued),
(iii) releases and discharges the Bidder from any and all claims such holder
may have now, or may have in the future arising out of, or related to, the
Notes including without limitation any claims that such holder is entitled
to receive additional principal or interest payments with respect to the
Notes or to participate in any redemption or defeasance of the Notes and
(iv) irrevocably constitutes and appoints the Depositary as the true and
lawful agent and attorney-in-fact of such holder with respect to any such
tendered Notes, will full power of substitution and resubstitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest) to (a) deliver certificates representing such Notes, or transfer
ownership of such Notes, on the account books maintained by DTC, together,
in any such case, with all accompanying evidences of transfer and
authenticity, to the Bidder, (b) present such Notes for transfer on the
relevant security register and (c) receive all benefits or otherwise
exercise all rights of beneficial ownership of such Notes (except that the
Depositary will have no rights to, or control over, funds from the Bidder,
except as agent for the Bidder, for the purchase price of any tendered Notes
that are purchased by the Bidder), all in accordance with the terms of the
Offer.
The undersigned understands that tenders of Notes may be withdrawn by
written notice of withdrawal received by the Depositary at any time prior to
the Expiration Date. See Instruction 1.
The undersigned hereby represents and warrants that the undersigned (i) owns
the Notes tendered and is entitled to tender such Notes and (ii) has full
power and authority to tender, sell, assign and transfer the Notes tendered
hereby and that when such Notes are accepted for purchase and payment by the
Bidder, the Bidder will acquire good title thereto, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim or right. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Bidder to be necessary
or desirable to complete the sale, assignment and transfer of the Notes
tendered hereby.
For the purposes of the Offer, the undersigned understands that the Bidder
will be deemed to have accepted for purchase validly tendered Notes (or
defectively tendered Notes with respect to which the Bidder has waived such
defect) only if, as and when the Bidder gives oral or written notice thereof
to the Depositary. Payment for Notes purchased pursuant to the Offer will be
made by deposit of the purchase price for such Notes with the Depositary,
which will act as agent for tendering holders for the purpose of receiving
payments from the Bidder and transmitting such payments to such holders.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall survive the death or incapacity of the undersigned and
every obligation of the undersigned under this Letter of Transmittal shall
be binding upon the undersigned's heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and
other legal representatives.
-5-
<PAGE>
The undersigned understands that valid tender of Notes pursuant to any one
of the procedures described under "Procedures for Tendering Notes" in the
Offer to Purchase and in the instructions hereto will constitute a binding
agreement between the undersigned and the Bidder upon the terms and subject
to the conditions of the Offer, including the undersigned's waiver of any
existing defaults and their consequences in respect of the Notes and the
Indenture (including, without limitation, a default in the payment of
interest).
The undersigned understands that the delivery and surrender of the Notes is
not effective, and the risk of loss of the Notes does not pass to the
Depositary, until receipt by the Depositary of this Letter of Transmittal,
or a facsimile hereof, properly completed and duly executed, together with
all accompanying evidences of authority and any other required documents in
form satisfactory to the Bidder. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Notes pursuant to the procedures described in the Offer to
Purchase and the form and validity (including time of receipt of notices of
withdrawal) of all documents will be determined by the Bidder, in its sole
direction, which determination shall be final and binding on all parties.
Unless otherwise indicated herein under "Special Issuance or Payment
Instructions," the undersigned hereby requests that any Notes representing
principal amounts at maturity not tendered be issued in the name(s) of the
undersigned, and checks constituting payments for Notes purchased in
connection with the Offer be issued to the order of the undersigned.
Similarly, unless otherwise indicated herein under "Special Delivery
Instructions," the undersigned hereby requests that any Notes representing
principal amounts at maturity not tendered and checks constituting payments
for Notes to be purchased in connection with the Offer be delivered to the
undersigned at the address(es) shown herein. In the event that the "Special
Issuance or Payment Instructions" box or the "Special Delivery Instructions"
box, or both, are completed, the undersigned hereby requests that any Notes
representing principal amounts not tendered be issued in the name(s) of,
certificates for such Notes be delivered to, and checks constituting
payments for Notes purchased in connection with the Offer be issued in the
name(s) of, and be delivered to, the person(s) at the address(es) so
indicated, as applicable. The undersigned recognizes that the Bidder has no
obligation pursuant to the "Special Issuance or Payment Instructions" box to
transfer any Notes from the name of the registered holder(s) thereof if the
Bidder does not accept for purchase any of the principal amount at maturity
of such Notes so tendered.
-6-
<PAGE>
- --------------------------------------------------------------------------------
PLEASE SIGN BELOW
(TO BE COMPLETED BY ALL TENDERING HOLDERS OF
NOTES REGARDLESS OF WHETHER NOTES
ARE BEING PHYSICALLY DELIVERED HEREWITH)
This Letter of Transmittal must be signed by the registered
holder(s) of Notes exactly as his (their) name(s) appear(s) on certificate(s)
for Notes or by person(s) authorized to become registered holder(s) by
endorsements and documents transmitted with this Letter of Transmittal. If
the signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person must set forth his or her full title
below under "Capacity" and submit evidence satisfactory to the Bidder of such
person's authority to so act. See Instruction 3 below.
If the signature appearing below is not of the registered holder(s) of the
Notes, then the registered holder(s) must sign a valid power of attorney.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s) of Holder(s) or Authorized Signatory)
Date: , 1999
---------------
Name(s):
-----------------------------------
-----------------------------------
(Please Print)
Capacity:
-----------------------------------
Address:
--------------------------------------------------
--------------------------------------------------
(Including Zip Code)
Area Code and Telephone No.: ( )
---------------
PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN
SIGNATURE GUARANTEE (IF REQUIRED - SEE INSTRUCTION 3 BELOW)
Certain Signatures Must be Guaranteed by an Eligible Institution
- --------------------------------------------------------------------------------
(Name of Eligible Institution Guaranteeing Signatures)
- --------------------------------------------------------------------------------
(Address (including zip code) and Telephone Number (including area code) of
Eligible Institution)
- --------------------------------------------------------------------------------
(Authorized Signature)
- --------------------------------------------------------------------------------
(Printed Name)
- --------------------------------------------------------------------------------
(Title)
Date: , 1999
---------------
- --------------------------------------------------------------------------------
-7-
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. PROCEDURES FOR TENDERING NOTES; GUARANTEED DELIVERY PROCEDURES;
WITHDRAWAL OF TENDERS. To tender the Notes in the Offer, certificates
representing such Notes, together with a properly completed and duly
executed copy (or facsimile) of this Letter of Transmittal, and any other
documents required by this Letter of Transmittal must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration
Date. The method of delivery of this Letter of Transmittal, certificates for
Notes and all other required documents to the Depositary is at the election
and risk of holders. If such delivery is to be made by mail, it is suggested
that holders use properly insured registered mail, return receipt requested,
and that the mailing be made sufficiently in advance of the Expiration Date
to permit delivery to the Depositary prior to such date. Except as otherwise
provided below, the delivery will be deemed made when actually received or
confirmed by the Depositary. THIS LETTER OF TRANSMITTAL AND NOTES SHOULD BE
SENT ONLY TO THE DEPOSITARY, AND NOT TO FIRE & MARINE OR ST. PAUL.
This Letter of Transmittal is also being supplied for informational purposes
only to persons who hold notes in book-entry form through the facilities of
DTC. Tender of Notes held through DTC must be made pursuant to the
procedures described under "Procedures for Tendering Notes C Tendering Notes
C Notes Held Through DTC" in the Offer to Purchase.
Except as provided herein for the book-entry or guaranteed delivery
procedures, unless the Notes being tendered are deposited with the
Depositary on or prior to the Expiration Date (accompanied by the
appropriate, properly completed and duly executed Letter of Transmittal and
any required signature guarantees and other documents required by this
Letter of Transmittal), the Bidder may, in its sole discretion, reject such
tender. Payment for Notes will be made only against deposit of tendered
Notes.
By executing this Letter of Transmittal (or a facsimile thereof), a
tendering holder waives any right to receive any notice of the acceptance
for payment of tendered Notes.
For a full description of the procedures for tendering Notes, see
"Procedures for Tendering Notes--Tendering Notes" in the Offer to Purchase.
If a holder desires to tender Notes pursuant to the Offer and (i)
certificates representing such holder's Notes are not lost but are not
immediately available or time will not permit this Letter of Transmittal,
certificates representing Notes or other required documents to reach the
Depositary on or prior to the Expiration Date or (ii) the procedures for
book-entry transfer cannot be completed on or prior to the Expiration Date,
such holder may effect a tender of such Notes in accordance with the
guaranteed delivery procedures described under "Procedures for Tendering
Notes C Guaranteed Delivery Procedures" in the Offer to Purchase.
Tenders of Notes may be withdrawn at any time prior to the Expiration Date
pursuant to the procedures described under "Procedures For Tendering Notes C
Withdrawal Rights" in the Offer to Purchase.
2. PARTIAL TENDERS. Tenders of Notes pursuant to the Offer will be accepted
only in principal amounts at maturity equal to $1,000 or integral multiples
thereof. If less than the entire principal amount at maturity of any Notes
evidenced by a submitted certificate is tendered, the tendering holder must
fill in the principal amount at maturity tendered in the last column of the
box entitled "Description of Notes Tendered" herein. The entire principal
amount at maturity represented by the certificates for all Notes delivered
to the
-8-
<PAGE>
Depositary will be deemed to have been tendered unless otherwise
indicated. If the entire principal amount at maturity of all Notes is not
tendered, certificates for the principal amount at maturity of Notes not
tendered will be sent to the holder unless otherwise provided in the
appropriate box on this Letter of Transmittal (see Instruction 4), promptly
after the Notes are accepted for purchase.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENT:
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder(s) of the Notes tendered hereby, the signature(s) must
correspond with the name(s) as written on the face of the certificate(s)
without alteration, enlargement or any change whatsoever.
IF THIS LETTER OF TRANSMITTAL IS EXECUTED BY A HOLDER OF NOTES WHO IS NOT
THE REGISTERED HOLDER, THEN THE REGISTERED HOLDER MUST SIGN A VALID POWER OF
ATTORNEY, WITH THE SIGNATURE OF SUCH REGISTERED HOLDER GUARANTEED BY AN
ELIGIBLE INSTITUTION.
If any of the Notes tendered hereby are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal. If any
tendered Notes are registered in different names on several certificates, it
will be necessary to complete, sign and submit as many copies of this Letter
of Transmittal and any necessary accompanying documents as there are
different names in which certificates are held.
If this Letter of Transmittal is signed by the holder, and the certificates
for any principal amount at maturity of Notes not tendered for purchase are
to be issued (or if any principal amount at maturity of Notes that is not
tendered for purchase is to be reissued or returned) to the holder, and
checks constituting payments for Notes to be purchased in connection with
the Offer are to be issued to the order of the holder, then the holder need
not endorse any certificates for tendered Notes nor provide a separate bond
power. In any other case (including if this Letter of Transmittal is not
signed by the holder), the holder must either properly endorse the
certificates for Notes tendered or transmit a separate properly completed
bond power with this Letter of Transmittal (in either case, executed exactly
as the name(s) of the registered holder(s) appear(s) on such Notes), with
the signature on the endorsement or bond power guaranteed by an Eligible
Institution, unless such certificates or bond powers are executed by an
Eligible Institution.
If this Letter of Transmittal or any certificates representing Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing,
and proper evidence satisfactory to the Bidder of their authority so to act
must be submitted with this Letter of Transmittal.
Endorsements on certificates for Notes and signatures on bond powers
provided in accordance with this Instruction 3 by registered holders not
executing this Letter of Transmittal must be guaranteed by an Eligible
Institution.
No signature guarantee is required if: (i) this Letter of Transmittal is
signed by the registered holder(s) of the Notes tendered herewith and the
payments for the Notes to be purchased are to be made, or any Notes for
principal amounts not tendered for purchase are to be issued, directly to
such registered holder(s) and neither the "Special Issuance or Payment
Instructions" box nor the "Special Delivery Instructions" box of this Letter
of Transmittal has been completed; or (ii) such Notes are tendered for the
account of an Eligible Institution. In all other cases, all signatures on
Letters of Transmittal accompanying Notes must be guaranteed by an Eligible
Institution.
4. SPECIAL ISSUANCE OR PAYMENT AND SPECIAL DELIVERY INSTRUCTIONS. Tendering
holders should indicate in the applicable box or boxes the name and address
to which certificates representing Notes for principal amounts at maturity
not tendered or not accepted for purchase or checks constituting payments
for Notes purchased in connection with the Offer are to be issued or sent,
if different from the name and address of the holder signing this Letter of
Transmittal. In the case of issuance in a different name, the taxpayer
identification or social security number of the person named must also be
indicated. If no instructions are given, Notes not tendered or not accepted
for purchase will be returned to the holder of the Notes tendered.
-9-
<PAGE>
5. TAXPAYER IDENTIFICATION NUMBER AND SUBSTITUTE FORM W-9. Each tendering
holder is required to provide the Depositary with the holder's correct
taxpayer identification number ("TIN"), generally the holder's social
security or federal employer identification number, on Substitute Form W-9,
which is provided under "Important Tax Information" below, or,
alternatively, to establish another basis for exemption from backup
withholding. A holder must cross out item (2) in the Certification box on
Substitute Form W-9 if such holder is subject to backup withholding. Failure
to provide the information on the form may subject the tendering holder to
31% federal income tax backup withholding on the payments made to the holder
or other payee with respect to Notes purchased pursuant to the Offer. If the
tendering holder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future, the tender holder should
write "Applied For" in the space provided for the TIN.
<PAGE>
6. TRANSFER TAXES. The Bidder will pay all transfer taxes, if any, payable
on the purchase and transfer of Notes purchased pursuant to the Offer,
except in the case of deliveries of certificates for Notes for principal
amounts at maturity not tendered for payment that are to be registered or
issued in the name of any person other than the holder of Notes tendered
hereby, in which case the amount of any transfer taxes (whether imposed on
the registered holder or such other person) payable on account of the
transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. IRREGULARITIES. All questions as to the validity, form, eligibility
(including the time of receipt) and acceptance for payment of any tenders of
Notes pursuant to the procedures described in the Offer to Purchase and the
form and validity (including the time of receipt of notices of withdrawal)
of all documents will be determined by the Bidder, in its sole discretion,
which determination shall be final and binding on all parties. The Bidder
reserves the absolute right to reject any or all tenders determined by it
not to be in proper form or the acceptance of or payment for which may be
unlawful. The Bidder also reserves the absolute right to waive any of the
conditions of the Offer and any defect or irregularity in the tender of any
particular Notes. The Bidder's interpretations of the terms and conditions
of the Offer (including without limitation the instructions in this Letter
of Transmittal) shall be final and binding. No alternative, conditional or
contingent tenders will be accepted. Unless waived, any irregularities in
connection with tenders must be cured within such time as the Bidder shall
determine. None of the Bidder, the Depositary or any other person will be
under any duty to give notification of any defects or irregularities in such
tenders or will incur any liability to holders for failure to give such
notification. Tenders of such Notes shall not be deemed to have been made
until such irregularities have been cured or waived. Any Notes received by
the Depositary that are not properly tendered and as to which the
irregularities have not been cured or waived will be returned by the
Depositary to the tendering holders, unless such holders have otherwise
provided herein, as promptly as practical following the Expiration Date.
8. MUTILATED, LOST, STOLEN OR DESTROYED CERTIFICATES FOR NOTES. Any holder
of Notes whose certificates for Notes have been mutilated, lost, stolen or
destroyed should contact the Depositary at the address indicated above for
further instructions.
9. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering Notes and requests for assistance or additional
copies of the Offer to Purchase and this Letter of Transmittal may be
directed to, and additional information about the Offer may be obtained from
the Depositary, whose address and telephone number appears herein.
-10-
<PAGE>
IMPORTANT INFORMATION
Under federal income tax laws, a holder whose tendered Notes are accepted
for payment is required by law to provide the Depositary (as payer) with
such holder's correct TIN on Substitute Form W-9 included herein or
otherwise establish a basis for exemption from backup withholding. If such
holder is an individual, the TIN is his social security number. If the
Depositary is not provided with the correct TIN, a $50 penalty may be
imposed by the Internal Revenue Service, and payments made with respect to
Notes purchased pursuant to the Offer may be subject to backup withholding.
Failure to comply truthfully with the backup withholding requirements also
may result in the imposition of severe criminal and/or civil fines and
penalties.
Certain holders (including, among others, all corporations and certain
foreign persons) are not subject to these backup withholding and reporting
requirements. Exempt holders should furnish their TIN, write "Exempt" on the
face of the Substitute Form W-9, and sign, date and return the Substitute
Form W-9 to the Depositary. A foreign person, including entities, may
qualify as an exempt recipient by submitting to the Depositary a properly
completed Internal Revenue Service Form W-8, signed under penalties of
perjury, attesting to that holder's foreign status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for additional
instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the holder or other payee. Backup withholding is not an
additional federal income tax. Rather, the federal income tax liability of
persons subject to backup withholding will be reduced by the amount of tax
withheld. If withholding results in an overpayment of taxes, a refund may be
obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Notes
purchased pursuant to the Offer, the holder is required to provide the
Depositary with either: (i) the holder's correct TIN by completing the form
included herein, certifying that the TIN provided on Substitute Form W-9 is
correct (or that such holder is awaiting a TIN) and that (A) the holder has
not been notified by the Internal Revenue Service that the holder is subject
to backup withholding as a result of failure to report all interest or
dividends or (B) the Internal Revenue Service has notified the holder that
the holder is no longer subject to backup withholding; or (ii) an adequate
basis for exemption.
NUMBER TO GIVE THE DEPOSITARY
The holder is required to give the Depositary the TIN (e.g., social security
number or employer identification number) of the registered holder of the
Notes. If the Notes are held in more than one name or are held not in the
name of the actual owner, consult the "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" included herein for
additional guidance on which number to report.
-11-
<PAGE>
<TABLE>
<S><C>
PAYER'S NAME: THE CHASE MANHATTAN BANK
- ------------------------------------- ----------------------------------------- -------------------------------------
SUBSTITUTE Part I - PLEASE PROVIDE YOUR TIN IN THE
FORM W-9 BOX AT RIGHT AND CERTIFY BY SIGNING AND ---------------------------------
DATING BELOW. Social Security Number
OR
---------------------------------
Employer Identification
Number
(If awaiting TIN write
AApplied For")
- ------------------------------------- -------------------------------------------------------------------------------
Payer's Request for Taxpayer Part II -- For Payees Exempt from Backup Withholding, see the enclosed
Identification Number (TIN) Guidelines and complete as instructed therein.
- ------------------------------------- -------------------------------------------------------------------------------
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me) and
(2) I am not subject to back-up withholding either because I have not been
notified by the Internal Revenue Service (IRS) that I am subject to
back-up withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to
back-up withholding.
CERTIFIED INSTRUCTIONS -- You must cross out item (2) above if you have been
notified by the IRS that you are subject to back-up withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS stating that you are no longer
subject to back-up withholding, not cross out item (2).
- ---------------------------------------------------------------------------------------------------------------------
SIGNATURE DATE , 19
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9
- --------------------------------------------------------------------------------
-12-
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-000. Employer Identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the Payer.
<TABLE>
<S><C>
====================================================================================================================
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL
SECURITY NUMBER OF: SECURITY NUMBER OF:
====================================================================================================================
1. Individual The individual 8. Corporate The corporation
2. Two or more The actual owner of 9. Association, club, The organization
the account or, if religious, charitable,
combined funds, any educational or other
one of the individuals tax-exempt organization
(1)
3. Custodian account of a The minor (2) 10. Partnership The partnership
minor (Uniform Gift to
Minors Act)
4. a. The usual The grantor-trustee (1) 11. A broker or registered The broker or nominee
revocable savings nominee
trust (grantor is
also trustee)
b. So-called trust The actual owner (1)
account that is not
a legal or valid
trust under state
law
5. Sole proprietorship The owner (3)
6. Sole proprietorship The owner (3)
7. A valid trust, estate, The legal entity (Do or pension trust not
furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.) (4)
====================================================================================================================
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
-13-
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Section references are to the Internal Revenue Code.
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local
office of the Social Security Administration or the Internal Revenue Service
(the AIRS") and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
(1) through (13) and a person registered under the Investment Advisers Act
of 1940 who regularly acts as a broker are exempt. Payments subject to
reporting under sections 6041 and 6041A are generally exempt from backup
withholding only if made to payees described in items (1) through (7),
except that a corporation that provides medical and health care services or
bills and collects payments for such services is not exempt from backup
withholding or information reporting. Only payees described in items (2)
through (6) are exempt from backup withholding for barter exchange
transactions, patronage dividends, and payments by certain fishing boat
operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an individual
retirement plan ("IRA"), or a custodial account under 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A State, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments that are not subject to information reporting are also not subject
to backup withholding. For details see sections 6041, 6041(A)(a), 6042,
6044, 6045, 6049, 6050A and 6050N, and the regulations under such sections.
PRIVACY ACT NOTICE. Section 6109 requires you to give your correct taxpayer
identification number to persons who must file information returns with the
IRS to report interest, dividends, and certain other income paid to you,
mortgage interest you paid, the acquisition or abandonment of secured
property, cancellation of debt, or contributions you made to an IRA. The IRS
uses the numbers for identification purposes and to help verify the accuracy
of your tax return. You must provide your taxpayer identification number
whether or not you are qualified to file a tax return. Payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
PENALTIES.
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. If you fail
to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. Wilfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR
TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
-14-
<PAGE>
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF CERTIFICATES FOR
ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE 2009
ISSUED BY
USF&G CORPORATION
Capitalized terms used but not defined herein have the meanings given them in
the Offer to Purchase, dated February 5, 1999 (the "Offer to Purchase").
This Notice of Guaranteed Delivery may be used to cause a tender of Zero
Coupon Convertible Subordinated Notes Due 2009 (the "Notes") issued by USF&G
by (i) a record holder of Notes if certificates for the Notes are not
immediately available or time will not permit all required documents to reach
the Depositary on or prior to the Expiration Date or (ii) by a DTC
Participant if the procedures for book-entry transfer described in the Offer
to Purchase cannot be completed on a timely basis.
THE DEPOSITARY FOR THE OFFER IS:
THE CHASE MANHATTAN BANK (THE "DEPOSITARY")
<TABLE>
<S> <C> <C>
BY COURIER: BY REGISTERED MAIL: BY HAND:
Chase Bank of Texas, N.A. Chase Bank of Texas, N.A. The Chase Manhattan Bank
Corporate Trust Services Corporate Trust Services Corporate Trust-Securities Window
1201 Main Street, 18th floor P O Box 219052 55 Water Street
Dallas, TX 75202 Dallas, TX 75221-9053 Room 234, North Building
New York, NY 10041
</TABLE>
BY FACSIMILE: (214) 672-5932
CONFIRM BY TELEPHONE: (214) 672-5678 or (212) 946-3487
Delivery of this instrument to an address other than as set forth above does
not constitute a valid delivery.
Ladies and Gentlemen:
By execution hereof, the undersigned acknowledges receipt of the Offer to
Purchase and the Letter of Transmittal.
On the terms and subject to the conditions of the Offer to Purchase and the
Letter of Transmittal, the undersigned hereby represents that it is the
holder of the Notes being tendered (or caused to be tendered) hereby and is
entitled to tender (or cause to be tendered) such Notes as contemplated by
the Offer and, pursuant to the guaranteed delivery procedures described in
the Offer to Purchase and Letter of Transmittal, hereby tenders (or causes a
tender) to the Bidder of the aggregate principal amount of Notes indicated
below.
Except as stated in the Offer to Purchase, all authority herein conferred or
agreed to be conferred shall survive the death or incapacity of the
undersigned, and any obligation of the undersigned hereunder shall be
binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
A record holder must execute this Notice of Guaranteed Delivery exactly as
its name appears on its Notes and a DTC Participant must execute this Notice
of Guaranteed Delivery exactly as its name is registered with DTC. If
signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in
a fiduciary or representative capacity, such person must set forth his or
her name, address and capacity as indicated below and submit evidence to the
Bidder of such person's authority so to act.
<PAGE>
<TABLE>
<S> <C>
- ----------------------------------------------------------- -----------------------------------------------------------
Aggregate Principal Amount at Maturity of
Notes Tendered:____________________________________________ -----------------------------------------------------------
Certificate Nos. for Notes (if available): -----------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
- -----------------------------------------------------------
Dated: ____________, 199_
- ----------------------------------------------------------- NAME(S) OF HOLDERS:
-----------------------------------------------------------
Check Box if being executed by a DTC Participant:
-----------------------------------------------------------
PLEASE TYPE OR PRINT
-----------------------------------------------------------
ADDRESS
DTC Participant's Number: _________________________________
-----------------------------------------------------------
Transaction Code Number: __________________________________ ZIP CODE
( )
Account Number:____________________________________________ -----------------------------------------------------------
AREA CODE AND TELEPHONE NO.
-----------------------------------------------------------
- ----------------------------------------------------------- -----------------------------------------------------------
</TABLE>
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of a registered national securities exchange or of
the National Association of Securities Dealers, Inc., or a commercial bank
or trust company having an office or correspondent in the United States or
another "Eligible Guarantor Institution" as defined in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, hereby guarantees that,
within three New York Stock Exchange trading days from the date of receipt
by the Depositary of this Notice of Guaranteed Delivery, a properly
completed and validly executed Letter of Transmittal (or a facsimile
thereof), together with Notes tendered hereby in proper form for transfer,
(or confirmation of the book-entry transfer of such Notes into the
Depositary's account at the Depositary Trust Company, pursuant to the
procedures for book-entry transfer set forth under "Procedure for Tendering
Notes" in the Offer to Purchase) and all other required documents will be
delivered by the undersigned to the Depositary.
- --------------------------------- ---------------------------------------
NAME OF FIRM TITLE
- --------------------------------- ---------------------------------------
AUTHORIZED SIGNATURE ADDRESS ZIP CODE
- --------------------------------- ---------------------------------------
NAME (PLEASE TYPE OR PRINT) AREA CODE AND TELEPHONE NO.
The institution which completes this form must deliver to the Depositary the
guarantee, the Letter of Transmittal (or facsimile thereof) and certificates
for Notes within the time periods specified herein.
Failure to do so could result in a financial loss to such institution.
DO NOT SEND CERTIFICATES FOR NOTES WITH THIS FORM. THEY SHOULD BE SENT WITH
THE LETTER OF TRANSMITTAL.
-2-
<PAGE>
Exhibit (a)(4)
OFFER TO PURCHASE FOR CASH
ANY AND ALL OF THE OUTSTANDING
ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE 2009
ISSUED BY
USF&G CORPORATION
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12 MIDNIGHT, NEW YORK CITY TIME,
ON MARCH 5, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE
LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES TENDERED
IN THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
February 5, 1999
TO OUR CLIENTS:
Enclosed for your consideration is a Offer to Purchase, dated February 5,
1999 (as the same may be amended from time to time, the "Offer to Purchase"),
and a Form of Letter of Transmittal and instructions thereto (the "Letter of
Transmittal"), relating to the offer (the "Offer") by St. Paul Fire and
Marine Insurance Company ("Fire & Marine" or the "Bidder") to purchase for
cash at $640.82 per $1,000 principal amount at maturity (the "Repurchase
Price"), upon the terms and subject to the conditions set forth in the Offer
to Purchase and in the accompanying Letter of Transmittal, any and all of the
outstanding Zero Coupon Convertible Subordinated Notes Due 2009 (the "Notes")
issued by USF&G Corporation ("USF&G").
The materials are being forwarded to you as the beneficial owner of Notes
carried by us for your account or benefit but not registered in your name. A
tender of any notes may only be made by us as the registered holder and
pursuant to your instructions. Therefore, the company urges beneficial owners
of notes registered in the name of a broker, dealer, commercial bank, trust
company or any other nominee to contact such registered holder promptly if
they wish to tender Notes in the Offer.
Accordingly, we request instructions as to whether you wish us to tender any
or all such Notes held by us for your account or benefit pursuant to the
terms and conditions set forth in the Offer to Purchase and the Letter of
Transmittal. We urge you to read carefully the Offer to Purchase and the
Letter of Transmittal before instructing us to tender your Notes.
Your instructions to us should be forwarded as promptly as possible in order
to permit us to tender Notes on your behalf in accordance with the provisions
of the Offer. Notes tendered pursuant to the offer may be validly withdrawn,
subject to the procedures described in the Offer to Purchase, at any time
prior to the expiration date.
Your attention is directed to the following:
1. The Offer is for any and all outstanding Notes.
2. The Offer and withdrawal rights will expire on the Expiration Date.
3. Any transfer taxes incident to the transfer of Notes from the tendering
holder to the Bidder will be paid by the Bidder, except as provided in the
Offer to Purchase and the instructions to the Letter of Transmittal.
If you wish to have us tender any or all of your Notes held by us for your
account or benefit, please so instruct us by completing, executing and
returning to us the instruction form that appears below. If you authorize
the tender of your Notes, all such Notes will be tendered unless otherwise
specified below. The accompanying Letter of Transmittal is furnished to you
for informational purposes only and may not be used by you to tender notes
held by us and registered in our name for your account or benefit.
<PAGE>
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Offer.
This will instruct you to tender the principal amount of Notes indicated
below held by you for the account or benefit of the undersigned pursuant to
the terms of and conditions set forth in the Offer to Purchase and the
Letter of Transmittal.
Box 1 / / Please tender ALL my Notes held by you for my account or benefit.
Box 2 / / Please tender LESS than all my Notes. I wish to tender $
principal amount of Notes.
Box 3 / / Please do not tender any Notes held by you for my account or benefit.
Date: , 1999
- ----------------------------------------------
SIGNATURE(S)
PLEASE PRINT NAME(S) HERE
UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN, YOUR SIGNATURE(S) HEREON
SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OF YOUR NOTES.
-2-
<PAGE>
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ANY AND ALL OF THE OUTSTANDING
ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE 2009
ISSUED BY
USF&G CORPORATION
- --------------------------------------------------------------------------------
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THE OFFER TO PURCHASE, THE
OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12 MIDNIGHT, NEW YORK CITY TIME,
ON MARCH 5, 1999, UNLESS THE OFFER IS EXTENDED (SUCH TIME AND DATE OR THE
LATEST EXTENSION THEREOF, IF EXTENDED, THE "EXPIRATION DATE"). NOTES TENDERED
IN THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
February 5, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Enclosed for your consideration is an Offer to Purchase, dated February 5,
1999 (as the same may be amended from time to time, the "Offer to
Purchase"), and a form of Letter of Transmittal and instructions thereto
(the "Letter of Transmittal") relating to the offer (the "Offer") by St.
Paul Fire and Marine Insurance Company ("Fire & Marine" or the "Bidder") and
The St. Paul Companies, Inc. ("St. Paul", together with Fire & Marine, the
"Bidder") to purchase cash at $640.82 per $1,000 principal amount at
maturity (the "Repurchase Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the accompanying Letter
of Transmittal, any and all of the outstanding Zero Coupon Convertible
Subordinated Notes Due 2009 (the "Notes") issued by USF&G Corporation
("USF&G").
We are asking you to contact your clients for whom you hold Notes registered
in your name or in the name of your nominee. The Bidder will pay all
transfer taxes, if any, applicable to the tender of Notes, except as
otherwise provided in the Offer to Purchase and the Letter of Transmittal.
Enclosed is a copy of each of the following documents for forwarding to your
clients:
1. The Offer to Purchase.
2. A Blue Letter of Transmittal, including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9, for your use in
connection with the tender of Notes by record holders and for the
information of your clients.
3. A Yellow form of letter addressed "To Our Clients" that may be sent to your
clients for whose accounts you hold Notes registered in your name or the
name of your nominee, with space provided for obtaining the clients'
instructions with regard to the Offer.
4. A Pink Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Notes are not lost but not immediately available, or if the
procedure for book-entry transfer cannot be completed on or prior to the
Expiration Date.
5. A return envelope addressed to an affiliate of The Chase Manhattan Bank, as
Depositary (the "Depositary").
Your prompt action is requested. Notes tendered pursuant to the Offer may be
validly withdrawn, subject to the procedures described in the Offer to
Purchase, at any time prior to the Expiration Date.
Please refer to "Procedures for Tendering Notes" in the Offer to Purchase
for a description of the procedures which must be followed to tender Notes
in the Offer.
Additional copies of the enclosed materials may be obtained from the
Depositary at (214) 672-5678 or (212) 946-3487.
Very truly yours,
ST. PAUL FIRE & MARINE INSURANCE COMPANY
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY, THE TRUSTEE, OR THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF
THEM WITH RESPECT TO THE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE
OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
<PAGE>
Exhibit (c)(3)
SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE, dated as of January 1, 1999 (this "Second
Supplemental Indenture"), among St. Paul Fire and Marine Insurance Company
("F&M"), a Minnesota corporation and a wholly owned subsidiary of The St. Paul
Companies, Inc. ("St. Paul"), USF&G Corporation, a Maryland corporation (the
"Company") and The Chase Manhattan Bank (formerly known as Chemical Bank), as
Trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has issued Zero Coupon Convertible Subordinated Notes
due 2009 (the "Securities") under and pursuant to an Indenture, dated as of
January 28, 1994, as amended and supplemented by the First Supplemental
Indenture (the "First Supplemental Indenture"), dated as of April 24, 1998 (as
so supplemented and amended, the "Indenture");
WHEREAS, on the date hereof, pursuant to an Agreement and Plan of Merger,
dated as of January 1, 1999, between the Company and F&M, the Company is being
merged with and into F&M, with F&M continuing as the surviving corporation (the
"Merger");
WHEREAS, pursuant to the First Supplemental Indenture, St. Paul jointly and
severally assumed with the Company the due and punctual payment of the principal
of, and premium, if any, and interest on the Securities when due, as more fully
set forth therein;
WHEREAS, the Company has delivered to the Trustee, pursuant to Section
801(3) of the Indenture, an Officers' Certificate and an Opinion of Counsel,
each stating that the Merger and this Second Supplemental Indenture comply with
Section 801 of the Indenture and that all conditions precedent in the Indenture
relating to the Merger have been complied with;
WHEREAS, Section 901(1) of the Indenture permits the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, without the consent of any Holders of the Securities, to enter into one or
more supplemental indentures for the purpose of evidencing succession of another
Person to the Company and the assumption by such successor of the covenants of
the Company in the Indenture and in the Securities; and
WHEREAS, F&M and the Company have requested that the Trustee execute and
deliver this Second Supplemental Indenture pursuant to Section 901 of the
Indenture, and all requirements necessary to make this Second Supplemental
Indenture a valid
<PAGE>
instrument in accordance with its terms have been performed and the execution
and delivery of this Second Supplemental Indenture have been duly authorized in
all respects by each of F&M and the Company.
NOW, THEREFORE, the Company, F&M, and the Trustee covenant and agree as
follows:
ARTICLE I
AUTHORIZATION; DEFINITIONS
Section 101. SECOND SUPPLEMENTAL INDENTURE. This Second Supplemental
Indenture is supplemental to, and is entered into in accordance with Sections
801 and 901 of, the Indenture, and except as modified, amended and supplemented
by this Second Supplemental Indenture, the provisions of the Indenture,
including the First Supplemental Indenture, are in all respects ratified and
confirmed and shall remain in full force and effect.
Section 102. DEFINITIONS. Except as expressly provided in Section 201 of
this Second Supplemental Indenture below and unless the context shall otherwise
require, all terms which are defined in Section 101 of the Indenture shall have
the same meanings, respectively, in this Second Supplemental Indenture as such
terms are given in said Section 101 of the Indenture.
ARTICLE II
AMENDMENTS TO THE INDENTURE
Section 201. AMENDMENTS TO SECTION 101 OF THE INDENTURE. (a) Section 101
of the Indenture is hereby amended by inserting the following definitions:
"F&M" means St. Paul Fire and Marine Insurance Company, a wholly owned
subsidiary of St. Paul.
"Second Supplemental Indenture" means the Second Supplemental
Indenture to the Indenture, dated as of January 1, 1999, among the Company,
F&M, and the Trustee.
<PAGE>
ARTICLE III
ASSUMPTION AND SUBORDINATION
Section 301. ASSUMPTION. F&M hereby irrevocably and unconditionally
assumes, pursuant to Section 801 of the Indenture, all of the obligations and
covenants of the Company under the Securities, including without limitation the
due and punctual payment of the principal of (and premium, if any), and interest
(including any Additional Interest) on all the Securities when due, and the
performance or observance of every covenant of the Indenture on the part of the
Company to be performed or observed. It is understood and agreed that F&M shall
be fully liable for all obligations under the terms of the Securities and the
Indenture, and no rights of the Trustee or any Holder of the Securities existing
under the Securities or Indenture prior to the execution of this Second
Supplemental Indenture shall be deemed to be amended, abridged, reduced or
otherwise affected by the Second Supplemental Indenture. The conversion rights
set forth in the Indenture shall continue to be governed as set forth in such
Article Twelve of the Indenture and the First Supplemental Indenture.
Section 302. SUBORDINATION. The obligations of F&M under Section 301 of
this Second Supplemental Indenture shall be subordinate and junior in right of
payment to the Senior Debt of F&M to the same extent and in the same manner that
the Securities are subordinate and junior in right of payment to the Senior Debt
of the Company pursuant to Article Fifteen of the Indenture.
ARTICLE IV
MISCELLANEOUS
Section 401. CONFIRMATION OF INDENTURE. The Indenture, as supplemented
and amended by this Second Supplemental Indenture, is in all respects ratified
and confirmed, and the Indenture, this Second Supplemental Indenture and all
indentures supplemental thereto shall be read, taken and construed as one and
the same instrument.
Section 402. CONCERNING THE TRUSTEE. The Trustee accepts the Indenture,
as supplemented by this Second Supplemental Indenture, and agrees to perform the
same upon the terms and conditions set forth therein as so supplemented. The
Trustee shall not be responsible in any manner whatsoever for or in respect of
the validity or sufficiency of this Second Supplemental Indenture or the due
execution hereof by the Company or F&M or for or in respect of the recitals
contained herein, all of which are made by the Company and F&M solely.
Section 403. GOVERNING LAW. This Second Supplemental Indenture shall be
governed by and construed in accordance with the laws of the State of New York
without regard to the principles of conflicts of laws.
<PAGE>
Section 404. SEPARABILITY. In case any one or more of the provisions
contained in this Second Supplemental Indenture shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Second
Supplemental Indenture, but this Second Supplemental Indenture shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein.
Section 405. COUNTERPARTS. This Second Supplemental Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 406. EFFECTIVENESS. This Second Supplemental Indenture shall
become effective upon the effectiveness of the Merger.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental
Indenture to be duly executed as of the day and year first above written.
ST. PAUL FIRE AND MARINE
INSURANCE COMPANY
By: /s/ Thomas A. Bradley
------------------------------------
Name: Thomas A. Bradley
Title: Senior Vice President
USF&G CORPORATION
By: /s/ John A. MacCall
------------------------------------
Name: John A. MacCall
Title: Executive Vice President
THE CHASE MANHATTAN BANK, AS TRUSTEE
By: /s/ Francine Springer
------------------------------------
Name: Francine Springer
Title: Assistant Vice President
