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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(AMENDMENT NO. 2)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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ACORDIA, INC.
(NAME OF SUBJECT COMPANY)
ACORDIA, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
(TITLE OF CLASS OF SECURITIES)
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004929 105
(CUSIP NUMBER OF CLASS OF SECURITIES)
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ERNEST J. NEWBORN, JR.,
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ACORDIA, INC.
120 MONUMENT CIRCLE
INDIANAPOLIS, INDIANA 46204
(317) 488-6666
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATION ON BEHALF OF THE PERSON(S) FILING STATEMENT)
WITH COPIES TO:
JONATHAN L. FREEDMAN, ESQ.
DEWEY BALLANTINE
1301 AVENUE OF THE AMERICAS
NEW YORK, NY 10019-6092
(212) 259-8000
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Acordia, Inc. (the "Company") hereby amends and supplements its
Solicitation/Recommendation Statement on Schedule 14D-9 originally filed on June
6, 1997, as amended on June 13, 1997 (the "Statement"), relating to a tender
offer by AICI Acquisition Corp., a Delaware corporation and a wholly-owned
subsidiary of Anthem Insurance Companies, Inc., an Indiana mutual insurance
company, disclosed in a Tender Offer Statement on Schedule 14D-1 dated June 6,
1997 to purchase any and all of the outstanding shares of common stock, par
value $1.00 per share, of the Company at a price of $40.00 per share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated June 6, 1997 and the related
Letter of Transmittal. Capitalized terms used herein but not otherwise defined
shall have the meanings assigned to them in the Statement.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
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<CAPTION>
EXHIBIT
NO.
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<C> <S>
(a)(1) Offer to Purchase dated June 6, 1997.
(a)(2) Letter of Transmittal dated June 6, 1997.
(a)(3) Text of Press Release dated June 2, 1997.
(a)(4) Fairness Opinion of Alex. Brown & Sons, Incorporated dated May 30, 1997.
(a)(5) Letter to Acordia, Inc. Stockholders, dated June 6, 1997.
(c)(1) Agreement and Plan of Merger dated as of June 2, 1997, by and among Acordia,
Inc., Anthem Insurance Companies, Inc. and AICI Acquisition Corp.
(c)(2) Portions of Acordia, Inc.'s Proxy Statement dated April 11, 1997, for the Acordia
1997 Annual Meeting of Stockholders.
(c)(3) Acordia, Inc. 1992 Stock Compensation Plan.
(c)(4) Acordia, Inc. Directors Stock Compensation Plan.
(c)(5) Acordia, Inc. Directors Deferred Compensation Plan.
(c)(6) Acordia 401(k) Long Term Savings Investment Plan, as amended to date.
(c)(7) Transaction Agreement dated February 17, 1997, by and between Acordia, Inc. and
Frank C. Witthun.
(c)(8) Transaction Agreement dated February 28, 1997, by and between Acordia, Inc. and
John J. O'Connor.
(c)(9) Transaction Agreement dated February 28, 1997, by and between Acordia, Inc. and
Ernest J. Newborn.
(c)(10) Transaction Agreement dated February 28, 1997, by and between Acordia, Inc. and
Keith A. Maib.
(c)(11) Transaction Agreement dated February 28, 1997, by and between Acordia, Inc. and
Robert C. Nevins.
(c)(12) Transaction Agreement dated February 28, 1997, by and between Acordia, Inc. and
Daniel W. Kendall.
(c)(13) Transaction Agreement dated March 17, 1997, by and between Acordia, Inc. and
Michael B. Henning.
(c)(14) Employment Agreement dated June 1, 1994, by and between Acordia, Inc. and Ernest
J. Newborn.
(c)(15) Employment Agreement dated January 1, 1994, by and between Acordia, Inc. and John
J. O'Connor.
(c)(16) Complaint filed in Crandon Capital Partners v. Acordia, Inc. et. al (Del. Ch.
June 4, 1997).
(c)(17) Complaint filed in Sherry Levinson v. Acordia, Inc. et. al. and Anthem Insurance
Companies, Inc. (Del. Ch. June 4, 1997).
(c)(18) Notice regarding the Acordia, Inc. Producers Deferred Compensation & Equity Plan.
(c)(19) Notice regarding the Anthem, Acordia and ABI 401(k) Plans.
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT
NO.
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*(c)(20) Letter dated June 17, 1997 from Frank C. Witthun, President and CEO of Acordia,
Inc. and L. Ben Lytle, Chairman of the Board of Directors of Acordia, Inc. to all
restricted stock participants.
*(c)(21) Letter dated June 17, 1997 from Frank C. Witthun, President and CEO of Acordia,
Inc. and L. Ben Lytle, Chairman of the Board of Directors of Acordia, Inc. to the
restricted stock participants under the Producer Deferred Compensation and Equity
Plan.
*(c)(22) Letter from Frank C. Witthun, President and CEO of Acordia, Inc. and L. Ben
Lytle, Chairman of The Board of Directors of Acordia, Inc. to each stock
optionholder of Acordia, Inc. with an attached list of questions and answers
regarding the stock options issued under the various Acordia, Inc. stock
compensation plans.
*(c)(23) Form of Stock Option Cancellation Agreement.
</TABLE>
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* Material filed herewith.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
ACORDIA, INC.
By: /s/ FRANK C. WITTHUN
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Name: Frank C. Witthun
Title: President and
Chief Executive Officer
Dated: June 20, 1997
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EXHIBIT INDEX
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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<S> <C> <C>
(a)(1) Offer to Purchase dated June 6, 1997..................................
(a)(2) Letter of Transmittal dated June 6, 1997..............................
(a)(3) Text of Press Release dated June 2, 1997..............................
(a)(4) Fairness Opinion of Alex. Brown & Sons, Incorporated dated May 30,
1997..................................................................
(a)(5) Letter to Acordia, Inc. Stockholders dated June 6, 1977...............
(c)(1) Agreement and Plan of Merger dated as of June 2, 1997, by and among
Acordia, Inc., Anthem Insurance Companies, Inc. and AICI Acquisition
Corp..................................................................
(c)(2) Portions of Acordia Inc.'s Proxy Statement dated April 11, 1997, for
the Acordia 1997 Annual Meeting of Stockholders.......................
(c)(3) Acordia, Inc. 1992 Stock Compensation Plan............................
(c)(4) Acordia, Inc. Directors Stock Compensation Plan.......................
(c)(5) Acordia, Inc. Directors Deferred Compensation Plan....................
(c)(6) Acordia 401(k) Long Term Savings Investment Plan, as amended to
date..................................................................
(c)(7) Transaction Agreement dated February 17, 1997, by and between Acordia,
Inc. and Frank C. Witthun.............................................
(c)(8) Transaction Agreement dated February 28, 1997, by and between Acordia,
Inc. and John J. O'Connor.............................................
(c)(9) Transaction Agreement dated February 28, 1997, by and between Acordia,
Inc. and Ernest J. Newborn............................................
(c)(10) Transaction Agreement dated February 28, 1997, by and between Acordia,
Inc. and Keith A. Maib................................................
(c)(11) Transaction Agreement dated February 28, 1997, by and between Acordia,
Inc. and Robert C. Nevins.............................................
(c)(12) Transaction Agreement dated February 28, 1997, by and between Acordia,
Inc. and Daniel W. Kendall............................................
(c)(13) Transaction Agreement dated March 17, 1997, by and between Acordia,
Inc. and Michael B. Henning...........................................
(c)(14) Employment Agreement dated June 1, 1994, by and between Acordia, Inc.
and Ernest J. Newborn.................................................
(c)(15) Employment Agreement dated January 1, 1994, by and between Acordia,
Inc. and John J. O'Connor.............................................
(c)(16) Complaint filed in Crandon Capital Partners v. Acordia, Inc. et al.
(Del. Ch. June 4, 1997)...............................................
(c)(17) Complaint filed in Sherry Levinson v. Acordia, Inc. et al. and Anthem
Insurance Companies, Inc. (Del. Ch. June 4, 1997).....................
(c)(18) Notice regarding the Acordia, Inc. Producers Deferred Compensation &
Equity Plan.
(c)(19) Notice regarding the Anthem, Acordia and ABI 401(k) Plans.
*(c)(20) Letter dated June 17, 1997 from Frank C. Witthun, President and CEO of
Acordia, Inc. and L. Ben Lytle, Chairman of the Board of Directors of
Acordia, Inc. to all restricted stock participants.
</TABLE>
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<TABLE>
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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*(c)(21) Letter dated June 17, 1997 from Frank C. Witthun, President and CEO of
Acordia, Inc. and L. Ben Lytle, Chairman of the Board of Directors of
Acordia, Inc. to the restricted stock participants under the Producer
Deferred Compensation and Equity Plan.
*(c)(22) Letter from Frank C. Witthun, President and CEO of Acordia, Inc. and
L. Ben Lytle, Chairman of The Board of Directors of Acordia, Inc. to
each stock optionholder of Acordia, Inc. with an attached list of
questions and answers regarding the stock options issued under the
various Acordia, Inc. stock compensation plans.
*(c)(23) Form of Stock Option Cancellation Agreement.
</TABLE>
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* Material filed herewith.
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EXHIBIT (c)(20)
June 17, 1997
To All Restricted Stock Participants
Dear Participant:
As you probably already know, Acordia, Inc. has entered into a merger agreement
with AICI Acquisition Corporation and Anthem Insurance Companies, Inc.
(collectively "Anthem"), under which Anthem will acquire all of the outstanding
common stock of Acordia at $40.00 per share. Because you own shares of
restricted stock which were issued to you under the Acordia, Inc. 1992 Stock
Compensation Plan, you are entitled to tender such shares to Anthem in
connection with the tender offer made by Anthem on June 6, 1997. Subject to the
purchase of shares pursuant to the tender offer, all restrictions on transfer
applicable to such stock will lapse and you will be entitled to tender all such
shares. You should have already received an Offer to Purchase and related
documents prepared by Anthem. The tender information described in such Offer to
Purchase is applicable to your restricted stock, except that you need not
forward stock certificates in connection with the tender of such shares. Instead
of forwarding such certificates, please enter the words "Restricted Stock" under
the heading "Certificate Number(s)" on the chart entitled "Description of Common
Stock Tendered" in the "BLUE" Letter of Transmittal included with the tender
offer materials. If you did not receive a "BLUE" Letter of Transmittal, please
let us know immediately. Please note that this procedure is only applicable to
your shares of restricted stock and a separate Letter of Transmittal should be
used for such shares. All other shares you own which are not restricted shares
must be tendered in all respects in accordance with the Offer to Purchase and
Transmittal Letter. Assuming shares are purchased pursuant to the tender offer,
you will receive a payment of $40, less applicable withholding, for each share
of restricted stock which you tender. This letter is not, and should not be
deemed to be, an offer to purchase any security of Acordia.
If you have already submitted a Letter of Transmittal without referencing to
the restricted stock, please let us know. If you have any questions concerning
the treatment of your restricted stock in connection with the merger, please
contact Ernest Newborn at (317) 488-6163 or Theresa Segert at (317) 488-6133 or
via e-mail.
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Page 2
Restricted Stock Participants
June 17, 1997
We would like to take this opportunity to thank you for your contribution to
Acordia's success and we look forward to the new opportunities presented to
Acordia and Anthem as a result of the merger.
Very truly yours,
/s/ Frank C. Witthun /s/ L. Ben Lytle
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Frank C. Witthun L. Ben Lytle
President and CEO of Chairman of the Board of
Acordia, Inc. Directors of Acordia, Inc.
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EXHIBIT (c)(21)
June 17, 1997
Restricted Stock Participants Under the Producer Deferred Compensation & Equity
Plan
Dear Participant:
For those of you involved in the conference call on June 17, 1997, the
following is a clarification of the information given to you as it relates to
the Letter of Transmittal and your restricted stock.
Because you own shares of restricted stock which were issued to you under the
Acordia, Inc. Producer's Deferred Compensation & Equity Plan, you are entitled
to tender such shares to Anthem in connection with the tender offer made by
Anthem on June 6, 1997. Subject to the purchase of shares pursuant to the
tender offer, all restrictions on transfer applicable to such stock will lapse
and you will be entitled to tender all such shares. You should have already
received an Offer to Purchase and related documents prepared by Anthem. The
tender information described in such Offer to Purchase is applicable to your
restricted stock, except that you need not forward stock certificates in
connection with the tender of such shares. Instead of forwarding such
certificates, please enter the words "Restricted Stock" under the heading
"Certificate Number(s)" on the chart entitled "Description of Common Stock
Tendered" in the "BLUE" Letter of Transmittal included with the tender offer
materials. If you did not receive a "BLUE" Letter of Transmittal, please let us
know immediately. Please note that this procedure is only applicable to your
shares of restricted stock and a separate Letter of Transmittal should be used
for such shares. All other shares you own which are not restricted shares must
be tendered in all respects in accordance with the Offer to Purchase and
Transmittal Letter. Assuming shares are purchased pursuant to the tender offer,
you will receive a payment of $40, less applicable withholding, for each share
of restricted stock which you tender. This letter is not, and should not be
deemed to be, an offer to purchase any security of Acordia.
If you have already submitted a Letter of Transmittal for your restricted
stock, please let us know. If you have any questions concerning the treatment
of your restricted stock in connection with the merger, please contact Ernest
Newborn at (317) 488-6163 or Theresa Segert at (317) 488-6133 or via e-mail.
<PAGE> 2
Page 2
Restricted Stock Participants
June 17, 1997
We would like to take this opportunity to thank you for your contribution to
Acordia's success and we look forward to the new opportunities presented to
Acordia and Anthem as a result of the merger.
Very truly yours,
/s/ Frank C. Witthun /s/ L. Ben Lytle
- ----------------------------- -----------------------------
Frank C. Witthun L. Ben Lytle
President and CEO of Chairman of the Board of
Acordia, Inc. Directors of Acordia, Inc.
<PAGE> 1
EXHIBIT (c)(22)
Dear Optionee:
As you probably already know, Anthem Insurance Companies, Inc. ("Anthem") has
entered into a merger agreement with Acordia, Inc. ("Acordia") under which
Anthem will acquire all of the outstanding common stock of Acordia at $40.00
per share. Because you own one or more stock options under the 1992 Stock
Compensation Plan, the Acordia, Inc. Director Stock Compensation Plan, the
Subsidiary Directors Stock Compensation Plan, or the Producers Deferred
Compensation Stock Equity Plan, you will receive, in connection with the
merger, a cash payment for your unexercised stock option(s). Attached is a list
of questions and answers which addresses the terms and conditions of this cash
payment. This letter is not, and shall not be deemed to be an offer to purchase
any security of Acordia.
If you have any questions concerning the treatment of your stock options in
connection with the merger, please contact Acordia's General Counsel, Ernest J.
Newborn at (317) 488-6163 or via e-mail.
We would like to take this opportunity to thank you for your contribution to
Acordia's success, and we look forward to the new opportunities presented to
Acordia and Anthem as a result of the merger.
Very truly yours,
/s/ Frank C. Witthun /s/ L. Ben Lytle
- -------------------------- -------------------------
Frank C. Witthun L. Ben Lytle
President and CEO of Chairman of the Board of
Acordia, Inc. Directors of Acordia, Inc.
<PAGE> 2
QUESTIONS AND ANSWERS REGARDING THE
STOCK OPTION ISSUED UNDER THE VARIOUS
ACORDIA STOCK COMPENSATION PLANS
1. Q. What will happen to my outstanding stock option as a result of the
merger?
A. Your outstanding stock option will be canceled and you will receive a cash
payment with respect to this outstanding option.
2. Q. What if my option is not fully exercisable?
A. You will receive a cash payment for all of the unexercised shares under
your outstanding option, even if all or any portion of your option is not
exercisable at the time of the merger because you have not yet satisfied
the option's vesting requirements.
3. Q. What if I have partially exercised my option in order to buy shares?
A. You will receive a cash payment with respect to the portion of your option
which has not been exercised.
4. Q. How will the cash payment which I will receive be calculated?
A. The amount of your cash payment will be equal to the number of shares of
Acordia stock which you are entitled to purchase with your outstanding
stock option multiplied by the difference between (1) $40.00, the amount
that Anthem is paying for each share of Acordia stock and (2) the exercise
price of your option. For example, if you own an option to purchase 200
shares of Acordia stock at $30.00 a share, you will receive a payment of
$2,000.00 calculated in the following manner:
200 (the number of shares you can purchase with your
option)
times ($40.00 the amount which Anthem is paying per
share)
minus $30.00 per share (your exercise price) equal
$2,000.00.
All applicable withholding amounts will be withheld from your cash
payments.
5. Q. When will I receive this payment?
A. You will receive the payment described above shortly after the close of
the tender offer.
6. Q. What do I have to do in order to receive this cash payment?
A. You must sign the enclosed Stock Option Cancellation Form and return the
same by fax or regular mail to Theresa Segert at (317) 488-6408 (fax) or
120 Monument Circle, Indianapolis, IN 46204.
7. Q. What happens if I have been granted more than one option to purchase
shares?
A. The procedures described above will apply to each of your options.
Accordingly, the total amount of cash which you will receive will be equal
to the aggregate amount calculated in accordance with Q&A 4 above for each
of your options.
8. Q. What happens if the merger does not actually occur?
A. All of the procedures described above are contingent upon the occurrence
of the merger between Anthem and Acordia. If such merger does not occur,
you will continue to have an option to purchase shares of Acordia stock in
accordance with the conditions of your option agreement.
9. Q. What will happen to the Plans in connection with the merger?
A. In connection with the merger, the Plans will be terminated, or in the
case of the Producer Plan, amended to eliminate the equity based feature.
The procedures described above represent the manner in which all of your
"option" rights under the Plans will be satisfied.
<PAGE> 3
10. Q. What is the tax impact on receipt of the income from the stock option?
A. The tax treatment differs for Non-Qualified Stock Options (NQSO) and
Incentive Stock Options (ISO). Following is the impact:
NQSO -- the gain on the option is FICA (Medicare) taxable and
the Company is required to withhold FICA, Federal and State.
For the Federal tax withholding, the rate will be 28%.
ISO -- There are no FICA taxes due and the Company is not
required to withhold FICA, federal or state taxes.
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EXHIBIT (c)(23)
STOCK OPTION CANCELLATION AGREEMENT
In connection with the merger agreement between Acordia, Inc. and Anthem
Insurance Companies, Inc., under which Anthem will acquire all of the
outstanding common stock of Acordia at $40.00 per share, I hereby agree that
upon receipt by me of a cash payment from Acordia equal to the number of shares
of Acordia stock which I am entitled to purchase with my outstanding stock
option multiplied by the difference between (1) $40.00 and (2) the exercise
price of my option (minus any applicable withholding taxes), any and all Option
Agreements between me and Acordia shall be canceled and of no further force or
effect.
Name:
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Printed:
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Date:
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