<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
EXEL LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
ELECTION FORM AND LETTER OF TRANSMITTAL
To accompany certificates representing Ordinary Shares, par value $.01 per
share,
of
EXEL LIMITED ("EXEL")
("EXEL Shares") when submitted pursuant to an election to receive (i) cash, (ii)
shares of Exel Merger Company Ltd.
("New EXEL") ("New EXEL Shares") or (iii) some combination of cash and New EXEL
Shares, in connection with the schemes
of arrangements between EXEL and its shareholders and between Mid Ocean Limited
("Mid Ocean") and its
shareholders (the "Arrangements") pursuant to which EXEL and Mid Ocean will
become
wholly owned subsidiaries of New EXEL, which will be renamed "EXEL Limited"
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND/OVERNIGHT COURIER: BY FACSIMILE:
ChaseMellon Shareholder Services ChaseMellon Shareholder Services FOR ELIGIBLE INSTITUTIONS
Reorganization Department Reorganization Department ONLY
P.O. Box 3301 120 Broadway, 13th Floor (201) 329-8936
South Hackensack, New Jersey New York, New York 10271 To confirm fax by telephone only
07606 (201) 296-4860
</TABLE>
FOR INFORMATION CALL TOLL FREE: (800) 223-2064
IF YOU WISH TO RECEIVE ANY PART OF YOUR CONSIDERATION IN CASH, THIS ELECTION
FORM AND LETTER OF TRANSMITTAL, TOGETHER WITH YOUR SHARE CERTIFICATES, MUST BE
RECEIVED BY THE EXCHANGE AGENT BEFORE THE ELECTION DEADLINE SPECIFIED BELOW.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
BOX A: ELECTION AND DESCRIPTION OF EXEL SHARES ENCLOSED
(Attached additional sheets if necessary).
See "Election" and Instruction 13.
/ / SHARE ELECTION / / CASH ELECTION / / MIXED ELECTION
- ------------------------------------------------------------------------------------
NAME AND ADDRESS OF REGISTERED SHARES TO SHARES TO
HOLDER(S) RECEIVE RECEIVE
(PLEASE FILL IN, IF BLANK, EXACTLY AS CERTIFICATE CASH SHARE
NAME(S) APPEARS ON CERTIFICATE(S)) NUMBER CONSIDERATION CONSIDERATION
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Total Number
of Shares
- ------------------------------------------------------------------------------------
</TABLE>
PLEASE READ THE INSTRUCTIONS IN THIS ELECTION FORM AND LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THIS ELECTION FORM AND LETTER OF TRANSMITTAL
5:00 P.M., NEW YORK CITY TIME, ON AUGUST 1, 1998 IS THE ELECTION DEADLINE,
BY WHICH DATE A COMPLETED ELECTION FORM AND LETTER OF TRANSMITTAL, TOGETHER WITH
YOUR SHARE CERTIFICATES, MUST BE RECEIVED BY THE EXCHANGE AGENT IN ORDER FOR ANY
CASH ELECTION OR MIXED ELECTION (AS SUCH TERMS ARE DEFINED BELOW) CONTAINED
HEREIN TO BE VALID. ANY SHAREHOLDER WISHING TO MAKE A SHARE ELECTION (AS DEFINED
BELOW) NEED NOT SUBMIT THE ELECTION FORM AND LETTER OF TRANSMITTAL PRIOR TO THE
ELECTION DEADLINE. ANY ELECTION FORM AND LETTER OF TRANSMITTAL RECEIVED BY THE
EXCHANGE AGENT AFTER THE ELECTION DEADLINE, WHETHER OR NOT A SHARE ELECTION IS
INDICATED THEREON, SHALL BE DEEMED TO INDICATE A SHARE ELECTION.
<PAGE>
The tax consequences to a holder of EXEL Shares will vary depending upon,
among other things, whether a Share Election, Cash Election or Mixed Election is
made. For a summary of the federal income tax consequences of the receipt of the
Arrangements Consideration (as defined below), see "THE ARRANGEMENTS--Certain
Federal Income Tax Consequences of the Arrangements" in the Joint Proxy
Statement dated July 2, 1998 (including all documents incorporated therein, and
as it may be amended from time to time, the "Joint Proxy Statement") delivered
prior hereto. You are urged, in addition, to consult with your tax advisor.
IF YOUR SHARE CERTIFICATE(S) HAS (HAVE) BEEN LOST, STOLEN OR DESTROYED AND
YOU REQUIRE ASSISTANCE IN REPLACING IT (THEM), SEE INSTRUCTION 12 BELOW. YOU
CANNOT SUBMIT AN EFFECTIVE ELECTION FORM AND LETTER OF TRANSMITTAL WITHOUT
ATTACHING YOUR SHARE CERTIFICATES TO THIS ELECTION FORM AND LETTER OF
TRANSMITTAL; THEREFORE, IF YOU WISH TO MAKE AN EFFECTIVE ELECTION, IT IS
CRITICAL THAT YOU ACT IMMEDIATELY TO OBTAIN REPLACEMENT SHARE CERTIFICATES.
To ChaseMellon Shareholder Services, L.L.C.:
Pursuant to the Arrangements, and pursuant to an Agreement and Schemes of
Arrangement, dated as of March 16, 1998, amended and restated April 28, 1998,
further amended June 26, 1998, as amended (the "Agreement"), among EXEL, New
EXEL and Mid Ocean, the undersigned hereby makes the election or elections set
forth herein and surrenders to you for cancellation, as exchange agent (the
"Exchange Agent"), certificates representing (or, if after the effective time of
the Arrangements (the "Effective Time"), formerly representing) all of the
undersigned's EXEL Shares (each such certificate, an "EXEL Certificate"), listed
in Box A above in exchange for either (i) the right to receive a number of New
EXEL Shares equal to the number of EXEL Shares represented by the EXEL
Certificates surrendered herewith (such election, a "Share Election"), (ii) the
right to receive an amount in cash without interest equal to the product of (A)
the Valuation Period Market Value (as defined below) and (B) the number of EXEL
Shares represented by the EXEL Certificates surrendered herewith (such election,
a "Cash Election") or (iii) the right to receive (A) the number of New EXEL
Shares equal to the number of EXEL Shares designated by the undersigned as
receiving New EXEL Shares under the column heading "Shares To Receive Share
Consideration" in Box A above and (B) an amount in cash equal to the product of
(1) the Valuation Period Market Value and (2) the number of EXEL Shares
designated by the undersigned as receiving cash under the column heading "Shares
To Receive Cash Consideration" in Box A above (such election, a "Mixed
Election"). New EXEL Shares issued in the Arrangements are referred to herein as
the "Share Consideration" and cash paid in connection with the Arrangements to
record holders of EXEL Shares as of the Effective Time ("EXEL Holders") is
referred to herein as the "EXEL Cash Consideration," and together with the cash
paid in connection with the Arrangements to shareholders of Mid Ocean ("Mid
Ocean Cash Consideration"), is referred to herein as the "Cash Consideration."
The Share Consideration and the Cash Consideration are collectively referred to
as the "Arrangements Consideration."
The undersigned understands that the election referred to above is subject
to certain terms, conditions and limitations that have been set forth in the
Agreement (including, but not limited to, the fact that the aggregate amount of
the Cash Consideration payable in the Arrangements to EXEL Holders and Mid Ocean
shareholders shall not exceed $300 million, and consequently it is possible that
certain EXEL Holders making a Cash Election or a Mixed Election may receive New
EXEL Shares in lieu of the cash they would otherwise receive pursuant to such
elections), the Instructions below and the Joint Proxy Statement. The Agreement
is included as Appendix A to the Joint Proxy Statement. Extra copies of this
Election Form and Letter of Transmittal and the Joint Proxy Statement may be
requested from Georgeson & Company Inc., the Information Agent, at the phone
number shown above, or from the Exchange Agent at the addresses shown above. The
filing of this Election Form and Letter of Transmittal with the Exchange Agent
is acknowledgment of the receipt of the Joint Proxy Statement.
2
<PAGE>
The undersigned hereby represents and warrants that the undersigned is as of
the date hereof, and will be as of the Effective Time, the registered holder of
the EXEL Shares represented by the EXEL Certificate(s) surrendered herewith,
with good title to the above-described EXEL Shares and full power and authority
to sell, assign and transfer such EXEL Shares, free and clear of all liens,
claims and encumbrances, and not subject to any adverse claims. The undersigned
will, upon request, execute any additional documents necessary or desirable to
complete the surrender and exchange of such EXEL Shares. The undersigned hereby
irrevocably appoints the Exchange Agent, as agent of the undersigned, to effect
the exchange pursuant to the Arrangements, the Agreement and the Instructions
hereto. All authority conferred or agreed to be conferred in this Election Form
and Letter of Transmittal shall be binding upon the successors, assigns, heirs,
executors, administrators and legal representatives of the undersigned and shall
not be affected by, and shall survive, the death or incapacity of the
undersigned.
3
<PAGE>
ELECTION
The appropriate box must be checked in Box A above in order to make a Cash
Election or a Mixed Election (each as defined above). The box indicating a Share
Election (as defined above) may be checked by those wishing to make a Share
Election but any Election Form and Letter of Transmittal received by the
Exchange Agent without any checked election box will be treated as indicating a
Share Election.
For purposes of a Cash Election or a Mixed Election, the "Valuation Period
Market Value" means the average of the closing sales prices of an EXEL Share as
reported on the New York Stock Exchange Composite Transactions reporting system
(as reported in THE WALL STREET JOURNAL or, in the absence thereof, by another
authoritative source) during the period beginning on July 15, 1998 and ending on
July 28, 1998.
In the event that, based on the elections properly made by EXEL Holders, the
EXEL Cash Consideration would be less than or equal to the EXEL Cash Amount (as
defined herein), all properly made Cash Elections, Share Elections and Mixed
Elections will be honored. Additionally, all those making no elections or
improperly making Cash Elections or Mixed Elections will be deemed to have made
a Share Election and will receive Share Consideration. In the event the
aggregate EXEL Cash Consideration would otherwise exceed the EXEL Cash Amount,
the Exchange Agent shall allocate the EXEL Cash Amount pro rata among all EXEL
Holders that elected to receive EXEL Cash Consideration (whether pursuant to a
Cash Election or a Mixed Election) on the basis of the number of shares covered
by each Cash Election or Mixed Election. If the proration would result in
fractional New EXEL Shares being issued to EXEL Holders, the Exchange Agent will
have the discretion to round such fractional share amounts up or down to whole
share numbers (with a corresponding decrease or increase in cash, as
appropriate). The EXEL Cash Amount will initially be $204,000,000, but such
amount will be increased to the extent that Mid Ocean shareholders, who also
have the right to make a cash election, do not make cash elections with respect
to the cash amount of $96,000,000 allocated to such Mid Ocean shareholders. ALL
DECISIONS BY THE EXCHANGE AGENT WITH RESPECT TO PRORATION WILL BE FINAL AND
BINDING.
ALL EXEL HOLDERS WISHING TO MAKE A CASH ELECTION OR A MIXED ELECTION MUST
DELIVER TO THE EXCHANGE AGENT A PROPERLY COMPLETED ELECTION FORM AND LETTER OF
TRANSMITTAL PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 1, 1998. ALL
HOLDERS SUBMITTING ELECTION FORM AND LETTER OF TRANSMITTALS AFTER SUCH TIME WILL
BE DEEMED TO HAVE MADE A SHARE ELECTION REGARDLESS OF THE ELECTION SPECIFIED ON
SUCH FORM. EXEL HOLDERS WISHING TO MAKE A SHARE ELECTION ARE NOT REQUIRED TO
SUBMIT THIS ELECTION FORM AND LETTER OF TRANSMITTAL PRIOR TO THE ELECTION
DEADLINE OR PRIOR TO THE EFFECTIVE TIME.
THE EXCHANGE AGENT RESERVES THE RIGHT TO DEEM THAT YOU HAVE CHECKED THE
"SHARE ELECTION" BOX IF:
A. NO ELECTION CHOICE IS INDICATED IN BOX A ABOVE;
B. YOU FAIL TO FOLLOW THE INSTRUCTIONS ON THIS ELECTION FORM AND LETTER OF
TRANSMITTAL (INCLUDING SUBMISSION OF YOUR EXEL CERTIFICATES) OR OTHERWISE FAIL
TO PROPERLY MAKE AN ELECTION; OR
C. A COMPLETED ELECTION FORM AND LETTER OF TRANSMITTAL (INCLUDING
SUBMISSION OF YOUR EXEL CERTIFICATES) IS NOT ACTUALLY RECEIVED BY THE ELECTION
DEADLINE.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS ELECTION FORM AND LETTER OF
TRANSMITTAL, THE EXCHANGE AGENT RESERVES THE RIGHT TO WAIVE ANY FLAWS IN A
COMPLETED ELECTION FORM AND LETTER OF TRANSMITTAL BUT SHALL BE UNDER NO
OBLIGATION TO DO SO.
4
<PAGE>
In order to receive the Arrangements Consideration, this Election Form and
Letter of Transmittal must be (i) completed and signed in the space provided
below and on the Substitute Form W-9 and (ii) mailed or delivered with your EXEL
Certificate(s) to the Exchange Agent at either of the addresses set forth above.
In order to properly make a Cash Election or a Mixed Election, these actions
must be taken in a timely fashion such that the Election Form and Letter of
Transmittal is received by the Exchange Agent prior to the Election Deadline. In
order to properly make a Share Election (or obtain the benefits of a deemed
Share Election), these actions must be taken at some time prior to or after the
Effective Time.
The method of delivery of the EXEL Certificates and all other required
documents is at the election and risk of the EXEL Holder; however, if the EXEL
Certificates are sent by mail, it is recommended that they be sent by registered
mail, appropriately insured, with return receipt requested.
Unless otherwise indicated below under "Special Issuance and Payment
Instructions," in exchange for the enclosed certificates, the undersigned
requests delivery of the Arrangements Consideration in the name of the
undersigned. Similarly, unless otherwise indicated below under "Special Delivery
Instructions," the undersigned requests that the Arrangements Consideration be
mailed to the undersigned at the address shown above. In the event that both the
"Special Delivery Instructions" and the "Special Issuance and Payment
Instructions" are completed, please issue the Arrangements Consideration in the
name of, and mail the Arrangements Consideration to, the person or entity so
indicated at the address so indicated. Appropriate signature guarantees have
been included with respect to EXEL Shares for which Special Issuance and Payment
Instructions have been given.
CONSUMMATION OF THE ARRANGEMENTS IS STILL SUBJECT TO APPROVAL OF THE
SHAREHOLDERS OF EXEL AND MID OCEAN AND OF THE GRAND COURT OF THE CAYMAN ISLANDS
AND TO THE SATISFACTION OF CERTAIN OTHER CONDITIONS. NO PAYMENTS RELATED TO ANY
SURRENDER OF MID OCEAN CERTIFICATES WILL BE MADE PRIOR TO THE EFFECTIVE TIME.
In the event that the Agreement is terminated, the Exchange Agent will
promptly return EXEL Certificates previously submitted with any Election Form
and Letter of Transmittal. In such event, EXEL Shares held through The
Depository Trust Company are expected to be available for sale or transfer
promptly following such termination; however, certificates representing EXEL
Shares held of record directly by the beneficial owners of such EXEL Shares will
be returned as promptly as practicable by first class, insured mail.
5
<PAGE>
SPECIAL ISSUANCE AND PAYMENT SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS (SEE INSTRUCTIONS 1, 4, AND 10)
(SEE INSTRUCTIONS 1, 4, 5, 9, 10 AND
11)
To be completed ONLY if the To be completed ONLY if the
certificate representing the Share certificate representing the Share
Consideration or the check Consideration or the check
representing the EXEL Cash representing the EXEL Cash
Consideration or cash in lieu of Consideration or cash in lieu of
fractional shares, as the case may fractional shares, as the case may
be, is to be issued in the name of be, issued in the name of the
and mailed to someone other than the undersigned is to be sent to someone
undersigned. NOTE: THE PERSON NAMED other than the undersigned or to the
IN THESE SPECIAL ISSUANCE AND undersigned at an address other than
PAYMENT INSTRUCTIONS MUST BE THE that shown above.
PERSON WHO COMPLETES THE SUBSTITUTE Mail the certificate representing
FORM W-9. the Share Consideration or the check
Issue the certificate representing representing the EXEL Cash
the Share Consideration or the check Consideration or cash in lieu of
representing the EXEL Cash fractional shares to:
Consideration or cash in lieu of Name _______________________________
fractional shares to: (PLEASE PRINT)
Name _______________________________ Address ____________________________
(PLEASE PRINT) ____________________________________
Address ____________________________ ____________________________________
____________________________________ (INCLUDE ZIP CODE)
____________________________________ Check this box if this is a
(INCLUDE ZIP CODE) permanent change of address. / /
If you complete this box, you will
need a signature guarantee by an
eligible institution. See
Instruction 5.
The undersigned represents and warrants that the undersigned has full power and
authority to transfer the EXEL Shares surrendered hereby and that the transferee
will acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim when
the shares are accepted for exchange by the Exchange Agent. The undersigned
will, upon request, execute and deliver any additional documents deemed by the
Exchange Agent, EXEL or New EXEL to be necessary and desirable to complete the
transfer of the EXEL Shares surrendered hereby.
Date: __________________________
PLEASE SIGN HERE
Signature: _____________________________________________________________________
Signature: _____________________________________________________________________
Signature(s) of registered holder(s) must be EXACTLY as name(s) appear(s) on the
box headed "Description of EXEL Shares Enclosed" or on the assignment
authorizing transfer.
If signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, the capacity of the person signing should be indicated. (See
Instruction 8 hereto.)
Dated: _________________________
Name(s): _______________________________________________________________________
(PLEASE PRINT)
Capacity: ______________________________________________________________________
Daytime Area Code and
Telephone Number: ______________________________________________________________
THE EXCHANGE AGENT HAS BEEN INSTRUCTED NOT TO MAKE ANY EXCHANGE OF YOUR SHARES
UNTIL THIS ELECTION FORM AND LETTER OF TRANSMITTAL HAS BEEN EXECUTED AND
DELIVERED TO THE EXCHANGE AGENT TOGETHER WITH YOUR SHARE CERTIFICATES.
SIGNATURE GUARANTEE
(REQUIRED ONLY IN CASES SPECIFIED IN INSTRUCTION 5)
The undersigned hereby guarantees the signature(s) which appear(s) on this
Election Form and Letter of Transmittal.
Dated: _________________________
________________________________________________________________________________
(NAME OF ELIGIBLE INSTITUTION ISSUING GUARANTEE)
(PLEASE PRINT)
________________________________________________________________________________
(FIX MEDALLION STAMP ABOVE)
6
<PAGE>
INSTRUCTIONS
This Election Form and Letter of Transmittal is to be completed and
submitted to the Exchange Agent prior to the Election Deadline by those EXEL
Holders desiring to make a Cash Election or a Mixed Election. It must also be
used as a letter of transmittal at any time by any other EXEL Holders who wish
to receive the Share Consideration. Until a record holder's EXEL Certificates
are received by the Exchange Agent at one of the addresses set forth above,
together with such documents as the Exchange Agent may require, and until the
same are processed for exchange by the Exchange Agent, such holders will not
receive (i) any certificates representing shares of the Share Consideration or
the check representing the EXEL Cash Consideration in exchange for their EXEL
Certificates or (ii) any dividends or other distributions payable on the New
EXEL Shares composing the Share Consideration. No interest will accrue on the
EXEL Cash Consideration or such dividends. Any such dividends or other
distributions will not be reinvested pursuant to any plan. If your share
certificate(s) is (are) lost, stolen or destroyed, please refer to Instruction
12 below.
A HOLDER OF EXEL SHARES MUST CHECK THE APPROPRIATE ELECTION BOX IN BOX A
ABOVE TO MAKE AN EFFECTIVE CASH ELECTION OR MIXED ELECTION.
Your election is subject to certain terms, conditions and limitations that
have been set out in the Agreement and the Joint Proxy Statement. The Agreement
is included as Appendix A to the Joint Proxy Statement. Extra copies of the
Joint Proxy Statement may be requested from Georgeson & Company Inc., the
Information Agent, at the phone number shown above, or from the Exchange Agent
at the addresses shown above. The filing of this Election Form and Letter of
Transmittal with the Exchange Agent is acknowledgment of the receipt of the
Joint Proxy Statement.
1. ELECTION DEADLINE. For any Cash Election or Mixed Election contained
herein to be considered, this Election Form and Letter of Transmittal, properly
completed, and the related EXEL Certificates must be received by the Exchange
Agent at one of the addresses shown above on this Election Form and Letter of
Transmittal no later than 5:00 p.m., New York City Time, on August 1, 1998. The
Exchange Agent will determine whether any Election Form and Letter of
Transmittal is received on a timely basis and whether an Election Form and
Letter of Transmittal has been properly completed. Any such determinations shall
be conclusive and binding.
THE ELECTION DEADLINE IS 5:00 P.M., NEW YORK CITY TIME, ON AUGUST 1, 1998.
2. REVOCATION OR CHANGE OF ELECTION FORM AND LETTER OF TRANSMITTAL. Any
Election Form and Letter of Transmittal may be revoked or changed by written
notice to the Exchange Agent from the person submitting such Election Form and
Letter of Transmittal, but to be effective such notice must be received by the
Exchange Agent at or prior to the Election Deadline. The Exchange Agent will
have reasonable discretion to determine whether any revocation or change is
received on a timely basis and whether any such revocation or change has been
properly made. Any such determinations shall be conclusive and binding.
3. ELECTION PROCEDURES/ALLOCATION. As set forth in the Joint Proxy Statement
and described above, the aggregate value of the EXEL Cash Consideration will not
exceed the EXEL Cash Amount. Accordingly, there can be no assurance that each
EXEL Holder who elects to receive EXEL Cash Consideration will receive the form
of consideration which such holder elects. If the elections result in an
oversubscription of the EXEL Cash Consideration, the procedures for allocating
the EXEL Cash Consideration set forth in the Agreement and described above and
in the Joint Proxy Statement will be followed by the Exchange Agent. Thus, a
Cash Election or a Mixed Election made by you may not be honored under certain
circumstances. See "THE ARRANGEMENTS -- Exchange of Shares -- Cash Election" in
the Joint Proxy Statement.
4. NO FRACTIONAL INTERESTS. No certificate representing a fraction of a New
EXEL Share will be issued to EXEL Holders. If the proration feature of the cash
election would otherwise result in fractional New EXEL Shares being issued to
EXEL Holders, the Exchange Agent will have the discretion to round such
7
<PAGE>
fractional share amounts up or down to whole share numbers (with a corresponding
decrease or increase in cash, as appropriate).
5. GUARANTEE OF SIGNATURES. Signatures on this Election Form and Letter of
Transmittal need not be guaranteed unless the "Special Issuance and Payment
Instructions" section has been completed and payment is to be made to someone
other than the EXEL Holder with respect to the surrendered EXEL Certificates. In
such event, signatures on this Election Form and Letter of Transmittal must be
guaranteed by an eligible guarantor institution pursuant to Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934. Public notaries cannot
execute acceptable guarantees of signatures.
6. DELIVERY OF ELECTION FORM AND LETTER OF TRANSMITTAL AND SHARE
CERTIFICATES. This Election Form and Letter of Transmittal, properly completed
and duly executed, together with the EXEL Certificate(s) representing the EXEL
Shares, should be delivered to the Exchange Agent at one of the addresses set
forth above. The method of delivery of the EXEL Certificate and all other
required documents is at the election and risk of the record holder of such EXEL
Shares; however, if such certificates are sent by mail, it is recommended that
they be sent by registered mail, appropriately insured, with return receipt
requested.
7. INADEQUATE SPACE. If the space provided herein is inadequate, the share
certificate numbers and the numbers of EXEL Shares represented thereby should be
listed on additional sheets and attached hereto.
8. SIGNATURES ON ELECTION FORM, SHARE POWERS AND ENDORSEMENTS.
(a) All signatures must correspond exactly with the name written on the face
of the EXEL Certificate(s) without alteration, variation or any change
whatsoever.
(b) If the EXEL Certificate(s) surrendered is (are) held of record by two or
more joint owners, all such owners must sign this Election Form and Letter of
Transmittal.
(c) If any surrendered EXEL Shares are registered in different names on
several EXEL Certificates, it will be necessary to complete, sign and submit as
many separate Election Form and Letter of Transmittals as there are different
registrations of EXEL Certificates.
(d) If this Election Form and Letter of Transmittal is signed by a person(s)
other than the record holder(s) of the EXEL Certificates listed (other than as
set forth in paragraph (e) below), such certificates must be endorsed or
accompanied by appropriate share powers, in either case signed exactly as the
name(s) of the record holder(s) appears on such certificate.
(e) If this Election Form and Letter of Transmittal is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity and such person is
not the record holder of the accompanying EXEL Certificates, he or she must
indicate the capacity when signing and must submit proper evidence of his or her
authority to act.
9. SHARE TRANSFER TAXES. In the event that any transfer or other taxes
become payable by reason of the issuance of the Arrangements Consideration in
any name other than that of the EXEL Holder, such transferee or assignee must
pay such tax to the Exchange Agent or must establish to the satisfaction of the
Exchange Agent that such tax has been paid.
10. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Indicate the name and/or
address of the person(s) to whom the Share Consideration or the check
representing the EXEL Cash Consideration or cash in lieu of fractional shares
(if any) is to be issued and sent, if different from the name and/or address of
the person(s) signing this Election Form and Letter of Transmittal.
11. WITHHOLDING. Each surrendering EXEL Holder is required to provide the
Exchange Agent with such holder's correct Taxpayer Identification Number ("TIN")
on the Substitute Form W-9 and to certify whether such holder is subject to
backup withholding. The TIN that must be provided is that of the EXEL Holder
with respect to the EXEL Certificate(s) surrendered herewith or of the last
transferee appearing on the transfers attached to or endorsed on such
certificate(s) (or, if a check is made payable to another
8
<PAGE>
person as provided in the box above entitled "Special Issuance and Payment
Instructions," then the TIN of such person). Failure to provide the information
on the Substitute Form W-9 may subject the surrendering EXEL Holder to 31%
federal income tax withholding on payments made to such surrendering holder with
respect to the EXEL Shares and on future dividends paid by New EXEL. An EXEL
Holder must cross out item (2) in the certification box of Substitute Form W-9
if such holder has been notified by the Internal Revenue Service ("IRS") that
such holder is currently subject to backup withholding. The box in Part 3 of the
Substitute Form W-9 should be checked if the surrendering EXEL Holder has not
been issued a TIN and has applied for a TIN or intends to apply for a TIN in the
near future. If the box in Part 3 is checked and the Exchange Agent is not
provided with a TIN, New EXEL will withhold 31% of all such payments and
dividends but will return such amounts to the EXEL Holder if a TIN is later
provided to the Exchange Agent within 60 days. Foreign investors should consult
their tax advisors regarding the need to complete IRS Form W-8 and any other
forms that may be required.
12. LOST, STOLEN OR DESTROYED CERTIFICATES. You cannot submit an effective
Election Form and Letter of Transmittal without attaching your EXEL Certificates
to this Election Form and Letter of Transmittal. If your EXEL Certificate(s) has
(have) been lost, stolen or destroyed, you are urged to call the Exhange Agent
at 800-777-3674 immediately to receive instructions as to the steps you must
take in order to effect an exchange of your EXEL Shares.
13. ELECTIONS, CERTIFICATES AND SHARE ALLOCATIONS. Each EXEL Holder is
entitled to make a Cash Election, a Share Election or a Mixed Election, provided
the Election Form and Letter of Transmittal for any holder making a Cash
Election or a Mixed Election is properly completed and received by the Exchange
Agent prior to the Election Deadline of August 1, 1998. All EXEL Holders must
complete Box A in order to receive the Arrangements Consideration. To properly
complete Box A, the number of each EXEL Certificate surrendered herewith must be
written in the column under the heading "Certificate Number." In the event such
holder is making a Cash Election, the box immediately to the left of the words
"Cash Election" must be checked, the number of EXEL Shares represented by each
EXEL Certificate surrendered herewith should be written into the column under
the heading "Shares to Receive Cash Consideration" beside each certificate
number, and the column under the heading "Shares to receive Share Consideration"
should be left blank. In the event such holder is making a Share Election, the
box immediately to the left of the words "Share Election" may be checked
(although all Election Form and Letter of Transmittals that are improperly
completed or that do not specify an election will be deemed to have specified a
Share Election), the number of EXEL Shares represented by each EXEL Certificate
surrendered herewith should be written into the column under the heading "Shares
to Receive Share Consideration" beside each certificate number, and the column
under the heading "Shares to Receive Cash Consideration" should be left blank.
In the event such holder is making a Mixed Election, the box immediately to the
left of the words "Mixed Election" should be checked and such holder should
allocate his or her shares represented by such holder's EXEL Certificates
between the columns marked "Shares to Receive Share Consideration" and "Shares
to Receive Cash Consideration" according to such holder's preferences. EXEL
Holders should see "Important Tax Information" below for important tax
consequences of various elections.
14. MISCELLANEOUS. EXEL, New EXEL and the Exchange Agent are not under any
duty to give notification of defects in any Election Form and Letter of
Transmittal. EXEL, New EXEL and the Exchange Agent shall not incur any liability
for failure to give such notification, and each of EXEL, New EXEL and the
Exchange Agent has the absolute right to reject any and all Election Form and
Letter of Transmittals not in proper form or to waive any irregularities or
flaws in any Election Form and Letter of Transmittal.
15. INFORMATION AND ADDITIONAL COPIES. Information and additional copies of
this Election Form and Letter of Transmittal may be obtained by telephoning
toll-free 800-223-2064.
9
<PAGE>
IMPORTANT TAX INFORMATION
WITHHOLDING. Under the federal income tax law, the Exchange Agent is
required to file a report with the IRS disclosing any payments of cash being
made to each holder of EXEL Certificates pursuant to the Agreement and to impose
31% backup withholding if required. If the correct certifications on Substitute
Form W-9 are not provided, a $50 penalty may be imposed by the IRS and payments
made for EXEL Shares may be subject to backup withholding of 31%. Backup
withholding is also required if the IRS notifies the recipient that they are
subject to backup withholding as a result of a failure to report all interest
and dividends.
In order to avoid backup withholding resulting from a failure to provide a
correct certification, an EXEL Holder must, unless an exemption applies, provide
the Exchange Agent with his correct TIN on Substitute Form W-9 as set forth on
this Election Form and Letter of Transmittal. Such person must certify under
penalties of perjury that such number is correct and that such holder is not
otherwise subject to backup withholding. The TIN that must be provided is that
of the registered holder of the EXEL Certificate(s) or of the last transferee
appearing on the transfers attached to or endorsed on the EXEL Certificate(s)
(or, if a check is made payable to another person as provided in the box
entitled "Special Issuance and Payment Instructions," then the TIN of such
person). Foreign investors should consult their tax advisors regarding the need
to complete IRS Form W-8 and any other forms that may be required.
Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained from the IRS.
Please read the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional important
information on how to complete the Substitute Form W-9.
For a summary of the federal income tax consequences of the receipt of the
Arrangements Consideration, see "THE ARRANGEMENTS--Certain Federal Income Tax
Consequences of the Arrangements" in the Joint Proxy Statement.
10
<PAGE>
<TABLE>
<C> <S> <C>
- -------------------------------------------------------------------------------------------
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
- -------------------------------------------------------------------------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TAXPAYER Social Security Number(s)
FORM W-9 IDENTIFICATION NUMBER IN THE BOX AT RIGHT AND OR
(SEE INSTRUCTION 11) CERTIFY BY SIGNING AND DATING BELOW. See the ------------------------
Please Fill in Your enclosed "Guidelines for Certification of Taxpayer Employer Identification
Name and Address Below Identification Number on Substitute Form W-9" for Number(s)
instructions.
---------------------------------------------------------------------------
Part 2--Exempt Payees / /
---------------------------------------------------------------------------
Part 3--Awaiting TIN / /
---------------------------------------------------------------------------
Name (if joint ownership, list CERTIFICATION--UNDER PENALTY OF PERJURY, I CERTIFY THAT:
first and
circle the name of the person or (1) The number shown on this form is my correct Taxpayer Identification Number
entity whose number is entered in (or I am waiting for a number to be issued to me), and
Part 1)
(2) I am not subject to backup withholding because: (a) I am exempt from backup
Address (number and street) withholding, or (b) I have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup withholding as a result of a
City, State and Zip Code failure to report all interest or dividends, or (c) the IRS has notified me
that I am no longer subject to backup withholding.
DEPARTMENT OF THE TREASURY CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
INTERNAL REVENUE SERVICE notified by the IRS that you are subject to backup withholding because of
PAYER'S REQUEST FOR TAXPAYER under-reported interest or dividends on your tax return. However, if after
IDENTIFICATION NUMBER (TIN) 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 backup withholding, do not cross out item (2). If you are exempt
from backup withholding, check the box in Part 2 above.
- ------------------------------------------------------------------------------------------------------------------
Signature ------------------------------------------------------------------ Date ------------------------
------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS ELECTION FORM AND LETTER OF
TRANSMITTAL, INCLUDING THE SUBSTITUTE FORM W-9, MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
ARRANGEMENTS. 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 THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number, 31% of all reportable
payments made to me thereafter will be withheld until I provide such number but
that such amounts will be returned to me if I later provide a taxpayer
identification number within 60 days.
<TABLE>
<S> <C>
Signature Date
</TABLE>
11
<PAGE>
[Letterhead of EXEL Limited]
July 15, 1998
Dear Shareholder:
It is currently anticipated that the acquisition of EXEL Limited ("EXEL")
and Mid Ocean Limited ("Mid Ocean") by a new company ("New EXEL"), which will be
renamed "EXEL Limited," will, subject to shareholder and Court approval, be
consummated on August 7, 1998.
In accordance with the terms of the schemes of arrangement (the
"Arrangements"), you may surrender the share certificate(s) representing all of
your Ordinary Shares of EXEL (including any certificates representing shares of
a predecessor company which have not yet been exchanged, "EXEL Shares") for
exchange into certificates representing Class A Shares of New EXEL ("New EXEL
Shares") at an exchange ratio of one New EXEL Share for each EXEL Share. The
Agreement also allows you to elect to receive, in lieu of New EXEL Shares, cash
for all or a portion of your EXEL Shares, subject to proration as described
below. The price per share will be equal to the average of the closing sale
prices of EXEL Shares as reported on the NYSE Composite Transactions reporting
system beginning July 15, 1998 through July 28, 1998. Pursuant to the terms of
the Arrangements, the aggregate amount of cash that will be paid to satisfy such
elections and the elections of shareholders of Mid Ocean will not exceed $300
million. If more than that amount is elected, $204 million of the cash will be
made available to shareholders of EXEL and $96 million of the cash will be made
available to shareholders of Mid Ocean, on a pro rata basis within each group of
shareholders. If the cash pool available to either group of shareholders is not
exhausted by cash elections within such group, the excess cash will be made
available for the other group of shareholders. Shareholders of EXEL who elect to
receive cash should be aware that they may receive some shares of New EXEL
instead of cash in the Arrangements.
As of the effective date of the Arrangements, your certificate(s) for EXEL
Shares automatically will be deemed to evidence ownership of the number of New
EXEL Shares into which such EXEL Shares have been converted, if you did not
elect cash, and, as such, will be entitled to dividends paid and other
distributions made with respect to your New EXEL Shares. However, no such
dividends or other distributions made with respect to your New EXEL Shares will
be distributed until your certificate(s) for EXEL Shares have been surrendered
for exchange and a properly completed Election Form and Letter of Transmittal
has been submitted. Therefore, we encourage you to exchange your certificate(s)
as soon as possible.
An Election Form and Letter of Transmittal and related instructions,
together with a return envelope are enclosed for your use in delivering or
mailing your certificates to ChaseMellon Shareholder Services, the Exchange
Agent for this transaction. The Election Form and Letter of Transmittal must be
properly executed and returned with your certificates. If you elect all or a
portion of the consideration for your shares in cash, your Election Form and
Letter of Transmittal and certificates must be received by 5:00 p.m., New York
City time, on August 1, 1998. Please read the Election Form and Letter of
Transmittal carefully, along with the instructions.
We urge you to act promptly in this matter. If you have any questions,
please contact Georgeson & Company Inc., the Information Agent, at
1-800-223-2064.
Sincerely,
<TABLE>
<S> <C>
/s/ Michael P. Esposito, Jr. /s/ Brian M. O'Hara
Michael P. Esposito, Jr. Brian M. O'Hara
CHAIRMAN OF THE BOARD PRESIDENT AND CHIEF
EXECUTIVE OFFICER
</TABLE>
Enclosure
<PAGE>
[Letterhead of Georgeson & Company Inc.]
July 15, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by EXEL Limited ("EXEL") to act as Information Agent
in connection with the acquisition of EXEL and Mid Ocean Limited ("Mid Ocean")
by Exel Merger Company Ltd. ("New EXEL"), which will be renamed "EXEL Limited"
(the "Arrangements").
For your information and for forwarding to your clients for whom you hold
shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. An Election Form and Letter of Transmittal for your use and for the
information of your clients; and
2. A form of letter which may be sent to your clients for whose accounts
you hold shares of EXEL registered in your name or in the name of your
nominee, with space provided for obtaining the instructions of such clients
with regard to the Arrangements.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
PLEASE NOTE THAT THE ELECTION DEADLINE FOR CASH ELECTIONS AND MIXED
ELECTIONS IS AUGUST 1, 1998 AT 5:00 P.M., NEW YORK CITY TIME.
EXEL or New EXEL will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding materials to their customers.
Any inquiries you may have with respect to the Arrangements should be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Exchange Agent at the address and telephone number set forth on the
Election Form and Letter of Transmittal.
Very truly yours,
Georgeson & Company Inc.
<PAGE>
To Our Clients:
Enclosed for your consideration is the Election Form and Letter of
Transmittal in connection with the acquisition of EXEL Limited ("EXEL") and Mid
Ocean Limited by Exel Merger Company Ltd. ("New EXEL"), which will be renamed
"EXEL Limited." We are the holder of record of shares of EXEL held for your
account. AN ELECTION WITH RESPECT TO SUCH SHARES CAN BE MADE ONLY BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. The Election Form and Letter
of Transmittal is furnished to you for your information only and cannot be used
by you to make an election with respect to shares held by us for your account.
You may elect to receive cash, shares or a mixture of cash and shares in
exchange for your EXEL shares. If you make no election you will receive New EXEL
shares for your EXEL shares.
We request instructions as to whether you wish us to elect cash, shares or a
mixture of cash and shares for your shares held by us for your account upon the
terms and subject to the conditions set forth in the Election Form and Letter of
Transmittal.
Your attention is invited to the following:
1. The exchange ratio is one New EXEL share for one EXEL share;
2. The election deadline for cash elections and mixed elections is
August 1, 1998 at 5:00 P.M., New York City time.
If you wish to have us submit your shares, please so instruct us by
completing, executing, and returning to us the instruction form on the reverse
side of this letter. An envelope to return your instructions to us is enclosed.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO
SUBMIT AN ELECTION ON YOUR BEHALF BY THE ELECTION DEADLINE. THE DEADLINE FOR
CASH ELECTIONS AND MIXED ELECTIONS IS AUGUST 1, 1998, AT 5:00 P.M., NEW YORK
CITY TIME.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE ACQUISITION
OF EXEL LIMITED AND MID OCEAN LIMITED BY
EXEL MERGER COMPANY LTD.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Election Form and Letter of Transmittal.
This will instruct you to exchange the number of shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Election Form and Letter of Transmittal.
<TABLE>
<S> <C>
Number of Shares to be Exchanged: SIGN HERE
Shares
Method of Election: Please print name(s) and
address(es) here
Share Election
Cash Election
Mixed Election
</TABLE>
If making a mixed election, please specify the number of shares with respect
to which you wish to receive cash and the number of shares with respect to which
you wish to receive shares.
Cash _______ Shares _______
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER FOR THE PAYEE (You)
TO GIVE THE PAYER. -- Social security numbers have nine digits separated by two
hyphens: i.e., 000-00-0000. Employee 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. All "Section" references are to the
Internal Revenue Code of 1986, as amended. "IRS" is the Internal Revenue
Service.
================================================================================
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY NUMBER OF --
================================================================================
1. Individual The individual
2. Two or more individuals (joint The actual owner of the account or,
account) if combined funds, the first
individual on the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable savings The grantor-trustee(2)
trust account (grantor is also
trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law
5. Sole proprietorship The owner(3)
================================================================================
FOR THIS TYPE OF ACCOUNT: GIVE THE EMPLOYER IDENTIFICATION
NUMBER OF --
================================================================================
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or The legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational, or other
tax-exempt organization account
10. Partnership The partnership
11. A broker or registered nominee The broker or nominee
12. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
================================================================================
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number
or your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension
trust. (Do not furnish the taxpayer identification number of the personal
representative or trustee unless the legal entity itself is not designated
in the account title.)
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.
================================================================================
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 Card, at the local
Social Security Administration office, or Form SS-4, Application for Employer
Identification Number, by calling 1 (800) TAX-FORM, and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
PAYEES SPECIFICALLY EXEMPTED FROM WITHHOLDING INCLUDE:
- - An organization exempt from tax under Section 501(a), an individual
retirement account (IRA), or a custodial account under Section 403(b)(7),
if the account satisfies the requirements of Section 401(f)(2).
- - The United States or a state thereof, the District of Columbia, a
possession of the United States, or a political subdivision or wholly-owned
agency or instrumentality of any one or more of the foregoing.
- - An international organization or any agency or instrumentality thereof.
- - A foreign government and any political subdivision, agency or
instrumentality thereof.
PAYEES THAT MAY BE EXEMPT FROM BACKUP WITHHOLDING INCLUDE:
- - A corporation.
- - A financial institution.
- - A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
- - A real estate investment trust.
- - A common trust fund operated by a bank under Section 584(a).
- - An entity registered at all times during the tax year under the Investment
Company Act of 1940.
- - A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
- - A futures commission merchant registered with the Commodity Futures Trading
Commission.
- - A foreign central bank of issue.
PAYMENTS OF DIVIDENDS AND PATRONAGE DIVIDENDS GENERALLY EXEMPT FROM BACKUP
WITHHOLDING INCLUDE:
- - Payments to nonresident aliens subject to withholding under Section 1441.
- - Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
- - Payments of patronage dividends not paid in money.
- - Payments made by certain foreign organizations.
- - Section 404(k) payments made by an ESOP.
PAYMENTS OF INTEREST GENERALLY EXEMPT FROM BACKUP WITHHOLDING INCLUDE:
- - Payments of interest on obligations issued by individuals. NOTE: You may
be subject to backup withholding if this interest is $600 or more and you
have not provided your correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
Section 852).
- - Payments described in Section 6049(b)(5) to nonresident aliens.
- - Payments on tax-free covenant bonds under Section 1451.
- - Payments made by certain foreign organizations.
CERTAIN PAYMENTS, OTHER THAN PAYMENTS OF INTEREST, DIVIDENDS, AND PATRONAGE
DIVIDENDS, THAT ARE EXEMPT FROM INFORMATION REPORTING ARE ALSO EXEMPT FROM
BACKUP WITHHOLDING. FOR DETAILS, SEE THE REGULATIONS UNDER SECTIONS 6041,
6041A, 6042, 6044, 6045, 6049, 6050A AND 6050N.
EXEMPT PAYEES DESCRIBED ABOVE MUST FILE FORM W-9 OR A SUBSTITUTE FORM W-9 TO
AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER,
FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE
FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE OF INTEREST, DIVIDENDS,
OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
PRIVACY ACT NOTICE. -- Section 6109 requires you to provide your correct
taxpayer identification number to payers, who must report the payments to IRS.
IRS uses the numbers for identification purposes and may also provide this
information to various government agencies for tax enforcement or litigation
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. 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) 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. -- Willfully 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.
