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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
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/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
ENHANCE FINANCIAL SERVICES GROUP
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(Name of Registrant as Specified In Its Charter)
ENHANCE FINANCIAL SERVICES GROUP
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INFORMATION FOR CHASEMELLON PROXY SOLICITORS
PROXY SOLICITORS SHOULD USE INFORMATION SUBSTANTIALLY IN THE FORM OF THE
FOLLOWING:
The Company has asked us to clarify certain information contained in the proxy
statement for the 1999 annual meeting of shareholders of the company regarding
the present value of employee stock options granted during 1998.
On page 12 of the proxy statement is a table showing the values on the grant
date of the options granted to the Company's Chief Executive Officer and the
four other most highly compensated executive officers during 1998.
These dollar amounts were based on the widely used Black-Scholes option
valuation model. That model takes into account a number of factors, including
market price of the stock, strike price of the option, interest rates and
dividend yield. A further factor that goes into this model is price
volatility. Consistent with prior years' proxy statements, the Company used a
number for price volatility based on the daily closing market prices of its
common stock during the 90 days preceding the option grant. However, the
Company is aware that another, more widely used, time period for measuring
volatility is the 360-day time period prior to the option grant. If a 360-day
period were used for the volatility measure, the dollar amounts stated in the
proxy statement as the value of these stock options on their grant date would
be reduced by approximately one third.
