<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
MID OCEAN 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:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
ELECTION FORM AND LETTER OF TRANSMITTAL
To accompany certificates representing Class A Ordinary Shares, par value $.20
per share,
of
MID OCEAN LIMITED ("MID OCEAN")
("Mid Ocean 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 Mid Ocean and its shareholders and between EXEL Limited
("EXEL") and its
shareholders (the "Arrangements") pursuant to which Mid Ocean and EXEL 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 MID OCEAN 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
<PAGE>
OR NOT A SHARE ELECTION IS INDICATED THEREON, SHALL BE DEEMED TO INDICATE A
SHARE ELECTION.
The tax consequences to a holder of Mid Ocean 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 Mid Ocean Shares (each such certificate, a "Mid Ocean
Certificate"), listed in Box A above in exchange for either (i) the right to
receive a number of New EXEL Shares equal to the product of (A) 1.0215 (the
"Exchange Ratio") and (B) the number of Mid Ocean Shares represented by the Mid
Ocean 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 Exchange Ratio, (B) the Valuation Period Market Value (as
defined below) and (C) the number of Mid Ocean Shares represented by the Mid
Ocean Certificates surrendered herewith (such election, a "Cash Election") or
(iii) the right to receive (A) the number of New EXEL Shares equal to the
product of (1) the Exchange Ratio and (2) the number of Mid Ocean 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 Exchange Ratio, (2) the Valuation Period
Market Value, and (3) the number of Mid Ocean 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"). In addition,
it is understood that the Exchange Agent will pay cash in lieu of any fractional
New EXEL Shares otherwise issuable in connection with the Arrangements as
specified herein. 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 Mid Ocean Shares as of the Effective Time
("Mid Ocean Holders"), excluding any cash paid in lieu of fractional shares, is
referred to herein as the "Mid Ocean Cash Consideration," and together with the
cash paid in connection with the Arrangements to shareholders of EXEL ("EXEL
Cash Consideration"), is referred to herein as the "Cash Consideration." The
Share Consideration, the Cash Consideration and any cash paid in lieu of
fractional shares 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 Mid Ocean Holders and EXEL
shareholders shall not exceed $300 million, and consequently it is possible that
certain Mid Ocean
2
<PAGE>
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.
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 Mid Ocean Shares represented by the Mid Ocean Certificate(s) surrendered
herewith, with good title to the above-described Mid Ocean Shares and full power
and authority to sell, assign and transfer such Mid Ocean 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 Mid Ocean 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 the an Ordinary
Share, par value $.01, of EXEL (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 Mid Ocean
Holders, the Mid Ocean Cash Consideration would be less than or equal to the Mid
Ocean 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 Mid Ocean Cash Consideration would otherwise exceed the Mid Ocean
Cash Amount, the Exchange Agent shall allocate the Mid Ocean Cash Amount pro
rata among all Mid Ocean Holders that elected to receive Mid Ocean 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.
The Mid Ocean Cash Amount will initially be $96,000,000, but such amount will be
increased to the extent that holders of EXEL Shares, who also have the right to
make a cash election, do not make cash elections with respect to the cash amount
of $204,000,000 allocated to such EXEL shareholders. ALL DECISIONS BY THE
EXCHANGE AGENT WITH RESPECT TO PRORATION WILL BE FINAL AND BINDING.
ALL MID OCEAN 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. MID OCEAN 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 MID OCEAN CERTIFICATES) OR OTHERWISE
FAIL TO PROPERLY MAKE AN ELECTION; OR
C. A COMPLETED ELECTION FORM AND LETTER OF TRANSMITTAL (INCLUDING
SUBMISSION OF YOUR MID OCEAN 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 Mid
Ocean 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 Mid Ocean Certificates and all other required
documents is at the election and risk of the Mid Ocean Holder; however, if the
Mid Ocean 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 Mid Ocean Shares for which Special Issuance and
Payment Instructions have been given.
CONSUMMATION OF THE ARRANGEMENTS IS STILL SUBJECT TO APPROVAL OF THE
SHAREHOLDERS OF MID OCEAN AND EXEL 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 Mid Ocean Certificates previously submitted with any Election
Form and Letter of Transmittal. In such event, Mid Ocean Shares held through The
Depository Trust Company are expected to be available for sale or transfer
promptly following such termination; however, certificates representing Mid
Ocean Shares held of record directly by the beneficial owners of such Mid Ocean
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 Mid Ocean Cash representing the Mid Ocean 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 Mid Ocean Cash
the Share Consideration or the check Consideration or cash in lieu of
representing the Mid Ocean 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 Mid Ocean 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 Mid Ocean 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 Mid Ocean 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 Mid
Ocean 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 Mid Ocean Holders
who wish to receive the Share Consideration. Until a record holder's Mid Ocean
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 Mid Ocean Cash Consideration or cash
in lieu of fractional shares (if any) in exchange for their Mid Ocean
Certificates or (ii) any dividends or other distributions payable on the New
EXEL Shares composing the Share Consideration. No interest will accrue on the
Mid Ocean Cash Consideration, the cash in lieu of fractional shares 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 MID OCEAN 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 Mid Ocean 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 Mid Ocean Cash Consideration
will not exceed the Mid Ocean Cash Amount. Accordingly, there can be no
assurance that each Mid Ocean Holder who elects to receive Mid Ocean Cash
Consideration will receive the form of consideration which such holder elects.
If the elections result in an oversubscription of the Mid Ocean Cash
Consideration, the procedures for allocating the Mid Ocean 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. In lieu thereof, the Exchange Agent will remit on New
EXEL's behalf cash without interest in an amount
7
<PAGE>
equal to the product of (i) such fraction of a New EXEL Share, if any, to which
any Mid Ocean Holder would otherwise be entitled (after taking into account all
Mid Ocean Shares held by such holder) and (ii) the Valuation Period Market
Value. No such Mid Ocean Holder shall be entitled to dividends, voting rights or
any other rights in respect of any fractional share.
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 Mid Ocean Holder with respect to the surrendered Mid Ocean
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 Mid Ocean Certificate(s) representing the
Mid Ocean Shares, should be delivered to the Exchange Agent at one of the
addresses set forth above. The method of delivery of the Mid Ocean Certificate
and all other required documents is at the election and risk of the record
holder of such Mid Ocean 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 Mid Ocean 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 Mid Ocean Certificate(s) without alteration, variation or any change
whatsoever.
(b) If the Mid Ocean 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 Mid Ocean Shares are registered in different names on
several Mid Ocean 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 Mid Ocean Certificates.
(d) If this Election Form and Letter of Transmittal is signed by a person(s)
other than the record holder(s) of the Mid Ocean 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 Mid Ocean 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 Mid Ocean 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 Mid Ocean 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 Mid Ocean 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
8
<PAGE>
certify whether such holder is subject to backup withholding. The TIN that must
be provided is that of the Mid Ocean Holder with respect to the Mid Ocean
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 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
Mid Ocean Holder to 31% federal income tax withholding on payments made to such
surrendering holder with respect to the Mid Ocean Shares and on future dividends
paid by New EXEL. A Mid Ocean 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 Mid Ocean 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 Mid Ocean 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 Mid Ocean
Certificates to this Election Form and Letter of Transmittal. If your Mid Ocean
Certificate(s) has (have) been lost, stolen or destroyed, you are urged to call
Mid Ocean at 441-292-1358 immediately to receive instructions as to the steps
you must take in order to effect an exchange of your Mid Ocean Shares.
13. ELECTIONS, CERTIFICATES AND SHARE ALLOCATIONS. Each Mid Ocean 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 Mid Ocean Holders
must complete Box A in order to receive the Arrangements Consideration. To
properly complete Box A, the number of each Mid Ocean 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 Mid Ocean
Shares represented by each Mid Ocean 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 Mid Ocean Shares represented
by each Mid Ocean 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 Mid Ocean Certificates between the columns marked "Shares to Receive
Share Consideration" and "Shares to Receive Cash Consideration" according to
such holder's preferences. Mid Ocean 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 Mid Ocean 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 Mid Ocean 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, a Mid Ocean 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 Mid Ocean Certificate(s) or of the last
transferee appearing on the transfers attached to or endorsed on the Mid Ocean
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 Mid Ocean Limited]
July 15, 1998
Dear Shareholder:
It is currently anticipated that the acquisition of Mid Ocean Limited ("Mid
Ocean") and EXEL Limited ("EXEL") by a new company ("New EXEL"), which will be
renamed "EXEL Limited," will be, subject to shareholder and Court approval,
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 Class A Ordinary Shares of Mid Ocean (including any certificates
representing shares of a predecessor company which have not yet been exchanged,
"Mid Ocean Shares") for exchange into certificates representing Class A Shares
of New EXEL ("New EXEL Shares") at an exchange ratio of 1.0215 New EXEL Shares
for each Mid Ocean Share. The Agreement also allows you to elect to receive, in
lieu of New EXEL Shares, cash for all or a portion of your Mid Ocean Shares,
subject to proration as described below. The price per share will be equal to
the exchange ratio of 1.0215 times the average of the closing sale prices of
Ordinary Shares of EXEL 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 EXEL 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 Mid Ocean 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 Mid
Ocean Shares automatically will be deemed to evidence ownership of the number of
New EXEL Shares into which such Mid Ocean 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 Mid Ocean 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/ Robert J. Newhouse, Jr. /s/ Michael A. Butt
Robert J. Newhouse, Jr. Michael A. Butt
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 Mid Ocean Limited ("Mid Ocean") and EXEL
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 Mid Ocean 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 Mid Ocean Limited ("Mid
Ocean") and EXEL Limited by Exel Merger Company Ltd. ("New EXEL"), which will be
renamed "EXEL Limited." We are the holder of record of shares of Mid Ocean 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 Mid Ocean shares. If you make no election you will receive New
EXEL shares for your Mid Ocean 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 1.0215;
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 MID OCEAN LIMITED AND EXEL 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.
