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As filed with the Securities and Exchange Commission on April 7, 2000
Registration No. 333-93557
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PHILADELPHIA CONSOLIDATED HOLDING CORP.
(Exact name of Registrant as specified in its charter)
PENNSYLVANIA 23-2202671
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation)
ONE BALA PLAZA, SUITE 100
BALA CYNWYD, PA 19004
(610) 617-7900
FAX: (610) 617-7600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MR. JAMES J. MAGUIRE, CHIEF EXECUTIVE OFFICER
OR
MR. CRAIG P. KELLER, SECRETARY
ONE BALA PLAZA, SUITE 100
BALA CYNWYD, PENNSYLVANIA 19004
(610) 617-7900
FAX: (610) 617-7600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
MICHAEL M. SHERMAN, ESQUIRE
WOLF, BLOCK, SCHORR AND SOLIS-COHEN LLP
1650 ARCH STREET
22ND FLOOR
PHILADELPHIA, PENNSYLVANIA 19103-2097
(215) 977-2236
FAX: (215) 977-2334
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this registration statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
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If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE. WE MAY CHANGE THE
INFORMATION IN THIS PROSPECTUS. THE SELLING SHAREHOLDERS MAY NOT SELL THESE
SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to completion, Dated April 7, 2000
SELLING SHAREHOLDER
PROSPECTUS
PHILADELPHIA CONSOLIDATED HOLDING CORP.
1,037,772 SHARES OF COMMON STOCK, NO PAR VALUE
FOR SALE BY SELLING SHAREHOLDERS
Thomas J. Jerger, Dean W. Jerger, Richard M. Jerger, Jr. and Evelyn W.
Jerger are offering to sell up to 1,037,772 shares of our common stock.
Our common stock is listed on the Nasdaq National Market of the Nasdaq
Stock Market Inc. under the symbol PHLY. On April 5, 2000, the last reported
sale price of the common stock on the Nasdaq National Market was $16.00 per
share.
INVESTING IN OUR COMMON STOCK INVOLVES RISKS WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 6 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2000.
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TABLE OF CONTENTS
Page
SUMMARY .............................................................. 3
RISK FACTORS........................................................... 6
SELLING SHAREHOLDERS
AND RELATED INFORMATION....................................... 9
PLAN OF DISTRIBUTION................................................... 11
USE OF PROCEEDS........................................................ 11
WHERE YOU CAN FIND MORE INFORMATION --
INCORPORATION OF INFORMATION BY REFERENCE..................... 11
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS............................. 12
LEGAL OPINIONS......................................................... 13
EXPERTS .............................................................. 13
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SUMMARY
INFORMATION ABOUT OUR BUSINESS
Philadelphia Consolidated Holding Corp. was incorporated in
Pennsylvania in 1984 to serve as a holding company for its subsidiaries.
We select and target industries and special areas of demand for
insurance products in which we believe we can grow our business by developing
insurance products that fill coverage needs unique to those industries and
areas. Then, through our subsidiaries, we design, market and sell property and
casualty insurance products that provide coverages and services that are
specific to these industries and special areas of demand but that are not
included in typical property and casualty policies. We use a "mixed" marketing
strategy. This means that we market our insurance products to the insured,
directly or through non-employee insurance agents with whom we have written
agency agreements, and also accept business from independent insurance brokers.
Our production underwriting organization consists of our marketing
staff and markets our products and services. It also reviews applications
against our general guidelines to determine whether the applicants meet the
guidelines before the applications are submitted to the underwriters in our home
office for a more detailed review. Our production underwriting organization
operates from offices located across the United States and includes
telemarketing staffs at our regional offices and our Philadelphia home office.
We offer the following product lines:
COMMERCIAL AUTOMOBILE AND EXCESS LIABILITY. We have provided commercial
automobile products to the leasing and rent-a-car industries for over 35 years.
We offer to the rent-a-car industry coverage for:
- the rent-a-car company's property;
- liability of the renter and the rent-a-car company; and
- physical damage on the rental vehicle.
Additionally, we offer additional coverage at the rental car counter to
rent-a-car customers through arrangements with a number of the largest
rent-a-car companies. This additional coverage protects renters against
liability for bodily injury and property damage over the amount of statutory
coverage provided with the rental vehicle. This coverage also pays claims, up to
the coverage limit, without regard to the renter's personal automobile insurance
coverage.
We also offer a full range of liability and physical damage coverages
to rent-a-car companies and their customers. For the renter, we offer both
liability coverage and physical damage coverage on the vehicle. For the leasing
company, we offer additional coverage over the initial layer of automobile and
liability insurance carried by the leasing company. This coverage protects the
leasing company if there is a loss when the initial coverage for which we are
primarily liable is absent or inadequate. We also offer the following products
to leasing companies:
- interim initial and physical damage coverage, which
protects the leasing company before and after the vehicle is
delivered to the renter;
- coverage that guarantees a stated minimum value of the leased
vehicle at the end of the lease; and
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- guaranteed asset protection coverage which protects the
leasing company and renter for the difference between the
leased vehicle's actual cash value and the lease or loan net
value in instances where the vehicle is stolen or damaged
beyond repair.
COMMERCIAL PACKAGE. We have provided commercial package policies that
combine numerous risk coverages in a single policy to several specialty markets
for more than 10 years. Our customers for these policies include:
- non-profit and social service organizations;
- health and fitness organizations;
- private and specialty training schools;
- condominium/homeowner association facilities;
- home health care operations; and
- day care facilities.
SPECIALTY LINES. We have provided professional liability insurance for
approximately 10 years. We initially offered directors and officers liability
coverage to nonprofit tax exempt organizations. In 1996, we also introduced a
package of coverages in our Executive Safeguard(R) policy offered to public and
private companies. The coverages offered in the Executive Safeguard(R) policy
include:
- directors and officers liability;
- employment practices liability;
- liability for employee benefits plan administrators and other
persons who act for others in trust; and
- kidnap ransom.
We currently are focused on broadening the target market for our professional
liability insurance by expanding our production underwriting organization and
introducing new products.
During 1998, we added a variety of coverage enhancements to several of our
policies, including Executive Safeguard(R) and miscellaneous professional and
non-profit directors and officers liability. We also introduced two new
products, accountants and dentists professional liability.
SPECIALTY PROPERTY AND INLAND MARINE LINE. In September 1998, we
introduced a new line of business with our specialty property and inland marine
underwriters. These underwriters specialize in:
- insuring large property risks for a wide range of businesses,
from shopping malls to hotels; and
- underwriting and providing marketing for all classes of inland
marine insurance, concentrating on the larger segments of
inland marine, including:
- builder's risk;
- contractor's equipment; and
- motor truck cargo.
MOBILE HOMEOWNERS AND PREFERRED HOMEOWNERS LINE. In July 1999, we
introduced a line of highly specialized mobile homeowners and preferred
homeowners personal property and casualty insurance policies. At the same time,
we introduced excess liability policies that provide coverage for amounts above
the limits of basic liability coverage policies, such as mobile homeowners,
preferred homeowners and auto.
Preferred homeowners are homeowners who meet stricter underwriting guidelines.
We acquired this business line through a merger between one of our subsidiaries
and The Jerger Company, Inc.
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PRINCIPAL EXECUTIVE OFFICES
Our principal executive offices are located at One Bala Plaza, Suite
100, Bala Cynwyd, Pennsylvania, 19004 (telephone number: (610) 617-7900).
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RISK FACTORS
IF OUR INSURANCE COMPANY SUBSIDIARIES ARE UNABLE TO PAY DIVIDENDS OR MAKE LOANS
TO US, DUE TO GOVERNMENT REGULATIONS THAT APPLY TO INSURANCE COMPANIES OR FOR
ANY REASON, WE MAY NOT BE ABLE TO CONTINUE OUR NORMAL BUSINESS OPERATIONS.
We are a holding company. Our principal assets currently consist of all
or substantially all of the equity interests of our subsidiaries listed below:
- - Philadelphia Indemnity Insurance Company;
- - Philadelphia Insurance Company;
- - Maguire Insurance Agency, Inc.;
- - PCHC Investment Corp., a Delaware investment corporation;
- - PCHC Financing I, a Delaware business trust;
- - Liberty American Insurance Group, Inc., formerly known as The Jerger
Company, Inc., an insurance holding company;
- - MHIA Premium Finance Company;
- - Mobile Homeowners Insurance Agencies, Inc.;
- - Liberty American Insurance Company, formerly known as Mobile United
Property and Casualty Insurance Company, Inc.; and
- - Mobile USA Insurance Company.
Philadelphia Indemnity Insurance Company, Philadelphia Insurance
Company, Mobile United Property and Casualty Insurance Company, Inc. and Mobile
USA Insurance Company, Inc. are our insurance company subsidiaries. These
insurance company subsidiaries are companies that we own that are licensed to
issue insurance policies. Maguire Insurance Agency, Inc. is an underwriting
manager and Mobile Homeowners Insurance Agencies, Inc. is an insurance agency
that markets, underwrites and services mobile homeowners and preferred
homeowners insurance policies.
Our primary sources of funds are dividends and payments from our
subsidiaries that we receive under tax allocation agreements. Government
regulations that apply to insurance companies restrict the ability of our
insurance company subsidiaries to pay dividends and make loans to us. The
accumulated profits of these subsidiaries from which dividends may be paid
totaled $82.7 million at December 31, 1999. Of this amount, these insurance
company subsidiaries may pay a total of about $22.2 million of dividends in 2000
without obtaining prior approval from the department of insurance for the state
in which they located. Further, creditors of any of our subsidiaries will have
the right to be paid in full the amounts they are owed if a subsidiary
liquidates its assets or undergoes a reorganization or other similar transaction
before we will have the right to receive any distribution of assets from the
subsidiary, unless we also are recognized as a creditor of the subsidiary. If we
are unable to receive distributions from our subsidiaries, we may not be able to
continue our normal business
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operations. At December 31, 1999, our subsidiaries had total liabilities,
excluding liabilities owed to us, of approximately $337.6 million.
IF RATING AGENCIES DOWNGRADE THE RATINGS OF OUR INSURANCE COMPANY SUBSIDIARIES,
WE WOULD NOT BE ABLE TO COMPETE AS EFFECTIVELY WITH OUR COMPETITORS AND OUR
ABILITY TO SELL INSURANCE POLICIES MIGHT DECLINE; IN THAT EVENT OUR SALES AND
EARNINGS WOULD BE REDUCED.
A.M. Best Company rates our insurance company subsidiaries "A+"
(Superior). According to A.M. Best Company, companies rated "A+" (Superior)
have, on balance, superior financial strength, operating performance and market
profile, when compared to the standards established by the A.M. Best Company,
and have a very strong ability to meet their ongoing obligations to
policyholders. Our insurance company subsidiaries also possess an "A" claims
paying ability rating by Standard & Poor's. According to Standard & Poor's,
insurers rated "A" offer good financial security for policyholders. We believe
that the ratings assigned by A.M. Best Company and Standard & Poor's are
important factors in marketing our products. If agencies downgrade our ratings
in the future, it is likely that:
- we would not be able to compete as effectively with our
competitors; and
- our ability to sell insurance policies might decline.
If that happens, our sales and earnings would decrease.
IF OUR RESERVES FOR LOSSES AND COSTS RELATED TO ADJUSTMENT OF LOSSES ARE NOT
ADEQUATE, GOVERNMENT REGULATORS MAY REQUIRE THAT WE INCREASE OUR RESERVES WHICH
COULD RESULT IN REDUCTIONS IN NET INCOME AND POLICYHOLDER'S SURPLUS, AND A
DOWNGRADING OF RATINGS OF OUR INSURANCE COMPANY SUBSIDIARIES THAT COULD RESULT
IN DECREASED SALES.
We establish reserves for losses and costs related to the adjustment of
losses under the insurance policies we write. We determine the amount of these
reserves based on our best estimate of the losses and costs we will incur on
existing insurance policies. We obtain periodic reviews by an actuary firm and
an annual statement of opinion from that firm on these reserves by independent
actuaries. While we believe that our reserves are adequate, we base these
reserves on assumptions about future events. The following factors may have a
substantial impact on our future loss experience:
- changes in inflation;
- the amounts of claims settlements;
- the manner in which we are required to structure settlement
payments;
- legislative activity; and
- legislative trends.
Actual losses and the costs we incur related to the adjustment of losses under
insurance policies may be different from the amount of reserves we establish.
Government regulators will require that we increase our reserves if they later
determine that we understated our reserves. When we increase reserves, our net
income for the period will decrease by a corresponding amount. In addition,
strengthening reserves could cause a reduction in policyholders' surplus and a
downgrading of the ratings of our insurance company subsidiaries. This in turn
could hurt our ability to sell insurance policies.
IF WE ARE NOT ABLE TO MAINTAIN ADEQUATE REINSURANCE TO INSURE AGAINST A PORTION
OF OUR RISK, WE WILL HAVE TO BEAR MORE RISK AND COULD EXPERIENCE LOSSES.
We purchase reinsurance coverage to insure against a portion of our
risk on policies we write directly. Reinsurance does not affect our direct
liability to our policyholders on the insurance policies we write. Instead, it
provides us with coverage for a portion of our obligations to pay the claims of
our policyholders. If a reinsurer becomes insolvent or is unable to make
payments under the terms of its reinsurance agreement with us, we will bear the
losses covered by that
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reinsurance agreement. Depending on the amount of risk that we are unable to
reinsure and the amount of claims we receive related to that risk, we could
experience losses.
YEAR 2000 READINESS DISCLOSURE; DUE TO YEAR 2000 ISSUES, THERE IS A RISK OF
INCREASED CLAIMS ON POLICIES WE WRITE THAT COULD RESULT IN LOSSES.
Many computer programs written before the year 2000 used only two
digits, instead of four, to identify a year in the date field. These programs
were designed and developed without considering the impact of the change in the
century. If not corrected, many computer applications could fail or create
incorrect results on or after the Year 2000. The Year 2000 issue affects
computer and information technology systems, as well as non-information
technology systems that include embedded technology, such as micro-processors
and micro-controllers or micro-chips, that have date sensitive programs that may
not properly recognize the year 2000 or beyond.
We issue professional liability coverage, including directors and
officers liability, and commercial insurance policies that provide coverage for
numerous risks. Our policy holders may claim that these policies cover losses
suffered by them as a result of Year 2000 issues. We write our professional
liability policies on a "claims made and reported" basis. Approximately 50% of
these policies that we sold since early 1997 specifically exclude from coverage
liability for Year 2000 problems. Almost all of our new or renewing professional
liability policies that provide coverage effective January 1, 1999 specifically
exclude coverage for Year 2000 liability. On occasion, for qualifying accounts,
our underwriters may remove the exclusion after they receive and review a
satisfactory additional application that provides information about the
applicant's Year 2000 risks, and other underwriting information. We believe that
we should not be held liable for claims arising from the Year 2000 issue under
our comprehensive general liability policies. However, we cannot determine
whether or to what extent courts may find liability for those claims. We could
experience losses if insureds are successful in bringing large Year 2000
coverage claims against us. Additionally, we could incur significant expense to
contest Year 2000 issue coverage claims, even if we prevail in our position.
CLAIMS RELATED TO CATASTROPHIC EVENTS COULD RESULT IN CATASTROPHE LOSSES THAT
COULD RESULT IN LOSSES.
It is possible that a catastrophic event could greatly increase claims
under the insurance policies we write. This, in turn, could result in losses for
one or more of our insurance company subsidiaries. Catastrophes may result from
a variety of events or conditions, including hurricanes, windstorms,
earthquakes, hail and other severe weather conditions.
We generally try to reduce our exposure to catastrophe losses through
underwriting and the purchase of catastrophe reinsurance. But, reinsurance may
not be sufficient to cover our actual losses. And, a number of states from time
to time have passed legislation that has had the effect of limiting the ability
of insurers to manage risk, such as legislation prohibiting an insurer from
withdrawing from catastrophe-prone areas. If we are unable to maintain adequate
reinsurance or to withdraw from areas where we experience or expect significant
catastrophe-related claims, we could experience significant losses.
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SELLING SHAREHOLDERS
AND RELATED INFORMATION
The following table includes (1) the identity of each selling
shareholder, (2) the amount of shares that each selling shareholder owned before
the offering, (3) the amount of shares that each selling shareholders is
offering for his or her account and (4) the amount and, if one percent or more,
the percentage of common stock that each selling shareholder will own after
completion of the offering, assuming all shares covered by this prospectus are
sold.
<TABLE>
<CAPTION>
Number of
Beneficial Ownership of Shares of Shares of Beneficial Ownership of Shares of
Selling Common Stock Before Offering (1) Common Stock Common Stock After Offering (2)
Shareholder Number Percentage (3) Being Offered Number Percentage (3)
----------- ------ ---------- ------------- ------ ----------
<S> <C> <C> <C> <C> <C>
Thomas J. Jerger 338,404 2.7% 338,404 0 *
Dean W. Jerger 338,404 2.7% 338,404 0 *
Richard M. Jerger, Jr. 338,404 2.7% 338,404 0 *
Evelyn W. Jerger (4) 22,560 * 22,560 0 *
</TABLE>
* Indicates less than one percent
(1) Beneficial ownership figures include shares of issued and outstanding
shares of common stock. None of the selling shareholders holds any
option, warrant, right or convertible security exercisable for or
convertible into common stock.
(2) Assumes that each selling shareholder will sell all shares of common
stock offered by this prospectus to third parties unaffiliated with the
selling shareholders.
(3) Percentages are calculated in accordance with Section 13(d) of the
Exchange Act and the rules promulgated under the Exchange Act.
(4) As trustee of the Evelyn W. Jerger Revocable Trust u/a/d 3/23/92.
Effective July 16, 1999, The Jerger Company, Inc., a Florida
corporation, merged with and into a subsidiary of Philadelphia Consolidated
Holding Corp. under a merger agreement among Philadelphia Consolidated Holding
Corp., our subsidiary and The Jerger Company, Inc. We issued the shares of
common stock that are covered by this prospectus on an unregistered basis
in connection with this merger. Each of Mobile Homeowners Insurance Agencies,
Inc. ("Mobile Homeowners"), Mobile USA Insurance Company ("Mobile USA"), MHIA
Premium Finance Company ("MHIA"), Jerger & Sons, Inc. ("Jerger & Sons") and
Liberty American Insurance Company, formerly known as Mobile United Property and
Casualty Insurance Co., Inc. ("Mobile United") was a subsidiary of The Jerger
Company, Inc. before the merger. Since the merger, each of those corporations
has been a subsidiary of the surviving company. The surviving company is a
subsidiary of ours. The selling shareholders were the only shareholders of The
Jerger Company, Inc. before the merger. Under the terms of the merger agreement,
we issued the shares to the selling shareholders. We also
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entered into an agreement with the selling shareholders to register the resale
of the shares upon their request.
Within the past three years, the selling shareholders held the
following positions or offices and/or had the following relationships with us or
our affiliates, including The Jerger Company, Inc. and its subsidiaries:
Thomas J. Jerger. Before the merger, Thomas J. Jerger was Chairman of
the Board and Chief Executive Officer of The Jerger Company, Inc.; Director and
President of Mobile Homeowners; Chairman of the Board and President of Mobile
USA; Chairman of the Board and President of MHIA; Director and Executive Vice
President of Jerger & Sons; and Chairman of the Board and President of Mobile
United. In addition, in April 1999, he was elected Director of Philadelphia
Consolidated Holding Corp.
On the effective date of the merger, in addition to continuing his term
as a Director of Philadelphia Consolidated Holding Corp., Thomas J. Jerger held
the following positions: President of The Jerger Company, Inc.; President of
Mobile Homeowners; Chairman of the Board and President of Mobile USA; Chairman
of the Board and President of MHIA; Executive Vice President of Jerger & Sons;
Chairman of the Board and President of Mobile United; and, since October 1999,
Executive Vice President of Philadelphia Consolidated Holding Corp. His other
pre-merger positions and offices, as described above, ended on the effective
date of the merger. Mr. Jerger resigned from all his positions and offices,
except his position as Director of Philadelphia Consolidated Holding Corp.,
effective November 22, 1999. Mr. Jerger resigned from his position as Director
of Philadelphia Consolidated Holding Corp. effective November 24, 1999.
Dean W. Jerger. Before the merger, Dean W. Jerger was Director and
President of The Jerger Company, Inc.; Chairman of the Board and Chief Executive
Officer of Mobile Homeowners; Director of Mobile USA; Director and Executive
Vice President of MHIA; Director and Executive Vice President of Jerger & Sons;
and Director of Mobile United.
Dean W. Jerger held the following positions and offices from the
effective date of the merger until December 3, 1999 when he resigned from all of
his positions and offices: Director and Executive Vice President of The Jerger
Company, Inc.; Chairman of the Board and Chief Executive Officer of Mobile
Homeowners; Director of Mobile USA; Director and Executive Vice President of
MHIA; Director and Executive Vice President of Jerger & Sons; and Director of
Mobile United.
Richard M. Jerger, Jr. Richard M. Jerger, Jr. held the following
positions and offices, before the effective date of the merger and until August
11, 1999, when he resigned from each of those positions: Director and Executive
Vice President of each of The Jerger Company, Inc., Mobile Homeowners, Mobile
USA and MHIA; Chairman of the Board and President of Jerger & Sons; and Director
and Executive Vice President of Mobile United.
Evelyn W. Jerger. Evelyn W. Jerger served as Director and Executive
Vice President of The Jerger Company, Inc. until June 30, 1999 when she resigned
from those positions.
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In addition, from April 1998 until the merger, Mobile Homeowners, a
subsidiary of The Jerger Company, Inc., was one of our agents.
The selling shareholders are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted.
PLAN OF DISTRIBUTION
The selling shareholders may offer and sell their shares of common
stock that are covered by this prospectus from time to time in one or more
transactions to or through brokers or dealers, who may be acting as
underwriters, or directly with investors or other purchasers. These shares of
common stock may be sold at:
- a fixed price or prices, which may be changed;
- market prices prevailing at the time of sale;
- prices related to the prevailing market prices; or
- negotiated prices.
We will describe in an accompanying prospectus supplement, as required
by law:
- the specific shares to be sold;
- the terms of the offering, including price;
- the names of any agent, dealer or underwriter; and
- any applicable commission, discount or other compensation
applicable to a particular sale.
USE OF PROCEEDS
The selling shareholders who offer and sell their shares will receive
all net proceeds from the sale of the shares. We will not receive any proceeds
from the sale of the shares.
WHERE YOU CAN FIND MORE INFORMATION --
INCORPORATION OF INFORMATION BY REFERENCE
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the following public reference rooms maintained by the SEC at:
Judiciary Plaza 7 World Trade Center
450 Fifth Street, N.W. 13th Floor
Washington, D.C. 20549 New York, New York 10048
You may obtain information on the operation of the SEC's public
reference rooms by calling the SEC at 1-800-SEC-0330. Our SEC filings also are
available to the public from the SEC's website at http://www.sec.gov.
We have filed a registration statement on Form S-3 with the SEC to
register the shares offered by this prospectus. This prospectus is part of the
registration statement. However, this prospectus does not contain all the
information that you can find in the registration statement or the exhibits to
the registration statement. You should refer to the registration statement and
to the exhibits filed with the registration statement for additional information
about us, our consolidated subsidiaries and the shares.
The SEC allows us to "incorporate by reference" the information we file
with them. This means that we may disclose information to you by referring you
to other documents we have filed with the SEC. The information that we
incorporate by reference is considered to be part of this prospectus. In
addition, information that we file with the SEC after the date of this
prospectus will automatically update and supersede the information in this
prospectus.
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We incorporate by reference in this prospectus all the documents listed
below and any filings we make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this prospectus and before all the
shares of common stock offered by this prospectus have been sold or
de-registered:
- - the annual report on Form 10-K for the fiscal year ended December 31,
1999;
- - the current report on Form 8-K filed with the SEC on March 17, 2000;
and
- - the description of our common stock, no par value, that is contained in
Philadelphia Consolidated Holding Corp.'s registration statement on
Form 8-A/A, dated September 13, 1993, including any amendments or
reports filed for the purpose of updating the description of the
shares.
You may send a written request or call us to obtain without charge a
copy of the documents incorporated by reference in this prospectus. We will not
send exhibits to these documents unless we specifically incorporated the
exhibits by reference in this prospectus. Make your request by calling or
writing to:
Craig P. Keller
Senior Vice President, Secretary, Treasurer
and Chief Financial Officer
Philadelphia Consolidated Holding Corp.
One Bala Plaza, Suite 100
Bala Cynwyd, PA 19004
(610) 617-7900
You should rely only on the information that we have provided or
incorporated by reference in this prospectus. We have not authorized anyone else
to provide you with different information. You should assume that the
information in this prospectus, as well as information we previously filed with
the SEC and incorporated by reference, is accurate only as of the date on the
front cover of this prospectus. Our business, financial condition, results of
operations and prospects may have changed since then.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
Some of the information in this prospectus may contain forward-looking
statements. These statements can be identified by the use of forward-looking
phrases such as "will likely result," "may," "are expected to," "is
anticipated," "estimate," "projected," "intends to," or other similar words.
These forward-looking statements are subject to risks and uncertainties that
could
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cause actual results to differ materially from those projected. We have
described some of these risks under "Risk Factors" in this prospectus. We have
included in this prospectus and in our other filings with the SEC additional
risks that may affect our future performance. You should keep in mind these risk
factors and other cautionary statements in this prospectus when considering
forward-looking statements.
LEGAL OPINIONS
Wolf, Block, Schorr and Solis-Cohen LLP will pass on the validity of
the shares of common stock offered in this prospectus.
EXPERTS
We have incorporated by reference in this prospectus the consolidated
financial statements of Philadelphia Consolidated Holding Corp. and its
subsidiaries as of December 31, 1999 and 1998 and for each of the three years in
the period ended December 31, 1999 in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
that firm as experts in accounting and auditing.
13
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission
Registration Fee .................. $ 4,179.00
*Accounting Fees and Expenses ..... 3,000.00
*Legal Fees and Expenses .......... 32,000.00
*Miscellaneous .................... 821.00
Total Expenses .................... $34,000.00
==========
</TABLE>
- ----------
* Estimated for purposes of completing the information required pursuant to this
Item 14.
Philadelphia Consolidated will pay all of the above fees and expenses
associated with filing the registration statement.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subchapter D (Sections 1741 through 1750) of Chapter 17 the
Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"), contains
provisions for mandatory and discretionary indemnification of a corporation's
directors, officers, employees and agents (collectively "Representatives"), and
related matters.
Under Section 1741, subject to certain limitations, a corporation has
the power to indemnify Representatives under certain prescribed circumstances
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with a threatened,
pending or completed action or proceeding, whether civil, criminal,
administrative or investigative, to which any of them is a party or threatened
to be made a party by reason of his or her being a Representative of the
corporation or serving at the request of the corporation as a Representative of
another corporation, partnership, joint venture, trust or other enterprise, if
he or she acted in good faith and in a manner he or she reasonably believed to
be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal proceeding, had no reasonable cause to believe his or
her conduct was unlawful.
Section 1742 provides for indemnification with respect to derivative
and corporate actions similar to that provided by Section 1741. However,
indemnification is not provided under Section 1742 in respect of any claim,
issue or matter as to which a Representative has been adjudged to be liable to
the corporation unless and only to the extent that the proper court determines
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, a Representative is fairly and reasonably
entitled to indemnity for the expenses that the court deems proper.
II-1
<PAGE> 17
Section 1743 provides that indemnification against expenses is
mandatory to the extent that a Representative has been successful on the merits
or otherwise in defense of any such action or proceeding referred to in Section
1741 or 1742.
Section 1744 provides that, unless ordered by a court, any
indemnification under Section 1741 or 1742 shall be made by the corporation only
as authorized in the specific case upon a determination that indemnification of
a Representative is proper because the Representative met the applicable
standard of conduct. Section 1744 further provides that such determination will
be made by the board of directors by a majority vote of a quorum consisting of
directors not parties to the action or proceeding; if a quorum is not obtainable
or if obtainable and a majority vote of a quorum of disinterested directors so
directs, by independent legal counsel; or by the shareholders.
Section 1745 provides that expenses incurred by a Representative in
defending any action or proceeding referred to in Subchapter D of Chapter 17 of
the BCL may be paid by the corporation in advance of the final disposition of
such action or proceeding upon receipt of an undertaking by or on behalf of the
Representative to repay such amount if it shall ultimately be determined that
such Representative is not entitled to be indemnified by the corporation.
Section 1746 provides generally that except in any case where the act
or failure to act giving rise to the claim for indemnification is determined by
a court to have constituted willful misconduct or recklessness, the
indemnification and advancement of expenses provided by Subchapter D of Chapter
17 of the BCL shall not be deemed exclusive of any other rights to which a
Representative seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in such Representative's official
capacity and as to action in another capacity while holding that office.
Section 1747 grants a corporation the power to purchase and maintain
insurance on behalf of any Representative against any liability incurred by such
Representative in his or her capacity as a Representative, whether or not the
corporation would have the power to indemnify such Representative against that
liability under Subchapter D of Chapter 17 of the BCL.
Sections 1748 and 1749 apply the indemnification and advancement of expenses
provisions contained in Subchapter D of Chapter 17 of the BCL to all constituent
corporations absorbed in a consolidation, merger or division, as well as the
surviving or new corporations surviving or resulting therefrom, and to service
as a representative of a corporation or an employee benefit plan.
Section 1750 provides that the indemnification and advancement of
expenses provided by, or granted pursuant to, Subchapter D of Chapter 17 of the
BCL shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a Representative and shall inure to the benefit of
the heirs and personal representative of such person.
Section 9 of Article IV of Philadelphia Consolidated Holding Corp.'s
By-Laws provides indemnification to directors for all actions taken by them and
for all failures to take action to the fullest extent
II-2
<PAGE> 18
permitted by Pennsylvania law against all expense, liability and loss reasonably
incurred or suffered by them in connection with any threatened, pending or
completed action, suit or proceeding (including, without limitation, an action,
suit or proceeding by or in the right of Philadelphia Consolidated Holding
Corp.), whether civil, criminal, administrative, investigative or through
arbitration. Section 9 of Article IV of the By-Laws also permits Philadelphia
Consolidated Holding Corp., by action of its board of directors, to indemnify
officers, employees and other persons to the same extent as directors. The
provisions of Section 9 of Article IV of the By-Laws relating to the limitation
of directors' liability, to indemnification and to the advancement of expenses
constitute a contract between Philadelphia Consolidated Holding Corp. and each
of its directors which may be modified as to any director only with that
director's consent or as otherwise specifically provided in Section 9. Any
repeal or amendment of Section 9 of Article IV of the By-Laws which is adverse
to any director will apply to such director only on a prospective basis, and
will not reduce any limitation on the personal liability of a director of
Philadelphia Consolidated Holding Corp., or limit the rights of an indemnitee to
indemnification or to the advancement of expenses with respect to any action or
failure to act occurring prior to the time of such repeal or amendment. No
repeal or amendment of the By-Laws will affect any or all of Section 9 of
Article IV so as either to reduce the limitation of directors' liability or
limit indemnification or the advancement of expenses in any manner unless
adopted by the unanimous vote of the directors of Philadelphia Consolidated
Holding Corp. then serving or the affirmative vote of shareholders entitled to
cast not less than a majority of the votes that all shareholders are entitled to
cast in the election of directors.
Section 9 of Article IV further permits Philadelphia Consolidated
Holding Corp. to maintain insurance, at its expense, for the benefit of any
person on behalf of whom insurance is permitted to be purchased by Pennsylvania
law against any such expenses, liability or loss, whether or not Philadelphia
Consolidated Holding Corp. would have the power to indemnify such person against
such expense, liability or loss under Pennsylvania or other law. Philadelphia
Consolidated Holding Corp. has purchased directors' and officers' liability
insurance.
Each of the selling shareholders has undertaken in writing to
indemnify and hold harmless Philadelphia Consolidated Holding Corp. and its
directors and officers and each person controlling Philadelphia Consolidated
Holding Corp. within the meaning of the Securities Act of 1933, as amended,
among others, with respect to any statement or alleged statement in or omission
from any resale registration statement, any final or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to Philadelphia Consolidated
Holding Corp. or its representatives by or on behalf of the selling shareholders
for use in the preparation of the resale registration statement; provided,
however, that the amount of any losses, claims, damages, liabilities or expenses
to be paid by the selling shareholders will not exceed the amount of proceeds
received by the selling shareholders from the sale of the securities.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
II-3
<PAGE> 19
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered
(if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in
such post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to
the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 20
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, such registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-5
<PAGE> 21
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
3.1 Articles of Incorporation of Philadelphia
Consolidated Holding Corp., as amended
(incorporated by reference to Exhibit 3.1 filed
with Philadelphia Consolidated Holding Corp.'s
Form S-1 Registration Statement under the
Securities Act of 1933 (Registration No.
33-65958)).
5.1 Opinion of Wolf, Block, Schorr and Solis-Cohen LLP
regarding the validity of the securities being
registered by Philadelphia Consolidated Holding
Corp. hereby.*
10.1 Registration Rights Agreement, dated as of July 9,
1999, among Philadelphia Consolidated Holding
Corp., Thomas Jerger, Dean Jerger, Richard M.
Jerger, Jr. and Evelyn W. Jerger (incorporated by
reference to Exhibit 10.43 filed with Philadelphia
Consolidated Holding Corp.'s Form 10-Q for the
fiscal quarter ended September 30, 1999).
23.1 Consent of PricewaterhouseCoopers LLP related to
the financial statements of Philadelphia
Consolidated Holding Corp.**
23.2 Consent of Wolf, Block, Schorr and Solis-Cohen LLP
(included in Exhibit 5.1).*
24.1 Powers of attorney.*
</TABLE>
- -----------------------------
*Previously filed.
**Filed electronically herewith.
II-6
<PAGE> 22
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
Philadelphia Consolidated Holding Corp. certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Amendment No. 2 to the Registration Statement, to be signed on
its behalf by the undersigned, thereunto duly authorized, in Bala Cynwyd,
Pennsylvania on April 7, 2000.
PHILADELPHIA CONSOLIDATED HOLDING CORP.
By: /s/ James J. Maguire
James J. Maguire
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed by the following
persons in the capacities indicated on April 7, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
* Chairman of the Board of Directors,
- ------------------ Chief Executive Officer
James J. Maguire and Director (Principal Executive Officer)
/s/ Craig P. Keller Senior Vice President, Secretary, Treasurer
- ------------------ and Chief Financial Officer (Principal
Craig P. Keller Financial and Accounting Officer)
* President, Chief Operating
- ------------------ Officer and Director
James J. Maguire, Jr.
</TABLE>
<PAGE> 23
<TABLE>
<S> <C>
* Executive Vice President and Director
- -------------------------
Sean S. Sweeney
* Director
- -------------------------
William J. Henrich, Jr.
* Director
- -------------------------
Roger R. Larson
* Director
- -------------------------
Paul R. Hertel, Jr.
* Director
- -------------------------
Thomas J. McHugh
* Director
- -------------------------
Michael J. Morris
* Director
- -------------------------
Dirk Stuurop
* Director
- -------------------------
J. Eustace Wolfington
*By: /s/ Craig P. Keller
- -------------------------
Craig P. Keller as attorney-in-
fact pursuant to the Powers of
Attorney previously filed as
Exhibit 24.1 to this Registration
Statement
</TABLE>
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
----------- ----------- ----------------
<S> <C> <C>
3.1 Articles of Incorporation of Philadelphia Consolidated Incorporated herein
Holding Corp., as amended (incorporated by reference to by reference
Exhibit 3.1 filed with Philadelphia Consolidated
Holding Corp.'s Form S-1 Registration Statement under
the Securities Act of 1933 (Registration No.
33-65958)).
5.1 Opinion of Wolf, Block, Schorr and Solis-Cohen LLP *
regarding the validity of the securities being
registered by Philadelphia Consolidated Holding Corp.
hereby.
10.1 Registration Rights Agreement, dated as of July 9, Incorporated herein
1999, among Philadelphia Consolidated Holding Corp., by reference
Thomas Jerger, Dean Jerger, Richard M. Jerger, Jr. and
Evelyn W. Jerger (incorporated by reference to Exhibit
10.43 filed with Philadelphia Consolidated Holding
Corp.'s Form 10-Q for the fiscal quarter ended
September 30, 1999).
23.1 Consent of PricewaterhouseCoopers LLP related to the **
financial statements of Philadelphia Consolidated
Holding Corp.
23.2 Consent of Wolf, Block, Schorr and Solis-Cohen LLP *
(included in Exhibit 5.1).
24.1 Powers of attorney. *
</TABLE>
* Previously filed.
** Filed electronically herewith.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 11, 2000 relating to the
financial statements, which appears in Philadelphia Consolidated Holding
Corp.'s Annual Report on Form 10-K for the year ended December 31, 1999. We
also consent to the incorporation by reference of our report dated February 11,
2000 relating to the financial statement schedules, which appears in such
Annual Report on Form 10-K. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania
April 6, 2000
