SC 13E3 1 a2031887zsc13e3.txt SC 13E3 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Rule 13e-3 Transaction Statement under Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 (Section 240.13e-3) thereunder. CHANDLER INSURANCE COMPANY, LTD. --------------------------------------------------------- (Name of the Issuer) CHANDLER INSURANCE COMPANY, LTD. --------------------------------------------------------- (Name of Person(s) Filing Statement) Common Stock, $1.67 par value --------------------------------------------------------- (Title of Class of Securities) 159057108 --------------------------------------------------------- (CUSIP Number of Class of Securities) David G. McLane, Gardere Wynne Sewell LLP, 1601 Elm Street, Suite 3000, Dallas, TX 75201 Telephone Number: (214) 999-3000 --------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications of Behalf of Person(s) Filing Statement) This statement is filed in connection with (check the appropriate box): a. [x] The filing of solicitation materials or an information statement subject to Regulation 14A (Sections 240.14a-1 through 240.14b-2), Regulation 14C (Sections 240.14c-1 through 240.14c-101)or Rule 13e-3(c) (Section 240.13e-3(c)) under the Securities Exchange Act of 1934 (the "Act"). b. [ ] The filing of a registration statement under the Securities Act of 1933. c. [ ] A tender offer. d. [ ] None of the above. Check the following box if the soliciting materials or information statement referred to in checking box (a) are preliminary copies: [x] Check the following box if the filing is a final amendment reporting results of the transaction: [ ] Calculation of Filing Fee Transaction Valuation Amount of Filing Fee $13,829,360(1) $2,765.87 (1) Price to be paid for an estimated 1,382,936 shares for which cash is to be paid in lieu of fractional shares. [ ] Check box if any part of the fee is offset as provided by Section 240.0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Form or Registration No.: Filing Party: Date Filed: 1 INTRODUCTION This Rule 13e-3 Transaction Statement on Schedule 13E-3 (the "Statement") involves a transaction subject to Regulation 14A of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the information contained in the Proxy Statement, filed concurrently herewith by Chandler Insurance Company, Ltd. (the "Company"), is incorporated by reference into the Statement. This Statement is being filed by the Company in connection with a proposed reverse stock split that, if effected, will result in the deregistration of common shares, $1.67 par value per share (the "Common Shares"), of the Company. Item 1. Summary Term Sheet The information set forth under the caption "SUMMARY" of the preliminary proxy statement filed by the Company on November 22, 2000 (the "Proxy Statement") is incorporated herein by reference. Item 2. Subject Company Information (a) The information set forth on Page 1 of the Proxy Statement is incorporated herein by reference. (b) The information set forth under the caption "GENERAL INFORMATION- Voting Securities and Record Date" of the Proxy Statement is incorporated herein by reference. (c) The information set forth under the caption "THE COMPANY-Price Range of Common Shares; Dividends" of the Proxy Statement is incorporated herein by reference. (d) The information set forth under the caption "THE COMPANY-Price Range of Common Shares; Dividends" of the Proxy Statement is incorporated herein by reference. (e) Not applicable. (f) The information set forth under the caption "THE COMPANY-Share Purchases" of the Proxy Statement is incorporated herein by reference. Item 3. Identity and Background of Filing Person (a)-(c) This Statement is being filed by the Company, whose address is Anderson Square, Fifth Floor, Grand Cayman, Cayman Islands, B.W.I. and whose phone number is (345) 949-8177. The information set forth in the introductory paragraph under the caption "THE COMPANY" and under the caption "THE COMPANY-Executive Officers and Directors" of the Proxy Statement is incorporated herein by reference. Item 4. Terms of the Transaction (a) The information set forth under the following captions of the Proxy Statement is incorporated herein by reference: "GENERAL INFORMATION -Quorum and Vote Required"; "THE RECAPITALIZATION PLAN"; "SPECIAL FACTORS-Interests of Certain Persons and -Material U.S. Federal Tax Consequences" 2 (c) The information set forth under the captions "THE RECAPITALIZATION PLAN-Description of Recapitalization Plan and -Effects of the Recapitalization Plan" and "SPECIAL FACTORS-Interests of Certain Persons" of the Proxy Statement is incorporated herein by reference. (d) The information set forth under the caption "SPECIAL FACTORS-Dissenters' Appraisal Rights" of the Proxy Statement is incorporated herein by reference. (e) The Company has not made any provision in connection with the transaction to provide unaffiliated security holders access to the files of the Company or to obtain counsel or appraisal services at the expense of the Company. (f) Not applicable. Item 5. Past Contacts, Transactions, Negotiations and Agreements (a)-(c) The information set forth under the caption "THE COMPANY-Certain Relationships and Related Transactions" of the Proxy Statement is incorporated herein by reference. (e) The information set forth under the caption "THE RECAPITALIZATION PLAN-Description of the Recapitalization Plan" of the Proxy Statement is incorporated herein by reference. Item 6. Purposes of the Transaction and Plans or Proposals (b) The information set forth under the caption "THE RECAPITALIZATION PLAN-Effects of the Recapitalization Plan" of the Proxy Statement is incorporated herein by reference. (c) The information set forth under the following captions of the Proxy Statement are incorporated herein by reference: "THE RECAPITALIZATION PLAN-Description of Recapitalization Plan, -Effective Date of Recapitalization Plan, -Effects of the Recapitalization Plan, and -Comparison of Capital Stock Before and After Recapitalization Plan"; "SPECIAL FACTORS--Conduct of the Company's Business After the Recapitalization Plan." Item 7. Purposes, Alternatives, Reasons and Effects (a)-(d) The information set forth under the following captions of the Proxy Statement are incorporated herein by reference: "THE RECAPITALIZATION PLAN-Effects of the Recapitalization Plan, -Reasons for and Purpose of the Recapitalization Plan, -Advantages and Disadvantages of the Recapitalization Plan" and "SPECIAL FACTORS-Background of the Recapitalization Plan and -Material U.S. Federal Tax Consequences." Item 8. Fairness of the Transaction (a)-(e) The information set forth under the following captions of the Proxy Statement are incorporated by reference: "GENERAL INFORMATION- 3 Quorum and Vote Required"; "SPECIAL FACTORS-Background of the Recapitalization Plan, -Recommendation of the Special Committee and Board of Directors; Fairness of the Recapitalization Plan and -Valuation Report and Opinion." (f) Not applicable Item 9. Reports, Opinions, Appraisals and Negotiations (a)-(c) The information set forth under the captions "SPECIAL FACTORS-Background of the Recapitalization Plan, -Recommendation of the Special Committee and Board of Directors; Fairness of the Recapitalization Plan, and -Valuation Report and Opinion of Financial Advisor" and Appendix C of the Proxy Statement Exhibit C(1) hereto is incorporated herein by reference. Item 10. Source and Amounts of Funds or Other Consideration (a)-(d) The information set forth under the caption "SPECIAL FACTORS-Source of Funds" of the Proxy Statement is incorporated herein by reference. Item 11. Interests in Securities of the Subject Company (a) The information set forth under the caption "SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT" of the Proxy Statement is incorporated herein by reference. (b) The information set forth under the caption "THE COMPANY-Share Purchases" of the Proxy Statement is incorporated herein by reference. Item 12. The Solicitation or Recommendation (d)-(e) The information set forth under the caption "GENERAL INFORMATION-Quorum and Vote Required" of the Proxy Statement is incorporated herein by reference. Item 13. Financial Statements (a) The information set forth under the caption "THE COMPANY-Financial Information" of the Proxy Statement is incorporated herein by reference. (b) Not material. Item 14. Persons/Assets, Retained, Employed, Compensated or Used (a) Not applicable. (b) The information set forth under the caption "SPECIAL FACTORS-Source of Funds" of the Proxy Statement is incorporated herein by reference. Item 15. Additional Information 4 (b) All of the information set forth in the Proxy Statement is incorporated herein by reference. Item 16. Exhibits (a) Proxy Statement of the Company, including all appendices thereto and related Notice of Special Meeting of Shareholders, incorporated herein by reference to the Proxy Statement filed contemporaneously with this Statement. (b) Loan Agreement between the Company and Chandler Insurance (Barbados), Ltd.* (c) Fairness Opinion of Stephen, Inc., dated November 14, 2000, incorporated herein by reference to Appendix C to the Proxy Statement filed contemporaneously with this Statement. (d)(1) Form of Repurchase and Subscription Agreement by and among the Company and purchasers of Class A Common Shares. (2) Form of Repurchase and Subscription Agreement by and among the Company and purchasers of Series B Preferred Shares. (3) Form of Repurchase and Subscription Agreement by and among the Company and purchasers of Series C Preferred Shares. (f) Not applicable. (g) Not applicable. *To be filed by amendment. 5 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. CHANDLER INSURANCE COMPANY, LTD. November 22, 2000 By: /s/ W. Brent LaGere -------------------------- W. Brent LaGere, President 6