SC 13E3/A 1 a2060625zsc13e3a.txt SC 13E3/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 TRANSACTION STATEMENT UNDER SECTION 13(e) OF THE SECURITIES EXCHANGE ACT OF 1934 AND RULE 13e-3 THEREUNDER RULE 13e-3 TRANSACTION STATEMENT (Pursuant to Section 13(E) Of The Securities Exchange Act Of 1934) (Final Amendment) Liberty Financial Companies, Inc. (Name of Issuer) Liberty Financial Companies, Inc. LFC Acquisition Corporation Liberty Mutual Insurance Company (Names of Person(s) Filing Statement) Common Stock, Par Value $0.01 Per Share (Title of Class of Securities) 530512-102 (CUSIP Number of Class of Securities) Christopher C. Mansfield, Esq. Christopher C. Mansfield, Esq. Kevin M. Carome, Esq. Senior Vice President and LFC Acquisition Corporation Senior Vice President and General General Counsel c/o Liberty Mutual Insurance Company Counsel Liberty Mutual Insurance Company 175 Berkeley Street Liberty Financial Companies, Inc. 175 Berkeley Street Boston, MA 02117 600 Atlantic Avenue Boston, MA 02117 (617) 357-9500 Boston, MA 02210 (617) 357-9500 (617) 371-2200
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) ------------------------------------------------------------------- with copies to: Stephen K. Fogg, Esq. William P. Gelnaw, Jr., Esq. McDermott, Will & Emery Choate, Hall & Stewart 28 State Street Exchange Place Boston, Massachusetts 02109 Boston, Massachusetts 02109 (617) 535-4096 (617) 248-5034 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, Regulation 14C, or Rule 13e-3(c) under the Securities Exchange Act of 1934. 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. [ ] Check the following box if the filing is a final amendment reporting the results of the transaction. [ ] -------------------------------------------------------------------------------- CALCULATION OF FILING FEE TRANSACTION VALUATION* AMOUNT OF FILING FEE** $483,290,964 $96,658 -------------------------------------------------------------------------------- * Estimated for the purposes of calculating the amount of the filing fee only. The transaction valuation was determined by multiplying 14,452,480 shares of common stock, par value $0.01 per share, of Liberty Financial Companies, Inc. by $33.44 per share. Such number of shares represents the 48,927,740 shares outstanding as of July 12, 2001, less the 34,475,260 shares of common stock of Liberty Financial Company, Inc. beneficially owned by Liberty Mutual Insurance Company on that date, which shares are not subject to the going-private transaction. ** The amount of the filing fee, calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of 1 percent of the value of the transaction. [X] Check box if any part of the fee is offset as provided by Exchange Act Rule 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: $96,658 Form or Registration No.: PREM 14A Filing Party: Liberty Financial Companies, Inc. CIK Code: 0000936372 File Number: 1-13654 Date Filed: July 17, 2001 2 SECTION 13E-3 TRANSACTION STATEMENT INTRODUCTION This Final Amendment to the Rule 13e-3 Transaction Statement on Schedule 13E-3 is being filed jointly by Liberty Financial Companies, Inc., a Massachusetts corporation, or LFC, Liberty Mutual Insurance Company, a Massachusetts mutual insurance company and LFC's controlling stockholder, or Liberty Mutual, and LFC Acquisition Corporation, a Massachusetts corporation and wholly owned subsidiary of Liberty Mutual, or Merger Sub, in connection with the Agreement and Plan of Merger, dated as of June 4, 2001, or the merger agreement, by and among LFC, Liberty Mutual and Merger Sub. Subject to the satisfaction of certain conditions and the adoption and approval of the merger agreement by LFC's stockholders, Merger Sub will merge with and into LFC, with LFC as the surviving corporation, and each holder of LFC's of common stock, par value $0.01 per share, other than LFC, Liberty Mutual and its affiliates and stockholders who perfect their appraisal rights under Massachusetts law, will be entitled to receive $33.44 in cash per share of LFC common stock, subject to adjustment, as described in the Merger Agreement. Concurrently with the filing of this Final Amendment to the Schedule 13E-3, LFC is filing with the Securities and Exchange Commission a preliminary proxy statement, or the proxy statement, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended, or the Exchange Act, relating to the special meeting of stockholders of LFC pursuant to which the LFC board of directors is soliciting proxies from stockholders of LFC in connection with: - the approval and adoption of the merger agreement; - the authorization and approval of the sale of LFC's annuity and intermediary retail distribution business pursuant to a Stock Purchase Agreement, dated as of May 2, 2001, as amended, by and among LFC, Liberty Financial Services, Inc., a Massachusetts corporation and wholly owned subsidiary of LFC, or LFS, and Sun Life Assurance Company of Canada, a Canadian insurance corporation, or Sun Life, pursuant to which LFC has agreed to sell to Sun Life the direct and indirect subsidiaries of LFC that constitute that business; and - the authorization and approval of the sale of LFC's asset management business pursuant to a Stock Purchase Agreement, dated as of June 4, 2001, by and among LFC, LFS, and Fleet National Bank, a national banking association, or Fleet, pursuant to which LFC has agreed to sell to Fleet the direct and indirect subsidiaries of LFC that constitute that business. A copy of the proxy statement is attached hereto as Exhibit (a)(3), and a copy of the merger agreement is attached as Appendix C to the proxy statement. In this Final Amendment to the Schedule 13E-3, all information concerning LFC has been supplied by LFC, and all information concerning Liberty Mutual and Merger Sub has been provided by Liberty Mutual. All references in this Final Amendment to the Schedule 13E-3 to Items numbered 1001 through 1016 are references to Items contained in Regulation M-A under the Exchange Act. The cross reference sheet below is being supplied pursuant to the General Instructions to Schedule 13E-3 and shows the location in the proxy statement of the information required to be included in response to the items of this Final Amendment to the Schedule 13E-3. The information set forth in the proxy statement, including all schedules, appendixes and exhibits thereto, is hereby expressly incorporated herein by reference and the responses to each item in this Final Amendment to the Schedule 13E-3 are qualified in their entirety by the information contained in the proxy statement and the appendixes thereto. 3 ITEM 1. SUMMARY TERM SHEET. REGULATION M-A ITEM 1001 The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET" and "QUESTIONS AND ANSWERS ABOUT THE MEETING" is incorporated herein by reference. ITEM 2. SUBJECT COMPANY INFORMATION. REGULATION M-A ITEM 1002 (a) NAME AND ADDRESS. The information set forth in the proxy statement under the caption "SUMMARY TERM SHEET" is incorporated herein by reference. (b) SECURITIES. The information set forth in the proxy statement under the captions "INFORMATION ABOUT LFC--Security Ownership of Certain Beneficial Owners and Management" and "INFORMATION CONCERNING THE MEETING--Record Date, Quorum Requirement and Vote Required" is incorporated herein by reference. (c) TRADING MARKET AND PRICE. The information set forth in the proxy statement under the caption "INFORMATION ABOUT LFC--Market Price of LFC Common Stock and Dividends" is incorporated herein by reference. (d) DIVIDENDS. The information set forth in the proxy statement under the caption "INFORMATION ABOUT LFC--Market Price of LFC Common Stock and Dividends" is incorporated herein by reference. (e) PRIOR PUBLIC OFFERINGS. Not applicable. (f) PRIOR STOCK PURCHASES. Merger Sub has not purchased any shares of LFC stock. LFC's board of directors established an optional dividend reinvestment plan, or DRIP, for holders of its capital stock. Liberty Mutual participated in the DRIP from its inception until the first quarter dividend for 2001 when it took its payment in cash. The table below sets forth the price and number of shares of LFC common stock acquired by Liberty Mutual pursuant to the DRIP at the conclusion of each quarter during 1999 and 2000: YEAR 2000
DATE DIVIDEND NO. OF SHARES ISSUED AVG. DAILY PRICE DECLARED DATE PAYABLE TO LIBERTY MUTUAL UNDER DRIP ON DATE PAYABLE First Quarter 02/11/00 03/10/00 174,249 $19.47 Second Quarter 05/10/00 06/09/00 152,820 $22.31 Third Quarter 08/10/00 09/06/00 141,243 $24.25 Fourth Quarter 11/09/00 12/06/00 82,496 $41.69
YEAR 1999
DATE DIVIDEND NO. OF SHARES ISSUED AVG. DAILY PRICE DECLARED DATE PAYABLE TO LIBERTY MUTUAL UNDER DRIP ON DATE PAYABLE First Quarter 02/11/99 03/12/99 152,996 $21.81 Second Quarter 05/12/99 06/11/99 116,232 $28.84 Third Quarter 08/11/99 09/08/99 135,758 $24.78 Fourth Quarter 11/10/99 12/08/99 146,460 $23.06
Liberty Mutual has not acquired any capital stock of LFC in the last two years, other than pursuant to the DRIP. Merger Sub has never acquired or held any shares of LFC's capital stock. ITEM 3. IDENTITY AND BACKGROUND OF THE FILING PERSONS. REGULATION M-A ITEM 1003(a) through (c) (a), (b) NAME AND ADDRESS; BUSINESS AND BACKGROUND OF ENTITIES. The information in the proxy statement under the caption "SUMMARY TERM SHEET" is incorporated herein by reference. LFC Acquisition Corporation, or Merger Sub, which was organized in May, 2001, is a Massachusetts corporation. LFC Acquisition Corporation was organized for the sole purpose of effecting the merger and has not conducted business other than the transactions described in the proxy statement attached as Exhibit (a)(3) hereto. Liberty Mutual is the sole stockholder of LFC Acquisition Corporation. LFC Acquisition Corporation's principal executive offices are located at c/o Liberty Mutual Insurance Company, 175 Berkeley Street, Boston, Massachusetts 02117, and its telephone number is (617) 357-9500. (c) BUSINESS AND BACKGROUND OF NATURAL PERSONS. The address of each of the directors and officers of LFC is c/o Liberty Financial Companies, Inc., 600 Atlantic Avenue, Boston, Massachusetts 02210. All directors and officers of LFC are U.S. citizens. 4 None of LFC's officers and directors have been convicted in a criminal proceeding or found in violation of securities laws in any judicial or administrative proceeding during the past five years. The address of each of the directors and officers of Liberty Mutual is c/o Liberty Mutual Insurance Company, 175 Berkeley Street, Boston, Massachusetts 02117. All directors and officers of Liberty Mutual are U.S. citizens. None of Liberty Mutual's officers and directors have been convicted in a criminal proceeding or found in violation of securities laws in any judicial or administrative proceeding during the past five years. The address of each of the directors and officers of Merger Sub is c/o Liberty Mutual Insurance Company, 175 Berkeley Street, Boston, Massachusetts 02117. All directors and officers of Merger Sub are U.S. citizens. None of Merger Sub's officers and directors have been convicted in a criminal proceeding or found in violation of securities laws in any judicial or administrative proceeding during the past five years. CHARLES I. CLOUGH Chairman and Chief Executive Officer, Clough Director of LFC Capital Partners, LP since January, 2000; Director of Liberty Mutual Chief Investment Strategist at Merrill Lynch Company, Inc. from 1987 through 1999; Chairman of the Board of Trustees of Boston College; Director of Liberty Mutual and Liberty Mutual Fire Insurance Company, an affiliate of Liberty Mutual ("Liberty Fire"). EDMUND F. KELLY Chairman of the Board (since 2000) of LFC, Director and Chairman President and Chief Executive Officer of of the Board of LFC Liberty Mutual and Liberty Fire since April, Director of Liberty Mutual 1998, President and Chief Operating Officer President/Director of Merger Sub prior thereto; Director of Liberty Mutual and certain of its affiliates, including Merger Sub and Citizens Financial Group, Inc. GLENN P. STREHLE Treasurer Emeritus and Advisor to the Director of LFC Chairman and President of the Massachusetts Director of Liberty Mutual Institute of Technology since January, 1999; Treasurer of MIT (and Vice President from 1986 and Vice President for Finance from June 1994) from 1975 through 1998; Director of The Otter Group, Inc., Liberty Mutual and Liberty Fire. 5 PAUL J. DARLING, II Chairman, President and Chief Executive Director of LFC Officer of Corey Steel Company, a Director of Liberty Mutual manufacturer of cold finished steel bars and a metal service center, since 1984; Director of Liberty Mutual, Liberty Fire and Unisource Worldwide, Inc. THOMAS J. MAY Chairman and Chief Executive Officer of NSTAR Director of LFC since 1999; Chairman, President and Chief Director of Liberty Mutual Executive Officer of Boston Edison Company from 1994 to August 1999; Director of FleetBoston Corporation, NSTAR, RCN Corporation, New England Business Service, Inc., Liberty Mutual and Liberty Fire. DR. KENNETH L. ROSE President and Chief Executive Officer of Director of LFC Henkels & McCoy, Inc., a privately held Director of Liberty Mutual engineering and construction company; Director of Liberty Mutual and Liberty Fire. MICHAEL J. BABCOCK Private investor; President and Chief Director of LFC Operating Officer of Leslie Fay Companies, Director of Liberty Mutual Inc., an apparel manufacturer, from 1993 to 1995; Director of Liberty Mutual and Liberty Fire, and HRDQ, Inc. GARY L. COUNTRYMAN President and Chief Executive Officer of LFC Director and Chief Executive since January 13, 2000; Chairman (from 1991 Officer of LFC until 2000) and Chief Executive Officer (from Director of Liberty Mutual 1986 until April 1998) of Liberty Mutual, Director of Liberty Mutual and Liberty Fire; Director of FleetBoston Corporation, NSTAR and Harcourt General, Inc. JOHN P. HAMILL Chairman and Chief Executive Officer of Director of LFC Sovereign Bank New England since January 10, Director of Liberty Mutual 2000; President of Fleet Bank of Massachusetts, N.A. from 1992 to December 31, 1999; Director of Liberty Mutual and Liberty Fire. MARIAN L. HEARD President and Chief Executive Officer of the Director of LFC United Way of Massachusetts Bay and Chief Director of Liberty Mutual Executive Officer of the United Way of New England since 1992; Director of CVS Corporation, FleetBoston Corporation, Liberty Mutual and Liberty Fire and a Director or Trustee of numerous national and local non-profitorganizations. 6 WILLIAM C. VAN FASSEN President and Chief Executive Officer of Blue Director of Liberty Mutual Cross Blue Shield Massachusetts from March, 1992 through the present and Executive Vice President and Chief Operating Officer from June, 1990 through March, 1992; Director of JMS Health, Inc., Tier Technologies and Citizens Bank of Massachusetts; Director of BankBoston from June, 1994 through October, 1999; Director of Liberty Mutual since April, 2001. PAUL G. CONDRIN III Senior Vice President and Chief Financial Senior Vice President and Officer of Liberty Mutual from March, 1997 Chief Financial Officer of through the present; Director, Vice President Liberty Mutual and Treasurer of Merger Sub since Director, Vice President May, 2001; Senior Manager at KPMG Peat and Treasurer of Merger Sub Marwick from July, 1983 through September, 1989. GARY J. OSTROW Vice President and Director of Corporate Director of Corporate Taxation Taxation at Liberty Mutual from 1999 through and Vice President of the present; Vice President of Merger Sub Liberty Mutual since May, 2001; Vice President - Taxes and Vice-President of Merger Sub Tax Counsel at AmerUs Life Holdings, Inc. from 1995 through 1998; and Director of Tax Planning and Compliance at American Mutual Life Ins. Co. from 1992 through 1995. CHRISTOPHER C. MANSFIELD General Counsel of Liberty Mutual since 1985; Senior Vice President and and Director of Merger Sub since May, 2001; General Counsel of from 1975 until 1985, held a variety of other Liberty Mutual positions at Liberty Mutual, including Director of Merger Sub Senior Vice President and Senior Trial Attorney. DEXTER R. LEGG Secretary and Vice President of Liberty Secretary and Vice President Mutual since December, 2000; Chief of Staff of Liberty Mutual at Liberty Mutual from 1998 through 2000; Vice President and Manager of Information Processes at Liberty Mutual from 1995 through 1998; from 1970 through 1998, held a variety of other positions at Liberty Mutual, including Manager - Planning and Development and Chief of Staff. ELLIOT J. WILLIAMS Vice President and Treasurer of Liberty Vice President and Treasurer Mutual from September 1996 to the present; of Liberty Mutual Vice President of Liberty Mutual from 1986 to August 1996; Assistant Treasurer of Liberty Mutual from 1973 through 1986. 7 ANTHONY A. FONTANES Senior Vice President and Chief Investment Senior Vice President and Officer of Liberty Mutual since 1992; Vice Chief Investment Officer of President of Liberty Mutual from 1990 Liberty Mutual through 1992. KEVIN M. CAROME Senior Vice President and General Counsel of Senior Vice President and LFC since August 2000; General Counsel for General Counsel of LFC Liberty Funds Group LLC, a wholly owned subsidiary of LFC from August 1998 to July 2000; Vice President and Associate General Counsel of LFC from August 1993 to August 1998. LINDSAY COOK Executive Vice President of LFC since Executive Vice President of LFC February 1997; Senior Vice President of LFC from February 1994 to February 1997; Vice President of LFC from March 1982 to February 1994. FRANK A. FAGGIANO Senior Vice President of Human Resources of Senior Vice President of LFC since August 1997; Vice President of Human Resources of LFC Human Resources of LFC from July 1989 to August 1997. STEPHEN E. GIBSON President of Liberty Advisors, a unit of LFC President of Liberty Advisors that includes Stein Roe and Colonial since August 2000; held various other executive positions in LFC's asset management business since July 1996; Executive Vice President of Liberty Funds Group from July 1996 to January 1997; Managing Director of Marketing at Putnam Investments from 1993 to July 1996; Executive Vice President of Putnam Mutual Funds from 1992 to 1993. J. ANDREW HILBERT Senior Vice President and Chief Financial Senior Vice President and Officer of LFC since March 1997; Treasurer of Chief Financial Officer of LFC LFC from March 1998 to May 2000; Senior Vice President and Chief Financial Officer of Paul Revere Corporation from October 1995 to March 1998; Partner at Price Waterhouse from 1981 to 1995. C. ALLEN MERRITT, JR. Chief of Staff of LFC since August 2000; Executive Vice President and Executive Vice President of LFC since Chief of Staff of LFC February 1997; Chief Operating Officer of LFC from March 1998 to August 2000; Senior Vice President of LFC from 1987 to February 1997. PORTER P. MORGAN Senior Vice President of Marketing of LFC Senior Vice President of since 1991. Marketing of LFC 8 PHILIP POLKINGHORN President of Keyport Life Insurance Company President of Keyport Life since May 1999; Senior Vice President and Insurance Company Chief Marketing Officer of American General Life Insurance Company from December 1996 to April 1999; Vice President Products of First Colony Life Insurance Company from March to December 1996; Chief Financial Officer Insurance Division of Connecticut Mutual Insurance Services from March 1995 to March 1996; Chief Marketing Officer of Allmerica Insurance Company from March 1993 to March 1994. ITEM 4. TERMS OF THE TRANSACTION. REGULATION M-A ITEM 1004(a) and (c) through (f) (a)(1) TENDER OFFERS. Not applicable. (a)(2)(i) TRANSACTION DESCRIPTION. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE MEETING--Purpose of the Meeting," "SUN LIFE TRANSACTION--AGREEMENTS--The Sun Life Purchase Agreement," "FLEET TRANSACTION--AGREEMENTS--The Fleet Purchase Agreement," "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT," and "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions" is incorporated herein by reference. (a)(2)(ii) CONSIDERATION. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE MEETING--Purpose of the Meeting," and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. (a)(2)(iii) REASONS FOR TRANSACTION. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendation of the Board of Directors," "THE TRANSACTIONS--SPECIAL FACTORS-- LFC's Purpose and Reasons for the Merger," "THE TRANSACTIONS--SPECIAL FACTORS--Liberty Mutual's and Merger Sub's Purpose and Reasons for the Merger" and "THE TRANSACTIONS--SPECIAL FACTORS--Position of Liberty Mutual and Merger Sub as to Fairness of the Transactions" is incorporated herein by reference. (a)(2)(iv) VOTE REQUIRED FOR APPROVAL. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE MEETING--Record Date, Quorum Requirement and Vote Required," and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. (a)(2)(v) DIFFERENCES IN THE RIGHTS OF SECURITY HOLDERS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "THE TRANSACTIONS--SPECIAL FACTORS--Consequences of the Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Interests of Certain Persons in the Transactions and Potential Conflicts of Interest," "THE TRANSACTIONS--SPECIAL FACTORS--U.S. Federal Income Tax Consequences," "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" and "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS--MATTERS PERTAINING TO LIBERTY MUTUAL" is incorporated herein by reference. 9 (a)(2)(vi) ACCOUNTING TREATMENT. The information set forth in the proxy statement under the caption "THE TRANSACTIONS--SPECIAL FACTORS--Accounting Treatment" is incorporated herein by reference. (a)(2)(vii) INCOME TAX CONSEQUENCES. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," and "THE TRANSACTIONS--SPECIAL FACTORS--U.S. Federal Income Tax Consequences" is incorporated herein by reference. (c) DIFFERENT TERMS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "THE TRANSACTIONS--SPECIAL FACTORS--Consequences of the Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Interests of Certain Persons in the Transactions and Potential Conflicts of Interest" and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. (d) APPRAISAL RIGHTS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE MEETING--Appraisal Rights," "APPRAISAL RIGHTS" and in Appendix E to the proxy statement is incorporated herein by reference. (e) PROVISIONS FOR UNAFFILIATED SECURITY HOLDERS. LFC, Liberty Mutual and Merger Sub have made no provisions in connection with the transaction to grant unaffiliated security holders access to corporate files of LFC, Liberty Mutual or Merger Sub or to obtain counsel or appraisal services at the expense of LFC, Liberty Mutual or Merger Sub. (f) ELIGIBILITY FOR LISTING OR TRADING. Not applicable. ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. REGULATION M-A ITEM 1005(a) through (c) and (e) (a) TRANSACTIONS. The information set forth in the proxy statement under the captions "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS--MATTERS PERTAINING TO LIBERTY MUTUAL" and "THE TRANSACTIONS--SPECIAL FACTORS--Interests of Certain Persons in the Transactions and Potential Conflicts of Interest" is incorporated herein by reference. There have been no transactions between Merger Sub and LFC or any of its officers or directors. There have been no transactions during the past two years between any of the officers or directors of any of the filing persons and LFC that would be required to be disclosed under this item. (b),(c) SIGNIFICANT CORPORATE EVENTS; NEGOTIATIONS OR CONTACTS. The information set forth in the proxy statement under the captions "INFORMATION ABOUT LFC--Security Ownership of Certain Beneficial Owners and Management," "INFORMATION ABOUT LFC--Retention Plans," and "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions" is incorporated herein by reference. There have been no significant corporate events (or negotiations or contracts with respect thereto) during the last two years between the Merger Sub or any officer or director of any filing person and LFC. (e) AGREEMENTS INVOLVING THE SUBJECT COMPANY'S SECURITIES. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "INFORMATION ABOUT LFC--Security Ownership of Certain Beneficial Owners and Management," "INFORMATION ABOUT LFC--Retention Plans," "SUN LIFE TRANSACTION--AGREEMENTS--The Sun Life Voting Agreement," "FLEET TRANSACTION--AGREEMENTS--The Fleet Voting Agreement" and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. There are no other agreements, arrangements or understandings between Merger Sub or any officer or director of any filing person and LFC. 10 ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS. REGULATION M-A ITEM 1006(b) and (c)(1) through (8) (b) USE OF SECURITIES ACQUIRED. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Consequences of the Transactions" and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. (c) PLANS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Consequences of the Transactions," "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" and in Appendix C to the proxy statement is incorporated herein by reference. ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS. REGULATION M-A ITEM 1013 (a),(c) PURPOSES; REASONS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of the Board of Directors" and "THE TRANSACTIONS--SPECIAL FACTORS--Position of Liberty Mutual and Merger Sub as to Fairness of the Transactions" is incorporated herein by reference. (b) ALTERNATIVES. The information set forth in the proxy statement under the captions "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of the Board of Directors" and "THE TRANSACTIONS--SPECIAL FACTORS--Opinions of the Financial Advisor" is incorporated herein by reference. (d) EFFECTS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Consequences of the Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--U.S. Federal Income Tax Consequences" and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. ITEM 8. FAIRNESS OF THE TRANSACTION. REGULATION M-A ITEM 1014 (a),(b) FAIRNESS; FACTORS CONSIDERED IN DETERMINING FAIRNESS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of the Board of Directors," "THE TRANSACTIONS--SPECIAL FACTORS--Opinions of the Financial Advisor," and the Opinions of Credit Suisse First Boston Corporation attached as Appendixes D-1, D-2 and D-3, respectively, to the proxy statement is incorporated herein by reference. (c) APPROVAL OF SECURITY HOLDERS. As structured, the transaction under the merger agreement and the other transactions described in the proxy statement do not require approval of at least a majority of the unaffiliated security holders of LFC. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE MEETING--Purpose of the Meeting," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendation of the Board of Directors," "THE GOING 11 PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. (d) UNAFFILIATED REPRESENTATIVE. The non-employee directors of LFC did not retain an unaffiliated representative to act solely on behalf of unaffiliated security holders for purposes of negotiating the terms of the merger agreement or the other transactions described in the proxy statement or for the purpose of preparing a report concerning the fairness of such transactions. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions" and "THE TRANSACTIONS--SPECIAL FACTORS--Interests of Certain Persons in the Transactions and Potential Conflicts of Interest" is incorporated herein by reference. (e) APPROVAL OF DIRECTORS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Background of the Transactions" and "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of the Board of Directors" is incorporated herein by reference. (f) OTHER OFFERS. None. ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS. REGULATION M-A ITEM 1015 (a)-(c) REPORT, OPINION, OR APPRAISAL; PREPARER AND SUMMARY OF THE REPORT, OPINION, OR APPRAISAL; AVAILABILITY OF DOCUMENTS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Opinions of the Financial Advisor," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of the Board of Directors" and the information set forth in the Opinions of Credit Suisse First Boston Corporation attached as Appendixes D-1, D-2 and D-3, respectively, to the proxy statement and in the Actuarial Appraisal of Keyport Life Insurance Company and Subsidiaries as of September 30, 2000 prepared by Milliman USA, a copy of which is attached to this Final Amendment to the Schedule 13E-3 as Exhibit 99(c)(4), is incorporated herein by reference. ITEM 10. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. REGULATION M-A ITEM 1007 (a),(b) SOURCE OF FUNDS; CONDITIONS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET" and "THE TRANSACTIONS--SPECIAL FACTORS--Financing; Source of Funds" is incorporated herein by reference. (c) EXPENSES. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "THE TRANSACTIONS--SPECIAL FACTORS--Fees and Expenses," "SUN LIFE TRANSACTION--AGREEMENTS--The Sun Life Purchase Agreement," "FLEET TRANSACTION--AGREEMENTS--The Fleet Purchase Agreement" and "THE GOING PRIVATE TRANSACTION--THE MERGER AGREEMENT" is incorporated herein by reference. (d) BORROWED FUNDS. Not applicable. 12 ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. REGULATION M-A ITEM 1008 (a) SECURITIES OWNERSHIP. The information set forth in the proxy statement under the caption "INFORMATION ABOUT LFC--Security Ownership of Certain Beneficial Owners and Management" is incorporated herein by reference. (b) SECURITIES TRANSACTIONS. Not applicable. ITEM 12. THE SOLICITATION OR RECOMMENDATION. REGULATION M-A ITEM 1012(d) and (e) (d) INTENT TO TENDER OR VOTE IN A GOING--PRIVATE TRANSACTION. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE MEETING--Purpose of the Meeting," "THE TRANSACTIONS--SPECIAL FACTORS--Interests of Certain Persons in the Transactions and Potential Conflicts of Interest," "THE TRANSACTIONS--SPECIAL FACTORS--Position of Liberty Mutual and Merger Sub as to Fairness of the Transactions," "SUN LIFE TRANSACTION-- AGREEMENTS--The Sun Life Voting Agreement" and "FLEET TRANSACTION-- AGREEMENTS--The Fleet Voting Agreement" is incorporated herein by reference. (e) RECOMMENDATIONS OF OTHERS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE MEETING--Purpose of the Meeting," "THE TRANSACTIONS--SPECIAL FACTORS--Recommendations of the Board of Directors" and "THE TRANSACTIONS--SPECIAL FACTORS--Position of Liberty Mutual and Merger Sub as to Fairness of the Transactions" is incorporated herein by reference. ITEM 13. FINANCIAL STATEMENTS. REGULATION M-A ITEM 1010(a) through (b) (a) FINANCIAL INFORMATION. The information set forth in the proxy statement under the caption "ADDITIONAL INFORMATION" and in Item 8, "Financial Statements and Supplementary Date," of LFC's most recent Annual Report on Form 10-K/A, a copy of which is attached as Appendix H to the proxy statement, and in Item 1, "Financial Statements," of LFC's most recent Quarterly Report on Form 10-Q, a copy of which is attached as Appendix J to the proxy statement, is incorporated herein by reference. (b) PRO FORMA INFORMATION. The information set forth in the proxy statement under the caption "INFORMATION ABOUT LFC--Unaudited Pro Forma Financial Information" is incorporated herein by reference. ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED. REGULATION M-A ITEM 1009 (a),(b) SOLICITATIONS OR RECOMMENDATIONS; EMPLOYEES AND CORPORATE ASSETS. The information set forth in the proxy statement under the captions "SUMMARY TERM SHEET," "QUESTIONS AND ANSWERS ABOUT THE MEETING," "INFORMATION CONCERNING THE 13 MEETING-- Solicitation, Revocation and Use of Proxies," "THE TRANSACTIONS --SPECIAL FACTORS--Opinions of the Financial Advisor" and "THE TRANSACTIONS--SPECIAL FACTORS--Fees and Expenses" is incorporated herein by reference. ITEM 15. ADDITIONAL INFORMATION. REGULATION M-A ITEM 1011(b) (b) OTHER MATERIAL INFORMATION. The entirety of the proxy statement is incorporated herein by reference. ITEM 16. EXHIBITS. REGULATION M-A ITEM 1016(a) through (d), (f) and (g) (a)(1) Letter to stockholders (included in the proxy statement, which is filed herewith as Exhibit (a)(3)). (a)(2) Notice of Special Meeting of Stockholders (included in the proxy statement, which is filed herewith as Exhibit (a)(3)). (a)(3) Proxy statement, including all appendixes hereto. (c)(1) Opinions of Credit Suisse First Boston Corporation (included in the proxy statement, which is filed herewith as Exhibit (a)(3)). (c)(2) Materials prepared by Credit Suisse First Boston Corporation presented to the board of directors of LFC on May 2, 2001. (c)(3) Materials prepared by Credit Suisse First Boston Corporation presented to the board of directors of LFC on June 4, 2001. (c)(4) Actuarial Appraisal of Keyport Life Insurance Company and Subsidiaries as of September 30, 2000 prepared by Milliman USA. (d)(1) Sun Life voting agreement (included in the proxy statement, which is filed herewith as Exhibit (a)(3)). (d)(2) Fleet voting agreement (included in the proxy statement, which is filed herewith as Exhibit (a)(3)). 14 SIGNATURES After due inquiry and to the best of my knowledge and belief, each of the undersigned does certify that the information set forth in this statement is true, complete and correct. Dated: October 9, 2001 LIBERTY FINANCIAL COMPANIES, INC. By: /S/ Kevin M. Carome ----------------------------------------- Kevin M. Carome Senior Vice President and General Counsel LFC ACQUISITION CORPORATION By: /S/ Gary J. Ostrow ----------------------------------------- Gary J. Ostrow Vice President LIBERTY MUTUAL INSURANCE COMPANY By: /S/ Christopher C. Mansfield ----------------------------------------- Christopher C. Mansfield Senior Vice President and General Counsel