-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, P0cw32Izelscjb8VtrYR6VwiIepzsX8YiuCp5Q1OgoSbErCc3WtqurAmngkrIGZN iO2nDbQKODBnnDfqglrocQ== 0000927016-98-004100.txt : 19981119 0000927016-98-004100.hdr.sgml : 19981119 ACCESSION NUMBER: 0000927016-98-004100 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19981118 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS CORP /DE/ CENTRAL INDEX KEY: 0000895469 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 043178765 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-54783 FILM NUMBER: 98754527 BUSINESS ADDRESS: STREET 1: 440 LINCOLN ST CITY: WORCESTER STATE: MA ZIP: 01653 BUSINESS PHONE: 5088551000 MAIL ADDRESS: STREET 1: 440 LINCOLN STREET CITY: WORCESTER STATE: MA ZIP: 01653 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ALLMERICA FINANCIAL CORP CENTRAL INDEX KEY: 0000944695 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 043263626 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 440 LINCOLN ST CITY: WORCESTER STATE: MA ZIP: 01653 BUSINESS PHONE: 5088551000 MAIL ADDRESS: STREET 1: 440 LINCOLN ST CITY: WORCESTER STATE: MA ZIP: 01653 SC 14D1/A 1 AMENDMENT # 2 TO SCHEDULE 14D-1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------- SCHEDULE 14D-1 (AMENDMENT NO. 2) TENDER OFFER STATEMENT Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934 --------------------------- CITIZENS CORPORATION (Name of Subject Company) ALLMERICA FINANCIAL CORPORATION CITIZENS ACQUISITION CORPORATION (Bidders) COMMON STOCK, $0.01 PAR VALUE (Title of Class of Securities) 01-174533 10 9 (CUSIP Number of Class of Securities) JOHN F. KELLY, ESQ. 440 LINCOLN STREET WORCESTER, MASSACHUSETTS 01653 (508) 855-1000 (Name of Person Authorized to Receive Notices on Behalf of Bidders) Copy to: LAUREN I. NORTON, ESQ. ROPES & GRAY ONE INTERNATIONAL PLACE BOSTON, MASSACHUSETTS 02110 (617) 951-7000 CALCULATION OF FILING FEE - ------------------------------------------------------------------------------- Transaction Value* Amount of Filing Fee - ------------------------------------------------------------------------------- $195,938,925.00 $39,187.79 - -------------------------------------------------------------------------------
* For purposes of calculating the fee only. This amount assumes the purchase of 5,892,900 shares of common stock, par value $.01 per share, of Citizens Corporation at $33.25 net in cash per share, which represents all outstanding shares at October 30, 1998 not owned directly or indirectly by the persons filing this statement. The amount of the filing fee calculated in accordance with Rule 0-11 equals 1/50th of 1% of the value of the shares to be purchased. [X] Check box if any part of the fee is offset as provided by 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: $34,178.82 Filing Parties: Allmerica Financial Corporation and Citizens Acquisition Corporation Form or Registration No.: Schedule 14D-1 Date Filed: November 2, 1998
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- INTRODUCTION Allmerica Financial Corporation ("AFC") and Citizens Acquisition Corporation (the "Purchaser") hereby amend and supplement their Rule 13e-3 Transaction Statement (the "Schedule 13E-3") originally filed on November 2, 1998 and as amended, with respect to the offer to purchase all of the outstanding shares of common stock, par value $0.01 per share (the "Shares"), of Citizens Corporation, a Delaware corporation ("Citizens") that AFC does not already own. The Purchaser has increased the price at which it is offering to purchase the Shares from $29.00 per Share to $33.25 per Share, net to the seller in cash, without interest (as so amended, the "Offer Price") upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 2, 1998 (the "Offer to Purchase"), the Supplement to the Offer to Purchase dated November 16, 1998 (the "Supplement") and in the related Letter of Transmittal and Revised Letter of Transmittal (which collectively constitute the "Offer"), copies of which are filed as Exhibits (d)(1), (d)(2), (d)(9) and (d)(10) hereto, respectively. Capitalized terms used herein but not defined are used as defined in the Schedule 14D-1. ITEM 1. SECURITY AND SUBJECT COMPANY. (c) Item 1(c) of the Schedule 14D-1 is amended and supplemented to incorporate by reference the information set forth in the Supplement under "The Offer--Price Range of Shares; Dividends." ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. (a)-(b) Items 3(a) and 3(b) of Schedule 14D-1 are amended and supplemented to incorporate by reference the information set forth in the Supplement under "Special Factors--Background." ITEM 4. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION. (a)-(b) Items 4(a) and 4(b) of the Schedule 14D-1 are amended and supplemented to incorporate by reference the information set forth in the Supplement under "The Amended Offer--Source and Amount of Funds." ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS. Item 9 of the Schedule 14D-1 is amended and supplemented to incorporate by reference the information set forth in the Supplement under "The Amended Offer--Selected Financial Information of AFC." The incorporation by reference herein of the above referenced financial information does not constitute an admission that such information is material to a decision by a stockholder of Citizens whether to sell, tender or hold shares being sought in the Offer. ITEM 10. ADDITIONAL INFORMATION. Item 10 is amended and supplemented to incorporate by reference the information set forth in the Supplement under "Special Factors--Certain Litigation," "The Amended Offer--Amended Terms of the Offer," "The Amended Offer--Selected Financial Information of Citizens," and "The Amended Offer--Miscellaneous." -2- ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. Item 11 of the Schedule 14D-1 is amended and supplemented to add the following exhibits: (a)(1) Commitment Letter dated November 9, 1998 among The Chase Manhattan Bank, AFC and the Purchaser. (d)(9) Supplement dated November 17, 1998 to the Offer to Purchase. (d)(10) Revised Letter of Transmittal. -3- SIGNATURES After due inquiry and to the best of my knowledge and belief, each of the undersigned certify that the information set forth in this statement is true, complete and correct. Date: November 17, 1998 ALLMERICA FINANCIAL CORPORATION By: /s/ Edward J. Parry, III ------------------------------------- Name: Edward J. Parry, III Title: Vice President, Treasurer and Chief Financial Officer CITIZENS ACQUISITION CORPORATION By: /s/ Edward J. Parry, III --------------------------------------- Name: Edward J. Parry, III Title: President and Treasurer -4- EXHIBIT INDEX EXHIBITS -------- (a)(1) Commitment Letter dated November 9, 1998 among The Chase Manhattan Bank, AFC and the Purchaser. (d)(9) Supplement dated November 17, 1998 to the Offer to Purchase. (d)(10) Revised Letter of Transmittal. EX-99.(A)(1) 2 COMMITMENT LETTER DATED 11/9/98 CHASE MANHATTAN November 9, 1998 Allmerica Financial Corporation 440 Lincoln Street Worcester, Massachusetts 01653 and Citizens Acquisition Corporation c/o Allmerica Financial Corporation Attention: Mr. Edward J. Parry, III Chief Financial Officer Ladies and Gentlemen: You have advised The Chase Manhattan Bank ("Chase") that Allmerica ----- Financial Corporation ("Allmerica"), a Delaware corporation, through Citizens --------- Acquisition Corporation ("Citizens;" collectively with Allmerica, the -------- "Borrower"), intends to acquire from the public (the "Acquisition") the shares -------- ----------- of Citizen Corporation, a Delaware Corporation and a subsidiary of the Borrower, that it does not already own for cash. In that connection, you have requested that Chase agree to provide financing for the Acquisition in an aggregate amount of $200,000,000 (the "Facility"). -------- Chase is pleased to advise you of its commitment to provide the Facility upon the terms and subject to the conditions set forth or referred to in this commitment letter (the "Commitment Letter") and in the Summary of Terms and ----------------- Conditions attached hereto as Exhibit A (the "Term Sheet"). ---------- As consideration for Chase's commitment hereunder and its agreement to perform the services described herein, you agree to pay to Chase the nonrefundable fees set forth in the Fee Letter dated the date hereof and delivered herewith (the "Fee Letter"). ---------- Chase's commitment hereunder and its agreement to perform the services described herein are subject to (a) there not occurring or becoming known to us any material adverse condition or material adverse change in or affecting the business, operations, property or condition (financial or otherwise) of the Borrower and its subsidiaries, taken as a whole, (b) our not becoming aware after the date hereof of any information or other matter affecting the Borrower or its subsidiaries or the transactions contemplated hereby which is inconsistent in a material and adverse manner with any such information or other matter disclosed to us prior to the date hereof, (c) there not having occurred a material disruption of or material adverse change in financial, banking or capital market conditions, (d) the negotiation, execution and delivery on or before November 13, 1998 of definitive credit documentation ("Credit ------ Documentation") with respect to the Facility satisfactory to Chase and its - ------------- counsel and (e) the other conditions set forth or referred to in the Term Sheet. The terms and conditions of Chase's commitment hereunder and of the Facility are not limited to those set forth herein and in the Term Sheet. Those matters that are not covered by the provisions hereof and of the Term Sheet are subject to the approval and agreement of Chase and the Borrower. You agree (a) to indemnify and hold harmless Chase, its affiliates and its officers, directors, employees, advisors, and the agents (each an "indemnified ----------- person") from and against any and all losses, claims, damages and liabilities to - ------ which any such indemnified person may become subject arising out of or in connection with this Commitment Letter, the Facility, the use of the proceeds thereof, the acquisition or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any indemnified person is a party thereto, and to reimburse each indemnified person upon demand for any legal or other expenses incurred in connection with investigating or defending any of the foregoing, provided that -------- the foregoing indemnity will not, as to any indemnified person, apply to losses, claims, damages, liabilities or related expenses to the extent they arise from the willful misconduct or gross negligence of such indemnified person, and (b) to reimburse Chase and its affiliates on demand for all reasonable out-of-pocket expenses (including due diligence expenses, syndication expenses, travel expenses, and reasonable fees, charges and disbursements of counsel) incurred in connection with the Facility and any related documentation (including this Commitment Letter, the Term Sheet, the Fee Letter and the Credit Documentation) or the administration, amendment, modification or waiver thereof; provided that (i) the reimbursement for fees and charges of counsel (including costs allocated by Chase's internal legal department) incurred in connection with the Facility and any related documentation shall be limited to $20,000 and (ii) the reimbursement for all other out-of-pocket expenses incurred in connection with the Facility and any related documentation shall be limited to $5,000. No indemnified person shall be liable for any indirect or consequential damages in connection with its activities related to the Facility. The obligations to indemnify each indemnified person and pay such legal and other expenses shall remain effective until the initial funding under the Credit Documentation and thereafter the indemnification and expense reimbursement obligations contained herein shall be superseded by those contained in the Credit Documentation. -2- This Commitment Letter shall not be assignable by you without the prior written consent of Chase (any purported assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original, and all of which, when taken together, shall constitute one agreement. Delivery of an executed signature page of this Commitment Letter by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. This Commitment Letter between you and Chase and the Fee Letter are the only agreements that have been entered into among us with respect to the Facility and set forth the entire understanding of the parties with respect thereto. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York. This Commitment Letter is delivered to you on the understanding that neither this Commitment Letter, the Term Sheet or the Fee Letter nor any of their terms or substance shall be disclosed, directly or indirectly, to any other person except (a) to your officers, agents and advisors who are directly involved in the consideration of this matter or (b) as may be compelled in a judicial or administrative proceeding or as otherwise required by law (in which case you agree to inform us promptly thereof), provided, that the foregoing -------- restrictions shall cease to apply (except in respect of the Fee Letter and its terms and substance) after this Commitment Letter has been accepted by you. Except to the extent otherwise provided herein, the compensation, reimbursement, indemnification and confidentiality provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether the Credit Documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or Chase's commitment hereunder. If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms hereof and of the Term Sheet and the Fee Letter by returning to us executed counterparts hereof and of the Fee Letter not later than 5:00 p.m., New York City time, on November 9, 1998. Chase's commitment and agreements herein will expire at such time in the event Chase has not received such executed counterparts in accordance with the immediately preceding sentence. If this Commitment Letter is accepted by you, Chase's commitment hereunder shall terminate if the Credit Documentation has not been executed and delivered on or before December 1, 1998 (the "Closing Date"). -3- Chase is pleased to have been given the opportunity to assist you in connection with this important financing. Very truly yours, THE CHASE MANHATTAN BANK By: ____________________________ Name: Title: Accepted and agreed to as of the date first written above by: ALLMERICA FINANCIAL CORPORATION By: _____________________________ Name: Title: Dated: November __, 1998 CITIZENS ACQUISITION CORPORATION By: ______________________________ Name: Title: Dated: November __, 1998 -4- EXHIBIT A --------- ALLMERICA FINANCIAL CORPORATION SUMMARY OF TERMS AND CONDITIONS ------------------------------- November 9, 1998 Capitalized terms used and not defined herein or in Annex I hereto have the meanings assigned to such terms in the Commitment Letter to which this Summary of Terms and Conditions is attached. I. Parties ------- Borrowers: Allmerica Financial Corporation and Citizens --------- Acquisition Corporation, as joint and several obligors (collectively, the "Borrower"). -------- Lender: The Chase Manhattan Bank ("Chase"). ------ ----- II. The Facility ------------ Type and Amount: Single draw term loan in an aggregate amount of up to --------------- $200,000,000 (the "Loan"). ---- Availability: The Loan shall be available for drawdown any time ------------ during the period (the "Availability Period") commencing on the Closing Date and ending on January 31, 1999 (the "Maturity Date"). ------------- Maturity: Six months from the Closing Date. -------- Purpose: The proceeds of the Loan shall be used to finance the ------- acquisition from the public of shares of Citizens Corporation. III Certain Payment ---------------- Provisions: ---------- Fees and Interest ----------------- Rates: Appendix II ----- Optional Prepayments -------------------- and Commitment -------------- Reductions: The Loan may be prepaid in minimums of $5,000,000 ----------- and the commitment may be reduced by the Borrower in minimums of $5,000,000, each without premium or penalty except for the broken-funding payments provided in the next sentence. Prepayment of a Eurodollar Loan or Money Market Loan prior to the last day of an Interest Period or maturity, respectively, require broken-funding payments. IV. Certain Conditions ------------------ Conditions: The availability of the Loan shall be conditioned ---------- upon satisfaction of, among other things, the following conditions precedent: (a) The Borrower shall have executed and delivered satisfactory definitive financing documentation with respect to the Loan (the "Credit Documentation"). -------------------- (b) Chase shall have received all fees required to be paid, and all expenses for which invoices have been presented, on or before the Closing Date. (c) The Lender shall have received an opinion from counsel to the Borrower with respect to the Loan and the Credit Documentation. -2- (d) The representations and warranties (including, without limitation, the material adverse change and material litigation representations) contained in the Credit Documentation shall be accurate on the Closing Date and on the date of drawdown of the Loan. (e) No default or event of default shall exist on the Closing Date and at the time of the drawdown of the Loan. V. Certain Documentation --------------------- Matters: The Credit Documentation shall contain ------- representations, warranties, covenants, events of default, yield protection provisions, assignment and participation provisions, indemnification and expenses provisions and governing law and jurisdiction provisions substantially the same as those contained in the Borrower's Credit Agreement dated as of May 29, 1998 with Chase, as administrative agent and Fleet National Bank, as co- agent, and the Lenders party thereto. -3- Annex I ------- Interest and Certain Fees ------------------------- Interest Rate Options: The Borrower may elect that the Loan bear --------------------- interest at a rate per annum equal to: the Base Rate or; the Eurodollar Rate plus the Eurodollar borrowing margin; or a short term money market rate offered by the Lender in its sole discretion ("Money Market ------------ Rate") and accepted by the Borrower. ---- As used herein: "Base Rate" means the higher of (i) the rate of --------- interest publicly announced by Chase as its prime rate in effect at its principal office in New York City (the "Prime Rate") and (ii) the federal funds ---------- rate from time to time plus 0.5%. ---- "Eurodollar Rate" will be established by reference --------------- to the display screen designated as Page 3750 on the Telerate Service at 11:00 a.m., London time, on the date that is two business days prior to the date of the Loan. If the Telerate Service is not available on such business day Chase will be selected as reference bank to establish the Eurodollar Rate. The Base Rate and Money Market Rate may be elected on one business day notice and the Eurodollar rate may be elected on 3 business days' notice. Interest Periods; Maturity: Interest for any Eurodollar Loan shall be -------------------------- determined for periods ("Interest Periods") of ---------------- one, two, three or six months (as selected by the Borrower). The maturity of any Money Market Loan shall be as offered by the Lender and accepted by the Borrower at the time such loan is made. Interest Payment Dates: In the case of the Loan bearing interest based ---------------------- upon the Base Rate ("Base Rate Loan"), quarterly -------------- in arrears. In the case of the Loan bearing interest based upon the Eurodollar Rate ("Eurodollar Loan"), on --------------- the last day of each relevant interest period and, in the case of any interest period longer than three months, on each successive date three months after the first day of such Interest Period. In the case of the Loan bearing interest upon a Money Market Rate ("Money Market Loan"), on the ----------------- maturity date therefor. Default Rate: At any time when the Borrower is in default in the ------------ payment of any amount due under the Credit Documentation, the principal of the Loan shall bear interest at 2% above the rate otherwise applicable thereto. Overdue interest, fees and other amounts shall bear interest at 2% above the rate applicable to a Base Rate Loan. Rate and Fee Basis: All per annum rates shall be calculated on the ------------------ basis of a year of 360 days (or 365/366 days, in the case of a Base Rate Loan the interest rate payable on which is then based on the Prime Rate) for actual days elapsed. -2- EX-99.(D)(9) 3 SUPPLEMENT DATED 11/17/98 TO OFFER TO PURCHASE SUPPLEMENT TO OFFER TO PURCHASE DATED NOVEMBER 2, 1998 CITIZENS ACQUISITION CORPORATION A WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION HAS INCREASED ITS OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF CITIZENS CORPORATION TO $33.25 NET PER SHARE - -------------------------------------------------------------------------------- THIS OFFER AND YOUR RIGHT TO WITHDRAW YOUR TENDER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS EXTENDED. - -------------------------------------------------------------------------------- Citizens Acquisition Corporation, a subsidiary of Allmerica Financial Corporation, is offering to purchase all of the outstanding shares of common stock of Citizens Corporation that Allmerica Financial Corporation or its subsidiaries do not already own. If you desire to tender all or any portion of your shares, you should either: . request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you, or . complete and sign the enclosed Letter of Transmittal, and mail or deliver it, together with any other required documents, to the Depositary and tender your shares to the Depositary by either: -- delivering your share certificates with the Letter of Transmittal, or -- arranging for your shares to be transferred by book-entry to the Depositary's account at DTC, as described on page 22 of the Offer to Purchase. If your shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee (in "street name") you must contact such person to tender your shares. You may direct any questions and requests for assistance to the Information Agent or the Dealer Managers at their addresses and telephone numbers shown on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent or from brokers, dealers, commercial banks or trust companies. THIS OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THIS OFFER A NUMBER OF SHARES OF COMMON STOCK OF CITIZENS CORPORATION WHICH, WHEN ADDED TO THE SHARES ALREADY OWNED BY ALLMERICA FINANCIAL CORPORATION OR ITS SUBSIDIARIES, CONSTITUTES AT LEAST 90% OF THE TOTAL SHARES OF COMMON STOCK OF CITIZENS CORPORATION OUTSTANDING. SEE "THE OFFER--CONDITIONS OF THE OFFER." If you desire to tender your shares but cannot before the offer expires because: . your certificates are not immediately available, . you are unable to deliver all of the documents required by the Letter of Transmittal prior to the expiration of the offer, or . you cannot complete the procedure for book-entry transfer on a timely basis, then you may tender your shares by following the procedures for guaranteed delivery as described on pages 22-23 of the Offer to Purchase. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. ---------------- The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. ---------------- THE DATE OF THIS SUPPLEMENT IS NOVEMBER 17, 1998 TABLE OF CONTENTS INTRODUCTION................................................................ 3 SPECIAL FACTORS............................................................. 3 Background................................................................ 3 Fairness of the Transaction............................................... 4 Certain Litigation........................................................ 6 THE AMENDED OFFER........................................................... 6 Amended Terms of the Offer................................................ 6 Procedure for Tendering Shares............................................ 7 Price Range of Shares; Dividends.......................................... 8 Selected Financial Information of AFC..................................... 8 Selected Financial Information of Citizens................................ 10 Source and Amount of Funds................................................ 11 Miscellaneous............................................................. 11
2 TO THE HOLDERS OF COMMON STOCK OF CITIZENS CORPORATION: INTRODUCTION The following information amends and supplements the Offer to Purchase dated November 2, 1998 (the "Offer to Purchase") of Citizens Acquisition Corporation (the "Purchaser"), a Delaware corporation and wholly owned subsidiary of Allmerica Financial Corporation, a Delaware corporation ("AFC"). The Purchaser has increased the price at which it is offering to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Citizens Corporation, a Delaware corporation (the "Company"), that AFC and its subsidiaries do not already own, from $29.00 per Share to $33.25 per Share (as so amended, the "Offer Price"), net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase, this Supplement and in the Letter of Transmittal and the revised Letter of Transmittal (which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer"). Except as otherwise set forth in this Supplement or the revised Letter of Transmittal, the terms and conditions previously set forth in the Offer to Purchase and the related Letter of Transmittal remain applicable in all respects to the Offer and this Supplement should be read in conjunction with the Offer to Purchase. Capitalized terms used herein and otherwise not defined are used as defined in the Offer to Purchase. Procedures for tendering Shares are set forth under the headings "The Offer--Procedures for Tendering Shares" in the Offer to Purchase and under the heading "The Amended Offer--Procedures for Tendering Shares" in this Supplement. The Citizens Special Committee on behalf of Citizens has filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") with the Commission recommending that the Unaffiliated Stockholders accept the Offer and tender their shares. In arriving at its recommendation, the Citizens Special Committee indicates that it considered, among other factors, the opinion of Merrill Lynch & Co. ("Merrill Lynch"), the independent financial advisor to the Citizens Special Committee, to the effect that the Offer Price of $33.25 per Share is fair to the Unaffiliated Stockholders from a financial point of view. SPECIAL FACTORS BACKGROUND Following the commencement of the Offer, the Citizens Special Committee selected Merrill Lynch as its independent financial advisor and Cleary, Gottlieb, Steen & Hamilton ("Cleary Gottlieb") as its legal counsel. On November 8, 1998, a representative of Merrill Lynch contacted AFC management to communicate the view of the Citizens Special Committee that the original $29.00 offer price was not fair to the Unaffiliated Stockholders. Merrill Lynch also communicated the Citizens Special Committee's request that the Offer be conditioned on the tender of a majority of the shares held by the Unaffiliated Stockholders. AFC indicated that in light of ongoing negotiations with the Citizens Special Committee it was unwilling at the time to condition the Offer on the tender of a majority of the shares held by the Unaffiliated Stockholders. On November 9, November 10 and November 11, 1998, representatives of Merrill Lynch, Goldman Sachs and AFC exchanged information and reviewed and discussed certain of their respective valuation analyses and underlying assumptions. On November 11, 1998, members of AFC management and representatives of Goldman Sachs met to review the status of negotiations and discuss how best to proceed. AFC instructed Goldman Sachs to communicate that AFC would be 3 willing to consider increasing the Offer to $30.25 per Share if the Citizens Special Committee was prepared to find that such price was fair to the Unaffiliated Stockholders. On November 12, 1998, Merrill Lynch informed Goldman Sachs that the Citizens Special Committee was of the view that if an offer of $30.25 per Share were to be made, it would be unfair to the Unaffiliated Stockholders. On November 13, 1998, AFC management met and again reviewed the valuation information that was previously provided by Goldman Sachs to the AFC Board on October 27, 1998, as well as the views regarding the valuation of Citizens that Merrill Lynch had expressed during negotiations. AFC management instructed Goldman Sachs to indicate to Merrill Lynch that AFC would consider raising the Offer Price to $32.00 per Share, but only if the Citizens Special Committee would be in a position to make a determination that such price was fair to the Unaffiliated Stockholders. On November 14, 1998, Goldman Sachs presented AFC's proposal to Merrill Lynch. Later on November 14, 1998, Merrill Lynch communicated to Goldman Sachs that the Citizens Special Committee indicated that it would find a $32.00 offer price, if offered, to be inadequate. Throughout November 15 and November 16, 1998, the advisors for the Citizens Special Committee and AFC continued to discuss the terms of the Offer. AFC reviewed the substance of these discussions with its advisors and considered the existence of the lawsuits filed by certain of the Unaffiliated Stockholders. On November 16, 1998, these discussions and considerations resulted in an agreement between the Citizens Special Committee and AFC and the Purchaser pursuant to which AFC and the Purchaser agreed to amend the Offer to increase the Offer Price to $33.25 per Share and the Citizens Special Committee agreed to recommend acceptance of the Offer, as so amended, to the Unaffiliated Stockholders. Later on November 16, 1998, AFC and the Citizens Special Committe on behalf of Citizens issued a joint press release amending the Offer and announcing the Citizens Special Committee's agreement to recommend the Offer as so amended to the Unaffiliated Stockholders. FAIRNESS OF THE TRANSACTION AFC and the Purchaser believe that the Transaction, including the Offer Price and the Merger Price, is fair to the Unaffiliated Stockholders. In making its determination, AFC and the Purchaser considered a number of factors. In particular, AFC and the Purchaser considered the arms-length, good faith negotiations between AFC and the Citizens Special Committee. The fact that Merrill Lynch was prepared to issue a fairness opinion to the effect that the $33.25 per Share Offer Price is fair to the Unaffiliated Stockholders from a financial point of view, that the Citizens Special Committee indicated it would find that the Offer is fair to and in the best interests of the Unaffiliated Stockholders, and that the Citizens Special Committee unanimously agreed to recommend that the Unaffiliated Stockholders accept the Offer. The other factors considered by AFC and the Purchaser in determining that the Offer is fair included the following: . The current and historical trading prices of the Shares and the fact that the $33.25 per Share price to be paid in the Offer and the Merger represents a premium of approximately 20.6% over the closing price of the Shares on October 26, 1998, the last trading day before the public announcement of the Transaction (as reported on the NYSE Composite Tape) and a premium of 22.4% and 24.4% over the average of the closing prices of the Shares for the 30 and 60 day periods, respectively, immediately prior to such public announcement; the fact that while the high closing sales prices of Citizens' common stock for the first and second quarters of 1998 were $34 and $34 5/8, respectively, and were in excess of the Offer Price, the average closing sales prices of Citizens' common stock for the first and second quarters of 1998 were $30.42 and $32.47, respectively. 4 . The information and analyses previously presented by Goldman Sachs, AFC's financial advisor, to the AFC Board on October 27, 1998, including Goldman Sachs' historical stock trading analysis, selected companies analysis, various discounted cash flow analyses and selected transaction analysis. See "Financial Analysis by AFC's Financial Advisor" in the Offer to Purchase. . That the Offer Price and the Merger Price represent a premium of approximately 26.9% over the book value per Share of $26.21 as of June 30, 1998 and a premium of approximately 27% over the book value per Share of $26.11 as of September 30, 1998. . That the Offer Price and the Merger Price represent a premium of approximately 22.9% over the most recent price paid by Citizens for its purchase of Shares. See "Transactions Concerning the Shares" in the Offer to Purchase. . That the terms of the Transaction, including the structural features of the Offer which provide for a prompt cash tender offer for all outstanding Shares held by the Unaffiliated Stockholders to be followed, if certain conditions are satisfied, by a merger for the same consideration, enable the Unaffiliated Stockholders to obtain the benefits of the Transaction in exchange for their Shares at the earliest possible time. . That while the consummation of the Offer is not conditioned on the tender of a majority of the Shares held by the Unaffiliated Stockholders, (i) AFC negotiated and came to an agreement with the independent Citizens Special Committee, (ii) the Citizens Special Committee determined that the Offer is fair to the Unaffiliated Stockholders and (iii) the Citizens Special Committee obtained an opinion of its independent financial advisor, Merrill Lynch, that the Offer Price is fair to the Unaffiliated Stockholders from a financial point of view. . That the Transaction structure permits each Unaffiliated Stockholder to decide whether or not to tender their Shares pursuant to the Offer; that the Transaction structure also provided the Unaffiliated Stockholders the opportunity to discuss their views regarding the Offer with the Citizens Special Committee. . That the Shares have generally had low trading volume and the Offer will provide holders with the opportunity for liquidity, without the transaction costs associated with open-market sales. . AFC's knowledge of the business, assets, operating results and prospects of Citizens, the risks involved in achieving those prospects and the general condition, outlook and trends of the property and casualty industry; the projections of Citizens management for the year ending December 31, 1998, 1999 and 2000 which were utilized by Goldman Sachs in their various analyses of the valuation of Citizens. See "Certain Projections for Citizens" in the Offer to Purchase. . That the Unaffiliated Stockholders would not have the opportunity to participate in any future earnings of Citizens, but that they would receive a fair price for their Shares. . The fact that the plaintiffs in the shareholder litigation brought in connection with the Offer had indicated that the payment of the increased Offer Price of $33.25 was sufficient to settle such lawsuits. See "Certain Litigation." . That AFC has no present intention of selling its Shares to a third party and no third party has made an offer for the Shares. . That the Unaffiliated Stockholders may exercise rights of appraisal under the DGCL in connection with the Merger. AFC and the Purchaser did not find it practicable to, and therefore did not, quantify or otherwise assign relative weights to the individual factors considered in reaching their conclusion as to fairness. Furthermore, while AFC and the Purchaser considered the positive and negative implications of each of the foregoing factors, on balance, AFC and the Purchaser viewed each of these factors favorably. 5 AFC and the Purchaser determined the liquidation value of Citizens to be less than the Offer Price and given that AFC had no intention of liquidating Citizens, AFC and the Purchaser did not find the liquidation value of Citizens to be material to the determination of the Offer Price. AFC and the Purchaser determined the initial Offer Price after considering many factors, including the current and historical trading prices of the Shares, the information and analyses presented by Goldman Sachs and the premium over book value represented by the initial Offer. The initial Offer Price was determined without negotiations with or input by Citizens or the Citizens Special Committee. The $33.25 Offer Price was determined through extensive arms-length negotiations between AFC and the Citizens Special Committee. In determining to seek to acquire the Shares at this time, AFC and the Purchaser considered the initiatives of the new senior management of AFC's property and casualty business to further integrate AFC's various property and casualty businesses, which it believed could be better accomplished with Citizens as a wholly owned subisidary. In considering the procedural fairness of the transaction to the Unaffiliated Shareholders, AFC evaluated seeking to reach an agreement with a special committee of the Citizens Board prior to commencing the Offer. However, AFC decided to first announce promptly its Offer, in order to allow the Unaffiliated Stockholders to independently assess the merit of the Offer, and then negotiate with the Special Committee on behalf of the Unaffiliated Stockholders. AFC believed that this process would provide the Unaffiliated Stockholders with the most information about the Offer, as well as the opportunity to communicate their views directly to the Citizens Special Committee, while still affording them the protection offered by negotiations with the Citizens Special Committee. The AFC Board did not consider any transaction structure other than a tender offer as a means of acquiring the Shares. Citizens has filed a Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") with the Commission recommending acceptance of AFC's amended Offer of $33.25. CERTAIN LITIGATION Since the filing by AFC and the Purchaser of the Schedule 14D-1 on November 2, 1998, an additional lawsuit has been commenced by an Unaffiliated Stockholder in the Delaware Court of Chancery; Hunter v. O'Brien, et al, Civil Action No. 16772. On November 16, 1998, the parties to each of the Delaware actions described in the Offer to Purchase and the parties to the action described above (the "Actions") executed an Memorandum of Understanding (an "MOU") memorializing an agreement-in-principle to settle such Actions. Under the terms of the MOU, the parties to the Actions have agreed to use their best efforts to execute and present a formal Stipulation of Settlement to the Delaware Chancery Court as soon as practicable. In the event that the Delaware Chancery Court approves the proposed settlement, it is anticipated that the Delaware Actions will be dismissed with prejudice as to the individual plaintiffs and the class of Unaffiliated Stockholders. The consideration for the plaintiffs' agreement to such settlement is the right of such plaintiffs to receive, along with each other Unaffiliated Shareholder, the Offer Price (the amount of which had been increased by AFC and the Purchaser during negotiations with the Special Committee from the Offer Price initially proposed by AFC at the time the Actions were instituted). THE AMENDED OFFER AMENDED TERMS OF THE OFFER The price to be paid for Shares purchased pursuant to the Offer has been increased from $29.00 to $33.25 per Share, net to the seller in cash, without interest thereon. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), after the Expiration Date, Purchaser will promptly accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not 6 properly withdrawn in accordance with the section entitled "The Tender Offer-- Withdrawal Rights" of the Offer to Purchase. All stockholders whose Shares are tendered and purchased pursuant to the Offer (including those Shares tendered prior to the date hereof) will receive the increased price. THE EXPIRATION DATE OF THE OFFER HAS NOT BEEN EXTENDED AND THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 2, 1998, unless and until Purchaser extends the period of time during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by Purchaser, shall expire. Shares tendered pursuant to the Offer may be withdrawn in the manner set forth in the section entitled "The Tender Offer--Withdrawal Rights" of the Offer to Purchase at any time unless theretofore accepted for payment as provided in the Offer. In addition to the Purchaser's rights to extend and amend the Offer at any time in its sole discretion, the Purchaser shall not be required to accept for payment, purchase or pay for any tendered Shares, and may terminate the Offer as to any Shares not then paid for, if at any time on or prior to the Expiration Date, any one or more of the events described in the Offer to Purchase under "The Offer--Conditions to Offer" shall occur. PROCEDURE FOR TENDERING SHARES Tendering stockholders may continue to use the original BLUE Letter of Transmittal previously circulated with the Offer to Purchase or may use the revised GREEN Letter of Transmittal circulated with this Supplement. Although the BLUE Letter of Transmittal previously circulated with the Offer to Purchase refers only to the Offer to Purchase, stockholders using such document to tender their Shares will nevertheless receive the increased Offer price of $33.25 per Share for each Share validly tendered (and not properly withdrawn) and accepted for payment pursuant to the Offer, subject to the conditions of the Offer. Tendering stockholders may continue to use the YELLOW Notice of Guaranteed Delivery previously circulated with the Offer to Purchase. STOCKHOLDERS WHO PREVIOUSLY TENDERED THEIR SHARES PURSUANT TO THE OFFER ARE NOT REQUIRED TO TAKE ANY FURTHER ACTION IN ORDER TO RECEIVE THE INCREASED PRICE OF $33.25 PER SHARE, EXCEPT AS MAY BE REQUIRED BY THE PROCEDURE FOR GUARANTEED DELIVERY IF SUCH PROCEDURE WAS UTILIZED. See the section entitled "The Tender Offer--Withdrawal Rights" of the Offer to Purchase for the procedures for withdrawing Shares tendered pursuant to the Offer. 7 PRICE RANGE OF SHARES; DIVIDENDS The common stock of Citizens is traded on the New York Stock Exchange under the symbol "CZC." The following table sets forth, for the fiscal quarters indicated, the high and low closing sales prices per Share as reported on the NYSE Composite Tape and the dividends per Share declared.
HIGH LOW DIVIDENDS --------- --------- --------- 1996 First Quarter................................... $20 1/8 $18 1/2 $0.05 Second Quarter.................................. $19 5/8 $18 $0.05 Third Quarter................................... $22 3/8 $18 1/2 $0.05 Fourth Quarter.................................. $22 3/4 $20 1/8 $0.05 1997 First Quarter................................... $25 1/8 $22 $0.05 Second Quarter.................................. $27 13/16 $23 7/8 $0.05 Third Quarter................................... $30 7/16 $27 13/16 $0.05 Fourth Quarter.................................. $31 1/16 $27 13/16 $0.05 1998 First Quarter................................... $34 $26 11/16 $0.05 Second Quarter.................................. $34 5/8 $30 9/16 $0.05 Third Quarter................................... $31 7/16 $23 7/8 $0.05 Fourth Quarter (through November 16)............ $31 $25 7/8 $0.05
On October 26, 1998, the last full trading day preceding public announcement of the Offer, the closing price per share of Citizens common stock on the NYSE Composite Tape was $27 9/16. November 13, 1998, the last full trading day prior to the announcement of the increased Offer Price, the closing price per share of Citizens common stock on the NYSE Composite Tape was $30 3/8. November 16, 1998, the most recent practicable date prior to the printing of this Supplement, the price per share for the last trade of Citizens common stock before trading of Citizens common stock was halted (prior to the issuance of the press release announcing the increased Offer Price) was $30 7/16. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES PRIOR TO DECIDING WHETHER TO TENDER IN RESPONSE TO THE OFFER. SELECTED FINANCIAL INFORMATION OF AFC Set forth below is certain consolidated financial information with respect to AFC and its subsidiaries excerpted from the information contained in the AFC Annual Report on Form 10-K (the "AFC 10-K") and the AFC Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 (the "AFC 10-Q"). More comprehensive financial information is included in the AFC 10-K and such AFC 10-Q and other documents filed by AFC with the Commission, and the following summary is qualified in its entirety by reference to such information. The AFC 10-K and the AFC 10-Q and such other documents are available for inspection and copies thereof should be obtainable in the manner set forth below under "-- Available Information." Certain prior year amounts have been reclassified to conform to the current year presentation. 8 SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF ALLMERICA FINANCIAL CORPORATION
AT OR FOR THE NINE MONTHS ENDED AT OR FOR THE SEPTEMBER 30, YEAR ENDED DECEMBER 31, ------------------- ----------------------------- 1998 1997 1997 1996 1995 --------- --------- --------- --------- --------- (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS) STATEMENT OF INCOME DATA: Revenues.................... $ 2,564.2 $ 2,543.1 $ 3,395.6 $ 3,285.1 $ 3,263.9 --------- --------- --------- --------- --------- Income before extraordinary item....................... $ 135.3 $ 114.3 $ 209.2 $ 181.9 $ 146.0 Extraordinary item- demutualization expenses(1)................ -- -- -- -- (12.1) --------- --------- --------- --------- --------- Net income.................. $ 135.3 $ 114.3 $ 209.2 $ 181.9 $ 133.9 ========= ========= ========= ========= ========= Net income per share (basic)(2)................. $ 2.26 $ 2.16 $ 3.83 $ 3.63 $ 2.61 ========= ========= ========= ========= ========= Net income per share (diluted)(2)............... $ 2.24 $ 2.16 $ 3.82 $ 3.63 $ 2.61 ========= ========= ========= ========= ========= Adjusted Net Income(3)...... $ 149.3 $ 125.3 $ 181.0 $ 137.9 $ 116.4 ========= ========= ========= ========= ========= BALANCE SHEET DATA (AT PERIOD END): Total assets................ $25,244.6 $21,967.2 $22,549.0 $18,970.3 $17,757.7 Long-term debt.............. 199.5 202.1 202.1 202.2 202.3 Total liabilities........... 22,310.6 19,257.6 19,714.8 16,461.6 15,425.0 Minority interest: Mandatorily redeemable pre- ferred securities of a subsidiary trust holding solely junior subordinated debentures of AFC(4)...... 300.0 300.0 300.0 -- -- Common stock(5)............ 153.7 146.2 152.9 784.0 758.5 --------- --------- --------- --------- --------- 453.7 446.2 452.9 784.0 758.5 Equity...................... 2,480.3 2,263.4 2,381.3 1,724.7 1,574.2
- -------- (1) Demutualization expenses relate to costs associated with conversion from a mutual life insurance company to a stock life insurance company. The demutualization resulted in the issuance of 37.5 million shares of AFC common stock. Concurrent with the demutualization was an initial public offering which resulted in issuance of an additional 12.6 million shares of AFC common stock. The demutualization and initial public offering occurred during the quarter ended December 31, 1995. (2) Net income per share for the nine months ended September 30, 1998 and 1997, and for the years ended December 31, 1997 and 1996 are based on a weighted average of the number of shares outstanding for each period presented. The net income per share for the year ended December 31, 1995 is unaudited and is pro forma based on a weighted average of the number of shares that would have been outstanding for the year had the demutualization transaction and the initial public offering of AFC Common Stock occurred as of January 1, 1995, and does not represent a projection or forecast of AFC's consolidated results of operations for any future period. All earnings per share amounts for all periods presented have been prepared in conformity with Statement of Financial Accounting Standards No. 128, Earnings Per Share. The adoption of the aforementioned standard did not have a material effect on previously reported earnings per share. The diluted weighted average shares outstanding applicable to AFC Common Stock were 60.5 million and 53.0 million for the nine months ended September 30, 1998 and 1997, respectively, and 54.8 million, 50.1 million and 50.1 million for the years ended December 31, 1997, 1996 and 1995, respectively. The basic weighted average shares outstanding for the nine months ended September 30, 1998 and 1997 were 60.0 million and 52.9 million, respectively, and 54.7 million, 50.1 million, and 50.1 million for the years ended December 31, 1997, 1996 and 1995, respectively. (3) Adjusted net income represents net income adjusted to eliminate certain items which management believes are not indicative of overall operating trends, including net realized gains and losses on the sales of investments, net gains and losses on disposals of businesses, extraordinary items, differential earnings tax and certain other items. While these items may be significant components in understanding and assessing AFC's financial performance, management believes adjusted net income enhances an investor's understanding of AFC's results of operations by highlighting net income attributable to the normal, recurring operations of the business. However, adjusted net income should not be construed as a substitute for net income determined in accordance with generally accepted accounting principles. 9 (4) In February 1997, AFC Capital Trust (the "Trust"), a subsidiary business trust of AFC, issued $300.0 million Series A Capital Securities, which pay cumulative dividends at a rate of 8.207% semiannually. The Trust exists for the sole purpose of issuing the Capital Securities and investing the proceeds thereof in an equivalent amount of 8.207% Junior Subordinated Deferrable Interest Debentures due 2027 of AFC. Through certain guarantees, the Subordinated Debentures and the terms of related agreements, AFC has irrevocably and unconditionally guaranteed the obligations of the Trust under the Capital Securities. (5) AFC's interest in APY, through its wholly owned subsidiary SMA Financial Corp., was represented by ownership of 59.5% and 58.3% at December 31, 1996 and December 31, 1995, respectively. Subsequent to the merger of AFC and APY on July 16, 1997, minority interest reflects AFC's interest in Citizens Corporation of 82.5% at September 30, 1997 and December 31, 1997, and 83.2% at September 30, 1998. SELECTED FINANCIAL INFORMATION OF CITIZENS Set forth below is certain selected consolidated financial information with respect to Citizens and its subsidiaries excerpted from the information contained in the Citizens' Annual Report on Form 10- K (the "Citizens 10-K") and Citizens' Quarterly Report on Form 10-Q for the quarter ended September 30, 1998. More comprehensive financial information is included in the Citizens' 10- K and the Citizens' 10-Q and other documents filed by Citizens with the Commission, and the following summary is qualified in its entirety by reference to such information. The Citizens' 10-K and the Citizens' 10-Q and such other documents are available for inspection and copies thereof should be obtainable in the manner set forth below under "--Available Information." SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF CITIZENS CORPORATION
AT OR FOR THE NINE MONTHS ENDED AT OR FOR THE SEPTEMBER 30, YEAR ENDED DECEMBER 31, ----------------------- ----------------------------------- 1998 1997 1997 1996 1995 ----------- ----------- ----------- ----------- ----------- (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND RATIOS) STATEMENT OF INCOME DATA: Revenues................ $ 769.5 $ 741.5 $ 992.4 $ 945.6 $ 906.5 =========== =========== =========== =========== =========== Net income.............. $ 65.0 $ 62.3 $ 94.2 $ 84.1 $ 74.9 Dividends on Series A preferred stock....... -- -- -- -- (2.0) ----------- ----------- ----------- ----------- ----------- Net income available to common shareholders.... $ 65.0 $ 62.3 $ 94.2 $ 84.1 $ 72.9 =========== =========== =========== =========== =========== Per common share data (basic and diluted) Net income available to common shareholders(1)....... $ 1.85 $ 1.77 $ 2.67 $ 2.37 $ 2.02 =========== =========== =========== =========== =========== Adjusted Net Income(2).. $ 43.6 $ 45.7 $ 76.9 $ 75.1 $ 72.5 =========== =========== =========== =========== =========== BALANCE SHEET DATA (AT PERIOD END): Total assets............ $ 2,633.3 $ 2,601.5 $ 2,605.3 $ 2,503.0 $ 2,470.8 Total liabilities....... 1,719.7 1,766.9 1,732.4 1,748.5 1,788.0 Equity.................. 913.6 834.6 872.9 754.5 682.8 ADDITIONAL DATA: Book value per share(1)............... $ 26.11 $ 23.64 $ 24.75 $ 21.39 $ 19.04 Ratio of earnings to fixed charges(3)....... 80.2x 77.9x 63.5x 56.5x 25.3x Statutory combined ratios(4) Citizens............... 103.5 103.5 101.1 100.4 98.6 Property and casualty industry.............. -- 101.1 101.8 105.8 106.5 Cash dividends declared per share.............. $ 0.15 $ 0.15 $ 0.20 $ 0.20 $ 0.20
- -------- (1) All earnings per share amounts for all periods presented have been prepared in conformity with Statement of Financial Accounting Standards No. 128, Earnings Per Share. The adoption of the aforementioned standard had no effect on previously reported earnings per share. The weighted average shares outstanding applicable to Citizens Common Stock 10 were 35.2 million and 35.3 million for the nine months ended September 30, 1998 and 1997, respectively. The weighted average shares outstanding applicable to Citizens Common Stock were 35.3 million, 35.5 million and 36.1 million for the years ended December 31, 1997, 1996 and 1995, respectively. (2) Adjusted net income represents net income adjusted to eliminate certain items which management believes are not indicative of overall operating trends, including net realized gains and losses on the sales of investments. While these items may be significant components in understanding and assessing Citizens' financial performance, management believes adjusted net income enhances an investor's understanding of Citizens' results of operations by highlighting net income attributable to the normal, recurring operations of the business. However, adjusted net income should not be construed as a substitute for net income determined in accordance with generally accepted accounting principles. (3) For purposes of determining the historical ratios of earnings to fixed charges, earnings consist of earnings before federal income taxes plus fixed charges. Fixed charges consist of the portion of operating lease rentals representative of the interest factor. In addition, fixed charges in 1995 include dividends on preferred stock. (4) The amounts presented reflect ratios after policyholder dividends. Industry averages are from A.M. Best. Industry combined ratios after policyholder dividends are not yet published for the nine months ended September 30, 1998. SOURCE AND AMOUNT OF FUNDS If all outstanding Shares (other than shares owned by the Purchaser and Shares subject to Options) are purchased pursuant to the Offer, the maximum amount required by the Purchaser to purchase such Shares will be approximately $195.9 million. In addition, the Purchaser and AFC expect to incur expenses of approximately $2 million in connection with the Transaction. AFC, the Purchaser and The Chase Manhattan Bank ("Chase") have entered into a commitment letter which provides for a $200 million revolving line of credit that expires in June 1999. Borrowings under the line of credit will be unsecured and will bear interest at a rate per annum equal to, at AFC's option, Chase's base rate or the eurodollar rate plus an applicable margin. The commitment letter provides that the loan documentation relating to the revolving line of credit will require AFC to provide Chase certain period financial reports and comply with certain financial ratios. AFC expects to enter into definitive documentation with respect to the revolving line of credit on or prior to December 1, 1998. AFC expects to repay these borrowings with cash from operations. AFC and the Purchaser intend to pay the purchase price for the Shares and any related fees and expenses from borrowings under the Chase line of credit, its working capital and other cash on hand. The Offer is not conditioned upon the closing of the Chase credit facility or upon AFC obtaining any other arrangements for the financing of the Offer. MISCELLANEOUS The Offer is being made to all holders of Shares, but is not being made in any jurisdiction where the making of such would not be in compliance with applicable law. If the Purchaser becomes aware of any state where the making of the Offer is prohibited by applicable law, the Purchaser will make a good faith effort to comply with any such law. If, after the good faith effort, the Purchaser cannot comply with any such law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) holders of Shares in such jurisdiction. In those jurisdictions where securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by Goldman Sachs or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASER OR AFC NOT CONTAINED HEREIN OR IN THE OFFER TO PURCHASE AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. 11 Pursuant to Rules 13e-3 and 14d-1 of the General Rules and Regulations under the Exchange Act, the Purchaser has filed a Schedule 13E-3 and a Schedule 14D- 1, together with exhibits in each case, furnishing additional information with respect to the Offer and Merger. Such Schedule 13E-3, Schedule 14D-1 and any amendments thereto, including exhibits, may be inspected and copies may be obtained at the same places and in the same manner as set forth with respect to information concerning Citizens in "Available Information" in the Offer to Purchase (except that they will not be available at the regional offices of the Commission). Citizens Acquisition Corporation November 17, 1998 12 The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of Citizens or his broker, dealer, commercial bank or other nominee to the Depositary at one of its addresses set forth below. The Depository is: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Hand: By Overnight Courier: By Mail: First Chicago Trust First Chicago Trust Company First Chicago Trust Company of of New York Company New York Tenders & Exchanges of New York Tenders & Exchanges Suite 4680-CIT Tenders & Exchanges c/o Securities Transfer 14 Wall Street, 8th Floor Suite 4660-CIT and New York, NY 10005 P.O. Box 2569 Reporting Services Inc. Jersey City, NJ 07303- 100 William Street, 2569 Galleria New York, NY 10038 Any questions or requests for assistance or additional copies of this Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to the Information Agent at its telephone numbers and location listed below. You may also contact your broker, dealer, commercial bank or trust company or nominee for assistance concerning the Offer. The Information Agent for the Offer is: CORPORATE INVESTOR COMMUNICATIONS, INC. 111 Commerce Road . Carlstadt, New Jersey 07072-2586 Banks and Brokers call (800) 346-7885 All others call Toll Free (888) 296-3503 The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (212) 902-1000 (Call Collect) (800) 323-5678 (Toll Free) EX-99.(D)(10) 4 REVISED LETTER OF TRANSMITTAL REVISED LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF CITIZENS CORPORATION AT $33.25 NET PER SHARE PURSUANT TO THE OFFER TO PURCHASE DATED NOVEMBER 2, 1998, AS SUPPLEMENTED ON NOVEMBER 17, 1998 BY CITIZENS ACQUISITION CORPORATION A WHOLLY OWNED SUBSIDIARY OF ALLMERICA FINANCIAL CORPORATION - ------------------------------------------------------------------------------ THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 2, 1998, UNLESS EXTENDED. - ------------------------------------------------------------------------------ The Letter of Transmittal, certificates for Shares (as defined below) and any other required documents should be sent or delivered by each stockholder of the Company or his broker, dealer, commercial bank or other nominee to the Depositary at one of its addresses set forth below. The Depositary for the Offer is: FIRST CHICAGO TRUST COMPANY OF NEW YORK By Hand: By Overnight Courier: By Mail: First Chicago Trust Company First Chicago Trust First Chicago Trust of New York Company Company Tenders & Exchanges of New York of New York c/o Securities Transfer and Tenders & Exchanges Tenders & Exchanges Reporting Services Inc. Suite 4680-CIT Suite 4660-CIT 100 William Street, 14 Wall Street, 8th P.O. Box 2569 Galleria Floor Jersey City, NJ 07303- New York, NY 10038 New York, NY 10005 2569 ---------------- DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders either if certificates for Shares (as defined below) are to be forwarded herewith or if delivery is to be made by book-entry transfer to the Depositary's account at The Depository Trust Company ("DTC") (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in "THE OFFER--Procedures for Tendering Shares" in the Offer to Purchase (as defined below) and "THE AMENDED OFFER-- Procedure for Tendering Shares" in the Supplement (as defined below). Stockholders whose certificates evidencing Shares ("Share Certificates") are not immediately available or who cannot deliver their Share Certificates (as defined below) and all other documents required hereby to the Depositary prior to the Expiration Date (as defined in "Terms of the Offer" in the Offer to Purchase) or who cannot comply with the book-entry transfer procedures on a timely basis must tender their Shares according to the guaranteed delivery procedure set forth in "THE OFFER--Procedures for Tendering Shares" in the Offer to Purchase and "THE AMENDED OFFER--Procedure for Tendering Shares" in the Supplement. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY [_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ____________________________________________ Account Number: ___________________________________________________________ Transaction Code Number: __________________________________________________ [_] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY SENT TO THE DEPOSITARY PRIOR TO THE DATE HEREOF AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s): ___________________________________________ Window Ticket Number (if any): ____________________________________________ Date of Execution of Notice of Guaranteed Delivery: _______________________ Name of Institution that Guaranteed Delivery: _____________________________ Account Number (if delivered by Book-Entry Transfer): _____________________ Transaction Code Number: __________________________________________________ List below the Share Certificates to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and/or the number of Shares tendered should be listed on a separate signed schedule and attached hereto. DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) SHARE CERTIFICATE(S) AND SHARE(S) TENDERED ON SHARE CERTIFICATE(S) AND SHARE(S) TENDERED (ATTACH ADDITIONAL LIST IF NECESSARY) - ------------------------------------------------------------------------------------------------------- TOTAL NUMBER SHARE OF SHARES NUMBER CERTIFICATE REPRESENTED OF SHARES NUMBER(S)* BY CERTIFICATES* TENDERED** ------------------------------------------------------------------- ------------------------------------------------------------------- ------------------------------------------------------------------- ------------------------------------------------------------------- Total Shares: - -------------------------------------------------------------------------------------------------------
* Need not be completed by stockholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share Certificate delivered to the Depositary are being tendered hereby. See Instruction 4. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Citizens Acquisition Corporation, a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Allmerica Financial Corporation, a Delaware corporation ("AFC"), the above- described shares of common stock, par value $0.01 per share (the "Shares"), of Citizens Corporation, a Delaware corporation ("Citizens"), at a price of $33.25 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 2, 1998 (the "Offer to Purchase"), the Supplement thereto dated November 17, 1998 (the "Supplement"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as amended or supplemented from time to time, together with the Offer to Purchase and the Supplement constitute the "Offer"). The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole or in part from time to time to AFC or one or more direct or indirect wholly owned subsidiaries of AFC, the right to purchase Shares tendered pursuant to the Offer. Subject to and effective upon acceptance for payment of the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby and all other Shares or other securities or property, other than cash dividends, issued or issuable in respect thereof on or after November 2, 1998 (such other Shares, securities or property other than the Shares being referred to herein as the "Other Securities") and irrevocably appoints the Depositary the true and lawful agent and attorney-in- fact of the undersigned with respect to such Shares and all Other Securities with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (a) deliver Share Certificates evidencing such Shares and all Other Securities, or transfer ownership of such Shares and all Other Securities on the account books maintained by the Book- Entry Transfer Facility, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, upon receipt by the Depositary, as the undersigned's agent, of the purchase price (adjusted, if appropriate, as provided in the Offer to Purchase and the Supplement), (b) present such Shares and all Other Securities for transfer on the books of Citizens, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Other Securities, all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints AFC, the Purchaser, and each of them or any other designees of AFC or the Purchaser, the attorneys and proxies of the undersigned, each with full power of substitution, to the full extent of the undersigned's rights, including to exercise such voting and other rights as each such attorney and proxy or his (or her) substitute shall, in his (or her) sole discretion, deem proper, and otherwise act (including pursuant to written consent), with respect to all of the Shares tendered hereby which have been accepted for payment by the Purchaser (and any and all Other Securities issued or issuable in respect thereof on or after November 2, 1998), which the undersigned is entitled to vote at any meeting of stockholders of Citizens (whether annual or special and whether or not an adjourned meeting), or written consent in lieu of such meeting, or otherwise. This proxy and power of attorney is coupled with an interest in the Shares tendered hereby and is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by the Purchaser in accordance with the terms of the Offer. Such acceptance for payment shall, without further action, revoke all prior proxies and consents granted by the undersigned with respect to such Shares (and all Shares and other securities issued in Other Securities in respect of such Shares), and no subsequent proxy or power of attorney or written consent shall be given (and if given or executed, shall be deemed not to be effective) with respect thereto by the undersigned. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser is able to exercise full voting and other rights with respect to such Shares (including voting at any meeting of stockholders then scheduled or acting by written consent without a meeting). By accepting the Offer through the tender of Shares pursuant to the Offer, the undersigned hereby agrees to release, and hereby releases, all claims with respect to and in respect of the Shares other than the right to receive payment for such tendered shares and that, upon payment for the Shares, the undersigned waives any right to attack, and will be barred from thereafter attacking, in any legal proceeding the fairness of the consideration paid in the Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Other Securities, and that when such Shares are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Shares and Other Securities will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver any signature guarantees or additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Other Securities. In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser all Other Securities in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and pending such remittance or appropriate assurance thereof the Purchaser shall be entitled to all rights and privileges as owner of such Other Securities and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Purchaser in its sole discretion. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned. Except as stated in the Offer to Purchase and the Supplement, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in "THE OFFER--Procedures for Tendering Shares" in the Offer to Purchase, "THE AMENDED OFFER--Procedure for Tendering Shares" in the Supplement and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase and the Supplement, the Purchaser may not be required to accept for payment any of the Shares tendered hereby. Unless otherwise indicated herein under "Special Payment Instructions," the Undersigned authorizes the issuer to issue the check for the purchase price and/or return any Share Certificates evidencing Shares not tendered or not accepted for payment in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," the Undersigned authorizes the issuer to mail the check for the purchase price and/or return any Share Certificates evidencing Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Shares Tendered." In the event that both the Special Delivery Instructions and the Special Payment Instructions are completed, the Undersigned authorizes the issuer to issue the check for the purchase price and/or return any Share Certificates evidencing Shares not purchased (together with accompanying documents as appropriate) in the name(s) of, and deliver said check and/or return such Share Certificates to, the person or persons so indicated. The undersigned recognizes that the Purchaser has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered holder(s) thereof if the Purchaser does not accept for payment any of the Shares so tendered. SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6, AND 7) (INSTRUCTIONS 5 AND 7) To be completed ONLY if the To be completed ONLY if the check for the purchase price of check for the purchase price of Shares purchased or Share Shares purchased or Share Certificates evidencing Shares Certificates evidencing Shares not tendered or not purchased are not tendered or not purchased are to be issued in the name of to be mailed to someone other someone other than the than the undersigned, or to the undersigned. undersigned at an address other than that shown under Issue "Description of Shares Tendered." [_] Check and/or [_] Mail Certificate(s) [_] Check and/or [_] Certificate(s) To: __________________________________ To: NAME(S) (PLEASE PRINT __________________________________ __________________________________ __________________________________ NAME(S) (PLEASE PRINT) ADDRESS __________________________________ __________________________________ (INCLUDE ZIP CODE) __________________________________ __________________________________ (TAXPAYER IDENTIFICATION OR ADDRESS SOCIAL SECURITY NO.) (SEE SUBSTITUTE FORM W-9) __________________________________ (INCLUDE ZIP CODE) STOCKHOLDERS SIGN HERE (ALSO COMPLETE SUBSTITUTE FORM W-9) ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- SIGNATURE(S) OF STOCKHOLDER(S) (Must be signed by registered holder(s) exactly as name(s) appear(s) on share certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or any other person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.) PLEASE PRINT OR TYPE Name(s) _____________________________________________________________________ ----------------------------------------------------------------------------- (PLEASE PRINT OR TYPE) Capacity (Full Title) _______________________________________________________ Address _____________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone Number (Home) _____________________________________________________ Area Code and Telephone Number (Business) _________________________________________________ Tax Identification or Social Security Number ______________________________________________________ (COMPLETE SUBSTITUTE FORM W-9 BELOW) GUARANTEE OF SIGNATURE(S) (IF REQUIRED--SEE INSTRUCTIONS 1 AND 5) Authorized Signature ________________________________________________________ Name ________________________________________________________________________ (PLEASE PRINT OR TYPE) Full Title __________________________________________________________________ Name of Firm ________________________________________________________________ Address _____________________________________________________________________ ZIP CODE Area Code and Telephone Number ____________________________________________________________ Dated: ____________________________ , 1998 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. All signatures on this Letter of Transmittal must be guaranteed by a participant in the Security Transfer Agents Medallion Program or any other "eligible guarantor institution" as defined in Rule 17Ad- 15 under the Securities Exchange Act of 1934, as amended (each, an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by the registered holder(s) of Shares (which term, for the purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered hereby and such holder(s) has (have) not completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on this Letter of Transmittal or (ii) such Shares are tendered for the account of an Eligible Institution. See Instruction 5. 2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery Procedures. This Letter of Transmittal is to be completed by stockholders either if Share Certificates are to be forwarded herewith or if a tender of Shares is to be made pursuant to the procedures for delivery by book-entry transfer set forth in "THE OFFER--Procedures for Tendering Shares" in the Offer to Purchase and "THE AMENDED OFFER--Procedure for Tendering Shares" in the Supplement. Share Certificates evidencing all physically tendered Shares, or confirmation ("Book-Entry Confirmation") of any book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of Shares delivered by book-entry transfer as well as a properly completed and duly executed Letter of Transmittal, must be received by the Depositary, at one of the addresses set forth herein prior to the Expiration Date (as defined in "Terms of the Offer" of the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Stockholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot comply with the book-entry transfer procedures on a timely basis may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in "THE OFFER-- Procedures for Tendering Shares" of the Offer to Purchase and "THE AMENDED OFFER--Procedure for Tendering Shares" in the Supplement. Pursuant to such procedure, (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary prior to the Expiration Date and (iii) the Share Certificates evidencing all physically tendered Shares (or Book-Entry Confirmation with respect to such Shares), as well as a properly completed and duly executed Letter of Transmittal with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Depositary within three (3) New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in "THE OFFER--Procedures for Tendering Shares" in the Offer to Purchase and "THE AMENDED OFFER--Procedure for Tendering Shares" in the Supplement. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT SUCH CERTIFICATES AND DOCUMENTS BE SENT BY REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted. All tendering stockholders, by execution of this Letter of Transmittal, waive any right to receive any notice of the acceptance of their Shares for payment. 3. Inadequate Space. If the space provided herein under "Description of Shares Tendered" is inadequate, the certificate numbers and/or the number of Shares tendered should be listed on a separate signed schedule and attached hereto. 4. Partial Tenders. (Not applicable to stockholders who tender by book-entry transfer.) If fewer than all the Shares evidenced by any Share Certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such case, new Share Certificate(s) evidencing the remainder of the Shares that were evidenced by the old Share Certificate(s) will be sent to the registered holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the Share Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several Share Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such Shares. If this Letter of Transmittal is signed by the registered holder(s) of the Shares evidenced by Share Certificates listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to or Share Certificates evidencing Shares not tendered or purchased are to be issued in the name of a person other than the registered holder(s), in which case the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Share Certificate(s). Signatures on such certificates and stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, the Share Certificate(s) evidencing the Shares tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder or holders appear on the Share Certificate(s). Signatures on such Share Certificate(s) or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal or any Share Certificates or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or any person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of such person's authority so to act must be submitted. 6. Stock Transfer Taxes. Except as set forth in this Instruction 6, the Purchaser will pay or cause to be paid any stock transfer taxes with respect to the transfer and sale of Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if Share Certificates evidencing Shares not tendered or purchased are to be registered in the name of, any person other than the registered holder(s), or if Share Certificates evidencing tendered Shares are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such other person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) LISTED IN THIS LETTER OF TRANSMITTAL. 7. Special Payment and Delivery Instructions. If a check for the purchase price of any Shares tendered hereby is to be issued, or Share Certificate(s) evidencing Shares not tendered or not purchased are to be issued, in the name of a person other than the person(s) signing this Letter of Transmittal or if such check or any such Share Certificate is to be sent and/or any Share Certificates are to be returned to someone other than the signer above, or to the signer above but at an address other than that shown in the box entitled "Description of Shares Tendered" on the first page hereof, the appropriate boxes on this Letter of Transmittal should be completed. 8. Request for Assistance or Additional Copies. Requests for assistance may be directed to, or additional copies of the Offer to Purchase, the Supplement, this Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from, the Information Agent or the Dealer Managers at the telephone numbers and address set forth below. Stockholders may also contact their broker, dealer, commercial bank or trust company. 9. Waiver of Conditions. Except as otherwise provided in the Offer to Purchase and the Supplement, the Purchaser reserves the right in its sole discretion to waive in whole or in part at any time or from time to time any of the specified conditions of the Offer or any defect or irregularity in tender with regard to any Shares tendered. 10. Substitute Form W-9. The tendering stockholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN"), generally the stockholder's Social Security Number or Employer Identification Number, on Substitute Form W-9, which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, whether he or she is subject to backup withholding of federal income tax. If a tendering stockholder is subject to backup withholding, he or she must cross out item (2) of the Certification Box on Substitute Form W-9. Failure to provide the information on Substitute Form W-9 may subject the tendering stockholder to 31% federal income tax withholding on the payment of the purchase price. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, he or she should write "Applied For" in the space provided for the TIN in Part I, sign and date the Substitute Form W-9 and sign and date the Certificate of Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of payments for surrendered Shares thereafter until a TIN is provided to the Depositary. 11. Mutilated, Lost, Stolen or Destroyed Certificates. Any holder of a Share Certificate whose certificate(s) has been mutilated, lost, stolen or destroyed should call the Transfer Agent at 1-800-317-4454. IMPORTANT: THIS LETTER OF TRANSMITTAL PROPERLY COMPLETED AND DULY EXECUTED, OR AN AGENT'S MESSAGE IN THE CASE OF A BOOK-ENTRY DELIVERY, TOGETHER WITH CERTIFICATES (OR BOOK-ENTRY CONFIRMATION) AND ALL OTHER REQUIRED DOCUMENTS OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. IMPORTANT TAX INFORMATION Under federal tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary (as payor) with such stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is an individual, the TIN is such stockholder's Social Security Number. If the Depositary is not provided with the correct TIN or an adequate basis for exemption, the stockholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding in an amount equal to 31% of the gross proceeds resulting from the Offer. Certain stockholders (including, among others, certain corporations and foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, that stockholder must submit an IRS Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. If backup withholding applies, the Depositary is required to withhold 31% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of his or her correct TIN by completing the Substitute Form W-9 contained herein, certifying that the TIN provided on the Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and that (1) the stockholder is exempt from backup withholding, (2) the stockholder has not been notified by the Internal Revenue Service that he or she is subject to backup withholding as a result of failure to report all interest or dividends, or (3) the Internal Revenue Service has notified the stockholder that he or she is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The stockholder is required to give the Depositary the Social Security Number or Employer Identification Number of the record owner of the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, he or she should write "Applied For" in the space provided for the TIN in Part I, sign and date the Substitute Form W-9 and sign and date the Certificate of Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price until a TIN is provided to the Depositary. PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK, AS DEPOSITARY PART I--PLEASE PROVIDE YOUR Social Security or TIN IN THE BOX AT RIGHT AND Employee Identification CERTIFY BY SIGNING AND Number DATING BELOW. SUBSTITUTE NAME (Please Print) FORM W-9 ____________________________ (If awaiting TIN ---------------------- DEPARTMENT OF ADDRESS write "applied for") THE TREASURY ____________________________ INTERNAL REVENUE SERVICE CITY STATE ZIP CODE -------------------------------------------------------- PAYOR'S REQUEST FOR PART II--For Payees NOT subject to backup TAXPAYER withholding, see the enclosed Guidelines for IDENTIFICATION Certification of Taxpayer Identification Number on NUMBER (TIN) AND Substitute Form W-9 and complete as instructed CERTIFICATION therein. CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT: 1. The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because either (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. -------------------------------------------------------- CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.) - ------------------------------------------------------------------------------- Signature: ____________________________ Dated: ______________________, 1998 NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9. PAYOR'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK, AS DEPOSITARY CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number within sixty (60) days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. Signatures: ____________________________________ Dated: ___________________ The Information Agent for the Offer is: [LOGO OF CORPORATE INVESTOR COMMUNICATIONS, INC.] The Dealer Managers for the Offer are: GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 (212) 902-1000 (Call Collect) (800) 323-5678 (Toll Free) -----END PRIVACY-ENHANCED MESSAGE-----