General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D General Statement of Beneficial Ownership 21 89K
2: EX-99.A Agreement of Joint Filing 2 9K
3: EX-99.B Investment and Strategic Alliance Agreement 203 480K
4: EX-99.C Certificate of Determination 22 77K
5: EX-99.D Certificate of Amendment 13 43K
6: EX-99.E By-Laws of 20th Century Industries 37 64K
7: EX-99.F Proxy Statement of 20th Century Industries 221 1.16M
8: EX-99.G List of Directors and Officers 28 89K
9: EX-99.H Registration Rights Agreement 14 61K
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __________)*
20th Century Industries
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(Name of Issuer)
COMMON STOCK, WITHOUT PAR VALUE PER SHARE
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(Title of Class of Securities)
901272 20 3
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(CUSIP Number)
WAYLAND M. MEAD, ACTING GENERAL COUNSEL
AMERICAN INTERNATIONAL GROUP, INC.
70 PINE STREET, NYC, NY 10270 (212)770-5121
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
December 16, 1994
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /x/. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
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CUSIP NO. 901272 20 3 Page of Pages
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American International Group, Inc.
IRS No. 13-2592361
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) / /
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Incorporated in the State of Delaware
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SOLE VOTING POWER
7
NUMBER OF -------------------------------------------------------------------------------------------
SHARES SHARED VOTING POWER
BENEFICIALLY 8 34,552,250
OWNED BY -------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9
PERSON -------------------------------------------------------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 34,552,250
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 34,552,250
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 40.59%
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TYPE OF REPORTING PERSON*
14
HC, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 2 of 7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP NO. 901272 20 3 Page of Pages
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
American Home Assurance Company
IRS No. 13-5124990
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) / /
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Incorporated in the State of New York
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SOLE VOTING POWER
7 9,124,125
NUMBER OF -------------------------------------------------------------------------------------------
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY -------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9 9,124,125
PERSON -------------------------------------------------------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 9,124,125
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 10.72%
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TYPE OF REPORTING PERSON*
14
IC, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 2 of 7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP NO. 901272 20 3 Page of Pages
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Commerce & Industry Insurance Company
IRS No. 31-1938623
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) / /
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Incorporated in the State of New York
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SOLE VOTING POWER
7 3,530,450
NUMBER OF -------------------------------------------------------------------------------------------
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY -------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9 3,530,450
PERSON -------------------------------------------------------------------------------------------
WITH SHARED DISPOSITIVE POWER
10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 3,530,450
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 4.15%
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TYPE OF REPORTING PERSON*
14
IC, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 2 of 7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP NO. 901272 20 3 Page of Pages
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
New Hampshire Insurance Company
IRS No. 02-0172170
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) / /
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Incorporated in the State of Pennsylvania
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SOLE VOTING POWER
7 5,295,675
NUMBER OF -------------------------------------------------------------------------------------------
SHARES SHARED VOTING POWER
BENEFICIALLY 8 --
OWNED BY -------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9 5,295,675
PERSON -------------------------------------------------------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 --
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 5,295,675
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 6.22%
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TYPE OF REPORTING PERSON*
14
IC, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 2 of 7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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SCHEDULE 13D
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CUSIP NO. 901272 20 3 Page of Pages
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NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
National Union Fire Insurance Company of Pittsburgh, Pa.
IRS No. 25-0687550
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) / /
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4
WC
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6
Incorporated in the State of Pennsylvania
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SOLE VOTING POWER
7 702,000
NUMBER OF -------------------------------------------------------------------------------------------
SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY -------------------------------------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
REPORTING 9 702,000
PERSON -------------------------------------------------------------------------------------------
WITH SHARED DISPOSITIVE POWER
10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 702,000
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / /
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 0.82%
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TYPE OF REPORTING PERSON*
14
IC, CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 2 of 7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, without par value ("Common
Stock"), of 20th Century Industries, a California corporation ("Company"). The
principal executive offices of the Company are located at 6301 Owensmouth
Avenue, Woodland Hills, California 91367.
ITEM 2. IDENTITY AND BACKGROUND.
(a) through (c). This statement is filed by American International Group,
Inc., a Delaware corporation ("AIG"), on behalf of itself and the following of
its wholly owned subsidiaries (collectively, the "AIG Subs"):
American Home Assurance Company, a New York corporation ("American Home");
Commerce & Industry Insurance Company, a New York corporation ("Commerce &
Industry");
National Union Fire Insurance Company of Pittsburgh, Pa., a Pennsylvania
corporation ("National Union"); and
New Hampshire Insurance Company, a Pennsylvania corporation ("New
Hampshire").
A copy of an Agreement of Joint Filing dated as of December 15, 1994 by and
among AIG, American Home, Commerce & Industry, National Union and New Hampshire
is attached hereto as Exhibit A.
On December 16, 1994 ("Closing Date"), AIG and the Company consummated the
transactions contemplated under the Investment and Strategic Alliance Agreement
dated as of October 17, 1994 ("Investment Agreement") between the Company and
AIG, at which time, for an aggregate purchase price of $216 million:
1. the Company sold, and the AIG Subs purchased,
a. 200,000 shares of the Company's Series A Convertible
Preferred Stock, stated value $1,000 per share ("Series A Preferred
Stock"), which are convertible into shares of Common Stock at a
conversion price of $11.33 (subject to customary antidilution
provisions), and
b. 16 million Series A Warrants ("Series A Warrants") to
purchase an aggregate of 16 million shares of Common Stock at an
exercise price of $13.50 per share (subject to customary antidilution
provisions and further adjustment as described below);
Page 6 of 19 Pages
2. the Company agreed to the issuance to the AIG Subs of Common Stock
upon conversion of the Series A Preferred Stock and upon exercise of the
Series A Warrants in accordance with their terms; and
3. the Company agreed to the issuance to AIG of additional shares of
Series A Preferred Stock ("Earthquake Shares") on the terms described below
at the election of the Company in the event gross losses and allocated loss
adjustment expenses of the Company associated with the January 17, 1994
Northridge, California earthquake ("Northridge Quake") exceed $850 million.
The exercise price per Series A Warrant will be subject to downward
adjustment due to adverse loss development with respect to the Northridge Quake.
In the event total incurred loss and allocated loss adjustment expenses of the
Company with respect to the Northridge Quake exceed $945 million, the exercise
price of the Series A Warrants shall be reduced by $0.08 per share for each
million dollars in excess of $945 million; provided, however, that the exercise
price of the Series A Warrants shall not thereby be reduced below $1.00; and
further provided that no adjustment to the exercise price shall be made with
respect to increases in total incurred loss and allocated loss adjustment
expenses reflected in the Company's financial statements following the 1995
year-end audited financial statements.
A conformed copy of the Investment Agreement generally setting forth the
terms of the Series A Preferred Stock and the Series A Warrants (hereinafter
collectively referred to as the "Company Securities"), the terms under which the
Earthquake Shares will be issued to AIG and the AIG Subs, and the further terms
of the transactions contemplated thereby is attached hereto as Exhibit B. A copy
of the form of the Series A Warrant is attached as Exhibit B to the Investment
Agreement. A copy of the Certificate of Determination for the Series A Preferred
Stock, as filed ("Certificate of Determination"), is attached as Exhibit C
hereto. A copy of the Certificate of Amendment of the Articles of Incorporation
of the Company, as filed ("Certificate of Amendment") is attached as Exhibit D
hereto. A copy of the Amended By-Laws of the Company ("By-Laws") is attached as
Exhibit E hereto. The descriptions set forth in this Form 13D are qualified in
their entirety by reference to the Investment Agreement, the Series A Warrant,
the Certificate of Determination, the Certificate of Amendment and the By-Laws
which are attached hereto. A copy of the Proxy Statement of the Company dated
November 15, 1994 ("Proxy Statement") is also attached as Exhibit F hereto.
AIG is a holding company which, through its subsidiaries, is primarily
engaged in a broad range of insurance and insurance-related activities in the
United States and abroad. AIG, through its subsidiaries, also conducts financial
services activities and
Page 7 of 19 Pages
agency and fee operations. Each of American Home, Commerce & Industry, National
Union and New Hampshire is a multiple line, insurance company which writes
substantially all lines of property and casualty insurance in each state of the
United States and abroad. The principal executive offices of AIG, Commerce &
Industry, National Union and New Hampshire are located at 70 Pine Street, New
York, New York 10270.
Starr International Company, Inc., a private holding company incorporated
in Panama ("SICO"), The Starr Foundation, a New York not-for-profit corporation
("The Starr Foundation"), and C.V. Starr & Co., Inc., a private holding company
incorporated in Delaware ("Starr"), have the right to vote approximately 16.0%,
3.7% and 2.4%, respectively, of the outstanding common stock of AIG. The
principal offices of SICO are located at 29 Richmond Road, Pembroke, Bermuda.
The principal offices of The Starr Foundation and Starr are located at 70 Pine
Street, New York, New York 10270. A list of the directors and officers ("Covered
Persons") of AIG, American Home, Commerce & Industry, National Union, New
Hampshire, SICO, The Starr Foundation and Starr, their business addresses and
principal occupations is attached hereto as Exhibit G. Each of the Covered
Persons is a citizen of the United States, except for Messrs. Manton, Milton and
Edmund Tse who are British subjects, Mr. Cohen who is a Canadian subject and Mr.
Joseph Johnson who is a Bermudian subject.
(d) through (e). During the last five years, none of AIG, SICO, The Starr
Foundation, Starr, American Home, Commerce & Industry, National Union and New
Hampshire, or any of the Covered Persons, has (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to federal or state securities laws or finding any
violations with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the Investment Agreement, the AIG Subs purchased the Series A
Preferred Stock in the following proportions:
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NUMBER OF DOLLAR AMOUNT
NAME OF AIG SUB SHARES PURCHASED OF PURCHASE
--------------- ---------------- --------------
American Home........................................ 100,000 $100.0 million
Commerce & Industry.................................. 40,000 $ 40.0 million
New Hampshire........................................ 60,000 $ 60.0 million
Page 8 of 19 Pages
National Union purchased all of the Series A Warrants issued pursuant to the
Investment Agreement for an aggregate purchase price of $16.0 million. Each of
the AIG Subs used its available working capital to purchase its portion of the
Company Securities.
During the period from May 20, 1991 through October 18, 1991, American Home
purchased 298,000 shares of Common Stock at an aggregate purchase price of
$5,939,712.50. During the period from February 28, 1991 through May 3, 1994,
National Union purchased 602,000 shares of Common Stock at an aggregate purchase
price of $10,789,510.00. Each of American Home and National Union used its
available working capital to purchase its portion of the above-described shares
of Common Stock.
ITEM 4. PURPOSE OF TRANSACTION.
The purpose of the acquisition of the Company Securities by the AIG Subs
was investment. A further discussion of the terms of the transaction is set
forth in the Investment Agreement, the Series A Warrant, the Certificate of
Determination, the Certificate of Amendment, the By-Laws and the Quota Share
Agreements, all of which are attached hereto and incorporated in their entirety
by reference.
a. ACQUISITION OF ADDITIONAL SECURITIES OF THE ISSUER
In addition to the purchase of the Company Securities on the Closing Date,
AIG may, after the Closing Date, receive or be required to purchase additional
shares of Series A Preferred Stock from the Company as follows:
1. Dividends payable with respect to the Series A Preferred Stock may,
at the Company's option, be paid in cash or in kind (whereby the holder
receives, in lieu of cash, shares of Series A Preferred Stock ("PIK
Shares") having a liquidation value equal to the dividends declared) during
the first three years after the Closing Date. Following the third
anniversary of the Closing Date, dividends will be payable only in cash.
2. If at any time the Company's gross losses and allocated loss
adjustment expenses associated with claims resulting from the Northridge
Earthquake exceed $850 million (such excess being referred to herein
as the "Excess Loss Amount"), AIG shall, if requested in writing by the
Company after the Closing Date, contribute to the capital of the Company,
in whole or in part, an amount ("AIG Contribution") up to the lesser of $70
million or the Excess Loss Amount. In consideration of the AIG
Contribution, the Company shall issue to AIG that number of fully paid and
nonassessable Earthquake Shares having an aggregate liquidation value equal
to (a) the amount of the AIG Contribution plus (b) an amount equal to the
product of (i) the AIG Contribution,
Page 9 of 19 Pages
(ii) 0.65 and (iii) the quotient of (A) the number of shares of Common
Stock beneficially owned or obtainable by AIG and its affiliates by virtue
of ownership of the shares of Series A Preferred Stock (including any
additional shares actually issued by virtue of the provision of the
Certificate of Determination governing the Series A Preferred Stock
permitting payment of dividends by the issuance of PIK Shares) and the
Series A Warrants and conversion or exercise thereof divided by (B) the sum
of (1) the total number of shares of Common Stock of the Company
outstanding on October 17, 1994 plus (2) the number of shares referred to
in (A); provided, however, that the aggregate liquidation value of any
Earthquake Shares issued pursuant to the foregoing provisions of the
Investment Agreement (without taking into account any Series A Preferred
Stock issuable as a dividend in kind on any outstanding Series A Preferred
Stock) shall not exceed $87.9725 million.
With respect to additional shares of capital stock of the Company which are not
described, AIG may or may not purchase such additional securities at such time
that it is permitted to do so.
b. EXTRAORDINARY CORPORATE TRANSACTION
Except as set forth in the Investment Agreement, no plans or proposals are
presently contemplated by AIG with respect to any extraordinary corporate
transaction involving the Company and/or its subsidiaries. Article VI of the
Investment Agreement provides that, for a period three years following the
Closing Date (or earlier in certain events), neither AIG nor any of its
subsidiaries will, without the prior approval of the company's Board of
Directors ("Board"):
(i) acquire, offer to acquire or agree to acquire (with certain stated
exceptions in Section 6.1(a) of the Investment Agreement) any outstanding
Common Stock or any other voting securities of the Company or commence any
tender offer or exchange offer to acquire beneficial ownership (as defined
in Rule 13D-3 under the Securities Exchange Act of 1934 ("Exchange Act")
without regard to the 60-day provision in paragraph (d)(1)(i) thereof) of
the Common Stock or any other voting securities of the Company,
(ii) become a member of a 13(d) group within the meaning of Rule 13d-3
under the Exchange Act (a "Group") with respect to any Common Stock or
voting securities of the Company, other than a Group composed solely of
itself and its affiliates, or encourage any other Group to acquire any
Common Stock or other voting securities of the Company (other than in
purchases from AIG),
(iii) solicit any proxies or shareholder consents or become a
participant (other than by voting), or encourage any
Page 10 of 19 Pages
person to become a participant, in a proxy or consent solicitation with
respect to any of the Company's securities (in each case other than
solicitations to holders of Series A Preferred Stock with respect to
matters as to which the Series A Preferred Stock are entitled to vote),
(iv) call any special meeting of shareholders,
(v) make any public proposal to shareholders with respect to any
extraordinary transaction involving the Company, including, but not limited
to, any business combination, restructuring, recapitalization, dissolution
or similar transaction, or
(vi) request in a manner that would require public disclosure of such
request by the Company or AIG that the Company amend any restrictions
set forth in (i) through (v) above.
Notwithstanding the foregoing, AIG and its subsidiaries have the right
under the Investment Agreement freely to acquire securities of the Company in
any manner whatsoever and engage in any of the activities proscribed above, in
the event that (i) an Insolvency Event (as defined in Section 6.1(c) of the
Investment Agreement) occurs; (ii) 60 days after the Company or any of its
subsidiaries is in default under any indebtedness or other borrowing incurred by
it unless such default is cured during such 60-day period; (iii) the Company or
any of its subsidiaries breaches the Investment Agreement, the Series A Warrant,
the Certificate of Determination, the Registration Rights Agreement
or the Quota Share Agreements in any material respect; (iv) any person not
affiliated with AIG acquires, offers to acquire or agrees to acquire beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act without regard to
the 60-day provision in paragraph (d) (1) (i) thereof) of 20% or more of the
outstanding shares of the Common Stock or any other class of the Company's
voting securities, or commences any tender or exchange offer seeking to
acquire any such ownership; (v) a third party engages in a proxy solicitation
for the purpose of removing directors of the Company elected by the Common
Stockholders or influencing the directors' management of the Company; or (vi)
a majority of the directors of the Company elected by the holders of Common
Stock vote to terminate or release AIG from compliance with any or all of the
restrictions set forth above.
In addition, the restrictions do not apply to Common Stock or shares of
other voting securities which as of October 17, 1994 are held or managed as part
of the investment portfolio by subsidiaries of AIG if such subsidiaries have
fiduciary obligations to third parties to take any of such actions.
c. SALE OR TRANSFER OF A MATERIAL AMOUNT OF ASSETS OF THE ISSUER OR ANY OF
ITS SUBSIDIARIES
On the Closing Date, New Hampshire entered into a Quota
Page 11 of 19 Pages
Share Reinsurance Agreement (collectively, the "Quota Share Agreements") with
each of the Company's insurance subsidiaries, 20th Century Insurance Company and
21st Century Casualty Company (collectively, the "Insurance Subs"), providing
for a five-year quota share reinsurance for 10% of each of the Insurance Subs'
policies incepting on and after January 1, 1995. At AIG's option, the agreements
may be renewed annually for four additional one-year terms following the initial
one-year term, with an annual reduction of 2% in the share percentage ceded to
New Hampshire. Copies of the Quota Share Agreements are attached as Exhibit C
to the Investment Agreement.
Section 5.1(b) of the Investment Agreement also provides that, following
the Closing Date, the Company and AIG may from time to time discuss additional
quota share arrangements. In particular, the Company and AIG may discuss an
arrangement whereby (i) the Insurance Subs cede such participation in excess of
the 10% participation pursuant to the Quota Share Agreements as results in an
agreed upon net premium-to-surplus ratio being achieved and (ii) in the event
the Insurance Subs' net premium-to-surplus ratio subsequently improves below
such specified ratio, with increases and reductions in the additional
participation made annually. Neither the Company nor AIG is obligated to enter
into any such arrangement.
In addition, Section 5.2 of the Investment Agreement provides that,
following the Closing Date, the Company and AIG will use their respective best
efforts to negotiate and mutually agree upon a joint venture agreement whereby
the Company and AIG will form a new subsidiary or subsidiaries to engage in the
Company's business in states outside of California.
d. ANY CHANGE IN THE PRESENT BOARD OF DIRECTOR OR MANAGEMENT OF THE ISSUER
As a result of their purchase of the Company Securities, the AIG Subs, as
holders of the Series A Preferred Stock voting as a separate class, are entitled
to elect two of the eleven directors of the Board (such number to be accordingly
adjusted together with increases or decreases in the number of directors on the
Board) (the "Applicable Number"); provided, however, that, until the next
meeting of the Board (to be held in May of 1995), the Board will consist of
twelve members of which the AIG Subs, as holders of the Series A Preferred Stock
voting as a separate class, are entitled to elect two of the twelve directors.
Section 8(b) of the Certificate of Determination also generally provides that
the number of directors elected by the Series A Preferred Stock shall be reduced
by the minimum number of directorships in order that the sum of (i) the
Applicable Number and (ii) the minimum whole number of directors elected
(through the application of cumulative voting) by
Page 12 of 19 Pages
shares of Common Stock (x) obtained upon conversion of the Series A Preferred
Stock or the exercise of the Series A Warrants and (y) held of record by the
holder (or subsidiaries thereof) not equal or exceed a majority of the total
number of directors of the Company.
e. ANY MATERIAL CHANGE IN THE PRESENT CAPITALIZATION OR DIVIDEND POLICY OF THE
ISSUER
In connection with the acquisition of the Company Securities by the AIG
Subs, the Company amended its articles of incorporation on the Closing Date to,
among other things, (i) effect an increase in the number of shares of Common
Stock which the Company is authorized to issue from 80 million shares to 110
million shares and (ii) provide for the creation and issuance of the Series A
Preferred Stock. In seeking the approval of the Department of Insurance of the
State of California ("DOI") to the transactions contemplated by the Investment
Agreement, AIG provided the DOI with written acknowledgement concerning the
discretion of the Board with respect to the payment, from time to time, of cash
interest on the Series A Preferred Stock.
f. ANY OTHER MATERIAL CHANGE IN THE ISSUER'S BUSINESS OR CORPORATE STRUCTURE
In the event that the Company needs to obtain additional capital financing
following any sale of the Earthquake Shares to AIG and any additional or revised
quota share reinsurance arrangements that the Insurance Subs and AIG may enter
into, Section 8.9 of the Investment Agreement provides that the Company shall be
required to develop a capital financing plan which is reasonably acceptable to
AIG.
No other plans or proposals are presently contemplated.
g. CHANGES IN THE ISSUER'S CHARTER, BY-LAWS OR INSTRUMENTS CORRESPONDING
THERETO OR OTHER ACTIONS WHICH MAY IMPEDE THE ACQUISITION OF CONTROL
OF THE ISSUER BY ANY PERSON
In connection with the acquisition of the Company Securities by the AIG
Subs, the Company amended its Certificate on the Closing Date to (i) effect an
increase in the number of shares of Common Stock which the Company is authorized
to issue to 110 million shares, (ii) provide for the creation of the Series A
Preferred Stock, and (iii) effect certain transfer restrictions on the capital
stock of the Company. The By-Laws of the Company were amended to reflect the
amendments to the Company's Certificate, the creation and issuance of the Series
A Preferred Stock and the consummation of the other transactions contemplated by
the Investment Agreement. A copy of the Certificate of Determination for the
Series A Preferred Stock, as filed, is attached as Exhibit C hereto. A copy of
the Certificate of
Page 13 of 19 Pages
Amendment of the Articles of Incorporation of the Company, as filed, is attached
as Exhibit D hereto. A copy of the Amended By-Laws of the Company is attached as
Exhibit E hereto.
Transfer Restrictions on Company Securities
The Company amended its Certificate on the Closing Date to effect transfer
restrictions ("Transfer Restrictions") designed to restrict direct and indirect
transfers of the Company's stock that may result in the imposition of limitation
on the use by the Company, for federal income tax purposes, of net operating
losses (including gross losses and allocated loss adjustment expenses related to
the Northridge Earthquake) and other tax attributes that are and will be
available to the Company to offset taxable income in future years. The
Certificate now generally restricts, until 38 months after the Closing Date (or
earlier in certain events), any direct or indirect transfer of "stock" (which
includes the Company Securities and any other interest treated as "stock" for
purposes of Section 382 of the International Revenue Code of 1986) of the
Company if the effect would be to increase the ownership of stock by any person
who during the preceding three-year period owned more than 4.75% of the
Company's stock, would otherwise increase the percentage of stock owned by a "5
percent shareholder" (as defined in the Code, substituting "4.75 percent" for "5
percent"), or otherwise would cause an "ownership change" of the Company within
the meaning of Section 382.
Transfers in violations of the Transfer Restrictions would be void ab
initio as to the purported transferee and the purported transferee would not be
recognized for any purpose as the owner of the shares ("Excess Stock") owned in
violation of the Transfer Restrictions. Excess Stock is automatically
transferred to a trustee for the benefit of a charitable beneficiary designated
by the Company, effective as of the close of business on the business day prior
to the date of the violative transfer.
The Transfer Restrictions do not apply to: (i) the sale to AIG of the
Series A Preferred Stock, (ii) the sale to AIG of the Series A Warrants, (iii)
the conversion by AIG of Series A Preferred Stock, (iv) the sale by AIG of
shares of Series A Preferred Stock or shares of Common Stock obtained upon
conversion thereof if the sale would not be a Prohibited Transfer under the
Investment Agreement but for AIG's ownership of Stock, in either case in
compliance with the Investment Agreement, (v) any Transfer effected by AIG
permitted by Section 6.1(b) of the Investment Agreement, (vi) any sale effected
by AIG of any securities of the Company acquired after the Closing Date, and
(vii) any transfer which would otherwise be prohibited by the Transfer
Restrictions if the Person to whom the shares will be transferred obtains prior
written approval of the Board, which approval shall be granted in its sole and
absolute discretion after considering all facts and
Page 14 of 19 Pages
circumstances, including but not limited to future events the occurrence of
which are deemed by the Board to be reasonably possible.
A full description of the Transfer Restrictions are attached as Exhibit F
to the Investment Agreement.
Restrictions on Additional Issuances of Capital Stock
The Investment Agreement further provides that the Company may not issue
additional shares of Common Stock or of another class of securities similar
thereto, or any securities, options, warrants or similar rights convertible,
exercisable, exchangeable or having other rights to acquire any such shares
(except of certain issuances of Common Stock pursuant to employee stock option
or employee benefit plans); provided, however, that following the end of the
38th month following the Closing Date (i.e., the period referred to in the
Transfer Restrictions), the Company may issue and sell shares of Common Stock in
a fully distributed public offering, so long as (i) the Company first provides
AIG prior notice of the Company's intent to make such an offering and (ii) the
Company provides AIG a prior opportunity, at AIG's election, either (A) to make
an offer to purchase the outstanding shares of Common Stock of the Company (with
the result that the public offering not proceed) or (B) to preemptively
participate in such Common Stock up to AIG's fully converted/exercised interest
in the Common Stock of the Company at the per share price received by the
Company (i.e., without underwriters' discount) in such public offering.
In addition to the charter and by-law amendments described above and the
other actions taken by the Company as described in this Form, the Company took
the following actions in connection with the issuance and sale of the Company
Securities which may impede the acquisition of control of the Company by any
other person other than AIG:
Voting Rights of the Series A Preferred Stock
The Company will not be entitled, without the approval of holders of a
majority of the outstanding shares of Series A Preferred Stock, to (i)
authorize, issue or sell any shares of any class or series of capital stock of
the Company ranking senior to the Common Stock as to dividend rights or rights
upon liquidation, winding up or dissolution, or any security convertible into,
or exchangeable for or possessing the right to acquire such shares, (ii) amend,
alter or repeal any provisions of its Certificate or Bylaws, (iii) enter into
any consolidation or merger with or into, or sell or convey all or
substantially all of the assets of the Company to, any person or entity or (iv)
make certain extraordinary dividends or other distributions to all holders of
Common Stock; as described in section 8(c)(4) of the Certificate of
Determination; provided, however, that, with respect to clause (iii), after the
third anniversary of the Closing Date, holders of the Series A Preferred Stock
will no longer have a special right to vote with
Page 15 of 19 Pages
respect to such transactions, but will vote together with the Common Stock, as a
single class, and will be entitled to a number of votes equal to the number of
shares of Common Stock into which such shares of Series A Preferred Stock are
convertible on the date the vote is taken or the consent is given.
Registration Rights Agreement
As of the Closing Date, the Series A Preferred Stock and the Series A
Warrants were not listed on any national securities exchange and the issuance of
the Series A Preferred Stock and the Series A Warrants will not be registered
with the SEC and therefore will be restricted securities. However, on the
Closing Date, the Company entered into a Registration Rights Agreement, pursuant
to which AIG or any transferee from AIG in a private transaction will be
entitled to certain additional rights with respect to the registration under the
Securities Act of 1933 of the shares of the Series A Preferred Stock or the
shares of the Series A Warrants purchased upon conversion or exercise of the
Series A Preferred Stock or the Series A Warrants. A copy of the Registration
Rights Agreement is attached as Exhibit H hereto.
h. CAUSING A CLASS OF SECURITIES OF THE ISSUER TO BE DELISTED FROM A NATIONAL
SECURITIES EXCHANGE OR TO CEASE TO BE AUTHORIZED TO BE QUOTED IN AN
INTER-DEALER QUOTATION SYSTEM OF A REGISTERED NATIONAL SECURITIES
ASSOCIATION
No plans or proposals are presently contemplated.
i. CAUSING A CLASS OF SECURITIES OF THE ISSUER TO BECOME ELIGIBLE FOR
TERMINATION OF REGISTRATION PURSUANT TO SECTION 12(G)(4) OF THE SECURITIES
EXCHANGE ACT OF 1934
No plans or proposals are presently contemplated.
j. ANY ACTION SIMILAR TO ANY OF THOSE ENUMERATED ABOVE
No additional plans or proposals are presently contemplated other than
those described elsewhere in this Form.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a) through (b). The information required by these paragraphs is set
forth in Items 7 through 11 and 13 of each of the cover pages of this Schedule
13D and is based upon the number of shares of Common Stock outstanding as of
November 1, 1994 (51,472,471) contained in the Proxy Statement, a copy of which
is attached hereto as Exhibit F.
(c). AIG, American Home, Commerce and Industry, National Union, New
Hampshire, SICO, The Starr Foundation and Starr, and to the best of each of
their knowledge, the Covered Persons, have
Page 16 of 19 Pages
not engaged in any transactions in the Common Stock within the past 60 days
other than those transactions described above occurring on the Closing Date
pursuant to the Investment Agreement.
(d) through (e). Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS & RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Contracts, arrangements, understandings and relationships with respect to
securities of the Company consist of the Investment Agreement, the Series A
Warrant, the Certificate of Determination, the Certificate of Amendment, the
By-Laws, the Quota Share Agreements and the Registration Rights Agreement, each
of which is attached as an exhibit hereto and is incorporated in its entirety by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(A) Agreement of Joint Filing dated as of December 15, 1994 by and among
American International Group, Inc., American Home Assurance Company,
Commerce & Industry Insurance Company, National Union Fire Insurance
Company of Pittsburgh, Pa. and New Hampshire Insurance Company.
(B) Investment and Strategic Alliance Agreement dated as of October 17,
1994 by and between 20th Century Industries and American International
Group, Inc.
(C) Certificate of Determination of 20th Century Industries for Series A
Convertible Preferred Stock, as filed with the Secretary of State of
the State of California.
(D) Certificate of Amendment of 20th Century Industries for Series A
Convertible Preferred Stock, as filed with the Secretary of State of
the State of California.
(E) By-Laws of 20th Century Industries, as in force on December 16, 1994.
(F) Proxy Statement of 20th Century Industries dated November 15, 1994.
(G) List of The Directors and Officers of American International Group,
Inc., American Home Assurance Company, Commerce & Industry Insurance
Company, National Union Fire Insurance Company of Pittsburgh, Pa., New
Hampshire Insurance Company, Starr International Company, Inc., The
Starr Foundation and C.V. Starr & Co., Inc., Their Business Addresses
and
Page 17 of 19 Pages
Principal Occupations.
(H) Registration Rights Agreement dated as of December 16, 1994 by and between
20th Century Industries and American International Group, Inc.
Page 18 of 19 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 23, 1994
AMERICAN INTERNATIONAL GROUP, INC.
By: /s/ Edward E. Matthews
---------------------------------
Edward E. Matthews
Vice Chairman - Finance
AMERICAN HOME ASSURANCE COMPANY
By: /s/ Edward E. Matthews
---------------------------------
Edward E. Matthews
Senior Vice President - Finance
COMMERCE & INDUSTRY INSURANCE COMPANY
By: /s/ Edward E. Matthews
---------------------------------
Edward E. Matthews
Senior Vice President - Finance
NEW HAMPSHIRE INSURANCE COMPANY
By: /s/ Edward E. Matthews
---------------------------------
Edward E. Matthews
Vice President
NATIONAL UNION FIRE INSURANCE COMPANY
OF PITTSBURGH, PA.
By: /s/ Edward E. Matthews
---------------------------------
Edward E. Matthews
Senior Vice President - Finance
Page 19 of 19 Pages
EXHIBIT INDEX
(A) Agreement of Joint Filing dated as of December 15, 1994 by and among
American International Group, Inc., American Home Assurance Company,
Commerce & Industry Insurance Company, National Union Fire Insurance
Company of Pittsburgh, Pa. and New Hampshire Insurance Company.
(B) Investment and Strategic Alliance Agreement dated as of October 17,
1994 by and between 20th Century Industries and American International
Group, Inc.
(C) Certificate of Determination of 20th Century Industries for Series A
Convertible Preferred Stock, as filed with the Secretary of State of
the State of California.
(D) Certificate of Amendment of 20th Century Industries for Series A
Convertible Preferred Stock, as filed with the Secretary of State of
the State of California.
(E) By-Laws of 20th Century Industries, as in force on December 16, 1994.
(F) Proxy Statement of 20th Century Industries dated November 15, 1994.
(G) List of The Directors and Officers of American International Group,
Inc., American Home Assurance Company, Commerce & Industry Insurance
Company, National Union Fire Insurance Company of Pittsburgh, Pa., New
Hampshire Insurance Company, Starr International Company, Inc., The
Starr Foundation and C.V. Starr & Co., Inc., Their Business Addresses
and Principal Occupations.
(H) Registration Rights Agreement dated as of December 16, 1994 by and
between 20th Century Industries and American International Group, Inc.
Dates Referenced Herein and Documents Incorporated by Reference
| Referenced-On Page |
|---|
| This ‘SC 13D’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| | 1/1/95 | | 13 | | | | | None on these Dates |
| Filed on: | | 12/27/94 |
| | 12/23/94 | | 20 |
| | 12/16/94 | | 1 | | 21 |
| | 12/15/94 | | 7 | | 21 |
| | 11/15/94 | | 8 | | 21 |
| | 11/1/94 | | 17 |
| | 10/31/94 | | 1 |
| | 10/17/94 | | 7 | | 21 |
| | 5/3/94 | | 10 |
| | 1/17/94 | | 8 |
| List all Filings |
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