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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 2, 1999
Selective Insurance Group, Inc.
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(Exact name of registrant as specified in its charter)
New Jersey 22-2168890
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(State or other jurisdiction of (IRS Employer Identification
incorporation) No.)
40 Wantage Avenue, Branchville, New Jersey 07890
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(Address of principal executive offices) (Zip Code)
(973) 948-3000
(Registrant's telephone number, including area code)
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Item 5. Other Events.
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On November 3, 1989, the Board of Directors ("Board of Directors") of
Selective Insurance Group, Inc. (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of
common stock, par value $2 per share (the "Common Shares"), of the Company.
The dividend was paid on November 17, 1989 (the "Record Date") to the
stockholders of record on the Record Date and a Right has been attached to
each Common Share issued by the Company after the Record Date. The
description and terms of the Rights was set forth in a Rights Agreementdated
as of November 3, 1989 (the "1989 Rights Agreement") between the Company and
Midlantic National Bank, as Rights Agent. First Chicago Trust Company of
New York (the "Rights Agent") succeeded Midlantic National Bank as the
Rights Agent in accordance with the provisions of the 1989 Rights Agreement.
On December 1, 1997, the Company distributed a two-for-one stock split
to holders of Common Shares (the "1997 Stock Split").
On February 2, 1999, the Board of Directors approved an Amended and
Restated Rights Agreement dated as of February 2, 1999 (the "Rights
Agreement") between the Company and the Rights Agent, and the Company and
the Rights Agent entered into the Rights Agreement as of said date. The
Rights Agreement amends and restates the 1989 Rights Agreement.
As amended and restated, (a) the term of the Rights Agreement is
extended to February 2, 2009, (b) the number of shares of the Company's
Series A Junior Preferred Stock, without par value ("Preferred Shares"),
for which each Right is exerciseable is adjusted to give effect to the 1997
Stock Split, (c) the definition of the term "Acquiring Person" includes any
person or group of affiliated or associated persons who shall be the
beneficial owner of 15% (reduced from 20% in the 1989 Rights Agreement) of
Common Shares, (d) the term "Acquiring Person" excludes a person or group
of affiliated or associated persons who becomes an Acquiring Person
inadvertently and subsequently divests himself or itself of a sufficient
number of Common Shares so that such person or group is no longer an
Acquiring Person; (e) the Company may, prior to any person becoming an
Acquiring Person, amend the Rights Agreement to lower the 15% ownership
threshold to the greater of (i) the sum of .001% and the largest percentage
of outstanding Common Shares then known by the Company to be owned by any
person and all affiliates and associates of such person other than the
Company or a Company employee benefit plan and (ii) 10%, (f) the "second
look" or "window" provision in
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the 1989 Rights Agreement under which the Company was permitted to redeem
Rights within ten days after a person or group of affiliated or associated
persons became an Acquiring Person has been deleted,(g) the provisions in
the 1989 Rights Agreement under which the acquisition of Common Shares in an
all-cash tender offer to purchase all outstanding Common Shares does not
trigger the Rights has been deleted, and (h) at any time after a person
becomes an Acquiring Person, the Board of Directors may exchange any
exerciseable Rights (excluding rights held by an Acquiring Person) for
Common Shares (or equivalent Preferred Shares) at an exchange rate of one
Common Share per Right.
The Rights Agreement, also provides for certain other technical
revisions.
Giving effect to the Company's two-for-one stock split distributed on
December 1, 1997, each Right entitles the registered holder to purchase from
the Company one two-hundredth of a Preferred Share of the Company at a price
of $80.00, subject to adjustment (the "Purchase Price"). The description
and terms of the Rights are set forth in the Rights Agreement.
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons have
acquired beneficial ownership of 15% or more of the outstanding Common
Shares (an "Acquiring Person") or (ii) 10 business days (or such later date
as may be determined by action of the Board of Directors prior to such time
as any person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group of affiliated or
associated persons becoming an Acquiring Person (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate with a copy of this Summary of Rights
attached thereto.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), new Common Share certificates issued after the Record Date, upon
transfer or new issuance of Common Shares, will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption, exchange or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares, outstanding as
of the Record Date, even without such notation or a copy of this Summary of
Rights being
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attached thereto, will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence
the Rights. The Rights are not exercisable until the Distribution Date.
The Rights will expire on February 2, 2009 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as described
below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain
rights or warrants to subscribe for or purchase Preferred Shares at a price,
or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii)
upon the distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends or
dividends payable in Preferred Shares) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of one two-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares, or subdivisions,
consolidations or combinations of the Common Shares, occurring, in any such
case, prior to the Distribution Date.
In the event that Rights become exercisable for Common Shares and there
are not sufficient Common Shares authorized and unissued or held in treasury
to permit the exercise in full of Rights, the Company shall, to the extent
permitted by applicable law and any material agreements to which the Company
is a party: (i) determine the value of the Common Shares issuable upon the
exercise of a Right and (ii) with respect to each Right, upon exercise
thereof, issue Common Shares to the extent available and, to the extent
Common Shares are not available, make adequate provision to substitute for
the Common Shares not received upon exercise thereof (1) cash, (2) other
equity securities of the Company, (3) debt securities of the Company, (4)
other assets, (5) a reduction of the Purchase Price or (6) any combination
of
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the foregoing, having a value which, when added to the value of the
Common Shares actually issued upon exercise of such Right, shall have an
aggregate value equal to the value of the Common Shares for which such Right
is exercisable.
Preferred Shares issuable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment made per
Common Share. Each Preferred Share will have 1 vote, and each one two-
hundredth of a Preferred Share will have one two-hundredths vote, voting
together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged,
each Preferred Share will be entitled to receive 100 times the amount
received per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend and liquidation
rights, the value of the one two-hundredth interest in a Preferred Share
issuable upon exercise of each Right should approximate the value of one-
half of a Common Share.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will have become void), will thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price,
that number of Common Shares having a market value of two times the Purchase
Price. In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets
or earning power are sold, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will have become void), will thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, that
number of shares of common stock of the acquiring company (or its parent)
which at the time of such transaction will have a market value of two times
the Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an increase or decrease of at
least 1% in such Purchase Price. No fractional Preferred Shares will be
issued (other than fractions
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which are integral multiples of one two-hundredth of a Preferred Share,
which may, at the election of the Company, be evidenced by depository
receipts) and in lieu thereof, a payment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the
date of exercise.
The Board of Directors may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") at any time prior to
the time that a person has become an Acquiring Person. Subject to the
foregoing, the redemption of the Rights may be made effective at such time
and on such basis with such conditions as the Board of Directors in its sole
discretion may establish. Upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
At any time after a person has become an Acquiring Person and prior
to the acquisition by such person or group of 50% more of outstanding Common
Shares, the Board of Directors may exchange the rights (other than the
rights held by such person or group which have become void), in whole or in
part, for Common Shares at an exchange ratio of one Common Share, or one
two-hundredth of a share of Preferred Stock (or of a class or series of the
Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights, including an amendment to
lengthen or shorten any time periods pertaining to Rights or to lower
certain thresholds described above to not less than the greater of (i) the
sum of .001% and the largest percentage of the outstanding Common Shares
then known by the Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that from and after
such time as any person or group of affiliated or associated persons becomes
an Acquiring Person no such amendment may adversely affect the interests of
the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors, except pursuant to
an offer conditioned on a substantial number of Rights being acquired. The
Rights should
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not interfere with any merger or other business combination
approved by the Board of Directors since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a person or group has
acquired beneficial ownership of 15% or more of the Common Shares.
The Amended and Restated Rights Agreement, dated as of February 2,
1999, between the Company and First Chicago Trust Company of New York, as
Rights Agent, specifying the terms of the Rights is attached hereto, as an
exhibit and is incorporated herein by reference. The foregoing description
of the Rights does not purport to be complete and is qualified in its
entirety by reference to such exhibit. Details of the Rights are contained
in a summary, the form of which is attached as Exhibit B to the Rights
Agreement, which will be provided to the Company's stockholders of record
as of February 2, 1999.
Item 7. Exhibits
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4.1 Amended and Restated Rights Agreement, dated as of February2,
1999, between the Company and First Chicago Trust Company of New York, which
includes the form of Right Certificate as Exhibit A and the Summary of
Rights to Purchase Preferred Shares as Exhibit B.
4.2 Restated Certificate of Incorporation of Selective Insurance
Group, Inc., as amended, including the terms of the Series A Junior
Preferred Stock, without par value (incorporated by reference to Exhibit
3.1 to the Selective Insurance Group, Inc. Annual Report on Form 10-K for
the year ended December 31, 1997 (File No. 0-8641)).
99.1 Press Release dated February 3, 1999.
99.2 Form of letter to stockholders of Selective Insurance Group,
Inc. dated February 3, 1999.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SELECTIVE INSURANCE GROUP, INC.
(Registrant)
By: /S/ Gregory E. Murphy
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Name: Gregory E. Murphy
Title: President
Dated: February 4, 1999
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INDEX TO EXHIBITS
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Exhibit
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4.1 Amended and Restated Rights Agreement dated as of February 2, 1999
between Selective Insurance Group, Inc. and First Chicago Trust
Company of New York, which includes the Form of Right Certificate
as Exhibit A and the Summary of Rights to Purchase Preferred Shares
as Exhibit B.
99.1 Press release dated February 3, 1999.
99.2 Form of letter to stockholders of Selective Insurance Group, Inc.,
dated February 3, 1999.
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