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As filed with the Securities and Exchange Commission on November 8, 1999
Registration No. 333-___________________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 30549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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STATE AUTO FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 31-1324304
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
518 EAST BROAD STREET
COLUMBUS, OHIO 43215-3976
(614) 464-5000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICERS)
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ROBERT H. MOONE
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
STATE AUTO FINANCIAL CORPORATION
518 EAST BROAD STREET
COLUMBUS, OHIO 43215-3976
(614) 464-5000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copies of correspondence to:
John R. Lowther Curtis A. Loveland, Esq.
Vice President, Secretary and Porter, Wright, Morris & Arthur LLP
General Counsel 41 South High Street
State Auto Financial Corporation Columbus, Ohio 43215
518 East Broad Street (614) 227-2000
Columbus, Ohio 43215-3976
(614) 464-5000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 of the Securities
Act of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box.[X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
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If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] ____________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box.[ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
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Common Stock, without par value 400,000 shares $11.4375 $4,575,000 $1,272
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(1) This Registration Statement is filed for up to 400,000 shares to be issued
or offered pursuant to the State Auto Financial Corporation 1998 State
Auto Agents' Stock Option Plan.
(2) Estimated solely for purposes of calculating registration fee.
(3) Registration fee has been calculated pursuant to Rule 457(h) based on the
average of the high and low prices of the Common Stock as reported on the
Nasdaq Stock Market on November 4, 1999 of $11.4375 share.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION DATED NOVEMBER 8, 1999
PROSPECTUS
STATE AUTO FINANCIAL CORPORATION
518 E. BROAD ST.
COLUMBUS, OHIO 43215-3976
(614) 464-5000
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1998 STATE AUTO AGENTS' STOCK OPTION PLAN
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We are offering 400,000 of our common shares, without par value, upon
the exercise of options granted to our insurance agents under the 1998 State
Auto Agents' Stock Option Plan.
When we grant an award of stock options, we will enter into a
Participation Agreement with you which sets forth additional terms of that
award. You should refer to the Participation Agreement for information
concerning the exercise price and number of shares that may be received when you
exercise your stock options. The common stock is listed on the Nasdaq National
Market under the symbol "STFC."
See "The Plan" below on page 2 for a description of the stock options.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or passed
upon the adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
You should rely only on the information contained or incorporated by
reference in this document. We have not authorized anyone to provide you with
information that is different from what is contained in this document. This
document is not an offer to sell or a solicitation of an offer to buy any
securities other than securities offered by this document. This document is not
an offer to sell or a solicitation of an offer to buy any securities in any
jurisdiction to any person to whom it is unlawful to make an offer or
solicitation in that jurisdiction. This document is dated November 8, 1999, and
you should not assume that the information contained in this document is
accurate as of any other date. Neither the mailing of this document nor the
issuance of any securities shall create any implication to the contrary.
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The date of this Prospectus is __________________, 1999
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TABLE OF CONTENTS
Business..................................................................................1
General................................................................................1
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995.......1
The Plan..................................................................................2
Administration of the Plan.............................................................2
Plan Eligibility.......................................................................2
The Grant of Stock Options.............................................................2
Option Prices..........................................................................2
Exercising an Option...................................................................2
Payment of the Option Price............................................................3
Available Shares.......................................................................3
The Exercise of Awards by Non-Participants.............................................3
The Termination of Awards..............................................................3
The Status of an Option Holder.........................................................3
Change of Control of the Company.......................................................3
Participant's Agreements...............................................................4
Conditions to Issue or Deliver Common Stock............................................4
Resale of Common Stock.................................................................4
Term of the Plan.......................................................................4
Federal Tax Considerations................................................................4
Other Considerations......................................................................5
Use of Proceeds...........................................................................5
Legal Matters.............................................................................5
Experts...................................................................................5
Where You Can Find More Information.......................................................5
Incorporation of Documents by Reference...................................................6
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BUSINESS
Throughout this prospectus the words "we", "us", "our" and "State
Auto" refer to both State Auto and our subsidiaries.
GENERAL
We are an insurance holding company engaged through our subsidiaries
in the property and casualty insurance business. We are approximately 70% owned
by State Automobile Mutual Insurance Company, an Ohio property and casualty
insurance company formed in 1921. Our principal operating subsidiaries and their
businesses are:
o State Auto Property and Casualty Insurance Company, a South Carolina
corporation, and Milbank Insurance Company, a South Dakota corporation,
which are regional standard insurers engaged primarily in writing personal
and commercial automobile, homeowners, commercial multi-peril, workers'
compensation and fire insurance.
o State Auto National Insurance Company, an Ohio corporation, which writes
personal automobile insurance for non-standard risks.
o Farmers Casualty Insurance Company, an Iowa domiciled standard property
casualty insurer, writing in Iowa and Kansas. Mid-Plains Insurance Company,
a subsidiary of Farmers Casualty Insurance Company, is an Iowa based
insurer which principally writes nonstandard auto insurance in Iowa and
Kansas.
o Stateco Financial Services, Inc., an Ohio corporation, provides investment
management services to affiliated companies and insurance premium finance
services to customers of State Auto Property and Casualty Insurance Company
and Milbank Insurance Company.
o State Auto Insurance Company, an Ohio corporation, which is currently
seeking a certificate of authority from the Ohio Department of Insurance,
expects to offer personal lines insurance in Ohio.
o Strategic Insurance Software, Inc., an Ohio corporation and a
majority-owned subsidiary of State Auto Financial, develops and sells
software for the processing of insurance transactions, management of
insurance policy data and electronic interfacing of insurance policy
information between insurance companies and agencies.
o 518 Property Management and Leasing, LLC, an Ohio limited liability
company, owns and leases real and personal property to our affiliated
companies. The members of 518 Property Management and Leasing are State
Auto Property and Casualty Insurance Company and Stateco Financial
Services, Inc.
Additionally, Midwest Security Insurance Company, a Wisconsin
domiciled standard personal lines property and casualty insurer, owned by State
Automobile Mutual Insurance Company, is managed by us.
At this time, we market our insurance products through approximately
12,500 independent insurance agents associated with approximately 2,200 agencies
in 26 states. Our insurance products are marketed primarily in the central and
eastern part of the United States, excluding New York, New Jersey and the New
England States.
Our principal executive office is located at 518 East Broad St.,
Columbus, Ohio 43215. Our telephone number is (614) 464-5000. You can find
additional information concerning State Auto and our business activities in the
documents incorporated by reference in this prospectus.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements contained in this prospectus and incorporated herein by
reference expressing the beliefs of our management and the other statements
which are not historical facts are forward looking statements that involve risks
and uncertainties. These risks and uncertainties include but are not limited to:
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o adverse state and federal legislative changes or judicial and
regulatory decisions;
o competitive products and pricing;
o weather and weather-related events or other types of catastrophic
events;
o geographic spread of risk;
o fluctuations of securities markets;
o general economic and business conditions that are less favorable
than expected;
o changes in technology or industry standards;
o shortages of labor and materials in storm hit areas;
o late reported claims and previously undisclosed damage;
o utilities and financial institutions disruptions;
o shortage of skilled personnel;
o regulatory or governmental systems breakdown; and
o other risk factors or uncertainties listed from time to time in
this prospectus or any document incorporated by reference in this
prospectus.
THE PLAN
ADMINISTRATION OF THE PLAN
The Plan will be administered by a Plan Administration Committee
consisting of at least three members appointed by our Board of Directors.
PLAN ELIGIBILITY
Our agents who will be eligible to receive options under the Plan are
those invited to participate pursuant to criteria established by the Plan
Administration Committee. Each person who receives an award under the Plan is
referred to as a Participant. We have no obligation to select any or all agents
for participation in the Plan. For purposes of the Plan, an agent is a person
who has entered into an agency agreement with us.
THE GRANT OF STOCK OPTIONS
Each year, we will grant options to Participants in the Plan based on
the formula set forth in the Plan and in each Participant's Participation
Agreement.
OPTION PRICES
As long as our shares of common stock are listed on the Nasdaq
National Market, the exercise price of options granted under the Plan will be
equal to the last reported sale price on the Nasdaq National Market on the day
of the grant under the terms of the Plan.
EXERCISING AN OPTION
Subject to certain restrictions, Participants may exercise options
that are vested. Each option will be effective for no more than ten (10) years.
If an option is not fully exercised by its expiration date it will terminate to
the extent not previously exercised.
A Participant may exercise an option by delivering written notice to
us and paying the exercise price. Participants may exercise options in full or
in part. A Participant will become a shareholder of those shares for which an
option is exercised at the time the Plan Administration Committee determines
that the exercise is valid, the option price has been received and a certificate
for the shares has been issued. We will issue shares of common stock as soon as
practicable after exercise.
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PAYMENT OF THE OPTION PRICE
A Participant may pay the exercise price of an option in cash or by
check. Additionally, Participant can pay the exercise price by delivering
previously held shares of the common stock or by a combination of cash and
shares. If a Participant uses shares for this payment, the value of each share
delivered shall be equal to the last reported sale price on the Nasdaq National
Market on the day the option is exercised.
AVAILABLE SHARES
Subject to adjustments for stock splits, stock dividends and other
changes in the number and character of shares of common stock available for
awards, we will grant awards for up to 400,000 shares of common stock under the
Plan. The shares that we will deliver upon the exercise of options may be
authorized but unissued shares of common stock or issued shares of common stock
which we have reacquired or a combination of both.
In the event of a stock split, stock dividend or similar change in the
number and character of shares of common stock available for awards, we will
adjust:
o The number of shares of common stock available for awards under
the Plan; and
o The exercise price per share of common stock under each
outstanding option.
The purpose and effect of this type of adjustment is to give you the same
economic rights in our common stock that you had prior to a stock split, stock
dividend or similar change. We will not make this type of adjustment unless the
adjustment would require an increase or decrease in the number of shares or
exercise price of at least 1%.
THE EXERCISE OF AWARDS BY NON-PARTICIPANTS
Under the Agents' Stock Option Plan Addendum, which you are required
to sign to become a Participant in the Plan, we will consent to allow you to
designate natural persons who are your owners the right to participate in the
Plan. Otherwise, you may not transfer awards other than by will or by the laws
of descent and distribution upon death. In the case of your death, your estate
or heirs may exercise the award within one (1) year of death, to the same extent
that you could have exercised the award at the time of your death.
THE TERMINATION OF AWARDS
All awards have a term of ten (10) years. If your agency agreement
terminates, you fail to meet your performance criteria as set forth in your
Participation Agreement and in the Plan, or you fail to pay us any amounts due
under your agency agreement on time, your option, to the extent not vested,
terminates. You will, however, be able to exercise your option to the extent
vested until the term lapses.
If your relationship with us terminates, you will not be eligible to
receive awards after the date of termination of the relationship. Any
outstanding but unexercised awards will terminate as described in the preceding
paragraph.
THE STATUS OF AN OPTION HOLDER
Receiving an option does not give you any right to continue your
relationship with us, and it does not interfere with our right to terminate our
relationship with you at any time. You will not have rights as a shareholder for
any shares of common stock subject to an option until the date we issue those
shares.
CHANGE OF CONTROL OF THE COMPANY
If we are a party to a merger or consolidation, other than a merger in
which we are the surviving corporation, the aggregate number of shares reserved
for issuance under the Plan and the number and exercise price of outstanding
options will be adjusted. The adjustment will entitle you to receive for the
original aggregate exercise price the number and type of shares of stock which
you would have received upon the happening of the
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event giving rise to the adjustment as if you had exercised all of your options
and held shares of common stock prior to the happening of the event.
PARTICIPANT'S AGREEMENTS
The terms and conditions of your award will be contained in an
agreement between you and us. The terms of your agreement will be consistent
with the terms of the Plan, but may include additional provisions and
restrictions that are not inconsistent with the Plan.
CONDITIONS TO ISSUE OR DELIVER COMMON STOCK
Our obligation to issue or deliver shares of common stock upon the
exercise of an award is subject to applicable laws and the approval of
applicable governmental and regulatory authorities, if necessary or appropriate.
RESALE OF COMMON STOCK
You may publicly sell shares of common stock acquired pursuant to the
Plan. However, if you may be considered our "affiliate" as defined in the SEC
rules under the Securities Act of 1933 any shares that you own may not be
re-offered or resold except:
o Under a separate prospectus covering those shares;
o In connection with Rule 144 under the rules of the Securities
Act; or
o Under another Securities Act exemption from registration.
TERM OF THE PLAN
The Plan will terminate on May 27, 2008, unless terminated earlier by
our Board of Directors. The termination of the Plan will not affect the
exercisability of outstanding options.
FEDERAL TAX CONSIDERATIONS
Options granted under the Plan are non-qualified options under the
Internal Revenue Code. Generally, the grant of options will not result in the
recognition of taxable income for federal income tax purposes. When a
Participant exercises an option, the Participant recognizes, as ordinary income,
the excess of the fair market value of the common stock on the date of exercise
over the exercise price. We will be allowed a deduction for federal income tax
purposes to the same extent and at the same time as the Participant recognizes
income.
The tax basis of a share acquired by exercise of an option with a cash
payment will be its fair market value used to determine the amount of taxable
income arising from the exercise of the option. Assuming the shares issued on
the exercise of an option are held as a capital asset, the holding period for
purposes of determining whether a subsequent sale of the share results in the
recognition of short-term or long-term capital gain or loss will begin on the
day of transfer of the share to the Participant.
If a Participant delivers shares of common stock that he or she
already owns as payment of the exercise price of shares acquired on the exercise
of an option, the delivery will not result in the recognition of a capital gain
or loss on the previously owned stock. The number of option shares received in
excess of the previously owned shares given up, in effect, are "purchased" with
the untaxed appreciation on the previously owned stock. A Participant's tax
basis and holding period for the number of shares received equal to the number
of shares delivered will be the same as that for the shares delivered. A
Participant's tax basis for shares received in excess of the number of shares
delivered will equal the fair market value of the shares used to determine the
amount of taxable income arising from the exercise of the option. A
Participant's holding period for those excess shares will begin on the date the
shares are transferred to the Participant.
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We will report the amount of taxable income arising from the exercise
of an option on IRS Form 1099. You should consult your tax advisor to determine
the income tax consequences of holding and exercising any awards granted under
the Plan and of selling any stock acquired pursuant to that exercise, as well as
to determine the effect of any state or local taxes.
The Plan is not qualified under Section 401(a) of the Internal Revenue
Code and is not subject to any provisions of the Employee Retirement Income
Security Act of 1974, as amended.
OTHER CONSIDERATIONS
The Plan will continue in effect until all awards that we have granted
expire. We will not grant any awards under the Plan after May 27, 2008. Our
Board of Directors may amend, suspend or terminate the Plan. However, no action
shall adversely affect or impair in any material respect any award granted under
the Plan without the consent of the Participant holding the award.
USE OF PROCEEDS
We will use any proceeds from the exercise of awards for general
corporate purposes.
LEGAL MATTERS
The legality of the common stock offered under this prospectus will be
passed upon by Porter, Wright, Morris & Arthur LLP.
EXPERTS
The consolidated financial statements of State Auto Financial
Corporation at December 31, 1998 and 1997, and for each of the three years in
the period ended December 31, 1998, incorporated by reference in this Prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon and incorporated by reference
herein, and are included in reliance upon such report given the authority of
such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934 and, therefore, we file annual, quarterly and special
reports, proxy statements and other information with the Securities and Exchange
Commission. You can inspect and copy any document we file with the Commission at
the following locations:
o At the Public Reference Room of the Commission, Room
1024-Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549;
o At the Public Reference Room of the Commission's regional
office at Seven World Trade Center, 13th Floor, New York,
New York 10048;
o At the Public Reference Room of the Commission's regional
office at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661;
o By writing the Commission, Public Reference Section,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549;
o At the offices of the National Association of Securities
Dealers, Inc., Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006; or
o From the Commission's web site at www.sec.gov.
Some of these locations may charge a prescribed fee or modest fee for
copies.
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We have filed with the Commission a registration statement and related
exhibits under the Securities Act of 1933 with respect to the securities. As
permitted by the Commission, this prospectus, which constitutes a part of the
registration statement, does not contain all the information included in the
registration statement. Such additional information may be obtained from the
locations described above. Statements contained in this prospectus as to the
contents of any contract or other document are not necessarily complete. You
should refer to the contract or other document for all the details.
INCORPORATION OF DOCUMENTS BY REFERENCE
The Commission allows us to incorporate by reference the information
we file with it, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and information that we later file
with the Commission will automatically update and supersede this information.
Accordingly, we incorporate by reference the following documents we filed with
the Commission pursuant to Section 13 of the Securities Exchange Act of 1934
(Commission File Number 0-19289):
o Our Annual Report on Form 10-K for the fiscal year ended December
31, 1998 (filed March 30, 1999);
o Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999 (filed May 14, 1999) and June 30, 1999 (filed August 13,
1999);
o Our Proxy Statement for the Annual Meeting of Shareholders held
on May 27, 1999 (filed April 26, 1999);
o The description of our common stock, contained in the
registration statement on Form 8-A filed with the Commission
pursuant to Section 12 of the Securities Exchange Act of 1934 and
all amendments thereto and reports filed for the purpose of
updating such description; and
o All documents filed by us with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 after the date of this prospectus and before the offering
of the common stock thereby is completed (other than portions of
such documents described in paragraphs (i), (k) and (l) of Item
402 of Regulation S-K promulgated by the Commission).
These documents are or will be available for inspection or copying at
the locations identified above under the caption "Where You Can Find More
Information." We will provide without charge to each to whom this prospectus is
delivered, upon written or oral request, a copy of any and all of the documents
that have been incorporated by reference in this prospectus (other than exhibits
to such documents unless such exhibits are specifically incorporated by
reference). You should direct requests for documents to:
State Auto Insurance Corporation
518 East Broad St.
Columbus, Ohio 43215-3976
Attention: James E. Duemey, Vice President
Telephone Number: (614) 464-5000
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses to be paid by the
Company in connection with the sale and distribution of the securities being
registered hereby. All amounts shown are estimates, except the SEC registration
fee:
SEC registration fee $ 1,272.00
Legal fees and expenses 7,500.00
Accounting fees and expenses 1,000.00
Miscellaneous expenses 1,228.00
Total $11,000.00
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1701.13(E) of the Ohio Revised Code sets forth conditions and
limitations governing the indemnification of officers, directors, and other
persons.
Article 6 of the Code of Regulations of the Company contains certain
indemnification provisions adopted pursuant to authority contained in Section
1701.13(E) of the Ohio Revised Code. The Company's Code of Regulations provides
for the indemnification of its officers, directors, employees, and agents, or
persons who are serving or have served at the request of the Company as a
director, trustee, officer, employee, or agent of another corporation, domestic
or foreign, nonprofit or for profit, partnership, joint venture, trust, or other
enterprise, against all expenses with respect to any judgments, fines, and
amounts paid in settlement, or with respect to any threatened, pending, or
completed action, suit, or proceeding to which they were or are parties or are
threatened to be made parties by reason of acting in such capacities, provided
that it is determined, either by a majority vote of a quorum of disinterested
directors of the Company or by the shareholders of the Company or otherwise as
provided in Section 1701.13(E) of the Ohio Revised Code, that: (a) they acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the Company; (b) in any action, suit, or proceeding by or
in the right of the Company, they were not, and have not been adjudicated to
have been, negligent or guilty of misconduct in the performance of their duties
to the Company; and (c) with respect to any criminal action or proceeding, that
they had no reasonable cause to believe that their conduct was unlawful. Section
1701.13(E) provides that to the extent a director, officer, employee, or agent
has been successful on the merits or otherwise in defense of any such action,
suit, or proceeding, he shall be indemnified against expenses reasonably
incurred in connection therewith.
The Company has entered into Indemnification Agreements with each of
its directors. These contracts generally: (i) confirm the existing indemnity
provided to them under the Company's Code of Regulations and assure that this
indemnity will continue to be provided; and (ii) provide that, in addition, the
directors shall be indemnified to the fullest extent permitted by law against
all expenses (including legal fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by them in any threatened, pending
or completed action or proceeding, including any action by or in the right of
the Company, on account of their service as a director or officer of the Company
or at the request or with the consent of the Company as a trustee, director,
officer, employee, or agent of another corporation or enterprise. Coverage under
the contracts is excluded: (A) to the extent the director is indemnified under
directors' and officers' liability insurance maintained by the Company; (B) on
account of conduct which is finally adjudged to be knowingly fraudulent,
deliberately dishonest, or willful misconduct; (C) if a final court of
adjudication shall determine that such indemnification is not lawful; or (D) on
account of any suit in which judgment is rendered against the director for an
accounting of profits made from the purchase or sale by the director of
securities of the Company pursuant to Section 16(b) of the Securities Exchange
Act of 1934 or any similar provision. The indemnification agreements are
applicable to claims asserted after their effective date, whether arising from
acts or omissions occurring before or after their effective date.
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The Company has purchased a liability policy to indemnify its officers
and directors against loss arising from claims by reason of their legal
liability for acts as officers and directors, subject to limitations and
conditions set forth in the policy.
At present, there are no claims, actions, suits, or proceedings
pending where indemnification would be required under the foregoing provisions,
and the Company does not know of any threatened claims, actions, suits, or
proceedings which may result in a request for such indemnification.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed herewith or incorporated by reference
as part of this Registration Statement.
Exhibit No. Description of Exhibit
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4.1* 1998 State Auto Agents' Stock Option Plan.
5.1* Opinion of Porter, Wright, Morris & Arthur LLP regarding
the legality of the securities being issued hereunder.
23.1* Consent of Counsel (included in Exhibit 5.1 hereof)
23.2* Consent of Ernst & Young LLP.
24.1* Power of Attorney.
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*Filed herewith.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in aggregate, represent a
fundamental change in the information set forth in
the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect
to the Plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement;
(iv) Provided, however, that paragraphs (1)(i) and
(1)(ii) do not apply if the information required
to be included in a post-effective amendment by
those paragraphs is contained in periodic reports
filed with or furnished to the Securities and
Exchange Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities
Exchange Act of
II-2
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1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Columbus, State of Ohio, on November 5, 1999.
STATE AUTO FINANCIAL CORPORATION
By: /s/ Robert H. Moone
-------------------------------
Robert H. Moone, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the 5th day of November, 1999.
Name Title
/s/ Robert H. Moone President and Chief Executive Officer
- ------------------------ (principal executive officer)
Robert H. Moone
/s/ Steven J. Johnston Chief Financial Officer, Vice President,
- ------------------------ and Treasurer (principal financial officer
Steven J. Johnston and principal accounting officer)
Robert L. Bailey* Chairman of the Board
- ------------------------
Robert L. Bailey
John R. Lowther* Vice President, Secretary,
- ------------------------ General Counsel, and Director
John R. Lowther
David L. Bickelhaupt* Director
- ------------------------
David L. Bickelhaupt
David J. D'Antoni* Director
- ------------------------
David J. D'Antoni
Urlin G. Harris* Director
- ------------------------
Urlin G. Harris
Paul W. Huesman* Director
- ------------------------
Paul W. Huesman
William J. Lhota* Director
- ------------------------
William J. Lhota
George R. Manser* Director
- ------------------------
George R. Manser
II-4
15
*The undersigned hereby executes this Registration Statement on behalf of each
of the indicated directors of the Registrant pursuant to powers of attorney
executed by such directors and filed as an exhibit to this Registration
Statement.
/s/ Robert H. Moone
- ------------------------
Robert H. Moone
Power of Attorney
II-5
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
----------- ----------------------
4.1* 1998 State Auto Agents' Stock Option Plan.
5.1* Opinion of Porter, Wright, Morris & Arthur LLP regarding
the legality of the securities being issued hereunder.
23.1* Consent of Counsel (included in Exhibit 5.1 hereof)
23.2* Consent of Ernst & Young LLP.
24.1* Power of Attorney.
- ----------------------
*Filed herewith.