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EXHIBIT 36
(AMERICAN BANKERS INSURANCE GROUP, INC. LETTERHEAD)
March 10, 1998
To Our Common Stock Holders:
On February 19, 1998, the Board of Directors of American Bankers Insurance
Group, Inc. (the "Company") adopted a new shareholders' rights agreement. The
Company's existing shareholders' rights agreement will expire on March 10, 1998.
The new shareholders' rights agreement is substantially identical to the
existing shareholders' rights agreement, except the exercise price has been set
at $75 and the expiration date is March 10, 2003.
One right (a "Right") for each outstanding share of the Company's common
stock, par value $1.00 per share ("Common Stock") will be distributed to
shareholders of record at the close of business on March 10, 1998. The Rights
initially will be part of and will trade with the Common Stock. No action is
necessary on your part at this time.
We have enclosed a summary description of the Rights Agreement, dated as of
February 19, 1998, between American Bankers Insurance Group, Inc. and
ChaseMellon Shareholder Services, L.L.C., as Rights Agent.
We thank you for your continued support.
Sincerely,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
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SUMMARY OF
RIGHTS AGREEMENT, DATED AS OF FEBRUARY 19, 1998,
BETWEEN
AMERICAN BANKERS INSURANCE GROUP, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., AS RIGHTS AGENT
On February 19, 1998, the Company declared a dividend distribution of one
Right (a "Right") for each outstanding share of the Company's Common Stock to
shareholders of record at the close of business on March 10, 1998 (the "Record
Date"). Except as described below, each Right, when exercisable, entitles the
registered holder thereof to purchase from the Company 1/100th of a share (a
"Unit") of Series C Participating Preferred Stock, no par value (the "Preferred
Stock"), at a Purchase Price of $75.00 per Unit, subject to adjustment. The
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent.
Initially, each Right will be a part of and trade with each share of Common
Stock outstanding. The Rights will separate from the Common Stock and a
Distribution Date will occur on the day (or such later date as may be determined
by action of the Board of Directors, upon approval by a majority of the
Continuing Directors (as such term is defined below)) which is the earlier of
(i) 10 days following a public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the outstanding shares
of Common Stock, or (ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 15% or more of such outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates (and no separate Rights certificate will be issued) and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
Notwithstanding the foregoing, no Distribution Date will occur until such
date as may be determined by action of the Board of Directors, upon approval by
a majority of the Continuing Directors, as a result of the Cendant Offer (as
such term is defined in the Rights Agreement). In addition, the Rights Agreement
provides that the date of execution, delivery or consummation of the
transactions contemplated by the Agreement and Plan of Merger dated as of
December 21, 1997, as amended and restated as of January 7, 1998, and as amended
by Amendment No. 1 thereto dated as of January 28, 1998, among the Company,
American International Group, Inc. ("AIG") and AIGF, Inc., a wholly-owned
subsidiary of AIG ("AIGF") (the "Merger Agreement"), the Stock Option Agreement
dated as of December 21, 1997, between the Company and AIG (the "Stock Option
Agreement") and the Voting Agreement dated as of December 21, 1997, among AIG
and certain stockholders of the Company (the "Voting Agreement") shall not be
deemed to be a Distribution Date for any purpose of the Rights Agreement solely
by reason of such execution, delivery or consummation; provided, however, that
any other acquisition of Beneficial Ownership (as such term is defined in the
Rights Agreement) of Common Stock by AIG, AIGF or any of their Affiliates (as
such term is defined in the Rights Agreement) otherwise than pursuant to the
Merger Agreement, the Stock Option Agreement or the Voting Agreement shall give
rise to a Distribution Date. The Rights Agreement also provides that neither
AIG, AIGF nor any of their Affiliates will be deemed to be an Acquiring Person
for any purpose of the Rights Agreement solely by reason of the execution,
delivery or consummation of the transactions contemplated by the Merger
Agreement, the Stock Option Agreement or the Voting Agreement; provided,
however, that AIG, AIGF or any of their Affiliates shall be deemed to be an
Acquiring Person if any of them acquire Beneficial Ownership of any shares of
Common Stock other than pursuant to the Merger Agreement, the Stock Option
Agreement or the Voting Agreement.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as set forth in the Rights
Agreement and except as
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otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 10, 2003, unless earlier redeemed or exchanged
by the Company as described below.
If (i) the Company is the surviving corporation in a merger with an
Acquiring Person and the Company's Common Stock remains outstanding and
unchanged, (ii) an Acquiring Person is or becomes the beneficial owner of 15% or
more of the then outstanding shares of the Company's Common Stock, (iii) an
Acquiring Person engages in one or more "self-dealing" transactions as set forth
in the Rights Agreement, or (iv) there is any recapitalization, reclassification
or similar transaction involving the Company, which has the effect of increasing
by more than 1% an Acquiring Person's proportionate share of the beneficial
ownership of the outstanding shares of any class of equity securities or
securities exercisable for or convertible into equity securities of the Company
or its subsidiaries, then each holder of a Right will thereafter have the right
to receive, upon exercise of the Right, Common Stock or, in certain
circumstances, cash, property or other securities of the Company having a value
equal to two times the Purchase Price of the Right; PROVIDED, HOWEVER, that the
Rights to purchase Common Stock (or cash, property or other securities of the
Company) are not exercisable following the occurrence of any of the events set
forth above until such time as the Rights are no longer redeemable by the
Company as set forth below or until certain other events occur as set forth in
the Rights Agreement. Notwithstanding any of the foregoing, following the
occurrence of any of the events set forth in this paragraph, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
If at any time on or after the Distribution Date (i) the Company is
acquired in a merger or other business combination transaction in which the
Company is not the surviving corporation (or is the surviving corporation but
the Company's Common Stock is changed or exchanged), or (ii) more than 50% of
the Company's assets or earning power is sold or transferred, then each holder
of a Right (except Rights which previously have been voided as set forth in the
preceding paragraph) shall thereafter have the right to receive, upon exercise
of the Right, Common Stock of the acquiring entity having a value equal to two
times the Purchase Price of the Right. The events set forth in this paragraph
and in the preceding paragraph are referred to as the "Triggering Events." If
any acquiring entity does not have Registered Common Stock (as such term is
defined in the Rights Agreement), each Right will entitle its holder to
purchase, for the Purchase Price, at such holder's option, (i) the number of
shares of such entity (or, at such holder's option, of the surviving corporation
in such acquisition, which could be the Company) which, at the time of the
transaction, would have a book value of two times the Purchase Price of the
Right or (ii) if such entity has an affiliate that has Registered Common Stock,
the number of shares of such affiliate which, at the time of the transaction,
would have a market value of two times the Purchase Price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock 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, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
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At any time after the acquisition by a Person or group of affiliated or
associated Persons of beneficial ownership of 15% or more of the outstanding
Common Stock and prior to the acquisition by such Person or group of 50% of the
outstanding Common Stock, the Board of Directors of the Company may exchange the
Rights (other than the Rights owned by such Person or group that have become
void), in whole or in part, at an exchange ratio of one share of Common Stock
(or of a share of a class of series or the Company's preferred stock having
equivalent rights, preferences and privileges) per Right (subject to
adjustment).
At any time until 10 days following the Distribution Date, the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right,
payable in cash or stock. The redemption period may be extended by the Company
at any time prior to the expiration of such period. After the redemption period
has expired, the Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company and there are no other persons who are Acquiring Persons. Immediately
upon the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price. The decision to redeem or to extend the
redemption period shall require the vote of a majority of the Disinterested
Directors, with the concurrence of a majority of the Continuing Directors voting
separately.
The term "Continuing Director" means any member of the Board of Directors
of the Company who was a member of the Board immediately prior to the time that
any person became an Acquiring Person, and any member of the Board subsequent to
the time that any Person shall become an Acquiring Person if such person is
recommended or approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person, or any representative of such Acquiring Person.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors prior to the Distribution Date. On and after the Distribution
Date, the provisions of the Rights Agreement may be amended by a majority of the
Disinterested Directors, with the concurrence of a majority of the Continuing
Directors voting separately, in order to cure any ambiguity, to make changes in
any manner which the Disinterested Directors and Continuing Directors may deem
necessary or desirable and which does not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; PROVIDED,
HOWEVER, that no amendment to adjust the time period governing redemption shall
be made at any time that the Rights are not redeemable.
The Rights Agreement provides that the Company may not consolidate or merge
with, or sell 50% or more of the Company's assets or earning power to, any
person that has securities or is bound by agreements which would substantially
diminish the benefits of the Rights.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement.
A copy of the Rights Agreement (and the exhibits thereto) has been filed by
the Company with the Securities and Exchange Commission as part of Amendment No.
3 to Schedule 14D-9, dated February 20, 1998.
