UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
(Amendment No. 2)
Tender Offer Statement Under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
ODYSSEY RE HOLDINGS CORP.
(Name of Subject Company (issuer))
FAIRFAX INVESTMENTS USA CORP.
a wholly owned subsidiary of
FAIRFAX FINANCIAL HOLDINGS LIMITED
(Names of Filing Persons (offerors))
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
67612W108
(CUSIP Number of Class of Securities)
Eric P. Salsberg
Vice President, Corporate Affairs
Fairfax Financial Holdings Limited
95 Wellington Street West, Suite 800
Toronto, Ontario, Canada M5J 2N7
(416) 367-4941
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications on Behalf of Filing Persons)
Copy to:
Christopher J. Cummings
Adam M. Givertz
Shearman & Sterling LLP
Commerce Court West
199 Bay Street, Suite 4405
Toronto, Ontario, Canada M5L 1E8
(416) 360-8484
CALCULATION OF FILING FEE
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Transaction Valuation* |
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Amount of Filing Fee** |
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$1,042,046,980 |
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$58,146.22 |
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Estimated for purposes of calculating the amount of the filing fee
only. The calculation assumes the purchase of all outstanding shares
of common stock, par value $0.01 per share (the “Shares”), of Odyssey
Re Holdings Corp., a Delaware corporation, other than Shares owned by
Fairfax Financial Holdings Limited (“Fairfax”) and its subsidiaries,
at a purchase price of $65.00 per Share, net to the seller in cash.
As of September 17, 2009, there were 58,430,892 Shares outstanding, of
which 42,399,400 Shares are owned by Fairfax and its subsidiaries. As
a result, this calculation assumes the purchase of 16,031,492 Shares. |
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The amount of the filing fee is calculated in accordance with Rule
0-11 of the Securities Exchange Act of 1934, as amended, and Fee Rate
Advisory No. 5 for fiscal year 2009 issued by the Securities and
Exchange Commission on March 11, 2009. Such fee equals 0.00558% of
the transaction value. |
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Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
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Amount Previously Paid:
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$58,146.22 |
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Filing Party:
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Fairfax
Financial Holdings Limited and
Fairfax Investments USA Corp. |
Form or Registration No.:
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Schedule TO-T
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Date Filed:
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September 23, 2009 |
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Check the box if the filing relates solely to preliminary communications made before the
commencement of a tender offer. |
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Check the appropriate boxes to designate any transactions to which the statement relates: |
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third-party tender offer subject to Rule 14d-1. |
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issuer tender offer subject to Rule 13e-4. |
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going-private transaction subject to Rule 13e-3. |
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amendment to Schedule 13D under Rule 13d-2. |
Check
the following box if the filing is a final amendment reporting the
results of the tender
offer: o
This Amendment No. 2 amends and supplements the Tender Offer Statement and Rule 13e-3
Transaction Statement filed on Schedule TO and as previously amended and supplemented (as amended
and supplemented, the “Schedule TO”) by Fairfax Financial Holdings Limited, a Canadian corporation
(“Fairfax”), and Fairfax Investments USA Corp., a Delaware corporation and wholly-owned subsidiary
of Fairfax (“Purchaser”). The Schedule TO relates to the offer by Purchaser to purchase all the
outstanding shares of common stock, par value $0.01 per share (the “Shares”), of Odyssey Re
Holdings Corp, a Delaware corporation (“Odyssey Re”), other than Shares owned by Fairfax and its
subsidiaries, at a purchase price of $65.00 per Share, net to the seller in cash, without interest
and less any applicable withholding of taxes, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated September 23, 2009 (the “Offer to Purchase”), a copy of which
is attached to the Schedule TO as Exhibit (a)(1)(i), and the related Letter of Transmittal, a copy
of which is attached to the Schedule TO as Exhibit (a)(1)(ii) (which, as amended or supplemented
from time to time, together constitute the “Offer”). All capitalized terms used in this Amendment
No. 2 without definition have the meanings ascribed to them in the Schedule TO.
The following amendments and supplements to Item 13 of the Schedule TO are hereby made.
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| Item 13. |
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Information Required by Schedule 13E-3. |
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| Item 5. |
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Past Contacts, Transactions, Negotiations and Agreements. |
Item 5 of Item 13 of the Schedule TO is hereby amended and supplemented to add the following
information:
(e) Pursuant to the Merger Agreement, the parties to the Merger Agreement have agreed to use
reasonable best efforts to take any and all actions necessary to provide for treatment of all
outstanding stock options, restricted stock and awards issued or granted pursuant to Odyssey Re’s
Stock Option Plan, 2002 Stock Incentive Plan, Restricted Share Plan, Employee Share Purchase Plan
as a result of the Merger in a manner acceptable to the Special Committee. Following consultation
with and approval of the Special Committee, Odyssey Re and Fairfax management have agreed on the
proposed treatment of the aforementioned equity-based awards in connection with the Merger, as
further described below. These arrangements are subject to satisfaction of the conditions to and
completion of the Offer and the Merger.
Stock Options. Immediately following the completion of the Merger, participants in Odyssey
Re’s Stock Option Plan and 2002 Stock Incentive Plan who hold vested options would receive, for
each unexercised option, the difference between the Offer Price and the grant price of the vested
option, less any applicable withholding of taxes. In connection with such payment, the vested
options would be cancelled. With respect to unvested options issued pursuant to the Stock Option
Plan, Odyssey Re would, as permitted pursuant to the terms of such plan, replace, effective as of
the effective time of the Merger, the Shares underlying such options with an amount in cash (the
“Cash Value”). The vesting terms of the option would not change from those governing the original
grant award. The Cash Value would equal: $65.00, increased or decreased by the adjusted cumulative
percentage change (which may be positive or negative) in Odyssey Re’s book value from June 30, 2009
through to the end of the most recently completed fiscal quarter for which financial statements
that report Odyssey Re’s book value are available prior to the applicable vesting date of the
option. Unless the participant were to elect otherwise in writing at least 14 days prior to the
vesting date, such participant would be deemed to have exercised the option (which has an exercise
price equal to $0) upon vesting, and would receive the Cash Value, less any applicable withholding
of taxes.
Any participant who chose not to exercise the option upon vesting would be responsible for
payment of applicable taxes, and the Cash Value would not increase or decrease based on changes in
Odyssey Re’s book value following the vesting date, but would accrue nominal interest from that
vesting date until the option is exercised.
Restricted Stock. Any outstanding shares of restricted stock that remain subject to vesting
terms would, as of the Merger, be cancelled and converted into the Merger Consideration ($65.00 per
share of Common Stock), but the cash payable in connection therewith would be subject to the same
vesting terms as applied to the restricted stock, and award recipients would not be eligible to
receive that cash until the vesting date or dates that would have been applicable to their
restricted stock, provided the applicable vesting requirements are satisfied at the time of
vesting. Subject to completion of the Merger, Odyssey Re anticipates that it will offer holders of
this restricted cash
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the option to substitute the opportunity to receive such restricted cash with the opportunity to
receive the Cash Value. The Cash Value would be subject to the same non-economic terms and
conditions, including the vesting schedule, as currently apply to a holder’s restricted stock.
Employee Share Purchase Plan. Immediately following completion of the Merger, Odyssey Re plans
to terminate the Employee Share Purchase Plan (the “ESPP”). Pursuant to the arrangements agreed
upon between Fairfax and Odyssey Re, Odyssey Re has suspended the ESPP as of October 2, 2009, and
no further employee contributions or Odyssey Re matching contributions will be made under, and no
further Shares will be purchased pursuant to, the ESPP. Any person holding Shares in ESPP accounts
is entitled to tender such Shares in the Offer (subject to applicable requirements of the
Securities Act and Exchange Act). Fairfax and Odyssey Re further intend to provide that, if, after
earnings for fiscal year ended December 31, 2009 are reported, Odyssey Re’s return on equity for
2009 (calculated in accordance with the ESPP) is 15% or higher, ESPP participants will receive an
amount in cash equal to 20% of their ESPP contributions during 2009.
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