-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QqbLRtDd8yFJwL4EhfCgD8gLtGRc8F7oT3HMxoxVaHAzSxd/7zi3GBhQCT1dC+Gw zvIxM0lf6Wc+Gnd8z8YJrw== 0000950152-98-007002.txt : 19980825 0000950152-98-007002.hdr.sgml : 19980825 ACCESSION NUMBER: 0000950152-98-007002 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19980824 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALLIED GROUP INC CENTRAL INDEX KEY: 0000774624 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 420958655 STATE OF INCORPORATION: IA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-41078 FILM NUMBER: 98696513 BUSINESS ADDRESS: STREET 1: 701 FIFTH AVE CITY: DES MOINES STATE: IA ZIP: 50391-2000 BUSINESS PHONE: 5152804211 MAIL ADDRESS: STREET 1: 701 5TH AVENUE CITY: DES MOINES STATE: IA ZIP: 50391-2000 FORMER COMPANY: FORMER CONFORMED NAME: AID CORP DATE OF NAME CHANGE: 19870519 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE MUTUAL INSURANCE CO CENTRAL INDEX KEY: 0000315099 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: OH FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: ONE NATIONWIDE ENTERPRISE CITY: COLUMBUS STATE: OH ZIP: 43125 BUSINESS PHONE: 6142497111 MAIL ADDRESS: STREET 1: ONE NATIONWIDE ENTERPRISE CITY: COLUMBUS STATE: OH ZIP: 43215 SC 14D1/A 1 ALLIED GROUP, INC./NATIONWIDE AMNDMT.#8 SC 14D1/A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14D-1 (AMENDMENT NO. 8) TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 ALLIED GROUP, INC. (NAME OF SUBJECT COMPANY) NATIONWIDE GROUP ACQUISITION CORPORATION NATIONWIDE MUTUAL INSURANCE COMPANY (Bidders) COMMON STOCK, NO PAR VALUE (Title of Class of Securities) 019220102 (CUSIP Number of Class of Securities) W. SIDNEY DRUEN SENIOR VICE PRESIDENT AND GENERAL COUNSEL NATIONWIDE MUTUAL INSURANCE COMPANY ONE NATIONWIDE PLAZA COLUMBUS, OHIO 43215 TELEPHONE: (614) 249-7111 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidders) WITH A COPY TO: ERIC M. FOGEL, ESQ. HAROLD W. NATIONS, ESQ. HOLLEB & COFF 55 E. MONROE STREET, SUITE 4100 CHICAGO, ILLINOIS 60603 TELEPHONE: (312) 807-4600 2 This Amendment No. 8 amends and supplements the Tender Offer Statement on Schedule 14D-1 initially filed on May 19, 1998 (as amended, the "Schedule 14D-1") with the Securities and Exchange Commission by Nationwide Group Acquisition Corporation ("Purchaser"), an Ohio corporation and a wholly owned subsidiary of Nationwide Mutual Insurance Company ("Parent"), an Ohio mutual insurance company, to purchase all outstanding shares of common stock, no par value (the "Common Shares"), of Allied Group, Inc., an Iowa corporation, at a price of $48.25 per Common Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated May 19, 1998 (the "Offer to Purchase"), as amended and supplemented by the Supplement thereto, dated June 10, 1998 (the "Supplement") and the revised Letter of Transmittal (which, together with any amendments or supplements thereto, constitutes the "Offer"). Capitalized terms used and not defined herein shall have the meanings assigned such terms in the Offer to Purchase, the Supplement or the Schedule 14D-1. 3 ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a) (35) Third set of "Nationwide answers your Hotline questions." (a) (36) Fourth set of "Nationwide answers your Hotline questions." (a) (37) Fifth set of "Nationwide answers your Hotline questions." (a) (38) Letter to participants in the Allied Group Employee Stock Ownership Plan. (a) (39) Sixth set of "Nationwide answers your Hotline questions." 4 SIGNATURE After due inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: August 24, 1998 NATIONWIDE MUTUAL INSURANCE COMPANY By: /s/ David A. Diamond ------------------------------- Name: David A. Diamond Title: Vice President - Enterprise Controller NATIONWIDE GROUP ACQUISITION CORPORATION By: /s/ Mark B. Koogler ------------------------------- Name: Mark B. Koogler Title: Vice President - Associate General Counsel 5 EXHIBIT INDEX (a)(35) Third set of "Nationwide answers your Hotline questions." (a)(36) Fourth set of "Nationwide answers your Hotline questions." (a)(37) Fifth set of "Nationwide answers your Hotline questions." (a)(38) Letter to participants in the Allied Group Employee Stock Ownership Plan. (a)(39) Sixth set of "Nationwide answers your Hotline questions." EX-99.A.35 2 EXHIBIT 99(A)(35) 1 EXHIBIT (a)(35) NATIONWIDE ANSWERS YOUR HOTLINE QUESTIONS HOTLINE: 1-877-655-6417 July 8, 1998 Below are the answers to the latest Hotline Questions. Most questions continue to deal with human resource policies and benefits. Answers reflect the human resource policies and benefit plan provisions that generally apply to most Nationwide Insurance Enterprise employees. You should not assume that Nationwide human resource policies or benefit plans would automatically apply to you as you continue employment with ALLIED. To date, no final plan has been completed concerning benefit changes. Your ALLIED benefit plans and current policies will generally continue through 1998. We will provide updates of the status of the transition review, and you will certainly be informed of any changes in human resource policies or benefits well in advance of the time when you would be asked to make decisions or elections. Later in 1998, we expect Nationwide benefits representatives to be on site to review the programs that will apply. Q#1: WILL SALARIES REMAIN THE SAME? Our transition plan calls for current salary programs to remain in place for at least one year. Salary administration practices will be developed in conjunction with other transition issues that exist between Nationwide and ALLIED. Q#2: WILL SICK TIME BE ROLLED OVER TO NEXT YEAR? WHAT IS THE SHORT-TERM DISABILITY PLAN THAT CAN BE USED FOR MATERNITY LEAVE? REGARDING SICK TIME CARRY OVER. WHAT HAPPENS TO THOSE DAYS WHEN THE MERGER IS COMPLETE? IF NOT THE SAME TYPE OF PLAN, WILL WE BE COMPENSATED FOR ANY UNUSED SICK TIME AT THAT POINT? Nationwide sponsors a different sick leave program for Enterprise employees. For the remainder of 1998, the current ALLIED sick leave program will continue to apply and your ALLIED service will continue to be recognized for eligibility and benefits purposes. The major difference between ALLIED and Nationwide sick leave programs is that Nationwide's plan is not an accrual based program. Instead, it provides an annual sick leave award, provisions for partial sick leave benefits and no limitations for pre-existing conditions. Nationwide does not offer a sick leave carry over provision since there is a new award every year. 1 2 Q#3: DOES NATIONWIDE OFFER REIMBURSEMENT FOR MILITARY LEAVE? Nationwide generally pays the difference between the pay you receive for military service and your regular salary for training duty up to 10 days each year. Q#4: THE 401(k) DIFFERS FROM THE DEFINED BENEFIT PLAN. WE NEED HIGHLIGHTS OF THE DEFINED PLAN. The Nationwide Insurance Enterprise Retirement Plan (NIERP) is a tax-qualified, final average pay, defined benefit pension plan. The companies currently pay for all benefits. Benefits accrue in the NIERP based on service and compensation. Benefits can start as early as age 55 or they can be delayed until normal retirement date or longer. NIERP benefits are in addition to Social Security. Q#5: I AM A NEW ALLLIED EMPLOYEE, AND LIKE MANY OTHERS WHO WERE AT THE JANUARY TRAINING SCHOOL, THE CHANCES OF HAVING A YEAR OF EMPLOYMENT BEFORE THE NATIONWIDE TAKEOVER ARE RELATIVELY SLIM (I WAS HIRED 12/30/97). WITH ALLIED, I AM ELIGIBLE TO PARTICIPATE IN THE ESOP ON JANUARY 1999, BUT IF THE TAKEOVER HAPPENS BEFORE MY FIRST YEAR OF SERVICE IS UP, DOES THAT MEAN I HAVE TO WAIT UNTIL JANUARY 2000 TO BE ELIGIBLE TO PARTICIPATE IN THE NATIONWIDE RETIREMENT PROGRAM? No. If the Nationwide Insurance Enterprise Retirement Plan (NIERP) is adopted for ALLIED employees, your past service with ALLIED will be counted in determining whether you have met the one-year of service eligibility requirement. Q#6: DOES THE 401(k) PLAN CHANGE EVERY TIME YOU MAKE A CHANGE TO YOUR PLAN? IF SO, HOW MUCH? IS THERE A CERTAIN PERCENTAGE OF SALARY BEFORE NATIONWIDE WILL MATCH CONTRIBUTIONS? IS THERE A CAP TO THE PERCENTAGE THAT NATIONWIDE MATCHES? Enterprise employees are paid biweekly. Participants can change their deferral percentage every payday. In 1998, participants can defer 1% to 22% of covered compensation, to a maximum of $10,000. The plan also includes a company matching contribution of 70% on a participant's deferral of 2% of covered compensation. So, participants who defer 6% of covered compensation received a company matching contribution of 3% of covered compensation (.7 x .02) + (.4 x .04). Covered compensation includes most items of pay such as regular salary, bonus, overtime, etc. The maximum covered compensation for calendar year 1998 is $160,000. Participants control the investment of both their deferrals and the company matching contributions. Assets can be invested among 15 fund options. Those options include some Nationwide funds, some publicly traded Nationwide mutual funds, and a number of funds sponsored by other mutual fund companies-including Dreyfus, Fidelity, Templeton and others. Participants can redirect where future contributions are allocated every payday-26 times a year. Participants can redirect existing assets every day the New York Stock Exchange and Nationwide are open for business--approximately 250 times a year. Each investment option has an asset management fee. Participants pay no brokers' fees or commissions. 2 3 Q#7: DOES NATIONWIDE HAVE AN EMPLOYEE STOCK PURCHASE PLAN AVAILABLE FOR EMPLOYEES TO PURCHASE STOCK THROUGH THE COMPANY AND A DISCOUNT OF ANY NATURE? No. However, we have designed a program that will offer Nationwide Financial Services, Inc. common stock through a payroll deduction program. Our application is pending regulatory approval. Q#8: DOES NATIONWIDE OFFER TRIPS TO ANNUAL MEETINGS AND CONFERMENTS? FOR HOW LONG AND WHICH TRIP WILL BE AVAILABLE? Yes. Enterprise employees are generally eligible for the Nationwide Insurance Enterprise Educational Assistance Plan. For example, employees who complete a CPCU designation are eligible to attend the respective society's next Annual Meeting to receive their designation in person. Reasonable expenses for hotel, meals and transportation are paid for the employees and one guest to attend the Annual Meeting. Q#9: ALLIED ALLOWS US TO BUY A WEEK OF VACATION. WILL WE BE ABLE TO DO THIS? Nationwide Insurance Enterprise human resources policies currently provide to each supervisor the authority to approve up to a two-week absence. This vacation is "purchased" as a period of unpaid time off. The current ALLIED vacation provisions will continue to apply through year-end 1998. Q#10: WHAT IS MEANT BY PERSONAL TIME OFF SCHEDULES? Personal time includes vacation, personal days, family illness days, medical leave, absences for jury duty, funeral and military leave. Q#11: WHAT IS GOING TO HAPPEN TO ALLIED GROUP MORTGAGE COMPANY? As reported elsewhere, Nationwide's current intention is to continue to grow the ALLIED operations. However, we are not aware that any decisions have been made with respect to specific business units. 3 EX-99.A.36 3 EXHIBIT 99(A)(36) 1 Exhibit (a)(36) - -------------------------------------------------------------------------------- NATIONWIDE ANSWERS YOUR QUESTIONS NATIONWIDE HOTLINE: 1-877-655-6417 - -------------------------------------------------------------------------------- JULY 22, 1998 Q#1: WHAT IS THE NATIONWIDE SICK-LEAVE PROGRAM? WILL THERE BY ANY COMPENSATION ON ACCUMULATED SICK LEAVE HOURS OR WILL THE HOURS BE ROLLED OVER TO NEXT YEAR? The Nationwide sick leave program is not an accrual based plan. Instead, sick leave benefits are awarded on July 1 of each calendar year. The award is based on service according to the following schedule: If you Weeks Paid Weeks Paid Have Been at 100% of Base at 80% of Base Employed Salary Salary -------- ------ ------ Less than 1 year 1 -- 1 year, less than 2 1 4 2 years, less than 3 2 8 3 years, less than 4 3 12 4 years, less than 5 4 16 5 years or more 5 20 Your ALLIED sick leave and Long Term Disability benefits will continue through 12-31-98. No decisions have been made concerning future sick leave and Long Term Disability benefits. We will provide employees with enough time to make informed benefits decisions. Should the Nationwide schedule be adopted, the award will be based on combined ALLIED and Nationwide service without any carryover of unused ALLIED sick leave accruals. Q#2: WILL NATIONWIDE'S MEDICAL COVERAGE BE OFFERED OR WILL CURRENT MEDICAL COVERAGE APPLY? Your ALLIED medical coverage will continue through 12-31-98. No decisions have been made concerning medical coverage options for ALLIED employees. We expect to announce all benefit changes in advance of the time when employees would be called upon to make decisions. Our past practice has been to offer the same medical options to all Enterprise employees and to time such an offer with a calendar year effective date--since 1 2 some of the benefit plan provisions have calendar year deductibles. Should the Nationwide medical options be adopted, we will credit for ALLIED service for eligibility purposes. Treatment in progress is not likely to be a significant issue in any such transition since the Nationwide medical options do not include pre-existing condition exclusions. Nationwide offers a variety of medical coverage options. Depending on where employees live, they may have a choice of indemnity options or managed care organizations (MCOs). The MCOs include health maintenance organizations (HMOs), preferred provider organizations (PPOs) and point of Service (POS). Nationwide contracts with Kaiser, Pacificare/FHP and Principal, for example. Q#3: HOW IS OVERTIME PAID? HOW IS IT CALCULATED OVER A HOLIDAY? IF YOU ARE SICK, DO YOU RECEIVE REGULAR PAY UNTIL YOU REACH 40 HOURS? Non-exempt employees (those eligible to receive overtime payments) are paid straight time for time worked up to 40 hours. Overtime is paid at the rate of 1-1/2 times the normal hourly rate for hours in excess of 40 hours in a work week. A separate overtime policy applies in California. Hours taken for holidays, sick time or vacation time, whether paid or unpaid, are counted as hours worked for overtime purposes. Q#4: WILL EXEMPT EMPLOYEES RECEIVE HOLIDAY PAY? The Nationwide holiday policy includes both holidays and personal days (except in California, where personal days are included with vacation days). Holidays are scheduled days where the companies close all offices. Generally, however, personal days are scheduled by agreement between the employee and his/her supervisor. The Nationwide holiday/personal day award is 11 days per calendar year. The number of personal days are generally either 2 or 3 per year, depending on the number of scheduled holidays or scheduled personal days, unless the local office management schedules an office-wide personal day, such as to celebrate Patriot's Day in Boston. Holidays for part-time employees and employees working an alternative work schedule, are prorated and applied to match the hours worked. 2 3 Q#5: HOW MANY WEEKS OF VACATION DO NEW EMPLOYEES RECEIVE WITHIN THE FIRST YEAR OF EMPLOYMENT? At Nationwide, the amount of vacation awarded is determined on service with the company and is based on the following schedule (a separate schedule applies in California). First Calendar Year of Employment Second Calendar Year Hired during Award Award ------------ ----- ----- 1st Calendar Qtr. 5 days after 7-1 10 days on 1-1 2nd Calendar Qtr. 5 days after 10-1 10 days on 1-1 3rd Calendar Qtr. 0 days 10 days on 4-1 4th Calendar Qtr. 0 days 10 days on 7-1 Calendar Year During Which Your Award ----------------- ----- 2nd anniversary occurs 10 days 3rd anniversary occurs 10 days 4th anniversary occurs 10 days 5th thru 14th anniversary occurs 15 days 15th thru 24th anniversary occurs 20 days 25th or more anniversary occurs 25 days Should the Nationwide schedule be applied for ALLIED employees, awards will be based on combined ALLIED/Nationwide service. At this time, Nationwide uses an informal program of unpaid personal leave as a method some employees use to "purchase" vacation. We are considering an Enterprise-wide vacation purchase program to enable exchanges of pay for time off-subject to supervisor approval. Q#6: WILL I BE PAID OUT WHATEVER VACATION TIME I DON'T USE OR WILL I HAVE TO TAKE THE TIME BEFORE YEAR END TO RECEIVE A CREDIT? Your ALLIED vacation schedule will continue to apply through 12-31-98. Should the Nationwide schedule be adopted for ALLIED employees effective 1-1-99, you will receive vacation according to the schedule presented in Question #5. The Nationwide Plan provides for a 10-day carryover which would apply. Q#7: WHAT IS THE MINIMUM REQUIRED NUMBER OF PART-TIME HOURS WORKED NECESSARY TO PARTICIPATE IN THE BENEFIT PROGRAM? WILL PART-TIME SERVICE TRANSFER OVER TO NATIONWIDE? Nationwide pays employees on a biweekly basis. The minimum number of hours an individual must be regularly scheduled to work during a two week period 3 4 (biweekly) is 38.75. All individuals scheduled to work at least 38.75 hours per biweekly pay period are eligible for Nationwide benefits. To the extent ALLIED employees participate in the various Nationwide benefits plans, all part-time, salaried employee service will be recognized. Q#8: ALLIED HAS A HEALTH CARE REIMBURSEMENT PROGRAM FOR HALF OF THE HEALTH CLUB DUES FOR UP TO $200.00. WILL NATIONWIDE STILL HONOR THE SAME PROGRAM? Nationwide does not currently provide financial support for health club dues. No decision has been made as to whether the ALLIED health club reimbursement program will continue. Q#9: ALLIED FURNISHES LIFE INSURANCE AT A REDUCED RATE FOR EMPLOYEES. WILL THERE BE LIFE INSURANCE FURNISHED THROUGH NATIONWIDE? Nationwide provides three forms of death benefits to employees--term life insurance, group accident coverage, and a death benefit from the Nationwide Insurance Enterprise Retirement Plan. Term life insurance and group accident coverage is available at low employee contribution levels for up to 3 x annual pay (term life) or up to $300,000 (Group Accident). A non-contributory, death benefit equal to 1 x pay is provided to active participants in the retirement plan. Nationwide does not currently offer subsidized permanent, universal or variable life insurance products to employees. Q#10: WHAT IS THE MAXIMUM LOAN AMOUNT YOU CAN BORROW FROM THE 401(k) PROGRAM? Under the Nationwide Insurance Enterprise Savings Plan, the maximum loan is the lesser of $50,000 or 50% of your vested account balance. Q#11: WHAT IS THE NATIONWIDE INSURANCE ENTERPRISE? The Nationwide Insurance Enterprise is the business combination of Nationwide and affiliated companies that were established to provide insurance and financial services. It includes Nationwide Mutual Insurance Company, Nationwide Life Insurance Company, Nationwide Financial Services, Inc., Employers Insurance of Wausau, Farmland Mutual Insurance Company, Scottsdale Insurance Company, Colonial Insurance Company, Gates, McDonald & Company, Public Employees Benefits Services Corporation, Morley Neckura, Insurance Intermediaries, Inc., Nationwide Financial Institution Distributor Agency, Inc., Nationwide Financial Services, NEA Valuebuilder Investor Services, Inc., and Public Employees Benefit Services Corporation (PEBSCO). 4 5 Q#12: PLEASE EXPLAIN HOW YOUR TUITION ASSISTANCE PROGRAM WORKS. I AM WORKING TOWARD A DEGREE. PLEASE EXPLAIN WHICH CLASSES YOU WILL COVER. The Nationwide Education Assistance Plan consists of reimbursement of specific expenses for the following types of degree programs and courses: technical insurance courses, certifications courses, undergraduate/ graduate degrees/courses, and specially approved courses. Employees who receive a grade of "C" or better or Pass/Satisfactory will receive 100% reimbursement for tuition and fees for application, registration, graduation, transfer, and labs. Nationwide employees receive a 50% reimbursement for those college courses, which are not part of a degree program, if successfully completed with a grade of "C" or better. The courses must be academic courses offered at an accredited school recognized by the Commission of Recognition of Post-secondary Accreditation (CORPA). Q#13: I HAVE A CHILD ON A FULL SCHOLARSHIP PROGRAM THROUGH ALLIED GROUP. HOW WILL THE MERGER AFFECT HER SCHOLARSHIP? Nationwide does maintain a National Merit Scholarship Program, however, it is too early in the transition planning process for a response to your question. As plans are finalized, you will be kept informed. Q#14: CAN I TRADE ALLIED STOCK FOR NATIONWIDE'S STOCK WITHOUT IT HAVING TO BE A TAXABLE EVENT? Nationwide Mutual is a mutual insurance company and has no stock traded on a public basis. Nationwide Financial Service, Inc. is a subsidiary where a portion of the stock is publicly traded. There are no plans to create an option to simply exchange shares. Q#15: THE BULLETINS HAVE NOT TALKED ABOUT THE ALLIED SUBSIDIARIES. WHAT WILL HAPPEN TO US? Nationwide's current intention is to continue to grow the ALLIED operations including subsidiaries. We are not aware that any decisions have been made with respect to specific business units. 5 EX-99.A.37 4 EXHIBIT 99(A)(37) 1 Exhibit (a)(37) NATIONWIDE ANSWERS YOUR QUESTIONS NATIONWIDE HOTLINE: 1-877-655-6417 - -------------------------------------------------------------------------------- JULY 29, 1998 Q#1: NATIONWIDE'S 401(k) PROGRAM HAS AN ASSET MANAGEMENT FEE. HOW IS THIS FEE DETERMINED? IF IT IS A FLAT FEE, WHAT IS THE DOLLAR AMOUNT? As is generally true for investment fund options offered in Section 401(k) plans, the funds offered in the Nationwide Insurance Enterprise Savings Plan (NIESP) are subject to asset management fees. These include the fees charged by the fund manager and an annual fee, generally set at .05% of the assets in each fund, which compensates the Nationwide Life Insurance Company for services it provides in connection with the annuity contract held by the plan. The fee is monitored periodically for appropriateness and is expected to decline over time. Q#2: AS A PART-TIME EMPLOYEE WORKING 1,000 OR MORE HOURS A YEAR, I AM ELIGIBLE FOR 401(k) AND ESOP CONTRIBUTIONS AT ALLIED. WHAT DOES NATIONWIDE OFFER FOR PART-TIME EMPLOYEES? 401(k)? SICK LEAVE? Salaried employees who are regularly scheduled to work at least 38.75 hours bi-weekly (two-week period) are eligible to participate in all benefit plans. If you continue as a part-time employee you will be eligible for the Nationwide 401(k) program. Sick leave, vacation, personal days and family illness day benefits are pro-rated based upon the number of hours the employee is regularly scheduled to work as of the award date. Under these plans, for part-time and alternative work environment employees, one day equals 1/10 of their regularly scheduled bi-weekly hours. Q#3: IS THERE A PENALTY FEE IF A WITHDRAWAL IS TAKEN FROM THE ENTERPRISE SAVINGS PLAN WITHIN TEN YEARS OF RETIREMENT? Generally, federal tax law provides that if funds are distributed from a tax qualified retirement plan such as the Enterprise Savings Plan, a 10% tax penalty applies, unless the employee has attained age 55 and terminated. You should check with your tax advisor for rules that may apply to you. Q#4: IF YOU ROLL OVER ALLIED ESOP MONEY INTO NATIONWIDE 401(k) IN A LUMP SUM DOES NATIONWIDE MATCH 50%? EXAMPLE: $10,000 FROM ALLIED ESOP TO THE NATIONWIDE 401(k), WOULD THE MATCH BE $5,000.00? The match at Nationwide does not apply to rollover funds. The match applies only to salary deferrals once you become a Nationwide employee. 2 Q#5: COULD YOU PLEASE PROVIDE AN OVERVIEW OF THE NATIONWIDE PENSION PLAN? The Nationwide Insurance Enterprise Retirement Plan (NIERP) is a tax qualified, defined benefit pension plan. The companies currently pay for all benefits. Benefits accrue in the NIERP based on service and compensation. Benefits can start as early as age 55 or they can be delayed until normal retirement date or longer. NIERP benefits are in addition to Social Security. Q#6: WHAT QUESTIONS SHOULD I ASK BEFORE BUYING ANYTHING FROM A BROKER OR INVESTMENT ADVISOR? o What are your qualifications? o What designations do you hold? Look for designations such as CLU (Chartered Life Underwriter), ChFC (Chartered Financial Consultant), CFP (Certified Financial Planner), and CPA (Certified Public Accountant). o What types of products do you sell? o What are the major features of the product? o What documents disclose the details of the product? o How do you get paid if I buy a product from you? o How is your compensation determined? o How much will you get paid? o What services do you provide for your compensation? Remember that whatever compensation your broker or financial advisor receives will be assessed from your account, in one way or another. o What types of charges will my account incur? o How much are Front-end charges, Back-end charges, asset management fees, 12b-1 fees, administrative and other fees? o Please estimate the total fees or charges that will be assessed against my account in a year and show me how you calculated them. o How have the investments you are selling performed in the last year, three years, five years, and ten years? o How do these returns compare to other investments of a similar type? o You should insist on receiving answers you understand and compare the answers from several advisors before buying. EX-99.A.38 5 EXHIBIT 99(A)(38) 1 EXHIBIT (a)(38) TO: Participants in the ALLIED Group Employee Stock Ownership Plan On May 18, 1998, Nationwide Mutual Insurance Company ("Nationwide") announced a tender offer to purchase all outstanding shares of ALLIED Group, Inc. Common Stock, no par value (the "Common Stock") for a purchase price of $47 per share in cash, subject to certain terms and conditions (the "Offer"). Nationwide has subsequently increased its offering price for the Common Stock to $48.25 per share (the "Revised Offer"). The Board of Directors of ALLIED Group, Inc. ("ALLIED") has unanimously determined that the Revised Offer is fair to and in the best interests of the shareholders of ALLIED and has recommended that all ALLIED shareholders accept the Revised Offer and tender their shares pursuant to the Revised Offer. State Street Bank and Trust Company (the "Trustee") as trustee of the ALLIED Group Employee Stock Ownership Trust (the "ESOP") has previously provided you with a letter from us concerning the Offer. In that letter, we estimated (on the basis of certain assumptions and interpretations) that the stock portion of each tendering participant's ESOP account would triple in value, based on the Offer price and the additional allocation described in that letter. Based on an amendment adopted on June 1, 1998 by ALLIED, after consultation with outside counsel in light of the tender offer, the surplus proceeds available to the ESOP from tender of shares will be allocated as if they were an employer contribution rather than earnings of the ESOP. This change will not affect the total amount of the surplus proceeds nor will it affect, in the aggregate, the tripling of value of the stock accounts of the participants. However, individually, it will result in some participants receiving greater than triple the value while other participants will receive less than triple the value. ALLIED has addressed this issue as part of its weekly newsletters to employees. Further questions concerning the effect of the amendment on individual accounts should be directed to ALLIED. Nationwide continues to believe that each ESOP participant will realize a significant increase in their account value as a result of the Revised Offer, particularly in light of the increased offering price, and encourages all participants to instruct the Trustee to tender all applicable shares. Very truly yours, NATIONWIDE MUTUAL INSURANCE COMPANY NATIONWIDE GROUP ACQUISITION CORPORATION EX-99.A.39 6 EXHIBIT 99(A)(39) 1 Exhibit (a)(39) - ------------------------------------------------------------------------------ NATIONWIDE ANSWERS YOUR QUESTIONS NATIONWIDE HOTLINE: 1-877-655-6417 - ------------------------------------------------------------------------------ August 5, 1998 Q#1: IS IT POSSIBLE TO DISTRIBUTE A PACKET DETAILING NATIONWIDE'S CURRENT BENEFITS PACKAGE? As part of the enrollment process Nationwide provides a packet describing the benefits plans that you may enroll in to obtain coverage. If the Nationwide benefit plans are adopted on behalf of ALLIED employees, you will also receive a set of booklets detailing the provisions of the various benefit plans. Q#2: QUESTION #10 IN THE JULY 22 UPDATE STATES THAT THE MAXIMUM LOAN AMOUNT YOU CAN BORROW FROM THE NATIONWIDE 401(k) IS LESSER OF $50,000 OR 50% OF YOUR VESTED ACCOUNT BALANCE. IN ONE OF THE EMPLOYEE MEETINGS IT WAS STATED THAT THE MAXIMUM LOAN AMOUNT CANNOT BE MORE THAN 33% OF YOUR SALARY. WHICH IS CORRECT? The maximum loan amount a participant can borrow from the Nationwide 401(k) is the lesser of $50,000 or 50% of the vested account balance. In addition, there is a limit on the maximum amount of the loan repayment. The combination of loan repayments cannot exceed 33% of net pay. The test is performed at the time the loan is requested. Q#3: PLEASE GIVE AN EXAMPLE OF THE HOW VACATION IS AWARDED. Someone hired in May of 1998 (second quarter) would receive five days on October 1, 1998 and another 10 days on January 1, 1999. Another example, someone hired in October of 1999 receives 10 days on April 1, 2000 and another ten days on January 1, 2001. 1st Calendar 2nd Calendar Hired during Year Award Year Award 1st Calendar Qtr. 5 days on 7-1 10 days on 1-1 2nd Calendar Qtr. 5 days on 10-1 10 days on 1-1 3rd Calendar Qtr. 0 days 10 days on 4-1 4th Calendar Qtr. 0 days 10 days on 7-1 Vacation for employees with more than one year of service is awarded each January 1st. Note that a separate accrual schedule applies in California. Q#4: IF THE NATIONWIDE VACATION SCHEDULE IS APPLIED TO ALLIED EMPLOYEES, HOW WILL IT WORK FOR EMPLOYEES WHO WERE HIRED IN THE THIRD OR FOURTH QUARTER OF 1997 AND HAVE BEEN HERE FOR ONE YEAR? ALLIED service will be credited for vacation award purposes therefore, an employee hired in the third or fourth quarter of 1997 would receive an award of 10 days vacation on January 1, 1999, under the Nationwide vacation schedule. 2 Q#5: WILL EMPLOYEES BE COMPENSATED FOR THEIR ACCUMULATED SICK DAYS? Nationwide's current benefit program does not provide for a payment for unused sick leave. Should the Nationwide benefit's programs be adopted for the ALLIED employees, we anticipate no payment or compensation will be made for prior accumulated sick days under the ALLIED program. Sick leave benefits will be awarded based on combined ALLIED and Nationwide service effective 1-1-99. Q#6: WHAT IS NATIONWIDE'S WORK WEEK? IS IT BASED ON 38.75 HOURS OR 40 HOURS? Nationwide's workweek varies by location. For example, Farmland Insurance Company, located in Des Moines, Iowa works a 40 hour week. You may anticipate a 40 hour work-week. Q#7: I STARTED WITH ALLIED ON APRIL 15, 1993 AND LEFT ON JANUARY 7, 1996. I WAS REHIRED ON DECEMBER 31, 1996. ALLIED DID NOT TREAT THIS AS A BREAK IN SERVICE, THEREFORE, I AM FULLY VESTED IN THE ESOP PLAN. WHAT AMOUNT OF VESTING WILL I HAVE WITH NATIONWIDE ON THE DATE OF CHANGE OF CONTROL? Once your combined ALLIED and Nationwide service reaches 60 months, you will be fully vested in the Nationwide Insurance Enterprise Retirement Plan (NIERP) and the Nationwide Insurance Enterprise Savings Plan (NIESP). You will always be vested in any rollover contributions, such as your ESOP money, that is placed in the Nationwide Insurance Enterprise Savings Plan (NIESP). Under the NIESP, you will receive credit for your ALLIED service towards the 60 months of service vesting requirement for future company matching contributions to that plan. Once your combined ALLIED and Nationwide service reaches 60 months, you will be 100% vested in the company matching contributions and earnings on those contributions in the NIESP. Of course, you are always 100% vested in your contributions, any rollover contributions and any earnings on those contributions. Q#8: I HAVE BEEN REHIRED BY ALLIED. WILL NATIONWIDE GIVE ME CREDIT FOR ALL MY YEARS OF SERVICE WITH ALLIED OR JUST THE PRESENT PERIOD FOR VESTING PURPOSES AND FOR VACATION? If your prior service was counted by ALLIED for purposes of their benefits plans after your rehire, it will generally be counted in the Nationwide pension, savings, vacation and sick leave plans if they are adopted on behalf of ALLIED employees. Q#9: DO YOU HAVE ANY MORE DETAILS AVAILABLE ON MATERNITY LEAVE? The policy typically followed by the companies for uncomplicated pregnancy/maternity situations is that maternity leave may begin two weeks prior to the estimated date of delivery and continue for up to six weeks after a normal delivery or up to eight weeks after a caesarian delivery. Typically, we treat employees as disabled during this period of time. Sick leave/disability income benefits can begin earlier than this time if pregnancy prevents 3 an employee from working and can continue beyond these typical periods of absence should there be a continuing disability post-partum. The amount of benefit during this leave is determined by the sick leave schedule presented in the July 22 Update. Q#10: I WORK 30 HOURS PER WEEK. AS A PART-TIME EMPLOYEE WILL I RECEIVE BENEFITS? As described in Answer #2 of the July 29 Update, sick leave, vacation, personal days and family illness day benefits are pro-rated based upon the number of hours the employee is regularly scheduled to work. For part-time employees, one day equals 1/10 of their regularly scheduled bi-weekly hours. As a part time employee you will be eligible for the Nationwide 401(k) program. Q#11: I WAS HIRED IN SEPTEMBER OF 1995. I DO NOT MEET THE 60 MONTH RULE. IF I ROLL MY ESOP MONEY INTO A NATIONWIDE 401(k) CAN I BORROW AGAINST THAT? IF I CAN BORROW AGAINST THIS MONEY QUICKLY AND WITH LITTLE RESTRICTION, WHY GIVE HALF TO THE GOVERNMENT BY TAKING A CASH SETTLEMENT? You would typically be able to take loans against any monies that you rolled into the NIESP. The NIESP provides for a maximum loan of the lesser of (1) $50,000 reduced by your highest outstanding loan balance under all plans in the twelve months, or (2) 50% of your vested account balance. The combination of loan repayments cannot exceed 33% of net pay. So, any existing loans you may have outstanding in the ALLIED 401(k) plans may have an impact on the maximum amount you may borrow. Employees will have the opportunity to decide what action, withdrawal or rollover, best suits their needs, and whether they can meet their needs through the loan program in the NIESP. With the diversity of individual situations, there is no one correct answer for all employees. However, the government reinforces the position that these funds are intended to be used for long term savings by applying a penalty tax to early withdrawals but not to rollovers. And, implicit in your comments, is the recognition, that, as long as you defer taxation, by rolling your funds into the Nationwide 401(k), 100% of your monies work for you. Q#12: DOES NATIONWIDE HAVE ANY BENEFIT TO PAY THE ADOPTIVE MOTHER FOR LEAVE TIME AS MATERNITY LEAVE? Nationwide complies with the Family Medical Leave Act of 1933 and provides up to 12 weeks of time off. Employees typically use a combination of vacation, personal days and unpaid time off to meet their bonding needs following the placement. The companies have long treated adopted children the same as birth children-in terms of their eligibility to participate in the various benefits plans (medical, dental, life, accident, etc.) Similarly, the companies also recognize the additional needs of parents by providing up to three family illness days per calendar year to care for a sick child. 4 Q#13: I HAVE AN ANNUITY WITH ALLIED. I AM INTERESTED IN THE NATIONWIDE ANNUITY PLAN. PLEASE PROVIDE ME INFORMATION ON THE NATIONWIDE PLAN. Nationwide offers employees a number of non-qualified, tax-deferred annuities, such as The BEST of AMERICA- and Multi-flex product that are sold to the general public. The annuities are offered on a favorably- priced/reduced fee basis to employees, spouses, children and certain other family members. These products will become available to you once you become an Enterprise employee. Information on these products will be made available soon. Q#14: WHAT IS THE PENSION PLAN FORMULA FOR NATIONWIDE? The pension plan formula defines the annual benefit you would receive at normal retirement, currently age 65. The formula is: .0125 x 5 year final average pay x years of service + .005 x (5 year final average pay - Social Security Covered Compensation) x years of service. The Internal Revenue Code limits the maximum covered compensation in any one year to $160,000 and also limits the maximum service to 35 years. Benefits are reduced for commencement prior to age 65. For example, an employee with $40,000 of final average compensation, retiring in 1998, would receive a pension benefit of approximately: Age 55 with 15 years of service $4,800/year or 12% of final average compensation Age 55 with 25 years of service $8,000/year or 20% of final average compensation Age 55 with 35 years of service $10,800/year or 27% of final average compensation Age 62 with 15 years of service $8,000/year or 20% of final average compensation Age 62 with 25 years of service $13,200/year or 33% of final average compensation Age 62 with 35 years of service $18,800/year or 47% of final average compensation The percentages of pay replaced by the plan vary with accumulated service, compensation, and the age at which benefits begin. Q#15: IS THE NATIONWIDE INSURANCE ENTERPRISE SAVINGS PLAN PROTECTED AGAINST FRAUD OR EMBEZZLEMENT? We are protected through a bonding policy, and there is additional protection provided according to the various state insurance guaranty associations. In addition, The Nationwide Insurance Enterprise Savings Plan incorporates all of the protections provided under the Employee Retirement Income Security Act. 5 Q#16: WE ARE CONFUSED ABOUT VARIABLE ANNUITIES. HOW DO THEY WORK? Variables annuities are products available through insurance companies in which the investment returns vary depending upon the performance of underlying investment pools, usually mutual funds. In addition, these products usually have certain guarantees, for instance, that if the owner dies, beneficiaries will receive at least the initial amount invested. Investment earnings within variable annuities are not taxed until the assets are withdrawn. Nationwide Life Insurance Company is one of the largest writers of variable annuities. Q#17: PLEASE PROVIDE ME WITH A COMPARISON OF IRA AND NATIONWIDE 401(k) PLAN ROLLOVER OPTIONS.
Comparison of IRAs and Nationwide 401(k) Plan as Rollover Options for your ESOP Money - ------------------------------------------------------------------------------------- Nationwide Insurance Similarities Rollover IRA Enterprise Savings Plan - ------------ ------------ ----------------------- No tax on ESOP rollover Yes Yes Earnings continue tax-deferred Yes Yes Maximum rollover amount Unlimited Unlimited Can roll your money over to Yes, but some IRA Yes another IRA or 401(k) plan products may have without tax exit fees Differences - ----------- Investment choices available Virtually any financial 15 investment choices asset, but not collectibles or real estate Available if your retire when you Yes No take the ESOP distribution Access to your money through loans No Yes, up to lesser of 50% of vested balance or $50,000 10% penalty tax applied to... All withdrawals taken before Same as IRA, except with age 59 1/2, with limited early retirement provision exceptions at age 55 Spread tax liability on lump sum Not available Available in limited withdrawals over a 5 or 10 year period circumstances - seek advice of a tax expert Mandatory 20% federal withholding No Yes, unless rolled to on withdrawals another plan or IRA Payout options available Varies by product Installment, lump sum or ad hoc
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