SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20459
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment NO. 6)
STATE AUTO FINANCIAL CORPORATION
(Name of Issuer)
COMMON SHARES
(Title of Class of Securities)
85570710500
(CUSIP Number of Class of Securities)
F. Ronald O'Keefe, Esq.
Hahn Loeser & Parks LLP
3300 BP Tower
200 Public Square
Cleveland, Ohio 44114-2301
(216) 621-0150
(Name, address and telephone number of persons
authorized to receive notices and communications
on behalf of person(s) filing statement)
JUNE 30, 2003
(Date of Event which Requires Filing of this Statement)
If the reporting person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-l(b)(3) or (4), check the following box
[ ].
CUSIP No. 85570710500
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF REPORTING PERSON
GREGORY M. SHEPARD
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
[x]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
7. SOLE VOTING POWER
NUMBER OF SHARES
BENEFICIALLY 2,000,000
OWNED BY EACH
REPORTING PERSON 8. SHARED VOTING POWER
WITH
-0-
9. SOLE DISPOSITIVE POWER
2,000,000
10. SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000,000
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.11%
14. TYPE OF REPORTING PERSON
IN
SCHEDULE 13D/A
This Amendment No. 6 to Schedule 13D is filed on behalf of Gregory M. Shepard
("Shepard"), an individual, for the purpose of updating Items 2 and 4 hereof
with respect to his shares of common stock, no par value ("Shares") of State
Auto Financial Corporation ("STFC"). Filing Person has elected to disclose the
following information even though Filing Person believes that these disclosures
are not mandatory.
ITEM 2. IDENTITY AND BACKGROUND
ITEM 2(c) IS HEREBY AMENDED TO ADD THE FOLLOWING SUPPLEMENTARY INFORMATION:
From 1997 to 2000, Filing Person served as Chairman and President of Illinois
HealthCare Insurance Company, an Illinois stock life, accident & health
insurance company with HMO authority. Illinois HealthCare Insurance Company was
authorized to issue insurance against bodily injury, disablement or death by
accident and against disablement resulting from sickness or old age and every
insurance appertaining thereto, including stop-loss insurance. Illinois
HealthCare Insurance Company received its Certificate of Authority on or about
November 6, 1997, from the Illinois Department of Insurance. Due to the
insolvency of Illinois HealthCare Insurance Company, on June 30, 2000, Illinois
HealthCare was placed into liquidation with the Office of the Special Deputy
Receiver representing the Director of Insurance of the State of Illinois.
ITEM 2(e) IS HEREBY AMENDED TO ADD THE FOLLOWING SUPPLEMENTAL INFORMATION:
On August 30, 2000, American Union Insurance Company ("AUIC") and its wholly
owned subsidiary Meridian Insurance Group Acquisition Corporation ("MIGAC"),
filed with the Securities and Exchange Commission a $20.00 per share tender
offer to acquire Meridian Insurance Group, Inc. ("MIGI"). A hearing required
under the Indiana Business Takeover Act (Indiana Code 23-2-3.1), was scheduled
before the Indiana Securities Division for September 25, 2000 with MIGAC, AUIC
and MIGI as the parties. On September 18, 2000, AUIC and MIGAC amended their
tender offer for MIGI, increasing their offer to $25.00 per share. On September
21, 2000, the Indiana Securities Division filed Administrative Complaints
against AUIC, MIGAC, the Filing Person and the Filing Person's brother
(collectively, referred to in the Order as the "Offerors"), requesting that the
Offerors cease and desist the tender offer prior to a hearing. On October 4,
2000, the Indiana Securities Division issued an order (the "Order") in its
administrative proceedings against MIGAC and AUIC, prohibiting the Offerors from
proceeding with their tender offer for MIGI until the tender offer documents
were amended to include additional AUIC financial information based on generally
accepted accounting principles ("GAAP"), and until additional financing details
were provided. AUIC filed financial statements with insurance departments using
permitted statutory accounting principles ("SAP"). In particular, the Order
required: (a) Offerors were to provide a reconciliation of AUIC's financial
statements, prepared in accordance with SAP, such that Offerors' disclosure
could be considered under GAAP, or otherwise affirmatively demonstrate that such
reconciliation could not be prepared and produced absent unreasonable cost or
expense; (b) Offerors were to provide an auditors' report regarding AUIC's SAP
based financial statements, or otherwise affirmatively
demonstrating that audited financial statements could not be prepared or
produced absent unreasonable cost or expense; (c) Offerors were to provide an
adequate description of the source of the funds and consideration to be used to
finance the takeover offer; (d) Offerors were to provide additional disclosure
relative to the amount of Gregory and Tracy Shepard's net worth constituting
illiquid assets and the magnitude of guarantees or contingencies that may
negatively affect their net worth. On October 4, 2000, AUIC engaged its
independent accountants to provide GAAP financial information and to provide a
reconciliation of AUIC's SAP financial statements with GAAP. On October 25,
2000, State Auto Mutual Insurance Company announced an agreement to acquire
MIGI's publicly traded shares for $30.00 per share. On November 16, 2000 and
December 4, 2000, the Offerors submitted information to the Indiana Securities
Division in an attempt to provide the additional information required by the
October 4, 2000 Order. On December 8, 2000, the Offerors' $25.00 per share
amended tender offer was withdrawn. The Offerors notified the Indiana Division
of Securities of its withdrawal and there have been no further proceedings.
ITEM 4. PURPOSE OF TRANSACTION
ITEM 4 IS HEREBY AMENDED TO ADD THE FOLLOWING:
On June 30, 2003, State Automobile Mutual Insurance Company ("State Auto") and
STFC filed a complaint in the United States District Court for the Southern
District of Ohio against Filing Person (Case No. C2 03 585). State Auto and STFC
requested among other things that Filing Person file an amended 13-D to include
the additional information included in Item 2 above. State Auto and STFC also
sought an injunction enjoining Filing Person: (a) from making material
misrepresentations and omissions in future Schedule 13D filings and from future
violations of the federal securities laws; (b) pursuing further transactions in
STFC shares; (c) making further proposals to take over State Auto, STFC or any
of their affiliates; (d) making a tender offer for any STFC shares, until 30
days after Filing Person files what plaintiffs characterize as a "curative"
Schedule 13D approved by the Court. Plaintiffs also seek an order requiring
Filing Person to file a Schedule 13D amendment correcting what State Auto and
STFC allege are "material misrepresentations and omissions". On July 15, 2003,
Filing Person filed a motion to dismiss State Auto's and STFC's lawsuit. Shepard
requests dismissal of the lawsuit on the grounds that (a) his prior Schedule 13D
filings were sufficient, and are not false or misleading; (b) State Auto and
STFC have not and will not incur any irreparable injury, and therefore an
injunction is not warranted; and (c) there is no private right of action for
violation of Section 13(d) of the Securities Exchange Act of 1934.
SCHEDULE 13D
SIGNATURE PAGE
After reasonable inquiry and to the best of his knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
DATED: July 17, 2003
/s/ Gregory M. Shepard
----------------------
Gregory M. Shepard