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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
RISCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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(RISCORP LOGO)
June 30, 2000
Dear Shareholder:
Attached to this letter is a brief supplement to our Proxy Statement, dated
May 11, 2000, as previously supplemented, which describes recent changes to the
terms of our pending merger with Griffin Acquisition Corp. The supplement
explains an increase in the cash portion of the merger consideration from $2.85
per share to $3.075 per share. Class A shareholders continue to be entitled to
receive an additional pro rata cash amount if RISCORP recovers any amounts in
connection with the litigation currently pending against Zenith Insurance
Company and Arthur Andersen LLP.
In addition, the supplement explains that the special meeting of the
shareholders originally convened on June 21, 2000 has been adjourned until 11:00
a.m. on July 20, 2000 in order to allow the Board of Directors to solicit
additional proxies with respect to the proposed merger.
The Board of Directors continues to believe that this transaction is fair
and in the best interests of the holders of Class A Common Stock.
IF YOU HAVE ALREADY DELIVERED A PROPERLY EXECUTED PROXY AND DO NOT WISH TO
CHANGE YOUR VOTE, THERE IS NO NEED TO TAKE ANY ADDITIONAL ACTION. WE HAVE
ENCLOSED ANOTHER PROXY, TOGETHER WITH A RETURN ENVELOPE, WHICH MAY BE USED IF
YOU WISH TO CHANGE YOUR VOTE OR, IF A PROXY HAS NOT PREVIOUSLY BEEN RETURNED, TO
VOTE FOR THE FIRST TIME. YOU HAVE THE RIGHT TO REVOKE YOUR PROXY ANY TIME PRIOR
TO VOTING AT THE MEETING.
This letter and the accompanying Supplement to the Proxy Statement are
first being mailed to RISCORP's shareholders on or about June 30, 2000.
If you have any questions about this Supplement or the Proxy Statement,
please let me hear from you.
Sincerely,
/s/ Walter E. Riehemann
Walter E. Riehemann
President
<PAGE> 3
RISCORP
SUPPLEMENT TO PROXY STATEMENT
JUNE 30, 2000
---------------------
ADJOURNMENT OF SPECIAL MEETING
The special meeting of the shareholders of RISCORP was originally convened
on June 21, 2000 and was adjourned until June 28, 2000. On June 28, 2000, the
Board of Directors was informed that William D. Griffin and Griffin Acquisition
Corp. had agreed to increase the cash portion of the merger consideration
payable to the holders of Class A Common Stock from $2.85 per share to $3.075
per share. As a result of this increase, the special meeting of shareholders was
again adjourned until 11:00 a.m. on July 20, 2000 in order to inform the
shareholders of the increase in the cash portion of the merger consideration and
to solicit additional proxies in connection with the proposed merger. The
special meeting will reconvene at the Sheraton Colony Square, 188 14th Street,
N.E., Atlanta, Georgia at such time and date.
INCREASE IN MERGER CONSIDERATION AND AMENDMENT TO MERGER AGREEMENT
As a result of the agreement among RISCORP, Mr. Griffin and Griffin
Acquisition Corp., upon completion of the merger, holders of the Class A Common
Stock were to receive a cash payment of $2.85 per share without interest and
less any required withholding taxes, plus a contingent right to receive an
additional pro rata cash amount if RISCORP recovers any amounts from Zenith
Insurance Company or other specified parties in connection with RISCORP's sale
of assets to Zenith in 1998. On June 28, 2000, RISCORP, Mr. Griffin and Griffin
Acquisition Corp. entered into a third amendment to the merger agreement
increasing the cash portion of the merger consideration to $3.075 per share and
extending, from June 30, 2000 to August 15, 2000, the date upon which either
party can terminate the merger agreement if the merger has not been completed.
In addition, the third amendment removes the adjustment to the cash portion of
the merger consideration that would have reduced the amount distributed to the
holders of the Class A Common Stock if certain of RISCORP's expenses in the
merger exceeded $1,500,000. A copy of the third amendment is attached hereto as
Appendix A to this Proxy Supplement. Finally, RISCORP and Mr. Griffin amended
the tolling agreement discussed in the Proxy Statement to extend the termination
date from June 30, 2000 to August 15, 2000.
NEGOTIATIONS REGARDING THE THIRD AMENDMENT TO THE MERGER AGREEMENT
The increase in the cash portion of the merger consideration resulted from
discussions among representatives of Mr. Griffin and RISCORP, and Robert L.
Chapman, representing Chap-Cap Partners, L.P., Seth Hamot, certain of Mr.
Hamot's affiliates, Thomas A. Albrecht, and Peter D. Norman. Messrs. Chapman,
Hamot, Norman, and Albrecht collectively own of record or beneficially, either
directly or through their affiliates, 3,609,372 shares of the Class A Common
Stock.
On June 16, 2000, representatives of Mr. Griffin contacted Mr. Chapman
indicating that Mr. Griffin would be willing to increase the cash portion of the
merger consideration payable to $2.92 per share but would retain the first $2.7
million of any recovery from Zenith and Arthur Andersen. Mr. Chapman countered
with a suggestion that Mr. Griffin pay $3.50 per share and retain all of the
recovery from Zenith and Arthur Andersen. Mr. Griffin's representatives rejected
that suggestion and offered to pay $2.95 per share plus the contingent right to
receive an additional pro rata cash amount if RISCORP recovers any amount from
Zenith and Arthur Andersen. Mr. Chapman countered with $3.42 per share. The
parties ended discussions on June 16, 2000 without reaching agreement.
Following adjournment of the special meeting on June 21, 2000, Mr. Chapman
and Mr. Griffin continued discussions concerning the transactions and the
possible settlement of the outstanding litigation initiated by Mr. Chapman.
<PAGE> 4
On June 27, 2000, representatives of Mr. Griffin delivered a counter
proposal increasing the cash portion of the merger consideration to $3.00 per
share. Throughout the day of June 27, 2000, representatives of Mr. Griffin and
Mr. Chapman made a number of offers and counter offers between $3.00 and $3.20
per share, some of which included elimination of the contingent portion of the
merger consideration. Mr. Chapman and representatives of Mr. Griffin continued
discussions and agreed on an increase in the cash portion of the merger
consideration to $3.075 without any change to the contingent recovery right. In
addition, Mr. Chapman and Mr. Griffin agreed to remove the adjustment to the
cash portion of the merger that would have reduced the amount paid to the Class
A shareholders if certain of RISCORP's expenses in the merger exceeded
$1,500,000. As part of these negotiations, Mr. Chapman, Mr. Norman, Mr.
Albrecht, Mr. Hamot and certain of Mr. Hamot's affiliates agreed to enter into
voting agreements to support the amended transaction.
On June 27, 2000, representatives of Mr. Griffin advised counsel to RISCORP
of the revised terms of the merger for consideration by the Board of Directors
in connection with the proposed transaction. Counsel to RISCORP advised the
Board of the revised terms of the merger and the timing considerations with
respect to soliciting shareholder approval of the transaction. Following a
discussion of the issues, the Board authorized counsel to finalize the terms of
the amendment to the Plan and Agreement of Merger for consideration by the Board
prior to reconvening the special meeting of shareholders scheduled for 1:00 p.m.
on June 28, 2000.
On June 28, 2000, the Board met to review and consider the terms of the
third amendment to the merger agreement. Counsel advised the Board of the status
of the negotiations between the parties and the outstanding issues related to
the voting agreements to be executed by Messrs. Chapman, Hamot, Norman and
Albrecht in connection with the execution and delivery of the amendment. The
Board was also advised that each of the foregoing shareholders had requested an
adjournment of the 1:00 p.m. shareholder meeting to provide adequate time for
their counsel to review and finalize the voting agreements to be executed by
each. The Board approved a four hour adjournment of the meeting, subject to
shareholder approval, and directed counsel to communicate a 5:00 p.m. deadline
to the parties for finalizing the terms of the agreements. The special meeting
of shareholders was adjourned until 5:00 p.m. that afternoon.
Following the adjournment of the special meeting, the Board met to continue
its deliberations regarding the revised terms of the merger and the timing
issues related to the distribution of supplemental proxy material and any
further adjournment of the special meeting. The Board concluded that the revised
terms of the merger were in the best interests of the holders of Class A Common
Stock and approved the execution and delivery of the third amendment and an
extension of the tolling agreement with Mr. Griffin until August 15, 2000. The
Board also authorized a further adjournment of the special meeting until July
20, 2000, subject to RISCORP's receipt of executed counterparts of the third
amendment and the voting agreements with Messrs. Chapman, Hamot, Norman and
Albrecht.
The special meeting of shareholders was reconvened on June 28, 2000 and
adjourned until 11:00 a.m. on July 20, 2000.
VOTING AGREEMENTS
Each of Mr. Hamot and his affiliates, Chap-Cap Partners, L.P., Mr. Albrecht
and Mr. Norman have entered into a voting agreement insuring that all of their
shares will be voted in favor of the merger agreement, as amended, and the
transactions contemplated therein.
IF YOU HAVE ALREADY DELIVERED A PROPERLY EXECUTED PROXY AND DO NOT WISH TO
CHANGE YOUR VOTE, THERE IS NO NEED TO TAKE ANY ADDITIONAL ACTION. WE HAVE
ENCLOSED ANOTHER PROXY, TOGETHER WITH A RETURN ENVELOPE, WHICH MAY BE USED IF
YOU WISH TO CHANGE YOUR VOTE OR, IF A PROXY HAS NOT PREVIOUSLY BEEN RETURNED, TO
VOTE FOR THE FIRST TIME. YOU HAVE THE RIGHT TO REVOKE YOUR PROXY ANY TIME PRIOR
TO VOTING AT THE MEETING.
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<PAGE> 5
APPENDIX A
THIRD AMENDMENT TO
PLAN AND AGREEMENT OF MERGER
THIS THIRD AMENDMENT TO PLAN AND AGREEMENT OF MERGER (this "Amendment") is
entered into as of the 28th day of June, 2000 among GRIFFIN ACQUISITION CORP., a
Florida corporation (the "Acquiror"), WILLIAM D. GRIFFIN, an individual resident
of the State of Florida (the "Guarantor"), and RISCORP, INC., a Florida
corporation ("RISCORP").
WITNESSETH:
WHEREAS, on November 3, 1999, the parties entered into a Plan and Agreement
of Merger, as amended by the first and second amendments thereto (the
"Agreement"), which contemplates the merger of Acquiror with and into RISCORP
pursuant to the applicable provisions of the Florida Business Corporation Act,
with RISCORP surviving the merger;
WHEREAS, the parties now desire to amend the Agreement as hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Section 1.2(b)(i)(1). Section 1.2(b)(i)(1) of the Agreement is
hereby deleted in its entirety and, in lieu thereof, the following new
Section 1.2(b)(i)(1) is hereby inserted:
the term "Merger Consideration" shall equal (A) $3.075, plus (B) the
Contingent Claim Amount divided by the aggregate of the Outstanding
Class A Shares and the Outstanding Class B Shares (as defined in
Section 3.2); and
2. Section 7.1(b). Section 7.1(b) of the Agreement is hereby amended by
deleting the date "June 30, 2000" contained therein and substituting in its
place the date "August 15, 2000."
3. Section 7.1(c). Section 7.1(c) of the Agreement is hereby amended by
deleting the date "June 30, 2000" contained therein and substituting in its
place the date "August 15, 2000."
4. Other Terms and Conditions Ratified and Confirmed. All other terms
and conditions of the Agreement are hereby ratified and confirmed by the
parties and shall remain in full force and effect.
5. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned parties have executed this Amendment as
of the day and year set forth above.
GRIFFIN ACQUISITION CORP.
By: /s/ WILLIAM D. GRIFFIN
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William D. Griffin
President
/s/ WILLIAM D. GRIFFIN
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William D. Griffin
RISCORP, INC.
By: /s/ WALTER E. RIEHEMANN
------------------------------------
Walter E. Riehemann
President
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