SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
Guaranty National Corporation
------------------------------
(Name of Subject Company)
Orion Capital Corporation
The Connecticut Indemnity Company
Connecticut Specialty Insurance Company
Design Professionals Insurance Company
EBI Indemnity Company
Employee Benefits Insurance Company
The Fire and Casualty Insurance Company of Connecticut
Security Insurance Company of Hartford
---------------------------------------
(Bidder)
Common Stock, par value $1.00 per share
----------------------------------------
(Title of Class of Securities)
401192109
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(CUSIP Number of Class of Securities)
Michael P. Maloney, Esq.
Vice President and General Counsel
ORION CAPITAL CORPORATION
600 Fifth Avenue
New York, New York 10020-2302
(212) 332-8080
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidder)
Copy to:
John J. McCann, Esq.
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
(212) 632-3000
<PAGE>
This Statement is filed by Orion Capital Corporation
("Orion") and the following of its wholly-owned subsidiaries:
The Connecticut Indemnity Company, Connecticut Specialty
Insurance Company, Design Professionals Insurance Company, EBI
Indemnity Company, Employee Benefits Insurance Company, The
Fire and Casualty Insurance Company of Connecticut and
Security Insurance Company of Hartford (collectively with
Orion, the "Purchasers") relating to the tender offer of the
Purchasers to purchase up to 4,600,000 shares of common stock,
par value $1.00 per share (the "Shares"), of Guaranty National
Corporation, a Colorado corporation (the "Company"). This
Statement further amends the Schedule 14D-1 of the Purchasers,
dated May 8, 1996 previously amended by Amendment No. 1 dated
May 23, 1996, by Amendment No. 2 dated June 4, 1996 and by
Amendment No. 3 dated June 11, 1996 (as heretofore and hereby
amended, the "Schedule 14D-1"), by incorporating by reference
herein the information set forth in the press release dated
June 18, 1996 of Orion attached as Exhibit (a)(13) hereto.
This Statement also amends Items 1, 3, 7, 10 and 11 of the
Schedule 14D-1 by adding the information set forth below.
Except as otherwise indicated herein, the Schedule 14D-1
remains unchanged in all respects. Capitalized terms not
otherwise defined herein are defined as set forth in the
Schedule 14D-1 or in the Offer to Purchase of the Purchasers,
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<PAGE>
dated May 8, 1996 as supplemented by the Supplement to the
Offer to Purchase dated June 4, 1996 (the "Offer to
Purchase").
Item 1. Security and Subject Company
-----------------------------
The information set forth in Item 1 of the 14D-1 is
hereby supplemented as follows:
On June 18, 1996 the Purchasers increased the Offer
price from $17.50 per Share net to the seller in cash to
$18.50 per Share net to the seller in cash. The information
set forth in the press release dated June 18, 1996 of Orion
attached hereto as Exhibit (a)(13) is incorporated herein by
reference.
Item 3. Past Contacts, Transactions or Negotiations
with the Subject Company
--------------------------
The information set forth in Item 3 of the 14D-1 is
hereby supplemented as follows:
Discussions took place during the period June 10
through June 17, 1996 between legal counsel for the Purchasers
and legal counsel for the Company, with respect to the
Company's plan to convene a meeting of the Board of Directors
of the Company to consider amendment of the Company's
Shareholder Rights Plan. During those discussions, legal
counsel for the Company reiterated that the Special Committee
and its financial advisors believed the Offer price was
inadequate but suggested that it would be helpful to a
resolution of open issues for the Purchasers to memorialize
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<PAGE>
the undertakings of the Purchasers, previously disclosed in
the Supplement to the Offer to Purchase dated June 4, 1996, by
amending the Shareholder Agreement dated November 7, 1991 by
and among the Company, Orion and certain subsidiaries of
Orion, as set forth in Exhibit (c)(5) hereto.
On June 16, 1996, legal counsel for the Company
indicated that if the undertakings previously made could be so
memorialized and the Offer price adjusted as reflected in this
Amendment No. 4, he hoped that the Company's financial
advisors would find that the terms of the Offer are fair to the
holders of Shares from a financial point of view.
On June 17, 1996, during discussions between legal
counsel for the Company and legal counsel for the Purchasers,
further requests were made on behalf of the Company with
respect to clarification of the undertakings previously made
by the Purchasers and for the imposition of a further
condition to the Offer: that a minimum of 3,776,000 Shares (a
majority of the Shares not owned by the Purchasers) be validly
tendered for the Offer to be effective.
At a meeting of the Board of Directors of the
Company held on June 18, 1996, the Special Committee reported
that the Committee's financial advisors are of the opinion
that an Offer of $18.50 in cash, particularly in light of the
Amendment to the Shareholder Agreement attached as Exhibit (c)(5)
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<PAGE>
hereto and the imposition of the additional condition reflected in
the press release attached as Exhibit (a)(13) hereto, would be
fair to the stockholders of the Company from a financial point of
view. Messrs. Gruber, Hollen and Sanborn participated in that
meeting by telephone.
The Board of Directors of the Company voted
unanimously (with Messrs. Gruber, Hollen and Sanbornabstaining
and Mr. Shepherd and Ms. Adams not in attendance at the meeting)
to accept and approve the report of the Special Committee and
to recommend acceptance of the Offer by holders of the Shares.
On June 18, 1996, the Chairman of the Purchasers
informed the Company's Board of Directors of their intention
to amend the terms of the Offer as had been requested by the
Special Committee and as reflected in this Amendment No. 4 and
the Exhibits hereto.
Item 7. Contracts, Arrangements, Understandings
or Relationships with Respect to the
Subject Company's Securities
------------------------------------------
The information set forth in Item 7 of the Schedule
14D-1 is hereby supplemented by incorporating the information
set forth in Item 3 above.
Item 10. Additional Information
------------------------
The information set forth in Item 10 of the Schedule
14D-1 is hereby supplemented as follows:
Whether or not otherwise specifically referenced in
response to the Items of this Statement, the information
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<PAGE>
contained in the press release dated June 18, 1996 of Orion
attached hereto as Exhibit (a)(13) is incorporated herein by
reference.
Item 11. Material to be Filed as Exhibits
---------------------------------
(a) (13) Press Release dated June 18, 1996
of Orion Capital Corporation
(c) (5) Amendment dated June 18, 1996 to the
Shareholder Agreement by and among
Guaranty National Corporation, Orion
Capital Corporation and certain sub-
sidiaries of Orion Capital Corporation,
as listed therein
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<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: June 18, 1996
ORION CAPITAL CORPORATION
By /s/ Michael P. Maloney
--------------------------
Vice President, General
Counsel and Secretary
THE CONNECTICUT INDEMNITY COMPANY
CONNECTICUT SPECIALTY INSURANCE COMPANY
DESIGN PROFESSIONALS INSURANCE COMPANY
EBI INDEMNITY COMPANY
EMPLOYEE BENEFITS INSURANCE COMPANY
THE FIRE AND CASUALTY INSURANCE COMPANY
OF CONNECTICUT
SECURITY INSURANCE COMPANY OF HARTFORD
By /s/ Michael P. Maloney
---------------------------
Senior Vice President
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<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- ------------
(a)(13) Press Release dated June 18, 1996
of Orion Capital Corporation
(c)(5) Amendment dated June 18, 1996 to the
Shareholder Agreement by and among
Guaranty National Corporation, Orion
Capital Corporation and certain
subsidiaries of Orion Capital
Corporation, as listed therein
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Exhibit (a)(13)
From: Vincent T. Papa Dawn Dover
(212) 332-8080 Robert Siegfried
Jeanne Hotchkiss Kekst and Company
(860) 674-6754 (212) 593-2655
FOR IMMEDIATE RELEASE
GUARANTY NATIONAL RECOMMENDS ACCEPTANCE OF
ORION CAPITAL CASH TENDER OFFER
FOR GUARANTY NATIONAL SHARES AT INCREASED PRICE OF
$18.50 PER SHARE; OFFER EXTENDED TO JULY 1, 1996
New York, New York, June 18, 1996 -- Orion Capital Corporation
(NYSE: OC) today announced that the Board of Directors of Guaranty
National Corporation (NYSE: GNC), pursuant to the recommendation of
its Special Committee, has now recommended that Guaranty National's
shareholders accept the outstanding Offer to Purchase by Orion and
certain subsidiaries of up to 4,600,000 shares of Guaranty National
common stock. The offered price has been increased from $17.50 per
share to $18.50 per share in cash and the Expiration Date of the
Offer has been extended to July 1, 1996.
In response to a request made by the Special Committee, Orion has
conditioned its revised offer on the receipt by it of a minimum of
3,776,000 validly tendered shares. Orion stated that through the
close of business on June 17, 1996, 3,444,509 shares of Guaranty's
Common Stock have been tendered pursuant to the Offer. The Offer
continues to be subject to proration if more than 4,600,000 shares
of common stock are validly tendered.
Orion Capital Corporation is engaged in the specialty property and
casualty insurance business through wholly-owned subsidiaries which
include EBI Companies, DPIC Companies, Connecticut Specialty
Insurance Group, SecurityRe Companies and Wm. H. McGee & Co. Inc.,
as well as through its 49.5% ownership interest in Guaranty
National Corporation.
###
Exhibit (c)(5)
AMENDMENT TO SHAREHOLDER AGREEMENT
This Amendment is made as of June 18, 1996 (the "Amendment")
by and among Guaranty National Corporation, a Colorado corporation
("Guaranty"), Orion Capital Corporation, a Delaware corporation
("Orion") and certain of Orion's wholly-owned subsidiaries, as
listed on the signature page hereof (the "Subsidiaries"); this
Amendment further revises that certain Shareholder Agreement dated
as of November 7, 1991 by and among Guaranty, Orion and certain
subsidiaries of Orion named therein. (The November 7, 1991
Shareholder Agreement, as previously amended on February 2, 1994
and March 2, 1995, is herein referred to as the "Shareholder
Agreement.") Terms defined in the Shareholder Agreement and not
otherwise defined herein shall have the meanings ascribed to such
terms in the Shareholder Agreement.
WHEREAS, Orion and the Subsidiaries currently own
approximately 49.5% of the outstanding Guaranty Common Stock,
including certain shares received in 1995 on conversion of
Guaranty's 7.85% Subordinated Notes due July 1, 2003 (the "7.85%
Notes"); and
WHEREAS, Orion and certain of the Subsidiaries have made a
tender offer to purchase up to 4,600,000 additional shares of
Guaranty Common Stock; and
WHEREAS, Guaranty, Orion and the Subsidiaries have determined
that it would be in their mutual best interests further to amend
the Shareholder Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and subject to the terms and
conditions hereinafter set forth, Guaranty, Orion and the
Subsidiaries agree to further amend the Shareholder Agreement, as
follows:
Two additional subsidiaries of Orion, EBI Indemnity Company
and SecurityRe, Inc., are hereby added as signatories to this
Shareholder Agreement inasmuch as such companies currently hold
shares of outstanding Guaranty Common Stock, which shares were
received on conversion of the 7.85% Notes.
Subject to at least 4,600,000 shares of outstanding Guaranty
Common Stock having been validly tendered, accepted for payment and
paid for pursuant to the tender offer, then, effective upon the
closing of the purchase of such shares, the Section entitled
"Miscellaneous" shall be amended by adding a new Subsection 3.10 to
the Shareholder Agreement, as follows:
<PAGE>
3.10 Further Agreements
------------------
(a) Orion and the Subsidiaries will not purchase, prior to
July 1, 1999, additional shares of Guaranty Common Stock (if after
giving effect to such purchase they would own more than 81% of the
outstanding Guaranty Common Stock) other than pursuant to an offer
made for all shares of outstanding Guaranty Common Stock not held
by them, which offer is conditioned upon the acceptance thereof by
at least a majority of the shares of Guaranty Common Stock then
outstanding and not held by Orion and the Subsidiaries.
(b) If an offer is made to holders of shares of outstanding
Guaranty Common Stock, as described in subparagraph (a) above,
prior to July 1, 1999, Orion and the Subsidiaries will offer a
purchase price involving consideration equal to at least $18.50 per
share.
(c) Orion and the Subsidiaries will support the adoption of
a policy by the Board of Directors of Guaranty that any repurchase
of shares of outstanding Guaranty Common Stock by Guaranty prior to
July 1, 1999 should be approved by a majority of those members of
the Board of Directors who are independent of and not employed by
any of Orion or the Subsidiaries.
(d) If, at any time during the five-year period following
July 1, 1996, Orion and the Subsidiaries should wish to sell as a
block 90% or more of the aggregate number of shares then owned by
them, or propose a merger or consolidation involving Guaranty, they
will not do so unless (i) in the case of a sale of 90% or more of
the aggregate number of shares owned by Orion and the Subsidiaries,
the purchaser of such shares undertakes to offer to purchase all
other shares of Guaranty Common Stock outstanding for consideration
of substantially equivalent value to that offered to Orion and the
Subsidiaries or (ii) in the case of a merger or consolidation, all
shares are exchanged for substantially equivalent value.
All other terms of the Shareholder Agreement shall continue
in full force and effect.
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement as of the day and year set forth in the
heading hereof.
GUARANTY NATIONAL CORPORATION
By /s/ Arthur J. Mastera
------------------------------
Arthur J. Mastera
Senior Vice President
ORION CAPITAL CORPORATION
By /s/ Alan R. Gruber
------------------------------
Alan R. Gruber
Chairman of the Board and
Chief Executive Officer
THE CONNECTICUT INDEMNITY COMPANY
CONNECTICUT SPECIALTY INSURANCE
COMPANY
DESIGN PROFESSIONALS INSURANCE COMPANY
EBI INDEMNITY COMPANY
EMPLOYEE BENEFITS INSURANCE COMPANY
THE FIRE & CASUALTY INSURANCE
COMPANY OF CONNECTICUT
SECURITY INSURANCE COMPANY OF HARTFORD
SECURITY REINSURANCE COMPANY
By /s/ Alan R. Gruber
-----------------------------
Alan R. Gruber
Chairman
SECURITYRE, INC.
By /s/ Raymond J. Schuyler
-------------------------------
Raymond J. Schuyler
Senior Vice President-Investments
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