SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE l3D
Under the Securities Exchange Act of l934
Amendment No. 1
Guaranty National Corporation
(Name of Issuer)
Common Stock, $1.00 par value
(Title of class of securities)
401192109
(CUSIP Number)
Michael P. Maloney, Esq.
Vice President, General Counsel and Secretary
Orion Capital Corporation
600 Fifth Avenue
New York, New York 10020
(212) 332-8080
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(Name, address and telephone number of person authorized to
receive notices and communications)
Copies of all notices and communications should be sent to:
John J. McCann, Esq.
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York l0112
July 2, 1996
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(Date of event which requires filing of this statement)
If filing person has previously filed a statement on
Schedule l3G to report the acquisition which is the subject
of this statement and is filing this statement because of
Rule l3d-l(b) (3) or (4), check the following:[x]
Check the following box if a fee is being paid with this
statement: []
(Continued on following pages)
Exhibit Index Appears on Page 11
<PAGE>
CUSIP No.401192109
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1) Names of Reporting Persons (a) Orion Capital Corporation
S.S. of IRS Identification IRS No. 95-6069054
Nos of Above Persons (b) The Connecticut Indemnity
Company
IRS No. 06-0303520
(c) Connecticut Specialty
Insurance Company
IRS No. 06-1121822
(d) Design Professionals
Insurance Company
IRS No. 94-2319176
(e) Employee Benefits
Insurance Company
IRS No. 95-1613489
(f) EBI Indemnity Company
IRS No. 06-1008792
(g) The Fire and Casualty
Insurance Company of
Connecticut
IRS No. 06-0640218
(h) Security Insurance
Company of Hartford
IRS No. 06-0529570
(i) Security Reinsurance
Company
IRS No. 06-1008792
(j) SecurityRe, Inc.
IRS No. 06-1008789
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2) Check the Appropriate Box if a (a)
Member of a Group (b) X
(See Instructions) (c) X
(d) X
(e) X
(f) X
(g) X
(h) X
(i) X
(j) X
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3) SEC use Only
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<PAGE>
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4) Source of Funds (a) WC
(See Instructions) (b) WC
(c) WC
(d) WC
(e) WC
(f) WC
(g) WC
(h) WC
(i) WC
(j) WC
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5) Check if Disclosure of Legal
Proceedings are Required
Pursuant to Items 2(d) or 2(e)
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6) Citizenship or Place of (a) Delaware
Organization (b) Connecticut
(c) Connecticut
(d) Connecticut
(e) Connecticut
(f) Connecticut
(g) Connecticut
(h) Connecticut
(i) Connecticut
(j) Connecticut
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(7) Sole Voting
Number Power 12,009,942
of Shares (8) Shared Voting
Beneficially Power
Owned by (9) Sole Dispositive 12,009,942
Each Reporting Power
Person With (10) Shared Dispositive
Power
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11) Aggregate Amount Beneficially
Owned by Each Reporting Person 12,009,942
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12) Check if the Aggregate Amount
in Row (11) Excludes Certain Shares
(See instructions)
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<PAGE>
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13) Percent of Class Represented
by Amount in Row (11) 80.3%
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14) Type of Reporting Person (a) CO, HC
(See Instructions) (b) CO, IC
(c) CO, IC
(d) CO, IC
(e) CO, IC
(f) CO, IC
(g) CO, IC
(h) CO, IC
(i) CO, IC
(j) CO
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<PAGE>
Item 1. Security and Issuer.
-------------------
This statement relates to the Common Stock, $1.00
par value (the "Common Stock"), of Guaranty National
Corporation ("GNC" or the "Company"). The principal
executive offices of GNC are located at 9800 South Meridian
Boulevard, Englewood, Colorado 80112.
Item 2. Identity and Background.
------------------------
This statement is filed by Orion Capital
Corporation ("Orion or the Parent"), a Delaware corporation
with its principal executive offices at 600 Fifth Avenue,
New York, New York 10020, and nine of Orion's subsidiaries,
each of which is a corporation organized under the laws of
the state of Connecticut: The Connecticut Indemnity Company
("CI"); Connecticut Specialty Insurance Company ("CSIC");
Design Professionals Insurance Company ("DPIC"); Employee
Benefits Insurance Company ("EBIC"); EBI Indemnity Company
("EIC"); The Fire and Casualty Insurance Company of
Connecticut ("F&C"); Security Insurance Company of Hartford
("SICH"); Security Reinsurance Company ("SRC"); and
SecurityRe, Inc. ("SRI"). The principal offices of CI,
CSIC, DPIC, EBIC, EIC, F&C, SICH, SRC and SRI are located at
9 Farm Springs Drive, Farmington, Connecticut 06032. Orion
owns, directly or indirectly,
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<PAGE>
all of the outstanding capital stock of each of CSIC, DPIC,
EBIC, EIC, F&C, SICH, SRC and SRI (collectively, the
"Subsidiaries"). The Subsidiaries, other than SRI,
underwrite and sell most types of property and casualty
insurance with an emphasis on commercial insurance in
specialized markets, particularly workers compensation and
architect and engineer professional liability. SRI is
engaged in facultative reinsurance management.
This statement amends Items 3, 4, 5, 6 and 7 of the
Schedule 13D dated May 8, 1996 (which supplemented and
modified the information contained in Amendment No. 2 to the
Schedule 13G dated February 5, 1996 and filed in paper
format by Orion and the Subsidiaries with respect to GNC's
Common Stock) by adding to such items the information
contained herein.
Item 3. Source and Amount of Funds or Other Consideration.
--------------------------------------------------
An aggregate of $85,100,000 was needed to purchase
the 4,600,000 shares of GNC Common Stock pursuant to the
Offer. Each Subsidiary and Orion utilized its available
cash and short-term investments to purchase the shares of
GNC Common Stock which were the subject of the Offer.
Item 4. Purpose of Transaction.
-----------------------
As of midnight on July 1, 1996, the Offer expired; and on
July 2, 1996 Orion and certain of the Subsidiaries accepted for
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<PAGE>
payment, subject to proration, 4,600,000 shares of GNC
Common Stock. In a press release dated July 9, 1996, a copy
of which is attached hereto as Exhibit 1 and incorporated by
reference herein, Orion announced the successful consummation of
the Offer to Purchase 4,600,000 shares of GNC Common Stock; the
4,600,000 shares so purchased, together with the 7,409,942
shares of GNC Common Stock already owned by the
Subsidiaries, represents approximately 80.3% of the GNC
shares outstanding.
Item 5. Interest in Securities of Issuer.
---------------------------------
According to GNC's quarterly report on Form 10-Q
for the quarter ended March 31, 1996, there were 14,961,354
shares of GNC Common Stock outstanding as of May 6, 1996.
In addition to the 7,409,942 shares of GNC Common Stock
previously reported as owned by the Subsidiaries, Orion and
certain of the Subsidiaries purchased a total of 4,600,000
shares of GNC Common Stock at $18.50 per share pursuant to
the Offer, as follows:
Company No. of Shares Purchased
---------- -----------------------
Orion 1,025,000
CI 650,000
CSIC 105,000
DPIC 150,000
EBIC 125,000
EIC 125,000
F&C 225,000
SICH 2,195,000
---------
4,600,000
=========
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<PAGE>
Following consummation of the Offer, Orion and
the Subsidiaries own, in the aggregate, 12,009,942 shares of
GNC Common Stock, as follows:
Company No. of Shares Directly Owned
------- ----------------------------
Orion 1,025,000
CI 1,057,795
CSIC 215,154
DPIC 317,115
EBIC 618,612
EIC 630,379
F&C 422,416
SICH 7,116,802
SRC 538,955
SRI 67,714
----------
12,009,942
==========
Orion may continue to be deemed the beneficial owner of all shares
of GNC Common Stock owned by the Subsidiaries.
Except as previously reported, or to the extent that
the officers and directors of Orion and the Subsidiaries may
be deemed to "beneficially own" shares of GNC Common Stock
by reason of their voting power or investment power with
respect to the shares owned by Orion and the Subsidiaries,
no officer or director of Orion nor any of the Subsidiaries
beneficially owns, or has the
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<PAGE>
right to acquire, directly or indirectly, any shares of GNC
Common Stock or has effected any transaction in shares of
GNC Common Stock since May 3, 1996 (other than the tender of
shares pursuant to the Offer).
Item 6. Contracts, Arrangements, Understandings or
Relationships with respect to Securities of
the Issuer
--------------------------------------------.
Attached hereto as Exhibit 2 and incorporated by
reference herein is a copy of an Amendment, dated as of June
18, 1996, to the Shareholder Agreement by and among GNC,
Orion and the Subsidiaries. The Amendment provides certain
ongoing rights to the shareholders of GNC other than Orion
and its Subsidiaries.
Item 7. Materials to be filed as Exhibits
------------------------------------.
Exhibit 1 - Form of Press Release
of Orion dated July 9, 1996
Exhibit 2 - Amendment, dated as of June 18,
1996, to Shareholder Agreement by
and among GNC, Orion and the Sub-
sidiaries
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<PAGE>
Signatures
-----------
After reasonable 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.
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
EMPLOYEE BENEFITS INSURANCE COMPANY
EBI INDEMNITY COMPANY
THE FIRE AND CASUALTY INSURANCE COMPANY
OF CONNECTICUT
SECURITY INSURANCE COMPANY OF HARTFORD
SECURITY REINSURANCE COMPANY
SECURITYRE, INC.
By:/s/ Craig A. Nyman
----------------------------
Vice President and Treasurer
Dated: July 15, 1996
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<PAGE>
EXHIBIT INDEX
Exhibit 1 Form of Press Release dated July 9, 1996
Exhibit 2 Amendment, dated as of June 18, 1996, to
Shareholder Agreement by and among GNC,
Orion and the Subsidiaries
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Exhibit 1
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
ORION CAPITAL SUCCESSFULLY CONSUMMATES CASH TENDER OFFER
FOR GUARANTY NATIONAL SHARES
SETTLES RELATED LAW SUITS
New York, New York, July 9, 1996 -- Orion Capital Corporation
(NYSE: OC) today announced that it has purchased the 4,600,000
shares of Guaranty National Corporation (NYSE: GNC) Common Stock
for which it tendered. The tender offer expired at 12:00 midnight,
New York City time on July 1, 1996.
Based on its final tabulation, the Depositary for the Offer has
informed Orion that 6,774,515 shares of Guaranty National
Corporation were tendered and not withdrawn pursuant to the Offer
(including 2,369,030 shares tendered by means of notices of
guaranteed delivery which did not fail). The proration factor used
was .67901168. The 4,600,000 shares, together with the 7,409,942
shares previously owned by certain of Orion's wholly-owned
subsidiaries, represent approximately 80.3% of the shares of
Guaranty National Corporation currently outstanding. Payment for
shares accepted pursuant to the Offer will commence on July 9,
1996.
An Orion spokesperson also announced that on July 2, 1996, Orion,
on behalf of the Purchasers (Orion and certain of its wholly-owned
subsidiaries) and Guaranty National, signed a Memorandum of
Understanding with respect to the settlement and dismissal of the
three law suits which were brought as a result of the tender. The
plaintiffs would, under the terms of the Memorandum of
Understanding, terminate all pending litigation on behalf of the
entire purported class of allegedly affected stockholders of
Guaranty National, based on the revisions which Purchasers made in
the terms of the Offer to Purchase.
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 interest in Guaranty National Corporation.
###
Exhibit 2
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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