SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
SCHEDULE 13E-3
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the
Securities Exchange Act of 1934)
Guaranty National Corporation
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(Name of Issuer)
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
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(Name of Person (s) Filing Statement)
Common Stock, par value $1.00 per share
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(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 insurance
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 amends the
Schedule 13E-3 of the Purchasers, dated May 8, 1996 (the
"Schedule 13E-3"), by incorporating by reference herein the
information set forth in the press release dated May 23, 1996
of Orion attached as Exhibit (d)(9) hereto. This Statement
also amends Items 3, 16 and 17 of the Schedule 13E-3 by adding
the information set forth below. Except as otherwise
indicated herein, the Schedule 13E-3 remains unchanged in all
respects. Capitalized terms not otherwise defined herein are
defined as set forth in the Schedule 13E-3 or in the Offer to
Purchase of the Purchasers, dated May 8, 1996.
Item 3. Past Contacts, Transactions or Negotiations.
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The information set forth in Item 3 to the Schedule
13E-3 is hereby supplemented as follows:
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<PAGE>
On May 21, 1996, Messrs. Gruber, Sanborn and
Shepherd participated by conference telephone in a meeting of
the Board of Directors of the Company called to consider a
report from a Special Committee of the Board which had been
authorized to evaluate the Offer.
The Chairperson of the Special Committee reported at
the outset that Salomon Brothers, Inc. had been retained to
evaluate the Offer to Purchase and outlined Salomon's fee
arrangement. Mr. Gruber pointed out that the engagement and
incentive fee structure raises serious questions about the
objectivity and fairness of the evaluation process. The
Special Committee made no response to those observations.
At the meeting, and at the request of the Chairman
of the Special Committee, Mr. Gruber responded to questions
concerning the Offer to Purchase. Mr. Gruber affirmed in his
responses to the Special Committee several matters which had
previously been set forth in the Offer to Purchase, as
follows:
(a) The Purchasers continue to believe that the
offered price of $17.50 per Share is fair and adequate and the
Purchasers have no present intention to increase or reduce
that price.
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<PAGE>
(b) The Purchasers intend to increase their
aggregate holdings to approximately 80% of the outstanding
Shares of the Company, not more.
(c) The Purchasers believe that their offer to
stockholders of the Company to accept all Shares tendered
(subject to possible proration) is more fair than to impose
(as was apparently suggested by the Company's advisors) a
minimum number of Shares which must be tendered before any
Shares will be accepted.
(d) The Purchasers do not expect that either
delisting or deregistration of the Company's Shares will occur
as a result of the completion of the Offer.
(e) The Purhasers have no present intention to seek
a merger or other business combination with the Company.
(f) The Purchasers expect that the Company will in
the future have a Board of Directors whose members include
persons who are independent of and not employed by or
affiliated with Orion or the Company. The Purchasers expect
that any future service, insurance or other contractual
arrangements between the Company and Orion (or subsidiaries of
either) should, and will, continue to be subject to review by
the entire Board of Directors of the Company and, where
required, by insurance regulatory authorities.
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<PAGE>
At the request of the Special Committee, following
the meeting of the Board of Directors, Mr. Gruber and the
Purchasers' legal and financial advisors met at Orion's New
York City offices with the financial advisors to the Special
Committee and legal counsel to those advisors. Members of the
Special Committee participated by telephone. The Special
Committee's advisors asked Mr. Gruber substantially the same
questions as had previously been answered for the Board of
Directors.
Mr. Gruber and his advisors were then asked to leave
the meeting so that the Special Committee could consult with
its advisors. When Mr. Gruber was invited to return, he was
informed that the Company would make a filing on Schedule 14D-
9 in which it would decline to make any recommendation with
respect to the Offer.
Item 16. Additional Information.
-----------------------
The information set forth in Item 16 of the Schedule
13E-3 is hereby supplemented as follows:
Orion Capital Corporation has been served with a
complaint in an action entitled Eugenia Gladstone Vogel v.
Guaranty National Corporation, et al. which has been filed in
the Supreme Court for the State and County of New York. The
complaint seeks damages and other relief allegedly arising out
of the Offer to Purchase. In Orion 's opinion the claims made
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<PAGE>
in the complaint are without merit and Orion intends
vigorously to defend the litigation. Orion understands that
two other suits have been filed in the state courts in
Colorado alleging similar claims and seeking similar relief.
Orion has not been served in either of these actions.
Item 17. Material to be Filed as Exhibits
---------------------------------
(d)(9) Press Release dated May 23, 1996 of Orion Capital
Corporation
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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: May 23, 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
- ------- ------------
(d)(9) Press Release dated May 23, 1996
of Orion Capital Corporation
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Exhibit (d)(9)
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 PROCEEDING WITH CASH TENDER OFFER FOR
GUARANTY NATIONAL SHARES
New York, New York, May 23, 1996 -- Orion Capital Corporation
acknowledged today that it has received a copy of a filing on
Schedule 14D-9 made by Guaranty National Corporation, reporting
that a Special Committee of Guaranty National's Board of Directors
declined to make any recommendation with respect to the Offer to
Purchase. Commenting on the filing, Alan R. Gruber, the Chairman
and Chief Executive Officer of Orion Capital, said: "We believe
that the decision to make no recommendation is appropriate and
entirely consistent with Orion Capital's desire to make the offer
available to each and every stockholder of Guaranty National,
allowing each stockholder to make his or her own decision as to
whether to tender."
Orion's cash offer at $17.50 per share is presently scheduled to
remain open until midnight on June 5, 1996. Subject to the terms
and conditions of the Offer, if shares are accepted for purchase
all shares validly tendered will be accepted, subject to proration
if more than 4,600,000 shares are validly tendered.
Orion Capital also stated today that it has been served with a
complaint in an action entitled Eugenia Gladstone Vogel v. Guaranty
National Corporation, et al. which has been filed in the Supreme
Court for the State and County of New York. The complaint seeks
damages and other relief allegedly arising out of the Offer to
Purchase. An Orion spokesperson stated that in Orion's opinion the
claims made in the complaint are without merit and that Orion
intends vigorously to defend the litigation. The spokesperson
stated that he understood that two other suits have been filed in
the state courts in Colorado alleging similar claims and seeking
similar relief. Orion has not been served in either of these
actions.
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.
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