SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
PICO Holdings, Inc.
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(Name of Issuer)
Common Stock, $0.001 par value
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(Title of Class of Securities)
693366 10 6
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(CUSIP Number)
James F. Mosier
13515 Yarmouth Drive, NW
Pickerington, Ohio 43147
(614) 864-7100
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing 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-1(b)(3) or (4), check the following box. [___]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Global Equity Corporation
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
(a) X
(b) ____
3. SEC USE ONLY:
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e): ____
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Ontario, Canada
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: 4,258,415 shares
8. SHARED VOTING POWER: None
9. SOLE DISPOSITIVE POWER: 4,258,415 shares
10. SHARED DISPOSITIVE POWER: None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
4,258,415 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS): ____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
13.1%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
CO
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SCHEDULE 13D
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
Physicians Insurance Company of Ohio
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
(a) X
(b) ____
3. SEC USE ONLY:
4. SOURCE OF FUNDS (SEE INSTRUCTIONS):
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e): ____
6. CITIZENSHIP OR PLACE OF ORGANIZATION:
Ohio
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7. SOLE VOTING POWER: 4,258,415 shares
8. SHARED VOTING POWER: None
9. SOLE DISPOSITIVE POWER: 4,258,415 shares
10. SHARED DISPOSITIVE POWER: None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
4,258,415 shares
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS): ____
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
13.1%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
IC
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Item 1. Security and Issuer.
This Amendment No. 1 to Schedule 13D relates to the Common Stock, $0.001
par value per share (the "Common Stock"), of PICO Holdings, Inc. (the "Issuer").
The address of the principal executive offices of the Issuer is 875 Prospect
Street, Suite 301, La Jolla, California 92037.
Item 2. Identity and Background.
The persons filing this Amendment No. 1 to Schedule 13D are Global Equity
Corporation ("GEC") and Physicians Insurance Company of Ohio ("Physicians").
A. GEC is an Ontario, Canada corporation. GEC currently engages, both
directly and through its various subsidiaries, in investment banking, asset
management and corporate finance activities on an international basis. Through
its subsidiaries, GEC is also involved in agricultural services and food
processing, tea and commodity brokering operations, stockbrokering operations
and plantation services and management.
The directors of GEC include:
(i) Ronald Langley, whose business address is 875 Prospect Street, Suite
301, La Jolla, California 92037. Mr. Langley served as Chairman of the Boards of
GEC, Physicians and the Issuer. Mr. Langley is a citizen of Australia.
(ii) John R. Hart, whose business address is 875 Prospect Street, Suite
301, La Jolla, California 92037. Mr. Hart serves as President and Chief
Executive Officer of GEC, Physicians and the Issuer. Mr. Hart is a citizen of
the United States.
(iii) James D. Hamilton, whose business address is 30A Hazelton Avenue, 4th
Floor, Toronto, Canada M5R 2E2. Mr. Hamilton is President and Director of Forbes
& Walker Securities Limited, a wholly-owned subsidiary of GEC. Mr. Hamilton is a
citizen of Australia.
(iv) Stephen H. Halperin, whose business address is 250 Yonge Street, Suite
2400, Toronto, Ontario, Canada M5B 2M6. Mr. Halperin is a partner in Goodman,
Phillips & Vineberg, barristers and solicitors. Mr. Halperin is a citizen of
Canada.
(v) Paul B. Brent, whose business address is 80 Richmond Street, West,
Suite 1850, Toronto, Ontario, Canada M5H 2A4. Mr. Brent is a financial
consultant. Mr. Brent is a citizen of Canada.
The executive officers of GEC, in addition to Messrs. Langley and Hart,
include:
(i) Christine Veira, whose business address is 30A Hazelton Avenue, 4th
Floor, Toronto, Ontario, Canada M5R 2E2. Ms. Veira is Assistant Secretary of
GEC. Ms. Veira is a citizen of Canada.
(ii) James F. Mosier, whose business address is 13515 Yarmouth Drive, N.W.,
Pickerington, Ohio 43147. Mr. Mosier serves as Secretary of GEC and as General
Counsel and Corporate Secretary of Physicians and the Issuer. Mr. Mosier is a
citizen of the United States.
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B. Physicians is an Ohio licensed insurance corporation which operates
primarily as a diversified investment and insurance company. Physicians'
business address is 13515 Yarmouth Drive, N.W., Pickerington, Ohio 43147.
Physicians owns approximately 38% of the shares and voting power of GEC.
The directors of Physicians include:
(i) S. Walter Foulkrod, III, Esq., whose business address is S. Walter
Foulkrod, III & Associates, P.O. Box 6600, Harrisburg, Pennsylvania 17112-0600.
Mr. Foulkrod is an attorney and the owner of S. Walter Foulkrod, III &
Associates, Attorneys at Law. Mr. Foulkrod is a citizen of the United States.
(ii) Richard D. Ruppert, MD, whose residence address is 2710 Falmouth
Drive, P.O. Box 352855, Toledo, Ohio 43635-2855. Dr. Ruppert is a physician. Dr.
Ruppert is a citizen of the United States.
(iii) Dr. Gary H. Weiss, whose business address is Level 24, 2 Market
Street, Sydney 2000 Australia. Dr. Weiss is a barrister and solicitor and serves
as Executive Director of Guiness Peat Group plc, an investment holding company.
Dr. Weiss is a citizen of Australia and New Zealand.
(iv) John R. Hart, whose background is described in Item 2(A) above.
(v) Ronald Langley, whose background is described in Item 2(A) above.
(vi) John D. Weil, whose business address is 200 North Broadway, Suite 825,
St. Louis, Missouri 63102-2573. Mr. Weil serves as President of Clayton
Management Company, a strategic investment company. Mr. Weil is a citizen of the
United States.
The executive officers of Physicians, in addition to Messrs. Langley and
Hart, are:
(i) Richard H. Sharpe, whose business address is Physicians Insurance
Company of Ohio, 13515 Yarmouth Drive, N.W., Pickerington, Ohio 43147. Mr.
Sharpe serves as Chief Operating Officer of Physicians and the Issuer. He is a
citizen of the United States.
(ii) Martha G. Althauser, Esq., whose business address is Physicians
Insurance Company of Ohio, 13515 Yarmouth Drive, N.W., Pickerington, Ohio 43147.
Ms. Althauser serves as Vice President, Claims of Physicians. She is an United
States citizen.
(iii) Gary W. Burchfield, whose business address is Physicians Insurance
Company of Ohio, 13515 Yarmouth Drive, N.W., Pickerington, Ohio 43147. Mr.
Burchfield serves as Chief Financial Officer and Treasurer of Physicians and the
Issuer. He is an United States citizen.
(iv) James F. Mosier, Esq., whose background is described in Item 2(A)
above.
C. The Issuer is a California insurance holding company which became the
parent of Physicians as a result of the merger described in Item 3 below. In
addition to being the parent of Physicians, the Issuer is the direct parent of
Citation Insurance Company and the indirect parent of Citation National
Insurance Company, which are principally engaged in writing workers'
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compensation and commercial property and casualty insurance. The Issuer's
business address is 875 Prospect Street, Suite 301, La Jolla, California 92037.
The directors of the Issuer include:
(i) S. Walter Foulkrod, III, Esq., whose background is described in Item
2(B) above.
(ii) Richard D. Ruppert, MD, whose background is described in Item 2(B)
above.
(iii) Dr. Gary H. Weiss, whose background is described in Item 2(B) above.
(iv) John R. Hart, whose background is described in Item 2(A) above.
(v) Ronald Langley, whose background is described in Item 2(A) above.
(vi) John D. Weil, whose background is described in Item 2(B) above.
(vii) Robert R. Broadbent, whose business address is Tower City Center,
2900 Terminal Tower, Cleveland, Ohio 44113-2204. Mr. Broadbent is a retail
consultant. Mr. Broadbent is a citizen of the United States.
(viii) Marshall J. Burak, whose business address is College of Business,
San Jose State University, One Washington Square, San Jose, California
95192-0065. Mr. Burak is Professor of Finance and Dean of the College of
Business of San Jose State University. Mr. Burak is a citizen of the United
States.
(ix) Paul M. Bancroft, whose business address is 655 Montgomery Street,
Suite 920, San Francisco, California 94111. Mr. Bancroft is a private investor.
Mr. Bancroft is a citizen of the United States.
The executive officers of the Issuer, in addition to Messrs. Langley and
Hart, are:
(i) Gary W. Burchfield, whose background is described in Item 2(B) above.
(ii) James F. Mosier, Esq., whose background is described in Item 2(A)
above.
(iii) Richard H. Sharpe, whose background is described in Item 2(B) above.
D. The Issuer is controlled by Guinness Peat Group plc ("GPG"), an English
investment holding company whose business address is Second Floor, 21-26 Garlick
Hill, London EC4V 2AU England, as a result of GPG's ownership of shares of the
Issuer. Based upon information contained in the Schedule 13D, and Amendments No.
1, 2, 3 and 4 thereto, filed by GPG in respect of its beneficial ownership of
shares of Class A Common Stock of Physicians prior to the Merger whereby
Physicians became a wholly-owned subsidiary of the Issuer (collectively, the
"GPG Schedule 13D"), Physicians is aware that the directors and executive
officers of GPG are as follows:
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Directors and Executive Officers of GPG
(i) Maurice William Loomes, who is a citizen of Australia and whose
business address is Level 24, 2 Market Street, Sydney 2000 Australia. Mr. Loomes
is a director of GPG.
(ii) Anthony Ian Gibbs, who is a citizen of New Zealand and whose business
address is c/o Registry Managers (New Zealand Limited), Private Bag 92119,
Auckland 1030 New Zealand. Mr. Gibbs is a director of GPG.
(iii) Sir Ron Brierley, who is a citizen of New Zealand and whose business
address is Guinness Peat Group plc, Second Floor, 21-26 Garlick Hill, London
EC4V 2AU England. Sir Ron is Chairman of the Board and a director of GPG.
(iv) Trevor J.N. Beyer, who is a citizen of New Zealand and whose business
address is Guinness Peat Group plc, Second Floor, 21-26 Garlick Hill, London
EC4V 2AU England. Mr. Beyer is a director of GPG.
(v) Blake A. Nixon, who is a citizen of New Zealand and whose business
address is Guinness Peat Group plc, Second Floor, 21-26 Garlick Hill, London
EC4V 2AU England. Mr. Nixon is a director and Executive Director in the United
Kingdom of GPG.
(vi) Dr. Gary H. Weiss, who is a director and Executive Director in
Australia of GPG. Dr. Weiss' background is described in Item 2(A) above.
(vii) J. Richard Russell, who is a citizen of Great Britain and whose
business address is Guinness Peat Group plc, Second Floor, 21-26 Garlick Hill,
London EC4V 2AU England. Mr. Russell is Secretary of GPG.
E. During the last five years, none of GEC, Physicians and the Issuer and,
to the best knowledge of GEC, Physicians and the Issuer, the individuals named
in Items 2(A), 2(B) and 2(C), has been convicted in a criminal proceeding. To
the best knowledge of Physicians, based upon the information contained in the
GPG Schedule 13D, none of GPG and the individuals named in Item 2(D) has been
convicted in a criminal proceeding.
F. During the last five years, none of GEC, Physicians and the Issuer and,
to the best knowledge of GEC, Physicians and the Issuer, the individuals named
in Items 2(A), 2(B) and 2(C), was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction resulting in a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws. To the best knowledge of Physicians, based upon the
information contained in the GPG Schedule 13D, none of GPG and the individuals
named in Item 2(D) has been a party to such a civil proceeding.
Item 3. Source and Amount of Funds or Other Consideration.
As contemplated by that certain Agreement and Plan of Reorganization, dated
as of May 1, 1996, as amended, by and among Physicians, the Issuer (which was
then known as "Citation Insurance Group") and Citation Holdings, Inc.
("Holdings"), on November 20, 1996, Holdings, a wholly-owned subsidiary of the
Issuer, merged with and into Physicians (the "Merger") and Physicians became a
wholly-owned subsidiary of the Issuer. Following the consummation of the Merger,
the Issuer changed its name from "Citation Insurance Group" to "PICO Holdings,
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Inc." In connection with the Merger, each Class A Common Share, $1.00 par value
(the "Physicians Shares"), of Physicians was converted into 5.0099 shares of
Common Stock of the Issuer. As a result, in exchange for the 850,000 Physicians
Shares owned by it, GEC received 4,258,415 shares of the Common Stock of the
Issuer.
Item 4. Purpose of Transaction.
See Item 3 above.
Item 5. Interest in Securities of the Issuer.
(a)(b) As of the date of this Schedule 13D, GEC beneficially owned 4,258,415
shares of Common Stock of the Issuer (or approximately 13.1% of the shares of
Common Stock of the Issuer outstanding), in respect of which it has sole voting
and investment power. By virtue of its ownership of approximately 38% of the
outstanding shares and voting power of GEC, Physicians may also be deemed to
indirectly beneficially own the 4,258,415 shares of Common Stock of the Issuer
(or approximately 13.1% of the shares of Common Stock of the Issuer outstanding)
reported herein as beneficially owned by GEC. Under California law, any
corporation deemed a subsidiary of a parent corporation is prohibited from
voting shares of the parent which are held by such subsidiary. A corporation
will be deemed a subsidiary for voting purposes if 25% of its outstanding shares
are owned directly or indirectly by the parent corporation. Accordingly, GEC,
38% of which is owned indirectly by the Issuer, will not be able to vote the
shares of the Common Stock of the Issuer which it owns.
GEC also has an option to purchase $825,000 more of newly issued shares of
Common Stock of the Issuer, pursuant to the Agreement for Purchase and Sale of
Shares, dated May 9, 1996, between GEC, GPG and Physicians (the "GEC
Agreement"), to which the Issuer became subject as a result of the Merger. The
purchase price would be the average of the closing bid prices for shares of
Common Stock of the Issuer on The Nasdaq Stock Market for the 20 trading days
immediately preceding the date when GEC gives notice of purchase. The option
will expire if GEC's ownership of the Issuer's Common Stock becomes less than
7.5%. Also, pursuant to the GEC Agreement, until December 10, 1996, if the
Issuer issues additional equity securities of any class or type, GEC has the
prior right and option to participate in the issuance of such equity securities
in an amount not to exceed $5,000,000 in aggregate purchase price. The Issuer
has, pursuant to the GEC Agreement, a first right to purchase any Issuer Common
Stock which GEC desires to sell.
To the knowledge of GEC and Physicians, the following persons are the only
persons (in addition to GEC and Physicians) who may be deemed the beneficial
owners of shares of the Issuer's Common Stock:
(a) GPG -- 6,065,871 shares (18.7% of outstanding). GPG has an option to
purchase $1,175,000 more of newly issued shares of Common Stock of the Issuer,
pursuant to the Agreement for Purchase and Sale of Stock, dated November 23,
1993, among GPG, Quaker Holdings Limited and Physicians (as amended, the "GPG
Agreement"), to which the Issuer became subject as a result of the Merger. The
purchase price would be the average of the closing bid prices for shares of
Common Stock of the Issuer on The Nasdaq Stock Market for the 20 trading days
immediately preceding the date when GPG gives notice of purchase. This option
will expire if GPG's ownership of shares of the Issuer's Common Stock becomes
less than 7.5%. The Issuer has, pursuant to the GPG Agreement, a first right to
purchase any shares of the Issuer's Common Stock which GPG desires to sell,
except for sales to Ronald Langley and John R. Hart.
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(b) John D. Weil -- 2,135,708 shares (6.6% of outstanding). Mr. Weil owns
10,019 shares directly and has indirect ownership of an additional 2,125,689
shares.
(c) John R. Hart -- 1,908,847 shares (5.7% of outstanding). Mr. Hart holds
an option to purchase up to 1,032,115 shares of the Issuer's Common Stock
presently owned by GPG and a currently exercisable stock option to purchase
876,732 shares from the Issuer.
(d) Ronald Langley -- 1,908,847 shares (5.7% of outstanding). Mr. Langley
has an option to purchase up to 1,032,115 shares of the Issuer's Common Stock
presently owned by GPG and a currently exercisable stock option to purchase
876,732 shares from the Issuer.
(e) Richard D. Ruppert, M.D. -- 31,397 shares (less than 1%). Dr. Ruppert
shares voting and investment power with respect to these shares with his wife.
(f) S. Walter Foulkrod, III, Esq. -- 12,524 shares (less than 1%).
(g) Dr. Gary H. Weiss -- 6,497 shares (less than 1%). Does not include
shares held by GPG.
(h) Robert R. Broadbent -- 20,039 shares (less than 1%).
(i) Richard H. Sharpe -- 211,783 shares (less than 1%). Includes currently
exercisable stock option to purchase up to 200,396 shares from Issuer.
(j) James F. Mosier -- 149,435 shares (less than 1%). Includes currently
exercisable stock option to purchase up to 140,277 shares from Issuer.
(k) Gary W. Burchfield -- 151,339 shares (less than 1%). Includes currently
exercisable stock option to purchase up to 140,277 shares from Issuer.
(l) Martha G. Althauser -- 1,603 shares (less than 1%). Includes 1502
shares held as administrator of estate of her father.
(m) Paul M. Bancroft -- 111,555 shares (less than 1%). Includes 24,137
shares as to which Mr. Bancroft disclaims beneficial ownership.
(c) See Item 3 above.
(d) See Items 5(a) and 5(b) above.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
See Items 2, 5(a) and 5(b) above.
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Item 7. Material to be Filed as Exhibits:
Exhibit A - Joint Filing Agreement, dated December 2, 1996, among PICO
Holdings, Inc., Physicians Insurance Company of Ohio, and Global
Equity Corporation [Incorporated herein by reference to Exhibit A
to the Schedule 13D filed on behalf of Physicians Insurance
Company of Ohio and Global Equity Corporation with the SEC on
December 2, 1996.]
Exhibit B - Agreement and Plan of Reorganization by and among Citation
Insurance Group, Citation Holdings, Inc. and Physicians Insurance
Company of Ohio, dated as of May 1, 1996, and Amendment to
Agreement and Plan of Reorganization, dated August 14, 1996
[Incorporated herein by reference to Exhibit 2.2 to Amendment No.
1 to Form S-4 filed with the SEC by Citation Insurance Group on
September 20, 1996 [Registration No. 333-06671]].
Exhibit C - Second Amendment to Agreement and Plan of Reorganization,
dated as of November 12, 1996, among Citation Insurance Group,
Citation Holdings, Inc. and Physicians Insurance Company of Ohio.
[Incorporated herein by reference to Exhibit C to the Schedule
13D filed on behalf of Physicians Insurance Company of Ohio and
Global Equity Corporation with the SEC on December 2, 1996].
Exhibit D - Agreement of Merger, dated as of November 20, 1996,
between Citation Holdings, Inc. and Physicians Insurance Company
of Ohio [Page 12].
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EXHIBIT D
AGREEMENT OF MERGER
This AGREEMENT OF MERGER dated as of November 20, 1996 (the "Merger
Agreement") by and between Citation Holdings, Inc., an Ohio corporation
("Holdings"), and The Physicians Insurance Company of Ohio, an Ohio corporation
("PICO"; Holdings and PICO being hereinafter sometimes collectively referred to
as the "Constituent Corporations"):
WITNESSETH:
WHEREAS, each of Holdings and PICO is a corporation organized and existing
under the laws of the State of Ohio;
WHEREAS, pursuant to an Agreement and Plan of Reorganization dated as of
May 1, 1996 by and between Citation Insurance Group, a California corporation
("Citation"), Holdings and PICO (the "Reorganization Agreement"), Citation,
Holdings and PICO each have made certain agreements and undertakings in
connection with the Merger (as defined below) contemplated by this Merger
Agreement:
WHEREAS, the respective Board of Directors and shareholders of PICO,
Holdings and Citation have approved this Merger Agreement and deem it advisable
for the mutual benefit of the Constituent Corporations, and of the shareholders
of each, that Holdings merge with and into PICO under and pursuant to the
applicable provisions of Chapter 1701 of the Ohio Revised Code (the "Ohio
General Corporation Law") and upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises hereof and the mutual
agreements, provisions and covenants herein contained, and in accordance with
the laws of the State of Ohio, Holdings and PICO hereby agree that, subject to
the terms and conditions hereinafter set forth, on the Effective Date (as
defined in Section 6.1 hereof) Holdings shall be merged with and into PICO (the
"Merger"), PICO shall be the surviving corporation (hereinafter sometimes called
the "Surviving Corporation"), the name of the Surviving Corporation shall be
"Physicians Insurance Company of Ohio," and the Surviving Corporation shall
continue to be governed by the laws of the State of Ohio, and that the terms of
the Merger, the mode of carrying the same into effect and the manner and basis
of making distributions to shareholders of the Constituent Corporations in
extinguishment of or in substitution for their shares shall be as follows:
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ARTICLE I
The Articles of Incorporation of PICO in effect immediately prior to the
merger shall be the Articles of Incorporation of the Surviving Corporation and
from and after the Effective Date of the Merger such Articles shall become and
continue to be, and may be separately certified as, the "Articles" of the
Surviving Corporation within the meaning of Section 1701.01 of the Ohio General
Corporation Law until changed as provided by law.
ARTICLE II
The Regulations of PICO in effect immediately prior to the Merger shall be
the Regulations of the Surviving Corporation until changed as provided by law.
ARTICLE III
The Directors and Executive Officers of the Surviving Corporation at the
Effective Date of the Merger, each of whom shall hold office until his successor
is elected in accordance with the Regulations of the Surviving Corporation and
shall have been duly qualified, are as follows:
Name Position
------ --------
John R. Hart Director, President and
Chief Executive Officer
Richard H. Sharpe Chief Operating Officer
Martha G. Althauser Vice President, Claims
Gary W. Burchfield Chief Financial Officer
and Treasurer
James Mosier General Counsel and
Secretary
Ronald Langley Director and Chairman of
the Board
S. Walter Foulkrod, III, Esq. Director
Richard D. Ruppert M.D. Director
John D. Weil Director
Dr. Gary H. Weiss Director
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ARTICLE IV
The name and address of the statutory agent in Ohio upon whom any process,
notice or demand against either of the Constituent Corporations or the Surviving
Corporation may be served is as follows:
Name Address
------ ---------
James Mosier 13515 Yarmouth Road, N.W.
Pickerington, OH 43147
ARTICLE V
5.1 At the Effective Date of the Merger, by virtue of the Merger and
without any action on the party of the holders thereof:
(a) Each PICO Class A Common Share held by PICO as a treasury share shall
be cancelled;
(b) Each other outstanding PICO Class A Common Share, except those held by
Dissenting Shareholders (as defined in Section 5.1(c) hereof) of PICO whose
rights as dissenting shareholders have not terminated in accordance with Section
1701.85(D) of the Ohio General Corporation Law, shall be converted into the
right to receive 5.0099 shares of Common Stock of Citation.
(c) Each outstanding PICO Class A Common Share, the holder of which has
delivered or delivers to the corporation a written demand for the fair cash
value of his shares in accordance with Section 1701.85 of the Ohio General
Corporation Law and whose rights have not terminated under Section 1701.85(D) of
the Ohio General Corporation Law (any shareholder duly making such demand being
hereinafter called a "Dissenting Shareholder"), shall not be converted into or
represent a right to Common Stock of Citation. If the Dissenting Shareholder
shall, in accordance with Section 1701.85 of the Ohio General Corporation Law,
become entitled to receive payment of the fair cash value for his PICO Common
Shares (the "Dissenting Share"), such payment shall be made by the Surviving
Corporation. If the rights of any holder of Dissenting Shares shall have
terminated in accordance with Section 1701.85(D) of the Ohio General Corporation
Law, such holder shall no longer be entitled to receive payment of the fair cash
value of his PICO Common Shares under Section 1701.85 of the Ohio General
Corporation Law and such shares shall thereupon be deemed to have been converted
into and to have become exchangeable for, as of the Effective Date, the
consideration set forth in Section 5.1(b) hereto.
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(d) Each outstanding Holdings Common Share shall be converted into ten
thousand (10,000) validly issued and outstanding, fully paid and non-assessable
Class A Common Shares of the Surviving Corporation.
5.2 (a) At and after the Effective Date of the Merger, the holders of
certificates for PICO Class A Common Shares shall cease to have any rights as
shareholders of PICO (except such rights, if any, as they may have pursuant to
Sections 1701.84 and 1701.85 of the Ohio General Corporation Law), and, except
as aforesaid, their said rights shall pertain to the right to receive the number
of shares of Common Stock of Citation into which their PICO Class A Common
Shares shall have been converted by the Merger. At and after the Effective Date
of the Merger, each holder of an outstanding certificate or certificates for
PICO Class A Common Shares shall be entitled, upon surrender of the same in
accordance with Section 1.5(e) of the Reorganization Agreement to Huntington
National Bank (the "Agent"), to receive in exchange therefor an aggregate number
of shares of Citation Common Stock equal to 5.0099 multiplied by the number of
PICO Class A Common Shares so surrendered plus any amounts to be paid pursuant
to Section 5.2(b) below, subject to any required withholding of taxes. Until
such surrender and payment, such holder's certificate or certificates which
immediately prior to the Effective Date of the Merger represented outstanding
PICO Class A Common Shares shall be deemed for all corporate purposes to
evidence the right to receive Citation Common Shares in accordance with the
terms of this Section 5.2(a).
(b) No certificates or scrip representing fractional shares of Citation
Common Stock shall be issued in the Merger. In lieu of the issuance or
recognition of fractional shares of Citation Common Stock, or interests or
rights therein, each fractional share of Citation Common Stock which, but for
this Section 5.2(b), would have been issuable pursuant to Section 5.2(a) shall,
on a holder by holder basis (aggregating all such holder's shares), be converted
into cash in an amount equal to the product of such fraction multiplied by $5.03
per share of Citation Common Stock.
5.3 The stock transfer books of PICO with respect to PICO Class A Common
Shares shall be closed at the Effective Date of the Merger and PICO's
shareholders of record as of that time shall be the shareholders entitled to
receive shares of Citation Common Stock in exchange for PICO Class A Common
Shares in accordance with the terms of Section 5.2 hereof.
In the event of a transfer of ownership of PICO Common Shares which is not
registered in the transfer records of PICO, an appropriate number of Citation
Common Shares may be paid and delivered to a transferee of the certificate
representing such PICO Class A Common Shares as presented to the Agent,
accompanied by all documents required to evidence and effect such transfer and
by any applicable stock transfer taxes.
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<PAGE>
5.4 Except as hereinafter provided, immediately prior to the Effective Date
of the Merger and without any action on the part of the holder thereof, each
unexercised option outstanding at such time to purchase PICO Class A Common
Shares (an "Option") pursuant to The PICO 1995 Non-Qualified Stock Option Plan,
(the "Stock Option Plans"), whether or not then exercisable, shall be converted
into an option to purchase that number of Citation Common Shares equal to 5.0099
multiplied by the number of PICO Class A Common Shares subject to such option,
with an exercise price per share equal to the exercise price per share of the
option divided by 5.0099.
5.5 At the Effective Date of the Merger, the effect of the Merger shall be
as provided herein and by the applicable provisions of the laws of the State of
Ohio. Without limiting the generality of the foregoing and subject thereto, at
the Effective Date of the Merger: the separate existence of Holdings shall
thereupon cease, the Surviving Corporation shall possess all assets and property
of every description, and every interest therein, wherever located and the
rights, privileges, immunities, powers, franchises, and authority, of a public
as well as of a private nature, of each of the Constituent Corporations; all
obligations belonging to or due to each of the Constituent Corporations shall be
vested in the Surviving Corporation without further act or deed; title to any
real estate or any interest therein vested in any Constituent Corporation shall
not revert or in any way be impaired by reason of the Merger; the Surviving
Corporation shall be liable for all obligations of each Constituent corporation,
including liability to Dissenting Shareholders; all of the rights of creditors
of each of the Constituent Corporations shall be preserved unimpaired; and all
liens upon the property of each of the Constituent Corporations shall be
preserved unimpaired, on only the property affected by such liens immediately
prior to the Effective Date.
ARTICLE VI
6.1 The Merger shall become effective at the time of the filing of the
Certificate of Merger with the Secretary of State for the State of Ohio (the
"Effective Date").
6.2 The Constituent Corporations may terminate this Merger Agreement at any
time prior to the Effective Date of the Merger by a mutual agreement in writing
to that effect, authorized by their respective Boards of Directors. This Merger
Agreement shall terminate without further action by the Constituent Corporations
either before or after the action of the shareholders of the Constituent
Corporations on this Merger Agreement (but prior to the Effective Date of the
Merger) upon the termination of the Reorganization Agreement.
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<PAGE>
ARTICLE VII
Any of the provisions of this Merger Agreement may be waived at any
time prior to the Effective Date by the party which is or the shareholders of
which are entitled to the benefit thereof, and this Merger Agreement may be
amended at any time prior to the Effective Date (by action taken by the
respective Boards of Directors of the Constituent Corporations or duly
authorized representatives thereof), provided that no such waiver or amendment
shall affect materially and adversely the benefits to PICO or its shareholders
intended under this Merger Agreement without the further approval of such
shareholders.
ARTICLE VIII
Nothing expressed or implied in this Merger Agreement is intended, or shall
be construed, to confer upon or give any person, firm or corporation other than
Holdings and PICO and their respective shareholders and the holders of Options
any rights or remedies under or by reason of this Merger Agreement. This Merger
Agreement 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.
IN WITNESS WHEREOF, the parties have each caused this Merger Agreement to
be duly executed on its behalf effective as of the day and year first above
written.
Physicians Insurance Company of Ohio
By: /s/ John R. Hart
_______________________________
President
And: /s/ James F. Mosier
_______________________________
Secretary
Citation Holdings, Inc.
By: /s/ Robert M. Erickson
_______________________________
President
And: /s/ Douglas Gould
_______________________________
Secretary
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<PAGE>
Signature.
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.
Date: December 3, 1996 PHYSICIANS INSURANCE COMPANY OF OHIO
By: /s/ James F. Mosier
______________________________
James F. Mosier,
General Counsel and Secretary
GLOBAL EQUITY CORPORATION
By: /s/ James F. Mosier
______________________________
James F. Mosier,
Secretary
