SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 6 TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND AMENDMENT NO. 11
TO SCHEDULE 13D
UNDER SECURITIES EXCHANGE ACT OF 1934
GRYPHON HOLDINGS INC.
(NAME OF SUBJECT COMPANY)
MARKEL CORPORATION
MG ACQUISITION CORP.
(Bidders)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(Title of Class of Securities)
400515 10 2
(CUSIP Number of Class of Securities)
GREGORY B. NEVERS, ESQ.
CORPORATE COUNSEL
MARKEL CORPORATION
4551 COX ROAD
GLEN ALLEN, VIRGINIA 23060-3382
TELEPHONE: (804) 965-1673
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
WITH A COPY TO:
LESLIE A. GRANDIS, ESQ.
MCGUIRE, WOODS, BATTLE & BOOTHE LLP
901 EAST CARY STREET
RICHMOND, VIRGINIA 23219
TELEPHONE: (804) 775-1000
<PAGE>
This Amendment to Schedule 14D-1 filed by MG Acquisition Corp., a Delaware
corporation, a wholly owned subsidiary of Markel Corporation, a Virginia
corporation (Parent), in connection with its pending tender offer for all
outstanding shares of common stock, par value $0.01 per share (the "Common
Stock") of Gryphon Holdings Inc., a Delaware corporation (the "Company"), also
constitutes an Amendment to Statement on Schedule 13D with respect to the
acquisition by Markel Corporation and MG Acquisition Corp. of beneficial
ownership of shares of Common Stock of the Company. The Schedule 14D-1 is
hereby amended as follows:
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(11) Press release dated November 17, 1998.
(g)(5) Letter Agreement, dated November 17, 1998, between Gryphon
Holdings Inc. and Markel Corporation.
-1-
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and belief, the undersigned
certifies that the information set forth in this statement is true, complete and
correct.
Dated: November 17, 1998
MARKEL CORPORATION
By: s/ Stephen A. Markel
------------------------------
Name: Stephen A. Markel
Title: Vice Chairman
MG ACQUISITION CORP.
By: s/ Stephen A. Markel
------------------------------
Name: Stephen A. Markel
Title: Vice Chairman
-2-
<PAGE>
EXHBIT INDEX
EXHIBIT EXHIBIT NAME
- ------- ------------
(a)(11) Press Release dated November 17, 1998
(g)(5) Letter Agreement, dated November 17, 1998,
between Gryphon Holdings Inc. and Markel Corporation.
-3-
Exhibit (a)(11)
Contact: Steven Markel Fred Spar/Josh Rosen
Markel Corporation Kekst and Company
804-965-1675 212-521-4813
MARKEL SIGNS CONFIDENTIALITY AGREEMENT WITH GRYPHON
RICHMOND, VA, November 17, 1998 -- Markel Corporation (NYSE-MKL) announced today
it has signed a confidentiality agreement with Gryphon Holdings Inc.
(NASDAQ:GRYP) and will immediately begin a due diligence review of financial
information provided by Gryphon. Markel said it is amending its current $18.00
per share all-cash offer for all Gryphon common stock to $19.00 per share in
cash. The $19.00 offer is subject to the satisfactory completion of this due
diligence review.
Markel also reported that, subject to there being no higher offers to purchase
the Company outstanding at the time, the Special Committee of the Gryphon Board
of Directors has agreed that upon completion of due diligence it will
unanimously recommend acceptance of Markel's $19.00 offer by the full Gryphon
Board and Gryphon shareholders. The parties will immediately commence good
faith negotiation of transaction terms.
Markel Corporation Vice Chairman, Steven Markel said, "We are pleased that the
two companies are proceeding in this positive manner and we look forward to
completing our due diligence as promptly as possible."
Markel Corporation markets and underwrites specialty insurance products and
programs to a variety of niche markets. In each of these markets, the Company
seeks to provide quality products and excellent customer service so that it can
be a market leader. The financial goals of the Company are to earn consistent
underwriting profits and superior investment returns to build shareholder value.
Markel's tender offer for common shares of Gryphon expires at 6:00 p.m., New
York City time, on December 4, 1998, unless extended. Any extension of the offer
will be followed as promptly as practicable by public announcement thereof, with
such announcement to be made no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled expiration date.
# # #
-4-
Exhibit (g)(5)
November 17, 1998
Markel Corporation
4551 Cox Road
Glen Allen, Virginia 23060-3382
Attention: Mr. Steven A. Markel
Vice-Chairman
Gentlemen:
In connection with your consideration of a possible negotiated
transaction by you or one or more of your affiliates involving Gryphon
Holdings Inc. (the "Company") (a "Transaction"), the Company, Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), acting as the Company's
exclusive financial advisor in connection with the proposed Transaction,
and their respective advisors and agents are prepared to make available to
you certain information which is non-public, confidential or proprietary
in nature ("Evaluation Material").
By execution of this letter agreement (the "Agreement"), you agree
to treat all Evaluation Material confidentially and to observe the terms
and conditions set forth herein. For purposes of this Agreement,
Evaluation Material shall include all information, regardless of the form
in which it is communicated or maintained (whether prepared by the Company,
DLJ or otherwise, and whether written or oral, provided after the date of
this Agreement, or specifically identified as "confidential") that contains
or otherwise reflects information concerning the Company that you or your
Representatives (as defined below) may be provided by or on behalf of the
Company or DLJ in the course of your evaluation of a possible Transaction. The
term "Evaluation Material" shall also include all reports, analyses, notes
or other information that are based on, contain or reflect any Evaluation
Material ("Notes"). The term "Evaluation Material" does not include those
portions of the Evaluation Material that (i) become generally available to
the public other than as a result of a disclosure by you or any of your
Representatives, (ii) were available to you on a non-confidential basis
prior to the disclosure of such Evaluation Material to you pursuant to this
Agreement, provided that the source of such information was not known by you
or any of your Representatives, after reasonable investigation, to be bound by
a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any of its affiliates with
respect to such material or (iii) become available to you on a
non-confidential basis from a source other than the Company or its
agents, advisors or representatives provided that the source of such
information was not known by you or any of your Representatives, after
reasonable investigation, to be bound by a confidentiality agreement with
or other contractual, legal or fiduciary obligation of confidentiality to
the Company or any of its affiliates with respect to such material.
-5-
<PAGE>
You agree that you will not use the Evaluation Material for any
purpose other than determining whether you wish to enter into a Transaction.
Except as may be required by law, you agree not to disclose or allow disclosure
to others of any Evaluation Material; except that, you may disclose Evaluation
Material to your directors, officers, employees, partners, affiliates,
agents, advisors or representatives (hereinafter, "Representatives"), to the
extent necessary to permit such Representatives to assist you in making the
determination referred to in the prior sentence, provided, however, that
you shall require each such Representative to be bound by the terms of this
Agreement to the same extent as if they were parties hereto and you shall be
responsible for any breach of this Agreement by any of your Representatives.
You agree that for a period of 18 months from the date of the signing
of this Agreement you and your affiliates will not knowingly, as a result
of knowledge or information obtained from the Evaluation Material or
otherwise in connection with a possible Transaction: (i) divert or attempt
to divert any business or customer of the Company or any of its affiliates; nor
(ii) employ or attempt to employ or divert an employee of the Company or any of
its affiliates.
Although the Company and DLJ have endeavored to include in the
Evaluation Material information known to them which they believe to be
relevant for the purpose of your investigation, you understand and agree
that, except as may be set forth in a definitive agreement, none of the
Company, DLJ or any of their affiliates, agents, advisors or representatives
(i) has made or makes any representation or warranty, expressed or
implied, as to the accuracy or completeness of the Evaluation Material
or (ii) shall have any liability whatsoever to you or your Representatives
relating to or resulting from the use of the Evaluation Material or any errors
therein or omissions therefrom.
In the event that you or anyone to whom you transmit any
Evaluation Material in accordance with this Agreement are requested or
required (by deposition, interrogatories, requests for information or
documents in legal proceedings, subpoenas, civil investigative demand or
similar process), in connection with any proceeding, to disclose any
Evaluation Material, you will give the Company prompt written notice of
such request or requirement so that the Company may seek an appropriate
protective order or other remedy and/or waive compliance with the
provisions of this Agreement, and you will cooperate with the Company to
obtain such protective order. In the event that such protective order
or other remedy is not obtained or the Company waives compliance with
the relevant provisions of this Agreement, you (or such other persons to
whom such request is directed) will furnish only that portion of the
Evaluation Material which, in the opinion of your counsel, is legally
required to be disclosed and, upon the Company's request, and at the
Company's expense, use reasonable efforts to obtain assurances that
confidential treatment will be accorded to such information.
If you decide that you do not wish to proceed with a Transaction, you
will promptly notify DLJ of that decision. In that case, or if the Company
-6-
<PAGE>
shall elect at any time to terminate further access by you to the Evaluation
Material for any reason, you will, within two business days, redeliver to us
all copies of the Evaluation Material, destroy all Notes and deliver to DLJ
and the Company a certificate executed by one of your duly authorized officers
indicating that the requirements of this sentence have been satisfied in
full. Notwithstanding the return or destruction of Evaluation Material
and Notes, you and your Representatives will continue to be bound by your
obligations of confidentiality and other obligations hereunder.
The Company acknowledges the tender offer, disclosed in the Schedule
14D-1, dated October 20, 1998, of Markel Corporation ("Markel") and its
wholly-owned subsidiary MG Acquisition Corp. ("MG"), to purchase all of the
outstanding shares of common stock of the Company (the "Shares") at a price of
$18.00 per share net to the seller in cash on the terms and subject to the
conditions set forth in Markel's and MG's Offer to Purchase, dated October 20,
1998, as amended from time to time (the "Offer to Purchase") and the related
Letter of Transmittal (which together, and as they may be amended from time to
time, constitute the "Offer"). In exchange for the Company's agreements
contained herein you agree (i) to publicly announce an amendment to your Offer
to increase the Offer to $19.00 per share net to the seller in cash subject to
your completion of due diligence and (ii) you will use all reasonable efforts to
complete such due diligence as promptly as possible but in any event within 5
days of the date of this letter agreement. The Company agrees that it and its
advisors will (i) use all reasonable efforts to provide information and
otherwise cooperate with you to enable you to complete due diligence as promptly
as possible but in any event within 5 days of the date of this letter agreement
and (ii) commence good faith negotiation of transaction terms. The Company and
the Special Committee acknowledge and agree that you may publicly disclose that
the Special Committee has agreed that upon completion of your due diligence it
will recommend to the Board of Directors of the Company that the Board and the
Company's shareholders accept an offer of $19.00 per share net to the seller in
cash, subject to their being no higher offers to purchase the Company
outstanding at that time. You agree that, prior to December 31, 1998, unless
such shall have been specifically approved and authorized by resolution of the
Board of Directors of the Company, you shall not, and you shall cause MG and any
other affiliate of Markel not to, accept for purchase any Shares under or
pursuant to the Offer.
You agree that, for a period of six (6) months from the date of
this agreement, unless such shall have been specifically invited in writing
by the Board of Directors of the Company (or a Committee thereof), neither
you nor any of your Representatives will in any manner, directly or
indirectly, other than pursuant to the Offer and in accordance with the
provisions of the preceding paragraph, (a) effect or seek, offer or propose
(whether publicly or otherwise) to effect, or cause or participate in or in
any way assist any other person to effect or seek, offer or propose (whether
publicly or otherwise) to effect or participate in, (i) any acquisition of
any securities (or beneficial ownership thereof) or assets of the Company or
any of its subsidiaries; (ii) any tender or exchange offer or merger or other
business combination involving the Company or any of its subsidiaries; (iii)
any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to the Company or any of its
subsidiaries (each of the events described in the foregoing clauses (i), (ii)
and (iii) being referred to as an "Alternative Transaction"); or (iv) any
"solicitation" of "proxies" (as such terms are used in the proxy rules of
the Securities and Exchange Commission) or consents to vote, or seek to
advise or influence any person with respect to the voting of, any voting
securities of the Company, (b) form, join or in any way participate in a
"group" (as defined under the Securities Exchange Act of 1934, as amended), (c)
otherwise act, alone or in concert with others, to seek to control or influence
the management, Board of Directors or policies of the Company, (d) take any
-7-
<PAGE>
action which might force the Company to make a public announcement regarding
any of the types of matters set forth in (a) above, or (e) enter into any
discussions or arrangements with or advise, assist or encourage, any third
party with respect to any of the foregoing, or disclose any intention, plan
or arrangement inconsistent with the foregoing. You also agree during any
such period not to request the Company (or its directors, officers, employees
or agents), directly or indirectly, to amend or waive any provision of this
paragraph (including this sentence). If at any time during the period set
forth in the first sentence of this paragraph you are approached by any
third party concerning your or such third party's participation in
any of the activities described in (a), (b) or (c) above, you will promptly
inform the Company of the nature of such contact and the parties thereto.
Notwithstanding anything to the contrary in the two preceding paragraphs,
the Company hereby agrees that, (A) in the event the Company enters into or
announces an Alternative Transaction with any party other than you or one of
your affiliates, the provisions of the two preceding paragraphs shall not
prohibit you from making an offer to purchase all of the outstanding Shares of
the Company for a purchase price per share greater than 105% of the per share
consideration being offered in the Alternative Transaction and (B) in the event
the Company does not accept your offer of $19 per share in cash upon completion
of your due diligence or in the event the Company has not announced or entered
into a Transaction by December 31, 1998, nothing contained herein shall preclude
you from pursuing the Offer on such terms and conditions as you deem
appropriate. In addition, notwithstanding anything to the contrary in the
preceding two paragraphs, the Company agrees that the provisions in the
preceding two paragraphs shall not prohibit you from making such offer or other
response as you deem appropriate in response to an Alternative Transaction which
is not proposed or solicited by the Company.
You understand that except as expressly set forth in this Agreement
(i) the Company and DLJ shall conduct the process for a possible Transaction as
they in their sole discretion shall determine (including, without
limitation, negotiating with any prospective buyer and entering into
definitive agreements without prior notice to you or any other person), (ii)
any procedures relating to such a Transaction may be changed at any time
without notice to you or any other person, (iii) the Company shall have
the right to reject or accept any potential buyer, proposal or offer, for
any reason whatsoever, in its sole discretion, and (iv) neither you nor any
of your Representatives shall have any claims whatsoever against the
Company or DLJ or any of their respective directors, officers,
stockholders, owners, affiliates or agents arising out of or relating to
such a Transaction (other than those against the parties to a definitive
agreement with you in accordance with the terms thereof). You and the
Company agree that unless and until a definitive agreement between the
Company and you with respect to any Transaction has been executed and
delivered, neither the Company nor you will be under any legal obligation
of any kind whatsoever with respect to such a Transaction except in the
case of this Agreement, for the matters specifically agreed to herein.
-8-
<PAGE>
It is further understood and agreed that DLJ will arrange for
appropriate contacts for due diligence purposes. It is also understood and
agreed that all (i) communications regarding a possible Transaction,
(ii) requests for additional information, (iii) requests for facility tours
or management meetings and (iv) discussions or questions regarding
procedures, will be submitted or directed exclusively to DLJ and/or Mr.
Robert M. Baylis (the chairman of the Special Committee of the Board of
Directors that has been established in connection with a possible
Transaction), and that none of you or your Representatives who are
aware of the Evaluation Material and/or the possibility of a Transaction will
initiate or cause to be initiated any communication with any director,
officer or employee of the Company (other than Mr. Baylis) concerning
the Evaluation Material or a Transaction.
Each of you and the Company agree that money damages would not be
a sufficient remedy for any breach of this Agreement by the parties or
their Representatives, that in addition to all other remedies the non-breaching
party shall be entitled to specific performance and injunctive or other
equitable relief as a remedy for any such breach or threatened breach,
and that the breaching party shall not oppose the granting of such relief, and
the breaching party further agrees to waive, and to use its best efforts
to cause its Representatives to waive, any requirement for the securing
or posting of any bond in connection with such remedy. Such remedy shall not
be deemed to be the exclusive remedy for a breach of this Agreement, but shall
be in addition to all other remedies available for all damages, costs and
damages, costs and expenses (including reasonable attorneys' fees) incurred
in this regard. In the event of litigation relating to this letter
agreement, if a court of competent jurisdiction determines that a party
or any of its Representatives have breached this letter agreement, such
party shall be liable and pay to the other the reasonable legal fees
incurred in connection with such litigation, including any appeal therefrom.
The Company reserves the right to assign its rights, powers and
privileges under this letter agreement (including, without limitation, the
right to enforce the terms of this letter agreement) to any person
who enters into a Transaction. This Agreement shall be binding on the
respective successors and assigns of the parties hereto and shall inure
to the benefit of and be enforceable by the respective successors in
interest and assigns of the parties hereto.
All modifications of, waivers of and amendments to this Agreement or
any part hereof must be in writing signed on behalf of you and the Company or
by you and DLJ, as agent for the Company. You acknowledge that the Company is
intended to be benefited by this Agreement and that the Company shall be
entitled, either alone or together with DLJ, to enforce this Agreement and
to obtain for itself the benefit of any remedies that may be available for the
breach hereof.
It is further understood and agreed that no failure or delay by
the Company in exercising any right, power or privilege under this Agreement
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege hereunder.
-9-
<PAGE>
You hereby irrevocably and unconditionally submit to the
exclusive jurisdiction of any State or Federal court sitting in either New
York City or Wilmington, Delaware over any suit, action or proceeding
arising out of or relating to this letter. You hereby agree that service of
any process, summons, notice or document by U.S. registered mail addressed
to you shall be effective service of process for any action, suit or proceeding
brought against you in any such court. You hereby irrevocably and
unconditionally waive any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such
suit, action or proceeding brought in any such court has been brought in
an inconvenient forum. You agree that a final judgment in any such suit,
action or proceeding brought in any such court shall be conclusive and
binding upon you and may be enforced in any other courts to whose
jurisdiction you are or may be subject, by suit upon such judgment or in any
other manner provided by law.
Any notice, request, demand, or other communication required or
permitted to be made under this Agreement shall be in writing and shall
be delivered personally or shall be sent by facsimile transmission. Any such
notice shall be deemed given when so delivered personally or sent by facsimile
transmission (and confirmed to have been received) to the address set forth
below (or to any other address subsequently furnished in writing by any party
hereto, as the case may be, in accordance with this paragraph), if to you, to
4551 Cox Road, Glen Allen, Virginia 23060-3382; if to the Company to 30 Wall
Street, New York, New York 10005-2201.
In the event that any provision or portion of this letter is determined
to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this letter shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by applicable
law. The parties hereto shall endeavor in good faith negotiations to
replace any invalid or unenforceable provision, the effect of which comes
as close as possible to that of the invalid or unenforceable provision.
-10-
<PAGE>
This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of New York applicable to contracts
made, executed and delivered and performed wholly within the State of
New York, without regard to the conflicts of laws principles thereof.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which shall constitute
the same agreement.
If you are in agreement with the foregoing, please so indicate by
signing, dating and returning one copy of this Agreement, which will
constitute our agreement with respect to the matters set forth herein.
Very truly yours,
GRYPHON HOLDINGS INC.
By: s/ Scott Huntsman
---------------------------
Scott Huntsman
Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
as Exclusive Agent
Agreed and Accepted:
MARKEL CORPORATION
By: s/ Stephen A. Markel
-------------------------------
Title: Vice President
----------------------------
Date: November 17, 1998
-----------------------------
-11-
