SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 17, 1997
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AVEMCO Corporation
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(Exact name of registrant as specified in its charter)
Delaware 1-6271 52-0733935
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
Frederick Municipal Airport
411 Aviation Way
Frederick, Maryland21701
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(Address of principal executive offices) (Zip Code)
(301) 694-5700
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(Registrant's telephone number)
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On January 17, 1997, AVEMCO Corporation ("AVEMCO") and HHC Insurance
Holdings, Inc. ("HCCH") jointly announced that they had signed a Letter of
Intent to merge AVEMCO with a wholly-owned subsidiary of HCCH in a
stock-for-stock transaction. Pursuant to the Letter of Intent, each outstanding
share of AVEMCO common stock would be exchanged for one share of HCCH common
stock. The transaction is intended to be accounted for as a pooling of interests
and to be a nontaxable exchange to AVEMCO's shareholders.
As of December 31, 1996, AVEMCO had 8,264,070 shares issued and outstanding
and HCCH had 35,850,832 shares issued and outstanding.
The combination is subject to various conditions, including the parties
entering into a mutually acceptable definitive agreement, receipt of required
regulatory approvals, approval of the transaction by the shareholders of AVEMCO
and HCCH, and satisfactory performance of due diligence by each party.
Under the terms of the Letter of Intent, if AVEMCO's Board of Directors
receives another offer which it believes to be superior to the terms of the HCCH
proposal, AVEMCO may terminate the Letter of Intent and, in such event, AVEMCO
will be obligated to pay HCCH a termination fee equal to $7,500,000, plus its
reasonable out-of-pocket expenses. AVEMCO has agreed that it will not solicit
other offers to acquire AVEMCO during the term of the Letter of Intent, and has
agreed not to provide information to other parties during such term unless
required in the exercise of applicable fiduciary duties. AVEMCO also may
terminate the proposed transaction if the closing price of HCCH's common stock
is below $23.00 for a ten consecutive day period. Each party may terminate the
Letter of Intent if a definitive agreement is not executed by March 15, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: January 22, 1997 AVEMCO Corporation
By: /s/ William P. Condon
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Title: Chairman of the Board
and Chief Executive Officer
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