-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, R2VpPdmnRDLUrwQ4ZebeJ1p4VgTXCyg9Uon9CM6ix1UvqjvL7DsuRZSatgnzS9nM FkFnzjxoN5Uh+pBwCEudjw== 0000950123-97-009981.txt : 19971202 0000950123-97-009981.hdr.sgml : 19971202 ACCESSION NUMBER: 0000950123-97-009981 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19971201 SROS: NYSE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GUARANTY NATIONAL CORP CENTRAL INDEX KEY: 0000044358 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 840445021 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-43461 FILM NUMBER: 97730566 BUSINESS ADDRESS: STREET 1: 9800 SOUTH MERIDIAN BOULEVARD CITY: ENGLEWOOD STATE: CO ZIP: 80112-5901 BUSINESS PHONE: 3037548400 MAIL ADDRESS: STREET 1: 9800 SOUTH MERIDIAN BLVD CITY: ENGLEWOOD STATE: CO ZIP: 80112-5901 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ORION CAPITAL CORP CENTRAL INDEX KEY: 0000074931 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 956069054 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 9 FARM SPRINGS RD STREET 2: 24TH FLOOR CITY: FARMINGTON STATE: CT ZIP: 06032 BUSINESS PHONE: 8606746600 MAIL ADDRESS: STREET 1: 600 FIFTH AVENUE STREET 2: 24TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020-2302 FORMER COMPANY: FORMER CONFORMED NAME: EQUITY FUNDING CORP OF AMERICA DATE OF NAME CHANGE: 19760518 FORMER COMPANY: FORMER CONFORMED NAME: TONGOR CORP OF AMERICA DATE OF NAME CHANGE: 19670330 FORMER COMPANY: FORMER CONFORMED NAME: TONGOR CORP DATE OF NAME CHANGE: 19661024 SC 14D1/A 1 AMENDMENT NO. 1 TO SCHEDULE 14D-1 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 1 SCHEDULE 14D-1 Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities Exchange Act of 1934, Guaranty National Corporation (Name of Subject Company) Orion Capital Corporation (Bidder) Common Stock, par value $1.00 Per Share (Title of Class of Securities) 401192109 (CUSIP Number of Class of Securities) Michael P. Maloney, Esq. 9 Farm Springs Road Farmington, Connecticut 06032 (860) 674-6600 (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 2 INTRODUCTION This Statement is filed by Orion Capital Corporation ("Orion") This Statement relates to the tender offer of Orion to purchase all outstanding shares of common stock, par value $1.00 per share (including any associated stock purchase rights) (the "Shares"), of Guaranty National Corporation, a Colorado corporation ("Guaranty") for $36.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Orion's Offer to Purchase dated November 5, 1997 (the "Original Offer to Purchase") as supplemented by the Supplement to the Offer to Purchase dated December 1, 1997 which is attached hereto as Exhibit (a)(10) (together referred to as the "Offer to Purchase") and the related Letter of Transmittal which together with amendments or supplements thereto constitute the Offer (the "Offer"). The Offer is being made pursuant to the Agreement and Plan of Merger dated October 31, 1997 between Orion and Guaranty, which also provides for the merger (the "Merger") of a wholly-owned subsidiary of Orion with and into Guaranty. If the Merger is consummated, each Share outstanding immediately prior to the time when the Merger becomes effective , other than Shares as to which dissenters' rights of appraisal have been duly and timely asserted and perfected under the Colorado Business Corporation Act, and Shares held by Orion, its wholly-owned subsidiaries or Guaranty, will be converted into the right to receive $36.00 in cash per Share, without interest, all as more fully described in the Offer to Purchase referred to herein. 2 3 This Statement amends the Schedule 14D-1 of Orion dated November 5, 1997 (as hereby amended, the "Schedule 14D-1") by incorporating by reference herein the information set forth in the press release, dated December 1, 1997 of Orion attached hereto as Exhibit (a)(11). This Statement also amends Items 10 and 11 by adding the information set forth below. Except as otherwise indicated herein, the Schedule 14D-1 remains unchanged in all respects. Capitalized terms not defined herein are deemed defined as set forth in the Offer to Purchase and Orion's Tender Offer Statement on Schedule 14D-1. Item 10. Additional Information. The following information is hereby added to Item 10 of the Schedule 14D-1: (a). All conditions to the Offer, other than receipt of necessary governmental approvals, must be satisfied or waived prior to the acceptance of Shares for payment pursuant to the terms of the Offer. When a condition has not been satisfied the existence of which is to be determined in the sole discretion of Orion, Orion will exercise its reasonable good-faith judgment in determining whether the occurrence or non-occurrence of the event giving rise to such condition makes it inadvisable to proceed with the Offer or with acceptance for payment for the Shares. References in "THE OFFER -- Section 10. Certain Conditions of the Offer" of the Original Offer to Purchase to Orion's right to terminate, amend or extend the Offer or to delay acceptance for payment or payment if all conditions are not satisfied or waived should not be interpreted as reserving to Orion the right to accept Shares and subsequently to invoke the existence of a condition as a basis on which to withhold payment for and return of the Shares tendered and accepted. The reservation by Orion of the right to delay payment for Shares is subject to the provisions of applicable law under Rule 14e-1 promulgated under the Exchange Act, which require that Orion pay the consideration offered or return the Shares deposited by or on behalf of shareholders promptly after termination or withdrawal of the Offer. (f) The information set forth in the Supplement to the Offer to Purchase dated December 1, 1997, a copy of which is attached as Exhibit (a)(10) hereto is incorporated herein by reference. Item 11. Material to be Filed as Exhibits. (a)(10) Supplement to the Offer to Purchase dated December 1, 1997. (a)(11) Form of press release issued on December 1, 1997. (g)(2) Amendment No. 1 to Rule 13e-3 Transaction Statement on Schedule 13E-3 dated November 25, 1997. 3 4 (g)(3) Amendment No 2 to Rule 13e-3 Transaction Statement on Schedule 13E-3 dated December 1, 1997. 4 5 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: December 1, 1997 ORION CAPITAL CORPORATION By: /s/ Michael P. Maloney ---------------------------------------- Name: Michael P. Maloney Title: Senior Vice President, Secretary and General Counsel 5 6 EXHIBIT INDEX
Exhibit Description - ------- ----------- (a)(10) Supplement to the Offer to Purchase dated December 1, 1997. (a)(11) Form of press Release issued on December 1, 1997. (g)(2) Amendment No. 1 to Rule 13e-3 Transaction Statement on Schedule 13E-3 dated November 25, 1997. (g)(3) Amendment No. 2 to Rule 13e-3 Transaction Statement on Schedule 13E-3 dated December 1, 1997.
6 EX-99.A10 2 SUPPLEMENT TO THE OFFER TO PURCHASE 1 - -------------------------------------------------------------------------------- SUPPLEMENT TO OFFER TO PURCHASE DATED NOVEMBER 5, 1997 ALL SHARES OF COMMON STOCK OF GUARANTY NATIONAL CORPORATION AT $36.00 NET PER SHARE IN CASH BY ORION CAPITAL CORPORATION THE OFFER AND WITHDRAWAL RIGHTS, AS HEREBY EXTENDED, WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK TIME, ON FRIDAY, DECEMBER 5, 1997, UNLESS THE OFFER IS FURTHER EXTENDED. - -------------------------------------------------------------------------------- THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER DATED AS OF OCTOBER 31, 1997 (THE "MERGER AGREEMENT") BY AND BETWEEN ORION CAPITAL CORPORATION ("ORION") AND GUARANTY NATIONAL CORPORATION ("GUARANTY"). THE BOARD OF DIRECTORS OF GUARANTY HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF GUARANTY AND RECOMMENDS ACCEPTANCE OF THE OFFER BY THE SHAREHOLDERS OF GUARANTY. ORION'S OBLIGATION TO PURCHASE SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE, OF GUARANTY (THE "SHARES") PURSUANT TO THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE A NUMBER OF SHARES WHICH, EXCLUDING SHARES OWNED BY ORION AND ITS WHOLLY-OWNED SUBSIDIARIES (THE "TENDER SHARES") WILL CONSTITUTE AT LEAST 50.01% OF THE TOTAL NUMBER OF TENDER SHARES AS OF THE DATE THE SHARES ARE ACCEPTED FOR PURCHASE BY ORION PURSUANT TO THE OFFER (THE "MINIMUM SHARE CONDITION") AND (ii) ALL REGULATORY APPROVALS, IF ANY, REQUIRED TO CONSUMMATE THE OFFER HAVING BEEN OBTAINED ON TERMS AND CONDITIONS SATISFACTORY TO THE ORION BOARD OF DIRECTORS (THE "REGULATORY APPROVAL CONDITION"). THE OFFER IS ALSO SUBJECT TO OTHER TERMS AND CONDITIONS. SEE "THE OFFER" -- SECTION 10 IN ORION'S OFFER TO PURCHASE DATED NOVEMBER 5, 1997 IMPORTANT Any shareholder desiring to tender all or any portion of such shareholder's Shares should either (i) complete and sign the original Letter of Transmittal previously circulated with the Offer to Purchase, dated November 5, 1997, or a facsimile thereof in accordance with the instructions in such Letter Of Transmittal and deliver the Letter of Transmittal with the Shares and all other required documents to the Depositary, or follow the procedure for book-entry transfer set forth in THE OFFER -- Section 3 of the Offer to Purchase, dated November 5, 1997, or (ii) request his broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such shareholder. A shareholder having Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such person if he desires to tender his Shares. Any shareholder who desires to tender Shares and cannot deliver such Shares and all other required documents to the Depositary by the expiration of the Offer must tender such Shares pursuant to the guaranteed delivery procedure set forth in THE OFFER - Section 3 of the Offer to Purchase, dated November 5, 1997. Questions and requests for assistance or additional copies of this Supplement, the Letter of Transmittal, the Offer to Purchase, dated November 5, 1997, and other tender offer materials may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Supplement to the Offer to Purchase. THIS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE OFFER TO PURCHASE, DATED NOVEMBER 5, 1997, AND THE RELATED LETTER OF TRANSMITTAL, COPIES OF WHICH MAY BE OBTAINED AT ORION'S EXPENSE IN THE MANNER SET FORTH ON THE BACK COVER OF THIS SUPPLEMENT. THE OFFER TO PURCHASE, DATED NOVEMBER 5, 1997, THIS SUPPLEMENT AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR 2 UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. ------------------------------------------- The Dealer Manager for the Offer is: DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION December 1, 1997 3 To the Holders of Common Stock of GUARANTY NATIONAL CORPORATION: This Supplement dated December 1, 1997, to the Offer To Purchase (this "Supplement") supplements the Offer to Purchase, dated November 5, 1997 (the "Original Offer to Purchase"). Together, the Original Offer to Purchase and this Supplement are referred to herein as the "Offer to Purchase. Except as otherwise stated herein, the terms and conditions set forth in the Original Offer to Purchase and the Letter of Transmittal remain applicable in all respects to the Offer (as defined below). This Supplement contains important information which should be read carefully before any decision is made with respect to the Offer. This Supplement is being delivered for the purpose of extending the time period of the Offer as well as supplementing certain information concerning the Offer. Capitalized terms used in this Supplement that are not defined herein shall have the meanings ascribed to such terms in the Original Offer to Purchase or, as appropriate, in the Solicitation/Recommendation Statement on Schedule 14D-9 of Guaranty pursuant to Section 14(d)(4) of the Securities Exchange Act, dated November 5, 1997, which has previously been disseminated by Guaranty to holders of Shares. SHARES TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE EXPIRATION DATE (AS DEFINED HEREIN) AND, UNLESS THERETOFORE ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER, ALSO MAY BE WITHDRAWN AT ANY TIME AFTER JANUARY 3, 1998. SEE THE OFFER -- SECTION 4 OF THE ORIGINAL OFFER TO PURCHASE FOR THE PROCEDURES FOR WITHDRAWING SHARES TENDERED PURSUANT TO THE OFFER. ON NOVEMBER 25, 1997, ORION AND GUARANTY JOINTLY FILED AMENDMENT NO. 1 TO THE RULE 13e-3 TRANSACTION STATEMENT ON SCHEDULE 13E-3 FILED BY ORION ON NOVEMBER 5, 1997. BY SUCH FILING NEITHER ORION NOR GUARANTY CONCEDES THAT RULE 13E-3 UNDER THE SECURITIES EXCHANGE ACT IS APPLICABLE TO THE OFFER OR THE MERGER. SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN THEIR SHARES PURSUANT TO THE OFFER ARE NOT REQUIRED TO TAKE ANY FURTHER ACTION, EXCEPT AS MAY BE REQUIRED BY THE PROCEDURE FOR GUARANTEED DELIVERY IF SUCH PROCEDURE WAS UTILIZED. INTRODUCTION Orion Capital Corporation hereby offers to purchase all of the outstanding Shares, at $36.00 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"). THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE REGULATORY CONDITION AND THE MINIMUM SHARE CONDITION. SUCH CONDITIONS AND THE OTHER CONDITIONS TO THE OFFER ARE SET FORTH IN THE OFFER -- SECTION 10. 2 4 The information set forth under "special factors" in the original offer to purchase is hereby supplemented as follows: SPECIAL FACTORS BACKGROUND OF THE TRANSACTION From November, 1995 to March, 1996, Design Professionals Insurance Company, a wholly-owned subsidiary of Orion, acquired an additional 80,000 Shares in open market purchases. The range of prices paid by Design Professionals Insurance Company was between $13.38 and $14.00. FAIRNESS OF THE OFFER Orion's Board of Directors received a report from Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") on various techniques which might be utilized to assist in determining the price and structure of a possible transaction. The report consisted of discussion materials which DLJ provided on September 12, 1997 to the Guaranty Board of Directors in connection with its September 12 meeting, copies of which were also supplied to the Orion Directors for their information, positing a transaction whereby Orion would purchase the remaining 19% of Guaranty's outstanding shares not already owned by Orion and its wholly-owned subsidiaries for a value of $30.25 per share comprised of $20.17 in cash and $10.08 in Orion common stock (the "September Case"). These materials discussed the benefits of consideration consisting of a combination of both stock and cash, alternative options with respect to the equity component of the Offer and stock performance data for Orion and Guaranty. DLJ compared the September Case to selected publicly-announced merger and acquisition transactions (the "Selected Acquisitions"). The September Case ratio of equity purchase price to operating net income of 16.9x compared to a low of 10.9x, a median of 12.2x and a high of 28.6x for the Selected Acquisitions. The September Case ratio of equity purchase price to general accepted accounting principles ("GAAP") shareholders' equity of 1.91x compared to a low of 0.97x, a median of 1.60x and a high of 2.88x for the Selected Acquisitions. The September Case ratio of total purchase price to statutory accounting principles ("SAP") net operating income ("NOI") of 18.7x compared to a low of 10.2x, a median of 16.9x and a high of 24.2x for the Selected Acquisitions. The September Case ratio of total purchase price to SAP capital and surplus ("C&S") of 2.19x compared to a low of 1.16x, a median of 2.59x and a high of 3.27x for the Selected Acquisitions. These multiples included an average implied equity valuation range with a low of $229.7 million, a median of $415.8 million, and a high of $700.2 million and an average implied price per share range from $15.29 to $46.60. The median of the average implied price per share of $27.67 was lower than the hypothetical $30.25 per share offer. DLJ also compared public valuations of selected non-standard personal auto insurers ("the Selected Insurers"). These valuations indicated a multiple range of 7.5x to 22.1x for 1997 estimated operating earnings and a multiple of 6.6x to 19.3x for 1998 estimated operating earnings and a multiple range of 1.43x to 3.99x for June 30, 1997 shareholders' equity. These multiples indicated an implied equity valuation for Guaranty from $256.7 million to $751.0 million based on 1997 projected earnings and $258.2 million to $759.5 million based on 1998 projected earnings and $338.9 million to $949.9 million based on June 30, 1997 shareholders' equity. These multiples indicated an implied estimated price per share range for Guaranty of $17.12 to $50.07 with a median of $30.02 based on 1997 projected earnings and $17.10 to $50.30 with a median of $28.86 based on 1998 projected earnings and $22.54 to $63.16 with a median of $29.54 based on June 30, 1997 shareholders' equity. In addition, DLJ compared selected ratios of Guaranty to ratios for the Selected Insurers. The Guaranty ratio of price to latest twelve months ("LTM") price per share, price to 1997 estimated price per share, price to 1998 estimated price per share, and price to book value per share of 16.1x, 12.7x, 11.1x and 1.83x, respectively, compared to a median of 15.2x, 13.2x, 11.1x and 1.84x, respectively, for the Selected Insurers. The Guaranty ratio of total enterprise value to SAP NOI of 18.0x and SAP C&S of 2.11x compared to a median of 27.5x and 3.20x, respectively, for the Selected Insurers. The Guaranty projected return on equity of 14.4% compared to a low of 10.7%, a median of 16.1% and a high of 24.5% for the Selected Insurers. The Guaranty projected earnings per share growth of 15.0% compared to a low of 12.6%, a median of 14.8% and a high of 27.7% for the Selected Insurers. 3 5 In its discussion materials and presentation, DLJ set forth no conclusions as to the fairness of any particular form of transaction or the consideration to be paid to Guaranty shareholders. The discussion materials did not address, and were not presented to the Guaranty Board as an opinion regarding the fairness of the consideration to be paid and received by the shareholders of Guaranty in the proposed transactions and contained no recommendation with respect thereto. No restrictions or limitations were imposed by the Orion Board on DLJ with respect to the preparation of the discussion materials. DLJ had earlier provided to the management of Orion, including Mr. W. Marston Becker, Chairman of the Board and CEO, certain discussion materials dated as of June 5, 1997, outlining alternatives for effecting the purchase of the remaining outstanding shares of Guaranty not owned directly or indirectly by Orion, including possible types of transactions, the form of consideration to be paid and comparative time schedules. In those materials, DLJ reviewed certain publicly available financial, operating and stock market information for selected transactions in the non-standard automobile insurance industry since 1990 and included an analysis of comparative prices paid in other transactions. DLJ also performed a public market valuation analysis and an analysis of the pro forma effect of the transaction on the shareholders' equity of Orion. In July, 1997 DLJ provided Orion's management, including Mr. W. Marston Becker, with discussion materials on trends in the insurance industry, summarizing certain information about insurance industry merger and acquisition activity and valuation data, numbers of transactions, average transaction size, purchase price/earnings data, and prices paid in selected major property/casualty transactions. Neither the June nor July materials were prepared for or presented to the Board of Directors of Orion. These discussion materials were intended to focus management's deliberations with respect to various techniques that could be utilized to assist in determining the price and structure of a possible transaction with Guaranty. Pursuant to the unanimous recommendation of its Special Committee, Guaranty's Board of Directors unanimously approved the Merger Agreement, the Offer and the Merger, determined that the Offer and the Merger are fair to, and in the best interests of, the shareholders of Guaranty, and recommended an acceptance of the Offer and approval and adoption of the Merger Agreement and the Merger by the shareholders of Guaranty. The factors considered by the Guaranty Board were referred to in a letter to the shareholders of Guaranty from James R. Pouliot, dated November 5, 1997 and discussed in greater detail in the Solicitation/Recommendation Statement of Guaranty Pursuant to Section 14(d)(4) of the Securities Exchange Act of 1934 dated November 5, 1997 (see Item 4 thereof, "The Solicitation or Recommendation"). Orion understands that, in reaching its conclusions and recommendations to the Board of Directors of Guaranty, the Special Committee considered a number of factors of which the most important were the following: (i) the fact that the $36.00 per Share price represents (A) a premium of $17.50 or 94.6% over the $18.50 paid by Orion in its tender offer completed in July 1996, (B) a premium of $20.62 or 134.1% over the 52-week low of $15.38, (C) a premium of 48.5% over the closing sale price of $24.25 on July 7. 1997, the day prior to the commencement of discussions between Orion and Guaranty, (D) a multiple of 1.94x Guaranty's net book value per share as of September 30, 1997, and (E) a multiple of 2.21x Guaranty's net tangible book value per share as of September 30, 1997; and (ii) the opinion of the Special Committee's financial advisor that the Offer is fair, from a financial point of view, to the Non-Orion Shareholders, and the analysis of various factors considered by the financial advisor in reaching its opinion. THE OFFER 1. TERMS OF THE OFFER; EXPIRATION DATE. The Expiration Date of the Offer is extended to 12:00 Midnight, New York City time, on Friday, December 5, 1997. Upon the terms and subject to the conditions of the Offer (including, if the Offer is further supplemented, extended or amended, the terms and conditions of any further supplement, extension or amendment), Orion will accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not theretofore withdrawn in accordance with THE OFFER -- Section 4 of the Original Offer to Purchase. 4 6 Tendering shareholders may continue to use the original Letter of Transmittal and the original Notice of Guaranteed Delivery previously circulated with the Original Offer to Purchase. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and subject to the conditions of the Offer, (including the Regulatory Condition and the Minimum Share Condition and, if the Offer is further supplemented, extended or amended, the terms and conditions of any further supplement, extension or amendment), Orion shall accept for payment (and thereby purchase), and Orion will pay for, any and all Shares validly tendered prior to the Expiration Date and not properly withdrawn in accordance with THE OFFER -- Section 4 (including Shares validly tendered and not withdrawn during any extension of the Offer, if the Offer is extended, upon the terms and subject to the conditions of such extension), as promptly as practicable after the Expiration Date. Orion expressly reserves the right to delay acceptance for payment of Shares in order to comply in whole or in part with the Regulatory Condition and the Minimum Share Condition but intends either to extend the Expiration Date, or to terminate the Offer if it should appear that either the Regulatory Condition or the Minimum Share Condition will delay for more than five (5) days the payment for Shares accepted for payment. See THE OFFER -- Sections 10 and 11. References in "THE OFFER -- Section 10. Certain Conditions of the Offer" to Orion's right to terminate, amend or extend the Offer or to delay acceptance for payment or payment if all conditions are not satisfied or waived should not be interpreted as reserving to Orion the right to accept Shares and subsequently to invoke the existence of a condition as a basis on which to withhold payment for and return of the Shares tendered and accepted. The reservation by Orion of the right to delay payment for Shares is subject to the provisions of applicable law under Rule 14e-1 promulgated under the Exchange Act, which require that Orion pay the consideration offered or return the Shares deposited by or on behalf of shareholders promptly after termination or withdrawal of the Offer. 10. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, and in addition to (and not in limitation of) Orion's right to amend the Offer at any time in its sole discretion, all conditions to the Offer, other than receipt of necessary governmental approvals, must be satisfied or waived prior to acceptance of the Shares for payment pursuant to the terms of the Offer. When a condition has not been satisfied the existence of which is to be determined in the sole discretion of Orion, Orion will exercise its reasonable good-faith judgment in determining whether the occurrence or non-occurrence of the event giving rise to such condition makes it inadvisable to proceed with the Offer or with acceptance for payment of the Shares. 11. CERTAIN LEGAL MATTERS. MISCELLANEOUS The action entitled Eugenia Gladstone Vogel v. Guaranty National Corporation, et al. which has been filed in the Denver District Court, City and County of Denver, Colorado, is still pending. That action was filed after announcement of the Exchange Offer, which has since been terminated, and prior to the commencement of the Offer. No answer has been filed and the complaint has not been amended. Settlement discussions have taken place between counsel for Orion and counsel for the plaintiff and a basis for agreement in principle has been reached but a stipulation of settlement has not yet been executed or presented to the Court for review and approval. Orion anticipates that, after appropriate notification to members of the purported class and if the Court certifies class-action status, the litigation would be settled on the basis of the payment to be made for Shares in the Offer, which is greater than the consideration which might have been paid in the Exchange Offer which was the subject matter of the original complaint. Orion would agree, in that connection, not to oppose an application by plaintiff's counsel to the Court for fees and expenses in an amount not in excess of $500,000. No determination has yet been made by the Court of class-action status and neither a proposed settlement nor a fee application of plaintiff's counsel has yet been presented by plaintiff's counsel to the Court; for review by the Court, whose approval is required. ------------------------------------------- No person has been authorized to give any information or make any representation on behalf of Orion not contained in the Offer to Purchase or the Letter of Transmittal, and, if given or made, such information or representation must not be relied upon as having been authorized. ORION CAPITAL CORPORATION 5 7 December 1, 1997 6 8 Facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and certificates for Shares and any other required documents should be sent or delivered by each shareholder of the Company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below: The Depositary For The Offer Is: STATE STREET BANK AND TRUST COMPANY
By Mail: By Courier: By Hand: State Street Bank State Street Bank Securities Transfer and and Trust Company and Trust Company Reporting Services, Inc. Corporate Reorganization Corporate Reorganization Corporate Reorganization P.O. Box 9061 70 Campanelli Drive 1 Exchange Plaza Boston, MA 02205-8686 Braintree, MA 02184 55 Broadway, 3rd Floor New York, New York 10006
Facsimile Transmission Copy Number: (617) 794-6333 Confirm by Facsimile to: (617) 794-6388 Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers specified below. Additional copies of the Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent. A shareholder may also contact his broker, dealer, commercial bank or trust company for assistance concerning the Offer. The Information Agent Is: D.F. KING & CO., INC. 77 Water Street New York, New York 10005 (212) 269-5550 (Call Collect) or Call Toll Free (800) 290-6429. The Dealer Manager for the Offer is: DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION 277 Park Avenue New York, New York 10172 (212) 892-7700 (Call Collect) EX-99.A11 3 PRESS RELEASE DATED DECEMBER 1, 1997 1 From: Jeanne Hotchkiss Dawn W. Dover Michael L. Pautler Orion Capital Corporation Kekst & Company Guaranty National 9 Farm Springs Road 437 Madison Avenue 9800 S. Meridian Blvd. Farmington, CT 06032 New York, NY 10022 Englewood, CO 80112 (860) 674-6754 (212) 521-4817 (303) 754-8701
December 1, 1997 FOR IMMEDIATE RELEASE ORION CAPITAL EXTENDS CASH TENDER OFFER FOR GUARANTY NATIONAL SHARES AT $36.00 PER SHARE TO DECEMBER 5, 1997 Orion Capital Corporation ("Orion") today announced that it has extended to December 5, 1997 its Offer to Purchase all the outstanding shares of Guaranty National Corporation common stock (NYSE: GNC) for $36.00 in cash per share, net to the seller. As of the close of business on November 28, 1997, 484,290 shares of Guaranty National common stock have been tendered pursuant to the Offer to Purchase. Orion Capital Corporation (NYSE: OC) 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 approximately 80% ownership interest in Guaranty National Corporation. EX-99.G2 4 AMENDMENT NO. 1 TO SCHEDULE 13E-3 1 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 and Rule 13e-3 (Section 240.13e-3) thereunder) Guaranty National Corporation (Name of the Issuer) Orion Capital Corporation and Guaranty National Corporation (Name of Persons Filing Statement) Common Stock, par value $1.00 Per Share (Title of Class of Securities) 401192109 (CUSIP Number of Class of Securities) Michael P. Maloney, Esq. Michael L. Pautler Orion Capital Corporation Guaranty National Corporation 9 Farm Springs Road 9800 South Meridian Boulevard Farmington, Connecticut 06032 Englewood, Colorado 80112 (860) 674-6600 (303) 754-8400 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) Copy to: John J. McCann, Esq. Hardin Holmes, Esq. Donovan Leisure Newton & Irvine Ireland, Stapleton, Pryor & Pascoe, P.C. 30 Rockefeller Plaza 1675 Broadway, 26th Floor New York, New York 10112 Denver, Colorado 80202 (212) 632-3000 (303) 623-2700 2 INTRODUCTION This Amendment No. 1 to the Rule 13E-3 Transaction Statement (the "Schedule 13E-3") of Orion Capital Corporation, a Delaware corporation ("Orion"), filed on November 5, 1997, amends and supplements the Schedule 13E-3 for the purposes of adding certain information and filing with the Securities and Exchange Commission certain exhibits thereto and to join Guaranty National Corporation ("Guaranty") as a signatory thereto. The Schedule 13E-3 relates to the tender offer by Orion to purchase all outstanding shares of common stock, par value $1.00 per share (including any associated stock purchase rights) ("Shares"), of Guaranty for $36.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Orion's Offer to Purchase dated November 5, 1997 and the related Letter of Transmittal, which, together with any amendments or supplements thereto, constitute the offer (the "Offer"). The Offer is being made pursuant to the Agreement and Plan of Merger dated October 31, 1997 between Orion and Guaranty, and which provides for the merger (the "Merger") of a wholly owned subsidiary of Orion with and into Guaranty. If the Merger is consummated, each Share outstanding immediately prior to the time when the Merger becomes effective, other than Shares as to which dissenters' rights of appraisal have been duly asserted and perfected under the Colorado Business Corporation Act and Shares held by Orion, its wholly owned subsidiaries or Guaranty will be converted into the right to receive $36.00 in cash per Share, without interest, all as more fully described in the Offer to Purchase referred to herein. This Amendment No. 1 to the Statement is being filed jointly by Orion and Guaranty. By filing this Schedule 13E-3, neither of the joint signatories concedes that Rule 13E-3 under the Securities Exchange Act of 1934, as amended, is applicable to the Offer or the Merger or the other transactions contemplated by the Agreement and Plan of Merger. -2- 3 This Statement amends Items 1-6, 8-12, 14, 15 and 17 of the Schedule 13E-3 of Orion dated November 5, 1997 (the "Schedule 13E-3"). This Statement is further amended to reflect the fact that it is being filed jointly by Orion and Guaranty. Except as otherwise indicated herein, the Schedule 13E-3 remains unchanged in all respects. The information in the Solicitation/Recommendation Statement on Schedule 14D-9 dated November 5, 1997 of Guaranty (the "Schedule 14D-9") is hereby expressly incorporated herein by Guaranty by reference, and the responses to each item in this Statement are qualified in their entirety by the information contained in the Schedule 14D-9. Capitalized terms not otherwise defined herein are defined as set forth in the Schedule 13E-3, Orion's Offer to Purchase, dated November 5, 1997, filed as Exhibit (d)(1) to the Schedule 13E-3 (the "Offer to Purchase"), or the Schedule 14D-9, filed as Exhibit (d)(10) hereto, as the case may be. ITEM 1. Issuer and Class of Security Subject to Transaction. The following information is hereby added to Item 1(f) of the Schedule 13E-3: The range of prices paid by Design Professionals Insurance Company for Shares between November, 1995 and March, 1996 was between $13.38 and $14.00. The information with respect to purchases of Shares by Guaranty in the last two fiscal years set forth in "THE OFFER -- Section 5. Price Range of Shares; Dividends" of the Offer to Purchase is hereby incorporated by reference . ITEM 2. Identity and Background. The following information is hereby added to Item 2 of the Schedule 13E-3: (a)-(d) and (g). Guaranty is the issuer of the class of equity securities which is the subject of the Rule 13e-3 transaction. The information set forth in "THE OFFER -- Section 7. Certain Information Concerning Guaranty" of the Offer to Purchase is incorporated herein by reference. The information with respect to the directors and executive officers of Guaranty set forth in Annex A hereto is incorporated herein by reference. (e) and (f). During the last five years, neither Guaranty nor to its best knowledge any of its executive officers and directors (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws or finding any violation of such laws. -3- 4 ITEM 3. Past Contacts, Transactions or Negotiations. The following information is hereby added to Item 3 of the Schedule 13E-3: (a)-(b). The information set forth under Items 3 and 4 of the Schedule 14D-9 is incorporated herein by reference. ITEM 4. Terms of the Transaction. The following information is hereby added to Item 4 of the Schedule 13E-3: (a). All conditions to the Offer, other than receipt of necessary governmental approvals, must be satisfied or waived prior to the acceptance of Shares for payment pursuant to the terms of the Offer. When a condition has not been satisfied the existence of which is to be determined in the sole discretion of Orion, Orion will exercise its reasonable good-faith judgment in determining whether the occurrence or non-occurrence of the event giving rise to such condition makes it inadvisable to proceed with the Offer or with acceptance for payment for the Shares. References in "THE OFFER -- Section 10. Certain Conditions of the Offer" of the Offer to Purchase to Orion's right to terminate, amend or extend the Offer or to delay acceptance for payment or payment if all conditions are not satisfied or waived should not be interpreted as reserving to Orion the right to accept Shares and subsequently to invoke the existence of a condition as a basis on which to withhold payment for and return of the Shares tendered and accepted. The reservation by Orion of the right to delay payment for Shares is subject to the provisions of applicable law under Rule 14e-1 promulgated under the Exchange Act, which require that Orion pay the consideration offered or return the Shares deposited by or on behalf of shareholders promptly after termination or withdrawal of the Offer. The information set forth under Item 2 of the Schedule 14D-9 is incorporated herein by reference. (b). Except as disclosed in the Offer to Purchase or the Schedule 14D-9, there are no terms or arrangements concerning the transactions with respect to which the Schedule 13E-3 is filed relating to any securityholder of Guaranty which is not identical to that relating to other holders of Tendered Shares. ITEM 5. Plans or Proposals of the Issuer or Affiliate. The following information is hereby added to Item 5 of the Schedule 13E-3: (a)-(g). The information set forth under Item 7 of the Schedule 14D-9 is incorporated herein by reference. Item 4 is hereby supplemented as follows: -4- 5 Of the factors considered by the Special Committee, Guaranty believes that those set forth in Item 4(b)(i) and (iv) on page 7 of the Schedule 14D-9 were the most important. ITEM 6. Sources and Amounts of Funds or Other Consideration. (b). The information set forth in Item 5 of the Schedule 14D-9 is hereby incorporated by reference. In addition to the expenses set forth therein, Guaranty has incurred other expenses relating to the transactions subject to the Schedule 13E-3 of approximately $100,000, including directors' fees for meetings of the Special Committee, legal fees and miscellaneous expenses. ITEM 8. Fairness of the Transaction. (a)-(b). The information set forth in Item 3 of the Schedule 14D-9 under "Background of the Offer; Appointment of the Special Committee" and Item 4 of the Schedule 14D-9 is incorporated by reference. ITEM 9. Reports, Opinions, Appraisals and Certain Negotiations. (a)-(b). The following information is hereby added to Item 9 of the Schedule 13E-3: The information set forth in Item 3 of the Schedule 14D-9 under "Background of the Offer; Appointment of the Special Committee" and Item 4 of the Schedule 14D-9 is incorporated herein by reference. The information incorporated by reference from "SPECIAL FACTORS -- Background of the Transactions" and "-- Fairness of the Offer and the Merger" in the Offer to Purchase is hereby supplemented as follows: The "report" referred to in the last sentence of "SPECIAL FACTORS -- Fairness of the Offer and the Merger" of the Offer to Purchase consisted of presentation materials which DLJ provided on September 12, 1997 to the Guaranty Board of Directors in connection with its September 12 meeting, copies of which were also supplied to the Orion Directors for their information, positing a transaction whereby Orion would purchase the remaining 19% of Guaranty's outstanding shares for a value of $30.25 per share comprised of $20.17 in cash and $10.08 in Orion common stock (the "September Case"). These materials discussed the benefits of consideration consisting of a combination of both stock and cash, alternative options with respect to the equity component of the Offer and stock performance data for Orion and Guaranty. DLJ compared the September Case to selected publicly-announced merger and acquisition transactions (the "Selected Acquisitions"). -5- 6 The September Case ratio of equity purchase price to operating net income of 16.9x compared to a low of 10.9x, a median of 12.2x and a high of 28.6x for the Selected Acquisitions. The September Case offer ratio of equity purchase price to general accepted accounting principles ("GAAP") shareholders' equity of 1.91x compared to a low of 0.97x, a median of 1.60x and a high of 2.88x for the Selected Acquisitions. The September Case ratio of total purchase price to statutory accounting principles ("SAP") net operating income ("NOI") of 18.7x compared to a low of 10.2x, a median of 16.9x and a high of 24.2x for the Selected Acquisitions. The September Case ratio of total purchase price to SAP capital and surplus ("C&S") of 2.19x compared to a low of 1.16x, a median of 2.59x and a high of 3.27x for the Selected Acquisitions. These multiples included an average implied equity valuation range with a low of $229.7 million, a median of $415.8 million, and a high of $700.2 million and an average implied price per share range from $15.29 to $46.60. The median of the average implied price per share of $27.67 was lower than the hypothetical $30.25 per share offer. DLJ also compared public valuations of selected non-standard personal auto insurers ("the Selected Insurers"). These valuations indicated a multiple range of 7.5x to 22.1x for 1997 estimated operating earnings and a multiple of 6.6x to 19.3x for 1998 estimated operating earnings and a multiple range of 1.43x to 3.99x for June 30, 1997 shareholders' equity. These multiples indicated an implied equity valuation for Guaranty from $256.7 million to $751.0 million based on 1997 projected earnings and $258.2 million to $759.5 million based on 1998 projected earnings and $338.9 million to $949.9 million based on June 30, 1997 shareholders' equity. These multiples indicated an implied estimated price per share range for Guaranty of $17.12 to $50.07 with a median of $30.02 based on 1997 projected earnings and $17.10 to $50.30 with a median of $28.86 based on 1998 projected earnings and $22.54 to $63.16 with a median of $29.54 based on June 30, 1997 shareholders' equity. In addition, DLJ compared selected ratios of Guaranty to ratios for the Selected Insurers. The Guaranty ratio of price to latest twelve months ("LTM") price per share, price to 1997 estimated price per share, price to 1998 estimated price per share, and price to book value per share of 16.1x, 12.7x, 11.1x and 1.83x, respectively, compared to a median of 15.2x, 13.2x, 11.1x and 1.84x, respectively, for the Selected Insurers. The Guaranty ratio of total enterprise value to SAP NOI of 18.0x and SAP C&S of 2.11x compared to a median of 27.5x and 3.20x, respectively, for the Selected Insurers. The Guaranty projected return on equity of 14.4% compared to a low of 10.7%, a median of 16.1% and a high of 24.5% for the Selected Insurers. The Guaranty projected earnings per share growth of 15.0% compared to a low of 12.6%, a median of 14.8% and a high of 27.7% for the Selected Insurers. -6- 7 In its discussion materials and presentation, DLJ set forth no conclusions as to the fairness of any particular form of transaction or the consideration to be paid to Guaranty shareholders. The discussion materials did not address, and were not presented to the Guaranty Board as an opinion regarding the fairness of the consideration to be paid and received by the shareholders of Guaranty in the proposed transactions and contained no recommendation with respect thereto. No restrictions or limitations were imposed by the Board on DLJ with respect to the preparation of the discussion materials. DLJ had earlier provided to the management of Orion, including Mr. W. Marston Becker, Chairman of the Board and CEO, certain discussion materials dated as of June 5, 1997, outlining alternatives for effecting the purchase of the remaining outstanding shares of Guaranty not owned directly or indirectly by Orion, including possible types of transactions, the form of consideration to be paid and comparative time schedules. In those materials, DLJ reviewed certain publicly available financial, operating and stock market information for selected transactions in the non-standard automobile insurance industry since 1990 and included an analysis of comparative prices paid in other transactions. DLJ also performed a public market valuation analysis and an analysis of the pro forma effect of the transaction on the stockholders' equity of Orion. In July, 1997 DLJ provided Orion's management, including Mr. W. Marston Becker, with discussion materials on trends in the insurance industry, summarizing certain information about insurance industry merger and acquisition activity and valuation data, numbers of transactions, average transaction size, purchase price/earnings data, and prices paid in selected major property/casualty transactions. Neither the June nor July materials were prepared for or presented to the Board of Directors of Orion. These discussion materials were intended to focus management's deliberations with respect to various techniques that could be utilized to assist in determining the price and structure of a possible transaction with Guaranty. The information incorporated by reference from "THE OFFER -- Section 12. Fees and Expenses" of the Offer to Purchase is hereby supplemented as follows: Orion has retained DLJ pursuant to a letter agreement to act as its financial advisor with respect to the contemplated acquisition of the remaining outstanding shares of Guaranty not owned directly or indirectly by Orion. DLJ is an internationally recognized investment bank which is engaged in a wide range of investment banking activities including, among other things, structuring of mergers and acquisitions, public offerings, restructuring, leveraged buy-outs, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for estate, corporate and other purposes. Orion engaged DLJ's services because of its reputation as well as its familiarity with both Orion and Guaranty as a result of its involvement in the 1996 Tender Offer -7- 8 by Orion for up to 4,600,000 Shares and its provision of other investment banking services to Orion in the ordinary course of business for which it received customary compensation. (c) The reports referred to in Item 9(a)-(b), above shall be made available for inspection and copying at the principal executive offices of Orion and Guaranty, respectively, during their regular business hours by any holder of Shares. ITEM 10. Interests in Securities of the Issuer. The following information is hereby added to Item 10 of the Schedule 13E-3: (a)-(b). The information set forth under Item 6 of the Schedule 14D-9 is incorporated herein by reference. The information incorporated by reference from Annex II of the Offer to Purchase with respect to the securities ownership of the directors and executive officers of Guaranty is supplemented, as follows: (i) Roger B. Ware no longer owns unexercised options for Shares and holds a total of 51,759 Shares which is approximately .3% of the Shares outstanding. (ii) Richard M. Beverage and Charles B. Ruzicka beneficially own 7,784 Shares and 10,000 Shares, respectively (including Shares outstanding, Shares subject to options exercisable within 60 days of October 31, 1997 and restricted Shares), which for each individual equals less than .1% of Shares outstanding. (iii) Richard M. Beverage and Charles B. Ruzicka hold unexercised options exercisable within 60 days of October 31, 1997 for 6,000 and 10,000 Shares, respectively. (iv) Richard M. Beverage, Andrea L. Peck, Charles B. Ruzicka and John W. Mahoney hold unexercised options not exercisable within 60 days of October 31, 1997 for 7,218, 3,867, 13,902 and 10,000 Shares, respectively. ITEM 11. Contracts, Arrangements or Understandings with Respect to the Securities. The following information is hereby added to Item 12 of the Schedule 13E-3: The information set forth under Items 2 and 3(b) of the Schedule 14D-9 is incorporated herein by reference. ITEM 12. Present Intention and Recommendation of Certain Persons with Regard to the Transaction. The following information is hereby added to Item 11 of the Schedule 13E-3: -8- 9 (a)-(b). The information set forth under Items 4 and 6 of the Schedule 14D-9 is incorporated herein by reference. ITEM 14 Financial Information. The following information is hereby added to Item 14 of the Schedule 13E-3: The information set forth in the Offer to Purchase under "THE OFFER -- Section 7. Certain Information Concerning Guaranty" is incorporated herein by reference. ITEM 15. Persons with Assets Employed, Retained or Utilized. The following information is hereby added to Item 15 of the Schedule 13E-3: (a)-(b). The information set forth under Item 5 of the Schedule 14D-9 is incorporated herein by reference. ITEM 17. Material to be Filed as Exhibits. (b)(1) Discussion Materials of Donaldson Lufkin & Jenrette Securities Corporation dated June 5, 1997. (b)(2) Discussion Materials of Donaldson Lufkin & Jenrette Securities Corporation dated July 1997. (b)(3) Presentation of Donaldson Lufkin & Jenrette Securities Corporation dated September 12, 1997. (b)(4) Presentation of Salomon Brothers Inc dated October 30, 1997. (b)(5) Opinion of Salomon Brothers Inc dated October 30, 1997. (d)(10) Solicitation/Recommendation Statement on Schedule 14D-9 of Guaranty National Corporation, dated November 5, 1997. (d)(11) Letter to Shareholders of Guaranty National Corporation dated November 5, 1997. (g)(4) Portions of Proxy Statement on Schedule 14A of Guaranty National Corporation dated March 27, 1997. (g)(5) Portions of Annual Report on Form 10-K of Guaranty National Corporation for the fiscal year ended December 31, 1996. -9- 10 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: November 24, 1997 ORION CAPITAL CORPORATION By: /s/ Michael P. Maloney Name: Michael P. Maloney Title: Senior Vice President, General Counsel and Secretary -10- 11 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: November 24, 1997 GUARANTY NATIONAL CORPORATION By: /s/ Michael L. Pautler Name: Michael L. Pautler Title: Senior Vice President - Finance -11- 12 ANNEX A DIRECTORS AND EXECUTIVE OFFICERS OF GUARANTY Set forth below are the name, business address, position with Guaranty, and present principal occupation or employment and five-year employment history of each director and executive officer of Guaranty. Each person listed below is a citizen of the United States. Except as indicated in Annex II to the Offer to Purchase, none of the persons listed below beneficially owns Shares or interests therein, including options thereon. Unless otherwise indicated, each occupation set forth opposite an individual's name refers to employment with Guaranty. All officers serve at the pleasure of the Board of Directors of the entity named. Unless otherwise indicated above, the address for each director and executive officer of Guaranty is Guaranty National Corporation, 9800 South Meridian Boulevard, Englewood, Colorado 80112.
Principal Occupation, Five-Year Name, Age and Position with Director Business Experience and Other Guaranty Since Corporate Directorships - ---------------------------------------------- --------------- ---------------------------------------------- Tucker Hart Adams, 59 1994 President, The Adams Group, Inc. (an Director economic consulting firm), since 1989; Director of Tax Free Fund of Colorado, Address: Montana Power Company and Rocky Mountain The Adams Group Equity Fund. 4822 Alteza Drive, Suite 300 Colorado Springs, CO 80917 W. Marston Becker, 44 1996 Chairman and Chief Executive Officer since Director; Chairman of the Board 1996 and Senior Vice President, 1994-1996, of Orion Capital Corporation Address: ("Orion"); President and Chief Executive Orion Capital Corporation Officer of Design Professionals Insurance 9 Farm Springs Drive Company, a subsidiary of Orion, Farmington, CT 06032 1994-1996; President and Chief Executive Officer of McDonough Caperton Insurance Group, 1987-1994. Dennis J. Lacey, 43 1994 Director, President and Chief Executive Director Officer of Capital Associates, Inc. (an equipment leasing company) since 1991. Address: Capital Associates International, Inc. Capital Associates Tower Suite 3000 7175 W. Jefferson Avenue Lakewood, CO 80235
-i- 13 ANNEX A
Principal Occupation, Five-Year Name, Age and Position with Director Business Experience and Other Guaranty Since Corporate Directorships - ---------------------------------------------- --------------- ---------------------------------------------- M. Ann Padilla, 54 1994 President, Sunny Side, Inc./Temp Side (a Director private employment service), since 1975; Director of Bank One Denver N.A. Address: Sunny Side Inc./Temp Side 210 University Boulevard #550 Denver, CO 80206-4622 Vincent T. Papa, 50 1996 Senior Vice President since 1996 and Vice Director President and Treasurer, 1987-1996, of Orion; Chairman and Chief Executive Address: Officer of Wm. H. McGee & Co., Inc., a Wm. H. McGee & Co. subsidiary of Orion, since 1995. 4 World Trade Center Suite 6274 New York, NY 10048-0835 James R. Pouliot, 43 1995 President and Chief Executive Officer of Director; President and Chief Executive Guaranty since December 1996 and of Officer Viking Insurance Holdings, Inc. ("Viking") since 1992; Executive Vice President of Guaranty during 1996; Vice Address: President, Marketing, Great American Guaranty National Corporation Insurance Co., 1990-1992. 9800 S. Meridian Boulevard Box 3329 Englewood, CO 80112 Robert B. Sanborn, 68 1988 Senior Executive Consultant of Orion since Director 1995; Director since 1987, Vice Chairman 1994-1995, and President and Chief Address: Operating Officer, 1987-1994, of Orion; 87 Farm Lane Director of HCG/Lloyd's Investment Trust South Dennis, MA 02660 plc., Intercargo Corporation and Nobel Insurance Limited.
-ii- 14 ANNEX A
Principal Occupation, Five-Year Name, Age and Position with Director Business Experience and Other Guaranty Since Corporate Directorships - ---------------------------------------------- --------------- ---------------------------------------------- William J. Shepherd, 70 1991 Private investor, Director of Orion, Director Chemical Bank New Jersey and Princeton Bank and Trust Company. Address: McConnell, Budd & Downes, Inc. 365 South Street Morristown, NJ 07960 Richard R. Thomas, 51 1991 Chief Executive Officer and Chairman of the Director Board of ADCO General Corporation (a property and casualty general agency) Address: since 1990. Adco General Corporation 1080 Kalamath Street Post Office Box 4005 Denver, CO 80204 Roger B. Ware, 62 1983 Senior Consultant of Guaranty since December Director 1996 and President and Chief Executive Officer of Guaranty, 1983-1996; Director Address: of Orion until September 11, 1997. 5733 Honeylocust Circle Greenwood Village, CO 80121
Richard M. Beverage has been Senior Vice President (SVP)-Chief Actuary for Guaranty National since February 1996. From 1992 through 1996, Mr. Beverage was a Senior Manager - Reserving Studies with Deloitte & Touche LLP. He served as Chief Pricing Actuary for Zurich-American Insurance Company of Illinois from 1991 through 1992. Shelly J. Hengsteler has been Controller and Assistant Treasurer and Principal Accounting Officer of Guaranty National since January 1996. Ms. Hengsteler joined Guaranty National in 1989. From 1991 until 1994, she was a Financial Reporting Manager and from 1994 through 1995 she served as Director of Corporate Finance. Arthur J. Mastera has been SVP-Chief Administrative Officer of Guaranty National since October 1996. Mr. Mastera was President of the Guaranty National Personal Lines Division from November 1995 until October, 1996. Mr. Mastera rejoined GNIC as SVP-Administrative and Corporate Information Systems in February 1992. From 1989 until 1992, he was Senior Vice President of Planning and Administration at Orion Capital Corporation. John W. Mahoney has been Senior Vice President - Elect of the Non-Standard Commercial Lines Division of Guaranty National since October of 1997. From October, 1990 -iii- 15 ANNEX A until March of 1993, Mr. Mahoney served in various managerial positions within the Commercial Division of Great American Insurance Co., and from April, 1993 to May, 1994, he was employed as a Product Manager by Viking Insurance Company of Wisconsin. From June, 1994 until September, 1997, Mr. Mahoney was employed as a Program Director at Coregis Insurance Group. Andrea Peck has been SVP-Human Resources of Guaranty National since July, 1997. From March, 1992 to November, 1993, Ms. Peck was employed by West Marine Products as Vice President of Human Resources, and from November, 1993 until May, 1997, she was Vice President of Human Resources of Design Professionals Insurance Co. Michael L. Pautler has been SVP-Finance and Treasurer of Guaranty National since 1988. Fred T. Roberts has been SVP of Guaranty National and President of the Commercial Lines Unit since November 1995. He served as SVP of GNIC Claims from 1984 to 1995. Charles B. Ruzicka has been SVP-Information Systems of Guaranty National since December 1996. From August 1996, until assuming his current position, Mr. Ruzicka was Vice President-Personal Lines Information Systems. From 1993 through 1996, Mr. Ruzicka was a Vice President of Viking Insurance Company Wisconsin. From 1987 to 1993, Mr. Ruzicka was employed by Progressive Insurance Company and was a Vice President from 1992 through 1993. Philip H. Urban has been SVP of Guaranty National and President of the Personal Lines Business Unit since November 1996. From 1990 to 1996, Mr. Urban was SVP-Personal Lines for Great American Insurance Company. -iv- 16 EXHIBIT INDEX Exhibit Description (b)(1) Discussion Materials of Donaldson Lufkin & Jenrette Securities Corporation dated June 5, 1997. (b)(2) Discussion Materials of Donaldson Lufkin & Jenrette Securities Corporation dated July 1997. (b)(3) Presentation of Donaldson Lufkin & Jenrette Securities Corporation dated September 12, 1997. (b)(4) Presentation of Salomon Brothers Inc dated October 30, 1997. (b)(5) Opinion of Salomon Brothers Inc dated October 30, 1997. (d)(10) Solicitation/Recommendation Statement on Schedule 14D-9 of Guaranty National Corporation, dated November 5, 1997. (d)(11) Letter to Shareholders dated November 5, 1997. (g)(4) Portions of Proxy Statement on Schedule 14A of Guaranty National Corporation dated March 27, 1997. (g)(5) Portions of Annual Report on Form 10-K of Guaranty National Corporation for the fiscal year ended December 31, 1996. EX-99.G3 5 AMENDMENT NO. 2 TO SCHEDULE 13E-3 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Amendment No. 2 Schedule 13E-3 Rule 13e-3 Transaction Statement (Pursuant to Section 13(e) of the Securities Exchange Act of 1934 and Rule 13e-3 (Section 240.13e-3) thereunder) Guaranty National Corporation (Name of the Issuer) Orion Capital Corporation and Guaranty National Corporation (Name of Persons Filing Statement) Common Stock, par value $1.00 Per Share (Title of Class of Securities) 401192109 (CUSIP Number of Class of Securities) Michael P. Maloney, Esq. Michael L. Pautler Orion Capital Corporation Guaranty National Corporation 9 Farm Springs Road 9800 South Meridian Boulevard Farmington, Connecticut 06032 Englewood, Colorado 80112 (860) 674-6600 (303) 754-8400 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) Copy to: John J. McCann, Esq. Hardin Holmes, Esq. Donovan Leisure Newton & Irvine Ireland, Stapleton, Pryor & Pascoe, P.C. 30 Rockefeller Plaza 1675 Broadway, 26th Floor New York, New York 10112 Denver, Colorado 80202 (212) 632-3000 (303) 623-2700 2 INTRODUCTION This Amendment No. 2 further amends and supplements the Rule 13E-3 Transaction Statement of Orion Capital Corporation, a Delaware corporation ("Orion") and Guaranty National Corporation, a Colorado corporation, filed by Orion on November 5, 1997, as previously amended and supplemented by Amendment No. 1 dated November 25, 1997 (together, the "Schedule 13E-3"). The Schedule 13E-3 relates to the tender offer by Orion to purchase all outstanding shares of common stock, par value $1.00 per share, (including any associated stock purchase rights) (the "Shares") of Guaranty for $36.00 per Share, net to the Seller in cash, upon the terms and subject to the conditions set forth in Orion's Offer to Purchase dated November 5, 1997 (the "Original Offer to Purchase") as supplemented by the Supplement to the Offer to Purchase dated December 1, 1997 which is attached hereto as Exhibit (d)(12) (together referred to as the "Offer to Purchase") and the related Letter of Transmittal which, together with amendments and supplements thereto constitute the "Offer". The Offer is being made pursuant to an Agreement and Plan of Merger dated October 31, 1997 between Orion and Guaranty, which provides for the merger (the "Merger") of a wholly-owned subsidiary of Orion with and into Guaranty. If the Merger is consummated, each Share outstanding immediately prior to the time when the Merger becomes effective, other than Shares as to which dissenter's rights of appraisal shall have been duly asserted and perfected under the Colorado Business Corporation Act and Shares held by Orion, its wholly-owned subsidiaries and Guaranty, will be converted into the right to receive $36.00 in cash per Share, without interest, all as more fully described in the Offer to Purchase referred to herein. This Amendment No. 2 to the Transaction Statement is being filed jointly by Orion and Guaranty. By filing this Schedule 13E-3, neither of the joint signatories concedes that Rule 13e-3 under the Securities Exchange Act of 1934, as amended, is applicable to the Offer or the Merger or the other transactions contemplated by the Agreement and Plan of Merger. -2- 3 This Statement amends the Schedule 13E-3 by incorporating by reference herein the Supplement dated December 1, 1997 to Orion's Offer to Purchase dated November 5, 1997, attached hereto as Exhibit (d)(12) and the press release dated December 1, 1997 of Orion attached hereto as Exhibit (d)(13). This Statement also amends Items 9, 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. ITEM 9. Reports, Opinions, Appraisals and Certain Negotiations. (a)-(b). The information set forth in the Supplement to the Offer to Purchase dated December 1, 1997 a copy of which is attached as Exhibit (d)(12) is incorporated herein by reference. ITEM 16. Additional Information Whether or not specifically referenced in response to Items of this Statement, the information contained in the Supplement to the Offer to Purchase dated December 1, 1997, a copy of which is attached as Exhibit (d)(12) hereto, and in the press release dated December 1, 1997 a copy of which is attached hereto as Exhibit (d)(13) is hereby incorporated herein by reference. ITEM 17. Material to be Filed as Exhibits. (d)(12) Supplement to the Offer to Purchase, dated December 1, 1997 (d)(13) Form of press release issued on December 1, 1997 (g)(6) Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 of Orion Capital Corporation dated December 1, 1997 -3- 4 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: December 1, 1997 ORION CAPITAL CORPORATION By: /s/ Michael P. Maloney ----------------------------------------- Name: Michael P. Maloney Title: Senior Vice President, General Counsel and Secretary -4- 5 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: December 1, 1997 GUARANTY NATIONAL CORPORATION By: /s/ James R. Pouliot ------------------------------- Name: James R. Pouliot Title: President -5- 6 EXHIBIT INDEX Exhibit Description (d)(12) Supplement to the Offer to Purchase, dated December 1, 1997. (d)(13) Form of press release issued on December 1, 1997 (g)(6) Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 of Orion Capital Corporation dated December 1, 1997 -----END PRIVACY-ENHANCED MESSAGE-----