-----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, ByItO1efGkP29yvCrdzXYZCTImAzj4KK78Fa/AkVrrEaTumHNw2lGnxm9OGArdiF tDy7ddTanMJAAhzBC1rIZQ== 0000916641-98-001302.txt : 19981204 0000916641-98-001302.hdr.sgml : 19981204 ACCESSION NUMBER: 0000916641-98-001302 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19981203 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: GRYPHON HOLDINGS INC CENTRAL INDEX KEY: 0000912558 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 133287060 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-43193 FILM NUMBER: 98763760 BUSINESS ADDRESS: STREET 1: 30 WALL ST STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2128251200 MAIL ADDRESS: STREET 1: 30 WALL ST STREET 2: 6TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10005 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MARKEL CORP CENTRAL INDEX KEY: 0000803509 STANDARD INDUSTRIAL CLASSIFICATION: FIRE, MARINE & CASUALTY INSURANCE [6331] IRS NUMBER: 540292420 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 4551 COX RD CITY: GLEN ALLEN STATE: VA ZIP: 23060-3382 BUSINESS PHONE: 8047470136 MAIL ADDRESS: STREET 1: P O BOX 2009 CITY: GLEN ALLEN STATE: VA ZIP: 23058-2009 SC 14D1/A 1 MARKEL SC 14D1/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 AMENDMENT NO. 8 TO SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND AMENDMENT NO. 13 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 CALCULATION OF FILING FEE ============================================================================== TRANSACTION VALUATION* $128,064,351 AMOUNT OF FILING FEE** $25,612.87 ============================================================================== * For purposes of calculating the filing fee only. This calculation assumes the purchase of 6,740,229 shares of common stock, par value $0.01 per share (the "Common Shares"), of Gryphon Holdings Inc. (the "Company") at $19.00 net per share in cash. ** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent of the aggregate value of cash offered by MG Acquisition Corp. for such number of Common Shares. [X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: $24,264.83 Filing Party: Markel Corporation and MG Acquisition Corp. Form or Registration No.: Schedule 14D-1 Date Filed: October 20, 1998 This Amendment No. 8 amends and supplements the Tender Offer Statement on Schedule 14D-1 filed on October 20, 1998 (as amended the "Schedule 14D-1") by MG Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Markel Corporation, a Virginia corporation ("Parent"), to purchase all outstanding shares of common stock, par value $0.01 per share (the "Common Shares") of Gryphon Holdings Inc., a Delaware corporation (the "Company"), at a price of $19.00 per share, net to the tendering shareholder in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated October 20, 1998 (the "Offer to Purchase") as amended and supplemented by the Supplement thereto dated December 3, 1998 (the "Supplement") and the revised Letter of Transmittal (which, together with any amendments or supplements thereto, constitutes the "Offer"). This Amendment also constitutes an Amendment to Statement on Schedule 13D with respect to the acquisition by Parent and Purchaser of beneficial ownership of Common Shares. Capitalized terms used and not defined herein shall have the meanings assigned such terms in the Offer to Purchase or the Schedule 14D-1. ITEM 1. SECURITY AND SUBJECT COMPANY. Item 1 is hereby amended and supplemented by the following: (b) The information set forth under "Introduction" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction" in the Supplement, is incorporated herein by reference. (c) The information set forth in "Price Range of Shares; Dividends" in the Offer to Purchase, as amended and supplemented by the information in Section 3 "Price Range of Shares; Dividends" in the Supplement, is incorporated herein by reference. ITEM 2. IDENTITY AND BACKGROUND. (a)-(d); (g) The information set forth under "Introduction" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction" in the Supplement, is incorporated herein by reference. ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY. Item 3 is hereby amended and supplemented by the following: (a)-(b) The information set forth under "Introduction," "Certain Information Concerning the Company," "Background of the Offer; Contacts with the Company," and "Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations," in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction," Section 4, "Certain Information Concerning the Company," Section 6, "Background of the Offer; Contacts with the Company," and Section 7, "Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations," in the Supplement, and the information set forth under "Certain Information Concerning Purchaser and Parent" in the Offer to Purchase, is incorporated herein by reference. ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. Item 4 is hereby amended and supplemented by the following: (a)-(b) The information set forth under "Introduction" and in "Source and Amount of Funds" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction" and Section 5 "Source and Amount of Funds" in the Supplement, is incorporated herein by reference. ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER. Item 5 is hereby amended and supplemented by the following: (a)-(e) The information set forth under "Introduction," "Background of the Offer; Contacts with the Company" and "Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction," Section 6, "Background of the Offer; Contacts with the Company" and Section 7, "Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations" in the Supplement, is incorporated herein by reference. (f)-(g) The information set forth under "Introduction" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction" in the Supplement, and the information set forth under "Effect of the Offer on the Market for the Common Shares; Exchange History and Exchange Act Regulation; Margin Regulations" in the Offer to Purchase, is incorporated herein by reference. ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY. Item 6 is hereby amended and supplemented by the following: (a) - (b) The information set forth under "Introduction" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction" in the Supplement, and the information set forth under "Certain Information Concerning Purchaser and Parent" in the Offer to Purchase, is incorporated herein by reference. ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES. Item 7 is hereby amended and supplemented by the following: The information set forth under "Introduction," "Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations" and, "Certain Legal Matters; Regulatory Approvals; Certain Litigation" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction," Section 7, "Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations" and Section 9, "Certain Legal Matters; Regulatory Approvals; Certain Litigation" in the Supplement, is incorporated herein by reference. ITEM 10. ADDITIONAL INFORMATION. Item 10 is hereby amended and supplemented by the following: (b)-(c) The information set forth under "Introduction" and "Certain Legal Matters; Regulatory Approvals; Certain Litigation" in the Offer to Purchase, as amended and supplemented by the information set forth under "Introduction" and Section 9 "Certain Legal Matters; Regulatory Approvals; Certain Litigation" in the Supplement, is incorporated herein by reference. (e) The information set forth under "Certain Legal matters; Regulatory Approvals; Certain Litigation" in the Offer to Purchase, as amended and supplemented by the information set forth in Section 9 "Certain Legal matters; Regulatory Approvals; Certain Litigation" in the Supplement, is incorporated herein by reference. (f) The information set forth in the Offer to Purchase, a copy of which is filed as Exhibit (a)(1) to this Schedule 14D-1, as amended and supplemented in the Supplement, and the revised Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(13) and (a)(14), respectively, is incorporated herein by reference. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. (a) (13) Supplement to Offer to Purchase, dated December 3, 1998. (14) Revised Letter of Transmittal. (15) Revised Notice of Guaranteed Delivery. (16) Text of Press Release issued by Markel Corporation on December 3, 1998. 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: December 3, 1998 MARKEL CORPORATION By: /s/ Steven A. Markel -------------------- Name: Steven A. Markel Title: Vice Chairman MG ACQUISITION CORP. By: /s/ Steven A. Markel --------------------- Name: Steven A. Markel Title: Vice Chairman EXHIBIT INDEX (a) (13) Supplement to Offer to Purchase, dated December 3, 1998. (14) Revised Letter of Transmittal. (15) Revised Notice of Guaranteed Delivery. (16) Text of Press Release issued by Markel Corporation on December 3, 1998. EX-99 2 EXHIBIT 99.A13 EXHIBIT (a)(13) SUPPLEMENT TO THE OFFER TO PURCHASE DATED DECEMBER 3, 1998 MG ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF MARKEL CORPORATION HAS INCREASED THE PRICE OF ITS OFFER TO PURCHASE ALL OUTSTANDING SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF GRYPHON HOLDINGS INC. TO $19.00 NET PER COMMON SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, DECEMBER 18, 1998, UNLESS THE OFFER IS EXTENDED. THE BOARD OF DIRECTORS OF GRYPHON HOLDINGS INC. (THE "COMPANY") HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS, OF THE COMPANY'S SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER AND, IF REQUIRED, VOTE IN FAVOR OF THE MERGER. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF COMMON SHARES (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) WHICH, TOGETHER WITH SHARES OWNED BY MARKEL CORPORATION ("PARENT") AND MG ACQUISITION CORP., A WHOLLY-OWNED SUBSIDIARY OF PARENT ("PURCHASER"), CONSTITUTE AT LEAST 51% OF THE COMMON SHARES OF THE COMPANY OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, AND (2) PARENT AND PURCHASER HAVING OBTAINED ALL INSURANCE REGULATORY APPROVALS NECESSARY FOR THEIR ACQUISITION OF CONTROL OVER THE COMPANY AND ITS INSURANCE SUBSIDIARIES ON TERMS AND CONDITIONS REASONABLY SATISFACTORY TO PURCHASER, IN ITS GOOD FAITH DETERMINATION. SEE THE INTRODUCTION AND SECTION 8 OF THIS SUPPLEMENT. THE OFFER IS NOT CONDITIONED UPON PURCHASER OBTAINING FINANCING. IMPORTANT Any shareholder desiring to tender all or any portion of such shareholder's Common Shares should either (i) complete and sign one of the Letters of Transmittal (or a facsimile thereof) in accordance with the instructions in the Letters of Transmittal, have such shareholder's signature thereon guaranteed if required by Instruction 1 to the Letters of Transmittal, mail or deliver one of the Letters of Transmittal (or such facsimile thereof) and any other required documents to the Depositary (as defined herein) and either deliver the certificates for such Common Shares to the Depositary along with the Letters of Transmittal (or a facsimile thereof) or deliver such Common Shares pursuant to the procedures for book-entry transfers set forth in Section 3 of the Offer to Purchase prior to the expiration of the Offer or (ii) request such shareholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such shareholder. A shareholder having Common Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such shareholder desires to tender such Common Shares. Any shareholder who desires to tender Common Shares and whose certificates for such shares are not immediately available, or who cannot comply with the procedures for book-entry transfers described in the Offer to Purchase as supplemented by Section 2 of this Supplement on a timely basis, may tender such Common Shares by following the procedures for guaranteed delivery set forth in Section 3 of the Offer to Purchase as supplemented by Section 2 of this Supplement. Questions and requests for assistance 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. Additional copies of the Offer to Purchase, this Supplement, the revised Letter of Transmittal or other tender offer materials may be obtained from the Information Agent. --------------- The Dealer Manager for the Offer is: [COCHRAN, CARONIA SECURITIES LLC LOGO] December 3, 1998 TABLE OF CONTENTS
SECTION PAGE - ------- ----- INTRODUCTION ............................................................................. 1 1. Terms of the Offer; Expiration Date ............................................ 2 2. Procedures for Tendering Common Shares ......................................... 2 3. Price Range of Shares; Dividends ............................................... 3 4. Certain Information Concerning the Company ..................................... 3 5. Source and Amount of Funds ..................................................... 4 6. Background of the Offer; Contacts with the Company ............................. 4 7. Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations................................................................ 5 8. Conditions of the Offer ........................................................ 11 9. Certain Legal Matters; Regulatory Approvals; Certain Litigation ................ 13 10. Miscellaneous ................................................................. 13
TO THE HOLDERS OF COMMON STOCK OF GRYPHON HOLDINGS INC.: INTRODUCTION The following information amends and supplements the Offer to Purchase dated October 20, 1998 (the "Offer to Purchase") of MG Acquisition Corp. ("Purchaser"), a Delaware corporation and a wholly owned subsidiary of Markel Corporation, a Virginia corporation ("Parent"), pursuant to which Purchaser is offering to purchase all outstanding shares of common stock, par value $0.01 per share (the "Common Shares"), of Gryphon Holdings Inc., a Delaware corporation (the "Company"), including the associated Junior Participating Cumulative Preferred Stock Purchase Rights (including any successors thereto, the "Rights") issued pursuant to the Rights Agreement, dated as of June 5, 1995, as amended as of July 28, 1998, October 22, 1998 and November 25, 1998, between the Company and State Street Bank and Trust Company, as Rights Agent (as such agreement may be further amended and including any successor agreement, the "Rights Agreement"), at a price of $19.00 per Common Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase, this Supplement and the revised Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). This Supplement should be read in conjunction with the Offer to Purchase. Except as set forth in this Supplement and the revised Letter of Transmittal, the terms and conditions previously set forth in the Offer to Purchase and the Letter of Transmittal previously mailed to shareholders, remain applicable in all respects to the Offer. Terms used but not defined herein have the meaning set forth in the Offer to Purchase. On November 24, 1998, the Board of Directors of the Company (the "Company Board") approved the Agreement and Plan of Merger, dated as of November 25, 1998, by and among Parent, Purchaser and the Company (the "Merger Agreement"). Thereafter, Parent, Purchaser and the Company entered into the Merger Agreement, which provides, among other things, for (i) the continuation of the Offer at an Offer Price of $19.00 per Common Share and the modification of the conditions of the Offer, as described in Section 8 hereof, and (ii) following the consummation of the Offer, the merger of Purchaser with and into the Company with the Company continuing as the surviving corporation (the "Merger"). Pursuant to the Merger, each Common Share then outstanding at the effective time of the Merger (other than Common Shares owned by Parent or Purchaser, the Company or any subsidiary of the Company and Dissenting Shares (as defined in the Merger Agreement)) will, by virtue of the Merger and without any action by the holder thereof, be converted into the right to receive $19.00 per Common Share, net to the shareholder in cash, without interest thereon (the "Merger Consideration"), upon surrender of the certificate formerly representing such Common Shares (a "Certificate"). According to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 (Amendment No. 4) (the "Schedule 14D-9") filed on December 3, 1998 with the Securities and Exchange Commission (the "SEC"), the Company Board unanimously determined that the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are fair to, and in the best interests, of the Company's shareholders. The Offer is being amended and supplemented pursuant to the terms of the Merger Agreement. For a more detailed description of the Merger Agreement, see Section 7 of this Supplement. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS, OF THE COMPANY'S SHAREHOLDERS AND RECOMMENDS THAT THE SHAREHOLDERS OF THE COMPANY ACCEPT THE OFFER AND, IF REQUIRED, VOTE IN FAVOR OF THE MERGER. Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), financial advisor to the Company, has delivered its written opinion to the Company Board that the consideration to be received by the holders of Common Shares pursuant to each of the Offer and the Merger is fair to such holders from a financial point of view. A copy of the opinion of DLJ is attached as an exhibit to the Schedule 14D-9. Shareholders are urged to read such opinion in its entirety for a description of the procedures followed, assumptions and qualifications made, matters considered and limitations on the review undertaken by DLJ. Because the Company Board approved, on November 24, 1998, the terms of the Merger Agreement, the provisions of Section 203 of the Delaware Corporation Law relating to Business Combinations with Interested Stockholders have been rendered inapplicable to the Merger. Accordingly, the Offer is no longer subject to the Affiliated Transaction Condition. The Company Board approved, on November 24, 1998, an amendment to the Rights Agreement providing, in effect, that the Rights are inapplicable to the Offer and the Merger. See Section 7 of this Supplement. Accordingly, the Offer is no longer subject to the Rights Condition. 1 THE OFFER REMAINS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF COMMON SHARES (INCLUDING THE ASSOCIATED RIGHTS) WHICH, TOGETHER WITH SHARES OWNED BY PARENT AND PURCHASER, CONSTITUTE AT LEAST 51% OF THE COMMON SHARES OF THE COMPANY OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE, AND (2) PARENT AND PURCHASER HAVING OBTAINED ALL INSURANCE REGULATORY APPROVALS NECESSARY FOR THEIR ACQUISITION OF CONTROL OF THE COMPANY AND ITS INSURANCE SUBSIDIARIES ON TERMS AND CONDITIONS REASONABLY SATISFACTORY TO PURCHASER, IN ITS GOOD FAITH DETERMINATION. SECTION 8 OF THIS SUPPLEMENT. THE OFFER IS NOT CONDITIONED UPON PURCHASER OBTAINING FINANCING. According to information included in the Form 10-Q of Gryphon Holdings Inc. for the quarter ended September 30, 1998, as filed with the Securities and Exchange Commission (the "SEC") on November 16, 1998 (the "Company Form 10-Q") there were 6,740,229 Common Shares outstanding as of September 30, 1998. According to information included within Forms S-8 of Gryphon Holdings Inc. filed with the SEC through February 20, 1998, and within the footnotes to the financial statements of Gryphon Holdings Inc. included within the Form 10-K of Gryphon Holdings Inc. for the year ended December 31, 1997, there were 790,075 Common Shares subject to issuance pursuant to various stock option and incentive plans of the Company (the "Incentive Shares") as of December 31, 1997 (the most recent date such information is available to Purchaser). In addition, according to the Form 8-K/A of Gryphon Holdings Inc. dated September 28, 1998, as of that date, 688,077 Common Shares were reserved for issuance pursuant to the conversion of the 14,440 issued and outstanding Preferred Shares which the Company had issued as partial consideration for the acquisitions reported by the Company in such Form 8-K/A. The Company also reported in that Form 8-K/A the existence of an earnout payment (the "Earnout Payment") relating to those acquisitions which could be comprised of either cash or additional Preferred Shares. Based on the foregoing without giving effect to the indeterminate number of Preferred Shares (and upon conversion, of Common Shares) which may be issued pursuant to the Earnout Payment, Purchaser believes there are approximately 6,740,229 Common Shares outstanding on a fully diluted basis. The Purchaser believes that approximately 3,437,517 Common Shares represent at least 51% of the Common Shares of the Company. Parent and Purchaser currently own an aggregate of 791,250 Common Shares, which were acquired in open-market transactions. Accordingly, Purchaser believes that the Minimum Condition would be satisfied if an aggregate of 2,646,267 Common Shares are validly tendered and not properly withdrawn pursuant to the Offer. THE OFFER TO PURCHASE, THIS SUPPLEMENT AND THE REVISED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER; EXPIRATION DATE. The discussion set forth in Section 1 of the Offer to Purchase is hereby amended and supplemented as follows: The term "Expiration Date" has been amended to mean 12:00 Midnight, New York City time, on December 18, 1998, unless and until Purchaser, in its sole discretion, but subject to the terms of the Merger Agreement, shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by Purchaser, shall expire. It is Parent's and Purchaser's current expectation that the required approvals by the relevant Insurance Commissions in California and Pennsylvania will occur by December 31, 1998. The hearing required under the Connecticut Insurance Code is not expected to occur until January 1999. Since the Offer remains conditional upon the satisfaction of the Insurance Regulatory Condition, the Purchaser is likely to extend the Expiration Date to a date after the Connecticut hearing. 2. PROCEDURES FOR TENDERING COMMON SHARES. The discussion set forth in Section 3 of the Offer to Purchase is hereby amended and supplemented as follows: The revised Letter of Transmittal and the revised Notice of Guaranteed Delivery distributed with this Supplement may be used to tender Common Shares. Tendering shareholders may also continue to use the Letter of Transmittal and Notice of Guaranteed Delivery previously distributed with the Offer to Purchase to tender Common Shares. SHAREHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED COMMON SHARES PURSUANT TO THE OFFER AND NOT PROPERLY WITHDRAWN SUCH COMMON SHARES HAVE VALIDLY TENDERED 2 SUCH COMMON SHARES FOR PURPOSES OF THE OFFER, AS AMENDED, AND NEED NOT TAKE ANY FURTHER ACTION IN ORDER TO RECEIVE THE PRICE OF $19.00 PER COMMON SHARE PURSUANT TO THE OFFER. 3. PRICE RANGE OF SHARES; DIVIDENDS. The discussion set forth in Section 6 of the Offer to Purchase is hereby amended and supplemented as follows: According to published financial sources, the high and low sales prices per Common Share on the Nasdaq NM for the Fourth Quarter of 1998 (through December 2, 1998) were $14.00 and $18 7/8 respectively. On November 24, 1998, the last full trading day prior to the announcement of the Merger Agreement, the last reported closing price on the Nasdaq NM was $18.00 per Common Share. Shareholders are urged to obtain a current market quotation for the Common Shares. 4. CERTAIN INFORMATION CONCERNING THE COMPANY The discussion set forth in Section 8 of the Offer to Purchase is hereby amended and supplemented as follows: Set forth below is certain selected consolidated financial information relating to the Company and its subsidiaries which has been excerpted or derived from the financial statements contained in the Company's 1997 Form 10-K, the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1998 (the "September, 1998 Form 10-Q"), and other documents filed by the Company with the SEC. More comprehensive financial information (including pro forma financial data giving effect to the Company's acquisition of all the issued and outstanding shares of capital stock of The First Reinsurance Company of Hartford, Oakley Underwriting Agency, and F/I Insurance Agency, Incorporated, as reported in the Company Form 8-K). is included in, and the financial information that follows is qualified in its entirety by reference to, the Company's 1997 Form 10-K, the September, 1998 10-Q and such other documents filed by the Company with the SEC. The Company Form 10-K, the September, 1998 10-Q and such other documents may be examined at and copies may be obtained from the offices of the SEC or the NASDAQ Stock Market in the manner set forth in Section 8 of the Offer to Purchase. 3 SUMMARY FINANCIAL INFORMATION FOR THE COMPANY FINANCIAL INFORMATION
AT OR FOR THE NINE AT OR FOR THE YEAR ENDING MONTHS ENDING DECEMBER 31, SEPTEMBER 30, ----------------------------------------- ----------------------- 1995 1996 1997 1997 1998 ------------- ------------- ------------- ------------ ---------- (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE) INCOME STATEMENT DATA Total Revenue ................................. $ 102,885 $ 106,644 $ 128,474 $ 93,054 $ 88,603 Net Income .................................... 12,925 6,163 8,794 8,035 (5,865) Earnings Per Share (basic) .................... 1.69 0.93 1.32 1.20 (0.87) BALANCE SHEET DATA Total Investments ............................. 261,265 280,471 280,810 275,907 386,537 Total Assets .................................. 530,989 526,984 538,985 559,451 747,997 Unpaid Losses and Loss Adjustment Expense ..... 308,886 309,259 328,911 343,782 448,636 Total Liabilities ............................. 437,767 431,848 434,476 455,189 632,321 Total Stockholders' Equity .................... 93,222 95,136 104,509 104,262 115,676
5. SOURCE AND AMOUNT OF FUNDS. The discussion set forth in Section 10 of the Offer to Purchase is hereby amended and supplemented as follows: Purchaser estimates that the total amount of funds now required to purchase Common Shares pursuant to the Offer (as described in this Supplement) and to pay all related costs and expenses will be approximately $122 million. Purchaser plans to obtain all funds needed for the Offer through a capital contribution from Parent. Parent plans to obtain such funds entirely from existing cash accounts and the Credit Facility. At December 3, 1998, Parent had $250 million of available borrowings under the Credit Facility. 6. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY. The discussion set forth in Section 11 of the Offer to Purchase is hereby amended and supplemented as follows: On October 30, 1998, Steven A. Markel, Vice Chairman of Parent, sent a letter to the Company Board indicating Parent was willing to discuss raising the $18.00 per Common Share offer price if it had access to information justifying an increase in price. In its Schedule 14D-9 filed November 4, 1998 (the "Original Schedule 14D-9") the Company reported that the Company Board voted to recommend that its shareholders reject the original Offer. By amendment to the Original Schedule 14D-9 filed November 6, 1998, the Company reported that at the regularly scheduled meeting of the Company Board held on November 5, 1998, the Company Board designated a Special Committee (the "Special Committee") consisting of three directors for the purpose of investigating, reviewing, evaluating and assessing the Company's strategic alternatives that have arisen or may arise. On November 9, 1998, Mr. Markel sent a letter to the Special Committee indicating, among other things, Parent's willingness to discuss raising the $18.00 per Common Share offer price if Parent had access to information justifying such an increase. On November 13, 1998, Mr. Markel met with Robert M. Baylis, Chairman of the Special Committee to explore the possibility of the Company and Parent entering into a confidentiality agreement on terms satisfactory to both parties and an increase in the $18.00 per Common Share offer price, subject to satisfactory completion of Parent's due diligence. From November 13 through November 17, 1998, representatives of Parent and the Company, together with their legal counsel and financial advisors, had discussions concerning the terms of the proposed confidentiality agreement and the amendment of the Offer Price. On November 17, 1998, Parent and the Company executed a confidentiality agreement and Parent announced that the Offer was amended to increase the Offer Price from $18.00 per Common Share to $19.00 per Common Share, subject to satisfactory completion of Parent's due diligence review. The Special Committee agreed that upon completion of Parent's due diligence review of the Company, the Special Committee would recommend to the Company Board that the Company Board and the Company's shareholders accept the Offer at a $19.00 per Common Share offer price, subject to there being no higher offers to purchase the Company outstanding at that time. From November 17 through November 24, representatives of Parent and the Company, together with their legal counsel and financial advisors, held discussions with respect to the negotiation of a definitive agreement. On November 24, 1998, the Company Board unanimously approved the Merger Agreement. Thereafter, Parent, Purchaser and the Company entered into the Merger Agreement, which provides, among other things, for (i) the continuation 4 of the Offer and the modification of the conditions of the Offer, as described in Section 8 hereof, and (ii) following the consummation of the Offer, the Merger. Pursuant to the Merger, each Common Share then outstanding at the effective time of the Merger (other than Common Shares owned by Parent or Purchaser, the Company or any subsidiary of the Company and Dissenting Shares (as defined in the Merger Agreement)) will, by virtue of the Merger and without any action by the holder thereof, be converted into the right to receive $19.00 per Common Share, net to the shareholder in cash, without interest thereon, upon surrender of the Certificate. 7. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; CERTAIN CONSIDERATIONS. The discussion set forth in Section 12 of the Offer to Purchase is hereby amended and supplemented as follows: THE MERGER AGREEMENT Pursuant to the Merger Agreement and following the consummation of the Offer, Parent, Purchaser and the Company have agreed to effect the Merger in accordance with the provisions of the Merger Agreement on the third business day (or such other time as the parties mutually agree) after the satisfaction or waiver of certain conditions to the Merger. Set forth below is a description of the material provisions of the Merger Agreement. THE OFFER. In the Merger Agreement, the Purchaser has agreed, subject to certain conditions, among other things, (a) to continue the Offer at an Offer Price of $19.00 per Common Share, net to the seller in cash without interest, and (b) to modify the conditions of the Offer to those set forth below under Section 8. The Merger Agreement provides that, without the consent of the Company, the Purchaser will not (a) reduce the number of Common Shares sought in the Offer, (b) reduce the Offer Price, (c) change or add to the conditions set forth below under Section 8, (d) except as provided in the next sentence, extend the expiration date of the Offer, (e) change the form of consideration payable in the Offer, (f) amend any other term of the Offer in any manner adverse to the holders of the Common Shares or (g) waive the Minimum Condition. Notwithstanding the foregoing, Purchaser may, without the consent of the Company, (A) extend the Offer, if at the scheduled expiration date of the Offer any of the conditions to the Purchaser's obligation to purchase the Common Shares are not satisfied or waived, until such time as such conditions are satisfied or waived (provided that the expiration date may not be extended beyond June 30, 1999 without the consent of the Company), (B) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer or (C) if all conditions to Purchaser's obligation to purchase the Common Shares are satisfied or waived but the number of Common Shares tendered together with Common Shares held by Parent and its subsidiaries is less than 90% of the then outstanding number of Common Shares (determined on a fully diluted basis for all outstanding Preferred Shares, stock options and any other rights to acquire Common Shares), extend the Offer for an aggregate period of not more than 20 business days after the latest expiration date that would be permitted under clause (A) or (B) of this sentence. Subject to the terms and conditions of the Offer and the Merger Agreement, Parent and Purchaser have agreed to accept for payment, and pay for, all Common Shares validly tendered and not withdrawn pursuant to the Offer that Purchaser becomes obligated to accept for payment, and pay for, pursuant to the Offer, as soon as practicable after the expiration of the Offer. THE MERGER. The Merger Agreement provides that, following the satisfaction or waiver of the conditions set forth therein, Purchaser will be merged with and into the Company, with the Company continuing as the surviving corporation (the "Surviving Corporation"), and each Common Share (with associated Rights) then outstanding (other than Common Shares owned by Parent or Purchaser, shares owned by the Company or any of its subsidiaries and Dissenting Shares) will, by virtue of the Merger and without any action by the holder thereof, be converted into the right to receive $19.00 per Common Share, net to the shareholder in cash, without interest thereon, upon the surrender of the certificate formerly representing such shares. REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains representations and warranties by the Company with respect to, among other things, the authority of the Company relative to the Merger Agreement, certain SEC filings of the Company, the absence of certain changes or events, and the inapplicability of state takeover statutes. The Merger Agreement also contains representations and warranties of Parent and Purchaser with respect to, among other things, their authority relative to the Merger Agreement and information supplied in SEC filings in connection with the Offer or the Merger. COVENANTS OF THE COMPANY. In the Merger Agreement, the Company has agreed that, among other things, during the period from the date of the Merger Agreement until the time persons nominated by Parent or Purchaser constitute a majority of the Company Board, the Company and its subsidiaries will conduct their respective businesses in the ordinary course and in a manner consistent with past practice and will use good faith efforts to preserve intact their business organizations, to keep available the services of their current officers and key employees, preserve its relationships with insureds, reinsurers, 5 customers, suppliers, insurance brokers and agents, and others having significant business dealings with them to the end that its goodwill and ongoing businesses will not be impaired in any material respect at the effective time of the Merger (the "Effective Time"), subject to the terms of the Merger Agreement. Without limiting the generality of the foregoing, from the date hereof until the time persons nominated by Parent or Purchaser constitute a majority of the Company Board except, as otherwise expressly contemplated by the Merger Agreement, the Company will not, and will not permit any of its subsidiaries to, without the prior written consent of Parent: (a) (i) declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its parent, (ii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (iii) purchase, redeem or otherwise acquire any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except, in the case of clause (iii), for (x) the acquisition of Common Shares from holders of stock options in full or partial payment of the exercise price payable by such holder or tax liability arising in connection therewith, upon exercise of stock options outstanding on the date of the Merger Agreement in accordance with their then present terms and (y) the conversion of the Preferred Shares; (b) authorize for issuance, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock or the capital stock of any of its subsidiaries, any other voting securities or any securities convertible into, or any rights, warrants or options to acquire, any such shares, voting securities or convertible securities or any other securities or equity equivalents (including without limitation stock appreciation rights), or contractual obligations valued or measured by the value or market price of the Common Shares (other than the issuance of Common Shares and associated Rights (and reservation of preferred stock in connection with the Rights) upon the exercise of stock options outstanding on the date of the Merger Agreement and in accordance with their then present terms); (c) amend its Certificate of Incorporation, Bylaws or other comparable charter or organizational documents; (d) acquire or agree to acquire by merging or consolidating with, or by purchasing a substantial portion of the stock or assets of, or by any other manner, any business or any entity; (e) sell, lease, license, mortgage or otherwise encumber or subject to any encumbrance or otherwise dispose of any of its properties or assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, except in the ordinary course of business consistent with past practice; (f)(i) incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of the Company or any of its subsidiaries, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for short-term borrowings incurred in the ordinary course of business consistent with past practice, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any direct or indirect wholly owned subsidiary of the Company; (g) acquire or agree to acquire any assets that are material, individually or in the aggregate, to the Company and its subsidiaries taken as a whole, or make or agree to make any capital expenditures except in the ordinary course of business consistent with past practice; (h) pay, discharge or satisfy any claims (including claims of shareholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), except for the payment, discharge or satisfaction, of (i) liabilities or obligations in the ordinary course of business consistent with past practice or in accordance with their terms as in effect on the date hereof or (ii) liabilities reflected or reserved against in, or contemplated by, the most recent consolidated audited financial statements (or the notes thereof) of the Company included in certain reports filed with the SEC prior to the date of the Merger Agreement, or waive, release, grant, or transfer any rights of material value or modify or change in any material respect any existing license, lease, contract or other document, other than in the ordinary course of business consistent with past practice; (i) except as set forth in a letter dated the date of the Merger Agreement delivered to Parent contemporaneously with the execution thereof, adopt or amend in any material respect (except as may be required by law or by the Merger Agreement) any bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan, agreement, trust, fund or other arrangement (including any Benefit Plan (as defined in the Merger Agreement)) for the benefit or welfare of any employee, director or former director or employee or increase the compensation or fringe benefits of any director or employee or former director or employee; pay any benefit (including any discretionary bonus) not required by any existing plan, arrangement or agreement, grant any new or modified severance or termination arrangement or increase or accelerate any benefits payable under its severance or termination pay policies in effect on the date of the Merger Agreement, other than any such increase or acceleration provided for under such policies as in effect on the date of the Merger Agreement; (j) change any material accounting principle used by it, except for such changes as may be required to be implemented following the date of the Merger Agreement pursuant to generally accepted accounting principles or rules and regulations of the SEC promulgated following the date of the Merger Agreement; (k) take any action that would, or is reasonably likely to, result in any of its representations and warranties in the Merger Agreement 6 becoming untrue, or in any of the conditions of Purchaser's obligation to purchase Common Shares in the Offer or the conditions to the Merger not being satisfied; (l) except in the ordinary course of business and consistent with past practice, make any material tax election or settle or compromise any material federal, state, local or foreign income tax liability; and (m) authorize any of, or commit or agree to take any of, the foregoing actions. PROHIBITION ON SOLICITATION. Pursuant to the Merger Agreement, the Company has agreed that the Company and its officers, directors, employees, representatives and agents will immediately cease any discussions or negotiations with any parties that may be ongoing with respect to an Acquisition Proposal (as defined below). From and after the date of the Merger Agreement until the termination thereof, the Company has agreed it will not, nor will it permit any of its subsidiaries to, authorize or permit any of its officers, directors or employees or any investment banker, financial advisor, attorney, accountant or other representative retained by it or any of its subsidiaries to, directly or indirectly, (i) solicit, initiate or knowingly encourage (including by way of furnishing non-public information or assistance), or knowingly take any other action to facilitate, any inquiries or the making of any proposal which constitutes, or would reasonably be expected to lead to, any Acquisition Proposal or (ii) participate in any discussions or negotiations regarding any Acquisition Proposal. If, at any time the Company Board determines in good faith, after receiving the advice of independent legal counsel (who may be the Company's regularly engaged independent counsel), that it is necessary to do so in the exercise of its fiduciary duties to the Company's shareholders under applicable law, the Company may, in response to an unsolicited Acquisition Proposal, and subject to compliance with certain provisions of the Merger Agreement, (A) furnish information with respect to the Company to any person pursuant to a confidentiality agreement in reasonably customary form and (B) participate in discussions or negotiations regarding such Acquisition Proposal. An, "Acquisition Proposal" means any inquiry, proposal or offer (or any public announcement of a proposal, plan or intention to do any of the foregoing or any agreement to engage in the foregoing) from any person relating to any direct or indirect acquisition or purchase of 20% or more of the assets of the Company or any of its subsidiaries or 20% or more of any class of equity securities of the Company or any of its subsidiaries, any tender offer or exchange offer that if consummated would result in any person beneficially owning 20% or more of any class of equity securities of the Company or any of its subsidiaries, any merger, consolidation, business combination, sale of all or substantially all the assets, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of its subsidiaries, other than the transactions contemplated by the Merger Agreement, or any other transaction the consummation of which would reasonably be expected to impede, interfere with, prevent or materially delay the Offer or the Merger or which would reasonably be expected to dilute materially the benefits to Parent of the transactions contemplated by the Merger Agreement. The Company has agreed that neither the Company Board nor any committee thereof will (i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to Parent, the approval or recommendation by the Company Board of the Merger Agreement, the Offer or the Merger, (ii) approve or recommend, or propose to approve or recommend, any Acquisition Proposal or (iii) cause the Company to enter into any agreement with respect to any Acquisition Proposal. Notwithstanding the foregoing, in the event that the Company Board determines in good faith, after receiving the advice of independent legal counsel (who may be the Company's regularly engaged independent counsel), that it is necessary to do so in the exercise of its fiduciary duties to the Company's shareholders under applicable law, the Company Board may (subject to certain provisions of the Merger Agreement) withdraw or modify its approval or recommendation of the Merger Agreement, the Offer and the Merger, approve or recommend a Superior Proposal (as defined below), cause the Company to enter into an agreement with respect to a Superior Proposal or terminate the Merger Agreement, but in each case only at a time that is after the twentieth business day following Parent's receipt of written notice (a "Notice of Superior Proposal") advising Parent that the Company Board has received a Superior Proposal, specifying the material terms and conditions of such Superior Proposal and identifying the person making such Superior Proposal. In addition, if the Company proposes to enter into an agreement with respect to any Acquisition Proposal, it has agreed concurrently with entering into such agreement to pay, or cause to be paid, to Parent a termination fee of $5 million (the "Termination Fee") plus all out-of-pocket fees and expenses incurred by Parent in connection with the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby not to exceed $500,000 ("Parent's Expenses"). A "Superior Proposal" means any bona fide Acquisition Proposal made by a third party to acquire, directly or indirectly, for consideration consisting of cash and/or securities, all of the Common Shares then outstanding or all or substantially all the assets of the Company and otherwise on terms which the Company Board determines in its good faith judgment (after receiving the advice of a financial advisor of nationally recognized reputation) to be more favorable to the Company's shareholders than the Offer and the Merger. The Company has agreed in the Merger Agreement (i) to promptly advise Parent orally and in writing of any request for information or of any Acquisition Proposal, the material terms and conditions of such request or Acquisition Proposal and the identity of the person making such request or Acquisition Proposal, (ii) to receive from the Person an executed confidentiality agreement on terms no less favorable to the Company than those contained in the confidentiality agreement 7 executed by Parent and (iii) to keep Parent promptly advised of all developments which could reasonably be expected to culminate in the Company Board withdrawing, modifying or amending its recommendation of the Offer, the Merger and other transactions contemplated thereby. Nothing in the Merger Agreement prohibits the Company from taking and disclosing to its shareholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure to the Company's shareholders if, in the good faith judgment of the Company Board, after consultation with independent legal counsel (who may be the Company's regularly engaged independent counsel), failure so to disclose would be inconsistent with its fiduciary duties to the Company's shareholders under applicable law. So long as Parent and Purchaser are in compliance in all material respects with their obligations under the Merger Agreement, neither the Company nor the Company Board nor any committee thereof will, except as permitted by the Merger Agreement, withdraw or modify, or propose to withdraw or modify, its position with respect to the Merger Agreement, the Offer or the Merger or approve or recommend, or propose to approve or recommend, an Acquisition Proposal. The Company has agreed not to release any third party from, or waive any provisions of, any confidentiality or standstill agreement to which the Company is a party. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT. The Merger Agreement provides that as soon as practicable following the consummation of the Offer, the Company will, at the direction of Parent, prepare and file with the SEC a proxy statement or information statement, if required by applicable law. The Company has agreed to use its commercially reasonable efforts to cause the Proxy Statement to be mailed to its shareholders at the earliest practical time. Subject to the fiduciary obligations of the Company Board, as described under "Prohibition on Solicitation" above, the Merger Agreement provides that following the consummation of the Offer, the Company will, at the direction of Parent, cause a meeting of its shareholders to be duly called and held as soon as practicable and take all action necessary in accordance with applicable law and its Articles of Incorporation and By-laws to convene a meeting of its shareholders (the "Shareholders Meeting") to vote upon the approval and adoption of the Merger Agreement and the Merger. For a description of the short-form merger provisions of the DGCL, which, under certain circumstances, if Parent and its subsidiaries following consummation of the Offer own at least 90% of the Common Shares, could be applicable to the Merger, see "Purpose of the Offer and the Merger; Plans for the Company; Certain Considerations" in the Purchaser's Offer to Purchase. INVESTIGATION OF BUSINESS AND PROPERTIES. The Merger Agreement provides that, until the earlier of (i) the consummation of the Offer and (ii) termination of the Merger Agreement, the Company will, and will cause its subsidiaries to, afford Parent, any financial institution providing financing to Parent, and their respective attorneys, accountants, financial advisors and other representatives, reasonable access during regular business hours upon reasonable notice, to make such reasonable inspection of the assets, business and operations of the Company and its subsidiaries and to inspect and make copies of all documents and information reasonably requested by Parent and related to the operations and business of the Company and of its subsidiaries and to meet with designated personnel of the Company and its subsidiaries and/or their respective representatives. Any such access will be conducted in such a manner as not to interfere unreasonably with the operation of the business. The Company has agreed to instruct its personnel, accountants and counsel to cooperate with Parent, and to provide such documents and information as Parent and its representatives may reasonably request. Parent has agreed to execute and deliver to such counsel and accountants such consents and waivers as are customary in connection with providing such documents and information. The Merger Agreement provides that the letter agreement dated November 17, 1998 between Parent and the Company (other than certain specified paragraphs thereof) applies with respect to information furnished thereunder or under the Merger Agreement. EFFORTS TO CONSUMMATE. Subject to the terms and conditions of the Merger Agreement, each of the parties has agreed to use its good faith efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable to consummate, as promptly as practicable, the transactions contemplated by the Merger Agreement, including the obtaining of all necessary consents, waivers, authorizations, orders and approvals of third parties, whether private or governmental, required of it to enable it to comply with the conditions precedent to consummating the transactions contemplated by the Merger Agreement. Without limiting the generality of the foregoing, each party has agreed to defend and cooperate with each other party in defending any legal proceedings, whether judicial or administrative and whether brought derivatively or on behalf of third parties, challenging the Merger Agreement or the consummation of the transactions contemplated thereby. No consideration for any such consent, waiver or agreement necessary to the consummation of the transactions contemplated by the Merger Agreement will be given or promised by the Company without the prior written approval of Parent. Notwithstanding the foregoing, nothing contained in the Merger Agreement requires (a) any party thereto or any of their respective affiliates to sell, transfer, divest or otherwise dispose of any of its respective business, assets or properties in connection with the Merger Agreement or any of the transactions contemplated thereby, (b) Parent to 8 enter into any agreement or other arrangement for the financing of the transactions contemplated by the Merger Agreement on terms that are not satisfactory to Parent, in its sole discretion or (c) any party thereto to initiate any litigation, make any substantial payment or incur any material economic burden (including as a result of any divestiture), except for payments a party presently is contractually obligated to make, to obtain any consent, waiver, authorization, order or approval. CERTAIN LITIGATION. In the Merger Agreement, Parent and Purchaser agreed to promptly dismiss litigation pending against the Company and its directors in the Delaware Chancery Court. See Section 9 of this Supplement. BOARD OF DIRECTORS. Promptly upon the acceptance for payment of, and payment by Parent for, Common Shares pursuant to the Offer, and from time to time thereafter, Parent is entitled to designate such number of directors on the Company Board as will give Parent, subject to compliance with Section 14(f) of the Exchange Act, representation on the Company Board equal to at least that number of directors, rounded up to the next whole number, which is the percentage of the total number of directors (giving effect to the directors elected pursuant to this sentence) that (i) the number of Common Shares owned by Parent and its affiliates bears to (ii) the total number of Common Shares outstanding, and the Company has agreed, at such time, to promptly take all action necessary to cause Parent's designees to be appointed or elected. In the event that Parent's designees are elected to the Company Board, the Merger Agreement provides that until the Effective Time the Company Board will have at least two Independent Directors (as defined below); and, in such event, if the number of Independent Directors is reduced below two for any reason whatsoever, the remaining Independent Director will designate a person to fill such vacancy who will be deemed to be an Independent Director for purposes of the Merger Agreement or, if no Independent Directors then remain, the other directors will designate two persons to fill such vacancies who may not be officers or affiliates of the Company or any of its subsidiaries, or officers or affiliates of Parent or any of its subsidiaries, and such persons will be deemed to be Independent Directors for purposes of the Merger Agreement. The Company will use its best efforts to cause persons designated by Parent to constitute the same percentage as is on the Company Board of (i) each committee of the Company Board, (ii) each board of directors of each domestic subsidiary of the Company and (iii) each committee of each such other board of directors, in each case to the extent permitted by law. Subject to applicable law, the Company has agreed to take all action requested by Parent necessary to effect any such appointment or election. Following the election of designees of Parent and prior to the Effective Time, any amendment of the Merger Agreement or the Certificate of Incorporation or Bylaws of the Company, any termination of the Merger Agreement by the Company, any extension by the Company of the time for the performance of any of the obligations or other acts of Parent or Purchaser or waiver of any of the Company's rights under the Merger Agreement requires the concurrence of a majority of the directors of the Company then in office who neither were designated by Parent nor are employees of the Company or any of its subsidiaries or, if there is just one such director, the concurrence of such director (the "Independent Directors"). The Independent Directors will have the authority to retain such counsel and other advisors at the expense of the Company as are reasonably appropriate to the exercise of their duties in connection with the Merger Agreement, subject to approval by the Company of the terms of such retention, which approval will not be unreasonably withheld. In addition, the Independent Directors will have the authority to institute any action, on behalf of the Company, to enforce performance of the Merger Agreement. TREATMENT OF STOCK OPTIONS; CERTAIN BENEFITS. After the Effective Time, holders of outstanding stock options under the Company's stock option plans will be entitled to receive cash in an amount equal to (A) the product of the number of Common Shares for which such stock option was exercisable immediately prior to the Effective Time multiplied by $19.00 less (B) the aggregate exercise price that would have been applicable to such stock option immediately prior to the Effective Time had such stock option been exercised immediately prior to the Effective Time. The Merger Agreement provides that Parent will cause the Surviving Corporation, for the period ending on December 31, 1999, either to provide employee benefits under plans, programs and arrangements which, in the aggregate, will provide benefits to the employees of the Surviving Corporation which are no less favorable than those provided pursuant to the benefit plans of the Company in effect at the date of the Merger Agreement (other than stock-based plans) or to provide employees of the Surviving Corporation with benefits, in the aggregate, that are comparable to those provided to similarly situated employees of Parent and its subsidiaries. Nothing in the Merger Agreement prevents the amendment or termination of any such benefit plan or interferes with the Surviving Corporation's right or obligation to make such changes as are necessary to conform with applicable law. Parent has agreed to cause the Surviving Corporation to honor without modification all employee severance plans (or policies) and employment and severance agreements of the Company or any of its subsidiaries in existence on the date of the Merger Agreement as such agreements are in effect on such date, but only to the extent such plans (or policies) and employment and severance agreements are identified in a letter dated the date of the Merger Agreement delivered to Parent contemporaneously with the execution of the Merger Agreement. Nothing in the Merger 9 Agreement requires the continued employment of any person or prevents the Surviving Corporation or any of its Subsidiaries from taking any action which the Company or any of its subsidiaries could take if the Offer or Merger had not been consummated. INDEMNIFICATION AND INSURANCE. The Merger Agreement provides that all rights to indemnification (including indemnification based in whole or in part on, arising in whole or in part out of, or pertaining to the Merger Agreement or the transactions contemplated thereby) by the Company now existing in favor of each present and former director and officer of the Company (the "Indemnified Parties") as provided in the Company's Certificate of Incorporation or the Company's Bylaws, in each case as in effect on the date of the Merger Agreement, or pursuant to any other agreements in effect on the date of the Merger Agreement, survives the Merger and will continue in full force and effect in accordance with their terms for a period of at least six years from the Effective Time. In addition, Parent has agreed to cause the Surviving Corporation to use reasonable efforts to provide, for a period of six years after the Effective Time, the Company's current directors and officers an insurance and indemnification policy that provides coverage for events occurring at or prior to the Effective Time (the "D &O Insurance") that is no less favorable in any material respect than the Company's existing D&O Insurance policy or, if substantially equivalent insurance coverage is unavailable, the best available coverage. The Surviving Corporation is not required to pay an annual premium for the D&O Insurance in excess of 150% of the annual premium currently paid by the Company for such insurance, but in such case the Surviving Corporation will purchase as much such coverage as possible for such amount. UNDERWRITING; INVESTMENT PORTFOLIO. From the date of the Merger Agreement through the time persons nominated by Parent or Purchaser constitute a majority of the Company Board, the Company has agreed to cause each of its subsidiaries not to change or alter its underwriting guidelines or criteria without the prior written approval of Parent and will consider in good faith such changes in its underwriting guidelines and criteria as Parent reasonably requests. From the date of the Merger Agreement through the time persons nominated by Parent or Purchaser constitute a majority of the Company Board, the Company has agreed to cause each of its subsidiaries not to change its investment managers or alter its investment guidelines or criteria without the prior written approval of Parent and will make such changes in its investment managers and will consider in good faith such changes in its investment guidelines and criteria as Parent reasonably requests. CONDITIONS TO THE MERGER. The respective obligation of each party to the Merger Agreement to effect the Merger is subject to the satisfaction, prior to the closing of the transactions contemplated by the Merger Agreement, of the following conditions: (a) the Offer shall have been successfully completed; (b) if required by applicable law, the Merger Agreement and the Merger shall have been authorized and approved by the requisite affirmative vote of the shareholders of the Company in accordance with applicable law; (c) no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect; provided that prior to invoking this condition the party seeking to invoke this condition shall use its good faith efforts to have any such decree, ruling, injunction or order vacated; and (d) other than the filing of the Certificate of Merger, all approvals of governmental authorities required to consummate the transactions contemplated by the Merger Agreement (including, without limitation, required approvals from the insurance regulatory authorities of the States of California, Connecticut and Pennsylvania) shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired. TERMINATION. The Merger Agreement may be terminated at any time prior to the closing whether before or after approval by the shareholders of the Company and without further shareholder action (a) subject in the case of the Company to the approval requirements described under "Board of Directors", by the mutual written consent of the Company and Parent duly authorized by action of their respective Board of Directors; (b) subject in the case of the Company to the approval requirements described under "Board of Directors", by either Parent or the Company upon notification to the non-terminating party by the terminating party, if any court of competent jurisdiction or other competent governmental authority has issued an order making illegal or otherwise restricting, preventing or prohibiting the Merger and such order has become final and nonappealable; (c) by Parent, if as a result of the failure of any of the conditions to Parent's Obligation to purchase Common Shares in the Offer, the Offer has terminated or expired in accordance with its terms without Parent having accepted for payment any Common Shares pursuant to the Offer, unless any such failure has been caused by or resulted from the failure of Parent or Purchaser to comply with the terms of the Offer or any covenant or agreement of either of them contained in the Merger Agreement; (d) by Parent prior to acceptance for purchase of Common Shares pursuant to the Offer, if (A) the Company Board has failed to approve and recommend, has withdrawn or modified in a manner adverse to Parent, or, upon reasonable request of Parent, has failed to reconfirm, its approval or recommendation of the Offer, the Merger or the Merger Agreement, or has approved or recommended any Acquisition Proposal, (B) the Company has entered into any agreement with respect to any Superior Proposal in accordance with the applicable provisions of the Merger Agreement or 10 (C) the Company Board has resolved to take any of the foregoing actions; (e) by the Company prior to purchase of Common Shares pursuant to the Offer, in connection with entering into a definitive agreement in accordance with the applicable provisions of the Merger Agreement, provided the Company (A) has complied with all provisions of the Merger Agreement, including the notice provisions therein and the payment of the Termination Fee and Parent's Expenses, and certain provisions of the Merger Agreement on solicitations as described in the second paragraph under "Prohibition on Solicitation" above, and (B) has not breached in any material respect any other provisions of the Merger Agreement on solicitation as described in the second paragraph under "Prohibition on Solicitation" above; or (f) by the Company or Parent if acceptance for payment of Common Shares pursuant to the Offer has not occurred by 11:59 p.m., June 30, 1999; provided that the right to terminate the Merger Agreement under clause (f) will not be available to any party whose failure to fulfill any obligation under the Merger Agreement has been the cause of, or resulted in, the failure of such purchase to occur on or before such date. The passage of the period referred to in clause (f) of the preceding sentence will be tolled for any part thereof during which any party to the Merger Agreement is subject to a nonfinal order or other action restraining, enjoining or otherwise prohibiting the purchase of Common Shares of the Company pursuant to the Offer. FEES AND EXPENSES. Except as otherwise provided in the Merger Agreement, all costs, fees and expenses incurred in connection with the Merger Agreement and the transactions contemplated thereby will be paid by the party incurring such costs, fees and expenses, whether or not the Merger is consummated. If (i) Parent terminates the Merger Agreement as described in clause (d) under "Termination", or the Company terminates the Merger Agreement as described in clause (e) under "Termination", the Company will pay, or cause to be paid, to Parent the Termination Fee plus Parent's Expenses. AMENDMENT. The Merger Agreement may be amended at any time by the parties thereto. The Merger Agreement may be amended only by an instrument in writing signed by each of the parties thereto. RIGHTS AGREEMENT THE RIGHTS. By an amendment, dated as of October 22, 1998, to the Rights Agreement (the "Second Amendment"), the definitions of the terms "Acquiring Person" and "Distribution Date" were modified by changing the ownership threshold specified therein to 11.8% of the outstanding Common Shares. This new ownership threshold is in excess of the percentage of the outstanding Common Shares that is held by Parent and Purchaser. Effective as of November 25, 1998, the Rights Agreement was further amended (the "Third Amendment") to provide that notwithstanding any other provisions contained in the Rights Agreement to the contrary, none of Parent, Purchaser or any of their affiliates or associates will become an "Acquiring Person,"nor will a Distribution Date with respect to the Rights occur, as a result of (i) Parent and Purchaser entering into the Merger Agreement or the performance of the transactions contemplated by or permitted under the Merger Agreement or (ii) the making of the Offer or the acceptance of, or payment for, Common Shares pursuant thereto. The Third Amendment also provides that the Rights will expire upon the earlier of Purchaser's acceptance of and payment for Common Shares pursuant to the Offer or immediately prior to the Effective Time of the Merger. Based on the modifications to the Rights Agreement contained in the Third Amendment, Purchaser believes that there will be no distribution of the Rights as a result of the Offer or the Merger. The foregoing summary of the amendments to the Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Second Amendment (filed as an exhibit to Amendment No. 3 to the Company's Schedule 14D-9 dated November 3, 1998) and the Third Amendment (filed as an exhibit to Amendment No. 4 to the Company's Schedule 14D-9 dated December 3, 1998). 8. CONDITIONS OF THE OFFER. The discussion set forth in Section 14 of the Offer to Purchase is hereby amended and supplemented as follows: Notwithstanding any other provisions of the Offer, and in addition to (and not in limitation of) Parent's or Purchaser's rights to extend and amend the Offer at any time pursuant to the terms of the Merger Agreement, Parent or Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Parent's obligation to pay for or return tendered Common Shares promptly after termination or withdrawal of the Offer), pay for, and may delay the acceptance for payment of or, subject to the restriction referred to above, the payment for, any tendered Common Shares, and may terminate the Offer as to any Common Shares not then paid for, if, prior to the expiration of the Offer (i) there shall not have been validly tendered and not withdrawn such number of Common Shares (including Rights) which, together with Common Shares owned by Parent, constitute at least 51% of the Common Shares outstanding on a fully diluted basis on the date of purchase, (ii) Parent and Purchaser have not obtained all insurance regulatory approvals necessary for their acquisition of control over the Company and its Insurance Subsidiaries on terms and conditions satisfactory to Parent, in its good faith determination; provided, that no such 11 approval shall contain any material limitations, requirements or conditions on Parent, the Company or a Subsidiary or require Parent, the Company or a Subsidiary to make any material payment to any party including in the case of Parent, to the Company or, in the case of Parent or the Company, to any Subsidiary (the "Insurance Regulatory Approval Condition"), (iii) the waiting period under the HSR Act applicable to the purchase of Common Shares pursuant to the Offer shall not have expired or been terminated, or (iv) at any time on or after the date hereof and prior to the acceptance for payment of Common Shares, any of the following events shall occur: (a) the Company shall have breached or failed to perform in any material respect its obligations, covenants or agreements under the Merger Agreement and, with respect to any such failure that can be remedied, the failure shall not have been remedied within five business days after Parent has furnished the Company written notice of such failure, the representations and warranties of the Company set forth in the Merger Agreement shall have been false or inaccurate or incomplete in any material respect when made or thereafter shall become and remain false or inaccurate or incomplete in any material respect or Parent shall not have received evidence in form and substance reasonably satisfactory to it of the actions taken by the Company which cause the Company to be in compliance with the representations and warranties contained in Section 3.5 of the Merger Agreement; provided that a prospective material addition (but not an actual material addition) to the Company's consolidated reserves for losses and loss adjustment expenses based upon information provided by the Company or otherwise known to Parent on or prior to the date of execution of the Merger Agreement shall not be deemed to be a breach of the representations and warranties set forth in Section 3.3 of the Merger Agreement. (b) there shall have been instituted or pending any action, proceeding, application or counterclaim before any Governmental Authority which (i) challenges or seeks to challenge the acquisition by Parent or Purchaser or any affiliate of either of them of the Common Shares, restrains, materially delays or prohibits or seeks to restrain, materially delay or prohibit the making of the Offer or the Merger or consummation of the transactions contemplated by the Offer or the Merger, (ii) prohibits or limits or seeks to prohibit or limit Parent's or Purchaser's ownership or operation of all or any portion of their or the Company's business or assets (including without limitation the business or assets of their respective affiliates and subsidiaries) or to compel or seeks to compel Parent or Purchaser to dispose of or hold separate all or any portion of their own or the Company's business or assets (including without limitation the business or assets of their respective affiliates and subsidiaries) or imposes or seeks to impose any limitation on the ability of Parent, Purchaser or any affiliate of either of them to conduct its own business or own such assets as a result of the transactions contemplated by the Offer or the Merger, (iii) makes or seeks to make the acceptance for payment, purchase of, or payment for, some or all of the Common Shares pursuant to the Offer or the Merger illegal or results in a material delay in, or restricts materially, the ability of Parent or Purchaser, or renders Parent or Purchaser unable, to accept for payment, purchase or pay for some or all of the Common Shares or to consummate the Merger, (iv) imposes or seeks to impose material limitations on the ability of Parent or Purchaser or any affiliate of either of them effectively to acquire or hold or to exercise full rights of ownership of the Common Shares, including, without limitation, the right to vote the Common Shares purchased by them on an equal basis with all other Common Shares on all matters properly presented to the shareholders of the Company or (v) might reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement) on the Company; (c) any statute, rule, regulation or order or injunction shall be enacted, promulgated, entered, enforced or deemed or become applicable to the Offer or the Merger which could reasonably be expected to result in any of the consequences referred to in clauses (i) through (v) of paragraph (b) above; (d) any change, event or effect shall have occurred that, when taken together with all other adverse changes, events or effects that have occurred, has or is reasonably likely to have a Material Adverse Effect or a Material Adverse Change (as defined in the Merger Agreement) with respect to the Company and its Subsidiaries, taken as a whole; (e) there shall have occurred (i) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States (whether or not mandatory), (ii) any limitation (whether or not mandatory) by any governmental authority or agency on, or other event which limits the extension of credit by banks or other lending institutions, (iii) a commencement of a war, armed hostilities or other national or international crisis directly or indirectly involving the United States which has a material adverse effect on general economic conditions in the United States or (iv) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; (f) the Merger Agreement shall have been terminated in accordance with its terms or the Offer shall have been terminated with the consent of the Company; or 12 (g) (i) the Company Board shall have failed to approve and recommend, shall have withdrawn or modified in a manner adverse to Parent, or, upon request of Parent, shall have failed to reconfirm, its approval or recommendation of the Offer, the Merger or the Merger Agreement, or shall have approved or recommended any Acquisition Proposal (as defined in the Merger Agreement), (ii) the Company shall have entered into any definitive agreement or agreement in principle with respect to any Acquisition Proposal or (iii) the Company Board shall have resolved to take any of the foregoing actions. The foregoing conditions are for the sole benefit of Parent and Purchaser and may be asserted by Parent and Purchaser in their good faith determination (subject to the terms of the Merger Agreement) regardless of the circumstances (including any action or omission by Parent or Subsidiary) giving rise to any such conditions or may be waived by Parent or Purchaser in their good faith determination (subject to the terms of the Merger Agreement) in whole or in part at any time and from time to time. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. 9. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS; CERTAIN LITIGATION. The discussion set forth in Section 15 of the Offer to Purchase is hereby amended and supplemented as follows: STATE INSURANCE APPROVAL. It is Parent's and Purchaser's current expectation that the required approvals by the relevant Insurance Commissions in California and Pennsylvania will occur by December 31, 1998. The Pennsylvania Department of Insurance has set a hearing date of December 15, 1998 to review the Company's Form A filing with respect to the Offer. The hearing required under the Connecticut Insurance Code is not expected to occur until January 1999. Since the Offer remains conditional upon the satisfaction of the Insurance Regulatory Condition, the Purchaser is likely to extend the Expiration Date to a date after the Connecticut hearing. ANTITRUST. Early termination of the waiting period under the HSR Act has been granted. THE DELAWARE LITIGATION. In the Merger Agreement, Parent and Purchaser agreed to promptly dismiss litigation pending against the Company and its directors in the Court of Chancery of the State of Delaware. On November 25, 1998, Parent and Purchaser voluntarily dismissed the pending litigation with prejudice. SECTION 203 OF THE DELAWARE CORPORATION LAW. Because the Company Board approved, on November 24, 1998, the terms of the Merger Agreement, the provisions of Section 203 of the Delaware Corporation Law relating to Business Combinations with Interested Stockholders have been rendered inapplicable to the Merger. 10. MISCELLANEOUS. Parent and Purchaser have filed with the SEC the Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, furnishing certain additional information with respect to the Offer. The Schedule 14D-1, and any amendments thereto, may be inspected at, and copies may be obtained from, the same places and in the same manner as set forth in Section 8 (except that they may not be available at the regional offices of the SEC). MG ACQUISITION CORP. December 3, 1998 13 Facsimile copies of one of the Letters of Transmittal, properly completed and duly signed, will be accepted. The Letters of Transmittal, certificates for the Common Shares and any other required documents should be sent by each shareholder of the Company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary as follows: THE DEPOSITARY FOR THE OFFER IS: FIRST UNION NATIONAL BANK FACSIMILE TRANSMISSION: (704) 590-7628 CONFIRM BY TELEPHONE: (704) 590-7408 IF BY REGISTERED MAIL, CERTIFIED IF BY FIRST CLASS MAIL MAIL OR OVERNIGHT DELIVERY IF BY HAND ONLY First Union National Bank First Union National Bank First Union National Bank 1525 West W.T. Harris Blvd. 1525 West W.T. Harris Blvd. 5th Floor Reorg. Department Reorg. Department 40 Broad Street 3c3-NC-1153 3c3-NC-1153 New York, NY 10004 Charlotte, NC 28288-1153 Charlotte, NC 28262
Any questions or requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective telephone numbers and locations listed below. Additional copies of the Offer to Purchase, this Supplement, the revised Letter of Transmittal and the revised Notice of Guaranteed Delivery may be obtained from the Information Agent at its address and telephone numbers set forth below. Holders of Common Shares may also contact their broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer. THE INFORMATION AGENT FOR THE OFFER IS: [MACKENZIE PARTNERS, INC. LOGO] 156 Fifth Avenue New York, New York 10010 (212) 929-5500 (Call Collect) or CALL TOLL FREE (800) 322-2885 THE DEALER MANAGER FOR THE OFFER IS: [COCHRAN, CARONIA SECURITIES LLC LOGO] 1 South Wacker Drive Chicago, Illinois 60606 (312) 425-9335 or CALL TOLL FREE (800) 248-8163 14 EX-99 3 EXHIBIT 99.A14 EXHIBIT (a)(14) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF GRYPHON HOLDINGS INC. PURSUANT TO THE OFFER TO PURCHASE, DATED OCTOBER 20, 1998 AND THE SUPPLEMENT THERETO DATED DECEMBER 3, 1998 BY MG ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF MARKEL CORPORATION THE OFFER, AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, DECEMBER 18, 1998, UNLESS THE OFFER IS EXTENDED. THE DEPOSITARY FOR THE OFFER IS: FIRST UNION NATIONAL BANK FACSIMILE TRANSMISSION: (704) 590-7628 CONFIRM BY TELEPHONE: (704) 590-7408 IF BY FIRST CLASS MAIL IF BY REGISTERED MAIL, CERTIFIED IF BY HAND ONLY MAIL OR OVERNIGHT DELIVERY First Union National Bank First Union National Bank First Union National Bank 1525 West W.T. Harris Blvd. 1525 West W.T. Harris Blvd. 5th Floor Reorg. Department Reorg. Department 40 Broad Street 3c3-NC-1153 3c3-NC-1153 New York, NY 10004 Charlotte, NC 28288-1153 Charlotte, NC 28262
DELIVERY OF THIS REVISED LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS REVISED LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW. THE INSTRUCTIONS ACCOMPANYING THIS REVISED LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS REVISED LETTER OF TRANSMITTAL IS COMPLETED. THIS REVISED LETTER OF TRANSMITTAL IS TO BE COMPLETED BY SHAREHOLDERS OF GRYPHON HOLDINGS INC. EITHER IF CERTIFICATES EVIDENCING COMMON SHARES AND/OR RIGHTS (EACH AS DEFINED BELOW) ARE TO BE FORWARDED HEREWITH, OR IF DELIVERY OF COMMON SHARES AND/OR RIGHTS IS TO BE MADE BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY (THE "BOOK-ENTRY TRANSFER FACILITY") PURSUANT TO THE BOOK-ENTRY TRANSFER PROCEDURE DESCRIBED IN "PROCEDURES FOR TENDERING COMMON SHARES" OF THE OFFER TO PURCHASE (AS DEFINED BELOW). DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Shareholders who have previously tendered Common Shares pursuant to the Offer using the previously circulated Letter of Transmittal or the Notice of Guaranteed Delivery and who have not properly withdrawn such Common Shares for the purposes of the Offer, as amended, need not take any further action. Holders of Common Shares will be required to tender one Right for each Common Share tendered to effect a valid tender of such Common Share. Until the Distribution Date (as defined in the Offer to Purchase) has occurred, the Rights are 1 represented by and transferred with the Common Shares. Accordingly, if the Distribution Date does not occur prior to the Expiration Date (as defined in the Offer to Purchase), a tender of Common Shares will constitute a tender of the associated Rights. If a Distribution Date has occurred, certificates representing a number of Rights equal to the number of Common Shares being tendered must be delivered to the Depositary in order for such Common Shares to be validly tendered. If a Distribution Date has occurred, a tender of Common Shares without Rights constitutes an agreement by the tendering shareholder to deliver certificates representing a number of Rights equal to the number of Common Shares tendered pursuant to the Offer (as defined in the Offer to Purchase) to the Depositary within three Nasdaq National Market trading days after the date such certificates are distributed. Purchaser reserves the right to require that it receive such certificates prior to accepting Common Shares for payment. Payment for Common Shares tendered and purchased pursuant to the Offer to Purchase will be made only after timely receipt by the Depositary of, among other things, such certificates, if such certificates have been distributed to holders of Common Shares. Purchaser will not pay any additional consideration for the Rights tendered pursuant to the Offer to Purchase. Shareholders whose certificates for Common Shares and, if applicable, Rights, are not immediately available or who cannot deliver such certificates and all other documents required hereby to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis and who wish to tender their Common Shares and Rights must do so pursuant to the guaranteed delivery procedure described in "Procedures for Tendering Common Shares" of the Offer to Purchase. See Instruction 2. 2 [ ] CHECK HERE IF TENDERED COMMON SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ---------------------------------------------- If Delivered by Book-Entry Transfer to The Depository Trust Company: Account Number: ------------------------------------------------------------- Transaction Code Number: ---------------------------------------------------- [ ] CHECK HERE IF TENDERED RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE DEPOSITORY TRUST COMPANY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ---------------------------------------------- If Delivered by Book-Entry Transfer to The Depository Trust Company: Account Number: ------------------------------------------------------------- Transaction Code Number: ---------------------------------------------------- [ ] CHECK HERE IF TENDERED COMMON SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): -------------------------------------------- Window Ticket Number (if any): ---------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------- Name of Institution which Guaranteed Delivery: ------------------------------ If Delivered by Book-Entry Transfer to The Depository Trust Company: Account Number: ------------------------------------------------------------- Transaction Code Number: ---------------------------------------------------- [ ] CHECK HERE IF TENDERED RIGHTS ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): -------------------------------------------- Window Ticket Number (if any): ---------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------------- Name of Institution which Guaranteed Delivery: ------------------------------ If Delivered by Book-Entry Transfer to The Depository Trust Company: Account Number: ------------------------------------------------------------- Transaction Code Number: ---------------------------------------------------- 3 NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK)
DESCRIPTION OF COMMON SHARES TENDERED COMMON SHARE CERTIFICATE(S) TENDERED (ATTACH ADDITIONAL LIST IF NECESSARY) TOTAL NUMBER OF COMMON SHARES CERTIFICATE NUMBER(S)* REPRESENTED BY CERTIFICATE(S) NUMBER OF COMMON SHARES TENDERED** TOTAL COMMON SHARES ............................................... * Need not be completed by shareholders tendering by book-entry transfer. ** Unless otherwise indicated, it will be assumed that all Common Shares being delivered to the Depositary are being tendered. See Instruction 4.
4 NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN, IF BLANK)
DESCRIPTION OF RIGHTS TENDERED RIGHTS CERTIFICATE(S) TENDERED* (ATTACH ADDITIONAL LIST IF NECESSARY) TOTAL NUMBER OF RIGHTS REPRESENTED CERTIFICATE NUMBER(S)** BY CERTIFICATE(S) NUMBER OF RIGHTS TENDERED*** TOTAL RIGHTS ................................................................... *If the tendered Rights are represented by separate Rights Certificates, provide the certificate numbers of such Rights Certificates. Shareholders tendering Rights which are not represented by separate certificates will need to submit an additional Letter of Transmittal if Rights Certificates are distributed. **Need not be completed by shareholders tendering by book-entry transfer. ***Unless otherwise indicated, it will be assumed that all Rights being delivered to the Depositary are being tendered. See Instruction 4.
The names and addresses of the registered holders should be printed, if not already printed above, exactly as they appear on the certificates representing Common Shares and/or Rights tendered hereby. The certificates and number of Common Shares and/or Rights that the undersigned wishes to tender should be indicated in the appropriate boxes. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS REVISED LETTER OF TRANSMITTAL CAREFULLY. 5 LADIES AND GENTLEMEN: The undersigned hereby tenders to MG Acquisition Corp., a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Markel Corporation, a Virginia corporation, the above described shares of common stock, par value $0.01 per share (the "Common Shares"), of Gryphon Holdings Inc., a Delaware corporation (the "Company"), including the associated Junior Participating Cumulative Preferred Stock Purchase Rights (including any successors thereto, the "Rights") issued pursuant to the Rights Agreement, dated as of June 5, 1995, as amended as of July 28, 1998, October 22, 1998 and November 25, 1998, between the Company and State Street Bank and Trust Company, as Rights Agent (as such agreement may be further amended and including any successor agreement, the "Rights Agreement"), pursuant to Purchaser's offer to purchase all of the outstanding Common Shares, including the associated Rights, at a price of $19.00 per Common Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 20, 1998 (the "Offer to Purchase"), the Supplement thereto, dated December 3, 1998 (the "Supplement") receipt of which is hereby acknowledged, and in this revised Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"). Unless the context requires otherwise, all references herein to the Common Shares shall include the associated Rights, and all references to the Rights shall include the benefits that may inure to the holders of the Rights pursuant to the Rights Agreement, including the right to receive any payment due upon redemption of the Rights. The undersigned understands that Purchaser reserves the right to transfer or assign, in whole at any time, or in part from time to time, to one or more of its affiliates, the right to purchase all or any portion of the Common Shares and/or Rights tendered pursuant to the Offer, but any such transfer or assignment will not relieve Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering shareholders to receive payment for Common Shares validly tendered and accepted for payment pursuant to the Offer. Subject to, and effective upon, acceptance for payment of the Common Shares and Rights tendered herewith, in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, Purchaser all right, title and interest in and to all the Common Shares and Rights that are being tendered hereby (and any and all non-cash dividends, distributions, rights, other Common Shares or other securities issued or issuable in respect thereof or declared, paid or distributed in respect of such Common Shares on or after October 20, 1998 (collectively, "Distributions")), and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Common Shares, Rights and all Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver certificates for such Common Shares (individually, a "Common Share Certificate"), Rights and all Distributions, or transfer ownership of such Common Shares, Rights and all Distributions on the account books maintained by the Book-Entry Transfer Facility, together, in either case, with all accompanying evidence of transfer and authenticity to, or upon the order of Purchaser, (ii) present such Common Shares, Rights and all Distributions for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Common Shares, Rights and all Distributions, all in accordance with the terms of the Offer. If, on or after the date of the Offer to Purchase, the Company should declare or pay any dividend on the Common Shares or make any distribution (including, without limitation, the issuance of additional Common Shares pursuant to a stock dividend or stock split, the issuance of other securities or the issuance of rights for the purchase of any securities) with respect to the Common Shares that is payable or distributable to shareholders of record on a date prior to the transfer to the name of Purchaser or its nominee or transferee on the Company's stock transfer records of the Common Shares purchased pursuant to the Offer, then, subject to the provisions of Section 13 of the Offer to Purchase, (i) the purchase price per Common Share payable by Purchaser pursuant to the Offer will be reduced by the amount of any such cash dividend or cash distribution and (ii) any such non-cash dividend, distribution or right to be received by the tendering shareholder will be received and held by such tendering shareholder for the account of Purchaser and will be required to be remitted promptly and transferred by each such tendering shareholder to the Depositary for the account of Purchaser, accompanied by appropriate documentation of transfer. Pending such remittance and subject to applicable law, Purchaser will be entitled to all rights and privileges as owner of any such non-cash dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount of value thereof, as determined by Purchaser in its sole discretion. By executing this revised Letter of Transmittal, the undersigned irrevocably appoints Alan I. Kirshner, Anthony F. Markel and Steven A. Markel as proxies of the undersigned, each with full power of substitution, to the full extent of the undersigned's rights with respect to the Common Shares and Rights tendered by the undersigned and accepted for payment by Purchaser (and any and all Distributions). All such proxies shall be considered coupled with an interest in the tendered Common Shares and Rights. This appointment will be effective if, when, and only to the extent that Purchaser accepts such Common Shares and Rights for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given 6 by the undersigned with respect to such Common Shares, Rights, Distributions and other securities will, without further action, be revoked, and no subsequent proxies may be given. The individuals named above as proxies will, with respect to the Common Shares, Rights, Distributions and other securities for which the appointment is effective, be empowered to exercise all voting and other rights of the undersigned as they in their sole discretion may deem proper at any annual, special, adjourned or postponed meeting of Company shareholders, by written consent or otherwise, and Purchaser reserves the right to require that, in order for Common Shares, Rights, Distributions or other securities to be deemed validly tendered, immediately upon Purchaser's acceptance for payment of such Common Shares and Rights, Purchaser or Purchaser's designee must be able to exercise full voting rights with respect to such Common Shares and Rights. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Common Shares and Rights tendered hereby and all Distributions, that the undersigned own(s) the Common Shares and Rights tendered hereby within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that such tender of Common Shares complies with Rule 14e-4 under the Exchange Act, and that, when such Common Shares and Rights are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances, and that none of such Common Shares, Rights and Distributions will be subject to any adverse claim. The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Common Shares and Rights tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of Purchaser all Distributions in respect of the Common Shares and Rights tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Common Shares and Rights tendered hereby or deduct from such purchase price the amount or value of such Distribution as determined by Purchaser in its sole discretion. No authority herein conferred or agreed to be conferred shall be affected by, and all such authority shall survive, the death or incapacity of the undersigned. All obligations of the undersigned hereunder shall be binding upon the heirs, executors, personal and legal representatives, administrators, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that tenders of Common Shares and Rights pursuant to any one of the procedures described in "Procedures for Tendering Common Shares" of the Offer to Purchase as supplemented by Section 2 of the Supplement and in the Instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer. Purchaser's acceptance for payment of Common Shares and Rights tendered pursuant to the Offer will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase and the Supplement, Purchaser may not be required to accept for payment any of the Common Shares and Rights tendered hereby. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please issue the check for the purchase price and/or return any certificates evidencing Common Shares or Rights not tendered or accepted for payment, in the name(s) of the registered holder(s) appearing above under "Description of Common Shares Tendered." Similarly, unless otherwise indicated in the box entitled "Special Delivery Instructions," please mail the check for the purchase price and/or return any certificates evidencing Common Shares or Rights not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Common Shares Tendered." In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price and/or return any certificates for Common Shares or Rights not purchased or not tendered or accepted for payment in the name(s) of, and mail such check and/or return such certificates to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled "Special Payment Instructions," please credit any Common Shares or Rights tendered hereby and delivered by book-entry transfer, but which are not purchased, by crediting the account at the Book-Entry Transfer Facility. The undersigned recognizes that Purchaser has no obligation, pursuant to the Special Payment Instructions, to transfer any Common Shares or Rights from the name of the registered holder(s) thereof if Purchaser does not accept for payment any of the Common Shares or Rights tendered hereby. 7 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS REVISED LETTER OF TRANSMITTAL) To be completed ONLY if certificates for Common Shares and/or Rights not tendered or not purchased and/or the check for the purchase price of Common Shares and/or Rights purchased are to be issued in the name of someone other than the undersigned, or if the Common Shares and/or Rights delivered by book-entry transfer which are not purchased are to be returned by credit to an account maintained at a Book-Entry Transfer Facility other than that designated above. Issue check and/or certificate(s) to: Name ---------------------------------------------------------------------- (Please print) Address -------------------------------------------------------------------- (Include Zip Code) -------------------------------------------------------------------------- (Tax Identification or Social Security Number) (Also complete Substitute Form W-9 below) [ ] Credit unpurchased Common Shares and/or Rights delivered by book-entry transfer to The Depository Trust Company --------------------------------------------------------------------------- (Account Number) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7 OF THIS REVISED LETTER OF TRANSMITTAL) To be completed ONLY if certificates for Common Shares and/or Rights not tendered or not purchased and/or the check for the purchase price of Common Shares and/or Rights purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown above. Mail check and/or certificates to: Name ---------------------------------------------------------------------- (Please Print) Address -------------------------------------------------------------------- (Include Zip Code) -------------------------------------------------------------------------- (Tax Identification or Social Security Number) (also complete Substitute Form W-9 below) 8 PLEASE SIGN HERE (Complete Substitute Form W-9 on Reverse) SIGN SIGN HERE HERE ------------------------------------------------------------------ - - ------------------------------------------------------------------ (SIGNATURE(S) OF HOLDER(S)) Dated: ----------- , 19- (Must be signed by registered holder(s) exactly as name(s) appear(s) on Common Share certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5). Name(s): ----------------------------------------------------------- (Please print) Capacity (full title): ---------------------------------------------------- Address: ------------------------------------------------------------ (Include Zip Code) Area Code and Telephone Number: ------------------------------------------ Tax Identification or Social Security Number: ----------------------------- ------------------------------------------------------------------ (Complete Substitute Form W-9 on Reverse) Guarantee of Signature(s) (See instructions 1 and 5) Authorized Signature: --------------------------------------------------- Name: ------------------------------------------------------------- (Please print) Title: -------------------------------------------------------------- Name of Firm: -------------------------------------------------------- Address: ------------------------------------------------------------ (Include Zip Code) Area Code and Telephone Number: ------------------------------------------ Dated: , 19- ---------- 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all signatures on this revised Letter of Transmittal must be guaranteed by a firm which is a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agents Medallion Program (each, an "Eligible Institution"). No signature guarantee is required on this revised Letter of Transmittal (a) if this revised Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this document, shall include any participant in a Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Common Shares or Rights) of Common Shares and/or Rights tendered herewith, unless such holder(s) has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the reverse hereof, or (b) if such Common Shares or Rights are tendered for the account of an Eligible Institution. See Instruction 5. If a certificate evidencing Common Shares and/or Rights (a "Certificate") is registered in the name of a person other than the signer of this revised Letter of Transmittal, or if payment is to be made, or a Certificate not accepted for payment or not tendered is to be returned, to a person other than the registered holder(s), then the Certificate must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the Certificate, with the signature(s) on such Certificate or stock powers guaranteed as described above. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND COMMON SHARE CERTIFICATES. This revised Letter of Transmittal is to be used either if Certificates are to be forwarded herewith or if Common Shares and/or Rights are to be delivered by book-entry transfer pursuant to the procedure set forth in "Procedures for Tendering Common Shares" of the Offer to Purchase. Certificates evidencing all tendered Common Shares and/or Rights, or confirmation of a book-entry transfer of such Common Shares and/or Rights, if such procedure is available, into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedures set forth in "Procedures for Tendering Common Shares" of the Offer to Purchase, together with a properly completed and duly executed revised Letter of Transmittal (or facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message, as defined below) and any other documents required by this revised Letter of Transmittal, must be received by the Depositary at one of its addresses set forth on the reverse hereof prior to the Expiration Date (as defined in "Terms of the Offer; Expiration Date" of the Offer to Purchase). If Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed revised Letter of Transmittal must accompany each such delivery. Shareholders whose Certificates are not immediately available, who cannot deliver their Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis may tender their Common Shares or Rights pursuant to the guaranteed delivery procedure described in "Procedures for Tendering Common Shares" of the Offer to Purchase as supplemented by Section 2 of the Supplement. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by Purchaser herewith, must be received by the Depositary prior to the Expiration Date; and (iii) in the case of a guarantee of Common Shares or Rights, the Certificates, in proper form for transfer, or a confirmation of a book-entry transfer of such Common Shares or Rights, if such procedure is available, into the Depositary's account at the Book-Entry Transfer Facility, together with a properly completed and duly executed revised Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other documents required by this revised Letter of Transmittal, must be received by the Depositary within three Nasdaq National Market trading days after the date of execution of the Notice of Guaranteed Delivery, all as described in "Procedures for Tendering Common Shares" of the Offer to Purchase. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility to, and received by the Depositary and forming a part of the Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Common Shares or Rights, that such participant has received and agrees to be bound by the terms of this revised Letter of Transmittal and that Purchaser may enforce such agreement against the participant. THE METHOD OF DELIVERY OF THIS REVISED LETTER OF TRANSMITTAL, CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE SOLE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. 10 No alternative, conditional or contingent tenders will be accepted and no fractional Common Shares or Rights will be purchased. By execution of this revised Letter of Transmittal (or a facsimile hereof), all tendering shareholders waive any right to receive any notice of the acceptance of their Common Shares or Rights for payment. 3. INADEQUATE SPACE. If the space provided herein under "Description of Common Shares Tendered" is inadequate, the Certificate numbers, the number of Common Shares or Rights evidenced by such Certificates and the number of Common Shares or Rights tendered should be listed on a separate schedule and attached hereto. 4. PARTIAL TENDERS. (Not applicable to shareholders who tender by book-entry transfer.) If fewer than all the Common Shares or Rights evidenced by any Certificate delivered to the Depositary herewith are to be tendered hereby, fill in the number of Common Shares or Rights which are to be tendered in the box entitled "Number of Common Shares Tendered." In such cases, new Certificate(s) evidencing the remainder of the Common Shares or Rights that were evidenced by the Certificates delivered to the Depositary herewith will be sent to the person(s) signing this revised Letter of Transmittal, unless otherwise provided in the box entitled "Special Delivery Instructions," as soon as practicable after the expiration or termination of the Offer. All Common Shares or Rights evidenced by Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If this revised Letter of Transmittal is signed by the registered holder(s) of the Common Shares or Rights tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Certificate(s) evidencing such Common Shares or Rights without alteration, enlargement or any other change whatsoever. If any Common Shares or Rights tendered hereby are owned of record by two or more persons, all such persons must sign this revised Letter of Transmittal. If any of the Common Shares or Rights tendered hereby are registered in the names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of such certificates. If this revised Letter of Transmittal is signed by the registered holder(s) of the Common Shares or Rights tendered hereby, no endorsements of Certificates or separate stock powers are required, unless payment is to be made to, or Certificates evidencing Common Shares or Rights not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), in which case, the Certificate(s) evidencing the Common Shares or Rights tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Certificate(s). Signatures on such Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this revised Letter of Transmittal is signed by a person other than the registered holder(s) of the Common Shares or Rights tendered hereby, the Common Share or Rights Certificate(s) evidencing the Common Shares or Rights tendered hereby must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on such Certificate(s). Signatures on such Certificate(s) and stock powers must be guaranteed by an Eligible Institution. If this revised Letter of Transmittal or any Certificate(s) or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to Purchaser of such person's authority so to act must be submitted. 6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6, Purchaser will pay all stock transfer taxes with respect to the sale and transfer of any Common Shares or Rights to it or its order pursuant to the Offer. If, however, payment of the purchase price of any Common Shares or Rights purchased is to be made to, or Certificate(s) evidencing Common Shares or Rights not tendered or not purchased are to be issued in the name of, a person other than the registered holder(s), the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) payable on account of the transfer to such other person will be deducted from the purchase price of such Common Shares or Rights purchased, unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATE(S) EVIDENCING THE COMMON SHARES TENDERED HEREBY. 11 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase price of any Common Shares or Rights tendered hereby is to be issued, or Certificate(s) evidencing Common Shares or Rights not tendered or not purchased are to be issued, in the name of a person other than the person(s) signing this revised Letter of Transmittal or if such check or any such Certificate is to be sent to someone other than the person(s) signing this revised Letter of Transmittal or to the person(s) signing this revised Letter of Transmittal but at an address other than that shown in the box entitled "Description of Common Shares Tendered," the appropriate boxes on this revised Letter of Transmittal must be completed. Shareholders tendering Common Shares or Rights by book-entry transfer may request that Common Shares or Rights not purchased be credited to such account maintained at the Book-Entry Transfer Facility as such shareholder may designate in the box entitled "Special Payment Instructions" on the reverse hereof. If no such instructions are given, all such Common Shares or Rights not purchased will be returned by crediting the account at the Book-Entry Transfer Facility from which such Common Shares or Rights were delivered. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses or telephone numbers set forth below. Additional copies of the Offer to Purchase, the Supplement, this revised Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 may be obtained from the Information Agent or the Dealer Manager or from brokers, dealers, commercial banks or trust companies. 9. SUBSTITUTE FORM W-9. Each tendering shareholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on the Substitute Form W-9 which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, that such number is correct and that such shareholder is not subject to backup withholding of federal income tax. If a tendering shareholder has been notified by the Internal Revenue Service that such shareholder is subject to backup withholding, such shareholder must cross out item (2) of the Certification box of the Substitute Form W-9, unless such shareholder has since been notified by the Internal Revenue Service that such shareholder is no longer subject to backup withholding. Failure to provide the information on the Substitute Form W-9 may subject the tendering shareholder to 31% federal income tax withholding on the payment of the purchase price of all Common Shares or Rights purchased from such shareholder. If the tendering shareholder has not been issued a TIN and has applied for one or intends to apply for one in the near future, such shareholder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% on all payments of the purchase price to such shareholder until a TIN is provided to the Depositary. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s) representing Common Shares or Rights has been lost, destroyed or stolen, the shareholder should promptly notify the Depositary. The shareholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This revised Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. IMPORTANT: THIS REVISED LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED, WITH ANY REQUIRED SIGNATURE GUARANTEES, OR AN AGENT'S MESSAGE (TOGETHER WITH COMMON SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). IMPORTANT TAX INFORMATION Under the federal income tax law, a shareholder whose tendered Common Shares or Rights are accepted for payment is required by law to provide the Depositary (as payer) with such shareholder's correct TIN on Substitute Form W-9 below. If such shareholder is an individual, the TIN is such shareholder's social security number. If the Depositary is not provided with the correct TIN, the shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service. In addition, payments that are made to such shareholder with respect to Common Shares or Rights purchased pursuant to the Offer may be subject to backup withholding of 31%. Certain shareholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such individual must submit a statement, signed under penalties of perjury, attesting to such individual's exempt status. Forms of such statements can be obtained from the Depositary. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. 12 If backup withholding applies with respect to a shareholder, the Depositary is required to withhold 31% of any payments made to such shareholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments that are made to a shareholder with respect to Common Shares or Rights purchased pursuant to the Offer, the shareholder is required to notify the Depositary of such shareholder's correct TIN by completing the form below certifying (a) that the TIN provided on Substitute Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that (i) such shareholder has not been notified by the Internal Revenue Service that such shareholder is subject to backup withholding as a result of a failure to report all interest or dividends or (ii) the Internal Revenue Service has notified such shareholder that such shareholder is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The shareholder is required to give the Depositary the social security number or employer identification number of the record holder of the Common Shares or Rights tendered hereby. If the Common Shares or Rights are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering shareholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the shareholder should write "Applied For" in the space provided for the TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is written in Part I and the Depositary is not provided with a TIN within 60 days, the Depositary will withhold 31% of all payments of the purchase price to such shareholder until a TIN is provided to the Depositary. 13 PAYER'S NAME: FIRST UNION NATIONAL BANK, DEPOSITARY PART 1 -- PLEASE PROVIDE YOUR TIN IN Social Security Number THE BOX AT RIGHT OR__________________________________ SUBSTITUTE AND CERTIFY BY SIGNING AND DATING Employer Identification Number BELOW. (If awaiting TIN write "Applied For") FORM W-9 Department of the Treasury Internal Revenue Service PART 2 -- For Payees Exempt from Backup Withholding, see the enclosed Guidelines and complete as instructed therein. PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY THAT: (1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer Identification Num- ber has not been issued to me and either (a) I have mailed or delivered an application to receive a Taxpayer Identi- fication Number to the appropriate Internal Revenue Service ("IRS") or Social Security Administration office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identi- fication Number within sixty (60) days, 31% of all reportable payments made to me thereafter will be withheld until I provide a number), and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, (b) I have not been notified by the IRS that I am subject to backup withholding as a result of failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding. CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have been notified by the IRS that you are subject to backup with- holding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the enclosed Guidelines.) SIGNATURE: DATE: , 19- -------------------------------------- ----------------- NAME: -------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDEN- TIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN THE SPACE PROVIDED FOR THE TIN IN PART I OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS NOT BEEN ISSUED TO ME, AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPRO- PRIATE INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR (2) I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUM- BER BY THE TIME OF PAYMENT, 31% OF ALL REPORTABLE PAYMENTS MADE TO ME WILL BE WITHHELD. SIGNATURE DATE , 19- -------------------------------------- ------------------
14 Questions and requests for assistance or additional copies of the Offer to Purchase, this revised Letter of Transmittal and other tender offer materials may be directed to the Information Agent or the Dealer Manager as set forth below: THE INFORMATION AGENT FOR THE OFFER IS: [MacKenzie Partners, Inc. Logo] 156 Fifth Avenue New York, NY 10010 Call Collect (212) 929-5500 or CALL TOLL FREE (800) 322-2885 THE DEALER MANAGER FOR THE OFFER IS: [Cochran, Caronia Securites LLC Logo] 1 South Wacker Drive Chicago, Illinois 60606 (312) 425-9335 or CALL TOLL FREE (800) 248-8163 15 EX-99 4 EXHIBIT 99.A15 EXHIBIT (a)(15) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK (INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS) OF GRYPHON HOLDINGS INC. TO MG ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF MARKEL CORPORATION (NOT TO BE USED FOR SIGNATURE GUARANTEES) This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates ("Share Certificates") evidencing shares of common stock, par value $0.01 per share (the "Common Shares"), of Gryphon Holdings Inc., a Delaware corporation (the "Company"), including the associated Junior Participating Cumulative Preferred Stock Purchase Rights (including any successors thereto, the "Rights") issued pursuant to the Rights Agreement, dated as of June 5, 1995, as amended as of July 28, 1998, October 22, 1998 and November 25, 1998, between the Company and State Street Bank and Trust Company, as Rights Agent (as such agreement may be further amended and including any successor agreement, the "Rights Agreement"), are not immediately available, (ii) time will not permit all required documents to reach First Union National Bank, as Depositary (the "Depositary"), prior to the Expiration Date (as defined in the Offer to Purchase) or (iii) the procedure for book-entry transfer cannot be completed on a timely basis. All references herein to the Common Shares shall include the associated Rights. This Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary. See "Procedures for Tendering Common Shares" of the Offer to Purchase. THE DEPOSITARY FOR THE OFFER IS: FIRST UNION NATIONAL BANK FACSIMILE TRANSMISSION: (704) 590-7628 CONFIRM BY TELEPHONE: (704) 590-7408 IF BY FIRST CLASS MAIL IF BY REGISTERED MAIL, CERTIFIED IF BY HAND ONLY MAIL OR OVERNIGHT DELIVERY First Union National Bank First Union National Bank First Union National Bank 1525 West W.T. Harris Blvd. 1525 West W.T. Harris Blvd. 5th Floor Reorg. Department Reorg. Department 40 Broad Street 3c3-NC-1153 3c3-NC-1153 New York, NY 10004 Charlotte, NC 28288-1153 Charlotte, NC 28262
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY. THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. 1 Ladies and Gentlemen: The undersigned hereby tenders to MG Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Markel Corporation, a Virginia corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 20, 1998 (the "Offer to Purchase"), as amended and supplemented by the Supplement to the Offer to Purchase dated December 3, 1998 (the "Supplement"), and the related Letter of Transmittal (which, as amended from time to time, together constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Common Shares specified below pursuant to the guaranteed delivery procedures described in "Procedures for Tendering Common Shares" of the Offer to Purchase. Number of Common Shares (including the associated Rights): - --------------------------------------- - --------------------------------------- Name(s) of Record Holder(s): - --------------------------------------- - --------------------------------------- (Please Type or Print) Address(es): - --------------------------------------- - --------------------------------------- (Include Zip Code) Area Code and Telephone Number: - --------------------------------------- Certificate Number(s) (if available): - --------------------------------------- - --------------------------------------- Check box if Common Shares or Rights will be tendered by book-entry transfer: [ ] The Depository Trust Company Signature(s): - --------------------------------------- - --------------------------------------- Account Number: - --------------------------------------- Dated: , 19- ------------- GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office or correspondent in the United States, hereby (a) represents that the tender of Common Shares effected hereby complies with Rule 14e-4 of the Securities Exchange Act of 1934, as amended, and (b) guarantees delivery to the Depositary, at one of its addresses set forth above, of certificates evidencing the Common Shares and Rights tendered hereby in proper form for transfer, or confirmation of book-entry transfer of such Common Shares and Rights into the Depositary's accounts at The Depository Trust Company, with delivery of a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees, or an Agent's Message (as defined in "Acceptance for Payment and Payment for Shares" of the Offer to Purchase), and any other documents required by the Letter of Transmittal, (x) in the case of Common Shares, within three Nasdaq National Market trading days after the date of execution of this Notice of Guaranteed Delivery, or (y) in the case of Rights, within a period ending the later of (i) three Nasdaq National Market trading days after the date of execution of this Notice of Guaranteed Delivery or (ii) three business days after the date Rights Certificates are distributed to shareholders. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates for Common Shares and Rights to the Depositary within the time period shown herein. Failure to do so could result in financial loss to such Eligible Institution. Name of Firm: - --------------------------------------- (Authorized Signature) Address: - --------------------------------------- (Include Zip Code) Area Code and Telephone Number: - --------------------------------------- Name: - --------------------------------------- (Please Type or Print) Title: - --------------------------------------- Dated: , 19- --------------- NOTE: DO NOT SEND CERTIFICATES FOR COMMON SHARES OR RIGHTS WITH THIS NOTICE. SUCH CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. 2 EX-99 5 EXHIBIT 99.A16 Exhibit (a)(16) Contact: Steven Markel Markel Corporation (804) 965-1675 MARKEL EXTENDS OFFER RICHMOND, Va., December 3, 1998 -- Markel Corporation (NYSE: MKL) announced today that its subsidiary, MG Acquisition Corp., is extending the expiration date of its all cash tender offer for all shares of common stock of Gryphon Holdings Inc. (Nasdaq: GRYP) to 12:00 Midnight, New York City time, on Friday, December 18, 1998. As of 5:00 p.m., on December 2, 1998, 1,298,340 shares of Gryphon common stock had been tendered pursuant to the offer. The offer was scheduled to expire at 12:00 Midnight, New York City time, on Friday, December 4, 1998. As previously announced, Markel and Gryphon have entered into an Agreement and Plan of Merger providing for the acquisition of Gryphon at a price of $19.00 per share in cash. Markel and Gryphon will be mailing revised recommendation and tender offer materials to Gryphon shareholders shortly. The transaction is subject to required regulatory approvals and is expected to be completed in January of 1999. 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. Gryphon Holdings operates through its main subsidiary, Gryphon Insurance Group, as a specialty property and casualty underwriting organization. The Company's wholly-owned insurance subsidiaries are Associated International Insurance Company, Calvert Insurance Company, and the First Reinsurance Company of Hartford. Any further 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. ### -----END PRIVACY-ENHANCED MESSAGE-----