SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 1 SCHEDULE 13E-3 Rule 13e-3 Transaction Statement (Pursuant to Section 13(e) of the Securities Exchange Act of 1934) Guaranty National Corporation ------------------------------ (Name of Issuer) Orion Capital Corporation The Connecticut Indemnity Company Connecticut Specialty Insurance Company Design Professionals Insurance Company EBI Indemnity Company Employee Benefits Insurance Company The Fire and Casualty Insurance Company of Connecticut Security Insurance Company of Hartford --------------------------------------- (Name of Person (s) Filing Statement) Common Stock, par value $1.00 per share ---------------------------------------- (Title of Class of Securities) 401192109 -------------------------------------- (CUSIP Number of Class of Securities) Michael P. Maloney, Esq. Vice President and General Counsel ORION CAPITAL CORPORATION 600 Fifth Avenue New York, New York 10020-2302 (212) 332-8080 - ------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidder) Copy to: John J. McCann, Esq. Donovan Leisure Newton & Irvine 30 Rockefeller Plaza New York, New York 10112 (212) 632-3000 This Statement is filed by Orion Capital Corporation ("Orion") and the following of its wholly-owned insurance subsidiaries: The Connecticut Indemnity Company, Connecticut Specialty Insurance Company, Design Professionals Insurance Company, EBI Indemnity Company, Employee Benefits Insurance Company, The Fire and Casualty Insurance Company of Connecticut and Security Insurance Company of Hartford (collectively with Orion, the "Purchasers") relating to the tender offer of the Purchasers to purchase up to 4,600,000 shares of common stock, par value $1.00 per share (the "Shares"), of Guaranty National Corporation, a Colorado corporation (the "Company"). This Statement amends the Schedule 13E-3 of the Purchasers, dated May 8, 1996 (the "Schedule 13E-3"), by incorporating by reference herein the information set forth in the press release dated May 23, 1996 of Orion attached as Exhibit (d)(9) hereto. This Statement also amends Items 3, 16 and 17 of the Schedule 13E-3 by adding the information set forth below. Except as otherwise indicated herein, the Schedule 13E-3 remains unchanged in all respects. Capitalized terms not otherwise defined herein are defined as set forth in the Schedule 13E-3 or in the Offer to Purchase of the Purchasers, dated May 8, 1996. Item 3. Past Contacts, Transactions or Negotiations. -------------------------------------------- The information set forth in Item 3 to the Schedule 13E-3 is hereby supplemented as follows: - 2 - On May 21, 1996, Messrs. Gruber, Sanborn and Shepherd participated by conference telephone in a meeting of the Board of Directors of the Company called to consider a report from a Special Committee of the Board which had been authorized to evaluate the Offer. The Chairperson of the Special Committee reported at the outset that Salomon Brothers, Inc. had been retained to evaluate the Offer to Purchase and outlined Salomon's fee arrangement. Mr. Gruber pointed out that the engagement and incentive fee structure raises serious questions about the objectivity and fairness of the evaluation process. The Special Committee made no response to those observations. At the meeting, and at the request of the Chairman of the Special Committee, Mr. Gruber responded to questions concerning the Offer to Purchase. Mr. Gruber affirmed in his responses to the Special Committee several matters which had previously been set forth in the Offer to Purchase, as follows: (a) The Purchasers continue to believe that the offered price of $17.50 per Share is fair and adequate and the Purchasers have no present intention to increase or reduce that price. - 3 - (b) The Purchasers intend to increase their aggregate holdings to approximately 80% of the outstanding Shares of the Company, not more. (c) The Purchasers believe that their offer to stockholders of the Company to accept all Shares tendered (subject to possible proration) is more fair than to impose (as was apparently suggested by the Company's advisors) a minimum number of Shares which must be tendered before any Shares will be accepted. (d) The Purchasers do not expect that either delisting or deregistration of the Company's Shares will occur as a result of the completion of the Offer. (e) The Purhasers have no present intention to seek a merger or other business combination with the Company. (f) The Purchasers expect that the Company will in the future have a Board of Directors whose members include persons who are independent of and not employed by or affiliated with Orion or the Company. The Purchasers expect that any future service, insurance or other contractual arrangements between the Company and Orion (or subsidiaries of either) should, and will, continue to be subject to review by the entire Board of Directors of the Company and, where required, by insurance regulatory authorities. - 4 - At the request of the Special Committee, following the meeting of the Board of Directors, Mr. Gruber and the Purchasers' legal and financial advisors met at Orion's New York City offices with the financial advisors to the Special Committee and legal counsel to those advisors. Members of the Special Committee participated by telephone. The Special Committee's advisors asked Mr. Gruber substantially the same questions as had previously been answered for the Board of Directors. Mr. Gruber and his advisors were then asked to leave the meeting so that the Special Committee could consult with its advisors. When Mr. Gruber was invited to return, he was informed that the Company would make a filing on Schedule 14D- 9 in which it would decline to make any recommendation with respect to the Offer. Item 16. Additional Information. ----------------------- The information set forth in Item 16 of the Schedule 13E-3 is hereby supplemented as follows: Orion Capital Corporation has been served with a complaint in an action entitled Eugenia Gladstone Vogel v. Guaranty National Corporation, et al. which has been filed in the Supreme Court for the State and County of New York. The complaint seeks damages and other relief allegedly arising out of the Offer to Purchase. In Orion 's opinion the claims made - 5 - in the complaint are without merit and Orion intends vigorously to defend the litigation. Orion understands that two other suits have been filed in the state courts in Colorado alleging similar claims and seeking similar relief. Orion has not been served in either of these actions. Item 17. Material to be Filed as Exhibits --------------------------------- (d)(9) Press Release dated May 23, 1996 of Orion Capital Corporation - 6 - SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: May 23, 1996 ORION CAPITAL CORPORATION By /s/ Michael P. Maloney -------------------------- Vice President, General Counsel and Secretary THE CONNECTICUT INDEMNITY COMPANY CONNECTICUT SPECIALTY INSURANCE COMPANY DESIGN PROFESSIONALS INSURANCE COMPANY EBI INDEMNITY COMPANY EMPLOYEE BENEFITS INSURANCE COMPANY THE FIRE AND CASUALTY INSURANCE COMPANY OF CONNECTICUT SECURITY INSURANCE COMPANY OF HARTFORD By /s/ Michael P. Maloney --------------------------- Senior Vice President - 7 - EXHIBIT INDEX Exhibit Description - ------- ------------ (d)(9) Press Release dated May 23, 1996 of Orion Capital Corporation - 8 -