UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 13, 2008
National Atlantic Holdings Corporation
(Exact name of registrant as specified in its charter)
New Jersey 000-51127 223316586
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
4 Paragon Way
Freehold, New Jersey
07728
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (732) 665-1100
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[X] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
- --------------------------------------------------------------------------------
Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On March 13, 2008, National Atlantic Holdings Corporation, a New Jersey
corporation ("NAHC"), entered into a merger agreement (the "Merger Agreement")
with Palisades Safety and Insurance Association, an insurance exchange organized
under NJSA 17:50-1 et seq. ("Palisades"), and Apollo Holdings, Inc., a New
Jersey corporation and a direct wholly owned subsidiary of Palisades ("Merger
Sub"). The Merger Agreement provides that, upon the terms and subject to the
conditions set forth in the Merger Agreement, Merger Sub will merge with and
into NAHC, with NAHC continuing as the surviving corporation (the "Surviving
Corporation") and a direct wholly owned subsidiary of Palisades (the "Merger").
At the effective time and as a result of the Merger, in exchange for their
shares of issued and outstanding NAHC common stock, NAHC shareholders shall
receive $6.25 in cash for each of their shares. The closing price of NAHC shares
on the NASDAQ on March 12, 2008 was $5.46.
In addition, at or prior to the effective time of the Merger, each
outstanding option to purchase Common Stock and each outstanding stock
appreciation right (vested or unvested) will be canceled and the holder will be
entitled to receive an amount of cash equal to the difference between the Merger
Consideration and the exercise price of the applicable stock option, or the
difference between the Merger Consideration and the applicable per share base
price of the stock appreciation right, as applicable, less any required
withholding taxes.
The Merger Agreement provides that the directors and officers of the Merger
Sub immediately prior to the effective time of the Merger will be the directors
and officers of the Surviving Corporation.
NAHC and Palisades have made customary representations, warranties and
covenants in the Merger Agreement. The completion of the Merger is subject to
approval by the shareholders of NAHC, obtaining regulatory approvals, including
antitrust approval, and satisfaction or waiver of other conditions.
The Merger is subject to various closing conditions, including the approval
of NAHC's shareholders, the obtaining of certain regulatory approvals specified
in the Merger Agreement, the maintenance by NAHC of certain stockholders' equity
and capital and surplus measures within prescribed levels, NAHC obtaining a
directors' and officers' liability tail policy for a specified cost and level of
coverage and the maintenance of the A.M. Best Financial Strength Rating of
Proformance Insurance Company within a prescribed rating.
The Merger Agreement contains certain termination rights for both NAHC and
Palisades and further provides that, upon termination of the Merger Agreement
under specified circumstances, NAHC may be required to pay Palisades a
termination fee of up to $2,100,000. Furthermore, the Merger Agreement provides
that, upon termination of the Merger Agreement under specified circumstances
unrelated to a failure of the closing conditions, Palisades may be
required to pay NAHC certain liquidated damages based on the circumstances
relating to such termination.
Voting Agreement
Simultaneously with the execution and delivery of the Merger Agreement,
Palisades and James V. Gorman, the Chief Executive Officer of NAHC entered into
a voting agreement (the "Voting Agreement"). In the Voting Agreement, Mr. Gorman
agreed to vote, or provide his consent with respect to, all shares of NAHC
capital stock held by such him: (1) in favor of the recommendation of the Board
of Directors of NAHC to the holders of Common Shares; and (2) against any
Acquisition Proposal, or any agreement providing for the consummation of a
transaction contemplated by any Acquisition Proposal (other than the Merger and
other than following any Change in Recommendation made by the Board of Directors
pursuant to the requirements of the Merger Agreement); and (3) in favor of any
proposal to adjourn a shareholders' meeting which the Company, Merger Sub and
Parent support.
The foregoing description of the Merger, the Merger Agreement and the
Voting Agreement does not purport to be complete and is qualified in its
entirety by reference to (i) the complete text of the Merger Agreement, which is
attached hereto as Exhibit 2.1 and (ii) the complete text of the Voting
Agreement, which is attached hereto as Exhibit 4.1, which Merger Agreement and
Voting Agreement are incorporated herein by reference.
The Merger Agreement has been included to provide investors and
shareholders with information regarding its terms. It is not intended to provide
any other factual information about NAHC. The Merger Agreement contains
representations and warranties that the parties to the Merger Agreement made to
and solely for the benefit of each other. The assertions embodied in such
representations and warranties are qualified by information contained in
confidential disclosure letters that the parties exchanged in connection with
signing the Merger Agreement. Accordingly, investors and shareholders should not
rely on such representations and warranties as characterizations of the actual
state of facts or circumstances, since they were only made as of the date of the
Merger Agreement and are modified in important part by the underlying disclosure
letters. Moreover, information concerning the subject matter of such
representations and warranties may change after the date of the Merger
Agreement, which subsequent information may or may not be fully reflected in
NAHC's public disclosures.
Item 8.01 Other Events.
On March 13, 2008, NAHC issued a press release announcing the execution
of the Merger Agreement. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated herein by reference. In addition, on March
13, 2008, NAHC provided communications to its employees and certain other
individuals announcing that it had entered into the Merger Agreement. The full
text of these communications are furnished as Exhibits 99.2 and 99.3,
respectively, to this Report and are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
Exhibit No. Document Description
- ----------- ----------------------------------------------------------------
2.1 Agreement and Plan of Merger, dated as of March 13, 2008, by
and among Palisades Safety and Insurance Association, a New
Jersey insurance exchange, Apollo Holdings, Inc., a New Jersey
corporation, National Atlantic Holdings Corporation, a New Jersey
corporation. (1)
4.1 Voting Agreement, dated as of March 13, 2008, between Palisades
Safety and Insurance Association and James V. Gorman, Chief
Executive Officer of National Atlantic Holdings Corporation.
99.1 Press release issued by National Atlantic Holdings Corporation,
dated March 13, 2008
99.2 Communication from National Atlantic Holdings Corporation to
Employees, dated March 13, 2008
99.3 Communication from National Atlantic Holdings Corporation to
Certain Other Individuals, dated March 13, 2008
(1) Schedules have been omitted pursuant to Item 601(b)(2) of Regulation
S-K. National Atlantic Holdings Corporation hereby undertakes to
furnish supplementally copies of any of the omitted schedules and
exhibits upon request by the Securities and Exchange Commission.
Additional Information and Where to Find It
In connection with the proposed transaction, a proxy statement of National
Atlantic and other materials will be filed with SEC. WE URGE INVESTORS TO READ
THE PROXY STATEMENT AND THESE OTHER MATERIALS CAREFULLY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT NATIONAL
ATLANTIC AND THE PROPOSED TRANSACTION. Investors will be able to obtain free
copies of the proxy statement (when available) as well as other filed documents
containing information about NAHC at http://www.sec.gov, the SEC's free internet
site. In addition, copies of the definitive proxy statement can be obtained,
when available, without charge, by directing a request to Investor Relations,
National Atlantic Holdings Corporation, 4 Paragon Way, Freehold, NJ 07728,
732-665-1145.
Participants in the Solicitation
NAHC and its executive officers and directors may be deemed, under SEC rules, to
be participants in the solicitation of proxies from NAHC's stockholders with
respect to the proposed merger. Information regarding the officers and directors
of NAHC is set forth in NAHC's proxy statements, previously filed with the SEC.
More detailed information regarding the identity of potential participants, and
their direct or indirect interests, by securities holdings or otherwise, will be
set forth in the proxy statement and other materials to be filed with the SEC in
connection with the proposed merger.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
National Atlantic Holdings Corporation
(Registrant)
Dated: March 13, 2008 By: /s/ Frank J. Prudente
------------------------------------
Name: Frank J. Prudente
Title: Executive Vice President, Treasurer
and Chief Financial Officer