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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING ANY ASSOCIATED STOCK PURCHASE RIGHTS)
OF
GUARANTY NATIONAL CORPORATION
AT
$36.00 NET PER SHARE
BY
ORION CAPITAL CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE ON THURSDAY, DECEMBER 4, 1997,
AT 12:00 MIDNIGHT, NEW YORK CITY TIME, UNLESS THE OFFER IS EXTENDED.
November 5, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated November 5,
1997 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer") in
connection with the offer by Orion Capital Corporation, a Delaware corporation
("Orion"), to purchase all of the outstanding shares of Common Stock, $1.00 par
value per share (the "Shares"), of Guaranty National Corporation, a Colorado
corporation ("Orion"), and any Rights, for $36.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer.
Unless the context otherwise requires, all references to Shares shall include
the associated Rights and all references to the Rights shall include all
benefits that may inure to holders of the Rights pursuant to the Rights
Agreement (as defined in the Offer to Purchase). Holders of Shares whose
certificates for such Shares (the "Share Certificates") are not immediately
available, or who cannot deliver their Share Certificates and all other required
documents to the Depositary on or prior to the Expiration Date (as defined in
the Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
We are the holder of record of Shares held by us for your account. A tender
of such Shares can be made only by us as the holder of record and pursuant to
your instructions. THE SPECIMEN LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES.
We request instructions as to whether you wish to have us tender on your
behalf any or all of such Shares held by us for your account, pursuant to the
terms and conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $36.00 per Share, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in
the Offer.
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2. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of October 31, 1997, (the "Merger Agreement"), by and
between Orion and Guaranty. The Merger Agreement provides that, among other
things, following the consummation of the Offer and the satisfaction or
waiver of the other conditions set forth in the merger agreement, a
wholly-owned subsidiary of Orion will be merged with and into Guaranty (the
"Merger"). At the effective time of the Merger, each outstanding Share
(other than Shares held in the treasury of Guaranty, owned directly or
indirectly by Guaranty, held by Orion or any of its subsidiaries or any
held by shareholders who shall have perfected their dissenters' rights
under Colorado law) will be converted into the right to receive the $36.00
price per Share paid in the Offer, without interest.
The Board of Directors of Guaranty has unanimously approved the Merger
Agreement, the Offer and the Merger, has determined that the Offer and the
Merger are fair to, and in the best interests of, the shareholders of
Guaranty and recommends acceptance of the Offer.
3. The Offer and withdrawal rights will expire on Thursday, December
4, 1997, at 12:00 midnight, New York City time, unless the Offer is
extended.
4. The Offer is conditioned as set forth in the Offer to Purchase,
including the condition that a minimum number of Shares equal to at least
50.01% of the Shares not owned by Orion or its wholly-owned subsidiaries
are validly tendered and not withdrawn prior to the expiration of the
Offer.
5. Stockholders who tender Shares will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, transfer taxes on the purchase of Shares by the
Purchasers pursuant to the Offer.
6. Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by State Street Bank and Trust
Company (the "Depositary") of (a) Share Certificates or timely confirmation
of the book-entry transfer of such Shares into the account maintained by
the Depositary at The Depository Trust Company or The Philadelphia
Depository Trust Company (collectively, the "Book-Entry Transfer
Facilities"), pursuant to the procedures set forth in Section 3 of the
Offer to Purchase, (b) the Letter of Transmittal (or a facsimile thereof),
properly completed and duly executed, with any required signature
guarantees, in connection with a book-entry delivery, and (c) any other
documents required by the Letter of Transmittal. Accordingly, payment may
not be made to all tendering stockholders at the same time depending upon
when Share Certificates or confirmations of book-entry transfer of Shares
into the Depositary's account at a Book-Entry Transfer Facility are
actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth on the back page of this letter. If you
authorize the tender of your Shares, all such Shares will be tendered unless
otherwise specified on the back page of this letter. An envelope to return your
instructions to us is enclosed. Your instructions should be forwarded to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require
the Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of Orion, if at all, only by Donaldson, Lufkin & Jenrette Securities
Corporation, the Dealer Manager for the Offer, or one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
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INSTRUCTIONS WITH RESPECT TO
OFFER TO PURCHASE FOR CASH
ALL SHARES OF COMMON STOCK
OF
GUARANTY NATIONAL CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated November 5, 1997 and the related Letter of Transmittal
(which, as supplemented or amended, collectively constitute the "Offer") in
connection with the offer by Orion Capital Corporation, a Delaware corporation,
to purchase all of the outstanding shares of common stock, par value $1.00 per
share of Guaranty National Corporation not owned by Orion or one of its
wholly-owned subsidiaries (the "Shares").
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number(1) of Shares to be Tendered: __________ Shares of Common Stock
Account Number: ________________________________________
Dated: ___________ ,
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SIGN HERE
Signature
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Print Name(s):
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Print Address(es):
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Area Code and Telephone No.:
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Taxpayer ID No. or Social Security No.:
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(1)Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.