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EXHIBIT (C)(6)
AMENDMENT TO SHAREHOLDER AGREEMENT
This Amendment is made as of June 18, 1996 (the "Amendment") by and among
Guaranty National Corporation, a Colorado corporation ("Guaranty"), Orion
Capital Corporation, a Delaware corporation ("Orion") and certain of Orion's
wholly-owned subsidiaries, as listed on the signature page hereof (the
"Subsidiaries"); this Amendment further revises that certain Shareholder
Agreement dated as of November 7, 1991 by and among Guaranty, Orion and certain
subsidiaries of Orion named therein. (The November 7, 1991 Shareholder
Agreement, as previously amended on February 2, 1994 and March 2, 1995, is
herein referred to as the "Shareholder Agreement.") Terms defined in the
Shareholder Agreement and not otherwise defined herein shall have the meanings
ascribed to such terms in the Shareholder Agreement.
WHEREAS, Orion and the Subsidiaries currently own approximately 49.5% of
the outstanding Guaranty Common Stock, including certain shares received in 1995
on conversion of Guaranty's 7.85% Subordinated Notes due July 1, 2003 (the
"7.85% Notes"); and
WHEREAS, Orion and certain of the Subsidiaries have made a tender offer to
purchase up to 4,600,000 additional shares of Guaranty Common Stock; and
WHEREAS, Guaranty, Orion and the Subsidiaries have determined that it would
be in their mutual best interests further to amend the Shareholder Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and subject to the terms and conditions hereinafter set forth,
Guaranty, Orion and the Subsidiaries agree to further amend the Shareholder
Agreement, as follows:
Two additional subsidiaries of Orion, EBI Indemnity Company and SecurityRe,
Inc., are hereby added as signatories to this Shareholder Agreement inasmuch as
such companies currently hold shares of outstanding Guaranty Common Stock, which
shares were received on conversion of the 7.85% Notes.
Subject to at least 4,600,000 shares of outstanding Guaranty Common Stock
having been validly tendered, accepted for payment and paid for pursuant to the
tender offer, then, effective upon the closing of the purchase of such shares,
the Section entitled "Miscellaneous" shall be amended by adding a new Subsection
3.10 to the Shareholder Agreement, as follows:
3.10 Further Agreements
(a) Orion and the Subsidiaries will not purchase, prior to July 1, 1999,
additional shares of Guaranty Common Stock (if after giving effect to such
purchase they would own more than 81% of the outstanding Guaranty Common Stock)
other than pursuant to an offer made for all shares of outstanding Guaranty
Common Stock not held by them, which offer is conditioned upon the acceptance
thereof by at least a majority of the shares of Guaranty Common Stock then
outstanding and not held by Orion and the Subsidiaries.
(b) If an offer is made to holders of shares of outstanding Guaranty Common
Stock, as described in subparagraph (a) above, prior to July 1, 1999, Orion and
the Subsidiaries will offer a purchase price involving consideration equal to at
least $18.50 per share.
(c) Orion and the Subsidiaries will support the adoption of a policy by the
Board of Directors of Guaranty that any repurchase of shares of outstanding
Guaranty Common Stock by Guaranty prior to July 1, 1999 should be approved by a
majority of those members of the Board of Directors who are independent of and
not employed by any of Orion or the Subsidiaries.
(d) If, at any time during the five-year period following July 1, 1996,
Orion and the Subsidiaries should wish to sell as a block 90% or more of the
aggregate number of shares then owned by them, or propose a merger or
consolidation involving Guaranty, they will not do so unless (i) in the case of
a sale of 90% or more of the aggregate number of shares owned by Orion and the
Subsidiaries, the purchaser of such shares
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undertakes to offer to purchase all other shares of Guaranty Common Stock
outstanding for consideration of substantially equivalent value to that offered
to Orion and the Subsidiaries or (ii) in the case of a merger or consolidation,
all shares are exchanged for substantially equivalent value.
All other terms of the Shareholder Agreement shall continue in full force
and effect.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the day and year set forth in the heading hereof.
GUARANTY NATIONAL CORPORATION
By: /s/ ARTHUR J. MASTERA
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Arthur J. Mastera
Senior Vice President
ORION CAPITAL CORPORATION
By: /s/ ALAN R. GRUBER
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Alan R. Gruber
Chairman of the Board and
Chief Executive Officer
THE CONNECTICUT INDEMNITY COMPANY
CONNECTICUT SPECIALTY INSURANCE COMPANY
DESIGN PROFESSIONALS INSURANCE COMPANY
EBI INDEMNITY COMPANY
EMPLOYEE BENEFITS INSURANCE COMPANY
THE FIRE & CASUALTY INSURANCE COMPANY OF
CONNECTICUT
SECURITY INSURANCE COMPANY OF HARTFORD
SECURITY REINSURANCE COMPANY
By: /s/ ALAN R. GRUBER
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Alan R. Gruber
Chairman
SECURITYRE, INC.
By: /s/ RAYMOND J. SCHUYLER
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Raymond J. Schuyler
Senior Vice President-Investments
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