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NOTICE TO SHAREHOLDERS OF MERGER OF
GNC TRANSITION CORP INTO GUARANTY NATIONAL CORPORATION
AND OF DISSENTERS' RIGHTS
To the Shareholders of Guaranty National Corporation:
Please be advised that the board of directors of GNC Transition Corp, at a
meeting held December 6, 1997, approved a Plan of Merger between that
corporation and Guaranty National Corporation as set forth in Articles of Merger
dated December 6, 1997. Copies of the Articles of Merger and the directors'
resolution approving the plan are attached hereto. The effective date of the
merger is December 16, 1997.
Shareholders wishing to surrender shares for the merger price of $36.00 per
share should deliver certificated shares properly endorsed, or direct the record
holder of shares to deliver them, to the attention of the Corporate Secretary of
Guaranty National Corporation at 9800 South Meridian Boulevard, Englewood, CO
80112. It is recommended that certificated shares be delivered by registered or
certified mail to ensure proper delivery. If you have any questions concerning
this procedure, they may be directed to the Corporate Secretary's Office by
calling, collect, (303) 754-8400.
Approval of the Plan of Merger by the shareholders of Guaranty National
Corporation is not required pursuant to sec. 7-111-104 of the Colorado Business
Corporation Act since GNC Transition Corp owns more than 90% of the outstanding
common stock of Guaranty National Corporation. Shareholders who do not exercise
dissenters' rights in accordance with the following paragraph will receive a
cash payment of $36 each for their shares as set forth above.
You are entitled to exercise dissenters' rights and demand payment for your
shares under C.R.S. sec.sec. 7-113-101 to 7-113-302, copies of which are
attached hereto. The address at which Guaranty National Corporation will receive
payment demands and where certificates for certificated shares must be deposited
by shareholders making a demand for payment is 9800 South Meridian Boulevard,
Englewood, Colorado 80112. A form for demanding payment is also enclosed.
Guaranty National Corporation must receive the demand for payment and the
certificates for certificated shares on or before January 7, 1998. When a record
shareholder dissents with respect to the shares held by any one or more
beneficial shareholders, each such beneficial shareholder must certify to
Guaranty National Corporation that the beneficial shareholder and the record
shareholder or record shareholders of all shares owned beneficially by the
beneficial shareholder have asserted, or will timely assert, dissenters' rights
as to all such shares as to which there is no limitation on the ability to
exercise dissenters' rights.
Dated: December 6, 1997
/s/ BEVERLY SILK
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Secretary
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GUARANTY NATIONAL CORPORATION
FORM FOR DEMANDING PAYMENT
IN CONNECTION WITH THE EXERCISE OF DISSENTERS' RIGHTS
The undersigned shareholder of Guaranty National Corporation (the
"Company") pursuant to C.R.S. sec. 7-113-204 hereby demands payment for the
shares of the Company held by the undersigned as represented by the enclosed
stock certificate.
Name of shareholder:
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Number of shares Owned:
- --------------------------------------------------------------------------------
Address to which payment is to be made:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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(Signature of shareholder)
This form should be used only if you wish to exercise dissenters' rights.
Do not use this form if you wish to surrender shares for the merger price of
$36.00 per share. Instead, follow the instructions in the second paragraph of
the Notice to Shareholders.
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ARTICLES OF MERGER
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporations adopt the following Articles of Merger:
First: The Plan of Merger is as follows:
A. At the effective date of the merger, GNC Transition Corp shall be merged
with and into Guaranty National Corporation (the "Company" or the "Surviving
Corporation"), and the separate corporate existence of GNC Transition Corp shall
cease.
B. At the effective date, all the property, rights, privileges, powers and
franchises of the Company and GNC Transition Corp shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and GNC
Transition Corp shall become the debts, liabilities and duties of the Surviving
Corporation.
C. At the effective date, the Restated Articles of Incorporation of the
Company, as in effect immediately prior to the effective date, shall be the
Articles of Incorporation of the Surviving Corporation, until duly amended in
accordance with applicable law.
a. The Bylaws of the Company, as in effect at the effective date,
shall be the Bylaws of the Surviving Corporation, until duly amended in
accordance with applicable law, the Articles of Incorporation of the
Surviving Corporation and such Bylaws.
D. Each share of the Company's common stock ("Share") issued and
outstanding immediately prior to the effective date (other than shares held in
the Company's treasury or by GNC Transition Corp and other than Shares as to
which dissenters' rights have been properly exercised, shall, by virtue of the
merger and without any action on the part of the holder thereof, be converted
into the right to receive $36.00 in cash (the "Merger Price"), payable to the
holder thereof, without interest thereon, upon the surrender of the certificate
formerly representing such Share.
a. Each Share held in the treasury of the Company immediately prior to
the effective date shall, by virtue of the merger and without any action on
the part of the holder thereof, be cancelled, retired and cease to exist
and no payment shall be made with respect thereto.
b. Each Share held by GNC Transition Corp immediately prior to the
effective date shall remain outstanding and unchanged after the merger as a
share of the Surviving Corporation.
E. The shares of common stock of GNC Transition Corp issued and outstanding
immediately prior to the effective date shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
exchangeable for such number of shares of common stock, par value $1.00 per
share, of the Surviving Corporation as shall equal the number of Shares
converted into the right to receive the Merger Price pursuant to Paragraph D,
above.
F. At the effective date, each outstanding option to purchase Shares from
the Company (an "Option"), whether or not then exercisable shall be converted
into or replaced by an option to purchase a number of shares of Orion Capital
Corporation ("Orion") common stock (which shall be rounded up if .5 or more and
rounded down if less than .5 so that no option on Orion common stock shall
relate to a fractional share) equal to the number of Shares subject to the
Option multiplied by a fraction the numerator of which shall be 36 and the
denominator of which shall be the average of the closing price of Orion common
stock on the ten trading days ending on the fifth trading day prior to the
effective date, at a price per share (rounded to the nearest whole cent) equal
to (i) the aggregate exercise price for the Shares otherwise purchasable
pursuant to such stock option, divided by (ii) the number of full shares of
Orion common stock deemed purchasable pursuant to such option in accordance with
the foregoing.
Second: The Plan of Merger has been adopted by action of the shareholders
and board of directors of GNC Transition Corp and by action of the board of
directors of the Company, without any vote of its shareholders, pursuant to
C.R.S. sec. 7-111-104(3). As of the date of execution of these Articles of
Merger,
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GNC Transition Corp owned more than 90% of the outstanding shares of the only
class of voting stock of the Company, so as to render C.R.S. sec. 7-111-104(3)
applicable.
Third: The effective date of the merger is December 16, 1997, which date
complies with the provisions of C.R.S. sec. 7-111-104(5).
Dated: December 6, 1997.
GUARANTY NATIONAL CORPORATION
(the Company)
By: /s/ BEVERLY SILK By: /s/ JAMES R. POULIOT
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Secretary President
GNC TRANSITION CORP
By: /s/ MICHAEL P. MALONEY By: /s/ DANIEL L. BARRY
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Senior Vice President Senior Vice President
Secretary
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RESOLVED, that the form and substance of the Articles of Merger and the
Notice to Shareholders of Merger of GNC Transition Corp into Guaranty National
Corporation and of Dissenters' Rights, copies of which are hereby ordered
attached to the minutes of this meeting as Exhibits 1 and 2, respectively, and
incorporated in this resolution by reference, are hereby approved and adopted
and the officers of the Corporation, and each of them, are authorized to
execute, deliver and/or file such documents in accordance with the provisions
thereof and of the Colorado Business Corporation Act, as set forth therein and
as necessary or appropriate to give effect to the merger.
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From: Jeanne Hotchkiss Dawn W. Dover
Orion Capital Corporation Kekst & Company
9 Farm Springs Road 437 Madison Avenue
Farmington, CT 06032 New York, NY 10022
(860) 674-6754 (212) 521-4817
FOR IMMEDIATE RELEASE
ORION CAPITAL CORPORATION TENDER OFFER
FOR GUARANTY NATIONAL SHARES COMPLETED
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Farmington, CT (December 8, 1997) - Orion Capital Corporation (NYSE:OC) today
announced that its tender offer to purchase all outstanding shares of the common
stock of Guaranty National Corporation (NYSE: GNC) for $36 per share was
successfully completed, with 97.1% of the Guaranty National shares not held by
Orion or its subsidiaries having been validly tendered. The tender offer, which
expired at 12:00 midnight, New York time on December 5, 1997, was made pursuant
to an agreement entered into by Orion and Guaranty National and will be followed
by the merger of Guaranty with a wholly-owned subsidiary of Orion.
Based on its preliminary tabulation, the Depositary for the Offer has informed
Orion that 2,884,526 shares of Guaranty National Corporation were tendered and
not withdrawn pursuant to the Offer (including 129,233 shares tendered by means
of notices of guaranteed delivery). Orion has accepted the shares tendered for
payment, which together with the 12,129,942 shares currently owned by certain of
Orion's wholly-owned subsidiaries, represents approximately 99.4% of the shares
of Guaranty National Corporation outstanding. Only 85,653 shares of Guaranty
National Corporation were not tendered.
The remaining shareholders of Guaranty National Corporation will receive,
pursuant to the terms of the Merger Agreement, $36 per share in cash upon
delivery of their shares of Guaranty National common stock. The merger is
expected to close on or about December 16, 1997.
W. Martson Becker, Orion Chairman and CEO, stated, "In the growing and
attractive nonstandard automobile market, Guaranty National has a solid
presence, excellent management, an extremely well-positioned product portfolio
and outstanding prospects. This merger will provide Guaranty with additional
financing options to continue its expansion in this rapidly consolidating arena.
Orion, in turn, will benefit from the financial performance that derives from a
growing and well-run operation."
-more-
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Orion Capital Tender Offer
for Guaranty National Shares Completed 2.
"Orion and Guaranty National have enjoyed a mutually rewarding relationship for
more than a dozen years. We expect that this new chapter in our association will
benefit our customers, agents, employees and shareholders for years to come,"
Mr. Becker added.
Guaranty National is a Colorado-based property and casualty insurance holding
company with operating subsidiaries that write private passenger automobile
insurance, as well as specialty commercial automobile, collateral protection and
other commercial coverages. The Company is a leading provider of nonstandard
personal automobile insurance written through independent agents.
Orion Capital is engaged in the specialty property and casualty insurance
business through wholly-owned subsidiaries which include EBI Companies, DPIC
Companies, Connecticut Specialty, and Wm. H. McGee, as well as through its
ownership interest in Guaranty National Corporation.
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