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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RISCORP, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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RISCORP LOGO
June 9, 2000
Dear Shareholder:
Attached to this letter is a brief supplement to our Proxy Statement, dated
May 11, 2000, which involves our pending merger with Griffin Acquisition Corp.
The supplement explains a recent development in our litigation against Zenith
Insurance Company and Arthur Andersen LLP in which we seek to recover additional
amounts from Zenith in connection with our asset sale to Zenith in 1998. Class A
shareholders are entitled to receive an additional pro rata amount in the event
RISCORP obtains a recovery.
The Board of Directors continues to believe that this transaction is in the
best interests of the Class A shareholders.
ANOTHER PROXY AND RETURN ENVELOPE ARE ENCLOSED FOR YOUR CONVENIENCE. IF YOU
HAVE NOT RETURNED YOUR PROXY, PLEASE TAKE A FEW MINUTES TO VOTE YOUR PROXY
TODAY. IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY AND WOULD LIKE TO CHANGE YOUR
VOTE, PLEASE USE THE ENCLOSED PROXY AND RETURN ENVELOPE. YOUR VOTE IS IMPORTANT.
This letter and the accompanying Supplement to the Proxy Statement are
first being mailed to RISCORP's shareholders on or about June 9, 2000.
If you have any questions about this Supplement or the Proxy Statement,
please let me hear from you.
Sincerely,
/s/ Walter E. Riehemann
Walter E. Riehemann
President
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RISCORP
SUPPLEMENT TO PROXY STATEMENT
JUNE 9, 2000
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As more fully described in the Proxy Statement, upon completion of the
merger, each share of Class A Common Stock will receive a cash payment of $2.85
without interest and less any required withholding taxes, subject to adjustment
as set forth in the merger agreement, plus a contingent right to receive an
additional pro rata cash amount if RISCORP recovers any amounts from Zenith
Insurance Company or other specified parties in connection with RISCORP's sale
of assets to Zenith in 1998.
On January 5, 2000, RISCORP filed suit against Zenith and Arthur Andersen
LLP seeking to recover either $18,057,000 or $5,872,000, plus interest,
depending on the findings of the court about the nature of the neutral auditors'
alleged errors. On March 16, 2000, Zenith initiated an arbitration proceeding
seeking (1) an order barring RISCORP under the Settlement Agreement from
challenging an $18,057,000 adjustment made by Arthur Andersen LLP in connection
with deciding the final purchase price, (2) a determination that RISCORP had
breached the Settlement Agreement by bringing certain counts of the court
action, (3) damages, attorney's fees and expenses caused by RISCORP's alleged
breach, and (4) if the Settlement Agreement did not bar RISCORP from seeking to
recover the $18,057,000, then a finding that RISCORP had fraudulently induced
Zenith to enter the Settlement Agreement. RISCORP's suit against Zenith has not
proceeded pending resolution of Zenith's claims in arbitration.
On June 1, 2000, an independent arbitrator ruled against Zenith and in
favor of RISCORP on all matters before the arbitrator. This means that RISCORP
is not barred by the Settlement Agreement from seeking to recover from Zenith
either $18,057,000 or $5,872,000, depending on the nature of the neutral
auditors' alleged errors. RISCORP will now proceed promptly with its lawsuit.
Given the uncertainties inherent in litigation, even though RISCORP was
successful in this arbitration, there can be no assurance that RISCORP
ultimately will be successful in this litigation and, accordingly, it is
possible that holders of Class A Common Stock will only receive the $2.85 cash
payment in the merger.