UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No.
)
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a--11(c) or §240.14a-12
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SCPIE HOLDINGS INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the
appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which the transaction applies:
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(2)
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Aggregate number of securities to which the transaction applies:
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(3)
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Per unit price or other underlying value of the 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):
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(4)
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Proposed maximum aggregate value of the transaction:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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February 20, 2008
Dear SCPIE Holdings Stockholder:
You have recently received a number of mailings concerning the very important upcoming vote on a proposed
merger between SCPIE and The Doctors Company, a California-based medical malpractice insurer.
We think that the $28 per share all-cash merger price that you will receiveprovided the merger is approvedis the best deal for all of our
stockholders and we strongly recommend you vote FOR the transaction.
Unfortunately, one dissidentwho has been threatening your company with
proxy fights for the last three yearshas decided, for what we believe are his own selfish reasons, to oppose this premium deal and attack your Board and management to further his own interests.
The most important thing to remember when you receive letters from this New York City dissidentor telephone calls from him or his paid telemarketersis that
Joe Stilwell has an undeniable conflict of interest. Relative to his investment in SCPIE, he is a much larger stockholder and investor in a professional liability company from East Lansing, Michigan, that lost in a fair and thorough auction
conducted by your Board and its financial advisor, Deutsche Bank.
Furthermore, while the bid of The Doctors Company and the losing bid of the
Michigan company may appear to have been close in value on the surface, a further look shows that
the merger with The Doctors Companyan A- (Excellent) rated A.M. Best insurer well known in our market
represents more certainty in
value because it is for all cash and it is at a significant premium in a very volatile stock market. Your independent directors therefore thought The Doctors Company all-cash bid was clearly superior and strongly
recommend you vote FOR it on your
WHITE proxy card.
Additionally, despite Stilwells conflicted and self-serving advice to the contrary, the rejected bid from the Michigan
companyon the Board of Directors of which both Stilwell and his lawyer sithad very serious conditions to closing that, in our opinion, made it highly risky that it was nothing more than an illusory bid. In our opinion, SCPIE stockholders
would have been left holding all the risk of losing a bid and having a severely damaged company if we had tried and failed to get a deal done with an out-of-state malpractice insurer. We thought there was great risk that our policyholders would not
renew if they knew an out-of-state companyrated lower than The Doctors Companywas going to acquire SCPIE. This was not a risk worth taking. Moreover, we believe the illiquid stock of Stilwells preferred suitor was inferior to an
all-cash deal with a company like The Doctors Company, which is well-known in our market and which proposed a deal with conditions likely to be satisfied so that our stockholders would actually benefit from their premium offer.
So to clarify and simplify your voting decisionregardless of what Stilwell, an ex-director on your Board with a
significant conflict of interest, may have to saythe only real question on the table today is:
What would you rather have?
$28 PER SHARE OF CASH FOR EACH OF YOUR SCPIE SHARES
A PREMIUM OF OVER 31% FROM A WEEK BEFORE THE DEAL WAS ANNOUNCED
or
an illusory offer of
illiquid stock in a Michigan company, virtually unknown to California insureds, with little or no revenue growth, and no experience in the competitive California market.
These are the
FACTS
before you.
There is only one person who would send letters to you arguing (a) that there
is another offer out there that is of a higher value, and (b) that a risky stock offer was better than the certainty of cash
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someone who has more money invested in the Michigan company than in SCPIE
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someone who sits on the Michigan companys Board and
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someone who stands to benefit uniquely if SCPIE is ever sold to the Michigan company for stock instead of cash
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in all cases, Joe Stilwell.
Mr. Stilwell has an undeniable conflict of interest
and we suggest you take anything he says with a large grain of salt and be very skeptical of his motives. In his letter, Stilwell implies that he is
looking out for your interests. In our opinion, this dissident will always do one thing for certainthe thing that is best for Stilwell.
Stilwells preferred suitor from Michigan did not have enough liquid assets or earnings to offer all cash for your SCPIE sharesand in fact it chose to offer you no cash. Ask yourself, what does Stilwell really want? He sits on
the board of the Michigan company, he has a great deal of money invested in it, and he wants to merge your Southern California malpractice franchise into this Michigan company.
Your Board, which looked out for the interests of all stockholders and continues to do so, was not willing to gamble on the risky bid of the Michigan company to the detriment of our stockholders. In sum:
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Volatile stock markets like those experienced in the second half of 2007 and so far in 2008 clearly make the $28 per share all-cash offer of The Doctors Company
look even better today than when we signed the merger agreement in October of 2007.
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Your Board believes we would have lost significant business in our state of California if we had tried to enter into a transaction with an out-of-state company.
That Michigan company, which is unknown to the doctors in California, would have resulted in a loss of business for SCPIE and, ultimately, would have put the transaction in great jeopardy.
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The Doctors Company bid for SCPIE is still solid and impressive$28 cash per shareand reflects a premium of approximately 31% over the Companys
closing price one week before the transaction was announced. In these uncertain times, cash is king.
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Your Board urges you to vote
FOR
the proposed deal with The Doctors Company
because that is the only way to guarantee you an
outstanding premium for all your shares in cash at a fixed price of $28 per share.
Dont sit back and do nothing and think somebody
else can decide this election contest
NOT VOTING IS THE SAME AS A NO VOTE
. Dont let Stilwell
stand in the way of you getting paid $28 per share for all of your shares. If the deal with The Doctors Company is not approved, your stock could drop back substantially in value and there can be no assurance of any offer in the future. Even if
there is another offer, there is no guarantee that it would be more favorable than the deal with The Doctors Company.
Please vote
FOR
the merger proposal by telephone, Internet or mail today. We ask you to ignore Stilwells GOLD cards and reject his self-serving attempt to force your SCPIE to merge with the company from Michigan with which he is affiliated.
Sincerely,
Mitchell S. Karlan MD
Chairman,
Board of Directors
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If you have any questions, please call MacKenzie Partners
at the numbers listed below.
105 Madison Avenue
New York, New York 10016
proxy@mackenziepartners.com
Call Collect: 212/929-5500
or
Toll-Free: 800/322-2885
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Additional Information and
Where to Find It
On January 30, 2008, SCPIE filed a definitive proxy statement with the Securities and Exchange Commission (SEC)
in connection with its proposed acquisition by The Doctors Company. The proxy statement has been mailed to SCPIEs stockholders, who are urged to read the proxy statement and other relevant materials filed with the SEC because they contain
important information about the acquisition. Investors and security holders may obtain free copies of these documents and other documents filed with the SEC at the SECs website at www.sec.gov. In addition, investors and security holders may
obtain free copies of the documents filed with the SEC by SCPIE at the Investors/Media section on its corporate website at www.scpie.com.
SCPIEs executive officers and directors may be participants in the solicitation of proxies from SCPIE stockholders with respect to the acquisition. Information about SCPIEs executive officers and directors, and their ownership
of SCPIE Holdings common stock, is set forth in the definitive proxy statement SCPIE filed with the SEC on January 30, 2008, and in the reports filed by the executive officers and directors under Section 16 of the Securities Exchange Act
of 1934, as amended, since such date. Additional information regarding the direct and indirect interests of SCPIEs executive officers and directors in the acquisition is in the definitive proxy statement.
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