<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 31, 1996
PROVIDENT COMPANIES, INC.
-------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 000-19388 62-1598430
---------------- ------------ -------------
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
One Fountain Square, Chattanooga, Tennessee 37402
------------------------------------------------------------
(Addresses of Principal Executive Offices, including Zip Code)
(615) 755-1011
------------------------------------
(Registrant's Telephone Number, including Area Code)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On May 31, 1996, Provident Companies, Inc. ("Provident") entered into a
Common Stock Purchase Agreement (the "Purchase Agreement") by and between
Zurich Insurance Company ("Zurich") and Provident. Pursuant to the Purchase
Agreement, Zurich has agreed that it, or one or more of its affiliates, will
purchase from Provident 9,523,810 newly issued shares of the $1.00 par value
common stock of Provident ("Provident Common Stock") at a price of $31.50 per
share (or an aggregate of $300 million) payable in cash (the "Zurich Common
Stock Investment").
As previously announced by Provident on April 29, 1996, the net proceeds
from the Zurich Common Stock Investment will be used by Provident to finance a
portion of the cash payments to be made to the stockholders of The Paul Revere
Corporation ("Paul Revere") in connection with Provident's proposed acquisition
of Paul Revere (the "Merger") pursuant to the Agreement and Plan of Merger,
dated as of April 29, 1996, by and among Provident, Patriot Acquisition
Corporation, and Paul Revere. Consummation of the Merger is a condition to
consummation of the Zurich Common Stock Investment. Additionally, the issuance
of shares of Provident Common Stock pursuant to the Purchase Agreement is
conditioned upon Provident stockholder approval, regulatory approvals, and
customary conditions. Upon consummation of the Merger and the Zurich Common
Stock Investment, Zurich will own approximately 15% of the outstanding shares
of Provident Common Stock.
On May 31, 1996, in connection with the execution of the Purchase
Agreement, Provident and Zurich also entered into a Registration Rights
Agreement (the "Registration Rights Agreement"), pursuant to which Zurich will
be entitled to certain registration rights for the Provident Common Stock
purchased from Provident, and a Relationship Agreement (the "Relationship
Agreement") setting forth certain rights of Zurich to designate two members of
the Board of Directors of Provident, subject to certain ownership thresholds,
and setting forth certain limitations on the ability of Zurich to acquire
additional shares of Provident Common Stock or to take other actions with
respect to Provident.
The foregoing is qualified in its entirety by reference to the Purchase
Agreement, the Registration Rights Agreement, and the Relationship Agreement,
copies of which are attached as exhibits hereto and which are hereby
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS.
C. Exhibits
99.1 Common Stock Purchase Agreement, dated as of May 31,
1996, by and between Provident Companies, Inc. and Zurich
Insurance Company.
99.2 Registration Rights Agreement, dated as of May 31,
1996, by and between Provident Companies, Inc. and Zurich
Insurance Company.
99.3 Relationship Agreement, dated as of May 31, 1996, by
and between Provident Companies, Inc. and Zurich Insurance
Company.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROVIDENT COMPANIES, INC.
(REGISTRANT)
/S/ J. HAROLD CHANDLER
------------------------------------
J. Harold Chandler
Chairman, President and
Chief Executive Officer
Date: June 6, 1996
-3-
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C>
99.1 Common Stock Purchase Agreement, dated as of May 31, 1996,
by and between Provident Companies, Inc. and Zurich
Insurance Company.
99.2 Registration Rights Agreement, dated as of May 31, 1996,
by and between Provident Companies, Inc. and Zurich
Insurance Company.
99.3 Relationship Agreement, dated as of May 31, 1996, by and
between Provident Companies, Inc. and Zurich Insurance
Company.
</TABLE>
-4-
<PAGE> 1
Exhibit 99.1
Common Stock Purchase Agreement, dated as of May 31, 1996,
by and between Provident Companies, Inc. and Zurich Insurance Company
<PAGE> 2
- --------------------------------------------------------------------------------
COMMON STOCK
PURCHASE AGREEMENT
between
PROVIDENT COMPANIES, INC.
and
ZURICH INSURANCE COMPANY
Dated as of May 31, 1996
- --------------------------------------------------------------------------------
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. THE SHARES ....................................................... 2
Section 1.1. Issuance, Sale and Purchase of the Shares................. 2
Section 1.2. Closing .................................................. 2
Section 1.3. Further Action............................................ 2
Section 1.4. Anti-Dilution Provisions ................................ 2
SECTION 2. REPRESENTATIONS AND WARRANTIES ................................... 3
Section 2.1. Representations and Warranties of the
Company ................................................ 3
Section 2.1.1. Organization, Good Standing and
Qualification ........................................... 3
Section 2.1.2. Authorization, Enforceability ............................ 4
Section 2.1.3. No Conflict .............................................. 4
Section 2.1.4. Capitalization ........................................... 5
Section 2.1.5. Valid Issuance of Securities ............................. 5
Section 2.1.6. Litigation ............................................... 6
Section 2.1.7. Consents ................................................. 6
Section 2.1.8. Compliance with Law and Other Instruments ................ 7
Section 2.1.9. SEC Documents; Financial Statements ...................... 7
Section 2.1.10. Absence of Certain Changes or Events ..................... 9
Section 2.1.11. No Regulatory Disqualifications .......................... 9
Section 2.1.12. Registration Rights....................................... 9
Section 2.1.13. Acquisition Agreements.................................... 9
Section 2.1.14. Rating Agency ............................................ 9
Section 2.1.15. Brokers................................................... 10
Section 2.1.16. Environmental Protection ................................. 10
Section 2.1.17. Delaware Law ............................................. 11
Section 2.1.18. Incorporation of Representations and
Warranties from the Merger Agreement ................... 11
Section 2.2. Representations, Warranties and Covenants
of the Purchaser ....................................... 11
Section 2.2.1. Organization ............................................. 12
Section 2.2.2. Authorization ............................................ 12
Section 2.2.3. Purchase for Investment................................... 12
Section 2.2.4. Restricted Securities..................................... 12
Section 2.2.5. No Regulatory Disqualifications .......................... 13
Section 2.2.6. Purchaser Information .................................... 13
Section 2.2.7. Consents ................................................. 13
Section 2.2.8. Brokers .................................................. 14
SECTION 3. CERTAIN AGREEMENTS OF THE PARTIES ................................ 14
Section 3.1. Conduct of Business of the Company........................ 14
Section 3.2. Covenants of the Purchaser .............................. 16
</TABLE>
(i)
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 3.3. Proxy Statement; Stockholder Approval .................... 16
Section 3.4. Approvals, Etc. .......................................... 17
Section 3.5. Exclusivity ............................................. 17
Section 3.6. Publicity ................................................ 17
Section 3.7. Modification of Other Agreements ......................... 17
Section 3.8. Exchange Listing ......................................... 18
Section 3.9. Investigation and Confidentiality ........................ 18
Section 3.10. State Takeover Laws; Charter Provisions .................. 18
Section 3.11. Use of Proceeds .......................................... 18
Section 3.12. Marketing Agreement ...................................... 19
Section 3.13. Restrictive Agreements Prohibited ........................ 19
SECTION 4. CLOSING CONDITIONS ............................................... 19
Section 4.1. Conditions to Obligation of Purchaser..................... 19
Section 4.1.1. Representations and Warranties Complete and
Correct ................................................ 19
Section 4.1.2. Compliance with this Agreement ........................... 19
Section 4.1.3. Officers' Certificate .................................... 19
Section 4.1.4. Consents; Etc ............................................ 20
Section 4.1.5. Supporting Documents ..................................... 20
Section 4.1.6. HSR Act .................................................. 20
Section 4.1.7. Merger Closing ........................................... 20
Section 4.1.8. Other Agreements ......................................... 20
Section 4.1.9. Material Adverse Change .................................. 20
Section 4.1.10. Illegality, Etc. ......................................... 21
Section 4.1.11. Stockholder Approval ..................................... 21
Section 4.1.12. Exchange Listing ......................................... 21
Section 4.1.13. Financing of Cash Payments in Merger ..................... 21
Section 4.1.14. Maclellan Family Agreement ............................... 21
Section 4.1.15. Legal Opinions............................................ 21
Section 4.2. Conditions to the Obligations of the Company.............. 21
Section 4.2.1. Compliance with the Agreement ............................ 21
Section 4.2.2. Purchaser's Representations and Warranties
Complete and Correct ................................... 22
Section 4.2.3. Officer's Certificate .................................... 22
Section 4.2.4. Consents; Etc ............................................ 22
Section 4.2.5. HSR Act .................................................. 22
Section 4.2.6. Merger Closing ........................................... 22
Section 4.2.7. Illegality, Etc. ......................................... 22
Section 4.2.8. Stockholder Approval ..................................... 22
Section 4.2.9. Exchange Listing ......................................... 22
Section 4.2.10. Financing of Cash Payments in Merger...................... 23
Section 4.2.11. Legal Opinions ........................................... 23
SECTION 5. TERMINATION .................................................... 23
Section 5.1. Termination .............................................. 23
Section 5.2. Effect of Termination .................................... 24
</TABLE>
(ii)
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 5.3. Termination Fee .......................................... 24
SECTION 6. MISCELLANEOUS .................................................. 24
Section 6.1. Expenses and Indemnification ............................. 24
Section 6.2. Survival of Agreements ................................... 26
Section 6.3. Parties in Interest ...................................... 26
Section 6.4. Notices .................................................. 26
Section 6.5. Governing Law ............................................ 27
Section 6.6. Entire Agreement ......................................... 27
Section 6.7. Counterparts ............................................. 27
Section 6.8. Amendments ............................................... 27
Section 6.9. Severability ............................................ 27
Section 6.10. Titles and Subtitles ..................................... 28
Section 6.11. Further Assurances ...................................... 28
</TABLE>
Exhibit 1 Terms for Marketing Agreement
Exhibit 2 Certificate of Incorporation
Exhibit 3 By-laws
Exhibit 4 Family Stockholders Agreement
Exhibit 5 Form of Opinion of Company Counsel
Exhibit 6 Form of Opinion of Purchaser's
Counsel
(iii)
<PAGE> 6
COMMON STOCK PURCHASE AGREEMENT dated as of May 31, 1996 between Provident
Companies, Inc., a Delaware corporation (the "Company"), and Zurich Insurance
Company, a Swiss corporation ("Zurich" and, solely for purposes of the
provisions of this Agreement relating to the rights of the Purchaser hereunder,
together with such affiliates of Zurich as Zurich may designate in accordance
with Section 1.1 hereof, collectively the "Purchaser").
RECITALS:
WHEREAS, the Company wishes to issue and sell to the Purchaser an
aggregate of 9,523,810 shares (the "Shares") of the authorized but unissued
common stock, par value $1.00 per share (the "Common Stock"), of the Company;
and
WHEREAS, the Purchaser wishes to purchase the Shares on the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, the purchase and sale of the Shares is intended to be consummated
in connection with, and contingent upon, the acquisition by the Company of all
the outstanding common stock of The Paul Revere Corporation ("Revere") through
a merger transaction (the "Merger"), all pursuant to an Agreement and Plan of
Merger, dated as of April 29, 1996, between the Company, Patriot Acquisition
Corporation and Revere (as the same may be amended or supplemented in
accordance with the terms of this Agreement, the "Merger Agreement"); and
WHEREAS, in connection with the execution and delivery of this Agreement,
the Company and the Purchaser are entering into (i) a Registration Rights
Agreement of even date herewith (as the same may be amended or supplemented
from time to time, the "Registration Agreement") providing for certain rights
in favor of the Purchaser with respect to the registration of the Shares under
the federal securities laws and (ii) a Relationship Agreement of even date
herewith (as the same may be amended or supplemented from time to time, the
"Relationship Agreement") providing for certain agreements with respect to
Shares acquired hereunder; and
WHEREAS, on or prior to the Closing Date (as defined in Section 1.2) the
Company and the Purchaser will enter into a Marketing Agreement (as the same
may be amended or supplemented from time to time, the "Marketing Agreement")
relating to a proposed strategic relationship between the Purchaser and its
affiliates and the Company, which agreement shall include the terms set forth
on Exhibit 1 (the Marketing Agreement, the Registration Agreement and the
Relationship Agreement are referred to herein collectively as the "Ancillary
Agreements").
<PAGE> 7
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
SECTION 1. THE SHARES
Section 1.1 Issuance, Sale and Purchase of the Shares. In reliance upon
the representations and warranties made herein and subject to the satisfaction
or waiver of the conditions set forth herein, the Company agrees to issue and
sell to the Purchaser (and/or such affiliates (as defined in the Relationship
Agreement) of the Purchaser as it may designate in writing to the Company prior
to the Closing (as defined below)), and the Purchaser agrees to purchase (or to
cause such affiliates to purchase) from the Company 9,523,810 Shares, for a
purchase price of $31.50 per Share, or an aggregate purchase price equal to
$300,000,000.
Section 1.2 Closing. The closing shall take place at the offices of
Skadden, Arps, Slate, Meagher & Flom, One Beacon Street, Boston, Massachusetts,
on the date the Merger becomes effective in accordance with the terms and
conditions of the Merger Agreement, or at such other location, date and time as
may be agreed upon between the Purchaser and the Company (such closing being
called the "Closing" and such date and time being called the "Closing Date").
At the Closing, the Company shall issue and deliver to the Purchaser (or its
affiliates), a stock certificate or certificates in definitive form, registered
in the name of the Purchaser (or such affiliates), representing the Shares
being purchased at the Closing. As payment in full for the Shares being
purchased under this Agreement, and against delivery of the stock certificate
or certificates therefor on the Closing Date, the Purchaser shall (or shall
cause its affiliates to) wire transfer in accordance with the Company's
instructions funds in the amount of $300,000,000.
Section 1.3 Further Action. During the period from the date hereof to the
Closing Date, each of the Company and the Purchaser shall use all reasonable
efforts to take all action necessary or appropriate to satisfy the closing
conditions contained in Section 4 hereof and to cause its respective
representations and warranties contained in Section 2 to be complete and
correct in all material respects as of the Closing Date, after giving effect to
the transactions contemplated by this Agreement, as if made on and as of such
date.
Section 1.4 Anti-Dilution Provisions. In the event the Company changes
the number of shares of Common Stock issued and outstanding prior to the
Closing as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in
the case of a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Closing, the number of
- 2 -
<PAGE> 8
Shares to be purchased and the purchase price per Share shall be
proportionately adjusted, without any corresponding adjustment to the aggregate
purchase price for the Shares.
SECTION 2. REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Company. The Company
represents and warrants to the Purchaser as follows:
Section 2.1.1 Organization, Good Standing and Qualification. (a) Each
of the Company and each of its subsidiaries (the "Company Subsidiaries") is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and has all requisite power and
authority under such laws to own or lease and operate its properties and to
carry on its business as now conducted. Each of the Company and each of the
Company Subsidiaries is duly qualified or licensed to do business as a foreign
corporation in good standing in each jurisdiction in which the nature of the
business transacted by it or the character of the properties owned or leased by
it requires it to so qualify or be licensed, except where the failure to so
qualify or be licensed or be in good standing would not (i) have a material
adverse effect on the results of operations, assets, liabilities or financial
condition of the Company and the Subsidiaries considered as a single enterprise
or (ii) impair in any material respect the ability of the Company to perform
any of its obligations or agreements hereunder or under the Ancillary
Agreements or consummate the transactions contemplated hereby or thereby
(collectively, a "Material Adverse Effect"). Subject to the requisite
approvals of the Company's stockholders as described in Section 2.1.2, the
Company has the corporate power and authority to execute, deliver and perform
this Agreement and the Ancillary Agreements, and to issue, sell and deliver the
Shares.
(b) The Company conducts its insurance operations through Provident Life
and Accident Insurance Company, Provident National Assurance Company and
Provident Life and Casualty Insurance Company (collectively, the "Company
Insurance Subsidiaries"). Except as disclosed in Schedule 2.1.1, each of the
Company Insurance Subsidiaries is (i) duly licensed or authorized as an
insurance company in its jurisdiction of incorporation, (ii) duly licensed or
authorized as an insurance company in each other jurisdiction where it is
required to be so licensed or authorized, and (iii) duly authorized in its
jurisdiction of incorporation and each other applicable jurisdiction to write
each line of business reported as being written in the Company SAP Statements
(as hereinafter defined), except, in any such case, where the failure to be so
licensed or authorized is not reasonably likely to result in a Material Adverse
Effect.
- 3 -
<PAGE> 9
(c) Except for the Company Subsidiaries (including Revere after
consummation of the Merger) and as set forth in the 1995 SAP Statements or in
Schedule 2.1.1, the Company does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity that
directly or indirectly conducts any activity which is material to the Company.
Section 2.1.2. Authorization, Enforceability. Except for the
affirmative vote of a majority of the votes cast by holders of shares of
Common Stock present in person or represented by proxy at the Stockholders'
Meeting (as defined in Section 3.3) (provided that the votes cast by such
holders constitute a majority of the votes entitled to be cast by holders of
the outstanding shares of Common Stock) to authorize the issuance of the
Shares hereunder and the shares of Common Stock to be issued under the Merger
Agreement and except for the affirmative vote of the holders of sixty-six and
two thirds percent of the shares of Common Stock outstanding with respect to
the Charter Amendment (as defined in Section 5.3 of the Merger Agreement), all
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement and the Ancillary Agreements, the performance of all obligations of
the Company hereunder and thereunder and the authorization, issuance, sale and
delivery of the Shares has been taken. This Agreement, the Registration
Agreement and the Relationship Agreement have been (and the Marketing
Agreement, when executed and delivered, will be) duly authorized, executed and
delivered by the Company and constitute (and, in the case of the Marketing
Agreement, when executed and delivered, will constitute) the valid and legally
binding obligations of the Company, enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general principles of
equity (whether enforcement is sought by proceedings in equity or at law).
Section 2.1.3. No Conflict. The execution and delivery by the Company
of this Agreement and the Ancillary Agreements, the performance by the Company
of its obligations hereunder and thereunder, the issuance, sale and delivery
of the Shares, will not violate any provision of (i) the Amended and Restated
Certificate of Incorporation, as amended or supplemented (the "Certificate of
Incorporation"), or By-laws, as amended (the "By-laws"), of the Company, or
(ii) any law or any order of any court or other agency of government, or
conflict with, result in a breach of or constitute (with notice or lapse of
time or both) a default under any indenture, agreement or other instrument by
which the Company or any of its properties or assets is bound, or result in the
creation or imposition of any lien, charge,
- 4 -
<PAGE> 10
restriction, claim or encumbrance of any nature whatsoever known to the Company
upon any of the properties or assets of the Company, except for violations,
conflicts, breaches or defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect. True and correct
copies of the Certificate of Incorporation and By-laws, as in effect on the date
hereof, are attached hereto as Exhibits 2 and 3, respectively.
Section 2.1.4. Capitalization. (a) The authorized capital stock of the
Company consists of (i) 25,000,000 shares of Preferred Stock, par value $1.00
per share (the "Preferred Stock"), which may be issued in series; and (ii)
65,000,000 shares of Common Stock. As of the Closing Date, assuming the
Charter Amendment is approved by the Company's stockholders, the authorized
number of shares of Common Stock will be increased to at least 75,000,000
shares.
(b) As of April 29, 1996, there were issued and outstanding (i) 45,465,135
shares of Common Stock, (ii) 1,041,667 shares of 8.10% Cumulative Preferred
Stock, evidenced by depositary receipts for 6,250,002 depositary shares each
representing a one-sixth interest in one share of the 8.10% Cumulative
Preferred Stock, and (iii) options to purchase 1,837,145 shares of Common Stock
under the Company's Stock Option Plan of 1994, as amended (the "1994 Plan") out
of a total of 3,500,000 options authorized to be issued under the 1994 Plan.
As of the Closing Date (and after giving effect to the Merger and the
transactions contemplated by this Agreement), there will be outstanding
67,540,281 shares of Common Stock (not including shares of Common Stock issued
pursuant to the exercise of options granted under the 1994 Plan and assuming
12,492,617 shares of Common Stock are issued to stockholders of Revere by
virtue of the Merger).
(c) Except as set forth in Schedule 2.1.4 or as provided in this
Agreement and the Merger Agreement, there are not outstanding any options,
warrants, rights (including conversion, exchange or preemptive rights) or
agreements or commitments, orally or in writing, for the purchase or
acquisition from the Company of any shares of its capital stock.
(d) Except as set forth in Schedule 2.1.4, the Company has no obligation
(contingent or other) to purchase, redeem or otherwise acquire any of its
equity securities or any interest therein or to pay any dividend (other than
cumulative dividends on the 8.10% Cumulative Preferred Stock in accordance with
the terms thereof) or make any other distribution in respect thereof.
Section 2.1.5. Valid Issuance of Securities. (a) The Shares, when
issued, sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly authorized, validly issued, fully
paid and nonassessable.
- 5 -
<PAGE> 11
(b) The outstanding shares of Common Stock and 8.10% Cumulative Preferred
Stock are, and the shares of Common Stock issuable pursuant to the Merger
Agreement will be when issued, duly authorized, validly issued, fully paid and
nonassessable.
(c) The issuance, sale and delivery of the Shares is not subject to any
preemptive right of stockholders of the Company arising under law or the
Certificate of Incorporation or By-laws or to any contractual right of first
refusal or other right in favor of any person.
Section 2.1.6 Litigation. There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Company, currently threatened
against the Company or any of the Company Subsidiaries that questions the
validity of this Agreement or any of the Ancillary Agreements or the right of
the Company to enter into, or to consummate, the transactions contemplated
hereby or thereby, or that is reasonably likely, either individually or in the
aggregate, to have a Material Adverse Effect, nor does the Company have
knowledge that there is any basis for any of the foregoing. The Company is not
a party or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality that
specifically names the Company, any of the Company Subsidiaries and as to which
either compliance or noncompliance is reasonably likely to have a Material
Adverse Effect. Except as set forth on Schedule 2.1.6, there is no action,
suit, proceeding or investigation by the Company or any of the Company
Subsidiaries currently pending or which the Company or any Company Subsidiary
intends to initiate that is material to the operations of the Company and the
Company Subsidiaries considered as a whole.
Section 2.1.7. Consents. Assuming the accuracy of the representations and
warranties of the Purchaser set forth in this Agreement, except as set forth on
Schedule 2.1.7, no consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
governmental authority, agency or body or any other person on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements, except for (i)
required blue sky filings, if any, which will be effected in accordance with
such laws, (ii) filings required under the Securities Act of 1933 (the
"Securities Act") in connection with the Registration Agreement, (iii) the
filing of a Pre-Merger Notification Form and related documents under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), (iv) the
filing of appropriate documents with, and the approval of, the Superintendent
of Insurance of the State of New York and the Commissioners of Insurance of the
Commonwealth of Massachusetts, the States of Delaware and Tennessee and any
other state or jurisdiction in which the Company or any of the Company
Insurance Subsidiaries is domiciled or does business (the "Insurance
Regulators") for the issuance of
- 6 -
<PAGE> 12
the Shares to the Purchaser, (v) such consents, approvals, notices or waivers as
may be required under the law of Canada or any of the provinces thereof; (vi)
the approval of the NYSE (as defined in Section 3.8) for the listing of the
Shares on the NYSE, subject to official notice of issuance; and (vii) such
consents, approvals, orders, authorizations, registrations, qualifications,
designations, declarations or filings which if not obtained or made, as the case
may be, are not reasonably likely to have a Material Adverse Effect.
Section 2.1.8. Compliance with Law and Other Instruments. The Company
and the Company Subsidiaries are not in conflict with, or in default or
violation of, (i) any law, rule, regulation, order, judgment or decree
applicable to any of them or by which any of their property or assets is bound
or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which
any of them is a party or by which the Company or any of the Company
Subsidiaries or any of their property or assets is bound or affected, except
for any such conflicts, defaults or violations that are not reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect.
Section 2.1.9. SEC Documents; Financial Statements. Except as set forth
in Schedule 2.1.9:
(a) There are no agreements, understandings or proposed transactions
between the Company or any of the Subsidiaries and any of their respective
officers, directors or affiliates, or any affiliate thereof, of a type that
would be required to be disclosed on Form 10-K for the year ending on December
31, 1995 other than the agreements, understandings or proposed transactions
disclosed in the SEC Documents (as hereinafter defined).
(b) The Company has timely filed all reports required to be filed by it
with the SEC since January 1, 1994 pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations thereunder.
The Company has provided the Purchaser with copies of (i) the Company's annual
reports on Form 10-K for the years ended December 31, 1994 and 1995, (ii) the
Proxy Statement filed by the Company with the SEC on April 1, 1996 with respect
to the Annual Meeting of Stockholders of the Company held on May 1, 1996 and
(iii) the Company's quarterly report on Form 10-Q for the quarter ended March
31, 1996 (collectively, together with any other reports or filings made by the
Company since January 1, 1994 or which are made after the date hereof and on or
prior to the Closing Date with the SEC pursuant to the requirements of the
Securities Act or the Exchange Act or the rules and regulations thereunder,
including, without limitation, the Registration Statement and the Proxy
Statement (as those terms are defined in Section 2.2.6), the "SEC Documents").
As of their respective dates, the SEC
- 7 -
<PAGE> 13
Documents complied (or, as to SEC Documents filed after the date hereof, will
comply) in all material respects with the requirements of the Exchange Act, the
Securities Act and the rules and regulations of the SEC promulgated thereunder.
Except to the extent that information contained in any SEC Document has been
revised or superseded by a later filed SEC Document (which was filed prior to
the date of this Agreement), none of the SEC Documents contains (or, as to SEC
Documents filed after the date hereof, will contain) any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Registration
Statement will not, at the time it becomes effective, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. The Proxy Statement will not, at the time of the mailing of the
Proxy Statement to the Company's stockholders (or, in the case of any amendment
or supplement thereto, at the time of mailing of such amendment or supplement,
as the case may be) and at the time of the Stockholders' Meeting and at the
Effective Time (as defined in the Merger Agreement) contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(c) The financial statements of the Company included in the SEC Documents
comply (or, as to SEC Documents filed after the date hereof, will comply) as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles, except,
in the case of unaudited statements as permitted by Form 10-Q, applied on a
consistent basis during the periods involved and fairly present the
consolidated financial position of the Company and its subsidiaries as of the
date thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as set forth in the SEC Documents,
neither the Company nor any of the Company Subsidiaries has any material
liabilities or obligations which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect.
(d) Each Company Insurance Subsidiary has filed all annual or quarterly
statements, together with all exhibits and schedules thereto, required to be
filed or submitted to the appropriate regulatory authorities of the
jurisdiction in which it is domiciled on forms prescribed or permitted by such
authority (the "SAP Statements"). The financial statements included in the SAP
Statements, including the notes thereto, have been prepared in all material
respects in accordance with accounting practices prescribed or permitted by
applicable state
- 8 -
<PAGE> 14
regulatory authorities in effect as of the date of the respective statements
(and such accounting practices have been applied on a consistent basis
throughout the periods involved, except as expressly set forth in the notes or
schedules thereto), and present fairly the respective statutory financial
position and results of operation of each of the Company Insurance Subsidiaries
as of their respective dates and for the respective periods prescribed therein.
Section 2.1.10 Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents, or as set forth in Schedule 2.1.10 or as a
consequence of, or as contemplated by, this Agreement or the Merger Agreement,
since March 31, 1996, (i) the business of the Company has been carried on only
in the ordinary and usual course, (ii) there has not occurred any change which
has resulted or is reasonably likely to result in a Material Adverse Effect
and (iii) neither the Company nor any Company Subsidiary has taken any action
of the type described in clauses (g), (h), (i) or (j) of Section 3.1.
Section 2.1.11 No Regulatory Disqualifications. To the knowledge of the
Company, no event has occurred or condition exists or, to the extent it is
within the reasonable control of the Company, will occur or exist with respect
to the Company that, in connection with obtaining any approvals from any
Insurance Regulator required in connection with the transactions contemplated
by this Agreement or the Merger Agreement, would cause the Company or any
Company Subsidiary to fail to satisfy on its face any applicable statute or
written regulation of any Insurance Regulator, which is reasonably likely to
adversely affect the Company's ability to consummate the transactions
contemplated hereby or thereby.
Section 2.1.12 Registration Rights. Except for the Registration
Agreement, the registration rights granted pursuant to the Registration Rights
Agreement, dated April 29, 1996, between the Company and Textron Inc. and the
registration rights agreement with members of the Family Group (as defined in
the Registration Agreement), the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
Section 2.1.13 Acquisition Agreements. True and correct copies of (i) the
Merger Agreement and any agreements executed by the Company (or any of its
affiliates) and Revere in connection therewith (the "Merger Documents") and
(ii) any agreement, letter of intent, commitment letter or similar agreement or
document relating to any financing proposed to be incurred by the Company in
connection with the Merger, other than this Agreement and the Ancillary
Agreements (the "Company Financing Agreements"), have been furnished to the
Purchaser.
Section 2.1.14 Rating Agency. From December 31, 1995 through the date
hereof, except as disclosed on Schedule 2.1.14,
- 9 -
<PAGE> 15
no rating agency has (i) imposed conditions (financial or otherwise) on
retaining any rating assigned to the Company or any Company Insurance Subsidiary
or (ii) threatened to downgrade any rating assigned to the Company or any
Company Insurance Subsidiary.
Section 2.1.15. Brokers. Other than its financial advisor, Goldman,
Sachs & Company, the Company has not employed any investment banker, broker,
finder, or intermediary in connection with the sale of the Shares, and the
Company is under no obligation to pay any investment banking, brokerage,
finder's or similar fee or commission in connection with such transactions,
other than certain fees payable to Goldman, Sachs & Company, which fees are
the obligation of the Company.
Section 2.1.16. Environmental Protection. (a) For purposes of this
Section 2.1.16, the following terms shall be defined as follows:
"Environmental Laws" means any federal, state or local statute, code,
ordinance, rule, regulation, permit, consent, approval, license, judgment,
order, writ, decree, injunction or other authorization and any amendments
thereto, relating to:
(i) emissions, discharges, release or threatened releases of
pollutants, contaminants or hazardous or toxic materials or wastes into
indoor or ambient air, surface water, ground water, publicly owned
treatment works, septic systems or land;
(ii) the treatment, storage, disposal, handling, manufacturing,
transportation, or shipment of Hazardous Water or hazardous and/or toxic
wastes, material, substances, products or by-products as defined in the
Comprehensive Environmental Response Compensation and Liability Act as
amended by the Superfund Amendments and Reauthorization Act, as amended,
42 U.S.C. Section 9601 et seq.; the Resource Conservation Recovery Act,
as amended, 42 U.S.C. Section 6901 et seq. and the Toxic Substances
Control Act, as amended, 15 U.S.C. Section 2601 et seq. as amended from
time to time and corresponding state legislation and all regulations
promulgated thereunder; or
(iii) otherwise relating to the pollution or protection of health
or the environment; and
"Hazardous Waste" means any chemical substance or material including, but
not limited to wastes, petroleum and petroleum-derived substances, asbestos,
urea formaldehyde foam insulation, transformer equipment containing dielectric
fluid with levels of polychlorinated biphenyls, radon gas, radioactive
materials or other pollutants or contaminants which have the characteristic of
hazardous waste as set forth in or which are now or hereafter included or
regulated by the Clean Water Act, 33
- 10 -
<PAGE> 16
U.S.C. Section 1251 et seq.; the Clear Act, as amended, 42 U.S.C. Section
7401, et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C.
Section 1251 et seq.; CERCLA; RCRA; and TSCA.
(b) The Company and the Company Subsidiaries are not in violation of any
Environmental Laws, other than such violations which have not had and are
reasonably expected not to have a Material Adverse Effect and have, and are in
compliance with all terms and conditions of, all permits, licenses and
authorizations necessary for the conduct of their respective businesses, other
than such instances of non-compliance which are not reasonably likely to have
a Material Adverse Effect.
(c) Except as set forth on Schedule 2.1.16, there is no site which is
listed on either the National Priorities List pursuant to CERCLA or a similar
state or local law list with respect to which the Company has received notice
from the United States Environmental Protection Agency or a state or local
agency that the Company is considered to be a potentially responsible party by
reason of arranging for disposal, owning or operating any facility or site or
transporting any Hazardous Waste.
Section 2.1.17. Delaware Law. The Company has elected not to be
governed by the provisions of Section 203 of the Delaware General Corporation
Law ("DGCL") and such election is effective as of the date hereof and such
Section 203 (a) is not applicable to the transactions contemplated hereby and
by the Ancillary Agreements and (b) will not be applicable to any future
transactions between the Company, on the one hand, and the Purchaser and/or
any of its affiliates, on the other hand. The Company has taken all action so
that the entering into of this Agreement and the consummation of the sale of
the Shares and the other transactions contemplated by this Agreement do not
and will not result in the grant of any rights to any person under the
Certificate of Incorporation, By-laws or other governing instruments of the
Company or restrict or impair the ability of the Purchaser to vote, or
otherwise to exercise the rights of a stockholder with respect to, shares of
the Company that may be directly or indirectly acquired or controlled by the
Purchaser.
Section 2.1.18. Incorporation of Representations and Warranties from the
Merger Agreement. Without qualifying any of the other representations and
warranties set forth in this Agreement, the representations and warranties of
the Company set forth in Sections 5.3, 5.4, 5.9, 5.11, 5.12, 5.13, 5.14, 5.16,
5.17, 5.18, 5.19 and 5.20 of the Merger Agreement (including any related
definitions) shall be deemed to be incorporated by reference herein as if
fully set forth herein.
Section 2.2 Representations, Warranties and Covenants of the Purchaser.
The Purchaser represents and warrants to the Company that:
- 11 -
<PAGE> 17
Section 2.2.1. Organization. The Purchaser is a corporation duly
organized and validly existing under the laws of Switzerland.
Section 2.2.2. Authorization. The Purchaser has full power and
authority to enter into this Agreement and the Ancillary Agreements. Each of
this Agreement, the Registration Agreement and the Relationship Agreement
constitute (and the Marketing Agreement, when executed and delivered, will
constitute) its valid and legally binding obligation, enforceable in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity (whether enforcement is sought by proceedings in equity
or at law).
Section 2.2.3. Purchase for Investment. The Shares will be acquired for
investment for the Purchaser's (or its affiliates') own account and not with a
view to the resale or distribution of any part thereof, except in compliance
with the provisions of the Securities Act or an exemption therefrom.
Section 2.2.4. Restricted Securities. The Purchaser understands that the
Shares are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such shares may be resold without registration under the
Securities Act only in certain limited circumstances.
The Purchaser further agrees that each certificate representing the Shares
shall be stamped or otherwise imprinted with a legend substantially in the
following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE (I) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED
UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND
(II) ARE SUBJECT TO THE PROVISIONS OF A RELATIONSHIP AGREEMENT,
DATED AS OF MAY 31, 1996, BETWEEN THE COMPANY AND THE PURCHASER,
COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF
THE COMPANY."
A certificate shall not bear such legend if the Purchaser shall have delivered
to the Company an opinion of counsel reasonably satisfactory to the Company to
the effect that the securities being sold may be publicly sold without
registration under the Securities Act. The foregoing shall not be deemed to
affect the obligations of the Company under the Registration Agreement.
- 12 -
<PAGE> 18
Section 2.2.5. No Regulatory Disqualifications. To the knowledge of the
Purchaser, no event has occurred or condition exists or, to the extent it is
within the reasonable control of the Purchaser, will occur or exist with
respect to the Purchaser that, in connection with obtaining any approvals from
any Insurance Regulator required in connection with the transactions
contemplated by this Agreement, would cause the Purchaser to fail to satisfy on
its face any applicable statute or written regulation of any Insurance
Regulator, which would be reasonably likely to adversely affect the Purchaser's
ability to consummate the transactions contemplated hereby or thereby.
Section 2.2.6. Purchaser Information. None of the information regarding
the Purchaser supplied by the Purchaser in writing specifically for inclusion in
(i) the registration statement to be filed by the Company as contemplated by
Section 4.10 of the Merger Agreement (the "Registration Statement") or (ii) the
proxy statement-prospectus to be filed by the Company as contemplated by
Section 6.4 of the Merger Agreement (the "Proxy Statement") will, in the case
of the Registration Statement, at the time it becomes effective contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, or, in the case of the Proxy Statement, at the time of the mailing
of the Proxy Statement to the Company's stockholders (or, in the case of any
amendment or supplement thereto, at the time of mailing of such amendment or
supplement, as the case may be) and at the time of the Stockholders' Meeting
and at the Effective Time (as defined in the Merger Agreement) contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Section 2.2.7. Consents. Assuming the accuracy of the representations and
warranties of the Company set forth in this Agreement, no consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any governmental authority, agency or body or any
other person on the part of the Purchaser is required in connection with the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except for (i) the filing of a Pre-Merger Notification
Form and related documents under the HSR Act, (ii) the filing of appropriate
documents with, and approval of, the Insurance Regulators and the Commissioners
of Insurance of any state or jurisdiction in which the Purchaser or any of its
insurance subsidiaries is domiciled or does business, (iii) such consents,
approvals, notices or waivers as may be required under the laws of Canada or
any of the provinces thereof, (iv) filings required under the Securities Act
or the Securities Exchange Act of 1934, as amended, or (v) such consents,
approvals, orders, authorizations, registrations, qualifications, designations,
declarations or filings, which if
- 13 -
<PAGE> 19
not obtained or made, as the case may be, are not reasonably likely to impair in
any material respect the ability of the Purchaser to perform any of its
obligations or agreements hereunder or under the Ancillary Agreements or
consummate the transactions contemplated hereby or thereby.
Section 2.2.8. Brokers. Other than Donaldson, Lufkin & Jenrette
Securities Corporation, the Purchaser has not employed any investment banker,
broker, finder, or intermediary in connection with the transactions
contemplated by this Agreement, and the Purchaser is under no obligation to
pay any investment banking, brokerage, finder's or similar fee or commission
in connection with such transactions, other than certain fees payable to
Donaldson, Lufkin & Jenrette Securities Corporation, which are the obligation
of the Purchaser (except to the extent otherwise provided in Section 6.1).
SECTION 3. CERTAIN AGREEMENTS OF THE PARTIES
Section 3.1 Conduct of Business of the Company. Except as set forth in
Schedule 3.1, from the date of this Agreement until the earlier of the Closing
or the termination of this Agreement, unless the prior written consent of the
Purchaser shall have been obtained, and except as otherwise contemplated by
this Agreement, the Company will conduct its operations according to its
ordinary and usual course of business consistent with past practice and shall
use all reasonable efforts to preserve intact its current business
organizations, keep available the service of its current officers and
employees, maintain its material permits and contracts and preserve its
relationships with customers, suppliers and others having business dealings
with it. Without limiting the generality of the foregoing, and except as
otherwise contemplated by this Agreement or as set forth in Schedule 3.1, the
Company will not, without the prior written consent of the Purchaser (which
consent shall not be unreasonably withheld):
(a) issue, sell, grant, dispose of, pledge or otherwise encumber, or
authorize or propose the issuance, sale, disposition or pledge or other
encumbrance of (i) any additional shares of capital stock of capital
stock of any class (including shares of Common Stock), or any securities
or rights convertible into, exchangeable for, or evidencing the right to
subscribe for any shares of capital stock, or any rights, warrants,
options, calls, commitments or any other agreements of any character to
purchase or acquire any shares of capital stock or any securities or
rights convertible into, exchangeable for, or evidencing the right to
subscribe for, any shares of capital stock or (ii) any other securities
in respect of, in lieu of, or in substitution for, shares of Common Stock
outstanding on the date hereof;
- 14 -
<PAGE> 20
(b) redeem, purchase or otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its outstanding shares of Common
Stock;
(c) split, combine, subdivide or reclassify any shares of Common
Stock or declare, set aside for payment or pay any dividend, or make any
other actual, constructive or deemed distribution in respect of any
capital stock of the Company or otherwise make any payments to
stockholders in their capacity as such, other than the declaration and
payment of regular quarterly cash dividends on the Common Stock in an
amount no greater than $.18 per share and in accordance with past
dividend policy and except for dividends by a direct or indirect wholly
owned Company Subsidiary;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of the Company Subsidiaries (other
than the Merger);
(e) adopt any amendments to its Certificate of Incorporation or
Bylaws or alter through merger, liquidation, reorganization,
restructuring or in any other fashion the corporate structure or
ownership of any direct or indirect Company Subsidiary, except for
Company Subsidiaries which are not material to the assets, liabilities,
financial condition or results of operations of the Company and the
Company Subsidiaries taken as a whole;
(f) make, or permit any Company Subsidiary to make, any material
acquisition, by means of merger, consolidation or otherwise, or material
disposition, of assets or securities;
(g) other than in the ordinary course of business consistent with
past practice, incur, or permit any Company Subsidiary to incur, any
material indebtedness for borrowed money or guarantee any such
indebtedness or make any material loans, advances, or capital
contributions to, or other material investments in, any person other
than the Company or any Company Subsidiary;
(h) change any method of accounting or accounting practice by the
Company or any Company Subsidiary, except for such required change in
GAAP or applicable statutory accounting principles;
(i) permit any Company Insurance Subsidiary to materially change its
investment guidelines or policies or conduct transactions in investments
except in material compliance with the investment guidelines and policies
of such Company Insurance Subsidiary and all applicable insurance laws;
- 15 -
<PAGE> 21
(j) enter, or permit any Company Insurance Subsidiary to enter,
into any material reinsurance, coinsurance or similar agreement, whether
as reinsurer or reinsured, except in the ordinary course of business
consistent with past practice;
(k) (x) take, or agree or commit to take, or permit any Company
Subsidiary to take, or agree or commit to take, any action that would
make any representation and warranty of the Company hereunder inaccurate
in any material respect at the Closing (except for representations and
warranties which speak as of a particular date, which need be accurate
only as of such date), (y) omit, or agree or commit to omit, or permit
any Company Subsidiary to omit, or agree or commit to omit, to take any
action necessary to prevent any such representation and warranty from
being inaccurate in any material respect at the Closing (except for
representations and warranties which speak as of a particular date, which
need be accurate only as of such date), provided however that the Company
shall be permitted to take or omit to take such action which can be
cured, and in fact is cured, at or prior to the Closing, or (z) any
action that would result in, or would be reasonably likely to result in,
any of the conditions set forth in Section 4 not being satisfied; or
(l) authorize, recommend, propose or announce an intention to do
any of the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
Section 3.2 Covenants of the Purchaser. Except as otherwise
contemplated by this Agreement, the Purchaser will not, without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, (x) take, or agree or commit to take, any action that would make any
representation and warranty of the Purchaser hereunder inaccurate in any
material respect at the Closing (except for representations and warranties
which speak as of a particular date, which need be accurate only as of such
date), (y) omit, or agree or commit to omit, to take any action necessary to
prevent any such representation and warranty from being inaccurate in any
material respect at the Closing (except for representations and warranties
which speak as of a particular date, which need be accurate only as of such
date), provided however that the Purchaser shall be permitted to take or omit
to take such action which can be cured, and in fact is cured, at or prior to
the Closing, or (z) any action that would result in, or would be reasonably
likely to result in, any of the conditions set forth in Section 4 not being
satisfied.
Section 3.3 Proxy Statement; Stockholder Approval. The Company shall
call a special meting of its stockholders (the "Stockholders' Meeting"), to be
held as soon as reasonably practicable after the date of this Agreement, for the
purpose of voting upon approval of the sale of Shares pursuant to this
- 16 -
<PAGE> 22
Agreement, the issuance of shares of Company Common Stock pursuant to the
Merger Agreement, the Charter Amendment (as defined in the Merger Agreement)
and such other related matters as it deems appropriate. In connection with the
Stockholders' Meeting, (i) the Company shall prepare and file with the SEC a
Proxy Statement and mail such Proxy Statement to its stockholders, (ii) the
Board of Directors of the Company shall recommend to its stockholders the
approval of the sale of Shares pursuant to this Agreement and (subject to the
terms of the Merger Agreement) the issuance of shares of Common Stock pursuant
to the Merger Agreement and the Charter Amendment and (iii) the Board of
Directors and officers of the Company shall use their reasonable efforts to
obtain such stockholders' approval (subject to the terms of the Merger
Agreement).
Section 3.4. Approvals, Etc. Subject to the terms and conditions provided
herein, each of the parties hereto agrees to (i) promptly effect all
registrations, submissions and filings, including but not limited to, filings
under the HSR Act, submissions to the Insurance Regulators and filings required
under the Registration Agreement, which may be necessary or required in
connection with the consummation of the transactions contemplated by this
Agreement and, in the case of the Company, the Merger Agreement, (ii) to use
all reasonable efforts to take all other action and to do all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and, in the case of
the Company, the Merger Agreement and (iii) use all reasonable efforts to
obtain all other necessary or appropriate waivers, consents and approvals with
respect to the transactions contemplated by this Agreement and, in the case of
the Company, the Merger Agreement.
Section 3.5 Exclusivity. The Company hereby agrees that, prior to the
Closing Date, the Company shall not solicit or accept alternative sources for
the investment contemplated by this Agreement. The Company further agrees
that it will not utilize any funds or other sources of financing to finance
the Merger without first consummating the full purchase and sale provided
hereunder.
Section 3.6 Publicity. Neither the Company nor the Purchaser shall make
any public announcement concerning this Agreement or the other transactions
contemplated hereby without the prior written consent of the other, except as
may be required by law or stock exchange rule.
Section 3.7 Modification of Other Agreements. Without the prior written
consent of the Purchaser, the Company shall not amend in any material respect
any provision of, or waive any condition to the performance by the Company or
its affiliates of any of their respective obligations under, any of the Merger
Documents or the Company Financing Agreements.
- 17 -
<PAGE> 23
Section 3.8. Exchange Listing. The Company shall as promptly as
practicable prepare and submit to the New York Stock Exchange ("NYSE") a listing
application covering the Shares, and shall use all reasonable efforts to
obtain, prior to the Closing, approval for the listing of the Shares on the
NYSE, subject to official notice of issuance.
Section 3.9. Investigation and Confidentiality. (a) Prior to the Closing,
the Company shall keep the Purchaser advised of all material developments
relevant to its business and to consummation of the Merger and the sale of the
Shares and shall permit the Purchaser to make or cause to be made such
investigation of its business and properties and of its financial and legal
condition as the Purchaser reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. The
Purchaser agrees that it will not, and will cause its officers, employees and
agents not to, use any information obtained pursuant to this Section 3.9 for
any purpose unrelated to the performance of the obligations under, or the
consummation of the transactions contemplated by, this Agreement or the
Ancillary Agreements.
(b) The Purchaser agrees that the Confidentiality Agreement, dated
December 3, 1995, by and between Provident Life and Accident Insurance Company
of America and Centre ReSource Limited (the "Confidentiality Agreement"),
shall be binding upon the Purchaser and shall apply with respect to
information furnished by the Company or any of its Subsidiaries, or any of
their respective officers, employees, counsel, accountants and other
authorized representatives hereunder.
(c) Notwithstanding the provisions hereof, during the period prior to the
Closing Date, the parties shall take appropriate precautions to ensure that
competitively sensitive information is not exchanged in a manner which is
inconsistent with applicable law.
Section 3.10. State Takeover Laws; Charter Provisions. Each of the
Company and the Company Subsidiaries shall take all necessary action to ensure
that the entering into of this Agreement and the consummation of the sale of
the Shares and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Certificate of
Incorporation, Bylaws or other governing instruments of the Company or
restrict or impair the ability of the Purchaser to vote, or otherwise to
exercise the rights of a stockholder with respect to, shares of the Company
that may be directly or indirectly acquired or controlled by the Purchaser.
Section 3.11. Use of Proceeds. The proceeds from the sale of the Shares
shall be used to fund payments required to be made by the Company in
connection with the Merger.
- 18 -
<PAGE> 24
Section 3.12. Marketing Agreement. The parties hereto agree to
negotiate in good faith, and execute prior to the Closing, the Marketing
Agreement, which agreement shall (i) be effective as of the Closing, (ii) have
terms consistent with the summary of terms attached hereto as Exhibit 1 and
(iii) have such other terms as the parties may agree to.
Section 3.13 Restrictive Agreements Prohibited. The Company shall not
become a party to any agreement which by its terms violates the terms of this
Agreement or any of the Ancillary Agreements.
SECTION 4. CLOSING CONDITIONS
Section 4.1. Conditions to Obligation of Purchaser. The obligation of the
Purchaser to purchase the Shares shall be subject to its satisfaction or waiver
of the following conditions on or before the Closing Date:
Section 4.1.1. Representations and Warranties Complete and Correct. The
representations and warranties of the Company contained in Section 2.1 hereof
which are qualified as to materiality or a Material Adverse Effect shall have
been true and correct when made and shall be true and correct at and as of the
Closing Date, after giving effect to the transactions contemplated by this
Agreement and the Merger Agreement, as if made on and as of such date (except
for representations and warranties which are confined to a specified date,
which shall be true and correct as of such date). The representations and
warranties of the Company contained in Section 2.1 hereof which are not
qualified as to materiality or a Material Adverse Effect shall have been true
and correct in all material respects when made and shall be true and correct
in all material respects at and as of the Closing Date, after giving effect to
the transactions contemplated by this Agreement and the Merger Agreement, as
if made on and as of such date (except for representations and warranties
which are confined to a specified date, which shall be true and correct in all
material respects as of such date).
Section 4.1.2. Compliance with this Agreement. The Company shall have
performed and complied in all material respects with all agreements, covenants
and conditions contained herein which are required to be performed or complied
with by it on or before the Closing Date.
Section 4.1.3. Officers' Certificate. The Purchaser shall have received a
certificate, dated the Closing Date and signed by the President or any Vice
President and attested by the Secretary of the Company, certifying that the
conditions set forth in Sections 4.1.1 and 4.1.2 are satisfied on and as of
such date.
- 19 -
<PAGE> 25
Section 4.1.4. Consents; Etc. The Company shall have received all
consents, approvals and other authorizations that may be required from, and
made all such filings and declarations that may be required with, any
governmental authority or agency pursuant to any law, statute, regulation or
rule (federal, state, local and foreign), or pursuant to any agreement, order
or decree by which the Company or any of its assets is bound, in connection
with the transactions contemplated by this Agreement.
Section 4.1.5. Supporting Documents. The Purchaser shall have received
copies of the following documents:
(i) (A) the Certificate of Incorporation, certified as of a recent
date by the appropriate authority of the Company's jurisdiction of
incorporation; and (B) a certificate of such authority dated as of a
recent date as to the due incorporation and good standing of the Company,
and listing all documents of the Company on file with said authority; and
(ii) a certificate of the Secretary or an Assistant Secretary of
the Company dated the Closing Date and certifying: (A) that attached
thereto is a true and complete copy of the Bylaws of the Company as in
effect on the date of such certification; (B) that attached thereto is
a true and complete copy of all resolutions adopted by the Board of
Directors or the stockholders of the Company authorizing the execution,
delivery and performance of this Agreement and the Ancillary Agreements,
the issuance, sale and delivery of the Shares, and that all such
resolutions are in full force and effect and are all the resolutions
adopted in connection with the transactions contemplated by this
Agreement, the Marketing Agreement and the Registration Agreement; (C)
that the Certificate of Incorporation has not been amended since the date
of the last amendment referred to in the certificate delivered pursuant
to clause (i)(B) above; and (D) that the Bylaws have not been amended
since the date of the last amendment referred to in such certificate
pursuant to subclause (ii)(A) above.
Section 4.1.6. HSR Act. Any required waiting periods under the HSR Act
relating to the transactions to be consummated on the Closing Date shall have
expired or been terminated.
Section 4.1.7. Merger Closing. The closing under the Merger Agreement
shall have occurred or shall occur simultaneously with the Closing hereunder.
Section 4.1.8. Other Agreements. The Company shall have complied with all
agreements required to be complied with by it on or before the Closing Date
under the Ancillary Agreements.
Section 4.1.9. Material Adverse Change. Except as disclosed in the SEC
Documents filed prior to the date hereof, or
- 20 -
<PAGE> 26
as set forth in Schedule 2.1.10 or as a consequence of, or as contemplated by,
this Agreement or the Merger Agreement, since December 31, 1995, there shall not
have occurred any change, and no additional information shall have been
disclosed to the Purchaser, which is reasonably likely to have a material
adverse effect on the financial condition, results of operations, assets or
liabilities of the Company and the Company Subsidiaries, taken as a whole, or a
material adverse effect on the financial condition, results of operations,
assets or liabilities of Revere and its subsidiaries, taken as a whole.
Section 4.1.10 Illegality, Etc. No statute, rule or regulation, or order,
decree or injunction enacted, entered, promulgated or enforced by any court or
governmental authority shall be in effect which prohibits or restricts the
consummation of the transactions contemplated hereby.
Section 4.1.11. Stockholder Approval. Each of the sale of Shares
pursuant to this Agreement, the issuance of shares of Common Stock pursuant to
the Merger Agreement and the Charter Amendment shall have been duly approved
by the stockholders of the Company entitled to vote with respect thereto in
accordance with applicable law and the Certificate of Incorporation and Bylaws
of the Company and, in the case of the issuance of shares of Common Stock
pursuant to the Merger Agreement and the sale of the Shares, the rules of the
NYSE.
Section 4.1.12. Exchange Listing. The Shares shall have been approved for
listing on the NYSE, subject to official notice of issuance.
Section 4.1.13. Financing of Cash Payments in Merger. The Company shall
have obtained financing for the aggregate cash payments to be made to
stockholders of Revere in the Merger pursuant to the Company Financing
Agreements.
Section 4.1.14. Maclellan Family Agreement. The Purchaser shall have
entered into an agreement with the members of the Maclellan family, in form and
substance substantially in the form attached hereto as Exhibit 4.
Section 4.1.15. Legal Opinions. The Purchaser shall have received an
opinion or opinions of counsel to the Company, dated as of the Closing,
covering the matters set forth in Exhibit 5.
Section 4.2 Conditions to the Obligations of the Company. The Company's
obligation to sell the Shares shall be subject to the satisfaction or waiver by
it of the following conditions on or before the Closing Date:
Section 4.2.1. Compliance with the Agreement. The Purchaser shall have
performed and complied in all material respects with all agreements and
conditions contained herein
- 21 -
<PAGE> 27
which are required to be performed or complied with by it on or before the
Closing Date.
Section 4.2.2. Purchaser's Representations and Warranties Complete and
Correct. The Purchaser's representations and warranties contained in Section
2.2 of this Agreement shall be true and correct in all material respects when
made and shall be true and correct in all material respects at and as of the
Closing Date, after giving effect to the transactions contemplated by this
Agreement, as if made on and as of such date.
Section 4.2.3. Officer's Certificate. The Company shall have received a
certificate, dated the Closing Date and signed by a duly authorized officer of
the Purchaser, certifying that the conditions set forth in Section 4.2.2 are
satisfied on and as of such date.
Section 4.2.4. Consents; Etc. The Company shall have received all
consents, approvals and other authorizations that may be required from, and
made all such filings and declarations that may be required with, any
governmental authority or agency pursuant to any law, statute, regulation or
rule (federal, state, local and foreign), or pursuant to any agreement, order
or decree by which the Company or any of its assets is bound, in connection
with the transactions contemplated by this Agreement.
Section 4.2.5. HSR Act. Any required waiting periods under the HSR Act
relating to the transactions to be consummated on the Closing Date shall have
expired or been terminated.
Section 4.2.6. Merger Closing. The closing under the Merger Agreement
shall have occurred or shall occur simultaneously with the Closing hereunder.
Section 4.2.7. Illegality, Etc. No statute, rule or regulation, or order,
decree or injunction enacted, entered, promulgated or enforced by any court or
governmental authority shall be in effect which prohibits or restricts the
consummation of the transactions contemplated hereby.
Section 4.2.8. Stockholder Approval. Each of the sale of Shares
pursuant to this Agreement, the issuance of shares of Common Stock pursuant to
the Merger Agreement and the Charter Amendment shall have been duly approved
by the stockholders of the Company entitled to vote with respect thereto in
accordance with applicable law and the Certificate of Incorporation and Bylaws
of the Company and, in the case of the issuance of shares of Common Stock
pursuant to the Merger Agreement and the sale of the Shares, the rules of the
NYSE.
Section 4.2.9. Exchange Listing. The Shares shall have been approved for
listing on the NYSE, subject to official notice of issuance.
- 22 -
<PAGE> 28
Section 4.2.10. Financing of Cash Payments in Merger. The Company shall
have obtained financing for the aggregate cash payments to be made to
stockholders of Revere in the Merger pursuant to the Company Financing
Agreements.
Section 4.2.11. Legal Opinions. The Company shall have received an
opinion or opinions of counsel to the Purchaser, dated as of the Closing,
covering the matters set forth in Exhibit 6.
SECTION 5. TERMINATION
Section 5.1 Termination. This Agreement may be terminated as follows:
(a) by mutual written consent of the Company and the Purchaser;
(b) by either party if the Closing shall not have occurred by December 31,
1996 (and the failure of the Closing to occur is not due to the breach by
either party of this Agreement);
(c) by either party if the Merger Agreement is terminated;
(d) by either party (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained in this Agreement) in the event of a breach by the other party of any
representation or warranty contained in this Agreement which cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching Party of such breach and which breach would cause (i) in the case of
a breach by the Company, the conditions set forth in Section 4.1.1 not to be
satisfied (assuming the Closing were to occur on the date of such termination),
and (ii) in the case of a breach by the Purchaser, the conditions set forth in
Section 4.2.2 not to be satisfied (assuming the Closing were to occur on the
date of such termination); or
(e) by either party (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained in this Agreement) in the event of a material breach by the other
party of any covenant or agreement contained in this Agreement which cannot be
or has not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or
(f) by either party (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained in this Agreement) in the event any court of competent jurisdiction
in the United States or some other governmental body or regulatory
- 23 -
<PAGE> 29
authority shall have issued an order permanently restraining, enjoining or
otherwise prohibiting the sale of the Shares and such order shall have become
final and nonappealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 5.1(f) shall have used all reasonable efforts
to remove such order; or
(g) by either party, if the sale of the Shares, the issuance of shares of
Common Stock in the Merger and the Charter Amendment shall have been voted on
by stockholders of the Company and the vote shall not have been sufficient to
satisfy the conditions set forth in Sections 4.1.11 and 4.2.8.
Section 5.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 5.1, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party hereto,
other than the provisions of Sections 3.6, 3.9(b), 5.2, 5.3 and 6.1, which
shall survive any such termination. Nothing contained in this Section 5.2
shall relieve any party from liability for any willful breach of this
Agreement.
Section 5.3 Termination Fee. The Company hereby agrees that if the Merger
Agreement (or any similar agreement entered into by the Company (and/or one or
more of its affiliates) and Revere (or one or more of its affiliates) which
contemplates a business combination involving the Company and Revere or sale of
a majority of the equity interests or assets of the Company or Revere to the
other) is terminated and, in connection with such termination, the Company (or
any of its affiliates) receives a termination or similar fee (a "Termination
Fee"), the Company shall pay to the Purchaser, on the date a Termination Fee is
paid to the Company (or such affiliates), a cash fee in an amount equal to 20%
of the aggregate Termination Fee, payable in immediately available funds to an
account specified by the Purchaser.
SECTION 6. MISCELLANEOUS
Section 6.1. Expenses and Indemnification. (a) The Company hereby
agrees to pay or reimburse the Purchaser and its affiliates for all out-of-
pocket expenses (including the reasonable fees and disbursements of legal
counsel and investment and other advisors and consultants and expenses
incurred in connection with the preparation of the letter agreement dated
April 27, 1996 (the "Commitment Letter"), this Agreement and the Ancillary
Agreements) incurred by any of them in connection with the Purchaser's
consideration of various proposed financing and other transactions between the
Purchaser and/or its affiliates and the Company and the transactions referred
to herein, including, without limitation, the transactions contemplated hereby
and by the Merger Agreement, whether incurred before or after the date hereof
and whether or not such transactions are made or effected; provided that the
aggregate of such amounts
- 24 -
<PAGE> 30
shall not exceed $1,500,000 and the Company shall not be obligated to make such
payment or reimbursement prior to the earlier of (i) the Closing Date and (ii)
termination of this Agreement. Any such amounts shall be paid or reimbursed
promptly after invoicing thereof by the Purchaser which invoicing shall be
accompanied by supporting detail evidencing such expenses.
(b) In addition to the foregoing the Company agrees to indemnify and hold
harmless the Purchaser and any of its officers, partners, members, directors,
employees and affiliates (direct or indirect) from and against all actions,
suits, proceedings (including any investigations or inquiries), claims, losses,
damages, liabilities or expenses of any kind or nature whatsoever ("Claims")
which may be incurred by or asserted against or involve the Purchaser, or any
of its officers, partners, members, directors, employees or affiliates (direct
or indirect) as a result of any third party claim arising out of the
transactions contemplated hereby and, upon demand by the Purchaser or any such
officer, partner, member, director, employee or affiliates, pay or reimburse
any of the Purchaser or such officers, partners, members, directors, employees
or affiliates for any reasonable out-of-pocket legal or other expenses, and
other internal costs incurred by the Purchaser or its officers, partners,
members, directors, employees or affiliates (direct or indirect) in connection
with the investigation, defending or preparing to defend any such Claim,
provided that the foregoing indemnity shall not apply to the extent any Claim
arises from any material breach by the Purchaser of this Agreement or the gross
negligence or willful misconduct of an indemnified party.
(c) Each person entitled to indemnification under Section 6.1(b) (each an
"Indemnified Party") shall give notice to the Company promptly after such
Indemnified Party has actual knowledge of any Claim as to which indemnity may
be sought, and shall permit the Company to assume the defense of any such
Claim; provided, that counsel for the Company, who shall conduct the defense of
such Claim, shall be approved by the Indemnified Party (which approval shall
not be unreasonably withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there is a conflict of interest between the
Indemnified Party and the Company in such action, in which case the reasonable
fees and expenses for one such counsel for all Indemnified Parties (and one
local counsel) shall be at the expense of the Company), and provided, further,
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Company of its obligations under Section 6.1(b) or this
Section 6.1(c) unless the Company is materially prejudiced thereby. The
Company may not, in the defense of any such Claim, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the
- 25 -
<PAGE> 31
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such Claim. Each Indemnified Party shall furnish
such information regarding itself or the Claim in question as the Company may
reasonably request in writing and as shall be reasonably required in connection
with the defense of such Claim.
Section 6.2. Survival of Agreements. The representations and warranties
(i) of the Company set forth in Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4, 2.1.5,
2.1.7, 2.1.12, 2.1.15 and 2.1.17 hereof and (ii) of the Purchaser set forth in
Sections 2.2.1, 2.2.2, 2.2.3, 2.2.4, 2.2.6, 2.2.7 and 2.2.8 shall survive the
Closing indefinitely. None of the other agreements, representations or
warranties made in this Agreement, or any certificate or instrument delivered
to the Purchaser pursuant to or in connection therewith shall survive the
Closing; provided, however, that this Section 6.2 shall not limit any (x)
covenant or agreement of the parties hereto which by its terms contemplates
performance after the Closing Date or (y) rights or remedies otherwise
available to the Company or the Purchaser at law or in equity; provided,
further, that the Confidentiality Agreement shall survive any termination of
this Agreement.
Section 6.3. Parties in Interest. All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not; provided that the
Purchaser shall not assign its rights to purchase shares of Common Stock under
this Agreement to any non affiliate without first obtaining the prior written
consent of the Company, which consent may be withheld by the Company in its
sole discretion.
Section 6.4. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person
or mailed by certified or registered mail, return receipt requested, or sent by
facsimile transmission, addressed as follows:
(a) if to the Company:
Provident Companies, Inc.
1 Fountain Square
Chattanooga, Tennessee 37402
Attention: Chief Financial Officer
Fax No.: (423) 755-2590
with a copy to:
Alston & Bird
1201 W. Peachtree Street
Atlanta, Georgia 30309
Attention: F. Dean Copeland, Esq.
Fax No.: (404) 881-7777
- 26 -
<PAGE> 32
(b) if to the Purchaser:
Zurich Insurance Company
Mythenquai 2
P.O. Box Ch-8022
Zurich, Switzerland
Attention: General Counsel
Fax No.: 011-411-202-1063
with copies to:
Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
Attention: General Counsel
Fax No.: (212) 898-5002
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino, Esq.
Fax No.: (212) 821-8111
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others. All notices, requests,
consents and other communications hereunder shall be deemed to have been duly
given or served on the date on which personally delivered or on the date
actually received, if sent by mail or telex, with receipt acknowledged.
Section 6.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles thereof.
Section 6.6. Entire Agreement. This Agreement, including the Schedules
and Exhibits hereto, constitutes the sole and entire agreement of the parties
with respect to the subject matter hereof. All Schedules and Exhibits hereto
are hereby incorporated herein by reference. The Commitment Letter shall
hereby be deemed to be terminated.
Section 6.7. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 6.8. Amendments. This Agreement may not be amended or modified,
and no provisions hereof may be waived, without the written consent of the
Company and the Purchaser.
Section 6.9. Severability. If any provision of this Agreement shall be
declared void or unenforceable by any judicial
- 27 -
<PAGE> 33
or administrative authority, the validity of any other provision and of the
entire Agreement shall not be affected thereby.
Section 6.10. Titles and Subtitles. The titles and subtitles used in this
Agreement are for convenience only and are not to be considered in construing
or interpreting any term or provision of this Agreement.
Section 6.11. Further Assurances. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, the Company and
the Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement and the
Preferred Shares.
- 28 -
<PAGE> 34
IN WITNESS WHEREOF, the Company and the Purchaser have executed this
Agreement as of the day and year first above written.
PROVIDENT COMPANIES, INC.
By: /s/ Thomas R. Watjen
---------------------------
Name: Thomas R. Watjen
Title: Executive Vice President
ZURICH INSURANCE COMPANY
By: /s/ Steven M. Gluckstern
----------------------------
Name: Steven M. Gluckstern
Title: Representative
- 29 -
<PAGE> 35
EXHIBIT 1
Strategic Relationship
Overview of Terms
The strategic relationship described herein will be set forth in a "Marketing
Agreement" entered into by the parties. The concepts listed below require
further discussions to develop them fully, but it is contemplated that the
Marketing Agreement would include the following:
1. Provident intends to continue to offer a wide-range of
Individual and Employee Benefit products to its customers, through
multiple distributions channels. Provident would agree to utilize
products developed by Zurich whenever possible to meet its customers
needs. In the Individual marketplace, these products opportunities
may include term life, whole life, universal life, variable universal
life, individual property and casualty insurance products, and fixed
and variable annuities. When a "Zurich product" is sold, Provident
would expect to receive consideration "normal and customary" for the
business and would expect to have reasonable opportunity to
participate as a reinsurer on this business.
2. Provident intends to expand its offerings of retirement/asset
accumulation products to its Individual and Employee Benefits
customers. It would be Provident's intent, depending on the products'
design and features, to offer to its customers mutual funds and
institutional asset management services offered by Zurich. As
Provident considers integrating life and investment product features
into its Disability products, Provident would intend to utilize
Zurich's products, as appropriate, in these new product offerings.
Provident would again expect "normal and customary" consideration when
placing business in this capacity.
3. Zurich would agree to market Provident's Individual Disability
product through its U.S. marketing channels whenever possible,
including Kemper. The terms of such an agreement would be similar to
those used in other "Corporate Agreements", where Zurich
<PAGE> 36
would receive consideration for acting as an intermediary.
Provident would also intend to offer Zurich the opportunity to
reinsure a portion of this business if appropriate.
4. Zurich and Provident would jointly explore opportunities to
market Individual and Group Disability products outside the U.S. In
general it would be expected that Provident would contribute its
product and risk management expertise, while Zurich would contribute
its local market knowledge and marketing capabilities.
5. Zurich and Provident would jointly explore opportunities
which may exist in linking Group Long-Term Disability coverage with
Workers Compensation coverage. Both companies recognize the potential
market for a "24 hour" coverage and would commit the resources
necessary to investigate whether a mutually acceptable opportunity
may exist.
6. Zurich and Provident would continue to seek other opportunities to
leverage each other's strengths, and to bring better value and
service to both organizations' customers. This may include
reinsurance transactions and potential investment management ventures.
7. If Provident elects to engage in a significant reinsurance
transaction with respect to its Individual Disability block of
business, Provident will give Zurich the right to provide such
reinsurance on market terms. Provident agrees to offer to Zurich the
opportunity to propose other reinsurance transactions and investment
management arrangements and to consider such proposals in good faith.
The strategic initiatives outlined above would not be finalized prior to the
closing of the other "Investor Transactions" described in the letter agreement
to which this Exhibit is attached. Provident and Zurich would however expect
to refine the understanding noted above and have such an understanding
documented in a general "Marketing Agreement".
Each of Zurich and Provident would commit up to $1.5 million to a
joint marketing/development program to fund the expenses and/or hire dedicated
staff to pursue the strategic relationship.
<PAGE> 37
EXHIBIT 2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PROVIDENT COMPANIES, INC.
OMITTED
<PAGE> 38
EXHIBIT 3
PROVIDENT COMPANIES, INC.
BYLAWS
OMITTED
<PAGE> 39
EXHIBIT 4
FAMILY STOCKHOLDER AGREEMENT
AGREEMENT, dated as of May 31, 1996, with respect to all of the agreements
contained herein other than those set forth in Section 2, which shall be
effective as of the Closing (as defined below) among ZURICH INSURANCE COMPANY,
a Swiss corporation ("Zurich"), THE MACLELLAN FOUNDATION, INC., a Tennessee
nonprofit corporation (the "Foundation"), and the stockholders listed on
Schedule A attached hereto (each, a "Stockholder" and collectively, the
"Stockholders"). Certain capitalized terms used herein are defined in Section
1 hereof.
WHEREAS, the Stockholders are the record owners of the number of shares of
common stock, par value $1.00 per share ("the Common Stock"), of Provident
Companies, Inc., a Delaware corporation (the "Company"), set forth opposite
their respective names on Schedule 3.4 hereto; and
WHEREAS, Zurich has heretofore entered into (i) a Common Stock Purchase
Agreement, dated as of May 31, 1996, with the Company (the "Stock Purchase
Agreement") pursuant to which Zurich agreed, among other things, to purchase
9,523,810 newly issued shares of Common Stock (the "Shares") and (ii) a
Relationship Agreement, dated as of May 31, 1996, with the Company (the
"Relationship Agreement") relating to, among other things, the ability of
Zurich to purchase additional shares of Common Stock;
WHEREAS, Zurich entered into the Relationship Agreement on the condition
that this Agreement is entered into; and
WHEREAS, it is a condition to the Closing (as defined in the Stock
Purchase Agreement) under the Stock Purchase Agreement that the parties enter
into this Agreement; and
WHEREAS, the Stockholders are willing to grant to Zurich a right of first
offer with respect to shares of Common Stock owned by them on the terms and
conditions set forth herein in consideration of the agreements of Zurich
contained in the Stock Purchase Agreement and the Relationship Agreement.
NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereby agree as follows:
1. Definitions. The following terms when used in this Agreement shall
have the following meanings:
"Affiliate" means, with respect to a person, any corporation or other
entity in which such person has a direct or
<PAGE> 40
indirect controlling interest or by which such person is directly or indirectly
controlled or which is under direct or indirect common control with such person.
"Business Day" means any day which is not a Saturday or a Sunday, or a day
on which banks in the State of New York are authorized or required to close.
"Change of Control Transaction" means any of the following:
(i) A tender or exchange offer by any person, entity or group for
fifty percent (50%) or more of the outstanding voting securities of the Company;
or
(ii) any merger or consolidation with or into another person in a
transaction that would result in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock.
"First Offer Shares" mean (i) all of the shares of Common Stock owned by
any of the Stockholders on the date hereof, together with any shares of Common
Stock hereafter acquired by any of the Stockholders, (ii) any shares of Common
Stock issued in respect of any subdivision, split or dividend on the shares of
Common Stock described in subparagraph (i), and (iii) in the event the Company
at any time shall be a party to a merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation or recapitalization of
the Common Stock in which the previously outstanding Common Stock shall be
changed into or exchanged for different securities of the Company or common
stock or other securities of another corporation or interests in a noncorporate
entity (collectively, "Other Securities"), any such Other Securities received
in respect of such shares of Common Stock.
"Lien or Other Encumbrance" means any lien, pledge, mortgage, security
interest, claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction under any shareholder or similar agreement.
"Permitted Sale" means any sale of at least 70% of the First Offer Shares
then beneficially owned by all Stockholders pursuant to a firm commitment
underwritten registration under the Securities Act.
2. Right of First Offer.
2.1. Grant of Right; Exercise. Except as provided in Section 2.3(b)
below, during the period commencing on the Closing Date (as defined in the Stock
Purchase Agreement) and ending at the earlier of (i) such time as Zurich and its
Affiliates beneficially own (as defined below) less than 5% of
2
<PAGE> 41
the outstanding Company Voting Securities (as defined in the Relationship
Agreement) and (ii) the termination of the provisions of Section 2.2 of the
Relationship Agreement (the "Offer Term"), prior to making any sale or transfer
(whether for cash or other consideration) of the First Offer Shares, the
Stockholders shall, in each instance, give Zurich the right to purchase such
First Offer Shares in the following manner:
(a) If at any time, any Stockholder holding First Offer Shares (the
"Offeror") intends to sell or transfer any or all of such First Offer Shares,
then the Offeror shall give notice (the "First Offer Notice") to Zurich of such
intention. The First Offer Notice shall specify (i) the number of First Offer
Shares intended to be sold or transferred (the "Offered Securities"), and (ii)
the proposed purchase price per share to be received for the Offered Securities
(the "First Offer Price").
(b) Within five (5) Business Days (or fifteen (15) Business Days in the
event that any proposed sale or transfer of First Offer Shares would, if
purchased by Zurich or one of its Affiliates, cause Zurich and its Affiliates to
beneficially own (as defined in the Relationship Agreement) Company Voting
Securities (as defined in the Relationship Agreement) representing more than 40%
of the Outstanding Voting Power (as defined in the Relationship Agreement)
following the delivery of the First Offer Notice, Zurich may, by written notice
to the Offeror, either (i) agree to purchase all, but not less than all of the
Offered Securities for the First Offer Price and otherwise pursuant to the terms
set forth in the First Offer Notice (any such notice accepting the terms set
forth in the First Offer Notice, an "Acceptance Notice"), which notice shall
specify a date for the closing of the purchase and sale which shall be not
earlier than five (5) days nor later than twenty (20) days after the later of
the giving of such notice or the receipt of all required consents and approvals
or (ii) inform the applicable Stockholder that it does not wish to purchase the
Offered Securities. Following delivery of an Acceptance Notice in accordance
with this clause (b), Zurich and the applicable Stockholders agree to use all
commercially reasonable efforts to obtain all required consents and approvals as
promptly as practicable.
2.2. Delivery of First Offer Shares; Payment. If Zurich provides the
Offeror with an Acceptance Notice, the closing of the purchase of the Offered
Securities pursuant to Section 2.1 shall take place at the location and on the
date specified in the Acceptance Notice. At such closing, Zurich shall deliver
to the Offeror, against (i) delivery of certificates representing the Offered
Securities being acquired by Zurich (duly endorsed for transfer or accompanied
by stock powers executed in blank) and (ii) evidence that all stock
3
<PAGE> 42
transfer and other taxes required to be paid in connection with the sale and
delivery to Zurich of such shares have been paid, an amount equal to the number
of Offered Securities being sold by such person multiplied by the First Offer
Price by wire transfer of immediately available funds to such account or
accounts of the applicable Stockholders as such Stockholders shall designate to
Zurich, in the manner specified herein for the delivery of notices, not less
than two Business Days prior to the closing of the purchase of the Offered
Securities. All First Offer Shares sold to Zurich pursuant to this Agreement
shall be delivered free and clear of all Liens or Other Encumbrances.
2.3. Permitted Third Party Offers; Excluded Shares. (a) If Zurich
has rejected the terms of the Offer set forth in the First Offer Notice by
notice in writing to the Offeror or has not delivered an Acceptance Notice prior
to expiration of the five Business Day (or fifteen Business Day, as applicable)
period following delivery of the First Offer Notice, then for a period of six
(6) months from the earlier of the expiration of such five Business Day (or
fifteen Business Day, as applicable) period or the date Zurich notifies the
applicable Stockholder of its decision not to purchase the Offered Securities
(the "Third Party Offer Period"), the Offeror may sell or transfer (or cause to
be sold or transferred) the Offered Securities to a party or parties other than
Zurich for a purchase price at least equal to the First Offer Price multiplied
by the number of Offered Securities. Upon termination of the Third Party Offer
Period, the Offeror must again comply with the provisions of this Section 2
before it can sell or transfer (or cause to be sold or transferred) the Offered
Securities.
(b) Notwithstanding any other provision of this Section 2, the right of
first offer set forth in this Section 2 shall not apply to any sale or transfer
of First Offer Shares (w) pursuant to a Change of Control Transaction, (x) that
is a Permitted Sale, (y) to any sale or transfer between or among the
Stockholders or to the immediate family members or the estate of any Stockholder
(including, without limitation, any sale or transfer by any such Stockholder to
or among any trust, foundation, custodial or other similar accounts or funds in
which such Stockholder or other member of his immediate family serves as
trustee, custodian or a similar fiduciary capacity or to a trust created by any
Stockholder which has a member of his immediate family as a beneficiary)
pursuant to a bona fide gift; provided that any transferee under this clause (y)
shall receive and hold the shares of Common Stock so transferred subject to the
terms and provisions of this Agreement and shall be deemed a Stockholder for
purposes hereof or (z) that is a transfer to any organization that qualifies for
federal income tax charitable deduction at the time of such transfer; provided
that the proviso set forth in clause (y) above shall apply to any transfer to
any
4
<PAGE> 43
such organization that would also be covered by clause (y) above. For the
purpose of this Agreement, the term "immediate family" shall have the meaning
specified in Rule 16a-1 promulgated under the Securities Exchange Act of 1934,
as amended.
2.4. Release from Right of First Offer. Upon any permitted sale or
transfer (except as provided in 2.3(b)(y)) by the Stockholders under this
Section 2, the shares of Common Stock which are the subject of such sale shall
be released from the terms of this Section 2 and shall no longer be deemed to be
First Offer Shares.
3. Representations and Warranties of the Stockholders. Each of the
Stockholders represents and warrants, severally and not jointly, to Zurich as
follows:
3.1. Authority of the Stockholders. The Foundation is a nonprofit
corporation duly organized and validly existing under the laws of the State of
Tennessee. Each of the Stockholders has all requisite power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby; the execution, delivery and
performance of this Agreement by the Stockholders will not violate any agreement
or instrument to which any Stockholder is a party.
3.2. Execution and Delivery. This Agreement has been duly executed
and delivered by each of the Stockholders and constitutes the valid and binding
obligation of each of the Stockholders enforceable against each of them in
accordance with its terms.
3.3. Consents and Approvals. The execution and delivery by the
Stockholders of this Agreement, the performance by the Stockholders of their
obligations hereunder and the consummation by the Stockholders of the
transactions contemplated hereby do not require any of the Stockholders to
obtain any consent, approval or action of, or make any filing with or give any
notice to, any corporation, person or firm or any public, governmental or
judicial authority except (a) as set forth in Schedule 3.3; (b) such as have
been duly obtained or made, as the case may be, and are in full force and effect
on the date hereof; (c) any required filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, or under federal or state
securities laws or state insurance company or holding company laws; and (d)
those which, if not obtained, would not impair (i) Zurich's ability to own,
possess or exercise the rights of an owner with respect to the First Offer
Shares following the acquisition thereof or (ii) any of the other rights of
Zurich thereunder.
5
<PAGE> 44
3.4. Title to Shares. Except for the rights granted to Zurich under
this Agreement, each of the Stockholders owns beneficially and of record, and
has full power and authority to convey, free and clear of any Lien or Other
Encumbrance, the number of shares of Common Stock set forth opposite the name of
such Stockholder in Schedule 3.4 (collectively, the "Stockholder Shares") and,
upon delivery of and payment for any such Stockholder Shares as herein provided,
Zurich will acquire good title thereto, free and clear of any Lien or Other
Encumbrance.
3.5. Options or Other Rights. Except for the rights granted Zurich
under this Agreement, there is no outstanding right, subscription, warrant,
call, unsatisfied preemptive right, option or other agreement of any kind to
purchase or otherwise to receive from any Stockholder any of the Stockholder
Shares.
4. Voting of Company Voting Securities. Each of the Stockholders
identified on the signature pages hereto under the heading "Voting Stockholders"
shall effect such action as may be necessary to ensure that:
(a) subject to the receipt of proper notice and the absence of a
preliminary or permanent injunction or other final order of any United Stated
Federal or state court barring such action, such Stockholder is, as a
shareholder, present in person or represented by proxy at all shareholder
meetings of the Company relating to the matters referred to in clause (b) below
so that all shares of Company Voting Securities which such Stockholder
beneficially owns are voted and deemed to be present, in person or by proxy, at
all meetings of the shareholders of the Company relating to the matters referred
to in clause (b) below so that all Company Voting Securities so beneficially
owned may be counted for the purpose of determining the presence of a quorum at
such meetings; and
(b) all Company Voting Securities that are beneficially owned by such
Stockholder as of the appropriate record date are voted in favor of (i) the
Merger and the Merger Agreement (each, as defined in the Stock Purchase
Agreement) and the transactions contemplated thereby, including the Charter
Amendment and (ii) the transactions contemplated by the Stock Purchase
Agreement, including, without limitation, the issuance and sale of the Shares to
Zurich.
5. Miscellaneous.
5.1. Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile
6
<PAGE> 45
transmission or sent by overnight courier or by certified, registered or express
mail, postage prepaid. Any such notice shall be deemed received when so
delivered personally, telegraphed, telexed or sent by facsimile transmission or,
if sent by overnight courier, one day after delivered to the courier or, if
mailed, two days after the date of deposit in the United States mails, as
follows:
(i) If to Zurich to:
Zurich Insurance Company
Mythenquai 2
P.O. Box Ch-8022
Zurich, Switzerland
Fax No.: 011 411 202 1063
Attention: General Counsel
with copies to:
Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
Fax No.: (212) 898-5002
Attention: General Counsel
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Fax No.: (212) 821-8111
Attention: Thomas M. Cerabino, Esq.
(ii) If to the Stockholders, to:
Hugh O. Maclellan, Jr.
Suite 501
Provident Building
One Fountain Square
Chattanooga, TN 37402
Telephone: (423)755-8141
Facsimile: (423)755-1640
A.S. MacMillan
Team Resources
Suite 425
River Edge One
5500 Interstate North Parkway
Atlanta, GA 30328
Telephone: (770)955-5135
Facsimile: (770)955-1602
7
<PAGE> 46
Charlotte M. Heffner
3655 Randall Hall, NW
Atlanta, GA 30327
Telephone and Facsimile: (404)233-7238
Kathrina H. Maclellan
125 Fairy Trail
Lookout Mountain, Tennessee 37350
with a copy to:
King & Spalding
120 West 45th Street
New York, NY 10036
Telephone: (212) 556-2100
Facsimile: (212) 556-2222
Attention: E. William Bates, II
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
5.2. Entire Agreement. This Agreement contains the entire
agreement among the parties with respect to the subject matter hereof, and
supersedes all prior agreements, written or oral, with respect thereto.
5.3. Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. Any right, waiver, amendment, consent or
acknowledgment exercised or exercisable by the Stockholders may be exercised by
Hugh O. Maclellan, Jr., Charlotte M. Heffner, Kathrina H. Maclellan and the
Foundation (such Stockholders, together with any successors designated by them
with notice to Zurich, the "Consenting Stockholders"), acting unanimously
together, on behalf of themselves and the other Stockholders; and any right,
waiver, amendment, consent or acknowledgment so exercised by the Consenting
Stockholders shall be equally binding upon the other Stockholders.
Notwithstanding the immediately preceding sentence, no amendment to this
Agreement that is approved by the Consenting Stockholders shall be binding on
any other Stockholder, without such Stockholder's approval, if such amendment
would place any additional restrictions on such Stockholder's ability to sell or
transfer his shares of Common Stock. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any such right, power
or privilege, nor any single or partial
8
<PAGE> 47
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The rights
and remedies herein provided are cumulative and are not exclusive of any rights
or remedies that any party may otherwise have at law or in equity.
5.4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to conflicts of laws principles thereof.
5.5. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns and
legal representatives.
5.6. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
5.7. Headings. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.
5.8. Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.
5.9. Consent to Jurisdiction. Each of the parties hereby irrevocably
submits to the jurisdiction of any New York State or Federal court sitting in
the City of New York in any action or proceeding arising out of or relating to
this Agreement and hereby irrevocably agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or
Federal court. Each of the parties hereby irrevocably agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or Federal court. Zurich hereby irrevocably appoints the General
Counsel of Zurich Center ReSource Limited (the "Process Agent"), with an office
on the date hereof at Zurich Center ReSource Limited, One Chase Manhattan Plaza,
New York, New York 10005, as its agent to receive on behalf of Zurich and its
property service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding. Each of the Stockholders
hereby irrevocably appoints
9
<PAGE> 48
E. William Bates, II (the "Stockholder Process Agent"), with an office on the
date hereof at King & Spaulding, 120 West 45th Street, New York, New York 10036,
as their agent to receive on behalf of the Stockholders and their respective
property service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding. Such service may be made
by mailing or delivering a copy of such process to Zurich or the Stockholders,
as the case may be, in care of the Process Agent or Stockholder Process Agent,
as the case may be, at such agent's above address, and Zurich and the
Stockholders hereby irrevocably authorize and direct the Process Agent or
Stockholder Process Agent, as the case may be, to accept such service on behalf
of such party. As an alternative method of service, each of the parties also
irrevocably consents to the service of any and all process in any such action or
proceeding by the mailing of copies of such process to such party at its address
specified in Section 5.1. Each of the parties agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
10
<PAGE> 49
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ZURICH INSURANCE COMPANY
By:_________________________________
Name:
Title:
VOTING STOCKHOLDERS:
____________________________________
Hugh O. Maclellan
____________________________________
Kathrina H. Maclellan
____________________________________
Charlotte M. Heffner
THE MACLELLAN FOUNDATION, INC.
By:_________________________________
Name:
Title:
THE R.J. MACLELLAN TRUST FOR THE
MACLELLAN FOUNDATION, INC.
By:_________________________________
Name:
Title:
11
<PAGE> 50
THE HELEN M. TIPTON CHARITABLE TRUST
By: _________________________________
Name:
Title:
THE R.J. MACLELLAN TRUST FOR THE
R.L. MACLELLAN FAMILY
By:_________________________________
Name:
Title:
THE CORA L. MACLELLAN TRUST FOR THE
R.L. MACLELLAN FAMILY
By:_________________________________
Name:
Title:
THE R.J. MACLELLAN TRUST FOR THE
HUGH O. MACLELLAN, SR. FAMILY
By:_________________________________
Name:
Title:
THE CORA L. MACLELLAN TRUST FOR THE
HUGH O. MACLELLAN, SR. FAMILY
By:_________________________________
Name:
Title:
12
<PAGE> 51
STOCKHOLDERS
____________________________________
Charlotte F. Maclellan
____________________________________
Christopher Hugh Maclellan
____________________________________
Susan Maclellan
____________________________________
Daniel Owen Maclellan
____________________________________
Leslie Stophel Maclellan
____________________________________
Catherine Maclellan Heald
____________________________________
Daryl Heald
____________________________________
Nancy Browne Maclellan
____________________________________
13
<PAGE> 52
____________________________________
Richard L. Heffner, Sr.
____________________________________
Richard L. Heffner, Jr.
____________________________________
Christina M. Heffner
____________________________________
Thomas Maclellan Heffner
____________________________________
Jean B. Tipton
THE R.J. MACLELLAN TRUST FOR THE R.L.
MACLELLAN FAMILY TRUST
By:_________________________________
Name:
Title:
14
<PAGE> 53
THE R.J. MACLELLAN TRUST FOR THE H.O.
MACLELLAN, SR. FAMILY
By:_________________________________
Name:
Title:
THE CORA L. MACLELLAN TRUST FOR THE R.L.
MACLELLAN FAMILY
By:_________________________________
Name:
Title:
THE CORA L. MACLELLAN TRUST FOR THE H.O.
MACLELLAN, SR. FAMILY
By:_________________________________
Name:
Title:
THE CORA L. MACLELLAN TRUST FOR THE
MACLELLAN FOUNDATION INC.
By:_________________________________
Name:
Title:
15
<PAGE> 54
CHRISTIAN EDUCATION CHARITABLE TRUST
By:_________________________________
Name:
Title:
THE HUGH AND CHARLOTTE MACLELLAN CHARITABLE
TRUST
By:_________________________________
Name:
Title:
ESTATE OF HUGH O. MACLELLAN, SR.
By:_________________________________
Name:
Title:
TRUST OF C.F. MACLELLAN DATED 6/2/52 FOR THE
PRIMARY BENEFIT OF CHARLOTTE M. HEFFNER
By:_________________________________
Name:
Title:
16
<PAGE> 55
TRUST OF C.F. MACLELLAN DATED 6/2/52 FOR
H.O. MACLELLAN, JR.
By:_________________________________
Name:
Title:
TRUST OF H.O. MACLELLAN, SR. FOR THE BENEFIT
OF GREAT GRANDCHILDREN
By:_________________________________
Name:
Title:
TRUST UNDER THE WILL OF ANNE MACLELLAN
MUNFORD (CEDE & CO.)
By:_________________________________
Name:
Title:
TRUST FOR LARA L. MUNFORD U/A WITH KATHRINA
H. MACLELLAN DATED 8/5/76
By:_________________________________
Name:
Title:
17
<PAGE> 56
THE CHARITABLE REMAINDER UNITRUST OF
KATHRINA H. MACLELLAN 8/11/76
By:_________________________________
Name:
Title:
TRUST UAW ROBERT HOWZE MACLELLAN DATED
9/22/88
By:_________________________________
Name:
Title:
TRUST UAW ROBERT H. MACLELLAN FOR HEATHER
HOWZE MACLELLAN
By:_________________________________
Name:
Title:
TRUST UAW ROBERT H. MACLELLAN FOR IAN
LLEWELLYN MACLELLAN
By:_________________________________
Name:
Title:
18
<PAGE> 57
TRUST FOR R.L. MACLELLAN AND K.H. MACLELLAN
FOUNDATION U/A FOR MRS. KATHRINA H.
MACLELLAN DATED 1/4/73
By:_________________________________
Name:
Title:
THE SECOND CHARITABLE REMAINDER UNITRUST OF
K.H. MACLELLAN DATED 12/17/87
By:_________________________________
Name:
Title:
TRUST U/A HUGH O. MACLELLAN DATED 12/8/48
FOR HUGH O. MACLELLAN, JR.
By:_________________________________
Name:
Title:
19
<PAGE> 58
TRUST U/A HUGH O. MACLELLAN, SR. DATED
11/29/66 FOR THE BENEFIT OF CATHERINE H.
MACLELLAN
By:_________________________________
Name:
Title:
TRUST U/A HUGH O. MACLELLAN, SR. DATED
7/8/68 FOR THE BENEFIT OF DANIEL O.
MACLELLAN
By:_________________________________
Name:
Title:
TRUST U/A HUGH O. MACLELLAN, SR. DATED
3/12/64 FOR THE BENEFIT OF CHRISTOPHER H.
MACLELLAN
By:_________________________________
Name:
Title:
H.O. MACLELLAN, JR. AND SUNTRUST BANK
TRUSTEES U/A H.O. MACLELLAN, SR. FOR THE
BENEFIT OF CATHERINE H. MACLELLAN AND HER
DESCENDANTS DATED 5/29/70
By:_________________________________
Name:
Title:
20
<PAGE> 59
H.O. MACLELLAN, JR. AND SUNTRUST BANK
TRUSTEES U/A H.O. MACLELLAN, SR. FOR THE
BENEFIT OF DANIEL O. MACLELLAN AND HIS
DESCENDANTS DATED 5/29/70
By:_________________________________
Name:
Title:
H.O. MACLELLAN, JR. AND SUNTRUST BANK
TRUSTEES U/A H.O. MACLELLAN, SR. FOR THE
BENEFIT OF CHRISTOPHER H. MACLELLAN AND HIS
DESCENDANTS DATED 5/29/70
By:_________________________________
Name:
Title:
IRREVOCABLE INSURANCE TRUST OF HUGH O.
MACLELLAN, SR. DATED 1/31/67
By:_________________________________
Name:
Title:
THE H.O. MACLELLAN, SR. CHARITABLE INC.
TRUST DATED 11/29/83 FOR THE BENEFIT OF
ELIZABETH MACLELLAN
By:_________________________________
Name:
Title:
21
<PAGE> 60
CHARITABLE INCOME (LEAD) TRUST U/A HUGH O.
MACLELLAN, SR. DATED 12/31/76 FOR THE
BENEFIT OF CHRISTOPHER H. MACLELLAN
By:_________________________________
Name:
Title:
CHARITABLE INCOME (LEAD) TRUST U/A HUGH O.
MACLELLAN, SR. DATED 12/31/76 FOR THE
BENEFIT OF CATHERINE H. MACLELLAN
By:_________________________________
Name:
Title:
CHARITABLE INCOME (LEAD) TRUST U/A H.O.
MACLELLAN, SR. DATED 12/31/76 FOR THE
BENEFIT OF DANIEL O. MACLELLAN
By:_________________________________
Name:
Title:
22
<PAGE> 61
CHARITABLE INCOME (LEAD) TR U/A H.O.
MACLELLAN, SR. DATED 12/31/76 FOR THE
BENEFIT OF ELIZABETH MACLELLAN
By:_________________________________
Name:
Title:
IRREVOCABLE TRUST U/A NANCY B. MACLELLAN
DATED 12/15/83 FOR THE BENEFIT OF ELIZABETH
MACLELLAN
By:_________________________________
Name:
Title:
HUGH O. MACLELLAN JR. CUSTODIAN FOR
ELIZABETH MACLELLAN
By:_________________________________
Name:
Title:
CHRISTOPHER HUGH MACLELLAN CUSTODIAN FOR
MORGAN CHRISTOPHER MACLELLAN
By:_________________________________
Name:
Title:
23
<PAGE> 62
CHRISTOPHER HUGH MACLELLAN CUSTODIAN FOR
HUGH OWEN MACLELLAN III
By:_________________________________
Name:
Title:
CHRISTOPHER HUGH MACLELLAN CUSTODIAN FOR
ROBERT BROWNE MACLELLAN
By:_________________________________
Name:
Title:
DANIEL O. MACLELLAN CUSTODIAN FOR JACQUELINE
HANNAH MACLELLAN
By:_________________________________
Name:
Title:
24
<PAGE> 63
CATHERINE MACLELLAN HEALD CUSTODIAN FOR
FRANCES ANNE HEALD
By:_________________________________
Name:
Title:
CATHERINE MACLELLAN HEALD CUSTODIAN FOR
HALLIE ELIZABETH HEALD
By:_________________________________
Name:
Title:
CATHERINE MACLELLAN HEALD CUSTODIAN FOR
HAMILTON REED HEALD
By:_________________________________
Name:
Title:
TRUST OF HUGH O. MACLELLAN, JR. DATED
1/31/67 FOR THE BENEFIT OF CHILDREN
By:_________________________________
Name:
Title:
25
<PAGE> 64
H.O. MACLELLAN SENIOR TRUST DATED 9/8/72 FOR
THE BENEFIT OF RICHARD L. HEFFNER, JR.
By:_________________________________
Name:
Title:
H.O. MACLELLAN SENIOR TRUST DATED 9/8/72 FOR
THE BENEFIT OF THOMAS M. HEFFNER
By:_________________________________
Name:
Title:
CHARITABLE INCOME (LEAD) TRUST U/A H.O.
MACLELLAN SENIOR DATED 12/31/76 FOR THE
BENEFIT OF THOMAS MACLELLAN HEFFNER
By:_________________________________
Name:
Title:
26
<PAGE> 65
CHARITABLE INCOME (LEAD) TRUST U/A H.O.
MACLELLAN SENIOR TRUST DATED 12/31/76 FOR
THE BENEFIT OF RICHARD L. HEFFNER, JR.
By:_________________________________
Name:
Title:
TRUST U/A/ H.O. MACLELLAN SENIOR DATED
12/9/48 FOR THE BENEFIT OF CHARLOTTE M.
HEFFNER.
By:_________________________________
Name:
Title:
CHARLOTTE M. HEFFNER AND RICHARD L. HEFFNER,
SR. TRUSTEES FOR THE BENEFIT OF RICHARD L.
HEFFNER, SR. DATED 1/26/95
By:_________________________________
Name:
Title:
27
<PAGE> 66
IRREVOCABLE TRUST DATED 12/3/64 OF H.O.
MACLELLAN, SR. FOR THE BENEFIT OF THOMAS
MACLELLAN HEFFNER
By:_________________________________
Name:
Title:
IRREVOCABLE TRUST DATED 6/1/62 OF H.O.
MACLELLAN, SR. FOR THE BENEFIT OF RICHARD L.
HEFFNER, JR.
By:_________________________________
Name:
Title:
28
<PAGE> 67
SCHEDULE A
<TABLE>
<CAPTION>
SHARES
FAMILY SHAREHOLDERS OWNED AS
------------------- OF 3/4/96
---------
<S> <C>
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H.. Maclellan, 538,345
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust (#2151)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H. Maclellan, 116,425
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust Inv. Inc.
(#215109)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 522,615
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. (#2152)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 120,675
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215209)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 535,820
TTEES UAW Cora L. Maclellan Tr. For R.L. Maclellan Fam. (#2155)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 97,520
TTEES UAW Cora L. Maclellan Tr. For Maclellan Fam. Inv. Inc.
(#215509)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. Macallie III, 518,695
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Tr
(#2156)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. MacCallie III, 91,110
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215609)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr. & K.H. Maclellan, 3,470,123
TTEES for R.J. Maclellan Trust for the Maclellan Foundation Inc.
(#2150)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr & K.H. Maclellan, 34,538
TTEES for Cora L. Maclellan Trust for the Maclellan Foundation Inc.
(#2154)
The Maclellan Foundation Inc. 8,115,514
Christian Education Charitable Trust 711,100
H.O. Maclellan Jr., C.M. Heffner, Henry A. Henegar, Lee S. 392,706
Anderson, Frank A. Brock, TTEES U/A Dtd 4/23/93, Hugh & Charlotte
Maclellan Charitable Trust
</TABLE>
<PAGE> 68
<TABLE>
<S> <C>
Helen M. Tipton Charitable Trust 1,565,842
Estate of Hugh O. Maclellan Sr. 50,000
Mrs. Charlotte F. Maclellan 390,725
C.M. Heffner, H.O. Maclellan Jr. & US Tr. Co. of FL TTEES UTA 67,200
Dtd 8/2/52 with C.F. Maclellan for the Primary Benefit of Charlotte M. Heffner
J.P. Gaither, H.O. Maclellan Jr. & C.M. Heffner, TTEES UTA Dtd 69,000
6/2/52 with C.F. Maclellan for H.O. Maclellan Jr.
Hugh O. Maclellan Jr. & Charlotte M. Heffner Co-TTEES U/A H.O. 60,000
Maclellan Sr. FBO Great-grandchildren
Mrs. Kathrina H. Maclellan 1,389,344
Trust U/W Anne Maclellan Munford (Cede & Co) 585,000
US Trust Company of NY, Successor TTEE for Lara L. Munford U/A 2,000
with Kathrina H. Maclellan Dtd 8/5/76
US Trust Company as Corporate TTEE Charitable Remainder Unitrust 50,000
of Kathrina H. Maclellan 8/11/76
Suntrust Trust, Trustee UAW Robert Howze Maclellan Dtd 9/22/88 259,230
(US-TTEE 249,507; ANB-DTC 19,523)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Heather Howze Maclellan (ST-Summit)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Ian Llewellyn Maclellan (ST-Summit)
Trust for R.L. Maclellan & K.H. Maclellan Foundation U/A Mrs. 45,416
Kathrina H. Maclellan Dtd 1/4/73 (Cede & Co)
K.H. Maclellan & US Trust Company of NY, TTEES for Second 27,500
Charitable Remainder Unitrust of K.H. Maclellan Dtd 12/17/81 Their
Successor in Tr. & Assign
Hugh O. Maclellan Jr. 827,150
Hugh O. Maclellan Jr. & Suntrust Bank TTEES UTA 12/08/48 for 299,916
Hugh O. Maclellan Jr.
Hugh O. Maclellan Jr. TTEE FBO Catherine H. Maclellan Dtd. 51,091
11/19/66 UTA H.O. Maclellan Sr.
</TABLE>
<PAGE> 69
<TABLE>
<S> <C>
Hugh O. Maclellan, Jr. TTEE FBO Daniel O. Maclellan Dtd 7/8/68 51,060
UTA H.O. Maclellan Sr.
Hugh O. Maclellan Jr. TTEE FBO Christopher H. Maclellan UTA 47,435
H.O. Maclellan Sr.
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,612
Sr. FBO Catherine H. Maclellan & Her Descs, Dtd 5/29/70 (#4629)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,523
Sr. FBO Daniel O. Maclellan & His Descs Dtd 5/29/70 (#4630)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,715
Sr. FBO Christopher H. Maclellan & His Descs Dtd 5/29/70 (#4631)
Hugh O. Maclellan Jr. & Charlotte M. Heffner, TTEES for Hugh O. 1,740
Maclellan Sr. Dtd 1/31/67
C.F. Maclellan, H.O. Maclellan Jr., L.S. Anderson & J.C. Stophel, 158,190
TTEES of the H.O.M. Sr. Char. Inc. Tr. Dtd 11/29/83 FBO Elizabeth
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Christopher H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Catherine H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Daniel O.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,670
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Elizabeth
Maclellan
Hugh O. Maclellan Jr., TTEE UTA Dtd 12/15/83 FBO Elizabeth 3,320
Maclellan
Hugh O. Maclellan Jr. C/F Elizabeth Maclellan UTUGTMA 5,329
Hugh O. Maclellan Jr. C/F Hugh Owen Maclellan III UTUGTMA 5,079
Hugh O. Maclellan Jr. C/F Morgan Christopher Maclellan UTUGTMA 5,079
Christopher Hugh Maclellan (52 + 120, nominee name) 44,059
</TABLE>
<PAGE> 70
<TABLE>
<S> <C>
Christopher Hugh Maclellan, Cust. for Morgan Christopher Maclellan 688
Christopher Hugh Maclellan, Cust. for Hugh Owen Maclellan III 688
Christopher Hugh Maclellan, Cust. for Robert Browne Maclellan 688
Susan Maclellan (352 nominee name) 3,652
Daniel Owen Maclellan 29,800
Daniel O. Maclellan Cust. for Jacqueline Hannah Maclellan 688
Leslie Stophel Maclellan (746 nominee name) 1,518
Catherine Maclellan Heald 40,617
Catherine Maclellan Heald C/F Frances Anne Heald 3,130
Catherine Maclellan Heald C/F Hallie Elizabeth Heald 2,806
Catherine Maclellan Heald C/F Hamilton Reed Heald 688
Daryl Heald 1,432
Nancy Browne Maclellan 24,964
Nancy B. Maclellan & John P. Gaither, TTEES UTA Hugh O.
Maclellan Jr. Dtd 1/31/67 17,600
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Richard L. Heffner Jr. 74,170
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Thomas Maclellan Heffner 74,170
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Richard L.
Heffner Jr. 136,665
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Thomas M.
Heffner 136,670
Charlotte M. Heffner & Suntrust Bank Co-TTEES UTA Hugh O.
Maclellan Sr. 12/09/48 FBO Charlotte M. Heffner 294,695
Charlotte M. Heffner and Richard L. Heffner Sr. TTEES FBO Richard
L. Heffner Sr. UA Dtd 1/26/95 300,000
Charlotte M. Heffner 457,455
</TABLE>
4
<PAGE> 71
<TABLE>
<S> <C>
Richard L. Heffner, Sr. 9,482
Richard L. Heffner, Jr. 45,499
Christina M. Heffner 3,172
Thomas Maclellan Heffner 42,349
Irrevocable Trust 12/3/64 U/A H.O. Maclellan Sr. FBO Thomas 11,675
Maclellan Heffner, R.L. Heffner Sr., Trustee
Irrevocable Trust 6/1/62 U/A H.O. Maclellan Sr. FBO Richard L. 11,675
Heffner Jr., R.L. Heffner Sr., Trustee
Jean B. (Mrs. Jere) Tipton 61,000
TOTAL SHARES 23,967,036
</TABLE>
<PAGE> 72
SCHEDULE 3.3
NONE
<PAGE> 73
SCHEDULE 3.4
<TABLE>
<CAPTION>
SHARES
FAMILY SHAREHOLDERS OWNED AS
------------------- OF 3/4/96
---------
<S> <C>
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H.. Maclellan, 538,345
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust (#2151)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H. Maclellan, 116,425
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust Inv. Inc.
(#215109)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 522,615
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. (#2152)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 120,675
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215209)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 535,820
TTEES UAW Cora L. Maclellan Tr. For R.L. Maclellan Fam. (#2155)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 97,520
TTEES UAW Cora L. Maclellan Tr. For Maclellan Fam. Inv. Inc.
(#215509)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. Macallie III, 518,695
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Tr
(#2156)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. MacCallie III, 91,110
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215609)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr. & K.H. Maclellan, 3,470,123
TTEES for R.J. Maclellan Trust for the Maclellan Foundation Inc.
(#2150)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr & K.H. Maclellan, 34,538
TTEES for Cora L. Maclellan Trust for the Maclellan Foundation Inc.
(#2154)
The Maclellan Foundation Inc. 8,115,514
Christian Education Charitable Trust 711,100
H.O. Maclellan Jr., C.M. Heffner, Henry A. Henegar, Lee S. 392,706
Anderson, Frank A. Brock, TTEES U/A Dtd 4/23/93, Hugh & Charlotte
Maclellan Charitable Trust
</TABLE>
<PAGE> 74
<TABLE>
<S> <C>
Helen M. Tipton Charitable Trust 1,565,842
Estate of Hugh O. Maclellan Sr. 50,000
Mrs. Charlotte F. Maclellan 390,725
C.M. Heffner, H.O. Maclellan Jr. & US Tr. Co. of FL TTEES UTA 67,200
Dtd 8/2/52 with C.F. Maclellan for the Primary Benefit of Charlotte M. Heffner
J.P. Gaither, H.O. Maclellan Jr. & C.M. Heffner, TTEES UTA Dtd 69,000
6/2/52 with C.F. Maclellan for H.O. Maclellan Jr.
Hugh O. Maclellan Jr. & Charlotte M. Heffner Co-TTEES U/A H.O. 60,000
Maclellan Sr. FBO Great-grandchildren
Mrs. Kathrina H. Maclellan 1,389,344
Trust U/W Anne Maclellan Munford (Cede & Co) 585,000
US Trust Company of NY, Successor TTEE for Lara L. Munford U/A 2,000
with Kathrina H. Maclellan Dtd 8/5/76
US Trust Company as Corporate TTEE Charitable Remainder Unitrust 50,000
of Kathrina H. Maclellan 8/11/76
Suntrust Trust, Trustee UAW Robert Howze Maclellan Dtd 9/22/88 259,230
(US-TTEE 249,507; ANB-DTC 19,523)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Heather Howze Maclellan (ST-Summit)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Ian Llewellyn Maclellan (ST-Summit)
Trust for R.L. Maclellan & K.H. Maclellan Foundation U/A Mrs. 45,416
Kathrina H. Maclellan Dtd 1/4/73 (Cede & Co)
K.H. Maclellan & US Trust Company of NY, TTEES for Second 27,500
Charitable Remainder Unitrust of K.H. Maclellan Dtd 12/17/81 Their
Successor in Tr. & Assign
Hugh O. Maclellan Jr. 827,150
Hugh O. Maclellan Jr. & Suntrust Bank TTEES UTA 12/08/48 for 299,916
Hugh O. Maclellan Jr.
Hugh O. Maclellan Jr. TTEE FBO Catherine H. Maclellan Dtd. 51,091
11/19/66 UTA H.O. Maclellan Sr.
</TABLE>
<PAGE> 75
<TABLE>
<S> <C>
Hugh O. Maclellan, Jr. TTEE FBO Daniel O. Maclellan Dtd 7/8/68 51,060
UTA H.O. Maclellan Sr.
Hugh O. Maclellan Jr. TTEE FBO Christopher H. Maclellan UTA 47,435
H.O. Maclellan Sr.
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,612
Sr. FBO Catherine H. Maclellan & Her Descs, Dtd 5/29/70 (#4629)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,523
Sr. FBO Daniel O. Maclellan & His Descs Dtd 5/29/70 (#4630)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,715
Sr. FBO Christopher H. Maclellan & His Descs Dtd 5/29/70 (#4631)
Hugh O. Maclellan Jr. & Charlotte M. Heffner, TTEES for Hugh O. 1,740
Maclellan Sr. Dtd 1/31/67
C.F. Maclellan, H.O. Maclellan Jr., L.S. Anderson & J.C. Stophel, 158,190
TTEES of the H.O.M. Sr. Char. Inc. Tr. Dtd 11/29/83 FBO Elizabeth
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Christopher H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Catherine H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Daniel O.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,670
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Elizabeth
Maclellan
Hugh O. Maclellan Jr., TTEE UTA Dtd 12/15/83 FBO Elizabeth 3,320
Maclellan
Hugh O. Maclellan Jr. C/F Elizabeth Maclellan UTUGTMA 5,329
Hugh O. Maclellan Jr. C/F Hugh Owen Maclellan III UTUGTMA 5,079
Hugh O. Maclellan Jr. C/F Morgan Christopher Maclellan UTUGTMA 5,079
Christopher Hugh Maclellan (52 + 120, nominee name) 44,059
</TABLE>
<PAGE> 76
<TABLE>
<S> <C>
Christopher Hugh Maclellan, Cust. for Morgan Christopher Maclellan 688
Christopher Hugh Maclellan, Cust. for Hugh Owen Maclellan III 688
Christopher Hugh Maclellan, Cust. for Robert Browne Maclellan 688
Susan Maclellan (352 nominee name) 3,652
Daniel Owen Maclellan 29,800
Daniel O. Maclellan Cust. for Jacqueline Hannah Maclellan 688
Leslie Stophel Maclellan (746 nominee name) 1,518
Catherine Maclellan Heald 40,617
Catherine Maclellan Heald C/F Frances Anne Heald 3,130
Catherine Maclellan Heald C/F Hallie Elizabeth Heald 2,806
Catherine Maclellan Heald C/F Hamilton Reed Heald 688
Daryl Heald 1,432
Nancy Browne Maclellan 24,964
Nancy B. Maclellan & John P. Gaither, TTEES UTA Hugh O.
Maclellan Jr. Dtd 1/31/67 17,600
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Richard L. Heffner Jr. 74,170
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Thomas Maclellan Heffner 74,170
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Richard L.
Heffner Jr. 136,665
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Thomas M.
Heffner 136,670
Charlotte M. Heffner & Suntrust Bank Co-TTEES UTA Hugh O.
Maclellan Sr. 12/09/48 FBO Charlotte M. Heffner 294,695
Charlotte M. Heffner and Richard L. Heffner Sr. TTEES FBO Richard
L. Heffner Sr. UA Dtd 1/26/95 300,000
Charlotte M. Heffner 457,455
</TABLE>
4
<PAGE> 77
<TABLE>
<S> <C>
Richard L. Heffner, Sr. 9,482
Richard L. Heffner, Jr. 45,499
Christina M. Heffner 3,172
Thomas Maclellan Heffner 42,349
Irrevocable Trust 12/3/64 U/A H.O. Maclellan Sr. FBO Thomas 11,675
Maclellan Heffner, R.L. Heffner Sr., Trustee
Irrevocable Trust 6/1/62 U/A H.O. Maclellan Sr. FBO Richard L. 11,675
Heffner Jr., R.L. Heffner Sr., Trustee
Jean B. (Mrs. Jere) Tipton 61,000
TOTAL SHARES 23,967,036
</TABLE>
<PAGE> 78
EXHIBIT 5
---------
[FORM OF OPINION OF COMPANY COUNSEL]
1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of Delaware, and has all requisite power and
authority under such law to own or lease and operate its properties and to
carry on its business as now conducted. The Company is duly qualified or
licensed to do business as a foreign corporation in good standing in each
jurisdiction in which the nature of the business transacted by it or the
character of the properties owned or leased by it requires it to so qualify or
be licensed, except where the failure to so qualify or be licensed or be in
good standing would not have a Material Adverse Effect. The Company has the
corporate power and authority to execute, deliver and perform the Stock
Purchase Agreement and the Ancillary Agreements, and to issue, sell and deliver
the Shares.
2. All corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization, execution and
delivery of the Stock Purchase Agreement and the Ancillary Agreements, the
performance of all obligations of the Company thereunder and the authorization,
issuance, sale and delivery of the Shares has been taken. The Stock Purchase
Agreement and the Ancillary Agreements have been duly authorized, executed and
delivered by the Company and constitute the valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general principles of equity (whether
enforcement is sought by proceedings in equity or at law).
3. The execution and delivery by the Company of the Stock Purchase
Agreement and the Ancillary Agreements, the performance by the Company of its
obligations thereunder and the issuance, sale and delivery of the Shares, will
not violate any provision of (i) the Certificate of Incorporation or the By-laws
of the Company or (ii) any law or any order of any court or other agency of
government, or, to the best of our knowledge conflict with, result in a breach
of or constitute (with notice or lapse of time or both) a default under any
indenture, agreement or other instrument by which the Company or any of its
properties or assets is bound, or, to the best of our knowledge result in the
creation or imposition of any lien, charge, restriction, claim or encumbrance
of any nature whatsoever upon any of the properties or assets of the Company,
except for violations, conflicts,
<PAGE> 79
breaches or defaults which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect.
4. The Shares, when issued, sold and delivered in accordance with the
terms of the Stock Purchase Agreement for the consideration expressed therein,
will be duly authorized, validly issued, fully paid and nonassessable.
5. Except as set forth in the Relationship Agreement, the issuance,
sale and delivery of the Shares is not subject to any preemptive right of
stockholders of the Company arising under law or the Certificate of
Incorporation or By-laws of the Company or, to the best of our knowledge, to
any contractual right of first refusal or other right in favor of any person.
6. No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any governmental
authority, agency or body or any other person on the part of the Company not
already obtained or made is required in connection with the consummation of the
transactions contemplated by the Stock Purchase Agreement and the Ancillary
Agreements, except for such consents, approvals, orders, authorizations,
registrations, qualifications, designations, declarations or filings which if
not obtained or made, as the case may be, are not reasonably likely to have a
Material Adverse Effect.
7. The Company has elected not to be governed by the provisions of
Section 203 of the Delaware General Corporation Law and such election is
effective as of the date of the Stock Purchase Agreement and such Section 203
(a) is not applicable to the transactions contemplated by the Stock Purchase
Agreement and by the Ancillary Agreements and (b) will not be applicable to any
future transaction between the Company, on the one hand, and the Purchaser
and/or any of its affiliates, on the other hand.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Common Stock Purchase Agreement, dated as of
May [ ], 1996, between Provident Companies, Inc. and Zurich Insurance Company
(the "Stock Purchase Agreement").
<PAGE> 80
EXHIBIT 6
---------
[FORM OF OPINION OF PURCHASER'S COUNSEL]
1. The Purchaser is a corporation duly organized and validly existing
under the laws of Switzerland.
2. The Purchaser has full power and authority to enter into the Stock
Purchase Agreement and the Ancillary Agreements. Each of the Stock Purchase
Agreement and the Ancillary Agreements constitutes the valid and the legally
binding obligation of the Purchaser, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether
enforcement is sought by proceedings in equity or at law).
3. No consent, approval, order of authorization of, or registration,
qualification, designation, declaration or filing with, any governmental
authority, agency or body or any other person on the part of the Purchaser not
already obtained or made is required in connection with the consummation of the
transactions contemplated by the Stock Purchase Agreement and the Ancillary
Agreements, except for such consents, approvals, orders, authorizations,
registrations, qualifications, designations, declarations or filings, which if
not obtained or made, as the case may be, are not reasonably likely to impair
in any material respect the ability of the Purchaser to perform any of its
obligations or agreements under the Stock Purchase Agreement or the Ancillary
Agreements or to consummate the transactions contemplated thereby.
Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed thereto in the Common Stock Purchase Agreement, dated as of
May [___], 1996, between Provident Companies, Inc. and Zurich Insurance Company
(the "Stock Purchase Agreement").
<PAGE> 1
Exhibit 99.2
Registration Rights Agreement, dated as of May 31, 1996,
by and between Provident Companies, Inc. and Zurich Insurance Company
<PAGE> 2
PROVIDENT COMPANIES, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of May 31, 1996, between Zurich
Insurance Company, a Swiss corporation ("Zurich" and, together with any
purchaser of Common Stock (as defined below) pursuant to the Stock Purchase
Agreement (as defined below) collectively, the "Investor"), and Provident
Companies, Inc., a Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, the Investor has, pursuant to the terms of a Common Stock
Purchase Agreement, dated as of May 31, 1996, by and among the Company and the
Investor (the "Stock Purchase Agreement"), agreed to purchase shares of Common
Stock, par value $1.00 per share, of the Company (the "Common Stock"); and
WHEREAS, the Company has agreed, as a condition precedent to the
Investor's obligations under the Stock Purchase Agreement, to grant the
Investor certain registration rights; and
WHEREAS, the Company and the Investor desire to define the registration
rights of the Investor on the terms and subject to the conditions herein set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
Existing Holder: shall mean Textron, Inc. or any member of the Family
Group, and shall include any transferees thereof who are entitled to
registration rights from the Company pursuant to agreements between the
Company and Textron, Inc. or the Company and the members of the Family Group.
<PAGE> 3
Family Group: shall mean the stockholders of the Company set forth on
Exhibit A hereto.
Holder: shall mean any holder of Registrable Securities;
Initiating Holder: shall mean any Holder or Holders who in the aggregate
are Holders of more than 10% of the then outstanding Registrable Securities;
Person: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency
or political subdivision thereof;
register, registered and registration: shall mean a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of effectiveness of such registration
statement;
Registrable Securities: shall mean (A) the shares of Common Stock issued
under the Stock Purchase Agreement, (B) any additional shares of Common Stock
acquired by the Investor and (C) any stock of the Company issued as a dividend
or other distribution with respect to, or in exchange for or in replacement of,
the shares of Common Stock referred to in clause (A) or (B); provided, that
Registrable Securities shall not include (i) securities with respect to which a
registration statement with respect to the sale of such securities has become
effective under the Securities Act and all such securities have been disposed
of in accordance with such registration statement, or (ii) such securities as
are actually sold pursuant to Rule 144 (or any successor provision thereto)
under the Securities Act;
Registration Expenses: shall mean all expenses incurred by the Company in
compliance with Sections 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Security, Securities: shall have the meaning set forth in Section 2(1) of
the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as amended; and
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel
- 2 -
<PAGE> 4
for each of the Holders other than fees and expenses of one counsel for all
the Holders.
2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive
from an Initiating Holder, at any time, a written request that the
Company effect any registration with respect to all or a part of the
Registrable Securities, the Company will:
(A) promptly give written notice of the proposed
registration, qualification or compliance to all other Holders; and
(B) as soon as practicable, use its reasonable best
efforts to effect such registration (including, without limitation,
the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so requested
and as would permit or facilitate the sale and distribution of all
or such portion of such Registrable Securities as are specified in
such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are
specified in a written request received by the Company within 10
business days after written notice from the Company is given under
Section 2(a)(i)(A) above; provided that the Company shall not be
obligated to effect, or take any action to effect, any such
registration pursuant to this Section 2(a):
(u) Solely with respect to underwritten registrations
requested pursuant to this Agreement, if the Company shall
have previously effected an underwritten registration with
respect to Registrable Securities pursuant to Section 2(b)
hereof, the Company shall not be required to effect any
underwritten registration pursuant to this Section 2(a)
until a period of 180 days shall have elapsed from the
effective date of the most recent such previous
registration; provided that if, in the most recent such
previous registration, participation pursuant to Section
2(b) hereof shall not have been to the extent requested
pursuant to Section 2(b) hereof, then the Company shall not
be required to effect any underwritten registration pursuant
to this Section 2 (a) until a period of 90 days shall have
elapsed from the
- 3 -
<PAGE> 5
effective date of the most recent such previous registration;
(v) If, upon receipt of a registration request pursuant
to this Section 2(a), the Company is advised in writing (with
a copy to the Initiating Holder) by a recognized national
independent investment banking firm selected by the Company
that, in such firm's opinion, a registration at the time and
on the terms requested would adversely affect any public
offering of securities of the Company by the Company (other
than in connection with benefit and similar plans) or by or
on behalf of any shareholder of the Company exercising a
demand registration right (collectively, a "Company
Offering") with respect to which the Company has commenced
preparations for a registration prior to the receipt of a
registration request pursuant to this Section 2(a), the
Company shall not be required to effect a registration
pursuant to this Section 2(a) until the earlier of (i) 30
days after the completion of such Company Offering, (ii)
promptly after any abandonment of such Company Offering or
(iii) 60 days after the date of receipt of a registration
request pursuant to this Section 2(a); provided, however,
that the periods during which the Company shall not be
required to effect a registration pursuant to this Section
2(a) together with any periods of suspension under Section
2(i) hereof may not exceed 90 days in the aggregate during
any period of 12 consecutive months;
(w) If the Registrable Securities requested by all
Holders to be registered pursuant to such request are
included in, and eligible for sale under, the Shelf
Registration (as defined below);
(x) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, qualification or
compliance, unless the Company is already subject to service
in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(y) After the Company has effected three (3) such
registrations pursuant to this Section 2(a) (in the aggregate
for all Holders) and such registrations have been declared or
ordered effective and the sales of such
- 4 -
<PAGE> 6
Registrable Securities shall have closed; provided, that
Holders shall not have the right to request an underwritten
registration pursuant to this Section 2(a) more than one (1)
time in any six-month period; or
(z) If the Registrable Securities requested by all
Holders to be registered pursuant to such request do not have
an anticipated aggregate public offering price (before any
underwriting discounts and commissions) of not less than
$10,000,000.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
Securities of the Company which are held by Persons who, by virtue of
agreements with the Company, are entitled to include their Securities in any
such registration ("Other Stockholders").
(ii) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means
of an underwriting, they shall so advise the Company as a part of their
request made pursuant to Section 2(a). If Other Stockholders request
inclusion in any such registration, the Holders shall offer to include the
securities of such Other Stockholders in the underwriting and may
condition such offer on their acceptance of the further applicable
provisions of this Section 2. The Holders whose shares are to be
included in such registration and the Company shall (together with all
Other Stockholders proposing to distribute their securities through such
underwriting) enter into underwriting and related agreements in
customary form with the representative of the underwriter or
underwriters selected for such underwriting by the Initiating Holders
and reasonably acceptable to the Company. Such underwriting agreement
will contain such representations and warranties by the Company and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnities and contribution to the effect and to the extent
provided in Section 2(f) hereof and the provision of opinions of counsel
and accountants' letters to the effect and to the extent provided in
Section 2(e) hereof, and the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of the
Holders. The Company shall cooperate fully with the Holders and the
underwriters in connection with any underwritten offering.
Notwithstanding any other provision of this Section 2(a), if the
representative advises the Holders in writing that marketing factors
require a limitation on the number of shares to be underwritten, the
- 5 -
<PAGE> 7
securities of the Company held by Other Stockholders shall be excluded
from such registration to the extent so required by such limitation. If,
after the exclusion of such shares, further reductions are still
required, the number of shares included in the registration by each
Holder shall be reduced on a pro rata basis (based on the number of
shares held by such Holder), by such minimum number of shares as is
necessary to comply with such request. No Registrable Securities or any
other securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion
in such registration as provided above disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written
notice to the Company, the underwriter and the Initiating Holders. The
securities so withdrawn shall also be withdrawn from registration. If
the underwriter has not limited the number of Registrable Securities or
other securities to be underwritten, the Company and officers and
directors of the Company may include its or their securities for its or
their own account in such registration if the representative so agrees
and if the number of Registrable Securities and other securities which
would otherwise have been included in such registration and underwriting
will not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to register any of its
equity securities either for its own account or for the account of Other
Stockholders, other than a registration relating solely to benefit plans,
or a registration relating solely to a Commission Rule 145 transaction,
or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as
would be required to be included in a registration statement covering the
sale of Registrable Securities, the Company will:
(A) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which
the Company intends to attempt to qualify such securities under the
applicable blue sky or other state securities laws); and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made by the Holders
within ten (10) business days after the giving of the written
notice from the Company described in clause (i) above, except as
set forth in Section 2(b)(ii) below. Such written request shall
specify the amount of Registrable
- 6 -
<PAGE> 8
Securities intended to be disposed of by a Holder and may specify
all or a part of the Holders' Registrable Securities.
Notwithstanding the foregoing, if, at any time after giving such written
notice of its intention to effect such registration and prior to the
effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to
register such equity securities the Company may, at its election, give
written notice of such determination to the Holders and thereupon the
Company shall be relieved of its obligation to register such Registrable
Securities in connection with the registration of such equity securities
(but not from its obligation to pay Registration Expenses to the extent
incurred in connection therewith as provided herein), without prejudice,
however, to the rights (if any) of Holders immediately to request that
such registration be effected as a registration under Section 2(a)
hereof.
(ii) Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an
underwriting, the Company shall so advise each of the Holders as a part
of the written notice given pursuant to Section 2(b)(i)(A). In such
event, the right of each of the Holders to registration pursuant to this
Section 2(b) shall be conditioned upon such Holders' participation in
such underwriting and the inclusion of such Holders' Registrable
Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter
or underwriters selected for the underwriting by the Company or such
Other Stockholders, as the case may be. Such underwriting agreement will
contain such representations and warranties by the Company and such
other terms and provisions as are customarily contained in underwriting
agreements with respect to secondary distributions, including, without
limitation, indemnities and contribution to the effect and to the extent
provided in Section 2(f) hereof and the provision of opinions of counsel
and accountants' letters to the effect and to the extent provided in
Section 2(e), and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Holders
whose shares are to be included in such registration. Notwithstanding
any other provision of this Section 2(b), if the representative
determines that marketing factors require a limitation on the number of
shares to be underwritten, the Company shall so advise all holders of
securities requesting registration, and the
- 7 -
<PAGE> 9
number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following manner:
The securities of the Company held by officers, directors and Other
Stockholders of the Company (other than securities held by Existing
Holders or holders who by contractual right demanded such registration
("Demanding Holders")) shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a
limitation on the number of shares is still required, the number of
shares that may be included in the registration and underwriting by each
of the Holders, Existing Holders which are not Demanding Holders with
respect to such registration and Demanding Holders with respect to such
registration which are not Existing Holders shall be reduced, on a pro
rata basis (based on the number of shares held by such holder), by such
minimum number of shares as is necessary to comply with such limitation;
provided, however, that in the event that an Existing Holder is a
Demanding Holder with respect to such registration, the number of shares
of Registrable Securities proposed to be included in any such
registration by each Holder shall be reduced on a pro rata basis (based
on the number of shares held by such holder) prior to any reduction in
the number of shares to be included in such registration by such
Demanding Holder. If any of the Holders or any officer, director or
Other Stockholder disapproves of the terms of any such underwriting, he
may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Shelf Registration. (i) On or before July 1, 1996, the Company
shall file a "shelf" registration statement pursuant to Rule 415 under
the Securities Act (the "Shelf Registration") with respect to the
Registrable Securities to be issued under the Stock Purchase Agreement.
The Company shall (A) use its reasonable best efforts to have the Shelf
Registration declared effective on or before the Closing Date (as defined
in the Stock Purchase Agreement) or as soon thereafter as practicable and
(B) subject to Section 2(i) hereof, use its reasonable best efforts to
keep the Shelf Registration continuously effective from the date such
Shelf Registration is declared effective until the date of termination of
this Agreement pursuant to Section 2(j) hereof in order to permit the
prospectus forming a part thereof to be usable by Holders during such
period. Except as set forth in Section 2(c)(iii) below, the Shelf
Registration may not include other securities of the Company which are
held by Other Stockholders.
(ii) Subject to Section 2(i) hereof, the Company shall
supplement or amend the Shelf Registration, (A) as required by the
registration form utilized by the Company or
- 8 -
<PAGE> 10
by the instructions applicable to such registration form or by the
Securities Act or the rules and regulations promulgated thereunder, (B)
to include in such Shelf Registration any additional securities that
become Registrable Securities by operation of the definition thereof and
(C) following the written request of an Initiating Holder pursuant to
Section 2(c)(iii) below, to cover offers and sales of all or a part of
the Registrable Securities by means of an underwriting including the
incorporation of any information required pursuant to Section 2(e)(x)
below. The Company shall furnish to the Holders of the Registrable
Securities to which the Shelf Registration relates copies of any such
supplement or amendment sufficiently in advance (but in no event less
than five business days in advance) of its use and/or filing with
the Commission to allow the Holders a meaningful opportunity to comment
thereon.
(iii) The Holders may, at their election and upon written
notice by an Initiating Holder to the Company, subject to the
limitations set forth in clauses (u), (v), (x), (y) and (z) of Section
2(a)(i)(B) hereof, effect offers and sales under the Shelf Registration
by means of one or more underwritten offerings, in which case the
provisions of Section 2(a)(ii) above shall apply to any such
underwritten distribution of securities under the Shelf Registration and
such underwriting shall, if sales of Registrable Securities pursuant
thereto shall have closed, be regarded as the exercise of one of the
registration rights contemplated by Section 2(a) hereof. In the event
of such an election, and, without the consent of the Holders of a
majority of the then outstanding Registrable Securities, under no other
circumstances, the Shelf Registration may, subject to Section 2(a)(ii)
above, be amended to include other shares of Common Stock which are held
by Other Stockholders.
(d) Expenses of Registration. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to this Section 2 (including all Registration Expenses incurred in
connection with the Shelf Registration and any supplements or amendments
thereto, whether or not it becomes effective, and whether all, none or some of
the Registrable Securities are sold pursuant to the Shelf Registration) shall
be borne by the Company, and all Selling Expenses shall be borne by the
Holders of the securities so registered pro rata on the basis of the number of
their shares so registered; provided, however, that if, as a result of the
withdrawal of a request for registration by any of the Holders, as applicable,
the registration statement does not become effective, the Holders and Other
Stockholders requesting registration may elect to bear the Registration
Expenses (pro rata on the basis of the number of their shares so included in
the registration request, or on such other basis as such Holders and Other
Stockholders may agree), in which case such
- 9 -
<PAGE> 11
registration shall not be counted as a registration pursuant to Section
2(a)(i)(B)(y).
(e) Registration Procedures. In the case of each registration
effected by the Company pursuant to this Section 2, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company
will:
(i) other than the Shelf Registration, the obligations in
respect of which are set forth in Section 2(c)(i)(B) above, keep such
registration effective for a period of one hundred eighty (180) days or
until the Holders, as applicable, have completed the distribution
described in the registration statement relating thereto, whichever
first occurs;
(ii) furnish to each Holder, and to any underwriter before
filing with the Commission, copies of any registration statement
(including all exhibits) and any prospectus forming a part thereof and
any amendments and supplements thereto (including all documents
incorporated or deemed incorporated by reference therein prior to the
effectiveness of such registration statement and including each
preliminary prospectus, any summary prospectus or any term sheet (as
such term is used in Rule 434 under the Securities Act)) and any other
prospectus filed under Rule 424 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject the review of the Holders and any such
underwriter for a period of at least five business days, and the Company
shall not file any such registration statement or such prospectus or any
amendment or supplement to such registration statement or prospectus to
which any Holder or any such underwriter shall reasonably object within
five business days after the receipt thereof; a Holder or such
underwriter(s), if any, shall be deemed to have reasonably objected to
such filing only if the registration statement, amendment, prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission;
(iii) furnish to each Holder and to any underwriter, such
number of conformed copies of the applicable registration statement and
of each amendment and supplement thereto (in each case including all
exhibits) and such number of copies of the prospectus forming a part of
such registration statement (including each preliminary prospectus, any
summary prospectus or any term sheet (as such term is used in Rule 434
under the Securities Act)) and any other prospectus filed under Rule 424
under the Securities Act, in conformity with the requirements of the
Securities Act, and such other documents, including without limitation
documents incorporated or deemed to be
- 10 -
<PAGE> 12
incorporated by reference prior to the effectiveness of such
registration, as each of the Holders or any such underwriter, from time
to time may reasonably request;
(iv) to the extent practicable, promptly prior to the filing
of any document that is to be incorporated by reference into any
registration statement or prospectus forming a part thereof subsequent
to the effectiveness thereof, and in any event no later than the date
such document is filed with the Commission, provide copies of such
document to the Holders, if requested, and to any underwriter, make
representatives of the Company available for discussion of such document
and other customary due diligence matters, and include such information
in such document prior to the filing thereof as any Holder or any such
underwriter reasonably may request;
(v) make available at reasonable times for inspection by the
Holders, any underwriter participating in any disposition pursuant to
such registration and any attorney or accountant retained by the Holders
or any such underwriter, all financial and other records, pertinent
corporate documents and properties of the Company and cause the officers,
directors and employees of the Company to supply all information
reasonably requested by the Holders and any such underwriters, attorneys
or accountants in connection with such registration subsequent to the
filing of the applicable registration statement and prior to the
effectiveness of the applicable registration statement;
(vi) use its reasonable best efforts (x) to register or
qualify all Registrable Securities and other securities covered by such
registration under such other securities or blue sky laws of such States
of the United States of America where an exemption is not available and
as the sellers of Registrable Securities covered by such registration
shall reasonably request, (y) to keep such registration or qualification
in effect for so long as the applicable registration statement remains
in effect, and (z) to take any other action which may be reasonably
necessary or advisable to enable such sellers to consummate the
disposition in such jurisdictions of the securities to be sold by such
sellers, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in
any jurisdiction where it is not so qualified, or to subject itself to
taxation in any such jurisdiction, or to execute a general consent to
service of process in effecting such registration, qualification or
compliance, unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act or
applicable rules or regulations thereunder;
- 11 -
<PAGE> 13
(vii) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with
or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company
and counsel to the Holders of Registrable Securities to enable the
Holders thereof to consummate the disposition of such Registrable
Securities;
(viii) subject to Section 2(i) hereof, promptly notify each
Holder of Registrable Securities covered by a registration statement (A)
upon discovery that, or upon the happening of any event as a result of
which, the prospectus forming a part of such registration statement, as
then in effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading, (B) of the issuance by the
Commission of any stop order suspending the effectiveness of such
registration statement or the initiation of proceedings for that purpose,
(C) of any request by the Commission for (1) amendments to such
registration statement or any document incorporated or deemed to be
incorporated by reference in any such registration statement, (2)
supplements to the prospectus forming a part of such registration
statement or (3) additional information, (D) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and at the request of any such Holder
promptly prepare and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ix) use its reasonable best efforts to obtain the withdrawal
of any order suspending the effectiveness of any such registration, or the
lifting of any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction;
(x) if requested by any Initiating Holder, or any underwriter,
promptly incorporate in such registration statement or prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as the Initiating Holder and any underwriter may reasonably
request to have included therein, including, without limitation,
information relating to the "plan of distribution" of the
- 12 -
<PAGE> 14
Registrable Securities, information with respect to the principal amount
or number of shares of Registrable Securities being sold to such
underwriter, the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such offering
and make all required filings of any such prospectus supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment;
(xi) furnish to the Holders, addressed to them, an opinion of
counsel for the Company, dated the date of the closing under the
underwriting agreement, if any, or the date of effectiveness of the
registration statement if such registration is not an underwritten
offering, and use its reasonable best efforts to furnish to the Holders,
addressed to them, a "cold comfort" letter signed by the independent
certified public accountants who have certified the Company's financial
statements included in such registration, covering substantially the same
matters with respect to such registration (and the prospectus included
therein) and, in the case of such accountants' letter, with respect to
events subsequent to the date of such financial statements, as are
customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities and such other matters as the Holders may reasonably request;
(xii) provide promptly to the Holders upon request any document
filed by the Company with the Commission pursuant to the requirements of
Section 13 and Section 15 of the Exchange Act; and
(xiii) use its reasonable best efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on
each securities exchange on which securities of the same class are then
listed or, if not then listed on any securities exchange, to be eligible
for trading in any over-the-counter market or trading system in which
securities of the same class are then traded.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as
applicable, each of its officers, directors, members and partners, and
each person controlling each of the Holders, with respect to each
registration which has been effected pursuant to this Section 2, and
each underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or
alleged untrue
- 13 -
<PAGE> 15
statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration
statement, notification or the like) incident to any such registration,
qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or the Exchange Act or any
rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each of the
Holders, each of its officers, directors, members and partners, and each
person controlling each of the Holders, each such underwriter and each
person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided
that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is
based on any untrue statement or omission based upon written information
furnished to the Company by the Holders or underwriter and stated to be
specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held
by it are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company,
each of its directors and officers and each underwriter, if any, of the
Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter, each Other
Stockholder and each of their officers, directors, members and partners,
and each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement, prospectus,
offering circular or other document made by such Holder, or any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements by such Holder therein
not misleading, and will reimburse the Company and such Other
Stockholders, directors, officers, partners, members, persons,
underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with written information furnished to
the Company by such Holder and stated to be specifically for
- 14 -
<PAGE> 16
use therein; provided, however, that the obligations of each of the
Holders hereunder and under clause (vi) below shall be limited to an
amount equal to the net proceeds to such Holder of securities sold as
contemplated herein.
(iii) Each party entitled to indemnification under this
Section 2(f) (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party
to assume the defense of any such claim or any litigation resulting
therefrom; provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or any litigation resulting therefrom,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in
such defense at such party's expense (unless the Indemnified Party shall
have reasonably concluded that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party in such action,
in which case the fees and expenses of one such counsel for all
Indemnified Parties shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 2 unless the Indemnifying Party is
materially prejudiced thereby. No Indemnifying Party, in the defense of
any such claim or litigation shall, except with the consent of each
Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified
Party shall furnish such information regarding itself or the claim in
question as an Indemnifying Party may reasonably request in writing and
as shall be reasonably required in connection with the defense of such
claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f)
is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or
expense referred to herein, then the Indemnifying Party, in lieu of
indemnifying such Indemnified Party hereunder, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
loss, liability, claim, damage or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and of the Indemnified Party on the other in connection with
the statements or omissions which resulted in such loss, liability,
claim, damage or expense, as well as any other
- 15 -
<PAGE> 17
relevant equitable considerations. The relative fault of the
Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged omission) to
state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten
public offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting agreement shall
be controlling.
(vi) The foregoing indemnity agreement of the Company and
Holders is subject to the condition that, insofar as they relate to any
loss, claim, liability or damage made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes
effective or the amended prospectus filed with the Commission pursuant
to Commission Rule 424(b) (the "Final Prospectus"), such indemnity or
contribution agreement shall not inure to the benefit of any underwriter
or Holder (but only if such Holder was required to deliver such Final
Prospectus) if a copy of the Final Prospectus was furnished to the
underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is
required by the Securities Act.
(g) Information by the Holders. Each of the Holders holding
securities included in any registration shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Section 2.
(h) Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted
securities to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms
are understood and defined in Rule 144 under the Securities Act ("Rule
144"), at all times;
- 16 -
<PAGE> 18
(ii) use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities,
furnish to the Holder upon request, a written statement by the Company
as to its compliance with the reporting requirements of Rule 144, and of
the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and
documents so filed as the Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.
(i) Holdback Agreement; Postponement. Notwithstanding the
provisions of Sections 2(a),(b) and (c), if the Board of Directors of the
Company determines in good faith that it is in the best interests of the
Company (A) not to disclose the existence of facts surrounding any proposed or
pending acquisition, disposition, strategic alliance or financing transaction
involving the Company or (B) for any purpose, to suspend the registration
rights set forth herein, the Company may, by notice to the Holders in
accordance with Section 4(a), (1) suspend the rights of the Holders to make
sales pursuant to the Shelf Registration and (2) postpone any registration
which is requested pursuant to Section 2(a), in each case for such a period of
time as the Board of Directors may determine; provided that (x) such periods
of suspension together with any periods of suspension effected pursuant to
Section 2(a)(i)(B)(v) hereof may not exceed 90 days in the aggregate during
any period of 12 consecutive months and (y) the Company may not impose such a
suspension or a postponement pursuant to Section 2(a)(i)(B)(v) following the
printing and distribution of a preliminary prospectus in any underwritten
public offering of Registrable Securities pursuant to Section 2(a)(i) or
2(c)(iii) (except such suspension, not to exceed 10 days, which results from an
event that is not within the reasonable control of the Company).
Notwithstanding the provisions of Section 2(a)(i)(B)(v) or this Section 2(i),
the Company shall not suspend the registration rights set forth herein at any
time during which any similar rights of the Existing Holders are not similarly
suspended.
(j) Termination. The registration rights set forth in
Section 2(a) shall not be available to any Holder if, in the opinion of
counsel to the Company, all of the Registrable Securities then owned by such
Holder could be sold in any 90-day period pursuant to Rule 144 (without giving
effect to the provisions of Rule 144(k)).
(k) Assignment. The registration rights set forth in Section
2 hereof may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be
- 17 -
<PAGE> 19
considered thereafter to be a Holder (provided that any transferee who is not
an affiliate of Investor shall be a Holder only with respect to such
Registrable Securities so acquired and any stock of the Company issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, such Registrable Securities) and shall be bound by all
obligations and limitations of this Agreement).
3. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not
be deemed to constitute a part thereof.
4. MISCELLANEOUS
(a) Notices.
(i) All communications under this Agreement shall be in
writing and shall be delivered by facsimile or by hand or mailed by
overnight courier or by registered or certified mail, postage prepaid:
(A) if to the Company, to Provident Companies, Inc., 1
Fountain Square, Chattanooga, Tennessee 37402, Fax No.: (423)
755-2590, Attention: Chief Financial Officer, or at such other
address as it may have furnished in writing to the Investors;
(B) if to the Investor, at the address listed on Schedule I
hereto, or at such other address as may have been furnished the
Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on
the first business day following the date of such mailing; and if mailed
by registered or certified mail, on the third business day after the date
of such mailing.
- 18 -
<PAGE> 20
(b) Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitation, any consents,
waivers and modifications which may hereafter be executed may be reproduced by
the Investor by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and the Investors may destroy any
original document so reproduced. The parties hereto agree and stipulate that
any such reproduction shall be admissible in evidence as the original itself
in any judicial or administrative proceeding (whether or not the original is
in existence and whether or not such reproduction was made by the Investors in
the regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement
constitutes the entire understanding of the parties hereto and supersedes all
prior understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with)
the written consent of the Company and the Holders of a majority of the then
outstanding Registrable Securities.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(f) No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement.
(g) Remedies. Each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances,
is held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any
way impaired thereby, it being intended and
- 19 -
<PAGE> 21
understood that all of the rights and privileges of each of the Holders shall
be enforceable to the fullest extent permitted by law.
- 20 -
<PAGE> 22
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
PROVIDENT COMPANIES, INC.
By: /s/ Thomas R. Watjen
---------------------------
Name: Thomas R. Watjen
Title: Executive Vice President
INVESTOR:
ZURICH INSURANCE COMPANY
By: /s/ Steven M. Gluckstern
---------------------------
Name: Steven M. Gluckstern
Title: Representative
- 21 -
<PAGE> 23
SCHEDULE I
Name and Address
of Investor
ZURICH INSURANCE COMPANY
Mythenquai 2
P.O. Box
Ch-8022
Zurich, Switzerland
Attention: General Counsel
with copies to:
Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York
Facsimile No.: (212) 898-5002
Attention: General Counsel
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Facsimile No.: (212) 821-8111
Attention: Thomas M. Cerabino
<PAGE> 24
EXHIBIT A
<TABLE>
<CAPTION>
SHARES
FAMILY SHAREHOLDERS OWNED AS
------------------- OF 3/4/96
---------
<S> <C>
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H.. Maclellan, 538,345
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust (#2151)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H. Maclellan, 116,425
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust Inv. Inc.
(#215109)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 522,615
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. (#2152)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 120,675
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215209)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 535,820
TTEES UAW Cora L. Maclellan Tr. For R.L. Maclellan Fam. (#2155)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 97,520
TTEES UAW Cora L. Maclellan Tr. For Maclellan Fam. Inv. Inc.
(#215509)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. Macallie III, 518,695
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Tr
(#2156)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. MacCallie III, 91,110
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215609)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr. & K.H. Maclellan, 3,470,123
TTEES for R.J. Maclellan Trust for the Maclellan Foundation Inc.
(#2150)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr & K.H. Maclellan, 34,538
TTEES for Cora L. Maclellan Trust for the Maclellan Foundation Inc.
(#2154)
The Maclellan Foundation Inc. 8,115,514
Christian Education Charitable Trust 711,100
H.O. Maclellan Jr., C.M. Heffner, Henry A. Henegar, Lee S. 392,706
Anderson, Frank A. Brock, TTEES U/A Dtd 4/23/93, Hugh & Charlotte
Maclellan Charitable Trust
</TABLE>
<PAGE> 25
<TABLE>
<S> <C>
Helen M. Tipton Charitable Trust 1,565,842
Estate of Hugh O. Maclellan Sr. 50,000
Mrs. Charlotte F. Maclellan 390,725
C.M. Heffner, H.O. Maclellan Jr. & US Tr. Co. of FL TTEES UTA 67,200
Dtd 8/2/52 with C.F. Maclellan for the Primary Benefit of Charlotte M. Heffner
J.P. Gaither, H.O. Maclellan Jr. & C.M. Heffner, TTEES UTA Dtd 69,000
6/2/52 with C.F. Maclellan for H.O. Maclellan Jr.
Hugh O. Maclellan Jr. & Charlotte M. Heffner Co-TTEES U/A H.O. 60,000
Maclellan Sr. FBO Great-grandchildren
Mrs. Kathrina H. Maclellan 1,389,344
Trust U/W Anne Maclellan Munford (Cede & Co) 585,000
US Trust Company of NY, Successor TTEE for Lara L. Munford U/A 2,000
with Kathrina H. Maclellan Dtd 8/5/76
US Trust Company as Corporate TTEE Charitable Remainder Unitrust 50,000
of Kathrina H. Maclellan 8/11/76
Suntrust Trust, Trustee UAW Robert Howze Maclellan Dtd 9/22/88 259,230
(US-TTEE 249,507; ANB-DTC 19,523)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Heather Howze Maclellan (ST-Summit)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Ian Llewellyn Maclellan (ST-Summit)
Trust for R.L. Maclellan & K.H. Maclellan Foundation U/A Mrs. 45,416
Kathrina H. Maclellan Dtd 1/4/73 (Cede & Co)
K.H. Maclellan & US Trust Company of NY, TTEES for Second 27,500
Charitable Remainder Unitrust of K.H. Maclellan Dtd 12/17/81 Their
Successor in Tr. & Assign
Hugh O. Maclellan Jr. 827,150
Hugh O. Maclellan Jr. & Suntrust Bank TTEES UTA 12/08/48 for 299,916
Hugh O. Maclellan Jr.
Hugh O. Maclellan Jr. TTEE FBO Catherine H. Maclellan Dtd. 51,091
11/19/66 UTA H.O. Maclellan Sr.
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
Hugh O. Maclellan, Jr. TTEE FBO Daniel O. Maclellan Dtd 7/8/68 51,060
UTA H.O. Maclellan Sr.
Hugh O. Maclellan Jr. TTEE FBO Christopher H. Maclellan UTA 47,435
H.O. Maclellan Sr.
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,612
Sr. FBO Catherine H. Maclellan & Her Descs, Dtd 5/29/70 (#4629)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,523
Sr. FBO Daniel O. Maclellan & His Descs Dtd 5/29/70 (#4630)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,715
Sr. FBO Christopher H. Maclellan & His Descs Dtd 5/29/70 (#4631)
Hugh O. Maclellan Jr. & Charlotte M. Heffner, TTEES for Hugh O. 1,740
Maclellan Sr. Dtd 1/31/67
C.F. Maclellan, H.O. Maclellan Jr., L.S. Anderson & J.C. Stophel, 158,190
TTEES of the H.O.M. Sr. Char. Inc. Tr. Dtd 11/29/83 FBO Elizabeth
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Christopher H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Catherine H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Daniel O.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,670
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Elizabeth
Maclellan
Hugh O. Maclellan Jr., TTEE UTA Dtd 12/15/83 FBO Elizabeth 3,320
Maclellan
Hugh O. Maclellan Jr. C/F Elizabeth Maclellan UTUGTMA 5,329
Hugh O. Maclellan Jr. C/F Hugh Owen Maclellan III UTUGTMA 5,079
Hugh O. Maclellan Jr. C/F Morgan Christopher Maclellan UTUGTMA 5,079
Christopher Hugh Maclellan (52 + 120, nominee name) 44,059
</TABLE>
<PAGE> 27
<TABLE>
<S> <C>
Christopher Hugh Maclellan, Cust. for Morgan Christopher Maclellan 688
Christopher Hugh Maclellan, Cust. for Hugh Owen Maclellan III 688
Christopher Hugh Maclellan, Cust. for Robert Browne Maclellan 688
Susan Maclellan (352 nominee name) 3,652
Daniel Owen Maclellan 29,800
Daniel O. Maclellan Cust. for Jacqueline Hannah Maclellan 688
Leslie Stophel Maclellan (746 nominee name) 1,518
Catherine Maclellan Heald 40,617
Catherine Maclellan Heald C/F Frances Anne Heald 3,130
Catherine Maclellan Heald C/F Hallie Elizabeth Heald 2,806
Catherine Maclellan Heald C/F Hamilton Reed Heald 688
Daryl Heald 1,432
Nancy Browne Maclellan 24,964
Nancy B. Maclellan & John P. Gaither, TTEES UTA Hugh O.
Maclellan Jr. Dtd 1/31/67 17,600
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Richard L. Heffner Jr. 74,170
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Thomas Maclellan Heffner 74,170
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Richard L.
Heffner Jr. 136,665
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Thomas M.
Heffner 136,670
Charlotte M. Heffner & Suntrust Bank Co-TTEES UTA Hugh O.
Maclellan Sr. 12/09/48 FBO Charlotte M. Heffner 294,695
Charlotte M. Heffner and Richard L. Heffner Sr. TTEES FBO Richard
L. Heffner Sr. UA Dtd 1/26/95 300,000
Charlotte M. Heffner 457,455
</TABLE>
4
<PAGE> 28
<TABLE>
<S> <C>
Richard L. Heffner, Sr. 9,482
Richard L. Heffner, Jr. 45,499
Christina M. Heffner 3,172
Thomas Maclellan Heffner 42,349
Irrevocable Trust 12/3/64 U/A H.O. Maclellan Sr. FBO Thomas 11,675
Maclellan Heffner, R.L. Heffner Sr., Trustee
Irrevocable Trust 6/1/62 U/A H.O. Maclellan Sr. FBO Richard L. 11,675
Heffner Jr., R.L. Heffner Sr., Trustee
Jean B. (Mrs. Jere) Tipton 61,000
TOTAL SHARES 23,967,036
</TABLE>
<PAGE> 1
Exhibit 99.3
Relationship Agreement, dated as of May 31, 1996,
by and between Provident Companies, Inc. and Zurich Insurance Company
<PAGE> 2
RELATIONSHIP AGREEMENT
THIS RELATIONSHIP AGREEMENT (this "Agreement") is made and entered into as
of May 31, 1996, by and between PROVIDENT COMPANIES, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
and ZURICH INSURANCE COMPANY, a corporation organized and existing under the
laws of Switzerland (the "Investor").
In consideration of the mutual warranties, representations, covenants and
agreements set forth herein, the parties, intending to be legally bound, agree
as follows:
ARTICLE ONE
DEFINITIONS
As used in this Agreement and any amendments hereto, the following terms
shall have the following meanings respectively:
"Affiliate" shall have the meaning set forth in regulations of the SEC
included in 17 C.F.R. Section 230.405.
"Beneficial owner" (and various derivations of such term such as
"beneficially owned") shall have the meaning set forth in the regulations of
the SEC included in 17 C.F.R. Section 240.13d-3; provided that for purposes of
this Agreement, any option, warrant, right, conversion privilege or arrangement
to purchase, acquire or vote Company Voting Securities regardless of the time
period during or at which it may be exercised and regardless of the
consideration paid shall be deemed to give the holder thereof beneficial
ownership of the Company Voting Securities to which it relates (excluding,
however, First Offer Shares (as defined in the Family Stockholder Agreement
(the "Family Agreement") to be dated as of the Closing (as defined in the
Purchase Agreement) among the Investors and the holders of Family Shares (the
"Family Stockholders") until such time as such First Offer Shares are acquired
by the Investor or an affiliate thereof pursuant to the Family Agreement). Any
Company Voting Securities which are subject to such options, warrants, rights,
conversion privileges or other arrangements shall be deemed to be outstanding
for purposes of computing the percentage of outstanding securities owned by
such Person but shall not be deemed to be outstanding for the purpose of
computing the percentage of outstanding securities owned by any other Person.
"Common Stock" shall mean the $1.00 par value common stock of the Company
and any security which is exchanged or substituted for such common stock.
"Company Voting Securities" shall mean all classes of capital stock of the
Company which are then entitled to vote generally in the election of directors
and any securities exchanged or substituted for such classes of capital stock
and any securities convertible into or exchangeable or exercisable for (whether
or not presently convertible, exchangeable or exercisable) such classes of
capital stock. For purposes of determining the amount or percentage of
outstanding Company Voting Securities beneficially owned by a Person, and for
purposes of calculating the aggregate
<PAGE> 3
voting power relating to such Company Voting Securities, securities that are
deemed to be outstanding shall be included to the extent provided in the
definition of "beneficial owner."
"Effective Time" shall have the meaning set forth in the Merger Agreement
(as defined below).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Family Representatives" shall mean initially Hugh O. Maclellan, Jr.,
Charlotte M. Heffner, Kathrina H. Maclellan and The Maclellan Foundation, Inc.
(the "Foundation"), or such other persons as shall have been appointed by
written notice to the Company and the Investor as the representatives of the
holders of the Family Shares for purposes of this Agreement; provided, however,
that the number of Family Representatives shall not exceed four at any time.
"Family Shares" shall mean any Company Voting Securities beneficially
owned by the Foundation, trusts for the benefit of the Foundation or those
members of the Maclellan family and other trusts and foundations identified on
Schedule A attached hereto.
"Initial Threshold" shall mean that percentage of the Outstanding Voting
Power equal to the percentage of the Company Voting Securities beneficially
owned by the Investor as of the Closing (as defined in the Purchase Agreement),
after giving effect to the transactions contemplated by the Purchase Agreement
and the Merger Agreement (as defined in the Purchase Agreement).
"Outstanding Voting Power" shall mean total number of votes which may be
cast in the election of directors of the Company at any meeting of stockholders
of the Company if all Company Voting Securities then outstanding were present
and voted at such meeting, other than votes that may be cast only by one class
or series of stock (other than the Common Stock) or upon the happening of a
contingency.
"Purchase Agreement" shall mean that certain Common Stock Purchase
Agreement, dated as of even date herewith, by and between the Company and the
Investor, as the same may be amended.
"Party" shall mean either the Company, on the one hand, or the Investor,
on the other hand, and "Parties" shall mean the Company and the Investor.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group (within the meaning of Section 13(d)(3) of
the Exchange Act), or any person acting in a representative capacity.
"Qualifying Tender Offer" shall mean an offer to purchase or exchange for
cash or other consideration any Company Voting Securities (whether pursuant to
a tender offer within the meaning of Section 14(d) of the Exchange Act or
otherwise) (i) which is made by or on behalf of the Company or (ii) which is
made by or on behalf of any other Person and which is approved by
- 2 -
<PAGE> 4
the Board of Directors of the Company or not opposed by the Board of Directors
of the Company by two business days prior to the expiration of such offer.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of the date hereof, between the Investor and the Company.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Standstill Agreement" shall mean the Standstill Agreement, dated as of
April 29, 1996, by and between the Company and Textron.
"Subsidiary" shall mean any "Subsidiary" of the Company as defined in
Regulation S-X under the Exchange Act.
"Textron" shall mean Textron Inc. and its successors and assigns.
"Textron Shares" shall mean (i) all of the shares of Common Stock issued
to Textron in the Merger and (ii) any Company Voting Securities issued in
respect of any subdivision, split or dividend on the shares of Common Stock
described in subparagraph (i).
ARTICLE TWO
COVENANTS AND AGREEMENTS
2.1 Directors.
(a) Effective as of the Closing, the Company shall take such action as
may be necessary to increase by two the number of members of the Board of
Directors of the Company and to elect to fill such newly created vacancies two
persons designated by the Investor. So long as the Investor is the beneficial
owner of Company Voting Securities representing 10% or more of the Outstanding
Voting Power, the Investor shall be entitled to designate two persons to serve
as directors of the Company. So long as the Investor and its Affiliates are the
beneficial owners of Company Voting Securities representing 5% or more but less
than 10% of the Outstanding Voting Power, the Investor shall be entitled to
designate one person to serve as a director of the Company. In the event that
the Investor and its Affiliates are the beneficial owners of Company Voting
Securities representing less than 5% of the Outstanding Voting Power, the
Investor shall not be entitled to designate any person to serve as a director of
the Company. Each of the persons designated by the Investor pursuant to this
Section 2.1(a) is referred to herein as an "Investor Designee."
(b) The Company shall use all reasonable efforts to cause the election
of the required number of Investor Designees to the Board of Directors of the
Company including taking the following actions: (i) at each annual meeting of
Company stockholders at which an Investor Designee's term as a director expires
or at any other meeting of the Company's stockholders at which directors are to
be elected, if the Investor is still entitled to designate one or more persons
to serve as a director of the Company in accordance with this Agreement, the
Investor Designees
- 3 -
<PAGE> 5
shall be included in the slate of nominees recommended by the Company's Board of
Directors to the stockholders for election as directors, unless either (x) an
Investor Designee requests not to be so included in the slate of nominees, in
which case such Investor Designee shall not be so included, or (y) service by an
Investor Designee as a director or his nomination for election as a director is
violative of applicable law or regulation (provided that, in such case, the
Investor shall be provided an opportunity to designate an alternate person to
serve as a director). and (ii) in the event that an Investor Designee is unable
to serve, or once having commenced to serve, is removed or withdraws from the
Board of Directors of the Company, the Investor will have the right to designate
such person's replacement and the Company agrees to take all reasonable action
within its power to cause the election of the substitute Investor Designee to
the Board of Directors of the Company as soon as possible following such
person's designation.
(c) In the event that, any time after an annual meeting of Company
stockholders in connection with which the Investor was entitled to designate two
Investor Designees and such Investor Designees were elected as directors, such
Investor Designees are still serving as directors, and prior to the next annual
meeting of Company stockholders the Investor shall beneficially own Company
Voting Securities representing less than 10% but 5% or more of the Outstanding
Voting Power, then, at the request of the Company (provided Investor at the time
of such request shall still beneficially own Company Voting Securities
representing less than 10% but 5% or more of the Outstanding Voting Power), the
Investor shall use all reasonable efforts to cause one of the Investor Designees
then in office to resign as a director. In the event that, any time after an
annual meeting of Company stockholders in connection with which the Investor was
entitled to designate one or more Investor Designees, such Investor Designees
were elected as directors and such Investor Designees are still serving as
directors at such time prior to the next annual meeting of Company stockholders
when the Investor shall beneficially own Company Voting Securities representing
less than 5% of the Outstanding Voting Power, then, at the request of the
Company (provided Investor at the time of such request still beneficially owns
Company Voting Securities representing less than 5% of the Outstanding Voting
Power), the Investor shall use all reasonable efforts to cause all Investor
Designees then in office to resign as directors.
(d) At the request of the Investor, the Company shall cause the
Investor Designees then required to be included in the slate of nominees
recommended by the Company's Board of Directors for the election to the
Company's Board of Directors to be elected to serve on the Board of Directors of
each Subsidiary.
(e) So long as the Investor beneficially owns Company Voting
Securities representing 5% or more of the Outstanding Voting Power, the Company
shall effect all action necessary to appoint one Investor Designee to the
Executive Committee of the Board of Directors (or other committee or group
performing similar functions) (the "Executive Committee") of the Company and
each Subsidiary having such a committee or group on which an Investor Designee
serves as a director.
(f) If after the Closing, the Company takes corporate action to
classify the Board of Directors of the Company, the Investor Designees (if the
Investor is then entitled to designate two directors) shall be designated to
serve on different classes.
- 4 -
<PAGE> 6
(g) So long as the Investor is entitled to designate at least one
member of the Board of Directors of the Company, during any period that the
requisite number of Investor Designees are not members of the Board of
Directors, the Company shall cause one person (to be designated by the Investor
in its sole discretion) to be permitted to attend all meetings of the Board of
Directors of the Company and all meetings of the Executive Committee of the
Company. The Company shall take all action necessary to ensure that (i) the
Investor is notified of all meetings of the Board of Directors in accordance
with and at the times prescribed by the notice provisions of the by-laws of the
Company applicable to directors of the Company and (ii) that the Investor is
furnished with all information and materials furnished to directors of the
Company in connection with any meetings of the Board of Directors or the
Executive Committee at the time such information and materials are furnished to
the directors.
2.2 Acquisition of Voting Securities.
(a) Neither the Investor or any of its Affiliates shall, directly or
indirectly, in any manner, acquire any Company Voting Securities, if, after
giving effect to such acquisition, the Investor and its Affiliates would
beneficially own, in the aggregate, Company Voting Securities representing more
than the Initial Threshold; provided, however, that this Section 2.2 shall not
prohibit the acquisition by the Investor or any of its Affiliates of any Company
Voting Securities the acquisition of which would cause the Investor and its
Affiliates to beneficially own Company Voting Securities in excess of the
Initial Threshold if (i) such securities (x) are Family Shares, (y) are other
than Family Shares if the Investor is unable to exercise the right of first
offer set forth in Section 2 of the Family Agreement due to the restrictions set
forth in clause (ii) of this Section 2.2(a) without giving effect to the proviso
to such clause (ii) or (z) are purchased from Textron (provided that (1) the
number of Company Voting Securities purchased from Textron do not exceed
one-half of the Textron Shares and (2) the Investor or such Affiliate shall have
first offered to the Family Representatives, on behalf of the holders of the
Family Shares, a right to sell the same number of Company Voting Securities to
the Investor or such Affiliate on the same terms as those offered to Textron,
which offer shall not have been irrevocably accepted in full by each of the
Family Representatives, on behalf of all of the holders of the Family Shares,
within 15 business days after such notice is given to each of the Family
Representatives, which acceptance shall identify the selling holders of Family
Shares) and (ii) after giving effect to any such acquisition, the Investor and
its Affiliates would beneficially own Company Voting Securities representing not
more than 40% of the Outstanding Voting Power; provided, further, that,
notwithstanding the foregoing, the Investor and its Affiliates may acquire
Family Shares as would result in the Investor and its Affiliates beneficially
owning Company Voting Securities representing more than 40% of the Outstanding
Voting Power if the Investor or its Affiliates first offer to purchase all of
the issued and outstanding Company Voting Securities at the price offered to be
paid for such Family Shares pursuant to either a tender offer to all holders of
Company Voting Securities or a definitive merger agreement (provided, that if
the Company's Board of Directors recommends that the holders of the Company
Voting Securities accept such offer and tender their shares, such offer shall be
made pursuant to a definitive merger agreement (or a tender offer followed by a
merger) on the same terms).
(b) No provision contained in this Agreement shall require the
Investor or any of its Affiliates to dispose of any Company Voting Securities if
the aggregate percentage of the
- 5 -
<PAGE> 7
Outstanding Voting Power represented by Company Voting Securities beneficially
owned by the Investor and its Affiliates is increased as a result of a
recapitalization of the Company or a repurchase of securities by the Company or
any other action taken by the Company or any of its Affiliates (other than the
Investor or its Affiliates).
(c) The agreements of the Investor set forth in this Section 2.2 shall
terminate on the seventh anniversary of the Closing and neither the Investor
nor any of its Affiliates shall have any further obligations or liabilities
hereunder or in respect hereof.
2.3 Exercise of Right of First Refusal. So long as the Investor and its
Affiliates have complied with the provisions of Section 2.2(a) hereof, (a) the
Company shall not exercise any of the rights set forth in Section 3.4 of the
Standstill Agreement with respect to any proposed sale or transfer of Company
Voting Securities by Textron or any of its Subsidiaries (as defined in the
Standstill Agreement) to the Investor or any of its Affiliates and (b) if the
Company receives notice of a proposed sale or transfer of the Textron Shares to
any Person other than the Investor or any of its Affiliates and if requested in
writing by the Investor, the Company shall take such actions as are within its
control to cause the Investor or an Affiliate thereof designated by the
Investor to be the Person designated by the Company to purchase such securities
in accordance with the provisions of Section 3.4(b) of the Standstill
Agreement; provided that any such request by the Investor shall be accompanied
by evidence reasonably satisfactory to the Company that any such sale or
transfer to the Investor or its Affiliates will comply with Section 2.2(a).
2.4 Sales of Company Voting Securities. During the period commencing on
the Closing and ending on the seventh anniversary thereof, neither the Investor
nor any of its Affiliates shall sell, transfer, assign or otherwise dispose of
its beneficial interest in any Company Voting Securities, except: (a) to the
Company or to any Person approved in a resolution adopted by a majority of the
Board of Directors of the Company; (b) in conversion, exchange or otherwise
pursuant to the terms of such Company Voting Securities; (c) in a merger or
consolidation in which the Company is acquired, in a plan of liquidation of the
Company, or pursuant to a Qualifying Tender Offer; (d) pursuant to a bona fide
underwritten public offering including a public sale pursuant to a registration
under the Registration Rights Agreement; (e) pursuant to Rule 144 under the
Securities Act; (f) to an Affiliate of the Investor, provided that such
Affiliate shall expressly assume in a writing duly executed by it and delivered
to the Company all of the obligations and restrictions contained in this
Agreement pertaining to the Investor and shall agree to transfer such Company
Voting Securities to the Investor or another Affiliate of the Investor if such
Affiliate ceases to be an Affiliate of the Investor; (g) to Insurance Partners,
L.P. or Insurance Partners Offshore (Bermuda), L.P. or one or more Affiliates
of either of them, provided that all voting rights with respect to such Company
Voting Securities are retained by the Investor or an Affiliate thereof; and (h)
in any other manner, provided that prior to making any offer to sell, sale or
other transfer to any Person pursuant to this clause (h) of Company Voting
Securities representing beneficial ownership of more than two percent (2%) of
the Outstanding Voting Power, the Investor shall give the Company the
opportunity to purchase, or to designate an alternative purchaser of, such
Company Voting Securities in the following manner:
(i) The proposed transferor of such Company Voting Securities shall
give to the Company written notice (the "Transfer Notice") of the
proposed transfer, specifying
- 6 -
<PAGE> 8
the proposed transferee, the number of Company Voting Securities proposed
to be disposed of, the proposed consideration to be received in exchange
therefor, and the other material terms of the proposed transfer.
(ii) The Company shall have the right, exercisable by written notice
given to the Person which gave the Transfer Notice within seven (7)
business days after receipt of such Notice, to purchase (or to cause
another Person designated by the Company to purchase) all, but not less
than all, of the Company Voting Securities specified in such Notice for
cash at the purchase price set forth therein. If the consideration
specified in the Transfer Notice includes any property other than cash,
such purchase price shall be deemed to be the amount of any cash included
as part of such consideration plus the value (as jointly determined by a
nationally recognized investment banking firm selected by each Party or,
in the event such firms are unable to agree, a third nationally
recognized investment banking firm to be selected by the first two such
firms) of such other property included in such consideration and the date
on which the Company must exercise its right of first refusal shall be
extended until five (5) business days after the determination of the
value of property included in the consideration.
(iii) If the Company exercises its right of first refusal hereunder,
the closing of the purchase of the Company Voting Securities with respect
to which such right has been exercised shall take place within five (5)
business days after the Company gives notice of such exercise; provided
that if any approval of or notice to any governmental authority or agency
is required in connection with such purchase of Company Voting Securities,
the parties shall use all reasonable efforts to obtain such approvals or
to make such notices and the closing shall take place within two (2)
business days after receipt of the last such approval and expiration of
any required waiting periods. If the Company does not exercise its right
of first refusal hereunder within the time specified for such exercise,
the Person giving the Transfer Notice shall be free during the period of
six months following the expiration of such time for exercise to sell the
Company Voting Securities specified in such Notice to any Person for the
consideration specified therein (or at any price in excess thereof).
ARTICLE THREE
MISCELLANEOUS
3.1 Further Assurances. From time to time after the execution of
this Agreement, as and when requested by the Company and the Investor and to the
extent permitted by Delaware law, the Parties shall take or cause to be taken
such further or other action as shall be necessary to carry out the purposes of
this Agreement.
3.2 Effectiveness of Agreement. The respective rights and
obligations of the Parties under this Agreement shall arise from and after the
Closing.
3.3 Remedies. The Parties recognize and hereby acknowledge that it
may be difficult to accurately measure the amount of damages that would result
to a Party by reason of a failure of
- 7 -
<PAGE> 9
the other Party to perform any of the obligations imposed on it by this
Agreement. The Parties accordingly agree that each such Party shall be entitled
to an injunction to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, in addition to any other remedies to which
such Party may be entitled at law or in equity in accordance with this
Agreement.
3.4 Notices. Any notices or other communications required or
permitted under this Agreement shall be effective only if it is in writing and
delivered personally, by facsimile transmission, or by registered or certified
mail, postage pre-paid, addressed as follows:
The Company: Provident Companies, Inc.
1 Fountain Square
Chattanooga, Tennessee 37402
Telecopy: (423) 755-2590
Attention: Chief Financial Officer
Copy to Counsel: Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy: (404) 881-7777
Attention: F. Dean Copeland
The Investor: Zurich Insurance Company
Mythenquai 2
P.O. Box Ch-8022
Zurich, Switzerland
Telecopy: 011-411-205-1063
Attention: General Counsel
With Copies to: Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
Telecopy: (212) 898-5002
Attention: General Counsel
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Telecopy: (212) 821-8111
Attention: Thomas M. Cerabino, Esq.
- 8 -
<PAGE> 10
Family Stockholders: Hugh O. Maclellan, Jr.
Suite 501
Provident Building
One Fountain Square
Chattanooga, TN 37402
Telephone: (423)755-8141
Facsimile: (423)755-1640
A.S. MacMillan
Team Resources
Suite 425
River Edge One
5500 Interstate North Parkway
Atlanta, GA 30328
Telephone: (770)955-5135
Facsimile: (770)955-1602
Charlotte M. Heffner
3655 Randall Hall, NW
Atlanta, GA 30327
Telephone and Facsimile: (404)233-7238
Kathrina H. Maclellan
125 Fairy Trail
Lookout Mountain, Tennessee 37350
With a Copy To: King & Spalding
120 West 45th Street
New York, NY 10036
Telephone: (212) 556-2100
Facsimile: (212) 556-2222
Attention: E. William Bates, II
or such other address as shall be furnished in writing by any of the
Parties. Any such notice or communication shall be deemed to have been given
as of the date so personally delivered or mailed.
3.5 Amendments. This Agreement may be amended by a subsequent
writing signed by both Parties upon the approval of each of the Parties.
3.6 Counterparts. This Agreement may be executed in two or more
counterparts all of which shall be one and the same Agreement and shall become
effective when one or more counterparts have been signed by each Party and
delivered to the other Party.
- 9 -
<PAGE> 11
3.7 Headings. The headings in this Agreement are for convenience
only and shall not affect the construction or interpretation of this Agreement.
3.8 Successors and Assigns. All terms and conditions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by any successor to the Investor and any successor to the Company. Except as
otherwise provided in this Section 3.8, any assignment of the rights and
obligations of the Parties under this Agreement shall be effective upon a
written agreement signed by all the Parties.
3.9 Severability. If any provision of this Agreement shall be held
to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
3.10 Entire Agreement. This Agreement constitutes the entire
understanding between and among the Parties with respect to the subject matter
hereof and shall supersede any prior agreements and understandings among the
Parties with respect to such subject matter.
3.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law principles thereof.
3.12 No Third Party Beneficiaries. Except for the Family
Representatives solely with respect to the provisions of Section 2.2 applicable
to the holders of Family Shares, this Agreement is not intended to confer upon
any Person any rights or remedies hereunder.
- 10 -
<PAGE> 12
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be duly executed and delivered as of the date above written.
PROVIDENT COMPANIES, INC.
By: /s/ Thomas R. Watjen
-------------------------------
Name: Thomas R. Watjen
Title: Executive Vice President
ZURICH INSURANCE COMPANY
By: /s/ Steven M. Gluckstern
-------------------------------
Name: Steven M. Gluckstern
Title: Representative
- 11 -
<PAGE> 13
SCHEDULE A
<TABLE>
<CAPTION>
SHARES
FAMILY SHAREHOLDERS OWNED AS
------------------- OF 3/4/96
---------
<S> <C>
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H.. Maclellan, 538,345
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust (#2151)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R. H. Maclellan, 116,425
TTEES UAW R.J. Maclellan for R.L. Maclellan Family Trust Inv. Inc.
(#215109)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 522,615
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. (#2152)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, 120,675
TTEES UAW R.J. Maclellan Tr. for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215209)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 535,820
TTEES UAW Cora L. Maclellan Tr. For R.L. Maclellan Fam. (#2155)
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, 97,520
TTEES UAW Cora L. Maclellan Tr. For Maclellan Fam. Inv. Inc.
(#215509)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. Macallie III, 518,695
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Tr
(#2156)
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. MacCallie III, 91,110
TTEES UAW Cora L. Maclellan for H.O. Maclellan Sr. Fam. Inv. Inc.
(#215609)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr. & K.H. Maclellan, 3,470,123
TTEES for R.J. Maclellan Trust for the Maclellan Foundation Inc.
(#2150)
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr & K.H. Maclellan, 34,538
TTEES for Cora L. Maclellan Trust for the Maclellan Foundation Inc.
(#2154)
The Maclellan Foundation Inc. 8,115,514
Christian Education Charitable Trust 711,100
H.O. Maclellan Jr., C.M. Heffner, Henry A. Henegar, Lee S. 392,706
Anderson, Frank A. Brock, TTEES U/A Dtd 4/23/93, Hugh & Charlotte
Maclellan Charitable Trust
</TABLE>
<PAGE> 14
<TABLE>
<S> <C>
Helen M. Tipton Charitable Trust 1,565,842
Estate of Hugh O. Maclellan Sr. 50,000
Mrs. Charlotte F. Maclellan 390,725
C.M. Heffner, H.O. Maclellan Jr. & US Tr. Co. of FL TTEES UTA 67,200
Dtd 8/2/52 with C.F. Maclellan for the Primary Benefit of Charlotte M. Heffner
J.P. Gaither, H.O. Maclellan Jr. & C.M. Heffner, TTEES UTA Dtd 69,000
6/2/52 with C.F. Maclellan for H.O. Maclellan Jr.
Hugh O. Maclellan Jr. & Charlotte M. Heffner Co-TTEES U/A H.O. 60,000
Maclellan Sr. FBO Great-grandchildren
Mrs. Kathrina H. Maclellan 1,389,344
Trust U/W Anne Maclellan Munford (Cede & Co) 585,000
US Trust Company of NY, Successor TTEE for Lara L. Munford U/A 2,000
with Kathrina H. Maclellan Dtd 8/5/76
US Trust Company as Corporate TTEE Charitable Remainder Unitrust 50,000
of Kathrina H. Maclellan 8/11/76
Suntrust Trust, Trustee UAW Robert Howze Maclellan Dtd 9/22/88 259,230
(US-TTEE 249,507; ANB-DTC 19,523)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Heather Howze Maclellan (ST-Summit)
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW 2,397
Robert H. Maclellan for Ian Llewellyn Maclellan (ST-Summit)
Trust for R.L. Maclellan & K.H. Maclellan Foundation U/A Mrs. 45,416
Kathrina H. Maclellan Dtd 1/4/73 (Cede & Co)
K.H. Maclellan & US Trust Company of NY, TTEES for Second 27,500
Charitable Remainder Unitrust of K.H. Maclellan Dtd 12/17/81 Their
Successor in Tr. & Assign
Hugh O. Maclellan Jr. 827,150
Hugh O. Maclellan Jr. & Suntrust Bank TTEES UTA 12/08/48 for 299,916
Hugh O. Maclellan Jr.
Hugh O. Maclellan Jr. TTEE FBO Catherine H. Maclellan Dtd. 51,091
11/19/66 UTA H.O. Maclellan Sr.
</TABLE>
<PAGE> 15
<TABLE>
<S> <C>
Hugh O. Maclellan, Jr. TTEE FBO Daniel O. Maclellan Dtd 7/8/68 51,060
UTA H.O. Maclellan Sr.
Hugh O. Maclellan Jr. TTEE FBO Christopher H. Maclellan UTA 47,435
H.O. Maclellan Sr.
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,612
Sr. FBO Catherine H. Maclellan & Her Descs, Dtd 5/29/70 (#4629)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,523
Sr. FBO Daniel O. Maclellan & His Descs Dtd 5/29/70 (#4630)
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan 100,715
Sr. FBO Christopher H. Maclellan & His Descs Dtd 5/29/70 (#4631)
Hugh O. Maclellan Jr. & Charlotte M. Heffner, TTEES for Hugh O. 1,740
Maclellan Sr. Dtd 1/31/67
C.F. Maclellan, H.O. Maclellan Jr., L.S. Anderson & J.C. Stophel, 158,190
TTEES of the H.O.M. Sr. Char. Inc. Tr. Dtd 11/29/83 FBO Elizabeth
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Christopher H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Catherine H.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,665
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Daniel O.
Maclellan
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, 136,670
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Elizabeth
Maclellan
Hugh O. Maclellan Jr., TTEE UTA Dtd 12/15/83 FBO Elizabeth 3,320
Maclellan
Hugh O. Maclellan Jr. C/F Elizabeth Maclellan UTUGTMA 5,329
Hugh O. Maclellan Jr. C/F Hugh Owen Maclellan III UTUGTMA 5,079
Hugh O. Maclellan Jr. C/F Morgan Christopher Maclellan UTUGTMA 5,079
Christopher Hugh Maclellan (52 + 120, nominee name) 44,059
</TABLE>
<PAGE> 16
<TABLE>
<S> <C>
Christopher Hugh Maclellan, Cust. for Morgan Christopher Maclellan 688
Christopher Hugh Maclellan, Cust. for Hugh Owen Maclellan III 688
Christopher Hugh Maclellan, Cust. for Robert Browne Maclellan 688
Susan Maclellan (352 nominee name) 3,652
Daniel Owen Maclellan 29,800
Daniel O. Maclellan Cust. for Jacqueline Hannah Maclellan 688
Leslie Stophel Maclellan (746 nominee name) 1,518
Catherine Maclellan Heald 40,617
Catherine Maclellan Heald C/F Frances Anne Heald 3,130
Catherine Maclellan Heald C/F Hallie Elizabeth Heald 2,806
Catherine Maclellan Heald C/F Hamilton Reed Heald 688
Daryl Heald 1,432
Nancy Browne Maclellan 24,964
Nancy B. Maclellan & John P. Gaither, TTEES UTA Hugh O.
Maclellan Jr. Dtd 1/31/67 17,600
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Richard L. Heffner Jr. 74,170
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O.
Maclellan Sr. Dtd 9/8/72 FBO Thomas Maclellan Heffner 74,170
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Richard L.
Heffner Jr. 136,665
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel,
TTEES UTA H.O. Maclellan Sr. Dtd 12/31/76 FBO Thomas M.
Heffner 136,670
Charlotte M. Heffner & Suntrust Bank Co-TTEES UTA Hugh O.
Maclellan Sr. 12/09/48 FBO Charlotte M. Heffner 294,695
Charlotte M. Heffner and Richard L. Heffner Sr. TTEES FBO Richard
L. Heffner Sr. UA Dtd 1/26/95 300,000
Charlotte M. Heffner 457,455
</TABLE>
4
<PAGE> 17
<TABLE>
<S> <C>
Richard L. Heffner, Sr. 9,482
Richard L. Heffner, Jr. 45,499
Christina M. Heffner 3,172
Thomas Maclellan Heffner 42,349
Irrevocable Trust 12/3/64 U/A H.O. Maclellan Sr. FBO Thomas 11,675
Maclellan Heffner, R.L. Heffner Sr., Trustee
Irrevocable Trust 6/1/62 U/A H.O. Maclellan Sr. FBO Richard L. 11,675
Heffner Jr., R.L. Heffner Sr., Trustee
Jean B. (Mrs. Jere) Tipton 61,000
TOTAL SHARES 23,967,036
</TABLE>
