<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
AMENDMENT NO. 1
The Seibels Bruce Group, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $1.00 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
816006-20
(CUSIP Number)
James L. Zech
Steven J. Tynan
High Ridge Capital, LLC
107 Elm Street
Four Stamford Plaza
P.O. Box 120043
Stamford, CT 06912-0043
(203) 705-2750
with a copy to:
James A. FitzPatrick, Jr.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019-6092
(212) 259-8000
----------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 29, 1998
-------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Check the following box if a fee is being paid with the statement [_]. (A
fee is not required only if the Reporting Person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class
of securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
Page 1 of 19
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SCHEDULE 13D
CUSIP No. 816006-20
---------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON: High Ridge Capital, LLC
-----------------------
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 06-1459537
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,406,248
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8 SHARED VOTING POWER
0
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9 SOLE DISPOSITIVE POWER
1,406,248
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10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,248
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
Not Applicable
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.5%
-----
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14 TYPE OF REPORTING PERSON
CO
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* Includes (a) 351,562 shares issuable upon exercise of options held by the
Reporting Person at any time before December 31, 1998, (b) 351,562 shares
issuable upon exercise of options held by the Reporting Person at any time
before December 31, 2000, (c) 351,562 shares issuable upon exercise of options
held by High Ridge Capital Partners Limited Partnership at any time before
December 31, 1998, and (d) 351,562 shares issuable upon the exercise of options
held by High Ridge Capital Partners Limited Partnership at any time before
December 31, 2000, as described in Items 3 and 4 herein.
Page 2 of 19
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SCHEDULE 13D
CUSIP No. 816006-20
---------
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1 NAME OF REPORTING PERSON: High Ridge Capital Partners Limited Partnership
-----------------------------------------------
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 06-1459533
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,406,248
- --------------------------------------------------------------------------------
8 SHARED VOTING POWER
0
- --------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,406,248
- --------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,248
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
Not Applicable
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.5%
-----
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14 TYPE OF REPORTING PERSON
PN
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* Includes (a) 351,562 shares issuable upon exercise of options held by High
Ridge Capital, LLC at any time before December 31, 1998, (b) 351,562 shares
issuable upon exercise of options held by High Ridge Capital, LLC at any time
before December 31, 2000, (c) 351,562 shares issuable upon exercise of options
held by the Reporting Person at any time before December 31, 1998 and (d)
351,562 shares issuable upon exercise of options held by the Reporting Person at
any time before December 31, 2000.
Page 3 of 19
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SCHEDULE 13D
CUSIP No. 816006-20
---------
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1 NAME OF REPORTING PERSON: HRC General Partner Limited Partnership
---------------------------------------
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 06-459536
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,406,248
- --------------------------------------------------------------------------------
8 SHARED VOTING POWER
0
- --------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,406,248
- --------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,406,248
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
Not Applicable
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.5%
-----
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
- --------------------------------------------------------------------------------
* Includes (a) 351,562 shares issuable upon exercise of options held by High
Ridge Capital, LLC at any time before December 31, 1998, (b) 351,562 shares
issuable upon exercise of options held by High Ridge Capital, LLC at any time
before December 31, 2000, (c) 351,562 shares issuable upon exercise of options
held by High Ridge Capital Partners Limited Partnership at any time before
December 31, 1998 and (d) 351,562 shares issuable upon exercise of options held
by High Ridge Capital Partners Limited Partnership at any time before December
31, 2000, as described in Items 3 and 4 herein.
Page 4 of 19
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SCHEDULE 13D
CUSIP No. 816006-20
---------
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1 NAME OF REPORTING PERSON: James L. Zech
-------------
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,406,248
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8 SHARED VOTING POWER
0
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9 SOLE DISPOSITIVE POWER
1,406,248
- --------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
Not Applicable
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.5%
-----
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14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
* Includes (a) 351,562 shares issuable upon exercise of options held by High
Ridge Capital, LLC, of which the Reporting Person is a member, at any time
before December 31, 1998, (b) 351,562 shares issuable upon exercise of options
held by High Ridge Capital, LLC at any time before December 31, 2000, (c)
351,562 shares issuable upon exercise of options held by High Ridge Capital
Limited Partnership at any time before December 31, 1998 and (d) 351,562 shares
issuable upon exercise of options held by High Ridge Capital Partners Limited
Partnership at any time before December 31, 2000, as described in Items 3 and 4
herein.
Page 5 of 19
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SCHEDULE 13D
CUSIP No. 816006-20
---------
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1 NAME OF REPORTING PERSON: Steven J. Tynan
---------------
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: ###-##-####
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,406,248
- --------------------------------------------------------------------------------
8 SHARED VOTING POWER
0
- --------------------------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,406,248
- --------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_]
Not Applicable
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.5%
-----
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
* Includes (a) 351,562 shares issuable upon exercise of options held by High
Ridge Capital, LLC, of which the Reporting Person is a member, at any time
before December 31, 1998, (b) 351,562 shares issuable upon exercise of options
held by High Ridge Capital, LLC at any time before December 31, 2000 (c) 351,562
shares issuable upon exercise of options held by High Ridge Capital Partners
Limited Partnership at any time before December 31, 1998 and (d) 351,526 shares
issuable upon exercise of options held by High Ridge Capital Partners Limited
Partnership at any time before December 31, 2000, as described in Items 3 and 4
herein.
Page 6 of 19
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 1 to Schedule 13D relates to the common stock, par value
$1.00 per share ("Common Stock"), of The Seibels Bruce Group, Inc., a South
Carolina corporation ("SBGI"), and amends and restates the Schedule 13D of the
Reporting Persons filed with the Commission on November 20, 1997. The address of
the principal executive offices of SBGI is 1501 Lady Street, Columbia, South
Carolina 29201.
The Reporting Persons have entered into a Joint Filing Agreement dated
November 24, 1997, attached hereto as Schedule I.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed on behalf of High Ridge Capital, LLC, a limited
liability corporation organized under the laws of the State of Delaware
("High Ridge"), High Ridge Capital Partners Limited Partnership, a limited
partnership organized under the laws of the State of Delaware (the
"Partnership"), HRC General Partner Limited Partnership, a limited
partnership organized under the laws of the State of Delaware ("HRC"),
James L. Zech, an individual, and Steven J. Tynan, an individual, each a
Reporting Person. High Ridge's principal business is to provide private
equity advisory services. The Partnership is a private equity fund that
invests exclusively in property/casualty insurance companies and related
businesses. HRC is the general partner of the Partnership. High Ridge is
the general partner of HRC. Mr. Zech and Mr. Tynan are the members of High
Ridge.
(b) The address of the principal offices of High Ridge, the Partnership, HRC,
Mr. Zech and Mr. Tynan is 107 Elm Street, Four Stamford Plaza, P.O. Box
120043, Stamford CT 06912-0043.
(c) Set forth in Schedule II to this Schedule 13D is the name, business address
and present principal occupation or employment of each of the executive
officers and directors of High Ridge.
(d) During the last five years, neither any Reporting Person nor any person
identified in Schedule II has been convicted in a criminal proceeding.
(e) During the last five years, neither any Reporting Person nor any person
identified in Schedule II has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction resulting in a
judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or
finding any violations with respect to such laws.
(f) All directors and executive officers of High Ridge named in Schedule II are
citizens of the United States.
Page 7 of 19
<PAGE>
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to the Stock Option Purchase Agreement dated as of November 20,
1997 between and among Charles H. Powers, Walker S. Powers, Rex Huggins, Jane
Huggins (collectively, the "SBGI Shareholders"), SBGI and High Ridge, (the "LLC
Option Agreement"), High Ridge has purchased, for $1.00 payable to each of the
SBGI Shareholders, options ("LLC Options") to purchase an aggregate of 703,124
shares of the common stock, par value $1.00 per share ("Common Stock") of SBGI.
The source of the consideration paid by High Ridge was working capital. The LLC
Option Agreement is attached as Exhibit I to this Schedule 13D.
Pursuant to the Stock Option Purchase Agreement dated as of November 20,
1997 between and among the SBGI Shareholders, SBGI and the Partnership (the
"Partnership Option Agreement"), the Assignment Agreement, dated as of June 23,
1998 between and among the SBGI Shareholders and the Partnership, which was
executed by such parties on June 29, 1998, a copy of which is attached hereto as
Exhibit III and is incorporated by reference herein in its entirety (the
"Assignment Agreement"), the Partnership has purchased, for $1.00 paid to each
of the SBGI Shareholders, options ("Partnership Options") to purchase an
aggregate of 703,124 additional shares of Common Stock of SBGI. The source of
the consideration paid by the Partnership was working capital. The Partnership
Option Agreement is attached as Exhibit II to this Schedule 13D and is
incorporated by reference herein in its entirety.
ITEM 4. PURPOSE OF THE TRANSACTION.
Each of High Ridge and the Partnership has acquired its respective
options for investment purposes. Pursuant to the LLC Option Agreement, one half
of the LLC Options will expire on December 31, 1998 (the "1998 LLC Options") and
the other half will expire on December 31, 2000 (the "2000 LLC Options").
Pursuant to the Partnership Option Agreement, one half of the Partnership
Options will expire on December 31, 1998 (the "1998 Partnership Options") and
the other half will expire on December 31, 2000 (the "2000 Partnership
Options").
Pursuant to the LLC Option Agreement, High Ridge has agreed that in the
event that High Ridge should exercise any of the 1998 LLC Options, or transfer,
sell or assign any of the 1998 LLC Options to a party other than a party
controlled by or under common control with High Ridge, then High Ridge shall
within 10 days after any such transaction, pay in cash to the SBGI Shareholders,
pro rata in proportion to the 1998 LLC Options sold by such SBGI Shareholders
pursuant to the LLC Option Agreement, an amount equal to the product of $2.00
and the number of shares of Common Stock subject to such 1998 LLC Options
exercised, transferred, sold or assigned by High Ridge in accordance with
Section 4 of the LLC Option Agreement. Pursuant to Section 4 of the Partnership
Option Agreement, the Partnership has agreed to the same terms with respect to
the 1998 Partnership Options.
High Ridge and the Partnership each intend to reexamine their
investments in SBGI from time to time and, depending on market considerations
and other factors, may exercise their options, or purchase or sell their options
or shares of SBGI Common Stock, if appropriate opportunities to do so are
available, on such terms and at such time as it considers advisable.
Pursuant to the LLC Option Agreement and the Partnership Option
Agreement, respectively, the LLC Options and the Partnership Options each remain
subject to certain provisions with respect to restrictions on transfer,
registration rights and indemnification contained in the Stock Purchase
Agreement dated as of January 29, 1996 between Charles H. Powers, Walker S.
Powers and SBGI, and the amendment thereto, and the Stock Option Agreement dated
as of January 30, 1996
Page 8 of 19
<PAGE>
between the SBGI Shareholders and SBGI (together, the "1996 Agreements"). The
1996 Agreements are filed as Annexes A and B to SBGI's Definitive Proxy
Statement on Schedule 14A filed on May 11, 1996, and are incorporated herein by
reference.
Subject to the foregoing, the Reporting Persons do not have any present
plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of SBGI, or the
disposition of securities of SBGI;
(b) An extraordinary corporate transaction, such
as a merger, reorganization or liquidation, involving SBGI or any of its
subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or any of
its subsidiaries;
(d) Any change in the present board of directors
or management of SBGI, including any plans or proposals to change the number of
directors or to fill any existing vacancies on the board;
(e) Any material change in the present capitalization or dividend policy of
SBGI;
(f) Any other material change in SBGI's business or corporate structure;
(g) Changes in SBGI's charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of SBGI by any person;
(h) Causing a class of securities of SBGI to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an inter-dealer
quotation system of a registered national securities association;
(i) A class of equity securities of SBGI becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b) According to SBGI, as of June 30, 1998, there were 11,283,134 shares of
SBGI Common Stock issued and outstanding on a fully diluted basis ("Total
Outstanding Shares").
Page 9 of 19
<PAGE>
Pursuant to the LLC Option Agreement, High Ridge has acquired the LLC
Options, which represent the right to acquire 703,124 shares of Common Stock, or
6.2% of the Total Outstanding Shares on a fully diluted basis taking into
consideration the Partnership Options. All of the Reporting Persons, as a group,
have acquired beneficial ownership of the 703,124 shares of Common Stock
represented by the LLC Options.
Pursuant to the Partnership Option Agreement, the Partnership has acquired
the Partnership Options, which represent the right to acquire an additional
703,124 shares of Common Stock, or 6.2% of the Total Outstanding Shares on a
fully diluted basis taking into consideration the LLC Options. Each of the
Reporting Persons may be deemed, as members of a group, to have acquired
beneficial ownership of the 1,406,248 shares of Common Stock represented by the
LLC Options and the Partnership Options, taken as a whole, which together
represent 12.5% of the Total Outstanding Shares on a fully diluted basis.
(c) Neither any Reporting Person nor any person named in Schedule II,
has effected any transaction in SBGI Common Stock during the past 60 days,
except as disclosed herein.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
In connection with the transactions contemplated by the LLC Option
Agreement, the Partnership Option Agreement and the Assignment Agreement, each
of High Ridge and the Partnership, on the one hand, and SBGI on the other hand,
have entered into a Stock Option Agreement dated as of June __, 1998 (the "Stock
Option Agreements"), copies of which are attached hereto as Exhibits IV and V
and are incorporated by reference herein in their entirety. Under the Stock
Option Agreements, the terms of the LLC Options and the Partnership Options, as
well as the terms of the 1996 Agreements which are applicable to such options,
are restated. Other than as described herein, to each Reporting Person's
knowledge there are no contracts, arrangements, understandings or relationships
(legal or otherwise) among the persons named in Item 2 and between such persons
and any person
Page 10 of 19
<PAGE>
with respect to any securities of SBGI, including, but not limited to, transfer
or voting of any securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
Page 11 of 19
<PAGE>
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO. DESCRIPTION
I Stock Option Purchase Agreement, dated as of November 20, 1997,
between and among the SBGI Shareholders, High Ridge and SBGI.
II Stock Option Purchase Agreement, dated as of November 20, 1997,
between and among the SBGI Shareholders, the Partnership and
SBGI.
III Assignment Agreement, dated as of June 23, 1998, between and
among the SBGI Shareholders and the Partnership.
IV Stock Option Agreement, dated as of July 7, 1998, between High
Ridge and SBGI.
V Stock Option Agreement, dated as of July 7, 1998, between the
Partnership and SBGI.
Page 12 of 19
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 7, 1998
HIGH RIDGE CAPITAL, LLC
By: /s/ James L. Zech
-----------------
Name: James L. Zech
Title: President
Page 13 of 19
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 7, 1998
HRC GENERAL PARTNER LIMITED PARTNERSHIP
By: High Ridge Capital, LLC
-----------------------
Its: General Partner
By: /s/ James L. Zech
--------------------
Name: James L. Zech
Title: President
Page 14 of 19
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 7, 1998
HIGH RIDGE CAPITAL PARTNERS
LIMITED PARTNERSHIP
By: HRC General Partner Limited Partnership
-----------------------------------------
Its: General Partner
By: High Ridge Capital, LLC
Its: General Partner
By: /s/ James L. Zech
--------------------
Name: James L. Zech
Title: President
Page 15 of 19
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 7, 1998
/s/ James L. Zech
-----------------
James L. Zech
Page 16 of 19
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: July 7, 1998
/s/ Steven J. Tynan
-------------------
Steven J. Tynan
Page 17 of 19
<PAGE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
I Stock Option Purchase Agreement, dated as of November 20, 1997
between and among the SBGI Shareholders, High Ridge and the SBGI.
II Stock Option Purchase Agreement, dated as of November 20, 1997,
between and among the SBGI Shareholders, High Ridge and SBGI.
III Assignment Agreement, dated as of June 23, 1998, between and
among the SBGI Shareholders and the Partnership.
IV Stock Option Agreement, dated as of July 7, 1998, between High
Ridge and SBGI.
V Stock Option Agreement, dated as of July 7, 1998, between the
Partnership and SBGI.
Page 18 of 19
<PAGE>
Schedule I
JOINT FILING AGREEMENT
----------------------
The undersigned parties hereby agree that the Schedule 13D filed
herewith (and any amendments thereto) relating to the stock of The Seibels Bruce
Group, Inc. is being filed jointly with the Securities and Exchange Commission
pursuant to Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended,
on behalf of each such person.
Dated: November 25, 1997
HIGH RIDGE CAPITAL, LLC
By: /s/ James L. Zech
----------------------
Name: James L. Zech
Title: President
HRC GENERAL PARTNER LIMITED PARTNERSHIP
By: High Ridge Capital, LLC
-----------------------
Its: General Partner
By: /s/ James L. Zech
---------------------
Name: James L. Zech
Title: President
HIGH RIDGE CAPITAL PARTNERS
LIMITED PARTNERSHIP
By: HRC General Partner Limited Partnership
---------------------------------------
Its: General Partner
By: High Ridge Capital, LLC
-----------------------
Its: General Partner
By: /s/ James L. Zech
---------------------
Name: James L. Zech
Title: President
/s/ James L. Zech
------------------
James L. Zech
/s/ Steven J. Tynan
-------------------
Steven J. Tynan
Page 19 of 19
<PAGE>
EXHIBIT I
STOCK OPTION PURCHASE AGREEMENT
-------------------------------
This Stock Option Purchase Agreement, dated as of November 20, 1997
(this "Agreement"), is made between and among Charles H. Powers, Walker S.
Powers, Rex Huggins and Jane Huggins (collectively, the "Sellers," and each
individually a "Seller"), High Ridge Capital LLC, a Delaware limited liability
corporation ("High Ridge"), and The Seibels Bruce Group, Inc., a South Carolina
corporation (the "Company").
W I T N E S S E T H;
--------------------
WHEREAS, pursuant to the terms of a Stock Option Agreement, dated as of
January 30, 1996, among the Sellers and the Company (the "Stock Option
Agreement") and a Stock Purchase Agreement, dated as of January 29, 1996, among
Charles H. Powers, Walker S. Powers and the Company (the "Stock Purchase
Agreement"), the Sellers own options (the "Options") to purchase an aggregate of
1,562,500 shares of the common stock, par value $1.00 per share, of the Company
(the "Common Stock");
WHEREAS, one half of the Options expire on December 31, 1998 (the "1998
Options") and one half of the Options expire on December 31, 2000 (the "2000
Options"); and
WHEREAS, the Sellers propose to sell and assign a portion of such
Options to High Ridge, High Ridge has agreed to purchase such
1
<PAGE>
portion of such Options, and the Company has consented to such sale and
assignment, all in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the promises, representations,
warranties and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Sellers, jointly and severally, and High Ridge and the Company hereby agree as
follows:
1. Sale and Assignment.
-------------------
Each of the Sellers hereby sells, transfers and assigns to High Ridge,
Options for the purchase of the number of shares of the Common Stock of the
Company set forth next to the name of such Seller below in this Section 1,
together with all rights and interests attendant to such Options pursuant to the
Stock Option Agreement and the Stock Purchase Agreement (other than Sections 6.1
and 7.2 thereof), and each of the Sellers acknowledges receipt of cash in the
amount of $1 from High Ridge:
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Name 1998 Options 2000 Options
- ---------------------------- ---------------- ----------------
<S> <C> <C>
Charles H. Powers 281,250 281,250
Walker S. Powers 56,250 56,250
Rex Huggins and Jane Huggins 14,062 14,062
------- -------
351,562 351,562
======= =======
</TABLE>
2. Company's Consent and Acknowledgement. The Company hereby consents,
-------------------------------------
pursuant to Section 3.2 of the Stock Option Agreement and Section 6.4(3) of the
Stock Purchase Agreement and otherwise, to the sale and transfer of Options by
the Sellers to High Ridge as provided herein. The Company acknowledges and
agrees
2
<PAGE>
that as to such Options, the terms of the Stock Option Agreement will continue
to apply and shall be enforceable in accordance with their terms by and against
High Ridge, including without limitation Section 2.4 thereof, which makes
applicable to shares of Common Stock purchased through exercise of the Options
the provisions of Section 7 of the Stock Purchase Agreement, which provide
registration rights with respect to such shares. For purposes of such Section 7,
High Ridge shall be deemed a Purchaser thereunder and shall have the same rights
as other Purchasers with respect to its shares (other than Section 7.2 thereof).
3. Hiqh Ridqe's Agreement to Be Bound.
----------------------------------
High Ridge hereby acknowledges and agrees that with respect to the
Options purchased hereunder, and any shares of Common Stock acquired through the
exercise thereof, it shall be bound by the terms of the Stock Option Agreement,
including without limitation Sections 2.6 and 3.2 thereof, which among other
things restrict transfers of the Options and shares of Common Stock acquired
through the exercise thereof. Without limiting the generality of the foregoing,
High Ridge hereby acknowledges and agrees it shall be bound by the provisions of
Section 5.4 of the Stock Purchase Agreement entitled "Securities Act of 1933"
(including Sections 5.4.1 and 5.4.2 thereunder), Section 5.3 of the Stock
Purchase Agreement entitled "The Shares", Section 5.4 of the Stock Purchase
Agreement entitled "Cooperation with Filings", Section 6.4 of the Stock Purchase
Agreement entitled "Restrictions on Resale" and Section 9 of the Stock Purchase
Agreement entitled "Indemnification
3
<PAGE>
By the Purchasers" of the Stock Purchase Agreement (including Sections 9.1 and
9.2 thereunder) provided, however, that High Ridge shall not provide
indemnification with respect to acts or omissions of any other Purchaser.
4. Contingent Payment Obligation.
-----------------------------
In the event that High Ridge should exercise any of the 1998 Options, or
transfer, sell or assign any of the 1998 Options to a party other than a party
controlled by or under common control with High Ridge, High Ridge shall, within
10 days after any such transaction, pay in cash to the Sellers, pro rata in
proportion to the 1998 Options sold by the respective Sellers hereunder, an
amount equal to the product of $2 and the number of shares of Common Stock
subject to such 1998 Options exercised, transferred, sold or assigned by High
Ridge. In the event of any stock dividend, stock split, combination of shares or
other similar change with respect to the Common Stock of the Company, the amount
payable by High Ridge under this Section 4 shall be adjusted accordingly.
5. Representations and Warranties by Sellers.
-----------------------------------------
Each Seller jointly and severally represents, warrants and covenants as
follows:
(a) The Sellers have all right, title and interest in and to the
Options, subject to no lien, encumbrance or right of any other party.
4
<PAGE>
(b) The execution, delivery and performance of this Agreement by the
Sellers does not conflict with, or constitute a default under, any agreement or
instrument to which any Seller is a party or is bound.
6. Representations and Warranties by High Ridge.
--------------------------------------------
High Ridge represents and warrants as follows:
(a) High Ridge is acquiring Options hereunder for investment purposes
only.
(b) The execution, delivery and performance of this Agreement by High
Ridge does not conflict with or constitute a default under any agreement or
instrument to which High Ridge is a party or is bound.
(c) High Ridge is a limited liability company formed under the laws of
the State of Delaware. The execution and delivery of the Agreement, the receipt
of the Options and compliance by High Ridge with all of the other provisions of
this Agreement are within the powers and capacity of High Ridge.
(d) Except for a Form 13D under the United States Securities Exchange
Act of 1934 as amended, and Rule 13-3 thereunder, no approval, consent or
authorization of, or declaration or filing with, any governmental or judicial
authority is required in connection with the execution and delivery of the
Agreement by High Ridge or the performance by High Ridge hereunder.
5
<PAGE>
(e) This Agreement has been duly executed by or on behalf of High Ridge
and is a valid and binding obligation enforceable against High Ridge in
accordance with its terms, except as enforceability thereof may be limited by
the exercise of judicial discretion, the laws of bankruptcy, insolvency,
reorganization, moratorium, or other similar laws from time to time in effect
relating to or affecting generally the enforcement of creditors' rights, and
except as enforcement of remedies may be limited by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
7. Amendments. No amendment or modification of this Agreement will be
----------
effective unless it is in writing and duly executed by each party to be charged
thereunder.
8. Counterpart. This Agreement may be executed in two or more
-----------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HIGH RIDGE CAPITAL LLC
By: /s/ Steven J. Tynan
-----------------------------------
Steven J. Tynan
Principal
THE SELLERS
/s/ Charles H. Powers
-----------------------------------
Charles H. Powers
/s/ Walker S. Powers
-----------------------------------
Walker S. Powers
/s/ Rex Huggins
-----------------------------------
Rex Huggins
/s/ Jane Huggins
-----------------------------------
Jane Huggins
THE SEIBELS BRUCE GROUP, INC.
By: /s/ Ernst N. Csiszar
-----------------------------------
Ernst N. Csiszar
President and Chief Executive Officer
<PAGE>
EXHIBIT II
STOCK OPTION PURCHASE AGREEMENT
-------------------------------
This Stock Option Purchase Agreement, dated as of November 20, 1997
(this "Agreement"), is made between and among Charles H. Powers, Walker S.
Powers, Rex Huggins and Jane Huggins (collectively the "Sellers," and each
individually a "Seller"), High Ridge Capital Partners Limited Partnership, a
Delaware limited partnership (the "Fund"), and The Seibels Bruce Group, Inc., a
South Carolina corporation (the "Company").
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the terms of a Stock Option Agreement, dated as of
January 30, 1996, among the Sellers and the Company (the "Stock Option
Agreement") and a Stock Purchase Agreement, dated as of January 29, 1996, among
Charles H. Powers, Walker S. Powers and the Company (the "Stock Purchase
Agreement"), the Sellers own options (the "Options") to purchase an aggregate of
1,562,500 shares of the common stock, par value $1.00 per share, of the Company
(the "Common Stock");
WHEREAS, one half of the Options expire on December 31, 1998 (the "1998
Options") and one half of the Options expire on December 31, 2000 (the "2000
Options"); and
WHEREAS, the Sellers propose to sell and assign a portion of such
Options to the Fund, the Fund has agreed to purchase such
1
<PAGE>
portion of such Options, and the Company has consented to such sale and
assignment, all in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the promises, representations,
warranties and covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Sellers, jointly and severally, and the Fund and the Company hereby agree as
follows:
1. Sale and Assignment.
-------------------
Upon the terms and subject to the conditions contained herein, on the
fifth business day following the satisfaction of the conditions set forth in
Section 7 of this Agreement (the "Closing Date"), each of the Sellers shall
sell, transfer and assign to the Fund, Options for the purchase of the number of
shares of the Common Stock of the Company set forth next to the name of such
Seller below in this Section 1, together with all rights and interests attendant
to such Options pursuant to the Stock Option Agreement and the Stock Purchase
Agreement (other than Sections 6.1 and 7.2 thereof), and the Fund shall pay to
each of the Sellers cash in the aggregate amount of $1:
Number of Shares Number of Shares
Name 1998 Options 2000 Options
- ---------------------------- ---------------- ----------------
Charles H. Powers 281,250 281,250
Walker S. Powers 56,250 56,250
Rex Huggins and Jane Huggins 14,062 14,062
------- -------
351,562 351,562
======= =======
2
<PAGE>
2. Company' Consent and Acknowledgement. The Company hereby consents,
------------------------------------
pursuant to Section 3.2 of the Stock Option Agreement and Section 6.4(3) of the
Stock Purchase Agreement and otherwise, to the sale and transfer of Options by
the Sellers to the Fund as provided herein. The Company acknowledges and agrees
that as to such Options, the terms of the Stock Option Agreement will continue
to apply and shall be enforceable in accordance with their terms by and against
the Fund, including without limitation Section 2.4 thereof, which makes
applicable to shares of Common Stock purchased through exercise of the Options
the provisions of Section 7 of the Stock Purchase Agreement, which provide
registration rights with respect to such shares. For purposes of such Section 7,
the Fund shall be deemed a Purchaser thereunder and shall have the same rights
as other Purchasers with respect to its shares (other than Section 7.2 thereof).
3. The Fund's Agreement to be Bound.
--------------------------------
The Fund hereby acknowledges and agrees that with respect to the Options
purchased hereunder, and any shares of Common Stock acquired through the
exercise thereof, it shall be bound by the terms of the Stock Option Agreement,
including without limitation Sections 2.6 and 3.2 thereof, which among other
things restrict transfers of the Options and shares of Common Stock acquired
through the exercise thereof.
3
<PAGE>
Without limiting the generality of the foregoing, the Fund hereby
acknowledges and agrees it shall be bound by the provisions of Section 5.4 of
the Stock Purchase Agreement entitled "Securities Act of 1933" (including
Sections 5.4.1 and 5.4.2 thereunder), Section 5.3 of the Stock Purchase
Agreement entitled "The Shares", Section 5.4 of the Stock Purchase Agreement
entitled "Cooperation with Filings", Section 6.4 of the Stock Purchase Agreement
entitled "Restrictions on Resale" and Section 9 of the Stock Purchase Agreement
entitled "Indemnification by the Purchasers" of the Stock Purchase Agreement
(including Sections 9.1 and 9.2 thereunder) provided, however, that the Fund
shall not provide indemnification with respect to the acts or omissions of any
other Purchaser.
4. Contingent Payment Obligation.
-----------------------------
In the event that the Fund should exercise any of the 1998 Options, or
transfer, sell or assign any of the 1998 Options to a party other than a party
controlled by or under common control with the Fund, the Fund shall, within 10
days after any such transaction, pay in cash to the Sellers, pro rata in
proportion to the 1998 Options sold by the respective Sellers hereunder, an
amount equal to the product of $2 and the number of shares of Common Stock
subject to such 1998 Options exercised, transferred, sold or assigned by the
Fund. In the event of any stock dividend, stock split, combination of shares or
other similar change with respect to the Common Stock of the Company, the amount
payable by the Fund under this Section 4 shall be adjusted accordingly.
4
<PAGE>
5. Representations and Warranties by Sellers.
-----------------------------------------
Each Seller jointly and severally represents, warrants and covenants as
follows:
(a) The Sellers have all right, title and interest in and to the
Options, subject to no lien, encumbrance or right of any other party.
(b) The execution, delivery and performance of this Agreement by the
Sellers does not conflict with, or constitute a default under, any agreement or
instrument to which any Seller is a party or is bound.
6. Representations and Warranties by the Fund.
------------------------------------------
The Fund represents and warrants as follows:
(a) The Fund is acquiring Options hereunder for investment purposes
only.
(b) The execution, delivery and performance of this Agreement by the
Fund does not conflict with or constitute a default under any agreement or
instrument to which the Fund is a party or is bound.
(c) The Fund is a limited partnership organized under the laws of the
State of Delaware. The execution and delivery of this Agreement, the receipt of
the Options and compliance by the Fund with all of the other provisions of this
Agreement are within the powers and capacity of the Fund.
5
<PAGE>
(d) Except for a Form 13D under the United States Securities Exchange
Act of 1934, as amended, and Rule 13-d thereunder, and regulatory filings or
approvals with certain state Insurance Departments, no approval, consent or
authorization of, or declaration or filing with, any governmental or judicial
authority is required in connection with the execution and delivery of this
Agreement by the Fund or the performance by the Fund hereunder.
(e) This Agreement has been duly executed by or on behalf of the Fund
and is a valid and binding obligation enforceable against the Fund in accordance
with its terms, except as enforceability thereof may be limited by the exercise
of judicial discretion, the laws of bankruptcy, insolvency, reorganization,
moratorium, or other similar laws from time to time in effect relating to or
affecting generally the enforcement of creditors' rights, and except as
enforcement of remedies may be limited by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
7. Condition to Closing. The obligations of each party to this
--------------------
Agreement to consummate the transactions contemplated hereby on the Closing Date
are subject to the reasonable satisfaction of each such party that all
regulatory filings required to be made prior to the Closing Date, and all
consents, approvals, permits and authorizations required to be obtained on or
prior to the Closing Date from any governmental authority (including, without
6
<PAGE>
limitation, the insurance department of any state) in connection with the
transactions contemplated herein shall have been made or obtained, without the
imposition of any material condition, restriction or required undertaking not
expressly set forth in applicable statutes and regulations ("Regulatory
Consents").
8. Covenant to Use All Commercially Reasonable Efforts to Obtain
-------------------------------------------------------------
Regulatory Consents. Sellers, the Fund and the Company shall, as soon as
- -------------------
practicable, commence to take all commercially reasonable actions required to
obtain as promptly as practicable all Regulatory Consents necessary to
authorize, approve or permit the consummation of the transactions contemplated
hereby, and Sellers, the Fund and the Company shall cooperate with each other
with respect thereto. In addition, upon the terms and subject to the conditions
herein provided, Sellers, the Fund and the Company covenant and agree to use all
commercially reasonable efforts to take, or cause to be taken, all actions
necessary or appropriate to obtain the Regulatory Consents.
9. Termination. This Agreement may be terminated and the transactions
-----------
contemplated hereby abandoned prior to the Closing Date:
(a) at any time by mutual agreement in writing of the parties hereto;
or
(b) on June 30, 1998 if the Required Consents have not been obtained on
or prior to that date, unless the parties hereto shall agree in writing to
extend the term of this Agreement.
7
<PAGE>
10. Amendments. No amendment or modification of this Agreement will be
----------
effective unless it is in writing and duly executed by each party to be charged
thereunder.
11. Counterpart. This Agreement may be executed in two or more
-----------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
8
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
HIGH RIDGE CAPITAL PARTNERS LIMITED
PARTNERSHIP
By High Ridge Capital LLC
By: /s/ Steven J. Tynan
-----------------------------------
Steven J. Tynan
Principal
THE SELLERS
/s/ Charles H. Powers
-----------------------------------
Charles H. Powers
/s/ Walker S. Powers
-----------------------------------
Walker S. Powers
/s/ Rex Huggins
-----------------------------------
Rex Huggins
/s/ Jane Huggins
-----------------------------------
Jane Huggins
THE SEIBELS BRUCE GROUP, INC.
By: /s/ Ernst N. Csiszar
-----------------------------------
Ernst N. Csiszar
President and Chief Executive Officer
<PAGE>
EXHIBIT III
ASSIGNMENT AGREEMENT
This Assignment Agreement, dated as of June 23, 1998, is made between and
among Charles H. Powers, Walker S. Powers, Rex Huggins and Jane Huggins
(collectively "Sellers," and each individually a "Seller") and High Ridge
Capital Partners Limited Partnership, a Delaware limited partnership (the
"Fund").
WHEREAS, pursuant to the terms of that certain Stock Option Purchase
Agreement dated as of November 20, 1997, among the Sellers, the Fund and The
Seibels Bruce Group, Inc., a South Carolina corporation (the "Company") (the
"Stock Option Purchase Agreement"), the Sellers agreed to sell and assign, and
the Fund agreed to purchase, options ("Options") to purchase an aggregate of
703,124 shares of the common stock, par value $1.00 per share ("Common Stock"),
of the Company, and the Company has consented to such sale and assignment in
accordance with the terms of the Stock Option Purchase Agreement;
WHEREAS, all of the conditions set forth in the Stock Option Purchase
Agreement to the obligations of each party to consummate the transactions have
been satisfied.
NOW, THEREFORE, subject to the terms and conditions hereof and in
consideration of the promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Sellers jointly and severally on one hand and the Fund on the other hereto agree
as follows:
1. Sale and Assignment. Consistent with the terms of the Stock Option
-------------------
Purchase Agreement among the Sellers, the Fund and the Company, each of the
Sellers hereby sells, transfers and assigns to the Fund, Options for the
purchase of the number of shares of the Common Stock set forth next to the name
of such Seller below, together with all rights and interest attendant to such
Options, and each of the Sellers acknowledges receipt of cash in the amount of
$1 (One Dollar) from the Fund:
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Name 1998 Options 2000 Options
- ---- ------------ ------------
<S> <C> <C>
Charles H. Powers 281,250 281,250
Walker S. Powers 56,250 56,250
Rex Huggins and Jane Huggins 14,062 14,062
------- -------
351,562 351,562
</TABLE>
<PAGE>
2. Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
IN WITNESS WHEREOF, the parties have executed this Assignment Agreement as
of the date first above-written.
THE SELLERS:
/s/ Charles H. Powers
__________________________
Charles H. Powers
/s/ Walker S. Powers
__________________________
Walker S. Powers
/s/ Rex Huggins
__________________________
Rex Huggins
/s/ Jane Huggins
__________________________
Jane Huggins
THE FUND:
HIGH RIDGE CAPITAL PARTNERS
LIMITED PARTNERSHIP
By: HRC General Partner Limited
Partnership
Its: General Partner
By: High Ridge Capital LLC
Its: General Partner
/s/ Steven J. Tynan
By:____________________
Name: Steven J. Tynan
Title: Principal
<PAGE>
EXHIBIT IV
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Option Agreement"), dated as of July 7,
1998, is made between High Ridge Capital LLC, a Delaware limited liability
corporation ("High Ridge"), and The Seibels Bruce Group, Inc., a South Carolina
corporation (the "Company"). Reference is made to the Stock Purchase Agreement,
dated as of January 20, 1996, among the Company, Charles H. Powers and Walker S.
Powers (the "1996 Stock Purchase Agreement"), the Stock Option Agreement, dated
as of January 30, 1996 among Charles H. Powers, Walker S. Powers, Rex Huggins
and Jane Huggins (the "Individual Optionholders") and the Company (the "1996
Stock Option Agreement") and the Stock Option Purchase Agreement, dated as of
November 20, 1997, among the Company, the Individual Optionholders and High
Ridge (the "High Ridge Stock Option Purchase Agreement").
WITNESSETH
WHEREAS, pursuant to the 1996 Stock Purchase Agreement and the 1996 Stock
Option Agreement, the Company granted to the Individual Optionholders an
irrevocable option to purchase, from the Company, 6,250,000 shares of common
stock, par value $1.00 per share ("Common Stock") of the Company, upon the terms
and conditions set forth therein, which option, as the result of a reverse stock
split by the Company of the Common Stock, represents as of the date hereof the
right to purchase 1,562,500 shares of Common Stock;
WHEREAS, pursuant to the High Ridge Stock Option Purchase Agreement, the
Individual Optionholders have sold and assigned a portion of such options to
High Ridge, and High Ridge has purchased such portion of such options,
aggregating options to purchase 703,124 shares of Common Stock, and the Company
has consented to such sale and assignment in accordance with the terms of High
Ridge Stock Option Purchase Agreement;
WHEREAS, High Ridge and the Company have agreed to restate the terms of
such options now held by High Ridge pursuant to the terms hereof;
NOW, THEREFORE, subject to the terms and conditions hereof and in
consideration of the premises and the promises contained herein, High Ridge and
the Company hereto agree as follows:
<PAGE>
ARTICLE 1
OPTION TERMS
------------
1.1 Amount of Option. The Company hereby confirms the terms of an
----------------
irrevocable option (the "Option") to purchase from the Company 703,124 shares of
Common Stock (the "Shares"), which Option has been assigned to High Ridge by the
Individual Optionholders pursuant to an Assignment Agreement dated as of June
23, 1998 by and among the Individual Optionholders and High Ridge, upon the
terms and conditions set forth below and in Section 1.2:
(a) The portion of the Option with respect to 351,562 of the Shares
shall have an exercise price of the greater of (i) Book Value (as defined in
Section 1.1(c)) per share on the date of exercise or (ii) $6.00 per share. This
portion of the Option for 351,562 of the Shares shall terminate on December 31,
1998.
(b) The portion of the Option with respect to the remaining 351,562 of
the Shares shall have an exercise price of the greater of (i) Book Value (as
defined Section 1.1(c)) per share on the date of exercise or (ii) $8.00 per
share. This portion of the Option for 351,562 of the Shares shall terminate on
December 31, 2000.
(c) For purposes of this Option Agreement, "Book Value" shall be the
total shareholders equity of the Company divided by the shares issued and
outstanding, determined under the standard practices of the Company and reported
on SEC Form 10-Q, as of the end of the previous calendar quarter.
1.2 Additional Terms and Conditions. In addition to the terms and
-------------------------------
conditions in Section 1.1, the Option shall be subject to the following terms
and conditions:
(a) Each exercise of the Option must be made in an amount equal to at
least 500 shares.
(b) Full payment of the exercise price must be made to the Company
upon exercise of the Option, whether in whole or in part, by certified or
cashier's check or wire transfer.
(c) The Option is not transferable by High Ridge, except as provided
in Article 3 of this Option Agreement.
(d) The Option is irrevocable until termination under Section 1.1(a)
or (b).
ARTICLE 2
EXERCISE OF OPTION AND ISSUANCE OF SHARES
-----------------------------------------
2.1 Exercise of Option. To exercise the Option, in whole or in part, High
------------------
Ridge must deliver to the Company written notice, signed by High Ridge, stating
the
2
<PAGE>
number of Shares High Ridge elects to be purchased, and stating that payment to
the Company is made as described in Section 1.2(b).
2.2 Issuance of Shares. Upon exercise of all or part of the Option, the
------------------
Company shall issue the appropriate number of Shares to High Ridge within 30
days or such later time as may be deemed necessary by the Company's Board of
Directors on the advice of counsel, to comply with applicable federal or state
securities laws or state insurance laws.
2.3 Securities Act of 1933.
----------------------
(a) Unregistered Securities. High Ridge understands that the Option
-----------------------
acquired pursuant to this Agreement and the Shares underlying the Option have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under applicable state securities laws, in reliance upon
exemptions thereunder from such registration requirements afforded by Section
4(2) of the Securities Act and Regulation D thereunder, governing the offer and
sale of securities to accredited investors, and other applicable exemptions.
High Ridge agrees that there shall be imprinted on the face of any
certificate(s) of the Shares issued pursuant to a partial or full exercise of
the Option issued pursuant to this Agreement a restrictive legend substantially
in the form set forth in Section 2.3(b) below.
(b) Restrictive Legend. High Ridge understands and agrees that any
------------------
disposition of the Shares in violation of this Agreement shall be null and void,
and that no transfer of Shares shall be made by the Company's transfer agent
upon the Company's stock transfer books unless there has been compliance with
the terms of this Agreement. High Ridge understands and agrees that there shall
be imprinted on the certificates for the Shares a legend substantially in the
form as the following:
The option under which the shares of common stock represented by
this certificate was acquired and the shares acquired under
exercise of that option have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold unless the shares are registered under
the Securities Act, or an exemption from the registration
requirements under the Securities Act is available.
(c) The Option. High Ridge acknowledges that the Option has not been
----------
registered under the Securities Act. High Ridge is acquiring beneficial
ownership of the Option for its own account for investment, and not with a view
to a distribution. High Ridge agrees not to transfer or otherwise dispose of the
Option unless such transfer or other disposition is registered under the
Securities Act or is exempt from such registration. By reason of High Ridge's
knowledge and experience in financial and business matters, High Ridge is
capable of evaluating the merits and risks of its acquisition hereunder of
beneficial ownership of the Option. High Ridge has had available such
information with respect to the Company as deemed necessary or
3
<PAGE>
appropriate to make such evaluation. High Ridge has the financial resources to
bear the risk of ownership of the Option.
(d) Cooperation With Filings. High Ridge covenants to provide the
------------------------
Company with all information concerning High Ridge necessary to enable the
Company to make all required Securities and Exchange Commission ("SEC"),
insurance regulatory, and other filings required in connection with this
Agreement.
(e) Due Execution: Binding Effect. This Agreement has been duly
-----------------------------
executed by or on behalf of High Ridge and is a valid and binding obligation
enforceable against High Ridge in accordance with its terms, except as
enforceability thereof may be limited by the exercise of judicial discretion,
the laws of bankruptcy, insolvency, reorganization, moratorium, or other similar
laws from time to time in effect relating to or affecting generally the
enforcement of creditors' rights, and except as enforcement of remedies may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2.4 Change in Capital Stock Structure. In the event of a stock dividend,
---------------------------------
stock split or combination of shares, recapitalization or merger in which the
Company is the surviving corporation, or other change in the Company's capital
stock (including, but not limited to the creation or issuance to shareholders
generally of rights, options or warrants for the purchase of common stock or
preferred stock of the Company), the number and kind of shares of stock or
securities of the Company to be subject to the Option then remaining
outstanding, the number of additional Shares with respect to which the Option is
unexercised, and the exercise price shall be appropriately adjusted by the
Company.
ARTICLE 3
RESTRICTIONS ON RESALE
----------------------
High Ridge shall not sell, transfer, assign or otherwise dispose of any
Shares purchased by exercising Options granted by this Agreement (or the Option
itself), other than to a corporation of which High Ridge owns not less than 80%
of the voting power entitled to be cast in the election of directors of such
corporation, except as set forth below. High Ridge shall not sell, transfer,
assign or otherwise dispose of its beneficial interest in any Shares or the
Option, 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 (excluding for the
purposes of such approval any directors nominated or designated by High Ridge
pursuant to any agreement, arrangement or understanding between High Ridge and
the Company);
(b) subject to Article 4, pursuant to an underwritten public offering
of Shares managed by an investment banking firm reasonably acceptable to the
Company and registered under the Securities Act;
(c) in one or more privately negotiated transactions exempt from
registration under the Securities Act; provided that prior to making a transfer
pursuant to
4
<PAGE>
this clause (c), High Ridge shall obtain a representation from its transferee
addressed to High Ridge and the Company that such Shares are being acquired for
investment only;
(d) pursuant to Rule 144 under the Securities Act;
(e) to a corporation of which High Ridge and its affiliates own not
less than 80% of the voting power entitled to be cast in the election of
directors (a "Controlled Corporation"); provided that such Controlled
Corporation 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 High Ridge and shall agree to transfer such Shares
to High Ridge or another Controlled Corporation of High Ridge if it ceases to be
a Controlled Corporation of High Ridge;
(f) in a merger or consolidation in which the Company is acquired, or
a plan of liquidation of the Company; or
(g) in response to an offer to purchase or exchange for cash or other
consideration any Shares (i) which is made by or on behalf of the Company or
(ii) which is made by or on behalf of any Person or Group (as such terms are
defined in the 1996 Stock Purchase Agreement) and which is approved by the Board
of Directors of the Company at least two business days prior to the expiration
of such offer.
Notwithstanding the foregoing, High Ridge shall not sell in the aggregate,
pursuant to clause (c) or (d) above, Shares representing more than 10% of the
Outstanding Voting Power (as such term is defined in the 1996 Stock Purchase
Agreement) of the Company to any Person or Group or sell any Shares to any such
Person or Group who shall have on file with the SEC a current statement on
Schedule 13D under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), reporting its beneficial ownership of 10% or more of the
outstanding voting power of the Company.
ARTICLE 4
REGISTRATION OF SHARES
----------------------
4.1 Certain Definitions. The following terms as used in this Section
-------------------
shall have the meanings indicated therefor:
(a) "Effective Date" means the date on which a Registration becomes or
is declared effective by the SEC.
(b) "Piggy-back Registration" means a Registration of all or a portion
of the Shares pursuant to Section 4.2, whether or not the registration statement
becomes effective.
(d) "Registration" means the preparation of a registration statement
under the Securities Act and the taking of such other action as shall be
reasonable and appropriate to cause the registration provided for in such
registration statement to be filed
5
<PAGE>
and become effective under the Securities Act, such registration to be filed on
any registration statement form for which the Company is eligible and which it
elects to utilize.
(e) "Registration Expenses" means all expenses, other than Selling
Expenses, incurred by the Company in effecting a Piggy-back Registration
requested pursuant to and otherwise complying with the Company's obligations
under this Section, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company and
of independent public accountants engaged by the Company to conduct any special
audits incident to or required to be included in any such Registration.
(f) "Selling Expenses" means all stock transfer taxes and
underwriters' discounts and commissions applicable to the sale of all or certain
of the Shares by High Ridge.
4.2 Piggy-Back Registration.
-----------------------
(a) Notice of Possible Registration of Shares. Each time before
-----------------------------------------
December 31, 1999 that the Company proposes to effect a Registration of any
shares of the same class as the Shares, other that a registration on Form S-4 or
S-8, or other similar registration form hereafter authorized or prescribed by
the SEC, it will give written notice at least 30 days before the proposed filing
date therefor to High Ridge and, upon the written request of High Ridge given
within 10 business days after the date of such notice, the Company will, subject
to the limitations set forth elsewhere in this Section, include in such
Registration the Shares which High Ridge has so requested to be registered. High
Ridge shall be entitled to two Piggy-back Registrations.
4.3 Termination of Registration Rights. The right of High Ridge to a
----------------------------------
Piggy-back Registration will terminate when High Ridge no longer owns
beneficially at least 20% of the Shares represented by the Option, adjusted to
give effect to stock dividends, stock splits and other similar changes to the
capital structure of the Company.
4.4 Registration Procedure. Subject to the limitations set forth
----------------------
elsewhere in this Section, if the Company receives a request to register any
Shares pursuant to Section 4.2 which complies with the terms of this Article 4,
the Company will use its best efforts to:
(a) keep any effective registration statement effective and current
until the earlier of (i) the completion of the distribution of the Shares so
registered or (ii) expiration of 90 days after the Effective Date;
(b) furnish to High Ridge such number of copies of a summary
prospectus, if any, or other prospectus, including a preliminary prospectus, in
conformity
6
<PAGE>
with the requirements of the Securities Act, and such other documents in such
numbers as High Ridge may reasonably request in order to facilitate the public
sale or other disposition of the Shares registered;
(c) cooperate with High Ridge and High Ridge's counsel to register or
qualify the Shares covered by such Registration under the securities or "blue
sky" laws of such states of the United States as High Ridge shall reasonably
request not to exceed five (5) states and, in any event, at High Ridge's
expense;
(d) promptly advise High Ridge as to the following: (i) the time at
which the registration statement or any post-effective amendment thereto shall
have become effective, the time at which any amendment or supplement to the
prospectus is filed with the SEC and the time at which the offering and sale may
commence, (ii) any request by the SEC for any amendment to such registration
statement or the prospectus or for additional information, and the nature and
substance thereof, and (iii) the issuance by the SEC or any other federal or
state governmental authority or court of any order or similar process suspending
the effectiveness of such registration statement or the suspension of the
qualification of Shares for sale in any jurisdiction, or the initiation (or
threat thereof in writing) of any proceedings for that purpose, and the Company
will use its best efforts to prevent the issuance of such order or process and,
if all such order or process shall be issued, to obtain the withdrawal thereof
at the earliest possible time.
4.5 Underwriting.
------------
(a) Underwritten Distribution May be Requested. If the Company
------------------------------------------
proposes to offer, issue and sell securities of the same class as the Shares in
an underwritten distribution by the Company in a Registration covering Shares
then the right of High Ridge to Registration of High Ridge's Shares shall be
conditioned, subject to the further terms and conditions hereof, on the
Company's best effort to effect the inclusion of the Shares of High Ridge
requested to be so registered in such underwriting.
(b) Selection of Underwriters. The Company shall have the sole right
-------------------------
to select the managing underwriter to effect any underwritten distribution of
the Shares.
(c) Underwriting Agreement. In the case of an underwritten
----------------------
Registration, the Company and High Ridge shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected in
accordance with this Section and shall agree not to effect any public sale or
distribution of securities of the same class as the Shares other than as part of
such underwriting within 90 days (or such other period as may be negotiated)
after the Effective Date of such registration statement.
(d) Limitation on Shares to be included in an Underwritten
------------------------------------------------------
Registration. If the managing underwriter advises the Company in writing that
marketing factors require a limitation of the number of Shares to be
underwritten, then the Company will provide a copy of such writing to High Ridge
and High Ridge shall be entitled to consult with the underwriters concerning
such advice. High Ridge shall be entitled to sell
7
<PAGE>
only the maximum number of Shares that may, in the opinion of such underwriters
after such consultation with High Ridge, be sold by High Ridge.
4.6 Expenses.
--------
(a) Registration Expenses. The Company will bear Registration
---------------------
Expenses for a Registration commenced or completed pursuant to this Section.
(b) Selling Expenses. All Selling Expenses in connection with any
----------------
Registration commenced or completed pursuant to this Section will be borne by
High Ridge.
(c) Mitigation of Company's Obligations. (i) The Company shall have
-----------------------------------
no obligation to bear Registration Expenses if the Company is informed by the
South Carolina Insurance Department that it will not allow any direct or
indirect Subsidiary of the Company to pay a dividend or make a distribution to
the Company to provide funds for the payment of Registration Expenses. The
Company agrees to use its best efforts to cause such Department to give its
approval of such a dividend or distribution.
(ii) If the Company is relieved from bearing any Registration
Expenses pursuant to this subsection, High Ridge may assume the obligation to
pay such Registration Expenses and the Company will proceed with the
Registration.
(iii) If, within three years of the Effective Date of a
Registration for which High Ridge bore the Registration Expenses which otherwise
would have been borne by the Company, the Company has funds available to it, it
will upon request reimburse High Ridge for such Registration Expenses borne by
it.
4.7 Indemnification.
---------------
(a) Indemnification by the Company. In each case of a Registration of
------------------------------
Shares pursuant to the registration rights granted hereby, the Company will
indemnify, save and hold harmless High Ridge, each underwriter thereof, and each
officer and director of any such underwriter from and against any claim, damage,
loss, settlement, or liability, arising out of or based on any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement, any summary prospectus, prospectus or preliminary prospectus
contained therein or any amendment or supplement thereto (including, in each
case, documents incorporated therein by reference) or arising out of or based
upon 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
in the light of the circumstances under which they were made, and will reimburse
each such person for all legal or other expenses reasonably incurred in
connection with the investigation or defense of any such claim, damage, loss or
liability; provided, however, that the Company will not be liable in any such
case to the extent that such claim, damage, loss or liability arises out of or
is based upon any untrue statement, alleged untrue statement, omission or
alleged omission, made in or omitted from such materials in reliance upon and in
conformity with written information in regard to the person or entity seeking
indemnification which information was furnished to the Company specifically for
use in
8
<PAGE>
the preparation of such registration statement, summary prospectus, prospectus
or preliminary prospectus or any amendment or supplement thereto by High Ridge,
any underwriter or other person, or their respective agents; and provided
further that the foregoing indemnification with respect to a preliminary
prospectus shall not inure to the benefit of any underwriter from whom the
person asserting any such claim, damage, loss or liability purchased any of
Shares if a copy of the final prospectus had not been sent or given to such
person at or prior to written confirmation of the sale of such Shares to such
person and the untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the final prospectus.
(b) Indemnification by High Ridge. High Ridge will indemnify, save
-----------------------------
and hold harmless the Company, each officer and director of the Company and each
person who controls the Company (within the meaning of the Securities Act) to
the same extent (and subject to the same limitations) as the foregoing indemnity
from the Company to High Ridge, but only with respect to information relating to
High Ridge and furnished to the Company by High Ridge or its agents specifically
for use in any registration statement, any summary prospectus, prospectus, or
preliminary prospectus contained therein or any amendment or supplement thereto
including, in each case, the documents incorporated therein by reference.
(c) Counsel Fees and Expenses; Settlements. In case any proceeding
--------------------------------------
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnification may be sought pursuant to this
Section 4.7 (the "Indemnified Party"), such Indemnified Party shall promptly
notify the person from whom such indemnity may be sought (the "Indemnifying
Party") in writing and the Indemnifying Party, at its election, may retain
counsel reasonably satisfactory to the Indemnified Party to represent both the
Indemnifying Party and the Indemnified Party in such proceeding. In any such
proceeding, the Indemnified Party shall have the right to retain counsel in
addition to counsel provided pursuant to the preceding sentence, but the fees
and expenses of such additional counsel shall be at the expense of such
Indemnified Party unless (i) the Indemnifying Party has agreed to the retention
of such additional counsel at its expense or (ii) the named parties (including
any impleaded parties) to any such proceeding include both the Indemnifying
Party and the Indemnified Party (or another person), the Indemnifying Party
proposes that the same additional counsel represent both the Indemnifying Party
and the Indemnified Party (or such other person), and representation of both
such persons by the same counsel would be inappropriate due to actual or
potential differing interests between them. Except as provided in the preceding
sentence, the Indemnifying Party will not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one firm qualified in such jurisdiction to act as counsel
for all such Indemnified Parties. Such firm shall be approved as satisfactory in
writing by High Ridge in the case of Indemnified Parties and pursuant to Section
4.7(a) and by the Company in the case of Indemnified Parties indemnified
pursuant to Section 4.7(b). The Indemnifying Party shall not be liable for any
settlement of any litigation or proceeding effected without the Indemnifying
Party's written consent. The Indemnifying Party will not, without the
Indemnified Party's written consent, settle or compromise any proceeding or
consent to entry of any judgment which would impose an injunction or
9
<PAGE>
other equitable relief upon such Indemnified Party or which does not include as
an unconditional term thereof the release of such Indemnified Party from all
liability in respect to such proceeding. In the event that the Indemnifying
Party, within a reasonable time after notice of any such proceeding, fails to
provide counsel, the Indemnified Party shall have the right (upon further notice
to the Indemnifying Party) to retain counsel and undertake the defense,
compromise or settlement of such proceeding for the account of the Indemnifying
Party, subject to the right of the Indemnifying Party to assume the defense of
such proceeding at any time prior to settlement, compromise or final
determination thereof. The cost and expense of counsel so retained by the
Indemnified Party shall be borne by the Indemnifying Party, and the Indemnifying
Party shall be bound by, and shall pay the amount of, any settlement,
compromise, final determination, or judgment reached while the Indemnified Party
was represented by counsel retained by the Indemnified Party pursuant to this
Section.
(d) Other Terms Required by Underwriters. The indemnification
------------------------------------
pursuant to the foregoing provisions of this Section 4.7 shall be on such other
terms and conditions as are at the time customary and reasonably required by
underwriters in public offerings, including providing for contribution in the
event indemnification provided for in this Section 4.7 is unavailable or
insufficient, all as shall be set forth in an underwriting agreement between the
Company, High Ridge and the underwriter.
4.8 Provision of information by High Ridge. In connection with any
--------------------------------------
Registration to be effected pursuant to this Agreement, High Ridge shall furnish
the Company such written information regarding High Ridge as the Company may
request in writing, which information shall be required in connection with any
registration, qualification or compliance referred to in this Agreement for
inclusion in the registration statement (and the prospectus included therein).
4.9 Agreements of High Ridge. If requested by the Company, High Ridge
------------------------
will execute and deliver to the Company an agreement, in form reasonably
satisfactory to the Company, that High Ridge will comply with all applicable
prospectus delivery requirements of the Securities Act and all anti-
stabilization, manipulation and similar provisions of the Exchange Act and any
rules promulgated thereunder, and will furnish to the Company information about
sales made in such public offering. The Company's obligations to effect the
Registration of Shares of High Ridge under this Agreement shall be conditioned
upon High Ridge's complying with the foregoing provisions.
4.10 Market Standstill Agreement. In addition to the provisions of
---------------------------
Section 4.5(c), if requested by the Company or by the managing underwriter in
respect of any Registration provided for in this Article 4, High Ridge will
agree not to sell or otherwise transfer or dispose of any Shares (or other
securities of the Company) held by it during the ninety (90) day period
following the effective date of any registration statement filed in respect of
any Registration or such other period as may be negotiated with the managing
underwriter. Such agreement shall be in writing and in form reasonably
satisfactory to the Company and such managing underwriter. The Company may
impose stop-transfer instructions with respect to the Shares (or other
securities) subject to the foregoing restrictions until the end of such ninety
(90) day or other period.
10
<PAGE>
ARTICLE 5
MISCELLANEOUS
-------------
5.1 Governing Law. This Option Agreement shall be deemed to be a contract
-------------
under the laws of the State of South Carolina and will be construed in
accordance with and governed by the laws of said State. Both parties agree to
submit to the jurisdiction of the Court of Common Pleas for Richland County,
Columbia, South Carolina in settlement of any dispute or controversy arising
under or in connection with this Option Agreement.
5.2 Parties in Interest; Assignment. This Option Agreement shall be
-------------------------------
binding upon and inure to the benefit of the parties hereto and to each of their
respective successors or permitted assigns, but this Option Agreement and the
rights and obligations under this Option Agreement shall not be assignable by
either the Company or High Ridge without written consent of the other party.
5.3 Agreement. This Option Agreement and High Ridge Stock Option Purchase
---------
Agreement contain the entire agreement between the parties hereto with respect
to the Option for the Shares and supersedes any prior agreements or
understandings between or among any of the parties hereto relating to the
Option.
5.4 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given when received, and shall be
given in person, by certified mail, return receipt requested or by an
independent messenger service which obtains a receipt upon delivery to a party
at the following addresses or to such other address as a party may hereafter
specify by notice:
if to the Company:
-----------------
The Seibels Bruce Group, Inc.
1501 Lady Street
Columbia, South Carolina 29201
Attn: John A. Weitzel, President and Chief Executive Officer
Fax: 803-748-2309
if to High Ridge:
----------------
Steven J. Tynan
James L. Zech
High Ridge Capital LLC
Four Stamford Plaza
107 Elm Street
P.O. Box 120043
Stamford, Connecticut 06912
Fax: 860-526-5870
11
<PAGE>
with copies to:
James A. FitzPatrick, Jr., Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Fax: 212-259-6333
5.5 Modification. No amendment or modification of or supplement to this
------------
Option Agreement will be effective unless it is in writing and duly executed by
each party to be charged thereunder.
12
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Option Agreement as of
the date first above-written.
THE COMPANY:
THE SEIBELS BRUCE GROUP, INC.
By: /s/ John A. Weitzel
_____________________________________________
Name: John A. Weitzel
Title: President and Chief Executive Officer
HIGH RIDGE:
HIGH RIDGE CAPITAL LLC
By: /s/ Steven J. Tynan
______________________________
Name: Steven J. Tynan
Title: Principal
13
<PAGE>
EXHIBIT V
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Option Agreement"), dated as of July 7,
1998, is made between High Ridge Capital Partners Limited Partnership, a
Delaware limited partnership ("High Ridge Fund"), and The Seibels Bruce Group,
Inc., a South Carolina corporation (the "Company"). Reference is made to the
Stock Purchase Agreement, dated as of January 20, 1996, among the Company,
Charles H. Powers and Walker S. Powers (the "1996 Stock Purchase Agreement"),
the Stock Option Agreement, dated as of January 30, 1996 among Charles H.
Powers, Walker S. Powers, Rex Huggins and Jane Huggins (the "Individual
Optionholders") and the Company (the "1996 Stock Option Agreement") and the
Stock Option Purchase Agreement, dated as of November 20, 1997, among the
Company, the Individual Optionholders and High Ridge Fund (the "High Ridge Fund
Stock Option Purchase Agreement").
WITNESSETH
WHEREAS, pursuant to the 1996 Stock Purchase Agreement and the 1996 Stock
Option Agreement, the Company granted to the Individual Optionholders an
irrevocable option to purchase, from the Company, 6,250,000 shares of common
stock, par value $1.00 per share ("Common Stock") of the Company, upon the terms
and conditions set forth therein, which option, as the result of a reverse stock
split by the Company of the Common Stock, represents as of the date hereof the
right to purchase 1,562,500 shares of Common Stock;
WHEREAS, pursuant to the High Ridge Fund Stock Option Purchase Agreement,
the Individual Optionholders have sold and assigned a portion of such options to
High Ridge Fund, and High Ridge Fund has purchased such portion of such options,
aggregating options to purchase 703,124 shares of Common Stock, and the Company
has consented to such sale and assignment in accordance with the terms of High
Ridge Fund Stock Option Purchase Agreement;
WHEREAS, High Ridge Fund and the Company have agreed to restate the terms
of such options now held by High Ridge Fund pursuant to the terms hereof;
NOW, THEREFORE, subject to the terms and conditions hereof and in
consideration of the premises and the promises contained herein, High Ridge Fund
and the Company hereto agree as follows:
<PAGE>
ARTICLE 1
OPTION TERMS
------------
1.1 Amount of Option. The Company hereby confirms the terms of an
----------------
irrevocable option (the "Option") to purchase from the Company 703,124 shares of
Common Stock (the "Shares"), which Option has been assigned to High Ridge Fund
by the Individual Optionholders pursuant to an Assignment Agreement dated as of
June 23, 1998 by and among the Individual Optionholders and High Ridge Fund,
upon the terms and conditions set forth below and in Section 1.2:
(a) The portion of the Option with respect to 351,562 of the Shares
shall have an exercise price of the greater of (i) Book Value (as defined in
Section 1.1(c)) per share on the date of exercise or (ii) $6.00 per share. This
portion of the Option for 351,562 of the Shares shall terminate on December 31,
1998.
(b) The portion of the Option with respect to the remaining 351,562 of
the Shares shall have an exercise price of the greater of (i) Book Value (as
defined Section 1.1(c)) per share on the date of exercise or (ii) $8.00 per
share. This portion of the Option for 351,562 of the Shares shall terminate on
December 31, 2000.
(c) For purposes of this Option Agreement, "Book Value" shall be the
total shareholders equity of the Company divided by the shares issued and
outstanding, determined under the standard practices of the Company and reported
on SEC Form 10-Q, as of the end of the previous calendar quarter.
1.2 Additional Terms and Conditions. In addition to the terms and
-------------------------------
conditions in Section 1.1, the Option shall be subject to the following terms
and conditions:
(a) Each exercise of the Option must be made in an amount equal to at
least 500 shares.
(b) Full payment of the exercise price must be made to the Company
upon exercise of the Option, whether in whole or in part, by certified or
cashier's check or wire transfer.
(c) The Option is not transferable by High Ridge Fund, except as
provided in Article 3 of this Option Agreement.
(d) The Option is irrevocable until termination under Section 1.1(a)
or (b).
ARTICLE 2
EXERCISE OF OPTION AND ISSUANCE OF SHARES
-----------------------------------------
2.1 Exercise of Option. To exercise the Option, in whole or in part, High
------------------
Ridge Fund must deliver to the Company written notice, signed by High Ridge
Fund,
2
<PAGE>
stating the number of Shares High Ridge Fund elects to be purchased, and stating
that payment to the Company is made as described in Section 1.2(b).
2.2 Issuance of Shares. Upon exercise of all or part of the Option, the
------------------
Company shall issue the appropriate number of Shares to High Ridge Fund within
30 days or such later time as may be deemed necessary by the Company's Board of
Directors on the advice of counsel, to comply with applicable federal or state
securities laws or state insurance laws.
2.3 Securities Act of 1933.
----------------------
(a) Unregistered Securities. High Ridge Fund understands that the
-----------------------
Option acquired pursuant to this Agreement and the Shares underlying the Option
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under applicable state securities laws, in reliance upon
exemptions thereunder from such registration requirements afforded by Section
4(2) of the Securities Act and Regulation D thereunder, governing the offer and
sale of securities to accredited investors, and other applicable exemptions.
High Ridge Fund agrees that there shall be imprinted on the face of any
certificate(s) of the Shares issued pursuant to a partial or full exercise of
the Option issued pursuant to this Agreement a restrictive legend substantially
in the form set forth in Section 2.3(b) below.
(b) Restrictive Legend. High Ridge Fund understands and agrees that
------------------
any disposition of the Shares in violation of this Agreement shall be null and
void, and that no transfer of Shares shall be made by the Company's transfer
agent upon the Company's stock transfer books unless there has been compliance
with the terms of this Agreement. High Ridge Fund understands and agrees that
there shall be imprinted on the certificates for the Shares a legend
substantially in the form as the following:
The option under which the shares of common stock represented by
this certificate was acquired and the shares acquired under
exercise of that option have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and
may not be offered or sold unless the shares are registered under
the Securities Act, or an exemption from the registration
requirements under the Securities Act is available.
(c) The Option. High Ridge Fund acknowledges that the Option has
----------
not been registered under the Securities Act. High Ridge Fund is acquiring
beneficial ownership of the Option for its own account for investment, and not
with a view to a distribution. High Ridge Fund agrees not to transfer or
otherwise dispose of the Option unless such transfer or other disposition is
registered under the Securities Act or is exempt from such registration. By
reason of High Ridge Fund's knowledge and experience in financial and business
matters, High Ridge Fund is capable of evaluating the merits and risks of its
acquisition hereunder of beneficial ownership of the Option. High Ridge Fund has
had available such information with respect to the Company as
3
<PAGE>
deemed necessary or appropriate to make such evaluation. High Ridge Fund has the
financial resources to bear the risk of ownership of the Option.
(d) Cooperation With Filings. High Ridge Fund covenants to provide
------------------------
the Company with all information concerning High Ridge Fund necessary to enable
the Company to make all required Securities and Exchange Commission ("SEC"),
insurance regulatory, and other filings required in connection with this
Agreement.
(e) Due Execution: Binding Effect. This Agreement has been duly
-----------------------------
executed by or on behalf of High Ridge Fund and is a valid and binding
obligation enforceable against High Ridge Fund in accordance with its terms,
except as enforceability thereof may be limited by the exercise of judicial
discretion, the laws of bankruptcy, insolvency, reorganization, moratorium, or
other similar laws from time to time in effect relating to or affecting
generally the enforcement of creditors' rights, and except as enforcement of
remedies may be limited by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
2.4 Change in Capital Stock Structure. In the event of a stock dividend,
---------------------------------
stock split or combination of shares, recapitalization or merger in which the
Company is the surviving corporation, or other change in the Company's capital
stock (including, but not limited to the creation or issuance to shareholders
generally of rights, options or warrants for the purchase of common stock or
preferred stock of the Company), the number and kind of shares of stock or
securities of the Company to be subject to the Option then remaining
outstanding, the number of additional Shares with respect to which the Option is
unexercised, and the exercise price shall be appropriately adjusted by the
Company.
ARTICLE 3
RESTRICTIONS ON RESALE
----------------------
High Ridge Fund shall not sell, transfer, assign or otherwise dispose of
any Shares purchased by exercising Options granted by this Agreement (or the
Option itself), other than to a corporation of which High Ridge Fund owns not
less than 80% of the voting power entitled to be cast in the election of
directors of such corporation, except as set forth below. High Ridge Fund shall
not sell, transfer, assign or otherwise dispose of its beneficial interest in
any Shares or the Option, 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 (excluding for the
purposes of such approval any directors nominated or designated by High Ridge
Fund pursuant to any agreement, arrangement or understanding between High Ridge
Fund and the Company);
(b) subject to Article 4, pursuant to an underwritten public offering
of Shares managed by an investment banking firm reasonably acceptable to the
Company and registered under the Securities Act;
(c) in one or more privately negotiated transactions exempt from
registration under the Securities Act; provided that prior to making a transfer
pursuant to
4
<PAGE>
this clause (c), High Ridge Fund shall obtain a representation from its
transferee addressed to High Ridge Fund and the Company that such Shares are
being acquired for investment only;
(d) pursuant to Rule 144 under the Securities Act;
(e) to a corporation of which High Ridge Fund and its affiliates own
not less than 80% of the voting power entitled to be cast in the election of
directors (a "Controlled Corporation"); provided that such Controlled
Corporation 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 High Ridge Fund and shall agree to transfer such
Shares to High Ridge Fund or another Controlled Corporation of High Ridge Fund
if it ceases to be a Controlled Corporation of High Ridge Fund;
(f) in a merger or consolidation in which the Company is acquired, or
a plan of liquidation of the Company; or
(g) in response to an offer to purchase or exchange for cash or other
consideration any Shares (i) which is made by or on behalf of the Company or
(ii) which is made by or on behalf of any Person or Group (as such terms are
defined in the 1996 Stock Purchase Agreement) and which is approved by the Board
of Directors of the Company at least two business days prior to the expiration
of such offer.
Notwithstanding the foregoing, High Ridge Fund shall not sell in the aggregate,
pursuant to clause (c) or (d) above, Shares representing more than 10% of the
Outstanding Voting Power (as such term is defined in the 1996 Stock Purchase
Agreement) of the Company to any Person or Group or sell any Shares to any such
Person or Group who shall have on file with the SEC a current statement on
Schedule 13D under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), reporting its beneficial ownership of 10% or more of the
outstanding voting power of the Company.
ARTICLE 4
REGISTRATION OF SHARES
----------------------
4.1 Certain Definitions. The following terms as used in this Section
-------------------
shall have the meanings indicated therefor:
(a) "Effective Date" means the date on which a Registration becomes or
is declared effective by the SEC.
(b) "Piggy-back Registration" means a Registration of all or a portion
of the Shares pursuant to Section 4.2, whether or not the registration statement
becomes effective.
5
<PAGE>
(d) "Registration" means the preparation of a registration statement
under the Securities Act and the taking of such other action as shall be
reasonable and appropriate to cause the registration provided for in such
registration statement to be filed and become effective under the Securities
Act, such registration to be filed on any registration statement form for which
the Company is eligible and which it elects to utilize.
(e) "Registration Expenses" means all expenses, other than Selling
Expenses, incurred by the Company in effecting a Piggy-back Registration
requested pursuant to and otherwise complying with the Company's obligations
under this Section, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company and
of independent public accountants engaged by the Company to conduct any special
audits incident to or required to be included in any such Registration.
(f) "Selling Expenses" means all stock transfer taxes and
underwriters' discounts and commissions applicable to the sale of all or certain
of the Shares by High Ridge Fund.
4.2 Piggy-Back Registration.
-----------------------
(a) Notice of Possible Registration of Shares. Each time before
-----------------------------------------
December 31, 1999 that the Company proposes to effect a Registration of any
shares of the same class as the Shares, other that a registration on Form S-4 or
S-8, or other similar registration form hereafter authorized or prescribed by
the SEC, it will give written notice at least 30 days before the proposed filing
date therefor to High Ridge Fund and, upon the written request of High Ridge
Fund given within 10 business days after the date of such notice, the Company
will, subject to the limitations set forth elsewhere in this Section, include in
such Registration the Shares which High Ridge Fund has so requested to be
registered. High Ridge Fund shall be entitled to two Piggy-back Registrations.
4.3 Termination of Registration Rights. The right of High Ridge Fund to a
----------------------------------
Piggy-back Registration will terminate when High Ridge Fund no longer owns
beneficially at least 20% of the Shares represented by the Option, adjusted to
give effect to stock dividends, stock splits and other similar changes to the
capital structure of the Company.
4.4 Registration Procedure. Subject to the limitations set forth
----------------------
elsewhere in this Section, if the Company receives a request to register any
Shares pursuant to Section 4.2 which complies with the terms of this Article 4,
the Company will use its best efforts to:
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(a) keep any effective registration statement effective and current
until the earlier of (i) the completion of the distribution of the Shares so
registered or (ii) expiration of 90 days after the Effective Date;
(b) furnish to High Ridge Fund such number of copies of a summary
prospectus, if any, or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
in such numbers as High Ridge Fund may reasonably request in order to facilitate
the public sale or other disposition of the Shares registered;
(c) cooperate with High Ridge Fund and High Ridge Fund's counsel to
register or qualify the Shares covered by such Registration under the securities
or "blue sky" laws of such states of the United States as High Ridge Fund shall
reasonably request not to exceed five (5) states and, in any event, at High
Ridge Fund's expense;
(d) promptly advise High Ridge Fund as to the following: (i) the time
at which the registration statement or any post-effective amendment thereto
shall have become effective, the time at which any amendment or supplement to
the prospectus is filed with the SEC and the time at which the offering and sale
may commence, (ii) any request by the SEC for any amendment to such registration
statement or the prospectus or for additional information, and the nature and
substance thereof, and (iii) the issuance by the SEC or any other federal or
state governmental authority or court of any order or similar process suspending
the effectiveness of such registration statement or the suspension of the
qualification of Shares for sale in any jurisdiction, or the initiation (or
threat thereof in writing) of any proceedings for that purpose, and the Company
will use its best efforts to prevent the issuance of such order or process and,
if all such order or process shall be issued, to obtain the withdrawal thereof
at the earliest possible time.
4.5 Underwriting.
------------
(a) Underwritten Distribution May be Requested. If the Company
------------------------------------------
proposes to offer, issue and sell securities of the same class as the Shares in
an underwritten distribution by the Company in a Registration covering Shares
then the right of High Ridge Fund to Registration of High Ridge Fund's Shares
shall be conditioned, subject to the further terms and conditions hereof, on the
Company's best effort to effect the inclusion of the Shares of High Ridge Fund
requested to be so registered in such underwriting.
(b) Selection of Underwriters. The Company shall have the sole right
-------------------------
to select the managing underwriter to effect any underwritten distribution of
the Shares.
(c) Underwriting Agreement. In the case of an underwritten
----------------------
Registration, the Company and High Ridge Fund shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected in
accordance with this Section and shall agree not to effect any public sale or
distribution of securities of the same class as the Shares other than as part of
such underwriting within 90 days (or
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such other period as may be negotiated) after the Effective Date of such
registration statement.
(d) Limitation on Shares to be included in an Underwritten
------------------------------------------------------
Registration. If the managing underwriter advises the Company in writing that
- ------------
marketing factors require a limitation of the number of Shares to be
underwritten, then the Company will provide a copy of such writing to High Ridge
Fund and High Ridge Fund shall be entitled to consult with the underwriters
concerning such advice. High Ridge Fund shall be entitled to sell only the
maximum number of Shares that may, in the opinion of such underwriters after
such consultation with High Ridge Fund, be sold by High Ridge Fund.
4.6 Expenses.
--------
(a) Registration Expenses. The Company will bear Registration
---------------------
Expenses for a Registration commenced or completed pursuant to this Section.
(b) Selling Expenses. All Selling Expenses in connection with any
----------------
Registration commenced or completed pursuant to this Section will be borne by
High Ridge Fund.
(c) Mitigation of Company's Obligations. (i) The Company shall have
-----------------------------------
no obligation to bear Registration Expenses if the Company is informed by the
South Carolina Insurance Department that it will not allow any direct or
indirect Subsidiary of the Company to pay a dividend or make a distribution to
the Company to provide funds for the payment of Registration Expenses. The
Company agrees to use its best efforts to cause such Department to give its
approval of such a dividend or distribution.
(ii) If the Company is relieved from bearing any Registration
Expenses pursuant to this subsection, High Ridge Fund may assume the obligation
to pay such Registration Expenses and the Company will proceed with the
Registration.
(iii) If, within three years of the Effective Date of a
Registration for which High Ridge Fund bore the Registration Expenses which
otherwise would have been borne by the Company, the Company has funds available
to it, it will upon request reimburse High Ridge Fund for such Registration
Expenses borne by it.
4.7 Indemnification.
---------------
(a) Indemnification by the Company. In each case of a Registration of
------------------------------
Shares pursuant to the registration rights granted hereby, the Company will
indemnify, save and hold harmless High Ridge Fund, each underwriter thereof, and
each officer and director of any such underwriter from and against any claim,
damage, loss, settlement, or liability, arising out of or based on any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement, any summary prospectus, prospectus or preliminary
prospectus contained therein or any amendment or supplement thereto (including,
in each case, documents incorporated therein by reference) or arising out of or
based upon 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 in the light
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of the circumstances under which they were made, and will reimburse each such
person for all legal or other expenses reasonably incurred in connection with
the investigation or defense of any such claim, damage, loss or liability;
provided, however, that the Company will not be liable in any such case to the
extent that such claim, damage, loss or liability arises out of or is based upon
any untrue statement, alleged untrue statement, omission or alleged omission,
made in or omitted from such materials in reliance upon and in conformity with
written information in regard to the person or entity seeking indemnification
which information was furnished to the Company specifically for use in the
preparation of such registration statement, summary prospectus, prospectus or
preliminary prospectus or any amendment or supplement thereto by High Ridge
Fund, any underwriter or other person, or their respective agents; and provided
further that the foregoing indemnification with respect to a preliminary
prospectus shall not inure to the benefit of any underwriter from whom the
person asserting any such claim, damage, loss or liability purchased any of
Shares if a copy of the final prospectus had not been sent or given to such
person at or prior to written confirmation of the sale of such Shares to such
person and the untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the final prospectus.
(b) Indemnification by High Ridge Fund. High Ridge Fund will
----------------------------------
indemnify, save and hold harmless the Company, each officer and director of the
Company and each person who controls the Company (within the meaning of the
Securities Act) to the same extent (and subject to the same limitations) as the
foregoing indemnity from the Company to High Ridge Fund, but only with respect
to information relating to High Ridge Fund and furnished to the Company by High
Ridge Fund or its agents specifically for use in any registration statement, any
summary prospectus, prospectus, or preliminary prospectus contained therein or
any amendment or supplement thereto including, in each case, the documents
incorporated therein by reference.
(c) Counsel Fees and Expenses; Settlements. In case any proceeding
--------------------------------------
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnification may be sought pursuant to this
Section 4.7 (the "Indemnified Party"), such Indemnified Party shall promptly
notify the person from whom such indemnity may be sought (the "Indemnifying
Party") in writing and the Indemnifying Party, at its election, may retain
counsel reasonably satisfactory to the Indemnified Party to represent both the
Indemnifying Party and the Indemnified Party in such proceeding. In any such
proceeding, the Indemnified Party shall have the right to retain counsel in
addition to counsel provided pursuant to the preceding sentence, but the fees
and expenses of such additional counsel shall be at the expense of such
Indemnified Party unless (i) the Indemnifying Party has agreed to the retention
of such additional counsel at its expense or (ii) the named parties (including
any impleaded parties) to any such proceeding include both the Indemnifying
Party and the Indemnified Party (or another person), the Indemnifying Party
proposes that the same additional counsel represent both the Indemnifying Party
and the Indemnified Party (or such other person), and representation of both
such persons by the same counsel would be inappropriate due to actual or
potential differing interests between them. Except as provided in the preceding
sentence, the Indemnifying Party will not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of
9
<PAGE>
more than one firm qualified in such jurisdiction to act as counsel for all such
Indemnified Parties. Such firm shall be approved as satisfactory in writing by
High Ridge Fund in the case of Indemnified Parties and pursuant to Section
4.7(a) and by the Company in the case of Indemnified Parties indemnified
pursuant to Section 4.7(b). The Indemnifying Party shall not be liable for any
settlement of any litigation or proceeding effected without the Indemnifying
Party's written consent. The Indemnifying Party will not, without the
Indemnified Party's written consent, settle or compromise any proceeding or
consent to entry of any judgment which would impose an injunction or other
equitable relief upon such Indemnified Party or which does not include as an
unconditional term thereof the release of such Indemnified Party from all
liability in respect to such proceeding. In the event that the Indemnifying
Party, within a reasonable time after notice of any such proceeding, fails to
provide counsel, the Indemnified Party shall have the right (upon further notice
to the Indemnifying Party) to retain counsel and undertake the defense,
compromise or settlement of such proceeding for the account of the Indemnifying
Party, subject to the right of the Indemnifying Party to assume the defense of
such proceeding at any time prior to settlement, compromise or final
determination thereof. The cost and expense of counsel so retained by the
Indemnified Party shall be borne by the Indemnifying Party, and the Indemnifying
Party shall be bound by, and shall pay the amount of, any settlement,
compromise, final determination, or judgment reached while the Indemnified Party
was represented by counsel retained by the Indemnified Party pursuant to this
Section.
(d) Other Terms Required by Underwriters. The indemnification
------------------------------------
pursuant to the foregoing provisions of this Section 4.7 shall be on such other
terms and conditions as are at the time customary and reasonably required by
underwriters in public offerings, including providing for contribution in the
event indemnification provided for in this Section 4.7 is unavailable or
insufficient, all as shall be set forth in an underwriting agreement between the
Company, High Ridge Fund and the underwriter.
4.8 Provision of information by High Ridge Fund. In connection with any
-------------------------------------------
Registration to be effected pursuant to this Agreement, High Ridge Fund shall
furnish the Company such written information regarding High Ridge Fund as the
Company may request in writing, which information shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement for inclusion in the registration statement (and the prospectus
included therein).
4.9 Agreements of High Ridge Fund. If requested by the Company, High
-----------------------------
Ridge Fund will execute and deliver to the Company an agreement, in form
reasonably satisfactory to the Company, that High Ridge Fund will comply with
all applicable prospectus delivery requirements of the Securities Act and all
anti-stabilization, manipulation and similar provisions of the Exchange Act and
any rules promulgated thereunder, and will furnish to the Company information
about sales made in such public offering. The Company's obligations to effect
the Registration of Shares of High Ridge Fund under this Agreement shall be
conditioned upon High Ridge Fund's complying with the foregoing provisions.
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<PAGE>
4.10 Market Standstill Agreement. In addition to the provisions of
---------------------------
Section 4.5(c), if requested by the Company or by the managing underwriter in
respect of any Registration provided for in this Article 4, High Ridge Fund will
agree not to sell or otherwise transfer or dispose of any Shares (or other
securities of the Company) held by it during the ninety (90) day period
following the effective date of any registration statement filed in respect of
any Registration or such other period as may be negotiated with the managing
underwriter. Such agreement shall be in writing and in form reasonably
satisfactory to the Company and such managing underwriter. The Company may
impose stop-transfer instructions with respect to the Shares (or other
securities) subject to the foregoing restrictions until the end of such ninety
(90) day or other period.
ARTICLE 5
MISCELLANEOUS
-------------
5.1 Governing Law. This Option Agreement shall be deemed to be a contract
-------------
under the laws of the State of South Carolina and will be construed in
accordance with and governed by the laws of said State. Both parties agree to
submit to the jurisdiction of the Court of Common Pleas for Richland County,
Columbia, South Carolina in settlement of any dispute or controversy arising
under or in connection with this Option Agreement.
5.2 Parties in Interest; Assignment. This Option Agreement shall be
-------------------------------
binding upon and inure to the benefit of the parties hereto and to each of their
respective successors or permitted assigns, but this Option Agreement and the
rights and obligations under this Option Agreement shall not be assignable by
either the Company or High Ridge Fund without written consent of the other
party.
5.3 Agreement. This Option Agreement and High Ridge Fund Stock Option
---------
Purchase Agreement contain the entire agreement between the parties hereto with
respect to the Option for the Shares and supersedes any prior agreements or
understandings between or among any of the parties hereto relating to the
Option.
5.4 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given when received, and shall be
given in person, by certified mail, return receipt requested or by an
independent messenger service which obtains a receipt upon delivery to a party
at the following addresses or to such other address as a party may hereafter
specify by notice:
if to the Company:
-----------------
The Seibels Bruce Group, Inc.
1501 Lady Street
Columbia, South Carolina 29201
Attn: John A. Weitzel, President and Chief Executive Officer
Fax: 803-748-2309
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<PAGE>
if to High Ridge Fund:
---------------------
Steven J. Tynan
James L. Zech
High Ridge Capital Partners Limited Partnership
Four Stamford Plaza
107 Elm Street
P.O. Box 120043
Stamford, Connecticut 06912
Fax: 860-526-5870
with copies to:
James A. FitzPatrick, Jr., Esq.
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Fax: 212-259-6333
5.5 Modification. No amendment or modification of or supplement to this
------------
Option Agreement will be effective unless it is in writing and duly executed by
each party to be charged thereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Option Agreement as of
the date first above-written.
THE COMPANY:
THE SEIBELS BRUCE GROUP, INC.
/s/ John A. Weitzel
By:_____________________________________________
Name: John A. Weitzel
Title: President and Chief Executive Officer
HIGH RIDGE FUND:
HIGH RIDGE CAPITAL PARTNERS
LIMITED PARTNERSHIP
By: HRC General Partner Limited
Partnership
Its: General Partner
By: High Ridge Capital LLC
Its: General Partner
/s/ Steven J. Tynan
By:___________________
Name: Steven J. Tynan
Title: Principal
13
