<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
PROVIDENT COMPANIES, INC.
(Name of Issuer)
Common Stock, Par Value $1.00
(Title of Class of Securities)
743862 10 4
(CUSIP Number)
Steven Germain
Zurich Centre Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
(212) 898-5350
(Name, Address and Telephone Number
of Person Authorized to Receive Notices
and Communications)
- with copies to -
Thomas M. Cerabino, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
May 31, 1996
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement in 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 [X].
<PAGE>
SCHEDULE 13D
CUSIP No. 743862 10 4
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
ZURICH INSURANCE COMPANY
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
a[ ]
b[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Switzerland
7. SOLE VOTING POWER
Not Applicable.
NUMBER OF 8. SHARED VOTING POWER
SHARES
BENEFICIALLY 17,940,903 (See Item 5 below)
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER
REPORTING
PERSON Not Applicable.
WITH
10. SHARED DISPOSITIVE POWER
Not Applicable.
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,940,903 (See Item 5 below)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
39.5% (See Item 5 below)
14. TYPE OF REPORTING PERSON*
IC, CO
<PAGE>
Item 1. Security and Issuer.
This Statement relates to the Common Stock, par value $1.00
per share (the "Common Stock"), of Provident Companies, Inc. ("Provident" or the
"Company"), which has its principal executive offices at 1 Fountain Square,
Chattanooga, Tennessee 37402.
Item 2. Identity and Background.
This statement is being filed by Zurich Insurance Company, a
corporation organized under the laws of Switzerland ("Zurich"). The address of
the principal business and principal office of Zurich is 2 Mythenquai, CH-8002
Zurich, Switzerland. Zurich and its subsidiaries and affiliates are engaged in
life and property and casualty insurance and reinsurance and insurance related
businesses and the asset management business. Information regarding the
identity and background of the directors and executive officers of Zurich is
set forth in Schedule I hereto, which is incorporated by reference in response
to this Item 2.
Neither Zurich, nor to the best of its knowledge, any of the
directors or executive officers set forth in Schedule I hereto, have been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) during the last five years.
Neither Zurich, nor to its knowledge, any of the directors or
executive officers set forth in Schedule I hereto, have been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which Zurich was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws during the last five years.
Item 3. Source and Amount of Funds or Other Consideration.
The Family Stockholder Agreement described in Item 4 of this
Statement (including the voting agreements contained therein) was entered into
by the Maclellan Stockholders (as defined below) as an inducement to Zurich to
enter into the Purchase Agreement and the Relationship Agreement, as described
in Item 4. Except as set forth in the previous sentence, Zurich has paid no
consideration in connection with the voting agreements contained in the Family
Stockholder Agreement.
Item 4. Purpose of Transaction.
Pursuant to a Common Stock Purchase Agreement, dated as of May
31, 1996 (the "Purchase Agreement"), between Provident and Zurich and subject to
the satisfaction of certain closing
<PAGE>
conditions, including the receipt of all necessary regulatory and requisite
stockholder approvals and the consummation of the Merger (as defined below),
Provident will issue to Zurich or one or more of Zurich's affiliates, and
Zurich or one or more of Zurich's affiliates will purchase from Provident,
9,523,810 newly authorized but unissued shares of Common Stock, at a price of
$31.50 per share, for a total purchase price of $300 million, payable in cash
(the "Zurich Common Stock Investment"). The Purchase Agreement is attached to
this Statement as Exhibit 1 and the description of the Purchase Agreement
contained herein is qualified in its entirety by reference to such Exhibit,
which is incorporated herein by reference thereto.
The net proceeds from the Zurich Common Stock Investment will
be used by Provident to finance a portion of the cash payments to be made to The
Paul Revere Corporation ("Paul Revere") stockholders pursuant to the
transactions contemplated by the Agreement and Plan of Merger, dated as of April
29, 1996 (the "Merger Agreement"), by and among Provident, Patriot Acquisition
Corporation, a Massachusetts corporation and a wholly owned subsidiary of
Provident ("Newco"), and Paul Revere. Subject to the satisfaction of certain
closing conditions, including receipt of all necessary regulatory and requisite
stockholder approvals, the Merger Agreement provides for the merger (the
"Merger") of Newco with and into Paul Revere, with Paul Revere surviving the
Merger.
The issuance of shares of Common Stock pursuant to the
Purchase Agreement (and the issuance of shares of Common Stock pursuant to the
Merger Agreement) must be approved by a majority of votes cast at a special
meeting of stockholders of Provident anticipated to be held in July 1996 (the
"Provident Special Meeting") on each such proposal, respectively, provided that
the total votes cast on each such proposal represents over 50% in interest of
all shares of Common Stock entitled to vote at the Provident Special Meeting.
Approval of the proposed amendment to Provident's charter to increase from 65
million to 75 million the number of shares of Common Stock that Provident is
authorized to issue (the "Charter Amendment"), which is required to consummate
the Zurich Common Stock Investment and the Merger, requires the affirmative vote
of the holders of two-thirds of the shares of Common Stock entitled to vote at
the Provident Special Meeting. Pursuant to the Family Stockholder Agreement,
dated as of May 31, 1996 (the "Family Stockholder Agreement"), among Zurich, the
Maclellan Foundation, Inc., a Tennessee nonprofit corporation, and certain
members of the Maclellan family and certain family trusts, which own of record
and beneficially 17,940,903 shares of Common Stock, or approximately 39.5% of
the outstanding shares of Common Stock (collectively, the "Maclellan
Stockholders"), the Maclellan Stockholders have agreed to vote, subject to
certain exceptions and conditions, all Common Stock that is beneficially owned
by such stockholders in favor of (i) the Merger, the Merger Agreement and the
Charter Amendment and (ii) the transactions
<PAGE>
contemplated by the Purchase Agreement including the issuance and sale of the
shares of Common Stock to Zurich. The Family Stockholder Agreement is attached
to this Statement as Exhibit 3 and the description of the Family Stockholder
Agreement contained herein is qualified in its entirety by reference to such
Exhibit, which is incorporated herein by reference thereto.
In connection with the Purchase Agreement, Provident and
Zurich have entered into a Relationship Agreement, dated as of May 31, 1996 (the
"Relationship Agreement"). The Relationship Agreement is attached to this
Statement as Exhibit 2, and the description of the Relationship Agreement
contained herein is qualified in its entirety by reference to such Exhibit,
which is incorporated herein by reference thereto. The Relationship Agreement
sets forth (i) certain rights of Zurich to designate persons to serve as members
of the Board of Directors of Provident, (ii) certain standstill arrangements
regarding the acquisition by Zurich of additional shares of Common Stock and
(iii) certain restrictions on the ability of Zurich to dispose of the shares of
Common Stock beneficially owned by it.
Pursuant to the Relationship Agreement, while Zurich remains
the beneficial owner of 10% or more of the outstanding Common Stock, Zurich
shall be entitled to designate two persons to serve as members of the Board of
Directors of Provident and any of its subsidiaries. While Zurich owns between 5%
and 10% of the outstanding Common Stock, Zurich shall have the right to
designate one person to serve as a director of Provident or any of its
subsidiaries. As long as Zurich ownership of Common Stock remains above 5% of
the shares outstanding, Zurich is entitled to have a Zurich designee serve on
any Executive Committee of the Board of Directors of Provident or any of its
subsidiaries or any other committee or group performing a similar function. In
the event Zurich and its affiliates are the beneficial owners of less than 5% of
the outstanding Common Stock, Zurich will not be entitled to designate any
person to serve as a director of Provident. So long as Zurich is entitled to
designate at least one member of the Board of Directors of Provident, during any
period that the requisite number of Zurich designees are not members of the
Board of Directors, Provident shall cause one person (to be designated by Zurich
in its sole discretion) to be permitted to attend all meetings of the Board of
Directors of Provident and all meetings of the Executive Committee of Provident.
Provident has agreed to use its reasonable efforts to cause
the election of the number of directors contemplated by the Relationship
Agreement, including (i) placing Zurich designees on the slate of directors
recommended to stockholders at each annual meeting at which Zurich is entitled
to designate a person to serve unless (x) a Zurich designee requests not to be
included or (y) service by a Zurich designee would violate applicable law or
regulation (in which case Zurich may designate an alternate to
<PAGE>
serve), and (ii) in the event a Zurich designee is unable to serve, or is
removed or withdraws after service has commenced, Zurich may designate a
person to serve as such director's replacement. Zurich has also agreed to use
all reasonable efforts to cause any Zurich designee(s) to resign from office
in the event that its ownership of Provident securities falls below the
mandatory thresholds set forth above. In the event the Provident Board of
Directors is classified at some point, Zurich may appoint its designees to
different classes.
The Relationship Agreement sets forth certain conditions and
limitations in connection with Zurich's ownership of Common Stock which are to
be effective for a period of seven years from the closing of the proposed
transactions. Zurich and its affiliates have agreed not to acquire shares of
Common Stock in amounts that would cause Zurich's ownership of Common Stock to
exceed the percentage of the outstanding Common Stock represented by the shares
of Common Stock owned by Zurich immediately following consummation of the Merger
and the Zurich Common Stock Investment (the "Threshold Percentage"); provided,
that Zurich and its affiliates are not prohibited from acquiring shares of
Common Stock that would cause Zurich and its affiliates to exceed the Threshold
Percentage if (i) such shares are acquired from (x) the Maclellan Stockholders,
(y) persons other than the Maclellan Stockholders (under certain circumstances)
or (z) Textron, Inc. ("Textron") (with certain restrictions and limitations,
including Zurich's agreement that prior to purchasing any Provident voting
securities from Textron, Zurich will first offer to the Maclellan Stockholders
the right to sell to Zurich the same number of voting securities on the same
terms as those offered to Textron) and (ii) after giving effect to such
acquisition of Common Stock, Zurich and its affiliates would not beneficially
own more than 40% of the outstanding Common Stock. However, Zurich may acquire
shares of Common Stock from the Maclellan Stockholders in amounts that would
result in Zurich beneficially owning more than 40% of the outstanding Common
Stock if Zurich first offers to purchase all of the outstanding shares of Common
Stock at the same price pursuant to either a tender offer to all stockholders or
a binding merger agreement. In addition, pursuant to the Family Stockholder
Agreement, the Maclellan Stockholders have agreed that, subject to certain
exceptions and conditions, in the event any of them desires to sell shares of
Common Stock, such Maclellan Stockholder shall first offer to Zurich the
opportunity to purchase such shares.
The Relationship Agreement also provides that Zurich and its
affiliates may not dispose of its beneficial interest in any Provident voting
securities, except: (a) to Provident or to any person approved by a majority of
the Board of Directors of Provident; (b) in conversion, exchange or otherwise
pursuant to the terms of such Provident voting securities; (c) in a merger or
consolidation in which Provident is acquired, in a plan of liquidation of
Provident, or pursuant to a tender offer under
<PAGE>
the terms of the Relationship Agreement; (d) pursuant to a bona fide
underwritten public offering; (e) pursuant to Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act"); (f) to an affiliate of Zurich,
subject to transfer and buyback restrictions; (g) to Insurance Partners, L.P.
or Insurance Partners Offshore (Bermuda), L.P. or one or more affiliates of
either of them, provided that all voting rights with respect to such Provident
voting securities are retained by Zurich or an affiliate of Zurich; and (h) in
any other manner, provided that prior to making any offer to sell, sale or
other transfer to any person pursuant to this clause (h) of Provident voting
securities representing beneficial ownership of more than two percent (2%) of
the then outstanding Provident voting securities, Zurich shall give Provident
the opportunity to purchase, or to designate an alternative purchaser of, such
Provident voting securities in the manner set forth in the Relationship
Agreement.
Except as set forth herein, neither Zurich nor, to the best
of its knowledge, any person set forth in Schedule I hereto, has any plans or
proposals with respect to any material change in the business or corporate
structure of Provident or, generally, any other action referred to in
instructions (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) Zurich may be deemed the beneficial owner of 17,940,903
shares of Common Stock representing the total number of shares held by the
Maclellan Stockholders, which constitute approximately 39.5% of the outstanding
shares of Common Stock (the "Voting Shares"). In accordance with Rule 13d-3 of
the General Rules and Regulations of the Securities Exchange Act of 1934, as
amended, Zurich may be deemed to beneficially own the Voting Shares because, as
more fully described in Item 4, under the Family Stockholder Agreement, the
Maclellan Stockholders have agreed to vote the Voting Shares in accordance with
the terms of the Family Stockholder Agreement. The percentage used in this
paragraph 5(a) is calculated based upon 45,465,135 shares of Common Stock
outstanding as reported in the Company's Form 10-Q for the quarterly period
ended March 31, 1996, as filed with the Securities and Exchange Commission on
May 13, 1996.
(b) By virtue of the Family Stockholder Agreement, Zurich may
be deemed to beneficially own the Voting Shares with shared power to vote and
direct the vote of such Voting Shares on certain issues. Zurich does not have
the power to dispose or direct the
<PAGE>
disposition of any shares of Common Stock. Zurich expressly disclaims
beneficial ownership of the Voting Shares.
(c) Except as set forth in this Item 5, neither Zurich nor,
to the best of its knowledge, any executive officer or director listed in
Schedule I hereto, beneficially owns any shares of Common Stock or has effected
any transactions in the Common Stock during the preceding 60 days.
(c), (d) and (e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
In connection with the Purchase Agreement, Provident has
agreed to register the shares to be purchased by Zurich pursuant to a shelf
registration statement filed under the Securities Act pursuant to the terms of a
Registration Rights Agreement, dated as of May 31, 1996 (the "Registration
Rights Agreement"), by and between Provident and Zurich. Provident has also
granted to Zurich certain limited demand registration rights and unlimited
"piggy back" registration rights with respect to shares of Common Stock
beneficially owned by Zurich. The Registration Rights Agreement is attached to
this Statement as Exhibit 4 and the description of the Registration Rights
Agreement contained herein is qualified in its entirety by reference to such
Exhibit, which is incorporated by reference thereto.
Other than as set forth in this Statement, neither Zurich nor,
to the best of its knowledge, any of the directors or executive officers set
forth in Schedule I hereto, has any contracts, arrangements, understandings or
relationships (legal or otherwise) with each other or with any other person with
respect to any securities of the Company, 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.
Item 7. Material to be Filed as Exhibits.
Exhibit 1. Common Stock Purchase Agreement, dated as of May
31, 1996, between Provident Companies, Inc. and Zurich Insurance Company.
Exhibit 2. Relationship Agreement, dated as of May 31, 1996,
between Provident Companies, Inc. and Zurich Insurance Company.
Exhibit 3. Family Stockholder Agreement, dated as of May 31,
1996, among Zurich Insurance Company, the Maclellan
<PAGE>
Foundation, Inc. and the stockholders listed in Schedule A thereto.
Exhibit 4. Registration Rights Agreement, dated as of May 31,
1996, between Zurich Insurance Company and Provident Companies, Inc.
SIGNATURES
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Date: June 10, 1996
ZURICH INSURANCE COMPANY
By: /s/ David A. Bowers
Name: David A. Bowers
Title: Executive Vice President
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Directors of Zurich Insurance Company
Name and Business Address Principal Occupation
- - ------------------------- --------------------
<S> <C>
Henry C.M. Bodmer Deputy Chairman, Zurich Insurance Company; Chairman of the
Abegg Holding AG Board of Directors and Managing Director, Abegg Holding
Bahnhofstrasse 30 Co. Ltd.
8002 Zurich
Switzerland
Professor Dr. Peter Boeckli Attorney at Law, Professor of St. Law; Partner, Law
St. Jakobs-Strasse 41 Offices of Boeckli, Thomann & Partners, Besel.
4052 Basel
Switzerland
Dr. h.c. Kaspar V. Cassani Retired; Former Vice-Chairman, IBM Corporation, Armonk, NY.
Haldenstrasse 53
8142 Uitikon
Switzerland
Rolf Hueppi Chairman and Chief Executive Officer, Zurich Insurance
Mythenquai 2 Company.
8002 Zurich
Switzerland
Markus Kuendig Owner and CEO of Kuendig Druck, IGEG; Politician.
Bundesplatz 10
6300 Zug
Switzerland
Yves Oltramare Retired; Former Partner of Lombard, Odier & Cie, Bankers, Geneva.
MM. Lombard, Odier & Cie.
Rue de la Corraterie 11
1211 Geneva 11
Switzerland
Vreni Spoerry-Toneatti Politician; Member of the Council of States (Upper House).
Claridenstrasse 3
8810 Horgen
Switzerland
Helmut Maucher Chairman of the Board of Directors and Chief Executive
Nestle S.A. Officer of Nestle S.A.
Av. Nestle 55
1800 Vevey
Switzerland
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Name and Business Address Principal Occupation
- - ------------------------- --------------------
<S> <C>
David de Pury Director of various companies; Former co-Chairman of
BBC Brown Boveri and Co. ABB Group, Zurich.
5401 Baden
Switzerland
Drs. h.c. Karl Otto Poehl Banker; co-owner of the Bankhouse Sal. Oppenheim jr. & Cie.
Sal. Oppenheim Jr. & Cie.
Bockenheimer Landstrasse 20
D-6000 Frankfurt am Main
Germany
Lodewijk van Wachem Chairman of the Supervisory Board of the Royal Dutch Petroleum
Royal Dutch Petroleum Co. Company, The Hague, Netherlands.
2501 HR Den Haag
Netherlands
Rolf Haenggi Member of the Board of Directors and Deputy Chief
Mythenquai 2 Executive Officer of Zurich Insurance Company.
8002 Zurich
Switzerland
</TABLE>
<PAGE>
Executive Officers of Zurich Insurance Company
<TABLE>
<CAPTION>
Name and Business Address Principal Occupation
- - ------------------------- --------------------
<S> <C>
Rolf Hueppi Chairman and Chief Executive Officer.
Mythenquai 2
8002 Zurich
Switzerland
Rolf Haenggi Member of the Board of Directors and Deputy Chief
Mythenquai 2 Executive Officer.
8002 Zurich
Switzerland
Peter Eckert Member of Corporate Executive Board.
Mythenquai 2
8002 Zurich
Switzerland
Dr. Guenther Gose Member of Corporate Executive Board.
Mythenquai 2
8002 Zurich
Switzerland
Dr. Detlef Steiner Member of Corporate Executive Board.
Mythenquai 2
8002 Zurich
Switzerland
Dr. Frank Schnewlin Member of Corporate Executive Board.
Mythenquai 2
8002 Zurich
Switzerland
William H. Bolinder Member of Corporate Executive Board.
Mythenquai 2
8002 Zurich
Switzerland
Dominique P. Morax Member of Extended Corporate Executive Board.
Mythenquai 2
8002 Zurich
Switzerland
Dr. Adriana Passardi Member of Extended Corporate Executive Board.
Mythenquai 2
8002 Zurich
Switzerland
</TABLE>
<PAGE>
Notes:
- - ------
1. All of the directors and executive officers named in this Schedule I
are citizens of Switzerland, with the exception of Dr. Guenther Gose,
Dr. Detlef Steiner, Helmut Maucher and Drs. h.c. Karl Otto Poehl who
are citizens of Germany, William H. Bolinder, who is a citizen of the
United States, and Lodewijk van Wachem, who is a citizen of the
Netherlands.
2. Each of the executive officers named above is an employee of Zurich
Insurance Company.
3. The principal business of Zurich Insurance Company is set forth under
Item 2 to the Statement to which this Schedule I is attached.
<PAGE>
EXHIBIT INDEX
Exhibit 1. Common Stock Purchase Agreement, dated as of May 31, 1996,
between Provident Companies, Inc. and Zurich Insurance Company.
Exhibit 2. Relationship Agreement, dated as of May 31, 1996, between
Provident Companies, Inc. and Zurich Insurance Company.
Exhibit 3. Family Stockholder Agreement, dated as of May 31, 1996, among
Zurich Insurance Company, the Maclellan Foundation, Inc. and the
stockholders listed in Schedule A thereto.
Exhibit 4. Registration Rights Agreement, dated as of May 31, 1996, between
Zurich Insurance Company and Provident Companies, Inc.
<PAGE>
- - ------------------------------------------------------------------------------
COMMON STOCK
PURCHASE AGREEMENT
between
PROVIDENT COMPANIES, INC.
and
ZURICH INSURANCE COMPANY
Dated as of May 31, 1996
- - -------------------------------------------------------------------------------
<PAGE>i
TABLE OF CONTENTS
Page
SECTION 1. THE SHARES.......................................................2
Section 1.1. Issuance, Sale and Purchase of the Shares...........2
Section 1.2. Closing.............................................2
Section 1.3. Further Action......................................2
Section 1.4. Anti-Dilution Provisions............................2
SECTION 2. REPRESENTATIONS AND WARRANTIES...................................3
Section 2.1. Representations and Warranties of the Company.......3
Section 2.1.1. Organization, Good Standing and Qualification.......3
Section 2.1.2. Authorization, Enforceability.......................4
Section 2.1.3. No Conflict.........................................4
Section 2.1.4. Capitalization......................................5
Section 2.1.5. Valid Issuance of Securities........................5
Section 2.1.6. Litigation..........................................6
Section 2.1.7. Consents............................................6
Section 2.1.8. Compliance with Law and Other Instruments...........7
Section 2.1.9. SEC Documents; Financial Statements.................7
Section 2.1.10. Absence of Certain Changes or Events................9
Section 2.1.11. No Regulatory Disqualifications.....................9
Section 2.1.12. Registration Rights.................................9
Section 2.1.13. Acquisition Agreements..............................9
Section 2.1.14. Rating Agency.......................................9
Section 2.1.15. Brokers............................................10
Section 2.1.16. Environmental Protection...........................10
Section 2.1.17. Delaware Law.......................................11
Section 2.1.18. Incorporation of Representations and Warranties
from the Merger Agreement........................11
Section 2.2. Representations, Warranties and Covenants
of the Purchaser ................................11
Section 2.2.1. Organization.......................................12
Section 2.2.2. Authorization......................................12
Section 2.2.3. Purchase for Investment............................12
Section 2.2.4. Restricted Securities..............................12
Section 2.2.5. No Regulatory Disqualifications....................13
Section 2.2.6. Purchaser Information..............................13
Section 2.2.7. Consents...........................................13
Section 2.2.8. Brokers............................................14
SECTION 3. CERTAIN AGREEMENTS OF THE PARTIES...............................14
Section 3.1. Conduct of Business of the Company.................14
Section 3.2. Covenants of the Purchaser.........................16
<PAGE>ii
Section 3.3. Proxy Statement; Stockholder Approval..............16
Section 3.4. Approvals, Etc.....................................17
Section 3.5. Exclusivity........................................17
Section 3.6. Publicity .........................................17
Section 3.7. Modification of Other Agreements...................17
Section 3.8. Exchange Listing...................................18
Section 3.9. Investigation and Confidentiality..................18
Section 3.10. State Takeover Laws; Charter Provisions............18
Section 3.11. Use of Proceeds....................................18
Section 3.12. Marketing Agreement................................19
Section 3.13. Restrictive Agreements Prohibited..................19
SECTION 4. CLOSING CONDITIONS .............................................19
Section 4.1. Conditions to Obligation of Purchaser..............19
Section 4.1.1. Representations and Warranties Complete
and Correct......................................19
Section 4.1.2. Compliance with this Agreement.....................19
Section 4.1.3. Officers' Certificate..............................19
Section 4.1.4. Consents; Etc......................................20
Section 4.1.5. Supporting Documents...............................20
Section 4.1.6. HSR Act............................................20
Section 4.1.7. Merger Closing.....................................20
Section 4.1.8. Other Agreements...................................20
Section 4.1.9. Material Adverse Change............................20
Section 4.1.10. Illegality, Etc....................................21
Section 4.1.11. Stockholder Approval...............................21
Section 4.1.12. Exchange Listing...................................21
Section 4.1.13. Financing of Cash Payments in Merger...............21
Section 4.1.14. Maclellan Family Agreement.........................21
Section 4.1.15. Legal Opinions ....................................21
Section 4.2. Conditions to the Obligations of the Company.......21
Section 4.2.1. Compliance with the Agreement......................21
Section 4.2.2. Purchaser's Representations and Warranties
Complete and Correct.............................22
Section 4.2.3. Officer's Certificate..............................22
Section 4.2.4. Consents; Etc......................................22
Section 4.2.5. HSR Act............................................22
Section 4.2.6. Merger Closing.....................................22
Section 4.2.7. Illegality, Etc....................................22
Section 4.2.8. Stockholder Approval...............................22
Section 4.2.9. Exchange Listing...................................22
Section 4.2.10. Financing of Cash Payments in Merger...............23
Section 4.2.11. Legal Opinions.....................................23
SECTION 5. TERMINATION ....................................................23
Section 5.1. Termination........................................23
Section 5.2. Effect of Termination..............................24
<PAGE>iii
Section 5.3. Termination Fee....................................24
SECTION 6. MISCELLANEOUS...................................................24
Section 6.1. Expenses and Indemnification.......................24
Section 6.2. Survival of Agreements.............................26
Section 6.3. Parties in Interest................................26
Section 6.4. Notices............................................26
Section 6.5. Governing Law......................................27
Section 6.6. Entire Agreement...................................27
Section 6.7. Counterparts.......................................27
Section 6.8. Amendments.........................................27
Section 6.9. Severability.......................................27
Section 6.10. Titles and Subtitles...............................28
Section 6.11. Further Assurances.................................28
Exhibit 1 Terms for Marketing Agreement
Exhibit 2 Certificate of Incorporation
Exhibit 3 By-laws
Exhibit 4 Family Stockholders Agreement
Exhibit 5 Form of Opinion of Company Counsel
Exhibit 6 Form of Opinion of Purchaser's
Counsel
<PAGE>1
COMMON STOCK PURCHASE AGREEMENT dated as of May 31, 1996
between Provident Companies, Inc., a Delaware corporation (the "Company"), and
Zurich Insurance Company, a Swiss corporation ("Zurich" and, solely for purposes
of the provisions of this Agreement relating to the rights of the Purchaser
hereunder, together with such affiliates of Zurich as Zurich may designate in
accordance with Section 1.1 hereof, collectively the "Purchaser").
RECITALS:
WHEREAS, the Company wishes to issue and sell to the Purchaser
an aggregate of 9,523,810 shares (the "Shares") of the authorized but unissued
common stock, par value $1.00 per share (the "Common Stock"), of the Company;
and
WHEREAS, the Purchaser wishes to purchase the Shares on the
terms and subject to the conditions set forth in this Agreement; and
WHEREAS, the purchase and sale of the Shares is intended to be
consummated in connection with, and contingent upon, the acquisition by the
Company of all the outstanding common stock of The Paul Revere Corporation
("Revere") through a merger transaction (the "Merger"), all pursuant to an
Agreement and Plan of Merger, dated as of April 29, 1996, between the Company,
Patriot Acquisition Corporation and Revere (as the same may be amended or
supplemented in accordance with the terms of this Agreement, the "Merger
Agreement"); and
WHEREAS, in connection with the execution and delivery of this
Agreement, the Company and the Purchaser are entering into (i) a Registration
Rights Agreement of even date herewith (as the same may be amended or
supplemented from time to time, the "Registration Agreement") providing for
certain rights in favor of the Purchaser with respect to the registration of the
Shares under the federal securities laws and (ii) a Relationship Agreement of
even date herewith (as the same may be amended or supplemented from time to
time, the "Relationship Agreement") providing for certain agreements with
respect to Shares acquired hereunder; and
WHEREAS, on or prior to the Closing Date (as defined in
Section 1.2) the Company and the Purchaser will enter into a Marketing Agreement
(as the same may be amended or supplemented from time to time, the "Marketing
Agreement") relating to a proposed strategic relationship between the Purchaser
and its affiliates and the Company, which agreement shall include the terms set
forth on Exhibit 1 (the Marketing Agreement, the Registration Agreement and the
Relationship Agreement are referred to herein collectively as the "Ancillary
Agreements").
<PAGE>2
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained in this Agreement, the parties agree as follows:
SECTION 1. THE SHARES
Section 1.1. Issuance, Sale and Purchase of the Shares. In
reliance upon the representations and warranties made herein and subject to the
satisfaction or waiver of the conditions set forth herein, the Company agrees to
issue and sell to the Purchaser (and/or such affiliates (as defined in the
Relationship Agreement) of the Purchaser as it may designate in writing to the
Company prior to the Closing (as defined below)), and the Purchaser agrees to
purchase (or to cause such affiliates to purchase) from the Company 9,523,810
Shares, for a purchase price of $31.50 per Share, or an aggregate purchase price
equal to $300,000,000.
Section 1.2. Closing. The closing shall take place at the
offices of Skadden, Arps, Slate, Meagher & Flom, One Beacon Street, Boston,
Massachusetts, on the date the Merger becomes effective in accordance with the
terms and conditions of the Merger Agreement, or at such other location, date
and time as may be agreed upon between the Purchaser and the Company (such
closing being called the "Closing" and such date and time being called the
"Closing Date"). At the Closing, the Company shall issue and deliver to the
Purchaser (or its affiliates), a stock certificate or certificates in definitive
form, registered in the name of the Purchaser (or such affiliates), representing
the Shares being purchased at the Closing. As payment in full for the Shares
being purchased under this Agreement, and against delivery of the stock
certificate or certificates therefor on the Closing Date, the Purchaser shall
(or shall cause its affiliates to) wire transfer in accordance with the
Company's instructions funds in the amount of $300,000,000.
Section 1.3. Further Action. During the period from the date
hereof to the Closing Date, each of the Company and the Purchaser shall use all
reasonable efforts to take all action necessary or appropriate to satisfy the
closing conditions contained in Section 4 hereof and to cause its respective
representations and warranties contained in Section 2 to be complete and correct
in all material respects as of the Closing Date, after giving effect to the
transactions contemplated by this Agreement, as if made on and as of such date.
Section 1.4. Anti-Dilution Provisions. In the event the
Company changes the number of shares of Common Stock issued and outstanding
prior to the Closing as a result of a stock split,
<PAGE>3
stock dividend, or similar recapitalization with respect to such stock and the
record date therefor (in the case of a stock dividend) or the effective date
thereof (in the case of a stock split or similar recapitalization for which a
record date is not established) shall be prior to the Closing, the number of
Shares to be purchased and the purchase price per Share shall be
proportionately adjusted, without any corresponding adjustment to the
aggregate purchase price for the Shares.
SECTION 2. REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company.
The Company represents and warrants to the Purchaser as follows:
Section 2.1.1. Organization, Good Standing and Qualification.
(a) Each of the Company and each of its subsidiaries (the "Company
Subsidiaries") is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
requisite power and authority under such laws to own or lease and operate its
properties and to carry on its business as now conducted. Each of the Company
and each of the Company Subsidiaries is duly qualified or licensed to do
business as a foreign corporation in good standing in each jurisdiction in which
the nature of the business transacted by it or the character of the properties
owned or leased by it requires it to so qualify or be licensed, except where the
failure to so qualify or be licensed or be in good standing would not (i) have a
material adverse effect on the results of operations, assets, liabilities or
financial condition of the Company and the Subsidiaries considered as a single
enterprise or (ii) impair in any material respect the ability of the Company to
perform any of its obligations or agreements hereunder or under the Ancillary
Agreements or consummate the transactions contemplated hereby or thereby
(collectively, a "Material Adverse Effect"). Subject to the requisite approvals
of the Company's stockholders as described in Section 2.1.2, the Company has the
corporate power and authority to execute, deliver and perform this Agreement and
the Ancillary Agreements, and to issue, sell and deliver the Shares.
(b) The Company conducts its insurance operations through
Provident Life and Accident Insurance Company, Provident National Assurance
Company and Provident Life and Casualty Insurance Company (collectively, the
"Company Insurance Subsidiaries"). Except as disclosed in Schedule 2.1.1, each
of
<PAGE>4
the Company Insurance Subsidiaries is (i) duly licensed or authorized as an
insurance company in its jurisdiction of incorporation, (ii) duly licensed or
authorized as an insurance company in each other jurisdiction where it is
required to be so licensed or authorized, and (iii) duly authorized in its
jurisdiction of incorporation and each other applicable jurisdiction to write
each line of business reported as being written in the Company SAP Statements
(as hereinafter defined), except, in any such case, where the failure to be so
licensed or authorized is not reasonably likely to result in a Material
Adverse Effect.
(c) Except for the Company Subsidiaries (including
Revere after consummation of the Merger) and as set forth in the 1995 SAP
Statements or in Schedule 2.1.1, the Company does not directly or indirectly
own any equity or similar interest in, or any interest convertible into or
exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or
entity that directly or indirectly conducts any activity which is material to
the Company.
Section 2.1.2. Authorization, Enforceability. Except for the
affirmative vote of a majority of the votes cast by holders of shares of Common
Stock present in person or represented by proxy at the Stockholders' Meeting (as
defined in Section 3.3) (provided that the votes cast by such holders constitute
a majority of the votes entitled to be cast by holders of the outstanding shares
of Common Stock) to authorize the issuance of the Shares hereunder and the
shares of Common Stock to be issued under the Merger Agreement and except for
the affirmative vote of the holders of sixty-six and two thirds percent of the
shares of Common Stock outstanding with respect to the Charter Amendment (as
defined in Section 5.3 of the Merger Agreement), all corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Ancillary
Agreements, the performance of all obligations of the Company hereunder and
thereunder and the authorization, issuance, sale and delivery of the Shares has
been taken. This Agreement, the Registration Agreement and the Relationship
Agreement have been (and the Marketing Agreement, when executed and delivered,
will be) duly authorized, executed and delivered by the Company and constitute
(and, in the case of the Marketing Agreement, when executed and delivered, will
constitute) the valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether enforcement is sought by proceedings in
equity or at law).
<PAGE>5
Section 2.1.3. No Conflict. The execution and delivery by the
Company of this Agreement and the Ancillary Agreements, the performance by the
Company of its obligations hereunder and thereunder, the issuance, sale and
delivery of the Shares, will not violate any provision of (i) the Amended and
Restated Certificate of Incorporation, as amended or supplemented (the
"Certificate of Incorporation"), or By-laws, as amended (the "By-laws"), of the
Company, or (ii) any law or any order of any court or other agency of
government, or conflict with, result in a breach of or constitute (with notice
or lapse of time or both) a default under any indenture, agreement or other
instrument by which the Company or any of its properties or assets is bound, or
result in the creation or imposition of any lien, charge, restriction, claim or
encumbrance of any nature whatsoever known to the Company upon any of the
properties or assets of the Company, except for violations, conflicts, breaches
or defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect. True and correct copies of the Certificate
of Incorporation and By-laws, as in effect on the date hereof, are attached
hereto as Exhibits 2 and 3, respectively.
Section 2.1.4. Capitalization. (a) The authorized capital
stock of the Company consists of (i) 25,000,000 shares of Preferred Stock, par
value $1.00 per share (the "Preferred Stock"), which may be issued in series;
and (ii) 65,000,000 shares of Common Stock. As of the Closing Date, assuming the
Charter Amendment is approved by the Company's stockholders, the authorized
number of shares of Common Stock will be increased to at least 75,000,000
shares.
(b) As of April 29, 1996, there were issued and
outstanding (i) 45,465,135 shares of Common Stock, (ii) 1,041,667 shares of
8.10% Cumulative Preferred Stock, evidenced by depositary receipts for 6,250,002
depositary shares each representing a one-sixth interest in one share of the
8.10% Cumulative Preferred Stock, and (iii) options to purchase 1,837,145 shares
of Common Stock under the Company's Stock Option Plan of 1994, as amended (the
"1994 Plan") out of a total of 3,500,000 options authorized to be issued under
the 1994 Plan. As of the Closing Date (and after giving effect to the Merger and
the transactions contemplated by this Agreement), there will be outstanding
67,540,281 shares of Common Stock (not including shares of Common Stock issued
pursuant to the exercise of options granted under the 1994 Plan and assuming
12,492,617 shares of Common Stock are issued to stockholders of Revere by virtue
of the Merger).
(c) Except as set forth in Schedule 2.1.4 or as provided
in this Agreement and the Merger Agreement, there are not outstanding any
options, warrants, rights (including
<PAGE>6
conversion, exchange or preemptive rights) or agreements or commitments,
orally or in writing, for the purchase or acquisition from the Company of any
shares of its capital stock.
(d) Except as set forth in Schedule 2.1.4, the Company
has no obligation (contingent or other) to purchase, redeem or otherwise acquire
any of its equity securities or any interest therein or to pay any dividend
(other than cumulative dividends on the 8.10% Cumulative Preferred Stock in
accordance with the terms thereof) or make any other distribution in respect
thereof.
Section 2.1.5. Valid Issuance of Securities. (a) The
Shares, when issued, sold and delivered in accordance with the terms hereof
for the consideration expressed herein, will be duly authorized, validly
issued, fully paid and nonassessable.
(b) The outstanding shares of Common Stock and 8.10%
Cumulative Preferred Stock are, and the shares of Common Stock issuable pursuant
to the Merger Agreement will be when issued, duly authorized, validly issued,
fully paid and nonassessable.
(c) The issuance, sale and delivery of the Shares is not
subject to any preemptive right of stockholders of the Company arising under law
or the Certificate of Incorporation or By-laws or to any contractual right of
first refusal or other right in favor of any person.
Section 2.1.6. Litigation. There is no action, suit,
proceeding or investigation pending or, to the knowledge of the Company,
currently threatened against the Company or any of the Company Subsidiaries that
questions the validity of this Agreement or any of the Ancillary Agreements or
the right of the Company to enter into, or to consummate, the transactions
contemplated hereby or thereby, or that is reasonably likely, either
individually or in the aggregate, to have a Material Adverse Effect, nor does
the Company have knowledge that there is any basis for any of the foregoing. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality that specifically names the Company, any of the Company
Subsidiaries and as to which either compliance or noncompliance is reasonably
likely to have a Material Adverse Effect. Except as set forth on Schedule 2.1.6,
there is no action, suit, proceeding or investigation by the Company or any of
the Company Subsidiaries currently pending or which the Company or any Company
Subsidiary intends to initiate that is material to the operations of the Company
and the Company Subsidiaries considered as a whole.
<PAGE>7
Section 2.1.7. Consents. Assuming the accuracy of the
representations and warranties of the Purchaser set forth in this Agreement,
except as set forth on Schedule 2.1.7, no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority, agency or body or any other person on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements, except
for (i) required blue sky filings, if any, which will be effected in accordance
with such laws, (ii) filings required under the Securities Act of 1933 (the
"Securities Act") in connection with the Registration Agreement, (iii) the
filing of a Pre-Merger Notification Form and related documents under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), (iv) the
filing of appropriate documents with, and the approval of, the Superintendent of
Insurance of the State of New York and the Commissioners of Insurance of the
Commonwealth of Massachusetts, the States of Delaware and Tennessee and any
other state or jurisdiction in which the Company or any of the Company Insurance
Subsidiaries is domiciled or does business (the "Insurance Regulators") for the
issuance of the Shares to the Purchaser, (v) such consents, approvals, notices
or waivers as may be required under the law of Canada or any of the provinces
thereof; (vi) the approval of the NYSE (as defined in Section 3.8) for the
listing of the Shares on the NYSE, subject to official notice of issuance; and
(vii) such consents, approvals, orders, authorizations, registrations,
qualifications, designations, declarations or filings which if not obtained or
made, as the case may be, are not reasonably likely to have a Material Adverse
Effect.
Section 2.1.8. Compliance with Law and Other Instruments. The
Company and the Company Subsidiaries are not in conflict with, or in default or
violation of, (i) any law, rule, regulation, order, judgment or decree
applicable to any of them or by which any of their property or assets is bound
or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which any
of them is a party or by which the Company or any of the Company Subsidiaries or
any of their property or assets is bound or affected, except for any such
conflicts, defaults or violations that are not reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect.
Section 2.1.9. SEC Documents; Financial Statements. Except
as set forth in Schedule 2.1.9:
(a) There are no agreements, understandings or proposed
transactions between the Company or any of the
<PAGE>8
Subsidiaries and any of their respective officers, directors or affiliates, or
any affiliate thereof, of a type that would be required to be disclosed on
Form 10-K for the year ending on December 31, 1995 other than the agreements,
understandings or proposed transactions disclosed in the SEC Documents (as
hereinafter defined).
(b) The Company has timely filed all reports required to be
filed by it with the SEC since January 1, 1994 pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the rules and
regulations thereunder. The Company has provided the Purchaser with copies of
(i) the Company's annual reports on Form 10-K for the years ended December 31,
1994 and 1995, (ii) the Proxy Statement filed by the Company with the SEC on
April 1, 1996 with respect to the Annual Meeting of Stockholders of the Company
held on May 1, 1996 and (iii) the Company's quarterly report on Form 10-Q for
the quarter ended March 31, 1996 (collectively, together with any other reports
or filings made by the Company since January 1, 1994 or which are made after the
date hereof and on or prior to the Closing Date with the SEC pursuant to the
requirements of the Securities Act or the Exchange Act or the rules and
regulations thereunder, including, without limitation, the Registration
Statement and the Proxy Statement (as those terms are defined in Section 2.2.6),
the "SEC Documents"). As of their respective dates, the SEC Documents complied
(or, as to SEC Documents filed after the date hereof, will comply) in all
material respects with the requirements of the Exchange Act, the Securities Act
and the rules and regulations of the SEC promulgated thereunder. Except to the
extent that information contained in any SEC Document has been revised or
superseded by a later filed SEC Document (which was filed prior to the date of
this Agreement), none of the SEC Documents contains (or, as to SEC Documents
filed after the date hereof, will contain) any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Registration Statement will not,
at the time it becomes effective, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. The Proxy
Statement will not, at the time of the mailing of the Proxy Statement to the
Company's stockholders (or, in the case of any amendment or supplement thereto,
at the time of mailing of such amendment or supplement, as the case may be) and
at the time of the Stockholders' Meeting and at the Effective Time (as defined
in the Merger Agreement) contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
<PAGE>9
(c) The financial statements of the Company included in the
SEC Documents comply (or, as to SEC Documents filed after the date hereof, will
comply) as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles, except, in the case of unaudited statements as permitted by Form
10-Q, applied on a consistent basis during the periods involved and fairly
present the consolidated financial position of the Company and its subsidiaries
as of the date thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). Except as set forth in the SEC Documents,
neither the Company nor any of the Company Subsidiaries has any material
liabilities or obligations which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect.
(d) Each Company Insurance Subsidiary has filed all annual or
quarterly statements, together with all exhibits and schedules thereto, required
to be filed or submitted to the appropriate regulatory authorities of the
jurisdiction in which it is domiciled on forms prescribed or permitted by such
authority (the "SAP Statements"). The financial statements included in the SAP
Statements, including the notes thereto, have been prepared in all material
respects in accordance with accounting practices prescribed or permitted by
applicable state regulatory authorities in effect as of the date of the
respective statements (and such accounting practices have been applied on a
consistent basis throughout the periods involved, except as expressly set forth
in the notes or schedules thereto), and present fairly the respective statutory
financial position and results of operation of each of the Company Insurance
Subsidiaries as of their respective dates and for the respective periods
prescribed therein.
Section 2.1.10. Absence of Certain Changes or Events. Except
as disclosed in the SEC Documents, or as set forth in Schedule 2.1.10 or as a
consequence of, or as contemplated by, this Agreement or the Merger Agreement,
since March 31, 1996, (i) the business of the Company has been carried on only
in the ordinary and usual course, (ii) there has not occurred any change which
has resulted or is reasonably likely to result in a Material Adverse Effect and
(iii) neither the Company nor any Company Subsidiary has taken any action of the
type described in clauses (g), (h), (i) or (j) of Section 3.1.
Section 2.1.11. No Regulatory Disqualifications. To the
knowledge of the Company, no event has occurred or condition exists or, to the
extent it is within the reasonable control of the Company, will occur or exist
with respect to the
<PAGE>10
Company that, in connection with obtaining any approvals from any Insurance
Regulator required in connection with the transactions contemplated by this
Agreement or the Merger Agreement, would cause the Company or any Company
Subsidiary to fail to satisfy on its face any applicable statute or written
regulation of any Insurance Regulator, which is reasonably likely to adversely
affect the Company's ability to consummate the transactions contemplated
hereby or thereby.
Section 2.1.12. Registration Rights. Except for the
Registration Agreement, the registration rights granted pursuant to the
Registration Rights Agreement, dated April 29, 1996, between the Company and
Textron Inc. and the registration rights agreement with members of the Family
Group (as defined in the Registration Agreement), the Company has not granted or
agreed to grant any registration rights, including piggyback rights, to any
person or entity.
Section 2.1.13. Acquisition Agreements. True and correct
copies of (i) the Merger Agreement and any agreements executed by the Company
(or any of its affiliates) and Revere in connection therewith (the "Merger
Documents") and (ii) any agreement, letter of intent, commitment letter or
similar agreement or document relating to any financing proposed to be incurred
by the Company in connection with the Merger, other than this Agreement and the
Ancillary Agreements (the "Company Financing Agreements"), have been furnished
to the Purchaser.
Section 2.1.14. Rating Agency. From December 31, 1995 through
the date hereof, except as disclosed on Schedule 2.1.14, no rating agency has
(i) imposed conditions (financial or otherwise) on retaining any rating assigned
to the Company or any Company Insurance Subsidiary or (ii) threatened to
downgrade any rating assigned to the Company or any Company Insurance
Subsidiary.
Section 2.1.15. Brokers. Other than its financial advisor,
Goldman, Sachs & Company, the Company has not employed any investment banker,
broker, finder, or intermediary in connection with the sale of the Shares, and
the Company is under no obligation to pay any investment banking, brokerage,
finder's or similar fee or commission in connection with such transactions,
other than certain fees payable to Goldman, Sachs & Company, which fees are the
obligation of the Company.
Section 2.1.16. Environmental Protection. (a) For
purposes of this Section 2.1.16, the following terms shall be defined as
follows:
<PAGE>11
"Environmental Laws" means any federal, state or local
statute, code, ordinance, rule, regulation, permit, consent, approval, license,
judgment, order, writ, decree, injunction or other authorization and any
amendments thereto, relating to:
(i) emissions, discharges, release or threatened releases of
pollutants, contaminants or hazardous or toxic materials or wastes into
indoor or ambient air, surface water, ground water, publicly owned
treatment works, septic systems or land;
(ii) the treatment, storage, disposal, handling,
manufacturing, transportation, or shipment of Hazardous Water or
hazardous and/or toxic wastes, material, substances, products or
by-products as defined in the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments
and Reauthorization Act, as amended, 42 U.S.C. ss. 9601 et seq.; the
Resource Conservation Recovery Act, as amended, 42 U.S.C. ss. 6901 et
seq. and the Toxic Substances Control Act, as amended, 15 U.S.C. ss.
2601 et seq. as amended from time to time and corresponding state
legislation and all regulations promulgated thereunder; or
(iii) otherwise relating to the pollution or protection of
health or the environment; and
"Hazardous Waste" (a) means any chemical substance or
material including, but not limited to wastes, petroleum and petroleum-derived
substances, asbestos, urea formaldehyde foam insulation, transformer equipment
containing dielectric fluid with levels of polychlorinated biphenyls, radon gas,
radioactive materials or other pollutants or contaminants which have the
characteristic of hazardous waste as set forth in or which are now or hereafter
included or regulated by the Clean Water Act, 33 U.S.C. ss. 1251 et seq.; the
Clear Act, as amended, 42 U.S.C. ss. 7401, et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; CERCLA; RCRA; and TSCA.
(b) The Company and the Company Subsidiaries are not in
violation of any Environmental Laws, other than such violations which have not
had and are reasonably expected not to have a Material Adverse Effect and have,
and are in compliance with all terms and conditions of, all permits, licenses
and authorizations necessary for the conduct of their respective businesses,
other than such instances of non-compliance which are not reasonably likely to
have a Material Adverse Effect.
(c) Except as set forth on Schedule 2.1.16, there is no site
which is listed on either the National Priorities List pursuant to CERCLA or a
similar state or local law list with respect to which the Company has received
notice from the United States Environmental Protection Agency or a state or
local agency
<PAGE>12
that the Company is considered to be a potentially responsible party by reason
of arranging for disposal, owning or operating any facility or site or
transporting any Hazardous Waste.
Section 2.1.17. Delaware Law. The Company has elected not to
be governed by the provisions of Section 203 of the Delaware General Corporation
Law ("DGCL") and such election is effective as of the date hereof and such
Section 203 (a) is not applicable to the transactions contemplated hereby and by
the Ancillary Agreements and (b) will not be applicable to any future
transactions between the Company, on the one hand, and the Purchaser and/or any
of its affiliates, on the other hand. The Company has taken all action so that
the entering into of this Agreement and the consummation of the sale of the
Shares and the other transactions contemplated by this Agreement do not and will
not result in the grant of any rights to any person under the Certificate of
Incorporation, By-laws or other governing instruments of the Company or restrict
or impair the ability of the Purchaser to vote, or otherwise to exercise the
rights of a stockholder with respect to, shares of the Company that may be
directly or indirectly acquired or controlled by the Purchaser.
Section 2.1.18. Incorporation of Representations and
Warranties from the Merger Agreement. Without qualifying any of the other
representations and warranties set forth in this Agreement, the representations
and warranties of the Company set forth in Sections 5.3, 5.4, 5.9, 5.11, 5.12,
5.13, 5.14, 5.16, 5.17, 5.18, 5.19 and 5.20 of the Merger Agreement (including
any related definitions) shall be deemed to be incorporated by reference herein
as if fully set forth herein.
Section 2.2. Representations, Warranties and Covenants of
the Purchaser. The Purchaser represents and warrants to the Company that:
Section 2.2.1. Organization. The Purchaser is a
corporation duly organized and validly existing under the laws of Switzerland.
Section 2.2.2. Authorization. The Purchaser has full power and
authority to enter into this Agreement and the Ancillary Agreements. Each of
this Agreement, the Registration Agreement and the Relationship Agreement
constitute (and the Marketing Agreement, when executed and delivered, will
constitute) its valid and legally binding obligation, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights
<PAGE>13
generally and by general principles of equity (whether enforcement is sought
by proceedings in equity or at law).
Section 2.2.3. Purchase for Investment. The Shares will be
acquired for investment for the Purchaser's (or its affiliates') own account and
not with a view to the resale or distribution of any part thereof, except in
compliance with the provisions of the Securities Act or an exemption therefrom.
Section 2.2.4. Restricted Securities. The Purchaser
understands that the Shares are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such shares may be resold without registration under the
Securities Act only in certain limited circumstances.
The Purchaser further agrees that each certificate representing the
Shares shall be stamped or otherwise imprinted with a legend substantially in
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE (I) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION
IS AVAILABLE, AND (II) ARE SUBJECT TO THE PROVISIONS OF A
RELATIONSHIP AGREEMENT, DATED AS OF MAY 31, 1996, BETWEEN
THE COMPANY AND THE PURCHASER, COPIES OF WHICH ARE ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY."
A certificate shall not bear such legend if the Purchaser shall have delivered
to the Company an opinion of counsel reasonably satisfactory to the Company to
the effect that the securities being sold may be publicly sold without
registration under the Securities Act. The foregoing shall not be deemed to
affect the obligations of the Company under the Registration Agreement.
Section 2.2.5. No Regulatory Disqualifications. To the
knowledge of the Purchaser, no event has occurred or condition exists or, to the
extent it is within the reasonable control of the Purchaser, will occur or exist
with respect to the Purchaser that, in connection with obtaining any approvals
from any Insurance Regulator required in connection with the transactions
contemplated by this Agreement, would cause the Purchaser to fail to satisfy on
its face any applicable statute or written regulation of any Insurance
Regulator, which would be reasonably likely to adversely affect the Purchaser's
ability to consummate the transactions contemplated hereby or thereby.
<PAGE>14
Section 2.2.6. Purchaser Information. None of the information
regarding the Purchaser supplied by the Purchaser in writing specifically for
inclusion in (i) the registration statement to be filed by the Company as
contemplated by Section 4.10 of the Merger Agreement (the "Registration
Statement") or (ii) the proxy statement-prospectus to be filed by the Company as
contemplated by Section 6.4 of the Merger Agreement (the "Proxy Statement")
will, in the case of the Registration Statement, at the time it becomes
effective contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading, or, in the case of the Proxy Statement, at
the time of the mailing of the Proxy Statement to the Company's stockholders
(or, in the case of any amendment or supplement thereto, at the time of mailing
of such amendment or supplement, as the case may be) and at the time of the
Stockholders' Meeting and at the Effective Time (as defined in the Merger
Agreement) contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
Section 2.2.7. Consents. Assuming the accuracy of the
representations and warranties of the Company set forth in this Agreement, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any governmental authority, agency or
body or any other person on the part of the Purchaser is required in connection
with the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except for (i) the filing of a Pre-Merger Notification
Form and related documents under the HSR Act, (ii) the filing of appropriate
documents with, and approval of, the Insurance Regulators and the Commissioners
of Insurance of any state or jurisdiction in which the Purchaser or any of its
insurance subsidiaries is domiciled or does business, (iii) such consents,
approvals, notices or waivers as may be required under the laws of Canada or any
of the provinces thereof, (iv) filings required under the Securities Act or the
Securities Exchange Act of 1934, as amended, or (v) such consents, approvals,
orders, authorizations, registrations, qualifications, designations,
declarations or filings, which if not obtained or made, as the case may be, are
not reasonably likely to impair in any material respect the ability of the
Purchaser to perform any of its obligations or agreements hereunder or under the
Ancillary Agreements or consummate the transactions contemplated hereby or
thereby.
Section 2.2.8. Brokers. Other than Donaldson, Lufkin &
Jenrette Securities Corporation, the Purchaser has not employed any
<PAGE>15
investment banker, broker, finder, or intermediary in connection with the
transactions contemplated by this Agreement, and the Purchaser is under no
obligation to pay any investment banking, brokerage, finder's or similar fee
or commission in connection with such transactions, other than certain fees
payable to Donaldson, Lufkin & Jenrette Securities Corporation, which are the
obligation of the Purchaser (except to the extent otherwise provided in
Section 6.1).
SECTION 3. CERTAIN AGREEMENTS OF THE PARTIES
Section 3.1. Conduct of Business of the Company. Except as set
forth in Schedule 3.1, from the date of this Agreement until the earlier of the
Closing or the termination of this Agreement, unless the prior written consent
of the Purchaser shall have been obtained, and except as otherwise contemplated
by this Agreement, the Company will conduct its operations according to its
ordinary and usual course of business consistent with past practice and shall
use all reasonable efforts to preserve intact its current business
organizations, keep available the service of its current officers and employees,
maintain its material permits and contracts and preserve its relationships with
customers, suppliers and others having business dealings with it. Without
limiting the generality of the foregoing, and except as otherwise contemplated
by this Agreement or as set forth in Schedule 3.1, the Company will not, without
the prior written consent of the Purchaser (which consent shall not be
unreasonably withheld):
(a) issue, sell, grant, dispose of, pledge or otherwise
encumber, or authorize or propose the issuance, sale, disposition or
pledge or other encumbrance of (i) any additional shares of capital
stock of capital stock of any class (including shares of Common Stock),
or any securities or rights convertible into, exchangeable for, or
evidencing the right to subscribe for any shares of capital stock, or
any rights, warrants, options, calls, commitments or any other
agreements of any character to purchase or acquire any shares of
capital stock or any securities or rights convertible into,
exchangeable for, or evidencing the right to subscribe for, any shares
of capital stock or (ii) any other securities in respect of, in lieu
of, or in substitution for, shares of Common Stock outstanding on the
date hereof;
(b) redeem, purchase or otherwise acquire, or propose to
redeem, purchase or otherwise acquire, any of its outstanding shares
of Common Stock;
(c) split, combine, subdivide or reclassify any shares of
Common Stock or declare, set aside for payment or pay any dividend, or
make any other actual, constructive or deemed distribution in respect
of any capital stock of the Company
<PAGE>16
or otherwise make any payments to stockholders in their capacity as
such, other than the declaration and payment of regular quarterly
cash dividends on the Common Stock in an amount no greater than $.18
per share and in accordance with past dividend policy and except for
dividends by a direct or indirect wholly owned Company Subsidiary;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of the Company Subsidiaries
(other than the Merger);
(e) adopt any amendments to its Certificate of Incorporation
or Bylaws or alter through merger, liquidation, reorganization,
restructuring or in any other fashion the corporate structure or
ownership of any direct or indirect Company Subsidiary, except for
Company Subsidiaries which are not material to the assets, liabilities,
financial condition or results of operations of the Company and the
Company Subsidiaries taken as a whole;
(f) make, or permit any Company Subsidiary to make, any
material acquisition, by means of merger, consolidation or otherwise,
or material disposition, of assets or securities;
(g) other than in the ordinary course of business consistent
with past practice, incur, or permit any Company Subsidiary to incur,
any material indebtedness for borrowed money or guarantee any such
indebtedness or make any material loans, advances, or capital
contributions to, or other material investments in, any person other
than the Company or any Company Subsidiary;
(h) change any method of accounting or accounting practice by
the Company or any Company Subsidiary, except for such required change
in GAAP or applicable statutory accounting principles;
(i) permit any Company Insurance Subsidiary to materially
change its investment guidelines or policies or conduct transactions in
investments except in material compliance with the investment
guidelines and policies of such Company Insurance Subsidiary and all
applicable insurance laws;
(j) enter, or permit any Company Insurance Subsidiary to
enter, into any material reinsurance, coinsurance or similar agreement,
whether as reinsurer or reinsured, except in the ordinary course of
business consistent with past practice;
(k) (x) take, or agree or commit to take, or permit any
Company Subsidiary to take, or agree or commit to take,
<PAGE>17
any action that would make any representation and warranty of the
Company hereunder inaccurate in any material respect at the Closing
(except for representations and warranties which speak as of a
particular date, which need be accurate only as of such date), (y)
omit, or agree or commit to omit, or permit any Company Subsidiary to
omit, or agree or commit to omit, to take any action necessary to
prevent any such representation and warranty from being inaccurate in
any material respect at the Closing (except for representations and
warranties which speak as of a particular date, which need be
accurate only as of such date), provided however that the Company
shall be permitted to take or omit to take such action which can be
cured, and in fact is cured, at or prior to the Closing, or (z) any
action that would result in, or would be reasonably likely to result
in, any of the conditions set forth in Section 4 not being satisfied;
or
(l) authorize, recommend, propose or announce an intention to
do any of the foregoing, or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
Section 3.2. Covenants of the Purchaser. Except as otherwise
contemplated by this Agreement, the Purchaser will not, without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, (x) take, or agree or commit to take, any action that would make any
representation and warranty of the Purchaser hereunder inaccurate in any
material respect at the Closing (except for representations and warranties which
speak as of a particular date, which need be accurate only as of such date), (y)
omit, or agree or commit to omit, to take any action necessary to prevent any
such representation and warranty from being inaccurate in any material respect
at the Closing (except for representations and warranties which speak as of a
particular date, which need be accurate only as of such date), provided however
that the Purchaser shall be permitted to take or omit to take such action which
can be cured, and in fact is cured, at or prior to the Closing, or (z) any
action that would result in, or would be reasonably likely to result in, any of
the conditions set forth in Section 4 not being satisfied.
Section 3.3. Proxy Statement; Stockholder Approval. The
Company shall call a special meting of its stockholders (the "Stockholders'
Meeting"), to be held as soon as reasonably practicable after the date of this
Agreement, for the purpose of voting upon approval of the sale of Shares
pursuant to this Agreement, the issuance of shares of Company Common Stock
pursuant to the Merger Agreement, the Charter Amendment (as defined in the
Merger Agreement) and such other related matters as it deems appropriate. In
connection with the Stockholders' Meeting, (i) the Company shall prepare and
file with the SEC a
<PAGE>18
Proxy Statement and mail such Proxy Statement to its stockholders, (ii) the
Board of Directors of the Company shall recommend to its stockholders the
approval of the sale of Shares pursuant to this Agreement and (subject to the
terms of the Merger Agreement) the issuance of shares of Common Stock pursuant
to the Merger Agreement and the Charter Amendment and (iii) the Board of
Directors and officers of the Company shall use their reasonable efforts to
obtain such stockholders' approval (subject to the terms of the Merger
Agreement).
Section 3.4. Approvals, Etc. Subject to the terms and
conditions provided herein, each of the parties hereto agrees to (i) promptly
effect all registrations, submissions and filings, including but not limited to,
filings under the HSR Act, submissions to the Insurance Regulators and filings
required under the Registration Agreement, which may be necessary or required in
connection with the consummation of the transactions contemplated by this
Agreement and, in the case of the Company, the Merger Agreement, (ii) to use all
reasonable efforts to take all other action and to do all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and, in the case of
the Company, the Merger Agreement and (iii) use all reasonable efforts to obtain
all other necessary or appropriate waivers, consents and approvals with respect
to the transactions contemplated by this Agreement and, in the case of the
Company, the Merger Agreement.
Section 3.5. Exclusivity. The Company hereby agrees that,
prior to the Closing Date, the Company shall not solicit or accept alternative
sources for the investment contemplated by this Agreement. The Company further
agrees that it will not utilize any funds or other sources of financing to
finance the Merger without first consummating the full purchase and sale
provided hereunder.
Section 3.6. Publicity. Neither the Company nor the Purchaser
shall make any public announcement concerning this Agreement or the other
transactions contemplated hereby without the prior written consent of the other,
except as may be required by law or stock exchange rule.
Section 3.7. Modification of Other Agreements. Without the
prior written consent of the Purchaser, the Company shall not amend in any
material respect any provision of, or waive any condition to the performance by
the Company or its affiliates of any of their respective obligations under, any
of the Merger Documents or the Company Financing Agreements.
<PAGE>19
Section 3.8. Exchange Listing. The Company shall as promptly
as practicable prepare and submit to the New York Stock Exchange ("NYSE") a
listing application covering the Shares, and shall use all reasonable efforts to
obtain, prior to the Closing, approval for the listing of the Shares on the
NYSE, subject to official notice of issuance.
Section 3.9. Investigation and Confidentiality. (a)
Prior to the Closing, the Company shall keep the Purchaser advised of all
material developments relevant to its business and to consummation of the
Merger and the sale of the Shares and shall permit the Purchaser to make or
cause to be made such investigation of its business and properties and of its
financial and legal condition as the Purchaser reasonably requests, provided
that such investigation shall be reasonably related to the transactions
contemplated hereby and shall not interfere unnecessarily with normal
operations. The Purchaser agrees that it will not, and will cause its
officers, employees and agents not to, use any information obtained pursuant
to this Section 3.9 for any purpose unrelated to the performance of the
obligations under, or the consummation of the transactions contemplated by,
this Agreement or the Ancillary Agreements.
(b) The Purchaser agrees that the Confidentiality
Agreement, dated December 3, 1995, by and between Provident Life and Accident
Insurance Company of America and Centre ReSource Limited (the "Confidentiality
Agreement"), shall be binding upon the Purchaser and shall apply with respect to
information furnished by the Company or any of its Subsidiaries, or any of their
respective officers, employees, counsel, accountants and other authorized
representatives hereunder.
(c) Notwithstanding the provisions hereof, during the period
prior to the Closing Date, the parties shall take appropriate precautions to
ensure that competitively sensitive information is not exchanged in a manner
which is inconsistent with applicable law.
Section 3.10. State Takeover Laws; Charter Provisions. Each of
the Company and the Company Subsidiaries shall take all necessary action to
ensure that the entering into of this Agreement and the consummation of the sale
of the Shares and the other transactions contemplated hereby do not and will not
result in the grant of any rights to any Person under the Certificate of
Incorporation, Bylaws or other governing instruments of the Company or restrict
or impair the ability of the Purchaser to vote, or otherwise to exercise the
rights of a
<PAGE>20
stockholder with respect to, shares of the Company that may be directly or
indirectly acquired or controlled by the Purchaser.
Section 3.11. Use of Proceeds. The proceeds from the sale of
the Shares shall be used to fund payments required to be made by the Company in
connection with the Merger.
Section 3.12. Marketing Agreement. The parties hereto agree to
negotiate in good faith, and execute prior to the Closing, the Marketing
Agreement, which agreement shall (i) be effective as of the Closing, (ii) have
terms consistent with the summary of terms attached hereto as Exhibit 1 and
(iii) have such other terms as the parties may agree to.
Section 3.13. Restrictive Agreements Prohibited. The
Company shall not become a party to any agreement which by its terms violates
the terms of this Agreement or any of the Ancillary Agreements.
SECTION 4. CLOSING CONDITIONS
Section 4.1. Conditions to Obligation of Purchaser. The
obligation of the Purchaser to purchase the Shares shall be subject to its
satisfaction or waiver of the following conditions on or before the Closing
Date:
Section 4.1.1. Representations and Warranties Complete and
Correct. The representations and warranties of the Company contained in Section
2.1 hereof which are qualified as to materiality or a Material Adverse Effect
shall have been true and correct when made and shall be true and correct at and
as of the Closing Date, after giving effect to the transactions contemplated by
this Agreement and the Merger Agreement, as if made on and as of such date
(except for representations and warranties which are confined to a specified
date, which shall be true and correct as of such date). The representations and
warranties of the Company contained in Section 2.1 hereof which are not
qualified as to materiality or a Material Adverse Effect shall have been true
and correct in all material respects when made and shall be true and correct in
all material respects at and as of the Closing Date, after giving effect to the
transactions contemplated by this Agreement and the Merger Agreement, as if made
on and as of such date (except for representations and warranties which are
confined to a specified date, which shall be true and correct in all material
respects as of such date).
<PAGE>21
Section 4.1.2. Compliance with this Agreement. The Company
shall have performed and complied in all material respects with all agreements,
covenants and conditions contained herein which are required to be performed or
complied with by it on or before the Closing Date.
Section 4.1.3. Officers' Certificate. The Purchaser shall have
received a certificate, dated the Closing Date and signed by the President or
any Vice President and attested by the Secretary of the Company, certifying that
the conditions set forth in Sections 4.1.1 and 4.1.2 are satisfied on and as of
such date.
Section 4.1.4. Consents; Etc. The Company shall have received
all consents, approvals and other authorizations that may be required from, and
made all such filings and declarations that may be required with, any
governmental authority or agency pursuant to any law, statute, regulation or
rule (federal, state, local and foreign), or pursuant to any agreement, order or
decree by which the Company or any of its assets is bound, in connection with
the transactions contemplated by this Agreement.
Section 4.1.5. Supporting Documents. The Purchaser shall
have received copies of the following documents:
(i) (A) the Certificate of Incorporation, certified as of a
recent date by the appropriate authority of the Company's jurisdiction
of incorporation; and (B) a certificate of such authority dated as of a
recent date as to the due incorporation and good standing of the
Company, and listing all documents of the Company on file with said
authority; and
(ii) a certificate of the Secretary or an Assistant Secretary
of the Company dated the Closing Date and certifying: (A) that attached
thereto is a true and complete copy of the Bylaws of the Company as in
effect on the date of such certification; (B) that attached thereto is
a true and complete copy of all resolutions adopted by the Board of
Directors or the stockholders of the Company authorizing the execution,
delivery and performance of this Agreement and the Ancillary
Agreements, the issuance, sale and delivery of the Shares, and that all
such resolutions are in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated by
this Agreement, the Marketing Agreement and the Registration Agreement;
(C) that the Certificate of Incorporation has not been amended since
the date of the last amendment referred to in the certificate delivered
pursuant to clause (i)(B)
<PAGE>22
above; and (D) that the Bylaws have not been amended since the
date of the last amendment referred to in such certificate pursuant to
subclause (ii)(A) above.
Section 4.1.6. HSR Act. Any required waiting periods under the
HSR Act relating to the transactions to be consummated on the Closing Date shall
have expired or been terminated.
Section 4.1.7. Merger Closing. The closing under the
Merger Agreement shall have occurred or shall occur simultaneously with the
Closing hereunder.
Section 4.1.8. Other Agreements. The Company shall have
complied with all agreements required to be complied with by it on or before
the Closing Date under the Ancillary Agreements.
Section 4.1.9. Material Adverse Change. Except as disclosed in
the SEC Documents filed prior to the date hereof, or as set forth in Schedule
2.1.10 or as a consequence of, or as contemplated by, this Agreement or the
Merger Agreement, since December 31, 1995, there shall not have occurred any
change, and no additional information shall have been disclosed to the
Purchaser, which is reasonably likely to have a material adverse effect on the
financial condition, results of operations, assets or liabilities of the Company
and the Company Subsidiaries, taken as a whole, or a material adverse effect on
the financial condition, results of operations, assets or liabilities of Revere
and its subsidiaries, taken as a whole.
Section 4.1.10. Illegality, Etc. No statute, rule or
regulation, or order, decree or injunction enacted, entered, promulgated or
enforced by any court or governmental authority shall be in effect which
prohibits or restricts the consummation of the transactions contemplated hereby.
Section 4.1.11. Stockholder Approval. Each of the sale of
Shares pursuant to this Agreement, the issuance of shares of Common Stock
pursuant to the Merger Agreement and the Charter Amendment shall have been duly
approved by the stockholders of the Company entitled to vote with respect
thereto in accordance with applicable law and the Certificate of Incorporation
and Bylaws of the Company and, in the case of the issuance of shares of Common
Stock pursuant to the Merger Agreement and the sale of the Shares, the rules of
the NYSE.
Section 4.1.12. Exchange Listing. The Shares shall have been
<PAGE>23
approved for listing on the NYSE, subject to official notice of issuance.
Section 4.1.13. Financing of Cash Payments in Merger. The
Company shall have obtained financing for the aggregate cash payments to be
made to stockholders of Revere in the Merger pursuant to the Company Financing
Agreements.
Section 4.1.14. Maclellan Family Agreement. The Purchaser
shall have entered into an agreement with the members of the Maclellan family,
in form and substance substantially in the form attached hereto as Exhibit 4.
Section 4.1.15. Legal Opinions. The Purchaser shall have
received an opinion or opinions of counsel to the Company, dated as of the
Closing, covering the matters set forth in Exhibit 5.
Section 4.2. Conditions to the Obligations of the Company.
The Company's obligation to sell the Shares shall be subject to the
satisfaction or waiver by it of the following conditions on or before the
Closing Date:
Section 4.2.1. Compliance with the Agreement. The Purchaser
shall have performed and complied in all material respects with all agreements
and conditions contained herein which are required to be performed or complied
with by it on or before the Closing Date.
Section 4.2.2. Purchaser's Representations and Warranties
Complete and Correct. The Purchaser's representations and warranties contained
in Section 2.2 of this Agreement shall be true and correct in all material
respects when made and shall be true and correct in all material respects at and
as of the Closing Date, after giving effect to the transactions contemplated by
this Agreement, as if made on and as of such date.
Section 4.2.3. Officer's Certificate. The Company shall have
received a certificate, dated the Closing Date and signed by a duly authorized
officer of the Purchaser, certifying that the conditions set forth in Section
4.2.2 are satisfied on and as of such date.
Section 4.2.4. Consents; Etc. The Company shall have
received all consents, approvals and other authorizations that may be
<PAGE>24
required from, and made all such filings and declarations that may be required
with, any governmental authority or agency pursuant to any law, statute,
regulation or rule (federal, state, local and foreign), or pursuant to any
agreement, order or decree by which the Company or any of its assets is bound,
in connection with the transactions contemplated by this Agreement.
Section 4.2.5. HSR Act. Any required waiting periods under the
HSR Act relating to the transactions to be consummated on the Closing Date shall
have expired or been terminated.
Section 4.2.6. Merger Closing. The closing under the
Merger Agreement shall have occurred or shall occur simultaneously with the
Closing hereunder.
Section 4.2.7. Illegality, Etc. No statute, rule or
regulation, or order, decree or injunction enacted, entered, promulgated or
enforced by any court or governmental authority shall be in effect which
prohibits or restricts the consummation of the transactions contemplated hereby.
Section 4.2.8. Stockholder Approval. Each of the sale of
Shares pursuant to this Agreement, the issuance of shares of Common Stock
pursuant to the Merger Agreement and the Charter Amendment shall have been duly
approved by the stockholders of the Company entitled to vote with respect
thereto in accordance with applicable law and the Certificate of Incorporation
and Bylaws of the Company and, in the case of the issuance of shares of Common
Stock pursuant to the Merger Agreement and the sale of the Shares, the rules of
the NYSE.
Section 4.2.9. Exchange Listing. The Shares shall have
been approved for listing on the NYSE, subject to official notice of issuance.
Section 4.2.10. Financing of Cash Payments in Merger. The
Company shall have obtained financing for the aggregate cash payments to be made
to stockholders of Revere in the Merger pursuant to the Company Financing
Agreements.
Section 4.2.11. Legal Opinions. The Company shall have
received an opinion or opinions of counsel to the Purchaser, dated as of the
Closing, covering the matters set forth in Exhibit 6.
<PAGE>25
SECTION 5. TERMINATION
Section 5.1. Termination. This Agreement may be terminated
as follows:
(a) by mutual written consent of the Company and the
Purchaser;
(b) by either party if the Closing shall not have occurred
by December 31, 1996 (and the failure of the Closing to occur is not due to
the breach by either party of this Agreement);
(c) by either party if the Merger Agreement is terminated;
(d) by either party (provided that the terminating party is
not then in material breach of any representation, warranty, covenant or other
agreement contained in this Agreement) in the event of a breach by the other
party of any representation or warranty contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching Party of such breach and which breach would cause (i)
in the case of a breach by the Company, the conditions set forth in Section
4.1.1 not to be satisfied (assuming the Closing were to occur on the date of
such termination), and (ii) in the case of a breach by the Purchaser, the
conditions set forth in Section 4.2.2 not to be satisfied (assuming the
Closing were to occur on the date of such termination); or
(e) by either party (provided that the terminating party is
not then in material breach of any representation, warranty, covenant or other
agreement contained in this Agreement) in the event of a material breach by the
other party of any covenant or agreement contained in this Agreement which
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach; or
(f) by either party (provided that the terminating party is
not then in material breach of any representation, warranty, covenant or other
agreement contained in this Agreement) in the event any court of competent
jurisdiction in the United States or some other governmental body or regulatory
authority shall have issued an order permanently restraining, enjoining or
otherwise prohibiting the sale of the Shares and such order shall have become
final and nonappealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 5.1(f) shall have used all reasonable efforts
to remove such order; or
<PAGE>26
(g) by either party, if the sale of the Shares, the issuance
of shares of Common Stock in the Merger and the Charter Amendment shall have
been voted on by stockholders of the Company and the vote shall not have been
sufficient to satisfy the conditions set forth in Sections 4.1.11 and 4.2.8.
Section 5.2. Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 5.1, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party hereto, other than the provisions of Sections 3.6, 3.9(b), 5.2, 5.3
and 6.1, which shall survive any such termination. Nothing contained in this
Section 5.2 shall relieve any party from liability for any willful breach of
this Agreement.
Section 5.3. Termination Fee. The Company hereby agrees that
if the Merger Agreement (or any similar agreement entered into by the Company
(and/or one or more of its affiliates) and Revere (or one or more of its
affiliates) which contemplates a business combination involving the Company and
Revere or sale of a majority of the equity interests or assets of the Company or
Revere to the other) is terminated and, in connection with such termination, the
Company (or any of its affiliates) receives a termination or similar fee (a
"Termination Fee"), the Company shall pay to the Purchaser, on the date a
Termination Fee is paid to the Company (or such affiliates), a cash fee in an
amount equal to 20% of the aggregate Termination Fee, payable in immediately
available funds to an account specified by the Purchaser.
SECTION 6. MISCELLANEOUS
Section 6.1. Expenses and Indemnification. (a) The Company
hereby agrees to pay or reimburse the Purchaser and its affiliates for all
out-of-pocket expenses (including the reasonable fees and disbursements of legal
counsel and investment and other advisors and consultants and expenses incurred
in connection with the preparation of the letter agreement dated April 27, 1996
(the "Commitment Letter"), this Agreement and the Ancillary Agreements) incurred
by any of them in connection with the Purchaser's consideration of various
proposed financing and other transactions between the Purchaser and/or its
affiliates and the Company and the transactions referred to herein, including,
without limitation, the transactions contemplated hereby and by the Merger
Agreement, whether incurred before or after the date hereof and whether or not
such transactions are made or effected; provided that the aggregate of such
amounts shall not exceed $1,500,000 and the Company shall not be obligated to
make such payment or reimbursement prior to the earlier of (i) the Closing Date
and (ii) termination of this
<PAGE>27
Agreement. Any such amounts shall be paid or reimbursed promptly after
invoicing thereof by the Purchaser which invoicing shall be accompanied by
supporting detail evidencing such expenses.
(b) In addition to the foregoing the Company agrees to
indemnify and hold harmless the Purchaser and any of its officers, partners,
members, directors, employees and affiliates (direct or indirect) from and
against all actions, suits, proceedings (including any investigations or
inquiries), claims, losses, damages, liabilities or expenses of any kind or
nature whatsoever ("Claims") which may be incurred by or asserted against or
involve the Purchaser, or any of its officers, partners, members, directors,
employees or affiliates (direct or indirect) as a result of any third party
claim arising out of the transactions contemplated hereby and, upon demand by
the Purchaser or any such officer, partner, member, director, employee or
affiliates, pay or reimburse any of the Purchaser or such officers, partners,
members, directors, employees or affiliates for any reasonable out-of-pocket
legal or other expenses, and other internal costs incurred by the Purchaser or
its officers, partners, members, directors, employees or affiliates (direct or
indirect) in connection with the investigation, defending or preparing to defend
any such Claim, provided that the foregoing indemnity shall not apply to the
extent any Claim arises from any material breach by the Purchaser of this
Agreement or the gross negligence or willful misconduct of an indemnified party.
(c) Each person entitled to indemnification under Section
6.1(b) (each an "Indemnified Party") shall give notice to the Company promptly
after such Indemnified Party has actual knowledge of any Claim as to which
indemnity may be sought, and shall permit the Company to assume the defense of
any such Claim; provided, that counsel for the Company, who shall conduct the
defense of such Claim, shall be approved by the Indemnified Party (which
approval shall not be unreasonably withheld) and the Indemnified Party may
participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there is a conflict of interest
between the Indemnified Party and the Company in such action, in which case the
reasonable fees and expenses for one such counsel for all Indemnified Parties
(and one local counsel) shall be at the expense of the Company), and provided,
further, that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Company of its obligations under Section 6.1(b) or
this Section 6.1(c) unless the Company is materially prejudiced thereby. The
Company may not, in the defense of any such Claim, except with the consent of
each Indemnified Party (which consent shall not be unreasonably withheld or
delayed), consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the
<PAGE>28
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect of such Claim. Each Indemnified Party shall furnish
such information regarding itself or the Claim in question as the Company may
reasonably request in writing and as shall be reasonably required in connection
with the defense of such Claim.
Section 6.2. Survival of Agreements. The representations and
warranties (i) of the Company set forth in Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4,
2.1.5, 2.1.7, 2.1.12, 2.1.15 and 2.1.17 hereof and (ii) of the Purchaser set
forth in Sections 2.2.1, 2.2.2, 2.2.3, 2.2.4, 2.2.6, 2.2.7 and 2.2.8 shall
survive the Closing indefinitely. None of the other agreements, representations
or warranties made in this Agreement, or any certificate or instrument delivered
to the Purchaser pursuant to or in connection therewith shall survive the
Closing; provided, however, that this Section 6.2 shall not limit any (x)
covenant or agreement of the parties hereto which by its terms contemplates
performance after the Closing Date or (y) rights or remedies otherwise available
to the Company or the Purchaser at law or in equity; provided, further, that the
Confidentiality Agreement shall survive any termination of this Agreement.
Section 6.3. Parties in Interest. All representations,
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not;
provided that the Purchaser shall not assign its rights to purchase shares of
Common Stock under this Agreement to any non affiliate without first obtaining
the prior written consent of the Company, which consent may be withheld by the
Company in its sole discretion.
Section 6.4. Notices. All notices, requests, consents and
other communications hereunder shall be in writing and shall be delivered in
person or mailed by certified or registered mail, return receipt requested, or
sent by facsimile transmission, addressed as follows:
(a) if to the Company:
Provident Companies, Inc.
1 Fountain Square
Chattanooga, Tennessee 37402
Attention: Chief Financial Officer
Fax No.: (423) 755-2590
with a copy to:
Alston & Bird
1201 W. Peachtree Street
<PAGE>29
Atlanta, Georgia 30309
Attention: F. Dean Copeland, Esq.
Fax No.: (404) 881-7777
(b) if to the Purchaser:
Zurich Insurance Company
Mythenquai 2
P.O. Box Ch-8022
Zurich, Switzerland
Attention: General Counsel
Fax No.: 011-411-202-1063
with copies to:
Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
Attention: General Counsel
Fax No.: (212) 898-5002
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino, Esq.
Fax No.: (212) 821-8111
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others. All notices, requests,
consents and other communications hereunder shall be deemed to have been duly
given or served on the date on which personally delivered or on the date
actually received, if sent by mail or telex, with receipt acknowledged.
Section 6.5. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York, without giving effect to conflicts of law principles thereof.
Section 6.6. Entire Agreement. This Agreement, including the
Schedules and Exhibits hereto, constitutes the sole and entire agreement of
the parties with respect to the subject matter hereof. All Schedules and
Exhibits hereto are hereby incorporated herein by reference. The Commitment
Letter shall hereby be deemed to be terminated.
Section 6.7. Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
<PAGE>30
Section 6.8. Amendments. This Agreement may not be amended
or modified, and no provisions hereof may be waived, without the written
consent of the Company and the Purchaser.
Section 6.9. Severability. If any provision of this
Agreement shall be declared void or unenforceable by any judicial or
administrative authority, the validity of any other provision and of the
entire Agreement shall not be affected thereby.
Section 6.10. Titles and Subtitles. The titles and subtitles
used in this Agreement are for convenience only and are not to be considered
in construing or interpreting any term or provision of this Agreement.
Section 6.11. Further Assurances. From and after the date of
this Agreement, upon the request of the Purchaser or the Company, the Company
and the Purchaser shall execute and deliver such instruments, documents and
other writings as may be reasonably necessary or desirable to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement and the
Preferred Shares.
<PAGE>31
IN WITNESS WHEREOF, the Company and the Purchaser have
executed this Agreement as of the day and year first above written.
PROVIDENT COMPANIES, INC.
By:/s/ Thomas R. Watjen
Name: Thomas R. Watjen
Title: Executive Vice President
ZURICH INSURANCE COMPANY
By:/s/ Steven M. Gluckstern
Name: Steven M. Gluckstern
Title: Representative
<PAGE>1
EXHIBIT 1
Terms of Merger Agreement
The strategic relationship described herein will be set forth in a "Marketing
Agreement" entered into by the parties. The concepts listed below require
further discussions to develop them fully, but it is contemplated that the
Marketing Agreement would include the following:
1. Provident intends to continue to offer a wide range of
Individual and Employee Benefit products to its customers,
through multiple distributions channels. Provident would
agree to utilize products developed by Zurich whenever
possible to meet its customers' needs. In the Individual
marketplace, these products opportunities may include term
life, whole life, universal life, variable universal life,
individual property and casualty insurance products, and
fixed and variable annuities. When a "Zurich product" is
sold, Provident would expect to receive consideration "normal
and customary" for the business and would expect to have
reasonable opportunity to participate as a reinsurer on this
business.
2. Provident intends to expand its offerings of retirement/asset
accumulation products to its Individual and Employee Benefits
customers. It would be Provident's intent, depending on the
products' design and features, to offer to its customers
mutual funds and institutional asset management services
offered by Zurich. As Provident considers integrating life
and investment product features into its Disability products,
Provident would intend to utilize Zurich's products, as
appropriate, in these new product offerings. Provident would
again expect "normal and customary" consideration when
placing business in this capacity.
3. Zurich would agree to market Provident's Individual
Disability product through its U.S. marketing channels
whenever possible, including Kemper. The terms of such an
agreement would be similar to those used in other "Corporate
Agreements", where Zurich would receive consideration for
acting as an intermediary. Provident would also intend to
offer Zurich the opportunity to reinsure a portion of this
business if appropriate.
4. Zurich and Provident would jointly explore opportunities to
market Individual and Group Disability products outside the
U.S. In general it would be expected that Provident would
<PAGE>2
contribute its product and risk management expertise, while
Zurich would contribute its local market knowledge and
marketing capabilities.
5. Zurich and Provident would jointly explore opportunities
which may exist in linking Group Long-Term Disability
coverage with Workers Compensation coverage. Both companies
recognize the potential market for a "24 hour" coverage and
would commit the resources necessary to investigate whether a
mutually acceptable opportunity may exist.
6. Zurich and Provident would continue to seek other
opportunities to leverage each other's strengths, and to
bring better value and service to both organizations'
customers. This may include reinsurance transactions and
potential investment management ventures.
7. If Provident elects to engage in a significant reinsurance
transaction with respect to its Individual Disability block
of business, Provident will give Zurich the right to provide
such reinsurance on market terms. Provident agrees to offer
to Zurich the opportunity to propose other reinsurance
transactions and investment management arrangements and to
consider such proposals in good faith.
The strategic initiatives outlined above would not be finalized prior to the
closing of the other "Investor Transactions" described in the letter agreement
to which this Exhibit is attached. Provident and Zurich would however expect
to refine the understanding noted above and have such an understanding
documented in a general "Marketing Agreement".
Each of Zurich and Provident would commit up to $1.5 million to a joint
marketing/development program to fund the expenses and/or hire dedicated staff
to pursue the relationship.
<PAGE>1
RELATIONSHIP AGREEMENT
THIS RELATIONSHIP AGREEMENT (this "Agreement") is made and entered into
as of May 31, 1996, by and between PROVIDENT COMPANIES, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
and ZURICH INSURANCE COMPANY, a corporation organized and existing under the
laws of Switzerland (the "Investor").
In consideration of the mutual warranties, representations, covenants
and agreements set forth herein, the parties, intending to be legally bound,
agree as follows:
ARTICLE ONE
DEFINITIONS
As used in this Agreement and any amendments hereto, the following
terms shall have the following meanings respectively:
"Affiliate" shall have the meaning set forth in regulations of the
SEC included in 17 C.F.R. ss. 230.405.
"Beneficial owner" (and various derivations of such term such as
"beneficially owned") shall have the meaning set forth in the regulations of the
SEC included in 17 C.F.R. ss. 240.13d-3; provided that for purposes of this
Agreement, any option, warrant, right, conversion privilege or arrangement to
purchase, acquire or vote Company Voting Securities regardless of the time
period during or at which it may be exercised and regardless of the
consideration paid shall be deemed to give the holder thereof beneficial
ownership of the Company Voting Securities to which it relates (excluding,
however, First Offer Shares (as defined in the Family Stockholder Agreement (the
"Family Agreement") to be dated as of the Closing (as defined in the Purchase
Agreement) among the Investors and the holders of Family Shares (the "Family
Stockholders") until such time as such First Offer Shares are acquired by the
Investor or an affiliate thereof pursuant to the Family Agreement). Any Company
Voting Securities which are subject to such options, warrants, rights,
conversion privileges or other arrangements shall be deemed to be outstanding
for purposes of computing the percentage of outstanding securities owned by such
Person but shall not be deemed to be outstanding for the purpose of computing
the percentage of outstanding securities owned by any other Person.
"Common Stock" shall mean the $1.00 par value common stock of the
Company and any security which is exchanged or substituted for such common
stock.
"Company Voting Securities" shall mean all classes of capital stock of
the Company which are then entitled to vote generally in the election of
directors and any securities exchanged or substituted for such classes of
capital stock and any securities convertible into or exchangeable or exercisable
for (whether or not presently convertible, exchangeable or exercisable) such
classes of capital stock. For purposes of determining the amount or percentage
of outstanding Company Voting Securities beneficially owned by a Person, and for
purposes of calculating the aggregate
<PAGE>2
voting power relating to such Company Voting Securities, securities that are
deemed to be outstanding shall be included to the extent provided in the
definition of "beneficial owner."
"Effective Time" shall have the meaning set forth in the Merger
Agreement (as defined below).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Family Representatives" shall mean initially Hugh O. Maclellan,
Jr., Charlotte M. Heffner, Kathrina H. Maclellan and The Maclellan
Foundation, Inc. (the "Foundation"), or such other persons as shall
have been appointed by written notice to the Company and the Investor as the
representatives of the holders of the Family Shares for purposes of this
Agreement; provided, however, that the number of Family Representatives
shall not exceed four at any time.
"Family Shares" shall mean any Company Voting Securities beneficially
owned by the Foundation, trusts for the benefit of the Foundation or those
members of the Maclellan family and other trusts and foundations identified on
Schedule A attached hereto.
"Initial Threshold" shall mean that percentage of the Outstanding
Voting Power equal to the percentage of the Company Voting Securities
beneficially owned by the Investor as of the Closing (as defined in the Purchase
Agreement), after giving effect to the transactions contemplated by the Purchase
Agreement and the Merger Agreement (as defined in the Purchase Agreement).
"Outstanding Voting Power" shall mean total number of votes which may
be cast in the election of directors of the Company at any meeting of
stockholders of the Company if all Company Voting Securities then outstanding
were present and voted at such meeting, other than votes that may be cast only
by one class or series of stock (other than the Common Stock) or upon the
happening of a contingency.
"Purchase Agreement" shall mean that certain Common Stock Purchase
Agreement, dated as of even date herewith, by and between the Company and the
Investor, as the same may be amended.
"Party" shall mean either the Company, on the one hand, or the
Investor, on the other hand, and "Parties" shall mean the Company and the
Investor.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group (within the meaning of Section 13(d)(3) of
the Exchange Act), or any person acting in a representative capacity.
"Qualifying Tender Offer" shall mean an offer to purchase or exchange
for cash or other consideration any Company Voting Securities (whether pursuant
to a tender offer within the meaning of Section 14(d) of the Exchange Act or
otherwise) (i) which is made by or on behalf of the Company or (ii) which is
made by or on behalf of any other Person and which is approved by
<PAGE>3
the Board of Directors of the Company or not opposed by the Board of Directors
of the Company by two business days prior to the expiration of such offer.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of the date hereof, between the Investor and the Company.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Standstill Agreement" shall mean the Standstill Agreement, dated as of
April 29, 1996, by and between the Company and Textron.
"Subsidiary" shall mean any "Subsidiary" of the Company as defined in
Regulation S-X under the Exchange Act.
"Textron" shall mean Textron Inc. and its successors and assigns.
"Textron Shares" shall mean (i) all of the shares of Common Stock
issued to Textron in the Merger and (ii) any Company Voting Securities issued in
respect of any subdivision, split or dividend on the shares of Common Stock
described in subparagraph (i).
ARTICLE TWO
COVENANTS AND AGREEMENTS
2.1 Directors.
(a) Effective as of the Closing, the Company shall take such
action as may be necessary to increase by two the number of members of the Board
of Directors of the Company and to elect to fill such newly created vacancies
two persons designated by the Investor. So long as the Investor is the
beneficial owner of Company Voting Securities representing 10% or more of the
Outstanding Voting Power, the Investor shall be entitled to designate two
persons to serve as directors of the Company. So long as the Investor and its
Affiliates are the beneficial owners of Company Voting Securities representing
5% or more but less than 10% of the Outstanding Voting Power, the Investor shall
be entitled to designate one person to serve as a director of the Company. In
the event that the Investor and its Affiliates are the beneficial owners of
Company Voting Securities representing less than 5% of the Outstanding Voting
Power, the Investor shall not be entitled to designate any person to serve as a
director of the Company. Each of the persons designated by the Investor pursuant
to this Section 2.1(a) is referred to herein as an "Investor Designee."
(b) The Company shall use all reasonable efforts to cause the
election of the required number of Investor Designees to the Board of Directors
of the Company including taking the following actions: (i) at each annual
meeting of Company stockholders at which an Investor Designee's term as a
director expires or at any other meeting of the Company's stockholders at which
directors are to be elected, if the Investor is still entitled to designate one
or more persons to serve as a director of the Company in accordance with this
Agreement, the Investor Designees
<PAGE>4
shall be included in the slate of nominees recommended by the Company's Board
of Directors to the stockholders for election as directors, unless either (x)
an Investor Designee requests not to be so included in the slate of nominees,
in which case such Investor Designee shall not be so included, or (y) service
by an Investor Designee as a director or his nomination for election as a
director is violative of applicable law or regulation (provided that, in such
case, the Investor shall be provided an opportunity to designate an alternate
person to serve as a director). and (ii) in the event that an Investor
Designee is unable to serve, or once having commenced to serve, is removed or
withdraws from the Board of Directors of the Company, the Investor will have
the right to designate such person's replacement and the Company agrees to
take all reasonable action within its power to cause the election of the
substitute Investor Designee to the Board of Directors of the Company as soon
as possible following such person's designation.
(c) In the event that, any time after an annual meeting of
Company stockholders in connection with which the Investor was entitled to
designate two Investor Designees and such Investor Designees were elected as
directors, such Investor Designees are still serving as directors, and prior to
the next annual meeting of Company stockholders the Investor shall beneficially
own Company Voting Securities representing less than 10% but 5% or more of the
Outstanding Voting Power, then, at the request of the Company (provided Investor
at the time of such request shall still beneficially own Company Voting
Securities representing less than 10% but 5% or more of the Outstanding Voting
Power), the Investor shall use all reasonable efforts to cause one of the
Investor Designees then in office to resign as a director. In the event that,
any time after an annual meeting of Company stockholders in connection with
which the Investor was entitled to designate one or more Investor Designees,
such Investor Designees were elected as directors and such Investor Designees
are still serving as directors at such time prior to the next annual meeting of
Company stockholders when the Investor shall beneficially own Company Voting
Securities representing less than 5% of the Outstanding Voting Power, then, at
the request of the Company (provided Investor at the time of such request still
beneficially owns Company Voting Securities representing less than 5% of the
Outstanding Voting Power), the Investor shall use all reasonable efforts to
cause all Investor Designees then in office to resign as directors.
(d) At the request of the Investor, the Company shall cause
the Investor Designees then required to be included in the slate of nominees
recommended by the Company's Board of Directors for the election to the
Company's Board of Directors to be elected to serve on the Board of Directors of
each Subsidiary.
(e) So long as the Investor beneficially owns Company Voting
Securities representing 5% or more of the Outstanding Voting Power, the Company
shall effect all action necessary to appoint one Investor Designee to the
Executive Committee of the Board of Directors (or other committee or group
performing similar functions) (the "Executive Committee") of the Company and
each Subsidiary having such a committee or group on which an Investor Designee
serves as a director.
(f) If after the Closing, the Company takes corporate action
to classify the Board of Directors of the Company, the Investor Designees (if
the Investor is then entitled to designate two directors) shall be designated to
serve on different classes.
<PAGE>5
(g) So long as the Investor is entitled to designate at least
one member of the Board of Directors of the Company, during any period that the
requisite number of Investor Designees are not members of the Board of
Directors, the Company shall cause one person (to be designated by the Investor
in its sole discretion) to be permitted to attend all meetings of the Board of
Directors of the Company and all meetings of the Executive Committee of the
Company. The Company shall take all action necessary to ensure that (i) the
Investor is notified of all meetings of the Board of Directors in accordance
with and at the times prescribed by the notice provisions of the by-laws of the
Company applicable to directors of the Company and (ii) that the Investor is
furnished with all information and materials furnished to directors of the
Company in connection with any meetings of the Board of Directors or the
Executive Committee at the time such information and materials are furnished to
the directors.
2.2 Acquisition of Voting Securities.
(a) Neither the Investor or any of its Affiliates shall,
directly or indirectly, in any manner, acquire any Company Voting Securities,
if, after giving effect to such acquisition, the Investor and its Affiliates
would beneficially own, in the aggregate, Company Voting Securities representing
more than the Initial Threshold; provided, however, that this Section 2.2 shall
not prohibit the acquisition by the Investor or any of its Affiliates of any
Company Voting Securities the acquisition of which would cause the Investor and
its Affiliates to beneficially own Company Voting Securities in excess of the
Initial Threshold if (i) such securities (x) are Family Shares, (y) are other
than Family Shares if the Investor is unable to exercise the right of first
offer set forth in Section 2 of the Family Agreement due to the restrictions set
forth in clause (ii) of this Section 2.2(a) without giving effect to the proviso
to such clause (ii) or (z) are purchased from Textron (provided that (1) the
number of Company Voting Securities purchased from Textron do not exceed
one-half of the Textron Shares and (2) the Investor or such Affiliate shall have
first offered to the Family Representatives, on behalf of the holders of the
Family Shares, a right to sell the same number of Company Voting Securities to
the Investor or such Affiliate on the same terms as those offered to Textron,
which offer shall not have been irrevocably accepted in full by each of the
Family Representatives, on behalf of all of the holders of the Family Shares,
within 15 business days after such notice is given to each of the Family
Representatives, which acceptance shall identify the selling holders of Family
Shares) and (ii) after giving effect to any such acquisition, the Investor and
its Affiliates would beneficially own Company Voting Securities representing not
more than 40% of the Outstanding Voting Power; provided, further, that,
notwithstanding the foregoing, the Investor and its Affiliates may acquire
Family Shares as would result in the Investor and its Affiliates beneficially
owning Company Voting Securities representing more than 40% of the Outstanding
Voting Power if the Investor or its Affiliates first offer to purchase all of
the issued and outstanding Company Voting Securities at the price offered to be
paid for such Family Shares pursuant to either a tender offer to all holders of
Company Voting Securities or a definitive merger agreement (provided, that if
the Company's Board of Directors recommends that the holders of the Company
Voting Securities accept such offer and tender their shares, such offer shall be
made pursuant to a definitive merger agreement (or a tender offer followed by a
merger) on the same terms).
(b) No provision contained in this Agreement shall
require the Investor or any of its Affiliates to dispose of any Company
Voting Securities if the aggregate percentage of the
<PAGE>6
Outstanding Voting Power represented by Company Voting Securities beneficially
owned by the Investor and its Affiliates is increased as a result of a
recapitalization of the Company or a repurchase of securities by the Company
or any other action taken by the Company or any of its Affiliates (other than
the Investor or its Affiliates).
(c) The agreements of the Investor set forth in this Section
2.2 shall terminate on the seventh anniversary of the Closing and neither the
Investor nor any of its Affiliates shall have any further obligations or
liabilities hereunder or in respect hereof.
2.3 Exercise of Right of First Refusal. So long as the Investor and its
Affiliates have complied with the provisions of Section 2.2(a) hereof, (a) the
Company shall not exercise any of the rights set forth in Section 3.4 of the
Standstill Agreement with respect to any proposed sale or transfer of Company
Voting Securities by Textron or any of its Subsidiaries (as defined in the
Standstill Agreement) to the Investor or any of its Affiliates and (b) if the
Company receives notice of a proposed sale or transfer of the Textron Shares to
any Person other than the Investor or any of its Affiliates and if requested in
writing by the Investor, the Company shall take such actions as are within its
control to cause the Investor or an Affiliate thereof designated by the Investor
to be the Person designated by the Company to purchase such securities in
accordance with the provisions of Section 3.4(b) of the Standstill Agreement;
provided that any such request by the Investor shall be accompanied by evidence
reasonably satisfactory to the Company that any such sale or transfer to the
Investor or its Affiliates will comply with Section 2.2(a).
2.4 Sales of Company Voting Securities. During the period commencing on
the Closing and ending on the seventh anniversary thereof, neither the Investor
nor any of its Affiliates shall sell, transfer, assign or otherwise dispose of
its beneficial interest in any Company Voting Securities, except: (a) to the
Company or to any Person approved in a resolution adopted by a majority of the
Board of Directors of the Company; (b) in conversion, exchange or otherwise
pursuant to the terms of such Company Voting Securities; (c) in a merger or
consolidation in which the Company is acquired, in a plan of liquidation of the
Company, or pursuant to a Qualifying Tender Offer; (d) pursuant to a bona fide
underwritten public offering including a public sale pursuant to a registration
under the Registration Rights Agreement; (e) pursuant to Rule 144 under the
Securities Act; (f) to an Affiliate of the Investor, provided that such
Affiliate shall expressly assume in a writing duly executed by it and delivered
to the Company all of the obligations and restrictions contained in this
Agreement pertaining to the Investor and shall agree to transfer such Company
Voting Securities to the Investor or another Affiliate of the Investor if such
Affiliate ceases to be an Affiliate of the Investor; (g) to Insurance Partners,
L.P. or Insurance Partners Offshore (Bermuda), L.P. or one or more Affiliates of
either of them, provided that all voting rights with respect to such Company
Voting Securities are retained by the Investor or an Affiliate thereof; and (h)
in any other manner, provided that prior to making any offer to sell, sale or
other transfer to any Person pursuant to this clause (h) of Company Voting
Securities representing beneficial ownership of more than two percent (2%) of
the Outstanding Voting Power, the Investor shall give the Company the
opportunity to purchase, or to designate an alternative purchaser of, such
Company Voting Securities in the following manner:
(i) The proposed transferor of such Company Voting Securities
shall give to the Company written notice (the "Transfer Notice") of the
proposed transfer, specifying
<PAGE>7
the proposed transferee, the number of Company Voting Securities
proposed to be disposed of, the proposed consideration to be received
in exchange therefor, and the other material terms of the proposed
transfer.
(ii) The Company shall have the right, exercisable by written
notice given to the Person which gave the Transfer Notice within seven
(7) business days after receipt of such Notice, to purchase (or to
cause another Person designated by the Company to purchase) all, but
not less than all, of the Company Voting Securities specified in such
Notice for cash at the purchase price set forth therein. If the
consideration specified in the Transfer Notice includes any property
other than cash, such purchase price shall be deemed to be the amount
of any cash included as part of such consideration plus the value (as
jointly determined by a nationally recognized investment banking firm
selected by each Party or, in the event such firms are unable to agree,
a third nationally recognized investment banking firm to be selected by
the first two such firms) of such other property included in such
consideration and the date on which the Company must exercise its right
of first refusal shall be extended until five (5) business days after
the determination of the value of property included in the
consideration.
(iii) If the Company exercises its right of first refusal
hereunder, the closing of the purchase of the Company Voting Securities
with respect to which such right has been exercised shall take place
within five (5) business days after the Company gives notice of such
exercise; provided that if any approval of or notice to any
governmental authority or agency is required in connection with such
purchase of Company Voting Securities, the parties shall use all
reasonable efforts to obtain such approvals or to make such notices and
the closing shall take place within two (2) business days after receipt
of the last such approval and expiration of any required waiting
periods. If the Company does not exercise its right of first refusal
hereunder within the time specified for such exercise, the Person
giving the Transfer Notice shall be free during the period of six
months following the expiration of such time for exercise to sell the
Company Voting Securities specified in such Notice to any Person for
the consideration specified therein (or at any price in excess
thereof).
ARTICLE THREE
MISCELLANEOUS
3.1 Further Assurances. From time to time after the execution of this
Agreement, as and when requested by the Company and the Investor and to the
extent permitted by Delaware law, the Parties shall take or cause to be taken
such further or other action as shall be necessary to carry out the purposes of
this Agreement.
3.2 Effectiveness of Agreement. The respective rights and
obligations of the Parties under this Agreement shall arise from and after
the Closing.
3.3 Remedies. The Parties recognize and hereby acknowledge
that it may be difficult to accurately measure the amount of damages that
would result to a Party by reason of a failure of
<PAGE>8
the other Party to perform any of the obligations imposed on it by this
Agreement. The Parties accordingly agree that each such Party shall be
entitled to an injunction to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, in addition to any other remedies to which
such Party may be entitled at law or in equity in accordance with this
Agreement.
3.4 Notices. Any notices or other communications required or permitted
under this Agreement shall be effective only if it is in writing and delivered
personally, by facsimile transmission, or by registered or certified mail,
postage pre-paid, addressed as follows:
The Company: Provident Companies, Inc.
1 Fountain Square
Chattanooga, Tennessee 37402
Telecopy: (423) 755-2590
Attention: Chief Financial Officer
Copy to Counsel: Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy: (404) 881-7777
Attention: F. Dean Copeland
The Investor: Zurich Insurance Company
Mythenquai 2
P.O. Box Ch-8022
Zurich, Switzerland
Telecopy: 011-411-205-1063
Attention: General Counsel
With Copies to: Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
Telecopy: (212) 898-5002
Attention: General Counsel
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Telecopy: (212) 821-8111
Attention: Thomas M. Cerabino, Esq.
<PAGE>9
Family Stockholders: Hugh O. Maclellan, Jr.
Suite 501
Provident Building
One Fountain Square
Chattanooga, TN 37402
Telephone: (423)755-8141
Facsimile: (423)755-1640
A.S. MacMillan
Team Resources
Suite 425
River Edge One
5500 Interstate North Parkway
Atlanta, GA 30328
Telephone: (770)955-5135
Facsimile: (770)955-1602
Charlotte M. Heffner
3655 Randall Hall, NW
Atlanta, GA 30327
Telephone and Facsimile: (404)233-7238
Kathrina H. Maclellan
125 Fairy Trail
Lookout Mountain, Tennessee 37350
With a Copy To: King & Spalding
120 West 45th Street
New York, NY 10036
Telephone: (212) 556-2100
Facsimile: (212) 556-2222
Attention: E. William Bates, II
or such other address as shall be furnished in writing by any of the
Parties. Any such notice or communication shall be deemed to have been given as
of the date so personally delivered or mailed.
3.5 Amendments. This Agreement may be amended by a subsequent
writing signed by both Parties upon the approval of each of the Parties.
3.6 Counterparts. This Agreement may be executed in two or more
counterparts all of which shall be one and the same Agreement and shall become
effective when one or more counterparts have been signed by each Party and
delivered to the other Party.
<PAGE>10
3.7 Headings. The headings in this Agreement are for
convenience only and shall not affect the construction or interpretation of
this Agreement.
3.8 Successors and Assigns. All terms and conditions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by any
successor to the Investor and any successor to the Company. Except as otherwise
provided in this Section 3.8, any assignment of the rights and obligations of
the Parties under this Agreement shall be effective upon a written agreement
signed by all the Parties.
3.9 Severability. If any provision of this Agreement shall be held to
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
3.10 Entire Agreement. This Agreement constitutes the entire
understanding between and among the Parties with respect to the subject matter
hereof and shall supersede any prior agreements and understandings among the
Parties with respect to such subject matter.
3.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
giving effect to conflicts of law principles thereof.
3.12 No Third Party Beneficiaries. Except for the Family
Representatives solely with respect to the provisions of Section 2.2 applicable
to the holders of Family Shares, this Agreement is not intended to confer upon
any Person any rights or remedies hereunder.
<PAGE>11
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
duly executed and delivered as of the date above written.
PROVIDENT COMPANIES, INC.
By: /s/ Thomas R. Watjen
Name: Thomas R. Watjen
Title: Executive Vice President
ZURICH INSURANCE COMPANY
By: /s/ Steven M. Gluckstern
Name: Steven M. Gluckstern
Title: Representative
<PAGE>1
FAMILY STOCKHOLDER AGREEMENT
AGREEMENT, dated as of May 31, 1996, with respect to all of
the agreements contained herein other than those set forth in Section 2, which
shall be effective as of the Closing (as defined below) among ZURICH INSURANCE
COMPANY, a Swiss corporation ("Zurich"), THE MACLELLAN FOUNDATION, INC., a
Tennessee nonprofit corporation (the "Foundation"), and the stockholders listed
on Schedule A attached hereto (each, a "Stockholder" and collectively, the
"Stockholders"). Certain capitalized terms used herein are defined in Section 1
hereof.
WHEREAS, the Stockholders are the record owners of the number
of shares of common stock, par value $1.00 per share ("the Common Stock"), of
Provident Companies, Inc., a Delaware corporation (the "Company"), set forth
opposite their respective names on Schedule 3.4 hereto; and
WHEREAS, Zurich has heretofore entered into (i) a Common Stock
Purchase Agreement, dated as of May 31, 1996, with the Company (the "Stock
Purchase Agreement") pursuant to which Zurich agreed, among other things, to
purchase 9,523,810 newly issued shares of Common Stock (the "Shares") and (ii) a
Relationship Agreement, dated as of May 31, 1996, with the Company (the
"Relationship Agreement") relating to, among other things, the ability of Zurich
to purchase additional shares of Common Stock;
WHEREAS, Zurich entered into the Relationship Agreement on the
condition that this Agreement is entered into; and
WHEREAS, it is a condition to the Closing (as defined in the
Stock Purchase Agreement) under the Stock Purchase Agreement that the parties
enter into this Agreement; and
WHEREAS, the Stockholders are willing to grant to Zurich a
right of first offer with respect to shares of Common Stock owned by them on the
terms and conditions set forth herein in consideration of the agreements of
Zurich contained in the Stock Purchase Agreement and the Relationship Agreement.
NOW, THEREFORE, in consideration of the foregoing premises,
the parties hereby agree as follows:
1. Definitions. The following terms when used in this
Agreement shall have the following meanings:
<PAGE>2
"Affiliate" means, with respect to a person, any corporation
or other entity in which such person has a direct or indirect controlling
interest or by which such person is directly or indirectly controlled or which
is under direct or indirect common control with such person.
"Business Day" means any day which is not a Saturday or a
Sunday, or a day on which banks in the State of New York are authorized or
required to close.
"Change of Control Transaction" means any of the following:
(i) A tender or exchange offer by any person,
entity or group for fifty percent (50%) or more of the outstanding voting
securities of the Company; or
(ii) any merger or consolidation with or into
another person in a transaction that would result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock.
"First Offer Shares" mean (i) all of the shares of Common
Stock owned by any of the Stockholders on the date hereof, together with any
shares of Common Stock hereafter acquired by any of the Stockholders, (ii) any
shares of Common Stock issued in respect of any subdivision, split or dividend
on the shares of Common Stock described in subparagraph (i), and (iii) in the
event the Company at any time shall be a party to a merger, consolidation, sale
of all or substantially all of the Company's assets, liquidation or
recapitalization of the Common Stock in which the previously outstanding Common
Stock shall be changed into or exchanged for different securities of the Company
or common stock or other securities of another corporation or interests in a
noncorporate entity (collectively, "Other Securities"), any such Other
Securities received in respect of such shares of Common Stock.
"Lien or Other Encumbrance" means any lien, pledge, mortgage,
security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any shareholder or similar
agreement.
"Permitted Sale" means any sale of at least 70% of the First
Offer Shares then beneficially owned by all Stockholders pursuant to a firm
commitment underwritten registration under the Securities Act.
<PAGE>3
2. Right of First Offer.
2.1. Grant of Right; Exercise. Except as provided
in Section 2.3(b) below, during the period commencing on the Closing Date (as
defined in the Stock Purchase Agreement) and ending at the earlier of (i) such
time as Zurich and its Affiliates beneficially own (as defined below) less
than 5% of the outstanding Company Voting Securities (as defined in the
Relationship Agreement) and (ii) the termination of the provisions of Section
2.2 of the Relationship Agreement (the "Offer Term"), prior to making any sale
or transfer (whether for cash or other consideration) of the First Offer
Shares, the Stockholders shall, in each instance, give Zurich the right to
purchase such First Offer Shares in the following manner:
(a) If at any time, any Stockholder holding First Offer Shares
(the "Offeror") intends to sell or transfer any or all of such First Offer
Shares, then the Offeror shall give notice (the "First Offer Notice") to Zurich
of such intention. The First Offer Notice shall specify (i) the number of First
Offer Shares intended to be sold or transferred (the "Offered Securities"), and
(ii) the proposed purchase price per share to be received for the Offered
Securities (the "First Offer Price").
(b) Within five (5) Business Days (or fifteen (15) Business
Days in the event that any proposed sale or transfer of First Offer Shares
would, if purchased by Zurich or one of its Affiliates, cause Zurich and its
Affiliates to beneficially own (as defined in the Relationship Agreement)
Company Voting Securities (as defined in the Relationship Agreement)
representing more than 40% of the Outstanding Voting Power (as defined in the
Relationship Agreement) following the delivery of the First Offer Notice, Zurich
may, by written notice to the Offeror, either (i) agree to purchase all, but not
less than all of the Offered Securities for the First Offer Price and otherwise
pursuant to the terms set forth in the First Offer Notice (any such notice
accepting the terms set forth in the First Offer Notice, an "Acceptance
Notice"), which notice shall specify a date for the closing of the purchase and
sale which shall be not earlier than five (5) days nor later than twenty (20)
days after the later of the giving of such notice or the receipt of all required
consents and approvals or (ii) inform the applicable Stockholder that it does
not wish to purchase the Offered Securities. Following delivery of an Acceptance
Notice in accordance with this clause (b), Zurich and the applicable
Stockholders agree to use all commercially reasonable efforts to obtain all
required consents and approvals as promptly as practicable.
<PAGE>4
2.2. Delivery of First Offer Shares; Payment. If
Zurich provides the Offeror with an Acceptance Notice, the closing of the
purchase of the Offered Securities pursuant to Section 2.1 shall take place at
the location and on the date specified in the Acceptance Notice. At such
closing, Zurich shall deliver to the Offeror, against (i) delivery of
certificates representing the Offered Securities being acquired by Zurich
(duly endorsed for transfer or accompanied by stock powers executed in blank)
and (ii) evidence that all stock transfer and other taxes required to be paid
in connection with the sale and delivery to Zurich of such shares have been
paid, an amount equal to the number of Offered Securities being sold by such
person multiplied by the First Offer Price by wire transfer of immediately
available funds to such account or accounts of the applicable Stockholders as
such Stockholders shall designate to Zurich, in the manner specified herein
for the delivery of notices, not less than two Business Days prior to the
closing of the purchase of the Offered Securities. All First Offer Shares sold
to Zurich pursuant to this Agreement shall be delivered free and clear of all
Liens or Other Encumbrances.
2.3. Permitted Third Party Offers; Excluded
Shares. (a) If Zurich has rejected the terms of the Offer set forth in the
First Offer Notice by notice in writing to the Offeror or has not delivered an
Acceptance Notice prior to expiration of the five Business Day (or fifteen
Business Day, as applicable) period following delivery of the First Offer
Notice, then for a period of six (6) months from the earlier of the expiration
of such five Business Day (or fifteen Business Day, as applicable) period or
the date Zurich notifies the applicable Stockholder of its decision not to
purchase the Offered Securities (the "Third Party Offer Period"), the Offeror
may sell or transfer (or cause to be sold or transferred) the Offered
Securities to a party or parties other than Zurich for a purchase price at
least equal to the First Offer Price multiplied by the number of Offered
Securities. Upon termination of the Third Party Offer Period, the Offeror must
again comply with the provisions of this Section 2 before it can sell or
transfer (or cause to be sold or transferred) the Offered Securities.
(b) Notwithstanding any other provision of this Section 2, the
right of first offer set forth in this Section 2 shall not apply to any sale or
transfer of First Offer Shares (w) pursuant to a Change of Control Transaction,
(x) that is a Permitted Sale, (y) to any sale or transfer between or among the
Stockholders or to the immediate family members or the estate of any Stockholder
(including, without limitation, any sale or transfer by any such Stockholder to
or among any trust, foundation, custodial or other similar accounts or funds in
which
<PAGE>5
such Stockholder or other member of his immediate family serves as trustee,
custodian or a similar fiduciary capacity or to a trust created by any
Stockholder which has a member of his immediate family as a beneficiary)
pursuant to a bona fide gift; provided that any transferee under this clause
(y) shall receive and hold the shares of Common Stock so transferred subject
to the terms and provisions of this Agreement and shall be deemed a
Stockholder for purposes hereof or (z) that is a transfer to any organization
that qualifies for federal income tax charitable deduction at the time of such
transfer; provided that the proviso set forth in clause (y) above shall apply
to any transfer to any such organization that would also be covered by clause
(y) above. For the purpose of this Agreement, the term "immediate family"
shall have the meaning specified in Rule 16a-1 promulgated under the
Securities Exchange Act of 1934, as amended.
2.4. Release from Right of First Offer. Upon any
permitted sale or transfer (except as provided in 2.3(b)(y)) by the
Stockholders under this Section 2, the shares of Common Stock which are the
subject of such sale shall be released from the terms of this Section 2 and
shall no longer be deemed to be First Offer Shares.
3. Representations and Warranties of the Stockholders.
Each of the Stockholders represents and warrants, severally and not jointly,
to Zurich as follows:
3.1. Authority of the Stockholders. The
Foundation is a nonprofit corporation duly organized and validly existing
under the laws of the State of Tennessee. Each of the Stockholders has all
requisite power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby; the execution, delivery and performance of this Agreement
by the Stockholders will not violate any agreement or instrument to which any
Stockholder is a party.
3.2. Execution and Delivery. This Agreement has
been duly executed and delivered by each of the Stockholders and constitutes
the valid and binding obligation of each of the Stockholders enforceable
against each of them in accordance with its terms.
3.3. Consents and Approvals. The execution and
delivery by the Stockholders of this Agreement, the performance by the
Stockholders of their obligations hereunder and the consummation
<PAGE>6
by the Stockholders of the transactions contemplated hereby do not require any
of the Stockholders to obtain any consent, approval or action of, or make any
filing with or give any notice to, any corporation, person or firm or any
public, governmental or judicial authority except (a) as set forth in Schedule
3.3; (b) such as have been duly obtained or made, as the case may be, and are
in full force and effect on the date hereof; (c) any required filings under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or under
federal or state securities laws or state insurance company or holding company
laws; and (d) those which, if not obtained, would not impair (i) Zurich's
ability to own, possess or exercise the rights of an owner with respect to the
First Offer Shares following the acquisition thereof or (ii) any of the other
rights of Zurich thereunder.
3.4. Title to Shares. Except for the rights
granted to Zurich under this Agreement, each of the Stockholders owns
beneficially and of record, and has full power and authority to convey, free
and clear of any Lien or Other Encumbrance, the number of shares of Common
Stock set forth opposite the name of such Stockholder in Schedule 3.4
(collectively, the "Stockholder Shares") and, upon delivery of and payment for
any such Stockholder Shares as herein provided, Zurich will acquire good title
thereto, free and clear of any Lien or Other Encumbrance.
3.5. Options or Other Rights. Except for the
rights granted Zurich under this Agreement, there is no outstanding right,
subscription, warrant, call, unsatisfied preemptive right, option or other
agreement of any kind to purchase or otherwise to receive from any Stockholder
any of the Stockholder Shares.
4. Voting of Company Voting Securities. Each of the
Stockholders identified on the signature pages hereto under the heading
"Voting Stockholders" shall effect such action as may be necessary to ensure
that:
(a) subject to the receipt of proper notice and the absence of
a preliminary or permanent injunction or other final order of any United Stated
Federal or state court barring such action, such Stockholder is, as a
shareholder, present in person or represented by proxy at all shareholder
meetings of the Company relating to the matters referred to in clause (b) below
so that all shares of Company Voting Securities which such Stockholder
beneficially owns are voted and deemed to be present, in person or by proxy, at
all meetings of the shareholders of the Company relating to the matters referred
to in clause (b) below so that all Company Voting Securities so beneficially
owned may
<PAGE>7
be counted for the purpose of determining the presence of a quorum at such
meetings; and
(b) all Company Voting Securities that are beneficially
owned by such Stockholder as of the appropriate record date are voted in favor
of (i) the Merger and the Merger Agreement (each, as defined in the Stock
Purchase Agreement) and the transactions contemplated thereby, including the
Charter Amendment and (ii) the transactions contemplated by the Stock Purchase
Agreement, including, without limitation, the issuance and sale of the Shares
to Zurich.
5. Miscellaneous.
5.1. Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, telegraphed, telexed, sent by facsimile transmission or sent by
overnight courier or by certified, registered or express mail, postage
prepaid. Any such notice shall be deemed received when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if sent
by overnight courier, one day after delivered to the courier or, if mailed,
two days after the date of deposit in the United States mails, as follows:
(i) If to Zurich to:
Zurich Insurance Company
Mythenquai 2
P.O. Box Ch-8022
Zurich, Switzerland
Fax No.: 011 411 202 1063
Attention: General Counsel
with copies to:
Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
Fax No.: (212) 898-5002
Attention: General Counsel
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Fax No.: (212) 821-8111
Attention: Thomas M. Cerabino, Esq.
<PAGE>8
(ii) If to the Stockholders, to:
Hugh O. Maclellan, Jr.
Suite 501
Provident Building
One Fountain Square
Chattanooga, TN 37402
Telephone: (423)755-8141
Facsimile: (423)755-1640
A.S. MacMillan
Team Resources
Suite 425
River Edge One
5500 Interstate North Parkway
Atlanta, GA 30328
Telephone: (770)955-5135
Facsimile: (770)955-1602
Charlotte M. Heffner
3655 Randall Hall, NW
Atlanta, GA 30327
Telephone and Facsimile: (404)233-7238
Kathrina H. Maclellan
125 Fairy Trail
Lookout Mountain, Tennessee 37350
with a copy to:
King & Spalding
120 West 45th Street
New York, NY 10036
Telephone: (212) 556-2100
Facsimile: (212) 556-2222
Attention: E. William Bates, II
Any party may by notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
5.2. Entire Agreement. This Agreement contains
the entire agreement among the parties with respect to the subject matter
hereof, and supersedes all prior agreements, written or oral, with respect
thereto.
5.3. Waivers and Amendments. This Agreement may
be amended,
<PAGE>9
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. Any right, waiver, amendment, consent
or acknowledgment exercised or exercisable by the Stockholders may be
exercised by Hugh O. Maclellan, Jr., Charlotte M. Heffner, Kathrina H.
Maclellan and the Foundation (such Stockholders, together with any successors
designated by them with notice to Zurich, the "Consenting Stockholders"),
acting unanimously together, on behalf of themselves and the other
Stockholders; and any right, waiver, amendment, consent or acknowledgment so
exercised by the Consenting Stockholders shall be equally binding upon the
other Stockholders. Notwithstanding the immediately preceding sentence, no
amendment to this Agreement that is approved by the Consenting Stockholders
shall be binding on any other Stockholder, without such Stockholder's
approval, if such amendment would place any additional restrictions on such
Stockholder's ability to sell or transfer his shares of Common Stock. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any
party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege. The
rights and remedies herein provided are cumulative and are not exclusive of
any rights or remedies that any party may otherwise have at law or in equity.
5.4. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New
York, without giving effect to conflicts of laws principles thereof.
5.5. Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective
successors and assigns and legal representatives.
5.6. Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by
all of the parties hereto.
5.7. Headings. The headings in this Agreement are
for reference only, and shall not affect the interpretation of this Agreement.
<PAGE>10
5.8. Further Assurances. Each of the parties
shall execute such documents and other papers and take such further actions as
may be reasonably required or desirable to carry out the provisions hereof and
the transactions contemplated hereby.
5.9. Consent to Jurisdiction. Each of the parties
hereby irrevocably submits to the jurisdiction of any New York State or
Federal court sitting in the City of New York in any action or proceeding
arising out of or relating to this Agreement and hereby irrevocably agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or Federal court. Each of the parties
hereby irrevocably agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or Federal
court. Zurich hereby irrevocably appoints the General Counsel of Zurich Center
ReSource Limited (the "Process Agent"), with an office on the date hereof at
Zurich Center ReSource Limited, One Chase Manhattan Plaza, New York, New York
10005, as its agent to receive on behalf of Zurich and its property service of
copies of the summons and complaint and any other process which may be served
in any such action or proceeding. Each of the Stockholders hereby irrevocably
appoints E. William Bates, II (the "Stockholder Process Agent"), with an
office on the date hereof at King & Spaulding, 120 West 45th Street, New York,
New York 10036, as their agent to receive on behalf of the Stockholders and
their respective property service of copies of the summons and complaint and
any other process which may be served in any such action or proceeding. Such
service may be made by mailing or delivering a copy of such process to Zurich
or the Stockholders, as the case may be, in care of the Process Agent or
Stockholder Process Agent, as the case may be, at such agent's above address,
and Zurich and the Stockholders hereby irrevocably authorize and direct the
Process Agent or Stockholder Process Agent, as the case may be, to accept such
service on behalf of such party. As an alternative method of service, each of
the parties also irrevocably consents to the service of any and all process in
any such action or proceeding by the mailing of copies of such process to such
party at its address specified in Section 5.1. Each of the parties agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
<PAGE>11
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
ZURICH INSURANCE COMPANY
By: /s/ Steven M. Gluckstern
Name: Steven M. Gluckstern
Title: Representive
VOTING STOCKHOLDERS:
-------------------
/s/ Hugh O. Maclellan, Jr.
Hugh O. Maclellan, Jr.
/s/ Kathrina H. Maclellan
Kathrina H. Maclellan
/s/ Charlotte M. Heffner
Charlotte M. Heffner
THE MACLELLAN FOUNDATION, INC.
By: /s/ Hugh O. Maclellan, Jr.
Name: Hugh O. Maclellan, Jr.
Title: President
<PAGE>12
THE R.J. MACLELLAN TRUST FOR THE
MACLELLAN FOUNDATION, INC.
By: /s/ Hugh O. Maclellan, Jr.
Name: Hugh O. Maclellan, Jr.
Title: Trustee
THE HELEN M. TIPTON CHARITABLE TRUST
By: /s/ Hugh O. Maclellan, Jr.
Name: Hugh O. Maclellan, Jr.
Title: President
THE R.J. MACLELLAN TRUST FOR THE
R.L. MACLELLAN FAMILY
By: /s/ Kathrina H. Maclellan
Name: Kathrina H. Maclellan
Title: Trustee
By: /s/ Dudley Porter, Jr.
Name: Dudley Porter, Jr.
Title: Trustee
THE CORA L. MACLELLAN TRUST FOR THE
R.L. MACLELLAN FAMILY
By: /s/ Kathrina H. Maclellan
Name: Kathrina H. Maclellan
Title: Trustee
By: /s/ Dudley Porter, Jr.
Name: Dudley Porter, Jr.
Title: Trustee
<PAGE>13
THE R.J. MACLELLAN TRUST FOR THE
HUGH O. MACLELLAN, SR. FAMILY
By: /s/ Hugh O. Maclellan, Jr.
Name: Hugh O. Maclellan, Jr.
Title: Trustee
By: /s/ Charlotte M. Heffner
Name: Charlotte M. Heffner
Title: Trustee
THE CORA L. MACLELLAN TRUST FOR THE
HUGH O. MACLELLAN, SR. FAMILY
/s/ Hugh O. Maclellan, Jr.
Name: Hugh O. Maclellan, Jr.
Title: Trustee
By: /s/ Charlotte M. Heffner
Name: Charlotte M. Heffner
Title: Trustee
<PAGE>14
STOCKHOLDERS
------------
------------------------------------
Charlotte F. Maclellan
------------------------------------
Christopher Hugh Maclellan
------------------------------------
Susan Maclellan
------------------------------------
Daniel Owen Maclellan
------------------------------------
Leslie Stophel Maclellan
------------------------------------
Catherine Maclellan Heald
------------------------------------
Daryl Heald
------------------------------------
Nancy Browne Maclellan
<PAGE>15
------------------------------------
Richard L. Heffner, Sr.
------------------------------------
Richard L. Heffner, Jr.
------------------------------------
Christina M. Heffner
------------------------------------
Thomas Maclellan Heffner
------------------------------------
Jean B. Tipton
THE R.J. MACLELLAN TRUST FOR THE R.L.
MACLELLAN FAMILY TRUST
By:_________________________________
Name:
Title:
<PAGE>16
THE R.J. MACLELLAN TRUST FOR THE H.O.
MACLELLAN, SR. FAMILY
By:_________________________________
Name:
Title:
THE C0RA L. MACLELLAN TRUST FOR THE R.L.
MACLELLAN FAMILY
By:_________________________________
Name:
Title:
THE C0RA L. MACLELLAN TRUST FOR THE H.O.
MACLELLAN, SR. FAMILY
By:_________________________________
Name:
Title:
THE C0RA L. MACLELLAN TRUST FOR THE
MACLELLAN FOUNDATION INC.
By:_________________________________
Name:
Title:
<PAGE>17
CHRISTIAN EDUCATION CHARITABLE TRUST
By:_________________________________
Name:
Title:
THE HUGH AND CHARLOTTE MACLELLAN
CHARITABLE TRUST
By:_________________________________
Name:
Title:
ESTATE OF HUGH O. MACLELLAN, SR.
By:_________________________________
Name:
Title:
TRUST OF C.F. MACLELLAN DATED 6/2/52 FOR
THE PRIMARY BENEFIT OF CHARLOTTE M.
HEFFNER
By:_________________________________
Name:
Title:
<PAGE>18
TRUST OF C.F. MACLELLAN DATED 6/2/52 FOR
H.O. MACLELLAN, JR.
By:_________________________________
Name:
Title:
TRUST OF H.O. MACLELLAN, SR. FOR THE
BENEFIT OF GREAT GRANDCHILDREN
By:_________________________________
Name:
Title:
TRUST UNDER THE WILL OF ANNE MACLELLAN
MUNFORD (CEDE & CO.)
By:_________________________________
Name:
Title:
TRUST FOR LARA L. MUNFORD U/A WITH
KATHRINA H. MACLELLAN DATED 8/5/76
By:_________________________________
Name:
Title:
<PAGE>19
THE CHARITABLE REMAINDER UNITRUST OF
KATHRINA H. MACLELLAN 8/11/76
By:_________________________________
Name:
Title:
TRUST UAW ROBERT HOWZE MACLELLAN DATED
9/22/88
By:_________________________________
Name:
Title:
TRUST UAW ROBERT H. MACLELLAN FOR
HEATHER HOWZE MACLELLAN
By:_________________________________
Name:
Title:
TRUST UAW ROBERT H. MACLELLAN FOR IAN
LLEWELLYN MACLELLAN
By:_________________________________
Name:
Title:
<PAGE>20
TRUST FOR R.L. MACLELLAN AND K.H.
MACLELLAN FOUNDATION U/A FOR MRS.
KATHRINA H. MACLELLAN DATED 1/4/73
By:_________________________________
Name:
Title:
THE SECOND CHARITABLE REMAINDER UNITRUST
OF K.H. MACLELLAN DATED 12/17/87
By:_________________________________
Name:
Title:
TRUST U/A HUGH O. MACLELLAN DATED
12/8/48 FOR HUGH O. MACLELLAN, JR.
By:_________________________________
Name:
Title:
<PAGE>21
TRUST U/A HUGH O. MACLELLAN, SR. DATED
11/29/66 FOR THE BENEFIT OF CATHERINE H.
MACLELLAN
By:_________________________________
Name:
Title:
TRUST U/A HUGH O. MACLELLAN, SR. DATED
7/8/68 FOR THE BENEFIT OF DANIEL O.
MACLELLAN
By:_________________________________
Name:
Title:
TRUST U/A HUGH O. MACLELLAN, SR. DATED
3/12/64 FOR THE BENEFIT OF CHRISTOPHER
H. MACLELLAN
By:_________________________________
Name:
Title:
H.O. MACLELLAN, JR. AND SUNTRUST BANK
TRUSTEES U/A H.O. MACLELLAN, SR. FOR
THE BENEFIT OF CATHERINE H. MACLELLAN
AND HER DESCENDANTS DATED 5/29/70
By:_________________________________
Name:
Title:
<PAGE>22
H.O. MACLELLAN, JR. AND SUNTRUST BANK
TRUSTEES U/A H.O. MACLELLAN, SR. FOR
THE BENEFIT OF DANIEL O. MACLELLAN AND
HIS DESCENDANTS DATED 5/29/70
By:_________________________________
Name:
Title:
H.O. MACLELLAN, JR. AND SUNTRUST BANK
TRUSTEES U/A H.O. MACLELLAN, SR. FOR
THE BENEFIT OF CHRISTOPHER H. MACLELLAN
AND HIS DESCENDANTS DATED 5/29/70
By:_________________________________
Name:
Title:
IRREVOCABLE INSURANCE TRUST OF HUGH O.
MACLELLAN, SR. DATED 1/31/67
By:_________________________________
Name:
Title:
THE H.O. MACLELLAN, SR. CHARITABLE INC.
TRUST DATED 11/29/83 FOR THE BENEFIT OF
ELIZABETH MACLELLAN
By:_________________________________
Name:
Title:
<PAGE>23
CHARITABLE INCOME (LEAD) TRUST U/A HUGH
O. MACLELLAN, SR. DATED 12/31/76 FOR
THE BENEFIT OF CHRISTOPHER H. MACLELLAN
By:_________________________________
Name:
Title:
CHARITABLE INCOME (LEAD) TRUST U/A HUGH
O. MACLELLAN, SR. DATED 12/31/76 FOR
THE BENEFIT OF CATHERINE H. MACLELLAN
By:_________________________________
Name:
Title:
CHARITABLE INCOME (LEAD) TRUST U/A H.O.
MACLELLAN, SR. DATED 12/31/76 FOR THE
BENEFIT OF DANIEL O. MACLELLAN
By:_________________________________
Name:
Title:
<PAGE>24
CHARITABLE INCOME (LEAD) TR U/A H.O.
MACLELLAN, SR. DATED 12/31/76 FOR THE
BENEFIT OF ELIZABETH MACLELLAN
By:_________________________________
Name:
Title:
IRREVOCABLE TRUST U/A NANCY B. MACLELLAN
DATED 12/15/83 FOR THE BENEFIT OF
ELIZABETH MACLELLAN
By:_________________________________
Name:
Title:
HUGH O. MACLELLAN JR. CUSTODIAN FOR
ELIZABETH MACLELLAN
By:_________________________________
Name:
Title:
CHRISTOPHER HUGH MACLELLAN CUSTODIAN FOR
MORGAN CHRISTOPHER MACLELLAN
By:_________________________________
Name:
Title:
<PAGE>25
CHRISTOPHER HUGH MACLELLAN CUSTODIAN FOR
HUGH OWEN MACLELLAN III
By:_________________________________
Name:
Title:
CHRISTOPHER HUGH MACLELLAN CUSTODIAN FOR
ROBERT BROWNE MACLELLAN
By:_________________________________
Name:
Title:
DANIEL O. MACLELLAN CUSTODIAN FOR
JACQUELINE HANNAH MACLELLAN
By:_________________________________
Name:
Title:
<PAGE>26
CATHERINE MACLELLAN HEALD CUSTODIAN FOR
FRANCES ANNE HEALD
By:_________________________________
Name:
Title:
CATHERINE MACLELLAN HEALD CUSTODIAN FOR
HALLIE ELIZABETH HEALD
By:_________________________________
Name:
Title:
CATHERINE MACLELLAN HEALD CUSTODIAN FOR
HAMILTON REED HEALD
By:_________________________________
Name:
Title:
TRUST OF HUGH O. MACLELLAN, JR. DATED
1/31/67 FOR THE BENEFIT OF CHILDREN
By:_________________________________
Name:
Title:
<PAGE>27
H.O. MACLELLAN SENIOR TRUST DATED 9/8/72
FOR THE BENEFIT OF RICHARD L. HEFFNER,
JR.
By:_________________________________
Name:
Title:
H.O. MACLELLAN SENIOR TRUST DATED 9/8/72
FOR THE BENEFIT OF THOMAS M. HEFFNER
By:_________________________________
Name:
Title:
CHARITABLE INCOME (LEAD) TRUST U/A H.O.
MACLELLAN SENIOR DATED 12/31/76 FOR THE
BENEFIT OF THOMAS MACLELLAN HEFFNER
By:_________________________________
Name:
Title:
<PAGE>28
CHARITABLE INCOME (LEAD) TRUST U/A H.O.
MACLELLAN SENIOR TRUST DATED 12/31/76
FOR THE BENEFIT OF RICHARD L. HEFFNER,
JR.
By:_________________________________
Name:
Title:
TRUST U/A/ H.O. MACLELLAN SENIOR DATED
12/9/48 FOR THE BENEFIT OF CHARLOTTE M.
HEFFNER.
By:_________________________________
Name:
Title:
CHARLOTTE M. HEFFNER AND RICHARD L.
HEFFNER, SR. TRUSTEES FOR THE BENEFIT OF
RICHARD L. HEFFNER, SR. DATED 1/26/95
By:_________________________________
Name:
Title:
<PAGE>29
IRREVOCABLE TRUST DATED 12/3/64 OF H.O.
MACLELLAN, SR. FOR THE BENEFIT OF THOMAS
MACLELLAN HEFFNER
By:_________________________________
Name:
Title:
IRREVOCABLE TRUST DATED 6/1/62 OF H.O.
MACLELLAN, SR. FOR THE BENEFIT OF
RICHARD L. HEFFNER, JR.
By:_________________________________
Name:
Title:
<PAGE>S-1
SCHEDULE A
<TABLE>
<CAPTION>
SHARES OWNED
AS OF
FAMILY SHAREHOLDERS 3/4/96
------------------- ------------
<S> <C>
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, TTEES UAW R.J.
Maclellan for R.L. Maclellan Family Trust (#2151) 538,345
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, TTEES UAW R.J.
Maclellan for R.L. Maclellan Family Trust Inv. Inc. (#215109)
116,425
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, TTEES UAW R.J.
Maclellan Tr. for H.O. Maclellan Sr. Fam. (#2152) 522,615
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, TTEES UAW R.J.
Maclellan Tr. for H.O. Maclellan Sr. Fam. Inv. Inc. (#215209)
120,675
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, TTEES UAW Cora L.
Maclellan Tr. For R.L. Maclellan Fam. (#2155) 535,820
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, D. Porter Jr., K.H. Maclellan & R.H. Maclellan, TTEES UAW Cora L.
Maclellan Tr. For R.L. Maclellan Fam. Inv. Inc. (#215509) 97,520
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, TTEES UAW Cora
L. Maclellan for H.O. Maclellan Sr. Fam. Tr. (#2156)
518,695
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, H.O. Maclellan Jr., C.M. Heffner & T.H. McCallie III, TTEES UAW Cora
L. Maclellan for H.O. Maclellan Sr. Fam. Tr. Inv. Inc. (#215609)
91,110
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr. & K.H. Maclellan, TTEES for R.J.
Maclellan Trust for the Maclellan Foundation Inc. (#2150)
3,470,123
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, H.O. Maclellan Jr., D. Porter Jr. & K.H. Maclellan, TTEES for Cora L.
Maclellan Trust for the Maclellan Foundation Inc. (#2154)
34,538
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
The Maclellan Foundation Inc. 8,115,514
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Christian Education Charitable Trust 711,100
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr., C.M. Heffner, Henry A. Henegar, Lee S. Anderson, Frank A. Brock
TTEES U/A Dtd 4/23/93, Hugh & Charlotte Maclellan Charitable Trust
392,706
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Helen M. Tipton Charitable Trust 1,565,842
- - --------------------------------------------------------------------------------------- -----------------------------
</TABLE>
<PAGE>S-2
<TABLE>
<S> <C>
Estate of Hugh O. Maclellan Sr. 50,000
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Mrs. Charlotte F. Maclellan 390,725
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
C.M. Heffner, H.O. Maclellan Jr. & US Tr. Co. of FL TTEES UTA Dtd 8/2/52 with C.F.
Maclellan for the Primary Benefit of Charlotte M. Heffner
67,200
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
J.P. Gaither, H.O. Maclellan Jr. & C.M. Heffner, TTEES UTA Dtd 6/2/52 with C.F.
Maclellan for H.O. Maclellan Jr. 69,200
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. & Charlotte M. Heffner Co-TTEES U/A H.O. Maclellan Sr. FBO
Great-grandchildren 60,000
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Mrs. Kathrina H. Maclellan 1,389,344
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Trust U/W Anne Maclellan Munford (Cede & Co.) 585,000
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
US Trust Company of NY, Successor TTEE for Lara L. Munford U/A with Kathrina H.
Maclellan Dtd 8/5/76 2,000
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
US Trust Company as Corporate TTEE Charitable Remainder Unitrust of Kathrina H.
Maclellan 8/11/76 50,000
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, Trustee UAW Robert Howze Maclellan Dtd 9/22/88 (US-TTEE 249,507;
ANB-DTC 19,523) 259,230
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW Robert H. Maclellan for
Heather Howze Maclellan (ST-Summit) 2,397
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Suntrust Trust, C/F J.F. Decosimo & J.N. Irvine, Co-TTEES UAW Robert H. Maclellan for
Ian Llewellyn Maclellan (ST-Summit) 2,397
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Trust for R.L. Maclellan & K.H. Maclellan Foundation U/A Mrs. Kathrina H. Maclellan
Dtd 1/4/73 (Cede & Co.) 45,416
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
K.H. Maclellan & US Trust Company of NY, TTEES for Second Charitable Remainder
Unitrust of K.H. Maclellan Dtd 12/17/81 Their Successor in Tr. & Assign
27,500
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. 827,150
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. & Suntrust Bank TTEES UTA 12/08/48 for Hugh O. Maclellan Jr.
299,916
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. TTEE FBO Catherine H. Maclellan Dtd 11/19/66 UTS H.O. Maclellan
51,091
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. TTEE FBO Daniel O. Maclellan Dtd 7/8/68 UTA H.O. Maclellan Sr.
51,060
- - --------------------------------------------------------------------------------------- -----------------------------
</TABLE>
<PAGE>S-3
<TABLE>
<S> <C>
Hugh O. Maclellan Jr. TTEE FBO Christopher H. Maclellan UTA H.O. Maclellan Sr.
47,435
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan Sr. FBO Catherine
H. Maclellan & Her Descs Dtd 5/29/70 (#4629) 100,612
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan Sr. FBO Daniel O.
Maclellan & His Descs Dtd 5/29/70 (#4630) 100,523
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr. & Suntrust Trust, TTEES UITA of H.O. Maclellan Sr. FBO Christopher
H. Maclellan & His Descs Dtd 5/29/70 (#4631) 100,715
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. & Charlotte M. Heffner, TTEES for Hugh O. Maclellan Sr. Dtd
1/31/67 1,740
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
C.F. Maclellan, H.O. Maclellan Jr., L.S. Anderson & J.C. Stophel, TTEES of the H.O.M.
Sr. Char. Inc. Tr. Dtd 12/31/76 FBO Elizabeth Maclellan
158,190
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, TTEES of the H.O.
Maclelland Sr. Dtd 12/31/76 FBO Christoper H. Maclellan
136,665
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, TTEES of the H.O.
Maclelland Sr. Dtd 12/31/76 FBO Catherine H. Maclellan
136,665
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, TTEES of the H.O.
Maclelland Sr. Dtd 12/31/76 FBO Daniel O. Maclellan
136,665
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, TTEES of the H.O.
Maclellan Sr. Dtd 12/31/76 FBO Elizabeth Maclellan
136,670
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr., TTEE UTA Dtd 12/15/83 FBO Elizabeth Maclellan
3,320
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. C/F Elizabeth Maclellan UTUGTMA 5,329
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. C/F Hugh Owner III UTUGTMA 5,079
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Hugh O. Maclellan Jr. C/F Morgan Christopher Maclellan UTUGTMA 5,079
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Christopher Hugh Maclellan (52+120, nominee name) 44,059
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Christopher Hugh Maclellan, Cust. for Morgan Christopher Maclellan 688
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Christopher Hugh Maclellan, Cust. for Hugh Owner Maclellan III 688
- - --------------------------------------------------------------------------------------- -----------------------------
</TABLE>
<PAGE>S-4
<TABLE>
<S> <C>
Christopher Hugh Maclellan, Cust. for Robert Browne Baclellan 688
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Susan Maclellan (352 Nominee name) 3,652
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Daniel Owen Maclellan 29,800
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Daniel O. Maclellan Cust. for Jacqueline Hannah Maclellan 688
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Leslie Stophel Maclellan (746 nominee name) 1,518
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Catherine Maclellan Heald 40,617
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Catherine Maclellan Heald C/F Frances Anne Heald 3,130
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Catherine Maclellan Heald C/F Hallie Elizabeth Heald 2,806
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Catherine Maclellan Heald C/F Hamilton Reed Heald 688
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Haryl Heald 1,432
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Nancy Browne Maclellan 24,964
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Nancy B. Maclellan & John P. Gaither, TTEES UTA Hugh O. Maclellan Jr. Dtd 1/31/67
17,600
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O. Maclellan Sr. Dtd
9/8/72 FBO Richard L. Heffner Jr. 74,170
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Charlotte Maclellan Heffner & NationsBank as Co-TTEES U/A H.O. Maclellan Sr. Dtd
9/8/72 FBO Richard L. Heffner Jr. 74,170
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, TTEES UTA H.O.
Maclellan Sr. Dtd 12/31/76 FBO Richard L. Heffner Jr.
136,665
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
H.O. Maclellan Jr., C.M. Heffner, L.S. Anderson & J.C. Stophel, TTEES UTA H.O.
Maclellan Sr. Dtd 12/31/76 FBO Thomas M. Heffner
136,670
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Charlotte M. Heffner & Suntrust Bank CO-TTEES UTA Hugh O. Maclellan Sr. 12/09/48 FBO
Charlotte M. Heffner 294,695
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Charlotte M. Heffner and Richard L. Heffner Sr. TTEES FBO Richard L. Heffner Sr. UA
Dtd 1/26/95 300,000
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Charlotte M. Heffner 457,455
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Richard L. Heffner Sr. 9,482
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Richard L. Heffner, Jr. 45,499
- - --------------------------------------------------------------------------------------- -----------------------------
</TABLE>
<PAGE>S-5
<TABLE>
<S> <C>
Christina M. Heffner 3,172
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Thomas Maclellan Heffner 42,349
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Irrevocable Trust 12/3/64 U/A H.O. Maclellan Sr. FBO Thomas Maclellan Heffner, R.L.
Heffner Sr., Trustee 11,675
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Irrevocable Trust 6/1/62 U/A H.O. Maclellan Sr. FBO Richard L. Maclellan Jr., R.L.
Heffner Sr., Trustee 11,675
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
Jean B. (Mrs. Jere) Tipton 61,000
- - --------------------------------------------------------------------------------------- -----------------------------
- - --------------------------------------------------------------------------------------- -----------------------------
TOTAL SHARES 23,967,036
- - --------------------------------------------------------------------------------------- -----------------------------
</TABLE>
<PAGE>1
PROVIDENT COMPANIES, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of May 31, 1996,
between Zurich Insurance Company, a Swiss corporation ("Zurich" and, together
with any purchaser of Common Stock (as defined below) pursuant to the Stock
Purchase Agreement (as defined below) collectively, the "Investor"), and
Provident Companies, Inc., a Delaware corporation (the "Company").
R E C I T A L S
WHEREAS, the Investor has, pursuant to the terms of a Common
Stock Purchase Agreement, dated as of May 31, 1996, by and among the Company and
the Investor (the "Stock Purchase Agreement"), agreed to purchase shares of
Common Stock, par value $1.00 per share, of the Company (the "Common Stock");
and
WHEREAS, the Company has agreed, as a condition precedent to
the Investor's obligations under the Stock Purchase Agreement, to grant the
Investor certain registration rights; and
WHEREAS, the Company and the Investor desire to define the
registration rights of the Investor on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and
for other good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the
respective meanings set forth below:
Commission: shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act;
Exchange Act: shall mean the Securities Exchange Act of
1934, as amended;
Existing Holder: shall mean Textron, Inc. or any member of
the Family Group, and shall include any transferees thereof who are entitled
to registration rights from the Company pursuant to agreements between the
Company and Textron, Inc. or the Company and the members of the Family Group.
<PAGE>2
Family Group: shall mean the stockholders of the Company
set forth on Exhibit A hereto.
Holder: shall mean any holder of Registrable Securities;
Initiating Holder: shall mean any Holder or Holders who in
the aggregate are Holders of more than 10% of the then outstanding Registrable
Securities;
Person: shall mean an individual, partnership, joint-stock
company, corporation, trust or unincorporated organization, and a government
or agency or political subdivision thereof;
register, registered and registration: shall mean a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;
Registrable Securities: shall mean (A) the shares of Common
Stock issued under the Stock Purchase Agreement, (B) any additional shares of
Common Stock acquired by the Investor and (C) any stock of the Company issued
as a dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Common Stock referred to in clause (A) or (B);
provided, that Registrable Securities shall not include (i) securities with
respect to which a registration statement with respect to the sale of such
securities has become effective under the Securities Act and all such
securities have been disposed of in accordance with such registration
statement, or (ii) such securities as are actually sold pursuant to Rule 144
(or any successor provision thereto) under the Securities Act;
Registration Expenses: shall mean all expenses incurred by
the Company in compliance with Sections 2(a), (b) and (c) hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, fees and expenses of one counsel
for all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Security, Securities: shall have the meaning set forth in
Section 2(1) of the Securities Act;
Securities Act: shall mean the Securities Act of 1933, as
amended; and
Selling Expenses: shall mean all underwriting discounts and
selling commissions applicable to the sale of
<PAGE>3
Registrable Securities and all fees and disbursements of
counsel for each of the Holders other than fees and expenses of one counsel
for all the Holders.
2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall
receive from an Initiating Holder, at any time, a written request that
the Company effect any registration with respect to all or a part of
the Registrable Securities, the Company will:
(A) promptly give written notice of
the proposed registration, qualification or compliance to all other Holders;
and
(B) as soon as practicable, use its
reasonable best efforts to effect such registration
(including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate
qualification under applicable blue sky or other state
securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so
requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable
Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any
Holder or Holders joining in such request as are specified
in a written request received by the Company within 10
business days after written notice from the Company is given
under Section 2(a)(i)(A) above; provided that the Company
shall not be obligated to effect, or take any action to
effect, any such registration pursuant to this Section 2(a):
(u) Solely with respect to
underwritten registrations requested pursuant to this
Agreement, if the Company shall have previously
effected an underwritten registration with respect to
Registrable Securities pursuant to Section 2(b)
hereof, the Company shall not be required to effect
any underwritten registration pursuant to this
Section 2(a) until a period of 180 days shall have
elapsed from the effective date of the most recent
such previous registration; provided that if, in the
most recent such previous registration, participation
pursuant to Section 2(b) hereof shall not have been
to the extent requested pursuant to Section 2(b)
hereof, then the Company shall not be required to
effect any underwritten registration pursuant to this
Section 2 (a) until
<PAGE>4
a period of 90 days shall have elapsed from the
effective date of the most recent such previous
registration;
(v) If, upon receipt of a
registration request pursuant to this Section 2(a),
the Company is advised in writing (with a copy to the
Initiating Holder) by a recognized national
independent investment banking firm selected by the
Company that, in such firm's opinion, a registration
at the time and on the terms requested would
adversely affect any public offering of securities of
the Company by the Company (other than in connection
with benefit and similar plans) or by or on behalf of
any shareholder of the Company exercising a demand
registration right (collectively, a "Company
Offering") with respect to which the Company has
commenced preparations for a registration prior to
the receipt of a registration request pursuant to
this Section 2(a), the Company shall not be required
to effect a registration pursuant to this Section
2(a) until the earlier of (i) 30 days after the
completion of such Company Offering, (ii) promptly
after any abandonment of such Company Offering or
(iii) 60 days after the date of receipt of a
registration request pursuant to this Section 2(a);
provided, however, that the periods during which the
Company shall not be required to effect a
registration pursuant to this Section 2(a) together
with any periods of suspension under Section 2(i)
hereof may not exceed 90 days in the aggregate during
any period of 12 consecutive months;
(w) If the Registrable Securities
requested by all Holders to be registered pursuant to
such request are included in, and eligible for sale
under, the Shelf Registration (as defined below);
(x) In any particular jurisdiction
in which the Company would be required to execute a
general consent to service of process in effecting
such registration, qualification or compliance,
unless the Company is already subject to service in
such jurisdiction and except as may be required by
the Securities Act or applicable rules or regulations
thereunder;
(y) After the Company has
effected three (3) such registrations pursuant to
this Section 2(a) (in the aggregate for all
Holders)
<PAGE>5
and such registrations have been declared or
ordered effective and the sales of such Registrable
Securities shall have closed; provided, that
Holders shall not have the right to request an
underwritten registration pursuant to this Section
2(a) more than one (1) time in any six-month
period; or
(z) If the Registrable Securities
requested by all Holders to be registered pursuant to
such request do not have an anticipated aggregate
public offering price (before any underwriting
discounts and commissions) of not less than
$10,000,000.
The registration statement filed pursuant to the request of
the Initiating Holders may, subject to the provisions of Section 2(a)(ii) below,
include other Securities of the Company which are held by Persons who, by virtue
of agreements with the Company, are entitled to include their Securities in any
such registration ("Other Stockholders").
(ii) Underwriting. If the Initiating Holders intend
to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of
their request made pursuant to Section 2(a). If Other Stockholders
request inclusion in any such registration, the Holders shall offer to
include the securities of such Other Stockholders in the underwriting
and may condition such offer on their acceptance of the further
applicable provisions of this Section 2. The Holders whose shares are
to be included in such registration and the Company shall (together
with all Other Stockholders proposing to distribute their securities
through such underwriting) enter into underwriting and related
agreements in customary form with the representative of the underwriter
or underwriters selected for such underwriting by the Initiating
Holders and reasonably acceptable to the Company. Such underwriting
agreement will contain such representations and warranties by the
Company and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and
contribution to the effect and to the extent provided in Section 2(f)
hereof and the provision of opinions of counsel and accountants'
letters to the effect and to the extent provided in Section 2(e)
hereof, and the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Holders.
The Company shall cooperate fully with the Holders and the underwriters
in connection with any underwritten offering. Notwithstanding any other
provision
<PAGE>6
of this Section 2(a), if the representative advises the Holders in
writing that marketing factors require a limitation on the number of
shares to be underwritten, the securities of the Company held by
Other Stockholders shall be excluded from such registration to the
extent so required by such limitation. If, after the exclusion of
such shares, further reductions are still required, the number of
shares included in the registration by each Holder shall be reduced
on a pro rata basis (based on the number of shares held by such
Holder), by such minimum number of shares as is necessary to comply
with such request. No Registrable Securities or any other securities
excluded from the underwriting by reason of the underwriter's
marketing limitation shall be included in such registration. If any
Other Stockholder who has requested inclusion in such registration as
provided above disapproves of the terms of the underwriting, such
person may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Initiating Holders. The securities
so withdrawn shall also be withdrawn from registration. If the
underwriter has not limited the number of Registrable Securities or
other securities to be underwritten, the Company and officers and
directors of the Company may include its or their securities for its
or their own account in such registration if the representative so
agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such
registration and underwriting will not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to register any of
its equity securities either for its own account or for the account of
Other Stockholders, other than a registration relating solely to
benefit plans, or a registration relating solely to a Commission Rule
145 transaction, or a registration on any registration form which does
not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration
statement covering the sale of Registrable Securities, the Company
will:
(A) promptly give to each of the Holders a
written notice thereof (which shall include a list of the
jurisdictions in which the Company intends to attempt to
qualify such securities under the applicable blue sky or other
state securities laws); and
(B) include in such registration (and any
related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request or
requests, made by the Holders within ten (10) business days
after the giving of the written
<PAGE>7
notice from the Company described in clause (i) above,
except as set forth in Section 2(b)(ii) below. Such written
request shall specify the amount of Registrable Securities
intended to be disposed of by a Holder and may specify all
or a part of the Holders' Registrable Securities.
Notwithstanding the foregoing, if, at any time after giving such
written notice of its intention to effect such registration and prior
to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not
to register such equity securities the Company may, at its election,
give written notice of such determination to the Holders and thereupon
the Company shall be relieved of its obligation to register such
Registrable Securities in connection with the registration of such
equity securities (but not from its obligation to pay Registration
Expenses to the extent incurred in connection therewith as provided
herein), without prejudice, however, to the rights (if any) of Holders
immediately to request that such registration be effected as a
registration under Section 2(a) hereof.
(ii) Underwriting. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise each of the Holders as a part
of the written notice given pursuant to Section 2(b)(i)(A). In such
event, the right of each of the Holders to registration pursuant to
this Section 2(b) shall be conditioned upon such Holders' participation
in such underwriting and the inclusion of such Holders' Registrable
Securities in the underwriting to the extent provided herein. The
Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing
their securities through such underwriting) enter into an underwriting
agreement in customary form with the representative of the underwriter
or underwriters selected for the underwriting by the Company or such
Other Stockholders, as the case may be. Such underwriting agreement
will contain such representations and warranties by the Company and
such other terms and provisions as are customarily contained in
underwriting agreements with respect to secondary distributions,
including, without limitation, indemnities and contribution to the
effect and to the extent provided in Section 2(f) hereof and the
provision of opinions of counsel and accountants' letters to the effect
and to the extent provided in Section 2(e), and the representations and
warranties by, and the other agreements on the part of, the Company to
and for the benefit of such underwriters shall also be made to and for
the benefit of the Holders whose shares are to be included in such
registration. Notwithstanding any other provision of this Section 2(b),
if the representative determines that
<PAGE>8
marketing factors require a limitation on the number of shares to be
underwritten, the Company shall so advise all holders of securities
requesting registration, and the number of shares of securities that
are entitled to be included in the registration and underwriting
shall be allocated in the following manner: The securities of the
Company held by officers, directors and Other Stockholders of the
Company (other than securities held by Existing Holders or holders
who by contractual right demanded such registration ("Demanding
Holders")) shall be excluded from such registration and underwriting
to the extent required by such limitation, and, if a limitation on
the number of shares is still required, the number of shares that may
be included in the registration and underwriting by each of the
Holders, Existing Holders which are not Demanding Holders with
respect to such registration and Demanding Holders with respect to
such registration which are not Existing Holders shall be reduced, on
a pro rata basis (based on the number of shares held by such holder),
by such minimum number of shares as is necessary to comply with such
limitation; provided, however, that in the event that an Existing
Holder is a Demanding Holder with respect to such registration, the
number of shares of Registrable Securities proposed to be included in
any such registration by each Holder shall be reduced on a pro rata
basis (based on the number of shares held by such holder) prior to
any reduction in the number of shares to be included in such
registration by such Demanding Holder. If any of the Holders or any
officer, director or Other Stockholder disapproves of the terms of
any such underwriting, he may elect to withdraw therefrom by written
notice to the Company and the underwriter. Any Registrable Securities
or other securities excluded or withdrawn from such underwriting
shall be withdrawn from such registration.
(c) Shelf Registration. (i) On or before July 1, 1996, the
Company shall file a "shelf" registration statement pursuant to Rule
415 under the Securities Act (the "Shelf Registration") with respect to
the Registrable Securities to be issued under the Stock Purchase
Agreement. The Company shall (A) use its reasonable best efforts to
have the Shelf Registration declared effective on or before the Closing
Date (as defined in the Stock Purchase Agreement) or as soon thereafter
as practicable and (B) subject to Section 2(i) hereof, use its
reasonable best efforts to keep the Shelf Registration continuously
effective from the date such Shelf Registration is declared effective
until the date of termination of this Agreement pursuant to Section
2(j) hereof in order to permit the prospectus forming a part thereof to
be usable by Holders during such period. Except as set forth in Section
2(c)(iii) below, the Shelf Registration may not include other
securities of the Company which are held by Other Stockholders.
<PAGE>9
(ii) Subject to Section 2(i) hereof, the Company
shall supplement or amend the Shelf Registration, (A) as required by
the registration form utilized by the Company or by the instructions
applicable to such registration form or by the Securities Act or the
rules and regulations promulgated thereunder, (B) to include in such
Shelf Registration any additional securities that become Registrable
Securities by operation of the definition thereof and (C) following the
written request of an Initiating Holder pursuant to Section 2(c)(iii)
below, to cover offers and sales of all or a part of the Registrable
Securities by means of an underwriting including the incorporation of
any information required pursuant to Section 2(e)(x) below. The Company
shall furnish to the Holders of the Registrable Securities to which the
Shelf Registration relates copies of any such supplement or amendment
sufficiently in advance (but in no event less than five business days
in advance) of its use and/or filing with the Commission to allow the
Holders a meaningful opportunity to comment thereon.
(iii) The Holders may, at their election and upon
written notice by an Initiating Holder to the Company, subject to the
limitations set forth in clauses (u), (v), (x), (y) and (z) of Section
2(a)(i)(B) hereof, effect offers and sales under the Shelf Registration
by means of one or more underwritten offerings, in which case the
provisions of Section 2(a)(ii) above shall apply to any such
underwritten distribution of securities under the Shelf Registration
and such underwriting shall, if sales of Registrable Securities
pursuant thereto shall have closed, be regarded as the exercise of one
of the registration rights contemplated by Section 2(a) hereof. In the
event of such an election, and, without the consent of the Holders of a
majority of the then outstanding Registrable Securities, under no other
circumstances, the Shelf Registration may, subject to Section 2(a)(ii)
above, be amended to include other shares of Common Stock which are
held by Other Stockholders.
(d) Expenses of Registration. All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Section 2 (including all
Registration Expenses incurred in connection with the Shelf Registration and
any supplements or amendments thereto, whether or not it becomes effective,
and whether all, none or some of the Registrable Securities are sold pursuant
to the Shelf Registration) shall be borne by the Company, and all Selling
Expenses shall be borne by the Holders of the securities so registered pro
rata on the basis of the number of their shares so registered; provided,
however, that if, as a result of the withdrawal of a request for registration
by any of the Holders, as applicable, the registration statement does not
become effective, the Holders and Other Stockholders requesting registration
may elect to bear the Registration Expenses (pro
<PAGE>10
rata on the basis of the number of their shares so included in the
registration request, or on such other basis as such Holders and Other
Stockholders may agree), in which case such registration shall not be counted
as a registration pursuant to Section 2(a)(i)(B)(y).
(e) Registration Procedures. In the case of
each registration effected by the Company pursuant to this Section 2, the
Company will keep the Holders, as applicable, advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense, the Company will:
(i) other than the Shelf Registration, the
obligations in respect of which are set forth in Section 2(c)(i)(B)
above, keep such registration effective for a period of one hundred
eighty (180) days or until the Holders, as applicable, have completed
the distribution described in the registration statement relating
thereto, whichever first occurs;
(ii) furnish to each Holder, and to any underwriter
before filing with the Commission, copies of any registration statement
(including all exhibits) and any prospectus forming a part thereof and
any amendments and supplements thereto (including all documents
incorporated or deemed incorporated by reference therein prior to the
effectiveness of such registration statement and including each
preliminary prospectus, any summary prospectus or any term sheet (as
such term is used in Rule 434 under the Securities Act)) and any other
prospectus filed under Rule 424 under the Securities Act, which
documents, other than documents incorporated or deemed incorporated by
reference, will be subject the review of the Holders and any such
underwriter for a period of at least five business days, and the
Company shall not file any such registration statement or such
prospectus or any amendment or supplement to such registration
statement or prospectus to which any Holder or any such underwriter
shall reasonably object within five business days after the receipt
thereof; a Holder or such underwriter(s), if any, shall be deemed to
have reasonably objected to such filing only if the registration
statement, amendment, prospectus or supplement, as applicable, as
proposed to be filed, contains a material misstatement or omission;
(iii) furnish to each Holder and to any underwriter,
such number of conformed copies of the applicable registration
statement and of each amendment and supplement thereto (in each case
including all exhibits) and such number of copies of the prospectus
forming a part of such registration statement (including each
preliminary prospectus, any summary prospectus or any term sheet (as
such term is used in Rule 434 under the Securities Act)) and any other
prospectus filed under Rule 424 under the
<PAGE>11
Securities Act, in conformity with the requirements of the Securities
Act, and such other documents, including without limitation documents
incorporated or deemed to be incorporated by reference prior to the
effectiveness of such registration, as each of the Holders or any
such underwriter, from time to time may reasonably request;
(iv) to the extent practicable, promptly prior to the
filing of any document that is to be incorporated by reference into any
registration statement or prospectus forming a part thereof subsequent
to the effectiveness thereof, and in any event no later than the date
such document is filed with the Commission, provide copies of such
document to the Holders, if requested, and to any underwriter, make
representatives of the Company available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as any Holder
or any such underwriter reasonably may request;
(v) make available at reasonable times for inspection
by the Holders, any underwriter participating in any disposition
pursuant to such registration and any attorney or accountant retained
by the Holders or any such underwriter, all financial and other
records, pertinent corporate documents and properties of the Company
and cause the officers, directors and employees of the Company to
supply all information reasonably requested by the Holders and any such
underwriters, attorneys or accountants in connection with such
registration subsequent to the filing of the applicable registration
statement and prior to the effectiveness of the applicable registration
statement;
(vi) use its reasonable best efforts (x) to register
or qualify all Registrable Securities and other securities covered by
such registration under such other securities or blue sky laws of such
States of the United States of America where an exemption is not
available and as the sellers of Registrable Securities covered by such
registration shall reasonably request, (y) to keep such registration or
qualification in effect for so long as the applicable registration
statement remains in effect, and (z) to take any other action which may
be reasonably necessary or advisable to enable such sellers to
consummate the disposition in such jurisdictions of the securities to
be sold by such sellers, except that the Company shall not for any such
purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction where it is not so qualified, or to
subject itself to taxation in any such jurisdiction, or to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be
<PAGE>12
required by the Securities Act or applicable rules or regulations
thereunder;
(vii) use its reasonable best efforts to cause all
Registrable Securities covered by such registration statement to be
registered with or approved by such other federal or state governmental
agencies or authorities as may be necessary in the opinion of counsel
to the Company and counsel to the Holders of Registrable Securities to
enable the Holders thereof to consummate the disposition of such
Registrable Securities;
(viii) subject to Section 2(i) hereof, promptly
notify each Holder of Registrable Securities covered by a registration
statement (A) upon discovery that, or upon the happening of any event
as a result of which, the prospectus forming a part of such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,
(B) of the issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or the initiation of
proceedings for that purpose, (C) of any request by the Commission for
(1) amendments to such registration statement or any document
incorporated or deemed to be incorporated by reference in any such
registration statement, (2) supplements to the prospectus forming a
part of such registration statement or (3) additional information, (D)
of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any
of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and at the request of
any such Holder promptly prepare and furnish to it a reasonable number
of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(ix) use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such
registration, or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for
sale in any jurisdiction;
(x) if requested by any Initiating Holder, or any
underwriter, promptly incorporate in such registration statement or
prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as the
<PAGE>13
Initiating Holder and any underwriter may reasonably request to have
included therein, including, without limitation, information relating
to the "plan of distribution" of the Registrable Securities,
information with respect to the principal amount or number of shares
of Registrable Securities being sold to such underwriter, the
purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering
and make all required filings of any such prospectus supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment;
(xi) furnish to the Holders, addressed to them, an
opinion of counsel for the Company, dated the date of the closing under
the underwriting agreement, if any, or the date of effectiveness of the
registration statement if such registration is not an underwritten
offering, and use its reasonable best efforts to furnish to the
Holders, addressed to them, a "cold comfort" letter signed by the
independent certified public accountants who have certified the
Company's financial statements included in such registration, covering
substantially the same matters with respect to such registration (and
the prospectus included therein) and, in the case of such accountants'
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten
public offerings of securities and such other matters as the Holders
may reasonably request;
(xii) provide promptly to the Holders upon request
any document filed by the Company with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act; and
(xiii) use its reasonable best efforts to cause all
Registrable Securities included in any registration pursuant hereto to
be listed on each securities exchange on which securities of the same
class are then listed or, if not then listed on any securities
exchange, to be eligible for trading in any over-the-counter market or
trading system in which securities of the same class are then traded.
(f) Indemnification.
(i) The Company will indemnify each of the Holders,
as applicable, each of its officers, directors, members and partners,
and each person controlling each of the Holders, with respect to each
registration which has been effected pursuant to this Section 2, and
each
<PAGE>14
underwriter, if any, and each person who controls any underwriter,
against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to
any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the
Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each of
the Holders, each of its officers, directors, members and partners,
and each person controlling each of the Holders, each such
underwriter and each person who controls any such underwriter, for
any legal and any other expenses reasonably incurred in connection
with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in
any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the
Company by the Holders or underwriter and stated to be specifically
for use therein.
(ii) Each of the Holders will, if Registrable
Securities held by it are included in the securities as to which such
registration, qualification or compliance is being effected, indemnify
the Company, each of its directors and officers and each underwriter,
if any, of the Company's securities covered by such a registration
statement, each person who controls the Company or such underwriter,
each Other Stockholder and each of their officers, directors, members
and partners, and each person controlling such Other Stockholder
against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus, offering circular or other document
made by such Holder, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to
make the statements by such Holder therein not misleading, and will
reimburse the Company and such Other Stockholders, directors, officers,
partners, members, persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged
<PAGE>15
omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in
conformity with written information furnished to the Company by such
Holder and stated to be specifically for use therein; provided,
however, that the obligations of each of the Holders hereunder and
under clause (vi) below shall be limited to an amount equal to the
net proceeds to such Holder of securities sold as contemplated
herein.
(iii) Each party entitled to indemnification under
this Section 2(f) (the "Indemnified Party") shall give notice to the
party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim
as to which indemnity may be sought, and shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation
resulting therefrom; provided that counsel for the Indemnifying Party,
who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld) and the Indemnified Party may
participate in such defense at such party's expense (unless the
Indemnified Party shall have reasonably concluded that there may be a
conflict of interest between the Indemnifying Party and the Indemnified
Party in such action, in which case the fees and expenses of one such
counsel for all Indemnified Parties shall be at the expense of the
Indemnifying Party), and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Section 2 unless
the Indemnifying Party is materially prejudiced thereby. No
Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party (which consent
shall not be unreasonably withheld or delayed), consent to entry of any
judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect to
such claim or litigation. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this
Section 2(f) is held by a court of competent jurisdiction to be
unavailable to an Indemnified Party with respect to any loss,
liability, claim, damage or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or
expense in such
<PAGE>16
proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on
the other in connection with the statements or omissions which
resulted in such loss, liability, claim, damage or expense, as well
as any other relevant equitable considerations. The relative fault of
the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue
(or alleged untrue) statement of a material fact or the omission (or
alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten
public offering contemplated by this Agreement are in conflict with the
foregoing provisions, the provisions in such underwriting agreement
shall be controlling.
(vi) The foregoing indemnity agreement of the Company
and Holders is subject to the condition that, insofar as they relate to
any loss, claim, liability or damage made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the
Commission at the time the registration statement in question becomes
effective or the amended prospectus filed with the Commission pursuant
to Commission Rule 424(b) (the "Final Prospectus"), such indemnity or
contribution agreement shall not inure to the benefit of any
underwriter or Holder (but only if such Holder was required to deliver
such Final Prospectus) if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such action is
required by the Securities Act.
(g) Information by the Holders. Each of the
Holders holding securities included in any registration shall furnish to the
Company such information regarding such Holder and the distribution proposed
by such Holder as the Company may reasonably request in writing and as shall
be reasonably required in connection with any registration, qualification or
compliance referred to in this Section 2.
(h) Rule 144 Reporting.
With a view to making available the benefits of certain rules
and regulations of the Commission which may permit the sale
<PAGE>17
of restricted securities to the public without registration, the Company
agrees to:
(i) make and keep public information available as
those terms are understood and defined in Rule 144 under the Securities
Act ("Rule 144"), at all times;
(ii) use its best efforts to file with the Commission
in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable
Securities, furnish to the Holder upon request, a written statement by
the Company as to its compliance with the reporting requirements of
Rule 144, and of the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other
reports and documents so filed as the Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing
the Holder to sell any such securities without registration.
(i) Holdback Agreement; Postponement.
Notwithstanding the provisions of Sections 2(a),(b) and (c), if the Board of
Directors of the Company determines in good faith that it is in the best
interests of the Company (A) not to disclose the existence of facts
surrounding any proposed or pending acquisition, disposition, strategic
alliance or financing transaction involving the Company or (B) for any
purpose, to suspend the registration rights set forth herein, the Company may,
by notice to the Holders in accordance with Section 4(a), (1) suspend the
rights of the Holders to make sales pursuant to the Shelf Registration and (2)
postpone any registration which is requested pursuant to Section 2(a), in each
case for such a period of time as the Board of Directors may determine;
provided that (x) such periods of suspension together with any periods of
suspension effected pursuant to Section 2(a)(i)(B)(v) hereof may not exceed 90
days in the aggregate during any period of 12 consecutive months and (y) the
Company may not impose such a suspension or a postponement pursuant to Section
2(a)(i)(B)(v) following the printing and distribution of a preliminary
prospectus in any underwritten public offering of Registrable Securities
pursuant to Section 2(a)(i) or 2(c)(iii) (except such suspension, not to
exceed 10 days, which results from an event that is not within the reasonable
control of the Company). Notwithstanding the provisions of Section
2(a)(i)(B)(v) or this Section 2(i), the Company shall not suspend the
registration rights set forth herein at any time during which any similar
rights of the Existing Holders are not similarly suspended.
(j) Termination. The registration rights set
forth in Section 2(a) shall not be available to any Holder if, in
<PAGE>18
the opinion of counsel to the Company, all of the Registrable Securities then
owned by such Holder could be sold in any 90-day period pursuant to Rule 144
(without giving effect to the provisions of Rule 144(k)).
(k) Assignment. The registration rights set
forth in Section 2 hereof may be assigned, in whole or in part, to any
transferee of Registrable Securities (who shall be considered thereafter to be
a Holder (provided that any transferee who is not an affiliate of Investor
shall be a Holder only with respect to such Registrable Securities so acquired
and any stock of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement of, such Registrable
Securities) and shall be bound by all obligations and limitations of this
Agreement).
3. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any
provision in this Agreement refers to action to be taken by any Person, or
which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
(c) Section Headings. The headings of the
sections and subsections of this Agreement are inserted for convenience only
and shall not be deemed to constitute a part thereof.
4. MISCELLANEOUS
(a) Notices.
(i) All communications under this Agreement shall be
in writing and shall be delivered by facsimile or by hand or mailed by
overnight courier or by registered or certified mail, postage prepaid:
(A) if to the Company, to Provident
Companies, Inc., 1 Fountain Square, Chattanooga, Tennessee
37402, Fax No.: (423) 755-2590, Attention: Chief Financial
Officer, or at such other address as it may have furnished
in writing to the Investors;
(B) if to the Investor, at the address
listed on Schedule I hereto, or at such other address as may
have been furnished the Company in writing.
<PAGE>19
(ii) Any notice so addressed shall be deemed to be
given: if delivered by hand, on the date of such delivery; if mailed by
courier, on the first business day following the date of such mailing;
and if mailed by registered or certified mail, on the third business
day after the date of such mailing.
(b) Reproduction of Documents. This
Agreement and all documents relating thereto, including, without limitation,
any consents, waivers and modifications which may hereafter be executed may be
reproduced by the Investor by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and the Investors
may destroy any original document so reproduced. The parties hereto agree and
stipulate that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made by
the Investors in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
(c) Successors and Assigns. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns
of each of the parties.
(d) Entire Agreement; Amendment and Waiver.
This Agreement constitutes the entire understanding of the parties hereto and
supersedes all prior understanding among such parties. This Agreement may be
amended, and the observance of any term of this Agreement may be waived, with
(and only with) the written consent of the Company and the Holders of a
majority of the then outstanding Registrable Securities.
(e) Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original and all of which together shall be considered one and the same
agreement.
(f) No Inconsistent Agreements. The Company
will not hereafter enter into any agreement with respect to its securities
which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement.
(g) Remedies. Each Holder of Registrable
Securities, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance
of its rights under this Agreement. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Agreement and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
<PAGE>20
(h) Severability. In the event that any one
or more of the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained herein shall not
be in any way impaired thereby, it being intended and understood that all of
the rights and privileges of each of the Holders shall be enforceable to the
fullest extent permitted by law.
<PAGE>21
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
PROVIDENT COMPANIES, INC.
By:/s/ Thomas R. Watjen
Name: Thomas R. Watjen
Title: Executive Vice President
INVESTOR:
ZURICH INSURANCE COMPANY
By: /s/ Steven M. Gluckstern
Name: Steven M. Gluckstern
Title: Representative
<PAGE>
SCHEDULE I
Name and Address
of Investor
ZURICH INSURANCE COMPANY
Mythenquai 2
P.O. Box
Ch-8022
Zurich, Switzerland
Attention: General Counsel
with copies to:
Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York
Facsimile No.: (212) 898-5002
Attention: General Counsel
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Facsimile No.: (212) 821-8111
Attention: Thomas M. Cerabino
