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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
Commission File Number 1-9215
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UNITED ASSET MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2714625
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 330-8900
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- ---------------------
<S> <C>
Common Stock
($.01 par value) New York Stock Exchange
</TABLE>
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90 days. /X/ Yes ___ No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by
stockholders who are not directors or executive officers of the
registrant was approximately $1.0 billion based on the last
reported sale price of the registrant's common stock on the New
York Stock Exchange composite tape on March 8, 1995.
The number of shares of common stock, par value $.01, outstanding
as of March 8, 1995 was 30,723,837.
DOCUMENTS INCORPORATED BY REFERENCE
Certain of the information called for by Parts I through IV,
respectively, of this report on Form 10-K is incorporated by reference
from certain portions of (a) the Annual Report to Shareholders of
the registrant for the year ended December 31, 1994, and (b) the
Proxy Statement of the registrant to be filed pursuant to Regulation 14A
and to be sent to shareholders in connection with the Annual Meeting of
Stockholders to be held on May 18, 1995. Such Report and Proxy Statement,
except for the parts therein which have been specifically incorporated
herein by reference, shall not be deemed "filed" as part of this report
on Form 10-K.
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PART I
ITEM 1. BUSINESS
GENERAL
United Asset Management Corporation ("UAM" or the
"Company") is a holding company organized in December, 1980 to
acquire and own firms that provide investment advisory
services primarily for institutional investment clients. Its
41 wholly-owned operating subsidiaries (the "Affiliated Firms"
or the "Firms") are managers of investment portfolios for
corporate, public and union pension funds, profit sharing
plans, endowments and foundations. Some Firms manage assets
for mutual funds and individuals. UAM intends to continue
expanding through the internal growth of its present
Affiliated Firms and through the acquisition or organization
of additional firms in the future (see "Affiliated Firms").
In addition, UAM plans to continue to diversify, both
domestically and internationally, with respect to both the
classes of assets managed for institutional investors and the
firm's client base.
While UAM's Affiliated Firms primarily specialize in the
management of U.S. equities, bonds and cash, other asset
classes under management have grown significantly over recent
years to include real estate, international securities and
stable value assets.
Advisory fees based on the assets of pension plans,
profit sharing plans, endowments and foundations provide the
substantial portion of the Company's revenues. Such clients
are sometimes referred to as "institutional" clients, and they
are generally "tax-exempt" in that the income and any capital
gains which result from their portfolio investments are not
taxable to them under present law. Advisory fees are
primarily based on the value of assets under management. Fee
rates typically decline as account size increases. The assets
of institutional clients have generally been growing, with the
most rapid growth achieved by pension and profit sharing plans
(sometimes called employee benefit plans). For the year ended
December 31, 1994, no single client of any Affiliated Firm
provided more than 2% of the Company's consolidated revenues.
Accordingly, the loss of any single client would not have a
material adverse effect on the Company's total investment
management business.
Each Affiliated Firm operates under its own name, with
its own investment philosophy and approach. Each conducts its
own investment analysis, portfolio selection marketing and
client service. During any given period, investment results
may vary among Firms. Each Firm competes independently and
sets its client fees based on its own judgment concerning the
market for the services it renders. Each Firm is separately
regulated under applicable federal, state or foreign law.
UAM has established revenue sharing agreements with the
Affiliated Firms which are described more fully under "Revenue
Sharing." These agreements provide for UAM to derive
increased or decreased income from each Affiliated Firm, based
on a percentage of the change in each Firm's revenues from
year to year, starting from a base amount agreed upon in the
year of acquisition. These arrangements allow each Firm to
set its own operating expense budget and compensation
practices, limited by the share of revenues available to the
Firm.
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THE INDUSTRY
Revenues in the institutional investment management
industry are determined primarily by fees based on assets
under management. Therefore, the principal determinant of
growth in the industry is the growth of institutional assets
under management. In management's judgment, the major factors
which influence changes in institutional assets under
management are: (a) changes in the market value of
securities; (b) net cash flow into or out of existing
accounts; (c) gains of new or losses of existing accounts by
specific firms or segments of the industry; and (d) the
introduction of new products by the industry or by particular
firms.
In general, assets under management in the institutional
segments of the industry have increased steadily. For
example, Money Market Directories, Inc. recorded in its 1995
Directory $3.4 trillion in assets under management in accounts
of employee benefit plans, foundations and endowments within
the United States as of mid-1994, which represents an average
compound five-year annual growth rate of 9.1% over the
corresponding figure as of mid-1989. The largest
institutional segment of assets under management has been
employee benefit plan assets. The 1995 Directory reported
$3.1 trillion of employee benefit plan assets under management
as of mid-1994, which represents an average compound five-year
annual growth rate of 9.0% over the corresponding figure as of
mid-1989.
The employee benefit plan market includes two principal
sectors: defined benefit and defined contribution plans. The
majority of U.S. retirement plan assets are in defined benefit
plans, which assure workers of a particular level of pension
benefits when they retire. The Employee Retirement Income
Security Act of 1974 ("ERISA") and the Internal Revenue Code
of 1986 (the "Code") require employers to fund their defined
benefit plans sufficiently to generate the benefits they have
promised. However, the Code also prohibits overfunding of
defined benefit plans by employers. In management's opinion,
high investment returns through the 1980's resulted in many
defined benefit retirement plans approaching or even reaching
their full funding limits by the end of the 1980's, based on
actuarial calculations, so corporations were not called upon
to contribute any more cash to the plans. However, if the
value of plan assets declines due to market factors, employers
will generally be obligated to step up payments into their
defined benefit pension plans. This counter-cyclical funding
pattern for defined benefit plans helps to smooth out
fluctuations in the growth of plan assets under management by
firms that provide investment advisory services to sponsors of
defined benefit plans, and therefore, it helps to smooth out
fluctuations in the revenues of these investment managers.
Under defined contribution plans, on the other hand, employers
may contribute to their employees' retirement funds on a tax-
advantaged basis, but individual employees often decide how
their plan assets will be invested. Defined contribution
plans are the fastest growing sector of the employee benefit
plan market.
The number and size of investment management firms which
UAM would consider acquiring have grown in the past five
years. The 1990 Money Market Directory showed 999 investment
counseling firms (including branch offices) within the United
States managing $2.6 trillion as of mid-1989. The 1995
Directory showed 1,385 such firms (including branch offices)
within the United States managing approximately $5.5 trillion
of assets as of mid-1994, which represents an average compound
five-year annual growth rate of 16.5% over the corresponding
assets of mid-1989.
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COMPETITION
The Affiliated Firms compete with a large number of
investment management firms, principally those engaged in the
management of "institutional" accounts. In addition, the
Affiliated Firms compete with commercial banks and insurance
companies, many of which have substantially greater capital
and other resources and some of which offer a wider range of
financial services. Furthermore, each of the Affiliated Firms
may compete with other Affiliated Firms for clients.
Management believes that the most important factors
affecting competition in the investment management industry
are the abilities and reputations of investment managers,
differences in the investment performance of investment
management firms, and the development of new investment
strategies and information technologies, rather than
differences in advisory fees.
Barriers to entry are low, and firms are relatively long-
lived in the investment management business. A new investment
management firm has very low capital requirements.
Maintaining the firm requires only the continued involvement
of its professional personnel. A major portion of profits may
be regularly withdrawn because new capital commitments are
limited and rarely necessary.
UAM competes, with respect to the acquisition of
investment management firms, with many other potential
purchasers of investment management firms, including insurance
companies, banks and other investment groups. For the most
part, these acquirers have sought a single firm rather than
undertaking a program of acquisitions similar to UAM's. As a
result of its continuing acquisition activities, including
regular contacts with potential acquisition candidates, UAM
has an extensive knowledge of the candidate population both
domestically and internationally.
UAM'S ACQUISITION PROGRAM AND METHOD OF OPERATION
Since its inception, UAM has sought to acquire or to
organize institutional investment management firms. Once it
has acquired or organized such firms, UAM seeks to preserve
their autonomy by allowing their key employees to retain
control of investment decisions and day-to-day operations.
Where the Affiliated Firm is acquired from its employee-
stockholders, the former stockholders receive the added
benefits of a more diversified company by virtue of their
equity ownership in UAM.
UAM conducts its own acquisition activities rather than
relying primarily upon outside agents to find and develop
acquisition candidates for it. UAM's activities include
regular mailing and calling programs through which UAM seeks
to contact and visit potential acquisition candidates on a
regular basis. UAM is willing to use finders to locate
suitable candidates and has paid finders' fees on four
occasions. Once acquisition negotiations begin, UAM utilizes
its own staff and outside legal counsel to negotiate price,
terms and the wording of specific documents required.
Typically, a definitive purchase agreement is signed, and then
each of the clients of the firm to be acquired is contacted by
a principal of that firm in order to obtain the client's
consent to the transaction (which constitutes an assignment of
its advisory contract) as required by the Investment Advisers
Act of 1940. Once sufficient consents have been received, the
acquisition is completed. Consent of all of a
3
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firm's clients has been obtained in connection with virtually
all of UAM's acquisitions to date.
After acquisition by UAM, Affiliated Firms continue to
operate under their own firm name, with their own leadership
and individual investment philosophy and approach. UAM seeks
to achieve diversity by acquiring investment management firms
having different investment philosophies and strategies and
specializing in different asset classes. In addition, UAM has
acquired or organized firms at various stages of their
development, from start-up to relatively mature firms and has
acquired both employee-stockholder firms and subsidiaries or
divisions of financial institutions.
UAM itself does not manage portfolio investments for
clients and does not provide any investment advisory services
to Affiliated Firms and therefore is not registered as an
investment adviser under federal, state or foreign law. UAM
respects the individual character of each Affiliated Firm and
seeks to preserve an environment in which each Firm may
continue to provide investment management services which are
intended to meet the particular needs of each Firm's clients.
UAM's name does not appear on the office doors of any
Affiliated Firm, other than UAM Investment Services, Inc. and
United Asset Management (Japan), Inc. described below. UAM
provides assistance to the Affiliated Firms in connection with
the preparation of consolidated financial statements,
consolidated tax matters, insurance and maintenance of a
company-wide profit sharing retirement plan. UAM has also
established an operations group composed of senior officers of
the Company which assists the Affiliated Firms by creating
growth incentives and encouraging the undertaking of new
projects. Upon request, the Operations Group is also
available to assist Affiliated Firms in planning for future
growth and management development, particularly with respect
to succession planning.
UAM believes that the professional independence of the
Affiliated Firms and the continuing diversification of
investment philosophies and approaches within the company are
necessary ingredients of UAM's success and that of the
Affiliated Firms. The key employees of each Affiliated Firm
at the time of acquisition by UAM have continued with their
Firm in accordance with employment agreements executed in
connection with each acquisition, have remained on their
Firm's Board of Directors, and have continued to serve as its
executive officers. UAM intends to continue the method of
operation described above as it acquires or organizes
additional firms.
Each Affiliated Firm's directors and officers are
responsible for reviewing their respective Firm's results,
plans and budgets. The Company also has a Management Council
composed of senior executives from each of the Affiliated
Firms and from UAM which serves as a forum for sharing
business information.
UAM seeks to assist the Affiliated Firms in their
marketing activities by providing resources and support for
developing new products and reaching new markets. As a part of
these efforts, UAM has organized The Regis Fund, Inc., a series
mutual fund in which Affiliated Firms may open portfolios to
pool client accounts in an efficient, cost-effective manner and
to provide additional investment styles. As of December 31,
1994, fifteen of the Affiliated Firms had opened in the
aggregate 30 Regis Fund portfolios, and such portfolios held
assets totaling $1.8 billion.
4
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UAM has responded to the growth in the defined
contribution plan sector of the market by establishing Regis
Retirement Plan Services, Inc. in 1993 to offer bundled
products, including investment management capabilities through
the Regis Fund portfolios managed by the Affiliated Firms, as
well as employee education, recordkeeping and trustee services
to the sponsors of these plans.
To establish a presence in Japan, the world's second-
largest investment management market and pension system, UAM
launched United Asset Management (Japan), Inc. in 1994 to
offer and service products managed by the Affiliated Firms to
Japanese investors. This new affiliate is a single entity
delivering service locally in Japan, but it represents the
great breadth of expertise available in all of UAM's
Affiliated Firms.
Early in 1995, UAM established another marketing and
service organization by forming UAM Investment Services, Inc.
This affiliate was organized in order to meet the demands of
large institutional investors who prefer multi-product
investment management firms with global capabilities. Through
offering products managed by the Affiliated Firms, UAM
Investment Services will give these clients a single source
through which to tap the wide-ranging expertise available in
these Firms.
UAM has observed that the major reasons that employee-
owned firms consider selling to UAM include: (a) the high
value of the firm relative to its principals' total net worth;
(b) the need for liquidity on the part of the principals; and
(c) their desire for diversification and a reduction in their
exposure to a single firm's results. Substantially all the
key employees of Affiliated Firms continue to be vigorously
involved in their firm long after its acquisition by UAM.
In purchasing investment management firms, UAM has
structured the consideration of the transactions in order to
create incentives for the key personnel to remain with their
firm after the expiration of their employment agreements. The
key employees have entered into employment and non-competition
agreements for terms ranging primarily from five to twelve
years, which also prohibit the employees from competing with
their firm for a substantial period after termination of
employment. Most of the key employees of the Affiliated Firms
were stockholders of such firms prior to their acquisition by
UAM. In connection with the purchases, the former
stockholders and/or key employees have typically received
consideration in the form of cash, subordinated notes and
warrants to purchase UAM Common Stock, or UAM Common Stock.
The subordinated notes, which may be used to exercise the
warrants, generally have terms between five and ten years.
The key employees of each Affiliated Firm also participate
directly, through a revenue sharing arrangement, in revenues
of their firm and meet the firm's expenses from their share of
these revenues, as described more fully under "Revenue
Sharing."
UAM has over the past several years identified a
substantial number of institutional investment management
firms both domestically and internationally which it believes
may be candidates for future acquisition on the basis of an
evaluation of their personnel, investment approach, client
base, revenues and profitability.
To fund acquisitions, the Company utilizes its existing
capital, together with Operating Cash Flow (net income plus
amortization and depreciation) and borrowings available under
the $500,000,000 Reducing
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Revolving Credit Agreement (as more fully described in Note 3
to the Consolidated Financial Statements, see Items 8 and 14).
Such borrowings are secured by the stock of the Company's
subsidiaries.
REVENUE SHARING
UAM operates with the Affiliated Firms under "revenue
sharing" agreements. The agreements permit each Firm to
retain a specified percentage of its revenues (typically 50-
70%) for use by its principals at their discretion in paying
expenses of operation, including salaries and bonuses. The
purposes of the agreements are to provide significant ongoing
incentives for the principals of the Affiliated Firms to
continue working as they did prior to the sale of their firm
to UAM and to allow UAM to participate in the growth of
revenues of each Affiliated Firm. The agreements are designed
to allow each Firm's principals to participate in that Firm's
growth in a substantial manner and to make operating decisions
freely within the limits of that portion of the Firm's
revenues which is retained under the Firm's control. In
effect, the portion of its revenues retained by each Firm that
is not used to pay salaries and other operating expenses is
available for payment to the principals and other key
employees of such Firm in the form of bonuses. Thus, the
portion of Affiliated Firm revenues retained by the Firms is
included in operating expenses in the UAM Consolidated
Statement of Income.
Under each agreement, when an Affiliated Firm is acquired
by UAM, the "base revenues" of the Firm are established, and a
share of such revenues is allocated to UAM, with the remaining
balance being the acquired Firm's share of revenues. In
addition, agreement is reached on the Firm's and UAM's
respective percentage shares of changes in such Firm's
revenues compared to its base revenues. The Affiliated Firm
is required to pay for all of its business expenses out of its
share of its revenues. Each year, the amount of the
Affiliated Firm's revenues that is paid to UAM and the amount
that is retained by the Firm are adjusted upwards in the case
of growth in such Firm's revenues over its base, or downwards
in the case of decreases in such Firm's revenues below its
base, by applying the agreed-upon percentages to the total
increase or decrease in the Firm's revenues. Under most of the
existing revenue sharing agreements, UAM's share of increases
above a Firm's base revenues is between 30% and 50%, and UAM's
share of decreases below a Firm's base revenues is between 50%
and 70%. Thus, in any year in which the Affiliated Firm's revenues
increase over its base revenues, the Firm retains a portion of
such additional amounts to use as its principals may decide.
The balance of the increase in the Affiliated Firm's revenues
is paid to UAM, in addition to UAM's share of such Firm's base
revenues. In any year in which the Affiliated Firm's revenues
decrease to a level below its base revenues, the Firm's share
of its base revenues is reduced by the Firm's portion of the
decrease, and therefore, the Firm may need to reduce its
expenses. Similarly, the revenue sharing amount paid to UAM
will be reduced by UAM's share of any decline in the
Affiliated Firm's revenues below its base.
AFFILIATED FIRMS
Each of the Affiliated Firms conducts its own marketing,
client relations, research, portfolio management and
administrative functions. Each Firm sets its own investment
advisory fees and manages its business independently on a day-
to-day basis.
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The investment philosophy, style and approach of each
Affiliated Firm are independently determined by it, and these
philosophies, styles and approaches may vary substantially
from Firm to Firm. As a consequence, more than one Affiliated
Firm may be retained by a single client since many clients
employ multiple investment advisers. The strategies employed
and securities selected by Affiliated Firms are separately
chosen by each of them, with the result that any one Firm may
be bullish on the stock or bond market while another Firm is
bearish. Two of the Affiliated Firms are full-service
institutional real estate investment management firms with
$12.5 billion of assets under management at year end. These
Firms invest in real estate properties in the U.S. and
overseas for their U.S. and foreign clients and provide a
broad spectrum of real estate services, including research,
acquisition and disposition, financing and asset and property
management. In addition, another Affiliated Firm, with $7.0
billion of assets under management at year end, manages stable
value asset portfolios such as guaranteed investment contracts
("GICs") and synthetic GICs.
All of these differences, when combined with the separate
names and identities of the various Affiliated Firms may: (a)
tend to insulate UAM from the various cycles of market
performance for specific asset classes and individual Firms;
(b) permit more than one Affiliated Firm to serve any single
client; and (c) mean that some Affiliated Firms may attract
substantial new business while other Firms may be growing more
slowly or losing business.
On December 31, 1994, UAM's 41 Affiliated Firms had 5,600
clients with $104.0 billion of assets under management for an
average account size of $18.6 million. The 20 largest clients
of the Firms represented 16% of total assets under management
and the 100 largest clients represented 36%. The client list
includes many of the largest corporate, public, charitable and
union funds in the U.S. and abroad along with the funds of many
individuals, several mutual fund organizations and a number of
professional groups. Additional information regarding the
number of clients and types and amounts of assets under
management is found in the table on page 32 of the Company's
1994 Annual Report to Shareholders (the "Annual Report"), which
table is incorporated herein by reference.
The following table summarizes UAM's asset mix:
<TABLE>
<CAPTION>
Assets Under Management at December 31,
(in $ millions) 1992 1993 1994
--------------- ---------------- ----------------
<S> <C> <C> <C>
U.S. Equities 66% $49,562 57% $ 57,305 50% $ 52,546
U.S. Bonds and Cash 28 20,816 23 23,116 20 20,530
International Equities 2 1,300 9 8,449 9 9,274
International Bonds and Cash 1 852 2 2,356 1 1,313
Real Estate 3 2,536 9 8,858 13 13,389
Stable Value - - - - 7 6,994
--- ------- --- -------- --- --------
100% $75,066 100% $100,084 100% $104,046
--- ------- --- -------- --- --------
--- ------- --- -------- --- --------
</TABLE>
In February 1995, UAM acquired Provident Investment
Counsel, a growth stock manager based in Pasadena, California
with approximately $14.3 billion of assets under management.
Provident manages growth equity portfolios for institutional
clients and has a growing presence in balanced and fixed-income
management, wrap-fee accounts and mutual funds.
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As previously described, each of the Affiliated Firms is
responsible for and provides its own marketing of its
investment management services. Typically, one or more of the
employees at each Firm is responsible for making an initial
contact with prospective clients. Most Firms have brochures
describing the Firm, its principals and its investment
approach. These brochures are mailed to prospective clients.
In addition, clients are solicited by telephone and in person.
Once an initial contact is made, several face-to-face meetings
between the principals of such Firm and the prospective client
take place at which investment philosophy, management fees and
a variety of other related matters are discussed.
REGULATION
UAM's domestic investment advisory subsidiaries are
registered with and subject to regulation by the Securities
and Exchange Commission (the "SEC") under the Investment
Advisers Act of 1940 and, where applicable, under state
advisory laws. The Company's U.K. investment advisory
affiliates are members of and subject to regulation by the
Investment Management Regulatory Organization, a self-regulatory
body organized under the U.K. Financial Services Act. The
Company's brokerage subsidiaries are registered as broker-dealers
with the SEC under the Securities Exchange Act of 1934 (the
"Exchange Act") and, where applicable, under state securities
laws, and are regulated by the SEC, state securities
administrators, and the National Association of Securities
Dealers, Inc. Three Affiliated Firms are regulated by the
Commodities Futures Trading Commission, and two own trust
companies which are subject to regulation by the Office of
Comptroller of the Currency or applicable state law.
UAM's domestic investment advisory subsidiaries are
subject to ERISA and to regulations promulgated thereunder to
the extent they are "fiduciaries" under ERISA with respect to
their clients.
Registrations, reporting, maintenance of books and records and
compliance procedures required by these laws and regulations
promulgated thereunder are maintained by each UAM subsidiary
on an independent basis.
The officers, directors and employees of UAM's investment
advisory subsidiaries may from time to time own securities which are
also owned by one or more of their clients. Each such Firm
has internal guidelines and codes of ethics with respect to
individual investments, and requires reporting of securities
transactions and restricts certain transactions so as to
minimize possible conflicts of interest.
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UAM's Affiliated Firms as of December 31, 1994 are listed
below in the order in which they were acquired or organized.
<TABLE>
<CAPTION>
PRINCIPAL ACQUIRED
AFFILIATED FIRM LOCATION OR ORGANIZED
--------------- --------- ------------
<S> <C> <C>
Nelson, Benson & Zellmer, Inc. Denver, CO August, 1983
Chicago Asset Management Company Chicago, IL October, 1983
Hamilton, Allen & Associates, Inc. Atlanta, GA February, 1984
Hellman, Jordan Management Company, Inc. Boston, MA August, 1984
Thompson, Siegel & Walmsley, Inc. Richmond, VA December, 1984
Sterling Capital Management Company Charlotte, NC December, 1984
Analytic Investment Management, Inc. Irvine, CA May, 1985
Northern Capital Management, Inc. Madison, WI January, 1986
Cooke & Bieler, Inc. Philadelphia, PA February, 1986
Olympic Capital Management, Inc. Seattle, WA June, 1986
Fiduciary Management Associates, Inc. Chicago, IL June, 1986
Investment Counselors of Maryland, Inc. Baltimore, MD December, 1986
Hagler, Mastrovita & Hewitt, Inc. Boston, MA December, 1986
Rothschild/Pell, Rudman & Co., Inc. Baltimore, MD December, 1986
Rice, Hall, James & Associates San Diego, CA May, 1987
C.S. McKee & Company, Inc. Pittsburgh, PA August, 1987
Hanson Investment Management Company San Rafael, CA August, 1987
Barrow, Hanley, Mewhinney & Strauss, Inc. Dallas, TX January, 1988
Sirach Capital Management, Inc. Seattle, WA January, 1989
Dewey Square Investors Corporation Boston, MA May, 1989
HT Investors, Inc. Providence, RI May, 1989
The Campbell Group, Inc. Portland, OR May, 1989
Cambiar Investors, Inc. Englewood, CO August, 1990
Newbold's Asset Management, Inc. Bryn Mawr, PA September, 1990
First Pacific Advisors, Inc. Los Angeles, CA June, 1991
Spectrum Asset Management, Inc. Stamford, CT November, 1991
Acadian Asset Management, Inc. Boston, MA February, 1992
Alpha Global Fixed Income Managers London, England March, 1992
The L&B Group Dallas, TX June, 1992
NWQ Investment Management Company Los Angeles, CA October, 1992
Tom Johnson Investment Management, Inc. Oklahoma City, OK December, 1992
Regis Retirement Plan Services, Inc. New York, NY February, 1993
Pell, Rudman & Co., Inc. Boston, MA March, 1993
Ki Pacific Asset Management London, England June, 1993
Heitman Financial Ltd. Chicago, IL August, 1993
Murray Johnstone Limited Glasgow, Scotland November, 1993
GSB Investment Management, Inc. Fort Worth, TX December, 1993
Dwight Asset Management Company Burlington, VT January, 1994
Investment Research Company Chicago, IL February, 1994
Suffolk Capital Management New York, NY July, 1994
United Asset Management (Japan), Inc. Tokyo, Japan October, 1994
</TABLE>
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EMPLOYEES
The UAM holding company has forty-five employees, seven of
whom are executive officers of UAM (see Item 10, Directors and
Executive Officers). Each Affiliated Firm employs its own
investment advisory, administrative and operations personnel as
needed to provide advisory services to its clients and to maintain
necessary records in accordance with various regulatory agencies
(see "Affiliated Firms" and "Regulation" on pages 6 and 8,
respectively). At December 31, 1994, the Company as a whole employed
1,875 persons. These numbers exclude 2,155 individuals who are
employed by the property management subsidiaries of The L&B Group
and Heitman Financial Ltd. and whose total compensation is billed
directly to clients of these affiliates.
ITEM 2. PROPERTY
UAM's only offices are its executive offices in Boston,
Massachusetts, which occupy approximately 15,000 square feet under
a lease which expires in 1997. Affiliated Firms are likewise
lessees of their respective offices under leases which expire at
various dates.
ITEM 3. LEGAL PROCEEDINGS
Certain of the Company's subsidiaries are subject to legal
proceedings arising in the ordinary course of business. On the
basis of information presently available and advice received from
counsel, it is the opinion of management that the disposition or
ultimate determination of such legal proceedings will not have a
material adverse effect on the financial position of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to the vote of the security holders
of the Company during the fourth quarter of the fiscal year covered
by this report.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
As of December 31, 1994, there were 495 shareholders of
record. As of March 8, 1995, there were 509 shareholders of
record. The balance of the information required by this item is
incorporated herein by reference to the "Common Stock Information"
appearing on page 51 of the Annual Report.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein
by reference to the "Ten Year Review" appearing on pages 36 and 37
of the Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information required by this item is incorporated herein
by reference to the "Management's Discussion and Analysis"
appearing on pages 33 through 35 of the Annual Report.
10
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by
reference to the "Selected Quarterly Financial Data" on page 51 of
the Annual Report, "Consolidated Financial Statements" and "Notes to
Consolidated Financial Statements" appearing on pages 38 through 50
of the Annual Report and also the "Report of Independent
Accountants" on page 50 of the Annual Report. (See also the
"Financial Statement Schedule" filed under Item 14 of this Form 10-K.)
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item is incorporated herein
by reference to the sections entitled "Election of Directors-
Nominees for Election as Directors" and "Executive Compensation-
Executive Officers" included in the Company's Proxy Statement for
the Annual Meeting of Stockholders to be held on May 18, 1995 (the
"Proxy Statement").
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein
by reference to the sections entitled "Executive Compensation-
Summary Compensation Table," "Executive Compensation-Option Grants
in 1994," "Executive Compensation-Aggregated Option Exercises in
1994 and Option Values at December 31, 1994" and "Election of
Directors-Directors' Fees" included in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information required by this item is incorporated herein
by reference to the section entitled "Voting Securities" included
in the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein
by reference to the section entitled "Election of Directors-Certain
Transactions" included in the Proxy Statement.
11
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS
ON FORM 8-K
(a) 1. Financial Statements
The following consolidated financial statements of United
Asset Management Corporation and report of independent
accountants, included on pages 38 through 50 of the Annual
Report, are incorporated herein by reference as a part of this
Form 10-K:
PAGE(S) IN THE
TITLE ANNUAL REPORT
----- --------------
Report of Independent Accountants 50
Consolidated Balance Sheet as of December 31, 1994
and 1993 38
Consolidated Statement of Income for the three years 39
ended December 31, 1994
Consolidated Statement of Cash Flows for the three 40
years ended December 31, 1994
Consolidated Statement of Changes in Stockholders' 41
Equity for the three years ended December 31, 1994
Notes to Consolidated Financial Statements 42-50
(a) 2. Financial Statement Schedule
The following consolidated financial statement schedule and
report of independent accountants are filed as a part of this
Form 10-K and are located on the following pages:
PAGE
----
Report of Independent Accountants on Financial F-1
Statement Schedule
Schedule VIII Valuation and Qualifying Accounts for F-3
the three years ended December 31, 1994
All other schedules have been omitted since they are not
required, not applicable or the information is contained in
the Financial Statements or Notes thereto.
12
<PAGE>
a) 3. Exhibits
EXHIBIT
NUMBER TITLE
------- -----
3.1 Restated Certificate of Incorporation of the
Registrant.
3.2 By-Laws of the Registrant.
(1) 4.1 Specimen Certificate of Common Stock,
$.01 par value, of the Registrant.
(2) 4.2 Agreement to furnish copies of subordinated debt
instruments to the Commission.
9.0 Not Applicable
(3) 10.1 Acquisition Agreement by and among
United Asset Management Corporation,
Heitman Financial Ltd., JMB
Institutional Realty Corporation, JMB
Realty Corporation and Certain
Affiliates of JMB Institutional Realty
Corporation and JMB Realty Corporation
dated as of October 18, 1994.
(3) 10.2 Acquisition Agreement by and among
United Asset Management Corporation,
Provident Investment Counsel, PIC Newco,
Inc. and the Stockholders of Provident
Investment Counsel dated as of November
10, 1994.
10.3 Second Amended and Restated Reducing
Credit Agreement dated as of November
18, 1994, among United Asset Management
Corporation, the banks parties thereto,
Morgan Guaranty Trust Company of New
York, as Agent, and The First National
Bank of Boston, as Collateral Agent.
(4) 10.4 United Asset Management Corporation Profit
Sharing and 401(k) Plan dated as of May
11, 1989 and amended and restated as of
November 26, 1990.
(5) 10.5 Revised First Amendment to United Asset
Management Corporation Profit Sharing
and 401(k) Plan effective as of January 1, 1992.
(5) 10.6 Second Amendment to United Asset
Management Corporation Profit Sharing
and 401(k) Plan effective as of January 1, 1993.
10.7 Third Amendment to United Asset Management
Corporation Profit Sharing and 401(k)
Plan effective as of January 1, 1994.
10.8 1994 Stock Option Plan.
10.9 1994 Eligible Directors Stock Option Plan.
13
<PAGE>
(6) 10.10 Consulting Agreement between United Asset
Management Corporation and David I.
Russell dated as of January 1, 1993.
11.1 Calculation of Earnings Per Share.
12.0 Not Applicable
13.1 Annual Report to Shareholders for the
Year Ended December 31, 1994.
16.0 Not Applicable
18.0 Not Applicable
21.1 Subsidiaries of the Registrant.
22.0 Not Applicable
23.1 Consent of Independent Accountants.
24.0 Not Applicable
27.0 Not Applicable
28.0 Not Applicable
_________________
(1) Filed as an Exhibit to the Company's Form S-1 as filed
with the Commission and which became effective
on August 22, 1986, and incorporated herein by
reference (Registration No. 33-6874).
(2) Filed as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31,
1988, and incorporated herein by reference.
(3) Filed as an Exhibit to the Company's Current Report on
Form 8-K as filed with the Commission on
December 1, 1994, and incorporated herein by reference.
(4) Filed as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31,
1990, and incorporated herein by reference.
(5) Filed as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1993, and
incorporated herein by reference.
(6) Filed as an Exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31,
1992, and incorporated herein by reference.
Location of Documents Pertaining to Executive
Compensation Plans and Arrangements:
(1) 1994 Stock Option Plan - Exhibit 10.8 to this Form
10-K.
(2) 1994 Eligible Directors Stock Option Plan - Exhibit
10.9 to this Form 10-K.
14
<PAGE>
(3) Consulting Agreement between United Asset
Management Corporation and David I. Russell dated
as of January 1, 1993 - Form 10-K for fiscal year ended
December 31, 1992, Exhibit 10.10 to this Form 10-K.
(b) Reports on Form 8-K
A report on Form 8-K was filed on October 12, 1994. The item
reported was as follows:
Item 5. OTHER EVENTS.
-------------
The report disclosed the terms of the Amended
and Restated Reducing Credit Agreement dated
as of August 29, 1994.
A report on Form 8-K was filed on December 1, 1994 (and
amended on March 2, 1995). The items reported and financial
statements filed were as follows:
Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
-------------------------------------
Item 5. OTHER EVENTS.
-------------
The report disclosed the terms of the Second Amended
and Restated Reducing Credit Agreement dated as
of November 18, 1994.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
----------------------------------
(a) FINANCIAL STATEMENTS OF BUSINESSES TO BE ACQUIRED.
--------------------------------------------------
(i) JMB Institutional Realty Corporation (referred
to as "JMB Business Group") Combined Audited Balance
Sheets for the Two Years Ended December 31, 1993
and Combined Statements of Income and Cash Flows for
the Three Years Ended December 31, 1993.
(ii) JMB Institutional Realty Corporation Combined Unaudited
Financial Statements for the Nine Months Ended
September 30, 1994.
(iii) Provident Investment Counsel Audited Financial
Statements for the Years Ended December 31, 1992 and 1991.
(iv) Provident Investment Counsel Audited Financial Statements
for the Years Ended December 31, 1993 and 1992.
(v) Provident Investment Counsel Unaudited Financial Statements
for the Nine Months Ended September 30, 1994.
15
<PAGE>
(b) PRO FORMA FINANCIAL INFORMATION.
--------------------------------
(i) Summary of Historical and Pro Forma Financial Highlights
for the Year Ended December 31, 1993 and the Nine Months
Ended September 30, 1994.
(ii) Unaudited Pro Forma Condensed Combined Balance Sheet of
UAM as of December 31, 1993.
(iii) Unaudited Pro Forma Condensed Combined Statement of
Operations of UAM for the Year Ended December 31, 1993.
(iv) Unaudited Pro Forma Condensed Combined Balanced Sheet of
UAM as of September 30, 1994.
(v) Unaudited Pro Forma Condensed Combined Statement of
Operations of UAM for the Nine Months Ended September 30,
1994.
(c) EXHIBITS.
---------
EXHIBIT NUMBER TITLE
-------------- -----
2.1 Acquisition Agreement by and among
United Asset Management Corporation,
Heitman Financial Ltd., JMB
Institutional Realty Corporation, JMB
Realty Corporation and Certain
Affiliates of JMB Institutional Realty
Corporation and JMB Realty Corporation
dated as of October 18, 1994.
2.2 Acquisition Agreement by and among
United Asset Management Corporation,
Provident Investment Counsel, PIC Newco,
Inc. and the Stockholders of Provident
Investment Counsel dated as of November 10, 1994.
2.3 Agreement to Furnish Copies of
Omitted Schedules and Exhibits to
Acquisition Agreements.
24 Consents of Independent Accountants.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
UNITED ASSET MANAGEMENT CORPORATION
(Registrant)
Date: March 17, 1995 By /s/ NORTON H. REAMER
---------------------------------
Norton H. Reamer
President and
Chief Executive Officer
By /s/ WILLIAM H. PARK
---------------------------------
William H. Park
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant in
the capacities and on the dates indicated.
/s/ NORTON H. REAMER
-------------------------------
(Norton H. Reamer) Director March 17, 1995
/s/ RICHARD A. ENGLANDER
-------------------------------
(Richard A. Englander) Director March 17, 1995
/s/ ROBERT J. GREENEBAUM
-------------------------------
(Robert J. Greenebaum) Director March 17, 1995
/s/ MARK A. LIEB
-------------------------------
(Mark A. Lieb) Director March 17, 1995
/s/ JAY O. LIGHT
-------------------------------
(Jay O. Light) Director March 17, 1995
/s/ JOHN F. MCNAMARA
-------------------------------
(John F. McNamara) Director March 17, 1995
/s/ NORMAN PERLMUTTER
-------------------------------
(Norman Perlmutter) Director March 17, 1995
/s/ EDWARD I. RUDMAN
-------------------------------
(Edward I. Rudman) Director March 17, 1995
/s/ DAVID I. RUSSELL
-------------------------------
(David I. Russell) Director March 17, 1995
/s/ PHILIP SCATURRO
-------------------------------
(Philip Scaturro) Director March 17, 1995
/s/ JOHN A. SHANE
-------------------------------
(John A. Shane) Director March 17, 1995
/s/ BARBARA S. THOMAS
-------------------------------
(Barbara S. Thomas) Director March 17, 1995
17
<PAGE>
Exhibit 11.1
UNITED ASSET MANAGEMENT CORPORATION
CALCULATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Common and common equivalent
shares:
Net income......................... $59,012 $53,287 $39,072
Adjustments thereto (1)............ - - 331
------- ------- -------
Adjusted net income................ $59,012 $53,287 $39,403
------- ------- -------
------- ------- -------
Average shares outstanding......... 28,084 25,968 23,157
Adjustments thereto (2)............ 1,441 2,913 3,176
------- ------- -------
Shares used in computation........... 29,525 28,881 26,333
------- ------- -------
------- ------- -------
Per share............................ $ 2.00 $ 1.85 $ 1.50
------- ------- -------
------- ------- -------
Common shares-assuming full
dilution:
Net income......................... $59,012 $53,287 $39,072
Adjustments thereto (1)............ - - -
------- ------- -------
Adjusted net income................ $59,012 $53,287 $39,072
------- ------- -------
------- ------- -------
Average shares outstanding......... 28,084 25,968 23,157
Adjustments thereto (2)............ 1,486 3,127 3,487
------- ------- -------
Shares used in computation........... 29,570 29,095 26,644
------- ------- -------
------- ------- -------
Per share............................ $ 2.00 $ 1.83 $ 1.47
------- ------- -------
------- ------- -------
<FN>
______________
(1) The proceeds from the exercise of stock options and warrants
in accordance with the modified treasury stock method are
first used to buy back up to 20% of the CompanyOs common stock
at the average price for the period in the primary calculation
and at the higher of the average or closing price in the fully
diluted calculation. Any remaining proceeds are used to
retire debt, and this adjusts income for the interest assumed
to be saved net of income tax from the use of such proceeds.
(2) Adjusts shares for stock options and warrants under the
modified treasury stock method and contingently issuable
shares based on the probability of issuance, after adjusting
for the stock assumed repurchased in accordance with (1)
above.
</TABLE>
18
<PAGE>
Exhibit 21.1
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES OF THE REGISTRANT
Jurisdiction of Financial
Affiliated Firm Organization Statements
--------------- --------------- ----------
Acadian Asset Management, Inc. Massachusetts Consolidated
Alpha Global Fixed Income Managers Delaware Consolidated
Analytic Investment Management, Inc. California Consolidated
Barrow, Hanley, Mewhinney & Strauss, Inc. Nevada Consolidated
Cambiar Investors, Inc. Colorado Consolidated
The Campbell Group, Inc. Delaware Consolidated
Chicago Asset Management Company Delaware Consolidated
Cooke & Bieler, Inc. Pennsylvania Consolidated
Dewey Square Investors Corporation Delaware Consolidated
Dwight Asset Management Company Delaware Consolidated
Fiduciary Management Associates, Inc. Delaware Consolidated
First Pacific Advisors, Inc. Massachusetts Consolidated
GSB Investment Management, Inc. Delaware Consolidated
Hagler, Mastrovita & Hewitt, Inc. Delaware Consolidated
Hamilton, Allen & Associates, Inc. Delaware Consolidated
Hanson Investment Management Company California Consolidated
Heitman Financial Ltd. Delaware Consolidated
Heitman Properties Ltd.(1) Illinois Consolidated
Heitman/JMB Advisory Corporation Illinois Consoldiated
Hellman, Jordan Management Company, Inc. Delaware Consolidated
HT Investors, Inc. Delaware Consolidated
Investment Counselors of Maryland, Inc. Maryland Consolidated
Investment Research Company Illinois Consolidated
Tom Johnson Investment Management, Inc. Massachusetts Consolidated
Ki Pacific Asset Management, Inc. Delaware Consolidated
L&B Realty Advisors, Inc. (The L&B Group) Delaware Consolidated
L&B Institutional Property Managers, Inc.(2) Delaware Consolidated
L&B Real Estate Counsel Texas Consoldiated
C.S. McKee & Company, Inc. Pennsylvania Consolidated
Murray Johnstone Limited Scotland Consolidated
Nelson, Benson & Zellmer, Inc. Colorado Consolidated
NewboldOs Asset Management, Inc. Pennsylvania Consolidated
Northern Capital Management, Inc. Wisconsin Consolidated
NWQ Investment Management Company Massachusetts Consolidated
Olympic Capital Management, Inc. Washington Consolidated
Pell, Rudman & Co., Inc. Delaware Consolidated
Regis Retirement Plan Services, Inc. Massachusetts Consolidated
Rice, Hall, James & Associates California Consolidated
Rothschild/Pell, Rudman & Co., Inc. Maryland Consolidated
Sirach Capital Management, Inc. Washington Consolidated
Spectrum Asset Management, Inc. Connecticut Consolidated
Sterling Capital Management Company North Carolina Consolidated
Suffolk Capital Management Delaware Consolidated
Thompson, Siegel & Walmsley, Inc. Virginia Consolidated
United Asset Management (Japan), Inc. Delaware Consolidated
All of the Registrant's subsidiaries do business under the respective names
indicated above and are wholly-owned.
(1) Heitman Properties, Ltd. has 42 wholly-owned property management
subsidiaries operating in the U.S.
(2) L&B Institutional Property Managers, Inc. has 5 wholly-owned property
management subsidiaries operating in the U.S.
19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors
of United Asset Management Corporation
Our audits of the consolidated financial statements referred
to in our report dated February 15, 1995 appearing on page 50
of the 1994 Annual Report to Shareholders of United Asset
Management Corporation (which report and consolidated
financial statements are incorporated by reference in this
Annual Report on Form 10-K) also included an audit of the
Financial Statement Schedule listed in Item 14(a) of this Form
10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set
forth therein when read in conjunction with the related
consolidated financial statements.
/s/ PRICE WATERHOUSE LLP
Boston, Massachusetts
February 15, 1995
F-1
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectuses constituting part of the Registration Statements
on Form S-3 (Nos. 33-36928, 33-44215, 33-46310, 33-63350, 33-
69034, 33-51443, 33-52517 and 33-57049) and in the
Registration Statements on Form S-8 (Nos. 33-10621, 33-21756,
33-34288, 33-48858 and 33-54233) of United Asset Management
Corporation of our report dated February 15, 1995 appearing on
page 50 of the Annual Report to Shareholders which is
incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the
Financial Statement Schedule, which appears on page F-1 of
this Form 10-K.
/s/ PRICE WATERHOUSE LLP
Boston, Massachusetts
March 17, 1995
F-2
<PAGE>
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
VALUATION AND QUALIFYING ACCOUNTS Schedule VIII
(in $ thousands)
Cost Assigned
to Contracts Acquired Accumulated Amortization
----------------------------------------- -----------------------------------------------------
Range Weighted Ending
of Average Tax
Estimated Estimated Balance
Remaining Remaining Beginning Ending Beginning Charged to Ending in Excess
Firm Lives Lives Balance Additions Other Balance Balance Operations Other Balance of Book
---- --------- --------- --------- --------- ----- -------- --------- ---------- ----- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1992
----
BHM&S 10-11 10 $106,088 $ - $ - $106,088 $ 27,072 $ 7,284 $ - $ 34,356 $ 7,707
FPA 4-22 13 51,016 16 - 51,032 1,804 3,533 - 5,337 1,271
NAM 3-21 14 53,934 1,086 - 55,020 4,567 3,422 - 7,989 (A)
NWQ 4-13 12 - 96,011 - 96,011 - 1,597 - 1,597 627
All Others 1-22 9 264,689 57,268 - 321,957 98,863 21,443 - 120,306 55,154
-------- -------- ----- -------- -------- ------- ----- -------- -------
$475,727 $154,381 $ - $630,108 $132,306 $37,279 $ - $169,585 $64,759
-------- -------- ----- -------- -------- ------- ----- -------- -------
-------- -------- ----- -------- -------- ------- ----- -------- -------
1993
----
BHM&S 9-10 9 $106,088 $ - $ - $106,088 $ 34,356 $ 7,284 $ - $ 41,640 $ 7,979
FPA 3-21 12 51,032 - - 51,032 5,337 3,533 - 8,870 2,432
NAM 2-20 13 55,020 - - 55,020 7,989 3,422 - 11,411 (A)
NWQ 3-12 11 96,011 65 - 96,076 1,597 8,078 - 9,675 12,869
All Others 1-21 9 321,957 49,610 - 371,567 120,306 26,176 - 146,482 54,247
-------- -------- ----- -------- -------- ------- ----- -------- -------
$630,108 $ 49,675 $ - $679,783 $169,585 $48,493 $ - $218,078 $77,527
-------- -------- ----- -------- -------- ------- ----- -------- -------
-------- -------- ----- -------- -------- ------- ----- -------- -------
1994
----
BHM&S 8-9 8 $106,088 $ - $ - $106,088 $ 41,640 $ 7,284 $ - $ 48,924 $14,774
FPA 2-20 11 51,032 - - 51,032 8,870 3,533 - 12,403 4,998
HFL 4-22 15 - 212,668 - 212,668 - 1,142 - 1,142 -
NAM 1-19 9 55,020 - - 55,020 11,411 4,311 - 15,722 (A)
NWQ 2-11 10 96,076 - - 96,076 9,675 8,077 - 17,752 16,788
All Others 1-20 8 371,567 36,878 (755) 407,690 146,482 30,774 (755) 176,501 49,665
-------- -------- ----- -------- -------- ------- ----- -------- -------
$679,783 $249,546 $(755) $928,574 $218,078 $55,121 $(755) $272,444 $86,225
-------- -------- ----- -------- -------- ------- ----- -------- -------
-------- -------- ----- -------- -------- ------- ----- -------- -------
<FN>
(A)Due to the structure of this acquisition, tax amortization is less than book amortization.
</TABLE>
F-3
<PAGE>
Exhibit 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
UNITED ASSET MANAGEMENT CORPORATION
Pursuant to Section 245 of the General
Corporation Law of the State of Delaware
United Asset Management Corporation, a corporation duly organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), does hereby certify as follows:
FIRST: That the original Certificate of Incorporation was filed with the
Secretary of the State of Delaware on December 4, 1980; that said certificate
was amended and restated by a restated certificate of incorporation filed on
February 21, 1985; that such restated certificate was further amended by
certificates of amendment filed on January 17, 1986 and June 24, 1986; and
that such restated certificate was amended and restated by a restated
certificate of incorporation filed on June 2, 1987;
SECOND: That the restated certificate of incorporation, as amended, is
hereby further amended by striking out Article 4(a) thereof and by
substituting in lieu thereof new Article 4(a) which is set forth in the
Restated Certificate of Incorporation hereinafter set forth. The provisions of
the restated certificate of incorporation of the Corporation as amended and
supplemented, is hereby restated and integrated into the single instrument
which is entitled Restated Certificate of Incorporation of United Asset
Management Corporation without any further amendment other than the amendment
herein certified and without any discrepancy between the provisions of the
restated certificate of incorporation as heretofore amended and supplemented
and the provisions of the said single instrument hereinafter set forth,
THIRD: That the Certificate of Incorporation of the Corporation is hereby
amended and restated to read in its entirety as follows:
1. The name of the Corporation is United Asset Management Corporation.
2. The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the city of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3. The nature of the business to be conducted or promoted and the
purpose of the Corporation is: To be a holding company of which the
subsidiaries engage in the institutional investment management business and to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
4. Authorized Stock:
(a) The Corporation is authorized to issue two classes of shares of
capital stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of all such shares shall be Two
Hundred Five Million (205,000,000). The total number of shares of Common
Stock authorized to be issued shall be Two Hundred Million (200,000,000),
with a par value of one penny ($.01) per share. The total number of
shares of Preferred Stock authorized to be issued shall be Five Million
(5,000,000), with a par value of one dollar ($1.00) per share.
(b) The shares of Preferred Stock may be issued by the Board of
Directors from time to time in one or more series. The Board of Directors
is hereby authorized to establish from time to time by resolution or
resolutions the number of shares to be included in each such series, and
to fix the designations, powers, preferences and rights of the shares of
each such series and the qualifications, limitations or restrictions
thereof, including but not limited to the fixing or alteration of the
dividend rights, dividend rate or rates, conversion rights, voting
rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, and the liquidation
preferences of any wholly unissued series of shares of Preferred Stock,
and the number of shares constituting any such series and the designation
thereof, or any or all of them; and to increase or decrease the number of
shares of any series subsequent to the issue of
<PAGE>
shares of that series, but not below the number of shares of such series
then outstanding. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the status
which they had prior to the adoption of the resolution originally fixing
the number of shares of such series.
5. The Corporation is to have perpetual existence.
6. In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or
repeal the by-laws of the Corporation.
7. Elections of directors need not be by written ballot unless the
by-laws of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of
Delaware, as the by-laws may provide. The books of the Corporation may be
kept, subject to any provision contained in the statutes, outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the by-laws of the Corporation.
8. A Director of this Corporation shall not be liable to the Corporation
or its stockholders for monetary damages or breach of fiduciary duty as a
Director, except to the extent such exemption from liability or limitation
thereof is not permitted under the Delaware General Corporation Law as the
same now exists or may hereafter be amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the Corporation shall not adversely affect any right or protection of a
Director of the Corporation relating to such Director's conduct prior to the
time of such repeal or modification.
9. The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
FOURTH: The amendment and the restatement of the Restated Certificate of
Incorporation herein certified has been duly adopted by the stockholders in
accordance with the provisions of Section 242 and of Section 245 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said United Asset Management Corporation has caused
this certificate to be signed by Norton H. Reamer, its President, and John C.
Vincent, Jr., its Secretary, this day of May, 1994.
UNITED ASSET MANAGEMENT
CORPORATION
By: ..............................
Norton H. Reamer, President
ATTEST:
By: ..............................
John C. Vincent, Jr.,
Secretary
2
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
---ooOoo---
B Y - L A W S
---ooOoo---
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election of
directors shall be held in the City of Boston, State of Massachusetts, at such
place as may be fixed from time to time by the board of directors, or at such
other place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting. Meetings of stockholders for any other purpose may be held at
such time and place, within or without the State of Delaware, as shall be stated
in the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders, commencing with the year
1981, shall be held on the second Wednesday of May if not a legal holiday, and
if a legal holiday, then on the next secular day following, at 10:00 A.M., or at
such other date and time as shall be designated from time to time by the board
of directors and stated in the notice of
<PAGE>
the meeting, at which they shall elect by a plurality vote a board of directors,
and transact such other business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the place,
date and hour of the meeting shall be given to each stockholder entitled to vote
at such meeting not less than ten nor more than sixty days before the date of
the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting stating the place,
date and hour of the meeting and the purpose or purposes for which the meeting
is called, shall be given not less than ten nor more than sixty days before the
date of the meeting, to each stockholder entitled to vote at such meeting.
<PAGE>
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at such a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
<PAGE>
Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action which may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall not be less than one or more than twelve. The first board shall
consist of one director. Thereafter, within the limits above specified, the
number of directors shall be determined by resolution of the board of directors
or by the stockholders at the annual meeting. The directors shall be elected at
the annual meeting of the stockholders, except as provided in Section 2 of this
Article, and each director shall hold office until his successor is elected and
qualified. Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, though less than a quorum, or by a sole
remaining director, and the directors so chosen shall hold office until the next
annual election and until their successors are duly elected and shall qualify,
unless sooner displaced. If there are no directors in office, then an election
of directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute
<PAGE>
less than a majority of the whole board (as constituted immediately prior to any
such increase), the Court of Chancery may, upon application of any stockholder
or stockholders holding at least ten percent of the total number of shares at
the time outstanding having the right to vote for such directors, summarily
order an election to be held to fill any such vacancies or newly created
directorships, or to replace the directors chosen by the directors then in
office.
Section 3. The business of the corporation shall be managed by or
under the direction of its board of directors which may exercise all such powers
of the corporation and do all such lawful acts and things as are not by statute
or by the certificate of incorporation or by these by-laws directed or required
to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time as
determined by the board.
<PAGE>
Section 7. Special meetings of the board may be called by the
president on two days' notice to each director, either personally or by mail or
by telegram; special meetings shall be called by the president or secretary in
like manner and on like notice on the written request of two directors unless
the board consists of only one director; in which case special meetings shall be
called by the president or secretary in like manner and on like notice on the
written request of the sole director.
Section 8. At all meetings of the board a majority of the board of
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of
incorporation or these by-laws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.
Section 10. Unless otherwise restricted by the certificate of
incorporation or these by-laws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
<PAGE>
COMMITTEES OF DIRECTORS
Section 11. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee.
In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the board of directors.
Section 12. Each committee shall keep regular minutes of its meetings
and report the same to the board of directors when required.
<PAGE>
COMPENSATION OF DIRECTORS
Section 13. Unless otherwise restricted by the certificate of
incorporation or these by-laws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
REMOVAL OF DIRECTORS
Section 14. Unless otherwise restricted by the certificate of
incorporation or by law, any director or the entire board of directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
by-laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
<PAGE>
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-presidents,
and one or more assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the certificate of incorporation
or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by
the board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
<PAGE>
Section 7. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 8. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
the authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by his signature or by the signature of such
assistant secretary. The board of directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
his signature.
<PAGE>
Section 10. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the board of directors (or
if there be no such determination, then in the order of their election) shall,
in the absence of the secretary or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the secretary and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 13. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors
(or if there be no such
<PAGE>
determination, then in the order of their election), shall, in the absence of
the treasurer or in the event of his inability or refusal to act, perform the
duties and exercise the powers of the treasurer and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled
to have a certificate, signed by, or in the name of the corporation by, the
chairman or vice-chairman of the board of directors, or the president or a
vice-president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the corporation, certifying the number of shares owned
by him in the corporation.
Certificates may be issued for partly paid shares and in such case
upon the face or back of the certificates issued to represent any such partly
paid shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.
Section 2. Any of or all the signatures on the certificate may be
facsimile. In case any officer, transfer or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such
<PAGE>
lost, stolen or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
to give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting: provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as
<PAGE>
the owner of shares, and shall not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation,
subject to the provisions of the certificate of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the certificate or incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by vote
of the stockholders, a full and clear statement of the business and condition of
the corporation.
<PAGE>
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEARS
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name
of the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
INDEMNIFICATION
Section 7. The corporation shall indemnify its officers, directors,
employees and agents to the extent permitted by the General Corporation Law of
Delaware.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed or new
by-laws may be adopted by the stockholders or by the board of directors, when
such power is conferred upon the board of directors by the certificate or
incorporation at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption of new
by-laws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal by-laws is conferred upon the board of directors by the
certificate of
<PAGE>
incorporation it shall not divest or limit the power of the stockholders to
adopt, amend or repeal by-laws.
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
UNITED ASSET MANAGEMENT CORPORATION
THE SEVERAL BANKS AND OTHER
FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, AS AGENT
AND
THE FIRST NATIONAL BANK OF BOSTON, AS COLLATERAL AGENT
DATED AS OF NOVEMBER 18, 1994
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION I. DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . . . . 2
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Accounting Terms and Determinations. . . . . . . . . . . . . . .19
1.3 Other Definitional Terms. . . . . . . . . . . . . . . . . .20
SECTION II AMOUNTS AND TERMS OF LOANS. . . . . . . . . . . . . . . . .20
2.1 Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.2 Notice of Borrowing. . . . . . . . . . . . . . . . . . . . . . .21
2.3 Disbursement of Funds. . . . . . . . . . . . . . . . . . . . . .21
2.4 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . .23
2.5 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . .23
2.6 Interest Periods. . . . . . . . . . . . . . . . . . . . . . . .24
2.7 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . .25
2.8 Voluntary Termination or Reduction and
Mandatory Reduction of Total Commitment. . . . . . . . . . . . .26
2.9 Prepayments. . . . . . . . . . . . . . . . . . . . . . . . . . .27
2.10 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . .28
2.11 Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . .29
2.12 Interest Rate Not Ascertainable, Etc.. . . . . . . . . . . . . .29
2.13 Illegality.. . . . . . . . . . . . . . . . . . . . . . . . . . .30
2.14 Increased Costs; Capital Adequacy; Regulation D
Compensation.. . . . . . . . . . . . . . . . . . . . . . . . . .31
2.15 Change of Lending Office.. . . . . . . . . . . . . . . . . . . .34
2.16 Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . .34
2.17 Sharing of Payments, Etc.. . . . . . . . . . . . . . . . . . . .35
SECTION III REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . .35
3.1 Organization and Qualification.. . . . . . . . . . . . . . . . .35
3.2 Corporate Authority. . . . . . . . . . . . . . . . . . . . . .36
3.3 Valid Obligations. . . . . . . . . . . . . . . . . . . . . . .36
3.4 Governmental Approvals.. . . . . . . . . . . . . . . . . . . . .36
3.5 Title to Properties; Absence of Encumbrances.. . . . . . . . . .36
3.6 Financial Statements.. . . . . . . . . . . . . . . . . . . . . .37
3.7 Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . .37
3.8 Events of Default. . . . . . . . . . . . . . . . . . . . . . . .37
3.9 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . .37
3.10 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . .38
3.11 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .38
3.12 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . .38
3.13 Compliance with ERISA. . . . . . . . . . . . . . . . . . . . . .39
i
<PAGE>
3.14 Securities and Exchange Commission Registrations
and Filings, Etc. . . . . . . . . . . . . . . . . . . . . . .39
3.15 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . .40
3.16 Pledge Agreement and Security Agreement. . . . . . . . . . . . .40
3.17 Revenue Sharing Agreements.. . . . . . . . . . . . . . . . . . .41
3.18 Compliance with Laws.. . . . . . . . . . . . . . . . . . . . . .41
3.19 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION IV CONDITIONS OF LOANS . . . . . . . . . . . . . . . . . . . .41
4.1 Conditions Precedent to Effectiveness and to
Initial Loans. . . . . . . . . . . . . . . . . . . . . . . . . .41
4.2 Conditions Precedent to Each Loan. . . . . . . . . . . . . . . .44
SECTION V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . .45
5.1 Financial Statements. . . . . . . . . . . . . . . . . . . . .45
5.2 Conduct of Business. . . . . . . . . . . . . . . . . . . . . .47
5.3 Maintenance of Insurance.. . . . . . . . . . . . . . . . . . . .47
5.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . .48
5.5 Inspection by the Banks. . . . . . . . . . . . . . . . . . . . .48
5.6 Maintenance of Books and Records. . . . . . . . . . . . . . . .48
5.7 Current Ratio. . . . . . . . . . . . . . . . . . . . . . . . . .48
5.8 Cash Flow Ratios.. . . . . . . . . . . . . . . . . . . . . . . 48
5.9 Consolidated Net Worth. . . . . . . . . . . . . . . . . . . . 49
5.10 Consolidated Liabilities for Borrowed Money to
Consolidated Net Worth Ratio. . . . . . . . . . . . . . . . . 49
5.11 Senior Indebtedness to Capital Funds. . . . . . . . . . . . . 49
5.12 Limitations on Indebtedness. . . . . . . . . . . . . . . . . 50
5.13 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.14 Restriction on Encumbrances. . . . . . . . . . . . . . . . . 53
5.15 Merger; Consolidation; Sale or Lease of Assets . . . . . . . . 55
5.16 Additional Stock Issuance. . . . . . . . . . . . . . . . . . 55
5.17 Investments, Loans. . . . . . . . . . . . . . . . . . . . . . 55
5.18 Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.19 Notification of Default. . . . . . . . . . . . . . . . . . . 56
5.20 Notification of Material Litigation; Material
Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . 56
5.21 Change in Terms and Prepayment of Subordinated and
Other Indebtedness. . . . . . . . . . . . . . . . . . . . . . 57
5.22 Pledged Collateral. . . . . . . . . . . . . . . . . . . . . . 57
5.23 Restricted Payments. . . . . . . . . . . . . . . . . . . . . 59
5.24 Contingent Payments. . . . . . . . . . . . . . . . . . . . . 60
5.25 Transactions with Affiliates. . . . . . . . . . . . . . . . . 61
5.26 Revenue Sharing Agreements. . . . . . . . . . . . . . . . . . 61
5.27 Further Assurances. . . . . . . . . . . . . . . . . . . . . . 61
5.28 Investment in Aldrich, Eastman & Waltch, L.P. . . . . . . . . 61
ii
<PAGE>
SECTION VI DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . 61
6.1 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.2 Remedies on Default. . . . . . . . . . . . . . . . . . . . . 64
6.3 Money Market Loans. . . . . . . . . . . . . . . . . . . . . . 65
SECTION VII THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . 65
7.1 Appointment of Agents. . . . . . . . . . . . . . . . . . . . 65
7.2 Nature of Duties of Agents. . . . . . . . . . . . . . . . . . 66
7.3 Lack of Reliance on the Agents.. . . . . . . . . . . . . . . . 66
7.4 Certain Rights of the Agents. . . . . . . . . . . . . . . . . 67
7.5 Reliance by Agents. . . . . . . . . . . . . . . . . . . . . . 67
7.6 Indemnification of Agents. . . . . . . . . . . . . . . . . . 67
7.7 Each Agent in its Individual Capacity. . . . . . . . . . . . 68
7.8 Holders of Notes. . . . . . . . . . . . . . . . . . . . . . . 68
7.9 Successor Agents.. . . . . . . . . . . . . . . . . . . . . . . 68
SECTION VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 69
8.1 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.2 Expenses and Indemnity. . . . . . . . . . . . . . . . . . . . 70
8.3 Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.4 Application of Set-Offs. . . . . . . . . . . . . . . . . . . 72
8.5 Term of Agreement. . . . . . . . . . . . . . . . . . . . . . 72
8.6 Consents, Amendments, Waivers, etc. . . . . . . . . . . . . . 73
8.7 Benefit of Agreement.. . . . . . . . . . . . . . . . . . . . . 74
8.8 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 75
8.9 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . 75
8.10 Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . 75
8.11 No Third Party Rights. . . . . . . . . . . . . . . . . . . . 76
8.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 76
8.13 Partial Invalidity. . . . . . . . . . . . . . . . . . . . . . 76
8.14 Table of Contents and Captions. . . . . . . . . . . . . . . . 76
8.15 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . 76
8.16 Pledged Stock. . . . . . . . . . . . . . . . . . . . . . . . 76
8.17 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 77
8.18 Withholding Tax Exemption. . . . . . . . . . . . . . . . . . . 77
8.19 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . 78
iii
<PAGE>
EXHIBITS: A. . . . . . . . . . . . . . . Commitments
B. . . . . . . . . . . . . . . Form of Confirmation and Amendment
C. . . . . . . . . . . . . . . Agreements Providing for Contingent
Payments
D. . . . . . . . . . . . . . . Heitman Permitted Indebtedness and
Encumbrances
E-1. . . . . . . . . . . . . . Form of Tranche A Note
E-2. . . . . . . . . . . . . . Form of Tranche B Note
F. . . . . . . . . . . . . . . Subordinated Indebtedness
G. . . . . . . . . . . . . . . Form of Subordination
Agreement/Subordinated Note
H. . . . . . . . . . . . . . . Form of Notice of Borrowing
I. . . . . . . . . . . . . . . Encumbrances
J. . . . . . . . . . . . . . . Litigation
K. . . . . . . . . . . . . . . Subsidiaries
L. . . . . . . . . . . . . . . Subscription Rights, Warrants, etc.
M-1. . . . . . . . . . . . . . Opinion of Hill & Barlow
M-2. . . . . . . . . . . . . . Opinion of Wildman, Harrold, Allen
& Dixon
N. . . . . . . . . . . . . . . Revenue and Contract Amortization
History
O. . . . . . . . . . . . . . . Indebtedness
iv
<PAGE>
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 18,
1994, by and among UNITED ASSET MANAGEMENT CORPORATION, a Delaware corporation
(the "Company"), having its chief executive office at One International Place,
100 Oliver Street, Boston, Massachusetts 02110, the several banks and other
financial institutions from time to time parties to this Agreement (the
"Banks"), MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York banking
corporation, as agent for the Banks (in such capacity, the "Agent") and THE
FIRST NATIONAL BANK OF BOSTON, a national banking association, as collateral
agent for the Banks (in such capacity, the "Collateral Agent", and together with
the Agent, the "Agents"). All capitalized terms used herein and defined in
Section 1.1 are used herein as so defined.
R E C I T A L S:
(A) The Company, the Banks, the Agent and the Collateral Agent are
parties to that certain Amended and Restated Credit Agreement, dated as of
August 29, 1994 (the "Original Credit Agreement"), pursuant to which such Banks
have agreed to make certain loans to the Company from time to time upon the
terms and subject to the conditions therein set forth.
(B) The Company has requested that the aggregate amount of the
"Commitments" under the Original Credit Agreement be increased from $400,000,000
to $500,000,000, such amount to be allocated between two tranches of
$400,000,000 and $100,000,000, respectively.
(C) The parties hereto desire to make certain other amendments to
the Original Credit Agreement, as more particularly set forth herein.
(D) For convenience of reference, the Company, the Banks, the Agent
and the Collateral Agent desire to amend and restate the Original Credit
Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Original Credit Agreement is
hereby amended and restated to read in its entirety as follows:
<PAGE>
SECTION I.
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS. In addition to the terms defined above, capitalized
terms used in this Agreement or in the Notes or in any certificate, report or
other document made or delivered pursuant to this Agreement shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the terms defined):
AFFILIATE. Of any Person means any other Person (i)
directly or indirectly controlling, controlled by, or under common
control with, such Person, whether through the ownership of voting
securities, by contract or otherwise, (ii) which directly or
indirectly beneficially owns or holds 5% or more of any class of
voting stock of the Company or any of its Subsidiaries, (iii) 5% or
more of any class of the voting stock of which is directly or
indirectly owned or held by the Company or any of its Subsidiaries or
(iv) which is a partnership in which the Company or any of its
Subsidiaries is a general partner.
AGREEMENT. This Agreement, including all schedules and
exhibits hereto, as the same may be amended, supplemented or otherwise
modified from time to time.
AMORTIZATION AMOUNT. The meaning assigned to such term
in Section 5.11.
APPLICABLE TRANCHE A CD RATE MARGIN. For any day
during any fiscal quarter, the percentage indicated below opposite the
applicable Level as at the last day of the second preceding fiscal
quarter of the Company:
Applicable Tranche A CD
Rate Margin from the
Closing Date through Applicable Tranche A
and including the CD Rate Margin after
Level Conversion Date Conversion Date
----- ----------------------- --------------------
1 .875% 1.125%
2 1.000% 1.250%
3 1.125% 1.375%
4 1.375% 1.625%
APPLICABLE TRANCHE A COMMITMENT FEE RATE. For any day during any fiscal
quarter of the Company, the percentage indicated below opposite the applicable
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Level as at the last day of the second preceding fiscal quarter of the Company:
Applicable Tranche A
Level Commitment Fee Rate
----- ---------------------
1 .25%
2 .30%
3 .35%
4 .50%
APPLICABLE TRANCHE A EURODOLLAR RATE MARGIN. For any day during any fiscal
quarter of the Company, the percentage indicated below opposite the applicable
Level as at the last day of the second preceding fiscal quarter of the Company:
Applicable Tranche A
Eurodollar Rate Margin Applicable Tranche A
from the Closing Date Eurodollar Rate
through and including Margin after
Level the Conversion Date the Conversion Date
----- ---------------------- ---------------------
1 .750% 1.000%
2 .875% 1.125%
3 1.000% 1.250%
4 1.250% 1.500%
APPLICABLE TRANCHE B CD RATE MARGIN. For any day during any period set
forth below, the percentage indicated below opposite such period:
Applicable Tranche B
Period CD Rate Margin
------ --------------------
Closing Date through 5/18/95 1.125%
5/19/95 through 8/18/95 1.375%
8/19/95 and thereafter. 1.625%
APPLICABLE TRANCHE B COMMITMENT FEE RATE. For any day during any period
set forth below, the percentage indicated below opposite such period:
Applicable Tranche B
Period Commitment Fee Rate
------ --------------------
Closing Date through 5/18/95 .375%
5/19/95 and thereafter .50%
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<PAGE>
APPLICABLE TRANCHE B EURODOLLAR RATE MARGIN. For any day during any period
set forth below, the percentage indicated below opposite such period:
Applicable Tranche B
Period Eurodollar Rate Margin
------ ----------------------
Closing Date through 5/18/95 1.00%
5/19/95 through 8/18/95 1.25%
8/19/95 and thereafter. 1.50%
ASSESSMENT RATE. For any Interest Period, the net annual assessment rate
(rounded upward, if necessary, to the next higher 1/100 of 1%) actually
incurred by Morgan to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring time
deposits at offices of Morgan in the United States during the most recent
period for which such rate has been determined prior to the commencement of
such Interest Period.
ASSIGNMENT OF PARTNERSHIP INTEREST. The Pledge and Assignment of Limited
Partnership Interests, dated as of May 18, 1992, made by UAM Realty
Advisors to the Collateral Agent, as the same may be amended, supplemented
or otherwise modified from time to time.
BAILEE NOTICE. The meaning assigned to such term in Section 3.16(a).
BANKRUPTCY CODE. Title 11 of the United States Code entitled "Bankruptcy",
as now or hereafter in effect, or any successor thereto.
BASE RATE. For any day, a rate per annum equal to the greater of (a) the
Prime Lending Rate in effect on such day or (b) one-half of one percent
(1/2%) per annum in excess of the Federal Funds Effective Rate in effect on
such date. For purposes of this Agreement, any change in the Base Rate due
to a change in the Prime Lending Rate shall be effective on the date such
change in the Prime Lending Rate is announced, and any change in the Base
Rate due to a change in the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Federal Funds Effective Rate.
If for any reason Morgan shall have determined (which determination shall
be conclusive absent manifest error) that it is unable to ascertain for any
day the Federal Funds Effective Rate for any reason, including,without
limitation, the inability or failure of Morgan to obtain sufficient bids or
publications in accordance with the terms hereof, the Base Rate shall be
the Prime
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<PAGE>
Lending Rate until the circumstances giving rise to such inability no
longer exist.
BASE RATE LOAN. Any Loan bearing interest at the rate provided in Section
2.5(a).
BKB. The First National Bank of Boston, a national banking association.
BORROWED MONEY. Indebtedness incurred by any Person for borrowed money,
whether secured or unsecured, senior or subordinated.
BORROWING. A Tranche A Borrowing or a Tranche B Borrowing.
BUSINESS DAY. (i) For all purposes other than as covered by clause (ii)
below, any day on which banks are not authorized or required to close in
Boston, Massachusetts or New York, New York and (ii) with respect to all
notices and determinations in connection with, and payments of principal
and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between
banks in Dollar deposits in the applicable interbank Eurodollar market.
CAPITAL FUNDS. Consolidated Net Worth plus (i)Subordinated Indebtedness
outstanding on August 29, 1994 and(ii) Subordinated Indebtedness created
after August 29, 1994 no portion of the principal of which is due and
payable by the Company prior to a date 180 days following the Termination
Date.
CASH FLOW. For any period of determination, all amounts that should, in
accordance with GAAP, be included as income from operations before interest
expense and taxes and before amortization of original issue discount, debt
issue expense and value of acquired contracts, PLUS depreciation of real
and personal property and leasehold improvements.
CD BASE RATE. With respect to each Interest Period,the rate of interest
determined by the Agent to be the average (rounded upward, if necessary, to
the next higher 1/100 of 1%) of the prevailing rates per annum bid at 10:00
A.M. (New York City time) (or as soon thereafter as practicable) on the
first day of such Interest Period by two or more New York certificate of
deposit dealers of recognized standing for the purchase at face value from
each Reference Bank of its certificates of deposit in an amount comparable
to the principal amount of the CD Rate Loan of such Reference
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<PAGE>
Bank to which such Interest Period applies and having a maturity comparable
to such Interest Period.
CD RATE LOAN. Any Loan bearing interest at the rate provided in Section
2.5(b).
CLOSING DATE. November 18, 1994.
CODE. The Internal Revenue Code of 1986 and the rules and regulations
thereunder, collectively, as now or hereafter in effect, or any successor
thereto.
COLLATERAL. Collectively, (a) the "Collateral" as such term is defined in
each of the Pledge Agreement, the Subsidiaries Pledge Agreement, the
Security Agreement, the Subsidiaries Security Agreement, the DSI Pledge
Agreement, the Heitman Pledge Agreement, the UAM U.K. Holdings Pledge
Agreement and the Assignment of Partnership Interest, and (b) to the extent
not otherwise included in clause (a) above, and subject to the provisions
of Section 5.22(c), all capital stock of any Subsidiary, hereafter created
or acquired by the Company or by any Subsidiary of the Company.
COMMITMENT. For each Bank, such Bank's Tranche A Commitment and, in the
case of each Tranche B Bank, such Tranche B Bank's Tranche B Commitment.
COMMITMENT AMOUNT. For each Bank, the aggregate amount of its Tranche A
Commitment Amount and its Tranche B Commitment Amount, if any.
COMMITMENT PERCENTAGE. For each Bank, (i) at any time prior to the Tranche
B Termination Date or the earlier termination of the Tranche B Commitments,
such Bank's Total Commitment Percentage as specified on Exhibit A hereto,
and (ii) thereafter, such Bank's Tranche A Commitment Percentage as
specified on Exhibit A hereto, in each case as adjusted to reflect
assignments pursuant to Section 8.7.
CONFIRMATION AND AMENDMENT. The Guaranty and Security Documents
Confirmation and Amendment, dated as of the date here of, among the
Company, the Guaranty Subsidiaries, the Banks and the Agents, substantially
in the form of Exhibit B hereto, as the same may be amended, supplemented
or otherwise modified from time to time.
CONSOLIDATED CASH FLOW. For any period of determination, Cash Flow of the
Company and its Subsidiaries determined on a consolidated basis.
-6-
<PAGE>
CONSOLIDATED DEBT SERVICE. At any date, (a) all amounts that should in
accordance with GAAP be included, on a consolidated basis, as (i) payments
of principal on Indebtedness scheduled to arise during the four (4)
complete consecutive calendar quarters commencing with the quarter during
which such date of determination arises and including the three (3)
succeeding quarters and (ii) payments of interest due during the period
consisting of the four (4)complete consecutive calendar quarters
immediately preceding such date of determination, (including, for purposes
of clause (i) and (ii) above, the Loans but excluding payments of principal
on the Loans required to be made at the end of an Interest Period if
amounts at least equal to such payments will be available (such prospective
availability to be determined as of the date Consolidated Cash Flow is
determined) to be simultaneously re-borrowed by the Company pursuant to the
Commitments) PLUS (b) the aggregate of all amounts declared or paid
(without duplication) as dividends on the capital stock of the Company
during the period off our (4) complete calendar quarters immediately
preceding such date of determination.
CONSOLIDATED NET WORTH. At any date the consolidated stockholders' equity
of the Company and its Subsidiaries less their consolidated Intangible
Assets, all determined as of such date. For purposes of this definition
"Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (i) all write-ups
(other than write-ups resulting from foreign currency translations and
write-ups of assets of a going concern business made within twelve months
after the acquisition of such business) subsequent to December 31,1993 in
the book value of any asset owned by the Company or a Subsidiary, (ii) all
investments in unconsolidated Subsidiaries and all equity investments in
Persons which are not Subsidiaries and (iii) all unamortized debt discount
and expense, unamortized deferred charges, goodwill, trademarks,service
marks, trade names, anticipated future benefit of tax loss carry-forwards,
copyrights, organization or developmental expenses and other intangible
assets; PROVIDED, HOWEVER, that Consolidated Net Worth shall include the net
book value of investment advisory contracts acquired.
CONTINGENT PAYMENTS. Those amounts required to be paid in cash by the
Company under existing or future agreements among the Company, any of its
Subsidiaries and selling stockholders of any such Subsidiaries relating to
the payment of additional purchase price
-7-
<PAGE>
for Subsidiaries contingent upon future operating performance of such
Subsidiaries, including, without limitation, under the agreements set forth
on Exhibit C hereto.
CONTROLLED GROUP. All members of a controlled group of corporations and
all trades or businesses (whether or not incorporated) under common control
which, together with the Company, are treated as a single employer under
Section 414(b) or 414(c) of the Code.
CONVERSION DATE. August 29, 1996 as such date may be amended from time to
time.
CREDIT LYONNAIS. Collectively, Credit Lyonnais New York Branch, a branch
duly licensed under the laws of the State of New York of Credit Lyonnais, a
banking corporation organized and existing under the laws of the Republic
of France, with respect to Base Rate Loans and CD Rate Loans,and Credit
Lyonnais Cayman Island Branch, a branch duly licensed under the laws of the
Cayman Islands of Credit Lyonnais, a banking corporation organized and
existing under the laws of the Republic of France, with respect to
Eurodollar Loans.
DEFAULT. Any event or condition which, with notice or lapse of time, or
both, would constitute an Event of Default.
DEUTSCHE BANK. Collectively, Deutsche Bank AG, New York Branch, a branch
duly licensed under the laws of the State of New York of Deutsche Bank AG,
a banking corporation organized and existing under the laws of the Republic
of Germany, with respect to Base Rate Loans and CD Rate Loans,and Deutsche
Bank AG, Cayman Islands Branch, a branch duly licensed under the laws of
the Cayman Islands of DeutscheBank AG, a banking corporation organized and
existing under the laws of the Republic of Germany, with respect to
Eurodollar Loans.
DOLLAR AND THE SIGN "$". Lawful money of the United States of America.
DOMESTIC RESERVE PERCENTAGE. For any day, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves)for a member bank of the Federal Reserve
System in New York City with deposits exceeding five
-8-
<PAGE>
billion dollars in respect of new non-personal time deposits in dollars in
New York City having a maturity comparable to the related Interest Period
and in an amount of $100,000 or more. The Fixed CD Rate shall be adjusted
automatically on and as of the effective date of any change in the Domestic
Reserve Percentage.
DSI. Dewey Square Investors Corporation, a Delaware corporation and a
Subsidiary of UAM Holdings.
DSI GUARANTY. The DSI Guaranty, dated as of May 18, 1992, made by DSI in
favor of the Beneficiaries named therein, as the same may be amended,
supplemented or otherwise modified from time to time.
DSI PLEDGE AGREEMENT. The DSI Pledge Agreement dated as of May 18, 1992
made by DSI in favor of the Collateral Agent, for the ratable benefit of
the Banks, as the same may be amended, supplemented or otherwise modified
from time to time.
EACH AGENT. The Agent or the Collateral Agent.
ENCUMBRANCES. Any mortgage, pledge, security interest, lien or other
charge or encumbrance, including the lien or retained security title of a
conditional vendor.
ERISA. The Employee Retirement Income Security Act of 1974 and the rules
and regulations thereunder, collectively,as now or hereafter in effect, or
any successor thereto.
EURODOLLAR LOAN. Any Loan bearing interest at the rate provided in Section
2.5(c).
EURODOLLAR RESERVE PERCENTAGE. For any day, that percentage (expressed as
a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the Federal Reserve
System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category
of liabilities which includes deposits by reference to which the interest
rate on Eurodollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office
of any Bank to United States residents).
EXCHANGE ACT. Securities Exchange Act of 1934, as now or hereafter in
effect, or any successor thereto.
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<PAGE>
EVENT OF DEFAULT. The meaning given to such term in Section 6.1.
FEDERAL FUNDS EFFECTIVE RATE. For any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, PROVIDED that (i) if such day is not
a Business Day, the Federal Funds Effective Rate for such day shall be such
rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if no such rate is
so published on such next succeeding Business Day, the Federal Funds
Effective Rate for such day shall be the average rate quoted to Morgan on
such day on such transactions as determined by the Agent.
FIXED CD RATE. With respect to each Interest Period, a rate per annum
determined pursuant to the following formula:
[ CDBR ]*
FCDR = [ ---------- ] + AR
[ 1.00 - DRP ].
FCDR = Fixed CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
_________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
FIXED RATE LOAN. Any Loan made to the Company by the Banks as a CD Rate
Loan or Eurodollar Loan.
GAAP. Generally accepted accounting principles in the United States of
America in effect from time to time.
GUARANTEES. All guarantees, endorsements or other contingent or surety
obligations with respect to Indebtedness of others, whether or not
reflected on the balance sheet of a Person, including any obligation to
furnish funds, directly or indirectly (whether by virtue of partnership
arrangements, by agreement to keep-well or otherwise), through the purchase
of goods, supplies, services or by way of stock purchase, capital
contribution, advance or loan or otherwise, or to enter into a contract
for any of the foregoing, for the
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purpose of providing financial support to any other Person.
GUARANTY SUBSIDIARIES. Collectively, UAM Holdings, UAM Trademark, UAM
Investment, DSI, Heitman, UAM U.K. Holdings and UAM Realty Advisors.
HEITMAN. Heitman Financial Ltd., an Illinois corporation and a Subsidiary
of the Company.
HEITMAN PERMITTED INDEBTEDNESS. The Indebtedness of Heitman and its
Subsidiaries set forth on Exhibit D hereto.
HEITMAN GUARANTY. The Heitman Guaranty, dated as of August 25, 1993, made
by Heitman in favor of the Beneficiaries named therein, as the same may be
amended, supplemented or otherwise modified from time to time.
HEITMAN PLEDGE AGREEMENT. The Heitman Pledge Agreement, dated as of August
25, 1993, made by Heitman in favor of the Collateral Agent, for the ratable
benefit of the Banks, as the same may be amended, supplemented or otherwise
modified from time to time.
INDEBTEDNESS. As applied to any Person, without duplication, (i) all
obligations for Borrowed Money or other extensions of credit, whether or
not secured, (ii)obligations representing the deferred purchase price of
property or services other than Contingent Payments,(iii) all obligations
evidenced by bonds, notes, debentures or other similar instruments, (iv)
all obligations secured by any mortgage, pledge, security interest or other
lien on property owned or acquired, whether or not the obligations secured
thereby shall have been assumed, (v) all obligations as lessee under
capital leases, (vi) all Unfunded Vested Liabilities, (vii) all Guarantees,
and (viii) all contingent reimbursement obligations under or in respect of
undrawn letters of credit.
INTEREST EXPENSE. For any period, interest expense for such period as
determined on a consolidated basis for the Company and its Subsidiaries.
INTEREST PERIOD. The meaning given to such term in Section 2.6.
INVESTMENT ADVISERS ACT. Investment Advisers Act of 1940, as now or
hereafter in effect, or any successor thereto.
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INVESTMENT AGREEMENT. The Investment Agreement, dated as of March 20,
1991, by and among the Company, UAM Realty Advisors, Aldrich, Eastman &
Waltch, Inc. and certain stockholders of Aldrich, Eastman & Waltch, Inc.
LENDING OFFICE. For each Bank the office specified opposite such Bank's
name on the signature pages here of with respect to each Type of Loan, or
such other office as such Bank may designate in writing from time to time
to the Company and the Agent with respect to such Type of Loan.
LEVEL. Level 1, Level 2, Level 3 or Level 4. The determination of the
applicable Level as at the last day of any fiscal quarter of the Company
shall be based upon the certificate (on which the Agent may conclusively
rely absent manifest error) of the chief financial officer of the Company
furnished to the Banks pursuant to Section 5.1(d) in respect of such fiscal
quarter. In the event that the Company shall have failed to timely furnish
the financial statements and reports required by subsections (a), (b) or
(d) of Section 5.1, the applicable Level shall be Level 4 until such
financial statements and reports shall have been so furnished.
LEVEL 1. At any date of determination thereof, (i)Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
more than 600% of Interest Expense for such period AND (ii) the ratio of
(A)consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries to (B) Total Capital is less than 0.5:1.0.
LEVEL 2. At any date of determination thereof, (i) Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
more than 450% of Interest Expense for such period and (ii) the ratio of
(A) consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries to (B) Total Capital is less than 0.6:1.0.
LEVEL 3. At any date of determination thereof, (i) Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
more than 300% of Interest Expense for such period and (ii) the ratio of
(A) consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries to (B) Total Capital is less than 0.7:1.0.
LEVEL 4. At any date of determination thereof, (i) Consolidated Cash Flow
for the period of four consecutive fiscal quarters ended on such date is
equal
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to or less than 300% of Interest Expense for such period and (ii) the ratio
of (A) consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries to (B) Total Capital is equal to or greater than 0.7:1.0.
LOAN. Any Tranche A Loan or Tranche B Loan.
LOAN DOCUMENTS. Collectively, this Agreement, the Notes, the Security
Documents, the Subsidiaries Guaranty,the DSI Guaranty, the UAM Realty
Advisors Guaranty, the Heitman Guaranty, UAM U.K. Holdings Guaranty, the
Confirmation and Amendment, the Trademark Subordination Agreement and any
other instruments, documents and agreements referred to herein or related
hereto in favor of the Agents, or either of them, or the Banks.
LONDON INTERBANK OFFERED RATE. With respect to each Interest Period means
the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered
to each of the Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount approximately equal to the
principal amount of the Eurodollar Loan of such Reference Bank to which
such Interest Period is to apply and for a period of time comparable to
such Interest Period.
MONEY MARKET LOANS. Loans made by a Bank to the Company of the type
described in Section 5.12(m).
MORGAN. Morgan Guaranty Trust Company of New York, a New York banking
corporation.
MURRAY JOHNSTONE. Murray Johnstone Holdings Limited, a company
incorporated in Scotland and a Subsidiary of the Company.
NOTES. Collectively, the Tranche A Notes and the Tranche B Notes.
NOTICE OF BORROWING. The meaning given to such term in Section 2.2(a).
OBLIGATIONS. Any and all obligations of the Company to the Agent, the
Collateral Agent or the Banks, of every kind and description, direct or
indirect, absolute or contingent, primary or secondary, due or to become
due, arising under or in connection with this Agreement, the Notes or any
of the other Loan Documents or under or in
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connection with any Money Market Loan and including, without
limitation, obligations to perform acts and refrain from taking action as
well as obligations to pay money, which includes, without limitation, the
Loans and the Money Market Loans.
ORIGINAL CREDIT AGREEMENT. The meaning given to such term in the Recitals
hereto.
PARENT. With respect to any Bank, any Person controlling such Bank.
PAYMENT OFFICE. The Agent's office located at 60 Wall Street, New York,
New York 10260, ABA # 021000238, for credit to: Loan Department -
Syndications Unit, Account No.999-99-090, Attention: Syndications Unit,
Reference: United Asset Management Corporation.
PBGC. The Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.
PERMITTED BUSINESSES. The businesses of managing securities or other portfolios
(including but not limited to real estate, timber and foreign
currencies) and related activities, PROVIDED, HOWEVER, that the Relevant
Cash Flow of all Subsidiaries of the Company engaged primarily in the
business of managing securities shall at all times equal or exceed sixty
percent (60%) of the Relevant Cash Flow of all of the Company's
Subsidiaries. For any Subsidiary, the "Relevant Cash Flow" shall mean the
greater of (i) the cash flow of such Subsidiary for the four complete
consecutive fiscal quarters of such Subsidiary immediately preceding the
acquisition (the "Acquisition") of such Subsidiary by the Company or a
Subsidiary of the Company, and (ii) the projected cash flow (calculated, if
applicable, as the "Base UAM Distribution" as defined in the Revenue
Sharing Agreement relating to such Subsidiary) of such Subsidiary for the
four complete consecutive fiscal quarters of the Company immediately
following the Acquisition, as determined by the Company at the time of the
Acquisition and set forth in projections furnished to each Bank at least
ten (10) days prior to the consummation of such Acquisition.
PERSON. A corporation, association, partnership, trust, organization,
business, individual or government or any governmental agency or political
subdivision thereof.
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PLAN. Any employee pension or other benefit plan which is subject to Title
IV of ERISA or subject to the minimum funding standards under Section 412
of the Code and is either (i) established or maintained by the Company or
any member of the Controlled Group or (ii) established or maintained
pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which the
Company or any member of the Controlled Group is making or accruing an
obligation to make contributions or has within the preceding five Plan
years made contributions.
PLEDGE AGREEMENT. The Pledge Agreement, dated as of May 18, 1992, by and
between the Company and the Collateral Agent, as the same may be amended,
supplemented or otherwise modified from time to time.
PLEDGED STOCK. The shares of capital stock of Subsidiaries which are
pledged by the Company, UAM Holdings, Heitman, UAM U.K. Holdings or DSI, as
the case may be, to the Collateral Agent pursuant to the Pledge Agreement,
the Subsidiaries Pledge Agreement, the Heitman Pledge Agreement, the UAM
U.K. Holdings Pledge Agreement or the DSI Pledge Agreement, as the case may
be.
PRIME LENDING RATE. The rate which Morgan announces from time to time as
its prime lending rate, as in effect from time to time.
RECOGNITION AGREEMENT. The Recognition Agreement, dated as of May 18, 1992,
made by Aldrich, Eastman & Waltch, L.P., AEW Holdings, L.P., Aldrich,
Eastman & Waltch, Inc. and the Agent, and consented to by the Company and
UAM Realty Advisors, as the same may be amended, supplemented or otherwise
modified from time to time.
REFERENCE BANKS. Morgan and BKB.
REGULATION D, REGULATION G, REGULATION U AND REGULATION X. Regulation D,
Regulation G, Regulation U and Regulation X, respectively, of the Board of
Governors of the Federal Reserve System as from time to time in effect and
any successor thereto.
REQUIRED BANKS. At any time, Banks holding more than 50% of the then
aggregate unpaid principal amount of all Loans or, if no such principal
amount is then outstanding,Banks having more than 50% of the aggregate
amount of the Tranche A Total Commitment and the Tranche B Total
Commitment.
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REVENUE SHARING AGREEMENTS. Agreements among the Company, any of its
Subsidiaries and Persons comprising management of any such Subsidiaries,
pursuant to which a portion of the revenues generated by such Subsidiary
are paid to the Company, as the same may be amended, supplemented or
otherwise modified from time to time.
SECURITY AGREEMENT. The Security Agreement, dated as of May 18, 1992, made
by the Company in favor of the Collateral Agent, for the ratable benefit of
the Banks, as the same may be amended, supplemented or otherwise modified
from time to time.
SECURITY DOCUMENTS. Collectively, the Security Agreement, the Subsidiaries
Security Agreement, the Pledge Agreement, the Subsidiaries Pledge
Agreement, the DSI Pledge Agreement, the Heitman Pledge Agreement, the UAM
U.K. Holdings Pledge Agreement and the Assignment of Partnership Interest.
SENIOR INDEBTEDNESS. All Indebtedness of the Company for Borrowed Money
other than Subordinated Indebtedness.
SUBORDINATED INDEBTEDNESS. The Company's (i) Indebtedness set forth on
Exhibit F hereto, and (ii) all future Indebtedness incurred by the Company
which Indebtedness is specifically subordinated to the payment in full of
all Obligations to the Banks pursuant to documentation substantially in the
form of Exhibit G hereto or pursuant to terms and conditions satisfactory
to the Required Banks.
SUBSIDIARIES GUARANTY. The Subsidiaries Guaranty, dated as of May 18, 1992,
made by UAM Holdings, UAM Trademark and UAM Investment in favor of the
Beneficiaries named therein, as the same may be amended, supplemented or
otherwise modified from time to time.
SUBSIDIARIES PLEDGE AGREEMENT. The Subsidiaries Pledge Agreement dated as
of May 18, 1992 made by UAM Holdings in favor of the Collateral Agent, for
the ratable benefit of the Banks, as the same may be amended, supplemented
or otherwise modified from time to time.
SUBSIDIARIES SECURITY AGREEMENT. The Subsidiaries Security Agreement dated
as of May 18, 1992 made by UAM Holdings, UAM Trademark and UAM Investment
in favor of the Collateral Agent, for the ratable benefit of the Banks, as
the same may be amended, supplemented or otherwise modified from time to
time.
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SUBSIDIARY. A corporation of which a majority of the outstanding shares of
stock of each class having or dinary voting power is owned by any Person,
by one or more Subsidiaries of such Person, or by such Person and one or
more of its Subsidiaries.
TERMINATION DATE. August 29, 1999.
TOTAL CAPITAL. At any date, the sum of (i) Consolidated Net Worth and (ii)
consolidated liabilities for Borrowed Money of the Company and its
Subsidiaries.
TOTAL COMMITMENT. Collectively, the Tranche A Total Commitment and the
Tranche B Total Commitment.
TRADEMARK SUBORDINATION AGREEMENT. The Subordination Agreement dated May
18, 1992 made by the Company and UAM Trademark in favor of the Banks and
the Agents, as the same may be amended, supplemented or otherwise modified
from time to time.
TRANCHE. (i) The Tranche A Commitments of the Bank sand Tranche A Loans
made pursuant hereto or (ii) the Tranche B Commitments of the Tranche B
Banks and Tranche B Loans made pursuant hereto.
TRANCHE A BORROWING. Each borrowing of Tranche A Loans pursuant to a
Notice of Borrowing consisting of the same Type of Loans having the same
Interest Period (except as otherwise provided in Sections 2.13 and 2.14)
made by all of the Banks concurrently.
TRANCHE A COMMITMENT. The meaning assigned to such term in Section 2.1(b).
TRANCHE A COMMITMENT AMOUNT. For each Bank, the amount set forth opposite
such Bank's name on Exhibit A hereto as such Bank's "Tranche A Commitment
Amount", as such amount may be reduced as provided in Section 2.8 or
adjusted to reflect assignments pursuant to Section 8.7.
TRANCHE A COMMITMENT PERCENTAGE. For each Bank, the percentage set forth
opposite such Bank's name on Exhibit A hereto as such Bank's "Tranche A
Commitment Percentage", as adjusted to reflect assignments pursuant to
Section 8.7.
TRANCHE A LOAN. Any Loan made to the Company by the Banks hereunder
pursuant to Section 2.1(a)(i).
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TRANCHE A NOTES. Promissory notes of the Company, each substantially
in the form of Exhibit E-1 hereto with the blanks appropriately
completed.
TRANCHE A TOTAL COMMITMENT. The aggregate of the Tranche
A Commitment Amounts of the Banks, which shall initially be
$400,000,000 and shall be reduced thereafter as provided in Section
2.8.
TRANCHE B BANKS. The Banks identified on Exhibit A as "Tranche B
Banks".
TRANCHE B BORROWING. Each Borrowing of Tranche B Loans pursuant to a
Notice of Borrowing consisting of the same type of Loans having the
same Interest Period (except as otherwise provided in Sections 2.13
and 2.14) made by all of the Tranche B Banks concurrently.
TRANCHE B COMMITMENT. The meaning assigned to such term in Section
2.1(b).
TRANCHE B COMMITMENT AMOUNT. For each Tranche B Bank, the amount set
forth opposite such Tranche B Bank's name on Exhibit A hereto as such
Tranche B Bank's "Tranche B Commitment Amount", as such amount may be
reduced as provided in Section 2.8 or adjusted to reflect assignments
pursuant to Section 8.7.
TRANCHE B COMMITMENT PERCENTAGE. For each Tranche B Bank, the
percentage set forth opposite such Tranche B Bank's name on Exhibit A
hereto as such Bank's "Tranche B Commitment Percentage", as adjusted
to reflect assignments pursuant to Section 8.7.
TRANCHE B LOAN. Any Loan made to the Company by the Tranche B Banks
hereunder pursuant to Section 2.1(a)(ii).
TRANCHE B NOTES. Promissory notes of the Company, each substantially
in the form of Exhibit E-2 hereto with the blanks appropriately
completed.
TRANCHE B TERMINATION DATE. November 17, 1995.
TRANCHE B TOTAL COMMITMENT. The aggregate of the Tranche B Commitment
Amounts of the Banks, which shall initially be $100,000,000 and shall
be reduced thereafter as provided in Section 2.8.
TYPE. Base Rate Loan, CD Rate Loan or Eurodollar Loan.
UAM HOLDINGS. United Asset Management Holdings, Inc., a Delaware
corporation and a Subsidiary of the Company.
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UAM TRADEMARK. United Asset Management Trademark, Inc., a Delaware
corporation and a Subsidiary of the Company.
UAM INVESTMENT. UAM Investment Corporation, a Delaware corporation and
a Subsidiary of the Company.
UAM REALTY ADVISORS. UAM Realty Advisors Investment Corporation, a
Delaware corporation and a Subsidiary of UAM Holdings.
UAM REALTY ADVISORS GUARANTY. The UAM Realty Advisors Guaranty, dated
as of May 18, 1992, made by UAM Realty Advisors in favor of the
Beneficiaries named therein, as the same may be amended, supplemented
or otherwise modified from time to time.
UAM U.K. HOLDINGS. United Asset Management U.K. Holdings, Inc., a
Delaware corporation and a Subsidiary of the Company.
UAM U.K. HOLDINGS GUARANTY. The UAM U.K. Holdings Guaranty, dated as
of November 16, 1993, made by UAM U.K. Holdings in favor of the
Beneficiaries named therein, as the same may be amended, supplemented
or otherwise modified from time to time.
UAM U.K. HOLDINGS PLEDGE AGREEMENT. The UAM U.K. Holdings Pledge
Agreement, dated as of November 17, 1993, made by UAM U.K. Holdings in
favor of the Collateral Agent, for the ratable benefit of the Banks, as
the same may be amended, supplemented or otherwise modified from time
to time.
UNFUNDED VESTED LIABILITIES. With respect to any Plan at any time, the
amount (if any) by which the present value of all vested benefits under
such Plan EXCEEDS the fair market value of all Plan assets allocable to
such benefits (excluding any accrued but unpaid contributions),
all determined as of the then most recent valuation date forsuch Plan,
but only to the extent that such excess represents a potential
liability of the Company or any member of the Controlled Group to the
PBGC or the Plan under Title IV of ERISA.
1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
defined or specified herein, all accounting terms shall be construed herein,
all accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared and all
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financial records shall be maintained in accordance with GAAP.
1.3 OTHER DEFINITIONAL TERMS. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of
this Agreement, and section, schedule, exhibit and like references are to
this Agreement unless otherwise specified. Any reference in this Agreement
to any statute or regulation or provision thereof shall be deemed to be a
reference to such statute, regulation or provision, as amended from time to
time, and to any successor statute, regulation or provision.
SECTION II
AMOUNTS AND TERMS OF LOANS
2.1 COMMITMENTS.
(a) Subject to and upon the terms and conditions herein set
forth, (i) each Bank severally agrees, at any time and from time to time
prior to the Termination Date, to make Tranche A Loans to the Company in an
amount up to but not to exceed its Tranche A Commitment Amount in effect
from time to time, and (ii) each Tranche B Bank severally agrees, at any
time and from time to time prior to the Tranche B Termination Date, to make
Tranche B Loans to the Company in an amount up to but not to exceed its
Tranche B Commitment Amount in effect from time to time.
(b) The Loans made pursuant hereto by each Bank shall, at the
option of the Company, be either Base Rate Loans, CD Rate Loans or
Eurodollar Loans; PROVIDED, THAT except as otherwise specifically provided
herein all Loans made pursuant to the same Borrowing shall be of the same
Type. The Tranche A Loans made pursuant hereto by the Banks shall not
exceed in aggregate principal amount outstanding at any one time the
Tranche A Total Commitment (each Bank's commitment to make Tranche A Loans
hereunder, as the same may be adjusted to reflect assignments pursuant to
Section 8.7 or reduced pursuant to Sections 2.8 and 5.12(m) and otherwise
from time to time, is herein referred to as its "Tranche A Commitment").
The Tranche B Loans made pursuant hereto by the Tranche B Banks shall not
exceed in aggregate principal amount outstanding at any one time the
Tranche B Total Commitment (each Tranche B Bank's commitment to make
Tranche B Loans hereunder, as the same may be adjusted to reflect
assignments pursuant to Section 8.7 or reduced pursuant to Section 2.8 and
otherwise from time to time, is herein referred to as its "Tranche B
Commitment"). There may be more than one Borrowing on any day. Within the
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foregoing limits and subject to the conditions set out in Section IV, the
Company may borrow under this Section, repay under Section 2.7, prepay
under Section 2.9 and reborrow.
(c) The aggregate principal amount of each Borrowing hereunder
shall be not less than $1,000,000, and in integral multiples of $500,000.
No more than five (5) Borrowings shall be outstanding at any one time.
2.2 NOTICE OF BORROWING.
(a) Whenever the Company desires to make a Borrowing hereunder,
it shall give the Agent (i) on the date of the requested Borrowing, written
notice of each Base Rate Loan, (ii) at least two (2) Business Days' prior
written notice of each CD Rate Loan and (iii) at least three (3) Business
Days' prior written notice of each Eurodollar Loan to be made hereunder.
Each such notice in respect of Fixed Rate Loans shall be given prior to
12:00 Noon (New York City time) on the date specified, and each such notice
in respect of Base Rate Loans shall be given prior to 10:00 A.M. (New York
City time) on the date specified. Each such notice (each, a "Notice of
Borrowing") shall be irrevocable and specify the aggregate principal amount
of the Loans to be made pursuant to such Borrowing, whether such Loans are
to be Tranche A Loans or Tranche B Loans, the anticipated use of proceeds
of such Borrowing, the aggregate amount of Money Market Loans to be
outstanding on the date of Borrowing, the date of Borrowing (which shall be
a Business Day), whether the Loans being made pursuant to such Borrowing
are to be Base Rate Loans, CD Rate Loans or Eurodollar Loans and (in the
case of Fixed Rate Loans) the Interest Period to be applicable thereto.
Each such Notice of Borrowing shall be substantially in the form of Exhibit
H hereto.
(b) Without in any way limiting the Company's obligation to
provide written notice, the Agent may act without liability upon the basis
of telephonic notice believed by the Agent in good faith to be from the
Company prior to receipt of a written confirmation. In each such case, the
Company hereby waives the right to dispute the Agent's record of the terms
of such telephonic notice.
(c) The Agent shall promptly give each Bank notice of the
proposed Borrowing, of such Bank's proportionate share thereof and of the
other matters covered by the Notice of Borrowing.
2.3 DISBURSEMENT OF FUNDS.
(a) No later than 12:00 Noon (New York City time) on the date of
each Borrowing, (i) each Bank shall
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make available its Tranche A Commitment Percentage of the amount (if any)
by which the principal amount of the Tranche A Borrowing requested to be
made on such date exceeds the principal amount of Tranche A Loans (if any)
maturing on such date, and (ii) each Tranche B Bank shall make available
its Tranche B Commitment Percentage of the amount (if any) by which the
principal amount of the Tranche B Borrowing requested to be made on such
date exceeds the principal amount of Tranche B Loans (if any) maturing on
such date, in each case in Dollars and in immediately available funds at
the Payment Office, unless the Agent has determined that any applicable
condition specified in Section IV has not been satisfied. The Agent will
make available to the Company at the Payment Office the aggregate of the
amounts (if any) so made available by the Banks. To the extent that Loans
previously made by the Banks mature on the date of a requested Borrowing,
the Banks shall apply the proceeds of the Loans they are then making, to
the extent thereof, to the repayment of such maturing Loans, such Loans and
repayments intended to be a contemporaneous exchange.
(b) Unless the Agent shall have been notified by any Bank prior
to the date of a Borrowing that such Bank does not intend to make available
to the Agent such Bank's Tranche A Commitment Percentage of any Tranche A
Borrowing to be made on such date (or, in the case of a Tranche B
Borrowing, such Tranche B Bank's Tranche B Commitment Percentage of any
Tranche B Borrowing to be made on such date), the Agent may assume that
such Bank has made such amount available to the Agent on such date and the
Agent may make available to the Company a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such
Bank on the date of Borrowing, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank together with interest at the
Federal Funds Effective Rate for each day (including to date such amount is
made available by the Agent to the Company but excluding the date of
payment by such Bank to the Agent) such amount is outstanding. If such Bank
does not pay such corresponding amount, with interest, forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Company, and
the Company shall immediately pay such corresponding amount to the Agent
together with interest at the rate specified in Section 2.5(d). Nothing in
this Section shall be deemed to relieve any Bank from its obligation to
fulfill its Commitment hereunder or to prejudice any rights which the
Company may have against any Bank as a result of any default by such Bank
hereunder.
(c) No Bank shall be responsible for any default by any other
Bank in its obligation to make Loans hereunder, and each Bank shall be
obligated to make the
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Loans provided to be made by it hereunder, regardless of the failure of any
other Bank to fulfill its Commitment hereunder.
2.4 NOTES. The Company's obligation to pay the principal of and
interest on the Tranche A Loans made by each Bank shall be evidenced by a
Tranche A Note, and in the case of Tranche A Loans by Morgan, Deutsche Bank
and Credit Lyonnais, by two Tranche A Notes, one evidencing the Company's
obligations in respect of Base Rate Loans and CD Rate Loans, and the other
evidencing the Company's obligations in respect of Eurodollar Loans. The
Company's obligation to pay the principal of and interest on the Tranche B
Loans made by each Tranche B Bank shall be evidenced by a Tranche B Note,
and in the case of Tranche B Loans by Morgan, Deutsche Bank and Credit
Lyonnais, by two Tranche B Notes, one evidencing the Company's obligations
in respect of Base Rate Loans and CD Rate Loans, and the other evidencing
the Company's obligations in respect of Eurodollar Loans. The date,
amount, Type and, in case of a Fixed Rate Loan, the Interest Period with
respect to the making or payment of each Loan made by a Bank shall be
recorded on the schedule (or continuation thereof) attached to the
applicable Note issued to such Bank. The failure to record, or any error
in recording, any Loan or repayment on such schedule (or continuation
thereof) shall not, however, affect the obligations of the Company
hereunder or under any Note to repay the principal amount of the applicable
Loans, together with all interest accruing thereon or any other amount due
and payable under the Loan Documents. Each such schedule (or continuation
thereof) as maintained by a Bank shall constitute PRIMA FACIE evidence of
the outstanding amount of Loans evidenced by such Bank's Note. Any "Loans"
(as defined in the Original Credit Agreement) outstanding under the
Original Credit Agreement and the "Notes" issued pursuant thereto as of the
Closing Date shall from and after the Closing Date be deemed to be
outstanding Tranche A Loans under this Agreement and the Tranche A Notes.
2.5 INTEREST.
(a) The Company agrees to pay interest in respect of the unpaid
principal amount of each Base Rate Loan from the date thereof until
maturity (whether by acceleration or otherwise) at a fluctuating rate per
annum which shall be equal to the Base Rate in effect from time to time,
plus, following the Conversion Date in the case of Tranche A Loans,
one-quarter of one percent.
(b) The Company agrees to pay interest in respect of the unpaid
principal amount of each CD Rate Loan from the date thereof until maturity
(whether by acceleration or otherwise) at a rate per annum which shall
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be equal to the relevant Fixed CD Rate PLUS (i) in the case of Tranche A
Loans, the Applicable Tranche A CD Rate Margin and (ii) in the case of
Tranche B Loans, the Applicable Tranche B CD Rate Margin.
(c) The Company agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date thereof until
maturity (whether by acceleration or otherwise) at a rate per annum which
shall be equal to the relevant London Interbank Offered Rate PLUS (i) in
the case of Tranche A Loans, the Applicable Tranche A Eurodollar Rate
Margin and (ii) in the case of Tranche B Loans, the Applicable Tranche B
Eurodollar Rate Margin.
(d) Overdue principal (whether by reason of maturity,
acceleration or otherwise) and, to the extent permitted by law, overdue
interest in respect of each Loan and all other overdue amounts owing
hereunder shall bear interest for each day that such amounts are overdue at
a rate per annum equal to two percent (2%) per annum in excess of the Base
Rate in effect from time to time; PROVIDED, that no Loan shall bear
interest after maturity (whether by acceleration or otherwise) at a rate
per annum less than two percent (2%) in excess of the rate of interest
applicable thereto at maturity.
(e) Interest on each Loan shall accrue from and including the
date of such Loan to but excluding the date of any repayment thereof, and
shall be payable (i) on the last day of the Interest Period applicable
thereto, (ii) for an Interest Period in excess of three (3) months in the
case of a Eurodollar Loan or ninety (90) days in the case of a CD Rate
Loan, on each day which occurs every three (3) months or every ninety (90)
days, respectively, after the initial date of such Interest Period, (iii)
on the date of any prepayment (on the amount prepaid), (iv) at maturity
(whether by acceleration or otherwise) and (v) after maturity, on demand.
(f) The Agent, upon determining the Fixed CD Rate or the London
Interbank Offered Rate for any Interest Period, shall promptly notify the
Company and the Banks thereof.
(g) In no event shall the rate of interest on any Loan exceed
the maximum rate permitted by applicable law.
2.6 INTEREST PERIODS. In connection with each Borrowing, the Company
shall elect an interest period (each an "Interest Period") to be applicable
to such Borrowing, which Interest Period shall (x) in the case of Base Rate
Loans, be a 90 day period (y) in the case of CD Rate Loans,
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be either a 30, 60, 90 or 180 day period (or, in the case of Tranche A
Loans, upon the prior written consent of all of the Banks, a 270 or 360 day
period), and (z) in the case of Eurodollar Loans, be either a 1, 2, 3 or 6
month period (or, in the case of Tranche A Loans, upon the prior written
consent of all of the Banks, a 9 or 12 month period); PROVIDED, THAT:
(i) subject to clause (v) below, the Interest Period for any Loan
shall commence on the date of such Loan;
(ii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, THAT if any Interest Period in respect
of a Eurodollar Loan (other than a Eurodollar Loan made pursuant to Section
2.13(b)) would otherwise expire on a day which is not a Business Day but is
a day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iii) any Interest Period in respect of a Eurodollar Loan which
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall, subject to clause (iv) below, end on the
last Business Day of a calendar month;
(iv) no Interest Period in respect of Tranche A Loans shall
extend beyond any date upon which the Tranche A Total Commitment is
scheduled to be reduced under Section 2.8(b) unless the aggregate principal
amount of Tranche A Loans which are Base Rate Loans or which have Interest
Periods which will expire on or before such date is equal to or in excess
of the amount of any payment which would be required pursuant to Section
2.8 (including, without limitation, mandatory reduction payments) or
prepayment which would be required pursuant to Section 2.9 in connection
with any such Tranche A Total Commitment reduction; and no Interest Period
in respect of Tranche B Loans shall extend beyond the Tranche B Termination
Date; and
(v) the Interest Period for a Loan which is converted pursuant
to Section 2.13(b) shall commence on the date of such conversion and shall
expire on the date on which the Interest Periods for the related Loans of
the other Banks which were not converted expires.
2.7 REPAYMENT OF LOANS. Each Loan shall mature, and the Company shall
repay to each Bank the unpaid principal amount of each Loan made by such
Bank hereunder,
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together with all accrued and unpaid interest thereon, on the last day of
the Interest Period in respect of such Loan.
2.8 VOLUNTARY TERMINATION OR REDUCTION AND MANDATORY REDUCTION OF
TOTAL COMMITMENT.
(a) The Company may, upon at least three (3) Business Days'
written notice to the Agent, terminate entirely at any time, or
proportionately reduce from time to time, in amounts at least equal to the
aggregate of $5,000,000 and in integral multiples of $1,000,000, the unused
portion of the Tranche A Total Commitment or the Tranche B Total
Commitment, provided that (i) any such reduction in the Tranche A Total
Commitment shall apply proportionately to the Tranche A Commitment of each
Bank, and (ii) any such reduction in the Tranche B Total Commitment shall
apply proportionally to the Tranche B Commitment of each Tranche B Bank.
If the Tranche A Total Commitment or the Tranche B Total Commitment is
terminated in its entirety, all accrued fees in respect thereof shall be
payable on the effective date of such termination. No reduction in whole
or in part of the Tranche A Total Commitment or the Tranche B Total
Commitment shall be subject to reinstatement, except pursuant to subsection
(c) below.
(b) The Tranche A Total Commitment shall be automatically and
permanently reduced on the Conversion Date to the aggregate amount of
Tranche A Loans outstanding on such date. In addition, the Tranche A Total
Commitment shall be automatically and permanently reduced further on the
day corresponding to the Conversion Date in each of the third, sixth,
ninth, twelfth, fifteenth, eighteenth, twenty-first, twenty-fourth,
twenty-seventh, thirtieth, thirty-third and thirty-sixth month following
the Conversion Date, by 1/12 of the aggregate amount of Tranche A Loans
outstanding on the Conversion Date. The Tranche A Commitment Amount of
each Bank shall be reduced by an amount equal to its Tranche A Commitment
Percentage of the amount of each such reduction.
(c) The Tranche A Total Commitment shall be further reduced by
the amount of Money Market Loans, if any, outstanding at any one time,
subject to reinstatement to the extent of the repayment of any such Money
Market Loans. The Tranche A Commitment Amount of each Bank shall be
reduced by an amount equal to its Tranche A Commitment Percentage of the
amount of each such reduction.
(d) The Tranche B Total Commitment shall be automatically and
permanently reduced on the date of the incurrence by the Company of any
Indebtedness of the type permitted by Section 5.12(o), by an amount equal
to the
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principal amount of such Indebtedness. The Tranche B Commitment Amount of
each Tranche B Bank shall be reduced by an amount equal to its Tranche B
Commitment Percentage of the amount of each such reduction. The Tranche B
Total Commitment shall be reduced to zero on the Tranche B Termination
Date.
2.9 PREPAYMENTS.
(a) Concurrently with any reduction of the Tranche A Commitments
pursuant to Section 2.8, the Company shall pay or prepay such amount of
each Bank's outstanding Tranche A Loans, if any, as may be necessary so
that after such prepayment the aggregate unpaid principal amount of such
Bank's Tranche A Loans does not exceed the amount of such Bank's Tranche A
Commitment Percentage of the Tranche A Total Commitment as then reduced.
Concurrently with any reduction of the Tranche B Commitments pursuant to
Section 2.8, the Company shall pay or prepay such amount of each Tranche B
Bank's outstanding Tranche B Loans, if any, as may be necessary so that
after such prepayment the aggregate unpaid principal amount of such Tranche
B Bank's Tranche B Loans does not exceed the amount of such Tranche B
Bank's Tranche B Commitment Percentage of the Tranche B Total Commitment as
then reduced; and if the Tranche B Commitments are reduced to zero the
Tranche B Loans shall be paid in full. Each prepayment made pursuant to
this Section shall be accompanied by all interest accrued on the amount
prepaid to the date of such prepayment. Each prepayment of Tranche A Loans
shall be applied to prepay the Tranche A Loans of the Banks in proportion
to their respective Tranche A Commitment Percentages, and each prepayment
of Tranche B Loans shall be applied to prepay the Tranche B Loans of the
Tranche B Banks in proportion to their respective Tranche B Commitment
Percentages.
(b) The Company may, upon at least one (1) Business Day's
irrevocable written notice to the Agent, prepay, without premium or
penalty, the Loans at any time in whole, or from time to time in part, in
amounts aggregating at least $1,000,000 and in integral multiples of
$500,000, by paying the principal amount to be prepaid together with (i)
accrued interest thereon to the date of prepayment and (ii) in the case of
a prepayment of Fixed Rate Loans, any amounts payable to any Bank under
Section 2.16 as a result of such prepayment. Any such notice shall specify
whether such prepayment is to be applied to Tranche A Loans or Tranche B
Loans. Each such optional prepayment of Tranche A Loans shall be applied
to prepay the Tranche A Loans of the Banks in proportion to their
respective Tranche A Commitment Percentages. Each such optional prepayment
of Tranche B Loans shall be applied to prepay the Tranche B Loans of the
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Tranche B Banks in proportion to their respective Tranche B Commitment
Percentages.
(c) Upon receipt of a notice of prepayment pursuant to this
Section, the Agent shall promptly notify each Bank of the contents thereof
and of such Bank's ratable share of such prepayment.
2.10 FEES.
(a) The Company shall pay to the Agent for the account of and in
accordance with the Tranche A Commitment Percentage of each Bank a
commitment fee for the period commencing on the Closing Date to and
including the Termination Date (or such earlier date as the Tranche A Total
Commitment shall have been terminated) computed at a rate equal to the
Applicable Tranche A Commitment Fee Rate per annum as in effect from time
to time on the average daily unused portion of the Tranche A Total
Commitment (calculated, for purposes of this Section 2.10(a), without
giving effect to any reduction in the Tranche A Total Commitment pursuant
to Section 2.8(c)), payable quarterly in arrears on the last Business Day
of each March, June, September and December, commencing December 31, 1994,
and on the Termination Date or such earlier date as the Tranche A Total
Commitment shall be terminated.
(b) The Company shall pay to the Agent for the account of and in
accordance with the Tranche B Commitment Percentage of each Tranche B Bank
a commitment fee for the period commencing on the Closing Date to and
including the Tranche B Termination Date (or such earlier date as the
Tranche B Total Commitment shall have been terminated) computed at a rate
equal to the Applicable Tranche B Commitment Fee Rate per annum as in
effect from time to time on the average daily unused portion of the Tranche
B Total Commitment, payable quarterly in arrears on the last Business Day
of each March, June, September and December, commencing December 31, 1994,
and on the Tranche B Termination Date or such earlier date as the Tranche B
Total Commitment shall be terminated.
(c) The Company shall pay to each Tranche B Bank on the Closing
Date a facility fee equal to .125% of such Tranche B Bank's Tranche B
Commitment Amount.
(d) The Company shall pay to each Bank on the Closing Date an
amendment fee equal to $10,000.
(e) The Company shall pay to each Agent for its own account such
fees as may from time to time be agreed upon pursuant to a separate
agreement between the Company and such Agent.
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(f) All fees payable hereunder shall be non-refundable.
2.11 PAYMENTS, ETC.
(a) All payments by the Company under this Agreement shall be
made without defense, set-off, counterclaim or claim of recoupment to the
Agent not later than 11:00 A.M. (New York City time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Agent. The Agent will promptly thereafter distribute funds
in the form received relating to the payment of principal, interest or fees
(other than the fees specified in Section 2.10(e)) (i) in respect of
Tranche A Loans, to the Banks ratably in accordance with each Bank's
Tranche A Commitment Percentage, and (ii) in respect of Tranche B Loans, to
the Tranche B Banks in accordance with each Tranche B Bank's Tranche B
Commitment Percentage, in each case for the account of their respective
Lending Offices, and funds in the form received relating to the payment of
any other amount payable to any Bank to such Bank for the account of its
Lending Office.
(b) Except as provided in Section 2.6(ii), whenever any payment
to be made hereunder or under any Note shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal
and, to the extent permitted by applicable law, interest, fees and any
other amounts payable under any Loan Document, interest thereon shall be
payable at the applicable rate during such extension, provided that if the
next succeeding Business Day is a date beyond the Termination Date,
payments to be made hereunder shall be due on the next preceding Business
Day.
(c) All computations of interest based upon the Prime Lending
Rate shall be made on the basis of a year of 365 days, and all other
computations of interest and fees shall be made on the basis of a year of
360 days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
interest or commitment fees are payable. Each determination by the Agent
of an interest rate or fee hereunder shall, except for manifest error, be
final, conclusive and binding for all purposes.
2.12 INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that the
Agent is advised by the Reference Banks on or prior to the first day of any
Interest Period for any Fixed Rate Loans that deposits in Dollars (in the
applicable amounts) are not being offered to the Reference Banks in the
relevant market for such Interest Period or the Agent shall
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have determined (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) that on any date for
determining the London Interbank Offered Rate or the Fixed CD Rate for any
Interest Period, by reason of any changes arising after the date of this
Agreement affecting the London interbank market or the secondary
certificate of deposit market, as the case may be, or any Bank's position
in such markets, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
London Interbank Offered Rate or Fixed CD Rate, as the case may be, then,
and in any such event, the Agent shall forthwith give notice to the Company
and to the Banks of such determination. Until the Agent notifies the
Company that the circumstances giving rise to the suspension described
herein no longer exist, the obligations of the Banks to make CD Rate Loans
or Eurodollar Loans, as the case may be, shall be suspended, and the Banks
shall make any requested CD Rate Loans or Eurodollar Loans, as the case may
be, as a Base Rate Loan.
2.13 ILLEGALITY.
(a) In the event that any Bank shall have determined (which
determination shall, absent manifest error, be final, conclusive and
binding upon all parties) at any time that the making or continuance or
funding of any Fixed Rate Loan has become unlawful or impossible by
compliance by such Bank in good faith with any applicable law, governmental
rule, regulation, guideline or order, or any interpretation thereof
(whether or not having the force of law and whether or not failure to
comply therewith would be unlawful), then, in any such event, such Bank
shall give prompt notice to the Company and to the Agent of such
determination (which notice the Agent shall promptly transmit to the other
Banks).
(b) Upon the giving of the notice to the Company referred to in
clause (a) above, (i) the Company's right to request and such Bank's
obligation to make such type of Fixed Rate Loans shall be immediately
suspended, and such Bank shall make a Loan as part of the requested
Borrowing of such Fixed Rate Loans as a Base Rate Loan with an Interest
Period for such Base Rate Loan identical to the Interest Period for such
requested Fixed Rate Loans, notwithstanding clause (x) of Section 2.6,
which such Base Rate Loan shall, for all other purposes, be considered part
of such Borrowing, and (ii) if the affected Fixed Rate Loan or Loans are
then outstanding, the Company shall immediately, or if permitted by
applicable law, no later than the date permitted thereby, convert each such
Loan into a Loan or Loans of a different Type with an Interest Period
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ending on the date on which the Interest Period applicable to the affected Fixed
Rate Loan expires.
2.14 INCREASED COSTS; CAPITAL ADEQUACY; REGULATION D COMPENSATION.
(a) If, by reason of (x) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in or in the interpretation, application or administration
of any law, rule or regulation, or (y) the compliance with any guideline or
request issued or made subsequent to the date hereof from any central bank or
other governmental authority or quasi-governmental authority exercising control
over banks or financial institutions generally (whether or not having the force
of law and whether or not failure to comply therewith would be unlawful):
(i) any Bank (or its applicable Lending Office) shall be subject to
any tax, duty or other charge with respect to its Fixed Rate Loans, its Notes,
or its obligation to make Fixed Rate Loans, or there shall be a change in the
basis of taxation of payments to any Bank of the principal of or interest on its
Fixed Rate Loans or any other amounts due under this Agreement in respect of its
Fixed Rate Loans or its obligation to make Fixed Rate Loans (except for changes
in the rate of tax on the overall net income of such Bank or its applicable
Lending Office imposed by the jurisdiction in which such Bank's principal
executive office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Bank's applicable Lending Office shall be
imposed, modified or deemed applicable or any other condition affecting its
Fixed Rate Loans or its obligation to make Fixed Rate Loans shall be imposed on
any Bank or its applicable Lending Office or the London interbank market or the
secondary certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Bank
of agreeing to make or making, funding or maintaining Fixed Rate Loans (except
to the extent already included in the determination of the applicable Fixed CD
Rate for CD Rate Loans or the applicable London Interbank Offered Rate for
Eurodollar Loans or in any calculations made pursuant to Section 2.14(d)), or
there shall be a reduction in the amount received or receivable by such Bank
or its applicable Lending Office, then the Company shall from time to time,
upon written notice from and demand by
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such Bank (with a copy of such notice and demand to the Agent), pay the Agent
for the account of such Bank, within five (5) Business Days after the date
specified in such notice and demand, additional amounts sufficient to indemnify
such Bank against such increased cost. A certificate as to the amount of such
increased cost, submitted to the Company and the Agent by such Bank, shall,
except for manifest error, be final, conclusive and binding for all purposes.
(b) If at any time the Required Banks shall advise the Agent that
because of the circumstances described in clauses (x) or (y) of Section 2.14(a)
or any other circumstances arising after the Closing Date affecting such Banks
or the London interbank market or the secondary certificate of deposit market or
such Banks' position in such markets, the London Interbank Offered Rate or the
Fixed CD Rate, as the case may be, as determined by the Agent, will not
adequately and fairly reflect the cost to such Banks of funding any Fixed Rate
Loans, then, and in any such event:
(i) the Agent shall forthwith give notice (by telephone confirmed in
writing) to the Company and to the Banks of such advice;
(ii) the Company's right to request and the Banks' obligation to
make any such affected Fixed Rate Loans shall be immediately suspended; and
(iii) the Banks shall make Loans as part of the requested Borrowing
of any such affected Fixed Rate Loans as Base Rate Loans.
(c) without limiting the foregoing, in the event that any Bank shall
have determined that the adoption or effectiveness subsequent to the date hereof
of any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, or any change subsequent to the
date hereof therein or in the interpretation, application or administration
thereof, or compliance by any Bank (or its Parent) with any request or directive
made or issued subsequent to the date hereof regarding capital adequacy (whether
or not having the force of law and whether or not failure to comply therewith
would be unlawful) from any central bank or governmental agency or body having
jurisdiction, shall have the effect of increasing the amount of capital required
to be maintained by such Bank (or its Parent) (including, without limitation,
with respect to any Bank's Commitment) or of reducing the rate of return on such
Bank's (or its Parent's) capital, then the Company shall from time to time,
within five (5) days of written notice and demand from such Bank (with a
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copy to the Agent), pay to the Agent, for the account of such Bank, additional
amounts sufficient to compensate such Bank (or its Parent) for the cost of such
additional required capital or reduced rate of return. A certificate as to the
amount of such cost or reduced rate of return, submitted to the Company and the
Agent by such Bank, shall absent manifest error, be final, conclusive and
binding for all purposes.
(d) For so long as any Bank maintains reserves against "Eurocurrency
liabilities" (or any other category of liabilities which includes deposits by
reference to which the interest rate on Eurodollar Loans is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of such Bank to United States residents), and as a
result the cost to such Bank (or its Lending Office) of making or maintaining
its Eurodollar Loans is increased, then such Bank may require the Company to
pay, contemporaneously with each payment of interest on the Eurodollar Loans,
additional interest on the related Eurodollar Loan of such Bank at a rate per
annum up to but not exceeding the excess of (i) (A) the applicable London
Interbank Offered Rate divided by (B) one MINUS the Eurodollar Reserve
Percentage over (ii) the applicable London Interbank Offered Rate. Any Bank
wishing to require payment of such additional interest (x) shall so notify the
Company and the Agent, in which case such additional interest on the Eurodollar
Loans of such Bank shall be payable to such Bank at the place indicated in such
notice with respect to such Interest Period commencing at least three Business
Days after the giving of such notice and (y) shall furnish to the Company at
least five Business Days prior to each date on which interest is payable on the
Eurodollar Loans an officer's certificate setting forth the amount to which such
Bank is then entitled under this Section (which shall be consistent with such
Bank's good faith estimate of the level at which the related reserves are
maintained by it). A certificate as to the amount of such additional interest,
submitted to the Company and the Agent by such Bank, shall absent manifest
error, be final, conclusive and binding for all purposes.
(e) In the event that any Bank shall have requested any payment
under subsections (a), (c), or (d) of this Section 2.14, the Company may, upon
not less than thirty (30) days' notice to the Agent and such Bank, terminate
entirely the Commitment of such Bank, provided that such termination shall only
be effective upon the replacement of such Bank with another lender acceptable to
the Agent with a Commitment equal to the Commitment of such Bank. Upon the
effectiveness of such termination, the Company shall repay to such Bank the
principal amount of all Loans of such Bank then outstanding, together with all
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accrued and unpaid interest, commitment fees and other amounts (including
amounts payable in accordance with Section 2.16 as a result of such repayment)
payable in connection therewith. The termination of any Bank's Commitment
pursuant to this Section 2.14(e) shall not affect any amounts payable to such
Bank under this Section 2.14.
(f) Notwithstanding anything to the contrary contained in this
Section 2.14, no Bank shall be entitled to payment by the Company in respect of
any increased costs or capital requirements or reduced rate of return pursuant
to subsections (a) or (c) of this Section 2.14 incurred more than ninety (90)
days prior to the giving by such Bank to the Company of notice and demand for
such payment in accordance with such applicable subsection. For purposes of
this subsection (f), any such increased costs or capital requirements or reduced
rate of return incurred as a result of the retroactive application of any law,
rule, regulation, treaty, guideline, directive, request or order or of any
change therein or interpretation, application or administration thereof (each of
the foregoing, a "Change"), shall be deemed to have been incurred on the date of
the effectiveness of such Change.
2.15 CHANGE OF LENDING OFFICE. Each Bank agrees that it will use
reasonable efforts to designate an alternate Lending Office with respect to any
of its Fixed Rate Loans affected by the matters or circumstances described in
Sections 2.13 or subsections (a) through (d) of Section 2.14 or to take any
other reasonable action to reduce the liability of the Company or avoid the
results provided thereunder, so long as such designation or action is not
disadvantageous to such Bank or contrary to its policies as determined by such
Bank in its sole discretion.
2.16 FUNDING LOSSES. The Company shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
amounts and which request shall, absent manifest error, be final, conclusive and
binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Bank to
lenders of funds borrowed by it to make or carry its Fixed Rate Loans to the
extent not recovered by the Bank in connection with the reemployment of such
funds and including loss of anticipated profits), which the Bank may sustain:
(i) if for any reason (other than a default by such Bank) a borrowing of Fixed
Rate Loans does not occur on the date specified therefor in a Notice of
Borrowing, (ii) if any repayment or prepayment (or conversion pursuant to
Section 2.13) of any of its Fixed Rate Loans occurs on a date which is not the
last day of an Interest Period applicable thereto, or (iii) if, for any reason,
the Company defaults
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in its obligation to repay its Fixed Rate Loans when required by the terms of
this Agreement.
2.17 SHARING OF PAYMENTS, ETC. If, with respect to any Tranche, any Bank
shall obtain any payment or reduction (including, without limitation, any
amounts received as adequate protection of a deposit treated as cash collateral
under the Bankruptcy Code) of any obligation of the Company hereunder (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share of payments or reductions on account
of such obligations obtained by all the Banks participating in such Tranche,
such Bank shall forthwith (i) notify each of the other Banks participating in
such Tranche and the Agent of such receipt and (ii) purchase from the other
Banks participating in such Tranche such participation in the affected
obligations as shall be necessary to cause such purchasing Bank to share the
excess payment or reduction, net of costs incurred in connection therewith,
ratably with each of them, provided that if all or any portion of such excess
payment or reduction is thereafter recovered from such purchasing Bank or
additional costs are incurred, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery or such additional costs, but
without interest. The Company agrees that any Bank so purchasing a
participation from another Bank pursuant to this Section 2.17 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Bank were the direct creditor of the Company in the amount of such
participation.
SECTION III
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks and the Agents to enter into this Agreement
and to make Loans hereunder, the Company represents and warrants to the Banks
that:
3.1 ORGANIZATION AND QUALIFICATION. Each of the Company and its
Subsidiaries (a) is a corporation duly organized, existing and in good standing
under the laws of its jurisdiction of incorporation, (b) has all requisite
corporate power to own its property and conduct its business as now conducted
and as presently contemplated and (c) is duly qualified and in good standing as
a foreign corporation and is duly authorized to do business in each jurisdiction
wherein the nature of its properties or business requires such qualification,
except where the failure to be so qualified would not have a material adverse
effect on the business, financial condition, assets or properties of the
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Company and its Subsidiaries taken as a whole. Neither the Company nor any of
the Guaranty Subsidiaries (i) is an "investment company" or a company controlled
by an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, or (ii) is subject to regulation
under any Federal or State statute or regulation which limits its ability to
incur Indebtedness other than usury laws.
3.2 CORPORATE AUTHORITY. The execution, delivery and performance by the
Company, and each Subsidiary party to any Loan Document, of this Agreement, the
Notes and the other Loan Documents and the transactions contemplated hereby and
thereby are within the corporate power and authority of the Company and each
such Subsidiary, and have been authorized by all required proper corporate,
shareholder and other action, and do not and will not contravene any provision
of law, charter document or by-laws or contravene any provision of, or
constitute an event of default or event which, with the lapse of time or the
giving of notice, or both, would constitute an event of default under any other
agreement, instrument or undertaking binding on the Company or any such
Subsidiary.
3.3 VALID OBLIGATIONS. This Agreement, the Notes, and each of the other
Loan Documents and the transactions contemplated hereby and thereby and all of
the terms and provisions hereof and thereof are the legal, valid and binding
obligations of the Company and each Subsidiary party thereto, enforceable in
accordance with their respective terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally, and except as the remedy of
specific performance or of injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
3.4 GOVERNMENTAL APPROVALS. The execution, delivery and performance of
this Agreement, the Notes and each of the other Loan Documents and the
transactions contemplated hereby and thereby do not require any approval or
consent of, or filing or registration with, any governmental or other agency or
authority, or any other party except, in the case of the Security Documents, the
filing of Uniform Commercial Code financing statements in all appropriate public
offices.
3.5 TITLE TO PROPERTIES; ABSENCE OF ENCUMBRANCES. Each of the Company
and, to the knowledge of the Company after due inquiry, each of its Subsidiaries
has good and marketable title to all of its respective properties, assets and
rights of every name and nature now purported to be owned by it, including,
without limitation, such properties
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and assets as are shown on the financial statements referred to in Section 3.6
(except such assets as have been disposed of in the ordinary course of business
since the date thereof), free from all Encumbrances whatsoever, except for
Encumbrances permitted by Section 5.14 or as otherwise disclosed in Exhibit I
hereto, and, except as so disclosed, free from all defects of title that might
materially adversely affect such property, assets or rights, taken as a whole.
3.6 FINANCIAL STATEMENTS. The Company has furnished to the Banks its (i)
consolidated balance sheet as at December 31, 1993 and its consolidated
statement of income, retained earnings and cash flow for the calendar year then
ended, and related footnotes, audited and certified by Price Waterhouse and (ii)
unaudited consolidating balance sheet and statement of income of the Company and
its Subsidiaries as at December 31, 1993 and for the calendar year then ended.
Such financial statements were prepared in accordance with GAAP applied on a
consistent basis throughout the periods specified and present fairly the
financial position of the Company and its Subsidiaries and the results of the
operations of the Company and its Subsidiaries for such periods.
3.7 CHANGES. Since December 31, 1993, there have been no changes in the
financial condition, business or results of operations of the Company or any of
its Subsidiaries other than changes in the ordinary course of business, the
effect of which have not, individually or in the aggregate, been materially
adverse to the Company and its Subsidiaries taken as a whole.
3.8 EVENTS OF DEFAULT. As of the Closing Date, no Default or Event of
Default has occurred and is continuing, and no default exists under any material
agreement or other material contractual obligations of the Company or any
Subsidiary.
3.9 TAXES. The Company and its Subsidiaries have filed all tax returns
which are required to be filed and have paid all taxes (including interest and
penalties) which have become due pursuant to such returns or pursuant to any
assessment or notice of tax claim or deficiency received by them. All tax
liabilities were adequately provided for at the end of the most recent calendar
year of the Company and are now so provided for on the books of the Company and
its Subsidiaries. Except as set forth on Exhibit J hereto, no material tax
liability has been asserted by the Internal Revenue Service or any other taxing
authority for taxes (or interest or penalties thereon) in excess of those
already paid.
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3.10 LITIGATION. Except as set forth on Exhibit J hereto, there is no
litigation, proceeding or investigation pending or, to the knowledge of any of
the Company's officers, threatened, against the Company or any Subsidiary which
has any reasonable possibility of resulting in a material judgment which is not
fully covered by insurance or which would otherwise have a material adverse
effect on the business, financial condition, assets or properties of the Company
and its Subsidiaries taken as a whole.
3.11 USE OF PROCEEDS. The proceeds of Tranche A Loans shall be used for
the purpose of (i) refinancing amounts outstanding as of the Closing Date under
the Original Credit Agreement, (ii) financing the acquisition by the Company or
by any wholly-owned Subsidiary of the Company of the capital stock of any Person
or Persons engaged solely in one or more of the Permitted Businesses, (iii)
financing the acquisition by the Company or by any wholly-owned Subsidiary of
the Company from any Person or Persons of assets used in, or related to
Permitted Businesses, and (iv) providing working capital for the Company,
PROVIDED that Loans made for working capital purposes shall not exceed in the
aggregate $35,000,000 at any one time outstanding. The proceeds of Tranche B
Loans shall be used for financing the acquisition by the Company or by any
wholly-owned subsidiary of the Company of the capital stock and/or assets of JMB
Institutional Realty Corporation and Provident Investment Counsel. Neither the
Company nor any Subsidiary is in the business of extending credit secured by
"margin stock" and no portion of any Loan is to be used for the "purpose of
purchasing or carrying" any "margin security" or "margin stock" as such terms
are used in Regulations U and X or for any purpose that would entail a violation
of, or that is inconsistent with, Regulations G, U or X.
3.12 SUBSIDIARIES. (a) As of the Closing Date, all the Subsidiaries of
the Company are listed on Exhibit K hereto which sets forth the total amount of
capital stock issued and outstanding by each Subsidiary and the percentage of
such capital stock owned beneficially and of record by the Company or a
Subsidiary of the Company as the case may be. The Company or a Subsidiary of
the Company is the owner, free and clear of all Encumbrances, except for liens
in favor of the Collateral Agent for the ratable benefit of the Banks, of the
shares of issued and outstanding stock of each Subsidiary so indicated on
Exhibit K.
(b) As of the Closing Date, all shares of capital stock of the
Subsidiaries of the Company have been validly issued and are fully paid and
nonassessable, and, except as set forth on Exhibit L hereto, (i) no right to
subscribe to any additional shares have been granted, and no
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options, warrants, conversion rights or similar rights to acquire any common
stock of any Subsidiary of the Company are outstanding, and (ii) with respect to
any Subsidiary which is not wholly-owned by the Company or a Subsidiary of the
Company, no dividend, liquidation or other preferences are in effect except in
favor of the Company or a Subsidiary of the Company, and neither the Company nor
any Subsidiary of the Company has entered into any agreement obligating the
Company to purchase or sell any capital stock of any Subsidiary owned
beneficially or of record by any Person.
(c) The aggregate consolidated revenues of all Subsidiaries of the
Company identified as Exempted Subsidiaries on Exhibit K did not equal or exceed
$5,000,000 for the four full consecutive fiscal quarters immediately preceding
the date hereof.
3.13 COMPLIANCE WITH ERISA. The Company and each member of the
Controlled Group have fulfilled their obligations under the applicable minimum
funding standards of ERISA and the Code with respect to each Plan and, to the
best of the knowledge of the Company's officers, are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or a Plan under Title IV
of ERISA.
3.14 SECURITIES AND EXCHANGE COMMISSION REGISTRATIONS AND FILINGS, ETC.
Except as otherwise indicated on Exhibit K, each Subsidiary in existence on the
Closing Date is duly registered with the Securities and Exchange Commission (for
purposes of this Section, the "SEC") as an investment adviser under Section 203
of the Investment Advisers Act and each of the Subsidiaries identified as such
on Exhibit K is registered as a broker-dealer under Section 15 of the Exchange
Act. Each of Murray Johnstone and Murray Johnstone International Limited, a
wholly-owned Subsidiary of Murray Johnstone incorporated in Scotland, is duly
registered as a member of the Investment Management Regulatory Organization,
Limited as required under the laws of the United Kingdom. Neither the Company
nor any Subsidiary is required to be registered, licensed or qualified as an
investment adviser or broker dealer under the Investment Advisers Act, the
Exchange Act or any other applicable United States federal or state law or
regulation or any equivalent foreign law or regulation, or subject to any
material liability or disability by reason of any failure to be so registered,
licensed or qualified, except (i) for Subsidiaries which are so registered,
licensed or qualified or (ii) to the extent that the failure to be so
registered, licensed or qualified would not have a material adverse effect on
the business, financial condition, assets or properties of the Company or such
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Subsidiary, as the case may be. Each Subsidiary has filed with the SEC and with
each other applicable United States federal or state or foreign regulatory
agency when due all reports and other documents as are required for the conduct
of its business by the Investment Advisers Act, by the Exchange Act or by any
United States federal or state law or regulation or any equivalent foreign law
or regulation and with respect to which the failure to file when due has any
reasonable possibility of having a material adverse effect on the business,
financial condition, assets or properties of such Subsidiary, and there does not
exist any proceeding or, to the best of the Company's knowledge, any facts or
circumstances the existence of which could lead to any proceeding which would
adversely affect the registration of any Subsidiary with the SEC or with any
other applicable United States federal or state or foreign regulatory agency.
3.15 INDEBTEDNESS. Neither the Company nor any Subsidiary has any
Indebtedness, except Indebtedness permitted by Section 5.12.
3.16 PLEDGE AGREEMENT AND SECURITY AGREEMENT.
(a) The provisions of each of the Pledge Agreement, the Subsidiaries
Pledge Agreement, the Heitman Pledge Agreement, the UAM U.K. Holdings Pledge
Agreement and the DSI Pledge Agreement are effective to create in favor of the
Collateral Agent, for the ratable benefit of the Banks, a legal, valid and
enforceable security interest in all right, title and interest of the Company,
UAM Holdings, Heitman, UAM U.K. Holdings or DSI, as the case may be, in the
Pledged Stock described therein, and when the Collateral Agent receives
possession of the stock certificates representing the shares of such Pledged
Stock accompanied by undated stock powers duly executed in blank and when a
notice (each a "Bailee Notice" and collectively the "Bailee Notices") is duly
sent by the Company to each holder of the certificates evidencing the Second
Priority Pledged Securities (as such term is defined in the Pledge Agreement) to
the effect that the Collateral Agent, for the ratable benefit of the Banks, has
been granted a second priority security interest in such Second Priority Pledged
Securities, the Pledge Agreement shall constitute a fully perfected and
continuing first priority or, to the extent permitted hereunder and under the
Pledge Agreement, a fully perfected and continuing second priority, lien on and
security interest in all right, title and interest of the Company in the Pledged
Stock. The interest of the Collateral Agent in the Pledged Stock has been duly
registered on the books and records of each of the issuers thereof.
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(b) The provisions of each of the Security Agreement, the
Subsidiaries Security Agreement and the Assignment of Partnership Interest are
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Banks, a legal, valid and enforceable security interest in all right, title
and interest of the Company in collateral described therein and constitute and
shall continue to constitute a fully perfected and continuing first priority
lien on and security interest in all right, title and interest of the Company in
such collateral with respect to which a security interest may be perfected by
filing of financing statements under the Uniform Commercial Code.
3.17 REVENUE SHARING AGREEMENTS. The Revenue Sharing Agreements have
each been duly executed and delivered by the Company and by each Subsidiary
party thereto, and each is in full force and effect and has not been amended in
any manner during the period from the date each was delivered to the Banks
through the date hereof except as previously disclosed to the Banks in writing.
The representations and warranties of the Company and of the Subsidiaries
contained in each Revenue Sharing Agreement are true and correct in all material
respects.
3.18 COMPLIANCE WITH LAWS. The Company and each of its Subsidiaries is
in compliance in all material respects with all applicable laws, rules,
regulations and orders, including, without limitation, those relating to
environmental matters.
3.19 SOLVENCY. After giving effect to the execution and delivery of this
Agreement and the other Loan Documents and the transactions contemplated
hereunder and thereunder, the Company and each of the Guaranty Subsidiaries is
and will be able to pay their debts as they mature, and neither the Company nor
any of the Guaranty Subsidiaries is or will be insolvent or has or will have
unreasonably small capital to conduct its present and prospective businesses.
SECTION IV
CONDITIONS OF LOANS
The obligation of each Bank to make a Loan to the Company hereunder is subject
to the satisfaction of the following conditions:
4.1 CONDITIONS PRECEDENT TO EFFECTIVENESS AND TO INITIAL LOANS. This
Agreement shall not become effective, and the Banks shall not be obligated to
make their initial
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Loans hereunder, unless concurrently therewith all obligations of the Company to
the Agents and the Banks under the Original Credit Agreement (including, without
limitation, the payment of all accrued and unpaid interest and commitment fees
through the Closing Date) and all obligations of the Company hereunder to the
Agents or any Bank incurred prior to the initial Loans (including, without
limitation, the Company's obligation to reimburse the fees and disbursements of
the respective counsel to the Agents (to the extent billed) and any fees payable
to the Agents and the Banks on the Closing Date) shall have been paid in full,
and the Agent shall have received the following, each dated as of the date
hereof (except where not applicable), duly executed and in form and substance
satisfactory to the Agent, with an original thereof for each Agent (except as
otherwise indicated below) and with sufficient photocopies thereof for each Bank
(except that in the case of the Notes, the originals thereof will be received by
the Agent for the account of the respective Banks):
(a) a duly completed Tranche A Note (or Tranche A Notes, as
contemplated by Section 2.4), payable to the order of each Bank, and a duly
completed Tranche B Note (or Tranche B Notes, as contemplated by Section 2.4),
payable to the order of each Tranche B Bank;
(b) the Confirmation and Amendment;
(c) copies of all consents, licenses and approvals, if any, obtained
by the Company or its Subsidiaries in connection with the execution, delivery,
performance, validity and enforceability of the Loan Documents; and all such
consents, licenses and approvals received by the Agent pursuant to this
subsection (c) shall be in full force and effect;
(d) a certificate of the President of the Company, addressed to the
Agents and the Banks and dated as of the Closing Date, to the effect that, to
the best of his knowledge and belief after due inquiry, (i) there exists no
Default or Event of Default, (ii) all representations and warranties of the
Company contained in this Agreement or otherwise made in writing to the Agents
or any Bank in connection herewith by or on behalf of the Company are true and
correct on and as of such date, with the same force and effect as if made on and
as of such date, (iii) all of the conditions set forth in this Section 4.1 have
been satisfied on and as of such date, and (iv) after giving effect to the
execution and delivery of this Agreement and the other Loan Documents, the
making of the initial Loans hereunder and the other transactions contemplated by
this Agreement to be effected on or about or as of the Closing Date, the Company
will be able to pay its debts as they mature and the Company
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will not be insolvent or have unreasonably small capital to conduct its present
and prospective businesses, all in form and substance satisfactory to the Banks;
(e) for the Company and each Guaranty Subsidiary (i) a copy of the
Certificate of Incorporation or Articles of Incorporation of such Person, as
amended through the Closing Date, certified by the Secretary of State or
comparable officer of the State of incorporation of such Person; (ii) a
long-form good standing certificate from the Secretary of State or other
comparable officer of the State of incorporation of such Person; (iii) long-form
good standing Certificates from the Secretaries of State of the states, or other
comparable officers of each jurisdiction, in which such Person is required to
qualify to do business; (iv) a tax status report (where obtainable) from the
Secretary of State or other comparable officer of the State of incorporation of
such Person; (v) tax status reports (where obtainable) of the Secretary of State
of the states, or other comparable officers of each jurisdiction, in which such
Person is required to qualify to do business; and (vi) such additional
supporting documents as the Agent or any Bank may reasonably request; provided,
however, that if any such good standing certificates or tax status reports are
not readily available, then a telegram from the appropriate Secretary of State
or comparable officer may be substituted therefor;
(f) certified copies of the resolutions of the Board of Directors of
the Company approving this Agreement, the Notes, the borrowings hereunder and
all the other Loan Documents being executed and delivered on the Closing Date,
and of each Guaranty Subsidiary approving the Confirmation and Amendment, and of
all other documents, if any, evidencing corporate action and/or governmental
authorization or approval with respect to this Agreement, the Notes, the
borrowings hereunder and all the other Loan Documents;
(g) a certificate of the Secretary or an Assistant Secretary of the
Company and each Guaranty Subsidiary certifying the name, title and true
signature of each officer of such Person authorized to execute this Agreement,
the Notes, the other Loan Documents being executed and delivered on the Closing
Date and the other documents or certificates to be delivered pursuant to this
Agreement;
(h) an opinion of Hill & Barlow, counsel to the Company and its
Subsidiaries, substantially in the form of Exhibit M-1 hereto, and an opinion of
Wildman, Harrold, Allen & Dixon, counsel to Heitman, substantially in the form
of Exhibit M-2 hereto, in each case addressed to the Agents
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and each of the Banks, and covering such other matters as any Bank through the
Agent may reasonably request; the Company hereby expressly instructs each such
counsel to prepare its opinion and to deliver it to the Banks and the Agents for
their benefit;
(i) to the extent not delivered at the closing on August 29, 1994
under the Original Credit Agreement, copies, certified as true, complete and
correct by the Secretary or Assistant Secretary of the Company, of all Revenue
Sharing Agreements in force and effect on the Closing Date and all instruments
and documents evidencing Subordinated Indebtedness; and
(j) such other certificates, opinions, documents and instruments
confirming or otherwise relating to the transactions contemplated hereby as may
have been reasonably requested by the Agent or any Bank.
4.2 CONDITIONS PRECEDENT TO EACH LOAN. At the time of the making by such
Bank of each Loan, including the initial Loan (before as well as after giving
effect to such Loan and to the proposed use of the proceeds thereof):
(a) the Agent shall have received the relevant notice of Borrowing;
(b) there shall exist no Default or Event of Default; and
(c) all representations and warranties contained herein and in the
other Loan Documents shall be true and correct with the same effect as though
such representations and warranties had been made on and as of the date of such
Loan, except as to any matters that have changed in accordance with or as
permitted by this Agreement.
Each request for a Borrowing and the acceptance by the Company of the proceeds
thereof shall constitute a representation and warranty by the Company, as of
the date of the Loans comprising such Borrowing, that the conditions specified
in subsections (b) and (c) of this Section 4.2 have been satisfied.
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SECTION V
COVENANTS
So long as any Loan or any other Obligation remains outstanding hereunder or
under the Notes or any Bank shall have any obligation to make Loans hereunder:
5.1 FINANCIAL STATEMENTS. The Company will furnish to the Banks:
(a) as soon as available to the Company, but in any event within
ninety (90) days after the end of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as at the end of,
and a related consolidated statement of income, retained earnings and cash flow
for, such year, setting forth in each case in comparative form the figures for
the previous fiscal year, audited and certified by Price Waterhouse & Co. (or
other independent certified public accountants of nationally recognized standing
acceptable to the Required Banks); and, concurrently with such financial
statements, a written statement by such accountants that, in the making of the
audit necessary for their report and opinion upon such financial statements,
they have obtained no knowledge of any Default or Event of Default or, if in the
opinion of such accountants any such Default or Event of Default exists, they
shall disclose in such written statement the nature and status thereof;
(b) as soon as available to the Company, but in any event within
forty-five (45) days after the end of each of the first three (3) fiscal
quarters in each fiscal year, a consolidated and consolidating balance sheet of
the Company and its Subsidiaries as at the end of, and a related consolidated
and consolidating statement of income, retained earnings and cash flow for, the
period then ended, setting forth in each case in comparative form the figures
for each previous quarter in such fiscal year certified by the chief financial
officer of the Company as true and correct subject, however, to normal,
recurring year-end adjustments which shall not in the aggregate be material in
amount;
(c) concurrently with the delivery of each financial statement
pursuant to clause (a) of this Section 5.1, a consolidating balance sheet of the
Company and its Subsidiaries as at the end of the calendar year then ended and a
related statement of retained earnings and cash flow and a consolidating
statement of income for each such year certified by the chief financial officer
of the Company as true and correct;
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(d) contemporaneously with the delivery of the financial statements
described in Section 5.1(a) and (b), a certificate of the chief financial
officer of the Company stating that, to his best knowledge, after due diligence,
the Company is in compliance with all covenants of this Agreement together with
a summary of such officer's calculations verifying compliance with Section 5.7
through Section 5.11 inclusive and Section 5.23 through Section 5.24 inclusive,
and providing detailed calculations of the financial performance used in
determining the applicable Level as at the last day of such fiscal quarter, and
that such officer has reviewed the activities of the Company during the period
covered by such financial statements and has, to his best knowledge, after due
diligence, found no Default or Event of Default or if such Default or Event of
Default exists, a disclosure of the nature or status thereof.
(e) contemporaneously with the filing or mailing thereof, copies of
all material reports and financial statements submitted by the Company or any
Subsidiary to its stockholders or any State or federal agency in compliance with
any state or federal law or regulation;
(f) concurrently with the delivery of the financial statements
described in Sections 5.1(a) and (b), a revenue and contract amortization
history for purchase acquisitions of the Company for the fiscal quarter then
ended, substantially in the form attached hereto as Exhibit N.
(g) upon (i) the consummation of any acquisition by the Company or by
any Subsidiary of the Company of the capital stock of any Person, or of all or a
substantial portion of the assets of any Person, copies of all agreements,
instruments and documents executed and delivered in connection with such
transaction, including, without limitation, any Revenue Sharing Agreements and
any agreements or instruments representing Subordinated Indebtedness incurred in
connection with such transaction, and (ii) the execution of any amendment to any
agreement, instrument or document referred to in clause (i) of this subsection
(g), a true and complete copy of such amendment.
(h) from time to time, such other financial data and information
about the Company or its Subsidiaries as any Bank may reasonably request;
(i) if and when the Company gives or is required to give notice to
the PBGC of any "Reportable Event" (as defined in Section 4043 of ERISA) with
respect to any Plan which might constitute grounds for a termination of
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such Plan under Title IV of ERISA, or if and when the Company knows that any
member of the Controlled Group or the plan administrator of any Plan has given
or is required to give notice of any such Reportable Event, a copy of the notice
of such Reportable Event given or required to be given to the PBGC; and
(j) without limiting clauses (a) through (i) of this Section 5.1, as
soon as available, but in any event within ninety (90) days after the end of
each fiscal year of the Company, audited consolidated accounts for Murray
Johnstone and its Subsidiaries prepared in accordance with generally accepted
accounting principles in the U.K. in effect from time to time as at the end of
such fiscal year.
5.2 CONDUCT OF BUSINESS. The Company shall, and shall cause each of its
Subsidiaries to:
(a) duly observe and comply in all material respects with all
applicable laws and valid requirements of any governmental authorities relative
to its corporate existence, rights and franchises, to the conduct of its
business and to its property and assets, and will maintain and keep in full
force and effect all licenses and permits necessary in any material respect to
the proper conduct of its business, including, without limitation, the
registration as a broker-dealer of each Subsidiary required to so register under
the Exchange Act, the registration of each Subsidiary as an investment adviser
required to so register under Section 203 of the Investment Advisers Act, and
any equivalent foreign registration;
(b) maintain its corporate existence, rights and franchises;
(c) comply in all material respects with all applicable laws, rules,
regulations and orders in effect from time to time, including, without
limitation, those relating to environmental matters;
(d) keep and maintain all property useful and necessary in its
business in operating condition, ordinary wear and tear excepted;
(e) in the case of each Subsidiary, be engaged in Permitted
Businesses; and
(f) in the case of the Company, continue to remain engaged in the
business of being a holding company which acquires firms engaged in Permitted
Businesses.
5.3 MAINTENANCE OF INSURANCE. The Company will, and will cause its
Subsidiaries to, maintain or cause to be
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maintained with financially sound and reputable insurers, insurance with respect
to its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against by
reputable companies in the same or similar businesses, such insurance to be of
such types and in such amounts (with such deductible amounts) as is customary
for such companies under similar circumstances. The Company shall, upon request
of any Bank, furnish to the Banks certificates or other satisfactory evidence of
compliance with the foregoing insurance provisions.
5.4 TAXES. The Company will pay, and will cause its Subsidiaries to pay,
all taxes, assessments or governmental charges on or against it or any of its
Subsidiaries or its or their respective properties prior to the time when they
become delinquent; PROVIDED, THAT this covenant shall not apply to any tax,
assessment or charge which is being contested in good faith by proper
proceedings and with respect to which adequate reserves have been established
and are being maintained in accordance with GAAP if no proceedings shall have
been commenced to foreclose any lien securing such tax, assessment or charge.
5.5 INSPECTION BY THE BANKS. The Company will, and will cause its
Subsidiaries to, permit any Bank, or its designees, at any reasonable time and
at reasonable intervals of time, for the purpose of ascertaining compliance with
this Agreement, to (i) visit and inspect the properties of the Company and its
Subsidiaries, (ii) examine and make copies of and take abstracts from the books
and records of the Company and its Subsidiaries and (iii) discuss the affairs,
finances and accounts of the Company and its Subsidiaries with their appropriate
officers.
5.6 MAINTENANCE OF BOOKS AND RECORDS. The Company will keep, and will
cause its Subsidiaries to keep, adequate books and records of account, in which
true and complete entries will be made reflecting all of its business and
financial transactions, and such entries will be made in accordance with GAAP
consistently applied and applicable law.
5.7 CURRENT RATIO. The Company will at all times maintain consolidated
current assets equal to at least 120% of consolidated current liabilities
(excluding for this purpose the current portion of long-term debt).
5.8 CASH FLOW RATIOS. The Company will at all times (i) maintain a ratio
of Consolidated Cash Flow for the period consisting of the four (4) complete
consecutive calendar quarters immediately preceding the date of determination
(the "Preceding Period") to Consolidated Debt
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Service of at least (A) from the Closing Date through the Conversion Date,
1.6:1, and (B) at all times following the Conversion Date, 1.2:1, and (ii)
maintain Consolidated Cash Flow for the Preceding Period equal to at least 300%
of Interest Expense for the Preceding Period.
5.9 CONSOLIDATED NET WORTH. The Company will at all times maintain
Consolidated Net Worth of at least $190,234,000, PLUS an amount equal to 100% of
the proceeds of any sale by the Company of any shares of its capital stock
occurring on or after December 31, 1993, LESS an amount equal to the aggregate
amount paid by the Company after the Closing Date to repurchase shares of its
capital stock.
5.10 CONSOLIDATED LIABILITIES FOR BORROWED MONEY TO CONSOLIDATED NET
WORTH RATIO. The Company will not at any time permit consolidated liabilities
for Borrowed Money to exceed 225% of the sum of (a) Consolidated Net Worth, PLUS
(b) with respect to any Subsidiary whose acquisition by the Company or a
Subsidiary of the Company has been treated as a pooling of interests in
accordance with GAAP, 60% of the amount by which the fair market value
(determined at the date of such acquisition) of the stock of the Company issued
in exchange for the stock of such Subsidiary exceeds the book value of the stock
of such Subsidiary. For purposes of this Section 5.10, the fair market value of
each share of the stock of the Company shall be the mean of the bid and ask
prices per share on the date of such acquisition.
5.11 SENIOR INDEBTEDNESS TO CAPITAL FUNDS. The Company will not at any
time permit Senior Indebtedness to exceed the Applicable Percentage (defined
below) of the sum of (a) Capital Funds, PLUS (b) with respect to any Subsidiary
whose acquisition has been treated as a pooling of interests in accordance with
GAAP, 60% of the amount by which the fair market value (determined at the date
of such acquisition) of the stock of the Company issued in exchange for the
stock of such Subsidiary exceeds the book value of the stock of such Subsidiary,
PLUS (c) with respect to all investment advisory contracts held by the Company's
Subsidiaries which are amortized in accordance with GAAP, the cumulative amount
of such amortization for all such contracts taken by the Company from the later
of the date of the acquisition of such contracts by such Subsidiary or the date
of the acquisition of such Subsidiary by the Company or a Subsidiary of the
Company through the end of the fiscal quarter of the Company immediately
preceding the date of determination of compliance with this covenant (the amount
referred to in this clause (c) being hereinafter referred to as the
"Amortization Amount"); PROVIDED, HOWEVER, that if the aggregate of the revenues
(calculated in accordance with GAAP and excluding intercompany items) of all
Subsidiaries of the Company for the four (4) consecutive full fiscal
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quarters of such Subsidiaries immediately preceding the date of determination
of compliance with this covenant shall have declined from the aggregate of the
revenues (calculated in accordance with GAAP and excluding intercompany items)
(i) in the case of Subsidiaries acquired by the Company or a Subsidiary of the
Company, of all such Subsidiaries for the four (4) consecutive full fiscal
quarters of each such Subsidiary immediately prior to the acquisition by the
Company (or by a Subsidiary of the Company) of such Subsidiary and (ii) in the
case of the acquisition by a Subsidiary of the Company of such contracts,
derived by the seller of such contracts from such contracts for the four (4)
consecutive full fiscal quarters of such seller immediately prior to such
acquisition by such Subsidiary of such contracts (the aggregate of the revenues
described in (i) and (ii) above, the "Base Revenues"); then the Amortization
Amount, for the purpose of clause (c) above, shall be reduced by the percentage
obtained by dividing (A) the amount of such decline by (B) the Base Revenues
and by adding five (5) percentage points to the result obtained by such
division. For purposes of this Section 5.11, the term "Applicable Percentage"
shall mean (i) from the Closing Date through December 31, 1995, fifty percent
(50%), and (ii) at all other times, forty percent (40%).
5.12 LIMITATIONS ON INDEBTEDNESS. Neither the Company nor any of its
Subsidiaries will create, incur, assume or suffer to exist, contingently or
otherwise, any Indebtedness other than the following:
(a) Indebtedness of the Company and any of its Subsidiaries to the
Banks hereunder;
(b) Subordinated Indebtedness;
(c) Indebtedness existing as of the Closing Date and disclosed on
Exhibit O;
(d) Indebtedness of the Company to UAM Trademark, PROVIDED that such
Indebtedness is evidenced by a promissory note or notes which are subordinated
to all obligations of the Company to the Agents and the Banks hereunder and
under the other Loan Documents in form and substance satisfactory to the Agents
and the Banks and which note or notes have been delivered to the Collateral
Agent, duly endorsed to the Collateral Agent;
(e) Indebtedness of the Company to any Subsidiary (other than UAM
Trademark) which Indebtedness, when aggregated with Indebtedness of the Company
to other Subsidiaries (other than UAM Trademark), does not exceed $2,000,000 at
any one time outstanding;
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(f) Indebtedness of Barrow, Hanley, Mewhinney & Strauss, Inc. a
Nevada corporation and a Subsidiary of the Company ("BHMS") to UAM Investment
outstanding as of the Closing Date under the Non-Negotiable Note, dated July 27,
1988, made by BHM&S payable to the Company in the principal amount of
$75,000,000 and endorsed by the Company to the order of UAM Investment;
(g) Indebtedness of GSB Investment Management, Inc., a Delaware
corporation and a Subsidiary of the Company ("GSB"), to UAM Investment
outstanding as of the Closing Date under the 8.5% Note Due December 31, 2023,
dated December 31, 1993, made by GSB payable to the order of UAM Investment in
the principal amount of $27,500,000;
(h) Indebtedness of L&B Realty Advisors, Inc., a Delaware corporation
and a Subsidiary of the Company ("L&B"), to UAM Investment outstanding as of the
Closing Date under the 8.5% Note Due December 31, 2003, dated December 17, 1993,
made by L&B payable to the order of UAM Investment in the principal amount of
$27,000,000;
(i) the Heitman Permitted Indebtedness;
(j) Indebtedness of the Company in an amount not to exceed $3,500,000
to certain guarantors of Indebtedness of Heitman to LaSalle National Bank,
pursuant to an agreement made by the Company in favor of such guarantors to
reimburse such guarantors in an amount not to exceed $3,500,000 upon the
occurrence of a payment default under the Indebtedness of Heitman to LaSalle
National Bank, the Company's obligation to make such reimbursement being
conditioned upon the prior payment in full of all amounts owing by such
guarantors of such Indebtedness;
(k) Indebtedness of a wholly-owned Subsidiary of the Company to the
Company arising out of loans made by the Company to such Subsidiary to enable
such Subsidiary to pay all or a portion of the purchase price to acquire the
assets of another Person or Persons engaged in Permitted Businesses, provided
that all promissory notes or other instruments evidencing such Indebtedness are
endorsed to the order of the Collateral Agent and delivered to the Collateral
Agent, for the ratable benefit of the Agent and the Banks;
(l) Indebtedness of any Subsidiary or Subsidiaries to the Company
not otherwise permitted by clause (k) of this Section 5.12 which Indebtedness,
in the aggregate, does not exceed $5,000,000 at any one time outstanding;
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(m) Indebtedness of the Company to any Bank in respect of short term
"money market" borrowings, provided that (i) the maturity of any such borrowing
shall not be less than seven (7) days nor more than ninety (90) days from the
date of such borrowing, (ii) any such borrowing shall be in a principal amount
of not less than $1,000,000 and all such borrowings from all of the Banks
outstanding at any one time shall not (A) exceed $50,000,000 in the aggregate
and (B) when aggregated with all Tranche A Loans then outstanding exceed the
Tranche A Total Commitment (calculated without regard to the reduction provided
for in clause (iii) below) in the aggregate, and (iii) the Tranche A Total
Commitment shall (except for purposes of calculating the fee payable by the
Company pursuant to Section 2.10(a)) be reduced by the aggregate amount of such
borrowings outstanding at any one time. No such borrowings shall be permitted
if a Default or an Event of Default then exists or, after giving effect to such
borrowings, a Default or an Event of Default would exist and be continuing.
Immediately upon the occurrence of any such Indebtedness, the Company and the
Bank to whom such Indebtedness is incurred shall each give written notice (sent
by telecopier) to the Agent, which notice shall state (i) the principal amount
of such Indebtedness, (ii) the maturity date of such Indebtedness and (iii) the
name of such Bank;
(n) Indebtedness of Subsidiaries of the Company (other than UAM
Holdings, UAM Trademark, UAM Investment and UAM Realty Advisors) not otherwise
permitted by clauses (a) through (m) of this Section 5.12, provided that such
Indebtedness of all Subsidiaries of the Company shall not in the aggregate at
any one time outstanding exceed an amount equal to ten percent (10%) of
Consolidated Net Worth; and
(o) Indebtedness of the Company (including any refinancing thereof)
in the aggregate principal amount not to exceed $100,000,000 incurred in a
private placement or public offering of debt securities of the Company, provided
that (i) the proceeds thereof are used to refinance amounts outstanding under
this Agreement, (ii) no principal amount of such Indebtedness is required to be
directly or indirectly repaid under any circumstances prior to a date 180 days
following the Termination Date, and (iii) such Indebtedness is issued and at all
times outstanding on terms and pursuant to documentation acceptable in form and
substance to the Required Banks, and in no event shall such documentation
include any covenants, warranties, representations or defaults (or any other
type of restriction which would have the practical effect of any of the
foregoing, including, without limitation, any "put" or mandatory prepayment or
redemption of such Indebtedness) which are more restrictive then the covenants,
warranties, representations,
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defaults and Events of Default set forth herein and in the other Loan Documents
or more favorable to the holders of such Indebtedness than corresponding
provisions of this Agreement and the other Loan Documents in favor of the Banks
and the Agents.
5.13 LEASES. Neither the Company nor any of its Subsidiaries shall
during any calendar year, as lessee, enter into or be a lessee or tenant under
any leases of real or personal property, except for (i) capitalized leases and
(ii) leases providing for payments in any one calendar year (whether or not such
payments are termed rent) which do not result in aggregate lease payments of the
Company and its Subsidiaries in excess of $20,000,000 during any such calendar
year, or result in aggregate lease payments in excess of $1,000,000 during any
such calendar year of the Company alone.
5.14 RESTRICTION ON ENCUMBRANCES. Neither the Company nor any of its
Subsidiaries will create, incur, assume or suffer to exist any Encumbrance upon
or with respect to any of its property or assets, or assign or otherwise convey
any right to receive income, except:
(a) Encumbrances existing as of the date of this Agreement and
disclosed in accordance with Section 3.5;
(b) liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Section 5.4;
(c) landlords' and lessors' liens in respect of rent not in default
or liens in respect of pledges or deposits under workmen's compensation,
unemployment insurance, social security laws or similar legislation, including
liens securing up to $500,000 in respect of Unfunded Vested Liabilities under
ERISA permitted by Section 5.18 (but not any other liens arising under ERISA) or
in connection with appeal and similar bonds incidental to litigation;
mechanics', laborers' and materialmen's and similar liens, if the obligations
secured by such liens are not then delinquent; liens securing the performance of
bids or tenders; and statutory liens incidental to the ordinary conduct of the
business of the Company and its Subsidiaries and which do not in the aggregate
materially detract from the value of the property of the Company or any of its
Subsidiaries, or materially impair the use thereof in the operation of their
business;
(d) judgment liens which shall not have been in existence for a
period longer than thirty (30) days after the creation thereof or, if a stay of
execution shall have
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been obtained, for a period longer than thirty (30) days after the expiration of
such stay;
(e) rights of lessors under capital leases;
(f) easements, rights of way, restrictions and other similar charges
or Encumbrances not interfering in a material way with the ordinary conduct of
business of the Company or any of its Subsidiaries;
(g) Encumbrances on property or assets of the Company and its
Subsidiaries to secure Indebtedness not to exceed in the aggregate $1,000,000
resulting from the deferred purchase price of such property or assets created in
connection with the acquisition of such property or assets or the refinancing of
Indebtedness secured by Encumbrances on such property; PROVIDED, THAT with
respect to the refinancing of Indebtedness, any such Encumbrance shall not
extend to property or assets of the Company or any of its Subsidiaries not
encumbered prior to any such refinancing and any such Encumbrance shall not
secure more than the amount existing prior to such refinancing;
(h) pledges of stock of a Subsidiary of the Company incurred in
connection with an acquisition of such stock in exchange for Subordinated
Indebtedness which stock is pledged as collateral security to the sellers of
such Subsidiary in connection with such acquisition as permitted by Section
5.22;
(i) Encumbrances in favor of the Collateral Agent, the Agent or the
Banks securing Obligations to the Banks under this Agreement and the other Loan
Documents;
(j) Encumbrances set forth on Exhibit D hereto securing the Heitman
Permitted Indebtedness;
(k) Encumbrances on property or assets not constituting Collateral of
Subsidiaries of the Company (other than UAM Holdings, UAM Trademark, UAM
Investment, UAM Realty Advisors and UAM U.K. Holdings) securing Indebtedness
permitted by Section 5.12(n); and
(l) Encumbrances on the Collateral securing Indebtedness permitted
by Section 5.12(o), which Encumbrances shall not be superior to and may be of
equal and coordinate parity with the Encumbrances in favor of the Collateral
Agent hereunder and shall be created on terms and pursuant to documentation
(including without limitation an intercreditor agreement) acceptable in form and
substance to the Required Banks.
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5.15 MERGER; CONSOLIDATION; SALE OR LEASE OF ASSETS. Neither the Company
nor any of its Subsidiaries shall dissolve, liquidate, merge or consolidate into
or with any other Person, or sell, lease or otherwise dispose of a substantial
portion of its assets; PROVIDED, THAT (i) any Subsidiary of the Company may
merge with and into any other Subsidiary of the Company, (ii) any wholly-owned
Subsidiary of the Company formed by the Company or a Subsidiary of the Company
for the purpose of acquiring all of the outstanding capital stock of another
corporation in accordance with the terms of this Credit Agreement may merge with
such corporation, and (iii) any Subsidiary of the Company may dissolve, sell,
liquidate or otherwise dispose of all or a substantial portion of its assets if
such assets do not represent a substantial portion of the assets of the Company
and its Subsidiaries on a consolidated basis.
5.16 ADDITIONAL STOCK ISSUANCE. The Company shall not permit or suffer
any of its Subsidiaries to issue any additional shares of its capital stock, any
options, rights, or warrants therefor or any securities convertible into such
capital stock. Neither the Company nor any of its Subsidiaries shall sell,
transfer, pledge or otherwise dispose of any of the capital stock of a
Subsidiary, except dispositions of such stock in connection with a transaction
permitted by Section 5.15 and as permitted by Section 5.23.
5.17 INVESTMENTS, LOANS. Neither the Company nor any of its Subsidiaries
shall make any investment (by acquisition, capital contribution or otherwise)
in, or loans to, any Person, other than (i) notes, bonds or other obligations of
the United States or any agency thereof which as to principal and interest
constitute direct obligations of or are guaranteed by the United States, (ii)
certificates of deposit or other deposit instruments or accounts of the Banks or
other banks or trust companies organized under the laws of the United States or
any State thereof which have capital and surplus of at least $500,000,000, (iii)
commercial paper or finance company paper which is rated not less than prime-one
or A-1 or their equivalents by Moody's Investors Service, Inc. or Standard &
Poor's Corporation, respectively, or their successors, (iv) any repurchase
agreement secured by any one or more of the foregoing on a fully perfected
basis, (v) money market mutual funds having net assets of over $500,000,000,
(vi) investments in Subsidiaries made prior to the Closing Date, (vii) any
Subsidiary acquired after the Closing Date by the Company or a wholly-owned
Subsidiary of the Company which is engaged in Permitted Businesses, the effect
of which acquisition does not result in a Default or an Event of Default, (viii)
any wholly-owned Subsidiary formed by the Company or by a wholly-owned
Subsidiary of the Company for the purpose of acquiring the stock or assets of
any Person
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or Persons engaged in Permitted Businesses, (ix) investments not otherwise
permitted by clauses (i) through (viii) of this Section 5.17 as shall be made by
Murray Johnstone and its Subsidiaries which investments do not at any time have
an aggregate value in accordance with generally accepted accounting principles
in the U.K. in effect from time to time in excess of 15,000,000 pounds sterling,
(x) other investments not otherwise permitted by clauses (i) through (ix) of
this Section 5.17 in an aggregate amount not to exceed at any one time five
percent (5%) of Consolidated Net Worth and (xi) loans permitted by Section 5.12.
5.18 PLANS. The Company and each of its Subsidiaries will meet all
minimum funding requirements applicable to any Plans established or maintained
by any of them which are subject to ERISA and will at all times comply in all
material respects with the provisions of ERISA which are applicable to the
Plans. Neither the Company nor any of its Subsidiaries will permit any event or
condition to exist which could permit any Plan to be terminated under
circumstances which would cause the lien provided for in ERISA or any section
thereof (including without limitation Section 406B) to attach to the assets of
the Company or any of its Subsidiaries. The Company and its Subsidiaries will
not permit the aggregate current value of the Plans' benefits guaranteed under
Title IV of ERISA to exceed the aggregate current value of the Plans' assets
allocable to such benefits, PROVIDED that the Company and its Subsidiaries may
incur Unfunded Vested Liabilities of up to $100,000 in the aggregate.
5.19 NOTIFICATION OF DEFAULT. Immediately upon becoming aware of the
existence of any Default or Event of Default, the Company shall give the Agents
written notice thereof specifying the nature and duration thereof and the action
being or proposed to be taken with respect thereto.
5.20 NOTIFICATION OF MATERIAL LITIGATION; MATERIAL ADVERSE CHANGE. The
Company will promptly notify the Agents in writing of any (a) litigation or of
any investigative proceedings by a governmental agency or authority commenced or
threatened against it or any of its Subsidiaries of which it has notice, which
has any reasonable possibility of having a materially adverse affect on the
business, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole, and (b) material adverse change in the business,
financial condition, assets or properties of the Company and its Subsidiaries
taken as a whole.
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5.21 CHANGE IN TERMS AND PREPAYMENT OF SUBORDINATED AND OTHER
INDEBTEDNESS. The Company shall not:
(a) effect or permit any change in or amendment to (i) the terms by
which any Subordinated Indebtedness purports to be subordinated to the payment
and performance of the Obligations or (ii) the terms relating to the repayment
of any Subordinated Indebtedness (other than any extensions of the date of
payment therefor or any reductions in the amount thereof or in the rate at which
interest or other fees are payable to the holders thereof in connection
therewith);
(b) directly or indirectly make any payment of any principal of or
in redemption, retirement, defeasance or repurchase, in whole or in part, of any
Subordinated Indebtedness or pledge any collateral therefor, except payments
required by the instruments evidencing such Subordinated Indebtedness; PROVIDED,
THAT nothing shall preclude the Company from permitting the conversion of
Subordinated Indebtedness to equity by exercise of warrants or otherwise (in
accordance with its terms); or
(c) directly or indirectly make any payment of any principal of or in
redemption, retirement, defeasance or repurchase, in whole or in part, of any
Indebtedness permitted by Section 5.12(o).
5.22 PLEDGED COLLATERAL. (a) At all times, Collateral consisting of
capital stock of Subsidiaries of the Company shall have an aggregate value of at
least 150% of the aggregate principal amount of Senior Indebtedness then
outstanding. For purposes of this Section 5.22, Collateral consisting of the
capital stock of a Subsidiary of the Company will be valued at the end of each
calendar quarter (which valuation shall apply for purposes of this Section 5.22
until the next valuation date) as follows: Cash Flow of a Subsidiary for the
preceding four (4) complete consecutive calendar quarters (including the quarter
then ended) shall be multiplied by 4.25 and the product shall be multiplied by
the percentage of the total number of the issued and outstanding shares of
capital stock of such Subsidiary in which the Collateral Agent holds a
continuing perfected first priority security interest; and PROVIDED, THAT stock
of a Subsidiary shall be deemed to have zero value unless the Collateral Agent
has a continuing perfected first priority security interest in not less than 51%
of the issued and outstanding shares of all classes of such Subsidiary, and not
less than 51% of the voting stock (including at least 51% of the voting rights
attributable thereto) of such Subsidiary. Unless the Collateral Agent receives
written notice from the Company or the Agent to the contrary, the Collateral
Agent may assume without inquiry
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that the Collateral held by it, or in which it has a security interest, has the
value required by this Section 5.22. The Collateral Agent need not make any
independent valuation. Upon the written request of the Required Banks (but,
unless an Event of Default shall have occurred and be continuing, in no event
more than twice during any calendar year), the Company will promptly furnish
each Bank with a certificate of the chief financial officer of the Company, in
reasonable detail, verifying compliance with this subsection (a).
(b) Upon acquiring or forming a Subsidiary, the Company or the
wholly-owned Subsidiary of the Company acquiring or forming such Subsidiary,
shall promptly pledge the capital stock of such Subsidiary to the Collateral
Agent for the ratable benefit of the Banks pursuant to such documentation as the
Required Banks may require; PROVIDED, that in any case where a Subsidiary is
acquired by the issuance of Subordinated Indebtedness representing 70% or more
of the acquisition cost, the Company or such acquiring Subsidiary may pledge to
selling stockholders that stock which bears the same relation to all stock of
such Subsidiary acquired by the Company as such Subordinated Indebtedness bears
to the entire acquisition cost; PROVIDED, FURTHER, THAT in any case where a
Subsidiary is acquired by the issuance of Subordinated Indebtedness representing
less than 70% of the acquisition cost, the Company or such acquiring Subsidiary
may pledge to selling stockholders that stock which bears the same relation to
all stock of such Subsidiary acquired by the Company as such Subordinated
Indebtedness bears to the entire acquisition cost so long as not less than 51%
of the stock of such Subsidiary, but in no event less than 51% of the voting
stock (including at least 51% of the voting rights attributable to all the stock
of such Subsidiary) is pledged and delivered to the Collateral Agent and creates
a first priority perfected security interest thereon; and PROVIDED, FINALLY,
that the Collateral Agent, for the ratable benefit of the Banks, shall be
granted pursuant to such documentation as the Agents may require a perfected
second priority security interest in any stock pledged to selling stockholders.
In the event that a Subsidiary is acquired or formed by a Subsidiary of the
Company that is not a Guaranty Subsidiary, such acquiring or forming Subsidiary
shall execute and deliver to the Agents and the Banks a guaranty of the
Obligations of the Company hereunder, such guaranty to be in form, scope and
substance satisfactory to the Agent.
(c) Notwithstanding anything to the contrary contained in Subsection
(b) above, provided no Default or Event of Default has occurred or shall be
continuing, (i) the Company shall not be obligated to cause the pledge of the
Capital Stock of any Subsidiary identified as a "Heitman
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Exempted Subsidiary" on Exhibit K, (ii) the Company shall not be obligated to
cause the pledge of the capital stock of any Subsidiary identified as a "Murray
Johnstone Exempted Subsidiary" on Exhibit K, (iii) the Company shall not be
obligated to cause the pledge of more than sixty-five percent (65%) of the
issued and outstanding capital stock of any Subsidiary organized outside of the
United States of America, and (iv) subject to the last sentence of this
Subsection (c), the Company shall not be obligated to cause the pledge of the
capital stock of any Subsidiary acquired by the Company or any Subsidiary of the
Company if the consolidated revenues (calculated in accordance with GAAP) of the
acquired Subsidiary and its Subsidiaries for the four (4) consecutive full
fiscal quarters immediately prior to the acquisition of such Subsidiary shall
not have exceeded $1,000,000 in the aggregate. For purposes of this Subsection
(c), any such Subsidiary the capital stock of which has not been pledged as
allowed by this provision (including, without limitation, the Subsidiaries
identified on Exhibit K as "Exempted Subsidiaries" but excluding the
Subsidiaries identified on Exhibit K as "Heitman Exempted Subsidiaries", "Murray
Johnstone Exempted Subsidiaries" or "Special Exempted Subsidiaries") shall be
referred to as an "Exempted Subsidiary". The Company agrees that in the event
that the aggregate consolidated revenues (calculated in accordance with GAAP) of
all Exempted Subsidiaries and their Subsidiaries equal or exceed $5,000,000 for
the four (4) consecutive full fiscal quarters immediately preceding the date of
any determination thereof, then the Company shall immediately cause the pledge
of 100% of the capital stock of a sufficient number of Exempted Subsidiaries so
that aggregate consolidated revenues (calculated in accordance with GAAP) for
all remaining Exempted Subsidiaries and their Subsidiaries for such four (4)
fiscal quarters shall be less than $5,000,000.
(d) Except as provided in Subsection (c) above, and without limiting
the provisions of Subsection (b) above, upon the written request of the Required
Banks, the Company will from time to time cause all of the issued and
outstanding capital stock of any Subsidiary not previously pledged to the
Collateral Agent for the ratable benefit of the Banks to be so pledged pursuant
to such documentation as the Required Banks may require and, if such capital
stock is owned by a Subsidiary which is not a Guaranty Subsidiary, shall cause
such subsidiary to execute and deliver to the Agents and the Banks a guaranty of
the Obligations of the Company hereunder, such guaranty to be in form, scope and
substance satisfactory to the Agent.
5.23 RESTRICTED PAYMENTS. The Company and its Subsidiaries shall not
declare or pay any dividend on their respective capital stock or make any
payment or distribution
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to purchase, redeem, retire or acquire any of their respective capital stock
or any option, warrant, security convertible into stock or other right to
acquire such capital stock (collectively, "stock repurchases"), other than, if
no Default or Event of Default has occurred and is continuing, (i) dividends
payable solely in shares of their respective capital stock, (ii) dividends
payable to the Company by a Subsidiary of the Company, and (iii) dividends
declared or paid and/or stock repurchases made by the Company which, when added
to dividends declared or paid and stock repurchases made during the reference
period (as hereinbelow defined), do not exceed the lesser of (a) consolidated
net income of the Company and its Subsidiaries (determined in accordance with
GAAP) during the measuring period (as hereinbelow defined), treated as a single
accounting period and (b) 35% of Cash Flow during such measuring period;
PROVIDED, THAT payment of such dividend shall occur not later than sixty (60)
days after such declaration; and PROVIDED, FURTHER, THAT such dividends may be
paid only if such dividends are declared prior to payment thereof. Further, the
Company may, during the period commencing August 29, 1994 and ending August 29,
1995 (the "twelve month period"), so long as no Default or Event of Default has
occurred and is continuing or would as a result of such payment or declaration
occur, make payments to purchase shares of its common stock, so long as the
total of (i) the aggregate amounts paid by the Company to purchase shares of its
common stock and (ii) all dividends declared or paid by the Company, do not in
the aggregate exceed $80,000,000 during such twelve month period. For purposes
of this Section 5.23, "measuring period" means the period of four (4)
consecutive, complete calendar quarters preceding the first day of the calendar
quarter in which the proposed dividend is to be declared or stock repurchase is
to be effected, and "reference period" means the period of four (4) consecutive,
complete calendar quarters comprising the calendar quarter in which the dividend
or dividends are declared or stock repurchase or repurchases are effected and
the three (3) calendar quarters immediately preceding such quarter.
Notwithstanding anything contained herein to the contrary, for purposes of this
Section 5.23 and solely for purposes of this Agreement, payments made under the
Revenue Sharing Agreements shall not be deemed to be dividends, and shall be
permitted to the extent otherwise permitted under this Agreement.
5.24 CONTINGENT PAYMENTS. The Company shall not make any Contingent
Payment unless, as of the date of the making of such Contingent Payment,
Consolidated Cash Flow for the period consisting of the four (4) complete,
consecutive calendar quarters preceding such date was greater than 110% of the
sum of (i) Consolidated Debt
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Service as of the date of the making of such Contingent Payment and (ii) the
amount of such Contingent Payment.
5.25 TRANSACTIONS WITH AFFILIATES. Except as otherwise expressly
permitted hereunder, neither the Company nor any of its Subsidiaries shall enter
into any transaction, including, without limitation, the purchase, sale or
exchange of property or assets or the rendering of any service, with any
Affiliate, except for any transaction which is in the ordinary course of
business of the Company or any of its Subsidiaries, as the case may be, and
which is upon fair and reasonable terms no less favorable to the Company or such
Subsidiary, as the case may be, than it would obtain in an arm's-length
transaction with a Person not an Affiliate.
5.26 REVENUE SHARING AGREEMENTS. The Company shall use its best efforts
to, and shall make best efforts to cause its Subsidiaries to, comply in all
material respects with all of the terms and conditions of the Revenue Sharing
Agreements.
5.27 FURTHER ASSURANCES. The Company shall, and shall cause each
Subsidiary to, at any time and from time to time, execute and deliver such
further instruments and take such further action as may reasonably be requested
by the Agent or any Bank to effect the purposes of this Agreement, the Notes and
the other Loan Documents.
5.28 INVESTMENT IN ALDRICH, EASTMAN & WALTCH, L.P. The Company will not,
without the prior written consent of the Required Banks, (i) permit or suffer
the Investment Agreement to be amended, or (ii) make, or permit any Subsidiary
to make, any further investment in Aldrich, Eastman & Waltch, L.P. (whether
pursuant to the Acquisition Agreement a form of which is annexed to the
Investment Agreement or otherwise) or (iii) make, or permit any Subsidiary to
make, any additional capital contributions in Aldrich, Eastman & Waltch, L.P.
SECTION VI
DEFAULTS
6.1 DEFAULTS. There shall be an Event of Default hereunder (each an
"Event of Default") if any of the following events occur:
(a) the Company shall fail to pay (i) when due any principal of any
Loans or (ii) any interest payable hereunder or under the Notes or any fee or
expense payable
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hereunder or under any other Loan Document within five (5) days of the due date
therefor; or
(b) the Company shall fail to perform any covenant or agreement
contained in Sections 5.7 through 5.16, inclusive, and 5.18 through 5.27,
inclusive, of this Agreement or the Company or any Subsidiary shall fail to
perform any covenant or agreement contained in any of the other Loan Documents;
or
(c) the Company shall fail to perform any covenant contained in
Sections 5.2 through 5.6, inclusive, or 5.17 of this Agreement and such failure
shall continue for thirty (30) days after any officer of the Company has become
aware of such failure; or
(d) the Company shall fail to perform any term, covenant or
agreement (other than those referred to in Sections 6.1(a), (b) and (c) hereof)
contained in this Agreement, and such default shall continue for thirty (30)
days after notice thereof has been received by the Company from the Agent or the
Collateral Agent; or
(e) any representation or warranty of the Company or any of its
Subsidiaries made in this Agreement, the Notes, or any of the other Loan
Documents, or in any other documents or agreements executed in connection with
the transactions contemplated hereunder or thereunder or in any certificate
delivered hereunder shall prove to have been false in any material respect upon
the date when made or deemed to have been made; or
(f) At any time following December 31, 1993, there shall be a change
in the Code or regulations thereunder, or any revenue ruling or private letter
ruling (addressed to UAM) shall be issued by the Internal Revenue Service, if
compliance by the Company and its Subsidiaries with such change or ruling would
materially and adversely alter the basis upon which the Company or its
Subsidiaries amortize intangible assets for tax purposes; or
(g) the Company or any of its Subsidiaries shall fail to pay when
due the principal of or interest on Indebtedness having an aggregate outstanding
principal amount of at least $10,000,000, or the Company or any of its
Subsidiaries shall fail to observe or perform any covenant or agreement
contained in any agreement or instrument relating to any such Indebtedness
within any applicable grace period provided for in the agreement(s) or
instrument(s) creating or evidencing such Indebtedness, or any other event shall
occur if the effect of such failure or other event is to accelerate, or to
permit, or with the giving of notice or lapse of time or both would permit, the
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holder of such Indebtedness or any other Person to accelerate the maturity of
such Indebtedness; or any such Indebtedness shall be required to be prepaid in
whole or in part prior to its stated maturity; or
(h) the Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property, (ii) be generally not paying its debts as such debts become due,
(iii) make a general assignment for the benefit of its creditors, (iv) commence
a voluntary case under the Bankruptcy Code (as now or hereafter in effect), (v)
file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vi) fail to contest in a timely or appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary case
under the Bankruptcy Code, (vii) take any action under the laws of its
jurisdiction of incorporation or organization similar to any of the foregoing or
(viii) take any corporate action for the purpose of effecting any of the
foregoing; or
(i) a proceeding or case shall be commenced, without the application
or consent of the Company or any of its Subsidiaries, in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, dissolution, winding
up or composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets or (iii) similar relief in respect of it, under
any law providing for the relief of debtors, and such proceeding or case shall
not be dismissed or discharged for a period of sixty (60) days; or an order for
relief shall be entered in an involuntary case under the Bankruptcy Code against
the Company or any of its Subsidiaries; or
(j) judgments or orders for the payment of money shall be entered
against the Company or any of its Subsidiaries by any court, or a warrant of
attachment or execution or similar process shall be issued or levied against
property of the Company or such Subsidiary which in the aggregate exceeds
$2,000,000 in value, and any such judgment, order, warrant or process shall
continue undischarged, unbonded or unstayed for thirty (30) consecutive days; or
(k) the Company or any member of the Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess of $500,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV of
ERISA; or notice of intent to terminate a Plan or Plans having aggregate
Unfunded Vested Liabilities in
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excess of $500,000 shall be filed under Title IV of ERISA by the Company, any
member of the Controlled Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any such Plan or
Plans or a proceeding shall be instituted by a fiduciary of any such Plan or
Plans against the Company to enforce Section 515 of ERISA and such proceedings
shall not have been dismissed within thirty (30) days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any such Plan or Plans must be terminated.
(l) Any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 35% or more of the
Company; or, during any period of 12 months, individuals who were directors of
the Company at the beginning of such 12 month period together with individuals
who replaced existing directors through the standard rotation of board
representation among the Company's Subsidiaries cease to constitute a majority
of the board of directors of the Company; or
(m) For any reason, any Loan Document ceases to be in full force and
effect or any lien on any of the Collateral purported to be created by any Loan
Document ceases to be or is not a valid and perfected lien to the extent and
with the priority contemplated hereby or thereby.
6.2 REMEDIES ON DEFAULT. Upon the occurrence and continuance of any
Event of Default, the Agent may and, upon the request of the Required Banks, the
Agent shall, by notice to the Company, declare: (x) the Commitment of each Bank
to be terminated, whereupon the same shall forthwith terminate and/or (y) the
Obligations, including the Notes, all interest thereon and all other amounts
payable under this Agreement, to be forthwith due and payable, whereupon such
Obligations, all such interest and all such amounts shall become and be
forthwith due and payable without presentment, demand, protest or notice, all of
which are hereby expressly waived by the Company; PROVIDED, that if an Event of
Default specified in Section 6.1(h) or 6.1(i) shall occur, the consequences
which would occur upon the giving of notice by the Agent to the Company, as
specified in clauses (x) and (y) above, shall occur automatically without the
giving of any such notice. Upon the occurrence and during the continuance of an
Event of Default, the Agents, or either of them, as appropriate, may exercise
any and all rights and remedies under this Agreement, the Notes and the other
Loan Documents, or any other documents or agreements
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executed in connection with the transactions contemplated hereunder or
thereunder, or by law or equity, and proceed to protect and enforce the Banks'
rights by any action at law, suit in equity or other appropriate proceeding,
whether for specific performance or for an injunction against a violation of any
covenant contained herein, in the Notes or in any of the other Loan Documents or
in aid of the exercise of any power granted hereby or thereby or by law.
Payments under this Section 6.2, after satisfaction of costs of collection,
shall be applied PRO RATA to the Obligations according to the respective amounts
due the Banks under the Notes and Money Market Loans.
6.3 MONEY MARKET LOANS. Any action required to be taken, approved or
requested by the Required Banks hereunder or under any of the other Loan
Documents in connection with the control, release, preservation, foreclosure or
sale or any other action relating to the Collateral or the Obligations, shall be
taken, approved or requested by the Required Banks, as determined without regard
to any Money Market Loans outstanding from any Bank. The Banks and the Agents
hereby agree that upon receipt by the Collateral Agent of any proceeds of
foreclosure or sale of Collateral, such proceeds shall be applied PRO RATA to
the Obligations outstanding according to the respective amounts due to the Banks
under the Notes and Money Market Loans but that the Banks, in their capacity as
holders of Obligations relating to Money Market Loans, shall have no further
right in connection with the control, release, preservation, foreclosure, sale
or other action relating to the Collateral or the Obligations. The right to
receive proceeds of Collateral shall extend to any assignee of any Bank of such
Bank's rights in respect of Money Market Loans. In no event shall Money Market
Loans be taken into account in determining the Required Banks.
SECTION VII
THE AGENTS
7.1 APPOINTMENT OF AGENTS. Each Bank hereby designates Morgan as Agent
and BKB as Collateral Agent to act as herein and in the other Loan Documents
specified. Each Bank hereby authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed to authorize, the Agents to take such
action on its behalf under the provisions of this Agreement, the Notes, the
other Loan Documents and any other instruments and agreements referred to herein
or therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Agents, or either
of them, by the terms hereof and thereof and such
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other powers as are reasonably incidental thereto. The Agents may perform any
of their duties hereunder or thereunder by or through its agents or employees.
7.2 NATURE OF DUTIES OF AGENTS. No Agent shall have any duties or
responsibilities except those expressly set forth in this Agreement or in any of
the Loan Documents to which such Agent is a party. Neither the Agents nor any
of their respective officers, directors, employees or agents shall be liable for
any action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. Neither
of the Agents shall have any liability for any act or failure to act by the
other. The duties of the Agents shall be mechanical and administrative in
nature; the Agents shall not have by reason of this Agreement or the other Loan
Documents a fiduciary relationship in respect of any Bank or to each other; and
nothing in this Agreement or in the other Loan Documents, expressed or implied,
is intended to or shall be so construed as to impose upon the Agents any
obligations in respect of this Agreement or the other Loan Documents except as
expressly set forth herein or therein.
7.3 LACK OF RELIANCE ON THE AGENTS.
(a) Independently and without reliance upon the Agents, each Bank,
to the extent it deems appropriate, has made and shall continue to make (i) its
own independent investigation of the financial condition and affairs of the
Company and its Subsidiaries in connection with the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of the Company and its Subsidiaries, and, except as expressly provided in this
Agreement, the Agents shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any notice or any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter.
(b) The Agents shall not be responsible to any Bank for (i) any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith,
(ii) the execution (other than their own execution), effectiveness, genuineness,
validity, enforceability, collectibility, priority or sufficiency of this
Agreement, the Notes or any of the other Loan Documents, (iii) the existence,
value, collectibility or adequacy of the Collateral or the validity,
effectiveness, perfection or priority of the liens and security interests of the
Collateral Agent therein, or (iv) the financial condition of the Company or any
of its Subsidiaries, nor
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shall the Agents be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or the Notes or any of the other Loan Documents, or the financial
condition of the Company, or the existence or possible existence of any Default
or Event of Default or for the filing, refiling, recording, rerecording,
registration, reregistration or continuation of this Agreement, the Notes, the
other Loan Documents, any financing or continuation statements relating thereto,
or any other instrument or document for recording or for the giving of notice of
the same or of any collateral therefor to anyone.
7.4 CERTAIN RIGHTS OF THE AGENTS. Following the occurrence and during
the continuance of an Event of Default of which the Agents have notice, the
Agents shall, subject to the provisions of this Section VII, take such action or
refrain from taking such action with respect to such Event of Default as shall
be reasonably directed in writing by the Required Banks. If either Agent shall
request instructions from the Required Banks with respect to any act or action
(including the failure to act) in connection with this Agreement or the other
Loan Documents, such Agent shall be entitled to refrain from such act or taking
such action unless and until such Agent shall have received instructions from
the Required Banks; and neither Agent shall incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Bank shall have any
right of action whatsoever against the Agents as a result of the Agents, or
either of them, acting or refraining from acting hereunder in accordance with
the instructions of the Required Banks.
7.5 RELIANCE BY AGENTS. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other teletransmission, document or communication or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person. Each Agent may consult with legal
counsel (including counsel for the Company), independent public accountants
(including those retained by the Company) and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
7.6 INDEMNIFICATION OF AGENTS. To the extent each Agent is not
reimbursed and indemnified to its satisfaction by the Company, each Bank will
reimburse and indemnify each Agent, in proportion to its respective Commitment,
for and against any and all liabilities,
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against such Agent in performing its duties hereunder or under
the other Loan Documents, in any way relating to or arising out of this
Agreement or the other Loan Documents; PROVIDED, THAT no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct. Each Agent shall be indemnified
at the time it incurs any such expenses or disbursements.
7.7 EACH AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to lend under this Agreement, the Loans made by it and the Notes
issued to it, each Agent shall have the same rights and powers hereunder as any
other Bank or holder of a Note and may exercise the same as though it were not
performing the duties of such Agent specified herein; and the terms "Banks",
"Required Banks", "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include such Agent in its individual
capacity. Each Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust, financial advisory or other business with
the Company or any affiliate of the Company as if it were not performing the
duties of such Agent specified herein, and may accept fees and other
consideration from the Company for services in connection with this Agreement
and otherwise without having to account for the same to the Banks.
7.8 HOLDERS OF NOTES. Each Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with such
Agent. Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or notes issued in exchange therefor.
7.9 SUCCESSOR AGENTS.
(a) Each Agent may resign at any time thirty (30) days after giving
written notice thereof to the Banks, the other Agent and the Company and may be
removed at any time with cause by the Required Banks. Upon any such resignation
or removal, the Required Banks shall have the right, upon five (5) days' notice
to the Company, to appoint a successor Agent. If no successor Agent shall have
been so
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appointed by the Required Banks and shall have accepted such appointment, within
thirty (30) days after the retiring Agent's giving of notice of resignation or
the Required Banks' removal of the retiring Agent, then, upon five (5) days'
notice to the Company and the other Agent, the retiring Agent may, on behalf of
the Banks, appoint a successor Agent, which shall be a bank which maintains an
office in the United States, or a commercial bank organized under the laws of
the United States or of any State thereof, or any Affiliate of such bank, having
a combined capital and surplus of at least $50,000,000.
(b) Upon the acceptance in writing of any appointment as Agent
hereunder by a successor agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Section VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.
SECTION VIII
MISCELLANEOUS
8.1 NOTICES. Unless otherwise expressly provided herein or in another
Loan Document, all notices, requests and other communications to any party
hereunder or thereunder shall be in writing (including bank wire, telex,
telecopy or similar teletransmission or writing) and shall be given to such
party at its address, telex or telecopy number set forth on the signature pages
hereof or such other address or telex number as such party may hereafter specify
by notice to the Agents and the Company. Each such notice, request or other
communication shall be effective (i) if given by telex or telecopy, when such
telex or telecopy is transmitted to the telex or telecopy number specified in
this Section and the appropriate answerback is received, (ii) if given by mail,
seventy-two (72) hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means (including, without limitation, by air courier), when delivered at
the address specified in this Section; provided that if any day on which any
notice, request or other communication would otherwise be effective pursuant to
the immediately preceding clauses (i) through (iii) is not a Business Day, then
such notice, request or other communication shall be effective on the next
succeeding Business Day; and provided, further, that notices
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to the Agents, or either of them, shall not be effective until received.
8.2 EXPENSES AND INDEMNITY. The Company shall,
(a) whether or not the transactions hereby contemplated are
consummated, pay on demand all reasonable out-of-pocket costs and expenses of
each of the Agents (and after a Default, the Banks) in the administration (both
before and after the execution hereof and including advice of counsel as to the
rights and duties of each Agent and the Banks with respect thereto) of, and, in
connection with the preparation, execution and delivery of, preservation of
rights under, enforcement of, and, after a Default, refinancing, renegotiation
or restructuring of, this Agreement, the Notes, the other Loan Documents and the
other documents and instruments referred to herein or therein and any amendment,
waiver or consent relating thereto (including, without limitation, the
reasonable fees and disbursements of counsel, including allocated costs of
internal counsel, for each of the Agents and in the case of enforcement or
exercise of any right of any of the Banks);
(b) pay on demand and hold each of the Agents and the Banks harmless
from and against any and all present and future stamp and other similar taxes
with respect to the foregoing matters and save each of the Agents and the Banks
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission to pay such taxes;
(c) indemnify each of the Agents and each Bank, its officers,
directors, employees, representatives and agents from, and hold each of them
harmless against, any and all costs, losses, liabilities, claims, damages,
settlement costs and expenses incurred by any of them (whether or not any of
them is designated a party thereto) arising out of or by reason of any
investigation, litigation or other proceeding (including, without limitation,
responding to a subpoena or other process) related to any actual or proposed use
by the Company or any Subsidiary of the proceeds of any of the Loans or to any
breach by the Company or any of its Subsidiaries of any representations,
warranties, covenants or agreements contained in this Agreement, the Notes or
any other Loan Document, including, without limitation, the reasonable fees and
disbursements of counsel (including allocated costs of internal counsel)
incurred in connection with any such investigation, litigation or other
proceeding; and
(d) indemnify each of the Agents and each Bank, its officers,
directors, employees, representatives and agents from, and hold each of them
harmless against, any
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and all liabilities, losses, claims, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses, consultant fees,
investigation and laboratory fees), imposed upon or incurred by or asserted
against any of them, by reason of (A) the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release, or threatened release of any
Hazardous Materials on, from, or affecting any past, present or future property
of the Company or any of its Subsidiaries; (B) any personal injury (including
wrongful death) or property damage (real or personal) arising out of or related
to such Hazardous Materials; (C) any lawsuit or investigation brought or
threatened, settlement reached, or government order relating to such Hazardous
Materials; or (D) any violation of any law, order, regulation, requirement or
demand of any government authority relating to Hazardous Materials at, or
discharged from, any past, present or future property of the Company or any of
its Subsidiaries. For purposes of this subsection, "Hazardous Materials" shall
include, without limitation, any explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos or any material containing asbestos or any substances which
are hazardous by virtue of the manner of their use, or any activity involving
any of the foregoing or any other substance or material or activity defined as
hazardous in words or substance by any present or future Federal, state or local
environmental law, ordinance, rule or regulation including, without limitation,
the Comprehensive Environmental Response, Compensation, and Liabilities Act of
1980 (42 U.S.C. Sections 9601, et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. Sections 1801, et seq.), the Resource Conversation and Recovery
Act of 1976 (42 U.S.C. Sections 6901 et seq.), the Clean Air Act (42 U.S.C.
Sections 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251, et seq.) and the Toxic Substances Control Act (15 U.S.C. Sections
2601, et seq.) (all of the foregoing as amended at any time) and in the
regulations adopted and publications promulgated pursuant to each of the
foregoing or in any judicial or quasi-judicial determination relating to any of
the foregoing. If and to the extent that the obligations of the Company under
this Section 8.2 are unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
(e) The Company's obligations under this Section 8.2 shall survive
any termination of this Agreement or the other Loan Documents and the payment of
the Notes.
8.3 SET-OFF. To secure payment and performance of all Obligations, the
Company grants each Agent and each
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of the Banks, and each bank or other entity (a "Participant") which may purchase
a participation in any Bank's Loans, a security interest in all deposits,
balances or other sums now or hereafter credited by or due from an Agent, any
Bank or any such Participant to the Company and in any securities or other
property now or hereafter in the possession of or standing in the name of an
Agent, any Bank or any such Participant. Any such deposits, balances or other
sums credited by or due from an Agent, any Bank or any such Participant to the
Company and any such securities or other property may, upon the occurrence of an
Event of Default, or at any time thereafter, without notice to the Company or
compliance with any other condition precedent now or hereafter imposed by
statute, rule of law or otherwise (all of which are hereby expressly waived),
and regardless of the adequacy of any collateral security securing the
Obligations, be set-off, appropriated, and applied by such Agent, such Bank or
any such Participant against any and all Obligations of the Company to the
Agents and Banks, PROVIDED, however, that the right of a Participant to so
set-off shall be subject to such Participant applying the proceeds of such set
off in accordance with Section 8.4 as if it were a "Bank" hereunder.
8.4 APPLICATION OF SET-OFFS. Each Bank agrees with each other Bank that
(a) if any deposit or other sum credited by or due from such Bank to the Company
is applied to Indebtedness of the Company to such Bank, other than indebtedness
evidenced by the Notes, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by such Notes and (b) if such
Bank (i) shall receive from the Company, whether by distributions made by an
Agent, voluntary payment, exercise of the right of set-off, counterclaim, cross
action or enforcement of any claim evidenced by such Notes or by proof thereof
in bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or otherwise, and (ii) shall retain and apply to the payment of the Note(s) held
by such Bank any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to all such amounts as contemplated
hereby, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, PRO TANTO
assignment of claims, subrogation or otherwise, as shall result in each such
Bank receiving in respect of the Note(s) held by each such Bank its
proportionate payment as contemplated hereby, subject to Section 2.17.
8.5 TERM OF AGREEMENT. This Agreement shall continue in force and effect
so long as any portion of the Total Commitment, any Loan or any Obligation shall
be outstanding and thereafter as to any obligation of the Company stated to
survive the termination of this Agreement.
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8.6 CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
set forth in any particular provision of this Agreement, any consent or approval
required or permitted by this Agreement to be given by the Banks may be given,
and any term of this Agreement, the Notes, the other Loan Documents or of any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Company or any Subsidiary of any term of this
Agreement, the Notes, or the other Loan Documents may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Required Banks; PROVIDED, THAT
without the written consent of those Banks which hold 100% of the aggregate
outstanding principal amount of all Loans or, if no such principal amount is
then outstanding, Banks having one hundred percent (100%) of the Total
Commitment,
(i) no reduction in the principal amount of, interest rate on, or
commitment fee relating to, Loans shall be made;
(ii) no extension or postponement of the stated time (including,
without limitation, the Conversion Date, the Tranche B Termination Date and the
Termination Date) of payment or prepayment of the principal amount of, interest
on, or commitment fee relating to, the Loans shall be made;
(iii) except as contemplated by Section 8.7, no extension or
increase of the Total Commitment or Commitment Amount shall be made and no
change to any Commitment Percentage shall be made;
(iv) no amendment to this Section 8.6 or to Section 6.2 shall be
made;
(v) no Collateral shall be released; and
(vi) no Guaranty Subsidiary shall be released from its guaranty of
the Obligations.
The provisions of Section VII of this Agreement shall not be amended or
otherwise modified without the prior written consent of the Agents. Any
amendment, waiver, consent or approval under this Agreement, the Notes or
any Loan Document shall apply equally and without distinction to each of the
Banks. No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Company or any of its Subsidiaries shall
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entitle the Company or any such Subsidiary to other or further notice or demand
in similar or other circumstances.
8.7 BENEFIT OF AGREEMENT.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto, provided that the Company may not assign or transfer any of its interest
hereunder without the prior written consent of the Banks.
(b) Any Bank may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Bank.
(c) Any Bank may, with the written consent of the Company (which
consent will not be unreasonably withheld or delayed) assign any or all of its
rights and delegate any or all of its obligations under this Agreement
(including, without limitation, to an Affiliate of such Bank of the type
described in clause (i) of the definition of Affiliate, in which case the
consent of the Company shall not be required) provided that each such assignment
is in an amount of at least $5,000,000 and in an integral multiple of $1,000,000
and further may (without such consent) sell participation in, all or any part of
any Loan or Loans made by it or its Commitment or any other interest herein or
in its Note(s) to another bank or other Person, in which event (i) in the case
of an assignment, upon notice thereof by such Bank to the Company and the Agents
and the written consent of the Company (which consent will not be unreasonably
withheld or delayed), the assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights and benefits as it would
have if it were a Bank hereunder and the holder of a Note and, if the assignee
has expressly assumed, for the benefit of the Company, the Banks and the Agents,
the assignor Bank's obligations hereunder, such assignor Bank shall be relieved
of its obligations hereunder to the extent of such assignment and assumption,
and (ii) in the case of a participation, the participant shall not have any
rights under this Agreement or any Note or any other document delivered in
connection herewith (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such Bank
in favor of the participant relating thereto) and all amounts payable by the
Company under Sections 2.14 and 2.16 hereof shall be determined as if the Bank
had not sold such participation. No participation agreement or similar
arrangement entered into by any Bank in respect of the Commitments, the Notes,
the Loans or any interest thereon shall, directly or indirectly, require that
such Bank obtain the consent of its participant to any action, inaction,
amendment, waiver or consent of or
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under this Agreement or the Notes other than those amendments, waivers and
consents referred to in Section 8.6 which are required to be in writing and
signed by all of the Banks. Any Bank may furnish any information concerning the
Company in the possession of such Bank from time to time to Affiliates of such
Bank and to assignees and participants (including prospective assignees and
participants), PROVIDED, HOWEVER, that the furnishing of such information (and
the nature, manner and extent thereof) by any Bank to its Affiliates and such
assignees and participants shall be governed by the relevant agreement,
assignment or participation agreement relating to such arrangement, assignment
or participation, as the case may be and that the recipient thereof shall agree
to be bound by the confidentiality provisions of Section 8.17.
(d) Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note(s) to a Federal Reserve Bank. No such
assignment to a Federal Reserve Bank shall release the transferor Bank from its
obligations hereunder.
(e) THIS AGREEMENT, AND THE OTHER LOAN DOCUMENTS AND ALL OTHER
INSTRUMENTS EXECUTED SIMULTANEOUSLY HEREWITH CONSTITUTE ALL THE RIGHTS,
INTERESTS, UNDERSTANDINGS, AGREEMENTS AND OBLIGATIONS OF WHATSOEVER KIND AND
NATURE EXISTING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF, AND SUPERSEDE ALL PREVIOUS AGREEMENTS AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF, WHETHER WRITTEN OR ORAL. THE COMPANY MAY
NOT USE EVIDENCE OF ANY PRIOR ORAL AGREEMENT OR OF A CONTEMPORANEOUS ORAL
AGREEMENT TO CONTRADICT OR SUPPLEMENT THIS AGREEMENT, THE OTHER LOAN DOCUMENTS
OR ANY OTHER INSTRUMENTS EXECUTED SIMULTANEOUSLY HEREWITH.
8.8 SURVIVAL. The Company's obligations under Sections 2.14, 2.16 and
8.2 shall survive the payment in full of the Notes after the Termination Date.
8.9 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER, UNDER THE NOTES AND UNDER THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN
SUCH STATE.
8.10 JURISDICTION. Any action or proceeding in connection with this
Agreement, the Notes, or the other Loan Documents may be brought against the
Company or, if against the Agent, shall be brought, in a court of record of the
State of New York, County of New York, or in the United States District Court
for the Southern District of New York, sitting in New York, New York, the
Company hereby consenting
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<PAGE>
to the jurisdiction thereof over its person; and service of process may be made
upon the Company by mailing a copy of the summons and any complaint to the
Company, by registered mail, at the address to be used for the giving of notice
to the Company under this Agreement, such service to be effective ten (10) days
after the mailing thereof. In any action or proceeding relating to this
Agreement, the Notes or the other Loan Documents, the Company hereby waives any
claim that New York County or the Southern District of New York is an
inconvenient forum.
8.11 NO THIRD PARTY RIGHTS. This Agreement is solely for the benefit of
the parties hereto and their respective successors and assigns, and no other
Person shall have any right, benefit, priority or interest under, or because of
the existence of, this Agreement.
8.12 COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument and all such counterparts shall taken together
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart.
8.13 PARTIAL INVALIDITY. The invalidity or unenforceability or any one
or more phrases, clauses or sections of this Agreement shall not affect the
validity or enforceability of the remaining portions of it.
8.14 TABLE OF CONTENTS AND CAPTIONS. The Table of Contents and captions
and headings of the various sections and subsections of this Agreement are
provided for convenience only and shall not be taken into account to interpret
or modify the meaning of such sections or subsections.
8.15 EFFECTIVENESS. Subject to Section 4.1, this Agreement shall become
effective on the date on which all of the parties hereto shall have signed a
copy hereof (whether the same or different copies) and shall have delivered the
same (or its signature page therefor) to the Agent by delivery or by telecopy.
8.16 PLEDGED STOCK. Notwithstanding anything contained in this Agreement
or in any other Loan Document to the contrary, any and all shares of capital
stock of any Subsidiary of the Company incorporated as a Delaware corporation
pledged to the Collateral Agent pursuant to the terms of this Agreement and the
other Loan Documents shall be issued, and registered of record on the books and
records of each such Subsidiary, in the name of the Collateral Agent
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<PAGE>
or a nominee selected by the Collateral Agent, and in all cases, the interest of
the Collateral Agent as a secured party in the Pledged Stock shall be registered
on the books and records of each issuer thereof.
8.17 CONFIDENTIALITY. Each Bank agrees to exercise reasonable efforts to
keep confidential any written information delivered or made available by the
Company or any of its Subsidiaries to such Bank in connection with this
Agreement; PROVIDED that nothing herein shall prevent any Bank from disclosing
such information (i) to any other Bank, (ii) to its officers, directors,
employees, agents, attorneys and accountants, (iii) upon the order of any court
or administrative agency, (iv) upon the request or demand of any regulatory
agency or authority having jurisdiction over such Bank, (v) which has been
publicly disclosed, (vi) in connection with any litigation to which the Agent,
the Collateral Agent or any Bank or their respective affiliates may be a party,
(vii) in connection with the exercise of any remedy hereunder, (viii) to such
Bank's legal counsel and independent auditors, and (ix) to any actual or
proposed participant or assignee of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section 8.17.
8.18 WITHHOLDING TAX EXEMPTION. Not later than the Closing Date or, in
the case of any bank or financial institution that becomes a Bank after the
Closing Date, the date of the instrument of assignment or other instrument
pursuant to which such bank or financial institution became a Bank, and annually
thereafter or at such other times as the Agent, the Collateral Agent or the
Company may request, each Bank organized under the laws of a jurisdiction
outside the United States (a "Non-US Bank") shall provide the Agent, the
Collateral Agent and the Company with duly completed copies of Form 1001 or Form
4224, or, in the case of a Non-US Bank claiming exemption from United States
withholding taxes under Section 871(h) and 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or, in each case, any successor
form prescribed by the Internal Revenue Service of the United States (and, if
such Non-US Bank delivers a form W-8, a certificate representing that such
Non-US Bank is not a bank for purposes of Section 881(c) of the Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Company and is not a controlled foreign corporation related to the
Company (within the meaning of Section 864(d)(4) of the Code)), certifying as to
such Bank's status as exempt from United States withholding taxes with respect
to all payments to be made to such Bank hereunder or other documents
satisfactory to the Company, the Agent and the Collateral Agent indicating that
all payments to be made to such Bank hereunder are not subject to such taxes (an
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<PAGE>
"Exemption Certificate"). In the case of payments to be made by the Company,
the Agent or the Collateral Agent to or for any Bank organized under the laws of
a jurisdiction outside the United States, unless the Company, the Agent or
the Collateral Agent, as the case may be, has received the Exemption Certificate
from such Bank in accordance with this Section, the Company, the Agent or the
Collateral Agent, as the case may be, may withhold taxes from such payments
at the maximum applicable statutory rate.
8.19 WAIVER OF JURY TRIAL. IN ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS, THE PARTIES HERETO
HEREBY MUTUALLY WAIVE TRIAL BY JURY, INCLUDING WITH RESPECT TO ANY COUNTERCLAIM.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
One International Place UNITED ASSET MANAGEMENT
100 Oliver Street CORPORATION
Boston, MA 02110
Attn: William H. Park, By: /s/ William H. Park
Senior Vice President ----------------------------
Telecopier No.: (617) 330-1133 Title: Senior Vice President
Lending Office: MORGAN GUARANTY TRUST
Morgan Guaranty Trust Company COMPANY OF NEW YORK,
of New York as Bank and as Agent
c/o J.P. Morgan Services Inc.
500 Stanton Christiana Road By:
P.O. Box 6070 -----------------------------
Newark, Delaware 19713-2107 Title:
Telex No.: 177425
Answerback: MBDEL UT
Telecopier Nos.: (302) 992-1852
(302) 992-1872
-78-
<PAGE>
Address for Notices:
Morgan Guaranty Trust Company
of New York
60 Wall Street
New York, New York 10260
Attn: Crescent G. Sancilio
Telex No.: 177615
Answerback: MGTUT
Telecopier Nos.: (212) 648-5022
(212) 648-5023
Lending Office and Address THE FIRST NATIONAL BANK
for Notices: OF BOSTON, as a Bank
THE FIRST NATIONAL BANK OF BOSTON
100 Federal Street By: /s/ Mitchell B. Feldman
01-06-11 ----------------------------
Boston, MA 02110 Title: Director
Attn: Mitchell B. Feldman
Telex No.: 4996527
Answerback: BKB BOSTON
Telecopier No.: (617) 434-0637
With a Copy to:
The Loan Department
100 Federal Street
05-02-00-B
Boston, MA 02110
Attn: Betty Drake
Telecopier No.: (617) 929-6912
Blue Hills Office Park THE FIRST NATIONAL BANK
150 Royall Street OF BOSTON, as Collateral
Canton, MA 02021 Agent
Attn: Corporate Trust Div.
Mail Stop 45-02-15
(United Asset Management By: /s/ K. Caldwell
Corporation ----------------------------
Collateral Agency) Title: Account Manager
Telecopier No.: (617) 575-2078
-79-
<PAGE>
Lending Office: MELLON BANK, N.A.
Mellon Bank, N.A.
3 Mellon Bank Ctr. By: /s/ Susan M. Whitewood
Loan Administration Section -------------------------------
Room 2304 Title: Assistant Vice President
Pittsburgh, PA 15259-0003
Attn: Judy Laughrey
Telecopier No.: (412) 236-2028
Address for Notices:
To Lending Office above,
with a copy to:
Mellon Bank N.A.
1 Mellon Bank Center
Room 370
Pittsburgh, PA 15258
Attn: Susan Whitewood
Assistant Vice President
Telecopier No.: (412) 234-8087
Lending Office and Address DEUTSCHE BANK AG, NEW YORK
for Notices: BRANCH and/or CAYMAN ISLANDS
Deutsche Bank A.G. BRANCH
New York Branch/Cayman
Islands Branch
31 West 52nd Street By: /s/ Christopher C. Sharp
New York, New York 10019 ----------------------------
Attn: Jon Mendes Title: Vice President
Associate
Telecopier No.: (212) 474-8108 By: /s/ Elizabeth A. Ziegimeier
-------------------------------
Title: Vice President
Lending Office and Address CHEMICAL BANK
for Notices:
4 New York Plaza
New York, New York 10004-2477
Attn: Darrell W. Crate By:
Telecopier No.: (212) 623-4817 ----------------------------
Title: Vice President
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<PAGE>
Lending Office: CREDIT LYONNAIS NEW YORK
1301 Avenue of the Americas BRANCH
New York, New York 10019
Addresses for Notices: By: /s/ Robert Ivosevich
Credit Lyonnais ----------------------------
53 State Street Title: Senior Vice President
Boston MA 02109
Attn: Lisa Turilli
Telecopier No.: (617) 723-4803
Lending Office: CREDIT LYONNAIS CAYMAN ISLAND
c/o Credit Lyonnais New York BRANCH
Branch
1301 Avenue of the Americas
New York, New York 10019 By: /s/ Robert Ivosevich
----------------------------
Authorized Signature
Address for Notice:
Credit Lyonnais
53 State Street
Boston, MA 02109
Attn: Lisa Turilli
Telecopier No.: (617) 723-4803
Lending Office and Address SHAWMUT BANK, N.A.
for Notices:
Shawmut Bank, N.A.
One Federal Street By: /s/ Eileen P. Murphy
Boston, Massachusetts 02211 ----------------------------
Attn: Eileen P. Murphy Title: Vice President
Vice President
Telex No.: 681-7133
Answerback: SHAWMUT-BSN
Telecopier No.: (617) 292-2095
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<PAGE>
Lending Office and Address NATIONSBANK, N.A. (formerly
for Notices: known as NationsBank of
NationsBank, N.A. Maryland, N.A., successor
10 Light Street by merger to Maryland
Mailstop MD4-302-16-07 National Bank)
Baltimore, Maryland 21201
Attn: Christopher A. Pope
Vice President By: /s/ Christopher A. Pope
Telex No.: 198115 ----------------------------
Answerback: MNB OP UT Title: Vice President
Telecopier No.: (410) 337-8506
Lending Office and Address BANK HAPOALIM B.M.
for Notices:
Bank Hapoalim B.M. By: /s/
70 Federal Street ----------------------------
Boston, Massachusetts 02110 Title: Vice President
Attn: Henrietta Amadon
Telecopier No.: (617) 542-0015 By: /s/
----------------------------
Title: Vice President
Lending Office: THE DAIWA BANK, LIMITED
The Daiwa Bank, Limited
233 South Wacker Drive By: /s/ Daniel G. Eastman
Suite 5400 ----------------------------
Chicago, Illinois 60606 Title: Vice President
Address for Notices:
The Daiwa Bank, Limited By: /s/
1 Post Office Square ----------------------------
Suite 3820 Title:
Boston, Massachusetts 02109
Attn: Daniel G. Eastman
Vice President
Telecopier No.: (617) 423-4884
Lending Office and Address FLEET BANK OF MASSACHUSETTS
for Notices:
Fleet Bank of Massachusetts
75 State Street By: /s/ Gregory P. Dormitzer
Boston, Massachusetts 02109 ----------------------------
Attn: Gregory P. Dormitzer Title: Senior Vice President
Group Manager
Telecopier No.: (617) 346-1558
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<PAGE>
Lending Office and BAYBANK BOSTON, N.A.
Address for Notices:
BayBank Boston, N.A.
175 Federal Street, 10th Floor By: /s/ Virginia Ryan
Boston, Massachusetts 02110 ----------------------------
Attn: Virginia Ryan Title: Vice President
Vice President
Telecopier No.: (617) 556-6594
and, in case of Notice of Borrowing,
with a copy to:
Shohak Dekermendjian
BayBank Associates
3 University Office Park
Waltham, Massachusetts 02154
Reference: United Asset Management
Telecopier No.: (617) 788-3988
Lending Office and Address WACHOVIA BANK OF GEORGIA, N.A.
for Notices:
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E. By: /s/
Atlanta, Georgia 30303 ----------------------------
Attn: Elizabeth Colt Title: Senior Vice President
Assistant Vice President
Telex No.: 542553
Answerback: WACHFEX-ATL
Telecopier No.: (404) 332-6898
Lending Office and Address per pro BROWN BROTHERS
for Notices: HARRIMAN & CO.
Brown Brothers Harriman
& Co.
40 Water Street By: /s/
Boston, Massachusetts 02109 ----------------------------
Attn: Louise A. Coughlan, Title:
Deputy Manager
Telex No.: 4430048
Answerback: BROWNHAR BSN
Telecopier No.: (617) 589-3178
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<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A
TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
COMMITMENTS
Tranche A Tranche A Tranche B Tranche B Total
Commitment Commitment Commitment Commitment Commitment
Bank Amount Percentage Amount Percentage Percentage
---- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
*Morgan Guaranty Trust Company $42,500,000 10.625 $12,000,000 12% 10.9%
of New York
*The First National Bank of Boston $42,500,000 10.625 $12,000,000 12% 10.9%
*Mellon Bank, N.A. $40,000,000 10.000 $12,000,000 12% 10.4%
*Deutsche Bank AG, New York Branch/
Cayman Islands Branch $40,000,000 10.000 $12,000,000 12% 10.4%
*Chemical Bank $30,000,000 7.500 $12,000,000 12% 8.4%
*Credit Lyonnais $30,000,000 7.500 $10,000,000 10% 8.0%
*Shawmut Bank, N.A. $30,000,000 7.500 $10,000,000 10% 8.0%
*NationsBank, N.A. $30,000,000 7.500 $12,000,000 12% 8.4%
<FN>
------------------------
* Tranche B Bank
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Tranche A Tranche A Tranche B Tranche B Total
Commitment Commitment Commitment Commitment Commitment
Bank Amount Percentage Amount Percentage Percentage
---- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
*Bank Hapoalim B.M. $25,000,000 6.250 $ 2,000,000 2% 5.4%
Fleet Bank of Massachusetts $25,000,000 6.250 $0 N/A 5.0%
The Daiwa Bank, Limited $20,000,000 5.000 $0 N/A 4.0%
BayBank Boston, N.A. $20,000,000 5.000 $0 N/A 4.0%
*Wachovia Bank of Georgia, N.A. $20,000,000 5.000 $ 5,000,000 5% 5.0%
*Brown Brothers Harriman & Co. $ 5,000,000 1.250 $ 1,000,000 1% 1.2%
</TABLE>
-3-
<PAGE>
EXHIBIT B
TO SECOND AMENDED
AND RESTATED
CREDIT AGREEMENT
GUARANTY AND SECURITY DOCUMENTS
CONFIRMATION AND AMENDMENT
GUARANTY AND SECURITY DOCUMENTS CONFIRMATION AND AMENDMENT, dated as of
November 18, 1994 ("this Agreement"), made by UNITED ASSET MANAGEMENT
CORPORATION, a Delaware corporation (the "Company"), UNITED ASSET MANAGEMENT
HOLDINGS, INC., a Delaware corporation ("UAM Holdings"), UNITED ASSET MANAGEMENT
TRADEMARK, INC., a Delaware corporation ("UAM Trademark"), UAM INVESTMENT
CORPORATION, a Delaware corporation ("UAM Investment"), DEWEY SQUARE INVESTORS
CORPORATION, a Delaware corporation ("DSI"), HEITMAN FINANCIAL LTD., an Illinois
corporation ("Heitman"), UNITED ASSET MANAGEMENT U.K. HOLDINGS, INC., a Delaware
corporation ("UAM U.K. HOLDINGS") and UAM REALTY ADVISORS INVESTMENT
CORPORATION, a Delaware corporation ("UAM Realty Advisors"; UAM Holdings, UAM
Trademark, UAM Investment, DSI, Heitman, UAM U.K. Holdings and UAM Realty
Advisors, each a "Guaranty Subsidiary" and collectively, the "Guaranty
Subsidiaries") in favor of the "Banks" and the "Agents" (as defined below).
R E C I T A L S
A. The Company, the "Banks" parties thereto (the "Banks"), Morgan Guaranty
Trust Company of New York, as Agent (in such capacity, the "Agent"), and The
First National Bank of Boston, as Collateral Agent (in such capacity, the
"Collateral Agent" and together with the Agent, the "Agents") are parties to the
Amended and Restated Credit Agreement, dated as of August 29, 1994 (the
"Original Credit Agreement").
B. Concurrently with the execution of this Agreement, the Company, the
Banks, the Agent and the Collateral Agent are entering into a Second Amended and
Restated Credit Agreement dated as of the date hereof (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), which amends and restates the Original Credit Agreement in its
entirety.
C. It is a condition precedent to the effectiveness of the Credit
Agreement and to the obligation of the Banks to make Loans thereunder that the
Company and each of the Guaranty Subsidiaries shall have executed and delivered
this Agreement.
<PAGE>
NOW, THEREFORE, it is agreed as follows:
1. Unless the context otherwise requires, capitalized terms used
herein without definition shall have the meanings given to such terms in the
Credit Agreement.
2. The term "Banks" as defined in each of the Security Documents, the
Subsidiaries Guaranty, the DSI Guaranty, the UAM Realty Advisors Guaranty, the
Heitman Guaranty, the UAM U.K. Holdings Guaranty and the Trademark Subordination
Agreement (collectively, the "Documents") shall include all banks and other
financial institutions from time to time parties to the Credit Agreement as
"Banks".
3. All references in the Documents to "the Agreement" or "the Credit
Agreement" shall refer to the Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
4. Without limitation of any of the terms of the Documents, the
Company and each Guaranty Subsidiary hereby confirms and agrees that the terms
"Obligations" and "Guaranteed Obligations" as used in the Documents shall
include all of the "Obligations" as such term is defined in the Credit
Agreement.
5. Each of the Guaranty Subsidiaries hereby acknowledges receipt of a
copy of the Credit Agreement and of each agreement, instrument or document
delivered in connection therewith on the Closing Date.
6. Schedule A to the Pledge Agreement is hereby amended to read in
its entirety as set forth on Exhibit A hereto.
7. Schedule A to the Subsidiaries Pledge Agreement is hereby amended
to read in its entirety as set forth on Exhibit B hereto.
8. The amendments set forth herein are limited precisely as written
and shall not be deemed to (i) be an amendment to or waiver of any other term or
condition of the Documents or any of the instruments and documents referred to
therein, or (ii) prejudice any right or rights which the Agents or the Banks may
now have or may have in the future under or in connection with the Documents, as
amended, or any of the instruments and documents referred to therein. Except as
expressly modified hereby or pursuant hereto, the terms and provisions of the
Documents and the instruments and documents referred to therein shall remain in
full force and effect, and, as so modified, are hereby ratified and confirmed.
9. This Agreement is the Confirmation and Amendment referred to in
the Credit Agreement. All guaranties, liens and security interests made or
granted by the Company or any Guaranty Subsidiary pursuant to the Documents are
hereby ratified and confirmed.
-2-
<PAGE>
10. This Agreement may be signed in any number of separate
counterparts, each of which shall constitute an original instrument and all of
which taken together shall constitute one and the same instrument, with the same
force and effect as if the signatures of all the parties hereto were on a single
instrument.
11. The Company and each of the Guaranty Subsidiaries hereby
represents and warrants that (i) it has the right, power and capacity and has
been duly authorized and empowered by all required corporate and shareholder
action to enter into, execute, deliver and perform this Agreement; (ii) this
Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as enforcement thereof may be
subject to the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally and general
principles of equity (regardless of whether such enforcement is sought in a
proceeding in equity or at law); (iii) the execution, delivery and performance
of this Agreement do not and will not violate any provision of its certificate
of incorporation or by-laws or any contractual provision to which it is a party
or to which it or any of its property is subject; and (iv) all representations
and warranties contained in the Documents (as amended by this Agreement) are
true and correct in all material respects with the same effect as though such
representations and warranties has been made on and as of the date hereof.
12. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
UNITED ASSET MANAGEMENT CORPORATION
By:____________________________________________
Title:
UNITED ASSET MANAGEMENT HOLDINGS, INC.
By:____________________________________________
Title:
-3-
<PAGE>
UNITED ASSET MANAGEMENT TRADEMARK, INC.
By:____________________________________________
Title:
UAM INVESTMENT CORPORATION
By:____________________________________________
Title:
DEWEY SQUARE INVESTORS CORPORATION
By:____________________________________________
Title:
HEITMAN FINANCIAL LTD.
By:____________________________________________
Title:
UNITED ASSET MANAGEMENT U.K. HOLDINGS, INC.
By:____________________________________________
Title:
UAM REALTY ADVISORS INVESTMENT CORPORATION
By:____________________________________________
Title:
-4-
<PAGE>
AGREED:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as a Bank and as Agent
By:____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as Collateral Agent
By:____________________________________
Title:
THE FIRST NATIONAL BANK OF BOSTON,
as a Bank
By:____________________________________
Title:
MELLON BANK, N.A.
By:____________________________________
Title:
DEUTSCHE BANK AG NEW YORK
BRANCH and/or CAYMAN ISLANDS BRANCH
By:____________________________________
Title:
By:____________________________________
Title:
-5-
<PAGE>
CHEMICAL BANK
By:____________________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:____________________________________
Title:
CREDIT LYONNAIS CAYMAN ISLAND
BRANCH
By:____________________________________
Authorized Signature
SHAWMUT BANK, N.A.
By:____________________________________
Title:
NATIONSBANK, N.A. (formerly known as
NationsBank of Maryland, N.A., successor
by merger to Maryland National Bank)
By:____________________________________
Title:
BANK HAPOALIM B.M.
By:____________________________________
Title:
By:____________________________________
Title:
-6-
<PAGE>
FLEET BANK OF MASSACHUSETTS
By:___________________________________
Title:
THE DAIWA BANK, LIMITED
By:____________________________________
Title:
By:____________________________________
Title:
BAYBANK BOSTON, N.A.
By:____________________________________
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By:____________________________________
Title:
per pro BROWN BROTHERS HARRIMAN
& CO.
By:____________________________________
Title:
WS9\04509.101\08\jmp
-7-
<PAGE>
EXHIBIT A
TO
CONFIRMATION AND AMENDMENT
SCHEDULE A TO PLEDGE AGREEMENT BY AND BETWEEN
UNITED ASSET MANAGEMENT CORPORATION AND THE
FIRST NATIONAL BANK OF BOSTON, AS COLLATERAL AGENT
The Collateral covered by the Pledge Agreement to which this
Schedule A is annexed includes, without limitation, the following (and
all proceeds thereof):
A. The following shares of stock (the "First Priority
Pledged Securities"), certificates representing which are hereby
delivered to the Collateral Agent in good transferable form, endorsed
by the Pledgor in blank:
<TABLE>
<CAPTION>
Percentage
Number of Outstanding Certificate
Issuer of Shares Shares Number
------ --------- -------------- -----------
<S> <C> <C> <C>
Chicago Asset 100 100% 1
Management Company
Nelson, Benson 100 100% 1
& Zellmer, Inc.
Hamilton, Allen & 100 100% 2
Associates, Inc.
Thompson, Siegel 2,898 100% 18,19
& Walmsley, Inc.
Analytic Investment 3,400 100% 20
Management, Inc.
Northern Capital 100 100% 1
Management Incorporated
(certificate in name of
NCM Newco, Inc.)
Cooke & Bieler, Inc. 5,462 100% 208,209
Olympic Capital 100 100% 76
Management, Inc.
Fiduciary Management 900 100% 11,12
Associates, Inc.
Investment Counselors 7,500 100% 52
of Maryland, Inc.
<PAGE>
<S> <C> <C> <C>
The Rothschild 638.6316 100% 11
Company
Sterling Capital 7,757 100% 7,8
Management Company
Rice, Hall, James 100 100% 2
& Associates
C.S. McKee & Company, 21,000 100% 55,127
Incorporated Class A
7,430
Class B
HIMCO, Inc. 400 100% 6
(d/b/a Hanson
Investment Management
Company)
Barrow, Hanley, 100 100% 2
Mewhinney & Strauss,
Inc.
Sirach Capital Management, 100 100% 3
Inc.
United Asset Management 100 100% 1
Holdings, Inc.
United Asset Management 100 100% 1
Trademark, Inc.
The Campbell Group, Inc 100 100% 2
Newbold's Asset 100 100% 10
Management, Inc.
UAM Investment 100 100% 1
Corporation
Cambiar Investors, 100 100% 16
Inc.
Spectrum Asset 100 100% 3
Management, Inc.
Regis Retirement Plan 7000 100% 3
Services, Inc.
(formerly named RFI
Distributors, Inc.)
Alpha Global Fixed
Income Managers, Inc. 100 100% 1
<PAGE>
<S> <C> <C> <C>
Ki Pacific Asset 100 100% 2
Management, Inc.
L&B Realty Advisors, 3,710 95% A-2
Inc.
United Asset Management 1 100% 2
U.K. Holdings, Inc.
Regis Administrative 100 100% 3
Services, Inc.
(formerly named
Newco Acquisition Corp.)
Heitman Financial Ltd. 100 100% 3
GSB Investment 100 100% 2
Management, Inc.
John K. Dwight Asset
Management Company,
Inc. 100 100% 3
Investment Research 100 100% 13
Company
Suffolk Capital 100 100% 3
Management, Inc.
UAM Investment Services, 1,000 100% 2
Inc.
United Asset Management 1,000 100% 2
(Japan), Inc.
</TABLE>
B. The following shares of stock (the "Second
Priority Pledged Securities"), certificates representing which are
held pursuant to Stockholder Pledge Agreements, by which selling
stockholders have been granted first priority liens in such shares, as
follows:
Percentage Stockholder
Number of Outstanding Certificate Certificate Pledge
Issuer of Shares Shares Number Holder Agreement
------ --------- -------------- ----------- ----------- -----------
NONE
<PAGE>
EXHIBIT B
TO
CONFIRMATION AND AMENDMENT
SCHEDULE A TO
SUBSIDIARIES PLEDGE AGREEMENT
BY AND BETWEEN UNITED ASSET MANAGEMENT
HOLDINGS, INC. AND THE FIRST NATIONAL
BANK OF BOSTON, AS COLLATERAL AGENT
The Collateral covered by the Subsidiaries Pledge Agreement to which
this Schedule A is annexed includes, without limitation, the following shares of
stock, certificates representing which are hereby delivered to the Collateral
Agent in good transferable form, endorsed by the Pledgor in blank (and all
proceeds thereof):
Percentage
Number of of Shares Certificate
Shares Outstanding Number
--------- ----------- -----------
Hellman, Jordan 449.5 100% 30
Management
Company, Inc.
Hagler, Mastrovita 50,000 100% 11
& Hewitt, Inc.
Dewey Square 100 100% 1
Investors
Corporation
UAM Realty Advisors 100 100% 1
Investment
Corporation
First Pacific 200,000 100% 2
Advisors, Inc.
Acadian Asset 100 100% 7
Management, Inc.
NWQ Investment 200,000 100% 2
Management
Company, Inc.
Pell, Rudman & 100 100% 2
Co., Inc.
Tom Johnson 100 100% 2
Investment
Management, Inc.
PIC Newco, Inc. 100 100% 1
<PAGE>
EXHIBIT C TO SECOND
AMENDED AND RESTATED
CREDIT AGREEMENT
AGREEMENTS PROVIDING
FOR CONTINGENT PAYMENTS
1. Acquisition Agreement by and among the Company, Trinity Capital
Advisors, Inc., Sterling Capital Management Company and the stockholders of
Trinity Capital Advisors, Inc., dated as of July 31, 1991.
2. Acquisition Agreement by and among the Company, First Pacific
Advisors, Inc., FPA Newco, Inc., and Angeles Corporation, dated as of April 8,
1991.
3. Acquisition Agreement by and among the Company, SCM Newco, Inc.,
Suffolk Capital Management, Inc., and the stockholders of Suffolk Capital
Management, Inc., dated as of June 7, 1994.
4. Acquisition Agreement by and among the Company,
JD Newco, Inc., John K. Dwight, Inc., John K. Dwight Asset Management Company,
Inc., and John K. Dwight, dated as of November 9, 1993.
5. Acquisition Agreement by and among the Company, NIMC Newco, Inc., NWQ
Investment Management Company, and NWQ Charitable Remainder Unitrust, the
holders of the entire partnership interest in NWQ Investment Management Company,
and David A. Polak, dated as of October 21, 1992.
<PAGE>
EXHIBIT D TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
HEITMAN PERMITTED INDEBTEDNESS AND RELATED ENCUMBRANCES
(1) Indebtedness of Heitman Financial Ltd. to LaSalle National Bank in the
principal sum not to exceed $10,000,000 pursuant to the terms of a Loan
Agreement dated as of March 27, 1992, as amended (the "LaSalle Loan
Agreement"), by and between LaSalle National Bank and Heitman Financial
Ltd. and a Revolving Credit Note dated as of June 30, 1994 of Heitman
Financial Ltd. payable to the order of LaSalle National Bank in the
principal sum of $10,000,000.
(2) A Guaranty in favor of LaSalle National Bank of the obligations of Heitman
Financial Ltd. to LaSalle National Bank by the following: (a) Heitman
Advisory Corporation and all of its subsidiary corporations; (b) Heitman
Financial Services Ltd. and all of its subsidiary corporations; (c) Heitman
Properties Ltd. and all of its subsidiary corporations; (d) Heitman
Financial U.K. Ltd.; (e) HFL-A Partnership and HFL-B Partnership; and (f)
each corporation identified on any future amended Schedule 1.1 to the
LaSalle Loan Agreement as a "New Guarantor".
(3) Indebtedness of Heitman Properties Ltd. to Continental Bank N.A. in the
original principal sum of $5,000,000 (of which $600,000 is outstanding)
pursuant to the terms of a Credit Agreement dated as of March 5, 1992, as
amended, by and between Heitman Properties Ltd. and Continental Bank N.A.
and a Note dated March 5, 1992, as amended, of Heitman Properties Ltd.
payable to the order of Continental Bank, N.A. in the original principal
sum of $5,000,000.
(4) Indebtedness of Heitman Properties Ltd. to Continental Bank N.A. in the
original principal sum of $3,600,000 pursuant to the terms of a First
Amended and Restated Credit Agreement dated as of April 6, 1992, as amended
(the "Continental Loan Agreement"), by and between Heitman Properties Ltd.
and Continental Bank N.A. and a Second Amended and Restated Note dated as
of June 14, 1994 of Heitman Properties Ltd. payable to the order of
<PAGE>
Continental Bank N.A. in the original principal sum of $1,096,227.17.
(5) Guaranty of Payment dated March 5, 1992 of Heitman Financial Ltd. in favor
of Continental Bank N.A. of the obligations of Heitman Properties Ltd. to
Continental Bank N.A.
(6) A Guaranty in favor of Continental Bank N.A. of the obligations of Heitman
Properties Ltd. to Continental Bank N.A. by all of the subsidiary
corporations of Heitman Properties Ltd. as required under the terms of the
Continental Loan Agreement.
(7) Indebtedness of Heitman Holdings Ltd. and Heitman Financial Services Ltd.
as co-makers of a Promissory Note dated October 25, 1991 payable to the
order of General Electric Capital Corporation in the original principal sum
of $1,890,000.
(8) Indebtedness of Heitman Holdings Ltd. and Heitman Financial Services Ltd.
as co-makers of a Promissory Note dated October 25, 1991 payable to the
order of General Electric Capital Corporation in the original principal sum
of $1,450,000.
(9) Corporate Guaranty dated October 25, 1991 of Heitman Financial Ltd. in
favor of General Electric Capital Corporation of the obligations of Heitman
Financial Services Ltd. to General Electric Capital Corporation.
(10) Corporate Guaranty dated October 25, 1991 of Heitman Financial Ltd. in
favor of General Electric Capital Corporation of the obligations of Heitman
Holdings Ltd. to General Electric Capital Corporation.
(11) Corporate Guaranty dated October 25, 1991 of Heitman Advisory Corporation
in favor of General Electric Capital Corporation of the obligations of
Heitman Financial Services Ltd. to General Electric Capital Corporation.
(12) Corporation Guaranty dated October 25, 1991 of Heitman Advisory Corporation
in favor of General Electric Capital Corporation of the obligations of
Heitman Holdings Ltd. to General Electric Capital Corporation.
-2-
<PAGE>
SCHEDULE OF LIENS
(1) Aircraft Chattel Mortgage dated October 25, 1991 by and between Heitman
Holdings Ltd., as mortgagor, and General Electric Capital Corporation, as
mortgagee, in which the mortgagor pledges and mortgages a 1983 Gates
Learjet to the mortgagee to secure a Promissory Note dated October 25, 1991
of Heitman Holdings Ltd. and Heitman Financial Services Ltd. payable to the
order of General Electric Capital Corporation in the principal sum of
$1,890,000.
(2) Aircraft Chattel Mortgage dated October 25, 1991 by and between Heitman
Holdings Ltd., as mortgagor, and General Electric Capital Corporation, as
mortgagee, in which the mortgagor pledges and mortgages a 1978 Gates
Learjet to the mortgagee to secure a Promissory Note dated October 25, 1991
of Heitman Holdings Ltd. and Heitman Financial Services, Ltd. payable to
the order of General Electric Capital Corporation in the principal sum of
$1,450,000.
Collateral Assignment and Security Agreement (Assignment of Notes) dated as
of March 5, 1992 by Heitman Properties Ltd. in favor of Continental Bank
N.A. which collaterally assigns all of the right, title, and interest of
Heitman Properties Ltd. in, to, and under a Note dated March 5, 1992 in the
original principal amount of $3,000,000 executed by Mayfair Joint Venture,
an Illinois general partnership, payable to the order of Heitman Properties
Ltd.
-3-
<PAGE>
EXHIBIT E-1 TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
TRANCHE A
PROMISSORY NOTE
$_______________ New York, New York
November 18, 1994
FOR VALUE RECEIVED, the undersigned, UNITED ASSET MANAGEMENT
CORPORATION, a Delaware corporation (the "Company"), hereby promises to pay to
the order of ______________________ (the "Bank"), the lesser of (i) the
principal amount of ______________________________ DOLLARS ($_______________) or
(ii) the aggregate unpaid principal amount of all Tranche A Loans made by the
Bank to the Company pursuant to the Second Amended and Restated Credit
Agreement, dated as of November 18, 1994 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Company, the Bank, the other banks and financial institutions from
time to time parties thereto, Morgan Guaranty Trust Company of New York, as
Agent, and The First National Bank of Boston, as Collateral Agent, on the
Termination Date or such earlier date as may be provided in the Credit
Agreement.
The Company also promises to pay interest on the unpaid principal
amount of this Note from time to time outstanding from the date hereof until
such principal amount is paid in full at the rates per annum set forth in or
established pursuant to the Credit Agreement. Such interest shall be payable on
such dates as are determined from time to time pursuant to the Credit Agreement
and shall be calculated as therein provided.
Both the principal hereof and the interest hereon are payable in
lawful money of the United States of America in immediately available funds at
the office of the Agent located at 60 Wall Street, New York, New York 10260,
ABA #021000238, for credit to: Loan Department-Syndications Unit, Account No.
999-99-090, Attention: Syndications Unit, Reference: United Asset Management
Corporation, or at such other place as the Agent may specify in writing.
Presentment, demand, protest and other notice of any kind are hereby
expressly waived.
<PAGE>
In the event that any action, suit or other proceeding is brought by
the holder hereof to collect this Note, the Company shall be liable for all
court costs and expenses of collection, including, without limitation,
attorneys' fees and disbursements.
This Note is executed and delivered to the Bank pursuant to the Credit
Agreement, and is entitled to the benefits of the Credit Agreement, which, among
other things, contains provisions for mandatory and voluntary prepayment of the
amount due hereunder and acceleration of the maturity hereof upon the happening
of certain stated events. All capitalized terms used in the Credit Agreement
are used herein with the same meanings as are set forth in the Credit Agreement.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within such State.
This Note may not be modified or discharged orally or otherwise,
except by a writing duly executed by the holder hereof.
UNITED ASSET MANAGEMENT CORPORATION
By:________________________________
Title:
-2-
<PAGE>
SCHEDULE TO TRANCHE A PROMISSORY NOTE
DATED NOVEMBER 18, 1994 OF
UNITED ASSET MANAGEMENT CORPORATION
TO ____________________
LOANS
Amount Type Notation
of of Interest Interest Amount Made
Date Loan Loan Rate Period Paid By
---- ------ ---- -------- -------- ------ --------
-3-
<PAGE>
EXHIBIT E-2 TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
TRANCHE B
PROMISSORY NOTE
$_______________ New York, New York
November 18, 1994
FOR VALUE RECEIVED, the undersigned, UNITED ASSET MANAGEMENT
CORPORATION, a Delaware corporation (the "Company"), hereby promises to pay to
the order of ______________________ (the "Bank"), the lesser of (i) the
principal amount of ______________________________ DOLLARS ($_______________) or
(ii) the aggregate unpaid principal amount of all Tranche B Loans made by the
Bank to the Company pursuant to the Second Amended and Restated Credit
Agreement, dated as of November 18, 1994 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among the Company, the Bank, the other banks and financial institutions from
time to time parties thereto, Morgan Guaranty Trust Company of New York, as
Agent, and The First National Bank of Boston, as Collateral Agent, on the
Tranche B Termination Date or such earlier date as may be provided in the Credit
Agreement.
The Company also promises to pay interest on the unpaid principal
amount of this Note from time to time outstanding from the date hereof until
such principal amount is paid in full at the rates per annum set forth in or
established pursuant to the Credit Agreement. Such interest shall be payable on
such dates as are determined from time to time pursuant to the Credit Agreement
and shall be calculated as therein provided.
Both the principal hereof and the interest hereon are payable in
lawful money of the United States of America in immediately available funds at
the office of the Agent located at 60 Wall Street, New York, New York 10260,
ABA #021000238, for credit to: Loan Department-Syndications Unit, Account No.
999-99-090, Attention: Syndications Unit, Reference: United Asset Management
Corporation, or at such other place as the Agent may specify in writing.
Presentment, demand, protest and other notice of any kind are hereby
expressly waived.
<PAGE>
In the event that any action, suit or other proceeding is brought by
the holder hereof to collect this Note, the Company shall be liable for all
court costs and expenses of collection, including, without limitation,
attorneys' fees and disbursements.
This Note is executed and delivered to the Bank pursuant to the Credit
Agreement, and is entitled to the benefits of the Credit Agreement, which, among
other things, contains provisions for mandatory and voluntary prepayment of the
amount due hereunder and acceleration of the maturity hereof upon the happening
of certain stated events. All capitalized terms used in the Credit Agreement
are used herein with the same meanings as are set forth in the Credit Agreement.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within such State.
This Note may not be modified or discharged orally or otherwise,
except by a writing duly executed by the holder hereof.
UNITED ASSET MANAGEMENT CORPORATION
By:________________________________
Title:
-2-
<PAGE>
SCHEDULE TO TRANCHE B PROMISSORY NOTE
DATED NOVEMBER 18, 1994 OF
UNITED ASSET MANAGEMENT CORPORATION
TO ____________________
LOANS
Amount Type Notation
of of Interest Interest Amount Made
Date Loan Loan Rate Period Paid By
---- ------ ---- -------- -------- ------ --------
-3-
<PAGE>
EXHIBIT F TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
UNITED ASSET MANAGEMENT CORPORATION
1994 SUB INDEBTEDNESS SCHEDULE
November 9,1994
<TABLE>
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
----------------------------------------------------------------------------------------------------------------------------
============================================= ==============================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
BHMS JAMES P. BARROW 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS JAMES P. BARROW 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS JAMES P. BARROW 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS JAMES P. BARROW 379,356.07 379,356.07 03/01/95 0.085
BHMS JAMES P. BARROW 379,356.08 379,356.08 03/01/96 0.085
BHMS JAMES P. BARROW 379,356.08 379,356.08 03/01/97 0.085
BHMS JAMES P. BARROW 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/95 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/96 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/97 0.085
BHMS JAMES P. BARROW 381,163.65 381,163.65 03/01/98 0.085
----------------- ---------------
8,002,242.55 4,952,222.83
BHMS BRYANT M. HANLEY, JR. 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS BRYANT M. HANLEY, JR. 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.07 379,356.07 03/01/95 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.08 379,356.08 03/01/96 0.085
BHMS BRYANT M. HANLEY, JR. 379,356.08 379,356.08 03/01/97 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/95 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/96 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/97 0.085
BHMS BRYANT M. HANLEY, JR. 381,163.65 381,163.65 03/01/98 0.085
----------------- ---------------
8,002,242.55 4,952,222.83
BHMS MICHAEL C. MEWHINNEY 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS MICHAEL C. MEWHINNEY 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.07 379,356.07 03/01/95 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.08 379,356.08 03/01/96 0.085
BHMS MICHAEL C. MEWHINNEY 379,356.08 379,356.08 03/01/97 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/95 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/96 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/97 0.085
BHMS MICHAEL C. MEWHINNEY 381,163.65 381,163.65 03/01/98 0.085
----------------- ---------------
8,002,242.55 4,952,222.83
BHMS JOHN L. STRAUSS 2,289,500.00 (2,289,500.00) 0.00 01/07/94 0.085
BHMS JOHN L. STRAUSS 2,289,500.00 2,289,500.00 01/07/95 0.085
BHMS JOHN L. STRAUSS 379,356.07 (379,356.07) 0.00 03/01/94 0.085
BHMS JOHN L. STRAUSS 379,356.07 379,356.07 03/01/95 0.085
BHMS JOHN L. STRAUSS 379,356.08 379,356.08 03/01/96 0.085
BHMS JOHN L. STRAUSS 379,356.08 379,356.08 03/01/97 0.085
BHMS JOHN L. STRAUSS 381,163.65 (381,163.65) 0.00 03/01/94 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/95 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/96 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/97 0.085
BHMS JOHN L. STRAUSS 381,163.65 381,163.65 03/01/98 0.085
----------------- ---------------
8,002,242.55 4,952,222.83
-------------------------------------------------------------
32,008,970.20 0.00 (12,200,078.88) 19,808,891.32
============================================= ==============================================================================
CGI BIRDSHILL, INC 3,650,000.00 3,650,000.00 05/31/97 0.0865
CGI BIRDSHILL, INC 854,254.32 854,254.32 05/31/97 0.0865
-------------------------------------------------------------
4,504,254.32 0.00 0.00 4,504,254.32
============================================= ==============================================================================
DWIGHT JOHN K. DWIGHT 5,376,000.00 5,376,000.00 01/04/01 0.055
============================================= ==============================================================================
FMA ROBERT CARR 700,000.00 (700,000.00) 0.00 06/24/96 0.090
FMA ROBERT CARR 77,250.00 (77,250.00) 0.00 06/24/96 0.090
----------------- ------------------------------
777,250.00 (777,250.00) 0.00
FMA PHILIP ARNOLD - TRUST 700,000.00 700,000.00 06/24/96 0.090
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
1994 SUB INDEBTEDNESS SCHEDULE
NOVEMBER 9, 1994
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FMA PHILIP & ELLEN ARNOLD CHAR TST 77,250.00 77,250.00 06/24/96 0.090
----------------- ---------------
777,250.00 777,250.00
FMA ROBERT THORNBURGH 85,000.00 85,000.00 08/08/96 0.090
FMA ROBERT THORNBURGH 9,375.00 9,375.00 06/24/96 0.090
----------------- ---------------
94,375.00 94,375.00
FMA JOHN BORLAND, JR. 255,000.00 255,000.00 08/08/96 0.090
FMA JOHN BORLAND, JR. 28,125.00 28,125.00 06/24/96 0.090
----------------- ---------------
283,125.00 283,125.00
-------------------------------------------------------------
1,932,000.00 0.00 (777,250.00) 1,154,750.00
============================================= ==============================================================================
GSB MARK J. STUPFEL 3,358,693.60 3,358,693.60 01/02/01 0.055
GSB FRANK P. GANUCHEAU III 2,190,434.25 2,190,434.25 01/02/01 0.055
GSB ELISABETH M. GANUCHEAU 2,190,434.25 2,190,434.25 01/02/01 0.055
GSB MARK L. JOHNSON 730,172.50 730,172.50 01/02/01 0.055
GSB CHARLES P. LAMB 438,100.73 438,100.73 01/02/01 0.055
GSB WILLIAM M. BOWEN IV 219,057.30 219,057.30 01/02/01 0.055
GSB LYLE E. BRUMLEY 1,460,331.12 1,460,331.12 01/02/01 0.055
GSB RONALD J. GOLDMAN 730,172.50 730,172.50 01/02/01 0.055
GSB WILLIAM A. LANDRETH JR 730,172.50 730,172.50 01/02/01 0.055
GSB HAL FORD SMITH 365,086.25 365,086.25 01/02/01 0.055
GSB DEE M. PERKINS 730,172.50 730,172.50 01/02/01 0.055
GSB SCOTT SHERMAN 730,172.50 730,172.50 01/02/01 0.055
-------------------------------------------------------------
13,873,000.00 0.00 0.00 13,873,000.00
============================================= ==============================================================================
HA&A JOHN F. STATTS 34,900.00 (34,900.00) 0.00 02/17/94 0.100
HA&A JOHN F. STATTS 128,433.33 (128,433.33) 0.00 02/17/94 0.100
----------------- ---------------
163,333.33 0.00
-------------------------------------------------------------
163,333.33 0.00 (163,333.33) 0.00
============================================= ==============================================================================
ICM LINDA W. MCCLEARY 80,000.00 (80,000.00) 0.00 06/01/94 0.075
ICM STEPHEN T. SCOTT 194,933.00 (194,933.00) 0.00 06/01/94 0.075
-------------------------------------------------------------
274,933.00 0.00 (274,933.00) 0.00
============================================= ==============================================================================
NWQ NWQ CHARITABLE REMAINDER TRUST 28,166,400.00 28,166,400.00 09/30/99 0.060
NWQ NWQ CHARITABLE REMAINDER TRUST 5,476,800.00 5,476,800.00 09/30/99 0.060
33,643,200.00 33,643,200.00
NWQ JAMES P. OWEN 3,510,000.00 3,510,000.00 09/30/99 0.060
NWQ JAMES P. OWEN 682,500.00 682,500.00 09/30/99 0.060
4,192,500.00 4,192,500.00
NWQ EDWARD C. FRIEDEL, JR. 2,026,800.00 2,026,800.00 09/30/99 0.060
NWQ EDWARD C. FRIEDEL, JR. 394,100.00 394,100.00 09/30/99 0.060
2,420,900.00 2,420,900.00
NWQ JAMES H. GALBREATH 1,573,200.00 1,573,200.00 09/30/99 0.060
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
1994 SUB INDEBTEDNESS SCHEDULE
NOVEMBER 9, 1994
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NWQ JAMES H. GALBREATH 305,900.00 305,900.00 09/30/99 0.060
---------------- -------------
1,879,100.00 1,879,100.00
NWQ MARY-GENE SLAVEN 723,600.00 723,600.00 09/30/99 0.060
NWQ MARY-GENE SLAVEN 140,700.00 140,700.00 09/30/99 0.060
---------------- -------------
864,300.00 864,300.00
-------------------------------------------------------------
43,000,000.00 0.00 0.00 43,000,000.00
============================================= ==============================================================================
OCM BURTON K. CARR 67,845.31 (67,845.31) 0.00 03/01/94 0.090
OCM JOHN CROWL 67,845.31 (67,845.31) 0.00 03/01/94 0.090
OCM JOHN DAGRES 52,425.92 (52,425.92) 0.00 03/01/94 0.090
OCM CRAIG HINTZE 52,425.92 (52,425.92) 0.00 03/01/94 0.090
OCM JOHN MORBECK 67,845.31 (67,845.31) 0.00 03/01/94 0.090
-------------------------------------------------------------
308,387.77 0.00 (308,387.77) 0.00
============================================= ==============================================================================
PR EDWARD I. RUDMAN 2,070,000.00 2,070,000.00 03/29/00 0.060
PR ANTHONY D. PELL 2,070,000.00 2,070,000.00 03/29/00 0.060
-------------------------------------------------------------
4,140,000.00 0.00 0.00 4,140,000.00
============================================= ==============================================================================
RHJ WALTER H. BECK 180,000.00 (180,000.00) 0.00 05/29/94 0.075
RHJ CLAUDE C. BLAKEMORE - LANE & CO 100,000.00 (100,000.00) 0.00 05/29/94 0.075
RHJ ROBERT B. CONWAY - LANE & CO 100,000.00 (100,000.00) 0.00 05/29/94 0.075
RHJ H. LANGFORD HALL, JR. 586,415.00 (586,415.00) 0.00 05/29/94 0.075
RHJ PATRICK J. JAMES 150,000.00 (150,000.00) 0.00 05/29/94 0.075
RHJ CHARLES G. KING 105,527.00 (105,527.00) 0.00 05/29/94 0.075
RHJ D.C.SHERMAN,TR OF K.F.MADSEN TR WIRE 50,000.00 (50,000.00) 0.00 05/29/94 0.075
RHJ THOMAS MCDOWELL 85,000.00 (85,000.00) 0.00 05/29/94 0.075
RHJ WILLIAM H. MUCHNIC 60,000.00 (60,000.00) 0.00 05/29/94 0.075
RHJ GARY S. RICE 100,000.00 (100,000.00) 0.00 05/29/94 0.075
RHJ LOUIS E. RICE 565,239.00 (565,239.00) 0.00 05/29/94 0.075
RHJ DAVID TESSMER 129,600.00 (129,600.00) 0.00 05/29/94 0.075
RHJ TIMOTHY TODARO 120,000.00 (120,000.00) 0.00 05/29/94 0.075
RHJ SAMUEL R & MARILYN A TROZZO TR 524,800.00 (524,800.00) 0.00 05/29/94 0.075
RHJ PATRICIA ANN URBONYA 61,085.00 (61,085.00) 0.00 05/29/94 0.075
RHJ ALYSON R. GOUDY, TRUSTEE 33,333.33 (33,333.33) 0.00 05/29/94 0.075
RHJ L. GREGORY RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ PATRICIA G. RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ GARY S. RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ ROBERT MATTHEW RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ CHRISTOPHER BYRON RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ ASHLEY LANE RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
RHJ AMANDA FALCONER RICE 9,523.81 (9,523.81) 0.00 05/29/94 0.075
-------------------------------------------------------------
3,017,666.00 0.00 (3,017,666.00) 0.00
============================================= ==============================================================================
SIRACH WILMINGTON TR CO & BOYD E.SHARP,JR 750,780.00 750,780.00 03/31/97 0.0875
SIRACH GEORGE B. KAUFFMAN 834,197.00 834,197.00 03/31/97 0.0875
SIRACH J. MICHAEL FLINN 442,155.92 442,155.92 01/04/96 0.0875
SIRACH J. MICHAEL FLINN 834,197.00 834,197.00 03/31/97 0.0875
----------------- ---------------
1,276,352.92 1,276,352.92
SIRACH WILLIAM B. SANDERS 215,515.47 215,515.47 01/04/96 0.0875
SIRACH WILLIAM B. SANDERS 834,197.00 834,197.00 03/31/97 0.0875
----------------- ---------------
1,049,712.47 1,049,712.47
SIRACH LAURENCE O. ELVINS 174,197.00 174,197.00 03/31/97 0.0875
-------------------------------------------------------------
4,085,239.39 0.00 0.00 4,085,239.39
============================================= ==============================================================================
SCM ALEXANDER W. MCALISTER 20,000.00 20,000.00 08/26/98 0.075
SCM ALEXANDER W. MCALISTER 36,203.00 36,203.00 11/30/00 0.075
<PAGE>
UNITED ASSET MANAGEMENT CORPORATION
1994 SUB INDEBTEDNESS SCHEDULE
NOVEMBER 9, 1994
<CAPTION>
CURRENT YEAR CURRENT YEAR NOTE INT
AFFILIATE NOTEHOLDER PRINCIPAL INCREASES DECREASES TOTAL NOTES DUE DATE RATE
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SCM ALEXANDER W. MCALISTER 3,987.00 3,987.00 01/31/01 0.075
-------------------------------------------------------------
60,190.00 0.00 0.00 60,190.00
SCM DAVID M. RALSTON 205,000.00 205,000.00 08/26/98 0.075
SCM DAVID M. RALSTON 343,925.00 343,925.00 11/30/00 0.075
SCM DAVID M. RALSTON 37,863.00 37,863.00 01/31/01 0.075
-------------------------------------------------------------
586,788.00 0.00 0.00 586,788.00
SCM MARK W. WHALEN 205,000.00 205,000.00 08/26/98 0.075
SCM MARK W. WHALEN 343,925.00 343,925.00 11/30/00 0.075
SCM MARK W. WHALEN 37,863.00 37,863.00 01/31/01 0.075
-------------------------------------------------------------
586,788.00 0.00 0.00 586,788.00
-------------------------------------------------------------
1,233,766.00 0.00 0.00 1,233,766.00
============================================= ==============================================================================
SUFFOLK DONALD M. GILBERT 2,512,883.40 2,512,883.40 7/14/01 0.060
ERICH G. WEISSENBERGER , JR. 2,056,216.10 2,056,216.10 7/14/01 0.060
HIRAM F. MOODY, JR 235,370.50 235,370.50 7/14/01 0.060
RICHARD G. PHILLIPS 48,530.00 48,530.00 7/14/01 0.060
-------------------------------------------------------------
0.00 4,853,000.00 0.00 4,853,000.00
============================================= ==============================================================================
TJIM THOMAS E. JOHNSON 9,735,000.00 9,735,000.00 12/09/99 0.060
JERRY L. WISE 990,000.00 990,000.00 12/09/99 0.060
RICHARD H. PARRY 165,000.00 165,000.00 12/09/99 0.060
LORI A. CALFY 110,000.00 110,000.00 12/09/99 0.060
-------------------------------------------------------------
11,000,000.00 0.00 0.00 11,000,000.00
============================================= ==============================================================================
Subtotal 119,541,550.01 10,229,000.00 (16,741,648.98) 113,028,901.03
============================================= ==============================================================================
L&B LEHNDORFF USA LIMITED 6/01/94 - 6/24/94 3,125,126.00 (3,125,126.00) 0.00
M. THOMAS LARDNER 574,281.00 (574,281.00) 0.00
G. ANDREWS SMITH 96,000.00 (96,000.00) 0.00
3,795,407.00 0.00 (3,795,407.00) 0.00
============================================= =============================================================
TOTAL 123,336,957.01 10,229,000.00 (20,537,055.98)113,028,901.03
============================================= ==============================================================================
</TABLE>
<PAGE>
EXHIBIT G TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
SUBORDINATION AGREEMENT
AGREEMENT made as of the [____] day of [___________ __, 199_] by and
between United Asset Management Corporation, a Delaware corporation ("UAM"), and
ABC Associates, Inc., a [______________] corporation ("ABC" or, together with
any person to whom the Note referred to herein is assigned or endorsed, the
"Holder").
BACKGROUND
(a) The Holder has entered into an Acquisition Agreement with UAM dated as
of [____________ __, 199_], relating to the acquisition by UAM of the assets and
business of ABC, which assets and business have been transferred to UAM's
wholly-owned subsidiary, ABC Newco, Inc. ("Newco")(such agreement being
hereinafter referred to as the "Acquisition Agreement"). Terms defined and used
in the Acquisition Agreement and the Note, as defined below, shall have the same
meaning when used in this Subordination Agreement.
(b) On this date, UAM has issued and delivered to the Holder UAM's
[________%] Non-Negotiable Subordinated Note in the principal amount of
$[___________________] (the "Note") in partial payment for such assets and
business.
(c) Section 1.2 of the Acquisition Agreement and Section 4 of the Note
provide that the Note will be subordinated in accordance with this Subordination
Agreement.
AGREEMENTS
The parties hereto hereby agree as follows:
Section 1. SUBORDINATION. The indebtedness evidenced by the Note shall be
subordinated and junior to the extent set forth in the following subsections (a)
to (d), inclusive, to all Senior Debt (as defined in subsection (e) hereof) of
UAM:
(a) No payment on account of principal of, premium or interest on the Note
shall be made or accepted, including by right of set-off, and no
purchase of the Note directly or indirectly by UAM shall be made, and
the Holder of the Note shall not be entitled to enforce any such
payment, if, at the time thereof or immediately after giving effect
thereto, (i) there shall exist a default in the payment of principal
of, premium or interest on any Senior Debt, and such default shall not
have been cured or waived or shall not have ceased to exist or
<PAGE>
(ii) there shall exist a default or an event of default (other than a
default in the payment of amounts due thereon) with respect to any
Senior Debt, as defined therein or in the instrument under which the
same is outstanding, permitting the holders thereof, or any of them,
to accelerate the maturity thereof, and such default or event of
default shall not have been cured or waived or shall not have ceased
to exist; provided, however, that after 180 days of the occurrence of
a default or event of default described in (ii) hereof, if the holders
of Senior Debt have not caused the maturity of the Senior Debt to be
accelerated, the Holder of the Note shall thereafter be entitled to
receive each installment of interest and each installment of principal
on the Note as such installments become due and payable, subject to
the application of the restrictions of this paragraph again upon the
occurrence of each further default or event of default.
(b) Upon the maturity of any Senior Debt by lapse of time, acceleration or
otherwise, then all such matured Senior Debt shall first be paid in
full, before any payment on account of principal, premium or interest
is made upon the Note.
(c) In the event of any insolvency, bankruptcy, liquidation (whether
voluntary or involuntary), reorganization or other similar
proceedings, or any receivership proceedings in connection therewith,
relative to UAM or its property, and in the event of any proceedings
for voluntary liquidation, dissolution or other winding up of UAM,
whether voluntary or involuntary, or any assignment for the benefit of
creditors or other marshalling of assets or liabilities of UAM,
whether or not involving insolvency or bankruptcy proceedings, then
all Senior Debt shall first be paid in full or provision for such
payment satisfactory to the holders of the majority in principal
amount of the Senior Debt shall be made, before any payment on account
of principal, premium or interest is made upon the Note.
(d) In any of the proceedings referred to in subsection (c) above, any
payment or distribution of any kind or character, whether in cash,
property, stock or obligations, which may be payable or deliverable in
respect of the Note, or the indebtedness represented thereby, shall be
paid or delivered directly to the holders of Senior Debt or their
authorized representative designated to UAM in writing, for
application in payment thereof, unless and until the Senior Debt shall
have been paid in full, and the Holder of the Note does hereby
authorize holders of Senior Debt to prove and enforce claims
comprising the Note, vote claims comprising the Note to accept or
reject any plan
-2-
<PAGE>
for liquidation, reorganization, composition or extension and accept
and receipt for any payment or distribution to such extent and apply
such payment or distribution to the then unpaid Senior Debt and do all
things and to execute all such documents as may be necessary to
effectuate the foregoing; PROVIDED, HOWEVER, that notwithstanding the
foregoing, should any payment or distribution in any such proceeding
be received by the Holder of the Note before all Senior Debt is paid
in full, such payment or distribution shall be received in trust and
promptly delivered in the form received (duly endorsed, if
appropriate) to the holders of Senior Debt or their representative for
application to the payment of Senior Debt then remaining unpaid; and
PROVIDED, FURTHER, that no such delivery shall be made to holders of
Senior Debt of stock or obligations which are issued pursuant to
reorganization proceedings or dissolution or liquidation proceedings,
or upon any merger, consolidation, sale, lease, transfer or other
disposal not prohibited by the provisions of this Subordination
Agreement, by UAM, as reorganized, or by the corporation which is the
successor to UAM or which acquires its properties and assets, if such
stock or obligations are subordinate and junior at least to the extent
provided in this Section 1 to the prior payment in full of all Senior
Debt and to the prior payment in full of any stock or obligations
which are issued in exchange or substitution for any Senior Debt.
(e) "Senior Debt," as used herein, shall mean the principal of, premium
on, and unpaid interest (including any interest accrued after
commencement of any proceeding referred to in subsection (c) above at
the rate provided in any document or instrument creating or evidencing
any indebtedness referred to in this definition) on (i) all
indebtedness, whether outstanding on the date hereof or hereafter
created or arising and including all fees and other amounts related to
such indebtedness, to banks, insurance companies, pension funds or
other institutions regularly engaged in the business of lending money,
for money borrowed or other financial accommodations extended from
such institutions by UAM for working capital purposes, acquisitions,
general corporate purposes or otherwise, and all such indebtedness
with respect to which UAM is a guarantor; (ii) any modifications,
deferrals, renewals, extensions or increase in the amount of any such
indebtedness or any indebtedness issued in exchange, replacement,
refunding or refinancing of or for Senior Debt by banks, insurance
companies, pension funds or other institutions regularly engaged in
the business of lending money; and (iii) any costs, fees and expenses
incurred in connection with the enforcement or collection of Senior
Debt (including, without limitation, reasonable attorneys' fees).
-3-
<PAGE>
Subject to the prior payment in full of all Senior Debt as aforesaid, the
Holder of the Note shall be subrogated pro rata to the rights of the holders of
Senior Debt to receive payments or distributions of any kind or character,
whether in cash, property, stock or obligations, which may be payable or
deliverable to the holders of Senior Debt, until the principal of, and interest
on, the Note shall be paid in full and no such payments or distributions to the
holders of Senior Debt shall, as between UAM, its creditors other than the
holders of Senior Debt, and the Holder of the Note be deemed to be a payment by
UAM to the Holder of or on account of the Note.
The provisions of this Subordination Agreement are for the purposes of
defining the relative rights of the holders of Senior Debt on the one hand, and
the Holder of the Note on the other hand, against UAM and its property. Subject
to the rights under this Subordination Agreement of holders of Senior Debt to
receive cash, property, stock or obligations otherwise payable or deliverable to
the Holder of the Note, nothing herein shall either impair, as between UAM and
the Holder of the Note, the obligation of UAM, which is unconditional and
absolute, to pay to the Holder of the Note the principal and interest thereon in
accordance with the terms and the provisions of the Note or prevent the Holder
of the Note from exercising all remedies otherwise permitted by applicable law
or hereunder upon default hereunder or under the Note.
No right of any holder of Senior Debt to enforce the subordination of the
indebtedness evidenced by the Note shall be impaired by any act or failure to
act by UAM or by the failure of UAM to comply with the Note or this
Subordination Agreement.
* [The Holder of the Note shall give prompt written notice to each Holder of
Senior Debt of any default by UAM under the Note.]
Without limiting the effect of the immediately preceding paragraph, no
holder of Senior Debt need obtain the consent of, or give notice to, any Holder
of the Note prior to taking any of the following actions, upon or without any
terms or conditions and in whole or in part, none of which shall impair or
release any of the rights of any such holder of Senior Debt under this
Subordination Agreement:
(a) change the manner, place or terms of payment, and/or change or extend
the time of payment of, renew or alter, any Senior Debt or any other
liability of UAM to such holder of Senior Debt, any security therefor,
or any liability incurred directly or indirectly in respect thereof,
and the provisions of this Subordination Agreement shall apply to the
Senior Debt of UAM as so changed, extended, renewed or altered.
* optional
-4-
<PAGE>
(b) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, any Senior
Debt or any other liability of UAM to such holder of Senior Debt or
any other liabilities incurred directly or indirectly in respect
thereof or hereof and/or any offset there against;
(c) exercise or refrain from exercising any rights and/or remedies against
UAM or others or otherwise act or refrain from acting or, for any
reason, fail to file, record or otherwise perfect any security
interest in or lien on any property of UAM or any other person;
(d) settle or compromise any Senior Debt or any other liability of UAM to
such holder of Senior Debt or any security therefor, or any liability
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of
any liability (whether due or not) of UAM to creditors of UAM other
than such holder of Senior Debt; and
(e) apply any sums by whomsoever paid and howsoever realized to any
liability or liabilities of UAM to such holder of Senior Debt
regardless of what liability or liabilities of UAM to such holder of
Senior Debt remain unpaid.
Section 2. RELIANCE BY SENIOR DEBTHOLDERS. UAM agrees, and each Holder of
the Note by accepting the Note agrees, that the subordination effected hereby is
for the benefit of the holders of Senior Debt from time to time, and that each
holder of Senior Debt, whether now outstanding or hereafter created, incurred,
assumed or guaranteed shall be deemed to have acquired Senior Debt in reliance
upon the covenants and provisions contained herein. The subordination effected
hereby shall be enforceable by each holder of Senior Debt from time to time.
Section 3. FURTHER ASSURANCES. The parties hereto agree to execute and
deliver any and all papers and documents which may be reasonably necessary to
carry out the terms of this Subordination Agreement.
Section 4. ENTIRE AGREEMENT. This Subordination Agreement contains the
entire agreement among the parties with respect to the subject matter hereof.
Section 5. BINDING EFFECT. This Subordination Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and assigns; provided, however,
that this Subordination Agreement and all rights hereunder may not be assigned
by the Holder, except with the prior written consent of
-5-
<PAGE>
UAM, or by UAM except with the prior written consent of the Holder. No
amendment of this Subordination Agreement or waiver of any of its provisions
shall be effective without the written consent of each holder of Senior Debt if
such amendment adversely affects any rights of the holders of Senior Debt.
Section 6. SEPARATE COUNTERPARTS. This Subordination Agreement may be
executed in several identical counterparts, all of which when taken together
(whether the signatures of all the parties appear on one or several
counterparts) shall constitute but one and the same instrument, and it shall not
be necessary in any court of law to introduce more than one fully executed
counterpart, or several counterparts together containing the signatures of all
the parties, in proving this Subordination Agreement.
Section 7. NOTICES. All notices hereunder shall be given in accordance
with the notice provisions of the Acquisition Agreement.
Section 8. GOVERNING LAW. The execution, interpretation and performance
of this Subordination Agreement shall be governed by the laws of the
Commonwealth of Massachusetts which apply to contracts executed and to be
performed solely in Massachusetts. UAM and the Holder hereby consent to the
jurisdiction of any state or federal court located within Suffolk County,
Massachusetts, waive personal service of process and assent that service of
process may be made by registered mail to the parties' respective addresses as
provided in Section 12.6 of the Acquisition Agreement and shall be effective in
the same manner as notices are effective under such Section 12.6.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Subordination Agreement as of the date first above written.
UNITED ASSET MANAGEMENT
CORPORATION
By:
-------------------------------
Norton H. Reamer, President
ABC ASSOCIATES, INC.
By:
-------------------------------
Title:
-6-
<PAGE>
NON-NEGOTIABLE
[_____%] SUBORDINATED NOTE
DUE [_________ __, 19__]
[_________ __, 19__]
FOR VALUE RECEIVED, UNITED ASSET MANAGEMENT CORPORATION, a Delaware
corporation, (the "Company", which term shall include any corporation which
shall succeed to or assume the obligations of the Company hereunder), promises
to pay to ABC Associates, Inc., a [____________________] corporation (the
"Holder" or "ABC") (except as otherwise provided) the principal sum of
[________________________________________ ($ ____________)] in lawful money of
the United States of America, on [________ __, 19__], together with interest on
the outstanding principal balance payable in like money at the rate of
[_________________] percent [(______%)] per annum commencing the date hereof and
payable semi-annually in arrears on July 1 and January 2 in each year, beginning
on [____________________], until paid in full.
To the extent permitted by law, overdue interest shall bear interest at
[________________] percent [(____%)] per annum. Interest shall be computed on a
360-day year, 30-day month basis.
1. This Note is delivered by the Company to the Holder in accordance with
the terms of an Acquisition Agreement dated as of [_________ __, 19__] (the
"Acquisition Agreement"), relating to the acquisition by the Company of the
assets and business of ABC, which assets and business the Company has
transferred to its subsidiary ABC Newco, Inc. ("Newco"). The Company and the
Holder are parties to the Acquisition Agreement, and terms defined and used in
the Acquisition Agreement shall have the same meanings in this Note. THIS NOTE
IS NON-NEGOTIABLE. In accordance with the provisions of Section 4.4 of the
Acquisition Agreement, the Company may set off against amounts due the Holder
any amounts due from the Holder to UAM or Newco under Article IV of the
Acquisition Agreement.
2. The principal sum of this Note may be prepaid by the Company in whole
or in part at any time and from time to time without penalty or premium, with
interest prorated up to the date of any such prepayment.
3. All payments of principal and interest shall be payable in cash or by
the Company's check at the Holder's address indicated in the Acquisition
Agreement, or at such other place as the Holder may from time to time in writing
designate to the Company (by notice given in accordance with the Acquisition
Agreement) at least ten (10) days before a payment is due.
<PAGE>
4. This Note is subordinated to all Senior Debt as defined in the
accompanying Subordination Agreement of even date herewith. Reference is made
to such Subordination Agreement for the terms of such subordination.
5. If, (i) the Company shall fail to pay any principal of or interest on
this Note when due and payable whether at maturity or at any date fixed for
redemption or prepayment or otherwise, (except principal of or interest on this
Note as to which the Company has exercised its right of set-off in accordance
with Section 1 above) and such amount shall remain unpaid for thirty (30)
business days after the due date thereof; or (ii) the Company shall admit in
writing its inability to pay its debts; or suffer a receiver or custodian (or
other person performing a similar function) for it or substantially all of its
property to be appointed and, if appointed without its consent, not to be
discharged within sixty (60) days; or make a general assignment for the benefit
of its creditors, or suffer proceedings under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors to be instituted by or against
it and if contested by it not to be dismissed or stayed within sixty (60) days;
or suffer any judgment, writ of attachment, or execution of any similar process
to be issued or levied against a substantial part of its property which is not
released, stayed, bonded, or vacated within thirty (30) days after its issue or
levy, then, and in every such event (which are herein referred to as Events of
Default), the Holder hereof may declare the Note to be in default and to be due
and payable, and it shall, at the Holder's election, thereupon forthwith become
due and payable in full, without presentment, demand, protest, or any notice of
any kind, (other than notice of such election) all of which are hereby expressly
waived.
6. The Company will pay to the Holder on demand all reasonable legal and
other costs actually incurred in connection with any action to collect and/or
enforce this Note in which the Holder prevails.
7. In any case where the date of payment of any prepayment or redemption
of the principal of or interest on this Note shall be at any place of payment a
Sunday, a legal holiday, or a day on which banking institutions are authorized
or obliged by law or regulation to close, then payment of principal or interest
need not be made on such date at such place but may be made on the next
succeeding day that is not at such place of payment a Sunday, a legal holiday or
a day on which banking institutions are authorized or obligated by law or
regulation to close, with the same force and effect as if made on the date of
maturity or the date fixed for payment and no interest shall accrue for the
period after such date.
-2-
<PAGE>
8. The Holder shall not be deemed to have waived or amended any of the
Holder's rights hereunder unless such waiver or amendment is in writing and
signed by the Holder. No delay or omission on the part of the Holder in
exercising any such right shall operate as a waiver of such right or any other
right. A waiver on any one occasion shall not be construed as a bar to or
waiver of any right or remedy on any future occasion.
9. This Note shall bear the legend attached hereto, the provisions of
which are incorporated herein by reference.
This Note shall be governed by and construed and enforced in accordance
with the laws of The Commonwealth of Massachusetts which apply to contracts
executed and performed solely in Massachusetts. UAM and the Holder hereby
consent to the jurisdiction of any state or federal court located within Suffolk
County, Massachusetts, waive personal service of process, and assent that
service of process may be made by registered mail to the parties' respective
addresses as provided in Section 12.6 of the Acquisition Agreement and shall be
effective in the same manner as notices are effective under such Section 12.6.
This Note has been executed by the Company under seal as of the day, month
and year first above written.
UNITED ASSET MANAGEMENT
CORPORATION
[SEAL]
Attest: By:
---------------------------- ------------------------------
Secretary Norton H. Reamer, President
-3-
<PAGE>
LEGEND
This Note has not been registered under the Securities Act of 1933 or
qualified under any state securities laws. This Note may not be sold, assigned
or transferred, except with respect to distributions by the Holder to the
Holder's stockholders and transfers by devise to immediate members of the
respective families of such stockholders, in the absence of an effective
registration statement under such Act and qualification under such laws, or an
opinion of counsel satisfactory to the Company that such registration and
qualification are not in the circumstances required.
-4-
<PAGE>
EXHIBIT H TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
Morgan Guaranty Trust Company
of New York, as Agent under
the Agreement referenced below
60 Wall Street
New York, New York 10260
ATTENTION: Crescent G. Sancilio
Re: Second Amended and Restated Credit Agreement dated as of November 18,
1994 (the "Agreement") by and among United Asset Management Corpora-
tion, the banks and other financial institutions from time to time
parties thereto, Morgan Guaranty Trust Company of New York, as Agent,
and The First National Bank of Boston, as Collateral Agent.
--------------------------------------------------------------------
Gentlemen:
Pursuant to Section 2.2(a) of the Agreement, the undersigned hereby
irrevocably requests a [Tranche A Loan/Tranche B Loan] as a [Base Rate Loan/CD
Rate Loan/Eurodollar Loan] in the amount of $__________ to be made on ________
__, 19__.
The Interest Period applicable to said Loan will be
_______________________________.*
The proceeds of said Loan will be used for _______________________________.
As of the date hereof, the aggregate amount of Money Market Loans
outstanding is $____________________.
All representations and warranties contained or referred to in the
Agreement and in the other Loan Documents are true and accurate on and as of the
date hereof except as to any matters that have changed in accordance with or as
permitted by the Agreement [except that such representations and warranties
contained in Section 3.12(a) are updated as provided in Schedule I annexed
hereto]** and no Default or Event of Default has occurred and is continuing.
____________________________
* To be inserted in any request for a Fixed Rate Loan.
** To be inserted if new Subsidiaries have been acquired
or created since the Closing Date.
<PAGE>
All capitalized terms used in this letter have the meanings given to such
terms in the Agreement.
UNITED ASSET MANAGEMENT CORPORATION
By:__________________________________
Title:
Date: ______ __, 199_
<PAGE>
EXHIBIT I TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
ENCUMBRANCES
NONE
<PAGE>
EXHIBIT J TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
LITIGATION
The Company's federal income tax returns for the years ending December 31,
1984 through December 31, 1992 have been under audit by the Internal Revenue
Service. On January 30, 1992 the Company received a Revenue Agent's Report
proposing certain adjustments to the Company's federal income tax returns for
1984, 1985, and 1986. The principal issue involved is the deductibility of the
amortization of costs assigned to investment advisory contracts acquired. The
Company has appealed the Revenue Agent's proposed adjustments to the Appellate
Division of the Internal Revenue Service. The Internal Revenue Service has not
assessed any deficiency. This matter is more particularly described in footnote
6 to the Company's financial statements for the year ended December 31, 1993.
<PAGE>
EXHIBIT K TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alpha Global Fixed Income Managers, Inc. (DE) 100 100% Company
Analytic Investment Management, Inc. (CA) 3,400 100% Company
Barrow, Hanley, Mewhinney & Strauss, Inc. (NV) 100 100% Company
Cambiar Investors, Inc. (CO) 100 100% Company
The Campbell Group, Inc. (DE) 100 100% Company
**/***Timber Pacific Properties, Inc. (OR) 100 100% The Campbell Group, Inc.
Chicago Asset Management Company (DE) 100 100% Company
Cooke & Bieler, Inc. (PA) 5,462 100% Company
**/***Baxter & Stewart, Inc. (PA) 100 100% Cooke & Bieler, Inc.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 1
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
C. S. McKee & Company, Incorporated (PA) 21,100 Class A 100% Company
7,430 Class B
Fiduciary Management Associates, Inc. (DE) 900 100% Company
GSB Investment Management, Inc. (DE) 100 100% Company
Hamilton, Allen & Associates, Inc. (DE) 100 100% Company
HIMCO, INC., d/b/a Hanson Investment Management 400 100% Company
Company (CA)
Investment Counselors of Maryland, Inc. (MD) 7,500 100% Company
Investment Research Company (IL) 100 100% Company
John K. Dwight Asset Management Company, Inc. (DE) 100 100% Company
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 2
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
**Ki Pacific Asset Management, Inc. (DE) 100 100% Company
**/*** Ki Pacific Asset Management (Bermuda) 12,000 100% Ki Pacific Asset Management,
Limited (Bermuda) Inc.
L&B Realty Advisors, Inc. (DE) 3,910 95% Company (3,710)
**/***L&B Institutional Property Managers, Inc. (DE) 1,000 100% L&B Realty Advisors, Inc.
**/***L&B Institutional Property Managers of 1,000 100% L&B Institutional Property
Arizona, Inc. (AZ) Managers, Inc.
2/**L&B Institutional Property Managers of 1,000 100% L&B Institutional Property
California, Inc. (CA) Managers, Inc.
**/***L&B Institutional Property Managers of 1,000 100% L&B Institutional Property
Missouri, Inc. (MO) Managers, Inc.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 3
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
**/***L&B Institutional Property Managers of New 1,000 100% L&B Institutional Property
York, Inc. (NY) Managers, Inc.q
**/***L&B Institutional Property Managers of North 1,000 100% L&B Institutional Property
Carolina, Inc. (NC) Managers, Inc.
**/*** L&B Realty Acquisitions, Inc. (DE) 1,000 100% L&B Institutional Property
Managers, Inc.
Nelson, Benson & Zellmer, Inc. (DE) 100 100% Company
2/**Investment Trust Company (CO) 25,000 100% Nelson, Benson & Zellmer, Inc.
Newbold's Asset Management, Inc. (PA) 100 100% Company
Northern Capital Management Incorporated (WI) 100 100% Company
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 4
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NWQ Investment Management Company, Inc. (MA) 200,000 100% United Asset Management
Holdings, Inc.
Olympic Capital Management, Inc. (WA) 100 100% Company
**Regis Administrative Services, Inc. (DE) 100 100% Company
(formerly named Newco Acquisition Corp.)
*/**Regis Retirement Plan Services, Inc. (MA) 7,000 100% Company
(formerly named RFI Distributors, Inc.)
Rice, Hall, James & Associates (CA) 100 100% Company
The Rothschild Company (MD) 638.6316 100% Company
Sirach Capital Management, Inc. (WA) 100 100% Company
*Spectrum Asset Management, Inc. (CT) 100 100% Company
Sterling Capital Management Company (NC) 7,757 100% Company
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 5
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2/*/**Sterling Capital Distributors, Inc. (NC) 5,000 100% Sterling Capital Management
Company
Suffolk Capital Management, Inc. (DE) 100 100% Company
Thompson, Siegel & Walmsley, Inc. (VA) 2,898 100% Company
**UAM Investment Corporation (DE) 100 100% Company
**UAM Investment Services, Inc. (DE) 1,000 100% Company
(application pending as an investment adviser)
**United Asset Management Holdings, Inc. (DE) 100 100% Company
Acadian Asset Management, Inc. (MA) 100 100% United Asset Management
Holdings, Inc.
Dewey Square Investors Corporation (DE) 100 100% United Asset Management
Holdings, Inc.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 6
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
HT Investors, Inc. (DE) 100 100% Dewey Square Investors
Corporation
First Pacific Advisors, Inc. (MA) 200,000 100% United Asset Management
Holdings, Inc.
*/**/***FPA Fund Distributors, Inc. (CA) 100 100% First Pacific Advisors, Inc.
Hagler, Mastrovita & Hewitt, Inc. (DE) 50,000 100% United Asset Management
Holdings, Inc.
Hellman, Jordan Management Co., Inc. (DE) 449.5 100% United Asset Management
Holdings, Inc.
Pell, Rudman & Co., Inc. (DE) 100 100% United Asset Management
Holdings, Inc.
**/***Atlantic Trust Company, National Association 3 100% Pell, Rudman & Co., Inc.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 7
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2/**Boston Harbor Trust Company, National 4,670 100% Pell, Rudman & Co., Inc.
Association
**PIC Newco, Inc. (MA) 100 100% United Asset Management
(application to be filed as an investment Holdings, Inc.
adviser in November 1994)
Tom Johnson Investment Management, Inc. (MA) 100 100% United Asset Management
Holdings, Inc.
**UAM Realty Advisors Investment Corporation (DE) 100 100% United Asset Management
Holdings, Inc.
**United Asset Management (Japan), Inc. (DE) 1,000 100% Company
**United Asset Management Trademark, Inc. (DE) 100 100% Company
**Heitman Financial Ltd. (IL) 100 100% Company
**Heitman Financial Services Ltd. (IL) 1,000 100% Heitman Financial Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 8
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman FEW 2 Corp. (IL) 1,000 100% Heitman Financial Services Ltd.
+/**HMI Management Company (IL) 9,400 100% Heitman Financial Services Ltd.
+/**Philadelphian Realty Corporation (DE) 1,000 100% Heitman Financial Services Ltd.
+/**Heitman Holdings, Ltd. (DE) 1,000 100% Heitman Financial Services Ltd.
+/**Heitman Equities Corporation (DE) 1,000 100% Heitman Financial Services Ltd.
+/*/**Heitman Securities Corporation (DE) 1,000 100% Heitman Financial Services Ltd.
+/**HRC - OCC, Inc. (NV) 1,000 100% Heitman Financial Services Ltd.
(formerly named HRC, Inc.)
+/**Heitman Realty Corporation (IL) 1,000 100% Heitman Financial Services Ltd.
+/**Heitman Snowmass Corporation (IL) 100 100% Heitman Financial Services Ltd.
+/**HRC III, Inc. (NV) 100 100% Heitman Financial Services Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 9
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**H.E. One, Inc. (DE) 3,385 100% Heitman Financial Services Ltd.
+/**HRC IV, Inc. (NV) 100 100% Heitman Financial Services Ltd.
+/**HRC V, Inc. (NV) 100 100% Heitman Financial Services Ltd.
+/**HRC VI, Inc. (DE) 100 100% Heitman Financial Services Ltd.
+/**Castle Loan Corporation (IL) 1,000 100% Heitman Financial Services Ltd.
+/**HRC - LLC, Inc. (WY) 100 100% Heitman Financial Services Ltd.
+/**Heitman Financial U.K. Ltd. (IL) 1,000 100% Heitman Financial Ltd.
Heitman Advisory Corporation (IL) 1,000 100% Heitman Financial Ltd.
+/**Lender Services of Iowa Ltd. (IA) 1,000 100% Heitman Advisory Corporation
**Heitman Properties Ltd. (IL) 39,763 100% Heitman Financial Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 10
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman Properties of Rhode Island Ltd 1,000 100% Heitman Properties Ltd
(formerly named Castle Leasing Inc.) (RI)
+/**Centre Properties Ltd. (IL) 1,000 100% Heitman Properties Ltd.
+/**Heitman Florida Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Pennsylvania Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**HMC Insurance Agency, Inc. (IL) 1,000 100% Heitman Properties Ltd.
+/**Heitman Minnesota Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Kentucky Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Virginia Management Inc. (WI) 1,000 100% Heitman Properties Ltd.
+/**Heitman Ohio Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Nevada Management Inc. (DE) 1,000 100% Heitman Properties Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 11
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
NAME STOCK ISSUED CAPITAL
AND STOCK
OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman Wisconsin Management, Inc. 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Iowa Ltd. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman D.C. Properties Ltd. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Louisiana Ltd. (DE) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Michigan Ltd. (MI) 100 100% Heitman Properties Ltd.
+/**Heitman Properties of Missouri Ltd. (MO) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Arizona Ltd. (AZ) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Indiana Ltd. (IN) 1,000 100% Heitman Properties Ltd.
+/**Heitman Corporate Plaza, Inc. (KY) 100 100% Heitman Properties Ltd.
+/**Heitman Mayfair Corporation (NV) 2,500 100% Heitman Properties Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 12
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Heitman Properties of Oregon Ltd. (OR) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Mississippi Ltd. (MS) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of New Mexico Ltd. (NM) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of New York Ltd. (NY) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of North Carolina Ltd. (NC) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of South Carolina Ltd. (SC) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Tennessee Ltd. (TN) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Texas Ltd. 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Nebraska Ltd. (NE) 1,000 100% Heitman Properties Ltd.
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 13
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
+/**Property Security Services Ltd. (MI) 1,000 100% Heitman Properties Ltd.
+/**Heitman Properties of Alabama Ltd. (DE) 10,000 100% Heitman Properties Ltd.
+/** Heitman Development Co. Ltd. (IL) 1,000 100% Heitman Properties Ltd.
+/**PRA Securities Advisors, Inc. (IL) 1,000 100% Heitman Advisory Corporation
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 14
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
**United Asset Management U.K. Holdings, 1 100% Company
Inc. (DE)
**Murray Johnstone Holdings Limited (Scotland) 8,092,361 100% United Asset Management U.K.
Holdings, Inc.
1/**Murray Johnstone International Limited 1,000,000 100% Murray Johnstone
(Scotland) (ordinary) Holdings Limited
400,000 100%
(preferred)
1/**Murray Johnstone Limited (Scotland) 1,001,000 100% Murray Johnstone Holdings
Limited
1/**Murray Johnstone Investment Trust Management 2 100% Murray Johnstone Limited
Limited (Scotland)
1/**Murray Johnstone Developments Limited 2 100% Murray Johnstone Limited
1/**Murray Johnstone Europe Limited (Scotland) 2 100% Murray Johnstone Limited
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 15
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/**Murray Johnstone Asset Management Limited 500 100% Murray Johnstone Limited
(Scotland)
1/**Murray Johnstone Personal Asset Management 100,000 60% Murray Johnstone Limited
Limited (Scotland) (ordinary)
400,000 100%
(preferred)
1/**Murray Johnstone (General Partner) Limited 5,000 100% Murray Johnstone Limited
(England)
1/**BIG (General Partner) Limited (Scotland) 5,000 100% Murray Johnstone Limited
1/**Murray Johnstone Unit Trust Management Limited 50,000 100% Murray Johnstone Limited
(Scotland)
1/**Embankment Properties (Management) Limited 25,000 67% Murray Johnstone Limited
(Jersey)
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 16
<PAGE>
November 15, 1994
<TABLE>
<CAPTION>
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES
TOTAL PERCENTAGE
CAPITAL OF
STOCK ISSUED CAPITAL
AND STOCK
NAME OUTSTANDING OWNED OWNER
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1/**Murray Johnstone (Jersey) Limited 25,000 100% Murray Johnstone Limited
(Jersey)
1/**Murray Johnstone Buy-out Management (Jersey) 27,824 100% Murray Johnstone Limited
Limited (Jersey)
<FN>
* = Registered as a broker-dealer under Section 15 of the Exchange Act
** = Not registered as an investment adviser under Section 203 of the
Investment Advisers Act
*** = Exempted Subsidiary
+ = Heitman Exempted Subsidiary
1 = Murray Johnstone Exempted Subsidiary
2 = Special Exempted Subsidiary
</TABLE>
Page 17
<PAGE>
EXHIBIT L TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
SUBSCRIPTION RIGHT, WARRANTS, ETC.
(1) Recapitalization Agreement dated as of December 17, 1993 by and among
United Asset Management Corporation ("UAM"), L&B Realty Advisors, Inc.
("L&B"), and M. Thomas Lardner ("Lardner") which contains provisions
with respect to the payment of dividends to Lardner.
(2) As a stockholder of L&B, Lardner receives his proportionate share of
"Stockholders' Share of Revenues" under the Revenue Sharing Agreement
by and among UAM, L&B, Lardner, Daniel L. Plumlee, and G. Andrew
Smith.
(3) Stock Restriction, Stock Purchase and Sale and Non-Competition
Agreement dated as of June 24, 1992 by and among UAM, L&B, and Lardner
under the provisions of which, among other things, UAM has a right to
purchase the shares of stock of L&B of Lardner and Lardner has the
right to require UAM to purchase all of Lardner's shares of L&B.
(4) Option Agreement between Murray Johnstone Limited ("MJ") and David
Hamilton Hume ("Hume") under the terms of which, among other things,
(a) Hume grants to MJ an option entitling MJ to require Hume to sell
all of the shares of Murray Johnstone Personal Asset Management
Limited ("MJPAM") held by Hume to MJ, and (b) MJ grants to Hume an
option entitling Hume to require MJ to purchase all of the shares of
MJPAM held by Hume. There are similar Option Agreements between MJ
and each of Allen Topley, David Robert Barber, and Alexander Charles
Douglas Clay. In addition, there is a Deed of Adherence by Derek
Ronald Strauss in which Mr. Strauss, in contemplation of becoming a
shareholder of MJPAM, agrees to be bound by all of the terms and
conditions of the Option Agreement.
<PAGE>
EXHIBIT M-1 TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
November 18, 1994
Morgan Guaranty Trust Company of New York,
as Agent
60 Wall Street
New York, New York 10260
and
The First National Bank of Boston,
as Collateral Agent
150 Royall Street
Canton, Massachusetts 02021
and
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Credit Lyonnais New York Branch
c/o Credit Lyonnais Representative Office
53 State Street
Boston, Massachusetts 02109
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais Representative Office
53 State Street
Boston, Massachusetts 02109
Mellon Bank, N.A.
Mellon Bank Center
1735 Market Street, 6th Floor
Philadelphia, Pennsylvania 19101
<PAGE>
Page 2
November ____, 1994
Chemical Bank
4 New York Plaza
New York, New York 10004-2477
The Daiwa Bank, Limited
233 South Wacker Drive
Suite 5400
Chicago, Illinois 60606
Bank Hapoalim B.M.
70 Federal Street
Boston, Massachusetts 02110
Shawmut Bank, N.A.
One Federal Street
Boston, Massachusetts 02211
NationsBank, N.A.
10 Light Street
Baltimore, Maryland 21201
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Deutsche Bank AG
New York Branch/Cayman Islands Branch
31 West 52nd Street
New York, New York 10019
BayBank Boston, N.A.
175 Federal Street - 10th Floor
Boston, Massachusetts 02110
Fleet Bank of Massachusetts
75 State Street
Boston, Massachusetts 02109
<PAGE>
Page 3
November ____, 1994
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
as Banks under the Credit Agreement referred to below.
Ladies and Gentlemen:
We have acted as counsel to United Asset Management Corporation, a Delaware
corporation (the "Company"), United Asset Management Holdings, Inc., a Delaware
corporation ("UAM Holdings") and a wholly-owned subsidiary corporation of the
Company, United Asset Management Trademark, Inc., a Delaware corporation ("UAM
Trademark") and a wholly-owned subsidiary corporation of the Company, UAM
Investment Corporation, a Delaware corporation ("UAM Investment") and a
wholly-owned subsidiary corporation of the Company, United Asset Management U.K.
Holdings, Inc., a Delaware corporation ("UAM U.K. Holdings") and a wholly-owned
subsidiary corporation of the Company, UAM Realty Advisors Investment
Corporation, a Delaware corporation ("UAM Realty Advisors") and a wholly-owned
subsidiary corporation of UAM Holdings, and Dewey Square Investors Corporation,
a Delaware corporation ("DSI") and a wholly-owned subsidiary corporation of UAM
Holdings (UAM Holdings, UAM Trademark, UAM Investment, UAM U.K. Holdings, UAM
Realty Advisors, and DSI are hereinafter collectively called the "Guaranty
Subsidiaries"), in connection with the preparation, execution, and delivery of
(1) the Second Amended and Restated Credit Agreement dated as of November 18,
1994 (the "Credit Agreement") by and among the Company, Morgan Guaranty Trust
Company of New York, The First National Bank of Boston, Chemical Bank, Credit
Lyonnais New York Branch, Credit Lyonnais Cayman Island Branch, Mellon Bank,
N.A., Bank Hapoalim B.M., Shawmut Bank, N.A., Deutsche Bank AG New York
Branch/Cayman Islands Branch, NationsBank, N.A., The Daiwa Bank, Limited, Brown
Brothers Harriman & Co., BayBank Boston, N.A., Fleet Bank of Massachusetts, and
Wachovia Bank of Georgia, N.A. (the "Banks"), Morgan Guaranty Trust Company of
New York, as Agent (the "Agent"), and The First National Bank of Boston, as
Collateral Agent (the "Collateral Agent"), (2) the Tranche A
<PAGE>
Page 4
November ____, 1994
Notes and the Tranche B Notes dated November 18, 1994 of the Company evidencing
the obligation of the Company to the Banks to repay the Loans on such dates as
are provided in the Credit Agreement (the "Notes"), and (3) the Guaranty and
Security Documents Confirmation and Amendment dated as of November 18, 1994 (the
"Confirmation and Amendment") by and among the Company, the Guaranty
Subsidiaries, Heitman Financial Ltd., an Illinois corporation, the Agents, and
the Banks. Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in the Credit Agreement. The Credit Agreement,
the Notes, and the Confirmation and Amendment are hereinafter collectively
called the "Credit Documents". This opinion is being furnished to you pursuant
to Section 4.1(h) of the Credit Agreement. The Company has instructed us to
prepare this opinion and deliver it to the Banks and the Agents for their
benefit.
As such counsel, we have examined the originals or copies, certified or
otherwise identified to our satisfaction, of the following:
(a) the Credit Documents;
(b) a copy, certified as of a recent date by the Secretary of State of the
State of Delaware, of the charter documents of each of the Company and
the Guaranty Subsidiaries;
(c) certificates of recent date of the Secretary of State of the State of
Delaware as to the incorporation, legal existence, and corporate good
standing of each of the Company and the Guaranty Subsidiaries;
(d) a copy, certified as of the date of the Credit Agreement by the
Secretary or Assistant Secretary of each of the Company and the
Guaranty Subisidiaries, of the By-Laws of each of the Company and the
Guaranty Subsidiaries;
<PAGE>
Page 5
November ____, 1994
(e) a copy, certified as of the date of the Credit Agreement by the
Secretary or Assistant Secretary of each of the Company and the
Guaranty Subsidiaries, of resolutions adopted by the Board of
Directors of each of the Company and the Guaranty Subsidiaries
authorizing the execution and delivery of the Credit Documents to
which each is a party;
(f) a certificate as of the date of the Credit Agreement of the Secretary
or Assistant Secretary of each of the Company and the Guaranty
Subsidiaries as to the incumbency and signatures of officers of each
of the Company and the Guaranty Subsidiaries; and
(g) such other certificates, documents, and records as we have deemed
necessary for the purposes of this opinion.
We have also examined and relied upon the representations, warranties, and
agreements as to matters of fact contained in the Credit Documents and in
certificates delivered to you and to us in connection therewith and herewith.
We have assumed the genuineness of all signatures (other than those of the
Company, the Guaranty Subsidiaries, and the officers signing certificates on
behalf of the Company and the Guaranty Subsidiaries), the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. We have assumed the
validity and binding effect of the Credit Documents under the substantive law of
the State of New York, the jurisdiction whose law has been chosen by the parties
as governing the Credit Documents.
Our opinions expressed in paragraph 1. below, insofar as they relate to the
legal existence and corporate good standing of each of the Company and the
Guaranty Subsidiaries, are based solely on the certificates referred to in
clause (c) of the second paragraph of this opinion and are limited accordingly,
<PAGE>
Page 6
November ____, 1994
and, as to such matters, our opinion is rendered as of the respective dates of
such certificates, and, as to such matters, from the respective dates of such
certificates to the date hereof, our opinion is rendered to our knowledge based
on due inquiry of the Company.
We have acted as general counsel to each of the Company and the Guaranty
Subsidiaries (other than to DSI as to which we are acting as special counsel)
with respect to particular matters as to which we have been consulted by them,
although in rendering this opinion we have not made any independent review or
investigation of any litigation, proceeding, or investigation pending, or
threatened, against the Company or any of the Guaranty Subsidiaries, or of any
agreement or instrument binding on the Company or any of the Guaranty
Subsidiaries, except that we have made inquiries with respect to such matters
and have relied upon representations of an officer of the Company and each of
the Guaranty Subsidiaries and nothing has come to our attention or, to our
knowledge, is contained in our files relating to the Company or the Guaranty
Subsidiaries leading us to question the accuracy of such information.
We have assumed that the Agent, the Collateral Agent, and each of the Banks
has all requisite power and authority and has taken all necessary action to
enter into, execute, and deliver all of the Credit Documents to which each is a
party and to effect the transactions contemplated by the Credit Documents and
that each of the Credit Documents to which the Agent, the Collateral Agent, and
each of the Banks is a party constitutes the legal, valid, and binding
obligation of the Agent, the Collateral Agent, and each of the Banks. We have
assumed that the Agent, the Collateral Agent, and each of the Banks has all
requisite power and authority under any law or regulation of the United States
of America or any political subdivision thereof to enter into the transactions
contemplated by the Credit Documents.
The opinions expressed herein are qualified to the extent that the validity
or enforceability of any provision of the Credit Documents may be subject to or
limited by (i) bankruptcy,
<PAGE>
Page 7
November ____, 1994
insolvency, reorganization, moratorium, fraudulent transfer and conveyance, and
other similar laws of general application relating to or affecting the rights
and remedies of creditors and secured parties generally, which laws may be in
effect from time to time, (ii) general principles of equity, whether applied in
a proceeding in equity or at law, (iii) the application by courts of competent
jurisdiction of laws, rules, regulations, court decisions, and constitutional
requirements deemed to have a paramount public interest, (iv) limitations on the
legality, validity, binding effect, or enforceability of waivers, provisions in
the nature of penalties, rights of set-off, exculpatory provisions, and
indemnification provisions contained in the Credit Documents to the extent the
same may be limited by public policy, equitable principles, or applicable laws,
rules, regulations, court decisions, and constitutional requirements, and
(v) any duty of good faith.
We are members of the bar of The Commonwealth of Massachusetts and do not
express any opinion with respect to the laws or the regulations of any
jurisdiction other than the federal laws of the United States of America, the
General Corporation Law of the State of Delaware, and the laws of The
Commonwealth of Massachusetts.
We call to your attention that the Credit Agreement provides that the
Credit Agreement and the rights and obligations of the parties thereunder, under
the Notes, and under the other Loan Documents shall be governed by and construed
and interpreted in accordance with the laws of the State of New York applicable
to contracts made and to be performed wholly within the State of New York (and a
similar but not identical provision is also contained in the other Credit
Documents), and that we are not qualified to practice in the State of New York
and, therefore, as we express no opinion on the laws and the regulations of the
State of New York, the opinions expressed in the second sentence of paragraph 3.
below and the opinions expressed in paragraph 4. below are subject to the
qualification that they may be affected by the applicability of the laws of the
State of New York, in
<PAGE>
Page 8
November ____, 1994
respect of which, with your approval, and without consulting New York counsel,
we are expressing no opinion.
Based upon and subject to the foregoing, we are of the opinion that:
1. Each of the Company and the Guaranty Subsidiaries is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and each of the Company and the Guaranty Subsidiaries has all requisite
corporate power to own its property and to conduct its business as now
conducted. None of the Company and the Guaranty Subsidiaries is an "investment
company," or a company controlled by an "investment company," registered or
required to be registered under the Investment Company Act of 1940, as amended.
None of the Company and the Guaranty Subsidiaries (other than DSI) is registered
or required to be registered as an investment adviser under the Investment
Advisers Act of 1940, as amended. DSI is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended, and, to our knowledge,
such registration has not been withdrawn or revoked. None of the Company and
the Guaranty Subsidiaries is required to be qualified as a foreign corporation
in any state in which it is not qualified and in which the failure to qualify
would have a material adverse effect upon its business, operations, or property.
2. The execution and delivery by each of the Company and the Guaranty
Subsidiaries of the Credit Documents to which it is a party and the performance
by each of the Company and the Guaranty Subsidiaries of its obligations
thereunder are within the corporate power and authority of each of the Company
and the Guaranty Subsidiaries, have been authorized by proper corporate
proceedings of each of the Company and the Guaranty Subsidiaries, and do not
contravene any presently existing provision of law of the United States of
America or The Commonwealth of Massachusetts or the General Corporation Law of
the State of Delaware or the Restated Certificate of Incorporation (or
Certificate of Incorporation or Certificate of Incorporation, as amended, as the
case may be) or the By-Laws of each of the Company and the
<PAGE>
Page 9
November ____, 1994
Guaranty Subsidiaries, or, to our knowledge, based on due inquiry of each of the
Company and the Guaranty Subsidiaries, contravene any provision of, or
constitute a default or an event of default under, any other agreement or
instrument known to us and binding on the Company or any of the Guaranty
Subsidiaries. The execution and delivery by each of the Company and the
Guaranty Subsidiaries of the Credit Documents to which it is a party and the
performance by each of the Company and the Guaranty Subsidiaries of its
obligations thereunder do not, and will not, give rise to any lien or security
interest in favor of any Person other than the Collateral Agent, for the ratable
benefit of the Banks and for the benefit of the Agents.
3. Each of the Company and the Guaranty Subsidiaries duly executed and
delivered the Credit Documents to which it is a party. Each of the Credit
Documents to which each of the Company and the Guaranty Subsidiaries is a party
is the legal, valid, and binding obligation of the Company and the Guaranty
Subsidiaries enforceable against the Company and the Guaranty Subsidiaries in
accordance with its terms.
4. To our knowledge, the execution, delivery, and performance of the
Credit Documents to which each of the Company and the Guaranty Subsidiaries is a
party by each of the Company and the Guaranty Subsidiaries, as the case may be,
and the transactions contemplated thereby as to the Company and the Guaranty
Subsidiaries do not require any approval or consent of, or the filing or
registration with, any governmental or other agency or authority.
5. To our knowledge, based on due inquiry of the Company, as of the date
hereof, all of the Subsidiaries of the Company are listed in Exhibit K to the
Credit Agreement. The Company, except as disclosed in Exhibit K to the Credit
Agreement and except as required by Section 8.16 of the Credit Agreement and
Section 3(1) of the UAM U.K. Holdings Pledge Agreement, is the record and
beneficial holder of all of the issued and outstanding shares of capital stock
of each of the Subsidiaries of the Company. To our knowledge, based on due
inquiry of the Company, except as
<PAGE>
Page 10
November ____, 1994
disclosed in Exhibit L to the Credit Agreement, (a) all shares of capital stock
of the Subsidiaries of the Company have been validly issued and are fully paid
and nonassessable, no rights to subscribe to any additional shares of capital
stock of the Subsidiaries of the Company have been granted, and no options,
warrants, or similar rights to acquire shares of capital stock of the
Subsidiaries of the Company are outstanding, except in favor of the Company or a
Subsidiary of the Company; and (b) with respect to any Subsidiary of the Company
which is not wholly-owned by the Company or a Subsidiary of the Company, no
dividend, liquidation, or other preferences are in effect, except in favor of
the Company or a Subsidiary of the Company, and neither the Company nor any
Subsidiary of the Company has entered into any agreement obligating the Company
to purchase or sell any capital stock of any Subsidiary of the Company owned
beneficially or of record by any Person.
6. To our knowledge, based on due inquiry of the Company, except as set
forth in Exhibit J to the Credit Agreement, there is no litigation, proceeding,
or investigation pending, or threatened in writing (including, without
limitation, by the Internal Revenue Service or any other governmental agency),
against the Company or any of the Guaranty Subsidiaries which, if adversely
determined, would result in a material judgment not substantially covered by
insurance or would otherwise have a material adverse effect on the assets,
business, financial condition, or prospects of the Company or any of the
Guaranty Subsidiaries.
7. The execution and delivery by each of the Company and the Guaranty
Subsidiaries of the Credit Documents to which it is a party and the performance
by each of the Company and the Guaranty Subsidiaries of its obligations
thereunder will not violate Regulations G, U, or X of the Board of Governors of
the Federal Reserve System.
8. For purposes of the opinion set forth in this paragraph, it is assumed
that the State of New York is the location of negotiation of and of contracting
of the Credit Documents and of
<PAGE>
Page 11
November ____, 1994
the principal place of business of Morgan, Chemical Bank, and Credit Lyonnais
New York Branch, and that the Credit Documents require that the obligations to
the Banks arising thereunder be paid in the State of New York. Based on and
subject to the foregoing, as well as the relevant qualifications and assumptions
set forth above, we are of the opinion that, in any action or proceeding arising
out of or relating to the Credit Documents in any court of The Commonwealth of
Massachusetts or in any federal court sitting in The Commonwealth of
Massachusetts, such court would recognize and give effect to the provisions of
the Credit Documents that they shall be governed by and construed and
interpreted (or enforced) in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly within the State of New
York, except with respect to: (i) laws, rules, regulations, court decisions,
and constitutional requirements of The Commonwealth of Massachusetts deemed to
express paramount public policy; (ii) matters governed by the provisions of
Chapter 93A of the Massachusetts General Laws.
Very truly yours,
HILL & BARLOW, a Professional
Corporation
By:__________________________
Richard S. Chute, a
Member of the firm
<PAGE>
EXHIBIT M-2 TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
November ____, 1994
(312)201-2693
Morgan Guaranty Trust Company of New York,
as Agent
60 Wall Street
New York, New York 10015
and
The First National Bank of Boston,
as Collateral Agent
150 Royall Street
Canton, Massachusetts 02021
and
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Credit Lyonnais New York Branch
c/o Credit Lyonnais Representative Office
53 State Street
Boston, Massachusetts 02109
<PAGE>
November ____, 1994
Page 2
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais Representative Office
53 State Street
Boston, Massachusetts 02109
Mellon Bank, N.A.
Mellon Bank Center
1735 Market Street, 6th Floor
Philadelphia, Pennsylvania 19101
Chemical Bank
4 New York Plaza
New York, New York 10004-2477
The Daiwa Bank, Limited
233 South Wacker Drive
Suite 5400
Chicago, Illinois 60606
Bank Hapoalim B.M.
70 Federal Street
Boston, Massachusetts 02110
Shawmut Bank, N.A.
One Federal Street
Boston, Massachusetts 02211
NationsBank, N.A.
10 Light Street
Baltimore, Maryland 21201
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Deutsche Bank AG
New York Branch/Cayman Islands Branch
31 West 52nd Street
New York, New York 10019
<PAGE>
November ____, 1994
Page 3
Fleet Bank of Massachusetts
75 State Street
Boston, Massachusetts 02109
BayBank Boston, N.A.
175 Federal Street - 10th Fl.
Boston, Massachusetts 02110
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
as Banks under the Confirmation and Amendment referred to below.
Ladies and Gentlemen:
We have acted as counsel to Heitman Financial Ltd., an Illinois
corporation (the "Company") and a wholly-owned subsidiary corporation of United
Asset Management Corporation, a Delaware Corporation ("UAM"), in connection with
the preparation, execution, and delivery of the Guaranty and Security Documents
Confirmation and Amendment dated as of November ____, 1994 (the "Confirmation
and Amendment") by and among UAM, the Company, the other Guaranty Subsidiaries,
and Morgan Guaranty Trust Company of New York, The First National Bank of
Boston, Credit Lyonnais New York Branch, Credit Lyonnais Cayman Island Branch,
Mellon Bank, N.A., Chemical Bank, The Daiwa Bank, Limited, Bank Hapoalim B.M.,
Shawmut Bank, N.A., NationsBank, N.A., Brown Brothers Harriman Co., and
Deutsche Bank AG New York Branch/Cayman Islands Branch, Fleet Bank of
Massachusetts, BayBank Boston, N.A. and Wachovia Bank of Georgia, N.A. (the
"Banks"), and Morgan Guaranty Trust Company of New York, as Agent (the "Agent"),
and The First National Bank of Boston, as Collateral Agent (the "Collateral
Agent"). Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in the Confirmation and Amendment. The Company
has instructed us to prepare this opinion and deliver it to the Agents and the
Banks for their benefit.
As such counsel, we have examined the originals or copies, certified or
otherwise identified to our satisfaction, of the following:
(a) the Confirmation and Amendment;
(b) a copy, certified as of a recent date by the Secretary of State
of the State of Illinois, of the charter documents of the
Company:
<PAGE>
November ____, 1994
Page 4
(c) a certificate of recent date of the Secretary of State of the
State of Illinois as to the incorporation, legal existence, and
good standing of the Company;
(d) a copy, certified as of the date of the Confirmation and
Amendment by the Secretary or Assistant Secretary of the Company,
of the By-Laws of the Company;
(e) a copy, certified as of the date of the Confirmation and
Amendment by the Secretary or Assistant Secretary of the Company,
of resolutions adopted by the Board of Directors of the Company
authorizing the execution and delivery of the Confirmation and
Amendment:
(f) a certificate dated as of the date of the Confirmation and
Amendment of the Secretary or Assistant Secretary of the Company
as to the incumbency and signatures of officers of the Company;
and
(g) such other certificates, documents, and records as we have deemed
necessary for the purposes of this opinion.
We have also examined and relied upon the representations, warranties, and
agreements as to matters of fact contained in the Confirmation and Amendment and
in certificates delivered to you and to us in connection therewith and herewith.
We have assumed the genuineness of all signatures (other than those of the
Company and the officer(s) signing certificates on behalf of the Company), the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such letter documents. We have
assumed the validity and binding effect of the Confirmation and Amendment under
the substantive law of the State of New York, the jurisdiction whose law has
been chosen by the parties as governing the Confirmation and Amendment.
Our opinions expressed in paragraph 1. below, insofar as they relate to the
legal existence and good standing of the Company, are based solely on the
certificate referred to in clause (c) of the second paragraph of this opinion
and are limited accordingly, and, as to such matters, our opinion is rendered as
of the date of such certificate, and, as to such matters, from the date of such
certificate to the date hereof, our opinion is rendered to our knowledge based
on due inquiry of the Company.
We have acted as special counsel to the Company with respect to particular
matters as to which we have been consulted by it, although in rendering this
opinion we have not made any
<PAGE>
November ____, 1994
Page 5
independent review or investigation of any litigation, proceeding, or
investigation pending, or threatened, against the Company, or of any agreement
or instrument binding on the Company, except that we have made inquiries with
respect to such matters and have relied upon representations of an officer of
the Company and nothing has come to our attention relating to the Company
leading us to question the accuracy of such information.
We have assumed that the Agent, the Collateral Agent, and each of the Banks
has all requisite power and authority and has taken all necessary action to
enter into, execute, and deliver the Confirmation and Amendment and to effect
the transactions contemplated by the Confirmation and Amendment and that the
Confirmation and Amendment constitutes the legal, valid, and binding obligation
of the Agent, the Collateral Agent, and each of the Banks. We have assumed that
the Agent, the Collateral Agent, and each of the Banks has all requisite power
and authority under any law or regulation of the United States of America or any
political subdivision thereof to enter into the transactions contemplated by the
Confirmation and Amendment.
The opinions expressed herein are qualified to the extent that the validity
or enforceability of any provision of the Confirmation and Amendment may be
subject to or limited by (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and conveyance, and other similar laws of general
application relating to or affecting the rights and remedies of creditors and
secured parties generally, which laws may be in effect from time to time, (ii)
general principles of equity, whether applied in a proceeding in equity or at
law, (iii) the application by courts of competent jurisdiction of laws, rules,
regulations, court decisions, and constitutional requirements deemed to have a
paramount public interest, (iv) limitations on the legality, validity, binding
effect, or enforceability of waivers, provisions in the nature of penalties,
rights of set-off, exculpatory provisions, and indemnification provisions
contained in the Confirmation and Amendment to the extent the same may be
limited by public policy, equitable principles, or applicable laws, rules,
regulations, court decisions, and constitutional requirements, and (v) an duty
of good faith or commercial reasonableness.
We are members of the bar of the State of Illinois and do not express any
opinion with respect to the laws or the regulations of any jurisdiction other
than the federal laws of the United States of America and the laws of the State
of Illinois.
We call to your attention that the Confirmation and Amendment states that
it shall be governed by, and construed and enforced in accordance with, the
internal laws of the State of New york without reference to conflict of laws
rules, and that we are not qualified to practice in the State of New York, and
therefore, as we express no opinion on the laws and the regulations of the State
of New York, the opinions expressed in the second sentence of paragraph 3. below
and the opinions expressed in paragraph 4. below are subject to the
qualification that they may be affected by the applicability of the laws of the
State of New York.
<PAGE>
November ____, 1994
Page 6
in respect of which, with your approval, and without consulting New York
counsel, we are expressing no opinion.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Illinois and the Company has all
requisite corporate power to own its property and to conduct its business as now
conducted. The Company is not required to be qualified as a foreign corporation
in any state in which it is not qualified and in which the failure to qualify
would have a material adverse effect upon its business, operations, or property.
2. The execution and delivery by the Company of the Confirmation and
Amendment and the performance by the Company of its obligations thereunder are
within the corporate power and authority of the Company, have been authorized by
proper corporate proceedings of the Company, and do not contravene any presently
existing provision of law of the United States of America or the State of
Illinois or the Restated Articles of Incorporation or the By-Laws of the
Company, or, to our knowledge, based on due inquiry of the Company and a review
of our files, contravene any provision of, or constitute a default or an event
of default under, any other agreement or instrument known to us and binding on
the Company.
3. The Company duly executed and delivered the Confirmation and
Amendment. The Confirmation and Amendment is the legal, valid, and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
4. The execution, deliver, and performance of the Confirmation and
Amendment by the Company and the transactions contemplated thereby as to the
Company do not require any approval or consent of, or the filing or registration
with, any governmental or other agency or authority.
5. To our knowledge, based on due inquiry of the Company and a review of
our files, there is no litigation, proceeding, or investigation pending, or
threatened in writing (including, without limitation, by the Internal Revenue
Service or any other governmental agency), against the Company which, if
adversely determined, would result in a material judgment not substantially
covered by insurance or would otherwise have a material adverse effect on the
assets, business, financial condition, or prospects of the Company.
Very truly yours,
<PAGE>
EXHIBIT N TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
UAM ASSETS UNDER MANAGEMENT HISTORY
<TABLE>
<CAPTION>
GROSS TOTAL
DATE ASSETS AT ASSETS AT PERCENT CONTRACTS AMORTIZATION NET CONTRACTS
AFFILIATE ACQUIRED ACQUISITION 6/30/94 CHANGE CHANGE AT 6/30/94 AT 6/30/94 AT 6/30/94
--------- ---------- ------------- -------------- ----------- --------- ------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AIM 5/85 869,728,000 1,042,337,000 172,609,000 19.8% 9,291,000 7,548,000 1,743,000
BHMS 1/88 4,957,000,000 14,846,700,000 9,889,700,000 199.5% 106,088,000 45,282,000 60,806,000
CGI 5/89 211,000,000 964,443,000 753,443,000 357.1% 10,287,000 4,291,000 5,996,000
C&B 2/86 2,306,000,000 5,746,870,000 3,440,870,000 149.2% 39,062,000 19,171,000 19,891,000
DWIGHT 1/94 5,000,000,000 5,924,299,000 924,299,000 18.5% 13,801,000 416,000 13,385,000
DSI/HTI 5/89 3,400,000,000 3,560,679,000 160,679,000 4.7% 21,373,000 7,190,000 14,183,000
FMA 6/86 474,000,000 915,555,000 441,555,000 93.2% 6,496,000 4,531,000 1,965,000
FPA 6/91 2,700,000,000 3,626,022,000 926,022,000 34.3% 51,032,000 10,636,000 40,396,000
GSB 12/93 2,400,000,000 2,346,537,000 (53,463,000) -2.2% 35,724,000 1,623,000 34,101,000
HMH 12/86 1,432,659,000 1,196,883,000 (235,776,000) -16.5% 20,164,000 12,275,000 7,889,000
HA&A 2/84 818,328,000 461,854,000 (356,474,000) -43.6% 8,751,000 8,751,000 0
HJ 8/84 747,721,000 1,711,626,000 963,905,000 128.9% 16,339,000 15,396,000 943,000
ICM 12/86 2,001,000,000 3,260,287,000 1,259,287,000 62.9% 19,410,000 9,786,000 9,624,000
TJIM 12/92 1,400,000,000 1,501,591,000 101,591,000 7.3% 22407000 2483000 19,924,000
L&B 6/92 1,686,547,000 2,007,090,000 320,543,000 19.0% 32748000 5705000 27,043,000
NBZ 8/83 217,561,000 497,877,000 280,316,000 128.8% 3,680,000 2,849,000 831,000
NAM 9/90 4,282,877,000 7,672,771,000 3,389,894,000 79.1% 55,020,000 13,121,000 41,899,000
NCM 1/86 998,118,000 1,347,930,000 349,812,000 35.0% 16,005,000 8,302,000 7,703,000
NWQ 10/92 4,704,621,000 4,819,502,000 114,881,000 2.4% 96076000 13713000 82,363,000
OCM 6/86 1,680,291,000 1,330,768,000 (349,523,000) -20.8% 22,726,000 13,970,000 8,756,000
PRC 3/93 1,367,000,000 1,459,032,000 92,032,000 6.7% 10761000 1,131,000 9,630,000
RHJ 5/87 683,000,000 720,742,000 37,742,000 5.5% 8,961,000 4,702,000 4,259,000
TRC 12/86 853,126,000 598,651,000 (254,475,000) -29.8% 18,502,000 7,540,000 10,962,000
SIRACH 1/89 747,314,000 4,398,970,000 3,651,656,000 488.6% 14,337,000 7,940,000 6,397,000
SUFFOLK 7/94 875,000,000 **
TCA 8/91 158,000,000 *
SCM 12/84 548,000,000 1,342,465,000 794,465,000 145.0% 13,894,000 6,199,000 7,695,000
TSW 12/84 1,334,511,000 3,608,105,000 2,273,594,000 170.4% 16,522,000 7,867,000 8,655,000
<FN>
* Trinity Capital Advisors 6/30/94 assets under management are included
with SCM.
** Acquired 7/14/94
</TABLE>
<PAGE>
EXHIBIT O TO
SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
INDEBTEDNESS
1. Money Market Loans made to the Company by JP Morgan in the following
principal amounts and maturing on the following dates:
Principal Maturity
Amount Date
--------- --------
$20,000,000 11/28/94
2. Money Market Loans made to the Company by Mellon in the following
principal amounts and maturing on the following dates:
Principal Maturity
Amount Date
--------- --------
$10,000,000 12/08/94
<PAGE>
Exhibit 10.7
UNITED ASSET MANAGEMENT CORPORATION
PROFIT SHARING AND 401(k) PLAN
THIRD AMENDMENT
WHEREAS, United Asset Management Corporation (hereinafter referred to as
the "Company") adopted the United Asset Management Corporation Profit Sharing
and 401(k) Plan (hereinafter referred to as the "Plan") effective as of
January 1, 1989 and restated effective January 1, 1990, to provide retirement
benefits for certain employees of the Company and its subsidiaries; and
WHEREAS, in accordance with Article 11, the Company wishes to amend the
Plan;
NOW, THEREFORE, the Plan is hereby amended effective as of January 1, 1994,
unless otherwise indicated, as follows:
1. Section 1.12 of Article I is hereby amended by adding the following new
Paragraphs after the first Paragraph of Section 1.12 as follows:
In addition to other applicable limitations set forth in the
Plan, and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1, 1994,
the annual compensation of each employee taken into account under
the Plan shall not exceed the OBRA '93 annual compensation limit.
The OBRA '93 annual compensation limit is $150,000 as adjusted by
the Commissioner for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The
cost-of-living adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which Compensation is
determined (determination period) beginning in such calendar year.
If a determination period consists of fewer than 12 months, the
OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision.
<PAGE>
If Compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the
current Plan Year, the Compensation for that prior determination
period is subject to the OBRA '93 annual compensation limit in
effect for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first
Plan Year beginning on or after January 1, 1994, the OBRA '93
annual compensation limit is $150,000.
The family aggregation rules of Code Section 414(q)(6)(C), as
modified by Code Section 401(a)(17), and regulations thereunder
shall apply to Compensation in the following manner. In the case
of an Employee who is either a 5% owner or is both a highly
compensated employee (within the meaning of Code Section
414(q)(6)) and one of the ten most highly compensated employees,
the Employee, the Employee's spouse, and any lineal descendants of
such Employee who have not attained age 19 before the close of the
Year shall be treated as a single Employee (a "family unit") with
one Compensation to which the annual compensation limit under the
Plan applies. If Compensation for the family unit exceeds the
annual compensation limit under Code Section 401(a)(17), then the
Plan shall allocate the limit among the members of the family unit
pro rata to their Compensation. However, if the Plan provides
for permitted disparity under Code Section 401(l), this proration
shall not be applied for purposes of determining the portion of
each individual's Compensation ("Covered Compensation") that is
below the integration level.
2. Section 6.3 of Article 6 is hereby amended effective January 1, 1993 by
deleting the first Paragraph after the Vesting Schedule and substituting the
following Paragraph, in order to conform the provisions of Section 6.3 to those
of Section 5.6(c) of Article 5, as previously amended effective January 1, 1993:
If any Participant who ceases to be employed by the Company or an
Affiliated Company has a forfeitable interest in such Participant's
Company Account, the forfeitable interest in such account shall be
subject to forfeiture as of the date of such Participant's termination
of employment. Any forfeiture made pursuant to this Section 6.3 shall
be subject to the restoration provisions of Section 6.4.
3. Article 7 is hereby amended by addition of the following new Section 7.1 :
-2-
<PAGE>
7.1 NOTICE TO PARTICIPANT OR BENEFICIARY
(a) As required by section 1.411(a)-11(c) of the Income Tax
Regulations, not less than 30 days and not more
than 90 days before payment or commencement of a benefit, the
Committee shall give notice to a Participant or Beneficiary
concerning the alternative methods by which such benefits are to
be paid. After receiving such notice, and subject to Paragraph
(b) below, a Participant or Beneficiary shall elect a form of
benefit (if applicable) and a method of distribution on a form
provided by the Committee.
(b) If a distribution is one to which sections 401(a)(11) and
417 of the Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice required under
section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(i) the Committee clearly informs the Participant or
Beneficiary that such individual has a right to a period of
at least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(ii) such Participant or Beneficiary, after receiving the
notice, affirmatively elects a distribution.
4. Article 7 is hereby further amended by renumbering former Sections 7.1
through 7.9 as Sections 7.2 through 7.10, and by revising all Section references
within the text of Article 7 to reflect the amended Section numbers.
5. Section 7.2 of Article 7 (as renumbered above) is hereby amended by
deleting the Section heading and replacing it with the following:
DISTRIBUTION ON RETIREMENT AND DISABILITY; PARTICIPANT'S METHOD OF
GIVING NOTICE AND MAKING ELECTIONS
-3-
<PAGE>
6. Said Section 7.2 is hereby further amended by adding to the final clause of
the last Sentence, after the comma following the word "however" the phrase,
"subject to the provisions of Section 7.1 above," so that the final clause of
Section 7.2 appears as follows:
however, subject to the provisions of Section 7.1 above, the
Committee shall, at the Participant's request, waive the thirty
(30) day election requirement.
7. Section 7.4 of Article 7 (as renumbered above) is hereby amended by
deleting the second Sentence thereof without replacement.
Except as specifically amended hereby, the Plan is hereby reaffirmed in all
respects.
Signed as a sealed Massachusetts Instrument effective as of the date stated
above.
UNITED ASSET MANAGEMENT CORPORATION
By: /s/ William H. Park
-------------------------------
William H. Park,
Senior Vice President
Date:
-4-
<PAGE>
Exhibit 10.8
UNITED ASSET MANAGEMENT CORPORATION
1994 STOCK OPTION PLAN
The plan (the "Plan") comprises two subplans: Subplan A covers options to
be granted to key employees, including officers, and non-employees who provide
important services to United Asset Management Corporation, a Delaware
corporation ("UAM") or any of its subsidiaries or parents, who are subject to
the income tax laws of the United States and Subplan B covers options to be
granted to employees of UAM or of its subsidiaries who are subject to the
income tax laws of the United Kingdom.
Subject to the adjustments provided in the Plan, the aggregate number of
shares of Common Stock of UAM which may be issued and sold pursuant to options
granted under Subplan A and Subplan B under the Plan shall not exceed
2,900,000 shares of Common Stock (as defined below), which may be either
authorized but unissued shares or treasury shares. If any option granted under
the Plan shall terminate or expire without being fully exercised, the shares
which have not been purchased will again become available for purposes of the
Plan.
Subplan A -- U.S. Subplan Portion of the 1994 Stock Option Plan
1. Purpose of Subplan A
The purpose of this Subplan A is to encourage key employees, including
officers, of UAM and any present or future subsidiary and parent of UAM
(hereinafter collectively referred to as the "Company") as well as
non-employees who provide important services to the Company to acquire shares
of common stock of UAM, $.01 par value per share (the "Common Stock"), and
thereby increase their proprietary interest in the Company's success and
provide an added incentive to remain in the employ of the Company. For
purposes of this Subplan A, the words parent and subsidiary shall be
interpreted in accordance with Section 422 and Section 424 of the Internal
Revenue Code of 1986, as from time to time amended (the "Code"). It is
intended that options granted under this Subplan A shall constitute either
"incentive stock options" within the meaning of Section 422 of the Code, or
"non-incentive stock options", as determined by the Committee named in Section
3 of this Subplan in its sole discretion and indicated on each form of option
grant (the "Option Grant"), and the terms of this Subplan and the Option
Grants shall be construed accordingly.
2. Shares Reserved Under the Subplan A
Subject to the adjustment provided in Section 9, the aggregate number of
shares of Common Stock which may be issued and sold pursuant to options
granted under Subplan A of the Plan shall not exceed 2,900,000 shares less the
number of shares of Common Stock issued pursuant to Subplan B of the Plan or
underlying outstanding options which have been granted under Subplan B of the
Plan. All such shares may be either authorized but unissued shares or treasury
shares. If any option granted under the Plan shall terminate or expire without
being fully exercised, the shares which have not been purchased will again
become available for purposes of the Plan.
3. Administration
Except to the extent otherwise provided in Subplan B, the Plan shall be
administered by a committee (the "Committee") consisting of not less than
three (3) members of the Board of Directors of UAM (the "Board"). Each of the
members of the Committee shall be, and shall have been at all times within the
one-year period ending on the date of his appointment to the Committee, a
person who in the opinion of counsel to the Company is (i) a "disinterested
person" as such term is used in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Act"), and (ii) an "outside director"
as such term is used in proposed regulation 1.162-27(e)(3) under Section
162(m) of the Code. The Committee shall be appointed by, and shall serve at
the pleasure of, the Board of Directors. A majority of the members present at
any meeting at which a quorum is present, and any acts approved in writing by
all the members of the Committee without a meeting, shall constitute the acts
of the Committee. The Committee shall have the powers granted
1
<PAGE>
to it in Sections 3, 4, 5, 7 and 8 of this Subplan A. The Committee is
authorized to interpret this Subplan A and, subject to the provisions of the
Subplan, to prescribe, amend, and rescind rules and regulations relating
thereto. The Committee is further authorized, subject to the express
provisions of this Subplan A, to alter or amend the form of Option Grant
attached hereto as Exhibit A and to make all other determinations necessary or
advisable in the administration of the Subplan. The interpretation and
administration by the Committee of any provisions of this Subplan A and the
Option Grant shall be final and conclusive on all persons having any interest
therein.
No members of the Committee or the Board shall be held liable for any
action or determination made in good faith with respect to the Plan, this
Subplan A, or any option granted hereunder.
4. Option Grants
Options to purchase shares of Common Stock under this Subplan A may be
granted to key employees (including officers and directors who are employees)
of the Company and to non-employees who provide important services to the
Company. The term "Employee" will include, for purposes of this this Subplan
A, key employees as well as such non-employees who provide important services
to the Company. In selecting the Employees to whom options will be granted and
in deciding how many shares of Common Stock will be subject to each option,
the Committee shall give consideration to the importance of an Employee's
duties, to his experience with the Company, to his future value to the
Company, to his present and potential contribution to the success of the
Company, and to such other factors as the Committee may deem relevant. Subject
to the express provisions of the Plan and the form of Option Grant
incorporated herein by reference as from time to time altered or amended, the
Committee shall have authority to determine with respect to each Option Grant
the number of installments, the number of shares of Common Stock in each
installment, and the exercise dates, and, to the extent not inconsistent with
the applicable provisions of the Code, if any, may specify additional
restrictions and conditions for any Option Grant. Each incentive stock option
shall expire not later than ten years from the date of the grant of such
option.
Except as provided in Section 7 of this Subplan A, no incentive stock
option may be granted to any Employee who, at the time such option is granted
owns stock possessing more than 10 percent of the total combined voting power
of all classes of stock of the Company within the meaning of Section 422 of
the Code. Non-employees who provide services to the Company shall not be
eligible to receive incentive stock options under the Plan.
The date of grant of an option under this Subplan A shall be the date the
Committee votes to grant the option, but no optionee shall have the right to
exercise his option until the Company has executed and delivered the Option
Grant to such optionee. Each option granted under this Subplan A shall be
evidenced by and subject to the terms and conditions of the Option Grant which
is incorporated into the Plan by reference as from time to time altered or
amended.
No stock option granted under this Subplan A may be transferred by the
optionee, other than by will or the laws of descent and distribution. A stock
option granted under this Subplan A can be exercised during such individual's
life only by him. Notwithstanding the foregoing, the Committee may grant
non-incentive stock options under this Subplan A that are transferable
(subject to any terms and conditions imposed by the Committee) by the
optionee, either directly or in trust, to one or more members of the
optionee's family, and the Committee may amend accordingly the form of Option
Grant attached hereto. Following any transfer permitted pursuant to this
paragraph, of which the optionee has notified the Committee in writing, such
option may be exercised by the transferee(s), subject to all terms and
conditions of the Option Grant. For these purposes, the members of the
optionee's family are only the optionee's: (i) spouse; (ii) lineal
descendents; (iii) lineal ancestors; and (iv) siblings and spouses and
children of such siblings.
5. Option Price
The price per share at which each option granted under this Subplan A may
be exercised shall be determined by the Committee subject to the provisions of
this Section 5. In the case of an incentive stock option, the exercise price
shall not be less than the fair market value per share on the date of the
grant, as
2
<PAGE>
determined by the Committee in accordance with applicable provisions of the
Code then in effect. In the case of a non-incentive stock option, the exercise
price shall not be less than 50% of the fair market value per share on the
date of grant, as so determined. In no event shall the option price per share
for any option under the Plan be less than the par value per share.
6. Limitation on Amount
The aggregate fair market value (determined at the time the option is
granted) of the stock with respect to which incentive stock options are
exercisable for the first time by an individual during any calendar year under
all plans of the Company shall not exceed $100,000. To the extent that the
aggregate value of such options (determined in the order in which they were
granted) exceeds such amount, such options shall be treated as non-incentive
stock options.
The maximum number of shares with respect to which any options may be
granted under the Plan (including this Subplan A, to any individual during any
single calendar year shall be 100,000 shares.
7. Special Rule for 10 Percent Shareholders
The Committee may grant incentive stock options under this Subplan A to
Employees who own more than 10 percent of the combined voting stock of the
Company if (i) at the time of the Option Grant the price per share at which
the option may be exercised is at least 110 percent of the fair market value
of the stock subject to the option and (ii) such option is not exercisable
after the expiration of five years from the date such option is granted.
8. Non-Incentive Stock Options
Notwithstanding the provisions of Sections 4, 5, 6 and 7 of this Subplan
A, the Committee may grant options which in one or more respects do not meet
the requirements for incentive stock options established by Section 422 of the
Code. The Committee shall indicate on each Option Grant whether an incentive
stock option within the meaning of Section 422 of the Code or a non-incentive
stock option is thereby granted.
Except as otherwise provided in this Subplan A, the Committee, in its
sole discretion, shall establish the terms and conditions for each
non-incentive stock option which it grants. Such terms and conditions may, but
need not, include some or all of the provisions of Sections 4, 5, 6 and 7 of
this Subplan A with respect to incentive stock options. If the Committee
grants an option which in all respects meets the requirements for incentive
stock options it may nonetheless designate such option a non-incentive stock
option on the Option Grant.
9. Adjustment of Shares Reserved Under the Plan
The aggregate number and kind of shares reserved under the Plan, the
maximum number of shares as to which options may be granted to any individual
and the option price per share shall be appropriately adjusted by the Board in
the event of any recapitalization, stock split, stock dividend, combination of
shares, or other similar change in the capitalization of the Company, but no
adjustment in the option price shall be made which would reduce the option
price per share to less than the par value per share, and any adjustment in
the option price for options granted under Subplan B of the Plan shall be
subject to the requirements of Rule 5 of Subplan B.
10. Dissolution or Reorganization
Prior to a dissolution, liquidation, merger, consolidation, or
reorganization of the Company (the "Event"), the Board may decide to terminate
each outstanding option granted under this Subplan A. If the Board so decides,
such option shall terminate as of the effective date of the Event, but the
Board shall suspend the exercise of all outstanding options a reasonable time
prior to the Event, giving each optionee not less than fourteen days written
notice of the date of suspension, prior to which an optionee may purchase in
whole or in part the shares available to him as of the date of receipt of the
notice. If the Event is not consummated, the
3
<PAGE>
suspension shall be removed and all options shall continue in full force and
effect, subject to the terms of their respective Option Grants.
11. Amendment and Termination of Plan and Subplan A
The Board may amend, suspend, or terminate the Plan and/or this Subplan
A, including the form of Option Grant incorporated herein by reference. No
such action, however, may, without approval or ratification by the
shareholders, increase the maximum number of shares reserved under the Plan
except as provided in Section 9 of this Subplan A and Rule 5 of Subplan B,
alter the class or classes of employees eligible for options, or make any
other change which, pursuant to the Code or regulations thereunder or Section
16(b) of the Act and the rules and regulations promulgated thereunder,
requires action by the shareholders. No such action may, without the consent
of the holder of the option, alter or impair any option previously granted.
In any event, the Plan shall terminate 10 years from the date of adoption
by the Board of Directors, or if earlier, from the date of approval by the
shareholders. Any shares remaining under the Plan at the time of termination
which are not subject to outstanding options and any shares which thereafter
become available because of the expiration or termination of an option shall
cease to be reserved for purposes of the Plan.
12. Right to Terminate Employment
Nothing contained herein or in any Option Grant executed pursuant hereto
shall restrict the right of the Company to terminate the employment of any
optionee at any time.
13. Date of Adoption
The date of adoption of this Plan by the Board is January 18, 1994.
14. Date of Approval
The date of approval of this Plan by the shareholders and the Plan's
effective date is May 19, 1994.
4
<PAGE>
Subplan B -- UK Subplan Portion of the 1994 Stock Option Plan
RULES OF THE UNITED ASSET MANAGEMENT CORPORATION
EMPLOYEE SHARE OPTION SCHEME
1. DEFINITIONS
In this Scheme (hereinafter sometimes referred to as the "UK Subplan"),
unless the context otherwise requires, the following words and expressions
shall have the following meanings:
"Act" the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations
promulgated thereunder.
"Adoption Date" the date on which the Scheme is adopted by the
Company.
"Associated Company" the meaning given to that term in Section 416 of
the U.K. Income and Corporation Taxes Act 1988.
By way of illustration only, a company is
associated with another company if it is
or has at any time within the previous year been
under the Control of the same parties.
"auditors" the auditors for the time being of the Company
(acting as experts and not as arbitrators).
"Board" the board of directors of the Company.
"Code" the U.S. Internal Revenue Code of 1986, as
amended, and regulations promulgated thereunder.
"Committee" the committee established by the Board pursuant
to Rule 10.4.
"Company" United Asset Management Corporation.
"Control" the meaning given to that word by Section 840 of
the U.K. Income and Corporation Taxes Act 1988.
By was of illustration only, a person has
control in relation to a body corporate if
that person has the power to secure by means of
the holding of shares or the possession of
voting power in or in relation to that or any
other body corporate or by virtue of any powers
conferred by the Articles of Association or
other document regulating that or any other
body corporate, that the affairs of the first
mentioned body corporate are conducted in
accordance with the wishes of that person.
"Date of Grant" the date on which an Option is, was or is to be
granted under the Scheme.
"Eligible Employee" any employee of any Participating Company who is
subject to the income tax laws of the United
Kingdom and who is normally required to
devote to his duties not less than 20 hours per
week (excluding meal breaks) (in the case of
an employee who is also a director of any
Participating Company, 25 hours per week
(excluding meal breaks)) and is not
precluded by paragraph 8 of Schedule 9 from
participating in the Scheme. In summary only,
paragraph 8 of Schedule 9 provides that a
person may not obtain or exercise rights under
the Scheme at any time if he or she has, or has
within the preceding 12 months had, a material
interest in a close company whose shares may
be acquired on the exercise of rights obtained
under the Scheme or which has Control of such
a company. "Material Interest" is defined in
Section 187(3) of the
5
<PAGE>
U.K. Income and Corporation Taxes Act 1988 as an
equity interest of more than ten percent of a
company's total equity capital. "Close Company"
is defined in Section 414(1) of the U.K. Income
and Corporation Taxes Act 1988 in such manner
as to exclude the Company. Accordingly,
paragraph 8 of Schedule 9 does not preclude any
Eligible Employee from participating in the
Scheme.
"Event" the dissolution, liquidation, merger,
consolidation, or reorganization of the Company.
"Group" that group comprising all of the Participating
Companies.
"Market Value" on any day the closing sales price in U.S.
Dollars of a Share as derived from the
consolidated tape of The New York Stock
Exchange for such day or, if such day was not
a trading day or if no Shares were sold on
such day, the sales price on, for the next
previous trading day on which a sale occurred.
"Option" a right to purchase Shares under the Scheme.
"Option Certificate" the certificate embodying an Option granted in
accordance with these Rules.
"Participating Company" the Company and any other corporation which it
Controls.
"Plan" the United Asset Management Corporation 1994
Stock Option Plan, of which this Scheme is an
integral part.
"Price" the price determined by the Committee in U.S.
Dollars at which each Share subject to an Option
may be acquired on the exercise of that Option,
which price shall be, subject to Rule 5, not
less than the higher of:
(i) the par value (if any) of a Share and
(ii) the Market Value of a Share on the Date of
Grant of that Option.
"Relevant Emoluments" the meaning given to that term in sub-paragraph
(2) of paragraph 28 of Schedule 9 by virtue of
subparagraph (4) of that paragraph. By way of
illustration only, an Eligible Employee's
Relevant Emoluments for purposes of the Scheme
are those emoluments of his or her employment
with one or more Participating Companies which
entitle the Eligible Employee to participate in
the Scheme and are liable to be paid under
deduction of tax according to the PAYE rules
but leaving out any benefits in kind. Overseas
earnings not paid in the United Kingdom are not
liable to PAYE deductions and cannot count as
Relevant Emoluments.
"Rules" the terms of the Scheme, as expressed herein and
as amended from time to time.
"Schedule 9" Schedule 9 to the U.K. Income and Corporation
Taxes Act 1988.
"Scheme" this U.K. Subplan, as set forth in these Rules
as amended from time to time.
"Share" A share of common stock, U.S. $.01 par value, in
the capital of the Company which satisfies the
conditions specified in paragraphs 10 to 14
inclusive of Schedule 9 and which may either be
an authorized but unissued share or a treasury
share. In summary only, paragraphs 10 to 14
inclusive of Schedule 9 set forth the conditions
which must be satisfied
6
<PAGE>
by the Shares over which Options are granted
pursuant to the Scheme and include the
following: (i) the Shares must form part of the
ordinary equity capital of the Company, which
consists of a single class of stock; (ii) the
Shares must be shares of a class of stock that
is quoted on a recognized stock exchange; and
(iii) the Shares subject to the Scheme must be
fully paid, not redeemable and not subject to
any restrictions other than restrictions which
apply to all shares of the same class. For
purposes of this clause (iii), the following
shall be regarded as restrictions on the Shares:
any contract, agreement, arrangement or
condition that restricts freedom to dispose of
the Shares or any interest in the Shares or the
proceeds from the sale of the Shares, or
restricts freedom to exercise any right
conferred by the Shares, or would cause any
disadvantage to the Eligible Employee or any
connected person if Shares were disposed of or
any right conferred by them was exercised;
provided, however, that Shares will not be
treated as restricted as a result of any
arrangement pursuant to which they are pledged
as security for a loan or are used to repay a
loan.
"Sterling Value" In respect of an Option, the sterling equivalent
of the appropriate Price, calculated by
reference to the U.S. Dollar/Sterling exchange
rate prevailing on the Date of Grant of that
Option.
"Subplan A" the portion of the Plan applicable to key
employees of, and non-employees who provide
important services to, a Participating Company
who are subject to the income tax laws of the
United States.
"Subsisting Option" an Option which has neither lapsed nor been
exercised or released, given up, or surrendered
by its holder.
"UK Subplan" the portion of the Plan comprising the Scheme as
set forth in these Rules.
"Year of Assessment" a year beginning on any 6th April and ending on
the following 5th April.
Where the context permits the singular shall include the plural and vice
versa and the masculine shall include the feminine. References to any Act or
statute shall include any statutory modification, amendment or re-enactment
thereof.
2. GRANT OF OPTION
2.1 Subject to the terms of these Rules, the Committee may at its
absolute discretion, from time to time, grant Options to any Eligible
Employees under the Scheme by issuing Option Certificates to them,
complying with Rule 2.2 below.
2.2 Each Option Certificate shall be under seal and shall specify:
(i) the Date of Grant of the relevant Option;
(ii) the number of Shares for which the Option is granted (which
shall not be so large that the grant of an Option for that number of
Shares would cause the applicable limits specified in Rule 3 to be
exceeded);
(iii) the Price at which the relevant Shares can be acquired; and
(iv) any conditions on the Option imposed by the Committee,
including (without limitation) any vesting schedule.
7
<PAGE>
In addition each Option Certificate shall indicate that Options
cannot be transferred, assigned or charged and that any purported
transfer, assignment or charge shall cause the relevant Option to lapse
forthwith.
Each Option Certificate shall be accompanied by a "form of
acceptance" (as described in Rule 4.3) which shall indicate that the
Option to which it relates will automatically lapse if the Option holder
does not sign and return such form to the Company within 3 months of the
Date of Grant.
3. LIMITATIONS
3.1 Subject to adjustment as provided in Rule 5, the aggregate
number of Shares in respect of which Options may be granted under the
Scheme on any Date of Grant or which my be issued and sold pursuant to
such Options shall not exceed 2,900,000 Shares, less any Shares then
subject to any outstanding option granted under Subplan A of the Plan or
previously issued pursuant to Subplan A. If any Option granted under the
Plan shall lapse or be released, given up or surrendered without being
fully exercised, the Shares which have not been purchased under the
Option shall again become available for purposes of the Plan.
3.2 No Option shall be granted to an Eligible Employee if
immediately following such grant he would hold Subsisting Options with an
aggregate Sterling Value exceeding the greater of:
(i) L100,000 or
(ii) four times the amount of the Eligible Employee's Relevant
Emoluments for either the current or preceding Year of Assessment
(whichever is the higher) or, if he was not in receipt of any Relevant
Emoluments during the preceding Year of Assessment four times the
amount of his Relevant Emoluments for the period of twelve months
beginning with the first day during the current Year of Assessment in
respect of which he became entitled to any.
For the purposes of this Rule 3.2, Options shall include all Options
granted under this Scheme and all options granted under any other scheme
approved under Schedule 9 and established by the Company or any
Associated Company. Also for purposes of this Rule 3.2, an Eligible
Employee's Relevant Emoluments from two or more Participating Companies
shall be aggregated in determining the applicable limit.
3.3 The maximum number of Shares with respect to which any options
may be granted under the Plan (including this UK Subplan) to any
individual during any single calendar year shall be 100,000 Shares.
4. EXERCISE OF OPTIONS
4.1 Unless the Committee otherwise agrees, any Option which has not
lapsed may be exercised only after the earliest of the following events:
(i) the first anniversary of the Date of Grant;
(ii) the death of the Option holder;
(iii) the Option holder ceasing to be an employee of any
Participating Company by reason of injury, disability, redundancy or
retirement or, at the discretion of the Committee, for any other
reason.
Provided always that when granting an Option the Committee may
provide, as regards all or any part(s) of it, that the Option or such
part(s) of it shall not become exercisable under sub Rules (i), (ii) or
(iii) above until after such time(s) as the Committee may previously have
determined. Any such restriction shall be set forth in the Option
Certificate for that Option.
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4.2 Once an Option has become exercisable under Rule 4.1 above, it
may be exercised either in whole or in part at any time unless or until
it shall lapse under Rule 4.3 below, but subject in all cases to Rule 6
below.
4.3 An Option shall lapse on the earliest of the following events:
(i) the expiry of three months from the Date of Grant, unless the
Option holder has previously given notice to the Company of his
acceptance of the Scheme's Rules using the form of acceptance supplied
to him with the relevant Option Certificate;
(ii) subject to a shorter period specified in the Option
Certificate, the tenth anniversary of the Date of Grant;
(iii) subject to a shorter period specified in the Option
Certificate, the first anniversary of the Option holder's death;
(iv) the Option holder ceasing to be an employee of any
Participating Company by reason of gross misconduct;
(v) subject to a shorter period specified in the Option
Certificate, the expiry of three months after the date on which the
Option holder ceases to be an employee of any Participating Company
otherwise than by reason of death or gross misconduct in circumstances
in which subclause (iv) applies;
(vi) the Option holder being adjudicated bankrupt; and
(vii) the first date upon which the Option holder purports to
transfer, assign or charge the Option.
5. VARIATION OF SHARE CAPITAL
In the event of any capitalization or rights issue or any stock split or
stock dividend or any consolidation, subdivision or reduction of capital by
the Company, the number of Shares subject to any Option and the Price payable
for each of those Shares shall be adjusted in such manner as the Auditors
confirm to be fair and reasonable provided that:
(i) the aggregate amount payable on the exercise of any Option in
full is not increased;
(ii) the Price of a Share is not reduced below its par value if
any;
(iii) no adjustments shall be made without the prior approval of
the Board of Inland Revenue; and
(iv) following the adjustment the Shares continue to satisfy the
conditions specified in paragraphs 10 to 14 inclusive of Schedule 9.
6. MANNER OF EXERCISE OF OPTIONS
6.1 No Option may be exercised by an individual at any time when he
is precluded by paragraph 8 of Schedule 9 from participating in the
Scheme.
6.2 An Option shall be exercised by the Option holder, or as the
case may be his personal representative, giving notice to the Company in
writing of the number of Shares in respect of which he wishes to exercise
the Option and making arrangements reasonably acceptable to the Committee
for payment of the appropriate amount, and submitting the relevant Option
Certificate. Any such notice shall be effective on the date of its
receipt by the Company.
6.3 Shares shall be allocated and issued pursuant to a notice of
exercise within 60 days of the date of exercise.
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7. RIGHTS ATTACHING TO SHARES
All Shares allocated pursuant to the exercise of an Option shall rank
pari passu in all respects with all other Shares in issue at the date of such
allocation.
8. AVAILABILITY OF SHARES
The Company shall at all times procure that it can secure the issue or
the transfer of sufficient Shares to permit the exercise of all Subsisting
Options.
9. LOSS OF OFFICE
If any Option holder shall cease to be an employee of a Participating
Company within the Group for any reason, he shall not be entitled by way of
compensation for loss of office or otherwise howsoever to any sum or other
benefit to compensate him for any loss of any right under the Scheme, and in
returning the form of acceptance referred to in Rule 4.3 he shall be deemed to
have agreed to this.
10. ADMINISTRATION AND AMENDMENT
10.1 No member of the Committee or the Board shall be held liable
for any action or determination made in good faith with respect to the
Plan, the UK Subplan, these Rules or any Option granted hereunder.
10.2 The cost of establishing and operating the Scheme shall be
borne by the Participating Companies in such proportions as the Board
shall determine.
10.3 The Board may from time to time suspend or terminate the Plan
and/or the UK Subplan or amend these Rules or the form of Option
Certificate, provided that:
(i) no such action may, without approval or ratification by the
Company's shareholders, increase the maximum number of Shares reserved
under the UK Subplan (except as provided in Rule 5) or under the Plan
(except as otherwise expressly provided in the Plan), alter the class
or classes of employees eligible for Options, or make any other such
change which, pursuant to Section 16(b) of the Act and the rules and
regulations promulgated thereunder, requires action by the Company's
shareholders;
(ii) except as provided in Rule 10.5, no such action may
detrimentally affect an Option holder as regards an Option granted
prior to the taking of such action; and
(iii) no amendment to these Rules shall have effect until
approved by the Board of the Inland Revenue.
10.4 The Scheme shall be administered by the Committee, the members
of which shall be appointed by and shall serve at the pleasure of the
Board (subject to the restrictions of this Rule 10.4). The Committee
shall consist of at least three Board members, each of whom shall be, and
shall have been at all times within the one-year period ending on the
date of his appointment to the Committee, a person who in the opinion of
counsel to the Company is (i) a "disinterested person" as such term is
defined in Rule 16b-3 promulgated under the Act and (ii) an "outside
director" as such term is defined in proposed regulation Section
1.162-27(e)(3) under Section 162(m) of the Code. Notwithstanding the
foregoing, until and unless the Board shall have constituted the
Committee pursuant to this Rule 10.4, the committee serving from time to
time as administrator of the Plan generally shall also serve as the
Committee for purposes of the UK Subplan. Actions taken by a majority of
the members present at any meeting of the Committee at which a quorum is
present, and any acts approved in writing by all members of the Committee
without a meeting, shall constitute the acts of the Committee. The
Committee shall have all powers of administration granted under these
Rules, except such powers as are expressly reserved to the Board. The
Committee is authorized to interpret these Rules and, subject to the
provisions of Rule 10.3, to prescribe, amend, and rescind rules and
regulations relating thereto. The Committee is further authorized,
subject to the express provisions of the Plan and these Rules, to alter
or amend the form of
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Option Certificate pursuant to which Options may be granted under the
Scheme from time to time and to make all determinations necessary or
advisable in the administration of the Scheme. The interpretation and
administration by the Committee of any provisions of the Plan and the UK
Subplan, including these Rules, and any Option Certificate issued
pursuant to the Scheme shall be final, binding and conclusive on all
persons having any interest therein.
10.5 Prior to the occurrence of an Event, the Board may elect to
terminate each Subsisting Option. If the Board so elects, such Option
shall terminate as of the effective date of the Event, but the Board
shall suspend the exercise of all Subsisting Options a reasonable time
prior to the Event, giving each Option holder not less than fourteen days
written notice of the date of suspension, prior to which an Option holder
may purchase in whole or in part the Shares available to him as of the
date of receipt of the notice. If the Event is not consummated, the
suspension shall be removed and all Options shall continue in full force
and effect, subject to the terms of their respective Option Certificates.
10.6 Any notice or communication to be given by or on behalf of the
Company to any Eligible Employee may be given by personal delivery or by
sending the same by ordinary post to his last known address in which case
it shall be deemed to have been received on the day after it was posted.
Any notice, document, option, share certificate or other communication
sent by post shall be sent at the risk of the Eligible Employee involved.
10.7 Unless otherwise provided any notice or other communication to
be given by an Eligible Employee to the Company shall be regarded as
having been properly given if sent or delivered to the company secretary
of the Participating Company by whom he is employed at that company's
registered office, any such communication being effective only upon
receipt.
10.8 The Scheme shall at all times be read in accordance with the
provisions of the U.K. Income and Corporation Taxes Act 1980 and insofar
as any of its Rules shall be inconsistent with any of the said provisions
and/or with any requirements of the Board of Inland Revenue necessary for
its approval or continued approval under the said Act they shall be
deemed automatically varied or deleted in such a way as to ensure
compliance with the same.
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Exhibit A
UNITED ASSET MANAGEMENT CORPORATION
Option Grant
(U.S. Subplan)
This incentive stock option/non-incentive stock option, granted as of
, 19 (the "Option") is granted by United Asset Management
Corporation ("UAM") to (the "Optionee"), an employee of, or a person
who has provided, is providing or will provide important services to, UAM or a
parent or subsidiary of UAM (hereinafter collectively referred to as the
"Company"). (If the Optionee is not an employee of the Company, this option is
a non-incentive stock option.)
1. Shares Subject to Option
Pursuant to the provisions of the United Asset Management Corporation
1994 Stock Option Plan, as amended from time to time (the "Plan"), UAM hereby
grants to the Optionee an option to purchase shares of its Common
Stock ($.01 par value) (the "Optioned Shares") at a price of $ per
share, in accordance with and subject to all the terms and conditions of the
Plan and subject to the terms and conditions hereinafter set forth. The Plan
and any amendments are hereby incorporated by reference and made a part
hereof.
2. Term and Exercise of Option
Except as otherwise provided in the Plan, or in this Option, the Option
shall terminate at the close of business five years from the date of grant and
may be exercised only by the Optionee or, to the extent provided in Section
3(b) hereof, by his legal representative.
While the Option is effective and the Optionee continues to be employed
by the Company, the Optioned Shares shall become available for purchase by the
Optionee in installments on the following dates:
Date Number of Shares
------------------------------------- --------------------------------------
Unpurchased portions of available installments may be accumulated and
subsequently purchased by the Optionee. The option price of each share
purchased shall be paid in cash or by delivery of other shares of the
Company's Common Stock owned by the Optionee with a fair market value equal to
the exercise price of the Optioned Shares to be purchased, or in any
combination of the two forms of payment. If, however, the Committee
established pursuant to Section 3 of the Plan determines in good faith that an
exercise of an option through the delivery of shares of the Company's Common
Stock is not in the best interest of the Company, the Committee may withhold
the right to so exercise the option and require payment of the purchase price
in cash.
If the Option is not an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as from time to time
amended, and if the Optionee is an employee of the Company or is otherwise
subject to income tax withholding by the Company, then in addition to payment
of the option price for each share purchased, the Optionee shall pay the
amount of federal and state withholding taxes determined by the Committee
named in Section 3 of the Plan (or by the Committee's designate) to be owing
with respect to the compensation income that the Optionee will realize upon
each share purchased.
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The Company, upon fulfillment of the requirements for exercise, including
receipt of the payment of the purchase price and all applicable withholding
taxes, shall deliver the shares purchased hereunder to the Optionee.
3. Terms and Conditions of Exercise
Each exercise and purchase of shares pursuant to the Option shall be
subject to the following terms and conditions:
(a) If the Optionee was an employee of the Company on the date of
Option Grant, the Optionee shall have remained in the continuous employ
of the Company from such date until the date of exercise, provided that,
if the Optionee's employment terminates for any cause other than death,
the Optionee may purchase in whole or in part within three months after
termination of employment the shares available to him on his termination
date provided that the expiration date of the option as to such shares
shall not have occurred.
(b) If the Optionee dies, then his legal representative or the
person or persons to whom his rights under the Option shall pass by will
or by the applicable laws of descent and distribution shall be entitled,
subject to the condition that no Option shall be exercisable after the
expiration of ten years from the date it was granted, within twelve
months after the date of his death, to exercise the Option to the extent
that the Optionee would have been entitled to exercise the Option on the
date of his death.
(c) The Optionee shall hold the Optioned Shares for investment and
not with a view to, or for resale in connection with, any public
distribution of such shares, and if requested, shall deliver to the
Company appropriate certificates to that effect. The restriction shall
terminate upon the registration of such shares under federal and state
securities laws.
(d) In the event that the Company, upon the advice of counsel, deems
it necessary to list upon official notice of issuance any shares to be
issued pursuant to the Plan on a national securities exchange or to
register under the Securities Act of 1933 or other applicable federal or
state statute any shares to be issued pursuant to the Plan, or to qualify
any such shares for exemption from the registration requirements of the
Securities Act of 1933 under the Rules and Regulations of the Securities
and Exchange Commission or for similar exemption under state law, then
the Company shall notify the Optionee to that effect and no Optioned
Shares shall be issued until such registration, listing or exemption has
been obtained. The Company shall make prompt application for any such
registration, listing or exemption pursuant to federal or state law or
rules of such securities exchange which it deems necessary and shall make
reasonable efforts to cause such registration, listing or exemption to
become and remain effective.
4. Option Non-Transferable
This Option may not be transferred by the Optionee or by operation of law
other than by will or by the laws of descent and distribution. It may be
exercised during the lifetime of the Optionee only by him.
5. Right to Terminate
Nothing contained in the Option Grant shall restrict the right of the
Company to terminate the employment of the Optionee at any time.
6. Dissolution or Reorganization
Prior to dissolution, liquidation, merger, consolidation or
reorganization of the Company (the "Event"), the Board may decide to terminate
each outstanding option. If the Board so decides, each option shall terminate
as of the effective date of the Event, but the Board shall suspend the
exercise of all outstanding options a reasonable time prior to the Event,
giving each Optionee not less than fourteen days written notice of the date of
suspension, prior to which an Optionee may purchase in whole or in part the
Optioned shares available to him as of the date of receipt of the notice. If
the Event is not consummated, the suspension shall
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<PAGE>
be removed and all options continue in full force and effect, subject to the
terms of their respective Option Grants.
7. Restrictions on Transfer of Stock
The shares of stock issued on exercise of the Option shall be subject to
any restrictions on transfer then in effect pursuant to the Certificate of
Incorporation or By-laws of the Company, as each may be amended from time to
time, and to any other restrictions or provisions attached hereto and made a
part hereof or set forth in any other contract or agreement binding on the
Optionee.
8. Notice Concerning Disposition of Shares
If the Option granted hereby is an incentive stock option, any
disposition by the Optionee of Optioned Shares purchased under the Option
within two years from the date of grant or within one year after their
transfer to the Optionee will deprive the Optionee of certain tax benefits
with respect to the Option which might otherwise be available. Optionees are
urged to review the Proxy Statement for the Annual Meeting of Stockholders of
UAM for 1994 for a more detailed discussion of the Federal tax consequences of
such a disposition under current law. Additionally, if the Optionee is subject
to Section 16(b) of the Securities Exchange Act of 1934, as amended, or the
rules and regulations promulgated thereunder, any disposition by the Optionee
of the Optioned Shares purchased under the Option within six months of the
date of grant may deprive the Optionee of the protection from 16(b) liability
which the provisions of the Plan seek to provide.
UNITED ASSET MANAGEMENT CORPORATION
(Corporate Seal)
By:
-------------------------------
President
Attest:
-------------------------
Secretary
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Exhibit 10.9
UNITED ASSET MANAGEMENT CORPORATION
1994 ELIGIBLE DIRECTORS STOCK OPTION PLAN
1. Purpose of Plan
The purpose of this plan (the "Plan") is to grant options to purchase
shares of the common stock, $.01 par value (the "Common Stock"), of United
Asset Management Corporation (the "Company") to Eligible Directors (as defined
in Section 4 of the Plan) of the Company at market value on the date of grant,
and to permit the granting of stock options to Eligible Directors at an
exercise price less than market value at the date of grant as an alternative
to the payment of Directors' fees in cash. The Company believes that the
granting of such options will serve to enhance the Company's ability to
attract and retain the services of such persons, to provide additional
incentives to them and to encourage the highest level of performance by them
by offering them a proprietary interest in the Company's success. The Company
also believes that the Plan will encourage directors to make greater equity
investment in the Company, more closely aligning the interests of the
directors and the stockholders.
2. Shares Reserved Under the Plan
Subject to the adjustment provided in Section 8, the aggregate number of
shares of Common Stock which may be issued and sold pursuant to options
granted under the Plan shall not exceed 300,000 shares, which may be either
authorized but unissued shares or treasury shares. If any option granted under
the Plan shall terminate or expire without being fully exercised, the shares
which have not been purchased will again become available for purposes of the
Plan.
3. Administration
The Plan is intended to meet the requirements of Rule 16b-3(c)(2)(ii)
adopted under the Securities Exchange Act of 1934 (the "Act") with respect to
the Automatic Options granted hereunder and accordingly is intended to be
self-governing. To this end the Plan requires no discretionary action by any
administrative body with regard to any transaction under the Plan. To the
extent, if any, that any questions of interpretation arise, these shall be
resolved by the compensation committee (the "Committee") consisting of not
less than three (3) members of the Board of Directors of the Company (the
"Board"). The interpretation and administration by the Committee of any
provisions of the Plan and any option granted thereunder shall be final and
conclusive on all persons having any interest therein.
No members of the Committee or the Board shall be held liable for any
action or determination made in good faith with respect to the Plan or any
option granted thereunder.
4. Option Grants
"Eligible Directors" shall mean directors of the Company who are
directors on the date of grant, who are not officers or employees of the
Company and who are not eligible to participate under any other Company stock
related plan unless in the opinion of counsel to the Company such
participation would not impair the status of such Eligible Director as a
"disinterested person" within the meaning of Rule 16b-3 promulgated under the
Act. All options granted under the Plan shall be non-incentive stock options
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
(a) Regular Options
Each Eligible Director who is such on the 30th day following the
date on which each Annual Meeting of the Stockholders of the Company
(the "Annual Meeting") is held during the term of the
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Plan shall on such 30th day be granted a stock option to purchase
5,000 shares of Common Stock. Each such option is defined herein as a
"Regular Option."
The date of grant of an option to an Eligible Director under the
Plan shall be the applicable day referred to immediately above.
(b) Discounted Options
(i) Subject to such other rules as the Committee may adopt from
time to time, during the term of the Plan, options to purchase Common
Stock at a discount from fair market value on the date of grant
("Discounted Options") shall be granted to any Eligible Director who,
no later than June 15, with respect to the six-month period commencing
July 1 of such year, and no later than December 15, with respect to
the six-month period commencing January 1 of the following year (each
six month period, a "Semi-Annual Period"), has filed with the Company
an irrevocable election to receive a stock option in lieu of all or a
specified portion (expressed in terms of a percentage of the
Semi-Annual Fee) of the Semi-Annual Fee (as defined in Subsection
4(b)(iii)) expected to be earned by such Director for the Semi-Annual
Period beginning on the July 1 or January 1 immediately following the
election.
(ii) Discounted Options shall be granted to an electing Eligible
Director on December 16 with respect to the Semi-Annual Period which
began on July 1 of the same year, and on June 16, with respect to the
Semi-Annual Period which began on January 1 of the same year.
A separate election must be made for each Semi-Annual Period,
although a Director may specify that a particular election shall apply
to future Semi-Annual Periods unless amended or revoked; provided,
however, that no amendment or revocation may be made with respect to a
Semi-Annual Period after the applicable election date for such
Semi-Annual Period. The Director shall not be entitled to receive in
cash any portion of the Semi-Annual Fee for which an election has been
made to receive an option.
(iii) Option Formula. The number of shares of Common Stock
subject to each Discounted Option granted to any Eligible Director for
a Semi-Annual Period shall be equal to the nearest number of whole
shares of Common Stock, with cash payment for fractional shares,
determined in accordance with the following formula:
Semi-Annual Fee
------------------------ = Number of Shares
Fair Market Value minus
Discounted Option Price
"Discounted Option Price" and "Fair Market Value" shall be defined as set
forth in Section 5 below. "Semi-Annual Fee" shall mean the quarterly retainer
fees which the Director will be entitled to receive during a Semi-Annual
Period for serving as a Director pursuant to the policy in effect for each
year during the term of the Plan, but expressly excluding fees paid for
attendance at or participation in meetings of the Board or any committee
thereof; provided, however, that if a Director elects to receive a stock
option in lieu of only a portion of the Semi-Annual Fee, the SemiAnnual Fee
for purposes of the foregoing formula shall equal the portion of the
Semi-Annual Fee so elected. For purposes of this Plan, "Semi-Annual Fee" shall
also not include expenses reimbursed by the Company for attendance at or
participation in meetings of the Board or any committee of the Board or fees
for any other services to be provided to the Company.
5. Option Price
(a) Regular Option
The price per share at which each Regular Option granted under the
Plan to an Eligible Director may be exercised ("Regular Option Price")
shall be the fair market value of the Common Stock as determined by the
closing sales price of such Common Stock on the consolidated tape of the
principal
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<PAGE>
exchange on which such Common Stock is traded on the date of grant, or if
there are no sales on such date, on the trading day next preceding the
date of grant on which a sale took place, or, if the Common Stock is not
so traded, then as determined by a principal market maker for such Common
Stock selected by the Committee ("Fair Market Value").
(b) Discounted Stock Options
The price per share at which each Discounted Option granted under
the Plan to an Eligible Director may be exercised (the "Discounted Option
Price," the Automatic Option Price and the Discounted Option Price being
sometimes hereinafter referred to as the "Option Price") shall be
seventy-five percent (75%) of the Fair Market Value of the Common Stock
on the date the Discounted Option is granted.
(c) In no event shall the Option Price per share for any option
under the Plan be less than the par value per share.
6. Terms of Grant
Each option granted under the Plan shall be evidenced by and subject to
the terms and conditions of an Option Grant attached hereto as Exhibit A. Each
Option Grant executed and delivered to an Eligible Director shall contain the
following terms and conditions. Each option shall expire 5 years from the date
of grant of such option, and shall be exercisable in full beginning
immediately on the date of grant thereof, in the case of Discounted Options,
and on or after the date which is 6 months after the date of grant thereof, in
the case of Regular Options. Each Eligible Director to whom an option is
granted may exercise such option from time to time, in whole or in part,
during the period that it is exercisable, by payment of the Option Price of
each share purchased, in cash, or by delivery to the Company of a number of
shares of Common Stock having an aggregate Fair Market Value of not less than
the product of the Option Price multiplied by the number of shares the
participant intends to purchase upon exercise of the option on the date of
delivery. The shares of Common Stock issued upon exercise of an option granted
under this Plan will be acquired for investment and not with a view to
distribution thereof unless there shall be an effective registration statement
under the Securities Act of 1933, as amended (the "1933 Act"), with respect
thereto. In the event that the Company, upon the advice of counsel, deems it
necessary to list upon official notice of issuance shares to be issued
pursuant to the Plan on a national securities exchange or to register under
the 1933 Act or other applicable federal or state statute any shares to be
issued pursuant to the Plan, or to qualify any such shares for exemption from
the registration requirements of the 1933 Act under the Rules and Regulations
of the Securities and Exchange Commission or for similar exemption under state
law, then the Company shall notify each Eligible Director to that effect and
no shares of Common Stock subject to an option shall be issued until such
registration, listing or exemption has been obtained. The Company shall make
prompt application for any such registration, listing or exemption pursuant to
federal or state law or rules of such securities exchange which it deems
necessary and shall make reasonable efforts to cause such registration,
listing or exemption to become and remain effective. Nothing in this Plan or
in the Option Grant will confer upon any Eligible Director the right to
continue as a director of the Company. The shares of Common Stock issued on
exercise of the option shall be subject to any restrictions on transfer then
in effect pursuant to the Certificate of Incorporation or By-laws of the
Company.
No stock option may be transferred by the optionee, other than by will or
the laws of descent and distribution. A stock option can be exercised during
such individual's lifetime only by him.
7. Termination of Directorship
An Eligible Director's right to participate in the Plan shall
automatically terminate if and when such Director becomes an employee of the
Company. Options granted to an Eligible Director shall cease to be exercisable
6 months after the date such Director ceases to be a director for any reason
other than death. If an Eligible Director ceases to be a director on account
of his death, any option previously granted to him, whether or not exercisable
at the date of death, may be exercised by his executor, administrator or the
person or persons to whom his rights under the option shall pass by will or
the applicable laws of descent and
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distribution, at any time within 12 months after the date of death, but in no
event after the expiration of the option.
8. Adjustment of Shares Reserved Under the Plan
The aggregate number and kind of shares reserved under the Plan, the
maximum number of shares as to which options may be granted to any individual
and the Option Price per share shall be appropriately adjusted by the Board in
the event of any recapitalization, stock split, stock dividend, combination of
shares, or other similar change in the capitalization of the Company, but no
adjustment in the Option Price shall be made which would reduce the Option
Price per share to less than the par value per share.
9. Dissolution or Reorganization
Prior to a dissolution, liquidation, merger, consolidation, or
reorganization of the Company (the "Event"), the Board may decide to terminate
each outstanding option. If the Board so decides, such option shall terminate
as of the effective date of the Event, but the Board shall suspend the
exercise of all outstanding options a reasonable time prior to the Event,
giving each optionee not less than fourteen days written notice of the date of
suspension, prior to which an optionee may purchase in whole or in part the
shares available to him as of the date of receipt of the notice. If the Event
is not consummated, the suspension shall be removed and all options shall
continue in full force and effect subject to the terms of their respective
Option Grants.
10. Amendment and Termination of Plan
The Board may amend, suspend, or terminate the Plan, including the form
of Option Grant incorporated herein by reference. No such action, however,
may, without approval or ratification by the shareholders, increase the
maximum number of shares reserved under the Plan except as provided in Section
8, alter the class or classes of individuals eligible for options, change the
number of shares of Common Stock subject to options to be granted to Eligible
Directors or the exercise price thereof (other than pursuant to Section 8), or
the date of grant or the terms and conditions expressly set forth in Sections
4, 5 and 6 of this Plan, or make any other change which, pursuant to the Code
or regulations thereunder or Section 16(b) of the Act and the rules and
regulations promulgated thereunder, requires action by the shareholders. No
such action may, without the consent of the holder of the option, alter or
impair any option previously granted. No such action which would amend the
Plan to change the amount, timing or price of the Automatic Option grants made
to Eligible Directors hereof may be made more often than once every six months
except to comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the applicable rules and regulations
thereunder.
In any event, the Plan shall terminate 10 years from the date of adoption
by the Board of Directors, or if earlier, from the date of approval by the
shareholders. Any shares remaining under the Plan at the time of termination
which are not subject to outstanding options and any shares which thereafter
become available because of the expiration or termination of an option shall
cease to be reserved for purposes of the Plan.
11. Date of Adoption
The date of adoption of this Plan by the Board is January 18, 1994.
12. Date of Approval
The date of approval of this Plan by the shareholders and the Plan's
effective date is May 19, 1994.
4
<PAGE>
Exhibit A
UNITED ASSET MANAGEMENT CORPORATION
Eligible Directors Option Grant
This non-incentive stock option, granted as of , 19 (the
"Option") is granted by United Asset Management Corporation ("UAM") to
(the "Optionee"), a non-employee director of UAM.
1. Shares Subject to Option
Pursuant to the provisions of the United Asset Management Corporation
1994 Eligible Directors Stock Option Plan, as amended from time to time (the
"Plan"), UAM hereby grants to the Optionee an option to purchase
shares of its Common Stock ($.01 par value) (the "Optioned Shares") at a price
of $ per share, in accordance with and subject to all the terms and
conditions of the Plan and subject to the terms and conditions hereinafter set
forth. The Plan and any amendments are hereby incorporated by reference and
made a part hereof.
2. Term and Exercise of Option
Except as otherwise provided in the Plan, or in this Option, the Option
shall terminate at the close of business five years from the date of grant and
may be exercised only by the Optionee or, to the extent provided in Section
3(b) hereof, by his legal representative.
While the Option is effective and the Optionee continues to be an
eligible non-employee director of UAM, the Optioned Shares shall become
available for purchase by the Optionee immediately, if this Option is a
Discounted Option as defined in the Plan, and on or after the date which is
six months from the date of this grant, if the Option is an Automatic Option
as defined in the Plan. The option price of each share purchased shall be paid
in cash or by delivery of other shares of UAM's Common Stock owned by the
Optionee with a fair market value equal to the exercise price of the Optioned
Shares to be purchased, or in any combination of the two forms of payment.
The Company, upon fulfillment of the requirements for exercise, including
receipt of the payment of the purchase price, shall deliver the shares
purchased hereunder to the Optionee.
3. Terms and Conditions of Exercise
Each exercise and purchase of shares pursuant to the Option shall be
subject to the following terms and conditions:
(a) Options granted to an Optionee shall cease to be exercisable 6
months after the date such Optionee ceases to be a director for any
reason other than death.
(b) If the Optionee dies, then his legal representative or the
person or persons to whom his rights under the Option shall pass by will
or by the applicable laws of descent and distribution shall be entitled,
subject to the condition that no Option shall be exercisable after the
expiration of five years from the date it was granted, within twelve
months after the date of his death, to exercise the Option.
(c) The Optionee shall hold the Optioned Shares for investment and
not with a view to, or for resale in connection with, any public
distribution of such shares, and if requested, shall deliver to UAM
appropriate certificates to that effect. The restriction shall terminate
upon the registration of such shares under federal and state securities
laws.
(d) In the event that UAM, upon the advice of counsel, deems it
necessary to list upon official notice of issuance any shares to be
issued pursuant to the Plan on a national securities exchange or to
register under the Securities Act of 1933 or other applicable federal or
state statute any shares to be issued pursuant to the Plan, or to qualify
any such shares for exemption from the registration requirements of the
Securities Act of 1933 under the Rules and Regulations of the Securities
and Exchange Commission or for similar exemption under state law, then
UAM shall notify the Optionee to that effect and no Optioned Shares shall
be issued until such registration, listing or exemption has been
5
<PAGE>
obtained. UAM shall make prompt application for any such registration,
listing or exemption pursuant to federal or state law or rules of such
securities exchange which it deems necessary and shall make reasonable
efforts to cause such registration, listing or exemption to become and
remain effective.
4. Option Non-Transferable
This Option may not be transferred by the Optionee or by operation of law
other than by will or by the laws of descent and distribution. It may be
exercised during the lifetime of the Optionee only by him.
5. Right to Terminate
Nothing contained in the Option Grant or the Plan shall entitle the
Optionee to remain a director of UAM or an Eligible Director under the Plan.
6. Dissolution or Reorganization
Prior to dissolution, liquidation, merger, consolidation or
reorganization of UAM (the "Event"), the Board may decide to terminate each
outstanding option. If the Board so decides, each option shall terminate as of
the effective date of the Event, but the Board shall suspend the exercise of
all outstanding options a reasonable time prior to the Event, giving each
Optionee not less than fourteen days written notice of the date of suspension,
prior to which an Optionee may purchase in whole or in part the Optioned
shares available to him as of the date of receipt of the notice. If the Event
is not consummated, the suspension shall be removed and all options continue
in full force and effect, subject to the terms of their respective Option
Grants.
7. Restrictions on Transfer of Stock
The shares of stock issued on exercise of the Option shall be subject to
any restrictions on transfer then in effect pursuant to the Certificate of
Incorporation or By-laws of UAM, as each may be amended from time to time, and
to any other restrictions or provisions attached hereto and made a part hereof
or set forth in any other contract or agreement binding on the Optionee.
UNITED ASSET MANAGEMENT CORPORATION
(Corporate Seal)
By:
-----------------------------------
President
Attest:
-----------------------
Secretary
(LOGO)
6
<PAGE>
Exhibit 11.1
UNITED ASSET MANAGEMENT CORPORATION
CALCULATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Common and common equivalent
shares:
Net income......................... $59,012 $53,287 $39,072
Adjustments thereto (1)............ - - 331
------- ------- -------
Adjusted net income................ $59,012 $53,287 $39,403
------- ------- -------
------- ------- -------
Average shares outstanding......... 28,084 25,968 23,157
Adjustments thereto (2)............ 1,441 2,913 3,176
------- ------- -------
Shares used in computation........... 29,525 28,881 26,333
------- ------- -------
------- ------- -------
Per share............................ $ 2.00 $ 1.85 $ 1.50
------- ------- -------
------- ------- -------
Common shares-assuming full
dilution:
Net income......................... $59,012 $53,287 $39,072
Adjustments thereto (1)............ - - -
------- ------- -------
Adjusted net income................ $59,012 $53,287 $39,072
------- ------- -------
------- ------- -------
Average shares outstanding......... 28,084 25,968 23,157
Adjustments thereto (2)............ 1,486 3,127 3,487
------- ------- -------
Shares used in computation........... 29,570 29,095 26,644
------- ------- -------
------- ------- -------
Per share............................ $ 2.00 $ 1.83 $ 1.47
------- ------- -------
------- ------- -------
<FN>
______________
(1) The proceeds from the exercise of stock options and warrants
in accordance with the modified treasury stock method are
first used to buy back up to 20% of the Company's common stock
at the average price for the period in the primary calculation
and at the higher of the average or closing price in the fully
diluted calculation. Any remaining proceeds are used to
retire debt, and this adjusts income for the interest assumed
to be saved net of income tax from the use of such proceeds.
(2) Adjusts shares for stock options and warrants under the
modified treasury stock method and contingently issuable
shares based on the probability of issuance, after adjusting
for the stock assumed repurchased in accordance with (1)
above.
</TABLE>
<PAGE>
UNITED ASSET MANAGEMENT'S CLIENTS
The following is an analysis of the clients of UAM's firms. All data are as of
December 31, 1994, except as otherwise indicated.
As of December 31, 1994, UAM's firms had 5,600 clients with approximately
$104.0 billion under management for an average account size of $18.6 million.
The twenty largest clients represented 16% of total assets under management, and
the one hundred largest clients represented 36%. As of February 15, 1995,
reflecting the acquisition of Provident Investment Counsel, the mix of assets
under management for clients of UAM's firms was 56% U.S. equities, 18% U.S.
bonds and cash, 11% real estate, 9% international securities and 6% stable value
assets. The client list includes many of the largest corporate, public,
charitable and union funds in the U.S. and abroad along with the funds of many
individuals, several mutual fund organizations and a number of professional
groups.
Each UAM firm is dedicated to providing superior, focused and
individualized service to its clients. A sound and consistent investment
philosophy, regular communications and a keen awareness of individual needs are
all critical elements in providing high-quality client service. Because each
affiliate keeps its own identity, together with its investment and operating
independence, UAM's unique structure enhances each operating firm's ability to
meet and even exceed client expectations, and thereby to retain existing clients
and attract new prospects.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
Assets Under Average
Management Number Account Size
As of December 31, 1994 (in millions) Percent of Clients (in millions)
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Corporate Employee Benefit Plans $45,354 43.6% 1,702 $ 26.6
Government Employee Benefit Plans 19,582 18.8 317 61.8
Mutual Funds 10,540 10.1 87 121.1
Endowments and Foundations 10,021 9.6 697 14.4
Individuals 9,626 9.3 2,284* 4.2
Union Member Benefit Plans 6,974 6.7 226 30.9
Professional Groups 1,355 1.3 256 5.3
Corporate Cash Reserves 594 0.6 31 19.2
-----------------------------------------------------------------------------------------------------------------------
$104,046 100.0% 5,600 $ 18.6
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
<FN>
*These clients include 24 wrap-fee relationships with brokerage firms which
represent approximately 20,000 individual accounts with $4.1 billion under
management.
</TABLE>
32
<PAGE>
COMMON STOCK INFORMATION
The Company's common stock is listed on the New York Stock Exchange. Presented
below are the high, low and closing quarterly stock prices for 1994 and 1993, as
reported on the New York Stock Exchange composite tape, together with quarterly
dividends declared.
<TABLE>
<CAPTION>
Ticker Symbol: UAM
--------------------------------------------------------------------------------
Dividend
High Low Close Declared
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
First Quarter, 1994 $41-3/4 $32-1/2 $33-1/2 $0.24
Second Quarter, 1994 $36-1/2 $29-3/4 $33 $0.24
Third Quarter, 1994 $39-3/4 $32-5/8 $37-5/8 $0.26
Fourth Quarter, 1994 $38-3/8 $33-5/8 $36-7/8 $0.26
--------------------------------------------------------------------------------
First Quarter, 1993 $35-3/8 $28-3/8 $34 $0.20
Second Quarter, 1993 $42 $30-3/8 $41 $0.20
Third Quarter, 1993 $47-3/4 $38-5/8 $45-1/4 $0.22
Fourth Quarter, 1993 $46-1/2 $38-1/8 $40-1/2 $0.22
</TABLE>
51
<PAGE>
TEN YEAR REVIEW
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, UNLESS OTHERWISE INDICATED, EXCEPT PER SHARE AMOUNTS) 1994 1993 1992 1991 1990
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Revenues $492,288 $449,858 $376,160 $307,114 $254,938
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Compensation and related expenses 240,611 218,617 188,997 153,654 125,068
Amortization of cost assigned to contracts acquired 55,121 48,493 37,279 30,535 27,157
Other operating expenses 80,577 73,043 65,016 53,944 53,015
------------------------------------------------------------------------------------------------------------------------------------
376,309 340,153 291,292 238,133 205,240
------------------------------------------------------------------------------------------------------------------------------------
Operating income 115,979 109,705 84,868 68,981 49,698
------------------------------------------------------------------------------------------------------------------------------------
Interest expense, net and other amortization 12,773 15,235 16,116 16,904 12,917
------------------------------------------------------------------------------------------------------------------------------------
Income before income tax expense 103,206 94,470 68,752 52,077 36,781
Income tax expense 44,194 41,183 29,680 21,869 14,858
------------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary credit 59,012 53,287 39,072 30,208 21,923
Extraordinary credit--utilization of loss carryforward - - - - -
------------------------------------------------------------------------------------------------------------------------------------
Net income $ 59,012 $ 53,287 $ 39,072 $ 30,208 $ 21,923
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE
Primary:
Income before extraordinary credit $2.00 $1.85 $1.50 $1.27 $1.01
Extraordinary credit - - - - -
------------------------------------------------------------------------------------------------------------------------------------
Net income $2.00 $1.85 $1.50 $1.27 $1.01
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Fully diluted:
Income before extraordinary credit $2.00 $1.83 $1.47 $1.19 $1.01
Extraordinary credit - - - - -
------------------------------------------------------------------------------------------------------------------------------------
Net income $2.00 $1.83 $1.47 $1.19 $1.01
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS DECLARED PER COMMON SHARE $1.00 $0.84 $0.68 $0.55 $0.43
OPERATING DATA
Operating Cash Flow (net income plus amortization
and depreciation) $119,986 $107,397 $ 81,445 $ 65,030 $ 52,883
Assets under management at end of year (in millions) $104,046 $100,084 $ 86,244 $ 72,456 $ 55,608
BALANCE SHEET DATA
Total assets $915,627 $675,800 $650,238 $521,408 $452,840
Cost assigned to contracts acquired, net $656,130 $461,705 $460,523 $343,421 $320,940
Long-term debt (including current portion) $365,339 $212,179 $272,860 $204,719 $189,234
Total stockholders' equity $399,841 $353,011 $284,652 $223,584 $188,527
</TABLE>
36
<PAGE>
TEN YEAR REVIEW
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
(IN THOUSANDS, UNLESS OTHERWISE INDICATED, EXCEPT PER SHARE AMOUNTS) 1989 1988 1987 1986 1985
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Revenues $217,867 $184,208 $164,214 $120,364 $ 64,848
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses:
Compensation and related expenses 105,148 84,151 78,037 60,864 33,535
Amortization of cost assigned to contracts acquired 23,808 21,387 14,398 8,527 4,372
Other operating expenses 40,545 37,678 34,456 23,694 14,677
------------------------------------------------------------------------------------------------------------------------------------
169,501 143,216 126,891 93,085 52,584
------------------------------------------------------------------------------------------------------------------------------------
Operating income 48,366 40,992 37,323 27,279 12,264
------------------------------------------------------------------------------------------------------------------------------------
Interest expense, net and other amortization 12,811 12,794 6,933 6,180 4,584
------------------------------------------------------------------------------------------------------------------------------------
Income before income tax expense 35,555 28,198 30,390 21,099 7,680
Income tax expense 13,654 11,160 13,167 9,823 3,473
------------------------------------------------------------------------------------------------------------------------------------
Income before extraordinary credit 21,901 17,038 17,223 11,276 4,207
Extraordinary credit-utilization of loss carryforward - - - - 700
------------------------------------------------------------------------------------------------------------------------------------
Net income $ 21,901 $ 17,038 $ 17,223 $ 11,276 $ 4,907
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
EARNINGS PER SHARE
Primary:
Income before extraordinary credit $1.02 $0.87 $0.83 $0.61 $0.33
Extraordinary credit - - - - 0.05
------------------------------------------------------------------------------------------------------------------------------------
Net income $1.02 $0.87 $0.83 $0.61 $0.38
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Fully diluted:
Income before extraordinary credit $1.01 $0.86 $0.83 $0.59 $0.31
Extraordinary credit - - - - 0.05
------------------------------------------------------------------------------------------------------------------------------------
Net income $1.01 $0.86 $0.83 $0.59 $0.36
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
DIVIDENDS DECLARED PER COMMON SHARE $0.34 $0.26 $0.18 $0.06 -
OPERATING DATA
Operating Cash Flow (net income plus amortization
and depreciation) $ 49,349 $ 42,644 $ 35,313 $ 22,645 $ 11,273
Assets under management at end of year (in millions) $ 51,642 $ 39,663 $ 35,020 $ 26,845 $ 12,205
BALANCE SHEET DATA
Total assets $399,604 $341,548 $295,575 $265,204 $101,473
Cost assigned to contracts acquired, net $292,199 $258,804 $187,507 $187,843 $ 53,622
Long-term debt (including current portion) $154,340 $129,432 $ 71,128 $ 77,850 $ 41,164
Total stockholders' equity $175,365 $161,971 $164,124 $142,747 $ 40,244
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The revenues of UAM's affiliated firms are derived from fees for investment
advisory services provided to institutional and other clients. Investment
advisory fees are generally a function of the overall fee rate charged to each
account and the level of assets under management by the affiliated firms. A
minor portion of revenues are generated when firms consummate transactions for
client portfolios. Assets under management can be affected by the addition of
new client accounts or client contributions to existing accounts, withdrawals of
assets from or terminations of client accounts and investment performance, which
may depend on general market conditions.
-------------------------------------------------------------------------------
AMORTIZATION OF COST ASSIGNED TO CONTRACTS ACQUIRED AND OPERATING CASH FLOW
(NET INCOME PLUS AMORTIZATION AND DEPRECIATION)
Cost assigned to contracts acquired, net of accumulated amortization,
represented approximately 72% of the Company's total assets as of December 31,
1994. Amortization of cost assigned to contracts acquired, which is a non-cash
charge, represented 15% of the Company's operating expenses. Recording the cost
assigned to contracts acquired as an asset, with the resulting amortization as
an operating expense, reflects the application of generally accepted accounting
principles to acquisitions by UAM of investment management firms in transactions
accounted for as purchases, where the principal assets acquired are the
investment advisory contracts which evidence the firms' ongoing relationships
with their clients.
Although the contracts acquired are typically terminable on 30 days notice,
analyses conducted by independent consultants retained by UAM to assist the
Company in allocating the purchase price among the assets acquired and the
experience of UAM's firms to date have indicated that: (1) contracts are usually
relatively long-lived; (2) the duration of contracts can be reasonably
estimated; and (3) the value of the cost assigned to contracts acquired can be
estimated based on the present value of its projected income stream.
The cost assigned to contracts acquired is amortized on a straight-line
basis over the estimated weighted average useful life of the contracts of
individual firms acquired. These lives are estimated through statistical
analysis of historical patterns of terminations and the size and age of the
contracts acquired as of the acquisition date.
When actual terminations differ from the statistical patterns developed or
upon the occurrence of certain other events, the Company updates the lifing
analyses discussed above. If the update indicates that any of the estimates of
the average remaining lives should be shortened, the remaining cost assigned to
contracts acquired will be amortized over the shorter life commencing in the
year in which the new estimate is determined. There has been no material effect
on the Company's financial position or results of operations as a result of
these updates.
Cost assigned to contracts acquired is amortized as an operating expense.
It does not, however, require the use of cash and therefore, management believes
that it is important to distinguish this expense from other operating expenses
in order to evaluate the performance of the Company. Amortization of cost
assigned to contracts acquired per share referred to below has been calculated
by dividing total amortization by the same number of shares used in the fully
diluted earnings per share calculation.
For purposes of this discussion, "Operating Cash Flow" is defined as net
income plus amortization and depreciation, as reflected in the Company's
Consolidated Statement of Cash Flows. Management uses Operating Cash Flow not to
the exclusion of net income, but rather as an additional important measure of
the Company's performance. The Company changed its definition of Operating Cash
Flow during 1994, to "net income plus amortization and depreciation" from "Cash
flow provided by operations before working capital changes" which it had
previously used. The only difference is that deferred income taxes are now
excluded from Operating Cash Flow.
33
<PAGE>
-------------------------------------------------------------------------------
RESULTS OF OPERATIONS
1994 COMPARED TO 1993
Revenues increased 9% to $492,288,000 in 1994 from $449,858,000 in 1993. This
increase is the result of acquisitions that occurred during both 1994 and 1993
being partially offset by the effect of net client cash outflows and by net
declines in market values. The revenues from the acquisitions of Dwight Asset
Management Company, Suffolk Capital Management and JMB Institutional Realty were
included from January 4, 1994, July 14, 1994 and December 2, 1994, their
respective dates of acquisition. The revenues of Investment Research Company,
acquired February 25, 1994 in a pooling of interests transaction, have been
included for all of 1994. In addition, the revenues of Pell, Rudman & Co., Inc.,
acquired March 29, 1993, and GSB Investment Management, Inc., acquired December
29, 1993, were included for a full year in 1994, while only being included after
their acquisition dates in 1993.
Compensation increased 10% to $240,611,000 from $218,617,000 and other
operating expenses increased 10% to $80,577,000 from $73,043,000 reflecting the
acquisitions described above and higher compensation earned by employees of
existing affiliated firms in accordance with revenue sharing agreements.
Amortization of cost assigned to contracts acquired rose 14% to $55,121,000 from
$48,493,000 primarily due to the acquisitions of Dwight Asset Management
Company, Suffolk Capital Management and JMB Institutional Realty and a full year
of amortization of Pell, Rudman & Co., Inc. and GSB Investment Management, Inc.
Income before income taxes increased 9% to $103,206,000 from $94,470,000 in
1993 as a result of the events discussed above. Net income for 1994 increased
11% to $59,012,000 from $53,287,000 in 1993.
Fully diluted earnings per share for 1994 increased 9% to $2.00 compared to
$1.83 in 1993. This increase reflects the higher net income together with the
effect of the Company's lower common stock price, partially offset by the
issuance of shares of common stock and the exercise of warrants and stock
options on the calculation of earnings per share under the modified treasury
stock method. Amortization of cost assigned to contracts acquired on a per share
basis increased to $1.86 in 1994 from $1.67 in 1993, primarily as a result of
the acquisitions discussed above.
Operating Cash Flow increased 12% to $119,986,000 from $107,397,000 in
1993, as a result of the circumstances discussed above.
1993 COMPARED TO 1992
Revenues increased 20% to $449,858,000 in 1993 from $376,160,000 in 1992. The
increase in revenues is attributable to acquisitions that occurred during both
1993 and 1992 as well as favorable portfolio performance achieved by UAM's
affiliated firms and positive client cash flow. The revenues of Pell, Rudman &
Co., Inc. were included since its acquisition date of March 29, 1993. The
revenues from the acquisitions of Alpha Global Fixed Income Managers, The L&B
Group, NWQ Investment Management Company and Tom Johnson Investment Management,
Inc. were included for a full year in 1993 while only being included after their
dates of acquisition in 1992 which were March 16, 1992, June 25, 1992, October
21, 1992 and December 11, 1992, respectively.
Compensation and related expenses increased 16% to $218,617,000 from
$188,997,000 and other operating expenses increased 12% to $73,043,000 from
$65,016,000 reflecting the acquisitions described above and higher compensation
earned by employees of existing affiliated firms in accordance with revenue
sharing agreements. Amortization of cost assigned to contracts acquired rose 30%
to $48,493,000 from $37,279,000 primarily due to the acquisition of Pell, Rudman
& Co., Inc. and a full year of amortization of contracts acquired in conjunction
with the acquisitions of The L&B Group, NWQ Investment Management Company and
Tom Johnson Investment Management, Inc.
Income before income taxes increased 37% to $94,470,000 from $68,752,000 in
1992 as a result of the events discussed above. Net income for 1993 increased
36% to $53,287,000 from $39,072,000 in 1992.
34
<PAGE>
Fully diluted earnings per share for 1993 rose 24% to $1.83 compared to
$1.47 in 1992. This increase reflects higher net income partially offset by the
effect on the computation of earnings per share of a higher weighted average
number of common shares outstanding in 1993 resulting from the Company's shares
trading at higher prices in 1993 than in 1992, the issuance of warrants in
connection with the acquisitions discussed above and stock option and warrant
exercises during the year. Amortization of cost assigned to contracts acquired
on a per share basis increased to $1.67 in 1993 from $1.40 in 1992, primarily as
a result of the acquisitions discussed above.
Operating Cash Flow increased 32% to $107,397,000 from $81,445,000 in 1992,
as a result of the circumstances discussed above.
-------------------------------------------------------------------------------
FINANCIAL CONDITION AND LIQUIDITY
The Company generated $119,986,000 of Operating Cash Flow in 1994. This
Operating Cash Flow and additional borrowings under the Company's line of credit
were primarily used for the following: to finance the $170,394,000 cash portion
of the acquisitions completed in 1994, to pay dividends to shareholders totaling
$28,123,000 and to repurchase shares of the Company's common stock for
$14,883,000. As of December 31, 1994, the Company had working capital of
$65,175,000 and had $328,000,000 available under its $500,000,000 line of credit
(see Note 3 to the Consolidated Financial Statements included in this Annual
Report).
As of December 31, 1994, the Company had signed an agreement to acquire
Provident Investment Counsel in a transaction that will be accounted for as a
purchase in 1995. As consideration, UAM has agreed to pay $285,369,000 in cash
and subordinated notes, 459,385 warrants and 1,873,004 shares of its common
stock to the former owners of Provident. The acquisition was consummated on
February 15, 1995.
Management believes that the Company's existing capital, together with
Operating Cash Flow and borrowings available under its revolving line of credit,
will provide the Company with sufficient resources to meet its present and
reasonably foreseeable future cash needs. Management expects that the principal
need for financial resources will be to acquire additional investment management
firms, to fund shareholder dividends and to repurchase shares of the Company's
common stock, which will require cash, the issuance of additional UAM
securities, or some combination thereof.
-------------------------------------------------------------------------------
EFFECTS OF INFLATION
The Company's business is not capital intensive. Management believes that
financial results as reported would not be significantly affected had such
results been adjusted to reflect the effects of inflation and price changes.
Increases or decreases in interest rates affect UAM's costs of operations
chiefly through increasing or decreasing the interest expense related to bank
borrowings and to subordinated debt which may be issued in connection with
future acquisitions. To mitigate the risks associated with increases in interest
rates, UAM has entered into and plans to continue to enter into interest rate
protection agreements (see Note 1 to the Consolidated Financial Statements
included in this Annual Report). Rates of interest on existing subordinated debt
are fixed. Increases and decreases in interest rates may also affect market
prices for the various asset classes held by the Company's affiliated firms as
assets under management for clients. Changes in such prices may affect the
affiliated firm's revenues, and therefore UAM's consolidated revenues.
35
<PAGE>
SELECTED QUARTERLY FINANCIAL DATA
UNAUDITED (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
1994 1993
--------------------------------------------------------------------------------------------------------------------------
First Second Third Fourth First Second Third Fourth
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $121,340 $115,525 $118,922 $136,501 $110,024 $109,661 $111,402 $118,771
Operating income $ 29,365 $ 27,925 $ 28,655 $ 30,034 $ 25,418 $ 26,779 $ 28,087 $ 29,421
Income before
income tax
expense $ 26,148 $ 25,017 $ 25,752 $ 26,289 $ 21,150 $ 22,791 $ 24,512 $ 26,017
Net income $ 14,904 $ 14,294 $ 14,756 $ 15,058 $ 12,028 $ 13,047 $ 13,461 $ 14,751
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Primary earnings
per share* $0.50 $0.49 $0.50 $0.51 $0.44 $0.45 $0.46 $0.50
Fully diluted
earnings per
share* $0.50 $0.49 $0.50 $0.51 $0.43 $0.45 $.45 $0.50
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
Operating Cash
Flow** $ 29,623 $ 28,907 $ 29,776 $ 31,680 $ 25,310 $ 26,414 $ 27,027 $ 28,646
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
<FN>
*Under generally accepted accounting principles, when earnings per share are
computed under the modified treasury stock method and when the market price of
a company's common stock changes, the total of four quarters' earnings per
share may not equal the earnings per share for the year.
**Net income plus amortization and depreciation.
</TABLE>
51
<PAGE>
CONSOLIDATED BALANCE SHEET
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
December 31, 1994 1993
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 89,050,000 $ 62,807,000
Investment advisory fees receivable 77,292,000 75,003,000
Other current assets 12,922,000 5,611,000
------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 179,264,000 143,421,000
Fixed assets, net 19,351,000 14,994,000
Cost assigned to contracts acquired, net of accumulated
amortization of $272,444,000 in 1994 and $218,078,000
in 1993 656,130,000 461,705,000
Other assets 60,882,000 55,680,000
------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $915,627,000 $675,800,000
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 65,032,000 $ 56,541,000
Accrued compensation 48,048,000 20,331,000
Current portion of notes payable 1,009,000 1,628,000
------------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 114,089,000 78,500,000
Senior notes payable 172,000,000 80,000,000
Subordinated notes payable 192,330,000 130,551,000
Deferred income taxes 37,367,000 33,738,000
------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 515,786,000 322,789,000
------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01 per share:
Authorized--200,000,000 shares
Issued--28,283,082 shares in 1994 and 26,972,398 in 1993 283,000 270,000
Capital in excess of par value 255,162,000 233,759,000
Retained earnings 150,951,000 118,982,000
------------------------------------------------------------------------------------------------------------
406,396,000 353,011,000
Less treasury shares at cost-189,726 shares in 1994 (6,555,000) __
------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 399,841,000 353,011,000
------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $915,627,000 $675,800,000
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements.
38
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1994 1993 1992
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES $492,288,000 $449,858,000 $376,160,000
----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Compensation and related expenses 240,611,000 218,617,000 188,997,000
Amortization of cost assigned to
contracts acquired 55,121,000 48,493,000 37,279,000
Other operating expenses 80,577,000 73,043,000 65,016,000
----------------------------------------------------------------------------------------------------------------
376,309,000 340,153,000 291,292,000
----------------------------------------------------------------------------------------------------------------
Operating income 115,979,000 109,705,000 84,868,000
----------------------------------------------------------------------------------------------------------------
NON-OPERATING EXPENSES:
Interest expense, net 11,512,000 13,790,000 14,755,000
Other amortization 1,261,000 1,445,000 1,361,000
----------------------------------------------------------------------------------------------------------------
12,773,000 15,235,000 16,116,000
----------------------------------------------------------------------------------------------------------------
Income before income tax expense 103,206,000 94,470,000 68,752,000
Income tax expense 44,194,000 41,183,000 29,680,000
----------------------------------------------------------------------------------------------------------------
NET INCOME $ 59,012,000 $ 53,287,000 $ 39,072,000
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Earnings per common and common
equivalent share $2.00 $1.85 $1.50
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
Earnings per common share assuming
full dilution $2.00 $1.83 $1.47
----------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements.
39
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1994 1993 1992
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 59,012,000 $ 53,287,000 $ 39,072,000
Adjustments to reconcile net income to net
cash flow from operating activities:
Amortization of cost assigned to
contracts acquired 55,121,000 48,493,000 37,279,000
Depreciation 4,592,000 4,172,000 3,733,000
Other amortization 1,261,000 1,445,000 1,361,000
------------------------------------------------------------------------------------------------------------
NET INCOME PLUS AMORTIZATION AND
DEPRECIATION 119,986,000 107,397,000 81,445,000
Changes in assets and liabilities:
Increase in investment advisory fees
receivable (1,758,000) (8,038,000) (6,675,000)
Increase in other current assets (7,276,000) (103,000) (667,000)
Increase in accounts payable and accrued
expenses 7,649,000 11,290,000 14,199,000
Increase (decrease) in accrued
compensation 27,615,000 2,172,000 (8,929,000)
Increase in deferred income taxes 3,629,000 4,751,000 1,089,000
------------------------------------------------------------------------------------------------------------
NET CASH FLOW FROM OPERATING ACTIVITIES 149,845,000 117,469,000 80,462,000
------------------------------------------------------------------------------------------------------------
Cash flow from (used in) investing activities:
Purchase of fixed assets (8,747,000) (4,508,000) (5,825,000)
Cash additions to cost assigned to
contracts acquired (161,649,000) (30,499,000) (94,294,000)
Change in other assets (4,099,000) (2,045,000) 1,709,000
------------------------------------------------------------------------------------------------------------
NET CASH FLOW USED IN INVESTING ACTIVITIES (174,495,000) (37,052,000) (98,410,000)
------------------------------------------------------------------------------------------------------------
Cash flow from (used in) financing activities:
Purchase of treasury shares (14,883,000) (4,166,000) (3,023,000)
Additions to long-term debt 224,500,000 64,500,000 150,471,000
Reductions in long-term debt (140,280,000) (114,736,000) (110,517,000)
Issuance or reissuance of equity securities 8,153,000 9,590,000 8,408,000
Dividends declared (28,123,000) (20,304,000) (17,284,000)
------------------------------------------------------------------------------------------------------------
NET CASH FLOW FROM (USED IN) FINANCING
ACTIVITIES 49,367,000 (65,116,000) 28,055,000
------------------------------------------------------------------------------------------------------------
EFFECT OF FOREIGN EXCHANGE RATE CHANGES
ON CASH FLOW 1,526,000 (562,000) (5,092,000)
------------------------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 26,243,000 14,739,000 5,015,000
Cash and cash equivalents at beginning
of year 62,807,000 48,068,000 43,053,000
------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 89,050,000 $ 62,807,000 $ 48,068,000
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements.
40
<PAGE>
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY
UNITED ASSET MANAGEMENT CORPORATION
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Common Capital in Treasury
Shares Stock at Excess of Retained Treasury Shares
Issued Par Value Par Value Earnings Shares at Cost
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1991 21,670,459 $217,000 $150,353,000 $ 73,014,000 -- $ --
Issuance of stock 235,158 2,000 7,959,000 -- -- --
Exercise of stock
options and warrants 2,813,949 28,000 35,503,000 (128,000) 103,800 2,473,000
Issuance of warrants -- -- 2,292,000 -- -- --
Purchase of treasury
shares -- -- -- -- (122,700) (3,023,000)
Net income -- -- -- 39,072,000 -- --
Dividends declared
($0.68 per share) -- -- -- (13,506,000) -- --
Dividends declared by
pooled companies -- -- -- (3,778,000) -- --
Foreign currency
translation adjustment -- -- -- (5,826,000) -- --
-----------------------------------------------------------------------------------------------------------------
December 31, 1992 24,719,566 247,000 196,107,000 88,848,000 (18,900) (550,000)
Issuance of stock 319 -- 11,000 -- -- --
Exercise of stock
options and warrants 2,252,513 23,000 36,491,000 (2,195,000) 158,300 4,716,000
Issuance of warrants -- -- 1,150,000 -- -- --
Purchase of
treasury shares -- -- -- -- (139,400) (4,166,000)
Net income -- -- -- 53,287,000 -- --
Dividends declared
($0.84 per share) -- -- -- (20,304,000) -- --
Foreign currency
translation adjustment -- -- -- (654,000) -- --
-----------------------------------------------------------------------------------------------------------------
December 31, 1993 26,972,398 270,000 233,759,000 118,982,000 -- --
Issuance of stock 575,437 6,000 1,000 2,205,000 -- --
Exercise of stock
options and warrants 735,247 7,000 17,357,000 (2,989,000) 256,274 8,328,000
Issuance of warrants -- -- 4,045,000 -- -- --
Purchase of treasury
shares -- -- -- -- (446,000) (14,883,000)
Net income -- -- -- 59,012,000 -- --
Dividends declared
($1.00 per share) -- -- -- (28,123,000) -- --
Foreign currency
translation adjustment -- -- -- 1,864,000 -- --
-----------------------------------------------------------------------------------------------------------------
December 31, 1994 28,283,082 $283,000 $255,162,000 $150,951,000 (189,726) $(6,555,000)
-----------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Consolidated Financial Statements.
41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNITED ASSET MANAGEMENT CORPORATION
-------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY
The principal business activities of United Asset Management Corporation (the
Company) are investment advisory services, primarily for institutional clients,
and the acquisition of institutional investment management firms. The wholly-
owned subsidiaries operate in one business segment, that is, as investment
advisers.
The Company has arrangements with its subsidiaries and certain of their
principal officers (revenue sharing plans) under which the subsidiaries are
entitled to use a portion (determined by formula) of their revenues to meet
their operating expenses, including compensation, at the discretion of the
subsidiaries' management. All operating expenses incurred by the subsidiaries
and covered under the terms of the revenue sharing plans are charged to
operations and reported as compensation and related expenses or as other
operating expenses in these consolidated financial statements. Revenues in
excess of those used to meet operating expenses of a subsidiary are used by the
Company to meet its operating and cash flow needs.
CONSOLIDATION
These consolidated financial statements include the accounts of the Company and
all of its subsidiaries. All intercompany balances and transactions have been
eliminated.
REVENUE RECOGNITION
The majority of the Company's revenues are derived from investment advisory fees
that are normally accrued over the period in which services are performed. Any
fees collected in advance are deferred and recognized as income over the period
earned. Transaction based fees are recognized when all contractual obligations
have been satisfied. All investment advisory fees receivable are expected to be
collected.
FIXED ASSETS AND DEPRECIATION
Equipment and other fixed assets are recorded at cost and depreciated using the
straight-line method over their estimated useful lives. Leasehold improvements
are amortized over the shorter of their estimated useful lives or the term of
the lease.
COST ASSIGNED TO CONTRACTS ACQUIRED AND GOODWILL
The purchase price for the acquisition of companies acquired in business
combinations accounted for as a purchase is allocated based on the fair value of
the net assets acquired, primarily investment advisory contracts.
The cost assigned to contracts acquired is amortized using the
straight-line method over periods ranging from 5 to 20 years. These lives
represent the estimated weighted average lives of the contracts acquired and are
based generally on historical experience of the individual companies acquired.
The estimated remaining weighted average lives of contracts acquired are
periodically reevaluated. If experience subsequent to the acquisition indicates
that the estimate of the average remaining lives should be shortened, the cost
assigned to contracts acquired will be amortized over the shorter life
commencing in the year in which the new estimate is determined. The results of
the most recent reevaluations of estimated remaining lives had no material
effect on the Company's financial position or results of operations.
Amounts paid to certain key employees for entering into long-term
employment contracts and noncompetition agreements at the time of acquisitions
are included in cost assigned to contracts acquired and are amortized on a
straight-line basis over the lives of such contracts.
Purchase price in excess of the fair value of the net assets acquired is
recorded as goodwill and amortized on a straight-line method over 40 years.
Goodwill, net of accumulated amortization, was $21,419,000 and $19,802,000 at
December 31, 1994 and 1993, respectively, and is included in other assets in the
accompanying consolidated balance sheet.
42
<PAGE>
INCOME TAXES
Income taxes for financial reporting purposes are recorded in accordance with
Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes
(FAS 109). The asset and liability approach underlying FAS 109 requires the
recognition of deferred tax liabilities and assets for the expected future tax
consequences of temporary differences between the carrying amounts and tax basis
of the Company's assets and liabilities, primarily the cost of contracts
acquired. The Company's prospective adoption of FAS 109, effective January 1993,
did not have a material effect on the Company's consolidated financial
statements. Prior to adoption, the Company's income taxes for financial
reporting purposes were determined in accordance with APB 11.
RETIREMENT AND PENSION PLANS
The Company has certain retirement and pension plans which cover eligible
employees of the Company and its subsidiaries. All plans are defined
contribution retirement plans, with the exception of a defined benefit pension
plan maintained by a non-U.S. subsidiary. The expense related to all plans was
$6,883,000, $7,050,000 and $6,048,000 in 1994, 1993 and 1992, respectively.
The defined benefit pension plan has an excess of plan assets over plan
obligations. Excess plan assets and pension expense relating to the defined
benefit pension plan are not significant in relation to the Company's
consolidated financial statements.
EARNINGS PER SHARE
Earnings per common and common equivalent share are determined on the basis of
the weighted average number of shares outstanding after giving effect to (1)
potentially dilutive stock options and warrants under the modified treasury
stock method; and (2) contingently issuable stock and warrants based on the
probability of issuance.
Earnings per common share assuming full dilution are determined based on
(1) the weighted average number of common and common equivalent shares assumed
outstanding under the modified treasury stock method during the period; and (2)
the issuance of contingently issuable stock and warrants at the most dilutive
level.
STATEMENT OF CASH FLOWS
Cash equivalents represent highly-liquid investments with an original maturity
of three months or less.
FOREIGN CURRENCY TRANSLATION
In accordance with Statement of Financial Accounting Standards No. 52, Foreign
Currency Translation, the financial statements of all non-U.S. subsidiaries are
translated to U.S. dollars as follows: assets and liabilities at year-end
exchange rates; income, expenses and cash flows at average exchange rates; and
stockholders' equity at historical exchange rates. The resulting translation
adjustment is recorded as a component of stockholders' equity.
INTEREST RATE PROTECTION AGREEMENTS
The Company periodically enters into interest rate protection agreements to
reduce the potential impact of increases in interest rates associated with
borrowings under the Company's Reducing Revolving Credit Agreement. Premiums
paid for these instruments are amortized as interest expense over the terms of
the agreements. Any payments received under these agreements are recorded as a
reduction of interest expense.
--------------------------------------------------------------------------------
NOTE 2 - FIXED ASSETS AND LEASE OBLIGATIONS
Fixed assets, which have estimated useful lives up to 10 years, consist of the
following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
December 31, 1994 1993
--------------------------------------------------------------------------------
<S> <C> <C>
Equipment, leasehold improvements and other
fixed assets $ 47,124,000 $40,724,000
Accumulated depreciation and amortization (27,773,000) (25,730,000)
--------------------------------------------------------------------------------
$ 19,351,000 $14,994,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
At December 31, 1994, future minimum rentals for operating leases that have
initial or non-cancelable lease terms in excess of one year are payable as
follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Required
Minimum
Year Ended December 31, Payment
--------------------------------------------------------------------------------
<S> <C>
1995 $14,794,000
1996 $13,191,000
1997 $11,599,000
1998 $ 9,248,000
1999 $ 8,133,000
Thereafter $22,526,000
</TABLE>
Rent expense for 1994, 1993 and 1992 approximated $13,173,000, $11,776,000
and $9,059,000, respectively.
--------------------------------------------------------------------------------
NOTE 3 - NOTES PAYABLE
During 1994, the Company amended and restated its Reducing Revolving Credit
Agreement (the Credit Agreement) with a group of banks whereby the Company may
borrow, prepay and reborrow up to $500,000,000. A five-year credit facility
exists on $400,000,000 of this total, whereby any principal amount of
outstanding borrowings as of August 29, 1996 will be payable in twelve quarterly
installments through August 29, 1999. The remaining $100,000,000 may be borrowed
through November 18, 1995 and any principal amount outstanding at that time will
be due. As of December 31, 1994, a commitment fee ranging from 1/4 of 1% to 3/8
of 1% is payable on the daily average unused portions of the $500,000,000
commitment under the Credit Agreement.
Interest rates available for amounts outstanding under the $400,000,000
facility of the Credit Agreement are currently: prime, 3/4 of 1% over LIBOR, 7/8
of 1% over certain certificate of deposit rates or a money market bid option.
Under the money market bid option, the Company can borrow up to $50,000,000 from
members of the banking group at prevailing money market rates; any such
borrowings reduce the commitment under the Credit Agreement. Interest rates
available for amounts outstanding under the $100,000,000 facility of the Credit
Agreement are currently: prime, 1% over LIBOR and 1-1/8% over certain
certificate of deposit rates.
The Company is required to meet certain financial covenants, including
covenants restricting dividends and repurchase of the Company's stock, and
requiring the Company to maintain a minimum net worth, as defined. The Company
must also continue to maintain certain minimum working capital, cash flow, and
debt to equity ratios. Under the terms of the most restrictive covenant,
$80,000,000 is available for the payment of cash dividends and repurchase of the
Company's stock during 1995.
At December 31, 1994, $172,000,000 was outstanding under the Credit
Agreement. Borrowings under the Credit Agreement are secured by the stock of the
Company's subsidiaries.
At December 31, 1994, the Company was a party to interest rate protection
agreements entered into with certain members of the Company's banking group,
which extend up to four years and limit interest rates to an average of 8.1%.
These agreements fully cover the Company's borrowings under the Credit Agreement
as of December 31, 1994. Unamortized premiums outstanding were $3,532,000 and
$51,000 at December 31, 1994 and 1993, respectively. These amounts approximate
fair market value of the agreements.
At December 31, 1994 and 1993, the Company also had $189,757,000 and
$124,942,000 of subordinated notes outstanding, respectively, which primarily
represent a portion of the consideration paid to selling shareholders of
businesses acquired. The notes which mature at various dates in 1995 to 2001
have interest rates ranging from 5.5% to 9% and may be tendered by the selling
shareholders
44
<PAGE>
upon the exercise of warrants issued in conjunction with acquisitions. The
majority of these selling shareholders remain employed by the Company's
subsidiaries subsequent to the date of acquisition.
One of the Company's subsidiaries also had subordinated notes outstanding
of $3,582,000 and $7,237,000 at December 31, 1994 and 1993, respectively, which
are secured by certain assets of the subsidiary.
Due to the unique nature of each of the subordinated debt instruments
issued to the sellers of firms, the assessment of current fair value is not
practicable.
Accrued interest at December 31, 1994 and 1993 was $4,925,000 and
$3,717,000, respectively. Interest expense and interest paid for each of the
three years ended December 31 were as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest expense $13,337,000 $15,111,000 $16,135,000
Interest paid $12,129,000 $15,095,000 $16,197,000
</TABLE>
The aggregate cash repayments of the outstanding borrowings during each of
thefive years subsequent to December 31, 1994 total the following amounts:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Required
Minimum
Year Ended December 31, Payment
--------------------------------------------------------------------------------
<S> <C>
1995 $ 4,218,000
1996 $20,364,000
1997 $68,976,000
1998 $60,310,000
1999 $95,428,000
</TABLE>
In connection with the exercise of warrants through the tender of
subordinated notes, subordinated debt of $16,611,000, $29,488,000 and
$29,788,000 was extinguished in 1994, 1993 and 1992, respectively. In addition,
during 1994 subordinated notes totaling $3,959,000 were paid in cash.
Through February 15, 1995, $11,071,000 of the subordinated notes included
on the December 31, 1994 balance sheet were tendered in payment for the exercise
of warrants. To the extent not so tendered by the holders, the Company intends
to refinance any subordinated notes which mature in 1995 using its available
line of credit.
-------------------------------------------------------------------------------
NOTE 4 - STOCKHOLDERS' EQUITY
During 1994, 1993 and 1992, the Company issued 575,437, 3,694,398 and 843,050
shares of common stock, respectively, to effect acquisitions accounted for as
poolings of interests. The Company issued 1,690,653, 393,806 and 1,617,316
warrants during 1994, 1993 and 1992, respectively, to effect acquisitions
accounted for as purchases.
The Company has a program to systematically repurchase shares of its common
stock to meet the requirements for future issuance of shares upon the exercise
of stock options and warrants. During 1994, the Company's directors increased
the number of shares authorized for repurchase from 4,000,000 to 6,000,000
shares. Through December 31, 1994, 3,324,117 shares of common stock had been
repurchased at a cost of $58,226,000 and all but 189,726 shares had been
reissued from treasury upon the exercise of stock options and warrants.
Included in accounts payable and accrued expenses at December 31, 1994 and
1993 are dividends payable of $7,304,000 and $5,907,000, respectively.
45
<PAGE>
At December 31, 1994, the following warrants were outstanding at an average
exercise price of $35.14 per share:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Shares Issuable Exercise Price Year of Expiration
--------------------------------------------------------------------------------
<S> <C> <C>
530,438 $23.00 1995
243,311 $16.22-23.00 1996
593,609 $16.50-23.00 1997
81,116 $23.00-29.00 1998
1,617,316 $33.00-35.00 1999
150,421 $29.00-33.00 2000
1,934,038 $29.00-57.50 2001
---------
5,150,249
---------
---------
</TABLE>
The Company is authorized to issue 5,000,000 shares of $1.00 par value
preferred stock, none of which has been issued through December 31, 1994.
-------------------------------------------------------------------------------
NOTE 5 - STOCK OPTION PLANS
During 1994, the Company adopted the 1994 Stock Option Plan (the 1994 Plan) and
the 1994 Eligible Directors Stock Option Plan (the 1994 Directors Plan), with
such plans superseding all previously existing stock option plans. Under the
1994 Plan, the Board of Directors is authorized to grant options for the
purchase of 2,900,000 shares of the Company's common stock to officers and other
key employees of the Company and its subsidiaries. Consistent with prior plans,
the exercise price of the options is not less than the fair market value at the
date of the grant. The options expire five years from the date of the grant and
may not be exercised for one year from the date of the grant. Thereafter, they
may be exercised at dates stipulated in each grant. An additional 300,000 shares
may be awarded under the 1994 Directors Plan. Under this plan, eligible
directors will be granted 5,000 options annually for the purchase of shares of
the Company's common stock at the fair market value at the date of the grant. In
addition, eligible directors may also elect to receive discounted options in
lieu of a portion of their directors' fees. In 1994, 30,000 shares were granted
under the annual plan and 4,924 discounted options were issued in lieu of
directors' fees. These options expire five years from the date of the grant.
The following is a summary of stock option transactions during 1992, 1993
and 1994:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Number of Stock Option
Shares Price Range
--------------------------------------------------------------------------------
<S> <C> <C>
Balance, December 31, 1991 2,114,056 $ 0.02-27.25
Options granted 886,152 $22.63-32.00
Options exercised (671,608) $ 0.02-24.50
Options canceled (29,270) $14.25-31.25
---------
Balance, December 31, 1992 2,299,330 $ 0.02-32.00
Options granted 802,179 $29.00-46.38
Options exercised (509,602) $ 0.02-31.25
Options canceled (51,767) $14.88-41.00
---------
Balance, December 31, 1993 2,540,140 $ 0.02-46.38
Options granted 1,063,977 $26.81-40.75
Options exercised (255,685) $ 0.02-31.25
Options canceled (60,602) $14.25-46.38
---------
Balance, December 31, 1994 3,287,830 $ 0.02-46.38
---------
---------
Options exercisable at the end of the year 1,208,575
Options available for future grants 2,931,787
Shares reserved, but unissued at the
beginning of the year 3,602,510
Shares reserved, but unissued at the
end of the year 6,219,611
</TABLE>
46
<PAGE>
The options outstanding at December 31, 1994 expire at various times in
1995 through 1999. Options exercisable at December 31, 1994 had an average price
of $18.50. The average exercise price of all options outstanding at December 31,
1994 was $27.79.
--------------------------------------------------------------------------------
NOTE 6 - INCOME TAXES
Income before income tax expense was taxed under the following jurisdictions:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year Ended December 31, 1994 1993 1992
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic $ 92,170,000 $85,358,000 $62,716,000
Foreign 11,036,000 9,112,000 6,036,000
--------------------------------------------------------------------------------
$103,206,000 $94,470,000 $68,752,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
Income tax expense consists of the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year Ended December 31, 1994 1993 1992
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $30,159,000 $27,414,000 $22,508,000
State 6,658,000 5,734,000 4,012,000
Non-U.S. 3,748,000 3,284,000 2,071,000
Deferred:
Federal 2,948,000 3,909,000 880,000
State 681,000 842,000 209,000
--------------------------------------------------------------------------------
$44,194,000 $41,183,000 $29,680,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
Deferred tax liabilities are comprised of the following:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
December 31, 1994 1993
--------------------------------------------------------------------------------
<S> <C> <C>
Excess contract amortization for
tax purposes $35,043,000 $31,222,000
Installment sale for tax purposes on real estate
partnerships sold prior to acquisition
of subsidiary 1,675,000 1,919,000
Other 649,000 597,000
--------------------------------------------------------------------------------
$37,367,000 $33,738,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
For purchase acquisitions which occurred prior to The Revenue
Reconciliation Act of 1993 (the Act), the excess contract amortization for
income tax purposes results from the application of a method under which the
deductions for income tax purposes are determined by (1) amortizing the cost
assigned to contracts acquired on a straight-line basis over the same estimated
useful lives as those used for financial reporting purposes; and (2) deducting
the unamortized balance of such cost which is allocated to the individual
contracts when any such contract is terminated. For acquisitions subsequent to
the Act, the deduction for income tax purposes is determined by amortizing the
costs assigned to contracts acquired on a straight-line basis over a 15 year
period, with no deduction for the unamortized balance of individual contract
terminations.
The effective income tax rate differs from the statutory Federal income tax
rate as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
1994 1993 1992
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal income tax statutory rate 35% 35% 34%
State income taxes, net of federal benefit 5 6 6
Nondeductible items 3 3 3
-------------------------------------------------------------------------------
43% 44% 43%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
Income taxes of $39,907,000, $31,264,000 and $28,047,000 were paid in 1994,
1993 and 1992, respectively. Amounts related to income taxes payable were
$9,064,000 and $10,189,000 at December 31, 1994 and 1993, respectively.
The Company's federal income tax returns for the years ending December 31,
1984 through 1992 remain under audit by the Internal Revenue Service. On January
30, 1992, the Company received a Revenue Agent's Report proposing certain
adjustments to the Company's federal income tax returns for the years ending
December 31, 1984, 1985 and 1986. In April 1992, the Company filed its protest
with the Internal Revenue Service. The principal issue involved is the
deductibility of the amortization of costs assigned to investment advisory
contracts acquired. Management and its advisors believe that the Company's
practice of deducting the amortization of costs assigned to contracts acquired
is correct and that the Company's position for the years under audit, and
subsequent years if the issue is raised, will ultimately be sustained on appeal
within the Internal Revenue Service, or, if necessary, in court. In management's
opinion, the appropriateness of the Company's practice was further supported in
1993 by the Supreme Court's favorable decision on similar practices for treating
intangible assets. Should the adjustments proposed in the Revenue Agent's Report
be upheld in their entirety, the Company's additional liability for federal
income tax for the years covered by the report would approximate $13,124,000,
plus statutory interest thereon. The Company believes that the amount, if any,
which may become payable as a result of the audit will not have a material
effect on the Company's consolidated financial position.
--------------------------------------------------------------------------------
NOTE 7 - ACQUISITIONS AND COMMITMENTS
During 1994, the Company issued shares of its common stock to acquire Investment
Research Company through a transaction accounted for as a pooling of interests.
The Company also acquired Dwight Asset Management Company and Suffolk Capital
Management during 1994 through purchase transactions. In addition, the Company
acquired, through a purchase transaction, certain assets of JMB Institutional
Realty and JMB Properties Company which were contributed to an affiliate,
Heitman Financial Ltd.
During 1993, the Company issued shares of its common stock to acquire
Heitman Financial Ltd. and Murray Johnstone Limited through transactions
accounted for as poolings of interests. The Company also acquired Pell, Rudman &
Co., Inc. and GSB Investment Management, Inc. during 1993 through purchase
transactions.
During 1992, the Company issued shares of its common stock to acquire
Acadian Asset Management, Inc. through a transaction accounted for as a pooling
of interests. The Company also acquired Alpha Global Fixed Income Managers, The
L&B Group, NWQ Investment Management Company and Tom Johnson Investment
Management, Inc. during 1992 through purchase transactions.
The purchase price, including direct costs, associated with the
acquisitions accounted for as purchases and the allocations thereof are
summarized as follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Year Ended December 31, 1994 1993 1992
-------------------------------------------------------------------------------
<S> <C> <C> <C>
Consideration:
Cash $170,394,000 $32,693,000 $ 96,225,000
Subordinated notes 85,584,000 19,056,000 57,795,000
Common stock and warrants 4,045,000 1,161,000 2,292,000
-------------------------------------------------------------------------------
$260,023,000 $52,910,000 $156,312,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Allocation of purchase price:
Net tangible assets $ 6,464,000 $ 2,112,000 $ 4,321,000
Cost assigned to
contracts acquired 251,365,000 49,675,000 151,760,000
Other assets 2,194,000 1,123,000 231,000
-------------------------------------------------------------------------------
$260,023,000 $52,910,000 $156,312,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>
48
<PAGE>
The results of operations of Dwight, Suffolk and JMB are included in the
consolidated results of operations of the Company from their respective dates of
acquisition, January 4, 1994, July 14, 1994 and December 2, 1994. On February
25, 1994, the Company issued 566,099 shares of its common stock to the former
shareholders of IRC to effect the pooling of interests with that firm. The
results of IRC have been reflected since January 1, 1994. As this transaction is
not considered material to the consolidated financial statements of the Company,
prior year financial statements have not been restated.
Cash and subordinated notes of $2,896,000 and 24,966 warrants valued at
$214,000 were paid in 1993 in connection with additional purchase price
commitments due in 1993 to the former owners of an affiliate.
In conjunction with certain acquisitions and employment arrangements, the
Company has entered into agreements to make payments potentially totaling as
much as $177,000,000 (including the $125,000,000 associated with the Provident
Investment Counsel acquisition discussed below) in the form of cash,
subordinated notes and the Company's common stock, on dates through 2001. These
payments are dependent upon the achievement of stipulated business goals.
Unaudited pro forma data for the years ended December 31, 1994, 1993 and
1992 is set forth below, giving consideration to the acquisitions occurring in
the respective three year period assuming revenue sharing plans (see Note 1) had
been in effect and after certain other pro forma adjustments have been made.
This pro forma does not include the effects of the Provident Investment Counsel
acquisition which is separately disclosed below.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Year Ended December 31, 1994 1993 1992
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $563,080,000 $548,305,000 $507,390,000
Net income $ 62,367,000 $61,986,000 $49,823,000
Primary earnings per share $2.12 $2.10 $1.88
Fully diluted earnings per share $2.12 $2.08 $1.86
</TABLE>
On February 15, 1995, the Company completed its acquisition of Provident
which will be accounted for as a purchase transaction in 1995. As consideration,
the Company paid cash and subordinated notes of $285,369,000, 459,385 warrants
and 1,873,004 shares of its common stock to the former owners of Provident.
Additional purchase price associated with this acquisition, totaling up to
$125,000,000 in a combination of cash, the Company's common stock and
subordinated notes and warrants may be payable in 1998.
The unaudited pro forma combined condensed balance sheet of the Company and
Provident as of December 31, 1994 after giving effect to certain pro forma
adjustments is as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<S> <C>
Assets:
Current assets $ 188,039,000
Fixed assets, net 21,318,000
Cost assigned to contracts acquired, net 999,047,000
Other assets 60,882,000
--------------------------------------------------------------------------------
$1,269,286,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities and Stockholders' Equity:
Current liabilities $ 114,089,000
Senior notes payable 184,750,000
Subordinated notes payable 464,949,000
Other liabilities 37,367,000
Stockholders' equity 468,131,000
--------------------------------------------------------------------------------
$1,269,286,000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
The unaudited pro forma combined results of operations of the Company and
Provident for the year ended December 31, 1994 is set forth below. This pro
forma is based on the actual 1994 results of the Company and assumes the revenue
sharing plan (see Note 1) had been in effect and certain other pro forma
adjustments have been made with respect to Provident.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<S> <C>
Revenues $572,321,000
Net income $ 61,275,000
Primary earnings per share $1.98
Fully diluted earnings per share $1.98
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
UNITED ASSET MANAGEMENT CORPORATION
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, of cash flows and of changes in stockholders'
equity present fairly, in all material respects, the financial position of
United Asset Management Corporation and its subsidiaries at December 31, 1994
and 1993, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Boston, Massachusetts
February 15, 1995
<PAGE>
Exhibit 21.1
UNITED ASSET MANAGEMENT CORPORATION
SUBSIDIARIES OF THE REGISTRANT
Jurisdiction of Financial
Affiliated Firm Organization Statements
--------------- --------------- ----------
Acadian Asset Management, Inc. Massachusetts Consolidated
Alpha Global Fixed Income Managers Delaware Consolidated
Analytic Investment Management, Inc. California Consolidated
Barrow, Hanley, Mewhinney & Strauss, Inc. Nevada Consolidated
Cambiar Investors, Inc. Colorado Consolidated
The Campbell Group, Inc. Delaware Consolidated
Chicago Asset Management Company Delaware Consolidated
Cooke & Bieler, Inc. Pennsylvania Consolidated
Dewey Square Investors Corporation Delaware Consolidated
Dwight Asset Management Company Delaware Consolidated
Fiduciary Management Associates, Inc. Delaware Consolidated
First Pacific Advisors, Inc. Massachusetts Consolidated
GSB Investment Management, Inc. Delaware Consolidated
Hagler, Mastrovita & Hewitt, Inc. Delaware Consolidated
Hamilton, Allen & Associates, Inc. Delaware Consolidated
Hanson Investment Management Company California Consolidated
Heitman Financial Ltd. Delaware Consolidated
Heitman Properties Ltd.(1) Illinois Consolidated
Heitman/JMB Advisory Corporation Illinois Consoldiated
Hellman, Jordan Management Company, Inc. Delaware Consolidated
HT Investors, Inc. Delaware Consolidated
Investment Counselors of Maryland, Inc. Maryland Consolidated
Investment Research Company Illinois Consolidated
Tom Johnson Investment Management, Inc. Massachusetts Consolidated
Ki Pacific Asset Management, Inc. Delaware Consolidated
L&B Realty Advisors, Inc. (The L&B Group) Delaware Consolidated
L&B Institutional Property Managers, Inc.(2) Delaware Consolidated
L&B Real Estate Counsel Texas Consoldiated
C.S. McKee & Company, Inc. Pennsylvania Consolidated
Murray Johnstone Limited Scotland Consolidated
Nelson, Benson & Zellmer, Inc. Colorado Consolidated
Newbold's Asset Management, Inc. Pennsylvania Consolidated
Northern Capital Management, Inc. Wisconsin Consolidated
NWQ Investment Management Company Massachusetts Consolidated
Olympic Capital Management, Inc. Washington Consolidated
Pell, Rudman & Co., Inc. Delaware Consolidated
Regis Retirement Plan Services, Inc. Massachusetts Consolidated
Rice, Hall, James & Associates California Consolidated
Rothschild/Pell, Rudman & Co., Inc. Maryland Consolidated
Sirach Capital Management, Inc. Washington Consolidated
Spectrum Asset Management, Inc. Connecticut Consolidated
Sterling Capital Management Company North Carolina Consolidated
Suffolk Capital Management Delaware Consolidated
Thompson, Siegel & Walmsley, Inc. Virginia Consolidated
United Asset Management (Japan), Inc. Delaware Consolidated
All of the Registrant's subsidiaries do business under the respective names
indicated above and are wholly-owned.
(1) Heitman Properties, Ltd. has 42 wholly-owned property management
subsidiaries operating in the U.S.
(2) L&B Institutional Property Managers, Inc. has 5 wholly-owned property
management subsidiaries operating in the U.S.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Prospectuses constituting part of the Registration Statements
on Form S-3 (Nos. 33-36928, 33-44215, 33-46310, 33-63350, 33-
69034, 33-51443, 33-52517 and 33-57049) and in the
Registration Statements on Form S-8 (Nos. 33-10621, 33-21756,
33-34288, 33-48858 and 33-54233) of United Asset Management
Corporation of our report dated February 15, 1995 appearing on
page 50 of the Annual Report to Shareholders which is
incorporated in this Annual Report on Form 10-K. We also
consent to the incorporation by reference of our report on the
Financial Statement Schedule, which appears on page F-1 of
this Form 10-K.
/s/ PRICE WATERHOUSE LLP
Boston, Massachusetts
March 17, 1995
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This financial data schedule contains summary financial information extracted
from the Company's year ended December 31, 1994 consolidated statement of income
(see Annual Report page 39) and the consolidated Balance Sheet (see Annual
Report page 38). This information is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 89,050
<SECURITIES> 0
<RECEIVABLES> 77,292
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 179,264
<PP&E> 47,124
<DEPRECIATION> 27,773
<TOTAL-ASSETS> 915,627<F1>
<CURRENT-LIABILITIES> 114,089
<BONDS> 364,330<F2>
<COMMON> 283
0
0
<OTHER-SE> 399,558
<TOTAL-LIABILITY-AND-EQUITY> 915,627
<SALES> 0
<TOTAL-REVENUES> 492,288
<CGS> 0
<TOTAL-COSTS> 321,188
<OTHER-EXPENSES> 55,121<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,773
<INCOME-PRETAX> 103,206
<INCOME-TAX> 44,194
<INCOME-CONTINUING> 59,012
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,012
<EPS-PRIMARY> 2.00
<EPS-DILUTED> 2.00
<FN>
<F1>Includes $656,130,000 of cost assigned to contracts acquired, net.
<F2>Represents $172,000,000 in senior notes payable and $192,330,000 in
subordinated notes payable
<F3>Represents amortization of cost assigned to contracts acquired for the
year ended December 31, 1994
</FN>
</TABLE>
