SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. ______)*
HILB, ROGAL AND HAMILTON COMPANY
(Name of Issuer)
COMMON STOCK (NO PAR VALUE)
(Title of Class of Securities)
431294 10 7
(CUSIP Number)
Carole A. Masters, Esq.
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, CT 06102-5056
TELEPHONE (860) 403-5000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
MAY 3, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box [ ]
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Page 1 of 58 pages)
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SCHEDULE 13D
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CUSIP No. 431294 10 7 Page 2 of 58 pages
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
(a) Phoenix Home Life Mutual Insurance Company (Tax ID #06-0493340)
(b) PM Holdings, Inc. (Tax ID #06-1065485)
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2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)
___
/__/
(b)
___
/__/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e)
___
/__/
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
(a) Phoenix Home Life Mutual Insurance Company - New York
(b) PM Holdings, Inc. - Connecticut
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NUMBER OF 7 SOLE VOTING POWER
SHARES (a) PM Holdings, Inc. initially - 1,832,075 shares
BENEFICIALLY (b) Phoenix Home Life Mutual Insurance Company
OWNED BY initially - 439,560 shares
EACH (c) After transfer from PM Holdings, Inc. - 2,271,635
REPORTING shares
PERSON WITH
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8 SHARED VOTING POWER
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9 SOLE DISPOSITIVE POWER Phoenix Home Life Mutual
Insurance Company - 2,271,635 shares
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10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
(a) Phoenix Home Life Mutual Insurance Company - 2,271,635 shares
(b) PM Holdings, Inc. -0-
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12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
___
/__/
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.6%
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14 TYPE OF REPORTING PERSON*
(a) Phoenix Home Life Mutual Insurance Company - IC
(b) PM Holdings, Inc. - CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
(Page 2 of 58 pages)
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Item 1. SECURITY AND ISSUER
This Statement relates to the shares of Common Stock, no par value
(the "Shares"), of Hilb Rogal and Hamilton Company, a Virginia corporation (the
"Company"). The principal executive offices of the Company are located at 4235
Innslake Drive, Glen Allen, Virginia 23060.
Item 2. IDENTITY AND BACKGROUND
Phoenix Home Life Mutual Insurance Company ("PHL") is a New York
mutual life insurance company. PM Holdings, Inc. ("PM Holdings") is a
Connecticut corporation and a wholly-owned subsidiary of PHL. The principal
executive offices of PHL and PM Holdings are located at One American Road,
Hartford, Connecticut 06115. PHL is a mutual life insurance company engaged in
the life and health insurance and annuities business and the investment
management business. PM Holdings is a holding company for certain indirect
subsidiaries of PHL.
Set forth in Schedule A hereto is the name, business address and
present principal occupation or employment of each Director and executive
officer of PHL and of PM Holdings. None of such persons beneficially owns any
Shares or other equity securities of the Company, except that David W. Searfoss,
Executive Vice President and Chief Financial Officer of PHL, beneficially owns
1,000 Shares. Each of such persons is a United States citizen.
Neither PHL nor PM Holdings, nor, to the best of such companies'
knowledge, any of their Directors or executive officers, has been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors)
during the past five years, or has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS
On May 3, 1999, PM Holdings acquired 865,042 Shares and $22,000,000
principal amount of the Company's 5 1/4 % Convertible Subordinated Debentures
due 2014 (the "Convertible Debentures") from the Company in exchange for all of
the shares of Common Stock of American Phoenix Corporation, a Connecticut
corporation ("APC"), owned by PM Holdings, which shares represented 85% of the
total number of outstanding shares of APC capital stock. APC operates, through
subsidiaries, property and casualty insurance agencies and premium finance
companies. The Shares and Convertible Debentures (together, the "Purchase
Price") were issued to PM Holdings pursuant to a Stock Purchase Agreement, dated
as of March 29, 1999 (the "Stock Purchase Agreement"), among the Company, PM
Holdings, PHL and Martin L. Vaughan, III ("Vaughan"). The Purchase Price is
subject to adjustment, based upon the Tangible Net Worth (as defined) of APC as
of the Closing Date as determined by a post-closing audit of APC. In addition,
PHL received from the Company $10,000,000 principal amount of
(Page 3 of 58 pages)
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Convertible Debentures and $150,000 in cash in consideration of certain
non-competition covenants granted by PHL pursuant to the Stock Purchase
Agreement.
Pursuant to the Stock Purchase Agreement, at the Closing PM Holdings
contributed $19,805,898 in cash as a capital contribution to APC. Such funds
were used to pay all bank indebtedness of APC remaining after giving effect to a
concurrent payment by the Company to one of such banks of approximately
$45,029,063 in payment of such indebtedness of APC. Payment of such bank
indebtedness had been guaranteed by PHL. The cash required for such capital
contribution by PM Holdings was derived from its working capital.
Item 4. PURPOSE OF TRANSACTION
The sale BY PM Holdings of its 85% equity interest in APC was made as
part of a strategic decision by PHL to concentrate more fully on its core life
and health insurance and annuity business and its investment management
business. As more fully described in Item 6 hereof, pursuant to a Voting and
Standstill Agreement, dated as of May 3, 1999, among PM Holdings, PHL and the
Company (the "Voting and Standstill Agreement"), Robert W. Fiondella, the
Chairman of the Board and President and Chief Executive Officer of PHL, and
David W. Searfoss, Executive Vice President and Chief Financial Officer of PHL,
are to be elected as Directors of the Company in June, 1999 to fill vacancies on
the Company's 13 member Board of Directors.
Except for the election of Messrs. Fiondella and Searfoss as Directors
of the Company and the other matters provided for in the Voting and Standstill
Agreement, neither PHL nor PM Holdings has any plans or proposals which relate
to or would result in any of the actions or transactions described in paragraphs
(a) through (j) of Item 4 of Schedule 13D. However, subject to the provisions of
the Voting and Standstill Agreement, PHL and PM Holdings reserve the right in
the future to acquire additional Shares or to sell or otherwise dispose of the
Shares and Convertible Debentures acquired pursuant to the Stock Purchase
Agreement or to propose any of the other transactions or matters described in
Item 4 of Schedule 13D.
Item 5. INTEREST IN SECURITIES OF THE COMPANY.
Immediately following the Closing, on May 3, 1999 PM Holdings
transferred to PHL all of the 865,042 Shares and $22,000,000 principal amount of
Convertible Debentures which PM Holdings received as the Purchase Price pursuant
to the Stock Purchase Agreement. The aggregate of $32,000,000 principal amount
of Convertible Debentures beneficially owned by PHL are convertible, at any time
after the 60th day following the Closing, into 1,406,593 Shares at a conversion
price of $22.75 per share (subject to adjustment pursuant to anti-dilution
provisions). Thus, PHL may be deemed to be the beneficial owner of an aggregate
of 2,271,635 Shares which, based on information furnished by the Company,
constituted approximately 15.6% of the Shares outstanding after giving effect to
the Closing and assuming conversion of the Convertible Debentures.
David W. Searfoss, Executive Vice President and Chief Financial
Officer of PHL and
(Page 4 of 58 pages)
<PAGE>
Vice President and Chief Financial Officer of PM Holdings, beneficially owns
1,000 Shares which he purchased on April 16, 1999 at a purchase price of $18.625
per Share.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE COMPANY
Pursuant to the Stock Purchase Agreement, at the Closing PM Holdings
and PHL entered into the Voting and Standstill Agreement, pursuant to which,
among other things, the Company agreed (i) to increase the size of its Board of
Directors from nine to 13 Directors and to fill three of the resulting vacancies
with Robert W. Fiondella, the Chairman of the Board, President and Chief
Executive Officer of PHL, and another designee of PHL (the "PHL Designee"), and
with Vaughan, who was the President of APC and who entered into an employment
agreement with the Company to serve as the Chief Operating Officer of the
Company, and (ii) to nominate and recommend Mr. Fiondella and the PHL Designee
for election as Directors during the ten-year term of the Voting and Standstill
Agreement, provided that such obligation will terminate as to the PHL Designee
if PHL's beneficial ownership of Shares is less than 10% of the outstanding
Shares assuming conversion of the Convertible Debentures (the "Adjusted
Outstanding Shares"). PHL has designated David W. Searfoss, Executive Vice
President and Chief Financial Officer of PHL, as the initial PHL Designee. It is
contemplated that Messrs. Fiondella, Searfoss and Vaughan will be elected as
Directors immediately following the Company's Annual Meeting of Stockholders
scheduled to be held in June 1999.
Pursuant to the Voting and Standstill Agreement, PHL and PM Holdings
agreed, among other things, during the term of the Voting and Standstill
Agreement not to (i) acquire 20% or more of the Adjusted Outstanding Shares,
(ii) propose or solicit any other person with respect to any tender or exchange
offer, recapitalization, merger or other business combination involving the
Company (other than any such transaction that has been approved by the Board of
Directors or as to which the Board of Directors remains neutral or does not
propose or recommend rejection thereof), (iii) participate in a proxy or consent
solicitation with respect to the voting of Shares or become a "participant" in
an election contest with respect to the Company or (iv) take other specified
actions seeking to control the management or policies of the Company. PHL and PM
Holdings also agreed to vote or cause to be voted the Shares beneficially owned
by them during the term of the Voting and Standstill Agreement in accordance
with the recommendation of the Board of Directors with respect to the election
of Directors and with respect to any transaction to be effected with the Company
in connection with an unsolicited tender offer or exchange offer, any election
contest or any other attempt to acquire control of the Company and, for a period
of five years following the Closing Date, in accordance with the recommendation
of the Board of Directors with respect to negotiated mergers, acquisitions,
divestitures and similar transactions requiring a vote of shareholders of the
Company.
The Voting and Standstill Agreement also contains certain restrictions
on transfers of the Company's securities owned by PHL and PM Holdings, including
the transfer thereof to any person who owns, or who after such transfer would
own, more than 9.9% of the outstanding Shares as of the date of the transfer (as
adjusted pursuant to Rule 13d-3(d)(1)(i) under the
(Page 5 of 58 pages)
<PAGE>
Securities Act of 1934, as amended) with certain exceptions, including a
transfer pursuant to a tender or exchange offer not approved or recommended by
the Board of Directors in which more than 67% of the outstanding Shares have
been tendered by shareholders of the Company other than PHL or PM Holdings or
their affiliates.
At the Closing, PHL and PM Holdings also entered into a Registration
Rights Agreement, dated as of May 3, 1999, with the Company pursuant to which
PHL and PM Holdings are afforded certain demand and piggyback registration
rights under the Securities Act of 1933, as amended, with respect to the Shares
beneficially owned by them, including the Shares issuable upon conversion of the
Convertible Debentures (but not the Convertible Debentures themselves). PHL and
PM Holdings may exercise such registration rights so long as they beneficially
own in excess of 10% of the Adjusted Outstanding Shares or are otherwise deemed
to be "affiliates" of the Company.
The foregoing summaries of the Voting and Standstill Agreement and the
Registration Rights Agreement do not purport to be complete and are qualified by
reference to such Agreements, copies of which have been filed as Exhibits to
this Schedule 13D.
Except as set forth in this Item 6 and elsewhere in this Schedule 13D,
neither PHL, PM Holdings nor any of their respective officers or Directors have
any contracts, arrangements, understandings or relationships with respect to
securities of the Company that are required to be disclosed by Item 6 of
Schedule 13D.
Item 7. MATERIAL TO BE FILED AS EXHIBITS
(1) Stock Purchase Agreement, dated as of March 29, 1999, among the
Company, PM Holdings, PHL and Vaughan, incorporated by reference
to Exhibit 2 to the Company's Annual Report on Form 10-K for its
fiscal year ended December 31, 1998.
(2) Voting and Standstill Agreement, dated as of May 3, 1999, among
the Company, PM Holdings and PHL.
(3) Registration Rights Agreement, dated as of May 3, 1999, among the
Company, PM Holdings and PHL.
(Page 6 of 58 pages)
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After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Date: May 12, 1999
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By: S/ DAVID W. SEARFOSS
David W. Searfoss
Executive Vice President
and Chief Financial Officer
PM HOLDINGS, INC.
By: /S/ DAVID W. SEARFOSS
David W. Searfoss
Vice President and
Chief Financial Officer
(Page 7 of 58 pages)
<PAGE>
EXHIBIT INDEX
PAGE NUMBER IN
SEQUENTIALLY NUMBERED
EXHIBIT NUMBER TITLE ORDER
Exhibit 1 Stock Purchase Agreement
Exhibit 2 Voting and Standstill Agreement 17
Exhibit 3 Registration Rights Agreement 42
(Page 8 of 58 pages)
<PAGE>
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
Schedule A
DIRECTORS
NAME PRESENT PRINCIPAL OCCUPATION/ BUSINESS ADDRESS
Sal H. Alfiero Chairman and Chief Executive Officer
Mark IV Industries, Inc.
501 John James Audubon Parkway
Amherst, NY 14226-0810
(Manufacturer)
J. Carter Bacot Chairman and Chief Executive Officer
The Bank of New York
48 Wall Street, 3rd Floor
New York, NY 10286
Richard H. Booth Executive Vice President
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, CT 06102-5056
Peter C. Browning President and Chief Executive Officer
Sonoco Products Company
One North Second Street
P. O. Box 160
Hartsville, SC 29550-0160
(Page 9 of 58 pages)
<PAGE>
Arthur P. Byrne President, Chief Executive Officer and Chairman
The Wiremold Company
60 Woodlawn Street
West Hartford, CT 06110
Richard N. Cooper Professor
Center for International Affairs
Harvard University
1737 Cambridge Street, Room 403
Cambridge, MA 02138
Gordon J. Davis Partner
LeBoeuf, Lamb Greene & MacRae
125 West 55th Street
New York, NY 10019
(Attorneys)
Robert W. Fiondella Chairman, President and Chief Executive Officer
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, CT 06102-5056
Jerry J. Jasinowski President
National Association of Manufacturers
1331 Pennsylvania Avenue, N.W.
Suite 1500 North
Washington, DC 20004
(Page 10 of 58 pages)
<PAGE>
John W. Johnstone Chairman
Governance and Nominating Committees
Arch Chemicals, Inc.
191 Post Road West
Westport, CT 06880
Marilyn E. LaMarche Limited Managing Director
Lazard Freres & Co. L.L.C.
30 Rockefeller Plaza
New York, NY 10020
Philip R. McLoughlin Chairman and Chief Executive Officer
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, CT 06115-0480
Indra K. Nooyi Senior Vice President
PepsiCo., Inc.
700 Anderson Hill Road
Purchase, NY 10577
Robert F. Vizza President and Chief Executive Officer
The DeMatteis Center of St. Francis Hospital
Northern Boulevard
Old Brookville, NY 11545
(Page 11 of 58 pages)
<PAGE>
Robert G. Wilson Retired
Key Colony III, Apt. 1127
151 Crandon Boulevard
Key Biscayne, FL 33149
Dona D. Young Executive Vice President and General Counsel
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, CT 06102-5056
EXECUTIVE OFFICERS
NAME PRESENT PRINCIPAL OCCUPATION/BUSINESS ADDRESS*
Richard H. Booth Executive Vice President
Carl T. Chadburn Executive Vice President
Robert W. Fiondella Chairman, President and Chief Executive Officer
Philip R. McLoughlin Chairman and Chief Executive Officer
Phoenix Investment Partners, Ltd.
56 Prospect Street
Hartford, CT 06115-0480
* Except as otherwise noted, the business address of each Executive Officer is
c/o Phoenix Home Life Muual Insurance Company, One American Row, Hartford, CT
06102-5056
(Page 12 of 58 pages)
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NAME PRESENT PRINCIPAL OCCUPATION/BUSINESS ADDRESS*
David W. Searfoss Executive Vice President
Dona D. Young Executive Vice President and General Counsel
Kelly J. Carlson Senior Vice President
Robert G. Chipkin Senior Vice President
Martin J. Gavin Senior Vice President
Randall C. Giangiulio Senior Vice President
Phoenix Home Life Mutual Insurance Company
100 Bright Meadow Boulevard
Enfield, CT 06082
Edward P. Hourihan Senior Vice President
Joseph E. Kelleher Senior Vice President
Robert G. Lautensack Senior Vice President
Maura L. Melley Senior Vice President
* Except as otherwise noted, the business address of each Executive Officer is
c/o Phoenix Home Life Muual Insurance Company, One American Row, Hartford, CT
06102-5056
(Page 13 of 58 pages)
<PAGE>
NAME PRESENT PRINCIPAL OCCUPATION/BUSINESS ADDRESS*
David R. Pepin Senior Vice President
Robert E. Primmer Senior Vice President
Frederick W. Sawyer, III Senior Vice President
Simon Y. Tan Senior Vice President
Anthony J. Zeppetella Senior Vice President
Phoenix Home Life Mutual Insurance Company
56 Prospect Street
Hartford, CT 06115
Walter H. Zultowski Senior Vice President
PM HOLDINGS, INC.
DIRECTORS
NAME PRESENT PRINCIPAL OCCUPATION/ BUSINESS ADDRESS
* Except as otherwise noted, the business address of each Executive Officer is
c/o Phoenix Home Life Muual Insurance Company, One American Row, Hartford, CT
06102-5056
(Page 14 of 58 pages)
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Richard H. Booth Same as Above
Carl T. Chadburn Same as Above
NAME PRESENT PRINCIPAL OCCUPATION/ BUSINESS ADDRESS
Robert W. Fiondella Same as Above
Martin J. Gavin Same as Above
Philip R. McLoughlin Same as Above
Frederick W. Sawyer, III Same as Above
David W. Searfoss Same as Above
Dona D. Young Same as Above
<TABLE>
<CAPTION>
EXECUTIVE OFFICERS
NAME PRESENT PRINCIPAL OCCUPATION/ BUSINESS ADDRESS POSITION WITH PM HOLDINGS, INC.
<S> <C> <C>
Robert Fiondella Same as Above President
Richard H. Booth Same as Above Vice President
Carl T. Chadburn Same as Above Vice President
Martin J. Gavin Same as Above Vice President
Philip R. McLoughlin Same as Above Vice President
Frederick W. Sawyer, III Same as Above Vice President
NAME PRESENT PRINCIPAL OCCUPATION/BUSINESS ADDRESS Position with PM Holdings
(Page 15 of 58 pages)
<PAGE>
David W. Searfoss Same as Above Vice President and Chief Financial Officer
Dona D. Young Same as Above Vice President and General Counsel
</TABLE>
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(Page 16 of 58 pages)
Exhibit 2
VOTING AND STANDSTILL AGREEMENT
THIS VOTING AND STANDSTILL AGREEMENT (the "Agreement"), dated as of
May 3, 1999, is made by and among Hilb, Rogal and Hamilton Company, a Virginia
corporation (the "Company"), PM Holdings, Inc., a Connecticut corporation
("Holdings"), and Phoenix Home Life Mutual Insurance Company, a New York life
insurance company ("PHL").
W I T N E S S E T H:
WHEREAS, the Company, Holdings, PHL and Martin L. Vaughan, III entered
into a Stock Purchase Agreement dated March 29, 1999 (the "Stock Purchase
Agreement"), under which the Company agreed to acquire from Holdings and Martin
L. Vaughan, III all of the issued and outstanding shares of the capital stock of
American Phoenix Corporation, a Connecticut corporation ("APC"); and
WHEREAS, pursuant to the Stock Purchase Agreement, (i) Holdings
acquired 865,042 shares of the Company's Common Stock (as hereinafter defined)
and $22,000,000 principal amount of the Company's Subordinated Debentures (as
hereinafter defined), and (ii) PHL acquired $10,000,000 principal amount of the
Company's Subordinated Debentures; and
WHEREAS, the Subordinated Debentures acquired by Holdings and PHL
pursuant to the Stock Purchase Agreement are convertible into shares of Common
Stock pursuant to the terms of the Subordinated Debentures; and
WHEREAS, the parties to this Agreement desire to establish certain
rights and obligations in connection with the relationship of Holdings and PHL
to the Company.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and in the Stock Purchase Agreement, the Company,
Holdings and PHL hereby agree as follows:
ARTICLE I
DEFINITIONS; REPRESENTATIONS AND WARRANTIES
SECTION 1.1. DEFINITIONS. Except as otherwise specified herein,
capitalized terms used in this Agreement shall have the respective meanings
assigned to such terms in the Stock Purchase Agreement. For purposes of this
Agreement, the following terms have the following meanings:
(a) "Adjusted Outstanding Shares" shall mean, at any time and with
respect to the determination of (i) the Holdings Ownership Percentage as it
relates to Holdings and its Affiliates, (ii) the Standstill Percentage as it
relates to Holdings and its Affiliates, and (iii) any
(Page 17 of 58 pages)
<PAGE>
other percentage of the beneficial ownership of Common Stock as it relates to a
Person or Group, the total number of shares of Common Stock then issued and
outstanding together with the total number of shares of Common Stock not then
issued and outstanding that would be outstanding if all then existing
Subordinated Debentures had been converted.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement, and shall include, with
respect to a determination of the Affiliates of Holdings, any Affiliate of PHL;
PROVIDED, however, that (i) PXP and its subsidiaries and (ii) any Person
registered as an investment company under the Investment Company Act of 1940, as
amended, which might otherwise be deemed to be an "affiliate" of Holdings or PHL
within the meaning of Rule 12b-2 under the Exchange Act (a "Related Investment
Company"), shall not be deemed to be Affiliates of Holdings or PHL for purposes
of this Agreement to the extent their respective businesses consist principally
of investing in securities, investment management and/or advisory services, and
any shares of Common Stock or other equity securities of the Company acquired,
or caused to be acquired, by PXP and its subsidiaries or such Related Investment
Company in the conduct of their respective businesses in the ordinary course for
the account of, or for the benefit of, clients of PXP or its subsidiaries,
policyholders or investors (other than Holdings, PHL or their Affiliates), and
not with the purpose of avoiding the provisions of Section 3.1 below, shall not
be deemed, for purposes of this Agreement, to be beneficially owned by Holdings,
PHL or their Affiliates.
(c) "Beneficial ownership," "beneficial owner" and "beneficially own"
shall have the meanings ascribed to such terms in Rule 13d-3 under the Exchange
Act as in effect on the date of this Agreement; PROVIDED that Holdings and each
of its Affiliates and any Person or Group shall be deemed to be the beneficial
owners of any shares of Common Stock that Holdings or such Affiliate, Person
and/or Group, as the case may be, has the right to acquire within sixty (60)
days after the determination date pursuant to any other agreement, arrangement
or understanding or upon the exercise of conversion or exchange rights,
warrants, options or otherwise, including but not limited to any right to
acquire shares of Common Stock through the conversion of the Subordinated
Debentures.
(d) "Board of Directors" shall mean the Board of Directors of the
Company.
(e) "Business Day" shall mean any day on which banking institutions in
New York, New York are customarily open for the purpose of transacting business.
(f) "Common Stock" shall mean the Common Stock, without par value, of
the Company.
(g) "Continuing Directors" shall mean the members of the Board of
Directors of the Company immediately prior to the Closing Date and any future
members of the Board of Directors nominated by the Board of Directors; PROVIDED,
however, that no Holdings Director shall constitute a Continuing Director or be
counted in determining the presence of a quorum of Continuing Directors.
(Page 18 of 58 pages)
<PAGE>
(h) "Control" shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
(i) "Group" shall have the meaning comprehended by Section 13(d)(3) of
the Exchange Act as in effect on the date of this Agreement.
(j) "Holdings Designee" shall mean a member of the Board of Directors
of the Company who was designated by Holdings for nomination pursuant to this
Agreement, but shall not include Robert W. Fiondella or Martin L. Vaughan, III.
(k) "Holdings Directors" shall mean Robert W. Fiondella and the
Holdings Designee.
(l) "Holdings Ownership Percentage" shall mean, at any time, the
percentage of the Adjusted Outstanding Shares that is beneficially owned in the
aggregate by Holdings, PHL and their Affiliates. Immediately following the
consummation of the transactions contemplated by the Stock Purchase Agreement,
the Holdings Ownership Percentage was 15.6%.
(m) "Holdings Securities" shall mean collectively (i) the 865,042
shares of Common Stock that Holdings acquired pursuant to the terms of the Stock
Purchase Agreement, (ii) the Subordinated Debentures acquired by Holdings and
PHL pursuant to the terms of the Stock Purchase Agreement, (iii) the shares of
Common Stock into which the Subordinated Debentures are convertible pursuant to
the terms of the Subordinated Debentures and (iv) any other shares of Common
Stock that Holdings, PHL and their Affiliates may acquire from time to time,
including without limitation such additional shares of Common Stock that the
Company may issue with respect to such shares pursuant to any stock splits,
stock dividends, recapitalizations, restructurings, reclassifications or similar
transactions.
(n) "HRH Designee" shall mean a member of the Board of Directors of
the Company who was designated by the Continuing Directors for appointment or
nomination pursuant to this Agreement.
(o) "Indenture" shall mean the Indenture, dated May 3, 1999, executed
by the Company and Crestar Bank, as Trustee, in connection with the issuance of
the Subordinated Debentures.
(p) "NYSE Rules" shall mean the rules and regulations of the New York
Stock Exchange as in effect from time to time.
(q) "Person" shall have the meaning set forth in Section 3(a)(9) of
the Exchange Act as in effect on the date of this Agreement, and shall include,
without limitation, corporations, partnerships, limited liability companies and
trusts.
(Page 19 of 58 pages)
<PAGE>
(r) "PXP" shall mean Phoenix Investment Partners, Ltd., a Delaware
corporation, approximately 60% of the common stock of which is currently owned
by Holdings.
(s) "Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated May 3, 1999, executed by the Company, Holdings and PHL in
connection with the Stock Purchase Agreement.
(t) "Subordinated Debentures" shall mean the Company's 5.25%
Convertible Subordinated Debentures (Due 2014), in the aggregate principal
amount of $32,000,000, acquired by Holdings and PHL pursuant to the Stock
Purchase Agreement.
(u) "Standstill Percentage" shall mean, at any time, 20.0% of the
Adjusted Outstanding Shares.
(v) "Transfer" shall mean sell, transfer, assign, pledge, hypothecate,
give away or in any manner dispose of any Common Stock or Subordinated
Debentures.
SECTION 1.2. REPRESENTATIONS AND WARRANTIES OF HOLDINGS. Holdings
represents and warrants to the Company as follows:
(a) Holdings is a corporation duly organized, validly existing and in
good standing under the laws of the State of Connecticut.
(b) Except for the Holdings Securities, neither Holdings nor any of
its Affiliates beneficially owns any Common Stock or any options, warrants or
rights of any nature (including conversion and exchange rights) to acquire
beneficial ownership of any Common Stock.
(c) Holdings has full legal right, power and authority to enter into
and perform this Agreement, and the execution and delivery of this Agreement by
Holdings have been duly authorized by all necessary corporate action on behalf
of Holdings. This Agreement is enforceable against Holdings in accordance with
its terms, subject to bankruptcy, reorganization, insolvency and other similar
laws affecting the enforcement of creditors' rights generally and to general
principles of equity (regardless of whether considered in a proceeding in equity
or an action at law).
(d) The execution, delivery and performance of this Agreement by
Holdings does not and will not conflict with or constitute a violation of or
default under the Charter or Bylaws (or comparable documents) of Holdings, or
any statute, law, regulation, order or decree applicable to Holdings, or any
contract, commitment, agreement, arrangement or restriction of any kind to which
Holdings is a party or by which Holdings is bound, other than such violations as
would not prevent or materially delay the performance by Holdings of its
obligations hereunder or otherwise subject the Company to any material claim or
liability.
SECTION 1.3. REPRESENTATIONS AND WARRANTIES OF PHL. PHL represents and
warrants to the Company as follows:
(Page 20 of 58 pages)
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(a) PHL is a life insurance company duly organized, validly existing
and in good standing under the laws of the State of New York.
(b) PHL has full legal right, power and authority to enter into and
perform this Agreement, and the execution and delivery of this Agreement by PHL
have been duly authorized by all necessary corporate action on behalf of PHL.
This Agreement is enforceable against PHL in accordance with its terms, subject
to bankruptcy, reorganization, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and to general principles of equity
(regardless of whether considered in a proceeding in equity or an action at
law).
(c) The execution, delivery and performance of this Agreement by PHL
does not and will not conflict with or constitute a violation of or default
under the Charter or Bylaws (or comparable documents) of PHL, or any statute,
law, regulation, order or decree applicable to PHL, or any contract, commitment,
agreement, arrangement or restriction of any kind to which PHL is a party or by
which PHL is bound, other than such violations as would not prevent or
materially delay the performance by PHL of its obligations hereunder or
otherwise subject the Company to any material claim or liability.
SECTION 1.4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to Holdings and PHL as follows:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Virginia.
(b) The Company has full legal right, power and authority to enter
into and perform this Agreement, and the execution and delivery of this
Agreement by the Company have been duly authorized by all necessary corporate
action on behalf of the Company. This Agreement is enforceable against the
Company in accordance with its terms, subject to bankruptcy, reorganization,
insolvency and other similar laws affecting the enforcement of creditors' rights
generally and to general principles of equity (regardless of whether considered
in a proceeding in equity or an action at law).
(c) The execution, delivery and performance of this Agreement by the
Company does not and will not conflict with or constitute a violation of or
default under the Charter or Bylaws of the Company, or any statute, law,
regulation, order or decree applicable to the Company, or any contract,
commitment, agreement, arrangement or restriction of any kind to which the
Company is a party or by which the Company is bound, other than such violations
as would not prevent or materially delay the performance by the Company of its
obligations hereunder or otherwise subject Holdings or PHL to any material claim
or liability.
ARTICLE II
BOARD REPRESENTATION
(Page 21 of 58 pages)
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SECTION 2.1. INITIAL BOARD REPRESENTATION. On the later of the Closing
Date or the date of the Company's 1999 annual meeting of shareholders, the
Company will (a) take such action as may be necessary to increase the size of
the Board of Directors from nine (9) to thirteen (13) directors, (b) upon
receipt of executed letter agreements regarding resignation in the form attached
to this Agreement as Exhibit A, fill two (2) of the vacancies created thereby
with Martin L. Vaughan, III and the Holdings Designee in accordance with the
applicable provisions of the Charter and Bylaws of the Company, and (c) fill the
remaining two (2) vacancies created thereby with Robert W. Fiondella and the HRH
Designee in accordance with the applicable provisions of the Company's Charter
and Bylaws. With respect to the four (4) directors appointed to the Board of
Directors pursuant to this Section 2.1, the Company will (i) appoint Robert W.
Fiondella and Martin L. Vaughan, III to the Class whose current term expires in
2000, the Holdings Designee to the Class whose current term expires in 2001 and
the HRH Designee to the Class whose current term expires in 2002, and (ii)
subject to the right of Holdings to designate a new Holdings Designee as a
substitute for the initial Holdings Designee, nominate and recommend each for
election as a director to the respective Class designated above at the next
annual meeting of the Company's shareholders following such appointments;
PROVIDED that, if any such director is not elected by the shareholders of the
Company, the Company shall have no further obligations under this Section 2.1
for the applicable year; and PROVIDED further that the Company shall be under no
obligation to appoint or recommend for election the Holdings Designee or Martin
L. Vaughan, III to the Board of Directors unless and until it has received from
such director an executed letter agreement regarding resignation in the form
attached to this Agreement as Exhibit A. The HRH Designee shall be an executive
officer of the Company at the time of appointment or nomination by the Company.
Any person designated by Holdings to be the Holdings Designee shall be
reasonably acceptable to the Continuing Directors, and, if found unacceptable by
the Continuing Directors (i) the Company shall not be obligated to appoint or
recommend for election any such person to the Board of Directors and (ii)
Holdings shall be entitled to designate a replacement that is reasonably
acceptable to the Continuing Directors.
SECTION 2.2. CONTINUING BOARD REPRESENTATION.
(a) Except as otherwise expressly provided by the provisions of this
Article II, the Company agrees that, during the term of this Agreement, it will
not take or recommend to its shareholders any action that would cause the Board
of Directors to consist of any number of directors other than thirteen (13)
directors; PROVIDED, however, that the Company may increase the number of
directors on the Board of Directors (i) in connection with the consummation of
business combination transactions wherein the Company has agreed to increase the
size of the Board of Directors or (ii) with the consent of Holdings, which will
not be unreasonably withheld; and PROVIDED further, that the Company may reduce
the number of directors on the Board of Directors in the event of the death,
resignation or removal of any director pursuant to the Company's Bylaws or this
Agreement (unless such death, resignation or removal relates to the Holdings
Designee and Holdings has the right under this Article II to designate a
replacement).
(b) Subject to the provisions of Sections 2.2(a), 2.2(c) and 2.5
hereof regarding reductions in the size of the Board of Directors and any
required resignation of the Holdings Designee, during the term of this Agreement
the Company will nominate and recommend the
(Page 22 of 58 pages)
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Holdings Directors for election in the applicable year in which their respective
Class terms expire; PROVIDED that, if any such Holdings Director is not elected
by the shareholders of the Company, the Company shall have no further
obligations under this Section 2.2(b) for the applicable year; and PROVIDED
further that the Company shall be under no obligation to nominate or recommend
for election the Holdings Designee to the Board of Directors unless and until it
has received from such director an executed letter agreement regarding
resignation in the form attached to this Agreement as Exhibit A. Any person
designated by Holdings to be a Holdings Designee shall be reasonably acceptable
to the Continuing Directors, and, if found unacceptable by the Continuing
Directors (i) the Company shall not be obligated to appoint or recommend for
election any such person to the Board of Directors and (ii) Holdings shall be
entitled to designate a replacement that is reasonably acceptable to the
Continuing Directors.
(c) The Company shall have no obligation to nominate or recommend a
Holdings Director for election to the Board of Directors after the termination
of this Agreement pursuant to Article VI hereof or upon the occurrence of the
following events:
(i) With respect to the Holdings Designee, upon the earlier of
(x) the date when the Holdings Ownership Percentage is less than ten
percent (10%), or (y) subject to the right of Holdings to designate a
replacement Holdings Designee pursuant to Section 2.7 hereof, his
death, disability or attainment of the age of seventy (70) years; or
(ii) With respect to Robert W. Fiondella, upon the earlier of
his death, disability or attainment of the age of seventy (70) years;
or
(iii) With respect to each of the Holdings Directors, upon a
final determination by a court of competent jurisdiction that this
Agreement has been breached by PHL, Holdings or their Affiliates.
For purposes of this Section 2.2(c) and Section 2.5(b) below, the term
"disability" shall mean the inability to perform the duties of a director as a
result of a physical or mental incapacity (or combination thereof) for a period
longer than three (3) consecutive months or for more than six (6) months in any
consecutive twelve (12) month period, in each case determined by the written
opinion of such director's regular attending physician.
The Company may take such action as may be necessary to reduce the
size of the Board of Directors upon the occurrence of the events set forth in
(c)(i) and (c)(iii) above or in the event of Mr. Fiondella's death or
disability. Upon attaining the age of seventy (70) years, Mr. Fiondella may
continue to serve as a director for the remainder of his then current term on
the Board of Directors and thereafter the Company may take such action as may be
necessary to reduce the size of the Board of Directors by one director.
(d) Until the earlier to occur of (i) the date on which there are no
Holdings Directors serving on the Board of Directors pursuant to this Agreement
or (ii) the expiration of this Agreement, the Company agrees that it will not
take or recommend to its shareholders any action that would result in any
amendment to the Company's Bylaws in effect on the date hereof that
(Page 23 of 58 pages)
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would impose any qualifications on the eligibility of directors of the Company
to serve on any committee of the Board of Directors, except as may be required
by the NYSE Rules, the rules and regulations under the Internal Revenue Code of
1986, as amended, relating to the qualification of employee stock benefit plans
and the deductibility of compensation paid to executive officers, the rules and
regulations under Section 16(b) of the Exchange Act, including Rule 16b-3
thereunder or any successor rule, and the Company's Bylaws.
SECTION 2.3. COMMITTEE REPRESENTATION. Until the earlier to occur of
(i) the date on which there are no Holdings Directors serving on the Board of
Directors pursuant to this Agreement or (ii) the expiration of this Agreement,
to the extent that, and for so long as, but only insofar as required by
applicable law or NYSE Rules, any of the Holdings Directors is qualified under
the then-current NYSE Rules, the rules and regulations under the Internal
Revenue Code of 1986, as amended, relating to the qualification of employee
stock benefit plans and the deductibility of compensation paid to executive
officers, the rules and regulations under Section 16(b) of the Exchange Act,
including Rule 16b-3 thereunder or any successor rule, the Board of Directors
shall designate, as it deems appropriate, each of the Holdings Directors to
serve on at least one committee of the Board of Directors (whether existing on
the date hereof or formed or constituted after the date hereof).
SECTION 2.4. RESIGNATIONS AT THE REQUEST OF HOLDINGS; VACANCIES.
Holdings shall have the right to request the resignation from the Board of
Directors of the Holdings Designee pursuant to the terms of Exhibit A. In the
event that the Holdings Designee for any reason ceases to serve as a member of
the Board of Directors during his or her term of office and at such time
Holdings would have the right to a designation hereunder if an election for the
resulting vacancy were to be held, Holdings may designate a person to fill such
vacancy (a "Holdings Designee Vacancy"); PROVIDED that, the person so designated
shall be reasonably acceptable to the Continuing Directors. Subject to the
foregoing and Section 2.2 hereof, the Company agrees to (i) appoint Holdings'
designee to the Board of Directors to fill the Holdings Designee Vacancy and to
serve until the next annual meeting of the Company's shareholders and (ii)
nominate and recommend the Holdings' designee for election to the Board of
Directors at the next annual meeting of the Company's shareholders to fill the
remaining term of the class of directors to which such designee was appointed;
PROVIDED further that the Company shall be under no obligation to appoint,
nominate or recommend for election any such designee to fill an Holdings
Designee Vacancy unless and until it has received from such designee an executed
letter agreement regarding resignation in the form attached to this Agreement as
Exhibit A. Other than with respect to the foregoing provisions relating to a
Holdings Designee Vacancy, the Board of Directors shall have the sole and
exclusive right to designate a replacement director in the event of any vacancy
on the Board of Directors.
SECTION 2.5. REQUIRED RESIGNATIONS.
(a) On the earlier of (i) the date when the Holdings Ownership
Percentage is less than ten percent (10%), or (ii) the date of any final
determination by a court of competent jurisdiction that this Agreement has been
breached by PHL, Holdings or their Affiliates, Holdings shall, within five (5)
Business Days, use its best efforts to cause the Holdings Designee to resign
from
(Page 24 of 58 pages)
<PAGE>
the Board of Directors. In the event of any decrease in the Holdings Ownership
Percentage to below such ten percent (10%) threshold, any subsequent increase in
the Holdings Ownership Percentage to or above such ten percent (10%) threshold
shall not entitle Holdings to reinstate, elect or designate any Holdings
Designee to the Board of Directors. If Holdings does not cause the resignation
of the Holdings Designee within such five (5) Business Day period, the Company
may seek such resignation or, in the alternative, the Continuing Directors may
seek the removal of the Holdings Designee.
(b) In the event of the disability or termination of employment of
Martin L. Vaughan, III under the Employment Agreement between the Company and
Martin L. Vaughan, III dated May 3, 1999, the Company may request Martin L.
Vaughan, III to resign from the Board of Directors. If such resignation is not
received by the Company within five (5) Business Days from the date of the
Company's request for resignation, the Company may seek his removal in
accordance with the letter agreement attached hereto as Exhibit A.
(c) Upon any shareholder vote relating to the removal of a director
for failure to resign pursuant to this Section 2.5, Holdings and its Affiliates
shall (i) attend any meeting either in person or by proxy and (ii) vote in favor
of such removal. At such time as a director becomes subject to resignation
pursuant to this Section 2.5, the Board of Directors may amend its Bylaws or
take such other action as it deems appropriate to reduce the number of directors
constituting the Board of Directors proportionately or fill the vacancy caused
by such resignation(s) with its own nominee in accordance with the applicable
provisions of the Charter and Bylaws of the Company.
SECTION 2.6. NO VOTING TRUST. This Agreement does not create or
constitute, and shall not be construed as creating or constituting, a voting
trust agreement under the Virginia Stock Corporation Act or any other applicable
corporation law.
SECTION 2.7. NOTIFICATION OF DESIGNATION. Holdings shall notify the
Company in writing not later than March 1st of the year in which the Holdings
Designee's term on the Board of Directors expires as to the designation of the
person to be nominated for election as the Holdings Designee at the annual
meeting of the Company's shareholders for such year; PROVIDED that, if Holdings
should fail to so notify the Company of its Holdings Designee by such date,
Holdings shall be deemed to have designated the then current Holdings Designee
for nomination to the Board of Directors at the next annual meeting of
shareholders. Holdings shall cause the Holdings Designee to provide promptly
information that may be required under the Exchange Act for inclusion in the
Company's proxy statement for such annual meeting and shall cooperate with the
Company in obtaining any such information, including but not limited to the
prompt completion of any director questionnaires applicable to the directors
generally. Holdings shall have the sole and exclusive right to designate the
Holdings Designee under this Article II and the Company shall not be required to
accept a designation from any Person other than Holdings; PROVIDED, however,
that to the extent that Holdings Transfers all of the Holdings Securities
beneficially owned by Holdings to (i) an Affiliate of Holdings or PHL in
compliance with Section 4.1(g) hereof or (ii) a Person surviving a merger or
formed by a consolidation pursuant to
(Page 25 of 58 pages)
<PAGE>
Section 4.1(h) hereof, such Affiliate or Person shall have the sole and
exclusive right to designate the Holdings Designee under this Article II from
and after the date of such Transfer.
SECTION 2.8. NO DUTY TO DESIGNATE; REDUCTION OF BOARD REPRESENTATION.
Nothing contained in this Article II shall be construed as requiring Holdings to
designate any Holdings Designee or as requiring any Holdings Director, once
elected, to continue to serve in office if such Holdings Director elects to
resign. Until the earlier to occur of (i) the date on which there are no
Holdings Directors serving on the Board of Directors pursuant to this Agreement
or (ii) the expiration of this Agreement, in the event of any vacancy created by
the death, resignation or removal of the Holdings Designee or the failure of
Holdings to designate an Holdings Designee, other than a vacancy created by the
resignation or removal of an Holdings Designee pursuant to Section 2.5 above,
Holdings may notify the Company in writing that it does not intend to designate
a person to fill such vacancy, and the Company thereafter may take such action
as may be necessary either to reduce the size of the Board of Directors by one
director or fill the vacancy with its own designee.
ARTICLE III
STANDSTILL RESTRICTIONS; VOTING MATTERS
SECTION 3.1. STANDSTILL RESTRICTIONS.
(a) During the term of this Agreement, PHL and Holdings covenant and
agree that PHL and Holdings shall not, and shall not permit any of their
Affiliates to, either individually or as part of a Group, directly or
indirectly:
(i) acquire (other than acquisitions resulting from corporate action
taken by the Board of Directors with respect to any pro rata distribution of
shares of Common Stock in connection with any stock split, stock dividend,
recapitalization, reclassification or similar transaction), propose to acquire
(or publicly announce or otherwise disclose an intention to propose to acquire),
offer to acquire, or agree to acquire any Common Stock (or any options,
warrants, rights or other securities exercisable for, or convertible or
exchangeable into, Common Stock, including without limitation the Subordinated
Debentures) if the effect of such acquisition would cause the Holdings Ownership
Percentage to equal or exceed the Standstill Percentage (other than as a result
of any stock purchases or repurchases by the Company); PROVIDED that this
Section 3.1(a)(i) shall not apply to (a) any acquisition of Common Stock or of
options, warrants, rights or other securities exercisable for, or convertible or
exchangeable into, Common Stock granted to any Person, including without
limitation Holdings Directors, pursuant to any benefit plan of the Company or
any of its Affiliates or the exercise, conversion or exchange of any such
option, warrant, right or other security or (b) any acquisition of Common Stock
upon the exercise by PHL, Holdings or their Affiliates of rights pursuant to any
Rights Agreement that may be adopted by the Company for the purpose of deterring
coercive takeover activities with respect to the Company, PROVIDED that all of
the shares of Common Stock so acquired upon the exercise of the rights shall be
subject to all of the terms of this Agreement;
(Page 26 of 58 pages)
<PAGE>
(ii) propose (or publicly announce or otherwise disclose an intention
to propose), solicit, offer, seek or take any action to effect, negotiate with
or provide any confidential information relating to the Company or its business
to any other Person with respect to, any tender or exchange offer, merger,
consolidation, share exchange, business combination, restructuring,
recapitalization or similar transaction involving the Company (other than (x)
any of the foregoing that has been approved by the Board of Directors or (y) in
connection with any tender or exchange offer in which the Board of Directors has
(a) recommended that its shareholders accept such offer or (b) after ten (10)
business days (as defined in Rule 14d-1 under the Exchange Act as in effect on
the date of this Agreement) from the date of commencement of such offer,
expressed no opinion, remained neutral, was unable to take a position or
otherwise did not oppose or recommend that its shareholders reject such offer);
(iii) make, or in any way participate in, any "solicitation" of
"proxies" to vote (as such terms are defined in Rule 14a-1 under the Exchange
Act), solicit any consent or communicate with or seek to advise or influence any
person or entity with respect to the voting of any Common Stock or become a
"participant" in any "election contest" (as such terms are defined or used in
Rule 14a-11 under the Exchange Act) with respect to the Company; PROVIDED that
nothing in this Section 3.1(a)(iii) shall apply to any deemed solicitation of
proxies by the Holdings Directors that may result from such Holdings Directors'
position or status as a director of the Company at the time of any general
solicitation of proxies by the management of the Company;
(iv) form, participate in or join any Person or Group with respect to
any Common Stock or Subordinated Debentures, or otherwise act in concert with
any Person for the purpose of (x) acquiring beneficial ownership of any Common
Stock or Subordinated Debentures or (y) holding or disposing of Common Stock or
Subordinated Debentures for any purpose prohibited by this Section 3.1(a);
(v) except as specifically provided in Section 3.2 below, deposit any
Common Stock or Subordinated Debentures into a voting trust or subject any
Common Stock or Subordinated Debentures to any arrangement or agreement with
respect to the voting thereof;
(vi) initiate, propose or otherwise solicit shareholders for the
approval of any shareholder proposal with respect to the Company as described in
Rule 14a-8 under the Exchange Act, or induce or attempt to induce any other
Person to initiate, propose or otherwise solicit any such shareholder proposal;
(vii) except as specifically provided in Article II of this Agreement,
seek election to or seek to place a representative on the Board of Directors, or
seek the removal of any member of the Board of Directors (other than a Holdings
Director);
(viii) call or seek to have called any meeting of the shareholders of
the Company for any purpose;
(Page 27 of 58 pages)
<PAGE>
(ix) take any other action to seek to Control the management or
policies of the Company;
(x) demand, request or propose to amend, waive or terminate the
provisions of this Section 3.1(a); or
(xi) agree to do any of the foregoing, or advise, assist, encourage or
persuade any third party to take any action with respect to any of the
foregoing.
(b) PHL and Holdings agree that they will notify the Company promptly
if any inquiries or proposals are received by, any information is exchanged with
respect to, or any negotiations or discussions are initiated or continued by or
with, PHL, Holdings or any of their Affiliates regarding any matter described in
Section 3.1(a) above. PHL and the Company shall mutually agree upon an
appropriate response to be made to any such proposals received by PHL, Holdings
or any of their Affiliates.
(c) Nothing contained in this Article III shall be deemed to restrict
the manner in which the Holdings Directors may participate in deliberations or
discussions of the Board of Directors or individual consultations with any
member of the Board of Directors, so long as such actions do not otherwise
violate any provision of Section 3.1(a) above.
(d) Each of Holdings and PHL covenants and agrees that, during the
term of this Agreement and so long as Holdings, PHL or their Affiliates Control
(i) PXP and its subsidiaries (or any successor of PXP and its subsidiaries) or
(ii) any Person registered as an investment company under the Investment Company
Act of 1940, as amended, which might otherwise be deemed to be an "affiliate" of
Holdings or PHL within the meaning of Rule 12b-2 under the Exchange Act (a
"Related Investment Company"), it will not, and will not permit any of its
Affiliates to, cause or permit PXP and its subsidiaries (or any such successor
of PXP and its subsidiaries) or such Related Investment Company, directly or
indirectly, to (i) attempt to exercise Control or influence over the business
and affairs of the Company, (ii) act in concert with Holdings, PHL or their
Affiliates to violate the provisions of this Agreement or (iii) act in concert
with any other Person for the purposes of violating the provisions of this
Agreement or otherwise effecting a change of Control of the Company. Each of
Holdings and PHL also covenants and agrees that, during the term of this
Agreement, it will not direct or influence, or attempt to direct or influence,
the voting or disposition of shares of Common Stock owned of record or
beneficially by PXP and its subsidiaries (or any successor of PXP and its
subsidiaries).
SECTION 3.2. VOTING MATTERS.
(a) During the term of this Agreement, PHL and Holdings will take all
such action as may be required so that the Common Stock beneficially owned and
entitled to be voted by PHL, Holdings and their Affiliates, as a Group, are
voted or caused to be voted (in person or by proxy):
(i) with respect to the Continuing Director's nominees to the Board of
Directors, in accordance with the recommendation of the Board of Directors, or a
nominating or
(Page 28 of 58 pages)
<PAGE>
similar committee of the Board of Directors, if any such committee
exists and makes a recommendation; and
(ii) in accordance with the recommendation of the Board of Directors
with respect to any transaction to be effected with the Company or its
Affiliates in connection with an unsolicited tender or exchange offer, any
"election contest" (as such term is defined or used in Rule 14a-11 under the
Exchange Act as in effect on the date of this Agreement) with respect to the
Board of Directors of the Company or any other attempt to acquire Control of the
Company or the Board of Directors.
(b) For a period of five (5) years from the date of this Agreement,
PHL and Holdings will take all such action as may be required so that the Common
Stock beneficially owned and entitled to be voted by PHL, Holdings and their
Affiliates, as a Group, are voted or caused to be voted (in person or by proxy)
in accordance with the recommendation of the Board of Directors of the Company
with respect to negotiated mergers, acquisitions, divestitures, consolidations,
sale of assets, share exchanges or other similar transactions for which
shareholder approval is sought.
(c) With respect to all matters brought before the Company's
shareholders for a vote not otherwise provided for in Section 2.5(c) or Section
3.2(a) and (b) above, PHL, Holdings and their Affiliates may vote in accordance
with their independent judgment without regard to any request or recommendation
of the Board of Directors.
(d) PHL, Holdings and their Affiliates who beneficially own any of the
Common Stock shall be present, in person or by proxy, at all duly held meetings
of shareholders of the Company so that the Common Stock held by PHL, Holdings
and their Affiliates may be counted for the purposes of determining the presence
of a quorum at such meetings.
ARTICLE IV
TRANSFERS OF HOLDINGS SECURITIES
SECTION 4.1. TRANSFER RESTRICTIONS. During the term of this Agreement,
PHL, Holdings and their Affiliates, shall not, directly or indirectly, Transfer
any of the Holdings Securities beneficially owned by PHL, Holdings and their
Affiliates to any Person or Group without the prior written consent of the
Company (which consent may be withheld in the Company's sole discretion), if (i)
as a result of such Transfer, such Person or Group would have beneficial
ownership of Common Stock representing in the aggregate more than 9.9% of the
issued and outstanding shares of Common Stock, such determination to be based
upon (x) the most recent publicly available information as to the number of
shares of Common Stock beneficially owned by such Person or Group (to the extent
such information is available) or the transferor's actual knowledge, after due
inquiry, as to such beneficial ownership, (y) the number or amount of Holdings
Securities proposed to be Transferred and (z) the number of issued and
outstanding shares of Common Stock on the date of Transfer (as adjusted pursuant
to Rule 13d-3(d)(1)(i) under the Exchange Act), or (ii) prior to such Transfer,
such Person or Group has
(Page 29 of 58 pages)
<PAGE>
beneficial ownership of Common Stock representing in the aggregate more than
9.9% of the issued and outstanding shares of Common Stock, such determination to
be based upon (x) the most recent publicly available information as to the
number of shares of Common Stock beneficially owned by such Person or Group (to
the extent such information is available) or the transferor's actual knowledge,
after due inquiry, as to such beneficial ownership and (y) the number of issued
and outstanding shares of Common Stock on the date of Transfer (as adjusted
pursuant to Rule 13d-3(d)(1)(i) under the Exchange Act). Subject to the
foregoing limitation (except in the case of subparagraphs (g) and (h) of this
Section 4.1) and, with respect to any Transfer of the Subordinated Debentures,
the provisions of the Indenture, PHL, Holdings and their Affiliates may Transfer
the Holdings Securities beneficially owned by PHL, Holdings and their Affiliates
in the following manner:
(a) to the Company or any Affiliate of the Company;
(b) pursuant to an effective registration statement under the
Securities Act as provided in the Registration Rights Agreement; PROVIDED that
such registration statement shall apply only to sales of the Common Stock of the
Company and not to sales of the Subordinated Debentures;
(c) pursuant to Rule 144, Rule 144A, Regulation S or any other
applicable exemption from registration under the Securities Act;
(d) pursuant to a distribution (including any such distribution
pursuant to any liquidation or dissolution) by PHL or Holdings to its
shareholders; PROVIDED that, upon a change in Control of PHL or Holdings
occurring after the date of this Agreement, PHL or Holdings shall not distribute
any of the Holdings Securities to its Affiliates pursuant to this Section 4.1(d)
or otherwise unless PHL or Holdings has received the prior written consent of
the Company (which consent may be withheld in the Company's sole discretion) and
obtained an agreement in writing by the distributee to be bound by the terms and
conditions of this Agreement, such agreement to be substantially in the form of
Exhibit B attached hereto;
(e) pursuant to a merger or consolidation of the Company or pursuant
to a plan of liquidation of the Company, which has been approved by the
affirmative vote of a majority of the members of the Board of Directors then in
office;
(f) pursuant to a tender or exchange offer in which more than 67% of
the issued and outstanding shares of Common Stock have been tendered by Persons
who are not Affiliates of Holdings, PHL or its Affiliates or in which the Board
of Directors has (i) recommended that its shareholders accept such offer or (ii)
after ten (10) business days (as defined in Rule 14d-1 under the Exchange Act as
in effect on the date of this Agreement) from the date of commencement of such
offer, expressed no opinion, remained neutral, was unable to take a position or
otherwise did not oppose or recommend that its shareholders reject such offer;
(Page 30 of 58 pages)
<PAGE>
(g) to any Affiliate of Holdings or PHL; PROVIDED that such Affiliate
has delivered to the Company an agreement in writing by such Affiliate to be
bound by the terms and conditions of this Agreement, such agreement to be
substantially in the form of Exhibit B attached hereto;
(h) pursuant to a merger or consolidation of Holdings or PHL or any
Affiliate to which the Holdings Securities have theretofore been Transferred;
PROVIDED that the Person surviving such merger or formed by such consolidation
shall have delivered to the Company an agreement in writing by such Person to be
bound by the terms and conditions of this Agreement, such agreement to be
substantially in the form of Exhibit B attached hereto.
In connection with any permitted Transfer pursuant to this Section
4.1, the rights of PHL and Holdings under this Agreement shall not transfer to
any transferee(s) of the Holdings Securities, except to the extent provided in
Section 2.7 hereof or upon express assignment of such rights to the extent
permitted by Section 7.3 hereof.
SECTION 4.2. TRANSFERS TO AFFILIATES. In the event of any Transfer of
the Holdings Securities to an Affiliate of PHL or Holdings under Section 4.1
above, or such Affiliate otherwise becomes the beneficial owner of any of the
Holdings Securities, PHL shall use its best efforts to cause such Affiliate to
comply with all of the provisions of this Agreement, including without
limitation this Article IV.
SECTION 4.3. CONFIDENTIAL INFORMATION. In connection with any
permitted Transfer of the Holdings Securities pursuant to this Article IV,
neither PHL, Holdings nor their Affiliates shall disclose any confidential
information relating to the Company or its business to any Person except as
required by applicable law, including without limitation Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder, but only to the extent that any required
disclosure of such confidential information has been preceded by the execution
of a confidentiality agreement by PHL, Holdings or their Affiliates, as the case
may be, and such Person substantially in the form attached hereto as Exhibit C.
Such confidentiality agreement shall be promptly forwarded to the Company for
its execution, which execution by the Company may be subsequent to the permitted
Transfer or disclosure to such Person; PROVIDED that the failure of the Company
to so execute such confidentiality agreement shall in no way be construed to be
a failure on the part of PHL, Holdings or their Affiliates, as the case may be,
to fulfill its obligations under this paragraph or to limit or affect the
validity of such confidentiality agreement as between PHL, Holdings or their
Affiliates, as the case may be, and such Person.
ARTICLE V
FURTHER ASSURANCES
Each party shall execute and deliver such additional instruments and
other documents and shall take such further actions as may be necessary or
appropriate to effectuate, carry out and comply with all of its respective
obligations under this Agreement. Holdings shall deliver to the Company,
concurrently with the filing thereof with the Securities and Exchange
Commission, copies of all Forms 3, 4 and 5, Form 144 and Schedules 13D or 13G,
and each amendment
(Page 31 of 58 pages)
<PAGE>
thereto, filed by Holdings, PHL or its Affiliates pursuant to the Exchange Act.
Holdings and PHL agree to provide any additional information requested by the
Company regarding Transfers of the Holdings Securities for the purpose of
determining compliance with this Agreement. Holdings shall notify the Company
promptly of any proposed Transfer of the Holdings Securities pursuant to
Sections 4.1(g) and (h) hereof. If reasonably requested by the Company at any
time during the term of this Agreement, Holdings agrees to confirm in writing to
the Company the number of Holdings Securities held, beneficially and of record,
by Holdings and its Affiliates as of the latest practicable date.
ARTICLE VI
TERMINATION
Unless earlier terminated by written agreement of the parties hereto,
this Agreement shall terminate on the expiration of ten (10) years from the date
hereof. Any termination of this Agreement as provided herein shall be without
prejudice to the rights of any party arising out of the breach by any other
party of any provisions of this Agreement that occurred prior to the
termination.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
If to the Company, Hilb, Rogal and Hamilton Company
to it at: 4235 Innslake Drive
Glen Allen, Virginia 23060
Telecopier: (804) 747-3138
Attention: Andrew L. Rogal
With a copy to: Williams Mullen Christian & Dobbins
1021 East Cary Street, 16th Floor
Richmond, Virginia 23219
Telecopier: (804) 783-6507
Attention: Theodore L. Chandler, Jr., Esquire
If to Holdings PM Holdings, Inc.
or PHL, One American Row
to them at: Hartford, Connecticut 06115
Telecopier: (860) 403-5182
Attention: Carole A. Masters, Esquire
(Page 32 of 58 pages)
<PAGE>
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
Telecopier: (860) 403-5182
Attention: David W. Searfoss
Executive Vice President and
Chief Financial Officer
With a copy to: Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
Telecopier: (212) 806-6006
Attention: David L. Finkelman, Esquire
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of
receipt), or (b) in the case of any notice or communication sent by mail, three
(3) Business Days after being sent, if sent by registered or certified mail,
with first-class postage prepaid. Each of the parties hereto shall be entitled
to specify a different address by giving notice as aforesaid to each of the
other parties hereto.
SECTION 7.2. AMENDMENTS, WAIVERS, ETC. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated
except by an instrument in writing signed by Holdings, PHL and the Company
following approval thereof by a majority of the Continuing Directors.
SECTION 7.3. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall be binding upon and shall inure to the benefit of
and be enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; PROVIDED that no party may assign
this Agreement without the other party's prior written consent, which consent
will not be required in the event of the Transfer of the Holdings Securities in
accordance with Sections 4.1(g) or 4.1(h) hereof. Notwithstanding the foregoing,
during the term of this Agreement, as long as Holdings, PHL or any of their
Affiliates beneficially own any of the Holdings Securities, no assignment of
this Agreement by Holdings, PHL or any of their Affiliates shall relieve the
assignor from its obligation to fully perform or comply with the terms of this
Agreement and, unless otherwise expressly agreed in writing by the Company, such
assignor shall remain bound by all of the provisions hereof.
SECTION 7.4. ENTIRE AGREEMENT. This Agreement, the Stock Purchase
Agreement, the Indenture and the Registration Rights Agreement embody the entire
agreement and understanding among the parties relating to the subject matter
hereof and supersede all prior
(Page 33 of 58 pages)
<PAGE>
agreements and understandings relating to such subject matter. There are no
covenants by the parties hereto relating to such subject matter other than those
expressly set forth in this Agreement, the Stock Purchase Agreement, the
Indenture and the Registration Rights Agreement.
SECTION 7.5. SPECIFIC PERFORMANCE. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
SECTION 7.6. REMEDIES CUMULATIVE. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise or beginning
of the exercise of any thereof by any party shall not preclude the simultaneous
or later exercise of any other such right, power or remedy by such party.
SECTION 7.7. NO WAIVER. The failure of any party hereto to exercise
any right, power or remedy provided under this Agreement or otherwise available
in respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
SECTION 7.8. NO THIRD PARTY BENEFICIARIES. This Agreement is not
intended to be for the benefit of and shall not be enforceable by any Person who
or which is not a party hereto.
SECTION 7.9. CONSENT TO JURISDICTION. Each party to this Agreement, by
its execution hereof, hereby (i) irrevocably submits, and agrees to cause each
of its Affiliates to submit, to the jurisdiction of the federal courts located
either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, and in the event that such federal courts shall not have subject
matter jurisdiction over the relevant proceeding, then of the state courts
located either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, for the purpose of any Action arising out of or based upon this
Agreement or relating to the subject matter hereof or the transactions
contemplated hereby, (ii) waives, and agrees to cause each of its Affiliates to
waive, to the extent not prohibited by applicable law, and agrees not to assert,
and agrees not to allow any of its Affiliates to assert, by way of motion, as a
defense or otherwise, in any such Action, any claim that it is not subject
personally to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that any such proceeding brought
in one of the above-named courts is improper, or that this Agreement or the
subject matter hereof may not be enforced in or by such court and (iii) hereby
agrees not to commence or to permit any of its Affiliates to commence any Action
arising out of or based upon this Agreement or relating to the subject matter
hereof other than before one of the above-named courts nor to make any motion or
take any other action seeking or intending to cause the transfer or removal of
any such
(Page 34 of 58 pages)
<PAGE>
Action to any court other than one of the above-named courts whether on the
grounds of inconvenient forum or otherwise. Each party hereby consents to
service of process in any such proceeding in any manner permitted by Virginia or
Connecticut law, as the case may be, and agrees that service of process by
registered or certified mail, return receipt requested, at its address specified
pursuant to Section 7.1 above is reasonably calculated to give actual notice.
Notwithstanding anything contained in this Section 7.9 to the contrary with
respect to the parties' forum selection, if an Action is filed against a party
to this Agreement, including its Affiliates, by a Person who or which is not a
party to this Agreement, an Affiliate of a party to this Agreement, or an
assignee thereof (a "Third Party Action"), in a forum other than the federal
district court or a state court located in the City of Richmond, Virginia, or in
the City of Hartford, Connecticut, and such Third Party Action is based upon,
arises from, or implicates rights, obligations or liabilities existing under
this Agreement or acts or omissions pursuant to this Agreement, then the party
to this Agreement, including its Affiliates, joined as a defendant in such Third
Party Action shall have the right to file cross-claims or third-party claims in
the Third Party Action against the other party to this Agreement, including its
Affiliates, and even if not a defendant therein, to intervene in such Third
Party Action with or without also filing cross-claims or third-party claims
against the other party to this Agreement, including its Affiliates.
SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic substantive law of the Commonwealth of
Virginia, without giving effect to any choice or conflict of law provision or
rule that would cause the application of the law of any other jurisdiction.
SECTION 7.11. NAME, CAPTIONS. The name assigned to this Agreement and
the section captions used herein are for convenience of reference only and shall
not affect the interpretation or construction hereof.
SECTION 7.12. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one instrument. Each counterpart may consist
of a number of copies each signed by fewer than all, but together signed by all,
the parties hereto.
SECTION 7.13. EXPENSES. Each of the parties hereto shall bear their
own expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements
reasonably incurred from the other party or parties to such dispute.
SECTION 7.14. SEVERABILITY. In the event that any provision hereof
would, under applicable law, be invalid or unenforceable in any respect, such
provision shall (to the extent permitted under applicable law) be construed by
modifying or limiting it so as to be valid and enforceable to the maximum extent
compatible with, and possible under, applicable law. The provisions hereof are
severable, and in the event any provision hereof should be held invalid or
unenforceable in any respect, it shall not invalidate, render unenforceable or
otherwise affect any other provision hereof.
(Page 35 of 58 pages)
<PAGE>
[SIGNATURES ON NEXT PAGE]
(Page 36 of 58 pages)
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Voting and Standstill Agreement to be executed, as of
the date first above written by their respective officers thereunto duly
authorized.
HILB, ROGAL AND HAMILTON COMPANY
By: /S/ ANDREW L. ROGAL
Name: Andrew L. Rogal
Title: President and Chief Executive Officer
PM HOLDINGS, INC.
By: /S/ DAVID W. SEARFOSS
Name: David W. Searfoss
Title: Vice President/Chief Financial Officer
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By: /S/ DAVID W. SEARFOSS
Name: David W. Searfoss
Title: Executive Vice President and
Chief Financial Officer
(Page 37 of 58 pages)
<PAGE>
Exhibit A
FORM OF RESIGNATION AGREEMENT
Hilb, Rogal and Hamilton Company
4235 Innslake Drive
Glen Allen, Virginia 23060
Ladies and Gentlemen:
I hereby acknowledge that my position on the Board of Directors of
Hilb, Rogal and Hamilton Company ("the Company") is subject to the provisions of
a Voting and Standstill Agreement (the "Agreement"), dated May 3, 1999, between
the Company, PM Holdings, Inc., a Connecticut corporation ("Holdings"), and
Phoenix Home Life Mutual Insurance Company, a New York life insurance company
("PHL"). Accordingly, I hereby agree to resign immediately from such Board of
Directors under the terms of Article II of the Agreement in the event that the
Company or Holdings (with respect to the Holdings Designee) requests such
resignation in accordance with such terms. I understand that, if I do not resign
as requested within five (5) Business Days (as defined in the Agreement), the
Company may seek specific performance of this letter agreement through court
proceedings or otherwise may seek to remove me from office. I agree that any
failure to resign upon request shall be deemed to be "cause" for my removal from
the Board of Directors.
Date: May 3, 1999
------------------------------
Name
Agreed to and Accepted:
Hilb, Rogal and Hamilton Company
By:___________________________
Name:
Title:
(Page 38 of 58 pages)
<PAGE>
Exhibit B
FORM OF ASSUMPTION AGREEMENT
Hilb, Rogal and Hamilton Company
4235 Innslake Drive
Glen Allen, Virginia 23060
Ladies and Gentlemen:
Pursuant to Section 4.1[(d), (g) or (h)] of the Voting and Standstill
Agreement (the "Agreement"), dated May 3, 1999, between Hilb, Rogal and Hamilton
Company ("the Company"), PM Holdings, Inc., a Connecticut corporation
("Holdings"), and Phoenix Home Life Mutual Insurance Company, a New York life
insurance company ("PHL"), the undersigned hereby agrees to be bound by all of
the terms and conditions of the Agreement to the same extent as if it were a
party thereto and assumes all of the obligations of [Holdings, PHL or their
Affiliate] under the Agreement with respect to the Holdings Securities (as
defined in the Agreement).
[HOLDINGS, PHL OR AFFILIATE]
Date: _________________ By:
Name:
Title:
[TRANSFEREE]
Date: _________________ By:
Name:
Title:
Agreed to and Accepted:
Hilb, Rogal and Hamilton Company
By:___________________________
Name:
Title:
(Page 39 of 58 pages)
<PAGE>
Exhibit C
FORM OF CONFIDENTIALITY AGREEMENT
________ __, 19__
CONFIDENTIAL
[Name]
[Address]
Re: CONFIDENTIALITY AGREEMENT
Ladies and Gentlemen:
In connection with our [soliciting, offering, seeking to effect or
negotiating] with you with respect to the [sale, transfer, assignment, pledge,
etc.] of [shares of Common Stock, without par value, or 5.25% Convertible
Subordinated Debentures], of Hilb, Rogal and Hamilton Company (the "Company"),
we are prepared to make available to you certain confidential information
relating to the Company and its business (the "Confidential Information"). As a
condition to your being furnished the Confidential Information, you agree to
comply with the terms and conditions of this letter agreement (this
"Agreement").
For the purposes of this Agreement, the term "Representatives" shall
mean your employees, agents and advisors and the directors, officers, employees
and agents of any of your advisors. The term "Third Party" shall be broadly
interpreted to include without limitation any corporation, company, group,
partnership, other entity or individual. The term "Confidential Information"
shall not include information that (i) was or becomes generally available to the
public other than as a result of a disclosure by you or your Representatives, or
(ii) was or becomes available to you on a non-confidential basis from a source
other than the Company or its advisors.
You hereby agree to treat the Confidential Information as confidential
and, unless required by applicable law, you shall not, and shall direct your
Representatives not to, use in any way or to disclose, directly or indirectly,
the Confidential Information to any Third Party without the written consent of
the Company.
It is understood and agreed that money damages would not be a
sufficient remedy for any breach of this Agreement by you and that the Company
shall be entitled to specific performance and injunctive or other equitable
relief as a remedy for any such breach, and you further agree to waive any
requirement for the securing or posting of any bond in connection with such
remedy.
(Page 40 of 58 pages)
<PAGE>
Such remedy shall not be deemed to be the exclusive remedy for your breach of
this Agreement, but shall be in addition to all other remedies available at law
or equity to the Company.
If you are in agreement with the foregoing, please so indicate by
signing and returning one copy of this Agreement, whereupon it will constitute
our agreement with respect to the subject matter hereof.
Very truly yours,
[Name]
Officer of [Holdings or Affiliate]
CONFIRMED AND AGREED as of
the date first written above:
[NAME]
By:_________________________________
Name:
Title:
Hilb, Rogal and Hamilton Company
By:_________________________________
Name:
Title:
(Page 41 of 58 pages)
Exhibit 3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of May 3,
1999, is made between Hilb, Rogal and Hamilton Company, a Virginia corporation
(the "Company"), PM Holdings, Inc., a Connecticut corporation ("Holdings"), and
Phoenix Home Life Mutual Insurance Company, a New York life insurance company
("PHL").
W I T N E S S E T H:
WHEREAS, the Company, Holdings, PHL and Martin L. Vaughan, III entered into
a Stock Purchase Agreement dated March 29, 1999 (the "Stock Purchase
Agreement"), under which the Company agreed to acquire from Holdings and Martin
L. Vaughan, III all of the issued and outstanding shares of the capital stock of
American Phoenix Corporation, a Connecticut corporation ("APC"); and
WHEREAS, pursuant to the Stock Purchase Agreement, (i) Holdings acquired
865,042 shares of the Company's Common Stock (as hereinafter defined) and
$22,000,000 principal amount of the Company's Subordinated Debentures (as
hereinafter defined), and (ii) PHL acquired $10,000,000 principal amount of the
Company's Subordinated Debentures; and
WHEREAS, the Subordinated Debentures acquired by Holdings and PHL pursuant
to the Stock Purchase Agreement are convertible into shares of Common Stock
pursuant to the terms of the Subordinated Debentures; and
WHEREAS, the Company has agreed to enter into this Agreement to provide
certain registration rights to Holdings in order to facilitate the distribution
of the shares of Common Stock acquired by Holdings pursuant to the Stock
Purchase Agreement and any shares of Common Stock that may be acquired by
Holdings, PHL or their Affiliates upon conversion of the Subordinated
Debentures.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and in the Stock Purchase Agreement, the Company, Holdings and PHL
hereby agree as follows:
ARTICLE I
DEFINITIONS
Except as otherwise specified herein, capitalized terms used in this
Agreement shall have the respective meanings assigned to such terms in the Stock
Purchase Agreement. For purposes of this Agreement, the following terms have the
following meanings:
(Page 42 of 58 pages)
<PAGE>
(a) "Affiliate" shall mean, as to any specified Person, each other Person
directly or indirectly controlling, controlled by or under direct or indirect
common control with that specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, or by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. Notwithstanding the foregoing, the following shall not be deemed to
be an Affiliate of Holdings or PHL for purposes of this Agreement: (i) Phoenix
Investment Partners, Ltd., a Delaware corporation, and its subsidiaries (or any
successor thereof), and (ii) any Person registered as an investment company
under the Investment Company Act of 1940, as amended.
(b) "Blue Sky Filing" shall mean a filing made in connection with the
registration or qualification of the Registrable Shares under a particular
state's securities or blue sky laws.
(c) "Common Shares" shall mean the 865,042 shares of Common Stock that
Holdings acquired from the Company pursuant to the Stock Purchase Agreement and
such additional shares of Common Stock that the Company may issue with respect
to such shares pursuant to any stock splits, stock dividends, recapitalizations,
restructurings, reclassifications or similar transactions.
(d) "Common Stock" shall mean the Common Stock, without par value, of the
Company.
(e) "Effective Period," with respect to the Registrable Shares, shall mean
the period from the date of effectiveness of the Registration Statement relating
to the Registrable Shares under Section 2.3 below to the date that is two years
from the date of such effectiveness; PROVIDED, that, for each Holdback Period
required by the Company under Article III of this Agreement and for each
Discontinuance Period (as defined in Section 2.5(k) below), the Effective Period
shall be extended by the number of days during which the applicable Holdback
Period or Discontinuance Period was in effect.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "NYSE" shall mean the New York Stock Exchange.
(h) "Person" shall have the meaning set forth in Section 3(a)(9) of the
Exchange Act as in effect on the date of this Agreement, and shall include,
without limitation, corporations, partnerships, limited liability companies and
trusts.
(i) "Prospectus" shall mean the prospectus included in a Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement, and
all other amendments and supplements to such prospectus, including
post-effective amendments,
(Page 43 of 58 pages)
<PAGE>
and all material incorporated by reference or deemed to be incorporated by
reference in any such prospectus.
(j) "Registrable Shares" shall mean collectively (i) the Common Shares and
(ii) the aggregate number of shares of Common Stock into which the Subordinated
Debentures are convertible pursuant to the terms of the Subordinated Debentures
and such additional shares of Common Stock that the Company may issue with
respect to such shares pursuant to any stock splits, stock dividends,
recapitalizations, restructurings, reclassifications or similar transactions.
(k) "Registration Statement" shall mean a registration statement of the
Company under the Securities Act that covers the resale of the Registrable
Shares pursuant to the terms of this Agreement, including the related
Prospectus, all amendments and supplements to such registration statement,
including pre- and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
(l) "SEC" shall mean the Securities and Exchange Commission.
(m) "Securities Act" shall mean the Securities Act of 1933, as amended.
(n) "Subordinated Debentures" shall mean the Company's 5.25% Convertible
Subordinated Debentures (Due 2014), in the aggregate principal amount of
$32,000,000.
(o) "Voting and Standstill Agreement" shall mean the Voting and Standstill
Agreement, dated May 3, 1999, executed by the Company, Holdings and PHL in
connection with the Stock Purchase Agreement.
ARTICLE II
REGISTRATION OF SECURITIES
SECTION 2.1. SECURITIES SUBJECT TO THIS AGREEMENT. The securities entitled
to the benefits of this Agreement are the Registrable Shares. For the purposes
of this Agreement, one or more of the Registrable Shares will no longer be
subject to this Agreement when and to the extent that (i) a Registration
Statement covering such Registrable Shares has been declared effective under the
Securities Act and such Registrable Shares have been sold pursuant to such
effective Registration Statement, (ii) such Registrable Shares are distributed
to the public pursuant to Rule 144 under the Securities Act, (iii) such
Registrable Shares shall have been otherwise transferred or disposed of, new
certificates therefor not bearing a legend restricting further transfer or
disposition shall have been delivered by the Company and, at such time,
subsequent transfer or disposition of such securities shall not require
registration or qualification of such Registrable Shares under the Securities
Act or any similar state law then in force, or (iv) such Registrable Shares have
ceased to be outstanding.
(Page 44 of 58 pages)
<PAGE>
SECTION 2.2. REGISTRATION RIGHTS. Holdings may exercise the demand and
piggy-back registration rights to which it is entitled under this Agreement only
at a time at which the Holdings Ownership Percentage (as such term is defined in
the Voting and Standstill Agreement) exceeds 10% or Holdings is otherwise deemed
by the Company to be an Affiliate of the Company. Holdings may not exercise any
such rights after May 3, 2014.
SECTION 2.3. DEMAND REGISTRATION.
(a) Holdings shall have the right, subject to Section 2.2 above, to make
one written request to the Company for the registration of all of the
Registrable Shares subject to this Agreement that are beneficially owned by
Holdings, PHL and their Affiliates at the time of the request. The Company shall
not be obligated to register any of the Registrable Shares held by an Affiliate
of Holdings or PHL unless and until such Affiliate shall have agreed in writing
to indemnify the Company pursuant to Section 4.2 of this Agreement.
(b) Upon the receipt of the request described in Section 2.3(a) above, the
Company shall (i) within 45 days of such request, file a Registration Statement
with the SEC under the Securities Act to register the resale of the Registrable
Shares as set forth in such request and (ii) use its best efforts to cause such
Registration Statement to become effective as soon as practicable after the
filing thereof with the SEC. On or before the Closing Date, the Company shall
have listed on the NYSE, on a when issued basis, the Registrable Shares.
(c) The Company shall use its best efforts to maintain the effectiveness of
the Registration Statement relating to the Registrable Shares, and maintain the
listing of such shares, as applicable, on the NYSE or any exchange or automated
interdealer quotation system on which the Common Stock is then listed or quoted,
during the Effective Period.
(d) If the Company is required to effect a Registration Statement pursuant
to this Section 2.3, the Company may, in its discretion, include securities,
other than Registrable Shares, among the securities covered by such
registration.
(e) The Company shall not be required to effect more than one registration
under this Section 2.3.
SECTION 2.4 PIGGY-BACK REGISTRATION.
(a) In the event that the Company shall propose to file a registration
statement under the Securities Act relating to a public offering by or through
one or more underwriters of shares of Common Stock for the Company's own account
or for the account of any holder of shares of Common Stock other than Holdings,
PHL or any of their Affiliates (a "Selling Shareholder") and on a form and in a
manner that would permit the registration of any of the Registrable Shares for
sale to the public under the Securities Act, the Company shall (i) give written
notice to Holdings of its intention to do so and of the right of Holdings,
subject to Section 2.2 above, to have any or all of the Registrable Shares
subject to this Agreement that are beneficially owned by Holdings, PHL and their
Affiliates at the time of such notice included among the securities to be
covered by
(Page 45 of 58 pages)
<PAGE>
such registration statement and (ii) at the written request of Holdings given to
the Company within 20 days after the Company provides such notice, use its best
efforts to include among the securities covered by such registration statement
the number of such Registrable Shares that Holdings shall have requested be so
included (subject, however, to reduction in accordance with Section 2.4(b)
below). None of Holdings, PHL and their Affiliates, however, shall be entitled
to participate in any offering pursuant to this Section 2.4(a) unless and until
Holdings, PHL, if participating, and any participating Affiliate have entered
into an underwriting or other agreement with such underwriter or underwriters
for such offering in such customary form as such underwriter or underwriters
shall reasonably determine.
(b) Holdings may include Registrable Shares in any registration statement
relating to any offering pursuant to Section 2.4(a) above to the extent that the
inclusion of such shares shall not reduce the number of shares of Common Stock
to be offered and sold by the Company or the Selling Shareholder, as the case
may be. If the lead managing underwriter selected by the Company for any such
offering determines that marketing factors require a limitation on the number of
Registrable Shares to be offered and sold by Holdings, PHL and their Affiliates
in such offering, there shall be included in such offering only that number of
Registrable Shares, if any, that such lead managing underwriter reasonably and
in good faith believes will not jeopardize the success of the offering of all
shares of Common Stock that the Company or the Selling Shareholder, as the case
may be, desires to sell for its own account. In such event and provided that the
lead managing underwriter has so notified the Company in writing, the shares of
Common Stock to be included in such offering shall consist of (i) the securities
that the Company or the Selling Shareholder, as the case may be, proposes to
sell, and (ii) the number, if any, of Registrable Shares requested to be
included in such registration that, in the opinion of such lead managing
underwriter, can be sold without jeopardizing the success of the offering of the
shares of Common Stock that the Company or the Selling Shareholder, as the case
may be, desires to sell for its own account.
(c) Nothing in this Section 2.4 shall create any liability on the part of
the Company to Holdings, PHL or any of their Affiliates if the Company for any
reason should decide not to file a registration statement proposed to be filed
under Section 2.4(a) above or to withdraw such registration statement subsequent
to its filing, regardless of any action whatsoever that Holdings may have taken,
whether as a result of the issuance by the Company of any notice hereunder or
otherwise.
SECTION 2.5. REGISTRATION PROCEDURES. In order to comply with the
requirements of Sections 2.3 and 2.4 above, the Company will:
(a) prepare and file with the SEC a Registration Statement covering the
Registrable Shares on any form or forms for which the Company then qualifies and
that counsel for the Company shall deem appropriate, and which form shall be
available for the sale of the Registrable Shares
(i) in connection with the registration of the Registrable Shares
pursuant to Section 2.3 above, on a delayed or continuous basis in
accordance with Rule 415 under the Securities Act (or any successor rule);
PROVIDED, however, that the methods of distribution permitted by such
Registration Statement shall not include underwritten offerings; or
(ii) in connection with a registration that includes any Registrable
Shares pursuant to Section 2.4 above, in accordance with the intended
methods of distribution thereof.
(b) prepare and file with the SEC pre- and post-effective amendments to the
Registration Statement and such amendments and supplements to the Prospectus
used in connection therewith as may be required by the rules, regulations or
instructions applicable to the registration form utilized by the Company, or by
the Securities Act or the rules and regulations thereunder, and cause the
Prospectus as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and otherwise comply with the provisions of the Securities Act
with respect to the disposition of the Registrable Shares;
(c) furnish to Holdings such number of copies of the Registration Statement
and each pre- and post-effective amendment thereto, any Prospectus or Prospectus
supplement and each amendment thereto and such other documents as Holdings may
reasonably request in order to facilitate the transfer or disposition of the
Registrable Shares by Holdings;
(d) make such Blue Sky Filings, if necessary, to register or qualify the
Registrable Shares under such state securities or blue sky laws of such
jurisdictions as Holdings may reasonably request, and do any and all other acts
that may be reasonably necessary or advisable to enable Holdings to consummate
the transfer or disposition in such jurisdictions of the Registrable Shares,
except that the Company shall not for any such purpose be required (i) to
qualify generally to do business as a foreign corporation in any jurisdiction
where, but for the requirements of this Section 2.5(d), it would not be
obligated to be so qualified, (ii) to subject itself to taxation in any such
jurisdiction, or (iii) to consent to general service of process in any such
jurisdiction;
(e) notify Holdings, at any time when a Prospectus is required to be
delivered under the Securities Act with respect to one or more of the
Registrable Shares, of the Company's becoming aware that a Prospectus included
in the Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and prepare and furnish to Holdings a reasonable number of
copies of an amendment to such Prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such Registrable Shares, such
Prospectus shall not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(f) notify Holdings
(Page 47 of 58 pages)
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(1) when any Prospectus or Prospectus supplement or pre- or
post-effective amendment has been filed, and, with respect to the Registration
Statement or any post-effective amendment, when such Registration Statement or
post-effective amendment has become effective;
(2) of any request by the SEC or any other applicable regulatory
authority for amendments or supplements to the Registration Statement or
Prospectus or for additional information;
(3) of the issuance by the SEC or any other applicable regulatory
authority of any stop order of which the Company or its counsel is aware
suspending the effectiveness of the Registration Statement or any order
preventing the use of a related Prospectus, or the initiation or any threats of
any proceedings for such purpose; and
(4) of the receipt by the Company of any written notification of the
suspension of the registration or qualification of any of the Registrable Shares
for sale in any jurisdiction, or the initiation or any threats of any proceeding
for such purpose;
(g) make generally available to the Company's shareholders, as soon as
reasonably practicable, an earnings statement that shall satisfy the provisions
of Section 11(a) of the Securities Act, provided that the Company shall be
deemed to have complied with this Section 2.5(g) if it has complied with Rule
158 under the Securities Act;
(h) use its best efforts to provide a transfer agent and registrar for the
Registrable Shares covered by the Registration Statement no later than the
effective date of such Registration Statement;
(i) cooperate with Holdings to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing the
securities to be sold under the Registration Statement, and enable such
securities to be in such denominations and registered in such names as Holdings
may reasonably request;
(j) provide Holdings and any attorney, accountant or other agent retained
by Holdings (collectively, the "Inspectors") with reasonable access during
normal business hours to appropriate officers of the Company and its
subsidiaries to ask questions and to obtain information that any such Inspector
may reasonably request and make available for inspection all financial and other
records, pertinent corporate documents and properties of any of the Company and
its subsidiaries (collectively, the "Records"), as shall be reasonably necessary
to enable them to exercise their due diligence responsibility; PROVIDED,
however, that the Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors in writing are confidential
shall not be disclosed to any Inspector unless such Inspector signs or is
otherwise bound by a confidentiality agreement reasonably satisfactory to the
Company; and
(k) in the event of the issuance of any stop order of which the Company or
its counsel is aware suspending the effectiveness of the Registration Statement
or any order suspending or
(Page 48 of 58 pages)
<PAGE>
preventing the use of any related Prospectus or suspending the registration or
qualification of any Registrable Shares for sale in any jurisdiction, the
Company promptly will use its best efforts to obtain its withdrawal.
Holdings shall furnish to the Company in writing such information regarding
Holdings, PHL and their Affiliates as is required to be disclosed pursuant to
the Securities Act. Holdings agrees to notify the Company promptly of any
inaccuracy or change in information previously furnished by Holdings to the
Company or of the happening of any event in either case as a result of which the
Registration Statement, a Prospectus, or any amendment or supplement thereto
contains an untrue statement of a material fact regarding Holdings, PHL or any
of their Affiliates or omits to state a material fact regarding Holdings, PHL or
any of their Affiliates required to be stated therein or necessary to make the
statements therein not misleading and to furnish promptly to the Company any
additional information required to correct and update any previously furnished
information or required so that such Registration Statement, Prospectus, or
amendment or supplement, shall not contain, with respect to Holdings, PHL or any
of their Affiliates, an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
Holdings agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Sections 2.5(e) or (k) above,
Holdings will forthwith discontinue (and cause any Affiliate, and PHL and any of
its Affiliates, to discontinue) the transfer or disposition of any Registrable
Shares pursuant to the Prospectus relating to the Registration Statement
covering such Registrable Shares until Holdings' receipt of the copies of the
amended or supplemented Prospectus contemplated by Section 2.5(e) or the
withdrawal of any order contemplated by Section 2.5(k), and, if so directed by
the Company, Holdings will deliver to the Company all copies, other than
permanent file copies then in Holdings' possession, of the Prospectus covering
such Registrable Shares at the time of receipt of such notice. The period during
which any discontinuance under this paragraph is in effect is referred to herein
as a "Discontinuance Period."
SECTION 2.6. REGISTRATION EXPENSES.
(a) In connection with the registration of the Registrable Shares pursuant
to Section 2.3 above, the Company will pay any and all out-of-pocket expenses
incident to the Company's performance of or compliance with this Agreement,
including, without limitation, (i) all registration and filing fees with the SEC
relating to the shares of Common Stock into which the Subordinated Debentures
are convertible pursuant to the terms of the Subordinated Debentures, (ii) all
fees and expenses of complying with state securities or blue sky laws, (iii) all
printing and delivery expenses, (iv) all fees and expenses incurred in
connection with the listing of the Registrable Shares on the NYSE, or any other
exchange or automated interdealer quotation system as then applicable, (v) the
fees and disbursements of the Company's counsel and of its independent public
accountants, and (vi) the fees and expenses of any special experts retained by
the Company in connection with the requested registration, and Holdings shall
pay any and all out-of-pocket expenses incurred by Holdings, including, without
limitation, (x) all registration and filing fees with the SEC relating to the
Common Shares, (y) all fees or disbursements of
(Page 49 of 58 pages)
<PAGE>
counsel to Holdings and (z) all brokerage commissions, fees and expenses and all
transfer taxes and documentary stamp taxes, if any, relating to the sale or
disposition of the Registrable Shares.
(b) In connection with a registration that includes any Registrable Shares
pursuant to Section 2.4 above, Holdings will pay any and all out-of-pocket
expenses attributable to such Registrable Shares, including, without limitation,
(i) all registration and filing fees with the SEC and the National Association
of Securities Dealers, Inc., (ii) all fees and expenses associated with
qualifying the Registrable Shares with state securities or blue sky laws, (iii)
any fees or disbursements of counsel to Holdings, and (iv) any brokerage
commissions and fees, underwriting discounts and commissions, transfer taxes and
documentary stamp taxes, if any, relating to the sale or disposition of the
Registrable Shares.
ARTICLE III
HOLDBACK PERIOD
If one or more underwritten public offerings of shares of Common Stock
(other than the Registrable Shares) by the Company occur during the Effective
Period, then, in connection with each such public offering, the Company may
require Holdings, PHL and their Affiliates to refrain from, and Holdings, PHL
and their Affiliates will refrain from, selling any of the Registrable Shares
for a period determined by the Company but not to exceed 120 days (or such
lesser period as the Company may require its officers and directors or other
holders of shares of Common Stock to so refrain) (each such period referred to
as a "Holdback Period") so long as the Company delivers written notice to
Holdings of the Company's requirement of a Holdback Period and the length of
such Holdback Period prior to commencement of the Holdback Period.
ARTICLE IV
INDEMNIFICATION; CONTRIBUTION
SECTION 4.1. INDEMNIFICATION BY THE COMPANY. The Company will, and hereby
agrees to, indemnify and hold harmless, to the fullest extent permitted by law,
and, subject to Section 4.3 below, defend Holdings, PHL, each of their
Affiliates (i) to whom Holdings or PHL transferred Registrable Shares in a
manner permitted by the Voting and Standstill Agreement and (ii) who is listed
as a selling shareholder in the Prospectus, and their respective officers,
directors, employees, agents, representatives and each other Person, if any, who
controls Holdings within the meaning of the Securities Act (each, a "Company
Indemnitee"), against any and all losses, claims, damages, liabilities and
expenses, joint or several, to which they or any of them may become subject
under the Securities Act or any other statute or common law, including any
amount paid in settlement of any action or proceeding, commenced or threatened,
and to reimburse them for any reasonable legal or other expenses incurred by
them in connection with investigating any claims and defending any actions
(collectively, "Losses"), with respect to sales of Registrable Shares under the
Registration Statement, insofar as any Losses arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or any pre- or post-effective amendment thereto or in
any Blue Sky
(Page 50 of 58 pages)
<PAGE>
Filing, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (ii) any untrue statement or alleged untrue statement of a
material fact contained in the Prospectus or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED, however,
that the indemnification agreement contained herein shall not (i) apply to
Losses arising out of, or based upon, any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by such Company Indemnitee from time to time
specifically for use in the Registration Statement, the Prospectus or any such
amendment or supplement thereto or any Blue Sky Filing or (ii) inure to the
benefit of any Person, to the extent that any such Loss arises out of such
Person's failure to send or give a copy of the Prospectus, as the same may be
then supplemented or amended, to the Person asserting an untrue statement or
alleged untrue statement, or omission or alleged omission, at or prior to the
written confirmation of the sale of the Registrable Shares to such Person if
such statement or omission was corrected in the Prospectus or any amendment or
supplement thereto prior to the written confirmation of the sale. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Company Indemnitee or any other Person and shall survive the
transfer of such securities by such Company Indemnitee.
SECTION 4.2. INDEMNIFICATION BY HOLDINGS. Holdings and PHL will, and hereby
agree to, indemnify and hold harmless and, subject to Section 4.3 below, defend
(in the same manner and to the same extent as set forth in Section 4.1 above),
and cause each of their Affiliates who is listed as a selling shareholder in the
Prospectus to so indemnify, hold harmless and defend, the Company and the
Company's officers, directors, employees, agents, representatives and each other
Person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any such untrue statement or alleged untrue statement in,
or any such omission or alleged omission from, the Registration Statement, any
Prospectus, or any amendment or supplement thereto, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by Holdings, PHL or any of their Affiliates from time
to time specifically for use in the Registration Statement, the Prospectus, and
any such amendment or supplement thereto. Such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or any other Person and shall survive the
transfer of such securities by Holdings and PHL. The liability of an
indemnifying party under this Section 4.2 shall be limited to the amount of the
net proceeds received by such indemnifying party upon the resale of any
Registrable Shares pursuant to the Registration Statement creating such
liability.
SECTION 4.3. NOTICES OF CLAIMS. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Sections 4.1 and 4.2 above, such indemnified party will
give, if a claim in respect thereof is to be made against an indemnifying party,
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Article IV, except
to the extent
(Page 51 of 58 pages)
<PAGE>
that the indemnifying party is actually prejudiced in any material respect by
such failure to give notice. In case any such action is brought against an
indemnified party, the indemnifying party shall be entitled to participate in
and, unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist in respect
of such claim, to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
reasonable investigation. If the indemnifying party advises an indemnified party
that it will contest a claim for indemnification hereunder, or fails, within 30
days of receipt of any indemnification notice to notify, in writing, such Person
of its election to defend, settle or compromise, at its sole cost and expense,
any action, proceeding or claim (or discontinues its defense at any time after
it commences such defense), then the indemnified party may, at its option,
defend, settle or otherwise compromise or pay such action or claim in each case
at the indemnifying party's expense. In any event, unless and until the
indemnifying party elects in writing to assume and does so assume the defense of
any such claim, proceeding or action, the indemnified party's reasonable costs
and expenses arising out of the defense, settlement or compromise of any such
action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party that relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
informed at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the indemnified party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense, except that the indemnifying party shall be liable for such reasonable
costs and expenses if, in such indemnified party's reasonable judgment, a
conflict of interest between such indemnified and indemnifying parties may exist
as described above. If the indemnifying party does not assume such defense, the
indemnified party shall keep the indemnifying party informed at all times as to
the status of the defense; PROVIDED, however, that the failure to keep the
indemnifying party so informed shall not affect the obligations of the
indemnifying party hereunder. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its written
consent; PROVIDED, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the written consent of the indemnified party, consent to entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
general written release from all liability with respect to such claim or
litigation.
SECTION 4.4. INDEMNIFICATION PAYMENTS. The indemnification required by this
Article IV shall be made by periodic payments of the amount thereof during the
course of the investigation or defense as and when bills are received or Losses
are incurred, subject to the receipt of such documentary support therefor as the
indemnifying party may reasonably request.
(Page 52 of 58 pages)
<PAGE>
SECTION 4.5. CONTRIBUTION. If the indemnification provided for in this
Article IV is unavailable to or insufficient to hold harmless a party otherwise
entitled to be indemnified thereunder in respect to any Losses referred to
therein, then the parties required to provide indemnification under this Article
IV shall contribute to the amount paid or payable by such party as a result of
Losses in such proportion as is appropriate to reflect the relative fault of
each such indemnifying party in connection with the statements or omissions that
resulted in such Losses. The relative fault of each indemnifying party shall be
determined by reference to whether the untrue statement or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, Holdings and PHL
agree that it would not be just and equitable if contributions pursuant to this
Section 4.5 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to above in this Section 4.5. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
SECTION 4.6. OTHER RIGHTS AND LIABILITIES. The indemnity and contribution
agreements contained herein shall be in addition to (i) any cause of action or
similar right of the indemnified party against the indemnifying party or others
and (ii) any liabilities the indemnifying party may be subject to pursuant to
the law.
ARTICLE V
RULE 144 REPRESENTATIONS
The Company covenants that, for the time that the Holdings Ownership
Percentage (as such term is defined in the Voting and Standstill Agreement)
exceeds 10% or Holdings is otherwise deemed by the Company to be an Affiliate of
the Company, it will use its best efforts to:
(i) file with the SEC all reports and other documents required to be
filed by the Company under the Exchange Act and the rules and regulations
promulgated thereunder;
(ii) if not required to file such reports and documents referred to in
subsection (i) above, keep publicly available certain information regarding
the Company, as contemplated by Rule 144(c)(2) under the Securities Act;
and
(iii) take all other actions reasonably necessary to enable Holdings,
PHL and their Affiliates to sell the Registrable Shares without
registration under the Securities Act within the limitation of the
exemption provided by Rule 144 under the Securities Act.
(Page 53 of 58 pages)
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ARTICLE VI
MISCELLANEOUS
SECTION 6.1. NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if in writing (including
telecopy or similar teletransmission), addressed as follows:
If to the Company, Hilb, Rogal and Hamilton Company
to it at: 4235 Innslake Drive
Glen Allen, Virginia 23060
Telecopier: (804) 747-3138
Attention: Andrew L. Rogal
With a copy to: Williams Mullen Christian & Dobbins
1021 East Cary Street, 16th Floor
Richmond, Virginia 23219
Telecopier: (804) 783-6507
Attention: Theodore L. Chandler, Jr., Esquire
If to Holdings PM Holdings, Inc.
or PHL, to them at: One American Row
Hartford, Connecticut 06115
Telecopier: (860) 403-5182
Attention: Carole A. Masters, Esquire
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, Connecticut 06115
Telecopier: (860) 403-5182
Attention: David W. Searfoss
Executive Vice President and
Chief Financial Officer
With a copy to: Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, New York 10038-4982
Telecopier: (212) 806-6006
Attention: David L. Finkelman, Esquire
(Page 54 of 58 pages)
<PAGE>
Unless otherwise specified herein, such notices or other communications shall be
deemed received (a) in the case of any notice or communication sent other than
by mail, on the date actually delivered to such address (evidenced, in the case
of delivery by overnight courier, by confirmation of delivery from the overnight
courier service making such delivery, and in the case of a telecopy, by receipt
of a transmission confirmation form or the addressee's confirmation of receipt),
or (b) in the case of any notice or communication sent by mail, three Business
Days after being sent, if sent by registered or certified mail, with first-class
postage prepaid. Each of the parties hereto shall be entitled to specify a
different address by giving notice as aforesaid to each of the other parties
hereto.
SECTION 6.2. AMENDMENTS, WAIVERS, ETC. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by Holdings and by the Company following approval
thereof by a majority of the Continuing Directors (as such term is defined in
the Voting and Standstill Agreement).
SECTION 6.3. SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties and their respective successors and assigns,
including without limitation in the case of any corporate party hereto any
corporate successor by merger or otherwise; PROVIDED that no party may assign
this Agreement without the other party's prior written consent, which consent
will not be required in the event of the transfer of all of the Registrable
Shares beneficially owned by Holdings in accordance with Sections 4.1(g) or
4.1(h) of the Voting and Standstill Agreement.
SECTION 6.4. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding among the parties relating to the subject matter hereof and
supersedes all prior agreements and understandings relating to such subject
matter. There are no representations, warranties or covenants by the parties
hereto relating to such subject matter other than those expressly set forth in
this Agreement and the Stock Purchase Agreement.
SECTION 6.5. SPECIFIC PERFORMANCE. The parties acknowledge that money
damages are not an adequate remedy for violations of this Agreement and that any
party may, in its sole discretion, apply to a court of competent jurisdiction
for specific performance or injunctive or such other relief as such court may
deem just and proper in order to enforce this Agreement or prevent any violation
hereof and, to the extent permitted by applicable law, each party waives any
objection to the imposition of such relief.
SECTION 6.6. REMEDIES CUMULATIVE. All rights, powers and remedies provided
under this Agreement or otherwise available in respect hereof at law or in
equity shall be cumulative and not alternative, and the exercise or beginning of
the exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.
SECTION 6.7. NO WAIVER. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and
(Page 55 of 58 pages)
<PAGE>
any custom or practice of the parties at variance with the terms hereof, shall
not constitute a waiver by such party of its right to exercise any such or other
right, power or remedy or to demand such compliance.
SECTION 6.8. NO THIRD PARTY BENEFICIARIES. Except as provided in Article IV
above, this Agreement is not intended to be for the benefit of and shall not be
enforceable by any Person who or which is not a party hereto.
SECTION 6.9. CONSENT TO JURISDICTION. Each party to this Agreement, by its
execution hereof, (i) hereby irrevocably submits, and agrees to cause each of
its Affiliates to submit, to the jurisdiction of the federal courts located
either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, and in the event that such federal courts shall not have subject
matter jurisdiction over the relevant proceeding, then of the state courts
located either in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, for the purpose of any Action (as such term is defined in the Stock
Purchase Agreement) arising out of or based upon this Agreement or relating to
the subject matter hereof or the transactions contemplated hereby, (ii) hereby
waives, and agrees to cause each of its Affiliates to waive, to the extent not
prohibited by applicable law, and agrees not to assert, and agrees not to allow
any of its Affiliates to assert, by way of motion, as a defense or otherwise, in
any such Action, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment
or execution, that any such proceeding brought in one of the above-named courts
is improper, or that this Agreement or the subject matter hereof may not be
enforced in or by such court and (iii) hereby agrees not to commence or to
permit any of its Affiliates to commence any Action arising out of or based upon
this Agreement or relating to the subject matter hereof other than before one of
the above-named courts nor to make any motion or take any other action seeking
or intending to cause the transfer or removal of any such Action to any court
other than one of the above-named courts whether on the grounds of inconvenient
forum or otherwise. Each party hereby consents to service of process in any such
proceeding in any manner permitted by Virginia or Connecticut law, as the case
may be, and agrees that service of process by registered or certified mail,
return receipt requested, at its address specified pursuant to Section 6.1 above
is reasonably calculated to give actual notice. Notwithstanding anything
contained in this Section 6.9 to the contrary with respect to the parties' forum
selection, if an Action is filed against a party to this Agreement, including
its Affiliates, by a person who or which is not a party to this Agreement, an
Affiliate of a party to this Agreement, or an assignee thereof (a "Third Party
Action"), in a forum other than the federal district court or a state court
located in the City of Richmond, Virginia, or in the City of Hartford,
Connecticut, and such Third Party Action is based upon, arises from, or
implicates rights, obligations or liabilities existing under this Agreement or
acts or omissions pursuant to this Agreement, then the party to this Agreement,
including its Affiliates, joined as a defendant in such Third Party Action shall
have the right to file cross-claims or third-party claims in the Third Party
Action against the other party to this Agreement, including its Affiliates, and
even if not a defendant therein, to intervene in such Third Party Action with or
without also filing cross-claims or third-party claims against the other party
to this Agreement, including its Affiliates.
(Page 56 of 58 pages)
<PAGE>
SECTION 6.10. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic substantive law of the Commonwealth of
Virginia, without giving effect to any choice or conflict of law provision or
rule that would cause the application of the law of any other jurisdiction.
SECTION 6.11. NAME, CAPTIONS. The name assigned to this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof.
SECTION 6.12. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.
SECTION 6.13. EXPENSES. Each of the parties hereto shall bear their own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, except that in the event of a dispute concerning the terms
or enforcement of this Agreement, the prevailing party in any such dispute shall
be entitled to reimbursement of reasonable legal fees and disbursements from the
other party or parties to such dispute.
SECTION 6.14. SEVERABILITY. In the event that any provision of this
Agreement would, under applicable law, be invalid or unenforceable in any
respect, such provision shall (to the extent permitted under applicable law) be
construed by modifying or limiting it so as to be valid and enforceable to the
maximum extent compatible with, and possible under, applicable law. The
provisions of this Agreement are severable, and in the event that any provision
hereof should be held invalid or unenforceable in any respect, it shall not
invalidate, render unenforceable or otherwise affect any other provision hereof.
[SIGNATURES ON NEXT PAGE]
(Page 57 of 58 pages)
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused this Registration Rights Agreement to be executed, as of the
date first above written by their respective officers thereunto duly authorized.
HILB, ROGAL AND HAMILTON COMPANY
By: /S/ ANDREW L. ROGAL
Name: Andrew L. Rogal
Title: President and Chief Executive Officer
PM HOLDINGS, INC.
By: /S/ DAVID W. SEARFOSS
Name: David W. Searfoss
Title: Vice President/Chief Financial Officer
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By: /S/ DAVID W. SEARFOSS
Name: David W. Searfoss
Title: Executive Vice President and
Chief Financial Officer
(Page 58 of 58 pages)
