<PAGE>1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
ZURICH REINSURANCE CENTRE HOLDINGS, INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
989822101
(CUSIP Number)
Steven D. Germain, Secretary
Zurich Centre Investments Limited
Cumberland House
One Victoria Street
P.O. Box HM 1788
Hamilton, HM HX Bermuda
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
- with copies to -
Thomas M. Cerabino, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
April 17, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-l(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>2
- ----------------------------------------------------
CUSIP No. 989822101
- ----------------------------------------------------
- ---- --------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Zurich Centre Investments Limited
- ---- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- ---- --------------------------------------------------------------------------
3 SEC USE ONLY
- ---- --------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ---- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ---- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- -------------- --------- ------------------------------------------------------
7 SOLE VOTING POWER
16,217,572 (see Item 5)
NUMBER OF --------- ------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY None (see Item 5)
EACH
REPORTING --------- ------------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
16,217,572 (see Item 5)
--------- ------------------------------------------------------
10 SHARED DISPOSITIVE POWER
None (see Item 5)
- ---- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
16,217,572 (see Item 5)
- ---- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ---- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
61.9%
- ---- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- ---- --------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>3
- ----------------------------------------------------
CUSIP No. 989822101
- ----------------------------------------------------
- ---- --------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Zurich Insurance Company
- ---- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
- ---- --------------------------------------------------------------------------
3 SEC USE ONLY
- ---- --------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ---- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ---- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Switzerland
- -------------- --------- ------------------------------------------------------
7 SOLE VOTING POWER
17,217,572 (see Item 5)
--------- ------------------------------------------------------
8 SHARED VOTING POWER
NUMBER OF
SHARES None (see Item 5)
BENEFICIALLY
OWNED BY --------- ------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 17,217,572 (see Item 5)
--------- ------------------------------------------------------
10 SHARED DISPOSITIVE POWER
None (see Item 5)
- ---- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
17,217,572 shares (see Item 5)
- ---- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ---- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.7%
- ---- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IC, HC
- ---- --------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>4
- ----------------------------------------------------
CUSIP No. 989822101
- ----------------------------------------------------
- ---- --------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Zurich International (Bermuda) Ltd.
- ---- --------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b [ ]
- ---- --------------------------------------------------------------------------
3 SEC USE ONLY
- ---- --------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ---- --------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
- ---- --------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- -------------- --------- ------------------------------------------------------
7 SOLE VOTING POWER
350,000 (see Item 5)
--------- ------------------------------------------------------
8 SHARED VOTING POWER
NUMBER OF
SHARES None (see Item 5)
BENEFICIALLY --------- ------------------------------------------------------
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH
REPORTING 350,000 (see Item 5)
PERSON WITH --------- ------------------------------------------------------
10 SHARED DISPOSITIVE POWER
None (see Item 5)
- ---- --------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
350,000 shares (see Item 5)
- ---- --------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
- ---- --------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.3%
- ---- --------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
HC
- ---- --------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE>5
This statement amends the information set forth in the Schedule 13D
dated March 31, 1994, as amended by Amendment No. 1 thereto dated January 23,
1996 and Amendment No. 2 thereto dated January 13, 1997 (as amended, the
"Schedule 13D"), filed on behalf of Zurich Centre Investments Limited, Zurich
International (Bermuda) Ltd. and Zurich Insurance Company (collectively, the
"Reporting Persons") and constitutes Amendment No. 3 to the Schedule 13D. This
statement on Schedule 13D relates to the Common Stock, par value $.01 per share
(the "Common Stock"), of Zurich Reinsurance Centre Holdings, Inc. (the
"Company"). Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in Amendment No. 2 to the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is hereby amended by adding the following to
the end thereof:
The Proposed Transaction described in Item 4 hereof will require the
expenditure of approximately $370 million, which is expected to come from one or
more sources, including the working capital of the Reporting Persons and their
affiliates and/or borrowings.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended by adding the following to
the end thereof:
<PAGE>6
On April 17, 1997 Zurich Centre, the Company and Centre Merger Corp.
("Sub") entered into an Agreement and Plan of Merger (the "Merger Agreement")
which provides for the merger (the "Merger") of a newly formed indirect wholly
owned subsidiary of Zurich Centre with and into the Company and the conversion
of all outstanding shares of the Company not owned by the Reporting Persons or
any subsidiary of Zurich Centre into cash at the price of $39.50 per share,
subject to increase if Zurich Centre elects to extend the closing date for the
Merger following the date when the conditions to closing set forth in the Merger
Agreement are satisfied. As a result of the transaction, the Company would
become an indirect wholly owned subsidiary of Zurich Centre and the directors of
Sub would become the directors of the surviving corporation in the Merger.
Consummation of the transactions contemplated in the Merger Agreement
is subject to the approval of state insurance regulators and the approval of the
holders of a majority of the outstanding shares of Common Stock.
The Merger Agreement provides that between the date of the signing of
the Merger Agreement and the closing of the transactions contemplated thereby,
the Company shall not authorize the officers, directors, advisers or other
representatives of the Company to solicit, participate in
<PAGE>7
discussions or negotiate proposals to acquire a substantial amount of
the Company's assets or 50% or more of the Company' outstanding shares of Common
Stock, provided that the Board of Directors may consider such proposals and may
withdraw its approval of the Merger Agreement and the transactions contemplated
thereby, if the Board of Directors determines in good faith, after consultation
with counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders.
The Merger Agreement is set forth in full as Exhibit E to this Schedule
13D and it is incorporated into Item 4 by this reference. The foregoing
description of the terms and provisions of the Merger Agreement is a summary
only, and is qualified in its entirety by reference to the attached document.
Item 7. Materials to be Filed as Exhibits.
Item 7 of the Schedule 13D is hereby amended by adding the following to
the end thereof:
Exhibit E: Agreement and Plan of Merger, dated as of April 17, 1997, by
and among Zurich Centre Investments Limited, Zurich
Reinsurance Centre Holdings, Inc. and Centre Merger Corp.
<PAGE>8
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: April 22, 1997 ZURICH CENTRE INVESTMENTS
LIMITED
By: /s/ Thomas Gleeson
Name: Thomas Gleeson
Title: Vice President
Dated: April 22, 1997 ZURICH INSURANCE COMPANY
By:/s/ K. Hotz
Name: Dr. K. Hotz
Title: Company Secretary
and Legal Counsel
By:/s/ M. Machler-Erne
Name: Dr. M. Machler-Erne
Title: Corporate Legal
Advisor and Member
of the Executive Staff
Dated: April 22, 1997 ZURICH INTERNATIONAL (BERMUDA) LTD.
By:/s/ Michael R. Deevy
Name: Michael R. Deevy
Title: Vice President and
C.O.O.
<PAGE>9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page No.
- ------- ---------------------- ----------
<S> <C> <C>
Exhibit A Subscription and Stockholders' Agreement, dated as of March 8, *
1993, by and among the Company, Centre Holdings, Fund American
Enterprises Holdings, Inc., John J. Burne and Steven M.
Gluckstern and Amendment No. 1 thereto, dated as of November
2, 1993.
Exhibit B Acknowledgment and Undertaking, dated March 31, 1994, *
by Centre Holdings and Zurich Centre regarding the
Stockholders' Agreement.
Exhibit C Letter, dated January 10, 1997, addressed to the Board *
of Directors of the Company from Zurich Insurance
Company.
Exhibit D Joint Filing Agreement, dated January 13, 1997, by and *
between Zurich Insurance Company, Zurich International
(Bermuda) Ltd. and Zurich Centre Investments Limited.
Exhibit E Agreement and Plan of Merger, dated as of April 17, 1997, by
and among Zurich Centre Investments Limited, Zurich
Reinsurance Centre Holdings, Inc. and Centre Merger Corp.
</TABLE>
- -----------------
*previously filed
<PAGE>
EXHIBIT E
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER, dated as of April 17, 1997, by and among
ZURICH CENTRE INVESTMENTS LIMITED, a Bermuda corporation ("Parent"), CENTRE
MERGER CORP., a Delaware corporation and an indirect wholly owned subsidiary of
Parent ("Sub"), and ZURICH REINSURANCE CENTRE HOLDINGS, INC., a Delaware
corporation (the "Company").
WHEREAS the Board of Directors of each of Parent, Sub and the Company
deem it advisable and in the best interests of their respective stockholders to
consummate, and have approved, the transaction provided for herein in which Sub,
which is a wholly owned subsidiary of Centre Reinsurance (U.S.) Limited, would
merge with and into the Company and the Company would become an indirect wholly
owned subsidiary of Parent;
WHEREAS the Board of Directors of the Company has (i) determined that
the consideration to be paid to the Independent Stockholders (as defined below)
of the Company for each share of Common Stock of the Company in the Merger (as
defined below) held by them is fair to such Independent Stockholders, (ii)
approved this Agreement and the transactions contemplated hereby and (iii)
resolved, subject to Section 5.02(b) hereof, to recommend to such stockholders
their approval of the Merger and this Agreement;
WHEREAS the parties hereto intend and acknowledge that, assuming the
Merger takes place as contemplated hereunder, the Merger will be treated for
Federal income tax purposes as a taxable stock acquisition;
WHEREAS the Board of Directors of Sub has approved the merger (the
"Merger") of Sub into the Company in accordance with the General Corporation Law
of the State of Delaware (the "DGCL") upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein the
parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. Effective Time of the Merger. Subject to the provisions
of this Agreement, a certificate of merger (the "Certificate of Merger") shall
be duly prepared, executed and acknowledged by the Company and thereafter
delivered to the Secretary of State of the State of Delaware for filing, as
provided in the DGCL, as soon as practicable on or after the Closing Date (as
defined below). The Merger shall become effective upon the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware or at
such time thereafter as is agreed to between Parent and the Company and provided
in the Certificate of Merger (the "Effective Time").
1
<PAGE>
SECTION 1.02. Closing. The closing of the Merger (the "Closing") will
take place at 9:00 a.m., New York City time, on the third business day after
satisfaction of the latest to occur of the conditions set forth in Section 7.01
(provided that the other closing conditions set forth in Article VII have been
met or waived as provided in Article VII at or prior to the Closing) (the date
by which all such conditions shall have been satisfied or waived being referred
to herein as the "Satisfaction Date"); provided, however, that Parent and Sub
shall have the option to extend (in one or more increments) the date of Closing
to a date not later than 90 days following the Satisfaction Date by written
notice to the Company given within two business days after the Satisfaction Date
(or the last date to which the Closing has been extended by Parent and Sub
pursuant hereto). The date of Closing determined pursuant to the above is
referred to herein as the "Closing Date". The Closing shall take place at the
offices of Willkie Farr & Gallagher, 153 East 53rd Street, New York, New York,
unless another date or place is agreed to in writing by the parties hereto.
SECTION 1.03. Effect of the Merger. At the Effective Time, Sub shall
be merged with and into the Company which shall continue as the surviving
corporation (the Company is sometimes referred to herein as the "Surviving
Corporation").
SECTION 1.04. Certificate of Incorporation and By-laws. (a) The
certificate of incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be the certificate of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(b) The Bylaws of the Company as in effect at the Effective Time shall
be the by-laws of the Surviving Corporation until thereafter changed or amended
as provided therein or by applicable law.
SECTION 1.05. Directors. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.06. Officers. The officers of the Company immediately prior
to the Effective Time shall be the officers of the Surviving Corporation until
the earlier of their resignation or removal or until their respective successors
are duly elected and qualified, as the case may be.
ARTICLE II
CONVERSION OF SECURITIES
SECTION 2.01. Conversion of Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holder of any
shares of Common Stock, par value
2
<PAGE>
$0.01 per share, of the Company (the "Company Common Stock") or capital stock of
Sub:
(a) Capital Stock of Sub. Each issued and outstanding share
of the capital stock of Sub shall be converted into and become that
number of shares of fully paid and nonassessable shares of common
stock of the Surviving Corporation equivalent to the quotient obtained
by dividing (i) the total number of outstanding shares of Company
Common Stock immediately prior to the Effective Time by (ii) 1,000,000
[i.e., the number of outstanding Sub shares].
(b) Cancellation of Treasury Stock and Parent-Owned Stock.
All shares of Company Common Stock that are owned by the Company as
treasury stock or by Parent, Zurich Insurance Company, Zurich
International (Bermuda) Ltd. or any Subsidiary of Parent
(collectively, the "Zurich Stockholders") shall be canceled and
retired and shall cease to exist and no consideration shall be
delivered in exchange therefor. As used in this Agreement, the word
"Subsidiary" means, with respect to any party, any corporation or
other organization, whether incorporated or unincorporated, of which
(i) such party or any other Subsidiary of such party is a general
partner (excluding partnerships, the general partnership interests of
which held by such party or any Subsidiary of such party do not have a
majority of the voting interest in such partnership) or (ii) at least
a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or
others performing similar functions with respect to such corporation
or other organization is directly or indirectly owned or controlled by
such party or by any one or more of its Subsidiaries, or by such party
and one or more of its Subsidiaries.
(c) Conversion of Company Common Stock. Subject to Section
2.01(g), each share of Company Common Stock issued and outstanding
(other than shares to be canceled in accordance with Section 2.01(b))
shall be converted into the right to receive the Merger Consideration
(as defined below) net of all withholding and deduction other than
required for withholding under the Internal Revenue Code of 1986, as
amended, in cash without interest. As used herein, the term "Merger
Consideration" shall mean $39.50, except that if Parent and Sub elect
to extend the Closing Date pursuant to Section 1.02, such term shall
mean $39.50, plus interest on such amount computed at an annual rate
equal to the prime rate announced by Chase Manhattan Bank, N.A. and in
effect as of the Satisfaction Date, for the number of days elapsed
from (but not including) the third business day following the
Satisfaction Date through (and including) the Closing Date. As of the
Effective Time, all such shares shall no longer be outstanding and
shall automatically be canceled and shall cease to exist, and each
holder of a certificate
3
<PAGE>
representing any such shares shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration
without interest.
(d) Restricted Stock. Subject to Section 2.01(f), shares of
the Company Common Stock held as of the Effective Time by grantees
under the Company's Restricted Stock Plan, as Amended and Restated,
shall be treated consistent with the terms of Section 2.01(c) hereof,
whether or not the grantee's rights in respect of such shares have
vested.
(e) Options to Acquire Shares of Company Stock. Subject to
Section 2.01(f), at the Effective Time, each holder of a then
outstanding option, whether or not vested and exercisable ("Company
Options"), to acquire one or more shares of Company Common Stock under
the Company Stock Plan (as defined below) shall, in full settlement
thereof, receive from the Company for each share of Company Common
Stock subject to such option an amount (subject to any applicable
withholding tax) in cash equal to the excess of the Merger
Consideration over the per share exercise price of such option (such
amount being hereinafter referred to as the "Option Consideration").
The surrender of a Company Option shall be deemed a release of any and
all rights the holder had or may have had in respect of such option
and also in respect to the Company's former Long Term Performance
Incentive Plan.
(f) Deferral of Certain Payments. (i) The Company shall have
the ability with respect to holders of Company Options who are
officers of the Company's operating subsidiaries, other than Steven M.
Gluckstern, Richard Smith, Peter R. Porrino, Gerald S. King, Isaac
Mashitz, Adrienne W. Reid and Mark R. Sarlitto, to defer payments of
up to 50% of the Option Consideration otherwise payable to such
holders at the Effective Time for a period of up to two years from the
Effective Time, together with interest thereon computed at a rate
equal to the average yield on U.S. Treasury obligations having a term
to maturity of five years as determined annually in arrears by the
Company, and subject to such other terms and conditions as the Company
shall determine.
(ii) The Company may, not later than 30 days following the
date of this Agreement, enter into agreements with the holders of
Restricted Stock which will not be vested as of the Effective Time
("Unvested Shares") and the Company Options (collectively, the
"Holders") providing for the deferral of up to 100% of the aggregate
Merger Consideration and Option Consideration otherwise payable in
respect of such Holder's Unvested Shares and Company Options.
(g) Shares of Dissenting Stockholders. Notwithstanding
anything in this Agreement to the contrary,
4
<PAGE>
any issued and outstanding shares of Company Common Stock held by a
person (a "Dissenting Stockholder") who duly demands appraisal of his
shares of Company Common Stock pursuant to the DGCL and complies with
all the provisions of the DGCL concerning the right of holders of
Company Common Stock to demand appraisal of their shares in connection
with the Merger ("Dissenting Shares") shall not be converted as
described in Section 2.01(c) but shall become the right to receive
such cash consideration as may be determined to be due to such
Dissenting Stockholder as provided in the DGCL. If, however, such
Dissenting Stockholder withdraws his demand for appraisal or fails to
perfect or otherwise loses his right of appraisal, in any case
pursuant to the DGCL, his shares shall be deemed to be converted as of
the Effective Time into the right to receive the Merger Consideration
without interest. The Company shall give Parent (i) prompt notice of
any demands for appraisal of shares received by the Company and (ii)
the opportunity to participate in and direct all negotiations and
proceedings with respect to any such demands. The Company shall not,
without the prior written consent of Parent, make any payment with
respect to, or settle, offer to settle or otherwise negotiate, any
such demands.
(h) Withholding Tax. The right of any stockholder or
optionholder to receive the Merger Consideration or Option
Consideration, as applicable, shall be subject to and reduced by the
amount of any required tax withholding obligation.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall designate a bank or trust company to act as paying
agent in the Merger (the "Paying Agent"), and, from time to time on and after
the Effective Time, Parent shall make available, or cause its Subsidiaries to
make available, to the Paying Agent funds in amounts and at the times necessary
for the payment of the Merger Consideration and Option Consideration pursuant to
Sections 2.01(c) and 2.01(e), and any payments to Dissenting Stockholders
pursuant to Section 2.01(g), it being understood that any and all interest
earned on funds made available to the Paying Agent pursuant to this Agreement
shall be turned over to, or at the direction of, Parent, the Subsidiary
providing such funds or the Surviving Corporation, as applicable. Such funds
shall be invested by the Paying Agent as directed by Parent, the Subsidiary
providing such funds or the Surviving Corporation, as applicable, provided that
such investments shall be obligations of or guaranteed by the United States of
America, in commercial paper obligations rated A-1 or P-1 or better by Moody's
Investors Service, Inc. or Standard & Poor's Rating Services, respectively, or
in deposit accounts, certificates of deposit, bank repurchase or reverse
repurchase agreements or banker's acceptances of, or Eurodollar time deposits
purchased from, commercial banks with capital exceeding $250 million (based on
the most recent financial statements of
5
<PAGE>
such bank which are then publicly available at the SEC or otherwise).
(b) Exchange Procedure. Subject to Section 2.01(f), as soon as
reasonably practicable after the Effective Time, the Paying Agent shall mail to
(x) each holder of record (other than the Zurich Stockholders) of a certificate
or certificates which immediately prior to the Effective Time represented shares
of Company Common Stock (the "Certificates") and (y) each holder of Company
Options at the Effective Time (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Paying Agent and shall
be in a form and have such other provisions as Parent may specify) and (ii)
instructions for use in effecting the surrender of the Certificates and Company
Options in exchange for the Merger Consideration or Option Consideration, as
applicable. Upon surrender of a Certificate or Company Option for cancellation
to the Paying Agent or to such other agent or agents as may be appointed by
Parent, together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Paying Agent, the holder of such
Certificate or Company Option, as the case may be, shall be entitled to receive
in exchange therefor the amount of cash into which the shares theretofore
represented by such Certificate or Company Option, as the case may be, shall
have been converted pursuant to Section 2.01, and the Certificate or Company
Option, as the case may be, so surrendered shall forthwith be canceled. In the
event of a transfer of ownership of shares that is not registered in the
transfer records of the Company, payment may be made to a person other than the
person in whose name the Certificate so surrendered is registered, if such
Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
as contemplated by this Section 2.02, each Certificate and Company Option shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without interest, into which the
shares or Company Options, as the case may be, theretofore represented by such
Certificate or Company Option, as the case may be, shall have been converted
pursuant to Section 2.01. No interest will be paid or will accrue on the cash
payable upon the surrender of any Certificate.
(c) At any time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the Paying Agent to deliver
to it any funds (including any interest and other income received with respect
thereto) which has been made available to the Paying Agent and which have not
been disbursed to holders of Certificates or Company Options, as the case may
be, and thereafter such holders shall be entitled to
6
<PAGE>
look to the Surviving Corporation (subject to abandoned property, escheat or
other similar laws) only as general creditors thereof with respect to the Merger
Consideration or the Option Consideration, as the case may be, payable upon due
surrender of their Certificates or Company Options, as the case may be.
(d) No Further Ownership Rights in Company Common Stock. All cash paid
upon the surrender of Certificates in accordance with the terms of this Article
II shall be deemed to have been paid in full satisfaction of all rights
pertaining to the shares of Company Common Stock theretofore represented by such
Certificates. At the Effective Time, the stock transfer books of the Company
shall be closed, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares that were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation or the Paying
Agent for any reason, they shall be canceled and exchanged as provided in this
Article II.
(e) No Liability. None of Parent, Sub, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any person in respect of any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
SECTION 3.01. Organization. Each of the Company and its Subsidiaries
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation and has all requisite corporate
power and corporate authority and all necessary governmental approvals to own,
lease and operate its properties and to carry on its business as now being
conducted, except where the failure to be so organized, existing and in good
standing or to have such power, authority and governmental approvals would not
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole. As used in this Agreement, any reference to any event, change or effect
being material or having a material adverse effect on or with respect to an
entity (or group of entities taken as a whole) means such event, change or
effect is materially adverse to the consolidated condition (financial or
otherwise), properties, assets (including intangible assets), liabilities
(including contingent liabilities), businesses or results of operations of such
entity (or, if with respect thereto, of such group of entities, taken as a
whole), but shall exclude any change or effect resulting from general economic
conditions (including without limitation changes in interest rates) and any
occurrence or condition arising out of the transactions contemplated by this
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Agreement or the public announcement thereof. The Company and each of its
Subsidiaries is duly qualified or licensed to do business and in good standing
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or licensing
necessary, except where the failure to be so duly qualified or licensed and in
good standing would not in the aggregate have a material adverse effect on the
Company and its Subsidiaries, taken as a whole.
SECTION 3.02. Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 50,000,000 shares of Company Common
Stock of which, as of March 21, 1997, 26,205,569 shares were issued and
outstanding and no shares were held in treasury and (ii) 20,000,000 shares of
Preferred Stock, par value $0.10 per share, no shares of which are issued and
outstanding. As of the date hereof, 503,575 shares of Company Common Stock are
reserved for issuance upon exercise of outstanding options pursuant to the
Company's 1995 Stock Option Plan (the "Company Stock Plan"). All the outstanding
shares of Company Common Stock are, and all shares which may be issued pursuant
to the Company Stock Plan will be, when issued in accordance with the terms
thereof, duly authorized, validly issued, fully paid and nonassessable and free
of any preemptive rights in respect thereto. As of the date hereof, no bonds,
debentures, notes or other indebtedness convertible into securities having the
right to vote ("Convertible Debt") of the Company are issued or outstanding.
Except as set forth above or in respect of the employee benefit plans in effect
as of the date hereof, as of the date hereof, there are no existing options,
warrants, calls, subscriptions or other rights or other agreements or
commitments of any character relating to the issued or unissued capital stock or
Convertible Debt of the Company or any of its Subsidiaries or obligating the
Company or any of its Subsidiaries to issue, transfer or sell or cause to be
issued, transferred or sold any shares of capital stock or Convertible Debt of,
or other equity interests in, the Company or of any of its Subsidiaries or
securities convertible into or exchangeable for such shares or equity interests
or obligating the Company or any of its Subsidiaries to grant, extend or enter
into any such option, warrant, call, subscription or other right, agreement or
commitment. As of the date hereof, there are no outstanding contractual
obligations of the Company or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
Subsidiaries.
SECTION 3.03. Authority. The Company has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby (subject to, with respect to the Merger, the
approval and adoption of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock). The execution, delivery and
performance of this Agreement and the consummation
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of the Merger and of the other transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than as aforesaid). This Agreement has been duly executed and delivered
by the Company and, assuming this Agreement constitutes a valid and binding
obligation of Parent and Sub, as the case may be, constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
SECTION 3.04. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, state insurance
laws and the DGCL, neither the execution, delivery or performance of this
Agreement by the Company nor the consummation by the Company of the transactions
contemplated hereby nor compliance by the Company with any of the provisions
hereof will (i) conflict with or result in any breach of any provision of the
charter or by-laws of the Company or of any of its Subsidiaries, (ii) require
any filing with, or permit, authorization, consent or approval of, any court,
arbitral tribunal, administrative agency or commission or other governmental or
other regulatory authority or agency (a "Governmental Entity") (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole or a material adverse effect on the ability of the
Company to consummate the transactions contemplated by this Agreement), (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party or by which any of them or any of their properties or
assets may be bound or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company, any of its Subsidiaries
or any of their properties or assets, except in the case of (iii) or (iv) for
violations, breaches or defaults which would not, individually or in the
aggregate, have a material adverse effect on the Company and its Subsidiaries,
taken as a whole or a material adverse effect on the ability of the Company to
consummate the transactions contemplated by this Agreement.
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SECTION 3.05. SEC Reports and Financial Statements. Each of the
Company and its Subsidiaries has filed with the Securities and Exchange
Commission (the "SEC") and has heretofore made available to Parent true and
complete copies of, all forms, reports, schedules, statements and other
documents required to be filed by it since January 1, 1994, under the Exchange
Act or the Securities Act of 1933, as amended (the "Securities Act") (as such
documents have been amended since the time of their filing, collectively, the
"Company SEC Documents"). The Company SEC Documents, including without
limitation any financial statements or schedules included therein, at the time
filed, (a) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (b) complied in all material respects with the
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. The
financial statements of the Company included in the Company SEC Documents comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC) and fairly present (subject, in the case of
the unaudited statements, to normal, recurring audit adjustments) the
consolidated financial position of the Company and its consolidated Subsidiaries
as at the dates thereof and the consolidated results of their operations and
cash flows for the periods then ended.
SECTION 3.06. Opinion of Financial Advisor. The Company has received
the opinion of Morgan Stanley & Co. Incorporated, dated the date hereof, to the
effect that, as of such date, the consideration to be received in the Merger by
the holders of the outstanding shares of Company Common Stock not owned by the
Zurich Stockholders ("Independent Stockholders") is fair to such Stockholders
from a financial point of view.
SECTION 3.07. Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Company Common Stock is the only vote of
the holders of any class or series of the Company's capital stock necessary to
approve this Agreement and the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
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SECTION 4.01. Organization. Each of Parent and Sub and Parent's
Subsidiaries which own shares of Company Common Stock is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
corporate authority and all necessary governmental approvals to own, lease and
operate its properties and to carry on its business as now being conducted
except where the failure to be so organized, existing and in good standing or to
have such power, authority, and governmental approvals would not have a material
adverse effect on the ability of Parent and Sub to consummate the transactions
contemplated by this Agreement. Parent and each of its Subsidiaries which owns
shares of Company Common Stock is duly qualified or licensed to do business and
in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except where the failure to be so duly
qualified or licensed and in good standing would not in the aggregate have a
material adverse effect on the ability of Parent and Sub to consummate the
transactions contemplated by this Agreement.
SECTION 4.02. Authority. Parent and Sub have requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the Merger and of the other transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parent, and no other corporate proceedings on the part of Parent
and Sub are necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly executed and
delivered by Parent and Sub, as the case may be, and, assuming this Agreement
constitutes a valid and binding obligation of the Company, constitutes a valid
and binding obligation of each of Parent and Sub, as the case may be,
enforceable against Parent and Sub in accordance with its respective terms,
except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of court before which any proceeding therefor may
be brought.
SECTION 4.03. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, state insurance
laws and the DGCL, neither the execution, delivery or performance of this
Agreement by Parent and Sub nor the consummation by Parent and Sub of the
transactions contemplated hereby nor compliance by Parent and Sub with any of
the provisions hereof will (i) conflict with or result in any breach of any
provision of the respective certificate of incorporation or by-laws of Parent
and
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Sub, (ii) require any filing with, or permit, authorization, consent or approval
of, any Governmental Entity (except where the failure to obtain such permits,
authorizations, consents or approvals or to make such filings would not have a
material adverse effect on the ability of Parent and Sub to consummate the
transactions contemplated by this Agreement, (iii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation, or
acceleration) under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, lease, contract, agreement or other
instrument or obligation to which Parent or any of its Subsidiaries is a party
or by which any of them or any of their properties or assets may be bound or
(iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Parent, any of its Subsidiaries or any of their properties or
assets, except in the case of (iii) and (iv) for violations, breach or defaults
which would not, individually or in the aggregate, have a material adverse
effect on the ability of Parent and Sub to consummate the transactions
contemplated by this Agreement.
SECTION 4.04. Information in Proxy Statement. None of the information
supplied by Parent or Sub in writing specifically for inclusion or incorporation
by reference in the Company's Proxy Statement or Information Statement for the
special meeting of its stockholders to be called to consider the Merger (the
"Proxy Statement") will, at the date mailed to stockholders and at the time of
the meeting of the Company's stockholders to be held in connection with the
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
SECTION 4.05. Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
ARTICLE V
COVENANTS
SECTION 5.01. Covenants of the Company. During the period from the
date of this Agreement and continuing until the Effective Time, the Company
agrees as to itself and its Subsidiaries that (except as expressly contemplated
or permitted by this Agreement, or to the extent that Parent shall otherwise
consent in writing):
(a) Ordinary Course. The Company and its Subsidiaries shall
carry on their respective businesses in the usual, regular and
ordinary course in substantially the same manner as heretofore
conducted and use all reasonable efforts to
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preserve intact their present business organizations, keep available
the services of their present officers and employees and preserve
their relationships with customers, suppliers and others having
business dealings with them to the end that their goodwill and ongoing
business shall not be impaired in any material respect at the
Effective Time.
(b) Dividends; Changes in Stock. The Company shall not, nor
shall it permit any of its Subsidiaries to, nor shall it propose to,
(i) declare or pay any dividends on or make other distributions in
respect of any of its capital stock, except for dividends by any
Subsidiary to the Company or to another Subsidiary, (ii) split,
combine or reclassify its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock or (iii)
repurchase, redeem or otherwise acquire, or permit any Subsidiary to
repurchase, redeem or otherwise acquire, any shares of capital stock
of the Company or any of its Subsidiaries.
(c) Issuance of Securities. The Company shall not, nor shall
it permit any of its Subsidiaries to, issue, deliver or sell, or
authorize or propose the issuance, delivery or sale of, any shares of
its capital stock of any class or any securities convertible into, or
any rights, warrants, calls, subscriptions or options to acquire, any
such shares or convertible securities, other than (i) the issuance of
shares of Company Common Stock upon the exercise of employee stock
options outstanding on the date hereof under the Company Stock Plan or
pursuant to regular issuances of Company Common Stock in the ordinary
course in connection with employee benefit plans in effect on the date
hereof and (ii) issuance by a wholly owned Subsidiary of its capital
stock to its parent.
(d) Governing Documents. The Company shall not amend or
propose to amend its Certificate of Incorporation or Bylaws.
(e) Advice of Changes; Filings. The Company shall confer on
a regular and frequent basis with Parent, report on operational
matters and promptly advise Parent orally and in writing of any change
or event having, or which could reasonably be expected to have, a
material adverse effect on the Company and its Subsidiaries, taken as
a whole. The Company shall promptly provide Parent copies of all
filings made by the Company or any of its Subsidiaries with any
Federal, state or foreign Governmental Entity in connection with this
Agreement and the transactions contemplated hereby, other than the
portions of such filings that include confidential information not
directly related to the transactions contemplated by this Agreement.
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(f) The Company shall not (i) enter into, adopt, amend in
any material respect (except as may be required by law) or terminate
any employee benefit plan or any agreement, arrangement, plan or
policy between the Company and one or more of its directors or
officers or (ii) except for normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not
result in a material increase in benefits or compensation expense to
the Company, increase in any manner the compensation or fringe
benefits of any director, officer or key employee or pay any benefit
not required by any plan and arrangement as in effect as of the date
hereof (including, without limitation, the granting of stock options
or enter into any contract, agreement, commitment or arrangement to do
any of the foregoing.
SECTION 5.02. No Solicitation; Fiduciary Out. (a) The Company shall
not authorize or permit any of its executive officers or directors or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to (i) solicit,
initiate or encourage (including by way of furnishing information), or take any
other action to facilitate, any inquiries or the making of any proposal which
constitutes, or may reasonably be expected to lead to, any Takeover Proposal (as
defined below) or (ii) participate in any discussions or negotiations regarding
any Takeover Proposal; provided, however, that, if at any time prior to the
Effective Time the Board of Directors of the Company determines in good faith,
after consultation with counsel, that it is necessary to do so in order to
comply with its fiduciary duties to the Company's stockholders, the Company may,
in response to an unsolicited Takeover Proposal, and subject to compliance with
Section 5.02(c), (x) furnish information with respect to the Company to any
person pursuant to a confidentiality agreement and (y) participate in
negotiations regarding such Takeover Proposal. Without limiting the foregoing,
it is understood that any violation of the restrictions set forth in the
preceding sentence by any director or executive officer of the Company or any of
its Subsidiaries or any investment banker, financial advisor, attorney,
accountant or other representative of the Company or any of its Subsidiaries
shall be deemed to be a breach of this Section 5.02(a) by the Company. For
purposes of this Agreement, "Takeover Proposal" means any inquiry, proposal or
offer from any person (other than Parent or any of its Subsidiaries) relating to
any direct or indirect acquisition or purchase of a substantial amount of assets
of the Company or any of its Subsidiaries or of 50% or more of the shares of
Company Common Stock, any tender offer or exchange offer that if consummated
would result in any person beneficially owning 50% or more of the shares of
Company Common Stock, any merger, consolidation, business combination, sale of
substantially all the assets, recapitalization, liquidation, dissolution or
similar transaction involving the Company, other than the Merger, or any other
transaction the consummation of
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which could reasonably be expected to impede, interfere with, prevent or
materially delay the Merger or which would reasonably be expected to dilute
materially the benefits to Parent of the transactions contemplated hereby.
(b) Except as set forth in this Section 5.02(b), neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such Board of Directors of this Agreement or the Merger, (ii)
approve or recommend, or propose to approve or recommend, any Takeover Proposal
or (iii) cause the Company to enter into any agreement with respect to any
Takeover Proposal. Notwithstanding the foregoing, in the event that prior to the
Effective Time the Board of Directors of the Company determines in good faith,
after consultation with counsel, that it is necessary to do so in order to
comply with its fiduciary duties to the Company's stockholders, the Board of
Directors of the Company may withdraw or modify its approval or recommendation
of this Agreement and the Merger, approve or recommend a Takeover Proposal or
cause the Company to enter into an agreement with respect to a Takeover
Proposal. In evaluating any unsolicited Takeover Proposal, the Company's Board
of Directors may consider any statement or indication from or on behalf of
Parent that it will not agree to such Takeover Proposal, provided that such fact
shall not prevent the Company's Board of Directors from taking any action
permitted pursuant to this Section 5.02(b).
(c) In addition to the obligations of the Company set forth in Section
5.02(a), the Company shall immediately advise Parent orally and in writing of
any request for information or of any Takeover Proposal, or any inquiry with
respect to or which could lead to any Takeover Proposal, and shall (i) describe
the material terms and conditions of such request, Takeover Proposal or inquiry
and the identity of the person making such request, Takeover Proposal or inquiry
and (ii) immediately deliver to Parent a copy of any such request, Takeover
Proposal or inquiry made in writing. The Company will keep Parent fully informed
of the status and details (including amendments or proposed amendments) of any
such request, Takeover Proposal or inquiry.
(d) Nothing contained in this Section 5.02 shall prohibit the Company
from taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the opinion of the Board of Directors of the
Company, after consultation with counsel, failure so to disclose would be
inconsistent with its fiduciary duties to the Company's stockholders; provided,
however, that neither the Company nor its Board of Directors nor any committee
thereof shall, except as permitted by Section 5.02(b), withdraw or modify, or
propose to withdraw or modify, its position with respect to the Merger or
approve or recommend, or propose to approve or recommend, a Takeover Proposal.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Preparation of the Proxy Statement. The Company shall
promptly prepare and file with the SEC preliminary and final versions of the
Proxy Statement and a Schedule 13E-3 relating to the Merger (the "Schedule
13E-3"). The Company shall use its best efforts to have the Proxy Statement
cleared by the SEC and mailed to its stockholders at the earliest practicable
date. The Company shall cooperate and consult with Parent with respect to the
Proxy Statement and the Schedule 13E-3 and any related SEC comments. The Company
covenants that (i) the Proxy Statement and the Schedule 13E-3 will comply in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder and (ii) as of the date of mailing of the Proxy Statement
and at the time of the meeting of the Company's stockholders to be held in
connection with the Merger, the Proxy Statement and the Schedule 13E-3 will not
contain any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading; provided that no representation is made by the Company with respect
to any information included in the Proxy Statement and the Schedule 13E-3
regarding Parent or its Subsidiaries supplied by Parent in writing specifically
for inclusion in the Proxy Statement and the Schedule 13E-3.
SECTION 6.02. Access to Information. The Company shall (and shall
cause each of its Subsidiaries to) afford to the officers, employees,
accountants, counsel and other representatives of Parent, access, during normal
business hours during the period prior to the Effective Time, to all its
properties, books, contracts, commitments and records and, during such period,
the Company shall (and shall cause each of its Subsidiaries to) furnish promptly
to Parent (a) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of Federal securities laws and (b) all other information concerning its
business, properties and personnel as Parent may reasonably request. Unless
otherwise required by law, Parent will hold any such information which is
nonpublic in confidence until such time as such information otherwise becomes
publicly available through no wrongful act of either party, and in the event of
termination of this Agreement for any reason Parent shall promptly upon request
return all nonpublic documents obtained from the Company, and any copies made of
such documents, to the Company.
SECTION 6.03. Stockholders Meeting. The Company shall call a meeting
of its stockholders to be held as promptly as practicable for the purpose of
voting upon this Agreement and the Merger. Subject to Section 5.02(b), the
Company will, through its Board of Directors, recommend to its stockholders
approval of this Agreement and the Merger and shall use its best efforts to
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hold such meeting as soon as reasonably practicable after the date hereof.
SECTION 6.04. Legal Conditions to Merger. Each of the Company, Parent
and Sub will take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on itself with respect to the Merger
(which actions shall include, without limitation, furnishing all information in
connection with approvals of or filings with state insurance authorities and any
other Governmental Entity) and will promptly cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them or any of their Subsidiaries in connection with the Merger. Each of
the Company, Parent and Sub will, and will cause its Subsidiaries to, take all
reasonable actions necessary to obtain (and will cooperate with each other in
obtaining) any consent, authorization, order or approval of, or any exemption
by, any Governmental Entity or other public or private third party, required to
be obtained or made by Parent, the Company or any of their Subsidiaries in
connection with the Merger or the taking of any action contemplated thereby or
by this Agreement.
SECTION 6.05. Expenses. Whether or not the Merger is consummated, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expense; provided, however, that in the event this Agreement is terminated
pursuant to Section 8.01(c), the Company shall pay all costs and expenses of
Parent and its affiliates incurred in connection with this Agreement and the
transactions contemplated hereby.
SECTION 6.06. Brokers or Finders. Each of Parent and the Company
represents, as to itself, its Subsidiaries and its affiliates, that no agent,
broker, investment banker, financial advisor or other firm or person is or will
be entitled to any brokers' or finder's fee or any other commission or similar
fee in connection with any of the transactions contemplated by this Agreement
except (i) Morgan Stanley & Co. Incorporated, whose fees and expenses will be
paid by the Company in accordance with the Company's agreement with such firm
(copies of which have been delivered by the Company to Parent prior to the date
of this Agreement) and (ii) Donaldson, Lufkin & Jenrette Securities Corp., whose
fees and expenses will be paid by Parent in accordance with Parent's agreement
with such firm (except as contemplated by Section 6.05), and each of Parent and
the Company agree to indemnify and hold the other harmless from and against any
and all claims, liabilities or obligations with respect to any other fees,
commissions or expenses asserted by any person on the basis of any act or
statement alleged to have been made by such party or its affiliates.
SECTION 6.07. Indemnification; Insurance. (a) For a period of three
years from the Effective Time, the Surviving Corporation, shall maintain in its
Certificate of Incorporation
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the provisions with respect to indemnification set forth in the Company's
Certificate of Incorporation as in effect on the date hereof, which provisions
shall not be amended, repealed or otherwise modified for such a period in any
manner that would adversely affect the rights thereunder of persons who at the
Effective Time were directors, officers, employees or agents of the Company
(such persons being third-party beneficiaries of this Section 6.07) with respect
to actions and omissions occurring prior to the Effective Time, unless such
modification is required by law.
(b) For a period of three years from the Effective Time, the Surviving
Corporation shall use its best efforts to maintain in effect directors' and
officers' liability insurance covering those persons who are currently covered
by the Company's directors' and officers' liability insurance policy with
respect to actions and omissions occurring prior to the Effective Time on terms
no less favorable than the terms of such current insurance coverage.
Notwithstanding the foregoing, if the directors' and officers' liability
insurance referred to in this Section 6.07(b) is unavailable for the Maximum D&O
Premium (as defined below), the Surviving Corporation shall obtain as much
insurance as can be obtained for a premium not in excess (on an annualized
basis) of the Maximum D&O Premium. The Company will use its best efforts to give
to any director and officer covered by this Section 6.07, 30 days prior written
notice of any reduction on coverage or cancellation of the directors' and
officers' liability insurance referred to in this Section 6.07(b). For purposes
of this Section 6.07(b), the "Maximum D&O Premium" shall be an amount not
greater than 150% of the premium paid by the Company (on an annualized basis)
for directors' and officers' liability insurance during the period from June 30,
1996 to the Effective Time.
SECTION 6.08. (a) Additional Agreements; Best Efforts. Subject to the
terms and conditions of this Agreement, each of the parties hereto agrees to use
best efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including cooperating fully with the other party, including by
provision of information and making of all necessary filings under state
insurance laws. In case at any time after the Effective Time any further action
is necessary or desirable to carry out the purposes of this Agreement including
without limitation, consummation of the Centre Merger (as defined below), or to
vest the Surviving Corporation with full title to all properties, assets,
rights, approvals, immunities and franchises of either the Company or Sub, the
proper officers and directors of each party to this Agreement shall take all
such necessary action.
(b) Parent or Surviving Corporation agrees, subject to consummation of
the Merger, to pay, without deduction or
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withholding from any amount payable to the holders of Company Common Stock, any
New York State or City real property transfer taxes and any other similar taxes
that become payable by the shareholders of the Company, the Company or the
Surviving Corporation in connection with the Merger. The Company and Parent
shall cooperate in the preparation, execution and filing of any returns,
questionnaires, applications and other documents related to such taxes required
or permitted to be filed on or before the Effective Time.
Section 6.09. Merger of Operations. Each of the parties hereto agrees
to use its reasonable good faith efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to cause the merger (the "Centre Merger") of the operations of Zurich
Reinsurance Centre Inc. ("Centre") and Centre Reinsurance Company of New York
("CRNY") simultaneously with or promptly following the Merger on terms
reasonably acceptable to Parent, including, without limitation, causing Centre
and CRNY to enter into an agreement and plan of merger or similar agreement
providing for the Centre Merger and preparing and submitting all necessary
regulatory filings in connection therewith. This Section 6.09 shall terminate
upon a termination of this Agreement.
ARTICLE VII
CONDITIONS
SECTION 7.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. This Agreement and the Merger
shall have been approved and adopted by the affirmative vote of the
holders of a majority of the outstanding shares of Company Common
Stock.
(b) Other Approvals. The Insurance Department of the State
of Connecticut shall have approved the consummation of the Merger and
such approval shall be in full force and effect. Other than the filing
provided for by Section 1.01, all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity the failure to
obtain which would have a material adverse effect on Parent and its
Subsidiaries or the Surviving Corporation and its Subsidiaries, in
each case taken as a whole, shall have been filed, occurred or been
obtained.
(c) No Injunctions or Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in
effect.
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SECTION 7.02. Conditions of Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are subject to the
satisfaction of the following conditions unless waived by Parent and Sub:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement
and (except to the extent such representations and warranties speak as
of an earlier date or except, as to any failure to be true and
correct, to the extent that Parent or Sub had knowledge of such
failure to be true and correct as of the date hereof) as of the
Closing Date as though made on and as of the Closing Date, except as
otherwise contemplated by this Agreement.
(b) Performance of Obligations of the Company. The Company
shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing
Date.
(c) Officer's Certificate. Parent and Sub shall have
received a certificate signed by an executive officer of the Company
to the effects set forth in Paragraphs (a) and (b) of this Section
7.02.
(d) Appraisal Rights. The holders of not more than 7% of the
outstanding shares of Company Common Stock shall have exercised their
appraisal rights in the Merger in accordance with the DGCL.
SECTION 7.03. Conditions of Obligations of the Company. The obligation
of the Company to effect the Merger is subject to the satisfaction of the
following conditions unless waived by the Company:
(a) Representations and Warranties. The representations and
warranties of Parent and Sub set forth in this Agreement shall be true
and correct in all material respects as of the date of this Agreement
and (except to the extent such representations speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing
Date, except as otherwise contemplated by this Agreement.
(b) Performance of Obligations of Parent and Sub. Parent and
Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to
the Closing Date.
(c) Officer's Certificate. The Company shall have received a
certificate signed by an executive officer of each of Parent and Sub
to the effects set forth in Paragraphs (a) and (b) of this Section
7.03.
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ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval of the
matters presented in connection with the Merger by the stockholders of the
Company:
(a) by mutual consent of Parent and the Company;
(b) (i) by either Parent or the Company if there shall have
been a material breach of any representation, warranty, covenant or
agreement on the part of the other set forth in this Agreement which
breach shall not have been cured within two business days following
receipt by the breaching party of notice of such breach, or (ii) by
either Parent or the Company if any permanent injunction or other
order of a court or other competent authority preventing the
consummation of the Merger shall have become final and non-appealable;
(c) by either Parent or the Company if the Company's Board
of Directors takes any of the actions permitted by Section 5.02(b);
provided the Company may so terminate only if it has complied with all
the provisions of Section 5.02(c);
(d) by either Parent or the Company if the Merger shall not
have been consummated on or before October 1, 1997; or
(e) by either party if the required approval of the
stockholders of the Company shall not have been obtained by reason of
the failure to obtain the required vote at a duly held meeting of
stockholders or at any adjournment thereof.
SECTION 8.02. Effect of Termination. In the event of a termination of
this Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to any breach of any provision of
this Agreement prior to such termination and except that the last sentence of
Section 6.02 and all of Sections 6.05 and 6.06 shall continue in effect.
SECTION 8.03. Amendment. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors,
at any time before or after approval of the matters presented in connection with
the Merger by the stockholders of the Company, but, after any such approval, no
amendment shall be made which by law requires further approval by such
stockholders without such further approval in accordance with Section 7.01(a).
This Agreement may not be amended except
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by an instrument in writing signed on behalf of each of the parties hereto.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective
Time, the parties hereto, by action taken or authorized by their respective
Boards of Directors, may, to the extent legally allowed, (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for the agreements contained in Sections
2.01, 2.02, 6.05, 6.06, 6.07, 6.08 and 6.09 and this Section 9.01.
SECTION 9.02. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or mailed by registered or certified mail
(return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent or Sub, to
Zurich Centre Investments Limited
Cumberland House, One Victoria Street
P.O. Box HM 1788
Hamilton, HM HX Bermuda
Attention: General Counsel
Telecopy No.: (441) 292-0951
with copies to:
Willkie Farr & Gallagher
153 East 53rd Street
New York, New York 10022
Attention: Thomas M. Cerabino, Esq.
Telecopy No.: (212) 821-8111
Zurich Center Resource Limited
One Chase Manhattan Plaza
New York, New York 10005
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Attention: General Counsel
Telecopy No.: (212) 898-5002
(b) if to the Company, to
Zurich Reinsurance Centre
Holdings, Inc.
One Chase Manhattan Plaza
43rd Floor
New York, New York 10005
Attention: Richard E. Smith and
Mark R. Sarlitto
Telecopy No.: (212) 898-5028
with a copy to
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019-7475
Attention: Samuel C. Butler, Esq.
Telecopy No.: (212) 474-3700
SECTION 9.03. Entire Agreement; No Third Party Beneficiaries; Rights
of Ownership. This Agreement (including the documents and the instruments
referred to herein) (a) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (b) except as provided in Section 6.07,
are not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder.
SECTION 9.04. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without regard to
any applicable conflicts of law.
SECTION 9.05. Publicity. Except as otherwise required by law or the
rules of the New York Stock Exchange, for so long as this Agreement is in
effect, neither the Company nor Parent shall, or shall permit any of its
Subsidiaries to, issue or cause the publication of any press release or other
public announcement with respect to the transactions contemplated by this
Agreement without the consent of the other party, which consent shall not be
unreasonably withheld.
SECTION 9.06. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any
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or all of its rights, interests and obligations hereunder to Parent or to any
direct or indirect wholly owned Subsidiary of Parent. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
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IN WITNESS WHEREOF Parent, Sub and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
ZURICH CENTRE INVESTMENTS LIMITED
By: /s/ Thomas Gleeson
Name: Thomas Gleeson
Title: Vice President
CENTRE MERGER CORP.
By: /s/ Steven M. Gluckstern
Name: Steven M. Gluckstern
Title: President
ZURICH REINSURANCE CENTRE
HOLDINGS, INC.
By: /s/ Mark R. Sarlitto
Name: Mark R. Sarlitto
Title: Senior Vice President &
General Counsel
