<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Laurentian Capital Corporation
---------------------------------------------------------------
(Name of Issuer)
Common Stock, $.05 Par Value
---------------------------------------------------------------
(Title of Class of Securities)
519256309
---------------------------------------------------------------
(CUSIP Number)
James E. Evans, Esq.
One East Fourth Street
Cincinnati, Ohio 45202
(513) 579-2536
---------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
See Item 4
---------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with this statement [X].
Page 1 of 87 Pages
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CUSIP NO. 519256309 13D Page 2 of 87 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
American Premier Group, Inc. 31-1422526
American Financial Corporation 31-0624874
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Ohio corporations
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
- - -
8 SHARED VOTING POWER
- - - (See Item 5)
9 SOLE DISPOSITIVE POWER
- - -
10 SHARED DISPOSITIVE POWER
- - - (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- - - (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)
0.0% (See Item 5)
14 TYPE OF REPORTING PERSON*
HC
HC
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CUSIP NO. 519256309 13D Page 3 of 87 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
American Annuity Group, Inc. 06-1356481
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
See Item 3
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware corporation
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
- - -
8 SHARED VOTING POWER
- - - (See Item 5)
9 SOLE DISPOSITIVE POWER
- - -
10 SHARED DISPOSITIVE POWER
- - - (See Item 5)
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- - - (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)
0.0% (See Item 5)
14 TYPE OF REPORTING PERSON*
HC
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CUSIP NO. 519256309 13D Page 4 of 87 Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Carl H. Lindner
Carl H. Lindner III
S. Craig Lindner
Keith E. Lindner
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States Citizens
7 NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
SOLE VOTING POWER
- - -
8 SHARED VOTING POWER
- - -
9 SOLE DISPOSITIVE POWER
- - -
10 SHARED DISPOSITIVE POWER
- - -
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
- - -
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14 TYPE OF REPORTING PERSON*
IN
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This Schedule 13D is filed on behalf of American Premier Group,
Inc. ("American Premier"), American Financial Corporation ("AFC"),
American Annuity Group, Inc. ("AAG") and Carl H. Lindner, Carl H.
Lindner III, S. Craig Lindner and Keith E. Lindner (collectively, the
"Lindner Family") (American Premier, AFC, AAG and the Lindner Family are
collectively referred to as the "Reporting Persons").
As of May 31, 1995, the Lindner Family beneficially owned
approximately 50.0% of the outstanding common stock of American Premier
and American Premier beneficially owned (i) all of the common stock of
AFC (approximately 79% of AFC's outstanding voting equity securities)
and (ii) 81.4% of the common stock of AAG. Through their ownership of
common stock of American Premier and their positions as directors and
executive officers of American Premier, the members of the Lindner
Family may be deemed to be controlling persons with respect to American
Premier, AFC and AAG.
Item 1. Security and Issuer.
This Schedule relates to shares of Common Stock, par value $.05
per share, ("Laurentian Common Stock"), issued by Laurentian Capital
Corporation, a Delaware corporation ("Laurentian"). The principal
executive offices of Laurentian are located at 640 Lee Road, Wayne,
Pennsylvania 19087.
Item 2. Identity and Background.
See the schedule attached hereto as Exhibit 1 which contains
additional information concerning the Reporting Persons.
Item 3. Source and Amount of Funds or Other Consideration.
AAG plans to purchase the Laurentian Common Stock for cash
with funds available for investment. AAG intends to obtain the
remainder of th efunds necessary to complete the acquisition from
various other sources.
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Item 4. Purpose of Transaction.
AAG has agreed to acquire Laurentian pursuant to the terms of
an Agreement and Plan of Merger by and among AAG, L.Q. Acquisition
Corp., a Delaware corporation and a newly formed wholly-owned subsidiary
of AAG ("L.Q.") and Laurentian dated as of May 25, 1995 (the "Merger
Agreement"). The Merger Agreement provides that each share of
Laurentian Common Stock outstanding immediately prior to the effective
time other than shares held by (i) AAG or its subsidiaries or (ii) The
Imperial Life Assurance Company of Canada ("ILAC") and Desjardins-
Laurentian Life Group, Inc. ("DLLG") (collectively, the "Desjardins
Shares") shall be converted into the right to receive $14.125 in cash.
Each Desjardins Share shall be converted into the right to receive
$13.875 in cash. Each holder of shares of Laurentian Common Stock can
exercise his or her dissenters' rights pursuant to Section 262 of the
General Corporation Law of the State of Delaware.
The acquisition will be effected by means of the merger of L.Q.
with and into Laurentian. Consummation of the merger will result in AAG
becoming the sole stockholder of Laurentian. As a result, the
Laurentian Common Stock will be de-registered under the Securities
Exchange Act of 1934. The obligations of AAG, Laurentian and L.Q. to
consummate the merger as contemplated by the Merger Agreement are
subject to certain conditions, including regulatory approvals and the
approval of the merger by the stockholders of Laurentian.
In addition, AAG, ILAC and DLLG have entered into an Option
Agreement dated as of May 25, 1995. ILAC and DLLG collectively
beneficially own over 80% of the outstanding Laurentian Common Stock.
The Option Agreement provides that under certain circumstances following
the receipt of regulatory approvals and the termination of certain
financing agreements between DLLG and Laurentian, AAG can exercise its
option to purchase all Desjardins Shares for $13.875. The circumstances
that trigger AAG's ability to exercise its option include (i) the
failure, withdrawal or modification of the recommendation to the
stockholders of Laurentian by the Board of Directors of Laurentian (the
"Laurentian Board") to approve the Merger in accordance with the
fiduciary duties of the Laurentian Board due to the receipt of a third
party offer for Laurentian , (ii) the failure of either or both of ILAC
or DLLG to vote all shares of Laurentian Common Stock held by them in
favor of the Merger Agreement or (iii) the failure of the Laurentian
Board to submit the Merger Agreement to the stockholders of Laurentian
for approval on or before November 30, 1995 for any reason other than
the exercise of the fiduciary duties of the Laurentian Board due to the
receipt of a third party offer for Laurentian.
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Item 5. Interest in Securities of the Issuer.
No Reporting Person currently owns any Laurentian Common Stock,
but consummation of the merger as described in Item 4 would result in
AAG owning 100% of the Laurentian Common Stock.
Except as set forth in this Item 5, to the best knowledge and
belief of the undersigned, no transactions involving Laurentian equity
securities have been effected during the past 60 days by the Reporting
Persons or by the directors or executive officers of American Premier,
AFC or AAG.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Except for the Merger Agreement and the Option Agreement, each
as described in Item 4, there have been no contracts, arrangements,
understandings or relationships (legal or otherwise) among any of the
Reporting Persons and Laurentian with respect to transfer or voting of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
Item 7. Material to be filed as Exhibits.
(1) Schedule referred to in Item 2.
(2) Agreement and Plan of Merger by and among American
Annuity Group, Inc., L.Q. Acquisition Corp. and
Laurentian Capital Corporation dated as of May 25,
1995.
(3) Option Agreement dated as of May 25, 1995 by and among
American Annuity Group, Inc., The Imperial Life
Assurance Company of Canada and Desjardins-Laurentian
Life Group, Inc.
(4) Agreement required pursuant to Regulation Section
240.13d-1(f)(1) promulgated under the Securities
Exchange Act of 1934, as amended.
(5) Powers of Attorney executed in connection with filings
under the Securities Exchange Act of 1934, as amended.
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After reasonable inquiry and to the best knowledge and belief
of the undersigned, it is hereby certified that the information set
forth in this statement is true, complete and correct.
Dated: June 2, 1995 AMERICAN PREMIER GROUP, INC.
By: James E. Evans
James E. Evans, Senior Vice
President and General Counsel
AMERICAN FINANCIAL CORPORATION
By: James E. Evans
James E. Evans, Vice President
and General Counsel
AMERICAN ANNUITY GROUP, INC
By: Mark F. Muething
Mark F. Muething, Senior Vice
President, General Counsel
and Secretary
Carl H. Lindner *
Carl H. Lindner
Carl H. Lindner III *
Carl H. Lindner III
S. Craig Lindner *
S. Craig Lindner
Keith E. Lindner *
Keith E. Lindner
* By James E. Evans, Attorney-in-Fact
(Laurentian.13D)
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Exhibit 1
Item 2. Identity and Background.
American Premier is a holding company which was formed to
acquire and own all of the outstanding common stock of both American
Financial Corporation ("AFC") and American Premier Underwriters, Inc. in
a transaction which was consummated on April 3, 1995. American Premier
operates through indirect, wholly-owned and majority-owned subsidiaries
(including AFC and American Premier Underwriters, Inc.) and other
companies in which it beneficially owns significant equity interests.
These companies operate in a variety of financial businesses, primarily
property and casualty insurance and including annuities and portfolio
investing. In non-financial areas, these companies have substantial
operations in the food products industry, and radio and television
station operations.
Carl H. Lindner's principal occupation is as Chairman of the
Board of Directors and Chief Executive Officer of American Premier. Mr.
Lindner has been Chairman of the Board and Chief Executive Officer of
AFC since it was founded over 35 years ago and has been Chairman of the
Board and Chief Executive Officer of American Premier Underwriters, Inc.
since 1987. He is also Chairman of the Board of AAG.
Carl H. Lindner III's principal occupation is as President of
American Premier. He is also President of AFC.
S. Craig Lindner's principal occupations are as Vice Chairman
of American Premier and President of AAG. He is also Vice Chairman of
AFC.
Keith E. Lindner's principal occupations are as Vice Chairman
of American Premier and President and Chief Operating Officer of
Chiquita Brands International, Inc., an affiliate of American Premier.
He is also Vice Chairman of AFC.
The identity and background of the executive officers,
directors and controlling persons of American Premier and AFC (other
than the Lindner Family, which is set forth above) are as follows:
1. Theodore H. Emmerich is a retired managing partner of Ernst
& Young, certified public accountants, Cincinnati, Ohio. He is
presently a director of American Premier and AFC. Mr. Emmerich's
address is 1201 Edgecliff Place, Cincinnati, Ohio, 45206.
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2. James E. Evans' principal occupation is as Senior Vice
President and General Counsel of American Premier. He is Vice President
and General Counsel of AFC and presently serves as a director of
American Premier and AFC.
3. Thomas M. Hunt's principal occupation is as President of
Hunt Petroleum Corporation, an oil and gas production company. He is
presently a director of American Premier and AFC. Mr. Hunt's business
address is 5000 Thanksgiving Tower, 1601 Elm Street, Dallas, Texas,
75201.
4. Alfred W. Martinelli's principal occupation is as Chairman
and Chief Executive Officer of Buckeye Management Company. He is
presently a director of American Premier and AFC. Mr. Martinelli's
business address is 100 Matsonford Road, Building 5, Suite 445, Radnor,
Pennsylvania 19807.
5. William Martin's principal occupation is as Chairman of the
Board of MB Computing, Inc., a privately held computer software
development company. He is presently a director of American Premier and
AFC. Mr. Martin's business address is 245 46th Avenue, St. Petersburg
Beach, Florida 33706.
6. Fred J. Runk's principal occupation is as Senior Vice
President and Treasurer of American Premier. He is also Vice President
and Treasurer of AFC.
7. Thomas E. Mischell's principal occupation is as Senior Vice
President - Taxes of American Premier. He is also a Vice President of
AFC.
The following are persons who are executive officers of
American Premier who are not also executive officers of AFC:
1. Neil M. Hahl's principal occupation is as a Senior Vice
President of American Premier.
2. Robert W. Olson's principal occupation is as Senior Vice
President and Secretary of American Premier.
The following are persons who are executive officers of AFC who
are not also executive officers of American Premier:
1. Sandra W. Heimann's principal occupation is as a Vice
President of AFC.
2. Robert C. Lintz's principal occupation is as a Vice
President of AFC.
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AAG, through its Great American Life Insurance Company
subsidiary, is engaged in the sale of annuities. The identity and
background of the executive officers and directors of AAG (other than
the Lindner Family, which is set forth above) are as follows:
1. Robert A. Adams' principal occupation is as Executive Vice
President of AAG. Mr. Adams is presently a director of AAG and his
business address is 250 East Fifth Street, Cincinnati, Ohio 45202.
2. John B. Berding's principal occupation is as Senior Vice
President - Investments of AAG.
3. William J. Maney's principal occupation is as Senior Vice
President, Treasurer and Chief Financial Officer of AAG. Mr. Maney's
business address is 250 East Fifth Street, Cincinnati, Ohio 45202.
4. Mark F. Muething's principal occupation is as Senior Vice
President, General Counsel and Secretary of AAG. His business address
is 250 East Fifth Street, Cincinnati, Ohio 45202.
5. Jeffrey S. Tate's principal occupation is as Senior Vice
President of AAG. His business address is 250 East Fifth Street,
Cincinnati, Ohio 45202.
6. Christopher P. Miliano's principal occupation is as Vice
President and Controller of AAG. His business address is 250 East Fifth
Street, Cincinnati, Ohio 45202.
7. A. Leon Fergenson is the former Chairman of the Board of
G.K. Technologies, Inc., a manufacturer of electrical and electronic
products. He is presently a director of AAG. Mr. Fergenson's business
address is c/o The Penn Central Corp, 1328 Broadway, 3rd Floor, New
York, New York 10001.
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8. Ronald G. Joseph is the Chief Executive Officer of various
Cincinnati-based automobile dealerships and real estate ventures. He is
presently a director of AAG. Mr. Joseph's business address is 250 East
Fifth Street, Cincinnati, Ohio 45202.
9. John T. Lawrence is Senior Vice President of Paine Webber
Inc., an investment banking firm. He is presently a director of AAG.
Mr. Lawrence's business address is 312 Walnut Street, Suite 2000,
Cincinnati, Ohio, 45202.
10. William Martin's principal occupation is as Chairman of
the Board of MB Computing, Inc., a privately held computer software
development company. He is presently a director of AAG. Mr. Martin's
business address is 245 46th Avenue, St. Petersburg Beach, Florida
33706.
11. Alfred W. Martinelli's principal occupation is as Chairman
and Chief Executive Officer of Buckeye Management Company. He is
presently a director of AAG. Mr. Martinelli's business address is 100
Matsonford Road, Building 5, Suite 445, Radnor, Pennsylvania 19807.
12. Ronald F. Walker's principal occupation is as an executive
of AFC. He is presently a director of AAG. Mr. Walker's business
address is 580 Walnut Street, Cincinnati, Ohio 45202.
The Lindner Family and American Premier may be deemed to be
controlling persons with respect to AFC and AAG.
Unless otherwise noted, the business address of American
Premier, AFC and each of the persons listed above is One East Fourth
Street, Cincinnati, Ohio, 45202, and all of the individuals are citizens
of the United States.
None of the persons listed above have during the last five
years (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) 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 pro-
hibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
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<PAGE>
Exhibit 2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AMERICAN ANNUITY GROUP, INC.,
L.Q. ACQUISITION CORP.
AND
LAURENTIAN CAPITAL CORPORATION
DATED AS OF
MAY 25, 1995
13
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Merger Agreement" or
this "Agreement"), dated as of May 25, 1995, by and among American
Annuity Group, Inc., a Delaware corporation ("Acquiror"), L.Q.
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary
of Acquiror formed for the purposes of the transactions contemplated
hereby ("Newco"), and Laurentian Capital Corporation, a Delaware
corporation ("LCC").
WHEREAS, the Board of Directors of Acquiror (the "Acquiror
Board") believes it is in the best interests of Acquiror and its
stockholders and the Board of Directors of LCC (the "LCC Board")
believes it is in the best interests of LCC and its stockholders that
Acquiror, Newco and LCC effect the transactions contemplated hereby; and
WHEREAS, the parties hereto desire to adopt a plan of merger,
providing for the merger of Newco with and into LCC (the "Merger")
pursuant to which all of the issued and outstanding shares of Common
Stock, $.05 par value per share, of LCC ("LCC Common Stock") will be
converted into the right to receive the amount in cash per share
specified herein; and
WHEREAS, the LCC Board has concurrently herewith approved that
certain Option Agreement made by Acquiror, The Imperial Life Assurance
Company of Canada and Desjardins-Laurentian Life Group Inc. as of the
date hereof; and
WHEREAS, Acquiror, Newco and LCC desire to effect the Merger
and the other transactions contemplated hereby; and
WHEREAS, the parties hereto desire to set forth certain
representations, warranties, covenants and agreements made herein as an
inducement to the consummation of the Merger and the other transactions
contemplated hereby.
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties, covenants and agreements contained herein,
the parties hereto hereby agree as follows:
I. THE MERGER
In accordance with the terms and subject to the conditions of
this Merger Agreement, Acquiror, Newco and LCC shall effect the Merger
as follows:
14
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1.1 THE MERGER. At the Effective Time (as defined in
Section 1.3), in accordance with this Merger Agreement and the General
Corporation Law of the State of Delaware (the "Delaware Law"), Newco
shall be merged with and into LCC, and the separate existence of Newco
shall cease. LCC shall continue as the surviving corporation and is
herein sometimes referred to in this capacity as the "Surviving
Corporation."
1.2 EFFECT OF THE MERGER. The Merger shall have the
effects set forth in Section 259 of the Delaware Law.
1.3 CONSUMMATION OF THE MERGER. As soon as is practicable
on the Closing Date (as defined in Section 1.4) after all conditions to
the consummation of the Merger set forth herein have been satisfied or
duly waived, the parties hereto shall cause the Merger to be consummated
by filing with the Secretary of State of the State of Delaware, a
Certificate of Merger in such form as is required by, and executed,
acknowledged and certified in accordance with, the relevant provisions
of the Delaware Law (the later of the time of such filing or the
effective time of the Certificate of Merger filed pursuant to the
Delaware Law is herein referred to as the "Effective Time").
1.4 CLOSING. The closing of the Merger (the "Closing")
shall take place on the last business day of the month ending no less
than four business days after the date of satisfaction of all the
conditions to the Closing set forth in ARTICLE VIII or on such other
date as Acquiror and LCC shall mutually agree (such specified day
following the satisfaction of all conditions to Closing or such other
mutually agreed to date being herein referred to as the "Closing Date")
at such place as Acquiror and LCC shall mutually agree.
1.5 CERTIFICATE OF INCORPORATION AND BY-LAWS; DIRECTORS AND
OFFICERS.
(a) At the Effective Time, each of the Certificate of
Incorporation of LCC (the "Certificate") and the By-
Laws of LCC (the "By-Laws"), shall be amended in their
entirety to conform to Exhibit A and Exhibit B,
respectively, attached hereto and made a part hereof,
and shall be after such amendment the Certificate of
Incorporation and By-Laws of the Surviving Corporation
and thereafter shall continue to be such Certificate of
Incorporation and By-Laws until amended as provided
therein and in accordance with the Delaware Law.
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(b) From and after the Effective Time, the directors of
Newco 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. The
officers of LCC shall be the officers of the Surviving
Corporation, until the earlier of their resignation or
removal or until their respective successors are duly
appointed and qualified, as the case may be.
II. CONVERSION OF SHARES; DISSENTING LCC SHARES; PAYMENT FOR LCC
COMMON STOCK.
2.1 CONVERSION OF SHARES. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof
or of any party hereto:
(a) LCC Common Stock. Each share of LCC Common Stock
issued and outstanding immediately prior to the
Effective Time, other than (i) DLFC Shares (as
hereinafter defined), (ii) LCC Common Stock held by
Acquiror, any direct or indirect subsidiary of
Acquiror, LCC or any direct or indirect Subsidiary of
LCC ("Excluded Shares"), and (iii) Dissenting LCC
Shares (as hereinafter defined), shall be automatically
converted into the right to receive $14.125 in cash,
payable to the holder thereof without interest thereon
upon the surrender of the certificate formerly
representing such share in the manner provided by
Section 2.2.
(b) DLFC Shares. Each of the 6,177,093 shares of LCC
Common Stock issued and outstanding immediately prior
to the Effective Time held by The Imperial Life
Assurance Company of Canada and Desjardins-Laurentian
Life Group Inc. (collectively, the "DLFC Shares"),
shall be automatically converted into the right to
receive in cash $13.875, payable to the holders thereof
without interest thereon upon the surrender of the
certificates formerly representing such share in the
manner provided by Section 2.2.
(c) Excluded Shares. Each of the Excluded Shares shall be
automatically cancelled and extinguished, and no
payment shall be made with respect to such shares.
16
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(d) Newco Common Stock. Each share of common stock, no par
value per share, of Newco outstanding immediately prior
to the Effective Time shall be automatically converted
into one validly issued, fully paid and nonassessable
newly issued share of common stock, par value $0.05 per
share, of the Surviving Corporation, and the shares
converted pursuant to this Section 2.1(d) shall
constitute the only outstanding shares of capital stock
of the Surviving Corporation.
(e) Dissenting LCC Shares. Each share of LCC Common Stock
with respect to which dissenters' rights have been
properly exercised by the holders thereof under Section
262 of the Delaware Law and perfected to the extent
necessary, as of the Effective Time ("Dissenting LCC
Shares", or, individually, a "Dissenting LCC Share"),
shall thereafter represent only such rights as are
provided by Section 262 of the Delaware Law, and shall
be subject to compliance by the holder thereof with the
obligations imposed by Section 262 of the Delaware Law.
2.2 SURRENDER AND EXCHANGE OF LCC COMMON STOCK, OPTIONS AND
SARs.
(a) Payment Agent. Prior to the Effective Time, Acquiror
shall designate a bank or trust company reasonably
acceptable to LCC to act as Payment Agent in the Merger
(the "Payment Agent"). At the Effective Time, in
accordance with Section 8.3(e) Acquiror or Newco shall
deposit in trust with the Payment Agent and/or an
unconditional commitment to provide cash in the
aggregate amount equal to the Acquiror Payment (as
hereinafter defined). Such funds shall be invested by
the Payment Agent on behalf of the Surviving
Corporation in securities issued or guaranteed by the
United States government or certificates of deposit of
commercial banks that have consolidated total assets of
not less than $500,000,000.
(b) Letter of Transmittal. Promptly after the Effective
Time, the Payment Agent shall mail to each record
holder, as of the Effective Time, of an outstanding
certificate or certificates which immediately prior to
the Effective Time represented LCC Common Stock (the
"Certificates"), other than Certificates evidencing
Dissenting LCC Shares or Excluded Shares, a form letter
17
<PAGE>
of transmittal and instructions for use in effecting
the surrender of the Certificates for payment therefor.
Upon surrender to the Payment Agent of a Certificate,
together with such letter of transmittal duly executed,
and any other documents required by the Payment Agent,
the holder of such Certificate shall be entitled to
receive in exchange therefor the consideration set
forth in Section 2.1, and such Certificate shall
forthwith be cancelled. No interest will be paid or
accrued for the benefit of holders of the Certificates
on the cash payable upon the surrender of the
Certificates. If payment is to be made to a person
other than the person in whose name the Certificate
surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered shall be
properly endorsed or otherwise in proper form for
transfer as reasonably determined by Acquiror and that
the person requesting such payment shall pay to the
Payment Agent any transfer or other taxes required by
reason of the payment to a person other than the
registered holder of such LCC Common Stock or establish
to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable.
(c) Payment for Employee Options and SARs. There shall be
mailed to each holder of an Employee Option or SAR (as
defined in Section 3.2(b)) outstanding at the time for
payment therefor pursuant to this Section 2.2(c) the
consideration set forth in Section 5.3, and upon the
mailing of such payment each such Employee Option or
SAR shall forthwith be cancelled. Payment shall be
made in the manner specified in Section 2.2(c)(i),
unless Acquiror by notice to LCC given not less than
thirty (30) days prior to the filing of the Proxy
Statement described in Section 6.1(b) requests that LCC
pay such consideration in accordance with Section
2.2(c)(ii). No interest will be paid or accrued for
the benefit of holders of Employee Options or SARs on
the cash payable with respect to Employee Options or
SARs. Payment shall be made either:
(i) promptly after the Effective Time by the
Payment Agent to each holder of an Employee
Option or SAR listed on LCC's certificate
delivered pursuant to Section 5.3, or
(ii) by LCC immediately prior to the Effective
Time.
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(d) Undisbursed Funds. At any time following one year
after the Effective Time, Acquiror shall be entitled to
require the Payment Agent to deliver to it or to the
Surviving Corporation any funds (including any interest
received with respect thereto) which have been made
available to the Payment Agent and which have not been
disbursed to holders of Certificates or Employee
Options or SARs, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject
to abandoned property, escheat or other similar laws)
only as general creditors thereof with respect to the
cash payable upon due surrender of their Certificates
or Employee Options or SARs. The Surviving Corporation
shall pay all charges and expenses, including those of
the Payment Agent, in connection with the exchange of
the Acquiror Payment for LCC Common Stock, other than
transfer or other taxes to be paid pursuant to Section
2.2(b) by a person requesting payment to be made to a
person other than the person in whose name a
Certificate surrendered is registered. Until
surrendered in accordance with the provisions of this
Section, each Certificate (other than Certificates
representing Excluded Shares and Dissenting LCC Shares)
shall, at all times after the Effective Time, represent
for all purposes the right to receive in cash the
amount per share specified in Section 2.1 multiplied by
the number of shares of LCC Common Stock evidenced by
such Certificate, without any interest thereon.
Notwithstanding the foregoing, Acquiror shall not be
liable to any holder of LCC Common Stock for any amount
paid to a public official or governmental entity
pursuant to applicable abandoned property laws.
(e) No Stock Transfers. After the Effective Time, there
shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of
the shares of LCC Common Stock which were outstanding
immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented for transfer
to the Surviving Corporation, they shall be cancelled
and exchanged for the per share cash amount specified
in Section 2.1 as provided in this Article in
accordance with the procedures set forth in this
Article.
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2.4 ACQUIROR PAYMENT
The "Acquiror Payment" shall be the sum of
(a) the aggregate of the amounts payable to holders of LCC
Common Stock issued and outstanding as of the Effective
Time pursuant to Section 2.1, plus
(b) if payment is to be made to such holders pursuant to
Section 2.2(c)(i), the aggregate amount payable to
holders of Employee Options or SARs outstanding at the
Effective Time in accordance with Section 5.3.
2.5 CREDIT AGREEMENT. On the Closing Date and prior to the
Effective Time:
(a) Acquiror shall pay or cause to be paid in full to the
Lenders identified in that certain $45,000,000 Credit
Agreement among Laurentian Capital Corporation and the
several Lenders named therein as Lenders and National
Bank of Canada, New York Branch, as Agent (the
"Agent"), dated as of April 25, 1994 (the "Credit
Agreement"), the outstanding balance of the
indebtedness under the Credit Agreement including
principal, interest, fees and expenses;
(b) LCC shall have terminated the commitments under the
Credit Agreement effective as of the Closing Date; and
(c) LCC and the Agent shall have executed and delivered to
Desjardins Laurentian Financial Corporation ("DLFC") an
appropriate instrument of discharge acknowledging the
termination of the Long Term Financing Support
Agreement dated as of April 25, 1994, executed between
DLFC and LCC as well as that certain agreement dated as
of April 25, 1994 executed among DLFC, LCC and the
Agent, and releasing DLFC from all liabilities and
obligations under such agreements.
III. REPRESENTATIONS AND WARRANTIES OF LCC
LCC hereby represents and warrants to Acquiror that:
3.1 ORGANIZATION AND COMPLIANCE WITH LAW.
(a) Each of LCC and its direct and indirect subsidiaries
(such subsidiaries being those corporations of which
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LCC beneficially owns all of the outstanding voting
securities, including without limitation Loyal American
Life Insurance Company ("Loyal American"), an Alabama
stock insurance corporation and a wholly-owned
subsidiary of LCC, and Prairie States Life Insurance
Company ("Prairie States"), a South Dakota stock
insurance corporation and an indirect wholly-owned
subsidiary of LCC; and all such subsidiaries,
collectively referred to herein as the "LCC
Subsidiaries," being listed on Exhibit 22 to the LCC
10-K hereinafter defined) is a corporation duly
organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has
all requisite corporate power and corporate authority
and all requisite governmental and other authorizations
to own, lease and operate its assets and properties and
to carry on its business as now being conducted;
(b) each of LCC and the LCC Subsidiaries is duly qualified
as a foreign corporation to do business and is in good
standing in each jurisdiction in the United States,
Puerto Rico and the U.S. Virgin Islands
("Jurisdiction") in which the property owned, leased or
operated by it or the nature of the business conducted
by it makes such qualification necessary; and
(c) other than is disclosed in a disclosure letter
delivered by LCC to Acquiror prior to the date hereof
(the "LCC Disclosure Letter"), each of LCC and the LCC
Subsidiaries is in compliance with all applicable laws,
judgments, orders, decrees, rules and regulations,
including without limitation all Environmental Laws (as
defined in Section 3.21), without regard to any waiver
or forbearance arrangement;
except with respect to the foregoing (a), (b) and (c) as to such matters
(if any) where failure of such authorizations, qualifications or
compliance does not and would not, either individually or in the
aggregate, have a material adverse effect on the financial condition,
results of operations or business of LCC and the LCC Subsidiaries taken
as a whole. LCC has heretofore delivered to Acquiror true and complete
copies of its Certificate and By-laws and of the charter and bylaws of
each of the LCC Subsidiaries, in each case as in existence on the date
hereof.
3.2 CAPITALIZATION
(a) The authorized capital stock of LCC consists of
20,000,000 shares of LCC Common Stock and 5,000,000
shares of preferred stock. As of the date hereof:
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(i) there were issued and outstanding 7,587,398
shares of LCC Common Stock and 33,747 shares
of Series A Cumulative Convertible Preferred
Stock of LCC ("Preferred Stock"), of which 808
shares are held by Loyal American, and
(ii) 524,098 shares of LCC Common Stock were held
in treasury by LCC. As of December 31, 1994,
LCC had over 9,000 record holders of LCC
Common Stock. Except as disclosed in the LCC
Disclosure Letter, since such date no shares
of LCC Common Stock have been issued. All
outstanding shares of LCC Common Stock are
validly issued, fully paid and nonassessable
and no holder thereof is entitled to any
preemptive rights. Except as disclosed in the
LCC Disclosure Letter, neither LCC nor any of
the LCC Subsidiaries is a party to, nor is LCC
aware of, any voting agreement, voting trust
or similar agreement, arrangement or
understanding relating to any class of capital
stock of, or any agreement, arrangement or
understanding providing for registration
rights with respect to any class of capital
stock or other securities of, LCC or any of
the LCC Subsidiaries.
(b) As of the date hereof, there are outstanding (i)
options (the "Employee Options") to purchase under the
Laurentian Capital Corporation Amended and Restated
Executive Stock Option Plan (the "LCC Option Plan") an
aggregate of not more than 496,680 shares of LCC Common
Stock at a weighted average exercise price per share of
$5.58 (ranging from $2.125 to $8.50 per share), and
(ii) 349,044 Stock Appreciation Rights ("SARs") granted
under the LCC Option Plan at a weighted average base
price per share of approximately $2.54 (ranging from
$2.125 to $5.50 per SAR). Other than as set forth in
this Section 3.2 and any shares of LCC Common Stock
issued pursuant to any of the foregoing, there are not
now, and at the Effective Time there will not be, any
(A) outstanding shares of capital stock or other equity
securities of LCC or (B) outstanding options, warrants,
scrip, rights to subscribe for, calls or commitments of
any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of
any class of capital stock of LCC, or contracts,
agreements, arrangements or understandings to which LCC
is a party, or by which it is or may be bound, to issue
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additional shares of any class of its capital stock or
options, warrants, scrip or rights to subscribe for,
calls or commitments of any character whatsoever
relating to, or securities or rights convertible into
or exchangeable for, any additional shares of any class
of capital stock of LCC.
(c) The shares of capital stock or other equity securities
of each of the LCC Subsidiaries are collectively
referred to herein as the "LCC Subsidiary Shares". All
outstanding LCC Subsidiary Shares are validly issued,
fully paid and nonassessable and, except as set forth
in the LCC Disclosure Letter, owned beneficially and of
record directly or indirectly by LCC, and in each case
owned free and clear of all liens, pledges, security
interests, claims or other encumbrances. Except as
aforesaid or as described in the LCC Disclosure Letter,
there are not now, and at the Effective Time there will
not be, any (A) outstanding LCC Subsidiary Shares that
are owned of record or beneficially by any person or
entity other than LCC or one of the LCC Subsidiaries,
or (B) outstanding options, warrants, scrip, rights to
subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights
convertible into or exchangeable for, shares of any
class of capital stock of any of the LCC Subsidiaries,
or contracts, agreements, arrangements or
understandings to which LCC or any of the LCC
Subsidiaries is a party, or by which any thereof is or
may be bound, to issue additional shares of any class
of capital stock or options, warrants, scrip or rights
to subscribe for, calls or commitments of any character
whatsoever relating to, or securities or rights
convertible into or exchangeable for, any additional
shares of capital stock of any of the LCC Subsidiaries.
3.3 AUTHORIZATION AND VALIDITY OF AGREEMENTS. Subject
only, with respect to the Merger, to approval of this Agreement by the
stockholders of LCC as provided for in Section 8.1(a), LCC has all
requisite corporate power and corporate authority to enter into this
Agreement and to perform its obligations hereunder, and the execution
and delivery by LCC of this Agreement and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
requisite corporate action. On or prior to the date hereof, the LCC
Board has determined to recommend approval of the Merger to the
stockholders of LCC, and such determination is in effect as of the date
hereof. This Agreement has been duly executed and delivered by LCC and
is the valid and binding obligation of LCC, enforceable against LCC in
accordance with its terms, except that (i) such enforcement may be
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subject to bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally, and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought.
3.4 NO NOTICES OR APPROVALS REQUIRED AND NO CONFLICTS.
None of the execution and delivery of this Agreement by LCC, the
performance by LCC of its obligations hereunder or the consummation by
LCC of the transactions contemplated hereby will:
(a) conflict with the Certificate or By-laws of LCC or with
the charter or bylaws of any of the LCC Subsidiaries;
(b) assuming satisfaction of the requirements set forth in
Clause (c) (i), (ii), (iii) and (iv) below, violate any
provision of law applicable to LCC or any of the LCC
Subsidiaries;
(c) require any consent or approval of, or filing with or
notice to, any public body or authority, domestic or
foreign, under any provision of law applicable to LCC
or any of the LCC Subsidiaries, except for
(i) requirements of Federal and state securities
laws,
(ii) requirements arising out of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"),
(iii) the filing of a Certificate of Merger in
accordance with the Delaware Law, and
(iv) approvals of or notices to regulatory
authorities pursuant to the insurance laws of
jurisdictions requiring same; or
(d) assuming satisfaction of the condition set forth in
Section 8.3(d), require any consent, approval or notice
under, or violate, breach, be in conflict with or
constitute a default (or an event that, with notice or
lapse of time or both, would constitute a default)
under, or permit the termination of, or result in the
creation or imposition of any lien upon any assets,
properties or business of LCC or any of the LCC
Subsidiaries under, any note, bond, indenture,
mortgage, deed of trust, lease, franchise, permit,
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authorization, license, contract, instrument or other
agreement or commitment, order, judgment or decree to
which LCC or any of the LCC Subsidiaries is a party or
by which LCC or any of the LCC Subsidiaries or any of
the assets or properties thereof is bound or
encumbered, except those disclosed in the LCC
Disclosure Letter. Except as disclosed in the LCC
Disclosure Letter, there are no contracts, agreements
or arrangements by which LCC or any LCC Subsidiary is
bound under which the parties thereto or persons
covered thereby have any rights or entitlements
dependent upon the change of control to be effected by
the Merger.
3.5 LCC REPORTS AND FINANCIAL STATEMENTS; RESERVES.
(a) Since December 31, 1991, each of LCC and the LCC
Subsidiaries has timely filed all reports, registration
statements and other filings, together with any
amendments required to be made with respect thereto,
that it has been required to file with the Securities
and Exchange Commission ("SEC") under the Securities
and Exchange Act of 1934, as amended (the "1934 Act"),
or the Securities Act of 1933. All reports,
registration statements and other filings (including
all exhibits, notes and schedules thereto and documents
incorporated by reference therein) filed by LCC and any
of the LCC Subsidiaries with the SEC on or after
January 1, 1992, together with any amendments thereto,
including, when filed, the Proxy Statement described in
Section 6.1(b), together with any amendments thereto,
insofar as such Proxy Statement contains data and
information with respect to LCC or any of the LCC
Subsidiaries, are herein sometimes collectively
referred to as the "LCC SEC Reports". LCC has
heretofore delivered to Acquiror true and complete
copies of all of the LCC SEC Reports that have been
filed with the SEC prior to the date hereof. As of the
respective dates of their filing with the SEC the LCC
SEC Reports complied or will comply, as the case may
be, in all material respects with the rules and
regulations of the SEC and did not or will not, as the
case may be, contain any untrue statement of a material
fact or omit to state a material fact required to be
stated therein or necessary to make the statements made
therein not misleading.
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(b) The consolidated financial statements (including any
related notes or schedules) included in LCC's Annual
Report on Form 10-K for the year ended December 31,
1994 (the "LCC 10-K") and LCC's Quarterly Reports on
Form 10-Q for the quarter ended March 31, 1995 and for
quarters ended subsequent thereto (the "LCC 10-Qs"), as
filed with the SEC, were or will be, as the case may
be, prepared in accordance with generally accepted
accounting principles applied on a consistent basis
(except as may be noted therein or in the notes or
schedules thereto) and fairly present or will fairly
present, as the case may be, the consolidated financial
position of LCC and its consolidated subsidiaries as of
December 31, 1993 and 1994 and March 31 (or the last
day of the subsequent fiscal quarter, in the case of
subsequently-filed LCC 10-Qs), 1994 and 1995 and the
consolidated results of their operations and cash flows
for each of the three years in the three-year period
ended December 31, 1994 and each of the interim periods
reported on in the LCC 10-Qs, subject, in the case of
the unaudited interim financial statements contained in
the LCC 10-Qs, to normal year-end audit adjustments on
a basis comparable with prior periods. The accountants
who certified any financial statements and supporting
schedules included or incorporated by reference in the
LCC SEC Reports are independent public accountants with
respect to LCC as required by the rules and regulations
of the SEC.
(c) The statutory financial statements of each of the LCC
Subsidiaries engaged in the business of insurance (the
"Insurance Subsidiaries"), including Loyal American and
Prairie States, for each of the three years in the
three-year period ended December 31, 1994 and for the
quarter ended March 31, 1995 and quarters ended
subsequent thereto have been or will be, as the case
may be, prepared in accordance with accounting
practices prescribed or permitted by the National
Association of Insurance Commissioners and, with
respect to each such Insurance Subsidiary, the
appropriate insurance department of the state of
domicile of such Insurance Subsidiary, and such
accounting practices have been or will be, as the case
may be, applied on a consistent basis throughout the
periods involved, and such statutory financial
statements fairly present or will fairly present, as
the case may be, the financial condition of each
respective Insurance Subsidiary as of such dates in
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accordance with such accounting practices, except as
disclosed therein. LCC has heretofore delivered to
Acquiror true and complete copies of all such
statements which have heretofore been filed.
(d) Since December 31, 1991 (or if later, the date an LCC
Subsidiary became an LCC Subsidiary), each of LCC and
the LCC Subsidiaries has filed all reports and other
filings, together with any amendments required to be
made with respect thereto, that it has been required to
file with state and other insurance and securities
regulatory authorities (the "LCC Insurance Filings"),
and all of the LCC Insurance Filings filed prior to the
date hereof complied, and all such filings made
hereafter prior to the Effective Time will comply, in
all material respects with applicable laws, rules and
regulations, and, except as disclosed in the LCC
Disclosure Letter, there are no material open or
unresolved issues raised by any insurance or securities
regulatory authority with respect to any of such
filings. LCC has heretofore delivered to Acquiror true
and complete copies of (a) all Reports of Examination
issued by any insurance regulatory authority for any
Insurance Subsidiary since January 1, 1992 and all
written responses made by Insurance Subsidiaries
concerning such Reports of Examination, and (b) all
Reports of Examination or similar documents issued by
any other regulatory authority for any other LCC
Subsidiary since January 1, 1992 and all written
responses made by LCC Subsidiaries concerning such
Reports of Examination, and a list of same is included
in the LCC Disclosure Letter.
(e) The aggregate reserves and (except with respect to
clause (i) below) other amounts of liabilities or
obligations of each Insurance Subsidiary (including,
without limitation, reserves established as an
allowance for uncollectible amounts under any
reinsurance, coinsurance or similar contract) as
established or reflected on the books and records of
each of the Insurance Subsidiaries (i)(A) were
determined in accordance with generally accepted
actuarial standards consistently applied, (B) are
fairly stated in accordance with sound actuarial
principles, and (C) on the date hereof are, and at the
Effective Time will be, based on actuarial assumptions
that are in accordance with those specified in the
related insurance contracts, (ii) meet on the date
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hereof, and at the Effective Time will meet, in all
material respects, the requirements of the insurance
laws of the applicable jurisdiction as in effect on the
date hereof, or on the date of the Effective Time, as
the case may be, and (iii), except as set forth in the
LCC SEC Reports, are on the date hereof, and at the
Effective Time will be, adequate to cover the total
amount of all matured and unmatured liabilities and
obligations of such Insurance Subsidiary under all
outstanding insurance contracts pursuant to which such
Insurance Subsidiary has any liability (whether
absolute, accrued, contingent or otherwise) or
obligation, including without limitation any incurred
but not reported claims and any liability or obligation
arising as a result of any reinsurance, coinsurance or
other similar contract. For the purposes of clause
(iii) above, the fact that reserves covered by any such
representation are subsequently adjusted at times and
under circumstances consistent with LCC's ordinary
practices of reassessing the adequacy of its reserves
shall not be used to support any claim regarding the
accuracy of such representation, provided that such
adjustments do not exceed $6,000,000 in the aggregate.
As of the date hereof, each Insurance Subsidiary owns
assets that qualify as reserve assets to the extent
required by applicable insurance laws.
(f) Except as set forth in the financial statements
referred to in Sections 3.5(b) and 3.5(c) (the
"Financial Statements") or the LCC Disclosure Letter,
neither LCC nor any of its subsidiaries has any
liabilities or obligations (whether absolute, accrued,
contingent or otherwise) that in the aggregate have or
may reasonably be expected to have a material adverse
effect on LCC and the LCC Subsidiaries, taken as a
whole.
3.6 CONDUCT OF BUSINESS IN THE ORDINARY COURSE AND ABSENCE
OF CERTAIN CHANGES AND EVENTS
(a) Except as contemplated by this Merger Agreement or as
disclosed in the LCC SEC Reports filed with the SEC
prior to the date hereof or in the LCC Disclosure
Letter, to the extent material to LCC and the LCC
Subsidiaries taken as a whole, since December 31, 1994
LCC and the LCC Subsidiaries have taken no action of
the type referred to in Section 6.2 and there has not
been any material adverse change in the financial
condition, results of operations or businesses of LCC
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and the LCC Subsidiaries, taken as a whole (excluding
for purposes of the foregoing the effect of any
conditions, trends, uncertainties, events and
developments adversely affecting the life insurance
industry generally).
(b) Neither LCC nor any of the LCC Subsidiaries is in
violation of its charter or bylaws or, to the extent
material to LCC and the LCC Subsidiaries taken as a
whole, in default in the performance of, and no event
has occurred that, with notice or lapse of time or
both, would constitute a default in the performance of,
any note, bond, indenture, mortgage, deed of trust,
lease, franchise, permit, authorization, license,
contract, instrument or other agreement or commitment,
order, judgment or decree to which LCC or any of the
LCC Subsidiaries is a party or by which LCC or any of
the LCC Subsidiaries or any of the assets or properties
thereof is bound or encumbered.
3.7 CERTAIN FEES. With the exception of the engagement by
LCC of Oppenheimer & Co., Inc., none of LCC or any of the LCC
Subsidiaries, or any of their respective officers, directors or
employees, has employed any financial advisor, broker or finder or
incurred any liability for any financial advisory, brokerage or finders'
fees or commissions in connection with the transactions contemplated
hereby.
3.8 LITIGATION. Except as disclosed in the LCC SEC Reports
filed with the SEC prior to the date hereof or in the LCC Disclosure
Letter, there are no claims, actions, suits, investigations or
proceedings pending or, to the knowledge of LCC, threatened against or
affecting LCC or any of the LCC Subsidiaries or any of their respective
assets or properties, at law or in equity, before or by any Federal,
state, municipal or other governmental agency or authority, foreign or
domestic, or before any arbitration board or panel, wherever located,
other than those in the ordinary course of the insurance business of the
LCC Subsidiaries, or those which, individually or in the aggregate,
would not have a material adverse effect on LCC and the LCC
Subsidiaries, taken as a whole. LCC has heretofore delivered to
Acquiror a list of all litigation pending on the date hereof to which
LCC or any LCC Subsidiary is a party.
3.9 BENEFIT PLANS
(a) The LCC Disclosure Letter lists the name and a short
description of each Benefit Plan (as herein defined),
together with an indication of its funding status
(e.g., trust, insured or general company assets). For
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purposes hereof, the term "Benefit Plan" shall mean any
plan, program, arrangement or contract currently
maintained or terminated within the last five years by
LCC or any of the LCC Subsidiaries for the benefit of
its employees, former employees or Directors which
constitutes (i) any retirement plan intended to be
qualified under Section 401(a) such as a pension,
profit sharing, 401(k), stock bonus plan or employee
stock ownership plan or other "employee pension benefit
plan" as defined in ERISA Section 3(2), and (ii) any
plan, program or arrangement providing deferred
compensation, bonus deferral or incentive benefits,
whether funded through a trust or otherwise, and (iii)
any welfare plan, program or policy providing vacation,
severance, salary continuation, supplemental
unemployment, disability, life, health coverage,
retiree health, VEBA, medical expense reimbursement or
dependent care assistance benefits, in any such
foregoing case without regard to whether the Benefit
Plan constitutes an employee welfare benefit plan under
Section 3(1) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or the number of
employees covered under such Benefit Plan. The term
Benefit Plan shall include any of the foregoing,
whether or not maintained currently for the benefit of
employees, former employees or Directors of LCC or an
LCC Subsidiary, with respect to which there is any
current obligation (or with respect to which there is
any material likelihood of an obligation being asserted
against LCC or an LCC Subsidiary) for LCC or an LCC
Subsidiary to make contributions or benefit payments.
(b) LCC shall deliver to Acquiror within two weeks after
the date hereof true, complete and correct copies of
all plan documents comprising each Benefit Plan,
together with, when applicable (i) the most recent
summary plan description, if any, required under ERISA,
(ii) the most recent actuarial and financial reports,
if any, and the most recent annual reports filed with
any governmental agency and (iii) all Internal Revenue
Service ("IRS") or other governmental agency rulings
and determination letters or any open requests for IRS
rulings or letters with respect to Benefit Plans.
(c) With respect to each Benefit Plan which is an employee
pension benefit plan (as defined in Section 3(2) of
ERISA) other than any such plan that meets the "top-
hat" exception under Section 201(1) of ERISA (a
"Qualified Benefit Plan"), except as disclosed on the
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LCC Disclosure Letter: (i) the IRS has issued a
determination letter which determined that such
Qualified Benefit Plan satisfied the requirements of
Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), as amended by all of the laws
referred to in Section 1 of Revenue Procedure 93-39,
such determination letter has not been revoked or
threatened to be revoked by the IRS and the scope of
such determination letter is complete and does not
exclude consideration of any of the requirements of
matters referred to in Sections 4.02 through 4.04 of
Revenue Procedure 93-39; (ii) such Qualified Benefit
Plan is in compliance with all qualification
requirements of Section 401(a) of the Code, except for
noncompliance which would not have a material adverse
effect on LCC and the LCC Subsidiaries taken as a
whole; (iii) no application has been made to the IRS
under the voluntary compliance resolution program or
the walk-in closing agreement program and no
circumstance or condition exists which would qualify as
a subject matter of such a filing; (iv) such Qualified
Benefit Plan has been operated in material compliance
with all notice, reporting and disclosure requirements
of ERISA and the Code which apply to employee pension
benefit plans; (v) any Qualified Benefit Plan which is
an ESOP as defined in Section 4975(3)(7) of the Code
(an "ESOP") is in material compliance with the
applicable qualification requirements of Section 409 of
the Code; and (vi) with respect to such Qualified
Benefit Plan, if it was terminated or is currently in
the process of being terminated, such Qualified Benefit
Plan has been or is being terminated in compliance with
the requirements of the Code and ERISA and the
liabilities of such Qualified Benefit Plan, if already
terminated, were fully satisfied or, if such Plan is in
the process of termination, are not greater than the
assets held under such Plan. For purposes hereof, a
Qualified Benefit Plan shall not be considered in
"material compliance" if circumstances exist which, (x)
if discovered by the Internal Revenue Service, would
likely cause the Internal Revenue Service to either
disqualify the Plan or place the Plan in its closing
agreement program or (y) would cause the Department of
Labor to impose material penalties which would have a
material adverse effect upon the financial condition of
LCC and the LCC Subsidiaries taken as a whole.
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(d) With respect to each Benefit Plan, other than a
Qualified Benefit Plan, except as noted on the LCC
Disclosure Letter: (i) to the extent such Benefit Plan
is intended to provide benefits to plan participants
that are not subject to federal income tax so long as
specific provisions of the Code are met, such Benefit
Plan currently meets such Code provisions; (ii) such
Benefit Plan has been operated in material compliance
with all applicable notice, reporting and disclosure
requirements of ERISA and the Code (including but not
limited to the filing of timely Forms 5500); (iii) such
Benefit Plan, if a group health plan subject to the
requirements of Section 4980B of the Code or Sections
601 through 608 of ERISA, has been operated in material
compliance with such requirements; and (iv) there is
not now, and never has been, any "unrelated business
taxable income" as defined in Sections 512 through 514
of the Code. For purposes hereof, a Benefit Plan shall
not be considered in "material compliance" if
circumstances exist which allow the Internal Revenue
Service or the Department of Labor to impose material
penalties which would have a material adverse effect
upon the financial condition of LCC and the LCC
Subsidiaries taken as a whole.
(e) No prohibited transaction under Section 406 of ERISA
has occurred with respect to any Benefit Plan subject
thereto which would result, with respect to any person,
in (i) the imposition, directly or indirectly, of an
excise tax under Section 4975 of the Code or (ii)
fiduciary liability under Section 409 of ERISA which
would have a material adverse effect upon the financial
condition of LCC and the LCC Subsidiaries taken as a
whole. No ESOP is leveraged.
(f) Except as noted on the LCC Disclosure Letter, no
actions, suits or claims (other than routine claims for
benefits) are pending or threatened against any Benefit
Plan or against LCC or any of the LCC Subsidiaries with
respect to any Benefit Plan.
(g) All material Unfunded Liabilities, as hereinafter
defined, with respect to each Benefit Plan have been
recorded and disclosed on one or more of the most
recent Financial Statements or, if not, in the LCC
Disclosure Letter. For purposes hereof, the term
"Unfunded Liabilities" shall mean (i) any amounts
properly accrued to date under generally accepted
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accounting principles in effect as of the date of this
Merger Agreement ("GAAP"), or (ii) amounts not yet
accrued for GAAP purposes but for which an obligation
(which has legally accrued and cannot legally be
eliminated) exists for payment in the future which is
attributable to any Benefit Plan, including but not
limited to (A) severance pay benefits, (B) deferred
compensation or unpaid bonuses, (C) any liabilities on
account of the change in control which will result from
this Agreement, including any potential 20% excise tax
under Section 4999 of the Code relating to excess
parachute payments under Section 280G of the Code, (D)
any unpaid defined benefit or money purchase pension
plan contributions for the current plan year or any
accumulated funding deficiency under Section 412 of the
Code and related penalties under Section 4971 of the
Code, including unpaid defined benefit or money
purchase pension plan contributions of funding
deficiencies owed by members of a controlled group of
corporations which includes LCC or any of the LCC
Subsidiaries and for which LCC is liable under
applicable law, (E) authorized but unpaid profit
sharing contributions or contributions under Section
401(k) and Section 401(m) of the Code, (F) former
employee or Director health benefit or life insurance
coverage and (G) insurance premiums due but unpaid
required under any group health plan to maintain such
plan's coverage through the Closing Date.
(h) Neither LCC nor any of the LCC Subsidiaries maintain a
defined benefit pension plan subject to the provisions
of Title IV of ERISA. Neither LCC nor any of the LCC
Subsidiaries has, or within the past five years has
had, any obligation to contribute to any multiemployer
plan, as defined in Section 3(37) of ERISA.
(i) Except as listed on the LCC Disclosure Letter and
identified as "Retiree Liability," LCC and the LCC
Subsidiaries have no obligation to provide medical
benefits, or life insurance benefits to or with respect
to retirees, former employees or any of their
relatives, other than under Sections 601 through 608 of
ERISA or Section 4980(B) of the Code.
(j) Except as disclosed in the LCC Disclosure Letter, LCC
and the LCC Subsidiaries have all power and authority
necessary to amend or terminate each Benefit Plan
established and maintained by them.
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3.10 TAX MATTERS
(a) Definitions. For purposes of this Section 3.10, the
following terms have the following meanings:
(i) "Code" - The Internal Revenue Code of 1986, as
amended.
(ii) "Tax Return" - Any report, return, form,
declaration or other document or information
required to be supplied to any authority in
connection with Taxes.
(iii) "Taxes" - All taxes, charges, fees, levies or
other assessments, including without
limitation, all net income, gross income,
gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license,
withholding, payroll, employment, excise,
estimated, severance, stamp, occupation,
property, premium or other taxes, fees,
assessments or charges of any kind whatsoever,
together with any interest and any penalties
(including penalties for failure to file in
accordance with applicable information
reporting requirements), and additions to tax
by any authority (domestic or foreign).
(iv) "Taxable Period" - Any taxable year or any
other period that is treated as a taxable year
(including any Short Period) with respect to
which any Tax may be imposed under any
applicable statute, rule, or regulation.
(v) "Pre-Closing Period" - Any Short Period,
Interim Period or other Taxable Period that
ends on or before the Closing Date.
(vi) "Post-Closing Period" - Any Taxable Period
that begins after the Closing Date and, with
respect to any Taxable Period that begins on
or before and ends after the Closing Date, the
portion of such Taxable Period beginning on
the day following the Closing Date.
(vii) "Interim Period" - With respect to any Taxable
Period that begins on or before the Closing
Date and ends after the Closing Date, the
portion of such period that ends on the
Closing Date.
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(viii) "Short Period" - Any Taxable Period that ends
on the Closing Date.
(ix) "LCC Subsidiaries" - For purposes of this
Section 3.10, LCC Subsidiaries shall include
former subsidiaries of LCC for the periods
during which any such subsidiaries were owned
directly or indirectly by LCC.
(b) Representations and Warranties. Except as set forth in
the LCC Disclosure Letter:
(i) Filing Status. LCC is the "common parent" of
an "affiliated group" of corporations (as
those terms are used in Section 1504(a) of the
Code and the Treasury Regulations promulgated
under Section 1502 of the Code). LCC is and
will be eligible to file a consolidated
federal income Tax Return for the Short Period
ending on the Closing Date. The LCC
Disclosure Letter discloses the LCC
Subsidiaries eligible for inclusion in LCC's
consolidated federal income Tax Return and
those Subsidiaries that file separate federal
income Tax Returns.
(ii) Filing Tax Returns and Payment of Taxes. All
Tax Returns required to be filed with respect
to LCC and LCC Subsidiaries for all Taxable
Periods ending on or before the date hereof
have been or will be timely filed. All such
Returns (A) were prepared in the manner
required by applicable law, (B) are true,
correct, and complete in all material
respects, and (C) reflect the liability for
Taxes of LCC and LCC Subsidiaries. All Taxes
shown to be payable on such Returns, and all
assessments of Tax made against LCC and LCC
Subsidiaries with respect to such Returns,
have been or will be paid when due. No
adjustment to the income of LCC and LCC
Subsidiaries relating to such Returns has been
proposed formally or informally by any Tax
authority and, to the best knowledge of LCC,
no basis exists for any such adjustment, other
than such for which adequate reserves have
been established in the Financial Statements
described in Section 3.5(b).
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LCC and LCC Subsidiaries have paid, have
caused to be paid, or have provided a
sufficient reserve on the Financial Statements
for the period ended on or prior to the
Closing Date, for the payment of all Taxes in
the aggregate with respect to all Taxable
Periods, or portions thereof, ending on or
before the date of such statements; and such
Taxes paid or provided for include those for
which LCC and LCC Subsidiaries may be liable
in their own right, or as the transferee of
the assets of, or as successor to, any other
corporation, association, partnership, joint
venture, or other entity.
(iii) Returns Filed. LCC shall deliver to Acquiror
within two weeks after the date hereof, for
each Pre-Closing Period for which the
applicable statute of limitations for the
assessment of an income, franchise or premium
Tax against LCC and LCC Subsidiaries has not
lapsed, a list of (A) all jurisdictions in
which LCC and LCC Subsidiaries have filed an
income, franchise, or premium Tax Return and
(B) all consolidated, combined, group, and
unitary Tax Returns in which LCC and LCC
Subsidiaries have been included.
(iv) Audit Status. There are no claims or
investigations by the IRS or any other Tax
authority pending or threatened against LCC
and LCC Subsidiaries for any past due Taxes,
and there has been no waiver of any applicable
statute of limitations or extension of the
time for the assessment of any Tax for which
LCC and LCC Subsidiaries could be liable under
any provision of federal, state, foreign or
local law.
(v) Liens. Except for liens for real and personal
property Taxes that are not yet due and
payable, there are no material liens for any
Tax upon any asset of LCC and LCC
Subsidiaries.
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(vi) Power of Attorney. No power of attorney has
been granted to any person with respect to LCC
and LCC Subsidiaries relating to any Tax for
any Taxable Period ending after the Closing
Date.
(vii) Tax Sharing Agreement. With the exception of
the tax allocation agreement(s) disclosed in
the LCC Disclosure Letter, there is no
contract, agreement, or intercompany account
under which LCC and LCC Subsidiaries have, or
may at any time in the future have, an
obligation to assume, share, or contribute to
the payment of any portion of a Tax (or any
amount calculated with reference to any
portion of a Tax) determined on a
consolidated, combined, group, or unitary
basis with respect to any group of
corporations of which LCC and LCC Subsidiaries
are or were a member.
(viii) Partner in Partnerships. As of the date of
this Merger Agreement, for federal income Tax
purposes, LCC and LCC Subsidiaries are not
treated as a partner in any partnership, joint
venture, or any other entity treated as a
partnership.
(ix) Liability Under Reg. 1.1502-6. LCC has no
knowledge of any liability for Taxes asserted
against LCC and LCC Subsidiaries under Reg.
1.1502-6 for federal income Tax, or under any
similar state, local, or foreign law for a
state, local or foreign income or franchise
Tax, of any corporation other than LCC and the
LCC Subsidiaries.
(x) Accounting Method Changes. LCC and LCC
Subsidiaries are not required to include in
taxable income any adjustments under Code
Section 481(a) for any Taxable Period, or
portion thereof, ending after the date of this
Agreement for matters arising prior to the
Closing Date.
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(xi) Deferred Income. LCC and LCC Subsidiaries
have no income reportable for a Taxable Period
ending after the Closing Date, but
attributable to a transaction (e.g., an
installment sale) occurring in a Taxable
Period ending on or prior to the Closing Date,
that resulted in a deferred reporting of
income from such transaction (other than a
"deferred intercompany transaction").
(xii) Taxable Year. The taxable year of LCC and LCC
Subsidiaries for federal and state income and
franchise Tax purposes is the calendar year.
(xiii) Collapsible Corporations. Neither LCC nor any
of the LCC Subsidiaries are collapsible
corporations as defined in Code Section 341.
(xiv) Depreciable and Amortizable Assets. The Tax
Returns of LCC and the LCC Subsidiaries
reflect deductions for depreciation of
tangible and amortization of intangible
assets. LCC and the LCC Subsidiaries have
used appropriate lives and methods in
calculating Pre-Closing Period depreciation
and amortization.
(c) Additional Covenants.
(i) Tax Sharing Agreements. All contracts,
agreements, or intercompany accounts under
which LCC and LCC Subsidiaries have, or may at
any time in the future have, an obligation to
assume, share, or contribute to the payment of
any portion of a Tax (or any amount calculated
with reference to any portion of a Tax)
determined on a consolidated, combined, group,
or unitary basis with respect to any group of
corporations of which LCC and LCC Subsidiaries
are or were a member shall terminate with
respect to LCC and LCC Subsidiaries on or
before the Closing Date.
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(ii) Access to Information. From the date hereof,
LCC shall make available to the Acquiror and
its authorized representatives: (A) all
federal, state, local and foreign income,
franchise, gross premium, and similar Tax
Returns for Taxable Periods or portions
thereof ended on or before the Closing Date
and any examination reports and statements of
deficiencies assessed against, proposed to be
assessed against, or agreed to by LCC and LCC
Subsidiaries for such Taxable Periods; (B) any
tax sharing or allocation agreement or
arrangement involving LCC and LCC Subsidiaries
and a true and complete description of any
such unwritten or informal agreement or
arrangement; (C) any pro forma federal income
Tax Returns of LCC and LCC Subsidiaries
together with any schedule reconciling the
items in the pro forma Tax Returns to the
items as included in the consolidated Tax
Return or any separate federal income Tax
Returns for all Taxable Periods ended on or
before the Closing Date; (D) any workpapers or
schedules in LCC's possession showing the
amount of Tax earnings and profits for LCC and
LCC Subsidiaries; (E) any workpapers or
schedules in LCC's possession showing the
amount of Tax basis in LCC Subsidiaries; and
(F) the amount of any net operating loss,
capital loss, charitable contribution, general
business credit, or any other carryover Tax
attribute (if any) for Taxable Periods
beginning on the day following the Closing
Date.
3.11 NO SECURED DEBT. Except as set forth in the LCC
Disclosure Letter, there is not now, and there will not be immediately
prior to the Effective Time, any secured debt (including capitalized
leases) of LCC or any of the LCC Subsidiaries, except for (i)
capitalized leases of less than $1 million in the aggregate as to which
LCC and the LCC Subsidiaries are parties, or (ii) capitalized leases of
LCC or any of the LCC Subsidiaries that are not reflected (and should
not be reflected in accordance with generally accepted accounting
principles) on the consolidated financial statements of LCC, and, in
either case, the existence of which does not violate the terms of any
material note, bond, indenture, mortgage, deed of trust, lease,
franchise, permit, authorization, license, contract, instrument or other
agreement or commitment to which LCC or any of the LCC Subsidiaries is a
party or by which LCC or any of the LCC Subsidiaries or any of the
assets or properties thereof is bound or encumbered.
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3.12 OPINION OF FINANCIAL ADVISOR. The LCC Board has
received from Oppenheimer & Co., Inc. a written opinion, dated on or
prior to the date of this Agreement, to the effect that the
consideration to be received by holders of LCC Common Stock pursuant to
Section 2.1(a) is fair to such stockholders of LCC from a financial
point of view.
3.13 REINSURANCE AGREEMENTS. The LCC Disclosure Letter sets
forth a list of all material treaties, agreements, arrangements or
contracts regarding reinsurance to which any Insurance Subsidiary is a
party or a named reinsured and currently has any rights, privileges,
liabilities or obligations.
3.14 INSURANCE MATTERS. Except as required by law or as set
forth in the LCC Disclosure Letter:
(a) since December 31, 1994, except as originated or
amended in the ordinary course of business and as would
not have a material adverse effect on any such
Insurance Subsidiary, no insurance product or program
of any Insurance Subsidiary has been amended in any
material respect or introduced.
(b) since December 31, 1994, all insurance contract
obligations incurred by any Insurance Subsidiary have
in all material respects been paid (or provision for
payment has been made therefor) in accordance with the
terms of the contracts under which they arose, except
for such obligations for which such Insurance
Subsidiary reasonably believes there is a reasonable
basis to contest payment.
(c) except as set forth in the LCC Insurance Filings or the
LCC SEC Reports, since December 31, 1991 there have
been no outstanding insurance contracts which would
entitle the holder thereof or any other person to
receive dividends, distributions or other benefits
based on the revenues or earnings of any Insurance
Subsidiary.
(d) the underwriting standards utilized and ratings applied
by each Insurance Subsidiary with respect to insurance
contracts outstanding as of the date hereof conform in
all material respects to industry accepted practices
(or otherwise are reasonable where no such industry
accepted practices exist) and, with respect to any such
contract reinsured in whole or in part, conform in all
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material respects to the standards and ratings required
pursuant to the terms of the related reinsurance,
coinsurance or other similar contracts. To the
knowledge of LCC and the Insurance Subsidiaries: (i)
as of the date hereof, all amounts recoverable under
reinsurance, coinsurance or other similar contracts
(including without limitation amounts based on paid and
unpaid losses) are fully collectible in the ordinary
course, net of established reserves as set forth in the
Financial Statements or as reflected in the LCC SEC
Reports, except for amounts which would not, in the
aggregate, have a material adverse effect on LCC and
the LCC Subsidiaries, taken as a whole; (ii) since
December 31, 1991, each insurance agent or broker
appointed by any Insurance Subsidiary, at the time such
agent or broker wrote, sold or produced business for
any Insurance Subsidiary, was duly appointed and, to
the best of LCC's knowledge, duly licensed, as an
insurance agent or broker (for the type of business
written, sold or produced by such insurance agent or
broker) in the particular jurisdiction in which such
agent or broker wrote, sold or produced such business
for any Insurance Subsidiary, except for such failures
to be so appointed or so licensed which would not, in
the aggregate, have a material adverse effect on LCC
and the LCC Subsidiaries, taken as a whole; (iii) to
the best of LCC's knowledge, since December 31,1991 no
such insurance agent or broker violated (or with or
without notice or lapse of time or both would have
violated) any term or provision of any law or any writ,
judgment, decree, injunction or similar order
applicable to the writing, sale or production of
business for any Insurance Subsidiary, the result of
which violations in the aggregate has or may reasonably
be expected to have a material adverse effect on LCC
and the LCC Subsidiaries, taken as a whole, and (iv) as
of the date hereof, each Insurance Subsidiary has all
material licenses and permits required to conduct its
insurance business and operations as they are currently
being conducted.
(e) No action at law or in equity, and no investigation or
proceeding of any kind, is now pending or, to the
knowledge of LCC after due inquiry, threatened to
liquidate or dissolve any Insurance Subsidiary or to
declare any of the corporate rights, powers, or
privileges of any Insurance Subsidiary to be null and
void or otherwise than in full force and effect or
which would jeopardize any insurance license or permit
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held by any Insurance Subsidiary in any state or other
jurisdiction or result in sanctions against any
Insurance Subsidiary or require the restructuring of
the ownership, organization, business or assets of any
Insurance Subsidiary, except for actions which would
not, in the aggregate, have a material adverse effect
on LCC and the LCC Subsidiaries, taken as a whole, if
adversely determined.
(f) Neither LCC nor any LCC Subsidiary is a party to any
agreement which limits in any material respect its
freedom to compete in the life, annuity, health and
accident lines of business or to solicit employees from
any person.
(g) Without limiting the generality of subsection 3.1(c),
each Insurance Subsidiary is authorized to write
insurance for the types of insurance in the
Jurisdictions in which it presently writes. LCC shall
deliver to Acquiror at or prior to Closing true and
complete copies of all insurance licenses held by each
Insurance Subsidiary.
(h) All insurance and annuity contracts which are being
issued by any Insurance Subsidiary as of the date of
this Merger Agreement are in all material respects, to
the extent required under applicable laws, on forms
approved by the insurance regulatory authority of the
Jurisdiction where issued or have been filed with and
not objected to by such authority within the period
provided for objection.
3.15 REAL PROPERTY LEASES. The Financial Statements and LCC
SEC Reports disclose each lease and sublease pursuant to which LCC or an
LCC Subsidiary is a lessee or sublessee of real property which is
required to be disclosed therein; each such lease and sublease is valid
and in full force and effect and enforceable in accordance with its
terms, assuming due execution and authorization by all other parties
thereto; there exists no material event of default or event, occurrence,
condition or act, including without limitation, the execution and
delivery of this Merger Agreement and the consummation of the
transactions contemplated by this Merger Agreement, which constitutes or
would constitute (with notice or lapse of time or both) a default in any
material respect under any of such leases or subleases; and neither LCC
nor any LCC Subsidiary has received any notice of any event of default
or any event, occurrence, condition or act, including without
limitation, the execution and delivery of this Merger Agreement and the
consummation of the transactions contemplated by this Merger Agreement,
which constitutes or would constitute (with notice or lapse of time or
both) a default in any respect under any of such leases or subleases.
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3.16 INTELLECTUAL PROPERTY. Except as disclosed on the LCC
Disclosure Letter and to the extent material to LCC and the LCC
Subsidiaries, taken as a whole, LCC and each LCC Subsidiary owns or is
licensed or otherwise has the full and exclusive right to use all trade
names, trademarks, logos, service marks, patents and copyrights used in
its business as presently conducted and the use thereof does not, to the
best knowledge of LCC, conflict with or infringe upon or otherwise
violate any rights of others; no claim has been asserted by any person
against LCC or any LCC Subsidiary with respect to the use of any
trademark, trade name, service mark, patent, copyright, know-how or
process used by LCC if challenging or questioning the validity or
effectiveness of such use or any such license or agreement and, to the
best knowledge of LCC, there exists no valid basis for any such claim;
the consummation of the transactions contemplated by this Merger
Agreement will not alter or impair any rights referred to in this
Section 3.16; and to the best knowledge of LCC, no person is infringing
or otherwise violating the trade names, trademarks, logos, service
marks, patents and copyrights of LCC and the LCC Subsidiaries and
neither LCC nor any LCC Subsidiary has made any claim with respect
thereto.
3.17 RIGHTS UNDER LICENSES; SOFTWARE. To the extent
material to LCC and the LCC Subsidiaries, taken as a whole, all license
agreements under which LCC or any LCC Subsidiary has obtained rights to
use or permit its customers or agents to use computer software programs
or data owned by others are in full force and effect (assuming due
authorization and execution by the other parties thereto) and
enforceable in accordance with their terms and, to the best knowledge of
LCC, there is no claim that either LCC or any LCC Subsidiary or the
other party or parties to such agreements is in material default
thereof; none of LCC or any of the LCC Subsidiaries has materially
infringed the proprietary software rights of any third party and, to the
best knowledge of LCC, no third party has infringed the proprietary
software rights of LCC or any LCC Subsidiary; and the consummation of
the transactions contemplated by this Merger Agreement will not alter or
impair any rights of LCC or any LCC Subsidiary referred to in this
Section 3.17.
3.18 INTERCOMPANY SERVICES AND TRANSACTIONS. Except as
disclosed in the LCC Disclosure Letter, LCC has provided Acquiror with
true and complete copies of the annual holding company filings made by
the Insurance Subsidiaries for the years ended December 31, 1993 and
December 31, 1994, including monthly amendments, if any, in 1995, which
identify all reportable transactions and all agreements or arrangements
relating to all intercompany services provided currently or since
January 1, 1993 by members of the holding company system of which the
Insurance Subsidiaries are a part. To the extent material to LCC and
the LCC Subsidiaries, taken as a whole, all intercompany services or
transactions so described have been carried out in accordance with
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applicable law and all consents and notice filings for such services or
transactions have been obtained or made, as applicable. There are no
agreements between LCC or any LCC Subsidiary and DLFC or any affiliate
of DLFC which will remain in effect after the Effective Time, except for
insurance coverages provided by DLFC affiliates to LCC and the LCC
Subsidiaries.
3.19 THREATS OF CANCELLATION. Since December 31, 1994, no
policyholder, group of affiliated policyholders, agents, group of
affiliated agents, person or group of affiliated persons holding,
writing, selling or producing insurance (that accounted in the aggregate
for 5% or more of the aggregate premium or annuity income of the
Insurance Subsidiaries for the year ended December 31, 1994 or which
with respect to which LCC has established reserves in an amount in
excess of 5% of its total reserves) has terminated (or to the knowledge
of LCC threatened to terminate) its relationship with LCC or any LCC
Subsidiary.
3.20 DISCLOSURE. No representation, warranty or statement
made by LCC (i) in this Merger Agreement, (ii) in the LCC Disclosure
Letter or (iii) any other written materials furnished or to be furnished
by LCC to Acquiror or their respective representatives, attorneys or
accountants pursuant to this Merger Agreement, contains or will contain
any untrue statement of a material fact, or omits or will omit to state
a material fact required to be stated herein or therein or necessary to
make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
3.21 ENVIRONMENTAL MATTERS. Except as set forth
in the LCC Disclosure Letter, to the best of LCC's knowledge no claims
by third parties ("Third Party Claims") and/or regulatory actions have
been asserted or assessed against LCC or any LCC Subsidiary or any real
property owned or leased by LCC or any LCC Subsidiary (the "Real
Property") and, to the best of LCC's knowledge, no Third Party Claims
and/or regulatory actions are pending or threatened against LCC or the
Real Property, arising out of or due to, or allegedly arising out of or
due to, (i) the Release on, under or from the Real Property of any
Hazardous Substances; (ii) any contamination of the Real Property by
Hazardous Substances, including without limitation, the presence of any
Hazardous Substance which has come to be located on or under the Real
Property from another location; (iii) any material violation or alleged
violation of any Environmental Laws with respect to the Real Property;
(iv) any injury to human health or safety or to the environment by
reason of the past or present condition of, or past or present
activities on or under, the Real Property; or (v) the generation,
manufacture, storage, treatment, handling, transportation or other use,
however defined, of any Hazardous Substance on the Real Property. As
used herein, "Environmental Laws" means any and all laws, regulations,
ordinances, policies, standards, permits, licenses, orders and other
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restrictions or requirements, whether judicial or administrative, of the
United States, or any other country, of any state or other jurisdiction,
or of any political subdivision of any thereof, that relate to the
condition of the air, ground or surface water, land, or other parts of
the environment; to the Release or potential Release of any Hazardous
Substances into the air, ground or surface water, land or other parts of
the environment; or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or other handling of Hazardous
Substances; "Hazardous Substances" means any and all hazardous, toxic or
dangerous waste, substance, pollutant, contaminant, radiation or
material defined as such in (or deemed as such for purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act,
any so-called "Superfund" or "Superlien" law, or any Environmental law
or other applicable law or other requirement of any governmental
authority, relating to, or imposing liability or standards of or for
conduct concerning, any hazardous or toxic waste, substance, pollutant,
contaminant or material, or any petroleum or petroleum-based products;
and "Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or other
disposal in any amount into or onto the air, ground or surface water,
land or other parts of the environment, however caused.
3.22 INSURANCE COVERAGE. On the date hereof, to the extent
material to LCC and the LCC Subsidiaries, taken as a whole, LCC and the
LCC Subsidiaries maintain insurance covering their respective
properties, assets and businesses against such casualties, risks and
contingencies, and in such types and amounts, as are consistent with
customary practice and standards of companies engaged in similar
businesses.
3.23 TANGIBLE PERSONAL PROPERTY. To the extent material to
LCC and the LCC Subsidiaries, taken as a whole, all equipment and
tangible personal property used by LCC and the LCC Subsidiaries are
leased or owned by LCC or the LCC Subsidiaries, free and clear of all
liens, encumbrances or other third party interests of any nature
whatsoever which would materially impair the intended use of such
equipment and tangible personal property, and are in usable condition
for the purpose for which they are intended subject to ordinary wear and
tear and routine maintenance.
3.24 AMERICAN FUNERAL TRUST. To the extent material to LCC
and the LCC Subsidiaries, taken as a whole, (a) each state trust
established by American Funeral Trust (each, an "AFT Trust") is listed
in the LCC Disclosure Letter, (b) each AFT Trust was established and is
validly existing under the laws applicable to it, and (c) each AFT Trust
is in compliance with applicable law. At the time of Closing, each AFT
Trust will be in compliance in all material respects with applicable
law, notwithstanding any disclosure in the LCC Disclosure Letter.
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IV. REPRESENTATIONS AND WARRANTIES OF ACQUIROR.
Acquiror and Newco represent and warrant to LCC as follows:
4.1 ORGANIZATION.
(a) Each of Acquiror and Newco is a corporation duly
organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has
all requisite corporate power and corporate authority
and all requisite governmental and other authorizations
to own, lease and operate its assets and properties and
to carry on its business as it is now being conducted;
(b) each of Acquiror and Newco is duly qualified as a
foreign corporation to do business and is 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
necessary; and
(c) each of Acquiror and Newco is in compliance with all
applicable laws, judgments, orders, decrees, rules and
regulations;
except with respect to the foregoing (a), (b) and (c) as to such matters
(if any) where failure of such authorizations, qualifications or
compliance does not and would not, either individually or in the
aggregate, have a material adverse effect on the financial condition,
results of operations or business of Acquiror and its subsidiaries taken
as a whole. All of the outstanding capital stock of Newco is owned by
Acquiror.
4.2 AUTHORIZATION AND VALIDITY OF AGREEMENTS. Each of
Acquiror and Newco has the requisite corporate power and corporate
authority to enter into this Merger Agreement and to perform its
obligations hereunder, and the execution and delivery of this Merger
Agreement and the consummation by them of the transactions contemplated
hereby have been duly authorized by all requisite corporate action.
This Merger Agreement has been duly executed and delivered by each of
Acquiror and Newco and constitutes a valid and binding agreement of each
of Acquiror and Newco, enforceable against each of Acquiror and Newco in
accordance with its terms, except that (i) such enforcement may be
subject to bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally, and (ii) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought.
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4.3 NO NOTICES OR APPROVALS REQUIRED AND NO CONFLICTS.
None of the execution and delivery of this Agreement by Acquiror and
Newco, the performance by them of their obligations hereunder or the
consummation by them of the transactions contemplated hereby will:
(a) conflict with the articles of incorporation or bylaws
of Acquiror or with the charter or bylaws of Newco;
(b) assuming satisfaction of the requirements set forth in
Clause (c) (i), (ii), (iii) and (iv) below, violate any
provision of law applicable to Acquiror or Newco;
(c) require any consent or approval of, or filing with or
notice to, any public body or authority, domestic or
foreign, under any provision of law applicable to
Acquiror or Newco, except for:
(i) requirements of Federal and state securities
laws,
(ii) requirements arising out of the HSR Act,
(iii) the filing of a Certificate of Merger in
accordance with the Delaware Law, and
(iv) approvals of or notices to regulatory
authorities pursuant to the insurance laws of
the jurisdictions requiring same; or
(d) require any consent, approval or notice under, or
violate, breach, be in conflict with or constitute a
default (or an event that, with notice or lapse of time
or both, would constitute a default) under, or permit
the termination of, or result in the creation or
imposition of any lien upon any assets, properties or
business of Acquiror or Newco under, any note, bond,
indenture, mortgage, deed of trust, lease, franchise,
permit, authorization, license, contract, instrument or
other agreement or commitment, order, judgment or
decree to which either is a party or by which either or
any of the assets or properties of either is bound or
encumbered.
4.4 PROXY STATEMENT. None of the information relating to
Acquiror or its affiliates supplied in writing by Acquiror for inclusion
in the Proxy Statement described in Section 6.1(b) will at the time such
Proxy Statement is mailed or at the time of the LCC Stockholders Meeting
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
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4.5 BROKERS AND FINDERS. Neither Acquiror nor Newco, nor
any of their respective officers, directors or employees, has employed
any financial advisor, broker or finder or incurred any liability for
any financial advisor, brokerage or finders' fees or commissions in
connection with the transactions contemplated herein.
4.6 AVAILABLE FUNDS. At the Effective Time, Acquiror and
Newco will in accordance with Section 8.3(e) have provided, or will have
provided an irrevocable commitment to provide, the funds available to
satisfy the obligations of Acquiror and Newco pursuant to the Merger.
V. ADDITIONAL PROVISIONS
5.1 EMPLOYEE MATTERS.
(a) Without limiting any obligations of the Surviving
Corporation to assume any LCC employee benefit plan,
program, policy, contract, agreement or arrangement as
may arise by operation of law, at the Effective Time
the Surviving Corporation will continue the existing
LCC employee benefit plans, programs, policies,
contracts, agreements and arrangements (the "LCC
Plans") and shall succeed to such rights as LCC may
have as the employer or sponsor under the LCC Plans to
amend, modify or terminate the same in accordance with
their terms and applicable law. For purposes of any of
the LCC Plans that contains a provision relating to a
change in control of LCC (each of which is disclosed in
the LCC Disclosure Letter pursuant to Section 3.4(d)),
Acquiror acknowledges that the consummation of the
Merger constitutes such a change in control. Nothing
contained in this Section 5.1 or elsewhere in this
Merger Agreement shall restrict the right to terminate
the LCC Plans subsequent to the Effective Time.
(b) Acquiror agrees that, following the Effective Time,
Acquiror or the Surviving Corporation shall provide to
employees who are employees of LCC or any of the LCC
Subsidiaries the employee benefit plans, programs,
policies and arrangements provided to employees of
Acquiror and its subsidiaries (the "Acquiror Plans"),
subject to its rights as the employer or sponsor under
the Acquiror Plans to amend, modify or terminate the
same in accordance with their terms and applicable law.
The specific Acquiror Plans to be made available to
employees of LCC or any of the LCC Subsidiaries shall
be in accordance with the policies applicable to the
employees of Acquiror and its subsidiaries (the
"Acquiror Subsidiaries").
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(c) Nothing contained in this Section 5.1 or elsewhere in
this Agreement shall confer, or be deemed to confer,
upon any person who is an employee of Acquiror or any
of the Acquiror Subsidiaries or of LCC or any of the
LCC Subsidiaries any rights to continued employment or
to continuation of any benefit plans, programs,
policies or arrangements, including the LCC Plans and
the Acquiror Plans, for any particular period of time
following consummation of the Merger.
5.2 INDEMNIFICATION.
(a) Acquiror agrees that from and after the Effective Time
it will assume and honor with respect to each officer
and director of LCC and each LCC Subsidiary the
indemnification and advancement of expense obligations
of LCC set forth in Article V of the By-laws of LCC as
in effect on the date hereof with respect to any and
all persons described in such bylaw provision (the
"indemnitees") as to any matter arising out of any
action or omission of any such indemnitee prior to the
Effective Time (including without limitation
indemnification for any claim that is based upon,
arises out of or in any way relates to the Merger, the
Proxy Statement, this Agreement or any of the
transactions contemplated hereby) and that such
indemnitees shall be entitled to the full benefits of,
and Acquiror shall be bound by, such bylaw provision as
though such bylaw provision continued in full force and
effect after the effective time as an obligation of
Acquiror with respect to such matters.
(b) Acquiror agrees that for a period of six years from and
after the Effective Time it will provide directors' and
officers' liability insurance coverage for the benefit
of the indemnitees on substantially the same terms and
conditions as from time to time is provided by Acquiror
for its directors and officers; provided however, that
this Section 5.2(b) shall not prohibit Acquiror from
modifying or terminating any such coverage for the
indemnitees with the modification or termination of its
directors' and officers' liability insurance coverage
generally, so long as the coverage provided for the
indemnitees remains the same as that provided for
directors and officers of Acquiror.
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(c) In the event Acquiror or any of its successors or
assigns (i) reorganizes or consolidates with or merges
into or enters into another business combination
transaction with any other person or entity and is not
the resulting, continuing or surviving corporation or
entity of such consolidation, merger or transaction, or
(ii) liquidates, dissolves or transfers all or
substantially all of its properties and assets to any
person or entity, then, and in each such case, proper
provision shall be made so that the successors and
assigns of Acquiror assume the obligations set forth in
this Section 5.2.
(d) This Section 5.2 shall be construed as an agreement, as
to which the indemnitees are intended to be third-party
beneficiaries, between Acquiror and such indemnitees as
unaffiliated third parties and is not subject to any
limitations, other than those imposed by the Delaware
Law, to which Acquiror may be subject in indemnifying
its own directors or officers or other persons.
5.3 STOCK OPTIONS AND SARs. Each holder of an outstanding
Employee Option or SAR immediately before the Effective Time will be
entitled to receive from the Payment Agent promptly after the Effective
Time or from LCC immediately before the Effective Time, all in
accordance with Section 2.2(c), for each such Employee Option or SAR, an
amount in cash (subject to any applicable withholding taxes) equal to
the product of (A) the excess, if any, of (i) the amount per share
payable to holders of LCC Common Stock pursuant to Section 2.1(a) over
(ii) the per share exercise price or base price, as the case may be, of
such Employee Option or SAR, and (B) the number of shares of LCC Common
Stock subject to such Employee Option or the number of SARs, and such
Employee Option or SAR will be cancelled. The LCC Option Plan shall
terminate as of the Effective Time, and LCC shall ensure that, following
the Effective Time, no holder of an Employee Option or SAR or any
participant in the LCC Option Plan shall have any right thereunder to
acquire equity securities of the Company, Acquiror or any subsidiary
thereof. Prior to the Effective Time, LCC shall cause each holder of
Employee Options or SARs whose Employee Options or SARs have not
otherwise been satisfied to tender to LCC for surrender against payment
by the Payment Agent or LCC in accordance with Section 2.2(c) at or
before the Effective Time all Employee Options or SARs granted under the
LCC Option Plan which remain outstanding on the Closing Date. At the
Effective Time, unless it has previously paid holders of Employee
Options or SARs in accordance with Section 2.2(c)(ii), LCC shall deliver
to the Payment Agent a certificate specifying the name and address of
each holder of Employee Options or SARs, the number of Employee Options
or SARs owned by such holder and the exercise price of each Employee
Option or SAR. LCC has heretofore delivered to Acquiror a true and
complete list providing such information with respect to holders of
Employee Options or SARs as of the date hereof.
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5.4 SERIES A PREFERRED STOCK. LCC shall redeem all
outstanding shares of Preferred Stock at or prior to the later of July
7, 1995 or the Effective Time.
5.5 MANAGEMENT SERVICES AGREEMENT. LCC shall cause the
Management Services Agreement between LCC and Desjardin Laurentian
Financial Corporation to be cancelled at or prior to the Effective Time,
without cost to LCC other than for services performed to and including
the date of cancellation.
5.6 USE OF LAURENTIAN NAME. Immediately after the
Effective Time with respect to such use in Canada, and as soon as
practicable after the Effective Time and in any event within two years
thereafter with respect to such use other than in Canada, Acquiror shall
discontinue all use of the "Laurentian" name, marks and logos.
VI. COVENANTS OF LCC
6.1 STOCKHOLDERS MEETING. In order to consummate the
Merger, LCC acting through its Board of Directors, shall, in accordance
with applicable law and subject to the fiduciary duties of the LCC Board
under applicable law (as determined by the LCC Board in good faith after
consultation with and based upon advice of counsel),
(a) duly call, give notice of, convene and hold an annual
or special meeting of its stockholders (the "LCC
Stockholders Meeting") as soon as practicable following
the date of this Agreement for the purpose of approving
and adopting this Merger Agreement;
(b) include in the proxy statement with respect to the LCC
Stockholders Meeting (the "Proxy Statement") the
recommendation of its Board of Directors that holders
of LCC Common Stock vote in favor of the approval and
adoption of this Merger Agreement; and
(c) obtain and furnish the information required to be
included by it in the Proxy Statement, to file the
Proxy Statement promptly with the SEC and, after
consultation with Acquiror, respond promptly to any
comments made by the SEC with respect to the Proxy
Statement and any preliminary version thereof, and
cause the Proxy Statement to be mailed to its
stockholders at the earliest practicable time.
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6.2 CONDUCT OF BUSINESS BY LCC AND LCC SUBSIDIARIES PENDING
THE MERGER. LCC covenants and agrees with Acquiror that, with respect
to LCC and the LCC Subsidiaries, prior to the Effective Time, unless
Acquiror shall otherwise agree in writing or as is otherwise expressly
contemplated by this Agreement:
(a) The businesses of LCC and the LCC Subsidiaries will be
conducted only in, and LCC and the LCC Subsidiaries
will not take any material action except in, the
ordinary course of business and consistent with prior
practices.
(b) Each of LCC and the LCC Subsidiaries will not directly
or indirectly do any of the following: (i) issue, sell,
pledge, dispose of or encumber (A) any shares of
capital stock of LCC or any of the LCC Subsidiaries
(including without limitation any such shares held in
treasury), except the issuance of shares of LCC Common
Stock upon conversion of Preferred Stock or upon
exercise of LCC Stock Options outstanding as of the
date hereof, (B) any investment assets of LCC or any of
the LCC Subsidiaries other than in the ordinary course
of business consistent with prior practices, (C) any
other assets or properties of LCC or any of the LCC
Subsidiaries other than in the ordinary course of
business and consistent with prior practices or in
transactions not in excess of $500,000 in the
aggregate, or (D) any Insurance Subsidiary or all or
substantially all of the business thereof; (ii) amend
or propose to amend its charter or bylaws; (iii) split,
combine or reclassify any outstanding capital stock, or
declare, set aside or pay any dividend or distribution
payable in cash, stock, property or otherwise with
respect to its capital stock whether now or hereafter
outstanding, except for cash dividends from any LCC
Subsidiaries paid to LCC or another of the LCC
Subsidiaries; (iv) redeem, purchase or acquire or offer
to acquire any of their capital stock other than
redemption of Preferred Stock as contemplated by
Section 5.4; or (v) agree or commit to do any of the
foregoing.
(c) Each of LCC and the LCC Subsidiaries will not directly
or indirectly do any of the following: (i) grant,
issue, sell, pledge or dispose of any options, warrants
or rights of any kind to acquire any shares of any
class of capital stock of LCC or any of the LCC
Subsidiaries or any securities that are convertible or
exchangeable therefor; (ii) acquire (whether by merger,
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consolidation, acquisition of stock or assets or
otherwise) any corporation, partnership or other
business organization or division thereof; (iii) incur
any indebtedness for borrowed money or issue any debt
securities, except under the existing line of credit
under the Credit Agreement; (iv) cancel any material
debts or obligations owing to it, except in connection
with the settlement of policy claims; (v) liquidate or
merge into or consolidate with any other corporation;
or (vi) agree or commit to do any of the foregoing.
(d) Each of LCC and the LCC Subsidiaries will not enter
into, amend in any material respect, terminate or waive
any material right under any material contract or
agreement to which it is a party; provided however,
that this Section 6.2(d) shall not prohibit LCC or any
of the LCC Subsidiaries from taking any actions in the
ordinary course of business and consistent with prior
practices, including without limitation accepting or
reinsuring insurance or annuity risks (provided that
after the date hereof LCC shall notify Acquiror at
least ten (10) days before entering into or materially
modifying any reinsurance agreement), or entering into,
modifying or terminating agency contracts.
(e) Each of LCC and the LCC Subsidiaries will not enter
into or amend any employment, consulting, separation or
termination agreement, arrangement or understanding nor
take any action with respect to the grant of any
separation or termination pay or with respect to any
increase of benefits payable under its separation or
termination pay policies or agreements or arrangements
in effect as of the date hereof.
(f) Each of LCC and the LCC Subsidiaries will not (i) hire
any new executive employee, (ii) hire any new
management employee with annual compensation greater
than $60,000, (iii) except for replacements in the
ordinary course of business consistent with prior
practices, hire any other new employee, (iv) except in
the ordinary course of business consistent with prior
practices, increase the compensation of any employee or
pay any bonus, or (v) adopt or amend (except to comply
with applicable law) any bonus, profit sharing,
compensation, stock option, pension, retirement,
separation, deferred compensation or other employee
benefit plan, agreement, trust fund or arrangement for
the benefit or welfare of, any employee or former
employee.
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(g) Each of LCC and the LCC Subsidiaries will not make any
capital expenditure or commitment for which it is not
contractually bound at the date hereof except (i)
necessary replacements in the ordinary course of
business consistent with past practices, and (ii) other
capital expenditures and commitments not to exceed $2
million in the aggregate. All capital expenditures and
commitments in excess of $500,000 for which LCC and the
LCC Subsidiaries are contractually bound at the date
hereof are disclosed in the LCC Disclosure Letter.
(h) Subject to the provisions hereof, each of LCC and the
LCC Subsidiaries will use its reasonable efforts (i) to
preserve intact the business organization of LCC, Loyal
American, Prairie States and each of the other LCC
Subsidiaries, to maintain in effect any licenses,
franchises, authorizations or similar rights material
to the businesses of LCC and the LCC Subsidiaries, to
keep available the services of their respective current
officers and key employees and to preserve the goodwill
of those having relationships or business dealings with
LCC or any of the LCC Subsidiaries, (ii) to cooperate
with Acquiror in jointly communicating with LCC's
employees and with members of LCC's product
distribution system, including independent contractors,
regarding the Merger and continuing operations after
consummation of the Merger; and (iii) to maintain its
books and records in accordance with sound business
practice on a basis consistent with prior practice.
(i) Except as may be required under generally accepted
accounting principles or statutory accounting
requirements, each of LCC and the LCC Subsidiaries will
not make any material changes in its accounting,
underwriting, pricing or reserving principles, methods
or practices.
(j) After the date hereof, (i) LCC shall not adopt any
amendments to the LCC 401(k) Profit Sharing Savings
Plan except for such amendments as may be required by
the Internal Revenue Service, and (ii) LCC shall not
make any contributions to the LCC 401(k) Profit Sharing
Savings Plan except for 401(k) employee contributions
and employer matching contributions (not to exceed the
guidelines established in the LCC 401(k) Profit Sharing
Savings Plan) or as disclosed in the LCC Disclosure
Letter.
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6.3 NO SOLICITATION OF ACQUISITION TRANSACTIONS. Each of
LCC and the LCC Subsidiaries will not directly or indirectly, through
any director, officer, employee, agent, representative or otherwise,
solicit, initiate or intentionally encourage submission of any
inquiries, proposals or offers from any person or entity (other than
Acquiror) relating to any merger, consolidation, share exchange,
purchase or other acquisition of all or (other than in the ordinary
course of business) any substantial portion of the assets of or any
substantial equity interest in LCC or any of the LCC Subsidiaries or any
business combination with LCC or any of the LCC Subsidiaries
(collectively, an "Acquisition Transaction"), or participate in any
discussions or negotiations regarding, or, unless otherwise required by
law, furnish to any other person any information with respect to LCC or
any of the LCC Subsidiaries or afford access to the properties, books or
records of LCC or any of the LCC Subsidiaries for the purposes of, or
cooperate with, or assist or participate in, facilitate or encourage,
any effort or attempt by any other person or entity to seek or effect an
Acquisition Transaction; provided however, that in the event that
notwithstanding compliance by LCC and the LCC Subsidiaries with the
foregoing provisions of this Section 6.3, LCC receives from a third
party a proposal with respect to an Acquisition Transaction, only to the
extent necessary to act in accordance with the fiduciary duties of the
LCC Board under applicable laws (as determined by the LCC Board in good
faith after consultation with and based upon advice of counsel): (a)
LCC and the LCC Subsidiaries may take actions otherwise prohibited by
the foregoing provisions of this Section 6.3; and (b) in such event or
in the event of withdrawal of (or failure to update at the time of
mailing of the Proxy Statement) the opinion referred to in Section 3.12,
the LCC Board may fail to make, withdraw or modify its recommendation of
the Merger to the stockholders of LCC, and LCC may fail to disseminate
the Proxy Statement, fail to solicit proxies or fail to take other
action to secure a favorable vote of its stockholders for the Merger or
fail to hold a meeting of its stockholders to vote on the Merger. In
addition, following receipt of a proposal or offer relating to an
Acquisition Transaction, LCC may take and disclose to its stockholders a
position contemplated by Rule 14e-2 or Rule 14d-9 under the 1934 Act or
otherwise make a disclosure to its stockholders.
6.4 ACCESS TO INFORMATION. From the date hereof to the
Effective Time, each of LCC and the LCC Subsidiaries will, and their
respective directors, officers, employees, agents and representatives
will, afford the officers, employees, agents and representatives of
Acquiror reasonable access at all reasonable times to the officers,
employees, representatives, properties, books and records of LCC and the
LCC Subsidiaries, including without limitation present or past employee
benefit plans, and to the books and records of any predecessors thereof
in the possession of or under the control of LCC or any of the LCC
Subsidiaries, and will furnish to Acquiror all financial, operating and
other data and information as Acquiror, through its officers, employees
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or representatives, may reasonably request. Nonpublic data and
information received by Acquiror hereunder shall be deemed to be
Evaluation Information as defined in, and shall be subject to the terms
and conditions respecting same specified in, the Confidentiality
Agreement made by LCC and Acquiror on December 8, 1994.
6.5 DETERMINATION LETTER. LCC has filed a request for a
determination letter as to the qualified status of the LCC 401(k) Profit
Sharing Savings Plan, as amended and restated October 1, 1994, and shall
diligently prosecute same.
VII. MUTUAL COVENANTS
7.1 EXPENSES. Except as provided in Section 9.3, all costs
and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring
such costs and expenses.
7.2 ADDITIONAL AGREEMENTS. In accordance with the terms
and subject to the conditions hereof, each of the parties hereto agrees
to use all reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or
advisable to fulfill the conditions and consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement.
7.3 NOTIFICATION OF CERTAIN MATTERS. LCC will give prompt
notice to Acquiror, and Acquiror will give prompt notice to LCC, of (a)
the occurrence, or failure to occur, of any event which occurrence or
failure would be likely to cause any representation or warranty
contained in this Merger Agreement to be untrue or inaccurate in any
material respect at any time from the date hereof to the Effective Time,
and (b) any material failure of LCC or Acquiror, or any director,
officer, employee, agent or representative thereof, to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder.
7.4 AGREEMENT TO DEFEND. In the event of any claim,
action, suit, investigation or other proceeding by any governmental body
or other person or other legal or administrative proceeding is commenced
that questions the validity or legality of the transactions contemplated
hereby or seeks damages in connection therewith, whether before or after
the Effective Time, the parties hereto agree to cooperate and use all
reasonable efforts to defend against and respond thereto.
7.5 COMPLIANCE WITH HSR ACT; STOCKHOLDER APPROVAL;
REGULATORY APPROVALS. Each party hereto will use its best efforts and
shall fully cooperate with the others to make promptly all
registrations, filings and applications and to give all notices to
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obtain all governmental and third party consents, permits, approvals,
orders, authorizations, qualifications, exemptions and waivers necessary
for the consummation of the transactions contemplated by this Agreement
or that thereafter may be necessary to effectuate the transfer or
renewal of any material license, approval or authorization or that may
be necessary or appropriate to effectuate the transfer of contracts,
agreements or arrangements with change of control provisions. Without
limiting the generality of the foregoing, each of Acquiror and LCC will
use all reasonable efforts to:
(a) file as promptly as possible and in any event within
twenty (20) days after the date of this Merger
Agreement with the Department of Justice and the
Federal Trade Commission any premerger notification
required of it under the HSR Act, respond promptly to
any inquiries from the Department of Justice or the
Federal Trade Commission in connection with the
transactions contemplated hereby, and obtain the
earliest possible termination or waiver of any
applicable HSR Act waiting period;
(b) prepare and file the Proxy Statement with the SEC as
promptly as possible and in any event within forty-five
(45) days after the date of this Merger Agreement; and
(c) prepare and file such requests for regulatory approvals
as may be required to be filed with the insurance
departments of the States of Alabama, South Dakota,
Montana, Texas, if required, and Ohio as promptly as
possible in any event within forty-five (45) days after
the date of this Merger Agreement.
7.6 SECURITIES LAWS. Acquiror and LCC acknowledge that the
transactions contemplated hereby are subject to the provisions of the
1934 Act. Each of Acquiror and LCC agrees to provide promptly to the
other such data and information concerning its financial condition,
assets and properties, affairs, operations and businesses as may be
required or appropriate for inclusion in the Proxy Statement and to
cause its counsel, investment advisors, accountants and actuaries to
cooperate with the other's counsel, investment advisors, accountants and
actuaries in the preparation of the Proxy Statement.
7.7 FURTHER DISCLOSURE. If in the course of the
transactions contemplated by this Merger Agreement, either Acquiror or
LCC shall acquire knowledge of any fact, law or circumstance which, if
existing or occurring as of the date of this Merger Agreement, would be
required to be disclosed by such party to avoid a breach of its
representations and warranties contained in this Merger Agreement, then
such party shall immediately disclose such fact, law or circumstance to
the other party.
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VIII. CONDITIONS
8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE
MERGER. The respective obligations of each party hereto to effect the
Merger and to consummate the other transactions contemplated hereby will
be subject to the fulfillment at or prior to the Closing of the
following conditions.
(a) The Merger and this Merger Agreement shall have been
approved and adopted by the requisite vote of the
stockholders of LCC and Acquiror as the sole
stockholder of Newco as required by law, the rules of
the American Stock Exchange with respect to LCC, and
any applicable provisions of the respective charters
and bylaws of the parties.
(b) The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the
HSR Act shall have expired or been terminated.
(c) No order shall have been entered and remain in effect
in any action or proceeding before any foreign, Federal
or state court or governmental agency or other foreign,
Federal or state regulatory or administrative agency or
commission that would prevent or make illegal the
consummation of the Merger or impose any conditions on
the consummation of the transactions contemplated
hereby which Acquiror reasonably deems unacceptable.
(d) There shall have been obtained permits, consents and
approvals of insurance, securities or "blue sky"
commissions or agencies of any jurisdiction and of
other governmental bodies or agencies that may
reasonably be deemed necessary so that the consummation
of the Merger and the other transactions contemplated
hereby will be in compliance with applicable laws, and
they shall not contain any condition that, in the
judgment of Acquiror reasonably exercised, would
reasonably be expected to result in a material adverse
change in the financial condition, results of
operations or businesses of either Acquiror or LCC and
the LCC Subsidiaries, taken as a whole.
8.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF ACQUIROR. The
obligations of Acquiror to effect the Merger and to consummate the other
transactions contemplated hereby are, at the option of Acquiror, also
subject to the fulfillment at or prior to the Closing of the following
conditions:
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(a) The representations and warranties of LCC contained in
Article III shall be accurate in all material respects
as of the date of this Merger Agreement, and there
shall be no inaccuracy in any such representations and
warranties as of the Closing Date except to the extent
that any such inaccuracy individually or in the
aggregate does not constitute a material adverse change
in the financial condition, results of the operations
or businesses of LCC and the LCC Subsidiaries, taken as
a whole; all of the terms, covenants and conditions of
this Merger Agreement to be complied with and performed
by LCC at or before the Closing (including without
limitation those specified in Sections 5.3 and 5.4)
shall have been duly complied with and performed in all
material respects; and a certificate to the foregoing
effect dated as of the Closing Date and signed by the
Chief Executive Officer and Chief Financial Officer of
LCC shall have been delivered to Acquiror.
(b) Since the date of this Merger Agreement, no material
adverse change in the financial condition, results of
operations or businesses of LCC and the LCC
Subsidiaries, taken as a whole, shall have occurred
(excluding for these purposes the effect of any
conditions, events and developments adversely affecting
the life insurance industry generally), including
without limitation any of the following suffered by LCC
or any LCC Subsidiary: (i) any material adverse change
in the credit quality, yield and diversification
characteristics of its investment portfolio, except
declines in yield caused by general economic
conditions; (ii) any material casualty loss with
respect to its assets; (iii) any business interruption
which has not been cured prior to the Closing; or (iv)
any material labor difficulty or customer boycott; and
a certificate to such effect dated as of the Closing
Date and signed by the Chief Executive Officer and
Chief Financial Officer of LCC shall have been
delivered to Acquiror.
(c) Acquiror and its subsidiaries shall have received all
requisite approvals required under applicable insurance
laws necessary to consummate the Merger and the
transactions contemplated thereby.
(d) Acquiror shall have received an opinion of counsel to
LCC reasonably satisfactory to Acquiror, dated as of
the Effective Time and in form and substance reasonably
satisfactory to Acquiror, substantially to the effect
that:
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(i) Each of LCC and the LCC Subsidiaries has been
duly organized, and is subsisting and in good
standing, as a corporation under the laws of
its respective jurisdiction of incorporation.
(ii) LCC has the corporate power and corporate
authority to enter into this Merger Agreement
and consummate the transactions provided for
herein. The execution and delivery of this
Merger Agreement by LCC and the consummation
by it of the transactions provided for herein,
have been duly authorized by requisite
corporate action on the part of LCC. This
Merger Agreement has been executed and
delivered by LCC and (assuming this Merger
Agreement is a valid and binding obligation of
Acquiror) is a valid and binding obligation of
LCC enforceable against it in accordance with
its terms, except (A) that such enforcement
may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar
laws now or hereafter in effect relating to
creditors' rights generally and (B) that
remedies of specific performance and
injunctive and other forms of relief may be
subject to general principles of equity and
public policy and to the discretion of the
court before which any proceeding therefor may
be brought.
(iii) The execution, delivery and performance by LCC
of this Merger Agreement will not (A) conflict
with or result in a breach of any provision of
the Certificate or By-laws of LCC, (B) result
in, constitute a violation of or a default
under, or cause the creation of any security
interest or lien upon any of the properties or
assets of LCC or the LCC Subsidiaries pursuant
to, or cause the acceleration of the maturity
of any debt or obligation of LCC or the LCC
Subsidiaries pursuant to, any agreement,
instrument, order, judgment or decree to which
LCC or the LCC Subsidiaries is subject and of
which such counsel is specifically aware and
which LCC has advised such counsel in
connection with this transaction is material
to LCC and the LCC Subsidiaries or (C) insofar
as is actually known to such counsel, violate
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any law, rule or regulation or any judgment,
decree, order, governmental permit or license
to which LCC or any LCC Subsidiary is subject
which would have a material adverse effect on
LCC and the LCC Subsidiaries taken as a whole.
(iv) Except for such changes as are required by
this Merger Agreement, the capitalization of
LCC is as described in Section 3.2(a) of this
Merger Agreement.
As to any matter contained in such opinion which
involves the laws of any jurisdiction other than the
federal laws of the United States or the laws of a
state in which such counsel is licensed, such counsel
may rely upon opinions of counsel admitted to practice
in such other jurisdictions. Any opinions relied upon
by such counsel as aforesaid shall be delivered
together with the opinion of such counsel, which shall
state that Acquiror's and such counsel's reliance
thereon is justified. Such opinion may include
assumptions as to the accuracy of the representations
and warranties made by LCC in this Merger Agreement,
may include qualifications similar to those set forth
in Article III hereof and other qualifications
customarily contained in legal opinions rendered in
connection with transactions of the nature of the
Merger, and may expressly rely as to matters of fact
upon certificates furnished by appropriate officers and
directors of LCC and the LCC Subsidiaries and by public
officials.
(e) None of the insurance regulatory approvals referred to
in Section 8.1(d) shall be subject to any condition,
satisfaction of all of which conditions would
materially restrict the business or financial
activities of LCC and the LCC Subsidiaries, taken as a
whole, or Acquiror and the Acquiror Subsidiaries, taken
as a whole, or materially increase the cost to Acquiror
of consummating the transactions herein contemplated,
or have a material adverse effect on the financial
condition, results of operations, prospects or business
of LCC and the LCC Subsidiaries, taken as a whole, or
Acquiror and the Acquiror Subsidiaries, taken as a
whole.
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(f) There shall not have been issued and be in effect any
order of any court or tribunal of competent
jurisdiction, and there shall not have been enacted any
statute, rule, regulation or order by, or be
threatened, instituted or pending any suit, action,
investigation, inquiry or other proceeding by, any
governmental or regulatory agency, department,
commission, authority, board, bureau, body or
instrumentality which in the reasonable judgment of
Acquiror (i) makes the acquisition by Acquiror of LCC
illegal or otherwise prohibits the acquisition of LCC,
(ii) would require the divestiture by Acquiror or any
Acquiror subsidiary of a material portion of the
business or assets of Acquiror and the Acquiror
Subsidiaries, taken as a whole, as a result of the
transactions contemplated hereby, or (iii) would impose
any material limitation on the ability of Acquiror to
effectively exercise full rights of ownership of LCC or
of a material portion of the assets or business of LCC
and the LCC Subsidiaries, taken as a whole, as a result
of the transactions contemplated hereby.
(g) Acquiror shall have been provided by LCC at or before
the Closing such additional documents as are
customarily provided for such a closing as may be
reasonably required by Acquiror.
8.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF LCC. The
obligations of LCC to effect the Merger and to consummate the other
transactions contemplated hereby are, at the option of LCC, also subject
to the fulfillment at or prior to the Closing of the following
conditions:
(a) The representations and warranties of Acquiror
contained in Article IV shall be accurate in all
material respects as of the date of this Merger
Agreement, and there shall be no inaccuracy in any such
representations and warranties as of the Closing Date
except to the extent that any such inaccuracy
individually or in the aggregate does not constitute a
material adverse change in the financial condition,
results of operations or businesses of Acquiror and the
Acquiror Subsidiaries, taken as a whole; all of the
terms, covenants and conditions of this Merger
Agreement to be complied with and performed by Acquiror
at or before the Closing shall have been duly complied
with and performed in all material respects; and a
certificate to the foregoing effect dated as of the
Closing Date and signed by the Chief Executive Officer
and Chief Financial Officer of Acquiror shall have been
delivered to LCC.
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(b) Since the date of this Merger Agreement, no material
adverse change in the financial condition, results of
operations or businesses of Acquiror and the Acquiror
Subsidiaries, taken as a whole, shall have occurred
(excluding for these purposes the effect of any
conditions, events and developments adversely affecting
the life insurance industry generally), and a
certificate to such effect dated as of the Closing Date
and signed by the Chief Executive Officer and Chief
Financial Officer of Acquiror shall have been delivered
to LCC.
(c) On the date of the Proxy Statement, the LCC Board shall
have received from Oppenheimer & Co., Inc. a written
update, dated as of such date, confirming the opinion
referred to in Section 3.12.
(d) Acquiror shall have paid or caused to be paid the
outstanding balance under the Credit Agreement as
provided in Section 2.5.
(e) At or before the Closing Date, either: (i) Acquiror
(directly or through one or more of its Subsidiaries)
shall have deposited with the Payment Agent in trust,
for the benefit of the stockholders of LCC at the
Effective Time, funds sufficient to make all payments
required under Article II hereof to the holders of LCC
Common Stock and Employee Options or SARs, or (ii)
Acquiror shall have provided to the Payment Agent an
unconditional and irrevocable written commitment of
Acquiror for the benefit of the holders of LCC Common
Stock and Employee Options and SARs at the Effective
Time, in form reasonably satisfactory to LCC and the
Payment Agent, to make such funds available as they are
required, such commitment to include provisions by
which the Payment Agent is assured of access to cash
and/or marketable securities of Acquiror sufficient to
satisfy such commitment. This condition may be
satisfied by a combination of a deposit under
subsection (i) and a commitment under subsection (ii)
which together equal the amount of funds necessary to
make all payments required under ARTICLE II hereof.
(f) LCC shall have received an opinion of counsel to
Acquiror reasonably satisfactory to LCC, dated as of
the Effective Time and in form and substance reasonably
satisfactory to LCC, substantially to the effect that:
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(i) Each of Acquiror and Newco has been duly
organized, and is subsisting and in good
standing, as a corporation under the laws of
its respective jurisdiction of incorporation.
(ii) Each of Acquiror and Newco has the corporate
power and corporate authority to enter into
this Merger Agreement and consummate the
transactions provided for herein. The
execution and delivery of this Merger
Agreement by Acquiror and Newco and the
consummation by them of the transactions
provided for herein, have been duly authorized
by requisite corporate action on the part of
Acquiror and Newco. This Merger Agreement has
been executed and delivered by Acquiror and
Newco and (assuming this Merger Agreement is a
valid and binding obligation of LCC) is a
valid and binding obligation of Acquiror and
Newco enforceable against each of them in
accordance with its terms, except (A) that
such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect
relating to creditors' rights generally and
(B) that remedies of specific performance and
injunctive and other forms of relief may be
subject to general principles of equity and
public policy and to the discretion of the
court before which any proceeding therefor may
be brought.
(iii) The execution, delivery and performance by
Acquiror and Newco of this Merger Agreement
will not (A) conflict with or result in a
breach of any provision of the Articles of
Incorporation or By-laws of either of them,
(B) result in, constitute a violation of or a
default under, or cause the creation of any
security interest or lien upon any of the
properties or assets of Acquiror pursuant to,
or cause the acceleration of the maturity of
any debt or obligation of Acquiror pursuant
to, any agreement, instrument, order, judgment
or decree to which Acquiror is subject and of
which such counsel is specifically aware and
which LCC has advised such counsel in
connection with this transaction is material
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to Acquiror and would have a material adverse
effect on Acquiror's ability to perform its
obligations hereunder or (C) insofar as is
actually known to such counsel, violate any
law, rule or regulation or any judgment,
decree, order, governmental permit or license
to which Acquiror is subject which would have
a material adverse effect on Acquiror and the
Acquiror Subsidiaries taken as a whole.
As to any matter contained in such opinion which
involves the laws of any jurisdiction other than the
federal laws of the United States or the laws of a
state in which such counsel is licensed, such counsel
may rely upon opinions of counsel admitted to practice
in such other jurisdictions. Any opinions relied upon
by such counsel as aforesaid shall be delivered
together with the opinion of such counsel, which shall
state that Acquiror's and such counsel's reliance
thereon is justified. Such opinion may include
assumptions as to the accuracy of the representations
and warranties made by Acquiror in this Merger
Agreement, may include qualifications similar to those
set forth in Article IV hereof and other qualifications
customarily contained in legal opinions rendered in
connection with transactions of the nature of the
Merger, and may expressly rely as to matters of fact
upon certificates furnished by appropriate officers and
directors of Acquiror and the Acquiror Subsidiaries and
by public officials.
IX. TERMINATION
9.1 TERMINATION EVENTS. This Agreement may be terminated
and the Merger and the other transactions contemplated herein may be
abandoned at any time prior to the Effective Time, whether prior to or
after approval by the stockholder of Newco or the stockholders of LCC:
(a) By mutual consent of the Acquiror Board and the LCC
Board.
(b) By the Acquiror Board or the LCC Board, if the Merger
shall not have been consummated on or before December
31, 1995 (unless such circumstance is the result of a
breach of the terms hereof in any material respect by
the party asserting the termination right).
(c) By the Acquiror Board or the LCC Board, if the Merger
and this Merger Agreement shall have been submitted to
a vote of the stockholders of LCC and shall not have
been approved by the requisite votes.
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(d) By the LCC Board, if a condition to LCC's obligations
to close set forth in Article VIII of this Merger
Agreement is not met on the Closing Date and is not
waived.
(e) By the Acquiror Board, if a condition to Acquiror's
obligations to close set forth in Article VIII of this
Merger Agreement cannot be met on the Closing Date and
is not waived.
(f) By the Acquiror Board or the LCC Board, if an action is
brought and remains pending in a court of competent
jurisdiction (i) seeking to restrain, enjoin or
otherwise prevent the consummation of the Merger or the
other transactions contemplated hereby, or (ii) seeking
substantial damages based on the consummation of the
Merger or the other transactions contemplated hereby,
and in either case, the party seeking to terminate
believes in good faith with the advice of counsel that
such action may have substantial merit.
(g) By the Acquiror Board or the LCC Board, if the LCC
Board does not make to the stockholders of LCC a
favorable recommendation with respect to the Merger or
such recommendation is modified or withdrawn in a way
detrimental to Acquiror.
(h) By the Acquiror Board, but only within thirty (30) days
after the date hereof, if A. M. Best Company ("Best")
has communicated to Acquiror that consummation of the
transactions contemplated hereby has a reasonable
probability of resulting in a reduction of the Best's
rating of Great American Life Insurance Company to a
rating lower than "A", and Acquiror shall have
delivered to LCC within thirty (30) days after the date
hereof the certificate of Acquiror executed by its
President or a Senior Vice President, stating the
particulars of such communication.
9.2 EFFECT OF TERMINATION. In the event of any termination
of this Merger Agreement pursuant to Section 9.1, Acquiror and LCC shall
have no obligation or liability to each other except that (a) the
provisions of the last sentence of Section 6.4 and Section 9.3 shall
survive any such termination, and (b) nothing herein and no termination
pursuant hereto shall relieve any party from liability for any breach of
this Merger Agreement.
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9.3 CERTAIN FEES AND EXPENSES.
(a) LCC agrees to pay to Acquiror the amount of $2,500,000
in immediately available funds, which amount shall be
for the purpose of (i) reimbursement to Acquiror of
costs, expenses and fees actually incurred by or on
behalf of Acquiror and/or Newco in connection with the
Merger and the consummation of all transactions
contemplated by this Agreement and (ii) compensation to
Acquiror for its expenditure of time and effort in
connection with such transactions, such payment to be
made promptly, but in no event later than ten business
days, after the termination of this Merger Agreement as
a result of the occurrence of either of the events set
forth below which results in Acquiror or Newco not
consummating the transactions contemplated by this
Merger Agreement:
(A) in compliance with Section 6.3, LCC
shall have entered into, or shall have
publicly announced its intention to
enter into, an agreement or an
agreement in principle with respect to
any Acquisition Transaction or shall
have determined and such determination
shall have become public knowledge
that any such transaction is more
favorable to the stockholders of LCC
than the transactions contemplated by
this Merger Agreement; or
(B) in compliance with Section 6.3, the
Board of Directors of LCC shall have
withdrawn or materially negatively
modified its approval or
recommendation of this Merger
Agreement or the transactions
contemplated hereby or shall have
resolved to do any of the foregoing
(and such resolution shall have become
public knowledge)
if Acquiror and Newco have not breached any of their
representations, warranties, covenants or agreements
contained in this Merger Agreement in any material
respect.
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(b) Acquiror agrees to pay to LCC the amount of $2,500,000
in immediately available funds, which amount shall be
for the purposes of (i) reimbursement to LCC of costs,
expenses and fees actually incurred by or on behalf of
LCC in connection with the Merger and the consummation
of all transactions contemplated by this Merger
Agreement and (ii) compensation to LCC for its
expenditure of time and effort in connection with such
transactions, such payment to be made promptly, but in
no event later than ten business days, after the
termination of this Merger Agreement as a result of the
failure of Acquiror to satisfy the condition to closing
set forth in Section 8.3(e) hereof, if LCC has not
breached any of its representations, warranties,
covenants or agreements contained in this Merger
Agreement in any material respect.
(c) Any payment made pursuant to Section 9.3(a) or 9.3(b)
shall be liquidated damages paid in full satisfaction
of all claims that the recipient of the payment may
have against the party making such payment based on the
circumstances giving rise to such payment. The parties
hereto acknowledge the difficulty of ascertaining
actual damages in the circumstances under which
payments would be made pursuant to Section 9.3(a) or
Section 9.3(b), and agree that the amounts specified in
said Sections are reasonable and do not constitute a
penalty.
X. MISCELLANEOUS
10.1 WAIVER AND AMENDMENT. Any provision of this Agreement
may be waived at any time by the party that is, or whose stockholders
are, entitled to the benefits thereof. This Merger Agreement may not be
amended or supplemented at any time, except by an instrument in writing
signed on behalf of each party hereto; provided however, that after this
Merger Agreement has been approved and adopted by the stockholder of
Newco and the stockholders of LCC this Merger Agreement may be amended
only as may be permitted by applicable provisions of the Delaware Law.
10.2 NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. No
representation or warranty in this Merger Agreement shall survive the
consummation of the Merger.
10.3 PUBLIC STATEMENTS. Acquiror and LCC agree to consult
with each other prior to issuing any press release or otherwise making
any public statement or disclosure with respect to the transactions
contemplated hereby, and neither will issue any such press release or
make any such public statement or disclosure prior to such consultation,
except as may be required by law or applicable stock exchange policy.
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10.4 KNOWLEDGE. All references in this Merger Agreement to
knowledge of a corporation shall be deemed to mean knowledge of any one
or more of its executive officers.
10.5 ASSIGNMENT. This Merger Agreement will not be
assignable by the parties hereto.
10.6 NOTICES. All notices, requests, claims, demands and
other communications hereunder will be in writing and will be given (and
will be deemed to have been duly received if so given) by delivery by
cable, telegram, telex, telecopy or by registered or certified mail,
postage prepaid, return receipt requested, to the respective parties as
follows:
If to Acquiror:
American Annuity Group, Inc.
250 East Fifth Street
Cincinnati, Ohio 45202
Attention: Mark F. Muething, Esquire
Telephone Number: (513) 333-5515
Telecopy Number: (513) 357-3397
with a copy to:
Keating, Muething & Klekamp
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Edward E. Steiner, Esquire
Telephone Number: (513) 579-6468
Telecopy Number: (513) 579-6957
and if to LCC:
Laurentian Capital Corporation
640 Lee Road, Suite 303
Wayne, Pennsylvania 19087
Attention: Mr. Robert T. Rakich
Telephone Number: (610) 889-7400
Telecopy Number: (610) 889-7406
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with a copy to:
Armbrecht, Jackson, DeMouy,
Crowe, Holmes & Reeves, L.L.C.
1300 AmSouth Center
Post Office Box 290
Mobile, Alabama 36601
Attention: E. B. Peebles III, Esquire
Telephone Number: (334) 405-1300
Telecopy Number: (334) 432-6843
or to such other address as either party may have
furnished to the other in writing in accordance
herewith, except that notices of change of address
shall only be effective upon receipt.
10.7 GOVERNING LAW. THIS MERGER AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAW OF THE STATE OF
DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
10.8 SEVERABILITY. If any term, provision, covenant,
agreement or restriction of this Merger Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants, agreements and
restrictions of this Merger Agreement will continue in full force and
effect and will in no way be affected, impaired or invalidated.
10.9 COUNTERPARTS. This Merger Agreement may be executed in
counterparts, each of which will be an original, but all of which
together will constitute one and the same agreement.
10.10 HEADINGS. The section headings herein are
for convenience only and will not affect the construction hereof.
10.11 ENTIRE AGREEMENT. This Merger Agreement
constitutes the entire agreement between the parties hereto and
supersede all other prior agreements and understandings, both oral and
written, between the parties relating to the subject matter hereof and
thereof, and except as provided in Section 5.2 do not confer upon any
person or entity not a party hereto or thereto any rights or remedies
hereunder or thereunder.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Merger Agreement to be signed by its respective President or a Vice
President and attested by its respective Secretary or an Assistant
Secretary, all as of the date first above written.
AMERICAN ANNUITY GROUP, INC.
By: /s/ Jeffrey S. Tate
Senior Vice President
ATTEST:
/s/ Mark F. Muething
Secretary
LQ ACQUISITION CORP.
By: /s/ Jeffrey S. Tate
Senior Vice President
ATTEST:
/s/ Mark F. Muething
Secretary
LAURENTIAN CAPITAL CORPORATION
By: /s/ Robert T. Rakich
President
ATTEST:
/s/ Bernhard M. Koch
Secretary
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Exhibit 3
OPTION AGREEMENT
Option Agreement dated as of May 25, 1995, by and among
American Annuity Group, Inc., a Delaware corporation (the "Purchaser"),
The Imperial Life Assurance Company of Canada, a Canadian corporation
("ILACO") and Desjardins-Laurentian Life Group Inc., a Quebec
corporation ("DLLG"), (ILACO and DLLG collectively, the "Stockholders").
Simultaneously herewith, the Purchaser, L.Q. Acquisition Corp.,
a Delaware corporation and a wholly owned subsidiary of the Purchaser
("Newco"), and Laurentian Capital Corporation, a Delaware corporation
(the "Company"), are entering into an Agreement and Plan of Merger dated
as of the date hereof (the "Merger Agreement"), pursuant to which Newco
will merge into the Company (the "Merger").
In order to induce the Purchaser to enter into the Merger
Agreement and to provide reasonable assurances that the transactions
contemplated by the Merger Agreement will be consummated, the
Stockholders desire to grant to the Purchaser an option to purchase
their shares of Common Stock, $.05 par value per share, of the Company
("Company Common Stock") and further desire to make certain other
agreements regarding such shares, upon the terms and subject to the
conditions set forth below.
The Board of Directors of the Company has approved the
Stockholders' entering into this Agreement with the Purchaser, the form
of this Agreement and the consummation of the transactions contemplated
hereby.
Accordingly, the parties hereto agree as follows:
1. Grant of Option.
The Stockholders hereby jointly grant to the Purchaser an
exclusive and irrevocable option (the "Option") to purchase an aggregate
of 6,177,093 shares of Company Common Stock (the "Option Shares")
consisting of 5,432,109 shares owned by ILACO and 744,984 shares owned
by DLLG, at a price of $13.875 per share, subject to the terms and
conditions contained herein.
2. Exercise of Option.
2.1 Following (i) the expiration of any applicable
waiting period under Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "Hart-Scott-Rodino Act"), (ii)
the granting of all required regulatory approvals including, without
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limitation, approval from the office of The Superintendent of Financial
Institutions (Canada) and (iii) the termination of the Long Term
Financing Support Agreement dated as of April 25, 1994, between
Desjardins Laurentian Financial Corporation, a Quebec corporation
("DLFC"), and the Company and an Agreement dated as of April 25, 1994
among DLFC, the Company and National Bank of Canada, in its capacity as
Agent under the Company's Credit Agreement dated as of April 25, 1994
(both of such agreements collectively, the "Support Agreements"), and
the release of DLFC from all of its liabilities and obligations under
the Support Agreements, the Option may be exercised by the Purchaser, in
whole but not in part, at any time prior to the termination of the
Option and this Agreement in accordance with its terms, upon or
following the occurrence of either of the following events:
(a) the receipt by the Company from a third
party of a proposal with respect to an Acquisition Transaction
(as defined in the Merger Agreement) and the exercise by the
Company of its rights under Section 6.3 of the Merger
Agreement; provided, that if the Option Shares are not sold to
such third party by the Purchaser in connection with such
Acquisition Transaction, then the Purchaser shall promptly
thereafter take all necessary action to purchase or cause to be
purchased all of the outstanding Company Common Stock not held
by the Purchaser (other than the Option Shares) at a price per
share equal to the price per share of the proposed third party
Acquisition Transaction; or
(b) the failure (i) by either or both of the
Stockholders to vote all shares of Company Common Stock owned
by them in favor of the Merger and for adoption of the Merger
Agreement when the Merger Agreement is submitted to the
stockholders of the Company for approval or (ii) by the Company
to submit the Merger Agreement to the stockholders of the
Company for approval on or before November 30, 1995 for any
reason other than the exercise by the Company of its rights
under Section 6.3 of the Merger Agreement; provided, that if
the Option is exercised pursuant to this clause (b), the
Purchaser shall promptly thereafter take all necessary action
to purchase or cause to be purchased all of the outstanding
Company Common Stock not held by the Purchaser (other than the
Option Shares) at the price set forth in the Merger Agreement
to be paid for such shares.
2.2 In the event the Purchaser elects to exercise the
Option pursuant to Section 2.1 hereof, the Purchaser shall send a
written notice to the Stockholders (which notice shall be given within
five days after the Purchaser becomes aware that such Option is
exercisable) specifying a place, time and date (not earlier than 2 nor
later than 20 Business Days from the date such notice is given) for the
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closing of such purchase of the Option Shares. If such closing is to
occur sooner than five Business Days from the date such notice is given,
facsimile or telephonic notice shall also be given at the time such
written notice is given. For purposes of this Agreement, "Business Day"
shall mean any day on which banks in Toronto and New York are open for
business.
3. Payment and Delivery of Certificate(s).
At the closing of the purchase of the Option Shares hereunder,
(i) the Purchaser shall pay to each Stockholder the aggregate price for
the Option Shares being purchased from such Stockholder by delivery of a
certified check or cashier's check or by wire transfer of funds to a
bank account designated by the Stockholder and (ii) each Stockholder
shall deliver to the Purchaser a duly issued and executed certificate or
certificates representing the Option Shares being sold by such
Stockholder, duly endorsed or accompanied by stock powers duly executed
in blank. Such certificates may contain a legend substantially as
follows:
"These shares have not been registered under the
Securities Act of 1933, as amended, and may not be sold
without an effective registration statement under such
Act or pursuant to an exemption therefrom."
4. Representations and Covenants
of the Stockholders.
Each Stockholder hereby represents, warrants and covenants with
respect to itself to the Purchaser as follows:
4.1 The Stockholder is a corporation duly organized,
validly existing and in good standing under the laws of Canada in the
case of ILACO and of the Province of Quebec in the case of DLLG, and
with the corporate power to execute, deliver and carry out the terms of
this Agreement.
4.2 During the term of this Agreement and except as
contemplated by this Agreement and the Merger Agreement, the Stockholder
will not (i) transfer (which term shall include, without limitation, any
sale, gift, pledge or other disposition), or consent to any transfer of,
any or all of the Option Shares or any interest therein, (ii) enter into
any contract, option or other agreement or understanding with respect to
any transfer of any or all of the Option Shares or any interest therein,
(iii) grant any proxy, power-of-attorney or other authorization in or
with respect to the Option Shares, (iv) deposit the Option Shares into a
voting trust or enter into a voting agreement or arrangement with
respect to the Option Shares, or (v) take any other action that would in
any way restrict, limit or interfere with the performance of its
obligations hereunder or the transactions contemplated hereby or in the
Merger Agreement.
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4.3 On the date hereof, the Stockholder (i) owns as
sole owner, beneficially and of record, in the case of ILACO 5,432,109
shares of Company Common Stock and in the case of DLLG 744,984 shares of
Company Common Stock, free and clear of all liens, claims, options,
charges, encumbrances, security interests and rights or interests of any
kind; and (ii) has full right, power and authority to sell and vote such
shares of Company Common Stock, to enter into and perform this Agreement
and to grant the Option granted herein. No person holds a proxy or
other right to vote or direct the vote of the Stockholder's shares of
Company Common Stock and upon exercise of the Option granted herein, the
Stockholder shall convey good title to such shares, free and clear of
all liens, claims, options, charges, encumbrances, security interests
and rights or interests of any kind. The Stockholder owns no warrants
or options to acquire shares of Company Common Stock. The shares of
Company Common Stock owned by the Stockholder are (and upon exercise of
the Option will be) duly issued, fully paid and nonassessable. This
Agreement has been duly authorized by all necessary corporate action on
the part of the Stockholder, has been duly executed and delivered on
behalf of the Stockholder by duly authorized officers or representatives
of the Stockholder and is valid, binding and enforceable against the
Stockholder in accordance with its terms except to the extent that
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting the enforcement of creditors' rights generally or by
equitable principles. The execution, delivery and performance of this
Agreement by the Stockholder and the consummation of the transactions
contemplated hereby do not require the consent, waiver, approval,
license or authorization of or any filing with any person or
governmental authority other than pursuant to securities laws, the
Hart-Scott-Rodino Act and applicable insurance laws, including without
limitation approval from the office of The Superintendent of Financial
Institutions (Canada), and those consents required in connection with
the termination of the Support Agreements, and, following the
termination of the Support Agreements as contemplated by Section 2.1
hereof, will not violate, result in a breach of or the acceleration of
any obligation under, or constitute a default under, any provision of
the Stockholder's charter or by-laws, or any indenture, mortgage, lease,
agreement, contract, instrument, order, judgment, ordinance, regulation
or decree specifically applicable to the Stockholder.
4.4 The Stockholder will make any necessary filings
required to be made by such Stockholder under the Hart-Scott-Rodino Act
in connection with the transactions contemplated by this Agreement and
will take such action as may reasonably be required of it in order to
obtain the regulatory approvals contemplated by Section 2.1 hereof.
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5. Representations and Covenants
of the Purchaser.
The Purchaser hereby represents, warrants and covenants to the
Stockholders as follows:
5.1 The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and with the corporate power to execute, deliver and carry out
the terms of this Agreement.
5.2 This Agreement has been duly authorized by all
necessary corporate action on the part of the Purchaser, has been duly
executed and delivered on behalf of the Purchaser by a duly authorized
officer of the Purchaser and is valid, binding and enforceable against
the Purchaser in accordance with its terms except to the extent that
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
or affecting the enforcement of creditors' rights generally or by
equitable principles. The execution, delivery and performance of this
Agreement by the Purchaser and the consummation by it of the
transactions contemplated hereby do not require the consent, waiver,
approval, license or authorization of or any filing with any person or
governmental authority other than pursuant to federal securities laws,
the Hart-Scott-Rodino Act and applicable insurance laws and will not
violate, result in a breach of or the acceleration of any obligation
under, or constitute a default under, any provision of the Purchaser's
charter or by-laws, or any indenture, mortgage, lease, agreement,
contract, instrument, order, judgment, ordinance, regulation or decree
specifically applicable to the Purchaser.
5.3 The Purchaser is acquiring the Option and the
Option Shares transferable upon the exercise thereof for its own account
and not with a view to the distribution or resale thereof. Any sale,
transfer or other disposition of the Option Shares by the Purchaser will
be made in compliance with all applicable provisions of the Securities
Act of 1933, as amended, and the rules and regulations thereunder.
5.4 The Purchaser has such knowledge and experience in
financial and business matters that it is capable of utilizing the
information that is available to the Purchaser concerning the Company to
evaluate the risks of investment in the Option Shares.
5.5 The Purchaser acknowledges that it has not
received any information relating to the Company from the Stockholders
and that it is not relying on any information from the Stockholders in
connection with its entering into the Merger Agreement.
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5.6 The Purchaser will make any necessary filings
required to be made by the Purchaser under the Hart-Scott-Rodino Act in
connection with the transactions contemplated by this Agreement and will
take such action as may reasonably be required of the Purchaser in order
to obtain the regulatory approvals contemplated by Section 2.1 hereof.
6. Description of Shares.
For all purposes of this Agreement, the shares of Company
Common Stock shall mean the shares of Company Common Stock and all
securities or property (including cash) issued or exchanged with respect
to such shares from and after the date of this Agreement upon any
reorganization, recapitalization, reclassification, merger,
consolidation, spin-off, partial or complete liquidation, stock
dividend, split-up, sale of assets, distribution to stockholders or
combination of Company Common Stock or any other change in the corporate
or capital structure of the Company which would have the effect of
diluting the Purchaser's rights hereunder. In such event, the
Stockholders shall execute an amendment to this Agreement making those
adjustments in the number of Option Shares and the exercise price
thereof which may be necessary to restore the Purchaser to its rights
hereunder.
7. Termination of Agreement.
This Agreement shall terminate and the Option shall expire on
the first to occur of the following events: (i) the Effective Time (as
defined in the Merger Agreement) (it being understood that in such event
the Option Shares that are not previously purchased hereunder shall be
acquired pursuant to the terms of the Merger Agreement), (ii) the
termination of the Merger Agreement by the Purchaser pursuant to any of
the provisions of Section 9.1, (iii) the termination of the Merger
Agreement by the Company pursuant to any of the provisions of Section
9.1 thereof other than clauses (c) or (g) thereof, (iv) the abandonment
of the Merger by the Purchaser otherwise than in accordance with the
terms of the Merger Agreement, or (v) December 31, 1995.
8. Miscellaneous.
8.1 Assignability; Transfer Restrictions. Neither
this Agreement, nor any of the rights, interests or obligations
hereunder shall be assigned by either of the parties hereto without the
prior written consent of the other party except that the Purchaser may
assign its rights hereunder, in whole or in part, to any wholly owned
direct or indirect subsidiary of the Purchaser, provided that such
assignee shall deliver to the Stockholders a certificate signed on its
behalf by its President or any Vice President containing representations
and covenants substantially similar to those made by the Purchaser in
Section 5 hereof and provided further that in the event of any such
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assignment, the Purchaser shall not be released from any of its
obligations to the Stockholders hereunder. Neither the Option nor the
Option Shares may be sold, pledged, transferred, hypothecated, or
otherwise disposed of except in compliance with applicable law,
including, without limitation, federal securities laws.
8.2 Third Parties. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the successors and
permitted assigns of, the parties hereto. Nothing expressed or referred
to in this Agreement is intended or shall be construed to give any
person other than the parties to this Agreement or their respective
successors or assigns any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
The representations and warranties contained in this Agreement shall
survive for one year from the date hereof.
8.3 Further Assurances. Each party shall, upon the
reasonable request by the other, execute and deliver any additional
documents necessary or desirable to complete the sale, conveyance,
transfer and assignment of the Option Shares acquired by the Purchaser
pursuant to this Agreement.
8.4 Amendment. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof.
This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed
by all of the parties hereto.
8.5 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and given (and
shall be deemed to have been duly received if so given) by delivery by
messenger, telecopy or registered or certified mail, postage prepaid, to
the respective parties as follows:
If to the Purchaser:
American Annuity Group, Inc.
250 East Fifth Street
Cincinnati, Ohio 45202
Attention: Mark F. Muething, Esquire
Telephone Number: (513) 333-5515
Telecopy Number: (513) 357-3397
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with a copy to:
Keating, Muething & Klekamp
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Edward E. Steiner, Esquire
Telephone Number: (513) 579-6468
Telecopy Number: (513) 579-6957
If to the Stockholders:
The Imperial Life Assurance
Company of Canada
95 St. Clair Avenue West
Toronto, Ontario M4V 1N7
Canada
Attention: Mr. Robert W. Haig, Secretary
Telephone Number: (416) 926-2702
Telecopy Number: (416) 324-1825
and to
Desjardins-Laurentian Life Group Inc.
1, Complexe Desjardins
Tour Sud, 21st Floor
Montreal (Quebec) H5B 1E2
Attention: Mtre. Pierre Rousseau, Vice
President Corporate Affairs and
Assistant General Secretary
Telephone Number: (514) 285-3064
Telecopy Number: (514) 285-1765
with copies to:
Desjardins Laurentian Financial
Corporation
1, Complexe Desjardins, 40th Floor
P.O. Box 10500, Desjardins Station
Montreal, Quebec H5B 1J1
Canada
Attention: Mtre. Lise Bernier
Telephone Number: (514) 281-7081
Telecopy Number: (514) 281-7110
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and to
Arnold & Porter
399 Park Avenue
New York, New York 10022-4690
Attention: John A. Willett, Esquire
Telephone Number: (212) 715-1000
Telecopy Number: (212) 715-1399
or to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of changes of
address shall only be effective upon receipt.
8.6 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware
applicable to agreements made and to be wholly performed in such State.
8.7 Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original, but all of
which together shall constitute one and the same agreement.
8.8 Effect of Section Headings. The section headings
herein are for convenience only and shall not affect the construction
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
AMERICAN ANNUITY GROUP, INC.
By /s/ Jeffrey S. Tate
Title: Senior Vice President
THE IMPERIAL LIFE ASSURANCE
COMPANY OF CANADA
By /s/ Humberto Santos
Title: Authorized Representative
By /s/ Guy Rivard
Title: Authorized Representative
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DESJARDINS-LAURENTIAN LIFE
GROUP INC.
By /s/ Humberto Santos
Title: Authorized Representative
By /s/ Guy Rivard
Title: Authorized Representative
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Exhibit 4
AGREEMENT
This Agreement executed this 1st day of June, 1995, is by and
among American Premier Group, Inc. ("American Premier") and American
Financial Corporation ("AFC"), both Ohio corporations, located at One
East Fourth Street, Cincinnati, Ohio 45202, American Annuity Group, Inc.
("AAG"), a Delaware corporation located at 250 East Fifth Street,
Cincinnati, Ohio 45202, and Carl H. Lindner ("CHL"), Carl H. Lindner III
(CHL III), S. Craig Lindner ("SCL") and Keith E. Lindner ("KEL"), each
an individual, the business address of each is One East Fourth Street,
Cincinnati, Ohio 45202. CHL, CHL III, SCL and KEL are referred to
herein collectively as the Lindner Family.
WHEREAS, as of the date of this Agreement, American Premier
owns 100% of the common stock of AFC and 81.4% of the common stock of
AAG and the Lindner Family beneficially owns approximately 50.0% of
American Premier's outstanding Common Stock and each member of the
Lindner Family is a director and executive officer of American Premier
and AFC;
WHEREAS, the Lindner Family may be deemed to be the beneficial
owner of securities held by American Premier, AFC, AAG and their
subsidiaries pursuant to Regulation Section 240.13d-3 promulgated under
the Securities Exchange Act of 1934, as amended;
WHEREAS, American Premier, AFC and AAG and their subsidiaries
from time to time must file statements pursuant to certain sections of
the Securities Exchange Act of 1934, as amended, concerning the
ownership of equity securities of public companies;
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Exhibit 4 - continued
---------------------
NOW THEREFORE BE IT RESOLVED, that American Premier, AFC, AAG
and the Lindner Family, do hereby agree to file jointly with the
Securities and Exchange Commission any schedules or other filings or
amendments thereto made by or on behalf of American Premier, AFC, AAG or
any of their subsidiaries pursuant to Section 13(d), 13(f), 13(g), and
14(d) of the Securities Exchange Act of 1934, as amended.
AMERICAN PREMIER GROUP, INC.
AMERICAN FINANCIAL CORPORATION
By: /s/ James E. Evans
James E. Evans
Vice President & General Counsel
AMERICAN ANNUITY GROUP, INC.
By: /s/ Mark F. Muething
Mark F. Muething
Senior Vice President, General
Counsel and Secretary
/s/ Carl H. Lindner
Carl H. Lindner
/s/ Carl H. Lindner III
Carl H. Lindner III
/s/ S. Craig Lindner
S. Craig Lindner
/s/ Keith E. Lindner
Keith E. Lindner
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Exhibit 5
POWER OF ATTORNEY
I, Carl H. Lindner, do hereby appoint James E. Evans and James
C. Kennedy, or either of them, as my true and lawful attorneys-in-fact
to sign on my behalf individually and as Chairman of the Board of
Directors and Chief Executive Officer of American Premier Group, Inc. or
as a director or executive officer of any of its subsidiaries and to
file with the Securities and Exchange Commission any schedules or other
filings or amendments thereto made by me or on behalf of American
Premier Group, Inc. or any of its subsidiaries pursuant to Sections
13(d), 13(f), 13(g), and 14(d) of the Securities and Exchange Act of
1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati,
Ohio this 4th day of April, 1995.
/s/ Carl H. Lindner
Carl H. Lindner
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POWER OF ATTORNEY
I, Carl H. Lindner III, do hereby appoint James E. Evans and
James C. Kennedy, or either of them, as my true and lawful attorneys-in-
fact to sign on my behalf individually and as an officer or director of
American Premier Group, Inc. or as a director or executive officer of
any of its subsidiaries and to file with the Securities and Exchange
Commission any schedules or other filings or amendments thereto made by
me or on behalf of American Premier Group, Inc. or any of its
subsidiaries pursuant to Sections 13(d), 13(f), 13(g), and 14(d) of the
Securities and Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati,
Ohio this 4th day of April, 1995.
/s/ Carl H. Lindner III
Carl H. Lindner III
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POWER OF ATTORNEY
I, S. Craig Lindner, do hereby appoint James E. Evans and James
C. Kennedy, or either of them, as my true and lawful attorneys-in-fact
to sign on my behalf individually and as an officer or director of
American Premier Group, Inc. or as a director or executive officer of
any of its subsidiaries and to file with the Securities and Exchange
Commission any schedules or other filings or amendments thereto made by
me or on behalf of American Premier Group, Inc. or any of its
subsidiaries pursuant to Sections 13(d), 13(f), 13(g), and 14(d) of the
Securities and Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati,
Ohio this 4th day of April, 1995.
/s/ S. Craig Lindner
S. Craig Lindner
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POWER OF ATTORNEY
I, Keith E. Lindner, do hereby appoint James E. Evans and James
C. Kennedy, or either of them, as my true and lawful attorneys-in-fact
to sign on my behalf individually and as an officer or director of
American Premier Group, Inc. or as a director or executive officer of
any of its subsidiaries and to file with the Securities and Exchange
Commission any schedules or other filings or amendments thereto made by
me or on behalf of American Premier Group, Inc. or any of its
subsidiaries pursuant to Sections 13(d), 13(f), 13(g), and 14(d) of the
Securities and Exchange Act of 1934, as amended.
IN WITNESS WHEREOF, I have hereunto set my hand at Cincinnati,
Ohio this 4th day of April, 1995.
/s/ Keith E. Lindner
Keith E. Lindner
