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AMENDED AND RESTATED
SHAREHOLDERS' AGREEMENT
THIS AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT is made effective as
of the 22nd day of November, 1996, by and among Conning Corporation, a
Missouri corporation formerly known as Conning Asset Management Company (the
"Corporation"), General American Life Insurance Company, a Missouri
corporation ("General American"), General American Holding Company, a
Missouri corporation which is a wholly owned subsidiary of General American
("GAHC"), and the other persons who are parties to this Agreement or may
become parties to this Agreement, as indicated by their signatures below or
on an additional signature page hereto (the "Other Parties"). GAHC and the
Other Parties are hereinafter sometimes referred to collectively as
"Shareholders" or individually as a "Shareholder."
RECITALS
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A. The capital stock of the Corporation consists of (i) Class A Voting
Common Stock, par value $.01 per share (the "Voting Common Stock"), (ii)
Class B Non-Voting Common Stock, par value $.01 per share (the "Non-Voting
Common Stock"), (iii) Series A Convertible Preferred Stock, par value $.01
per share (the "Series A Preferred Stock"); and (iv) Series B Convertible
Preferred Stock, par value $.01 per share (the "Series B Preferred Stock").
In addition, the Corporation has outstanding options to purchase shares of
Non-Voting Common Stock which were granted pursuant to the Corporation's 1995
Flexible Stock Plan (the "1995 Options") and pursuant to the Corporation's
1996 Flexible Stock Plan (the "1996 Options"). The Series A Preferred Stock,
the shares of Non-Voting Common Stock issued upon conversion of the Series A
Preferred Stock and the shares of Voting Common Stock issued upon conversion
of such Non-Voting Common Stock are referred to collectively as the "Series A
Shares". The Series B Preferred Stock, the shares of Non-Voting Common Stock
issued upon conversion of the Series B Preferred Stock and the shares of
Voting Common Stock issued upon conversion of such Non-Voting Common Stock
are referred to collectively as the "Series B Shares." The Series A
Preferred Stock and the Series B Preferred Stock are referred to collectively
as the "Preferred Stock." The shares of Non-Voting Common Stock issuable
upon exercise of the 1995 Options and the 1996 Options are referred to as the
"1995 Option Shares" and the "1996 Option Shares," respectively, and the
"Option Shares," collectively. The 1995 Options and the 1996 Options are
referred to collectively as the "Options".
B. The parties hereto desire to amend and restate the provisions of
this Agreement as set forth herein.
C. The Shareholders own all of the outstanding shares of the capital
stock (the "Shares") of the Corporation and/or hold all of the outstanding
Options.
D. The parties hereto desire to insure that the Shares remain closely
held by persons knowledgeable about the Corporation's business and to provide
for continuity and harmony in the management of the Corporation.
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E. The parties hereto desire to provide for the orderly disposition of
the Shares in certain events, including the death or disability of any of the
Shareholders or the termination of a Shareholder's employment with the
Corporation.
AGREEMENTS
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1. General Restrictions on Transfer.
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(a) From and after the date hereof until the termination of this
Agreement, no Shareholder will in any manner, whether directly or indirectly,
voluntarily, involuntarily or by operation of law, sell, assign, convey,
pledge, give, mortgage, hypothecate, create any security interest in, or
otherwise encumber, dispose of or otherwise transfer, any interest in any
Shares of Non-Voting Common Stock or Preferred Stock (together with any
securities issued upon exchange or conversion of Shares of Non-Voting Common
Stock or Preferred Stock or upon any reclassification, recapitalization or
exchange thereof, the "Restricted Shares") except pursuant to the provisions
of this Agreement. This Agreement shall apply to all transfers of Restricted
Shares (now owned or hereafter acquired) by the Shareholders, whether
voluntary, involuntary or by operation of law, resulting from death or
otherwise.
(b) Notwithstanding the foregoing, a Shareholder may transfer
Restricted Shares pursuant to applicable laws of descent and distribution
(excluding community property laws) or to such Shareholder's spouse and
descendants (whether natural or adopted) or to any trust solely for the
benefit of either that Shareholder and/or his or her spouse and/or
descendants, provided that: (i) the restrictions and rights contained in
this Agreement will continue to be applicable to the Restricted Shares after
any such transfer, and (ii) the transferee(s) of such Restricted Shares
agrees in writing to be bound by the provisions of this Agreement.
2. Put Option/Purchase Obligation Upon Death, Total Disability or
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Termination of Employee Shareholders.
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(a) Upon the death, Total Disability (as hereinafter defined) or
termination of employment for any reason prior to August 11, 1998 of a
Shareholder who, at such time, is an employee of the Corporation or a
subsidiary of the Corporation or General American (an "Employer") and
provided that there has not been a Qualified IPO (as defined in Section 16.3)
by such time, such Shareholder's estate or such disabled or terminated
Shareholder shall have an option to sell all, but not less than all, of the
Series A Shares which the deceased, disabled or terminated Shareholder owned at
his death, disability or termination to General American, or at General
American's sole election to any affiliate other than the Corporation, for the
price established in Section 11.2.
(b) Upon the death, Total Disability or termination of employment for
any reason prior to November 22, 2001 of a Shareholder who, at such time, is
an employee of an Employer or a director of the Corporation and provided
there has been no Qualified IPO by such time, the Corporation shall have the
obligation, assignable in the Corporation's sole discretion to an affiliate
of the Corporation, to purchase, and such Shareholder's estate or such
disabled or terminated Shareholder shall be obligated to sell to the
Corporation or its designee, all but not
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less than all of the Series B Shares which the deceased, disabled or terminated
Shareholder owned at his death, disability or termination for the price
established in Section 11.2. With respect to any Shareholder who is both an
employee of an Employer and a director of the Corporation, "termination of
employment" for purposes of this paragraph shall mean the later of the
termination of such employment or the termination of such directorship.
(c) The option described in Section 2(a) shall be exercisable at any
time after the date of death, disability or termination of the Shareholder.
The option set forth in Section 2(a) shall remain exercisable,
notwithstanding any transfers proposed pursuant to Section 3, and shall
supersede any purchase options arising upon involuntary transfers pursuant to
Section 4.
(d) Total Disability means having a physical or mental condition which
renders the Shareholder incapable of performing his duties and responsibilities
with an Employer for a period of six months. Determination of Total Disability
will be made by a physician selected by the Corporation. If the determination
of such physician differs from the opinion as to disability of the
Shareholder's physician, the two physicians shall select a third physician,
whose determination shall be binding on both parties.
3. Purchase Option Upon Voluntary Transfer of Restricted Shares.
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Except as otherwise provided herein and except in conjunction with an IPO (as
defined in Section 16.3) of Shares, a Shareholder may transfer Restricted
Shares to another person or entity only in a bona fide sales transaction and
only in accordance with the following procedure:
3.1 Notice of Transfer. If a Shareholder proposes to transfer
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Restricted Shares of which he/she is either the beneficial or legal owner to
any person(s) or entity, he/she shall give a written notice of transfer to
the Corporation and each other Shareholder specifying: (i) the Shareholder's
intention to transfer Restricted Shares; (ii) the number of Restricted Shares
proposed to be transferred; (iii) the name, business and residence address of
the proposed transferee(s); and (iv) the amount of the consideration and the
other terms of sale.
3.2 General American's Option to Purchase; Purchase Price. For a
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period of thirty (30) days from the receipt of the notice of transfer,
General American (or at General American's sole election, any affiliate other
than the Corporation) shall have the option to purchase some or all of the
Series A Shares proposed to be sold. Any such sale shall be for such
consideration and under such terms as contemplated by the notice of transfer.
3.3 Corporation's Option to Purchase; Purchase Price. For a period of
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thirty (30) days from the receipt of the notice of transfer, the Corporation
(or at the Corporation's sole election, an affiliate of the Corporation)
shall have the option to purchase some or all of the Series B Shares proposed
to be sold, if any. Any such sale shall be for such consideration and under
such terms as contemplated by the notice of transfer.
3.4 Shareholders' Option to Purchase; Purchase Price. In the event
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all of the Restricted Shares subject to the purchase options described in
Sections 3.2 and 3.3 are not purchased, the non-transferring Shareholders
shall each have the option to purchase up to his/her
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Pro Rata Share (as hereinafter defined) of the remaining unpurchased Restricted
Shares at the price and on the terms specified in the notice of transfer by
delivering written notice of such election to the transferring Shareholder and
the Corporation within thirty (30) days after the expiration of the purchase
options described in Sections 3.2 and 3.3. A Shareholder's "Pro Rata Share"
shall mean a number of Restricted Shares equal to the total number of
unpurchased Restricted Shares multiplied by a fraction, the numerator of
which is the number of Restricted Shares owned by that Shareholder and the
denominator of which is the number of Restricted Shares owned by all
non-transferring Shareholders.
4. Purchase Option Upon Involuntary Transfer. If at any time
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Restricted Shares are transferred by operation of law to any person or entity
(such as, but not limited to, pursuant to a will or the laws of descent and
distribution, a property division in conjunction with a divorce proceeding, a
Shareholder's trustee in bankruptcy, or a purchaser at any creditor's or
court sale), the Corporation, within sixty (60) days of the Corporation's
receipt of actual notice of the transfer, may exercise an option to purchase
some or all of the Restricted Shares so transferred for the price established
in Section 11.2.
5. Put Option Relating to Series A Shares. If there has been no
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Qualified IPO on or before August 11, 1998, each Shareholder who holds Series
A Shares and who was a shareholder or option holder of Conning, Inc. (f/k/a
Conning Corporation) prior to August 11, 1995 shall have an option to sell to
General American (or at General American's sole election any affiliate other
than the Corporation), and General American shall have the obligation to
purchase, all, but not less than all, of his/her Series A Shares for the
price established in Section 11.2. The option described in this Section
shall be exercisable at any time after August 11, 1998.
6. Purchase Options Relating to Series A Shares.
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6.1 Purchase Option If No Qualified IPO by August 11, 2002. If there
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has been no Qualified IPO on or before August 11, 2002, General American
shall have the option, assignable in General American's discretion to any
affiliate other than the Corporation, to purchase some or all of the
outstanding Series A Preferred Stock for the price established in Section
11.2. The option described in this Section shall be exercisable at any time
after August 11, 2002 but is subject to each Series A Preferred Stockholder's
right to convert the Series A Preferred Stock to Non-Voting Common Stock.
The option set forth in this Section shall remain exercisable,
notwithstanding any transfers proposed or accomplished pursuant to Section 3.
6.2 Purchase Option If No Qualified IPO by August 11, 2005. If
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there has been no Qualified IPO on or before August 11, 2005, General American
shall have the option, assignable in General American's discretion to any
affiliate other than the Corporation, to purchase some or all of the
outstanding Series A Shares for the price established in Section 11.2. The
option described in this Section shall be exercisable at any time after
August 11, 2005. The option set forth in this Section shall remain
exercisable, notwithstanding any transfers proposed or accomplished pursuant
to Section 3.
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7. Put Option Relating to Series B Shares If No Qualified IPO by
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November 22, 2001. If there has been no Qualified IPO on or before November
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22, 2001, each Shareholder who holds Series B Shares and who is, at such
time, an employee of Conning & Company or an affiliate thereof or a director
of the Corporation, shall have an option to sell to the Corporation (or at
the Corporation's sole election any affiliate of the Corporation), and the
Corporation shall have the obligation to purchase, all, but not less than
all, of his/her Series B Shares for the price established in Section 11.2.
The option described in this Section shall be exercisable at any time after
November 22, 2001.
8. Purchase Option With Respect to Conning Assets or Stock.
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8.1 Notice of Transfer. If at any time prior to a Qualified IPO the
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Corporation proposes to sell all or substantially all of the capital stock of
Conning & Company or a material portion of the assets of Conning & Company
(including, without limitation, the Conning name), the Corporation shall give
a written notice of transfer to all Shareholders who were employees of
Conning Corporation or Conning & Company prior to August 11, 1995 and who own
Series A Shares, 1995 Options and/or 1995 Option Shares specifying: (i) the
Corporation's intention to make such sale, (ii) the name and business address
of the proposed transferee(s); and (iii) the amount of the consideration and
the other material terms of sale.
8.2 Shareholders' Option to Purchase; Purchase Price. For a period of
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sixty (60) days from the receipt of the notice of transfer set forth in
Section 8.1, Shareholders who were employees of Conning Corporation or
Conning & Company prior to August 11, 1995 and who own Series A Shares, 1995
Options and/or 1995 Option Shares, shall have the option to purchase all, but
not less than all, of the capital stock or assets proposed to be sold
pursuant to the notice of transfer. For purposes of this Section 8, all
eligible Shareholders who deliver notice to the Corporation during such sixty
day period stating his or her desire to exercise the option granted in this
Section 8 shall be deemed to have exercised the option granted in this
Section 8 as a group and shall thereafter appoint an authorized
representative to act on such group's behalf. Any sale to such group of
Shareholders shall be for such consideration and under such terms as
contemplated by the notice of transfer, provided that the Corporation shall
not be required to allocate the stock or assets proposed to be sold among the
Shareholders comprising the group that has exercised the option granted in
this Section 8 and shall only be obligated to sell such stock or assets to
the group comprised of such Shareholders as a single entity.
9. Purchase Options.
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9.1 General American's Purchase Option. General American (or at
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General American's sole election, any of its affiliates, other than the
Corporation) shall have the option to purchase 50% of the Series A Shares
(excluding fractional shares) and the Shareholders shall have the obligation
to sell such stock for the price established in Section 11.1. The option
described in this Section 9.1 shall be exercisable concurrently with the
proposals to amend this Agreement by adding this Section 9.1. All Shareholders
required to participate in said purchase option shall participate on a basis
which is pro rata among them based upon the percentage of
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Series A Shares then held by such Shareholder divided by the aggregate of
the number of all Series A Shares held by all such Shareholders.
9.2 Corporation's Purchase Option. If at any time there is a
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Qualified IPO on or after March 31, 1998, the Corporation (or at the
Corporation's sole election, any affiliate of the Corporation) shall have the
option to purchase and each Shareholder shall have the obligation to sell to
the Corporation all, but not less than all, of his/her Series B Preferred
Stock for the price established in Section 11.1, subject to the right of such
Shareholder to convert such Series B Preferred Stock. The option described
in this Section 9.2 shall be exercisable during the thirty day period
preceding closing of the Qualified IPO, subject to the occurrence of such
closing. In the Shareholder's discretion, the conversion of the Series B
Preferred Stock may be made contingent upon the consummation of the IPO.
10. Exercise of Options and Effect of Non-Exercise of Options.
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10.1 Exercise of Options. In order to exercise any option(s) granted
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pursuant to this Agreement, a party shall do so by delivering written notice
of exercise of the option within the time provided in the applicable Section
hereof to the transferring Shareholder, the Corporation or the transferee, as
the case may be. Copies of all such documents shall be delivered to the
Corporation.
10.2 Forfeiture, Waiver or Noncompliance.
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(a) If an option granted hereunder is forfeited, waived or not
exercised in compliance with Section 3, the Restricted Shares may be
transferred, within thirty (30) days after the expiration of the option
period granted to the other Shareholders, to the transferee named in the
notice required by Section 3, for such consideration and upon such terms
therein stated, which Restricted Shares when so transferred shall be subject
to the terms of this Agreement. No Section 3 transfer shall be valid if the
transfer is not made within the aforesaid thirty (30) day period or is not
for the consideration and upon the terms or to the transferee stated in the
notice required of the transferring Shareholder by Section 3.
(b) If an option is forfeited, waived or not exercised in compliance
with Section 4, the Restricted Shares shall, in the hands of the transferee,
be subject to the terms, conditions and restrictions of this Agreement.
(c) If an option is forfeited, waived or not exercised in compliance
with Section 8, the capital stock or assets may be transferred, within one
hundred twenty (120) days after the expiration of the option period granted
to the Shareholders, to the transferee named in the notice required by
Section 8, for such consideration and upon such terms therein stated. No
Section 8 transfer shall be valid if the transfer is not made within the
aforesaid one hundred twenty (120) day period or is not for the consideration
and upon the terms or to the transferee stated in the notice required of the
Corporation by Section 8.
11. Purchase Price.
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11.1 Purchase Price on Put/Purchase Option Pursuant to Purchase Options.
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The price for each Series A Share to be purchased pursuant to the option
granted in Section 9.1 shall be $11.25. The price for each Share of Series B
Preferred Stock to be purchased pursuant to the option granted in Section 9.2
shall be $5.33, plus accrued but unpaid dividends.
11.2 Purchase Price on Other Events. The price of each Share to be
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purchased pursuant to Section 2, 4, 5, 6 or 7 shall be equal to:
(a) in the case of Shares of Series A Preferred Stock, a price
per share equal to the Fair Market Value (as defined in Section 16.3) of
each share of Non-Voting Common Stock into which such Preferred Stock is
then convertible;
(b) in the case of Shares of Series B Preferred Stock, a price
per share equal to the Fair Market Value of each share of Non-Voting
Common Stock into which such Preferred Stock is then convertible,
less the per share amount required to be paid on conversion of such
Preferred Stock; and
(c) in the case of Shares of Non-Voting Common Stock, the Fair
Market Value of each such Share.
11.3 Payment of the Purchase Price. The purchase price for Shares
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purchased pursuant to this Agreement shall be paid in full by check at the
closing of such purchase.
11.4 Obligations of General American Unconditional. General American
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hereby absolutely and unconditionally agrees to purchase all Shares which any
Shareholder elects to sell pursuant to Section 2(a) or Section 5 hereof at
the price established in Section 11.2. The purchase obligations of General
American under this Agreement shall be absolute and unconditional and shall
remain in full force and effect until all payments and obligations of General
American under this Agreement shall have been fully and finally paid and
performed. Notwithstanding any assignment by General American to any
affiliate of any of its obligations hereunder, the Shareholders shall have
the right to proceed first and directly against General American under this
Agreement without proceeding against any other party or exhausting any other
remedies which such Shareholder may have.
12. The Closing.
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12.1 Time of Closing. (a) In the case of the purchase of Shares under
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Section 2, the closing shall occur on the date which is no later than the
earlier of thirty (30) days after the exercise of the option or the
triggering of the purchase obligation provided therein or one hundred twenty
(120) days after the deceased Shareholder's death or the date of the
determination of disability or termination, as the case may be.
(b) In the case of a purchase of Shares or assets, as the case may be,
under Section 3, Section 8 or Section 9.1, the closing shall be on the date
which is set forth in the notice provided for in such Sections.
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(c) In the case of a purchase of Shares under Section 4, 5, 6 or 7,
the closing shall occur on the thirtieth day after the exercise of the option
provided therein.
(d) In the case of a purchase of Shares under Section 9.2, the closing
shall be effective concurrently with or, in the purchaser's discretion,
immediately after the closing of the Qualified IPO.
(e) The parties agree to promptly take such further actions and to
execute and deliver such documents, instruments or agreements as may be
reasonably required to effect the transfer of title to the Shares pursuant to
this Agreement.
12.2 Absence of Liens. All Shares (or other property transferred
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pursuant to Section 8) shall be delivered to the Corporation or purchasing
Shareholder(s) free and clear of all liens, claims and encumbrances excepting
only those for which provision is expressly made in this Agreement or the
terms of such sale, and said Shares shall be transferred on the books of the
Corporation to the purchaser.
13. Legend on Certificates.
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(a) All Shares now or hereafter owned by the Shareholders of the
Corporation shall be subject to the provisions of this Agreement and the
certificates representing Shares, including Shares in the hands of permitted
transferees, shall bear the following legend:
"The sale, transfer or encumbrance of this certificate is subject to an
Agreement between the Corporation and all of its Shareholders. A
copy of this Agreement is on file in the office of the Secretary of
the Corporation. The Agreement provides, among other things, for
certain obligations to sell and to purchase the Shares evidenced by
this certificate, for a designated purchase price. By accepting the
Shares evidenced by this certificate, the holder agrees to be bound
by said Agreement."
(b) Each Shareholder understands that the certificates representing
Shares, including Shares in the hands of permitted transferees, shall also
bear the following legend:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933 or any applicable state law. They
may not be offered for sale, sold, transferred or pledged without (1)
registration under the Securities Act of 1933 and any applicable
state law, or (2) at holder's expense, an opinion (satisfactory to
the Company) that registration is not required."
14. Termination.
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14.1 Complete Termination. This Agreement and all restrictions on the
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Restricted Shares created hereby shall terminate on the occurrence of any of
the following events:
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(a) A single Shareholder becoming the owner of all of the Shares
of the Corporation which are then subject to this Agreement.
(b) The execution of a written instrument by the Corporation and
all of the Shareholders who then own Shares or Options subject to
this Agreement which terminates the same.
(c) The occurrence of a Qualified IPO.
14.2 Effect. The termination of this Agreement for any reason (i)
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shall not affect any right or remedy existing hereunder prior to the
effective date of its termination, and (ii) shall not terminate the
provisions of Section 15, which shall survive such termination according to
its terms.
15. Management and Board of the Corporation.
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15.1 Compensation. For the three years after August 11, 1995, the
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Corporation will maintain the general approach and methodology to cash
compensation (bonus and salary) of employees and venture capital carried
interest allocations as are currently in effect at Conning, Inc. (f/k/a
Conning Corporation). Prior to the end of 1996, the Corporation will
complete a compensation study with the goal of creating comparable
compensation plans for the operating subsidiaries of the Corporation
characterized by market pricing and performance incentives.
15.2 Composition of the Board. The Corporation shall have a Board of
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Directors comprised of not more than seven members. There will be a minimum
of 2 members of the management of Conning, Inc. (f/k/a Conning Corporation)
(including Maurice W. Slayton or his successor) on the Board of Directors of
the Corporation during the period ending upon the earlier of: (i) August 11,
2000 or (ii) the occurrence of a Qualified IPO. The president of Conning,
Inc. (f/k/a Conning Corporation) will serve on the Compensation Committee of
the Board of Directors of the Corporation, and will participate in the
compensation study referred to in Section 15.1 above and in formulating
recommendations regarding compensation. This Section 15.2 shall terminate
upon the earlier to occur of August 11, 2000 or a Qualified IPO.
15.3 Management of the Corporation. (a) Maurice W. Slayton shall serve
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as President of the Corporation, President of Conning Asset Management
Company (f/k/a GAIMCO) and as President and CEO of Conning, Inc. (f/k/a
Conning Corporation), which will survive as an operating subsidiary of the
Corporation. Leonard Rubenstein will serve as Chairman and CEO of the
Corporation and as Chairman and CEO of Conning Asset Management Company,
which will survive as an operating subsidiary of the Corporation.
(b) Maurice W. Slayton will serve as a senior member of management of
the Corporation with responsibility for (i) marketing for the Corporation and
its subsidiaries, (ii) manager of the Corporation's Hartford office, (iii)
participation in identifying and negotiating acquisitions, and (iv)
participation in the development and execution of an initial public offering
of the Shares of the Corporation.
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(c) Maurice W. Slayton will be consulted on the following: (i)
business plan development for combining subsidiary operations and (ii) titles
and roles for senior management of Conning, Inc.
(d) In the event Maurice W. Slayton ceases to be President of the
Corporation and President and CEO of Conning, Inc., General American shall
select a senior member of the Corporation's or Conning, Inc.'s management who
is a former shareholder of Conning, Inc. to assume the responsibilities
prescribed for Mr. Slayton in clauses 15.3(b)(iv) and 15.3(c)(i) above. This
Section 15.3 shall terminate upon the earlier to occur of August 11, 1998 or
a Qualified IPO.
16. General Provisions.
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16.1 Governing Law. This Agreement shall in all respects be construed
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in accordance with and governed by the substantive laws of the State of
Missouri, without reference to its choice of law rules.
16.2 Conflict with Articles or Bylaws. It is expressly agreed that
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whether or not the Articles or Bylaws of the Corporation fully incorporate
the provisions hereof, or any of them, the parties' rights and obligations
shall be governed by this Agreement which shall prevail in the event of any
ambiguity or any inconsistency between this Agreement and the Articles and
Bylaws.
16.3 Definitions. (a) Unless the context otherwise requires, the words
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"Shareholder" and "Shareholders" shall for all purposes of this Agreement
mean and include: (1) all of the individual parties hereto; (2) all persons
to whom any Shares may hereafter be transferred; and (3) all employees and
directors who may acquire any Shares of the Corporation which may hereafter
be issued. Similarly, the term "Shares" applies to any class of Shares which
the Corporation now or hereafter is authorized to issue.
(b) The words "IPO," "Qualified IPO" and "Conversion Rate" shall for
all purposes of this Agreement have the meanings ascribed thereto in the
Corporation's Articles of Incorporation as in effect on the date of execution
hereof.
(c) The term "Fair Market Value" shall mean: On any date specified
herein, the amount per share of the Voting Common Stock (as if the Non-Voting
Common Stock had been converted to Voting Common Stock), equal to the fair
value thereof determined by an Independent Financial Expert. The following
procedures shall be utilized in determining fair value.
(i) The value of the Voting Common Stock shall be determined by
an Independent Financial Expert (to be selected as provided in
Section 16.3(d) below) using one or more valuation methods that the
Independent Financial Expert in its professional judgment determines
to be most appropriate but without giving effect to the discount for
any lack of liquidity of the Voting Common Stock or to the fact that
the Corporation may have no class of securities registered under the
Securities Exchange Act of 1934. In
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performing its analysis, the Independent Financial Expert shall, among
other things, consider public market valuations of companies which it
deems comparable to the Corporation. The Independent Financial Expert
shall deliver, promptly upon completion, to the Corporation and to each
of the parties who will be a party to any transaction resulting from the
exercise of an option pursuant to the notice referred to in Section
10.1 (the "Interested Parties"), a report stating the method of
valuation considered or used and the fair value of said Voting Common
Stock as of the date of the exercise notice referred to in Section
10.1 and containing a statement as to the nature and scope of the
examination or investigation upon which the determination of value
was made (the "Value Report").
The Independent Financial Expert shall consult with management of
the Corporation in order to allow management to provide information
and data relevant to, and comment on the proposed value of, such
Independent Financial Expert's Value Report.
(ii) Within five business days of delivery of any notice by a
party of the exercise of an option which requires a determination of
Fair Market Value, the Corporation shall give written notice to each
Shareholder who will be a party to the transactions resulting from
the exercise of such options (the "Holders") of the Corporation's
choice of an Independent Financial Expert to prepare the Value
Report. Within five business days after the date of this notice,
Holders owning a majority of the shares identified in any notice of
option exercise or in any series of notices delivered within the same
10 business day period shall notify the Corporation in writing (the
"Holders' IFE Notice") of their approval or disapproval of the
Corporation's initial choice of Independent Financial Expert and, in
the event of disapproval, such Holders shall propose an alternative
firm as Independent Financial Expert. Failure to deliver written
notice of approval or disapproval within such 10 business day period
shall be deemed approval of such initial choice of the Corporation.
Within two business days after its receipt of the Holders' IFE
Notice, the Corporation shall notify the Holders of its approval or
disapproval of their selection. If the Corporation does not accept
the Independent Financial Expert chosen by the Holders, then the two
Independent Financial Experts previously selected pursuant to this
section shall promptly be requested by the Corporation and Holders to
jointly select a firm to act as Independent Financial Expert to
prepare the Value Report. Their joint selection, which shall be made
within five business days, shall be final and binding upon the
Interested Parties.
(iii) The Corporation shall consult and cooperate with the
selected Independent Financial Expert to facilitate the final
delivery of its Value Report no later than forty-five (45) calendar
days after the date of the notice of option exercise, unless the
parties to such transaction agree to a different time or delivery.
The Value Report shall be final and binding upon the Interested
Parties.
(d) The term "Independent Financial Expert" means a nationally
recognized investment banking firm, ranking in the top twenty (as determined
by the Securities Industry
11
12
Association, Inc. or a similar securities information data company) lead
managers for primary common stock offerings in the year prior to the year in
which it is called upon to give independent financial advice to the Corporation
as described herein and that does not (and whose directors, officers and
Affiliates do not) have a material direct or indirect financial interest in the
Corporation or any of its Affiliates and that does not provide any advice or
opinions to the Corporation or any of its Affiliates except as an Independent
Financial Expert. The Corporation will bear the expense of compensation of the
Independent Financial Expert for services or opinions it may provide in that
capacity.
16.4 Remedies for Breach. The Shares are unique chattels and each
-------------------
party to this Agreement shall have the remedies which are available to him or
it for the violation of any of the terms of this Agreement, including, but
not limited to, the equitable remedies for specific performance and
injunctive relief.
16.5 Notices. All notices provided for by this Agreement shall be made
-------
in writing (1) either by actual delivery or (2) by the mailing of the notice
in the United States mail to the last known address of the party entitled
thereto, registered or certified mail, return receipt requested. Copies of
such notices shall be mailed to:
James L. Nouss, Jr., Esq.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, MO 63102-2750
Matthew P. McCauley
Vice President and Assistant General Counsel
General American Life Insurance Company
700 Market Street
St. Louis, MO 63101
Thomas L. Fairfield, Esq.
LeBoeuf, Lamb, Greene & MacRae, LLP
Goodwin Square
225 Asylum Street
Hartford, CT 06103
16.6 Amendment. This Agreement may be amended or altered at any time
---------
if the amendment or alteration is both ratified by the Board of Directors of
the Corporation and consented to in writing by all other parties hereto.
16.7 Descriptive Headings. Titles to Sections are for information
--------------------
purposes only.
12
13
16.8 Binding Effect. This Agreement is binding upon and inures to the
--------------
benefit of the Corporation, its successors, assigns, and transferees, and to
the Shareholders and their respective heirs, personal representatives,
successors and permitted assigns and transferees.
17. Second Flight of Options. The Corporation hereby acknowledges and
------------------------
agrees that coincident with an IPO, at least 100,000 employee or director
stock options with a strike price equal to the Common Stock equivalent per
share price of stock sold by the Corporation in said IPO will be granted to
certain directors or key employees of the Corporation and its subsidiaries,
subject to concurrence by the managing underwriter of the Corporation's IPO;
provided, that the Corporation shall retain discretion with respect to the
allocation of options among directors and employees.
18. Inapplicability of Restrictions to General American. None of
---------------------------------------------------
Sections 1, 2, 3, 4, 5 or 6 hereof, including, without limitation, the
restriction on transfer and other provisions thereof, shall apply to any
Shares of Non-Voting Common Stock or Preferred Stock (or Restricted Shares
issued upon conversion or exchange of Shares of Non-Voting Common Stock or
Preferred Stock or upon any reclassification, recapitalization or exchange
thereof) held by General American, any parent of General American, any
subsidiary of General American, or any subsidiary of any parent of General
American (collectively, the "General American Entities") or any assignee or
transferee of any of the General American Entities.
13
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IN WITNESS WHEREOF, the parties have executed this Agreement June 11,
1997.
CONNING CORPORATION
By: /s/ Leonard M. Rubenstein
-----------------------------------------
Name: Leonard M. Rubenstein
Title: Chairman and Chief Executive
GENERAL AMERICAN LIFE INSURANCE
COMPANY
By: /s/ Richard A. Liddy
-----------------------------------------
Name: Richard A. Liddy
Title: Chairman, President and Chief
Executive Officer
GENERAL AMERICAN HOLDING COMPANY
By: /s/ Richard A. Liddy
-----------------------------------------
Name: Richard A. Liddy
Title: President
[Signature Page Continued On Following Two Pages]
15
COUNTERPART SIGNATURE PAGE TO AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT
--------------------------------------------------------------------------
/s/ Maurice W. Slayton
- ---------------------------------
Maurice W. Slayton
Dated: 5/28/97
/s/ Thomas A. Byrne
- ----------------------------------
Thomas A. Byrne
Dated: May 17, 1997
/s/ Mark E. Hansen
- ----------------------------------
Mark E. Hansen
Dated: 6/3/97
/s/ Scott E. Daniels
- ----------------------------------
Scott E. Daniels
Dated: 5/24/97
/s/ Paul J. Sellier
- ----------------------------------
Paul J. Sellier
Dated: 6/11/97
/s/ Gerard Vecchio
- ----------------------------------
Gerard Vecchio
Dated: June 3, 1997
/s/ Seth C. Miller
- ----------------------------------
Seth C. Miller
Dated: 5-19-97
/s/ Fred M. Schpero
- ----------------------------------
Fred M. Schpero
Dated: 5/14/97
/s/ Gary K. Ransom
- ----------------------------------
Gary K. Ransom
Dated: 5/27/97
/s/ John A. Corroon
- ----------------------------------
John A. Corroon
Dated: June 11, 1997
/s/ David N. Reid
- ----------------------------------
David N. Reid
Dated: 6-5-97
/s/ Thomas D. Sargent
- ----------------------------------
Thomas D. Sargent
Dated: 6-5-97
/s/ Daniel J. Mainolfi
- ----------------------------------
Daniel J. Mainolfi
Dated: 6/5/97
/s/ John B. Clinton
- ----------------------------------
John B. Clinton
Dated: 5/30/97
/s/ Steven F. Piaker
- ----------------------------------
Steven F. Piaker
Dated: 6/1/97
/s/ Gordon G. Pratt
- ----------------------------------
Gordon G. Pratt
Dated: June 5, 1997
/s/ William C. Shenton
- ----------------------------------
William C. Shenton
Dated: 6-5-97
/s/ Donald L. McDonald
- ----------------------------------
Donald L. McDonald
Dated: 6/1/97
/s/ John B. Kleiman
- ----------------------------------
John B. Kleiman
Dated: June 5, 1997
/s/ Leonard M. Rubenstein
- ----------------------------------
Leonard M. Rubenstein
Dated: 5/27/97
/s/ Stephan L. Christiansen
- ----------------------------------
Stephan L. Christiansen
Dated: 6/6/97
/s/ Laura R. Caro
- ----------------------------------
Laura R. Caro
Dated: 5/23/97
16
COUNTERPART SIGNATURE PAGE (Continued)
- --------------------------
/s/ Stephen R. Pivacek
- ----------------------------------
Stephen R. Pivacek
Dated: 6-3-97
/s/ David A. Kaslow
- ----------------------------------
David A. Kaslow
Dated: 5/19/97
/s/ Michael D. McLellan
- ----------------------------------
Michael D. McLellan
Dated: 5-29-97
/s/ Joann T. Tanaka
- ----------------------------------
Joann T. Tanaka
Dated: 5/27/97
/s/ William Bennett
- ----------------------------------
William Bennett
Dated: 5/20/97
/s/ John W. Marske
- ----------------------------------
John W. Marske
Dated: 5/21/97
/s/ William L. Frields
- ----------------------------------
William L. Frields
Dated: May 20, 1997
/s/ Mark A. Blassie
- ----------------------------------
Mark A. Blassie
Dated: 5-20-97
/s/ David B. Vignolo
- ----------------------------------
David B. Vignolo
Dated: 5/20/97
/s/ Douglas R. Koester
- ----------------------------------
Douglas R. Koester
Dated: 5/21/97
/s/ Scott Sparks
- ----------------------------------
Scott Sparks
Dated: May 19, 1997
/s/ Robert St. Cyr
- ----------------------------------
Robert St. Cyr
Dated: 5-16-97
/s/ W. Michael Cody
- ----------------------------------
W. Michael Cody
Dated: 5/13/97
/s/ William E. Rotatori
- ----------------------------------
William E. Rotatori
Dated: June 4, 1997
/s/ Claude A. Fongemie
- ----------------------------------
Claude A. Fongemie
Dated: 6-4-97
/s/ Sabra R. Brinkmann
- ----------------------------------
Sabra R. Brinkmann
Dated: 6/3/97
/s/ Frank D. Campbell
- ----------------------------------
Frank D. Campbell
Dated: 5/27/97
/s/ Allen A. Mossien
- ---------------------------------
Allen A. Mossien
Dated: 5/19/97
/s/ Paul Goulekas
- ----------------------------------
Paul S. Goulekas
Dated: 6/5/97
/s/ Richard A. Liddy
- ----------------------------------
Richard A. Liddy
Dated: June 11, 1997
/s/ Bruce B. Brodie
- ----------------------------------
Bruce B. Brodie
Dated: 6-3-97