EXHIBIT 4.06
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SHAREHOLDER RIGHTS AGREEMENT
Between
THE STANDARD FIRE INSURANCE COMPANY
and
FEDERATED INVESTORS
Dated August 1, 1989
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TABLE OF CONTENTS
Page
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ARTICLE I LEGEND ON CERTIFICATES
FOR RESTRICTED SECURITIES................................. 2
ARTICLE II TRANSFER OF RESTRICTED
SECURITIES................................................ 2
2.1 Compliance with Laws........................................ 2
2.2 No Transfer by Management
Shareholders.............................................. 3
2.3 Parallel Exit............................................... 3
2.3.1 Transfer Notice...................................... 3
2.3.2 Offer to Purchase
Conversion Common.................................. 4
2.3.3 Acceptance of Offer.................................. 4
2.3.4 Notice of Change of
Control; Expenses.................................. 4
2.3.5 Other Transfers Subject
to this Section.................................... 5
2.4 Transfers of Standard Fire
Shares; Right of First Offer.............................. 5
2.4.1 No Transfer Prior to Third
Anniversary of Closing
Date............................................... 5
2.4.2 Right of First Offer................................. 5
2.4.3 Limit on Number of Transfers......................... 7
2.5 Transferees; Non-Complying
Transfers................................................. 7
2.5.1 Transferees Bound by
Agreement.......................................... 7
2.5.2 Transfer in Violation of
Agreement Void..................................... 7
2.6 Effect of Foreclosure Under
Pledge Agreements......................................... 7
ARTICLE III FURTHER AGREEMENTS OF THE COMPANY........................... 8
3.1 Management Compensation..................................... 8
3.2 Transfer of Restricted
Securities and Assets..................................... 8
3.3 Change in Capital Structure................................. 9
3.4 Repurchase of Shares........................................ 9
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3.5 Financial Reports........................................... 10
3.5.1 Annual Financial
Statements......................................... 10
3.5.2 Financial Reports Furnished
to Other Persons................................... 11
3.5.3 Other Information.................................... 11
3.5.4 Compliance Certificate............................... 11
3.5.5 Shareholder List..................................... 11
3.6 Confidentiality; Restriction on
Access.................................................... 12
3.7 Company Treated as Corporation for
Federal Income Tax Purposes............................... 12
3.8 Amendment of Management Subscription
Agreements................................................ 13
ARTICLE IV REGISTRATION RIGHTS......................................... 13
4.1 Registration on Request..................................... 13
4.1.1 Request.............................................. 13
4.1.2 Registration Statement
Form............................................... 14
4.1.3 Expenses............................................. 14
4.1.4 Effective Registration
Statement.......................................... 14
4.1.5 Selection of Underwriters............................ 14
4.1.6 Priority in Requested
Registrations...................................... 15
4.2 Incidental Registration..................................... 16
4.2.1 Notice of Public
Registration....................................... 16
4.2.2 Right to Include Registrable
Securities......................................... 16
4.2.3 No Effect on Registrations
Under Section 4.1.................................. 17
4.2.4 Expenses............................................. 17
4.2.5 Priority in Incidental
Registrations...................................... 17
4.2.6 Selection of Underwriters............................ 18
4.3 Registration Procedures..................................... 18
4.3.1 Actions to be Taken by
the Company........................................ 18
4.3.2 Actions to be Taken by
Sellers of Registrable
Securities......................................... 22
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4.3.3 Actions to be Taken by all
Holders of Registrable
Securities......................................... 22
4.4 Underwritten Offerings...................................... 22
4.4.1 Requested Underwritten
Offerings.......................................... 22
4.4.2 Incidental Underwritten
Offerings.......................................... 23
4.4.3 Holdback Agreements.................................. 24
4.5 Preparation; Reasonable
Investigation............................................. 24
4.6 Rights of Standard Fire..................................... 25
4.7 Indemnification............................................. 25
4.7.1 Indemnification by the
Company............................................ 25
4.7.2 Indemnification by the
Sellers............................................ 27
4.7.3 Indemnification Procedures........................... 27
4.7.4 Other Indemnification................................ 29
4.7.5 Indemnification Payments............................. 29
4.8 Participation in Underwritten
Registrations............................................. 30
4.9 Adjustments Affecting Registrable
Securities................................................ 30
4.10 Rule 144.................................................... 30
ARTICLE V DEFINITIONS................................................. 31
ARTICLE VI MISCELLANEOUS............................................... 40
6.1 Other Shareholder Agreements................................ 40
6.2 Payments; Notices........................................... 41
6.3 Assignment.................................................. 42
6.4 Termination of Agreement; No
Preferred Shares Outstanding.............................. 43
6.5 Descriptive Headings........................................ 43
6.6 Specific Performance........................................ 43
6.7 Governing Law............................................... 43
6.8 Counterparts................................................ 43
6.9 Severability................................................ 43
6.10 Entire Agreement............................................ 44
6.11 Amendment and Waiver........................................ 44
6.12 Limitation of Liability..................................... 44
EXHIBIT A Form of Letter Agreement
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FORM OF SHAREHOLDER RIGHTS AGREEMENT
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SHAREHOLDER RIGHTS AGREEMENT, dated [the Closing Date] (the
"Agreement"), between The Standard Fire Insurance Company, a Connecticut
insurance corporation ("Standard Fire"), and Federated Investors, a Delaware
business trust (the "Company").
RECITALS
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A. The Company, pursuant to the Asset Purchase Agreement, dated July
28, 1989, among the Company, AEtna Life and Casualty Company and Standard Fire
(as amended and modified from time to time, the "Asset Purchase Agreement"), has
purchased from Standard Fire the assets of the Federated Research Division of
Standard Fire listed on Schedule 2 to the Asset Purchase Agreement.
B. As part of the consideration for such purchase, the Company has
issued to Standard Fire 1000 shares of Series A Preferred Shares which shares
are convertible into Class B Common Shares and, at the time of such conversion,
all accrued and unpaid dividends with respect to the Series A Preferred Shares
shall be paid in cash or in Series B Preferred Shares, in each case as provided
in the Declaration of Trust of the Company.
C. The parties hereto, including those Persons executing a letter
substantially in the form of Exhibit A, desire to make certain provisions with
respect to the Series A Preferred Shares, the Series B Preferred Shares, the
Series C Preferred Shares, the Class A Common Shares, the Class B Common Shares
and the conduct of the Company's affairs.
AGREEMENT
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In consideration of the mutual promises made herein and of the mutual
benefits to be derived therefrom, the parties hereto agree as follows:
ARTICLE I
LEGEND ON CERTIFICATES FOR RESTRICTED SECURITIES
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Unless otherwise expressly provided herein, each certificate for
Restricted Securities and each certificate issued in exchange for any such
certificate shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or any state
securities law. Such securities may not be sold, assigned, transferred,
exchanged, mortgaged, pledged or otherwise disposed of or encumbered
without compliance with, and are otherwise restricted by, that certain
Shareholder Rights Agreement, dated [the Closing Date] among Federated
Investors (the "Company"), The Standard Fire Insurance Company and the
other persons who have executed a letter substantially in the form of
Exhibit A thereto evidencing their agreement to become party thereto, a
counterpart of which Shareholder Rights Agreement has been placed on file
by the Company at its principal place of business and its registered
office. Any person who acquires such securities agrees, by such
acquisition, that it and the securities it acquires shall be bound by and
entitled to the benefits of such Shareholder Rights Agreement. A copy of
such Shareholder Rights Agreement will be furnished without charge by the
Company to the record holder hereof upon written request to the Company at
its principal place of business."
ARTICLE II
TRANSFER OF RESTRICTED SECURITIES
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2.1 COMPLIANCE WITH LAWS.
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In addition to the other restrictions contained herein, Restricted
Securities shall not be Transferred except (a) (i) pursuant to an effective
registration statement under the Securities Act, (ii) pursuant to Rule 144 (or
any successor provision) under the Securities Act, or (iii) upon receipt by the
Company of an opinion of in-house counsel of AEtna Life & Casualty or other
counsel
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Shareholder Rights Agreement
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reasonably satisfactory to the Company, to the effect that such Transfer is
exempt from the registration requirements of such Act, and (b) upon receipt by
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the Company of an opinion of such counsel to the effect that such Transfer would
not constitute an "Assignment" pursuant to section 2(a)(4) of the Investment
Company Act that would cause a termination of, or require shareholder approval
with respect to, the Investment Advisory Contracts.
2.2 NO TRANSFER BY MANAGEMENT SHAREHOLDERS.
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So long as any Standard Fire Shareholder holds any Standard Fire
Shares, no Management Shareholder shall Transfer to an Unrelated Third Party (a)
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any Management Shares until on or after the second anniversary of the Closing
Date, except pursuant to a Public Offering, or (b) until on or after the fourth
-
anniversary of the Closing Date, Options the number of underlying Class A Common
Shares or Class B Common Shares, as the case may be, of which exceed, in the
aggregate, 5% of either of the then outstanding Class A or Class B Common Shares
that have been held at any time by any of the Management Circle.
2.3 PARALLEL EXIT.
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So long as any Standard Fire Shareholder holds any Standard Fire
Shares, any Management Shareholder who wishes to Transfer Management Shares at
any time on or after the second and prior to the fourth anniversary of the
Closing Date, other than pursuant to a Public Offering, to any Unrelated Third
Party (the "Transferee") shall follow the procedures set forth in, and such
Transfer shall be conditioned upon compliance with, this section 2.3.
2.3.1 TRANSFER NOTICE. Such Management Shareholder shall, prior to such
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Transfer to an Unrelated Third Party, give to the Company and Standard Fire a
notice (a "Transfer Notice"), executed by it and such Transferee containing (a)
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the number and class of Management Shares that such Transferee proposes to
acquire from such Management Shareholder, (b) the name and address of such
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Transferee, (c) the proposed purchase price, terms of payment and other material
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terms and conditions of such Transferee's offer, (d) an estimate, in such
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Management Shareholder's reasonable judgment, of the fair value of any non-cash
consideration offered by such Transferee, (e) the number
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and class of Management Shares that have been Transferred to Unrelated Third
Parties from the date of this Agreement through the date of such Transfer
Notice, and (f) if applicable, the offer described in section 2.3.2.
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2.3.2 OFFER TO PURCHASE CONVERSION COMMON. If such Transfer, when
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aggregated with all previous Transfers of Management Shares to Unrelated Third
Parties since the date of this Agreement, would result in the Transfer of more
than 50% of either of the then outstanding Class A Common Shares or Class B
Common Shares that have been held at any time by any of the Management Circle
(assuming, for purposes of such calculation, that any Options so Transferred are
the number of Class A Common Shares or Class B Common Shares, as the case may
be, for which such Options are exercisable) (each, a "Change of Control"), such
Transfer Notice shall include an offer by such Transferee or the Management
Shareholders to each Standard Fire Shareholder that is a holder of Conversion
Common to purchase for cash, simultaneously with the purchase by such Transferee
of any such Management Shares, all Conversion Common from each such Standard
Fire Shareholder at a price per share equal to the Exit Price on the date of
such purchase.
2.3.3 ACCEPTANCE OF OFFER. Each such Standard Fire Shareholder shall have
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the right, for a period of 30 days after such Transfer Notice is given, to
accept such offer in whole or in part, exercisable by giving written notice of
such acceptance to such Transferee or the Management Shareholders, as the case
may be, within such 30-day period, stating therein the number of shares of
Conversion Common to be so sold. For a period of 60 days after such 30-day
period, such Management Shareholder may sell to such Transferee the number of
Management Shares stated in such Transfer Notice as subject to purchase by such
Transferee for the consideration per share and on the same payment and other
material terms and conditions stated in such Transfer Notice, provided that
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either such Transferee or the Management Shareholders shall simultaneously with
such Transfer to such Transferee purchase all such shares of Conversion Common
as to which such offer shall have been accepted.
2.3.4 NOTICE OF CHANGE OF CONTROL; EXPENSES. The Company shall notify
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Standard Fire in writing immediately upon obtaining knowledge of a proposed
Transfer that would result in a Change of Control. Each party shall pay its
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Shareholder Rights Agreement
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own respective expenses associated with the exercise by the Standard Fire
Shareholders of the rights under this section 2.3 except that the cost of
determining the Exit Price shall be shared equally by the Company and such
exercising Standard Fire Shareholders.
2.3.5 OTHER TRANSFERS SUBJECT TO THIS SECTION. Any sale or series of
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sales of Management Shares to any of the Management Circle with respect to which
this section 2.3 is not strictly applicable but which was intended to effect a
change in control of the Company in circumvention of the essential intent and
principles of this section 2.3 (for example, by installing an unrelated investor
or investor group as part of management prior to selling Management Shares to
such investor or investor group) shall be deemed a sale to an Unrelated Third
Party for purposes of this section 2.3.
2.4 TRANSFERS OF STANDARD FIRE SHARES; RIGHT OF FIRST OFFER.
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2.4.1 NO TRANSFER PRIOR TO THIRD ANNIVERSARY OF CLOSING DATE. No Standard
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Fire Shareholder shall Transfer any Standard Fire Shares prior to the third
anniversary of the Closing Date except (a) to an Affiliate of Standard Fire, (b)
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pursuant to a Public Offering, or (c) pursuant to section 2.3.
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2.4.2 RIGHT OF FIRST OFFER. (A) PURCHASE OPTION NOTICE. If any Standard
-------------------- ----------------------
Fire Shareholder wishes to Transfer any of its Standard Fire Shares other than
(i) to an Affiliate of Standard Fire, or (ii) pursuant to section 2.3, it shall
--
first give to the Company a notice (the "Purchase Option Notice") referencing
this Agreement and indicating the number of Standard Fire Shares it wishes to
sell (the "Offered Shares") and the price (the "Offer Price") at or above which
it wishes to sell such Shares.
(B) EXERCISE NOTICE. The Company or, if the Company does not elect,
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the Management Shareholders, may elect to purchase all (but not less than all)
of the Offered Shares at the Offer Price by giving to such Standard Fire
Shareholder a notice (the "Exercise Notice") within 30 days (or, in the case of
any proposed Transfer at any time when there exists a public market for Standard
Fire Shares, 15 days) after the date on which such Purchase Option Notice was
given, indicating that the Company
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Shareholder Rights Agreement
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or the Management Shareholders shall purchase such Shares and the date within 30
days after the Exercise Notice is given when the Company or the Management
Shareholders will purchase such Shares (the "Purchase Date"), and such Standard
Fire Shareholder shall be obligated to sell such Shares to the Company or the
Management Shareholders identified in the Exercise Notice against tender on the
Purchase Date of the Offer Price in immediately available funds, provided that
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such Standard Fire Shareholder shall not be obligated to sell such Shares to the
Company or the Management Shareholders if the Offer Price is not tendered to
such Standard Fire Shareholder on the Purchase Date in immediately available
funds.
(c) FAILURE TO EXERCISE. If neither the Company nor the Management
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Shareholders give such Standard Fire Shareholder the Exercise Notice by the time
required by section 2.4.2(b) or do not thereafter tender to such Standard Fire
Shareholder the Offer Price of such Shares in immediately available funds on the
Purchase Date, such Standard Fire Shareholder may Transfer (i) in the case of a
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Transfer pursuant to a Public Offering, all or part of such Shares at any time
pursuant to such Public Offering, and (ii) in the case of any other Transfer,
--
not less than 90% of such Shares at any time within 120 days after the Purchase
Option Notice was given (105 days in the case of any such Transfer at any time
when there exists a public market for such Standard Fire Shares), in each case
on terms and conditions no less favorable to Standard Fire than the terms and
conditions set forth in the Purchase Option Notice and free of the restrictions
contained in this section 2.4.2. Each Standard Fire Shareholder shall notify
the Company of any Transfer referred to in sub-clause (ii) above (and the
identity of the transferee) not less than 5 Business Days prior to entering into
a binding agreement with respect to such Transfer.
(d) RE-OFFER TO THE COMPANY. If, in the case of any Transfer other
-----------------------
than pursuant to a Public Offering, any Standard Fire Shareholder shall have
Transferred at least 90% (but less than 100%) of the Offered Shares within the
time required by subclause (ii) of section 2.4.2(c), such Standard Fire
Shareholder shall deliver to the Company a Purchase Option Notice offering to
sell to the Company or the Management Shareholders at the Offer Price the
Offered Shares not so Transferred. The procedures set forth in section 2.4.2
(other than this
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Shareholder Rights Agreement
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section 2.4.2(d)) shall apply to such Purchase Option Notice.
(e) ASSIGNMENT OF RIGHTS. The Company and each Management
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Shareholder may separately Transfer its rights under this section 2.4 to any
Person without Transferring the related Restricted Securities to such Person.
2.4.3 LIMIT ON NUMBER OF TRANSFERS. The Standard Fire Shareholders shall
----------------------------
not Transfer, in the aggregate, (a) Preferred Shares to more than 5 Persons
-
which are not Affiliates of Standard Fire, or (b) except pursuant to a public
-
offering, Class B Common Shares to more than 5 Persons which are not Affiliates
of Standard Fire.
2.5 TRANSFEREES; NON-COMPLYING TRANSFERS.
------------------------------------
2.5.1 TRANSFEREES BOUND BY AGREEMENT. Each Person who acquires Restricted
------------------------------
Securities agrees, by acquisition of such Restricted Securities, that such
Person and the Restricted Securities that it acquires shall be bound by and
entitled to the benefits of this Agreement to the extent applicable to such
Person.
2.5.2 TRANSFER IN VIOLATION OF AGREEMENT VOID. Any purported Transfer of
---------------------------------------
any Restricted Securities in violation of this Agreement shall be void and of no
effect, no dividend of any kind whatsoever nor any distribution pursuant to
liquidation or otherwise shall be paid by the Company to the purported
transferee in respect of such shares (all such dividends and distributions being
deemed waived), the voting rights of such shares, if any, on any matter
whatsoever shall remain vested in the transferor, and the transferor shall not
be relieved of any of its obligations hereunder as the holder of such shares
during the period commencing with such transferor's initial failure of
compliance and ending when compliance shall have occurred. In the event of such
a non-complying Transfer, the Company shall not Transfer any such shares on its
books or recognize the purported transferee as a shareholder, for any purpose,
until all applicable provision of this Agreement have been satisfied.
2.6 EFFECT OF FORECLOSURE UNDER PLEDGE AGREEMENTS.
---------------------------------------------
Sections 2.2, 2.3, 2.4 and 2.5 shall terminate as to any Common Shares
upon a Transfer (a) pursuant to the enforcement by the Agent of rights under the
-
PNB
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Shareholder Rights Agreement
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Pledge Agreement, or (b) at the request of the Agent at any time when an Event
-
of Default (as defined in the PNB Loan Agreement) has occurred and is continuing
under the PNB Loan Agreement in connection with a bona fide work-out of the
debts of the Company, provided in each case that such sections shall not
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terminate (and if previously terminated shall be reinstated) as to any Common
Shares Transferred to any Person who was a member of the Management Circle prior
to such Transfer by or at the request of Agent. If any Management Shareholder
receives any payment or distribution of any character, whether in cash,
securities or other property in respect to its Management Shares as a result of
any such Transfer, such payment or distribution shall be paid over pro-rata to
the holders of the Preferred Shares for application to the payment of all
amounts due to such holders under this Agreement and the Declaration of Trust,
including all accrued dividends and all amounts due from the Management
Shareholders with respect to such Transfer pursuant to section 2.3, to the
extent necessary to pay all such amounts in full.
ARTICLE III
FURTHER AGREEMENTS OF THE COMPANY
---------------------------------
3.1 MANAGEMENT COMPENSATION.
-----------------------
So long as any Preferred Shares are held other than by a Competitor or
Competitors, the aggregate amount paid and accrued by the Federated Group for
salary, bonus and deferred compensation (exclusive of qualified benefit plans,
life insurance policies existing as of March 10, 1989 and other customary
employee fringe benefits such as financial planning, group term life insurance,
disability insurance, health, hospitalization, major medical and dental
insurance, medical reimbursement plans, the use of company automobiles,
reimbursed business expenses and employee fringe benefits in effect for
employees of Federated Investors, Inc. on March 10, 1989) to the Management
Group shall not, in any calendar year, exceed 7% of gross revenues of the
Company and its Subsidiaries (as consolidated under GAAP) from management fees,
administrative fees and other sales and service income during such calendar
year.
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Shareholder Rights Agreement
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3.2 TRANSFER OF RESTRICTED SECURITIES AND ASSETS.
--------------------------------------------
So long as any Standard Fire Shareholder holds any Standard Fire
Shares, the Company shall not, prior to the second anniversary of the Closing
Date, (a) Transfer, except pursuant to a Public Offering, any Restricted
-
Securities, or (b) Transfer, or permit any of its Subsidiaries to Transfer, all
-
or substantially all of the assets or business of the Company or any of its
Subsidiaries, provided that (x) the Company may effect the Jones Sale, (y) the
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Company may Transfer Restricted Securities to Eligible Employee Stock Plans, and
(z) any wholly-Owned Subsidiary of the Company may consolidate with or merge
-
into the Company (so long as the Company is the surviving entity and the
Declaration of Trust has not been amended, altered, repealed or superseded) or
another Wholly-Owned Subsidiary of the Company.
3.3 CHANGE IN CAPITAL STRUCTURE.
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Until the earlier to occur of (a) the date on which the Standard Fire
-
Shareholders hold no Standard Fire Shares, and (b) the third anniversary of the
-
Conversion Termination Date, the Company shall not issue any shares of
beneficial interest or securities with similar rights in the Company other than
the Common Shares, the Preferred Shares and the Series C Preferred Shares.
3.4 REPURCHASE OF SHARES.
--------------------
The Company shall not, and shall not permit any of its Affiliates to,
directly or indirectly, make any payment on account of, or set apart for
payment, money or other property for a sinking or other similar fund for the
purchase, redemption, retirement or other acquisition for value of, or redeem,
purchase, retire or otherwise acquire for value or incur any other liability in
respect of (each, a "Repurchase") any Common Shares or Series C Preferred Shares
unless, on the date of a proposed Repurchase, (a) all accrued and unpaid
-
dividends on the Series A Preferred Shares shall have been paid in full, (b)
-
there are no Series B Preferred Shares outstanding, and (c) in the case of a
-
Repurchase of Class B Common Shares or Options, the Company shall have made a
pro rata offer to Repurchase (and shall have funds legally available to complete
such Repurchase) on such date all outstanding Series A Preferred Shares and
Conversion Common at the same price and terms of such Repurchase (in the
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Shareholder Rights Agreement
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case of Series A Preferred Shares, as if each such Share were converted into
Class B Common Shares on such date at the Conversion Rate that would apply were
such date a Conversion Notice Date), provided that (x) prior to the Final
-------- -
Dividend Date, or (y) on and after the Final Dividend Date if the requirements
-
of subclauses (a) and (b) are met, the Company may, free of any obligation
imposed by this section 3.4, upon 15 Business Days written notice thereof to the
holders of any outstanding Series A Preferred Shares, effect a Repurchase of
Common Shares then held by (i) any employee or former employee of the Federated
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Group who was not at any time a member of the Management Circle (or any relative
within the third degree of such employee or former employee), or (ii) any member
--
of the Management Circle as provided in section 5.2 of the Cash Subscription
Agreement and section 5.2 of the Stock Subscription Agreement, in each case
other than pursuant to a general offer to such Persons to so Repurchase.
3.5 FINANCIAL REPORTS.
-----------------
The Company shall deliver (a) to each holder of Preferred Shares the
-
information specified in sections 3.5.1 and 3.5.4(a), and (b) to each Standard
-
Fire Shareholder so long as it owns Standard Fire Shares, the information
specified in sections 3.5.2, 3.5.3, 3.5.4(b) and 3.5.5.
3.5.1 ANNUAL FINANCIAL STATEMENTS. As soon as practicable and in any
---------------------------
event within 90 days after the end of each fiscal year of the Company, the
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at the end of such year and the related consolidated (and, as to
the statement of income only, consolidating) statements of income, retained
earnings and cash flow of the Company and its Subsidiaries for such year, and
setting forth in each case in comparative form corresponding figures as of the
end of and for the preceding fiscal year (in the case of the first year after
the Closing Date, only with respect to the statement of cash flow), and, in the
case of such consolidated financial statements, accompanied by a report thereon
of independent public accountants of recognized national standing selected by
the Company, which report shall state that such consolidated financial
statements present fairly the consolidated financial position of the Company and
its Subsidiaries as at the dates indicated and the results of their consolidated
operations and changes in their con-
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solidated financial position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as approved by such
accountants and disclosed in the notes to such statements) and that the audit by
such accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards.
3.5.2 FINANCIAL REPORTS FURNISHED TO OTHER PERSONS.
--------------------------------------------
Promptly upon their becoming available, copies of all (a) financial statements,
-
reports, notices and proxy statements sent or made available generally by the
Company to its security holders or by any Subsidiary of the Company to its
security holders other than the Company or another of its Subsidiaries, (b)
-
regular and periodic reports and all registration statements and prospectuses
(other than registration statements, prospectuses and other filings with respect
to mutual funds managed or advised by the Company or any of its Subsidiaries or
which are routine or administrative in nature), if any, filed by the Company or
any of its Subsidiaries with any securities exchange or with the Commission, (c)
-
financial statements, reports, certificates, notices and other material
required, from time to time, to be delivered by the Company or any of its
Subsidiaries pursuant to any loan or securities purchase agreement in effect on
the Closing Date or entered into in connection with a refinancing of any
indebtedness outstanding on the Closing Date, and (d) press releases and other
-
written statements made available generally by the Company or any of its
Subsidiaries to the public concerning material developments in the business of
the Company and its Subsidiaries.
3.5.3 OTHER INFORMATION. With reasonable promptness, such other
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information and data with respect to the Company or any of its Subsidiaries
(other than Trade Secrets) as from time to time may be reasonably requested by
any Standard Fire Shareholder.
3.5.4 COMPLIANCE CERTIFICATE. Not later than 90 days after the end of
----------------------
each calendar year, a certificate executed on behalf of the Company by its chief
financial officer (a) stating that the Company has complied with section 3.1 for
-
such calendar year, and, in the case of each such certificate delivered to any
Standard Fire Shareholder, demonstrating such compliance in reasonable detail,
provided that the Company shall not be required to specify individually the
- --------
compensation received by any of
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the Management Group, and (b) setting forth in reasonable detail a calculation
-
of the amounts owed to AETNA pursuant to section 4.3.2 of the Stock Exchange
Agreement.
3.5.5 SHAREHOLDER LIST. Not later than 30 days after the end of each
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fiscal year of the Company, a list indicating the respective number of
Management Shares owned by the Management Circle (in the aggregate) and each
other Shareholder and of all Transfers of Management Shares made during such
year.
3.6 CONFIDENTIALITY; RESTRICTION ON ACCESS.
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Any information delivered to any holder of Preferred Shares pursuant
to this Agreement that the Company designates in writing as confidential shall
be held in confidence by such holder. Such holder shall restrict access to such
confidential information to those of its employees, agents, servants, counsel
and auditors who have a reasonable need to have access to such confidential
information in connection with the holding of such Preferred Shares and shall
instruct such employees, agents, servants, counsel and auditors to hold such
information in confidence as required by this section 3.6. This section 3.6
shall not apply (a) to any information that has been made public or that may be
-
obtained from sources other than the Company, or (b) to any disclosure by any
-
holder of Preferred Shares to (i) any federal or state regulatory authority
-
having jurisdiction over such holder, including the National Association of
Insurance Commissioners or any similar organizations, (ii) any Person to which
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such holder offers to sell any Preferred Shares if such Person agrees to keep
such information confidential in the manner set forth in this section 3.6, or
(iii) any Person pursuant to or in compliance with any law, rule, regulation,
---
legal process or order applicable to such holder or in order to protect such
holder's investment in the Preferred Shares. Such holder shall provide
reasonable prior notice to the Company of any request or order for any
information referred to in clause (b) (iii) of this section 3.6.
3.7 COMPANY TREATED AS CORPORATION-ORATION FOR FEDERAL INCOME TAX PURPOSES.
----------------------------------------------------------------------
The Company will, solely for Federal income tax purposes, be treated
as a corporation, the Preferred Shares, the Series C Preferred Shares and the
Common
12
Shareholder Rights Agreement
----------------------------
Shares will be treated as stock interests in that corporation, and the Company
will file Federal income tax returns in accordance with the foregoing.
3.8 AMENDMENT OF MANAGEMENT SUBSCRIPTION AGREEMENTS.
-----------------------------------------------
The Company shall not, without the written consent of the holder or
holders of more than 50% of the Registrable Securities and more than 50% of each
class of the Preferred Shares, amend or waive any provision of Article V
(including the Employee Rider) of the Cash Subscription Agreement or Article V
(including the Employee Rider) and Article VI of the Stock Subscription
Agreement.
ARTICLE IV
REGISTRATION RIGHTS
-------------------
The holders of Registrable Securities shall have the right to register
and sell such Securities to the public in a public offering in accordance with
the provisions of this Article IV, provided that, at any date, section 4.1 shall
--------
not apply to any holder of Registrable Securities which is a Competitor unless
as of such date the Company shall have publicly sold securities pursuant to a
registration statement under the Securities Act.
4.1 REGISTRATION ON REQUEST.
-----------------------
4.1.1 REQUEST. Subject to section 2.4.2, from time to time after the
-------
earliest to occur of (a) the first date on which any Common Shares shall have
-
been publicly sold pursuant. to a registration statement under the Securities
Act, (b) the fifth anniversary of the Closing Date, and (c) the date on which
- -
more than (i) 50% of the Class A Common Shares, or (ii) 50% of the Class B
- --
Common Shares (excluding Conversion Common) is, in the aggregate, held by
Unrelated Third Parties, upon the written request of the Initiating Holders
requesting that the Company effect the registration under the Securities Act of
Registrable Securities and specifying the intended method of disposition
thereof, accompanied by a letter from an investment banking firm of national
reputation to the effect that the price and other terms of such proposed
offering appear reasonable in light of then prevailing market conditions, the
Company will promptly, but in any event within 20
13
Shareholder Rights Agreement
----------------------------
days, give written notice of such requested registration to all holders of
Registrable Securities and thereupon the Company will use its best efforts to
effect the registration under the Securities Act of
(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such request,
and
(ii) all other Registrable Securities which the Company has been
requested to register by the holders thereof by written request given to
the Company within 30 days after the giving of such written notice by the
Company (which request shall specify the intended method of disposition of
such Registrable Securities),
all to the extent required to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered, provided the Company shall not be required to effect any
--------
registration pursuant to this section 4.1 (x) after three registrations
-
requested pursuant to this section 4.1 shall have been effected, (y) within the
-
12 month period immediately following a registration in connection with which a
firm commitment public offering of Registrable Securities shall have become
effective under the Securities Act pursuant to a request under this section 4.1,
or (z) after the third anniversary of the Conversion Termination Date.
-
4.1.2 REGISTRATION STATEMENT FORM. Registrations under this section 4.1
---------------------------
shall be on such appropriate registration form of the Commission selected by the
Company and approved by the Requisite Holders and as shall permit the
disposition of the Registrable Securities so to be registered in accordance with
the intended method or methods specified in their request for such registration.
The Company shall include in any such registration statement all information
required by law or which the holders of Registrable Securities being registered
shall reasonably request.
4.1.3 EXPENSES. The Company shall pay all expenses incident to the
--------
registrations requested pursuant to this section 4.1, provided that printing
--------
expenses, the costs
14
Shareholder Rights Agreement
----------------------------
of Commission and blue sky filing fees and underwriting fees and discounts
incurred in connection with any registration effected pursuant to this section
4.1 shall be borne pro rata by the holders (including the Company) of the
securities to be registered in such registration based on the number of shares
registered.
4.1.4 EFFECTIVE REGISTRATION STATEMENT. A registration requested pursuant
--------------------------------
to this section 4.1 shall not be deemed to have been effected (a) unless a
-
registration statement with respect thereto has become effective, provided that
--------
a registration which does not become effective after the Company has filed a
registration statement with respect thereto primarily by reason of the refusal
to proceed of the Requisite Holders (other than a refusal to proceed based upon
the advice of counsel relating to a matter with respect to the Company) shall be
deemed to have been effected by the Company unless the holders of the
Registrable Securities that were to have been registered shall have elected to
pay all expenses incident to such registration, (b) if such registration, after
-
it has become effective, is interfered with by any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason other than primarily by reason of an act or omission by the
holders of the Registrable Securities that were to have been sold under such
registration statement, or (c) if the conditions to closing specified in the
-
purchase agreement or underwriting agreement entered into in connection with
such registration are not satisfied other than primarily by reason of an act or
omission by the holders of the Registrable Securities that were to have been
sold thereunder.
4.1.5 SELECTION OF UNDERWRITERS. If a requested registration pursuant to
-------------------------
this section 4.1 involves an underwritten offering, the underwriter or
underwriters thereof shall be selected by the Company from a list of three
underwriters of national reputation submitted to the Company by the Requisite
Holders.
4.1.6 PRIORITY IN REQUESTED REGISTRATIONS. If a requested registration
-----------------------------------
pursuant to this section 4.1 involves an underwritten offering, and the managing
underwriter shall advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that, in its opinion, the number
of securities requested to be included in such registration exceeds the
15
Shareholder Rights Agreement
----------------------------
number which can be sold in such offering within a price range acceptable to the
Requisite Holders (such writing to state the basis of such opinion and the
approximate number of securities which may be included in such offering), the
Company will include in such registration, to the extent of the number which the
Company is so advised can be sold in such offering, (a) first, Registrable
-
Securities requested to be included in such registration by the holders of such
Registrable Securities, pro rata among the holders thereof requesting such
registration on the basis of the number of shares of such securities requested
to be included by such holders, and (b) second, other securities of the Company,
-
including Management Shares, proposed to be included in such registration, in
accordance with the priorities, if any, then existing among the Company and the
holders of such other securities.
4.2 INCIDENTAL REGISTRATION.
-----------------------
4.2.1 NOTICE OF PUBLIC REGISTRATION. If the Company at any time proposes
-----------------------------
to register any of its securities under the Securities Act (other than as
contemplated by section 4.1), whether pursuant to registration rights granted to
other holders of its securities or for sale for its own account, on a form and
in a manner which would permit registration of the Registrable Securities for
sale to the public under the Securities Act, it will each such time give prompt
written notice to all holders of Registrable Securities of its intention to do
so and of such holders' rights under this section 4.2.
4.2.2 RIGHT TO INCLUDE REGISTRABLE SECURITIES.
---------------------------------------
Upon the written request of any such holder made within 30 days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder), the Company will use its
best efforts to effect the registration under the Securities Act of all
Registrable Securities which the Company has been so requested to register by
the holders thereof, to the extent required to permit the disposition of the
Registrable Securities so to be registered, provided that if, at any time after
--------
giving written notice of its intention to register any securities and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason either not to register
or to delay registration of such securities, the Company may, at its
16
Shareholder Rights Agreement
----------------------------
election, give written notice of such determination to each holder of
Registrable Securities and, thereupon,
(a) in the case of a determination not to register, shall be relieved
of its obligation to register any Registrable Securities in connection with
such registration (but shall be required to pay all expenses in connection
therewith), without prejudice, however, to the rights of any holder or
holders of Registrable Securities entitled to do so to request that such
registration be effected as a registration under section 4.1, and
(b) in the case of a determination to delay registration, shall be
permitted to delay registering any Registrable Securities for the same
period as the delay in registering such other securities.
4.2.3 NO EFFECT ON REGISTRATIONS UNDER SECTION 4.1. No registration
--------------------------------------------
effected under this section 4.2 shall be deemed to have been effected pursuant
to section 4.1 or shall relieve the Company of its obligation to effect any
registration upon request under section 4.1.
4.2.4 EXPENSES. The Company shall pay all expenses incident to each
--------
registration of Registrable Securities requested pursuant to this section 4.2,
provided that, if such Registrable Securities are sold pursuant to such
- --------
registration, the costs of Commission and blue sky filing fees and ordinary and
customary underwriting fees and discounts incurred in connection with such
registration shall be borne pro rata by the sellers (including the Company) of
the securities sold pursuant to such registration based on the numbers of shares
sold.
4.2.5 PRIORITY IN INCIDENTAL REGISTRATIONS. IF a Registration pursuant to
------------------------------------
this section 4.2 involves an underwritten offering and the managing underwriter
advises the Company in writing (with a copy to each holder of Registrable
Securities requesting registration) that, in its opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering within a price range reasonably acceptable to
the Company (such writing to state the basis of such opinion and the approximate
number of such securities which may be included in such offering), the Company
will include in such registration, to the extent of the number of securities
which the Company is so advised can
17
Shareholder Rights Agreement
----------------------------
be sold in such offering, (a) first, all securities to be registered held by the
-
Person initiating such registration (whether initiated by the Company or any
Person having demand registration rights) other than any of the Management
Circle, and (b) second, Registrable Securities requested to be included in such
-
registration and all other securities proposed to be included therein, pro rata
among the holders thereof based on the number of shares of such securities so
proposed to be sold and so requested to be included.
4.2.6 SELECTION OF UNDERWRITERS. If a registration pursuant to this
-------------------------
section 4.2 involves an underwritten offering, the underwriter or underwriters
thereof shall be selected by the Company.
4.3 REGISTRATION PROCEDURES.
-----------------------
4.3.1 ACTIONS TO BE TAKEN BY THE COMPANY. If and whenever (a) the Company is
---------------------------------- -
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act as provided in sections 4.1 and 4.2, or (b)
-
if Standard Fire requests in connection with any other proposed registration by
the Company under the Securities Act, the Company will as expeditiously as
possible
(i) prepare and file as soon thereafter as possible (using its best
efforts to file within 90 days) with the Commission the requisite
registration statement to effect such registration and thereafter use its
best efforts to cause such registration statement to become effective,
provided that the Company may discontinue any registration of its
--------
securities, other than a registration requested pursuant to section 4.1, at
any time prior to the effective date of the registration statement relating
thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of either (A) not less than 120 days or,
-
if such registration statement relates to an underwritten offering, such
longer period as in the opinion of counsel for the underwriters a
prospectus is required by law to be
18
Shareholder Rights Agreement
----------------------------
delivered in connection with sales of Registrable Securities by an
underwriter or dealer, or (B) such shorter period which will terminate when
-
all of the securities covered by such registration statement have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement (but in
any event not before the expiration of any longer period required under the
Securities Act), and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement until such time as all of such securities have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof set forth in such registration statement;
(iii) furnish to each seller of Registrable Securities covered by
such registration statement and Standard Fire such number of conformed
copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number of
copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus), and any
other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents in order to facilitate the disposition of the Registrable
Securities owned by such seller, as such seller or Standard Fire may
reasonably request;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities or blue sky laws of such jurisdictions as each
seller and Standard Fire shall reasonably request, to keep such
registration or qualification in effect for so long as such registration
statement remains in effect, and take any other action which may be
reasonably necessary or advisable to enable such seller to consummate the
disposition in such jurisdictions of the securities owned by such seller,
provided that the Company shall not for any such purpose be required to (A)
-------- -
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for the requirements of this
subdivision (iv), (B) consent to gen-
-
19
Shareholder Rights Agreement
----------------------------
eral service of process in any such jurisdiction, or (C) subject itself to
-
taxation in such jurisdiction;
(v) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities in the United States as may
be necessary by virtue of the business and operations of the Company to
enable the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish to each seller of Registrable Securities and Standard
Fire a signed counterpart, addressed to such seller and Standard Fire (and
the underwriters, if any), of (A) an opinion of counsel for the Company,
-
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated the date of
the closing under the underwriting agreement), reasonably satisfactory in
form and substance to such seller and Standard Fire, and (B) a "comfort"
-
letter, dated the effective date of such registration statement (and, if
such registration includes an underwritten public offering, dated the date
of the closing under the underwriting agreement), signed by the independent
public accountants who have certified the company's financial statements
included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement
(and the prospectus included therein), and, in the case of the accountants'
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in opinions of issuer's counsel and
in accountants' letters delivered to the underwriters in underwritten
public offerings of securities, and, in the case of the accountants'
letter, such other financial matters, and, in the case of the legal
opinion, such other legal matters, as such seller or Standard Fire (or the
underwriters, if any) may reasonably request;
(vii) notify each seller of Registrable Securities covered by such
registration statement and Standard Fire, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, upon
discovery that, or upon the discovery
20
Shareholder Rights Agreement
----------------------------
of the happening of any event as a result of which, the prospectus included
in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made,
and at the request of any such seller or Standard Fire promptly prepare and
furnish to such seller or Standard Fire a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
under which they were made;
(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act, and furnish to each such
seller and Standard Fire at least five Business Days prior to the filing
thereof a copy of any amendment or supplement to such registration
statement or prospectus and not file any such amendment or supplement to
which any such seller or Standard Fire shall have reasonably objected on
the grounds that such amendment or supplement does not comply in all
material respects with the requirements of the Securities Act unless the
Company furnishes such seller and Standard Fire an opinion of counsel
reasonably satisfactory to such seller and Standard Fire concluding that
such amendment or supplement so complies;
(ix) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration
statement from and after a date not later than the effective date of such
registration statement;
21
Shareholder Rights Agreement
----------------------------
(x) use its best efforts to list (if such Registrable Securities are
not already listed) all Registrable Securities covered by such registration
statement on the New York Stock Exchange, the American Stock Exchange or
NASDAQ or, if such Registrable Securities cannot be so listed because of
their voting rights, any other national securities exchange that shall
permit such Registrable Securities to be listed and on each additional
securities exchange on which any of the securities of the same class as the
Registrable Securities are then listed; and
(xi) enter into such agreements and take such other actions as the
Requisite Holders shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities.
4.3.2 ACTIONS TO BE TAKEN BY SELLERS OF REGISTRABLE SECURITIES. The
--------------------------------------------------------
Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company such information as the
Company may from time to time reasonably request in writing.
4.3.3 ACTIONS TO BE TAKEN BY ALL HOLDERS OF REGISTRABLE SECURITIES. Each
------------------------------------------------------------
holder of Registrable Securities agrees by acquisition of such Registrable
Securities that upon receipt of any notice from the Company of the happening of
any event of the kind described in subdivision (vii) of section 4.3.1, such
holder will forthwith discontinue such holder's disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by subdivision (vii) of section 4.3.1 and, if so
directed by the Company, such holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
holder's possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
4.4 UNDERWRITTEN OFFERING.
---------------------
4.4.1 REQUESTED UNDERWRITTEN OFFERING. If requested by the underwriters
-------------------------------
for any underwritten offering by holders of Registrable Securities pursuant to a
registration requested under section 4.1, the Company
22
Shareholder Rights Agreement
----------------------------
will enter into an underwriting agreement with such underwriters for such
offering. Such agreement shall be satisfactory in substance and form to each
holder of Registrable Securities being registered and the underwriters and shall
contain such representations and warranties by the Company and such other terms
as are generally prevailing in agreements of this type, including, without
limitation, indemnities to the effect and to the extent provided in section 4.7.
The holders of Registrable Securities to be distributed by such underwriters
shall be parties to such underwriting agreement and may, at their option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such holders and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations of
such holders. Such holders of Registrable Securities shall not be required to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, such holder's Registrable Securities, such holder's intended method of
distribution and any other representation required by law.
4.4.2 INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at any time
---------------------------------
proposes to register any of its securities under the Securities Act as
contemplated by section 4.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any holder
of Registrable Securities as provided in section 4.2 and subject to section
4.2.5, use its best efforts to arrange for such underwriters to include all
Registrable Securities to be offered and sold by such holder among the
securities to be distributed by such underwriters. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to the
underwriting agreement between the Company and such underwriters and may, at
their option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such holders of
Registrable Securities and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of such holders of Registrable Securities. Such
holders of
23
Shareholder Rights Agreement
----------------------------
Registrable Securities shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such holder, such holder's
Registrable Securities, such holder's intended method of distribution and any
other representation required by law.
4.4.3 HOLDBACK AGREEMENTS. (a) To the extent not inconsistent with
-------------------
applicable law, each holder of securities of the Company agrees not to effect
any public sale or distribution of any equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities,
including a sale pursuant to Rule 144 under the Securities Act (or any similar
provision then in force) during the seven days prior to and the 90 days after
any underwritten registration has become effective, except as part of such
underwritten registration.
(b) The Company agrees not to effect any public sale or distribution
of its equity securities or securities convertible into or exchangeable or
exercisable for any of such securities during the seven days prior to and the 90
days after any underwritten registration pursuant to section 4.1 or 4.2 has
become effective, except as part of such underwritten registration and except
pursuant to registrations on Form S-4 or S-8, or any successor or similar forms
thereto. The Company agrees to cause each holder of its equity securities or any
securities convertible into or exchangeable or exercisable for any of such
securities (other than securities purchased in a public offering) to agree not
to effect any such public sale or distribution of such securities during such
period, except as part of any such registration if permitted, provided that the
--------
provisions of this subsection (b) shall not prevent the conversion or exchange
of any securities pursuant to their terms into or for other securities.
4.5 PREPARATION; REASONABLE INVESTIGATION.
-------------------------------------
Subject to section 3.6, in connection with the preparation and filing
of each registration statement under the Securities Act pursuant to this
Agreement, the Company will give the holders of Registrable Securities to be
registered under such registration statement, their underwriters, if any,
Standard Fire and their respective counsel and accountants, the opportunity to
participate in
24
Shareholder Rights Agreement
----------------------------
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto,
and will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
4.6 RIGHTS OF STANDARD FIRE.
-----------------------
The Company will not file any registration statement under the
Securities Act, unless it shall first have given to Standard Fire at least 30
days' prior written notice thereof. Standard Fire and its advisers shall have
the right to receive prior to filing drafts of any such registration or
comparable statement and, if Standard Fire reasonably believes that the filing
thereof or the statements contained therein could result in liability to
Standard Fire or its Affiliates, to require the insertion therein of material
furnished to the Company in writing, which in Standard Fire's reasonable
judgment should be included. In addition, if any such registration statement
refers to Standard Fire by name or otherwise as the holder of any securities of
the Company, then Standard Fire shall have the right to require (x) the
-
insertion therein of language, in form and substance satisfactory to Standard
Fire, to the effect that the holding by Standard Fire of such securities does
not necessarily make Standard Fire a "controlling person" of the Company within
the meaning of section 15 of the Securities Act (a "Controlling Person") and is
not to be construed as a recommendation by Standard Fire of the investment
quality of the Company's debt or equity securities covered thereby and that such
holding does not imply that Standard Fire will assist in meeting any future
financial requirements of the Company, or (y) in the event that such reference
-
to Standard Fire by name or otherwise is not required by the Securities Act, the
deletion of the reference to Standard Fire.
4.7 INDEMNIFICATION.
---------------
4.7.1 INDEMNIFICATION BY THE COMPANY. In the event of any registration of
------------------------------
any securities of the Company under the Securities Act, the Company will, and
hereby
25
Shareholder Rights Agreement
----------------------------
does, (a) in the case of any registration statement filed pursuant to section
-
4.1 or 4.2 indemnify and hold harmless the seller of any Registrable Securities
covered by such registration statement, its directors and officers, each other
Person who participates as an underwriter in the offering or sale of such
Registrable Securities and each other Person, if any, who is a Controlling
Person with respect to such seller or any such underwriter, and (b) in the case
-
of any registration statement of the Company, indemnify and hold harmless
Standard Fire, its directors and officers and each other Person, if any, who is
a Controlling Person with respect to Standard Fire, in each case against any
losses, claims, damages or liabilities, joint or several, to which such seller
or Standard Fire or any such director or officer or underwriter or Controlling
Person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon (i)
-
any untrue statement or alleged untrue statement of any material fact contained
in any registration statement under which such securities were registered under
the Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or (ii)
--
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse such seller, Standard Fire and each such director,
officer, underwriter and Controlling Person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding, provided that the Company
--------
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such seller or
Standard Fire, as the case may be, specifically stating that it is for use in
the preparation thereof which information contained any untrue statement of
any material fact or omitted to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Such
26
Shareholder Rights Agreement
----------------------------
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such seller or Standard Fire or any such director,
officer, underwriter or Controlling Person and shall survive the transfer of
such securities by such seller or Standard Fire. The Company shall agree to
provide for such contribution relating to such indemnity as shall be reasonably
requested by any seller of Registrable Securities, the underwriters or Standard
Fire.
4.7.2 INDEMNIFICATION BY THE SELLERS. The Company may require, as a
------------------------------
condition to including any Registrable Securities in any registration statement
filed pursuant to section 4.3, that it shall have received an undertaking
satisfactory to it from the prospective seller of such securities, to indemnify
and hold harmless (in the same manner and to the same extent as set forth in
section 4.7.1) the Company, each director of the Company, each officer of the
Company and each other Person, if any, who is a Controlling Person with respect
to the Company with respect to any statement or alleged statement in or omission
or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such seller specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement which information contained any untrue
statement of any material fact or omitted to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Company or any such director,
officer or Controlling Person and shall survive the transfer of such securities
by such seller.
4.7.3 INDEMNIFICATION PROCEDURES. (a) Whenever any claim, action, cause
--------------------------
of action or liability (a "Claim") shall be asserted against a party entitled to
be indemnified under this section 4.7 (the "Indemnified Party"), the Indemnified
Party shall notify promptly the party or parties from whom indemnification is
sought (the "Indemnifying Party") in writing but in any event within 30 days
27
Shareholder Rights Agreement
----------------------------
after such Indemnified Party has actual knowledge of the facts constituting
the basis for such Claim (the "Notice of Claim"), provided that the failure to
--------
provide a Notice of Claim shall not relieve the Indemnifying Party of its
indemnification obligations hereunder unless such failure materially prejudices
the ability of such Indemnifying Party to contest such Claim. The Notice of
Claim shall specify all facts known to such Indemnified Party giving rise to
such indemnification claim and an estimate of the amount of the liability
arising therefrom.
(b) The Indemnifying Party shall be entitled (without prejudice to
the right of the Indemnified Party to participate at its expense through counsel
of its own choosing) to contest such Claim (and to control such contest) at its
expense and through counsel of its own choosing if it gives written notice of
its intention to do so to the Indemnified Party within 30 days after receipt of
the Notice of Claim, provided that the Indemnified Party shall have the right to
--------
control such contest (at its own expense) jointly with the Indemnifying Party
if, with respect to such Claim, the interests of the Indemnified Party are not
substantially similar to the interests of the Indemnifying Party, or such
contest, if decided against the Indemnified Party, could reasonably be expected
to result in the imposition of equitable remedies
(c) If the Indemnifying Party elects to contest any Claim pursuant to
this section 4.7.3, the Indemnified Party shall, at the expense of the
Indemnifying Party, (i) permit the Indemnifying Party and its attorneys,
-
accountants and other agents to have access to all properties, records and
documents of the Indemnified Party and to furnish to the Indemnifying Party to
the extent available such financial, commercial, legal, operating and other
information with respect to the business and operations of the Indemnified
Party, as the Indemnifying Party may reasonably request and as may be related to
the Claim being contested, (ii) permit the Indemnifying Party to make any
--
investigation which the Indemnifying Party may reasonably request, (iii) procure
---
the cooperation of the Indemnified Party's counsel and accountants with respect
to the foregoing, and (iv) take such other actions as may be reasonably
--
requested by the Indemnifying Party.
(d) Neither the Indemnified Party nor the Indemnifying Party shall
make any settlement of any Claim
28
Shareholder Rights Agreement
----------------------------
which would give rise to liability on the part of the Indemnifying Party under
this section 4.7 without the prior written consent of the other, which consent
shall not be unreasonably withheld, provided that an Indemnified Party shall
--------
not be required to consent to any settlement involving the imposition of
equitable remedies or to any settlement of any Claim with respect to which the
interests of the Indemnified Party and the Indemnifying Party are not
substantially similar. Whenever the Indemnified Party or the Indemnifying Party
receives a firm offer to settle a Claim for which indemnification is sought
under this section 4.7, it shall promptly notify the other of such offer. If the
Indemnifying Party refuses to accept such offer within 20 Business Days after
receipt of such offer (or of notice thereof), such Claim shall continue to be
contested and, if such Claim is within the scope of the Indemnifying Party's
indemnity contained in this section 4.7, shall be indemnified pursuant to the
terms hereof. If the Indemnifying Party notifies the Indemnified Party in
writing that the Indemnifying Party desires to accept such offer, but the
Indemnified Party refuses to accept such offer within 20 Business Days after
receipt of such notice, the Indemnified Party may continue the contest of such
Claim and, in such event, the total maximum liability of the Indemnifying Party
to indemnify or otherwise reimburse the Indemnified Party hereunder with respect
to such Claim shall be limited to and shall not exceed the amount of such offer,
plus reasonable out-of-pocket costs and expenses (including reasonable
attorneys' fees and disbursements) to the date of notice that the Indemnifying
Party desires to accept such offer, provided that this sentence shall not apply
--------
to any settlement of any Claim involving the imposition of equitable remedies or
to any settlement of any Claim with respect to which the interests of the
Indemnified Party and the Indemnifying Party are not substantially similar.
4.7.4 OTHER INDEMNIFICATION. Indemnification similar to that specified in
---------------------
this section 4.7 (with appropriate modifications) shall be given by the Company
and each seller of Registrable Securities with respect to any required
registration or other qualification of securities under any Federal or state law
or regulation of governmental authority other than the Securities Act.
4.7.5 INDEMNIFICATION PAYMENTS. The indemnification required by this
------------------------
section 4.7 shall be made by periodic payments of the amount thereof during the
course of
29
Shareholder Rights Agreement
----------------------------
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred. Any indemnities payable under this section 4.7
shall be limited to the amount of actual damages sustained by the Indemnified
Party, net of any insurance proceeds or other recovery actually received by or
on behalf of such Indemnified Party and any reduction in taxes actually realized
on account of such damages.
4.8 PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
-------------------------------------------
No Person may participate in any underwritten registration hereunder
unless such Person (a) agrees to sell such Person's securities on the basis
-
provided in any underwriting arrangements reasonably approved by the Persons
entitled under section 4.1.5 or section 4.2.6 to select the underwriters, and
(b) except as otherwise expressly provided herein, completes and executes all
-
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements or this Agreement.
4.9 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES.
--------------------------------------------
The Company will not effect or permit to occur any combination or
subdivision of shares which would adversely affect the ability of the holders of
Registrable Securities to include such Registrable Securities in any
registration of its securities contemplated by this Article IV or the
marketability of such Registrable Securities under any such registration.
4.10 RULE 144.
--------
The Company will file the reports required to be filed by it under the
Securities Act and the Exchange Act if there are outstanding securities of the
Company which have been offered in a registered public offering (or, if the
Company is not required to file such reports, will, upon the request of any
holder of Registrable Securities, make publicly available other information) and
will take such further action as any holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 under the
-
Securities Act, as such Rule
30
Shareholder Rights Agreement
----------------------------
may be amended from time to time, or (b) any similar rule or regulation
-
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
ARTICLE V
DEFINITIONS
-----------
For the purpose of this Agreement, the following terms shall have the
following meanings:
AFFILIATE: As applied to any Person, (a) which is other than an
--------- -
individual, any Person directly or indirectly controlling or controlled by
or under common control with such Person, including, without limitation,
any Person beneficially owning or holding 5% or more of any class of Voting
Securities (including trust or partnership interests) of such Person or any
other Person of which such Person owns or holds 5% or more of any class of
Voting Securities (including trust or partnership interests), (b) which is
-
other than an individual, any director, officer or employee of such Person
or of any Person described in clause (a), and (c) who is an individual, a
-
spouse of such Person, any relative (by blood, adoption or marriage) of
such Person within the third degree and a trust created solely for the
benefit of any Persons described in this clause (c). For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with") as used with respect to
any Person shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Securities, by contract or
otherwise.
AGENT: As defined in the PNB Loan Agreement or the PNB Pledge
-----
Agreement, as appropriate
ASSET PURCHASE AGREEMENT: As defined in Recital A.
------------------------
BUSINESS DAY: Any day other than a Saturday, a Sunday or a day on
------------
which commercial banks in Hart-
31
Shareholder Rights Agreement
----------------------------
ford, Connecticut or Pittsburgh, Pennsylvania are required or authorized to
be closed.
CASH SUBSCRIPTION AGREEMENT: The Cash Subscription Agreement, dated
---------------------------
as of July 28, 1989, among the Company and the Persons signatory thereto,
as such agreement shall be amended and modified from time to time in
accordance with this Agreement.
CHANGE OF CONTROL: As defined in section 2.3.2.
-----------------
CLAIM: As defined in section 4.7.3(a).
-----
CLASS A COMMON SHARES: As defined in Article IV, section 4.1 of the
---------------------
Declaration of Trust.
CLASS A TRUST: The trust established on May 31, 1989 to hold the
-------------
Class A Common Shares for the benefit of the Persons party thereto.
CLASS B COMMON SHARES: As defined in Article IV, section 4.1 of the
---------------------
Declaration of Trust.
CLOSING DATE: The date of the Closing under the Asset Purchase
------------
Agreement.
COMMISSION: The Securities and Exchange Commission or any other
----------
Federal agency at the time administering the Securities Act.
COMMON SHARES: The Class A Common Shares and the Class B Common
-------------
Shares and any Options with respect thereto.
COMPANY: As defined in the introductory paragraph of this Agreement.
-------
COMPETITOR: As of any date, (a) any Person primarily engaged in the
---------- -
business of organizing, promoting, sponsoring, administering, advising or
underwriting any open-end management investment company registered as such
under the Investment Company Act, and (b) any Person which is or which
-
controls, is controlled by or is under common control with (i) Morgan
-
Stanley & Co., Reserve Management Company, Inc., Frank Russell Company, The
St. Paul Companies (Nuveen Advisory Corp.), Scudder, Stevens & Clark, Inc.,
Winsbury Company, SEI Financial Manage-
32
Shareholder Rights Agreement
----------------------------
ment Corp. and Goldman, Sachs & Co., (ii) any of the 25 largest (by total
--
net assets managed) mutual fund complexes as listed by the Wiesenberger
Investment Companies Service in effect on such date or, if such Service is
no longer being published on such date, another comparable publication of
similar public stature (the "Advisory Services Report"), or (iii) if on
---
such date it is one of the 50 largest (by total net assets managed) mutual
fund complexes as listed by the Advisory Services Report in effect on such
date, any of Citibank, N.A., Hong Kong and Shanghai Bank Corporation
(Marine Midland Bank, Inc.), The Mutual Life Insurance Company of New York
(Evaluation Associates), Security Pacific National Bank, The Travelers
Corporation (Keystone Custodian Funds, Inc.) or Xerox Corporation (Furman,
Selz, Mager, Dietz & Birney, Inc.), provided that neither Standard Fire nor
--------
any Affiliate of Standard Fire shall be a Competitor.
CONTROLLING PERSON: As defined in section 4.6.
------------------
CONVERSION COMMON: At any date, (a) the Class B Common Shares into
----------------- -
which the Series A Preferred Shares have been converted, (b) the Class B
-
Common Shares that would be issued to the holders of the Series A Preferred
Shares were such Preferred Shares converted into Class B Common Shares on
such date at the Conversion Rate that would apply were such date a
Conversion Notice Date, and (c) any securities issued or issuable with
-
respect to Conversion Common by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. Any holder of Series A
Preferred Shares shall be deemed to be a holder of the Conversion Common
issuable with respect to such Preferred Shares.
CONVERSION NOTICE DATE: As defined in Article IV, section 4.1 of the
----------------------
Declaration of Trust.
CONVERSION RATE: As defined in Article IV, section 4.2.6(a) of the
---------------
Declaration of Trust.
CONVERSION TERMINATION DATE: As defined in Article IV, section 4.1 of
---------------------------
the Declaration of Trust.
33
Shareholder Rights Agreement
----------------------------
DECLARATION OF TRUST: The Amended and Restated Declaration of Trust
--------------------
of the Company as in effect on the Closing Date.
ELIGIBLE EMPLOYEE STOCK PLAN: AS defined in Article IV, section 4.1
----------------------------
of the Declaration of Trust.
EXCHANGE ACT: The Securities Exchange Act of 1934, or any similar
------------
Federal statute, and the rules and regulations promulgated thereunder, all
as the same shall be in effect at the time. Reference to a particular
section of the Securities Exchange Act of 1934 shall include a reference to
the comparable section, if any, of any such similar Federal statute.
EXERCISE NOTICE: As defined in section 2.4.2(b).
---------------
EXIT PRICE: At any date of determination, an amount per share equal
----------
to the quotient determined by dividing: (a) the aggregate amount of cash
-
and the fair value of all non-cash consideration received in respect of all
Transfers of Management Shares by the Management Circle to Unrelated Third
Parties prior to and on such date (including consideration received or to
be received in respect of the Transfer giving rise to such determination of
Exit Price and including, in the case of any such Management Shares that
are Options, the exercise price relating to each thereof) by (b) the
-
aggregate number of Common Shares (including any Options) constituting
Management Shares that shall have been Transferred in all such Transfers to
Unrelated Third Parties (assuming, for purposes of such calculation, that
the Options so Transferred were the number of Class A Common Shares or
Class B Common Shares, as the case may be, for which such Options are
exercisable), as determined by agreement between the Company and the
Standard Fire Shareholders, or if they shall not agree, determined as of
such date by a qualified investment banking or appraisal firm, in each case
of recognized national stature mutually acceptable to the Company and such
Standard Fire Shareholders.
FEDERATED GROUP: Collectively, the Company, the Federated Research
---------------
Division of Standard Fire, Federated Investors, Inc., Passport Research,
Ltd., a
34
Shareholder Rights Agreement
----------------------------
Pennsylvania limited partnership, and each of their respective
Subsidiaries.
FINAL DIVIDEND DATE: As defined in Article IV, section 4.1 of the
-------------------
Declaration of Trust.
GAAP: Generally accepted accounting principles as set forth in the
----
opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements of the Financial Accounting
Standards Board or in such opinions and statements of such other entities
as shall be generally accepted by the accounting profession.
INDEMNIFIED PARTY: As defined in section 4.7.3(a).
-----------------
INDEMNIFYING PARTY: As defined in section 4.7.3(a).
------------------
INITIATING HOLDERS: Any holder or holders of Registrable Securities
------------------
holding at least 25% (by number of shares) of the Registrable Securities
then outstanding and initiating a request pursuant to section 4.1 for the
registration of all or part of such holder's or holders' Registrable
Securities.
INVESTMENT ADVISORY CONTRACT: Any written contract complying with
----------------------------
section 15(a) of the Investment Company Act pursuant to which the Company
or any Subsidiary of the Company agrees to serve or act as an investment
adviser of a registered investment company.
INVESTMENT COMPANY ACT: The Investment Company Act of 1940, or any
----------------------
similar Federal statute, and the rules and regulations thereunder, all as
the same shall be in effect at the time. Reference to a particular section
of the Investment Company Act of 1940 shall include a reference to the
comparable section, if any, of any such similar Federal statute.
JONES SALE: As defined in Article IV, section 4.1 of the Declaration
----------
of Trust.
MANAGEMENT CIRCLE: At any date, (a) the Management Group, (b) any
------------------- - -
relative (by blood, adoption or
35
Shareholder Rights Agreement
----------------------------
marriage) within the third degree of any of the Management Group, (c) any
-
corporation 90% or more of the stock of which is, any partnership 90% or
more of the interests in which are, or any trust (including a decedent's
estate) 90% or more of the beneficial interests in which are, held by any
of the Persons referred to in clauses (a) and (b), and (d) any qualified
-
employee benefit plan of the Company.
MANAGEMENT GROUP: At any date, (a) the Original Managers, and (b) the
---------------- -- --
Replacement Managers.
MANAGEMENT SHAREHOLDER: At any date, any Person owning beneficially
----------------------
and/or of record any Management Shares on such date.
MANAGEMENT SHARES: At any date, all shares of beneficial interest in
-----------------
the Company (and all Options to acquire such shares) held on such date by
any of the Management Circle other than the Series C Preferred Shares.
NOTICE OF CLAIM: As defined in section 4.7.3(a).
---------------
OFFER PRICE: As defined in section 2.4.2(a).
-----------
OFFERED SHARES: As defined in section 2.4.2(a).
--------------
OPTIONS: Any convertible securities, warrants, rights, puts or other
-------
options (other than the Series A Preferred Shares) exercisable for or
convertible into Preferred Shares or Common Shares or any other rights to
acquire Preferred Shares or Common Shares.
ORIGINAL MANAGERS: The individuals listed in Section A of Schedule 1
-----------------
to the Asset Purchase Agreement and Thomas J. Donnelly.
PERSON: An individual, a partnership, an association, a joint
------
venture, a corporation, a business, a trust, an unincorporated
organization, any other entity or a government or any department, agency or
subdivision thereof.
PNB LOAN AGREEMENT: The Senior Secured Reducing Revolving Credit
------------------
Agreement, dated as of the Closing
36
Shareholder Rights Agreement
----------------------------
Date, among the Company, Pittsburgh National Bank and the other Persons
signatory thereto, as amended and modified from time to time in a manner
that does not adversely affect the holders of the Preferred Shares or the
Conversion Common.
PNB PLEDGE AGREEMENT: The Pledge Agreement, dated as of the Closing
--------------------
Date, among the Company, Pittsburgh National Bank and the other Persons
signatory thereto, as amended and modified from time to time in a manner
that does not adversely affect the holders of the Preferred Shares or the
Conversion Common.
PREFERRED SHARES: The Series A Preferred Shares and the Series B
----------------
Preferred Shares.
PUBLIC OFFERING: Any offering of Restricted Securities to the public
---------------
pursuant to a registration statement under the Securities Act which has
complied with Article IV.
PURCHASE DATE: As defined in section 2.4.2(b).
-------------
PURCHASE OPTION NOTICE: As defined in section 2.4.2(a).
----------------------
REGISTRABLE SECURITIES: (a) The Conversion Common, and (b) any
---------------------- - -
securities issued or issuable with respect to shares of the Conversion
Common by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities,
once issued such securities shall cease to be Registrable Securities when
(w) a registration statement with respect to the sale of such securities
-
shall have become effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration statement,
(x) they shall have been distributed to the public pursuant to Rule 144 (or
-
any successor provision) under the Securities Act, (y) they shall have been
-
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any similar state law
then in force, or (z) they shall have ceased to be outstanding.
-
REPLACEMENT MANAGER: Any executive employee of the Company performing
-------------------
services for the Company
37
Shareholder Rights Agreement
----------------------------
substantially similar to those performed by any one or more Original
Managers (other than Thomas J. Donnelly), at any time when such executive
employee is employed by the Company to perform such services.
REPURCHASE: As defined in section 3.4.
----------
REQUISITE HOLDERS: With respect to any registration of Registrable
-----------------
Securities by the Company pursuant to Article IV, any holder or holders of
more than 50% (by number of shares) of the Registrable Securities to be so
registered.
RESTRICTED SECURITIES: The Class A Common Shares, the Class B Common
---------------------
Shares, the Series A Preferred Shares, the Series B Preferred Shares and
the Series C Preferred Shares, if any, and any securities issued with
respect to any thereof by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise, except that any
particular Restricted Securities shall cease to be Restricted Securities
when (a) they shall have been effectively registered under the Securities
-
Act and disposed of in accordance with the registration statement covering
them, (b) they shall have been distributed to the public pursuant to Rule
-
144 (or any successor provision) under the Securities Act, or (c) they
-
shall have ceased to be outstanding. Whenever any particular securities
cease to be Restricted Securities pursuant to clause (a) or (b), the holder
thereof shall be entitled to receive from the Company or its transfer
agent, without expense (other than transfer taxes, if any), new securities
of like tenor not bearing a legend of the character set forth in Article I.
SECURITIES ACT: The Securities Act of 1933, or any similar Federal
--------------
statute, and the rules and regulations promulgated thereunder, all as shall
be in effect at the time. References to a particular section of the
Securities Act of 1933 shall include a reference to the comparable section,
if any, of any such similar Federal statute.
SERIES A PREFERRED SHARES: As defined in Article III, section 3.2 of
-------------------------
the Declaration of Trust.
38
Shareholder Rights Agreement
----------------------------
SERIES B PREFERRED SHARES: AS defined in Article III, section 3.2 of
-------------------------
the Declaration of Trust.
SERIES C PREFERRED SHARES: As defined in Article III, section 3.2 of
-------------------------
the Declaration of Trust.
SHAREHOLDER: Any Person holding shares of beneficial interest in the
-----------
Company.
STANDARD FIRE: As defined in the introductory paragraph of this
-------------
Agreement.
STANDARD FIRE SHAREHOLDER: At any date, any Person owning
-------------------------
beneficially and/or of record any Standard Fire Shares on such date.
STANDARD FIRE SHARES: At any date, the Preferred Shares, the
--------------------
Conversion Common and any securities issued with respect to the Preferred
Shares or. the Conversion Common by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise, in each case held by
Standard Fire or its Affiliates on such date.
STOCK EXCHANGE AGREEMENT: The Stock Exchange Agreement, dated July
------------------------
28, 1989, between the Company and AEtna Life and Casualty Company, as such
agreement shall be amended and modified from time to time.
STOCK SUBSCRIPTION AGREEMENT: The Subscription Agreement, dated as of
----------------------------
July 25, 1989, among the Company and the Persons signatory thereto, as such
agreement shall be amended and modified from time to time in accordance
with this Agreement.
SUBSIDIARY: As to any Person, any corporation or entity at least a
----------
majority of the total combined voting power of all classes of Voting
Securities of which shall, at the time as of which any determination is
being made, be owned by such Person either directly or indirectly.
TRADE SECRETS: Information, not made available to or known by the
-------------
public or the trade in which the Company operates, which relates to the
business of the Company or its Affiliates and which provides an
39
Shareholder Rights Agreement
----------------------------
opportunity to obtain an advantage over competitors who do not know or use
such information.
TRANSFER: Any direct or indirect transfer, sale, assignment, pledge,
--------
hypothecation or other disposition of any interest (including an interest
in any entity holding such an interest), and any agreement to effect any of
the foregoing, provided that any pledge of the Management Shares pursuant
--------
to the PNB Pledge Agreement shall be deemed not to constitute a Transfer.
TRANSFEREE: As defined in section 2.3.
----------
TRANSFER NOTICE: As defined in section 2.3.1.
---------------
UNRELATED THIRD PARTY: At any date, any Person who is not a member of
---------------------
the Management Circle on such date.
VOTING SECURITIES: With respect to any corporation or entity, any
-----------------
securities of such corporation or entity whose holders are entitled under
ordinary circumstances to vote for the election of directors (or similar
positions) of such corporation or entity (irrespective of whether at the
time securities of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
WHOLLY OWNED: As applied to any Subsidiary, a Subsidiary all the
------------
outstanding securities every class of which are at the time owned by the
Company and/or one or more of its Wholly-Owned Subsidiaries.
ARTICLE VI
MISCELLANEOUS
-------------
6.1 OTHER SHAREHOLDER AGREEMENTS.
----------------------------
No Management Shareholder shall enter into or suffer to exist any
shareholder agreement or arrangement of any kind, including the Class A Trust
and the Management Subscription Agreements, with respect to which any Management
Shareholder is a party with any Person with respect to the Restricted Securities
inconsistent with the
40
Shareholder Rights Agreement
----------------------------
provisions of this Agreement. In the event of any conflict between this
Agreement and any provision of any such other shareholder agreement or
arrangement, the provisions of this Agreement shall be controlling.
6.2 PAYMENTS; NOTICES.
-----------------
All dividends and other amounts payable to Standard Fire hereunder and
pursuant to the Declaration of Trust shall be paid by crediting the account of
Standard Fire, acct. number 058-55-172 at Morgan Guaranty Trust Company of New
York, 23 Wall Street, New York, New York 10015, Attn: Money Transfer Department,
in immediately available funds, or as otherwise directed by Standard Fire and
providing sufficient information with such payment to identify the sender of the
funds and the reason for such payment.
Each notice, request, demand and other communication hereunder shall
be in writing and shall be deemed to have been duly given when delivered by hand
or three Business Days after being mailed by certified or registered mail,
postage prepaid, return receipt requested, addressed as follows (or to such
other address or Person as a party may designate by notice to the other
parties):
If to Standard Fire:
CityPlace
185 Asylum Avenue
Hartford, Connecticut 06103
Attention: Vice President-Finance and
Treasurer
With a copy to:
Law Department
AETNA Life and Casualty Company
151 Farmington Avenue
Hartford, Connecticut 06156
Attention: General Counsel
41
Shareholder Rights Agreement
----------------------------
If to the Company:
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222
Attention: Vice President and General Counsel
With a copy to:
Alan H. Finegold, Esq.
Kirkpatrick & Lockhart
1500 Oliver Building
Pittsburgh, PA 15222
and, if addressed to any other Shareholder, at the address that such Shareholder
shall have furnished to the Company and Standard Fire in writing, provided that
--------
all communications required to be furnished to any party hereto by any Standard
Fire Shareholder shall be required to be sent only to the Company on behalf of
such party.
6.3 ASSIGNMENT.
----------
Except as expressly provided herein, this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and assigns. The Company may grant, on the Closing
Date, a security interest in its rights under this Agreement as security for the
performance by the Company of its obligations under the financing referred to in
section 2.1.4 of the Asset Purchase Agreement, provided that (a) such grant
-------- -
shall not adversely affect any right or obligation of any holder of Preferred
Shares or Registrable Securities hereunder, including, without limitation, any
right or obligation to reduce any amounts owing by any such holder hereunder by
any amounts due to any such holder hereunder, and (b) prior to the acceleration
-
of such financing, such holder shall communicate (including the giving of
notices, opinions and similar matters) only with Federated Investors with
respect to this Agreement and such holder shall not be required to so
communicate with any secured party.
42
Shareholder Rights Agreement
----------------------------
6.4 TERMINATION OF AGREEMENT; NO PREFERRED SHARES OUTSTANDING.
---------------------------------------------------------
Except for sections 3.6 and 4.7, this Agreement shall terminate upon
the date upon which (a) all shares of Conversion Common shall have been sold in
-
a Public Offering or pursuant to Rule 144 under the Securities Act, and (b)
-
there are no Series B Preferred Shares outstanding. If no Preferred Shares are
outstanding, sections 2.4.3, 3.1 and 3.5.4(a) shall not apply.
6.5 DESCRIPTIVE HEADINGS.
--------------------
The descriptive headings of the several sections and paragraphs of
this Agreement are inserted for reference only and shall not limit or otherwise
affect the meaning hereof.
6.6 SPECIFIC PERFORMANCE.
--------------------
Without limiting the rights of each party hereto to pursue all other
legal and equitable rights available to such party for the other parties'
failure to perform their obligations under this Agreement, the parties hereto
acknowledge and agree that the remedy at law for any failure to perform their
obligations hereunder would be inadequate and that each of them, respectively,
shall be entitled to specific performance, injunctive relief or other equitable
remedies in the event of any such failure.
6.7 GOVERNING LAW.
-------------
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of
Delaware.
6.8 COUNTERPARTS.
------------
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
6.9 SEVERABILITY.
------------
In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstances, is held invalid, illegal or
unenforceable
43
Shareholder Rights Agreement
----------------------------
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions contained
herein shall not be in any way impaired thereby, it being intended that all of
the rights and privileges of the parties hereto shall be enforceable to the
fullest extent permitted by law.
6.10 ENTIRE AGREEMENT.
----------------
This Agreement is intended by the parties hereto as a final expression
of their agreement and understanding in respect to the subject matter contained
herein. There are no restrictions, promises, warranties or undertakings in
respect to the subject matter contained herein, other than those set forth or
referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
6.11 AMENDMENT AND WAIVER.
--------------------
This Agreement may be amended or waived only by the written consent of
the Company and the holder or holders of more than 50% of the Registrable
Securities and more than 50% of each class of the Preferred Shares, provided
--------
that any amendment or waiver with respect to section 4.7, this section 6.11 or
any provisions as to the number or timing of requests for registration to which
Initiating Holders are entitled under section 4.1 or as to the percentages of
holders of securities required for any action or omission to perform any act
hereunder, shall require the written consent of each holder of Registrable
Securities. Each holder of any Registrable Securities at the time or thereafter
outstanding shall be bound by any consent authorized by this section 6.11,
whether or not such Registrable Securities shall have been marked to indicate
such consent.
6.12 LIMITATION OF LIABILITY.
-----------------------
The parties hereto are hereby expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust and agree that
the obligations of the Company pursuant to this Agreement shall be limited in
any case to the Company and its assets and the parties hereto shall not seek
satisfaction of any obligation of the
44
Shareholder Rights Agreement
----------------------------
Company hereunder from the shareholders of the Company, the trustees, officers
or employees of the Company, or any of them.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
THE STANDARD FIRE INSURANCE
COMPANY
By /s/ James T. Lynn
------------------------------
Name: James T. Lynn
Title: Chairman
FEDERATED INVESTORS
By /s/ John F. Donahue
------------------------------
Name: John F. Donahue
Title: Chairman
45
9075
FIRST AMENDMENT TO
SHAREHOLDER RIGHTS AGREEMENT
----------------------------
THIS AMENDMENT made and entered into as of the 15th day of August, 1995
between THE STANDARD FIRE INSURANCE COMPANY, a Connecticut insurance corporation
("Standard Fire"), and FEDERATED INVESTORS, a Delaware business trust (the
"Company").
RECITALS
--------
A. Standard Fire and the Company have executed and delivered to each
other and entered into the Shareholder Rights Agreement dated August 1, 1989
(the "Shareholder Rights Agreement") between The Standard Fire Insurance Company
and Federated Investors making certain provisions with respect to the capital
stock of the Company and the conduct of the Company's affairs.
B. Section 6.11 of the Shareholder Rights Agreement entitled "Amendment
and Waiver" provides that the Shareholder Rights Agreement may be amended by the
written consent of the Company and by Standard Fire, as the holder of more than
50% of the Registrable Securities and more than 50% of each class of the
Preferred Shares, as referred to therein, in certain respects.
C. Standard Fire and the Company, the parties to the Shareholder Rights
Agreement, wish to amend the Shareholder Rights Agreement in certain respects
under and in accordance with the provisions of Section 6.11 thereof.
AGREEMENT
---------
In consideration of the mutual promises made herein and of the mutual
benefits to be derived therefrom, the parties hereto, each
intending to be legally bound, agree to amend the Shareholder Rights Agreement
in certain respects as follows:
FIRST: Section 2.4.2 of the Shareholder Rights Agreement entitled "Right
of First Offer" is hereby amended by the deletion therefrom of paragraph (b)
thereof and the substitution therefor of a new paragraph (b), as follows:
"(b) EXERCISE NOTICE. The Company or, if the Company does not
---------------
elect, the Management Shareholders, may elect to purchase all
(but not less than all) of the Offered Shares at the Offer Price
by giving to such Standard Fire Shareholder a notice (the
"Exercise Notice") within the period of time referred to in
section 2.4.2(f), indicating that the Company or the Management
Shareholders shall purchase such Shares and the date within the
period of time referred to in section 2.4.2(g) when the Company
or the Management Shareholders will purchase such Shares (the
"Purchase Date"), and such Standard Fire Shareholder shall be
obligated to sell such Shares to the Company or the Management
Shareholders identified in the Exercise Notice against tender on
the Purchase Date of the Offer Price in immediately available
funds, provided that such Standard Fire Shareholder shall
--------
not be obligated to sell such Shares to
-2-
the Company or the Management Shareholders if the Offer Price is
not tendered to such Standard Fire Shareholder on the Purchase
Date in immediately available funds."
SECOND: Section 2.4.2 of the Shareholder Rights Agreement entitled "Right
of First Offer" is hereby further amended by the addition, immediately following
the first sentence of paragraph (c) thereof and immediately preceding the last
sentence of such paragraph, of a new sentence as follows:
"For the purposes of this section 2.4.2(c), nevertheless, in the
case of a Transfer pursuant to a Public Offering at any time
after the original Purchase Option Notice was given with respect
to such Transfer pursuant to a Public Offering and a subsequent
Purchase Option Notice is given with respect to the same Public
Offering that gave rise to the original Purchase Option Notice
under this section 2.4.2, the Transfer by such Standard Fire
Shareholder of all or part of such Shares at a price no less than
ninety-five percent (95%) of the Offer Price shall not be deemed
to be less favorable to Standard Fire than the Offer Price."
THIRD: Section 2.4.2 of the Shareholder Rights Agreement entitled "Right
of First Offer" is hereby further amended by the
-3-
addition, at the conclusion thereof, of a new paragraph (f) and a new paragraph
(g), as follows:
"(f) PERIOD OF TIME FOR EXERCISE NOTICE. The Company or, if
----------------------------------
the Company does not elect, the Management Shareholders, may
elect to purchase the Offered Shares at the Offer Price in
accordance with section 2.4.2(b) by giving the Exercise Notice
within the period of 30 days after the date on which the Purchase
Option Notice was given; provided, however, that (i) in the case
of any proposed Transfer at any time when there exists a public
market for Standard Fire Shares, such period shall be 15 days
after the date on which the Purchase Option Notice was given and
(ii) in the case of any proposed Transfer pursuant to a Public
Offering at any time after the original Purchase Option Notice
was given with respect to such proposed Transfer pursuant to a
Public Offering and a subsequent Purchase Option Notice is given
with respect to the same Public Offering that gave rise to the
original Purchase Option Notice, such period shall be 7 days
after the date on which the subsequent Purchase Option Notice was
given.
"(g) PERIOD OF TIME FOR PURCHASE. The period of time within
---------------------------
which the Company shall purchase, or if the Company does not
elect,
-4-
the Management Shareholders shall purchase, Offered Shares at the
Offer Price on the Purchase Date in accordance with section
2.4.2(b) shall be 30 days after the Exercise Notice is given;
provided, however, that the Company or, if the Company does not
elect, the Management Shareholders may extend the Purchase Date
for a reasonable period of time to a date not later than 90 days
after the Exercise Notice is given for the purpose of obtaining
financing for the purchase of the Offered Shares."
FOURTH: In all other respects, the Shareholder Rights Agreement,
including but not limited to Section 6.12 thereof entitled "Limitation of
Liability," remains in full force and effect.
FIFTH: The terms used herein shall have the same meaning as those terms
have in the Shareholder Rights Agreement, except as the
- 5 -
context otherwise requires.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
and delivered as of the date first above written.
THE STANDARD FIRE INSURANCE COMPANY
By [SIGNATURE ILLEGIBLE]
---------------------------------------
Title: Investment Manager
---------------------------------
FEDERATED INVESTORS
By [SIGNATURE ILLEGIBLE]
---------------------------------------
Title: Vice President
---------------------------------
-6-
SECOND AMENDMENT
TO
SHAREHOLDER RIGHTS AGREEMENT
__________________________
THIS AMENDMENT made and entered into as of the 31st day of January,
1996 between THE STANDARD FIRE INSURANCE COMPANY, a Connecticut insurance
corporation ("Standard Fire"), and FEDERATED INVESTORS, a Delaware business
trust (the "Company").
RECITALS
--------
A. Standard Fire and the Company have executed and delivered to each
other and entered into the Shareholder Rights Agreement dated August 1, 1989, as
amended by the First Amendment to Shareholder Rights Agreement dated August 15,
1995 (hereinafter sometimes collectively called the "Agreement") between The
Standard Fire Insurance Company and Federated Investors making certain
provisions with respect to the capital stock of the Company and the conduct of
the Company's affairs.
B. Standard Fire, Aetna Life and Casualty Company, a Connecticut
insurance corporation, the Company and Federated Investors, Inc., a Pennsylvania
corporation ("Buyer"), have executed and delivered to each other and entered
into the Stock Purchase Agreement dated as of December 21, 1995 (the "Stock
Purchase Agreement") pursuant to which the parties have entered into a series of
transactions, including the sale by Standard
Fire to Buyer of all shares of capital stock issued by the Company to Standard
Fire and Standard Fire and the Company have agreed to terminate all of their
respective rights and obligations to each other under the Agreement and to
release and discharge each other from any and all claims, demands, judgments,
actions, causes of action, damages, expenses, costs, attorney's fees and
liabilities of any kind whatsoever.
C. Section 6.11 of the Agreement entitled "Amendment and Waiver,"
provides that the Agreement may be amended by the written consent of the Company
and by Standard Fire, as the holder of more than 50% of the Registrable
Securities and more than 50% of each class of the Preferred Shares, as referred
to therein, in certain respects.
D. Standard Fire and the Company, the parties to the Agreement, wish
to amend the Agreement in certain respects under and in accordance with the
provisions of Section 6.11 thereof.
AGREEMENT
---------
In consideration of the mutual promises made herein and of the mutual
benefits to be derived therefrom, the parties hereto, each intending to be
legally bound, agree that all rights and obligations of Standard Fire and the
Company to each other arising under the Agreement have been terminated, confirm
that the releases set forth in Article VII of the Stock Purchase Agreement have
become effective upon the closing thereunder and further agree, nevertheless,
that, with respect to any person other than Standard Fire who may be bound by
the terms of the
-2-
Agreement, the Agreement is hereby amended in certain respects as follows:
FIRST: Section 2.1 of the Agreement entitled "Compliance with Laws"
is hereby amended by the deletion therefrom of the words "in-house counsel of
Aetna Life & Casualty or other" from the seventh line thereof.
SECOND: Section 2.2 of the Agreement entitled "No Transfer by
Management shareholders," Section 2.3 of the Agreement entitled "Parallel Exit,"
Section 2.4 of the Agreement entitled "Transfers of Standard Fire Shares; Right
of First Offer," and Section 2.6 of the Agreement entitled "Effect of
Foreclosure Under Pledge Agreements" are hereby deleted therefrom in their
entirety; and Section 2.5 of the Agreement entitled "Transferees; Non-Complying
Transfers" is hereby renumbered as Section 2.2 thereof.
THIRD: Section 3.1 of the Agreement entitled "Management
Compensation," Section 3.2 of the Agreement entitled "Transfer of Restricted
Securities and Assets," Section 3.3 of the Agreement entitled "Change in Capital
Structure," Section 3.4 of the Agreement entitled "Repurchase of Shares,"
Section 3.5 of the Agreement entitled "Financial Reports," Section 3.6 of the
Agreement entitled "Confidentiality; Restriction on Access Section 3.7 of the
Agreement entitled "Company Treated as Corporation for Federal Income Tax
Purposes," and Section 3.8 of the Agreement entitled "Amendment of Management
Subscription Agreements" are hereby deleted therefrom in their entirety.
-3-
FOURTH: Article IV of the Agreement entitled "Registration Rights" is
hereby renumbered as Article III thereof, retitled as "Underwritten Offerings"
and amended and restated in its entirety, as follows:
"ARTICLE III
UNDERWRITTEN OFFERINGS
----------------------
If the Company or holders of Securities shall register and
sell such Securities to the public in a public offering
which shall be an underwritten offering pursuant to an
underwritten registration, to the extent not inconsistent
with applicable law, each holder of securities of the
Company agrees not to effect any public sale or distribution
of any equity securities of the Company or any securities
convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 under the
Securities Act (or any similar provision then in force)
during the seven days prior to and the 90 days after any
underwritten registration has become effective, except as
part of such underwritten registration."
FIFTH: Article V of the Agreement entitled "Definitions" is hereby
renumbered as Article IV thereof and all definitions of terms no longer used in
the Agreement are hereby deleted therefrom.
SIXTH: Article VI of the Agreement entitled "Miscellaneous" is
hereby renumbered as Article V thereof.
SEVENTH: Section 6.1 of the Agreement entitled "Other Shareholder
Agreements" is hereby renumbered as Section 5.1 thereof.
-4-
EIGHTH: Section 6.2 of the Agreement entitled "Payments; Notices" is
hereby renumbered as Section 5.2 thereof, retitled as "Notices" and amended and
restated in its entirety as follows:
"5.2 Notices.
-------
Each notice, request, demand and other communication
hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand or three business
days after being mailed by certified or registered mail,
postage prepaid, return receipt requested, addressed as
follows (or to such other address or Person as a party may
designate by notice to the other parties):
If to the Company:
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222
Attention: Vice President and
General Counsel
With a copy to:
Alan H. Finegold, Esq.
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222
and, if addressed to any Shareholder, at the address that
such Shareholder shall have furnished to the Company in
writing."
NINTH: SECTION 6.3 of the Agreement entitled "Assignment" is hereby
renumbered as Section 5.3 thereof and amended and restated in its entirety as
follows:
"5.3 Assignment.
----------
Except as expressly provided herein, this Agreement
shall be binding upon and inure to the benefit of and
be enforceable by the
-5-
PARTIES HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS."
TENTH: Section 6.4 of the Agreement entitled "Termination of
Agreement; No Preferred Shares outstanding" is hereby deleted therefrom in its
entirety.
ELEVENTH: Section 6.5 of the Agreement entitled "Descriptive Headings"
is hereby renumbered as Section 5.4 thereof; Section 6.6 of the Agreement
entitled "Specific Performance" is hereby renumbered as Section 5.5 thereof;
Section 6.7 of the Agreement entitled "Governing Law" is hereby renumbered as
Section 5.6 thereof; Section 6.8 of the Agreement entitled "Counterparts" is
hereby renumbered as Section 5.7 thereof; Section 6.9 of the Agreement entitled
"Severability" is hereby renumbered as Section 5.8 thereof; and Section 6.10 of
the Agreement entitled "Entire Agreement" is hereby renumbered as Section 5.9
thereof.
TWELFTH: Section 6.11 of the Agreement entitled "Amendment and
Waiver" is hereby renumbered as Section 5.10 thereof and amended and restated in
its entirety as follows:
"5.10 AMENDMENT AND WAIVER.
--------------------
THIS AGREEMENT MAY BE AMENDED OR WAIVED ONLY BY THE WRITTEN
CONSENT OF THE cOMPANY."
THIRTEENTH: Section 6.12 of the Agreement entitled "Limitation of
LIABILITY" is hereby renumbered as Section 5.11 thereof.
FOURTEENTH: In all other respects, the Agreement remains in full
FORCE and effect.
-6-
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered as of the day first above written.
THE STANDARD FIRE INSURANCE COMPANY
By [SIGNATURE ILLEGIBLE]
-------------------------------------
Title: Vice President
-------------------------------
FEDERATED INVESTORS
By [SIGNATURE ILLEGIBLE]
-------------------------------------
Title: Vice President
-------------------------------
-7-
1152
TERMINATION AGREEMENT
---------------------
THIS AGREEMENT made and entered into as of the 31st day of January in
the year 1996 by and between FEDERATED INVESTORS, a Delaware business trust
(hereinafter sometimes called "Federated"), of the one part,
a
n
d
AETNA LIFE AND CASUALTY COMPANY, a Connecticut insurance corporation
(hereinafter sometimes called "Aetna"), of the other part.
WITNESSETH THAT:
WHEREAS, under and in accordance with the provisions of the Asset
Purchase Agreement dated July 28, 1989 among Federated Investors, Standard Fire
Insurance Company and Aetna Life and Casualty Company, as amended, in Section
4.2.1 thereof, Aetna made certain covenants not to compete with Federated in
certain respects, as clarified and extended by the letter agreement dated June
12, 1992 addressed to Aetna Life and Casualty Company and Standard Fire
Insurance Company from Federated Investors (hereinafter sometimes collectively
called the "Non-Competition Covenant"); and
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Aetna shall pay to Federated the sum of Four Hundred Eighty Thousand,
Four Hundred Ten and 25/100 Dollars ($480,410.25) for and in consideration of
the termination of the Non-Competition Covenant hereunder;
NOW, THEREFORE, for and in consideration of the payment by Federated
to Aetna as indicated hereinabove, Federated and Aetna, the parties to the Non-
Competition Covenant and to this Agreement, each intending to be legally bound,
do hereby terminate the Non-Competition Covenant and release each other, and
their respective affiliates, from any liability or obligation thereunder.
The parties hereto are hereby expressly put on notice of the
limitation of liability as set forth in the Restated Declaration of Federated
and agree that the obligations of Federated pursuant to this Agreement shall be
limited in any case to Federated and its assets and the parties hereto shall not
seek satisfaction of any obligation of Federated hereunder from the shareholders
of Federated, the trustees, officers or employees of Federated, or any of them.
This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, Federated and Aetna, the parties hereto, have duly
executed this Agreement as of the day and year
-2-
first above written.
FEDERATED:
ATTEST: FEDERATED INVESTORS
[SIGNATURE ILLEGIBLE] By [SIGNATURE ILLEGIBLE]
- -------------------------- -------------------------------
Title: Asst. Secretary Title: Vice President
-------------------- -------------------------
[Trust Seal]
AETNA:
ATTEST: AETNA LIFE AND CASUALTY COMPANY
[SIGNATURE ILLEGIBLE] By [SIGNATURE ILLEGIBLE]
- -------------------------- -------------------------------
Title: Asst Corporate Title: Executive Vice President
-------------------- -------------------------
Secretary
--------------------
(CORPORATE SEAL]