Exhibit 2(b)
FIRST AMENDMENT TO THE
STOCK PURCHASE AGREEMENT
First Amendment, dated as of March 27, 1997 (the "First Amendment"),
to the Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of
March 12, 1997, between ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a New Jersey corporation (the
"Company"), the stockholders of the Company listed on Annex A to the Stock
Purchase Agreement (each such stockholder, a "Seller") and ▇▇▇▇▇ & McLennan
Companies, Inc., a Delaware corporation ("Buyer," and together with the Company
and Sellers, the "Parties").
WHEREAS, the Parties entered into the Stock Purchase Agreement,
providing for the terms of the business combination of the Company and Buyer;
and
WHEREAS, the Parties, in accordance with Section 10.1 to the Stock
Purchase Agreement, desire to amend the terms of such agreement;
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants contained in the Stock Purchase
Agreement, and subject to and on the terms and conditions set forth therein, the
Parties agree as follows:
Section 1. Amendment of Delivery of Stock Consideration Requirement.
The final sentence of Section 1.2(b) is amended to read as follows:
"Notwithstanding the foregoing requirement of delivery of the Stock
Consideration at the Closing, if Buyer is unable to deliver certificates
representing the Stock Consideration at Closing, the Closing shall occur in
any event, and Buyer shall deliver such certificates in accordance with the
foregoing as soon as practicable thereafter, but not later than April 9,
1997 and no Seller shall have any right of action against Buyer with
respect to such delivery occurring after the Closing if made as provided
herein."
The following sentence is added at the end of Section 1.2(b):
"Notwithstanding anything in this Section 1.2(b) and the Retiree
Agreements, Buyer shall wire transfer the Cash Consideration payable to the
Sellers and Retirees, respectively, at the Closing, net of any amounts
payable by the Company with respect to Taxes (including withholding,
unemployment, social security, and other Taxes) in amounts agreed upon by
the Company and Buyer before the Closing (which amounts Buyer would be
responsible for paying to the relevant authorities), to an account
designated by the Sellers' Committee, and the Sellers' Committee shall be
responsible for paying to each such Seller or Retiree, the amount due to
such Seller or Retiree.
Section 2. Amendment of Appointment of Directors and Officers of
Insurance Brokerage Holding Company. The second, third and fourth sentences of
Section 6.5(b)(iii) are amended to read as follows:
"Buyer shall cause the board of directors and executive officers of the
Insurance Brokerage Holding Company to consist of Persons whose identity
and positions shall be determined, in accordance with this Section
6.5(b)(iii), by Buyer and the Sellers' Committee in consultation and
cooperation with one another. Such directors and executive officers shall
be employees of the Company or Buyer at the Closing Time. Such directors
and executive officers and their positions shall be set forth on Annex B
hereto, which Annex shall be prepared before April 30, 1997 and be subject
to the approval of the Executive Committee of the Board of Directors of
Buyer (which Buyer shall seek to obtain promptly following the preparation
of such schedules) and such Annex will be initialled by Buyer, the Company
and the Sellers' Committee."
Section 3. Amendment of Employee Award Agreements. The fourth,
fifth, sixth and seventh sentences of Section 6.5(c)(ii) are amended to read as
follows:
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"The Company and Buyer will use their respective best efforts to reach a
good faith agreement as to the names and other items to be specified in
Annex C as soon as practicable after the Closing but not later than May 31,
1997. A completed version of Annex C setting forth all such agreed upon
items shall be added to and made a part of this Agreement not later than
such specified date. Any Buyer Common Stock to be specified for an employee
in such version of Annex C shall be expressed as a dollar amount, and the
number of shares issuable under such employee's Employee Award Agreement
shall be determined prior to such specified date by dividing such specified
dollar amount by the Closing Stock Price, with any resulting fractional
share being Rounded. The number of shares of Buyer Common Stock issuable
under each Employee Award Agreement shall be set forth in the amended
version of Annex C, which shall be added to and made a part of this
Agreement prior to such specified date."
The following Section 6.5(c)(v) is added to the Stock Purchase
Agreement:
"(v) All actions to be taken by the Company with respect to Section
6.5(c) shall be taken by the Sellers' Committee."
Section 4. Amendment to Escrow Agreements. Section 6.14(a) is
amended to read as follows:
"(a) At the Closing, Buyer, Sellers, the Escrow Agent and each Retiree with
an effective Retiree Agreement at the Closing shall enter into an escrow
agreement substantially in the form of Exhibit D hereto (the "Indemnity
Escrow Agreement"). Buyer shall designate the Escrow Agent subject to the
Company's approval which shall not be unreasonably withheld. On April 9,
1997, Buyer will deliver an amount equal to ten percent of the Total
Purchase Price, consisting of shares of Buyer Common Stock to be funded by
Sellers and Retirees with effective Retiree Agreements as of April 2, 1997
or such other date not later than April 8, 1997 as the Sellers' Committee
may request (the "Effective Date") as provided below
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(the "Escrow Fund"), to the Escrow Agent in accordance with the terms of
the Indemnity Escrow Agreement to secure certain obligations of the Sellers
pursuant to this Agreement. Pursuant to the Indemnity Escrow Agreement, the
Escrow Agent shall hold the Escrow Fund for a period of two years following
the Closing subject to asserted claims for indemnification. Each Retiree
executing a Retiree Agreement shall have appointed the Seller's Committee
to act as his or her attorney-in-fact with respect to the matters set forth
in the Indemnity Escrow Agreement. Notwithstanding the foregoing, on the
first anniversary of the Closing Date, the Escrow Agent shall release to
the Sellers' Committee an amount equal to one-half of the Escrow Fund,
reduced by any amounts paid to Buyer prior to such anniversary date and any
amounts then reserved with respect to any unresolved asserted claims for
Damages made by the Buyer Group all as is provided in the Indemnity Escrow
Agreement. The Escrow Fund initially will consist of a number of shares of
Buyer Common Stock to be contributed ratably by each Seller and each
Retiree with an effective Retiree Agreement as of the Effective Date in an
amount equal to such Person's proportionate interest (based on the amount
to be received by such Person for their Shares or under their Retiree
Agreements, as the case may be) in the amount equal to the sum of (x) the
Total Purchase Price and (y) the aggregate payments to be received by the
Retirees with effective Retiree Agreements as of the Effective Date under
such Retiree Agreements. The Sellers' Committee and Buyer will discuss in
good faith the appropriateness of including as part of the Escrow Fund a
portion of the shares of Buyer Common Stock to be issued to Retirees
executing Retiree Agreements after the Effective Date. In respect of the
shares placed in the Escrow Fund, the number of shares of Buyer Common
Stock deliverable hereunder to each such Seller and Retiree will be reduced
by the amount to be delivered to the Escrow Agent as part of the Escrow
Fund; provided, that the shares to be delivered into the Escrow Fund on
behalf of each such Seller and Retiree shall be drawn first from the shares
of such Person that are subject to transfer restrictions under Section 7(a)
of the
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Registration Rights Agreement until the second anniversary of the Closing
Date and thereafter, as necessary from the shares of such Person that are
subject to such resale restrictions until the first anniversary of the
Closing Date (with any resulting fractional share being Rounded)."
Section 5. Amendment to Closing Company Financial Information. The
following Section 6.16(d) is added to the Stock Purchase Agreement:
"(d) For purposes of this Section 6.16, the 'Closing Date' shall be deemed
to mean March 31, 1997. For the purposes of this Section 6.16 and Section
6.17, the 'Pre-Closing Period' shall be deemed to mean the period
commencing on January 1, 1997 and ending on March 31, 1997."
Section 6. Amendment to Definition of "Closing Stock Price." The
definition of "Closing Stock Price" in Section 11.1 is amended to read as
follows:
"'Closing Stock Price' shall mean the average of the per share closing
prices of Buyer Common Stock as reported on the NYSE composite transactions
reporting system (as reported in the New York City edition of The Wall
Street Journal or, if not reported thereby, another authoritative source)
for the five consecutive trading days in such market ending on the first
trading day immediately preceding the Closing Date, provided that (i) if
such average price shall be more than $129, the Closing Stock Price shall
be deemed to be $129, and (ii) if such average price shall be less than
$111, the Closing Stock Price shall be deemed to be $111."
Section 7. Amendment of Share Numbers. Annex A to the Stock Purchase
Agreement is amended to read as set forth in Annex A to this Amendment. Section
6.1(b)(v)(A) is amended to read as follows:
"(A) in the case of the Company, repurchases of up to 33,000
shares of Company Common Stock for cash in an amount not in
excess of $10 per share (it being understood that the Company
will repur-
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chase, to the extent available in the case of each Seller from
whom the Company elects to repurchase shares, shares which are
presently non-dividend bearing, prior to repurchasing shares
which are presently dividend bearing) and".
The second and third sentences of Section 2.4(a) are amended as follows:
"Immediately prior to the Closing, 22,335 shares of Company Common
Stock will be issued and outstanding and all such outstanding shares
have been duly authorized and are validly issued, fully paid and
nonassessable. At the Closing, the Sellers' Shares, in the
aggregate, will constitute all the issued and outstanding shares of
capital stock of the Company."
The first parenthetical clause in Section 2.6 is amended to read as follows:
"(including the payment of any dividend, distribution or other
amount contemplated by Section 6.17 and any repurchase of shares contemplated by
Section 6.1(b)(v)(A))".
Section 8. Stock Purchase Agreement as Amended. The term "Agreement"
as used in the Stock Purchase Agreement shall be deemed to refer to the Stock
Purchase Agreement as amended hereby. The foregoing amendments shall be
effective as of the date hereof and, except as set forth herein, the Stock
Purchase Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
Section 9. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 10. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE MADE
IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, this Amendment has been signed on behalf of each
of the parties hereto as of the date first written above.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: General Counsel
SELLERS' DESIGNEE
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ & MCLENNAN
COMPANIES, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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