EXHIBIT (c)(4)
STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of June 10, 1999 (this
"Agreement"), by the undersigned stockholder (the "Stockholder") of CAPITAL RE
CORPORATION, a Delaware corporation (the "Company"), for the benefit of ACE
LIMITED, a company incorporated with limited liability under the Cayman Islands
Companies Law ("ACE").
RECITALS
WHEREAS, concurrently with the execution and delivery of this Agreement,
ACE, Pacer Acquisition Corp., a Delaware corporation and a wholly owned direct
subsidiary of ACE ("Merger Subsidiary"), and the Company, have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides for, among other things, the merger of the Company
and Merger Subsidiary (the "Merger"); and
WHEREAS, the Stockholder owns of record and/or holds stock options,
warrants or convertible securities to acquire (whether or not vested) that
number and class of shares of outstanding capital stock of the Company ("Company
Capital Stock") appearing on the signature page hereof (such shares of Company
Capital Stock, together with any other shares of capital stock of the Company
acquired by such Stockholder after the date hereof and during the term of this
Agreement, being collectively referred to herein as the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, ACE has required that the Stockholder agree, and in order to induce
ACE to enter into the Merger Agreement, the Stockholder has agreed, to enter
into this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements set forth herein, the Stockholder agrees as follows:
1. Agreement to Vote. Until the termination of this Agreement in
accordance with Section 14, Stockholder agrees as follows:
(a) At the Company's stockholders' meeting to vote on approval and
adoption of the Merger Agreement, including any adjournment or postponement
thereof (the "Stockholders' Meeting") or in any other circumstances upon
which a vote, consent or other approval with respect to the Merger and the
Merger Agreement is sought, the Stockholder hereby irrevocably and
unconditionally agrees to vote (or cause to be voted) the Subject Shares in
favor of the Merger, the adoption of the Merger Agreement and the approval
of the terms thereof and each of the other transactions contemplated by the
Merger Agreement.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the Stockholder
hereby irrevocably and unconditionally agrees to vote (or cause to be
voted) the Subject Shares against (i) approval of any proposal made in
opposition to or in competition with the Merger Agreement or the
transactions contemplated by the Merger Agreement, (ii) any merger,
consolidation, merger of assets, business combination, share exchange,
reorganization or recapitalization of the Company or any of its
subsidiaries, with or involving any party other than ACE or one of its
subsidiaries, (iii) any liquidation, dissolution or winding up of the
Company, (iv) any change in the capital structure of the Company (other
than pursuant to the Merger Agreement) and (v) any other action including,
without limitation, any amendment of the Company's Certificate of
Incorporation or Bylaws, which such action reasonably may be expected to
impede, frustrate, interfere with, delay, postpone, attempt to discourage,
prevent or nullify the consummation of the transactions contemplated by the
Merger Agreement or this Agreement or result in a breach of any of the
covenants, representations, warranties or other obligations or agreements
of the Company under the Merger Agreement which would materially and
adversely affect the Company or its ability to consummate the transactions
contemplated by the Merger Agreement. The Stockholder further agrees not to
commit or agree to take any action inconsistent with the foregoing.
(c) Any such vote shall be cast or consent shall be given in
accordance with such procedures relating thereto as shall ensure that it is
duly counted for purposes of determining that a quorum is present and for
purposes of recording the results of such vote or consent. The Stockholder
agrees to deliver to ACE upon request a proxy in such form as ACE may
reasonably request, which proxy shall be coupled with an interest and
irrevocable to the extent permitted under Delaware law, with the total
number of Shares correctly stated thereon.
2. Restriction on Transfer of Company Capital Stock. The Stockholder
agrees (other than pursuant to the Merger Agreement) not to (a) sell, transfer,
pledge, assign or otherwise dispose of (including by gift) (collectively,
"Transfer"), or enter into any contract, option or other arrangement (including
any profit-sharing arrangement) with respect to the Transfer of the Subject
Shares to any person or (b) enter into any voting arrangement, whether by proxy,
voting agreement or otherwise, in relation to the Subject Shares, and agrees not
to commit or agree to take any of the foregoing actions.
3. No-Shop. The Stockholder shall not, nor shall the Stockholder permit
any affiliate, director, officer, employee, investment banker, attorney or other
advisor or representative of the Stockholder to, (i) directly or indirectly
solicit, initiate or knowingly
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encourage the submission of, any Acquisition Proposal or (ii) directly or
indirectly participate in any discussions or negotiations regarding, or furnish
to any person any information with respect to, or take any other action to
facilitate any inquiries or the making of any proposal that constitutes or may
reasonably be expected to lead to, any Acquisition Proposal; provided, that the
foregoing shall not restrict any director of the Company from taking any action
permitted by Section 6.3 of the Merger Agreement.
4. No Proxy Solicitations. The Stockholder agrees that it will not, nor
will it permit any entity under its control to, (a) solicit proxies or become a
"participant" in a "solicitation" (as such terms are defined in Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) in
opposition to or competition with the consummation of the Merger or otherwise
encourage or assist any party in taking or planning any action which would
compete with or otherwise could serve to materially interfere with, delay,
discourage, adversely affect or inhibit the timely consummation of the merger in
accordance with the terms of the Merger Agreement, (b) directly or indirectly
encourage, initiate or cooperate in a stockholders' vote or action by consent of
the Company's stockholders in opposition to or in competition with the
consummation of the Merger, or (c) become a member of a "group" (as such term is
used in Section 13(d)(3) of the Exchange Act) with respect to any voting
securities of the Company for the purpose of opposing or competing with the
consummation of the Merger; provided, that the foregoing shall not restrict any
director of the Company from taking any action such director believes is
necessary to satisfy such director's fiduciary duty to stockholders of the
Company.
5. Support of Merger. The Stockholder shall use the Stockholder's best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with ACE in doing, all things necessary,
proper or advisable to support and to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by the Merger Agreement.
6. Legend. As soon as practicable after the execution of this Agreement,
the Stockholder shall surrender to the Company the certificates representing the
Subject Shares in its possession (and within 30 days the Subject Shares not in
its possession), shall cause the following legend to be placed on the
certificates representing such Subject Shares and shall request that such legend
remain thereon until the earlier of (i) the termination hereof or (ii) the
consummation of the Merger:
"The shares of capital stock represented by this certificate are subject to
a Stockholder Support Agreement, dated as of June 10, 1999, among the
Stockholder named herein and ACE Limited, which, among other things, (a)
restricts the sale or transfer of such shares except in accordance
therewith, and (b) restricts the voting of such shares except in accordance
therewith."
In the event that ACE requests that a proxy be executed and delivered by the
Stockholder to it
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pursuant to Section 1(c) hereof, the Stockholder shall promptly surrender to the
Company the certificates representing the Shares covered by such proxy and cause
the foregoing legend to be revised to add to the end of such legend the
following words:
", and such shares are also subject to an irrevocable proxy."
The Stockholder shall provide ACE with reasonably satisfactory evidence of its
compliance with this Section 6 on or prior to the date five business days after
the execution hereof with respect to Subject Shares in its possession (or within
30 days with respect to Subject Shares not in its possession) or of the request
relating to the Stockholder's proxy, as the case may be.
7. Restriction on Transfer of Ordinary Shares. The Stockholder agrees,
until the date which is 180 days after the date of the consummation of the
Merger, not to Transfer or enter into any contract, option or other arrangement
(including any profit-sharing arrangement) with respect to the Transfer of the
ordinary shares, par value $0.041666667 per share, of ACE to be received as
consideration in the Merger, and agrees not to commit or agree to take any of
the foregoing actions; provided, that the Stockholder may sell all or
substantially all of such shares to a single person who agrees in writing (in
form and substance reasonably satisfactory to ACE) to abide by the foregoing
restrictions.
8. Standstill. The Stockholder agrees that, for a period of three years
following the date hereof (the "Standstill Period"), it will not (and it will
ensure that its affiliates (and any person acting on behalf of or in concert
with it or any affiliate) will not), without ACE's prior written approval, (a)
purchase or otherwise acquire (or enter into any agreement or make any proposal,
including any proposal which is made public, to purchase or otherwise acquire)
any securities of ACE, any warrant or option to purchase such securities, any
security convertible into any such securities, or any other right to acquire
such securities if upon any such purchase or acquisition the Stockholder owns or
has the right to acquire (whether or not presently) five percent or more of the
outstanding voting shares of ACE, (b) solicit proxies from stockholders of ACE
or otherwise seek to influence or control the management or policies of ACE or
any of its affiliates, (c) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any
voting securities of ACE or any of its subsidiaries, (d) otherwise act, alone or
in concert with others, to seek to control or influence the management, Board of
Directors or policies of ACE, (e) disclose any intention, plan or arrangement
inconsistent with the foregoing or (f) assist, advise or encourage any other
person in doing any of the foregoing; provided, however, that this Section 8
shall not prohibit the purchase or other acquisition of securities of ACE by any
person described in Rule 13d-1(b)(1)(i) and (ii) of the Exchange Act. The
Stockholders also agree during such period not to request ACE (or its directors,
officers, employees or agents), directly or indirectly, to amend or waive any
provisions of this Section 8 (including this sentence) or take any action which
might require ACE to make a public announcement regarding the possibility of a
business combination, merger or
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extraordinary transaction.
9. Confidentiality. The Stockholder acknowledges that, in relation to the
negotiation of the Merger Agreement and the consummation of the transactions
contemplated thereby, it may have access to material non-public information
concerning ACE. The Stockholder also recognizes that successful consummation of
the transactions contemplated by this Agreement and the Merger Agreement may be
dependent upon confidentiality with respect to the matters referred to herein.
In this connection, pending public disclosure thereof, the Stockholder hereby
agrees not to disclose or discuss such matters with anyone not a party to this
Agreement (other than its counsel and advisors, if any) without the prior
written consent of ACE, except for filings required pursuant to the Exchange Act
and the rules and regulations thereunder or disclosures its counsel advises are
necessary in order to fulfill its obligations imposed by law, in which case the
Stockholder shall give notice of such disclosure to ACE as promptly as
practicable so as to enable ACE to seek a protective order from a court of
competent jurisdiction with respect thereto.
10. Additional Shares. If, after the date hereof, the Stockholder
acquires beneficial ownership (as such term is defined in the Exchange Act) of
any shares of the capital stock of the Company (any such shares, "Additional
Shares"), including, without limitation, upon exercise of any option, warrant or
right to acquire shares of capital stock or through any stock dividend or stock
split, the provisions of this Agreement (other than those set forth in Section
13(a)) applicable to the Subject Shares shall be applicable to such Additional
Shares as if such Additional Shares had been Subject Shares as of the date
hereof. The provisions of the immediately preceding sentence shall be effective
with respect to Additional Shares without action by any person or entity
immediately upon the acquisition by either Stockholder of beneficial ownership
of such Additional Shares.
11. Action by Written Consent. If, in lieu of the Stockholders' Meeting,
stockholder action in respect of the Merger Agreement or any of the transactions
contemplated by the Merger Agreement is taken by written consent, the provisions
of this Agreement imposing obligations in respect of or in connection with the
Stockholders' Meeting shall apply mutatis mutandis to such action by written
consent.
12. Stockholders Certificates. Stockholder agrees to execute and deliver
a certificate containing such representations as are reasonably necessary and
customary for tax counsel to ACE on the one hand, and the Company on the other
hand, to render an opinion to the effect that the Merger Agreement will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended, and that no gain or loss will be recognized by
the stockholders of the Company to the extent they receive Ordinary Shares
solely in exchange for their Common Stock.
13. Representations and Warranties. The Stockholder represents and
warrants to ACE
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as follows:
(a) As of the date hereof, Stockholder is the beneficial and
registered owner of the Subject Shares. As of the date hereof, the
Stockholder does not beneficially own (as such term is defined in the
United States Securities Exchange Act of 1934, as amended (the "Exchange
Act")) any shares of any class or series of capital stock of the Company
other than the Subject Shares or any securities convertible into or
exercisable for shares of any class or series of the Company's capital
stock or have any options or other rights to acquire any shares of any
class or series of capital stock of the Company or any securities
convertible into or exercisable for shares of any class of the Company's
capital stock. The Subject Shares and certificates representing such
Subject Shares are now, and at all times during the term hereof will be,
held by the Stockholder, or by a nominee or custodian for the benefit of
the Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder.
(b) The Stockholder has full legal power, authority and right to vote
all of the Subject Shares in favor of approval and adoption of the Merger
Agreement without the consent or approval of, or any other action on the
part of, any other person or entity. Without limiting the generality of the
foregoing, except for this Agreement, the Stockholder has not entered into
any voting agreement or any other agreement with any person or entity with
respect to any of the Subject Shares, granted any person or entity any
proxy (revocable or irrevocable) or power of attorney with respect to any
of the Subject Shares, deposited any of the Subject Shares in a voting
trust or entered into any arrangement or agreement with any person or
entity limiting or affecting the Stockholder's ability to enter into this
Agreement or legal power, authority or right to vote its Subject Shares in
favor of the approval and adoption of the Merger Agreement or any of the
transactions contemplated by the Merger Agreement, and the Stockholder will
not take any such action after the date of this Agreement and prior to the
Stockholders' Meeting.
(c) This Agreement has been duly and validly executed and delivered
by the Stockholder and constitutes a valid and binding agreement
enforceable against the Stockholder in accordance with its terms except to
the extent (i) such enforcement may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
The representations and warranties contained in this Section 13 shall be made as
of the date hereof and as of each date from the date hereof through and
including the date the Merger is
6
consummated.
14. Termination. The obligations of the Stockholder hereunder shall
terminate upon the earlier of the termination of the Merger Agreement pursuant
to Article 8 thereof or the Effective Time.
15. Further Assurances. The Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other instruments as ACE may reasonably request for the
purpose of effectively carrying out the transactions contemplated by this
Agreement.
16. Successors, Assigns and Transferees Bound. Any successor, assignee or
transferee (including a successor, assignee or transferee as a result of the
death of the Stockholder, such as an executor or heir) shall be bound by the
terms hereof, and the Stockholder shall take any and all actions necessary to
obtain the written confirmation from such successor, assignee or transferee that
it is bound by the terms hereof.
17. Remedies. The Stockholder acknowledges that money damages would be
both incalculable and an insufficient remedy for any breach of this Agreement by
it, and that any such breach would cause ACE irreparable harm. Accordingly, the
Stockholder agrees that in the event of any breach or threatened breach of this
Agreement, ACE, in addition to any other remedies at law or in equity it may
have, shall be entitled, without the requirement of posting a bond or other
security, to equitable relief, including injunctive relief and specific
performance.
18. Severability. The invalidity or unenforceability of any provision of
this Agreement in any jurisdiction shall not affect the validity or
enforceability of any other provision of this Agreement in such jurisdiction, or
the validity or enforceability of any provision of this Agreement in any other
jurisdiction.
19. Amendment. This Agreement may be amended only by means of a written
instrument executed and delivered by both the Stockholder and ACE.
20. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to ACE:
ACE Limited
The ACE Building
00 Xxxxxxxxxx Xxxxxx
0
Xxxxxxxx XX 00 Xxxxxxx
Xxxxxxxxx: (000) 000 0000
Attention: Xxxxx X. Xxxx, Esq.
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Best
(b) if to the Stockholder:
Constellation Investments, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxx
21. Governing Law. This Agreement shall be governed by, and construed in
accordance in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
22. Capitalized Terms. Capitalized terms used in this Agreement that are
not defined herein shall have such meanings as set forth in the Merger
Agreement.
23. Counterparts. For the convenience of the parties, this Agreement may
be executed in counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
CONSTELLATION INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Number and class of shares of Company Capital
Stock owned or subject to acquisition on the date
hereof:
8
Number Class
--------- -----
4,973,340 common
Accepted and Agreed to as of the
date set forth above:
ACE LIMITED
By: /s/ Xxxxx Xxxxxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
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STOCKHOLDER SUPPORT AGREEMENT
STOCKHOLDER SUPPORT AGREEMENT, dated as of June 10, 1999 (this
"Agreement"), by the undersigned stockholder (the "Stockholder") of CAPITAL RE
CORPORATION, a Delaware corporation (the "Company"), for the benefit of ACE
LIMITED, a company incorporated with limited liability under the Cayman Islands
Companies Law ("ACE").
RECITALS
WHEREAS, concurrently with the execution and delivery of this Agreement,
ACE, Pacer Acquisition Corp., a Delaware corporation and a wholly owned direct
subsidiary of ACE ("Merger Subsidiary"), and the Company, have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the "Merger
Agreement"), which provides for, among other things, the merger of the Company
and Merger Subsidiary (the "Merger"); and
WHEREAS, the Stockholder owns of record and/or holds stock options,
warrants or convertible securities to acquire (whether or not vested) that
number and class of shares of outstanding capital stock of the Company ("Company
Capital Stock") appearing on the signature page hereof (such shares of Company
Capital Stock, together with any other shares of capital stock of the Company
acquired by such Stockholder after the date hereof and during the term of this
Agreement, being collectively referred to herein as the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, ACE has required that the Stockholder agree, and in order to induce
ACE to enter into the Merger Agreement, the Stockholder has agreed, to enter
into this Agreement.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements set forth herein, the Stockholder agrees as follows:
1. Agreement to Vote. Until the termination of this Agreement in
accordance with Section 14, Stockholder agrees as follows:
(a) At the Company's stockholders' meeting to vote on approval and
adoption of the Merger Agreement, including any adjournment or postponement
thereof (the "Stockholders' Meeting") or in any other circumstances upon
which a vote, consent or other approval with respect to the Merger and the
Merger Agreement is sought, the Stockholder hereby irrevocably and
unconditionally agrees to vote (or cause to be voted) the Subject Shares in
favor of the Merger, the adoption of the Merger Agreement and the approval
of the terms thereof and each of the other transactions contemplated by the
Merger Agreement.
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(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the Stockholder
hereby irrevocably and unconditionally agrees to vote (or cause to be
voted) the Subject Shares against (i) approval of any proposal made in
opposition to or in competition with the Merger Agreement or the
transactions contemplated by the Merger Agreement, (ii) any merger,
consolidation, merger of assets, business combination, share exchange,
reorganization or recapitalization of the Company or any of its
subsidiaries, with or involving any party other than ACE or one of its
subsidiaries, (iii) any liquidation, dissolution or winding up of the
Company, (iv) any change in the capital structure of the Company (other
than pursuant to the Merger Agreement) and (v) any other action including,
without limitation, any amendment of the Company's Certificate of
Incorporation or Bylaws, which such action reasonably may be expected to
impede, frustrate, interfere with, delay, postpone, attempt to discourage,
prevent or nullify the consummation of the transactions contemplated by the
Merger Agreement or this Agreement or result in a breach of any of the
covenants, representations, warranties or other obligations or agreements
of the Company under the Merger Agreement which would materially and
adversely affect the Company or its ability to consummate the transactions
contemplated by the Merger Agreement. The Stockholder further agrees not to
commit or agree to take any action inconsistent with the foregoing.
(c) Any such vote shall be cast or consent shall be given in
accordance with such procedures relating thereto as shall ensure that it is
duly counted for purposes of determining that a quorum is present and for
purposes of recording the results of such vote or consent. The Stockholder
agrees to deliver to ACE upon request a proxy in such form as ACE may
reasonably request, which proxy shall be coupled with an interest and
irrevocable to the extent permitted under Delaware law, with the total
number of Shares correctly stated thereon.
2. Restriction on Transfer of Company Capital Stock. The Stockholder
agrees (other than pursuant to the Merger Agreement) not to (a) sell, transfer,
pledge, assign or otherwise dispose of (including by gift) (collectively,
"Transfer"), or enter into any contract, option or other arrangement (including
any profit-sharing arrangement) with respect to the Transfer of the Subject
Shares to any person or (b) enter into any voting arrangement, whether by proxy,
voting agreement or otherwise, in relation to the Subject Shares, and agrees not
to commit or agree to take any of the foregoing actions; provided, however that
Stockholder may pledge the Subject Shares pursuant to agreements the same in all
material respects to Exhibit A attached hereto (the "Pledge Agreement")
prohibiting the pledgee from Transferring the Subject Shares or taking any other
action prohibited above, except that the pledgee may liquidate the Subject
Shares if neither Stockholder or ACE provide further security as required under
the Pledge Agreement after three business (3) days written notice of the need to
provide such security pursuant to the Pledge Agreement and subject to ACE's
right of first refusal to purchase the Subject Shares. In the event
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Stockholder does not meet the requirements for additional security within two
(2) business days of receiving such notice, ACE may provide such security.
Stockholder hereby agrees to immediately reimburse ACE for the amount of any
additional security provided and to indemnify ACE against any losses, costs
and/or expenses, including reasonable attorneys' fees and any difference in the
price at which ACE purchase Subject Shares pursuant to the aforementioned right
of first refusal and the purchase price paid in the Merger. Stockholder's
obligation shall be secured by a Guaranty from Minnesota Power in the form of
Exhibit B attached hereto delivered to ACE at the time this Agreement is
executed.
3. No-Shop. The Stockholder shall not, nor shall the Stockholder permit
any affiliate, director, officer, employee, investment banker, attorney or other
advisor or representative of the Stockholder to, (i) directly or indirectly
solicit, initiate or knowingly encourage the submission of, any Acquisition
Proposal or (ii) directly or indirectly participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to, or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal; provided, that the foregoing shall not restrict any
director of the Company from taking any action permitted by Section 6.3 of the
Merger Agreement.
4. No Proxy Solicitations. The Stockholder agrees that it will not, nor
will it permit any entity under its control to, (a) solicit proxies or become a
"participant" in a "solicitation" (as such terms are defined in Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) in
opposition to or competition with the consummation of the Merger or otherwise
encourage or assist any party in taking or planning any action which would
compete with or otherwise could serve to materially interfere with, delay,
discourage, adversely affect or inhibit the timely consummation of the merger in
accordance with the terms of the Merger Agreement, (b) directly or indirectly
encourage, initiate or cooperate in a stockholders' vote or action by consent of
the Company's stockholders in opposition to or in competition with the
consummation of the Merger, or (c) become a member of a "group" (as such term is
used in Section 13(d)(3) of the Exchange Act) with respect to any voting
securities of the Company for the purpose of opposing or competing with the
consummation of the Merger; provided, that the foregoing shall not restrict any
director of the Company from taking any action such director believes is
necessary to satisfy such director's fiduciary duty to stockholders of the
Company.
5. Support of Merger. The Stockholder shall use the Stockholder's best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with ACE in doing, all things necessary,
proper or advisable to support and to consummate and make effective, in the most
expeditious manner practicable, the Merger and the other transactions
contemplated by the Merger Agreement.
6. Legend. As soon as practicable after the execution of this Agreement,
the Stockholder shall surrender to the Company the certificates representing the
Subject Shares in its
3
possession (and within 30 days the Subject Shares not in its possession), shall
cause the following legend to be placed on the certificates representing such
Subject Shares and shall request that such legend remain thereon until the
earlier of (i) the termination hereof or (ii) the consummation of the Merger:
"The shares of capital stock represented by this certificate are subject to
a Stockholder Support Agreement, dated as of June 10, 1999, among the
Stockholder named herein and ACE Limited, which, among other things, (a)
restricts the sale or transfer of such shares except in accordance
therewith, and (b) restricts the voting of such shares except in accordance
therewith."
In the event that ACE requests that a proxy be executed and delivered by the
Stockholder to it pursuant to Section 1(c) hereof, the Stockholder shall
promptly surrender to the Company the certificates representing the Shares
covered by such proxy and cause the foregoing legend to be revised to add to the
end of such legend the following words:
", and such shares are also subject to an irrevocable proxy."
The Stockholder shall provide ACE with reasonably satisfactory evidence of its
compliance with this Section 6 on or prior to the date five business days after
the execution hereof with respect to Subject Shares in its possession (or within
30 days with respect to Subject Shares not in its possession) or of the request
relating to the Stockholder's proxy, as the case may be.
7. Restriction on Transfer of Ordinary Shares. The Stockholder agrees,
until the date which is 180 days after the date of the consummation of the
Merger, not to Transfer or enter into any contract, option or other arrangement
(including any profit-sharing arrangement) with respect to the Transfer of the
ordinary shares, par value $0.041666667 per share, of ACE to be received as
consideration in the Merger, and agrees not to commit or agree to take any of
the foregoing actions; provided, that the Stockholder may sell all or
substantially all of such shares to a single person who agrees in writing (in
form and substance reasonably satisfactory to ACE) to abide by the foregoing
restrictions; and provided, further, that the Stockholder may pledge the
Ordinary Shares pursuant to the Pledge Agreement and other provisions of
Paragraph 2 hereof.
8. Standstill. The Stockholder agrees that, for a period of three years
following the date hereof (the "Standstill Period"), it will not (and it will
ensure that its affiliates (and any person acting on behalf of or in concert
with it or any affiliate) will not), without ACE's prior written approval, (a)
purchase or otherwise acquire (or enter into any agreement or make any proposal,
including any proposal which is made public, to purchase or otherwise acquire)
any securities of ACE, any warrant or option to purchase such securities, any
security convertible into any such securities, or any other right to acquire
such securities if upon any such purchase or acquisition the Stockholder owns or
has the right to acquire (whether or not presently) five percent or more of the
outstanding voting shares of ACE, (b) solicit proxies from stockholders of
4
ACE or otherwise seek to influence or control the management or policies of ACE
or any of its affiliates, (c) form, join or in any way participate in a "group"
(within the meaning of Section 13(d)(3) of the Exchange Act) with respect to any
voting securities of ACE or any of its subsidiaries, (d) otherwise act, alone or
in concert with others, to seek to control or influence the management, Board of
Directors or policies of ACE, (e) disclose any intention, plan or arrangement
inconsistent with the foregoing or (f) assist, advise or encourage any other
person in doing any of the foregoing; provided, however, that this Section 8
shall not prohibit the purchase or other acquisition of securities of ACE by any
person described in Rule 13d-1(b)(1)(i) and (ii) of the Exchange Act. The
Stockholders also agree during such period not to request ACE (or its directors,
officers, employees or agents), directly or indirectly, to amend or waive any
provisions of this Section 8 (including this sentence) or take any action which
might require ACE to make a public announcement regarding the possibility of a
business combination, merger or extraordinary transaction.
9. Confidentiality. The Stockholder acknowledges that, in relation to the
negotiation of the Merger Agreement and the consummation of the transactions
contemplated thereby, it may have access to material non-public information
concerning ACE. The Stockholder also recognizes that successful consummation of
the transactions contemplated by this Agreement and the Merger Agreement may be
dependent upon confidentiality with respect to the matters referred to herein.
In this connection, pending public disclosure thereof, the Stockholder hereby
agrees not to disclose or discuss such matters with anyone not a party to this
Agreement (other than its counsel and advisors, if any) without the prior
written consent of ACE, except for filings required pursuant to the Exchange Act
and the rules and regulations thereunder or disclosures its counsel advises are
necessary in order to fulfill its obligations imposed by law, in which case the
Stockholder shall give notice of such disclosure to ACE as promptly as
practicable so as to enable ACE to seek a protective order from a court of
competent jurisdiction with respect thereto.
10. Additional Shares. If, after the date hereof, the Stockholder
acquires beneficial ownership (as such term is defined in the Exchange Act) of
any shares of the capital stock of the Company (any such shares, "Additional
Shares"), including, without limitation, upon exercise of any option, warrant or
right to acquire shares of capital stock or through any stock dividend or stock
split, the provisions of this Agreement (other than those set forth in Section
13(a)) applicable to the Subject Shares shall be applicable to such Additional
Shares as if such Additional Shares had been Subject Shares as of the date
hereof. The provisions of the immediately preceding sentence shall be effective
with respect to Additional Shares without action by any person or entity
immediately upon the acquisition by either Stockholder of beneficial ownership
of such Additional Shares.
11. Action by Written Consent. If, in lieu of the Stockholders' Meeting,
stockholder action in respect of the Merger Agreement or any of the transactions
contemplated by the Merger Agreement is taken by written consent, the provisions
of this Agreement imposing obligations in
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respect of or in connection with the Stockholders' Meeting shall apply mutatis
mutandis to such action by written consent.
12. Stockholders Certificates. Stockholder agrees to execute and deliver
a certificate containing such representations as are reasonably necessary and
customary for tax counsel to ACE on the one hand, and the Company on the other
hand, to render an opinion to the effect that the Merger Agreement will
constitute a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended, and that no gain or loss will be recognized by
the stockholders of the Company to the extent they receive Ordinary Shares
solely in exchange for their Common Stock.
13. Representations and Warranties. The Stockholder represents and
warrants to ACE as follows:
(a) As of the date hereof, Stockholder is the beneficial and
registered owner of the Subject Shares. As of the date hereof, the
Stockholder does not beneficially own (as such term is defined in the
United States Securities Exchange Act of 1934, as amended (the "Exchange
Act")) any shares of any class or series of capital stock of the Company
other than the Subject Shares or any securities convertible into or
exercisable for shares of any class or series of the Company's capital
stock or have any options or other rights to acquire any shares of any
class or series of capital stock of the Company or any securities
convertible into or exercisable for shares of any class of the Company's
capital stock. Except as permitted in Paragraph 2 herein relating to
pledges, the Subject Shares and certificates representing such Subject
Shares are now, and at all times during the term hereof will be, held by
the Stockholder, or by a nominee or custodian for the benefit of the
Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder.
(b) The Stockholder has full legal power, authority and right to vote
all of the Subject Shares in favor of approval and adoption of the Merger
Agreement without the consent or approval of, or any other action on the
part of, any other person or entity. Without limiting the generality of the
foregoing, except for this Agreement, the Stockholder has not entered into
any voting agreement or any other agreement with any person or entity with
respect to any of the Subject Shares, granted any person or entity any
proxy (revocable or irrevocable) or power of attorney with respect to any
of the Subject Shares, deposited any of the Subject Shares in a voting
trust or entered into any arrangement or agreement with any person or
entity limiting or affecting the Stockholder's ability to enter into this
Agreement or legal power, authority or right to vote its Subject Shares in
favor of the approval and adoption of the Merger Agreement or any of the
transactions contemplated by the Merger Agreement, and the Stockholder will
not take any such action after the date of this Agreement and prior to the
Stockholders'
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Meeting.
(c) This Agreement has been duly and validly executed and delivered
by the Stockholder and constitutes a valid and binding agreement
enforceable against the Stockholder in accordance with its terms except to
the extent (i) such enforcement may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
The representations and warranties contained in this Section 13 shall be made as
of the date hereof and as of each date from the date hereof through and
including the date the Merger is consummated.
14. Termination. The obligations of the Stockholder hereunder shall
terminate upon the earlier of the termination of the Merger Agreement pursuant
to Article 8 thereof or the Effective Time.
15. Further Assurances. The Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, documents and other instruments as ACE may reasonably request for the
purpose of effectively carrying out the transactions contemplated by this
Agreement.
16. Successors, Assigns and Transferees Bound. Any successor, assignee or
transferee (including a successor, assignee or transferee as a result of the
death of the Stockholder, such as an executor or heir) shall be bound by the
terms hereof, and the Stockholder shall take any and all actions necessary to
obtain the written confirmation from such successor, assignee or transferee that
it is bound by the terms hereof.
17. Remedies. The Stockholder acknowledges that money damages would be
both incalculable and an insufficient remedy for any breach of this Agreement by
it, and that any such breach would cause ACE irreparable harm. Accordingly, the
Stockholder agrees that in the event of any breach or threatened breach of this
Agreement, ACE, in addition to any other remedies at law or in equity it may
have, shall be entitled, without the requirement of posting a bond or other
security, to equitable relief, including injunctive relief and specific
performance.
18. Severability. The invalidity or unenforceability of any provision of
this Agreement in any jurisdiction shall not affect the validity or
enforceability of any other provision of this Agreement in such jurisdiction, or
the validity or enforceability of any provision of this Agreement in any other
jurisdiction.
19. Amendment. This Agreement may be amended only by means of a written
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instrument executed and delivered by both the Stockholder and ACE.
20. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) if to ACE:
ACE Limited
The ACE Xxxxxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx XX 00 Xxxxxxx
Xxxxxxxxx: (000) 000 0000
Attention: Xxxxx X. Xxxx, Esq.
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Best
(b) if to the Stockholder:
MP Investments, Inc.
00 Xxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Vice President, General Counsel and Secretary
21. Governing Law. This Agreement shall be governed by, and construed in
accordance in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
22. Capitalized Terms. Capitalized terms used in this Agreement that are
not defined herein shall have such meanings as set forth in the Merger
Agreement.
23. Counterparts. For the convenience of the parties, this Agreement may
be executed in counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
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MP INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President, General Counsel &
Secretary
Number and class of shares of Company Capital
Stock owned or subject to acquisition on the date
hereof:
Number Class
--------- -----
7,280,480 common
Accepted and Agreed to as of the
date set forth above:
ACE LIMITED
By: Xxxxx Xxxxxxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Chairman, President and
Chief Executive Officer
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