EXHIBIT 99.4
AMENDED AND RESTATED STOCKHOLDER AGREEMENT
This AMENDED AND RESTATED STOCKHOLDER AGREEMENT, dated as of December
29, 2003 (the "Agreement"), between Country Life Insurance Company, an Illinois
corporation ("Purchaser") and Shield Insurance Company ("Stockholder"), a
stockholder of Cotton States Life Insurance Company ("the "Company").
R E C I T A L S:
WHEREAS, Stockholder and Purchaser, an affiliated company of COUNTRY
Insurance and Financial Services ("COUNTRY"), entered into a Stockholder
Agreement dated November 11, 2003 (the "Original Stockholder Agreement");
WHEREAS, concurrently with the execution and delivery of this
Agreement, Purchaser, COUNTRY Medical Plans, Inc., Purchaser's subsidiary (the
"Purchaser Sub"), and the Company are entering into an Agreement and Plan of
Merger (as such agreement may hereafter be amended, restated or renewed from
time to time, the "Merger Agreement"), which provides, among other things, for
the merger of Purchaser Sub with and into the Company (the "Merger"); and
WHEREAS, as an inducement and a condition to Purchaser's and Purchaser
Sub's willingness to enter into the Merger Agreement, COUNTRY and Purchaser have
required that the Stockholder agree, and Stockholder has agreed, to amend and
restate the Original Stockholder Agreement on the terms and conditions contained
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Acquisition Proposal" shall mean any proposal or
offer, made by any person or group other than COUNTRY or Purchaser (in
each case, whether or not in writing and whether or not delivered to
the stockholders of the Company generally) relating to (i) any direct
or indirect acquisition or purchase which is structured to permit such
person or group to acquire beneficial ownership of at least 10% of the
assets of the Company or any of its subsidiaries or of over 10% of any
class of equity securities of the Company or any of its subsidiaries,
(ii) any tender offer or exchange offer that, if consummated, would
result in any person, other than COUNTRY, Purchaser, their affiliates
or any group of which any of them is a member beneficially owning 10%
or more of any class of equity securities of the Company or any of its
subsidiaries, or (iii) any merger, consolidation, business combination,
sale of substantially all the assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
subsidiaries.
(b) "beneficially owned," "beneficial owner" or
"beneficial ownership" with respect to any securities shall mean having
"beneficial ownership" of such securities (as determined pursuant to
Rule 13d-3 under the Exchange Act of 1934, as amended (the "Exchange
Act")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
(c) "Shares" shall mean the shares in the
Company set forth on Schedule I hereto with respect to which
Stockholder is the record holder or beneficial owner.
(d) Terms used and not defined herein, but
defined in the Merger Agreement, shall have the respective
meanings ascribed to them in the Merger Agreement.
2. Option.
(a) Stockholder hereby grants to Purchaser an
irrevocable option (the "Option") to purchase all of the
Shares or a portion thereof beneficially owned by Stockholder
at a price per Share equal to $20.25. The Option may be
exercised in whole or part at any time after (i) the
occurrence of any Acquisition Proposal, (ii) the occurrence of
any event entitling COUNTRY or Purchaser to receive the fee
referred to in Section 7.03 of the Merger Agreement, or (iii)
such time as Stockholder shall have breached any of its
agreements in Section 3(a), 3(b) or 3(d). In the event the
Option is not fully exercised, the Option shall remain in
effect through the Option Term (as defined below) with respect
to those Shares covered by the Option for which the Option has
not been previously exercised.
(b) The Option shall remain exercisable for the
term beginning on the date hereof until the earliest of (i)
December 31, 2004, (ii) the date that is thirty (30) days
after the later of the date that all approvals to the Merger
required under applicable insurance regulatory laws have been
obtained or a final non-appealable determination or order has
been made that such approvals will not be granted; all waiting
periods under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇") required for the purchase of the
Shares upon such exercise shall have expired or been
terminated or a final non-appealable determination or order
has been made that such approval will not be granted; and all
other conditions to Closing have been satisfied, and (iii) a
final non-appealable order of a federal or state court in
effect preventing the exercise of the Option or consummation
of the Merger or any law or order enacted, promulgated or
issued or deemed applicable to the Option or the Merger by any
governmental entity that would make exercise of the Option or
consummation of the Merger illegal (the "Option Term"). In the
event that Purchaser wishes to exercise all or part of the
Option, Purchaser shall send a written notice to Stockholder
identifying the place and date (not less than two (2) nor more
than ten (10) business days from the date of the notice) for
the closing of such purchase (an "Option Closing"). At each
Option Closing Purchaser shall deliver in immediately
available funds the aggregate exercise price due for the
Shares to be purchased at such Option Closing, against
delivery of such Shares.
(c) If transfer of the Shares upon exercise of the Option
(i) requires approval of a governmental agency under
insurance regulatory laws and such approval has not been obtained, and
(ii) either (a) a third party has commenced a tender offer
or exchange offer that, if consummated, would result in any third-party
beneficially owning 10% or more of any class of equity securities of
the Company or any of its subsidiaries and fewer than five (5) business
days remain before expiration of the tender offer period or (b) the
stockholders of the
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Company have approved a merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving the Company,
then Purchaser may elect (in its sole discretion) to have
Stockholder tender the Shares (or a portion thereof) and
receive the consideration therefore, or, in the event of a
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, take the
actions necessary to receive the consideration to which the
holder of the Shares is entitled and have Stockholder hold the
proceeds in trust to be delivered to Purchaser upon payment of
the applicable aggregate Option exercise price; provided,
however, Purchaser in making such election may require (and
Stockholder shall take all reasonable steps to ensure) that
payment with respect to the Shares (the "Applicable Share
Payment") is made to Purchaser and in such event Purchaser
shall pay by wire transfer in immediately available funds to
Stockholder the applicable aggregate exercise price within
three (3) business days after Purchaser's receipt of the
Applicable Share Payment.
3. Additional Agreements.
(a) During the Option Term, Stockholder shall,
at any meeting of the stockholders of the Company, however called, or
in connection with any written consent of the stockholders of the
Company, vote (or cause to be voted) all Shares then held of record or
beneficially owned by Stockholder, (i) in favor of approval of the
Merger Agreement and the Merger, the execution and delivery by the
Company of the agreements related to the approval of the Merger
Agreement and the Merger and the approval of the terms thereof and each
of the other actions contemplated by such agreements and this Agreement
and any actions required in furtherance thereof and hereof, and (ii)
against any proposal relating to an Acquisition Proposal and against
any action or agreement that would impede, frustrate, prevent or
nullify this Agreement or result in a breach in any respect of any
covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or other definitive
agreement with respect to the Merger.
Stockholder shall continue to have the right to vote in its
sole discretion at an annual meeting on all matters not
involving or related to the Merger or an Acquisition Proposal;
but, except as specified herein, Stockholder shall refrain
from voting its Shares on any matters involving or related to
the Merger or an Acquisition Proposal.
(b) Stockholder hereby covenants and agrees
that, except as contemplated by this Agreement and the Merger
Agreement, Stockholder shall not (i) offer to transfer (which term
shall include, without limitation, any sale, tender, gift, pledge,
assignment or other disposition), transfer or consent to any transfer
of, any or all of the Shares beneficially owned by Stockholder or any
interest therein, (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of any or all
of such Shares or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect
to such Shares, (iv) deposit such Shares into a voting trust or enter
into a voting agreement or arrangement with respect to such Shares or
(v) take any other action that would make any representation or
warranty of Stockholder contained herein untrue or
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incorrect or in any way restrict, limit or interfere with the
performance of its obligations hereunder or the transactions
contemplated hereby.
(c) Subject to any regulatory approval, if any,
required to be obtained from a governmental agency under insurance
regulatory laws, Stockholder hereby irrevocably grants to, and
appoints, Purchaser and any designee of Purchaser, and each of them
individually, Stockholder's proxy and attorney-in-fact (with full power
of substitution), for and in the name, place and stead of Stockholder,
to vote the Shares beneficially owned by Stockholder, or grant a
consent or approval in respect of such Shares, in the manner specified
in Section 3(a). Stockholder represents that any proxies previously
given in respect of Shares beneficially owned by Stockholder are not
irrevocable and that any such proxies are hereby revoked. Stockholder
hereby affirms that the irrevocable proxy set forth in this Section
3(c) is given in connection with the execution of the Merger Agreement
and that such irrevocable proxy is given to secure the performance of
the duties of Stockholder under this Agreement. Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest
and may under no circumstances be revoked. Stockholder hereby ratifies
and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Without limiting the generality of the
foregoing, such irrevocable proxy is executed and intended to be
irrevocable in accordance with the provisions of Section 14-2-722 of
the Georgia Business Corporation Code and to be valid during the Option
Term.
(d) Stockholder hereby agrees that during the
Option Term, Stockholder, shall not directly or indirectly:
(i) solicit, encourage, or initiate
inquiries, offers or proposals from, or
participate in any discussions or
negotiations with, any person or entity
concerning any Acquisition Proposal; or
(ii) except as required by law, disclose
any information not customarily disclosed to
any person or entity concerning the business
and properties of any of the companies in
Cotton States or any of their affiliates, or
afford to any person or entity access to the
properties, books or records of any of the
companies in Cotton States or any of their
affiliates or otherwise assist or encourage
any person or entity in connection with the
foregoing.
(e) Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause
to be done, all things necessary, proper or advisable under applicable
laws to consummate and make effective the transactions contemplated by
this Agreement. Each party shall promptly consult with the other and
provide any necessary information and material prior to any filings
made by such party with any governmental entity in connection with this
Agreement and the transactions contemplated hereby.
(f) Stockholder hereby waives any rights of
appraisal or rights to dissent from any merger effected as part of the
Merger that it may have.
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4. Representations and Warranties of Stockholder. Except
as may be set forth on Schedule I hereto Stockholder
hereby represents and warrants to Purchaser as
follows:
(a) Stockholder is the recordholder or beneficial owner
of the Shares set forth on Schedule I. Such Shares constitute all of
the Shares held of record or beneficially owned by Stockholder on the
date hereof. Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 2 and 3
hereof, sole power of disposition, sole power to demand and waive
appraisal rights and sole power to agree to all of the matters set
forth in this Agreement, in each case with respect to all of such
Shares with no limitations, qualifications or restrictions on such
rights, subject to applicable securities laws and the terms of this
Agreement.
(b) Stockholder has the power and authority to enter into
and perform all of Stockholder's obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by
Stockholder and constitutes a legal, valid and binding agreement of
Stockholder, enforceable against Stockholder in accordance with its
terms, except that such enforceability may be limited by bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
by general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity). There is no beneficiary or
holder of a voting trust certificate or other interest of any trust of
which Stockholder is a trustee, or any party to any other agreement or
arrangement, whose consent is required for the execution and delivery
of this Agreement or the consummation by Stockholder of the
transactions contemplated hereby.
(c) Except for filings and consents under the HSR Act,
the Exchange Act and applicable state insurance company laws (i) no
filing with, and no permit, authorization, consent or approval of, any
governmental entity is necessary for the execution and delivery of this
Agreement by Stockholder, the consummation by Stockholder of the
transactions contemplated hereby and the compliance by Stockholder with
the provisions hereof and (ii) none of the execution and delivery of
this Agreement by Stockholder, the consummation by Stockholder of the
transactions contemplated hereby or compliance by Stockholder with any
of the provisions hereof, except in cases in which any conflict,
breach, default or violation described below would not interfere with
the ability of Stockholder to perform Stockholder's obligations
hereunder, shall (A) conflict with or result in any breach of any
organizational documents applicable to Stockholder, (B) result in a
violation or breach of, or constitute (with or without notice or lapse
of time or both) a default (or give rise to any third party right of
termination, cancellation, modification or acceleration) under, any of
the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
understanding, agreement or other instrument or obligation of any kind,
including, without limitation, any voting agreement, proxy arrangement,
pledge agreement, stockholders agreement or voting trust, to which
Stockholder is a party or by which it or any of its properties or
assets may be bound, or (C) violate any order, writ, injunction,
decree, judgment, order, statute, rule or regulation applicable to
Stockholder or any of its properties or assets.
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(d) Except as permitted by this Agreement, the Shares
beneficially owned by Stockholder and the certificates representing
such Shares are now, and at all times during the term hereof will be,
held by Stockholder, or by a nominee or custodian for the benefit of
Stockholder, free and clear of all liens, proxies, voting trusts or
agreements, understandings or arrangements or any other rights
whatsoever, except for any such liens or proxies arising hereunder.
Subject to regulatory approval, if any, that is required to be obtained
from a governmental agency under insurance regulatory laws, the
transfer by Stockholder of the Shares to Purchaser hereunder shall pass
to and unconditionally vest in Purchaser good and valid title to all
Shares, free and clear of all liens, proxies, voting trusts or
agreements, understandings or arrangements or any other rights
whatsoever.
(e) No broker, investment banker, financial advisor or
other Person is entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with the transactions
contemplated under this Agreement based upon arrangements made by or on
behalf of Stockholder.
5. Stop Transfer. Stockholder shall request that the Company not
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares beneficially
owned by Stockholder, unless such transfer is made in compliance with
this Agreement.
6. Termination. This Agreement shall terminate with respect to
Stockholder upon the expiration of the Option Term.
7. No Limitation. Nothing in this Agreement shall be construed to
prohibit Stockholder, or any officer or affiliate of Stockholder who is
or has designated a member of the Board of Directors of the Company,
from taking any action solely in his or her capacity as a member of the
Board of Directors of the Company or from exercising his or her
fiduciary duties as a member of such Board of Directors to the extent
specifically permitted, or not prohibited by an agreement to which
COUNTRY or any of its affiliates is a party. Stockholder signs solely
in his or her capacity as the record and beneficial owner of, or the
trustee of a trust whose beneficiaries are the beneficial owners of,
Stockholder's Shares.
8. Miscellaneous.
(a) This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersede all other prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter
hereof.
(b) This Agreement shall not be assigned by operation of
law or otherwise without the prior written consent of Stockholder (in
the case of any assignment by Purchaser) or Purchaser (in the case of
an assignment by a Stockholder), provided that Purchaser may assign its
rights and obligations hereunder to any direct or indirect affiliate
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of Purchaser, but no such assignment shall relieve COUNTRY and
Purchaser of their obligations hereunder.
(c) Without limiting any other rights Purchaser may have
hereunder in respect of any transfer of the Shares, Stockholder agrees
that this Agreement and the obligations hereunder shall attach to the
Shares beneficially owned by Stockholder and shall be binding upon any
person to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including, without
limitation, Stockholder's heirs, guardians, administrators or
successors.
(d) This Agreement may not be amended, changed,
supplemented or otherwise modified with respect to Stockholder except
by an instrument in writing signed on behalf of Stockholder and
Purchaser.
(e) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly received if given) by hand delivery
or by facsimile transmission with confirmation of receipt, as follows:
If to a Stockholder:
To the address set out on Schedule I hereto.
If to COUNTRY or Purchaser:
Country Life Insurance Company
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: President
Copy to:
Office of General Counsel
ILLINOIS AGRICULTURAL ASSOCIATION
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
or to such other address or facsimile number as the person to whom
notice is given may have previously furnished to the others in writing
in the manner set forth above.
(f) Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or
portion of any provision of this Agreement is held to be invalid,
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illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision or portion of any provision had never been
contained herein.
(g) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
(h) The failure of any party hereto to exercise any
rights, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon
compliance by any other party hereto with its obligations hereunder,
and any custom or practice of the parties at variance with the terms
hereof, shall not constitute a waiver by such party of its right to
exercise any such or other right, power or remedy or to demand such
compliance.
(i) This Agreement shall be binding upon and inure solely
to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
(j) This Agreement shall be governed and construed in
accordance with the laws of the State of Georgia, without giving effect
to the principles of conflicts of law thereof.
(k) The parties agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this Agreement
in any Georgia state court or any Federal court located in such State,
this being in addition to any other remedy to which they are entitled
at law or in equity. In addition, each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any Georgia
state court or any Federal court located in such State in the event any
dispute arises out of this Agreement or any transaction contemplated by
this Agreement, (ii) agrees that it will not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from
any such court, (iii) agrees that it will not bring any action relating
to this Agreement or any transaction contemplated by this Agreement in
any court other than any such court and (iv) waives any right to trial
by jury with respect to any action related to or arising out of this
Agreement or any transaction contemplated by this Agreement. The
parties irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in any such court,
and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in
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an inconvenient forum. Notwithstanding the foregoing, COUNTRY and
Purchaser acknowledge and agree that such consent to jurisdiction is
solely for the purpose referred to in this paragraph (k) and shall not
be deemed to be a general submission to the jurisdiction of said courts
in the State of Georgia other than for such purposes.
(l) The descriptive headings used herein are inserted for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
(m) This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement. This Agreement
shall not be effective as to any party hereto until such time as this
Agreement or a counterpart thereof has been executed and delivered by
each party hereto.
(n) Except as otherwise provide herein, each party shall
pay its, his or her own expenses incurred in connection with this
Agreement.
[Remainder of page intentionally left blank. Signature page(s) to follow.]
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IN WITNESS WHEREOF, Purchaser, COUNTRY and Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
PURCHASER
COUNTRY Life Insurance Company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
COUNTRY
On behalf of certain companies of
COUNTRY Insurance & Financial Services
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
STOCKHOLDER
Shield Insurance Company
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman, President & CEO
Schedule I
SHARES
Number of Shares Owned 2,102,385
Name in Which Shares Held Shield Insurance Company
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
