Exhibit 99.2
--------------------------------------------------------------------------
Amended and Restated
Agreement and Plan of Merger
by and among
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Corporation,
Unitrin, Inc.,
and CW Disposition Company
dated as of January 11, 2001
--------------------------------------------------------------------------
TABLE OF CONTENTS
ARTICLE I THE MERGER...................................................2
Section 1.1 The Merger........................................2
Section 1.2 Effect on Capital Stock at the Effective Time.....3
Section 1.3 Share Certificates................................3
ARTICLE II THE SURVIVING CORPORATION...................................4
Section 2.1 Certificate of Incorporation......................4
Section 2.2 By-Laws...........................................5
Section 2.3 Directors and Officers............................5
ARTICLE III COVENANTS AND REPRESENTATIONS AND WARRANTIES...............7
Section 3.1 Stockholders Meeting..............................7
Section 3.2 Filings; Other Actions............................7
Section 3.3 Reasonable Efforts...............................10
Section 3.4 Representations and Warranties of the Company....10
Section 3.5 Representations and Warranties of UNITRIN and
Merger Sub.....................................12
ARTICLE IV CONDITIONS TO THE MERGER...................................13
Section 4.1 Conditions to the Obligation of the Company......13
Section 4.2 Conditions to the Obligations of UNITRIN
and Merger Sub.................................15
ARTICLE V TERMINATION.................................................17
Section 5.1 Termination......................................17
Section 5.2 Effect of Termination............................18
ARTICLE VI MISCELLANEOUS..............................................18
Section 6.1 Notices..........................................18
Section 6.2 Successors and Assigns...........................20
Section 6.3 Governing Law....................................20
Section 6.4 Counterparts; Effectiveness......................20
Section 6.5 Amendments.......................................20
i
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER (this
"Agreement"), dated as of November 6, 2000, as amended and restated as of
January 11, 2001, among ▇▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION, a Delaware corporation
(the "Company"), UNITRIN, INC., a Delaware corporation ("UNITRIN"), and CW
DISPOSITION COMPANY, a Delaware corporation and a wholly owned subsidiary
of UNITRIN ("Merger Sub").
WHEREAS, UNITRIN owns all the issued and outstanding shares of
common stock, par value $.01 per share, of Merger Sub ("Merger Sub Common
Stock"), and 4,382,400 shares (approximately 44% of the total number of
issued and outstanding shares) of common stock, par value $1.00 per share,
of the Company ("Common Stock");
WHEREAS, prior to the effectiveness of the Merger (as defined
below), UNITRIN plans to contribute to Merger Sub 4,382,400 shares
(approximately 44% of the total number of issued and outstanding shares) of
Common Stock (the "Contributed Shares");
WHEREAS, the Company and UNITRIN desire that Merger Sub merge with
and into the Company (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), pursuant to which
all the issued and outstanding shares of Merger Sub Common Stock shall be
converted into shares of a new Class B common stock, par value $1.00 per
share, of the Company ("Class B Common Stock"), and all the issued and
outstanding shares of Common Stock (other than the Contributed Shares held
by Merger Sub, which shall be canceled with no securities or other
consideration issued in exchange therefor) shall remain issued and
outstanding;
WHEREAS, UNITRIN has agreed, subject to certain conditions, to
distribute all the shares of Class B Common Stock, on a pro rata basis, to
the holders of the common stock of UNITRIN promptly following consummation
of the Merger (the "Distribution"), pursuant to the terms and conditions of
an Amended and Restated Distribution Agreement entered into between the
Company and UNITRIN and dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the "Distribution
Agreement"), which provides for the Distribution and certain other matters;
WHEREAS, the Boards of Directors of the Company and Merger Sub by
resolutions duly adopted have approved the terms, and declared the
advisability, of this Agreement and of the Merger, and the Company has
directed the submission of this Agreement to its stockholders for adoption;
and
WHEREAS, the Merger is intended to constitute a reorganization
within the meaning of Section 368(a)(1)(E) of the Internal Revenue Code of
1986, as amended (the "Code").
NOW, THEREFORE in consideration of the premises and the mutual
agreements and provisions herein contained, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger.
(a) Upon the terms and subject to the conditions of this
Agreement, at the Effective Time (as defined below), Merger Sub shall be
merged with and into the Company in accordance with the DGCL, whereupon the
separate corporate existence of Merger Sub shall cease, and the Company
shall be the surviving corporation (the "Surviving Corporation").
(b) Following satisfaction or waiver of all conditions to
the Merger, but only on the Distribution Date (as defined in the
Distribution Agreement), the Company shall file a Certificate of Merger
(the "Certificate of Merger") with the Secretary of State of the State of
Delaware and make all other filings or recordings required by the DGCL in
connection with the Merger. The Merger shall become effective at such time
as the Certificate of Merger is duly filed with the Secretary of State of
the State of Delaware or at such later time as is specified in the
Certificate of Merger (the "Effective Time").
(c) At and after the Effective Time, the Merger shall have
the effects set forth in the DGCL. Without limiting the foregoing and
subject thereto, from and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises
and be subject to all the restrictions, disabilities and duties of the
Company and Merger Sub, all as provided under the DGCL.
A-2
Section 1.2 Effect on Capital Stock at the Effective Time.
At the Effective Time:
(a) All the shares of Merger Sub Common Stock outstanding
immediately prior to the Effective Time shall be converted in the aggregate
into and become 4,382,400 fully paid and non-assessable shares of Class B
Common Stock of the Surviving Corporation and shall have the rights and
privileges as set forth in the Surviving Corporation Certificate of
Incorporation (as defined in Section 2.1).
(b) Each of the Contributed Shares shall automatically be
canceled and retired and shall cease to exist, and no stock of the
Surviving Corporation or other consideration shall be delivered in exchange
therefor.
(c) Each share of Common Stock outstanding immediately
prior to the Effective Time (other than shares to be canceled in accordance
with Section 1.2(b)) shall remain issued and outstanding, and each share of
Common Stock that immediately prior to the Effective Time was held in the
treasury of the Company shall remain in the treasury of the Company and, in
each case, shall have the rights and privileges as set forth in the
Surviving Corporation Certificate of Incorporation (as defined in Section
2.1).
Section 1.3 Share Certificates.
(a) As soon as practicable after the Effective Time:
(i) the Surviving Corporation shall deliver, or cause
to be delivered, to UNITRIN a number of certificates
issued in the names of such persons, in each case, as
UNITRIN shall direct, representing in the aggregate
4,382,400 shares of Class B Common Stock of the Surviving
Corporation which UNITRIN has the right to receive upon
conversion of shares of Merger Sub Common Stock pursuant
to the provisions of Section 1.2 (a) hereof;
(ii) the Surviving Corporation shall cancel the share
certificate or certificates that immediately prior to the
Effective Time represented the shares of Common Stock
owned directly by Merger Sub; and
(iii) the share certificates that immediately prior
to the Effective Time represented shares of Common Stock
that remain issued and outstanding or in the treasury of
the Company
A-3
pursuant to Section 1.2(c) hereof shall not be
exchanged and shall continue to represent an equal number
of shares of Common Stock of the Surviving Corporation
without physical substitution of share certificates of the
Surviving Corporation for existing share certificates of
the Company.
(b) Any dividend or other distribution declared or made
with respect to any shares of capital stock of the Company, whether the
record date for such dividend or distribution is before or after the
Effective Time, shall be paid to the holder of record of such shares of
capital stock on such record date, regardless of whether such holder has
surrendered its certificates representing Common Stock or received
certificates representing Class B Common Stock pursuant to Section
1.3(a)(i).
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation.
(a) In the event the adoption of this Agreement and each
of the Classified Board Proposal, the Board Size Proposal, the Written
Consent Proposal, the Special Meeting Proposal and the Supermajority Voting
Proposal (each defined below) are approved by the stockholders of the
Company at the Stockholders Meeting (as defined below), at the Effective
Time the Restated Certificate of Incorporation of the Company as in effect
immediately prior to the Effective Time shall be amended so as to read in
its entirety as set forth in Exhibit A-1(a) hereto and as so amended shall
be the Restated Certificate of Incorporation of the Surviving Corporation.
(b) In the event the adoption of any of the Classified
Board Proposal, the Board Size Proposal, the Written Consent Proposal, the
Special Meeting Proposal or the Supermajority Voting Proposal is not
approved, but the adoption of this Agreement is approved, by the
stockholders of the Company at the Stockholders Meeting, and the Company
waives the condition to its obligation to consummate the Merger set forth
in Section 4.1(b) hereof with respect to any of such proposals, at the
Effective Time the Restated Certificate of Incorporation of the Company as
in effect immediately prior to the Effective Time shall be amended so as to
read in its entirety as set forth in Exhibit A-1(b) hereto, with such
changes thereto as are set forth in Exhibit A-1(b) hereto to reflect such
of the Governance Amendments (as defined below), if any, as may be approved
by the vote of the
A-4
holders of a majority of the outstanding shares of Common Stock, and as so
amended shall be the Restated Certificate of Incorporation of the Surviving
Corporation.
(c) The Restated Certificate of Incorporation of the
Surviving Corporation that becomes effective pursuant to either Section
2.1(a) or 2.1(b) hereof is herein referred to as the "Surviving Corporation
Certificate of Incorporation."
Section 2.2 By-Laws.
(a) In the event the adoption of this Agreement and each
of the Classified Board Proposal, the Board Size Proposal, the Written
Consent Proposal, the Special Meeting Proposal and the Supermajority Voting
Proposal are approved by the stockholders of the Company at the
Stockholders Meeting, at the Effective Time the By-Laws of the Company as
in effect immediately prior to the Effective Time shall be amended so as to
read in their entirety as set forth in Exhibit A-1(c) hereto and as so
amended shall be the By-Laws of the Surviving Corporation.
(b) In the event the adoption of any of the Classified
Board Proposal, the Board Size Proposal, the Written Consent Proposal, the
Special Meeting Proposal or the Supermajority Voting Proposal is not
approved, but the adoption of this Agreement is approved, by the
stockholders of the Company at the Stockholders Meeting, and the Company
waives the condition to its obligation to consummate the Merger set forth
in Section 4.1(b) hereof with respect to any of such proposals, at the
Effective Time the By-Laws of the Company as in effect immediately prior to
the Effective Time shall be amended so as to read in their entirety as set
forth in Exhibit A-1(d) hereto, with such changes thereto as are set forth
in Exhibit A-1(d) hereto to reflect the By-laws amendments relating to such
of the Governance Amendments, if any, as may be approved by the vote of the
holders of a majority of the outstanding shares of Common Stock, and as so
amended shall be the By-Laws of the Surviving Corporation.
(c) The By-Laws of the Surviving Corporation as amended
pursuant to either Section 2.2(a) or 2.2(b) hereof are herein referred to
as the "Surviving Corporation By-Laws."
Section 2.3 Directors and Officers.
(a) The Surviving Corporation's board of directors shall
consist of 8 members. From and after the Effective Time, until the earlier
of their removal or resignation or until their successors are duly elected
or appointed and
A-5
qualified in accordance with applicable law, the directors of the Surviving
Corporation shall consist of the directors of the Company in office at the
Effective Time. Each such director shall be designated to serve as a
Director or a Class B Director (each as defined in the Surviving
Corporation Certificate of Incorporation), such designation to be mutually
agreed between UNITRIN and the Company and disclosed in the Proxy Statement
(as defined below).
(b) In the event the adoption of the Classified Board
Proposal is approved by the stockholders of the Company at the Stockholders
Meeting, at the Effective Time the directors of the Surviving Corporation
shall be divided into three classes pursuant to the Surviving Corporation
Certificate of Incorporation, and each such director shall be designated to
serve as a Class I Director, Class II Director or Class III Director (each
as defined in the Surviving Corporation Certificate of Incorporation), such
designation to be disclosed in the Proxy Statement or, at the option of the
Company, in the proxy statement to be filed with the SEC (as defined below)
in connection with the Company's next annual meeting of stockholders
following the date of this Agreement; provided that in the event that (i)
the Proxy Statement does not include the disclosure required by Regulation
14A under the Exchange Act in connection with the election of directors and
(ii) the Effective Time shall occur before the Company's next annual
meeting of stockholders, the directors shall be divided into three classes
at such annual meeting and not at the Effective Time.
(c) From and after the Effective Time, until the earlier
of their removal or resignation or until their successors are duly
appointed and qualified in accordance with applicable law and the Surviving
Corporation By-Laws, the officers of the Company shall be the officers of
the Surviving Corporation.
A-6
ARTICLE III
COVENANTS AND REPRESENTATIONS AND WARRANTIES
Section 3.1 Stockholders Meeting. The Company shall, as soon as
practicable following the date of this Agreement, duly call, give notice
of, convene and hold a meeting of its stockholders (the "Stockholders
Meeting") for the purpose of considering, as six separate proposals: (a)
the adoption of this Agreement; (b) the approval of an amendment to the
Company's Restated Certificate of Incorporation implementing a classified
Board (the "Classified Board Proposal"); (c) the approval of an amendment
to the Company's Restated Certificate of Incorporation placing limits on
the size of the Company's board and requiring, subject to certain
limitations, that board vacancies and newly created directorships be filled
only by remaining board members (the "Board Size Proposal"); (d) the
approval of an amendment to the Company's Restated Certificate of
Incorporation eliminating the ability of stockholders to act by written
consent (the "Written Consent Proposal"); (e) the approval of an amendment
to the Company's Restated Certificate of Incorporation eliminating the
ability of stockholders to call a special meeting (the "Special Meeting
Proposal"); and (f) the approval of an amendment to the Company's Restated
Certificate of Incorporation requiring a supermajority vote to amend the
Surviving Corporation By-Laws by stockholder action or to amend the
Surviving Corporation Certificate of Incorporation (the "Supermajority
Voting Proposal") in a manner that would affect matters covered by the
Classified Board Proposal, the Board Size Proposal, the Written Consent
Proposal, the Special Meeting Proposal or the Supermajority Voting Proposal
if adopted, all as set forth in Exhibit A-1(a) hereto (collectively, the
"Governance Amendments"), to become effective solely upon effectiveness of
the Merger. The Company shall, through its Board of Directors, recommend to
its stockholders adoption of this Agreement and the approval of the
Governance Amendments and shall not withdraw, change or modify such
recommendation; provided, however, that the Company's Board of Directors
may withdraw, change or modify such recommendation if it determines in good
faith, after consultation with outside counsel, that it would be
inconsistent with the Board's fiduciary duties to the stockholders of the
Company not to withdraw, change or modify such recommendation.
Section 3.2 Filings; Other Actions.
(a) Subject to the provisions of this Agreement and the
Distribution Agreement, the Company shall prepare and file with the
Securities and
A-7
Exchange Commission (the "SEC") a proxy statement (the "Proxy Statement")
for the solicitation of proxies in favor of (i) the adoption of this
Agreement; and (ii) the approval of each of the Governance Amendments as
amendments to the Company's Restated Certificate of Incorporation to become
effective solely upon the effectiveness of the Merger. The Company shall
not propose to its stockholders the adoption of any of the Governance
Amendments as independent amendments to the Company's Restated Certificate
of Incorporation, but only as amendments to become effective solely upon
the effectiveness of the Merger. The Company shall use all reasonable
efforts to have the Proxy Statement cleared by the SEC for mailing in
definitive form as promptly as practicable after such filing. The Company
and UNITRIN shall cooperate with each other in the preparation of the Proxy
Statement and any amendment or supplement thereto, and the Company shall
notify UNITRIN of the receipt of any comments of the SEC with respect to
the Proxy Statement and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to
UNITRIN promptly copies of all correspondence between the SEC and the
Company or any of its advisors with respect to the Proxy Statement. The
Company shall give UNITRIN and its counsel appropriate advance opportunity
to review and comment upon the Proxy Statement and all responses to
requests for additional information by, and replies to comments of, the
SEC, and shall incorporate therein any reasonable comments UNITRIN may
deliver to the Company with respect thereto, before such Proxy Statement,
response or reply is filed with or sent to the SEC. The Company agrees to
use all reasonable efforts, after consultation with UNITRIN and its
advisors, to respond promptly to all such comments of, and requests by, the
SEC and to cause the Proxy Statement to be mailed to the holders of the
Common Stock entitled to vote at the Stockholders Meeting as soon as
reasonably possible following the execution hereof. UNITRIN shall provide
the Company such information concerning the business and affairs of UNITRIN
and Merger Sub as is reasonably required for inclusion in the Proxy
Statement.
(b) Each of the Company and UNITRIN shall promptly, and in
any event within fifteen business days after the execution and delivery of
this Agreement, make all filings or submissions as are required under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and any other applicable law.
(c) Each of the Company and UNITRIN agrees promptly to
furnish to the other all copies of written communications (and to advise
one another of the substance of all material oral communications) received
by it, or any of its affiliates or representatives, from, or delivered by
any of the foregoing to, any
A-8
federal, state, local or international court, commission, governmental
body, agency, authority, tribunal, board or other governmental entity (each
a "Governmental Entity") in respect of the transactions contemplated
hereby.
(d) At the Stockholders' Meeting, UNITRIN agrees to vote,
or cause to be voted, all shares of Common Stock owned by it and any of its
subsidiaries or affiliates in favor of the adoption of this Agreement and
the approval of each of the Governance Amendments.
(e) As soon as reasonably practicable following execution
of this Agreement, UNITRIN, as the sole stockholder of Merger Sub, shall
execute and deliver to Merger Sub in accordance with Section 228 of the
DGCL a written consent to adoption of this Agreement.
Section 3.3 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in 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, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to obtain the
adoption of this Agreement and the approval of each of the Governance
Amendments by the stockholders of the Company as contemplated by Sections
4.1(a), 4.1(b) and 4.2(a) hereof and to consummate, as soon as practicable
following such approval, the Merger and the other transactions contemplated
by this Agreement and the Distribution Agreement, including, but not
limited to (a) the obtaining of all necessary actions, waivers, consents
and approvals from all Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all reasonable steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by,
any Governmental Entity (including those in connection with the HSR Act),
(b) the obtaining of all necessary consents, approvals or waivers from
third parties, (c) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this
Agreement, the Distribution Agreement or the consummation of the
transactions contemplated hereby or thereby, including seeking to have any
stay or temporary restraining order entered by any court or other
Governmental Entity with respect to the Merger, this Agreement or the
Distribution Agreement vacated or reversed, (d) the execution and delivery
of any additional instruments necessary to consummate the transactions
contemplated by this Agreement and the Distribution Agreement and (e)
causing all conditions to the parties' obligations to consummate (i) the
Merger set forth in Article 4 hereof and (ii)
A-9
the Distribution set forth in Section 2.1(b) of the Distribution Agreement
to be satisfied. The Company and UNITRIN, upon the other's request, shall
provide all such information reasonably necessary to accomplish the
foregoing concerning the party's business and affairs to the other party.
Section 3.4 Representations and Warranties of the Company. The
Company hereby represents and warrants to UNITRIN and Merger Sub that:
(a) the Company's Board of Directors has approved and
declared advisable the Merger, this Agreement, the Distribution Agreement
and each of the Governance Amendments and the transactions contemplated
hereby and thereby, has determined that the Merger and each of the
Governance Amendments and the other transactions contemplated by this
Agreement and the Distribution Agreement are in the best interests of the
stockholders of the Company and, subject to Section 3.1 hereof, has
recommended that the stockholders of the Company vote in favor of the
adoption of this Agreement and each of the Governance Amendments;
(b) the Proxy Statement, the form of proxy and any other
solicitation materials used in connection therewith and any oral
solicitations of proxies made by the Company shall not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements made, in light of the circumstances under
which they were made, not misleading or omit any statement necessary to
correct any statement in any earlier communication with respect to any
solicitation of a proxy for any of the matters to be voted upon at the
Stockholders Meeting which has become false or misleading, except that no
representation or warranty is made by the Company with respect to
information relating to UNITRIN or Merger Sub that is provided by UNITRIN
for inclusion in the Proxy Statement or any such other proxy material or
oral solicitation;
(c) this Agreement has been duly executed and delivered by
the Company and constitutes the valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing; and
(d) subject to the changes in the Company's capitalization
contemplated by this Agreement, the capitalization of the Company is as
follows:
A-10
(i) 22,500,000 authorized shares of Common Stock of
which 10,014,161 shares were outstanding at the close of
business on October 16, 2000;
(ii) 4,984,149 shares of Common Stock which are held
in the treasury of the Company as the date of this
Agreement;
(iii) 650,000 authorized shares of preferred stock of
which zero (0) shares are outstanding on the date of this
Agreement; and
(iv) no shares of any other class or series of
capital stock are authorized, issued or outstanding.
Section 3.5 Representations and Warranties of UNITRIN and Merger
Sub. Each of UNITRIN and Merger Sub jointly and severally represent and
warrant to the Company that:
(a) the Board of Directors of each of UNITRIN and Merger
Sub, as applicable, has approved and declared advisable the Merger, this
Agreement, the Distribution Agreement and the transactions contemplated
hereby and thereby, and, other than as contemplated by Section 3.2(e)
hereof, no stockholder approval or other further corporate action will be
required on the part of UNITRIN or Merger Sub;
(b) this Agreement has been duly executed and delivered by
UNITRIN and Merger Sub and constitutes the valid and binding agreement of
each such corporation, enforceable against UNITRIN and Merger Sub in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
general equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing;
(c) UNITRIN owns all outstanding capital stock of Merger
Sub free and clear of any claims, liens or encumbrances and no other person
holds any capital stock of Merger Sub nor has any right to acquire any
equity interest in Merger Sub;
A-11
(d) as of immediately prior to the Effective Time, all of
the Contributed Shares shall be owned beneficially and of record by Merger
Sub, free and clear of any claims, liens or encumbrances; and
(e) Merger Sub was formed by UNITRIN solely for the
purposes of effectuating the Merger upon the terms and subject to the
conditions of this Agreement; Merger Sub has no employees, will have no
assets other than the Contributed Shares, has not entered into any
contract, agreement or other commitment with any person except for
customary corporate organizational matters or as specifically set forth in
this Agreement, and has no liabilities, commitments or obligations of any
kind (known or unknown, fixed or contingent), except for those obligations
specifically set forth in this Agreement.
ARTICLE IV
CONDITIONS TO THE MERGER
Section 4.1 Conditions to the Obligation of the Company.
The obligation of the Company to consummate the Merger is subject to the
satisfaction (or waiver by the Company, except that the condition set forth
in Section 4.1(a) may not be waived) of the following conditions:
(a) a proposal to adopt this Agreement shall have been
approved by the holders of (i) a majority of the Common Stock outstanding
and entitled to vote thereon and (ii) a majority of the shares of Common
Stock (other than shares held of record or beneficially owned by UNITRIN)
present in person or by proxy at the Stockholders Meeting and voting on
such proposal;
(b) each of the Governance Amendments shall have been
approved by a majority of the Common Stock outstanding and entitled to vote
thereon;
(c) the waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have expired or been
terminated;
(d) no court, arbitrator or other Governmental Entity
shall have issued any order, injunction, decree or other legal restraint or
prohibition, and there shall not be any statute, rule or regulation,
restraining or prohibiting the consummation of the Merger or the
Distribution and no proceeding challenging this Agreement or the
Distribution Agreement or the transactions contemplated hereby or thereby
or seeking to prohibit, alter, prevent or materially delay the Merger or
the
A-12
Distribution shall have been instituted by any Governmental Entity before
any court, arbitrator or other Governmental Entity and be pending;
(e) all actions by or in respect of or filings with any
Governmental Entity required to permit the consummation of the Merger
(other than the filing of the Certificate of Merger in compliance with the
DGCL) and the other transactions contemplated by this Agreement and the
Distribution Agreement shall have been obtained and shall be in full force
and effect, except those that would not reasonably be expected to have a
material adverse effect on any party's ability to consummate the
transactions contemplated by this Agreement or the Distribution Agreement;
(f) prior to the Effective Time, the Board of Directors of
UNITRIN shall have declared the Distribution (subject to the prior
consummation of the Recapitalization (as defined in the Distribution
Agreement)), all conditions to the Distribution set forth in the
Distribution Agreement, other than the prior consummation of the
Recapitalization, shall have been satisfied or waived, no circumstance
shall exist that would reasonably be expected to prevent the consummation
of the Distribution immediately following the Merger, and the Distribution
Agreement shall remain in full force and effect;
(g) all representations and warranties of UNITRIN set
forth in the Distribution Agreement (other than the representation and
warranty set forth in Section 2.3(b)(v) of the Distribution Agreement) and
all representations and warranties of UNITRIN and Merger Sub set forth in
this Agreement that are qualified as to materiality shall be true and
correct, and any such representations and warranties that are not so
qualified shall be true and correct in all material respects, as of the
Effective Time, and the Company shall have received a certificate executed
by the chief executive officer of UNITRIN to such effect;
(h) all covenants to have been performed at or prior to
the Effective Time by UNITRIN and Merger Sub pursuant to this Agreement and
all covenants to have been performed at or prior to the Effective Time by
UNITRIN pursuant to the Distribution Agreement shall have been performed by
UNITRIN and Merger Sub in all material respects at or prior to the
Effective Time, and the Company shall have received a certificate executed
by the chief executive officer of UNITRIN to such effect;
(i) each of the Company and UNITRIN shall have received
all the Required Consents (as defined in the Distribution Agreement);
A-13
(j) the Class B Common Stock shall have been approved for
listing on the New York Stock Exchange, Inc., subject to official notice of
issuance;
(k) no event outside the control of the Company shall have
occurred or failed to occur that prevents the lawful consummation of the
Recapitalization;
(l) the transactions contemplated hereby and by the
Distribution Agreement shall be in compliance in all material respects with
applicable federal and state securities and other applicable laws;
(m) all actions and other documents and instruments
reasonably necessary in connection with the transactions contemplated
hereby and by the Distribution Agreement shall have been taken or executed,
as the case may be, in form and substance reasonably satisfactory to the
Company; and
(n) either (i) the private letter ruling from the Internal
Revenue Service, providing that, among other things, the Recapitalization
and the Distribution will qualify, to the extent set forth therein, as
tax-free transactions for federal income tax purposes under Sections 354
and 355 of the Code, respectively (the "IRS Ruling"), shall have been
issued and shall continue in effect, such ruling, insofar as it relates to
the tax-free nature of the Recapitalization, shall be in form and substance
satisfactory to the Company in its sole discretion, and UNITRIN shall have
complied with all provisions set forth in the IRS Ruling that are required
to be complied with prior to the Declaration Date and the Distribution Date
(each as defined in the Distribution Agreement) in order for the
Recapitalization to qualify as a tax-free transaction or (ii) if the IRS
Ruling is not obtained, each of UNITRIN and the Company shall have received
a written opinion in form and substance satisfactory to it of a nationally
recognized law firm mutually acceptable to UNITRIN and the Company (it
being agreed that Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ will each be deemed to be mutually acceptable to
UNITRIN and the Company for purposes of this clause (n)), to the same
effect as the IRS Ruling as it relates to the tax-free nature of the
Recapitalization.
The foregoing conditions are for the sole benefit of the Company and shall
not give rise to or create any duty on the part of the Company to waive or
not waive any such condition.
A-14
Section 4.2 Conditions to the Obligations of UNITRIN and
Merger Sub. The obligations of UNITRIN and Merger Sub to consummate the
Merger are subject to the satisfaction (or waiver by UNITRIN and Merger
Sub, except that the condition set forth in Section 4.2(a) may not be
waived) of the following conditions:
(a) a proposal to adopt this Agreement shall have been
approved by the holders of (i) a majority of the Common Stock outstanding
and entitled to vote thereon and (ii) a majority of the shares of Common
Stock (other than shares held of record or beneficially owned by UNITRIN)
present in person or by proxy at the Stockholders Meeting and voting on
such proposal;
(b) the waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have expired or been
terminated;
(c) the IRS Ruling shall have been issued and shall
continue in effect, such ruling shall be in form and substance satisfactory
to UNITRIN in its sole discretion, and the Company shall have complied with
all provisions set forth in the IRS Ruling that are required to be complied
with prior to the Declaration Date and the Distribution Date;
(d) no court, arbitrator or other Governmental Entity
shall have issued any order, injunction, decree or other legal restraint or
prohibition, and there shall not be any statute, rule or regulation,
restraining or prohibiting the consummation of the Merger or the
Distribution and no proceeding challenging this Agreement or the
Distribution Agreement or the transactions contemplated hereby or thereby
or seeking to prohibit, alter, prevent or materially delay the Merger or
the Distribution shall have been instituted by any Governmental Entity
before any court, arbitrator or other Governmental Entity and be pending;
(e) all actions by or in respect of or filings with any
Governmental Entity required to permit the consummation of the Merger
(other than the filing of the Certificate of Merger in compliance with the
DGCL) and the other transactions contemplated by this Agreement and the
Distribution Agreement shall have been obtained and shall be in full force
and effect, except those that would not reasonably be expected to have a
material adverse effect on any party's ability to consummate the
transactions contemplated by this Agreement or the Distribution Agreement;
A-15
(f) immediately prior to the Effective Time, all
conditions to the declaration of the Distribution and the Distribution set
forth in the Distribution Agreement, other than the prior consummation of
the Recapitalization, shall have been satisfied or waived, no circumstance
shall exist that would reasonably be expected to prevent the consummation
of the Distribution immediately following the Merger, and the Distribution
Agreement shall remain in full force and effect;
(g) all representations and warranties of the Company set
forth in the Distribution Agreement (other than the representation and
warranty set forth in Section 2.3(a)(v) of the Distribution Agreement) and
this Agreement that are qualified as to materiality shall be true and
correct, and any such representations and warranties that are not so
qualified shall be true and correct in all material respects, as of the
Effective Time, and UNITRIN shall have received a certificate executed by
the chief executive officer of the Company to such effect; and
(h) all covenants to have been performed at or prior to
the Effective Time by the Company pursuant to this Agreement or the
Distribution Agreement shall have been performed at or prior to the
Effective Time by the Company in all material respects, and UNITRIN shall
have received a certificate executed by the chief executive officer of the
Company to such effect.
The foregoing conditions are for the sole benefit of UNITRIN and Merger Sub
and shall not give rise to or create any duty on the part of UNITRIN or
Merger Sub to waive or not waive any such condition.
ARTICLE V
TERMINATION
Section 5.1 Termination.
(a) This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time (notwithstanding any
approval of this agreement by the stockholders of the Company):
(i) by mutual written consent of the Company and
UNITRIN;
(ii) by either the Company or UNITRIN, if there shall
be any law or regulation that makes consummation of the
Merger illegal or otherwise prohibited or if any judgment,
injunction, order or decree enjoining the Company or
Merger Sub from
A-16
consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and
nonappealable;
(iii) by either the Company or UNITRIN, if there
shall be any law or regulation that makes consummation of
the Distribution illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining UNITRIN
from consummating the Distribution is entered and such
judgment, injunction, order or decree shall become final
and nonappealable;
(iv) by either the Company or UNITRIN, if after a
vote on the matter by the Company's stockholders at the
Stockholders Meeting, the conditions set forth in Sections
4.1(a) and (b) hereof, in the case of the Company, and
Section 4.2(a) hereof, in the case of UNITRIN, are not
satisfied;
(v) by either the Company or UNITRIN, if the Merger
is not consummated by June 30, 2001; provided that this
right shall not be available to any party that is in
material breach of its obligations under this Agreement or
the Distribution Agreement; or
(vi) by either the Company or UNITRIN, to the extent
the Company or UNITRIN, as applicable, is allowed to
terminate the Distribution Agreement pursuant to Section
5.10(a)(iii) or 5.10(a)(iv)(C) thereof, as applicable.
(b) This Agreement shall terminate automatically without
any action on the part of the Company, UNITRIN or Merger Sub in the event
the Distribution Agreement is terminated according to its terms.
Section 5.2 Effect of Termination. If this Agreement is
terminated pursuant to Section 5.1, this Agreement shall become void and of
no effect with no liability on the part of any party hereto
ARTICLE VI
MISCELLANEOUS
A-17
Section 6.1 Notices. All notices and other communications
hereunder shall be in writing, shall be effective when received and shall
be duly given if delivered by (a) hand delivery, (b) U.S. Mail, postage
prepaid, for first class delivery, (c) Federal Express or similar carrier,
freight prepaid, for next business day delivery, or (d) electronic
transmission, provided that confirmation of transmission and receipt is
confirmed to each party at the following respective addresses (or at such
other address for a party as shall be specified by like notice):
To UNITRIN:
UNITRIN, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
with a copy to:
UNITRIN, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
and with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
To Merger Sub:
CW DISPOSITION COMPANY
c/o UNITRIN, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A-18
Attn: Chief Financial Officer
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
To the Company:
▇▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Section 6.2 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns; provided that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other party hereto.
Section 6.3 Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State of
Delaware.
Section 6.4 Counterparts; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
A-19
hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received counterparts hereof signed by
the other party hereto.
Section 6.5 Amendments. Any provision of this Agreement
may be amended or waived prior to the Effective Time (whether before or
after approval of matters presented in connection with the Merger by the
stockholders of the Company) if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by the Company and
UNITRIN or, in the case of a waiver, by the party against whom such waiver
is to be effective; provided that after the adoption of this Agreement by
the stockholders of the Company, there shall be no amendment that by law
requires further approval of such stockholders without obtaining such
further approval of such stockholders.
A-20
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
▇▇▇▇▇▇▇-▇▇▇▇▇▇ CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
UNITRIN, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
CW DISPOSITION COMPANY
By ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: President