EXECUTION COPY
AGREEMENT AND PLAN OF MERGER (this "Agreement") dated
as of November 22, 1998, between UNUM CORPORATION, a
Delaware corporation ("UNUM"), and PROVIDENT COMPANIES,
INC., a Delaware corporation ("Provident").
WHEREAS the respective Boards of Directors of UNUM and Provident
have approved and declared advisable this Agreement and the merger of UNUM
with and into Provident (the "Merger"), with Provident as the surviving
corporation (the "Surviving Corporation"), upon the terms and subject to
the conditions set forth in this Agreement, whereby each issued and
outstanding share of common stock, par value $.10 per share, of UNUM ("UNUM
Common Stock"), other than shares owned by Provident or UNUM, will be
converted, subject to the prior effectiveness of the Reverse Stock Split
(as defined in Section 3.01(n)), into one share of common stock, par value
$.10 per share, of the Surviving Corporation ("Surviving Corporation Common
Stock"); provided, however, that immediately prior to the Effective Time
(as defined in Section 1.03), Provident shall effect the Reverse Stock
Split, pursuant to which, among other things, each issued and outstanding
share of common stock, par value $1.00 per share, of Provident ("Provident
Common Stock") shall be reclassified and converted into (assuming the
effectiveness of the Merger) 0.730 of a validly issued, fully paid and
nonassessable share of Surviving Corporation Common Stock;
WHEREAS the respective Boards of Directors of UNUM and Provident
have each determined that the Merger and the other transactions
contemplated hereby are consistent with, and in furtherance of, their
respective business strategies and goals;
WHEREAS UNUM and Provident desire to make certain
representations, warranties, covenants and agreements in connection with
the Merger and also to prescribe various conditions to the Merger;
WHEREAS, for Federal income tax purposes, it is intended that the
Merger will qualify as a reorganization under the provisions of Section
368(a) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the "Code");
WHEREAS, for financial accounting purposes, it is intended that
the Merger will be accounted for as a pooling of interests transaction;
WHEREAS, substantially concurrently herewith and as a condition
and inducement to UNUM's willingness to enter into this Agreement, UNUM and
certain stockholders of Provident have entered into a Stockholders
Agreement (the "Stockholders Agreement");
WHEREAS, immediately following the due execution and delivery of
this Agreement, Provident and UNUM will enter into a stock option agreement
(the "Provident Stock Option Agreement"), pursuant to which Provident will
grant UNUM the option (the "Provident Option") to purchase shares of
Provident Common Stock, upon the terms and subject to the conditions set
forth therein; and
WHEREAS, immediately following the due execution and delivery of
this Agreement, UNUM and Provident will enter into a stock option agreement
(the "UNUM Stock Option Agreement" and, together with the Provident Stock
Option Agreement, the "Option Agreements"), pursuant to which UNUM will
grant Provident the option (the "UNUM Option") to purchase shares of UNUM
Common Stock, upon the terms and subject to the conditions set forth
therein.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, the
parties agree as follows:
ARTICLE I
The Merger
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SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), UNUM shall be merged with and into
Provident at the Effective Time. Following the Effective Time, Provident,
as the Surviving Corporation, shall succeed to and assume all the rights
and obligations of UNUM in accordance with the DGCL.
SECTION 1.02. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on the fifth business day after satisfaction
or waiver of the conditions set forth in Article VI (other than those
conditions that by their nature are to be satisfied at the Closing, but
subject to the fulfillment or waiver of those conditions), unless another
time or date is agreed to by the parties hereto (the "Closing Date").
SECTION 1.03. Effective Time. Subject to the provisions of this
Agreement, as soon as practicable on the Closing Date, the parties shall
acknowledge and file a certificate of merger or other appropriate documents
(in any such case, the "Certificate of Merger") executed in accordance with
the relevant provisions of the DGCL and shall make all other filings or
recordings required under the DGCL. The Merger shall become effective at
such time as the Certificate of Merger is duly filed with the Delaware
Secretary of State, or at such subsequent date or time as UNUM and
Provident shall agree and specify in the Certificate of Merger (the time
the Merger becomes effective being hereinafter referred to as the
"Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-laws. (a) The
Amended and Restated Certificate of Incorporation of Provident, as in
effect immediately prior to the Effective Time, shall be amended as of the
Effective Time so as to read in its entirety in the form set forth as
Exhibit A-1 and, as so amended, such Certificate of Incorporation shall be
the certificate of incorporation of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
(b) The By-laws of Provident, as in effect immediately prior to
the Effective Time, shall be amended as of the Effective Time so as to read
in their entirety in the form set forth as Exhibit A-2 and, as so amended,
such By-laws shall be the by-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.
SECTION 1.06. Board of Directors and Officers. The Board of
Directors and the officers of the Surviving Corporation shall be as set
forth on or designated in accordance with Exhibit B hereto until the
earlier of the resignation or removal of any individual set forth on or
designated in accordance with Exhibit B or until their respective
successors are duly elected and qualified, as the case may be, it being
agreed that if any director shall be unable or unwilling to serve as a
director at the Effective Time the party which designated such individual
as indicated in Exhibit B shall designate another individual to serve in
such individual's place. If any officer set forth on or designated in
accordance with Exhibit B ceases to be a full-time employee of either
Provident or UNUM at or before the Effective Time or shall be unable or
unwilling to serve as an officer of the Surviving Corporation at the
Effective
Time, the parties will agree upon another individual to serve in
such individual's stead.
ARTICLE II
Effect of the Merger on the Capital Stock of the
------------------------------------------------
Constituent Corporations
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SECTION 2.01. Effect on Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holder of
any shares of Provident Common Stock or UNUM Common Stock:
(a) Cancelation of Treasury Stock and Provident-Owned Stock. Each
share of UNUM Common Stock that is owned by Provident or UNUM (in each case
not held on behalf of third parties) shall automatically be canceled and
retired and shall cease to exist, and no consideration shall be delivered
in exchange therefor.
(b) Conversion of UNUM and Provident Common Stock. (i) Except as
set forth in Section 2.01(a), each issued and outstanding share of UNUM
Common Stock immediately prior to the Effective Time shall be converted
into, subject to the prior effectiveness of the Reverse Stock Split, one
fully paid and nonassessable share of Surviving Corporation Common Stock.
As of the Effective Time, all shares of UNUM Common Stock shall no longer
be outstanding and shall automatically be canceled and shall cease to
exist, and each holder of a certificate representing any such shares of
UNUM Common Stock shall cease to have any rights with respect thereto,
except that, from and after the Effective Time, certificates representing
UNUM Common Stock (other than shares to be canceled in accordance with
Section 2.01(a)) immediately prior to the Effective Time shall be deemed
for all purposes to represent the number of shares of Surviving Corporation
Common Stock into which they were converted pursuant to this subparagraph
(b) (provided that if an exchange of certificates formerly representing
UNUM Common Stock for certificates representing Surviving Corporation
Common Stock is required by law or applicable rule or regulation, the
parties will cause the Surviving Corporation to arrange for such exchange
on a one share-for-one share basis).
(ii) Each share of Provident Common Stock issued and outstanding
immediately prior to the Effective Time, assuming the prior effectiveness
of the Reverse Stock Split, shall remain an issued and outstanding share of
Surviving Corporation Common Stock.
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Representations and Warranties of Provident. Except
as disclosed in the Provident Filed SEC Documents (as defined in Section
3.01(g)) or as set forth on the Disclosure Schedule dated the date hereof
and delivered by Provident to UNUM in connection with the execution of this
Agreement (the "Provident Disclosure Schedule"), Provident represents and
warrants to UNUM as follows:
(a) Organization, Standing and Corporate Power. Each of Provident
and its subsidiaries (as defined in Section 8.03) is a corporation duly
organized, validly existing and in good standing under the laws of the
respective jurisdiction in which it is incorporated and has the requisite
corporate power and authority to carry on its business as now being
conducted. Each of Provident and its subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, is not reasonably likely to have a
material adverse effect (as defined in Section 8.03) on Provident.
Provident has made available to UNUM prior to the date hereof complete and
correct copies of its Amended and Restated Certificate of Incorporation and
By-laws and the certificates of incorporation and by-laws of its
subsidiaries, in each case as amended to the date hereof.
(b) Subsidiaries. Exhibit 21 to Provident's Annual Report on Form
10-K for the year ended December 31, 1997 (the "Provident Form 10-K"),
lists each subsidiary of Provident which as of the date of this Agreement
is a Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X of
the Securities and Exchange Commission (the "SEC")). All the outstanding
shares of capital stock of, or other ownership interests in, each such
Significant Subsidiary have been validly issued and are fully paid and
nonassessable and are owned directly or indirectly by Provident, free and
clear of all liens and free of any other restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or such other ownership interest). Except for the capital stock of,
or other ownership interests in, its Significant Subsidiaries noted above,
Provident does not own, directly or indirectly, any capital stock or other
ownership interest in any corporation, partnership, limited liability
company,
joint venture or other entity constituting a Significant Subsidiary.
(c) Capital Structure. The authorized capital stock of Provident
consists of 150,000,000 shares of Provident Common Stock and 25,000,000
shares of preferred stock, par value $1.00 per share. At the close of
business on November 17, 1998, (i) 135,406,403 shares of Provident Common
Stock and no shares of preferred stock were issued and outstanding and (ii)
294,151 shares of Provident Common Stock were held by Provident in its
treasury. As of November 17, 1998, collectively, 6,983,551 shares of
Provident Common Stock were subject to options ("Provident Stock Options")
granted under the Stock Plan of 1994, Stock Option Plan of 1989, Employee
Stock Option Plan of 1998, Non-Employee Director Compensation Plan of 1998
and Amended and Restated Annual Management Incentive Compensation Plan of
1994 (collectively, the "Provident Stock Plans"). As of November 17, 1998,
there were 9,278,780 shares of Provident Common Stock reserved for issuance
under the Provident Stock Plans. Except as set forth above, at the close of
business on November 17, 1998, no shares of capital stock or other voting
securities of Provident were issued, reserved for issuance or outstanding.
There are no outstanding stock appreciation rights ("SARs") or rights
(other than the Provident Stock Options) to receive shares of Provident
Common Stock on a deferred basis granted under the Provident Stock Plans or
otherwise. Schedule 3.01(c) of the Provident Disclosure Schedule sets forth
a true and complete list, as of November 17, 1998, of all Provident Stock
Options, the number of shares subject to each such option, the grant dates
and the exercise prices thereof. All outstanding shares of capital stock of
Provident are, and all shares which may be issued pursuant to this
Agreement or the Provident Stock Plans will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of Provident having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of Provident may vote are issued or
outstanding. Except as set forth above, as of the date of this Agreement,
there are no preemptive or other outstanding securities, options, warrants,
calls, rights, conversion rights, redemption rights, repurchase rights,
commitments, agreements, arrangements or undertakings of any kind to which
Provident or any of its subsidiaries is a party or by which any of them is
bound obligating Provident or any of its subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of
capital stock or other voting securities of Provident or any
of its subsidiaries, or giving any person a right to subscribe for or
acquire, any securities of Provident or any of its subsidiaries or
obligating Provident or any of its subsidiaries to issue, grant, extend or
enter into any such security, option, warrant, call, right, conversion
right, redemption right, repurchase right, commitment, agreement,
arrangement or undertaking. There are no outstanding contractual
obligations of Provident or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of capital stock of Provident or any of its
subsidiaries. There are no outstanding contractual obligations of Provident
to vote or to dispose of any shares of the capital stock of any of its
subsidiaries. To the knowledge of Provident, each individual or entity
executing the Stockholders Agreement contemporaneously with or prior to the
execution and delivery hereof is the record owner of, or is a trustee of a
trust that is the record holder of, a number of shares of Provident Common
Stock which is equal to the number of shares of Provident Common Stock set
forth opposite such individual's or entity's name on Schedule A to the
Stockholders Agreement.
(d) Authority; Noncontravention. (i) Provident has all requisite
corporate power and authority to enter into this Agreement and the Option
Agreements and, subject to receipt of the Provident Stockholder Approval
(as defined in Section 3.01(n)), to consummate the transactions
contemplated by this Agreement and the Option Agreements. The execution and
delivery of this Agreement and the Option Agreements by Provident and the
consummation of the transactions contemplated by this Agreement and the
Option Agreements have been duly authorized by all necessary corporate
action on the part of Provident, subject to receipt of the Provident
Stockholder Approval in the case of this Agreement. This Agreement and the
Option Agreements have been duly executed and delivered by Provident and,
assuming the due execution and delivery of each such agreement by the
counterparties thereto, each such agreement constitutes a valid and binding
obligation of Provident as to Provident's obligations therein, enforceable
against Provident in accordance with its terms. The execution and delivery
of this Agreement and the Option Agreements do not, and the consummation of
the transactions contemplated by this Agreement, the Option Agreements and
the Stockholders Agreement and compliance with the provisions of this
Agreement and the Option Agreements by Provident will not, conflict with,
or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material
benefit under, or result in the creation of any lien upon
any of the properties or assets of Provident or any of its subsidiaries
under, (A) the Amended and Restated Certificate of Incorporation or By-laws
of Provident or the comparable charter or organizational documents of any
of its subsidiaries, (B) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Provident or any of its
subsidiaries or their respective properties or assets or (C) subject to the
governmental filings and other matters referred to in the following
sentence, any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Provident or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (B) and
(C), any such conflicts, violations, defaults, obligations, losses, rights,
liens, judgments, orders, decrees, statutes, laws, ordinances, rules or
regulations that, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on Provident. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Federal, state or local government or any court, administrative
agency or commission or other governmental authority or agency, domestic or
foreign (a "Governmental Entity"), is required by or with respect to
Provident or any of its subsidiaries in connection with the execution and
delivery of this Agreement and the Option Agreements by Provident or the
consummation by Provident of any of the transactions contemplated by this
Agreement and the Option Agreements, except for (A) the filing of a
premerger notification and report form by Provident under the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"); (B) the filing with the SEC of (w) a registration statement on Form
S-4 relating to the issuance of Surviving Corporation Common Stock in the
Merger (the "Form S-4"), (x) a proxy statement relating to the Provident
Stockholders Meeting (as defined in Section 5.01(b)) (such proxy statement,
together with the proxy statement relating to the UNUM Stockholders Meeting
(as defined in Section 5.01(c)), in each case as amended or supplemented
from time to time, the "Joint Proxy Statement"), (y) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as may be required in connection
with this Agreement, the Option Agreements and the transactions
contemplated hereby and thereby and (z) a registration statement on Form
S-8 under the Securities Act of 1933, as amended (the "Securities Act");
(C) the filing with the Delaware Secretary of State of (x) an amendment to
the Amended and Restated Certificate of Incorporation of Provident to
effect the Reverse Stock Split immediately prior to the occurrence of the
Effective Time and (y) the Certificate of Merger, and
the filing of appropriate documents with the relevant authorities of other
states in which Provident is qualified to do business and such filings with
Governmental Entities to satisfy the applicable requirements of state
securities or "blue sky" laws; (D) such filings with and approvals of the
New York Stock Exchange, Inc. (the "NYSE"), to permit the shares of
Surviving Corporation Common Stock that are to be issued in the Merger to
be listed on the NYSE; (E) filings in respect of, and approvals and
authorizations of, and, as applicable, the expiration of applicable waiting
periods of, and, as applicable, the expiration of applicable waiting
periods of, the respective Commissioners of Insurance of the states of
Maine, New York, Delaware and South Carolina (the "Designated State
Insurance Approvals"); (F) such other filings in respect of, and, to the
extent necessary, approvals and authorizations of, and, as applicable, the
expiration of applicable waiting periods of, the respective state
Commissioners of Insurance or other similar state authorities to satisfy
applicable state insurance and competition control and licensing laws or
the expiration of applicable waiting periods (the "Other State Insurance
Approvals", and together with the Designated State Insurance Approvals, the
"State Insurance Approvals"); (G) notification under the Competition Act
(Canada) and other relevant Canadian approvals; and (H) such consents,
approvals, orders or authorizations the failure of which to be made or
obtained, individually or in the aggregate, is not reasonably likely to
have a material adverse effect on Provident.
(ii) As of the date hereof, the Board of Directors of Provident
has approved and declared advisable this Agreement, the Reverse Stock Split
and the Merger, and has approved the Option Agreements and the other
transactions contemplated by this Agreement and the Option Agreements.
(e) SEC Documents; Undisclosed Liabilities; SAP Statements. (i)
Provident has filed all required reports, schedules, forms, statements and
other documents with the SEC since January 1, 1997 (including all filed
reports, schedules, forms, statements and other documents whether or not
required, the "Provident SEC Documents"). As of their respective dates, the
Provident SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable
to such Provident SEC Documents, and none of the Provident SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the
statements therein, in light of the circumstances under which they were
made, not misleading. Except to the extent that information contained in
any Provident SEC Document has been revised or superseded by a later filed
Provident SEC Document, none of the Provident SEC Documents contains any
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Provident included in the Provident
SEC Documents comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with U.S. generally
accepted accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position of
Provident and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal
year-end adjustments). Except for liabilities and obligations incurred in
the ordinary course of business consistent with past practice since the
date of the most recent consolidated balance sheet included in the
Provident SEC Documents, neither Provident nor any of its subsidiaries has
any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) required by U.S. generally accepted accounting
principles to be recognized or disclosed on a consolidated balance sheet of
Provident and its consolidated subsidiaries or in the notes thereto.
(ii) Provident conducts its material insurance operations through
Provident Life and Accident Insurance Company, Provident Life and Casualty
Insurance Company, Provident National Assurance Company, The ▇▇▇▇ ▇▇▇▇▇▇
Life Insurance Company, The ▇▇▇▇ ▇▇▇▇▇▇ Variable Annuity Insurance Company
and The ▇▇▇▇ ▇▇▇▇▇▇ Protective Life Insurance Company (collectively, the
"Provident Insurance Subsidiaries"). Each of the Provident Insurance
Subsidiaries has filed all annual and quarterly statements, together with
all exhibits, interrogatories, notes, schedules and any actuarial opinions,
affirmations or certifications or other supporting documents in connection
therewith, required to be filed with or submitted to the appropriate
regulatory authorities of the jurisdiction in which it is domiciled or
commercially domiciled on forms prescribed or permitted by such authority
(collectively, the "Provident SAP Statements"). Provident has delivered or
made available to UNUM all Provident SAP Statements for each Provident
Insurance Subsidiary for the periods beginning January 1, 1996, each in the
form (including exhibits, annexes and any amendments thereto) filed with
the applicable state insurance regulatory agency. Financial statements
included in the Provident SAP Statements and prepared on a statutory basis,
including the notes thereto, were prepared in conformity with statutory
accounting practices prescribed or permitted by the applicable insurance
regulatory authority consistently applied for the periods covered thereby
and present fairly the statutory financial position of such Provident
Insurance Subsidiaries as at the respective dates thereof and the results
of operations of such Provident Insurance Subsidiaries for the respective
periods then ended. The Provident SAP Statements complied in all material
respects with all applicable laws, rules and regulations when filed, and no
material deficiency has been asserted with respect to any Provident SAP
Statements by the applicable insurance regulatory body or any other
governmental agency or body. Except as indicated therein, all assets that
are reflected on Provident SAP Statements comply with all applicable
foreign, federal, state and local statutes and regulations regulating the
business and products of insurance and all applicable orders and directives
of insurance regulatory authorities (collectively, the "Insurance Laws")
with respect to admitted assets and are in an amount at least equal to the
minimum amounts required by Insurance Laws. The statutory balance sheets
and income statements included in the Provident SAP Statements have been
audited by Ernst & Young LLP and Provident has delivered or made available
to UNUM true and complete copies of all audit opinions related thereto for
periods beginning January 1, 1996. As promptly as practicable following the
date of this Agreement, Provident will deliver or make available to UNUM
true and complete copies of all examination reports of insurance
departments and any insurance regulatory agencies received by Provident on
or after January 1, 1996 relating to Provident Insurance Subsidiaries.
(f) Information Supplied. No statement, certificate, instrument
or other writing furnished or to be furnished by Provident or any affiliate
(as defined in Section 8.03) thereof to UNUM pursuant to this Agreement or
any other document, agreement or instrument referred to herein contains or
will contain any untrue statement of material fact or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by Provident for inclusion or
incorporation by reference in
(i) the Form S-4 will, at the time the Form S-4 is filed with the SEC, at
any time it is amended or supplemented or at the time it becomes effective
under the Securities Act, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading or (ii) the Joint
Proxy Statement will, at the date the Joint Proxy Statement is first mailed
to Provident's stockholders or at the time of the Provident Stockholders
Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
are made, not misleading. The Form S-4 and the Joint Proxy Statement will
comply as to form in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, and the respective
rules and regulations promulgated thereunder, except that no representation
or warranty is made by Provident with respect to statements made or
incorporated by reference therein based on information supplied by UNUM
specifically for inclusion or incorporation by reference in the Form S-4 or
the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except as disclosed in
the Provident SEC Documents filed and publicly available prior to the date
of this Agreement (as amended to the date of this Agreement, the "Provident
Filed SEC Documents"), since the date of the most recent audited financial
statements included in the Provident Filed SEC Documents, Provident has
conducted its business only in the ordinary course, and there has not been
since such date, (i) any material adverse change (as defined in Section
8.03) in Provident, (ii) except for regular quarterly cash dividends not in
excess of $.10 per share declared on Provident Common Stock and subject to
Section 4.01(c), any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect to
any of Provident's capital stock, (iii) except for the Reverse Stock Split,
any split, combination or reclassification of any of its capital stock or
any issuance or the authorization of any issuance of any other securities
in respect of, in lieu of or in substitution for shares of its capital
stock, (iv) (x) any granting by Provident or any of its subsidiaries to any
director, executive officer or key employee of Provident or any of its
subsidiaries of any award or incentive payment or increase in compensation
or benefits, except in the ordinary course of business consistent with past
practice or as was required under employment agreements in effect as of the
date of this Agreement (copies of which have been made available to
UNUM), (y) any granting by Provident or any of its subsidiaries to any such
director, executive officer or key employee of any increase in severance or
termination pay, except as was required under any employment, severance or
termination agreements in effect as of the date of this Agreement (copies
of which have been made available to UNUM) or (z) any entry by Provident or
any of its subsidiaries into any employment, severance or termination
agreement with any such director, executive officer or key employee or (v)
any change in accounting methods, principles or practices by Provident
materially affecting its assets, liabilities or business, except insofar as
may have been required by a change in U.S. generally accepted accounting
principles.
(h) Litigation. There is no suit, action or proceeding pending
or, to the knowledge of Provident, threatened against or affecting
Provident or any of its subsidiaries that, individually or in the
aggregate, is reasonably likely to have a material adverse effect on
Provident nor is there any judgment, decree, injunction, rule or order of
any Governmental Entity or arbitrator outstanding against Provident or any
of its subsidiaries having, or which is reasonably likely to have,
individually or in the aggregate, a material adverse effect on Provident;
provided, that for purposes of this paragraph (h) any such suit, action,
proceeding, judgment, decree, injunction, rule or order arising after the
date hereof shall not be deemed to have a material adverse effect on
Provident if and to the extent such suit, action, proceeding, judgment,
decree, injunction, rule or order (or any relevant part thereof) is based
on this Agreement, the Option Agreements or the Stockholders Agreement or
the transactions contemplated hereby or thereby.
(i) Labor Relations. Neither Provident nor any of its
subsidiaries is the subject of any suit, action or proceeding which is
pending or, to the knowledge of Provident, threatened, asserting that
Provident or any of its subsidiaries has committed an unfair labor practice
(within the meaning of the National Labor Relations Act or applicable state
statutes) or is seeking to compel it to bargain with any labor union or
labor organization, nor is there pending or, to the knowledge of Provident,
threatened, nor has there been for the past five years, any labor strike,
dispute, walk-out, work stoppage, slow-down, lockout or organizational
effort involving Provident or any of its subsidiaries that, individually or
in the aggregate, is reasonably likely to have a material adverse effect on
Provident.
(j) Benefit Plans. (i) Schedule 3.01(j) contains a list and brief
description of all "employee pension benefit plans" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) (sometimes collectively referred to herein as "Provident Pension
Plans"), "employee welfare benefit plans" (as defined in Section 3(l) of
ERISA, hereinafter a "Welfare Plan"), severance, termination, change in
control, incentive compensation profit sharing stock option, stock
purchase, stock ownership, phantom stock, deferred compensation plans, and
other employee fringe benefit plans or arrangements maintained, contributed
to or required to be maintained or contributed to by Provident or its
subsidiaries for the benefit of any present or former officers, employees,
directors or independent contractors of Provident or any of its
subsidiaries (all the foregoing being herein called "Provident Benefit
Plans"). Provident has made available to UNUM true, complete and correct
copies of (1) each Provident Benefit Plan (or, in the case of any unwritten
Benefit Plans, descriptions thereof), (2) the most recent annual report on
Form 5500 filed with the Internal Revenue Service with respect to each
Provident Benefit Plan (if any such report was required by applicable law),
(3) the most recent summary plan description for each Provident Benefit
Plan for which such a summary plan description is required by applicable
law and (4) each currently effective trust agreement and insurance or
annuity contract relating to any Provident Benefit Plan.
(ii) Each Provident Benefit Plan has been administered in
accordance with its terms except for any failure so to administer as,
individually or in the aggregate, is not reasonably likely to have a
material adverse effect on Provident. Provident, its subsidiaries and all
the Provident Benefit Plans are in compliance with the applicable
provisions of ERISA, the Code and other applicable laws as to the Provident
Benefit Plans except for any failure so to be in compliance as,
individually or in the aggregate, is not reasonably likely to have a
material adverse effect on Provident.
(iii) With respect to the Provident Benefit Plans, individually
and in the aggregate, no event has occurred and, to the knowledge of
Provident, there exists no condition or set of circumstances, in connection
with which Provident or any of its subsidiaries could be subject to any
liability that is reasonably likely to have a material adverse effect on
Provident under ERISA, the Code or any other applicable law.
(iv) Each Provident Pension Plan that is intended to comply with
the provisions of Section 401(a) of the Code has been the subject of a
determination letter from the Internal Revenue Service to the effect that
such Provident Pension Plan is qualified and exempt from Federal income
taxes under Sections 401(a) and 501(a), respectively, of the Code; no such
determination letter has been revoked, and, to the knowledge of Provident,
revocation has not been threatened; and no amendment to such Provident
Pension Plan as to which the remedial amendment period has expired would
adversely affect its qualification or materially increase its cost.
Provident has made available to UNUM a copy of the most recent
determination letter received with respect to each Provident Pension Plan
for which such a letter has been issued, as well as a copy of any pending
application for a determination letter. Schedule 3.01(j) lists all
Provident Pension Plan amendments as to which a favorable determination
letter has not yet been received.
(v) No employee of Provident will be entitled to any additional
benefits or any acceleration of the time of payment, funding or vesting of
any benefits under any Provident Benefit Plan as a result of the
transactions contemplated by this Agreement.
(vi) Since the date of the most recent audited financial
statements included in the Provident Filed SEC Documents, there has not
been any adoption or amendment in any material respect by Provident or any
of its subsidiaries of any collective bargaining agreement or any Provident
Benefit Plans (whether or not legally binding).
(k) Taxes. (i) Each of Provident and its subsidiaries has filed
all tax returns and reports required to be filed by it or requests for
extensions to file such returns or reports have been timely filed, granted
and have not expired, except to the extent that all such failures to file,
taken together, are not reasonably likely to have a material adverse effect
on Provident. All returns filed by Provident and each of its subsidiaries
are complete and accurate in all material respects to the knowledge of
Provident. Provident and each of its subsidiaries has paid (or Provident
has paid on its behalf) all taxes shown as due on such returns, and the
most recent financial statements contained in the Provident Filed SEC
Documents reflect an adequate reserve for all taxes payable by Provident
and its subsidiaries for all taxable periods and portions thereof accrued
through the date of such financial statements.
(ii) No deficiencies for any taxes have been proposed, asserted
or assessed against Provident or any of
its subsidiaries that are not adequately reserved for, except for
deficiencies that, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on Provident, and no requests for
waivers of the time to assess any such taxes have been granted or are
pending (other than with respect to years that are currently under
examination by the Internal Revenue Service or other applicable taxing
authorities). The statute of limitations on assessment or collection of any
taxes due from Provident or any of its subsidiaries has expired for all
taxable years of Provident or any of its subsidiaries through 1985. The
Federal income tax returns of Provident and each of its subsidiaries have
been examined by and settled with the United States Internal Revenue
Service for all years through 1985.
(iii) Neither Provident nor any of its subsidiaries has taken any
action or has any knowledge of any fact or circumstance that is reasonably
likely to prevent the transactions contemplated hereby, including the
Merger, from qualifying as a reorganization within the meaning of Section
368 of the Code.
(iv) Neither Provident nor any of its subsidiaries has
constituted either a "distributing corporation" or a "controlled
corporation" (within the meaning of Section 355(a)(1)(A) of the Code ) in a
distribution of stock qualifying for tax-free treatment under Section 355
of the Code (i) in the two years prior to the date of this Agreement or
(ii) in a distribution which could otherwise constitute part of a "plan" or
"series of related transactions" (within the meaning of Section 355(e) of
the Code) in conjunction with the Merger.
(v) The amount of gain to be recognized by Provident or any of
its subsidiaries as a result of the Merger due to "intercompany
transactions" (as defined under Treasury Regulation Section 1.1502-13) will
not exceed $75 million.
(l) No Excess Parachute Payments. No amount that could be
received (whether in cash or property or the vesting of property) as a
result of any of the transactions contemplated by this Agreement, either
alone or together with other events, by any employee, officer or director
of Provident or any of its affiliates who is a "disqualified individual"
(as such term is defined in proposed Treasury Regulation Section 1.280G-1)
under any employment, severance or termination agreement, other
compensation arrangement or Provident Benefit Plan currently in effect
would be
characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code).
(m) Compliance with Applicable Laws. (i) Each of Provident and
its subsidiaries has in effect all Federal, state, local and foreign
governmental approvals, authorizations, certificates, filings, franchises,
licenses, notices, permits and rights ("Permits") necessary for it to own,
lease or operate its assets and to carry on its business as now conducted,
and there has occurred no default under or limitation with respect to any
such Permit, except for the lack of Permits and for defaults or limitations
under Permits which, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on Provident. To the knowledge of
Provident, Provident and its subsidiaries are, and have been, in compliance
with all applicable statutes, laws, ordinances, rules, orders and
regulations of any Governmental Entity, including Insurance Laws, except
for instances of noncompliance which, individually or in the aggregate, are
not reasonably likely to have a material adverse effect on Provident. To
the knowledge of Provident, the businesses and operations of each of
Provident and its subsidiaries are being and have been conducted in
compliance in all respects with all applicable Insurance Laws, except for
instances of noncompliance which, individually or in the aggregate, are not
reasonably likely to have a material adverse effect on Provident. No
investigation, examination or review by any Governmental Entity with
respect to Provident or any of its subsidiaries is pending or, to the
knowledge of Provident, threatened, nor has any Governmental Entity
indicated an intention to conduct the same, except for those the outcome of
which, individually or in the aggregate, are not reasonably likely to have
a material adverse effect on Provident.
(ii) To the knowledge of Provident, the businesses of each of
Provident and its subsidiaries are being and have been conducted in
compliance in all respects with all applicable statutes, laws, ordinances,
rules, orders and regulations which are administered, interpreted or
enforced by the U.S. Environmental Protection Agency and state and local
agencies with jurisdiction over pollution or protection of the environment
(collectively, "Environmental Laws"), except for instances of noncompliance
which, individually or in the aggregate, are not reasonably likely to have
a material adverse effect on Provident.
(iii) There is no suit, action, proceeding or inquiry pending or,
to the knowledge of Provident, threatened before any court, governmental
agency or
authority or other forum in which Provident or any of its subsidiaries has
been or, with respect to threatened suits, actions and proceedings, may be
named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release
into the environment of any Hazardous Material (as hereinafter defined),
whether or not occurring at, on, under or involving a site owned, leased or
operated by Provident or any of its subsidiaries, except for any such
suits, actions, proceedings and inquiries which, individually or in the
aggregate, are not reasonably likely to have a material adverse effect on
Provident.
(iv) During the period of ownership or operation by Provident and
its subsidiaries of any of their respective current properties, there have
been no releases of Hazardous Material in, on, under or affecting such
properties or, to the knowledge of Provident, any surrounding site, except
in each case for those which, individually or in the aggregate, are not
reasonably likely to have a material adverse effect on Provident. Prior to
the period of ownership or operation by Provident and its subsidiaries of
any of their respective current properties, to the knowledge of Provident,
there were no releases of Hazardous Material in, on, under or affecting any
such property or any surrounding site, except in each case for those which,
individually or in the aggregate, are not reasonably likely to have a
material adverse effect on Provident. "Hazardous Material" shall mean any
waste or other substance regulated under any Environmental Law including
any hazardous substance within the meaning of the Comprehensive
Environmental Response, Compensation, and Liability Act, or any similar
Federal, state or local law.
(v) Provident is not subject to any order, decree, injunction or
other arrangement with any Governmental Entity or any indemnity or other
agreement with any third party relating to liability under any
Environmental Law or relating to any Hazardous Substance except for any
such order, decree, injunction, arrangement, indemnity or other agreement
which, individually or in the aggregate, is not reasonably likely to have a
material adverse effect on Provident.
(n) Voting Requirements. The affirmative vote at the Provident
stockholders meeting (the "Provident Stockholder Approval") of (i) the
holders of sixty six and two-thirds percent of the voting power of all
outstanding shares of Provident Common Stock at the Provident Stockholders
Meeting to (A) adopt this Agreement is the only vote of the holders of any
class or series of Provident's
capital stock necessary to approve and adopt this Agreement, the Option
Agreements and, other than the Reverse Stock Split and the transaction
contemplated by clause (ii) below, the transactions contemplated hereby and
thereby and (B) adopt an amendment to the Provident Amended and Restated
Certificate of Incorporation to effect a reclassification of the Provident
Common Stock (the "Reverse Stock Split") such that, immediately prior to
the Effective Time, each issued and outstanding share of Provident Common
Stock shall be automatically reclassified and converted into (assuming the
effectiveness of the Merger) 0.730 (the "Ratio") of a validly issued, fully
paid and nonassessable share of Surviving Corporation Common Stock (with
the resulting number of shares of each registered holder of Provident
Common Stock being rounded down to the nearest whole number and with each
such registered holder being entitled to receive from Provident in lieu of
any fractional shares of Surviving Corporation Common Stock prior to such
rounding down an amount in cash (without interest) equal to the product
obtained by multiplying (x) the fraction of a share of Surviving
Corporation Common Stock to which such holder (after taking into account
all shares of Provident Common Stock held immediately prior to the
Effective Time by such holder) would otherwise be entitled to and (y) the
closing price per share of UNUM Common Stock on the NYSE on the last
trading day prior to the date on which the Effective Time occurs) and (ii)
the holders of a majority of all shares of Provident Common Stock casting
votes (provided that the total vote cast represents more than fifty percent
in interest of all capital stock of Provident entitled to vote) is the only
vote of the holders of any class or series of Provident's capital stock
necessary to approve, in accordance with the applicable rules of the NYSE,
the issuance of Surviving Corporation Common Stock in the Merger.
(o) State Takeover Statutes. Provident has caused Section 203 of
the DGCL not to be applicable to Provident by opting out of the provisions
of such Section 203 in its Amended and Restated Certificate of
Incorporation in accordance with the DGCL. To the knowledge of Provident,
no other state takeover statute, and no anti-takeover provision in
Provident's Amended and Restated Certificate of Incorporation and By-laws,
is applicable to the Merger or the other transactions contemplated by this
Agreement, the Option Agreements and the Stockholders Agreement.
(p) Brokers. No broker, investment banker, financial adviser or
other person, other than ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., the fees and expenses
of which will be paid by
Provident, is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf
of Provident. Provident has delivered to UNUM true and complete copies of
all agreements under which any such fees or expenses are payable and all
indemnification and other agreements related to the engagement of the
persons to whom such fees are payable.
(q) Opinion of Financial Advisor. Provident has received an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., dated as of the date hereof, that the
Ratio (taking into account the Merger) is fair, from a financial point of
view, to the holders of shares of Provident Common Stock, a copy of which
opinion has been, or promptly upon receipt thereof will be, delivered to
UNUM.
(r) Accounting Matters. Provident has disclosed to its independent
public accountants all actions taken by it, its subsidiaries or its
affiliates that would impact the accounting of the business combination to
be effected by the Merger as a pooling of interests. As of the date hereof,
Provident, based on advice from its independent public accountants,
believes that the Merger will qualify for "pooling of interests"
accounting.
(s) Material Contracts. Other than contracts or amendments
thereto that are required to be filed and have been filed as an Exhibit to
the Provident Form 10-K, there are no contracts or agreements that are
material to the business, financial position or results of operations of
Provident, including (A) any employment, severance, termination, consulting
or retirement contract providing for aggregate payments to any individual
in any calendar year in excess of $250,000, (B) any contract relating to
the borrowing of money or the guarantee of any such obligation (other than
contracts evidencing fully secured repurchase agreements, trade payables,
and contracts relating to borrowings or guarantees made in the ordinary
course of business), (C) any agency, third party administrator, management
or other service contracts and (D) any material contract or agreement
between or among Provident and its subsidiaries.
(t) Intellectual Property. (i) Except as, individually or in the
aggregate, is not reasonably likely to have a material adverse effect on
Provident: Provident does not have knowledge of any valid grounds for any
bona fide claims (A) to the effect that the manufacture, sale, licensing or
use of any product as now used, sold or
licensed or proposed for use, sale or license by Provident or any of its
subsidiaries, infringes on any copyright, patent, trademark, trade name,
service ▇▇▇▇ or trade secret; (B) against the use by Provident or any of
its subsidiaries, of any copyrights, patents, trademarks, trade names,
service marks, trade secrets, technology, know-how or computer software
programs and applications used in the business of Provident or any of its
subsidiaries as currently conducted or as proposed to be conducted; (C)
challenging the ownership, validity or effectiveness of any of the
Provident Intellectual Property Rights or other trade secret material to
Provident; or (D) challenging the license or legally enforceable right to
use of the Third-Party Intellectual Rights by Provident or any of its
subsidiaries.
(ii) As used in this Agreement, the term (x) "Intellectual
Property" means all patents, trademarks, trade names, service marks,
copyrights and any applications, therefor, technology, know-how, computer
software programs or applications, and tangible or intangible proprietary
information or materials, trademarks, trade names, service marks and
copyrights; and (y) "Third-Party Intellectual Property Rights" means
Intellectual Property owned by any third party; and (z) "Provident
Intellectual Property Rights" means the Intellectual Property owned by
Provident or any of its subsidiaries.
(u) No Regulatory Disqualifications. To the knowledge of
Provident, no event has occurred or condition exists or, to the extent it
is within the reasonable control of Provident, will occur or exist with
respect to Provident that, in connection with obtaining any regulatory
consents required for the Merger, would cause Provident to fail to satisfy
any applicable statute or written regulation of any applicable insurance
regulatory authority that, individually or in the aggregate, is reasonably
likely to have a material adverse effect on Provident.
(v) Reinsurance, etc. Provident has no reason to believe that any
material amount recoverable pursuant to any material reinsurance,
coinsurance, excess insurance, ceding of insurance, assumption of insurance
or indemnification with respect to insurance or similar material
arrangements (collectively, "Reinsurance Agreements") applicable to the
Provident Insurance Subsidiaries or their properties or assets reflected in
the Provident SAP Statements is not fully collectible in due course. Each
Provident Insurance Subsidiary is entitled to take full credit in its SAP
Statements pursuant to Insurance Laws, rules and regulations for such
reinsurance, coinsurance or excess insurance ceded pursuant to any such
Reinsurance Agreement.
There are no assumption reinsurance contracts or arrangements entered
into by any Provident Insurance Subsidiary in which such Provident
Insurance Subsidiary has ceded risk to any other person which are material
individually or in the aggregate to Provident and its subsidiaries taken as
a whole.
(w) Year 2000. All computer systems and computer software used by
Provident or any of its subsidiaries (i) recognize or are being adapted so
that, prior to December 31, 1999, they shall recognize the advent of the
year A.D. 2000 without any adverse change in operation associated with such
recognition, (ii) can correctly recognize or are being adapted so that they
can correctly recognize and manipulate date information relating to dates
before, on or after January 1, 2000, including but not limited to accepting
date input, performing calculations on dates or portion of dates and
providing date output, and the operation and functionality of such computer
systems and such computer software will not be adversely affected by the
advent of the year A.D. 2000 or any manipulation of data featuring
information relating to dates before, on or after January 1, 2000, and
(iii) can suitably interact with other computer systems and computer
software in a way that does not compromise (y) its ability to correctly
recognize the advent of the year A.D. 2000 or (z) its ability to correctly
recognize and manipulate date information relating to dates before, on or
after January 1, 2000 (the operations of clauses (i), (ii) and (iii)
together, "Millennium Functionality"), except in each case for such
computer systems and computer software, the failure of which to achieve
Millennium Functionality, individually or in the aggregate, is not
reasonably likely to have a material adverse effect on Provident. To the
knowledge of Provident as of the date hereof, the costs of the adaptions
necessary to achieve Millennium Functionality are not reasonably likely to
have a material adverse effect on Provident. Provident is in compliance
with all applicable state insurance department requests for "Year 2000"
filings.
SECTION 3.02. Representations and Warranties of UNUM. Except as
disclosed in the UNUM Filed SEC Documents (as defined in Section 3.02(g))
or as set forth on the Disclosure Schedule dated the date hereof and
delivered by UNUM to Provident in connection with the execution of this
Agreement (the "UNUM Disclosure Schedule"), UNUM represents and warrants to
Provident as follows:
(a) Organization, Standing and Corporate Power. Each of UNUM and
its subsidiaries is a corporation duly organized, validly existing and in
good standing under the
laws of the respective jurisdiction in which it is incorporated and has the
requisite corporate power and authority to carry on its business as now
being conducted. Each of Provident and its subsidiaries is duly qualified
or licensed to do business and is in good standing in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified or licensed,
individually or in the aggregate, is not reasonably likely to have a
material adverse effect (as defined in Section 8.03) on Provident.
Provident has made available to UNUM prior to the date hereof complete and
correct copies of its Amended and Restated Certificate of Incorporation and
By-laws and the certificates of incorporation and by-laws of its
subsidiaries, in each case as amended to the date hereof.
(b) Subsidiaries. Exhibit 21 to UNUM's Annual Report on Form 10-K
for the year ended December 31, 1997 (the "UNUM Form 10-K"), lists each
subsidiary of UNUM which as of the date of this Agreement is a Significant
Subsidiary (as defined in Rule 1-02 of Regulation S-X of the SEC). All the
outstanding shares of capital stock of, or other ownership interests in,
each such Significant Subsidiary have been validly issued and are fully
paid and nonassessable and are owned directly or indirectly by UNUM, free
and clear of all liens and free of any other restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or such other ownership interest). Except for the capital stock of,
or other ownership interests in, its Significant Subsidiaries noted above,
UNUM does not own, directly or indirectly, any capital stock or other
ownership interest in any corporation, partnership, limited liability
company, joint venture or other entity constituting a Significant
Subsidiary.
(c) Capital Structure. The authorized capital stock of UNUM
consists of 240,000,000 shares of UNUM Common Stock and 10,000,000 shares
of preferred stock, par value $.10 per share. At the close of business on
November 17, 1998, (i) 138,510,774 shares of UNUM Common Stock and no
shares of preferred stock were issued and outstanding (ii) 61,465,142
shares of UNUM Common Stock were held by UNUM in its treasury, and (iii)
1,000,000 shares of Junior Participating Preferred Stock, Series A, were
reserved for issuance in connection with the rights (the "UNUM Rights") to
purchase shares of Junior Participating Preferred Stock, Series A, issued
pursuant to the Rights Agreement dated as of March 13, 1992, as amended
(the "UNUM Rights Agreement"), between UNUM and First Chicago Trust Company
of New York, as
Right Agent. As of November 17, 1998, collectively, 10,242,262 shares of
UNUM Common Stock were subject to options ("UNUM Stock Options") granted
under the 1998 Goals Stock Option Plan, 1996 Long-Term Stock Incentive
Plan, 1990 Long-Term Stock Incentive Plan and the 1987 Executive Stock
Option Plan of UNUM (collectively, the "UNUM Stock Plans"). As of November
17, 1998, there were 15,857,738 shares of UNUM Common Stock reserved for
issuance under the UNUM Stock Plans. Except as set forth above, at the
close of business on November 17, 1998, no shares of capital stock or other
voting securities of UNUM were issued, reserved for issuance or
outstanding. There are no outstanding SARs or rights (other than the UNUM
Stock Options) to receive shares of UNUM Common Stock on a deferred basis
granted under the UNUM Stock Plans or otherwise. Schedule 3.02(c) of the
UNUM Disclosure Schedule sets forth a true and complete list, as of
November 17, 1998, of all UNUM Stock Options, the number of shares subject
to each such option, the grant dates and the exercise prices thereof. All
outstanding shares of capital stock of UNUM are, and all shares which may
be issued pursuant to the UNUM Stock Plans will be, when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to
preemptive rights. As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of UNUM having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of UNUM may vote are issued or
outstanding. Except as set forth above, as of the date of this Agreement,
there are no preemptive or other outstanding securities, options, warrants,
calls, rights, conversion rights, redemption rights, repurchase rights,
commitments, agreements, arrangements or undertakings of any kind to which
UNUM or any of its subsidiaries is a party or by which any of them is bound
obligating UNUM or any of its subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock
or other voting securities of UNUM or any of its subsidiaries, or giving
any person a right to subscribe for or acquire, any securities of UNUM or
any of its subsidiaries, or obligating UNUM or any of its subsidiaries to
issue, grant, extend or enter into any such security, option, warrant,
call, right, conversion right, redemption right, repurchase right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations of UNUM or any of its subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock of UNUM or any of
its subsidiaries. There are no outstanding contractual obligations of UNUM
to vote or to dispose of any shares of the capital stock of any of its
subsidiaries.
(d) Authority; Noncontravention. (i) UNUM has all requisite
corporate power and authority to enter into this Agreement, the Option
Agreements and the Stockholders Agreement and, subject to receipt of the
UNUM Stockholder Approval (as defined in Section 3.02(n)), to consummate
the transactions contemplated by this Agreement, the Option Agreements and
the Stockholders Agreement. The execution and delivery of this Agreement,
the Option Agreements and the Stockholders Agreement by UNUM and the
consummation of the transactions contemplated by this Agreement, the Option
Agreements and the Stockholders Agreement have been duly authorized by all
necessary corporate action on the part of UNUM, subject to receipt of the
UNUM Stockholder Approval in the case of this Agreement. This Agreement,
the Option Agreements and the Stockholders Agreement have been duly
executed and delivered by UNUM, and, assuming the due execution and
delivery of each such agreement by the counterparties thereto, each such
agreement constitutes a valid and binding obligation of UNUM as to
obligations therein, enforceable against UNUM in accordance with its terms.
The execution and delivery of this Agreement, the Option Agreements and the
Stockholders Agreement do not, and the consummation of the transactions
contemplated by this Agreement, the Option Agreements and the Stockholders
Agreement and compliance with the provisions of this Agreement, the Option
Agreements and the Stockholders Agreement by UNUM will not, conflict with,
or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material
benefit under, or result in the creation of any lien upon any of the
properties or assets of UNUM or any of its subsidiaries under, (A) the
Certificate of Incorporation or By-laws of UNUM or the comparable charter
or organizational documents of any of its subsidiaries, (B) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise or license applicable
to UNUM or any of its subsidiaries or their respective properties or assets
or (C) subject to the governmental filings and other matters referred to in
the following sentence, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to UNUM or any of its subsidiaries
or their respective properties or assets, other than, in the case of
clauses (B) and (C), any such conflicts, violations, defaults, obligations,
losses, rights, liens, judgments, orders, decrees, statutes, laws,
ordinances, rules or regulations that, individually or in the aggregate,
are not reasonably likely to have a material adverse effect on UNUM. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any Governmental
Entity is required by or with respect to UNUM or any of its subsidiaries
in connection with the execution and delivery of this Agreement, the Option
Agreements and the Stockholders Agreement by UNUM or the consummation by
UNUM of any of the transactions contemplated by this Agreement, the Option
Agreements or the Stockholders Agreement, except for (A) the filing of a
premerger notification and report form by UNUM under the HSR Act; (B) the
filing with the SEC of (x) the Joint Proxy Statement relating to the UNUM
Stockholders Meeting and (y) such reports under Section 13(a), 13(d), 15(d)
or 16(a) of the Exchange Act as may be required in connection with this
Agreement, the Option Agreements, the Stockholders Agreement and the
transactions contemplated hereby and thereby; (C) the filing with the
Delaware Secretary of State of (x) an amendment to the Amended and Restated
Certificate of Incorporation of Provident to effect the Reverse Stock Split
immediately prior to the occurrence of the Effective Time and (y) the
Certificate of Merger, and the filing of appropriate documents with the
relevant authorities of other states in which UNUM is qualified to do
business and such filings with Governmental Entities to satisfy the
applicable requirements of state securities or "blue sky" laws; (D) the
State Insurance Approvals; (E) filings with and approvals of the Insurance
Directorate of the Treasury of the United Kingdom (the "UK Insurance
Approval"), and filings or other approvals, if any, required by any
Japanese Governmental Entity (the "Japanese Insurance Approval, and
together with the UK Insurance Approval and the Designated State Insurance
Approvals, the "Designated Insurance Approvals"); (F) notification under
the Competition Act (Canada) and other relevant Canadian approvals and (G)
such consents, approvals, orders or authorizations the failure of which to
be made or obtained, individually or in the aggregate, is not reasonably
likely to have a material adverse effect on UNUM.
(ii) As of the date hereof, the Board of Directors of UNUM has
approved and declared advisable this Agreement and the Merger, and has
approved the Option Agreements, the Stockholders Agreement and the other
transactions contemplated by this Agreement, the Option Agreements and the
Stockholders Agreement.
(e) SEC Documents; Undisclosed Liabilities; SAP Statements. (i)
UNUM has filed all required reports, schedules, forms, statements and other
documents with the SEC since January 1, 1997 (including all filed reports,
schedules, forms, statements and other documents whether or not required,
the "UNUM SEC Documents"). As of their respective dates, the UNUM SEC
Documents complied in all
material respects with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such UNUM SEC Documents, and none of
the UNUM SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the extent that
information contained in any UNUM SEC Document has been revised or
superseded by a later filed UNUM SEC Document, none of the UNUM SEC
Documents contains any untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of UNUM included
in the UNUM SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with U.S.
generally accepted accounting principles (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position of UNUM and
its consolidated subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end
adjustments). Except for liabilities and obligations incurred in the
ordinary course of business consistent with past practice since the date of
the most recent consolidated balance sheet included in the UNUM SEC
Documents, neither UNUM nor any of its subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by U.S. generally accepted accounting principles to be
recognized or disclosed on a consolidated balance sheet of UNUM and its
consolidated subsidiaries or in the notes thereto.
(ii) UNUM conducts its material insurance operations through UNUM
Life Insurance Company of America, First UNUM Life Insurance Company and
Colonial Life and Accident Insurance Company (collectively, the "UNUM
Insurance Subsidiaries"). Each of the UNUM Insurance Subsidiaries has filed
all annual and quarterly statements, together with all exhibits,
interrogatories, notes, schedules and any actuarial opinions, affirmations
or certifications or other supporting documents in connection therewith,
required to be filed with or submitted to the appropriate regulatory
authorities of the jurisdiction in
which it is domiciled or commercially domiciled on forms prescribed or
permitted by such authority (collectively, the "UNUM SAP Statements"). UNUM
has delivered or made available to Provident all UNUM SAP Statements for
each UNUM Insurance Subsidiary for the periods beginning January 1, 1996,
each in the form (including exhibits, annexes and any amendments thereto)
filed with the applicable state insurance regulatory agency. Financial
statements included in the UNUM SAP Statements and prepared on a statutory
basis, including the notes thereto, were prepared in conformity with
statutory accounting practices prescribed or permitted by the applicable
insurance regulatory authority consistently applied for the periods covered
thereby and present fairly the statutory financial position of such UNUM
Insurance Subsidiaries as at the respective dates thereof and the results
of operations of such UNUM Insurance Subsidiaries for the respective
periods then ended. The UNUM SAP Statements complied in all material
respects with all applicable laws, rules and regulations when filed, and no
material deficiency has been asserted with respect to any UNUM SAP
Statements by the applicable insurance regulatory body or any other
governmental agency or body. Except as indicated therein, all assets that
are reflected on UNUM SAP Statements comply with the Insurance Laws with
respect to admitted assets and are in an amount at least equal to the
minimum amounts required by the Insurance Laws. The statutory balance
sheets and income statements included in the UNUM SAP Statements have been
audited by PricewaterhouseCoopers LLP and UNUM has delivered or made
available to Provident true and complete copies of all audit opinions
related thereto for periods beginning January 1, 1996. As promptly as
practicable following the date of this Agreement, UNUM will deliver or make
available to Provident true and complete copies of all examination reports
of insurance departments and any insurance regulatory agencies received by
UNUM on or after January 1, 1996 relating to UNUM Insurance Subsidiaries.
(f) Information Supplied. No statement, certificate, instrument
or other writing furnished or to be furnished by UNUM or any affiliate
thereof to Provident pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any
untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the information
supplied or to be supplied by UNUM for inclusion or incorporation by
reference in (i) the Form S-4 will, at the time the Form S-4 is filed with
the SEC, at any time it is amended or supplemented or at the time it
becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading or (ii) the Joint Proxy Statement will,
at the date the Joint Proxy Statement is first mailed to UNUM's
stockholders or at the time of the UNUM Stockholders Meeting, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Joint Proxy Statement will comply as to form in all
material respects with the requirements of the Exchange Act and the rules
and regulations promulgated thereunder, except that no representation or
warranty is made by UNUM with respect to statements made or incorporated by
reference therein based on information supplied by Provident specifically
for inclusion or incorporation by reference in the Joint Proxy Statement.
(g) Absence of Certain Changes or Events. Except as disclosed in
the UNUM SEC Documents filed and publicly available prior to the date of
this Agreement (as amended to the date of this Agreement, the "UNUM Filed
SEC Documents"), since the date of the most recent audited financial
statements included in the UNUM Filed SEC Documents, UNUM has conducted its
business only in the ordinary course, and there has not been (i) since such
date, any material adverse change in UNUM, (ii) except for regular
quarterly cash dividends not in excess of $.14 3/4 per share declared on
UNUM Common Stock and subject to Section 4.01(c), any declaration, setting
aside or payment of any dividend or other distribution (whether in cash,
stock or property) with respect to any of UNUM's capital stock, (iii) any
split, combination or reclassification of any of its capital stock or any
issuance or the authorization of any issuance of any other securities in
respect of, in lieu of or in substitution for, shares of its capital stock,
(iv) (x) any granting by UNUM or any of its subsidiaries to any director,
executive officer or key employee of UNUM or any of its subsidiaries of any
award or incentive payment or increase in compensation or benefits, except
in the ordinary course of business consistent with past practice or as was
required under employment agreements in effect as of the date of this
Agreement (copies of which have been made available to Provident), (y) any
granting by UNUM or any of its subsidiaries to any such director, executive
officer or key employee of any increase in severance or termination pay,
except as was required under any employment, severance or termination
agreements in effect as of the date of this Agreement (copies of which have
been made available to Provident), or (z) any entry by
UNUM or any of its subsidiaries into any employment, severance or
termination agreement with any such director, executive officer or key
employee or (v) any change in accounting methods, principles or practices
by UNUM materially affecting its assets, liabilities or business, except
insofar as may have been required by a change in U.S. generally accepted
accounting principles.
(h) Litigation. There is no suit, action or proceeding pending
or, to the knowledge of UNUM, threatened against or affecting UNUM or any
of its subsidiaries that, individually or in the aggregate, is reasonably
likely to have a material adverse effect on UNUM nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator
outstanding against UNUM or any of its subsidiaries having, or which is
reasonably likely to have, individually or in the aggregate, a material
adverse effect on UNUM; provided that, for purposes of this paragraph (h),
any such suit, action, proceeding, judgment, decree, injunction, rule or
order arising after the date hereof shall not be deemed to have a material
adverse effect on UNUM if and to the extent such suit, action, proceeding,
judgment, decree, injunction, rule or order (or any relevant part thereof)
is based on this Agreement, the Option Agreements or the Stockholders
Agreement or the transactions contemplated hereby or thereby.
(i) Labor Relations. Neither UNUM nor any of its subsidiaries is
the subject of any suit, action or proceeding which is pending or, to the
knowledge of UNUM, threatened, asserting that UNUM or any of its
subsidiaries has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or applicable state statutes) or is
seeking to compel it to bargain with any labor union or labor organization,
nor is there pending or, to the knowledge of UNUM, threatened, nor has
there been for the past five years, any labor strike, dispute, walk- out,
work stoppage, slow-down, lockout or organizational effort involving UNUM
or any of its subsidiaries that, individually or in the aggregate, is
reasonably likely to have a material adverse effect on UNUM.
(j) Benefit Plans. (i) Schedule 3.02(j) contains a list and brief
description of all "employee pension benefit plans" (as defined in Section
3(2) of ERISA) (sometimes collectively referred to herein as "UNUM Pension
Plans"), "employee welfare benefit plans" (as defined in Section 3(l) of
ERISA, hereinafter a "Welfare Plan"), severance, termination, change in
control, incentive compensation profit sharing stock option, stock
purchase, stock ownership, phantom stock, deferred compensation plans,
and other employee fringe benefit plans or arrangements maintained,
contributed to or required to be maintained or contributed to by UNUM or
its subsidiaries for the benefit of any present or former officers,
employees, directors or independent contractors of UNUM or any of its
subsidiaries (all the foregoing being herein called "UNUM Benefit Plans").
UNUM has made available to Provident true, complete and correct copies of
(1) each UNUM Benefit Plan (or, in the case of any unwritten Benefit Plans,
descriptions thereof), (2) the most recent annual report on Form 5500 filed
with the Internal Revenue Service with respect to each UNUM Benefit Plan
(if any such report was required by applicable law), (3) the most recent
summary plan description for each UNUM Benefit Plan for which such a
summary plan description is required by applicable law and (4) each
currently effective trust agreement and insurance or annuity contract
relating to any UNUM Benefit Plan.
(ii) Each UNUM Benefit Plan has been administered in accordance
with its terms except for any failure so to administer as, individually or
in the aggregate, is not reasonably likely to have a material adverse
effect on UNUM. UNUM, its subsidiaries and all the UNUM Benefit Plans are
in compliance with the applicable provisions of ERISA, the Code and other
applicable laws as to the UNUM Benefit Plans except for any failure so to
be in compliance as, individually or in the aggregate, is not reasonably
likely to have a material adverse effect on UNUM.
(iii) With respect to the UNUM Benefit Plans, individually and in
the aggregate, no event has occurred and, to the knowledge of UNUM, there
exists no condition or set of circumstances, in connection with which UNUM
or any of its subsidiaries could be subject to any liability that is
reasonably likely to have a material adverse effect on UNUM under ERISA,
the Code or any other applicable law.
(iv) Each UNUM Pension Plan that is intended to comply with the
provisions of Section 401(a) of the Code has been the subject of a
determination letter from the Internal Revenue Service to the effect that
such UNUM Pension Plan is qualified and exempt from Federal income taxes
under Sections 401(a) and 501(a), respectively, of the Code; no such
determination letter has been revoked, and, to the knowledge of UNUM,
revocation has not been threatened; and no amendment to such UNUM Pension
Plan as to which the remedial amendment period has expired would adversely
affect its qualification or, materially increase its cost. UNUM has made
available to Provident a copy of the most recent determination letter
received with respect to each UNUM Pension Plan for which such a letter has
been issued, as
well as a copy of any pending application for a determination letter.
Schedule 3.02(j) lists all UNUM Pension Plan amendments as to which a
favorable determination letter has not yet been received.
(v) No employee of UNUM will be entitled to any additional
benefits or any acceleration of the time of payment, funding or vesting of
any benefits under any UNUM Benefit Plan as a result of the transactions
contemplated by this Agreement.
(vi) Since the date of the most recent audited financial
statements included in the UNUM Filed SEC Documents, there has not been any
adoption or amendment in any material respect by UNUM or any of its
subsidiaries of any collective bargaining agreement or any UNUM Benefit
Plans (whether or not legally binding).
(k) Taxes. (i) Each of UNUM and its subsidiaries has filed all
tax returns and reports required to be filed by it or requests for
extensions to file such returns or reports have been timely filed, granted
and have not expired, except to the extent that all such failures to file,
taken together, are not reasonably likely to have a material adverse effect
on UNUM. All returns filed by UNUM and each of its subsidiaries are
complete and accurate in all material respects to the knowledge of UNUM.
UNUM and each of its subsidiaries has paid (or UNUM has paid on its behalf)
all taxes shown as due on such returns, and the most recent financial
statements contained in the UNUM Filed SEC Documents reflect an adequate
reserve for all taxes payable by UNUM and its subsidiaries for all taxable
periods and portions thereof accrued through the date of such financial
statements.
(ii) No deficiencies for any taxes have been proposed, asserted
or assessed against UNUM or any of its subsidiaries that are not adequately
reserved for, except for deficiencies that, individually or in the
aggregate, are not reasonably likely to have a material adverse effect on
UNUM, and no requests for waivers of the time to assess any such taxes have
been granted or are pending (other than with respect to years that are
currently under examination by the Internal Revenue Service or other
applicable taxing authorities). The statute of limitations on assessment or
collection of any taxes due from UNUM or any of its subsidiaries has
expired for all taxable years of UNUM or any of its subsidiaries through
1991. The Federal income tax returns of UNUM and each of its subsidiaries
have been examined by and settled with the United States Internal Revenue
Service for all years through 1991.
(iii) Neither UNUM nor any of its subsidiaries has taken any
action or has any knowledge of any fact or circumstance that is reasonably
likely to prevent the transactions contemplated hereby, including the
Merger, from qualifying as a reorganization within the meaning of Section
368 of the Code.
(iv) Neither UNUM nor any of its subsidiaries has constituted
either a "distributing corporation" or a "controlled corporation" (within
the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (i) in the
two years prior to the date of this Agreement or (ii) in a distribution
which could otherwise constitute part of a "plan" or "series of related
transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(l) No Excess Parachute Payments. No amount that could be
received (whether in cash or property or the vesting of property) as a
result of any of the transactions contemplated by this Agreement, either
alone or together with other events, by any employee, officer or director
of UNUM or any of its affiliates who is a "disqualified individual" (as
such term is defined in proposed Treasury Regulation Section 1.280G-1)
under any employment, severance or termination agreement, other
compensation arrangement or UNUM Benefit Plan currently in effect would be
characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code).
(m) Compliance with Applicable Laws. (i) Each of UNUM and its
subsidiaries has in effect all Permits necessary for it to own, lease or
operate its assets and to carry on its business as now conducted, and there
has occurred no default under or limitation with respect to any such
Permit, except for the lack of Permits and for defaults or limitations
under Permits which, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on UNUM. To the knowledge of UNUM,
UNUM and its subsidiaries are, and have been, in compliance with all
applicable statutes, laws, ordinances, rules, orders and regulations of any
Governmental Entity, including Insurance Laws, except for instances of
noncompliance which, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on UNUM. To the knowledge of UNUM,
the businesses and operations of each of UNUM and its subsidiaries are
being and have been conducted in compliance in all respects with all
applicable Insurance Laws, except for instances of noncompliance which,
individually or in the aggregate, are not reasonably likely
to have a material adverse effect on UNUM. No investigation, examination
or review by any Governmental Entity with respect to UNUM or any of its
subsidiaries is pending or, to the knowledge of UNUM, threatened, nor has
any Governmental Entity indicated an intention to conduct the same, except
for those the outcome of which, individually or in the aggregate, are not
reasonably likely to have a material adverse effect on UNUM.
(ii) To the knowledge of UNUM, the businesses of each of UNUM and
its subsidiaries are being and have been conducted in compliance in all
respects with all applicable Environmental Laws, except for instances of
noncompliance which, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on UNUM.
(iii) There is no suit, action, proceeding or inquiry pending or,
to the knowledge of UNUM, threatened before any court, governmental agency
or authority or other forum in which UNUM or any of its subsidiaries has
been or, with respect to threatened suits, actions and proceedings, may be
named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the release
into the environment of any Hazardous Material, whether or not occurring
at, on, under or involving a site owned, leased or operated by UNUM or any
of its subsidiaries, except for any such suits, actions, proceedings and
inquiries which, individually or in the aggregate, are not reasonably
likely to have a material adverse effect on UNUM.
(iv) During the period of ownership or operation by UNUM and its
subsidiaries of any of their respective current properties, there have been
no releases of Hazardous Material in, on, under or affecting such
properties or, to the knowledge of UNUM, any surrounding site, except in
each case for those which, individually or in the aggregate, are not
reasonably likely to have a material adverse effect on UNUM. Prior to the
period of ownership or operation by UNUM and its subsidiaries of any of
their respective current properties, to the knowledge of UNUM, there were
no releases of Hazardous Material in, on, under or affecting any such
property or any surrounding site, except in each case for those which,
individually or in the aggregate, are not reasonably likely to have a
material adverse effect on UNUM.
(v) UNUM is not subject to any order, decree, injunction or other
arrangement with any Governmental Entity or any indemnity or other
agreement with any third party relating to liability under any
Environmental Law or relating to any Hazardous Substance except for any
such
order, decree, injunction, arrangement, indemnity or other agreement
which, individually or in the aggregate, is not reasonably likely to have a
material adverse effect on UNUM.
(n) Voting Requirements. The affirmative vote at the UNUM
Stockholders Meeting (the "UNUM Stockholder Approval") of the holders of a
majority of the voting power of all outstanding shares of UNUM Common Stock
is the only vote of the holders of any class or series of UNUM's capital
stock necessary to approve and adopt this Agreement, the Option Agreements,
the Stockholders Agreement and the transactions contemplated hereby and
thereby.
(o) State Takeover Statutes; Certificate of Incorporation. The
Board of Directors of UNUM (including the disinterested directors thereof
(as defined in Article EIGHTH of the UNUM Certificate of Incorporation))
has unanimously approved the terms of this Agreement, the Option Agreements
and the Stockholders Agreement and the consummation of the Merger and the
other transactions contemplated by this Agreement, the Option Agreements
and the Stockholders Agreement and, assuming the accuracy of Provident's
representation and warranty contained in Section 3.01(n), such approval
constitutes approval of the Merger and the other transactions contemplated
by this Agreement, the Option Agreements and the Stockholders Agreement by
the UNUM Board of Directors under the provisions of Section 203 of the DGCL
and Article EIGHTH of the UNUM Certificate of Incorporation, and represents
all the actions necessary to ensure that such Section 203 and the
provisions of Article EIGHTH of the UNUM Certificate of Incorporation do
not apply to Provident in connection with the Merger and the other
transactions contemplated by this Agreement, by the Option Agreements and
by the Stockholders Agreement. To the knowledge of UNUM, no other state
takeover statute, and no other anti-takeover provision in the UNUM
Certificate of Incorporation or By-laws is applicable to the Merger or the
other transactions contemplated by this Agreement, the Option Agreements
and the Stockholders Agreement.
(p) Brokers. No broker, investment banker, financial adviser or
other person, other than ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co., the fees and
expenses of which will be paid by UNUM, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of UNUM. UNUM has delivered to Provident
true and complete copies of all agreements under which any such fees or
expenses are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees are payable.
(q) Opinion of Financial Advisor. UNUM has received an opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ & Co., dated as of the date hereof, that the
Ratio (taking into account the Merger), is fair, from a financial point of
view, to the holders of shares of UNUM Common Stock, a copy of which
opinion has been, or promptly upon receipt thereof will be, delivered to
Provident.
(r) Accounting Matters. UNUM has disclosed to its
independent public accountants all actions taken by it, its subsidiaries or
its affiliates that would impact the accounting of the business combination
to be effected by the Merger as a pooling of interests. As of the date
hereof, UNUM, based on advice from its independent public accountants,
believes that the Merger will qualify for "pooling of interests"
accounting.
(s) Material Contracts. Other than contracts or amendments
thereto that are required to be filed and have been filed as an Exhibit to
the UNUM Form 10-K, there are no contracts or agreements that are material
to the business, financial position or results of operations of UNUM,
including (A) any employment, severance, termination, consulting or
retirement contract providing for aggregate payments to any individual in
any calendar year in excess of $250,000, (B) any contract relating to the
borrowing of money or the guarantee of any such obligation (other than
contracts evidencing fully secured repurchase agreements, trade payables,
and contracts relating to borrowings or guarantees made in the ordinary
course of business), (C) any agency, third party administrator, management
or other service contracts and (D) any material contract or agreement
between or among UNUM and its subsidiaries.
(t) Intellectual Property. (i) Except as, individually or in the
aggregate, is not reasonably likely to have a material adverse effect on
UNUM: UNUM does not have knowledge of any valid grounds for any bona fide
claims (A) to the effect that the manufacture, sale, licensing or use of
any product as now used, sold or licensed or proposed for use, sale or
license by UNUM or any of its subsidiaries, infringes on any copyright,
patent, trademark, trade name, service ▇▇▇▇ or trade secret; (B) against
the use by UNUM or any of its subsidiaries, of any copyrights, patents,
trademarks, trade names, service marks, trade secrets, technology, know-how
or computer software programs and applications used in the business of UNUM
or any of its
subsidiaries as currently conducted or as proposed to be conducted; (C)
challenging the ownership, validity or effectiveness of any of the UNUM
Intellectual Property Rights or other trade secret material to UNUM; or (D)
challenging the license or legally enforceable right to use of the
Third-Party Intellectual Rights by UNUM or any of its subsidiaries.
(ii) As used in this Agreement, "UNUM Intellectual Property
Rights" means the Intellectual Property owned by UNUM or any of its
subsidiaries.
(u) No Regulatory Disqualifications. To the knowledge of UNUM, no
event has occurred or condition exists or, to the extent it is within the
reasonable control of UNUM, will occur or exist with respect to UNUM that,
in connection with obtaining any regulatory consents required for the
Merger, would cause UNUM to fail to satisfy any applicable statute or
written regulation of any applicable insurance regulatory authority that,
individually or in the aggregate, is reasonably likely to have a material
adverse effect on UNUM.
(v) Reinsurance, etc. UNUM has no reason to believe that any
material amount recoverable pursuant to any Reinsurance Agreement
applicable to the UNUM Insurance Subsidiaries is not fully collectible in
due course. Each UNUM Insurance Subsidiary is entitled to take full credit
in the UNUM SAP Statements pursuant to Insurance Laws, rules and
regulations for such reinsurance, coinsurance or excess insurance ceded
pursuant to any such Reinsurance Agreement. There are no assumption
reinsurance contracts or arrangements entered into by any UNUM Insurance
Subsidiary in which such UNUM Insurance Subsidiary has ceded risk to any
other person which are material individually or in the aggregate to UNUM
and its subsidiaries taken as a whole.
(w) UNUM Rights Agreement. The UNUM Rights Agreement has been
amended (the "UNUM Rights Plan Amendment") (i) to render the UNUM Rights
Agreement inapplicable to the Merger and the other transactions
contemplated by this Agreement, the Option Agreements and the Stockholders
Agreement and (ii) to ensure that (1) Provident is not deemed to be an
Acquiring Person (as defined in the UNUM Rights Agreement) pursuant to the
UNUM Rights Agreement and (2) a Distribution Date, a Triggering Event or
Stock Acquisition Date (as such terms are defined in the UNUM Rights
Agreement) does not occur solely by reason of the execution and delivery of
this Agreement, the Option Agreements, the Stockholders Agreement, the
consummation of the Merger, or the consummation of the other
transactions contemplated by this Agreement, the Option Agreements and
the Stockholders Agreement, and such amendment may not be further amended
by UNUM without the prior consent of Provident.
(x) Year 2000. All computer systems and computer software used by
UNUM or any of its subsidiaries have achieved or are being adapted so as to
achieve Millennium Functionality, except in each case for such computer
systems and computer software, the failure of which to achieve Millennium
Functionality, individually or in the aggregate, is not reasonably likely
to have a material adverse effect on UNUM. To the knowledge of UNUM as of
the date hereof, the costs of the adaptions necessary to achieve Millennium
Functionality are not reasonably likely to have a material adverse effect
on UNUM. UNUM is in compliance with all applicable state insurance
department requests for "Year 2000" filings.
ARTICLE IV
Covenants Relating to Conduct of Business
-----------------------------------------
SECTION 4.01. Conduct of Business. (a) Conduct of Business by
Provident. During the period from the date of this Agreement to the
Effective Time, Provident shall, and shall cause its subsidiaries to, carry
on their respective businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted and, to the extent
consistent therewith, use all reasonable efforts to preserve intact their
current business organizations, licenses and authorizations, keep available
the services of their current officers and employees and preserve their
relationships with policyholders, customers, suppliers, licensors,
licensees, distributors, brokers, agents, reinsurers, managers and others
having business dealings with them to the end that their goodwill and
ongoing businesses shall be unimpaired at the Effective Time. Without
limiting the generality of the foregoing, except as set forth on the
Provident Disclosure Schedule, as otherwise expressly contemplated by this
Agreement or the Provident Option Agreement or as consented to by UNUM in
writing, during the period from the date of this Agreement to the Effective
Time, Provident shall not, and shall not permit any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends payable in cash,
stock or property on, or make any other distributions in respect of,
any of its capital stock, other than dividends and distributions by a
direct or indirect wholly owned subsidiary of Provident to its parent
and except that Provident may continue (1) the declaration and payment
of regular quarterly cash dividends not in excess of $.10 per share of
Provident Common Stock, with usual record and payment dates and in
accordance with Provident's past dividend policy, subject to Section
4.01(c) and (2) the declaration, and payment of dividends on
participating policies, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of its capital
stock or (z) purchase, redeem or otherwise acquire any shares of
capital stock of Provident or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities,
other than, in accordance with the terms thereof, the issuance of
Provident Common Stock upon the exercise of Provident Stock Options or
otherwise pursuant to equity stock-based awards, in each case
outstanding on the date of this Agreement and in accordance with their
present terms;
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire (x) by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof or (y)
any assets that, in the case of clause (x) or (y), are material,
individually or in the aggregate, to Provident;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any lien or otherwise dispose of any of its properties or
assets, except sales of investment securities or other assets in the
ordinary course of business consistent with past practice;
(vi) (x) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt
securities or warrants or other
rights to acquire any debt securities of Provident or any of its
subsidiaries, guarantee any debt securities of another person, enter
into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement
having the economic effect of any of the foregoing, except for
short-term borrowings incurred in the ordinary course of business (or
to refund existing or maturing indebtedness) consistent with past
practice and except for intercompany indebtedness between Provident
and any of its subsidiaries or between such subsidiaries, or (y) make
any loans, advances or capital contributions to, or investments in,
any other person, other than to Provident or any direct or indirect
wholly owned subsidiary of Provident and other than investments made
in the ordinary course of business consistent with past practice as
part of Provident's investment portfolio and, in the case of any
long-term investments, as to which Provident has previously consulted
with UNUM;
(vii) make or agree to make any new capital expenditure or
expenditures, or enter into any agreement or agreements providing for
payments which, individually, are in excess of $10,000,000 or, in the
aggregate, are in excess of $100,000,000;
(viii) make any tax election that, individually or in the
aggregate, is reasonably likely to have a material adverse effect on
the tax liability of Provident or settle or compromise any material
income tax liability;
(ix) pay, discharge, settle or satisfy any claims, liabilities,
obligations or litigation (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of
liabilities recognized or disclosed in the most recent consolidated
financial statements (or the notes thereto) of Provident included in
the Provident Filed SEC Documents or incurred since the date of such
financial statements, or waive the benefits of, or agree to modify in
any manner, any confidentiality, standstill or similar agreement to
which Provident or any of its subsidiaries is a party;
(x) take any action that (without giving effect to any action
taken or agreed to be taken by UNUM or any of its affiliates) would
prevent Provident from accounting for the business combination to be
effected by the Merger as a pooling of interests or from
treating the Merger as a "reorganization" under Section 368 of the
Code;
(xi) except as required by law or contemplated hereby and except
for labor agreements negotiated in the ordinary course, enter into,
adopt or amend in any material respect or terminate any Provident
Benefit Plan or any other agreement, plan or policy involving
Provident or its subsidiaries, and one or more of its directors,
officers or employees, or materially change any actuarial or other
assumption used to calculate funding obligations with respect to any
pension plan, or change the manner in which contributions to any
pension plan are made or the basis on which such contributions are
determined;
(xii) except for normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not
materially increase benefits or compensation expenses of Provident or
its subsidiaries, or as contemplated hereby or by the terms of any
contract the existence of which does not constitute a violation of
this Agreement, increase the compensation of any director, executive
officer or other key employee or pay any benefit or amount not
required by a plan or arrangement as in effect on the date of this
Agreement to any such person; or
(xiii) authorize, or commit or agree to take, any of the
foregoing actions.
(b) Conduct of Business by UNUM. During the period from the date
of this Agreement to the Effective Time, UNUM shall, and shall cause its
subsidiaries to, carry on their respective businesses in the usual, regular
and ordinary course in substantially the same manner as heretofore
conducted and, to the extent consistent therewith, use all reasonable
efforts to preserve intact their current business organizations, licenses
and authorizations, keep available the services of their current officers
and employees and preserve their relationships with policyholders,
customers, suppliers, licensors, licensees, distributors, brokers, agents,
reinsurers, managers and others having business dealings with them to the
end that their goodwill and ongoing businesses shall be unimpaired at the
Effective Time. Without limiting the generality of the foregoing, except as
set forth on the UNUM Disclosure Schedule, as otherwise expressly
contemplated by this Agreement or the UNUM Option Agreement or as consented
to by Provident in writing, during the period from the date of
this Agreement to the Effective Time, UNUM shall not, and shall not permit
any of its subsidiaries to:
(i) (x) declare, set aside or pay any dividends payable in cash,
stock or property on, or make any other distributions in respect of,
any of its capital stock, other than dividends and distributions by a
direct or indirect wholly owned subsidiary of UNUM to its parent and
except that UNUM may continue (1) the declaration and payment of
regular quarterly cash dividends not in excess of $.14 3/4 per share
of UNUM Common Stock, with usual record and payment dates and in
accordance with UNUM's past dividend policy, subject to Section
4.01(c) and (2) the declaration on and payment of dividends on
participating policies, (y) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of its capital
stock or (z) purchase, redeem or otherwise acquire any shares of
capital stock of UNUM or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities;
(ii) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any
securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities
other than (x) upon the exercise of the UNUM Rights or (y) in
accordance with the terms thereof, the issuance of UNUM Common Stock
upon the exercise of UNUM Stock Options or otherwise pursuant to
equity stock-based awards, in each case outstanding on the date of
this Agreement and in accordance with their present terms;
(iii) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents;
(iv) acquire (x) by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, joint venture,
association or other business organization or division thereof or (y)
any assets that, in the case of clause (x) or (y), are material,
individually or in the aggregate, to UNUM;
(v) sell, lease, license, mortgage or otherwise encumber or
subject to any lien or otherwise dispose of
any of its properties or assets, except sales of investment
securities or other assets in the ordinary course of business
consistent with past practice;
(vi) (x) incur any indebtedness for borrowed money or guarantee
any such indebtedness of another person, issue or sell any debt
securities or warrants or other rights to acquire any debt securities
of UNUM or any of its subsidiaries, guarantee any debt securities of
another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or enter
into any arrangement having the economic effect of any of the
foregoing, except for short-term borrowings incurred in the ordinary
course of business (or to refund existing or maturing indebtedness)
consistent with past practice and except for intercompany indebtedness
between UNUM and any of its subsidiaries or between such subsidiaries,
or (y) make any loans, advances or capital contributions to, or
investments in, any other person, other than to UNUM or any direct or
indirect wholly owned subsidiary of UNUM and other than investments
made in the ordinary course of business consistent with past practice
as part of UNUM's investment portfolio and, in the case of any
long-term investments, as to which UNUM has previously consulted with
Provident;
(vii) make or agree to make any new capital expenditure or
expenditures, or enter into any agreement or agreements providing for
payments which, individually, are in excess of $10,000,000 or, in the
aggregate, are in excess of $100,000,000;
(viii) make any tax election that, individually or in the
aggregate, is reasonably likely to have a material adverse effect on
the tax liability of UNUM or settle or compromise any material income
tax liability;
(ix) pay, discharge, settle or satisfy any claims, liabilities,
obligations or litigation (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge,
settlement or satisfaction, in the ordinary course of business
consistent with past practice or in accordance with their terms, of
liabilities recognized or disclosed in the most recent consolidated
financial statements (or the notes thereto) of UNUM included in the
UNUM Filed SEC Documents or incurred since the date of such financial
statements or waive the benefits of, or agree to modify in any manner,
any confidentiality,
standstill or similar agreement to which UNUM or any of its
subsidiaries is a party;
(x) take any action that (without giving effect to any action
taken or agreed to be taken by Provident or any of its affiliates)
would prevent Provident from accounting for the business combination
to be effected by the Merger as a pooling of interests or from
treating the Merger as a "reorganization" under Section 368 of the
Code;
(xi) except as required by law or contemplated hereby and except
for labor agreements negotiated in the ordinary course, enter into,
adopt or amend in any material respect or terminate any UNUM Benefit
Plan or any other agreement, plan or policy involving UNUM or its
subsidiaries, and one or more of its directors, officers or employees,
or materially change any actuarial or other assumption used to
calculate funding obligations with respect to any pension plan, or
change the manner in which contributions to any pension plan are made
or the basis on which such contributions are determined;
(xii) except for normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not
materially increase benefits or compensation expenses of UNUM or its
subsidiaries, or as contemplated hereby or by the terms of any
contract the existence of which does not constitute a violation of
this Agreement, increase the compensation of any director, executive
officer or other key employee or pay any benefit or amount not
required by a plan or arrangement as in effect on the date of this
Agreement to any such person;
(xiii) amend the UNUM Rights Agreement; or
(xiv) authorize, or commit or agree to take, any of the foregoing
actions.
(c) Coordination of Dividends. Each of UNUM and Provident shall
coordinate with the other regarding the declaration and payment of
dividends in respect of the UNUM Common Stock and the Provident Common
Stock and the record dates and payment dates relating thereto, it being the
intention of UNUM and Provident that any holder of UNUM Common Stock or
Provident Common Stock shall not receive two dividends, or fail to receive
one dividend, for any single calendar quarter with respect to its shares of
UNUM Common Stock or Provident Common Stock and/or any shares of
Surviving Corporation Common Stock any such holder receives in exchange
therefor pursuant to the Merger.
(d) Other Actions. Except as required by law, Provident and UNUM
shall not, and shall not permit any of their respective subsidiaries to,
voluntarily take any action that would, or that is reasonably likely to,
result in any of the conditions to the Merger set forth in Article VI not
being satisfied.
(e) Advice of Changes. Provident and UNUM shall promptly advise
the other party orally and in writing to the extent it has knowledge of (i)
any representation or warranty made by it contained in this Agreement, the
Option Agreements or, in the case of UNUM, the Stockholders Agreement
becoming untrue or inaccurate in any respect where the failure of such
representation to be so true and correct (without giving effect to any
limitation as to "materiality" or "material adverse effect" set forth
therein), individually or in the aggregate, has had or is reasonably likely
to have a material adverse effect on it, (ii) the failure by it to comply
in any material respect with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
under this Agreement, the Option Agreements or, in the case of UNUM, the
Stockholders Agreement and (iii) any change or event having, or which,
insofar as can reasonably be foreseen, is reasonably likely to have a
material adverse effect on such party or on the truth of their respective
representations and warranties or the ability of the conditions set forth
in Article VI to be satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of
the parties (or remedies with respect thereto) or the conditions to the
obligations of the parties under this Agreement, the Option Agreements or,
in the case of UNUM, the Stockholders Agreement.
SECTION 4.02. No Solicitation by Provident. (a) Provident shall
not, nor shall it permit any of its subsidiaries to, nor shall it authorize
or permit any of its directors, officers or employees or any investment
banker, financial advisor, attorney, accountant or other representative
retained by it or any of its subsidiaries to, directly or indirectly
through another person, (i) solicit, initiate or encourage (including by
way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal which constitutes
any Provident Takeover Proposal (as defined below) or (ii) participate in
any discussions or negotiations regarding any Provident Takeover Proposal;
provided, however, that, at any time prior to the publicly
announced date of the Provident Stockholders Meeting (the "Provident
Applicable Period"), Provident may, in response to a Provident Superior
Proposal (as defined in Section 4.02(b)) which was not solicited by it and
which did not otherwise result from a breach of this Section 4.02(a), and
subject to providing prior written notice of its decision to take such
action to UNUM (the "Provident Notice") and compliance with Section
4.02(c), following delivery of the Provident Notice (x) furnish information
with respect to Provident and its subsidiaries to any person making a
Provident Superior Proposal pursuant to a customary confidentiality
agreement (as determined by Provident after consultation with its outside
counsel) and (y) participate in discussions or negotiations regarding such
Provident Superior Proposal. For purposes of this Agreement, "Provident
Takeover Proposal" means any inquiry, proposal or offer from any person
relating to any direct or indirect acquisition or purchase of a business
that constitutes 15% or more of the net revenues, net income or the assets
of Provident and its subsidiaries, taken as a whole, or 15% or more of any
class of equity securities of Provident or any of its subsidiaries, any
tender offer or exchange offer that if consummated would result in any
person beneficially owning 15% or more of any class of equity securities of
Provident or any of its subsidiaries, or any merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving Provident or any of its subsidiaries, other than the
transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 4.02, neither
the Board of Directors of Provident nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to UNUM, the approval or recommendation by such Board of Directors
or such committee of this Agreement, the Reverse Stock Split, the Merger or
the issuance of Surviving Corporation Common Stock in the Merger unless in
the good faith judgment of the Board of Directors of Provident, after
consultation with outside counsel, the failure to take the foregoing
actions would be inconsistent with its obligations under applicable law,
(ii) approve or recommend, or propose publicly to approve or recommend, any
Provident Takeover Proposal or (iii) cause Provident to enter into any
letter of intent, agreement in principle, acquisition agreement or other
similar agreement related to any Provident Takeover Proposal (each, a
"Provident Acquisition Agreement"). Notwithstanding the foregoing, in
response to a Provident Superior Proposal which was not solicited by
Provident and which did not otherwise result from a breach of Section
4.02(a), the Board of Directors of Provident may (subject to
this and the following sentences) terminate this Agreement (and
concurrently with or after such termination, if it so chooses, cause
Provident to enter into any Provident Acquisition Agreement with respect to
any Provident Superior Proposal), but only at a time that is during the
Provident Applicable Period and is after the fifth business day following
UNUM's receipt of written notice advising UNUM that the Board of Directors
of Provident is prepared to accept a Provident Superior Proposal,
specifying the material terms and conditions of such Provident Superior
Proposal and identifying the person making such Provident Superior
Proposal. For purposes of this Agreement, a "Provident Superior Proposal"
means any proposal made by a third party to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash
and/or securities, more than 50% of the combined voting power of the shares
of Provident Common Stock then outstanding or all or substantially all the
assets of Provident and its subsidiaries taken together and otherwise on
terms which the Board of Directors of Provident determines in its good
faith judgment (based on the advice of a financial advisor of nationally
recognized reputation) to be more favorable to Provident's stockholders
than the Merger and for which financing, to the extent required, is then
committed or which, in the good faith judgment of the Board of Directors of
Provident, is reasonably capable of being obtained by such third party.
(c) In addition to the obligations of Provident set forth in
paragraphs (a) and (b) of this Section 4.02, Provident shall immediately
advise UNUM orally and in writing of any request for information or of any
Provident Takeover Proposal, the material terms and conditions of such
request or Provident Takeover Proposal and the identity of the person
making such request or Provident Takeover Proposal. Provident will keep
UNUM reasonably informed of the status and details (including amendments or
proposed amendments) of any such request or Provident Takeover Proposal.
(d) Nothing contained in this Section 4.02 shall prohibit
Provident from taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from
making any disclosure to Provident's stockholders if, in the good faith
judgment of the Board of Directors of Provident, after consultation with
outside counsel, failure so to disclose would be inconsistent with its
obligations under applicable
law; provided, however, that neither Provident nor its Board of
Directors nor any committee thereof shall withdraw or modify, or propose
publicly to withdraw or modify, its position with respect to this
Agreement, the Reverse Stock Split, the Merger or the issuance of Surviving
Corporation Common Stock in the Merger unless in the good faith judgment of
the Board of Directors of Provident, after consultation with outside
counsel, the failure to take the foregoing actions would be inconsistent
with its obligations under applicable law, or approve or recommend, or
propose publicly to approve or recommend, a Provident Takeover Proposal.
SECTION 4.03. No Solicitation by UNUM. (a) UNUM shall not, nor
shall it permit any of its subsidiaries to, nor shall it authorize or
permit any of its directors, officers or employees or any investment
banker, financial advisor, attorney, accountant or other representative
retained by it or any of its subsidiaries to, directly or indirectly
through another person, (i) solicit, initiate or encourage (including by
way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal which constitutes
any UNUM Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any UNUM Takeover Proposal; provided,
however, that, at any time prior to the publicly announced date of the UNUM
Stockholders Meeting (the "UNUM Applicable Period"), UNUM may, in response
to a UNUM Superior Proposal (as defined in Section 4.03(b)) which was not
solicited by it and which did not otherwise result from a breach of this
Section 4.03(a), and subject to providing prior written notice of its
decision to take such action to Provident (the "UNUM Notice") and
compliance with Section 4.03(c), following delivery of the UNUM Notice (x)
furnish information with respect to UNUM and its subsidiaries to any person
making a UNUM Superior Proposal pursuant to a customary confidentiality
agreement (as determined by UNUM after consultation with its outside
counsel) and (y) participate in discussions or negotiations regarding such
UNUM Superior Proposal. For purposes of this Agreement, "UNUM Takeover
Proposal" means any inquiry, proposal or offer from any person relating to
any direct or indirect acquisition or purchase of a business that
constitutes 15% or more of the net revenues, net income or the assets of
UNUM and its subsidiaries, taken as a whole, or 15% or more of any class of
equity securities of UNUM or any of its subsidiaries, any tender offer or
exchange offer that if consummated would result in any person beneficially
owning 15% or more of any class of equity securities of UNUM or any of its
subsidiaries, or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
UNUM or any of
its subsidiaries, other than the transactions contemplated by this
Agreement.
(b) Except as expressly permitted by this Section 4.03, neither
the Board of Directors of UNUM nor any committee thereof shall (i) withdraw
or modify, or propose publicly to withdraw or modify, in a manner adverse
to Provident, the approval or recommendation by such Board of Directors or
such committee of this Agreement or the Merger unless in the good faith
judgment of the Board of Directors of UNUM, after consultation with outside
counsel, the failure to take the foregoing actions would be inconsistent
with its obligations under applicable law, (ii) approve or recommend, or
propose publicly to approve or recommend, any UNUM Takeover Proposal, or
(iii) cause UNUM to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement related to any
UNUM Takeover Proposal (each, a "UNUM Acquisition Agreement").
Notwithstanding the foregoing, in response to a UNUM Superior Proposal
which was not solicitated by UNUM and which did not otherwise result from a
breach of Section 4.03(a), the Board of Directors of UNUM may (subject to
this and the following sentences) terminate this Agreement (and
concurrently with or after such termination, if it so chooses, cause UNUM
to enter into any UNUM Acquisition Agreement with respect to any UNUM
Superior Proposal), but only at a time that is during the UNUM Applicable
Period and is after the fifth business day following Provident's receipt of
written notice advising Provident that the Board of Directors of UNUM is
prepared to accept a UNUM Superior Proposal, specifying the material terms
and conditions of such UNUM Superior Proposal and identifying the person
making such UNUM Superior Proposal. For purposes of this Agreement, a "UNUM
Superior Proposal" means any proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for consideration
consisting of cash and/or securities, more than 50% of the combined voting
power of the shares of UNUM Common Stock then outstanding or all or
substantially all the assets of UNUM and its subsidiaries taken together
and otherwise on terms which the Board of Directors of UNUM determines in
its good faith judgment (based on the advice of a financial advisor of
nationally recognized reputation) to be more favorable to UNUM's
stockholders than the Merger and for which financing, to the extent
required, is then committed or which, in the good faith judgment of the
Board of Directors of UNUM, is reasonably capable of being obtained by such
third party.
(c) In addition to the obligations of UNUM set forth in
paragraphs (a) and (b) of this Section 4.03, UNUM shall immediately advise
Provident orally and in writing of any request for information or of any
UNUM Takeover Proposal, the material terms and conditions of such request
or UNUM Takeover Proposal and the identity of the person making such
request or UNUM Takeover Proposal. UNUM will keep Provident reasonably
informed of the status and details (including amendments or proposed
amendments) of any such request or UNUM Takeover Proposal.
(d) Nothing contained in this Section 4.03 shall prohibit UNUM
from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any
disclosure to UNUM's stockholders if, in the good faith judgment of the
Board of Directors of UNUM, after consultation with outside counsel,
failure so to disclose would be inconsistent with its obligations under
applicable law; provided, however, that neither UNUM nor its Board of
Directors nor any committee thereof shall withdraw or modify, or propose
publicly to withdraw or modify, its position with respect to this Agreement
or the Merger unless in the good faith judgment of the Board of Directors
of UNUM, after consultation with outside counsel, the failure to take the
foregoing actions would be inconsistent with its obligations under
applicable law, or approve or recommend, or propose publicly to approve or
recommend, a UNUM Takeover Proposal.
ARTICLE V
Additional Agreements
---------------------
SECTION 5.01. Preparation of the Form S-4 and the Joint Proxy
Statement; Stockholders Meetings. (a) As soon as practicable following the
date of this Agreement, Provident and UNUM shall prepare and file with the
SEC a preliminary joint proxy statement relating to the Merger and use all
reasonable efforts to obtain and furnish the information required to be
included by the SEC in the Joint Proxy Statement and to respond promptly to
any comments made by the SEC with respect to the preliminary joint proxy
statement. Provident shall prepare and file with the SEC the Form S-4, in
which the Joint Proxy Statement will be included as a prospectus of
Provident with respect to the Surviving Corporation Common Stock to be
issued in the Merger. Each of Provident and UNUM shall use reasonable
efforts to have the Form S-4 declared effective under the Securities Act as
promptly as practicable after such filing. Provident will use all
reasonable efforts to cause the Joint
Proxy Statement to be mailed to Provident's stockholders, and UNUM will
use all reasonable efforts to cause the Joint Proxy Statement to be mailed
to UNUM's stockholders, in each case as promptly as practicable after the
Form S-4 is declared effective under the Securities Act. Provident shall
also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified or filing a general
consent to service of process) required to be taken under any applicable
state securities laws in connection with the issuance of Surviving
Corporation Common Stock in the Merger and UNUM shall furnish all
information concerning UNUM and the holders of UNUM Common Stock as may be
reasonably requested in connection with any such action. No filing of, or
amendment or supplement to, the Form S-4 or the Joint Proxy Statement will
be made by either party without providing the other party the opportunity
to review and comment thereon. Provident will advise UNUM, promptly after
it receives notice thereof, of the time when the Form S-4 has become
effective or any supplement or amendment has been filed, the issuance of
any stop order, the suspension of the qualification of the Surviving
Corporation Common Stock issuable in connection with the Merger for
offering or sale in any jurisdiction, or any request by the SEC for
amendment of the Joint Proxy Statement or the Form S-4 or comments thereon
and responses thereto or requests by the SEC for additional information. If
at any time prior to the Effective Time any information relating to
Provident or UNUM, or any of their respective affiliates, officers or
directors, should be discovered by Provident or UNUM which should be set
forth in an amendment or supplement to either the Form S-4 or the Joint
Proxy Statement, so that any of such documents would not include any
misstatement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, the party which discovers such
information shall promptly notify the other party hereto and an appropriate
amendment or supplement describing such information shall be promptly filed
with the SEC and, to the extent required by law, disseminated to the
stockholders of Provident and UNUM.
(b) Provident (i) shall, as soon as practicable following the
Form S-4 being declared effective by the SEC, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Provident Stockholders
Meeting") for the purpose of obtaining the Provident Stockholder Approval
and (ii) shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of this Agreement, the Reverse Stock
Split, the Merger, the issuance of Surviving Corporation Common Stock in
the Merger and the
other transactions contemplated hereby unless, in the case of this
clause (ii), in the good faith judgment of the Board of Directors of
Provident, after consultation with outside counsel, the failure to take the
foregoing action would be inconsistent with its obligations under
applicable law. Without limiting the generality of the foregoing but
subject to its rights to terminate this Agreement pursuant to Section
4.02(b), Provident agrees that its obligations pursuant to clause (i) of
this Section 5.01(b) shall not be affected by the commencement, public
proposal, public disclosure or communication to Provident of any Provident
Takeover Proposal or by the withdrawal or modification by the Board of
Directors of Provident, in accordance with clause (ii) above, of its
recommendation to the stockholders of Provident that such stockholders
approve and adopt this Agreement, the Reverse Stock Split, the Merger, the
issuance of Surviving Corporation Common Stock in the Merger and the other
transactions contemplated hereby.
(c) UNUM (i) shall, as soon as practicable following the Form S-4
being declared effective by the SEC, duly call, give notice of, convene and
hold a meeting of its stockholders (the "UNUM Stockholders Meeting") for
the purpose of obtaining the UNUM Stockholder Approval and (ii) shall,
through its Board of Directors, recommend to its stockholders the approval
and adoption of this Agreement, the Merger and the other transactions
contemplated hereby unless, in the case of this clause (ii), in the good
faith judgment of the Board of Directors of UNUM, after consultation with
outside counsel, the failure to take the foregoing action would be
inconsistent with its obligations under applicable law. Without limiting
the generality of the foregoing but subject to its rights to terminate this
Agreement pursuant to Section 4.03(b), UNUM agrees that its obligations
pursuant to clause (i) of this Section 5.01(c) shall not be affected by the
commencement, public proposal, public disclosure or communication to UNUM
of any UNUM Takeover Proposal or by the withdrawal or modification by the
Board of Directors of UNUM, in accordance with clause (ii) above, of its
recommendation to the stockholders of UNUM that such stockholders approve
and adopt this Agreement, the Merger and the other transactions
contemplated hereby.
(d) UNUM and Provident will use all reasonable efforts to hold
the Provident Stockholders Meeting and the UNUM Stockholders Meeting on the
same date and as soon as practicable after the date hereof.
SECTION 5.02. Letters of Provident's Accountants. Provident shall
use reasonable efforts to cause to be
delivered to UNUM two letters from Provident's independent accountants,
one dated a date within two business days before the date on which the Form
S-4 shall become effective and one dated a date within two business days
before the Closing Date, each addressed to UNUM, in form and substance
reasonably satisfactory to UNUM and customary in scope and substance for
comfort letters delivered by independent public accountants in connection
with registration statements similar to the Form S-4.
SECTION 5.03. Letters of UNUM's Accountants. UNUM shall use
reasonable efforts to cause to be delivered to Provident two letters from
UNUM's independent accountants, one dated a date within two business days
before the date on which the Form S-4 shall become effective and one dated
a date within two business days before the Closing Date, each addressed to
Provident, in form and substance reasonably satisfactory to Provident and
customary in scope and substance for comfort letters delivered by
independent public accountants in connection with registration statements
similar to the Form S-4.
SECTION 5.04. Access to Information; Confidentiality. Subject to
the Confidentiality Agreement dated as of September 21, 1998, between UNUM
and Provident (the "Confidentiality Agreement") and as otherwise required
by applicable law, including, without limitation, any applicable antitrust
laws, each of Provident and UNUM shall, and shall cause each of its
respective subsidiaries to, afford to the other party and to the officers,
directors, employees, accountants, counsel, financial advisors and other
representatives of such other party, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records
and, during such period, each of Provident and UNUM shall, and shall cause
each of its respective subsidiaries to, furnish promptly to the other party
(a) a copy of each report, schedule, registration statement and other
document filed by it during such period pursuant to the requirements of
Federal or state securities laws (b) all Provident SAP Statements or UNUM
SAP Statements, as the case may be, and (c) all other information
concerning its business, properties and personnel as such other party may
reasonably request. No review pursuant to this Section 5.04 shall have an
effect for the purpose of determining the accuracy of any representation or
warranty given by either party hereto to the other party hereto. Each of
Provident and UNUM will hold, and will cause its respective officers,
employees, accountants, counsel, financial advisors and other
representatives and affiliates to hold, any nonpublic
information in accordance with the terms of the Confidentiality
Agreement.
SECTION 5.05. Filings; Other Action. Subject to the terms and
conditions provided in this Agreement, UNUM and Provident shall (a)
promptly make their respective filings and thereafter make any other
required submissions under the HSR Act and other regulatory filings with
any relevant Governmental Entity with respect to the Merger and the
transactions contemplated by this Agreement, the Option Agreements and, in
the case of UNUM, the Stockholders Agreement; and (b) use their respective
reasonable efforts to promptly take, or cause to be taken, all other action
and do, or cause to be done, all other things necessary, proper or
appropriate under this Agreement and applicable laws and regulations to
obtain as promptly as practicable all consents, approvals, orders,
authorizations, registrations and permits required to be obtained from any
Governmental Entity or third party in connection with the execution and
delivery of this Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement, the Option Agreements and, in
the case of UNUM, the Stockholders Agreement as soon as practicable after
the date hereof; provided, however, that neither Provident nor UNUM will be
required to agree to, or proffer to, (i) divest or hold separate any of
Provident's, UNUM's or any of their respective affiliates' businesses or
assets or (ii) cease to conduct business or operations in any jurisdiction
in which Provident, UNUM or any of their respective subsidiaries conducts
business or operations as of the date of this Agreement.
SECTION 5.06. Stock Options and Restricted Stock Units. (a) As
soon as practicable following the date of this Agreement, the Board of
Directors of UNUM (or, if appropriate, any committee administering the UNUM
Stock Plans) shall adopt such resolutions or take such other actions as may
be required to effect the following:
(i) adjust the terms of all outstanding UNUM Stock Options
granted under the UNUM Stock Plans, whether vested or unvested, as
necessary to provide that, at the Effective Time, each such UNUM Stock
Option outstanding immediately prior to the Effective Time shall be
amended and converted, subject to the prior effectiveness of the
Reverse Stock Split, into an option to acquire one share of Surviving
Corporation Common Stock for each share of UNUM Common Stock subject
to such UNUM Stock Option (each, as so adjusted, an "Adjusted
Option"); and
(ii) make such other changes to the UNUM Stock Plans as
Provident and UNUM may agree are appropriate to give effect to the
Merger, including as provided in Section 5.07.
(b) As soon as practicable following the date of this Agreement,
the Board of Directors of Provident (or, if appropriate, any committee
administering the Provident Stock Plans) shall adopt such resolutions or
take such other actions as may be required to effect the following:
(i) all outstanding Provident Stock Options granted under the
Provident Stock Plans, whether vested or unvested, shall be adjusted
in accordance with their terms to provide that at the effectiveness of
the Reverse Stock Split each such Provident Stock Option outstanding
immediately prior to the effectiveness of the Reverse Stock Split
shall be converted into an option to acquire a number of shares of
Provident Common Stock giving effect to the Reverse Stock Split at an
exercise price that is correspondingly adjusted; and
(ii) make such other changes to the Provident Stock Plans as
Provident and UNUM may agree are appropriate to give effect to the
Merger, including as provided in Section 5.07.
(c) As soon as practicable after the Effective Time, the
Surviving Corporation shall deliver to the holders of UNUM Stock Options
appropriate notices setting forth such holders' rights pursuant to the
respective UNUM Stock Plans and the agreements evidencing the grants of
such UNUM Stock Options and that such UNUM Stock Options and agreements
shall be assumed by the Surviving Corporation and shall continue in effect
on the same terms and conditions (subject to the adjustments required by
this Section 5.06 after giving effect to the Merger).
(d) A holder of an Adjusted Option may exercise such Adjusted
Option in whole or in part in accordance with its terms by delivering a
properly executed notice of exercise to the Surviving Corporation, together
with the consideration therefor and the Federal withholding tax
information, if any, required in accordance with the related UNUM Stock
Plan.
(e) Except as otherwise contemplated by this Section 5.06 and
except to the extent required under the respective terms of the UNUM Stock
Options, all restrictions or limitations on transfer and vesting with
respect to the
UNUM Stock Options awarded under the UNUM Stock Plans or any other plan,
program or arrangement of UNUM or any of its subsidiaries, to the extent
that such restrictions or limitations shall not have already lapsed, shall
remain in full force and effect with respect to such options after giving
effect to the Merger and the assumption by the Surviving Corporation as set
forth above.
SECTION 5.07. UNUM Stock Plans and Certain Employee Matters. (a)
At the Effective Time, by virtue of the Merger, the UNUM Stock Plans shall
be assumed by the Surviving Corporation, with the result that all
obligations of UNUM under the UNUM Stock Plans, including with respect to
awards outstanding at the Effective Time under each UNUM Stock Plan, shall
be obligations of the Surviving Corporation following the Effective Time.
Prior to the Effective Time, Provident shall take all necessary actions
(including, if required, to comply with Section 162(m) of the Code (and the
regulations thereunder) or applicable law or rule of the NYSE, obtaining
the approval of its stockholders at the Provident Stockholders Meeting) for
the assumption of the UNUM Stock Plans, including the reservation, issuance
and listing of shares of Surviving Corporation Common Stock in a number at
least equal to the number of shares of Surviving Corporation Common Stock
that will be subject to Adjusted Options. No later than the Effective Time,
Provident shall prepare and file with the SEC a registration statement on
Form S-8 (or another appropriate form) registering a number of shares of
Surviving Corporation Common Stock determined in accordance with the
preceding sentence. Such registration statement shall be kept effective
(and the current status of the prospectus or prospectuses required thereby
shall be maintained) at least for so long as Adjusted Options or any
unsettled awards granted under the UNUM Stock Plans after the Effective
Time remain outstanding.
(b) Following the Effective Time, Provident, as the Surviving
Corporation in the Merger, will assume and honor all obligations under
employment agreements of UNUM the existence of which does not constitute a
violation of this Agreement in accordance with the terms thereof.
(c) UNUM and Provident agree to take or cause to be taken all
other actions described in Schedule 5.07.
SECTION 5.08. Indemnification, Exculpation and Insurance. (a)
Provident agrees that all rights to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective
Time now existing in favor of the current or former directors or
officers of UNUM or Provident and their respective subsidiaries as
provided in their respective certificates of incorporation or by-laws (or
comparable organizational documents) and any indemnification agreements of
UNUM or Provident, the existence of which does not constitute a breach of
this Agreement, shall be assumed by the Surviving Corporation in the
Merger, without further action, as of the Effective Time and shall survive
the Merger and shall continue in full force and effect in accordance with
their terms. In addition, from and after the Effective Time, directors and
officers of UNUM or Provident who become directors or officers of the
Surviving Corporation will be entitled to the same indemnity rights and
protections as are afforded to other directors and officers of the
Surviving Corporation.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other person
and is not the continuing or surviving corporation or entity of such
consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such
case, proper provision will be made so that the successors and assigns of
the Surviving Corporation assume the obligations set forth in this Section
5.08.
(c) For six years after the Effective Time, the Surviving
Corporation shall maintain in effect the better of UNUM's and Provident's
respective current directors' and officers' liability insurance covering
acts or omissions occurring prior to the Effective Time with respect to
those persons who are currently covered by either UNUM's or Provident's
respective directors' and officers' liability insurance policy on terms
with respect to such coverage and amount no less favorable than those of
such policy in effect on the date hereof; provided that the Surviving
Corporation may substitute therefor policies of the Surviving Corporation
or its subsidiaries containing terms with respect to coverage and amount no
less favorable to such directors or officers; provided further, that if the
existing or substituted directors' and officers' liability insurance
expires, is terminated or canceled during such six-year period, the
Surviving Corporation will obtain as much directors' and officers'
liability insurance as can be obtained for the remainder of such period for
a premium not in excess of 150% of the higher of (x) the aggregate premiums
paid by UNUM in 1998 and (y) the aggregate premiums paid by Provident in
1998, in each case on an annualized basis for such purpose and that in no
event shall the Surviving Corporation be required to pay aggregate premiums
for insurance under this Section 5.08(c) in excess of 150%
of the higher of the two amounts of aggregate premiums paid by UNUM and
Provident in 1998 on an annualized basis for such purpose.
(d) The provisions of this Section 5.08 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his
or her heirs and his or her representatives and (ii) are in addition to,
and not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise.
SECTION 5.09. Fees and Expenses. (a) Except as provided in this
Section 5.09, all fees and expenses incurred in connection with the Merger,
this Agreement, the Option Agreements, the Stockholders Agreement and the
transactions contemplated by this Agreement, the Option Agreements and the
Stockholders Agreement shall be paid by the party incurring such fees or
expenses, whether or not the Merger is consummated, except that each of
UNUM and Provident shall bear and pay one-half of the costs and expenses
incurred in connection with (1) the filing, printing and mailing of the
Form S-4 and the Joint Proxy Statement (including SEC filing fees) and (2)
the filings of the premerger notification and report forms under the HSR
Act (including filing fees). Provident shall file any return with respect
to, and shall pay, any state or local taxes (including any penalties or
interest with respect thereto), if any, which are attributable to the
transfer of the beneficial ownership of UNUM's real property (collectively,
the "Real Estate Transfer Taxes") as a result of the Merger. UNUM shall
cooperate with Provident in the filing of such returns including, in the
case of UNUM, supplying in a timely manner a complete list of all real
property interests held by UNUM and any information with respect to such
property that is reasonably necessary to complete such returns. The fair
market value of any real property of UNUM subject to the Real Estate
Transfer Taxes shall be as agreed to between UNUM and Provident.
(b) In the event that (1) a Provident Takeover Proposal shall
have been made known to Provident or any of its subsidiaries or has been
made directly to its stockholders generally or any person shall have
publicly announced an intention (whether or not conditional) to make a
Provident Takeover Proposal and thereafter this Agreement is terminated by
either UNUM or Provident pursuant to Section 7.01(b)(i) or (ii) or (2) this
Agreement is terminated (x) by Provident pursuant to Section 7.01(h) or (y)
by UNUM pursuant to Section 7.01(e) or Section 7.01(f), then Provident
shall promptly, but in no event later than
the date of such termination, pay UNUM a fee equal to $150 million (the
"Termination Fee"), payable by wire transfer of same day funds; provided,
however, that no Termination Fee shall be payable to UNUM pursuant to
clause (1) of this paragraph (b) or pursuant to a termination by UNUM
pursuant to Section 7.01(e) or Section 7.01(f) unless and until within 18
months of such termination Provident or any of its subsidiaries enters into
any Provident Acquisition Agreement or consummates any Provident Takeover
Proposal (for the purposes of the foregoing proviso the terms "Provident
Acquisition Agreement" and "Provident Takeover Proposal" shall have the
meanings assigned to such terms in Section 4.02 except that the references
to "15%" in the definition of "Provident Takeover Proposal" in Section
4.02(a) shall be deemed to be references to "35%" and "Provident Takeover
Proposal" shall only be deemed to refer to a transaction involving
Provident, or with respect to assets (including the shares of any
subsidiary) of Provident and its subsidiaries, taken as a whole, and not
any of its subsidiaries alone), in which event the Termination Fee shall be
payable upon the first to occur of such events. Provident acknowledges that
the agreements contained in this Section 5.09(b) are an integral part of
the transactions contemplated by this Agreement, and that, without these
agreements, UNUM would not enter into this Agreement; accordingly, if
Provident fails promptly to pay the amount(s) due pursuant to this Section
5.09(b), and, in order to obtain such payment, UNUM commences a suit which
results in a judgment against Provident for the fee set forth in this
Section 5.09(b), Provident shall pay to UNUM its costs and expenses
(including attorneys' fees and expenses) in connection with such suit,
together with interest on the amount of the fee(s) at the prime rate of
Citibank N.A. in effect on the date such payment was required to be made.
(c) In the event that (1) a UNUM Takeover Proposal shall have
been made known to UNUM or any of its subsidiaries or has been made
directly to its stockholders generally or any person shall have publicly
announced an intention (whether or not conditional) to make a UNUM Takeover
Proposal and thereafter this Agreement is terminated by either UNUM or
Provident pursuant to Section 7.01(b)(i) or (iii) or (2) this Agreement is
terminated (x) by UNUM pursuant to Section 7.01(d) or (y) by Provident
pursuant to Section 7.01(i) or Section 7.01(j), then UNUM shall promptly,
but in no event later than the date of such termination, pay Provident the
Termination Fee, payable by wire transfer of same day funds; provided,
however, that no Termination Fee shall be payable to Provident pursuant to
clause (1) of this paragraph (c) or
pursuant to a termination by Provident pursuant to Section 7.01(i) or
Section 7.01(j) unless and until within 18 months of such termination UNUM
or any of its subsidiaries enters into any UNUM Acquisition Agreement or
consummates any UNUM Takeover Proposal (for the purposes of the foregoing
proviso the terms "UNUM Acquisition Agreement" and "UNUM Takeover Proposal"
shall have the meanings assigned to such terms in Section 4.03 except that
the references to "15%" in the definition of "UNUM Takeover Proposal" in
Section 4.03(a) shall be deemed to be references to "35%" and "UNUM
Takeover Proposal" shall only be deemed to refer to a transaction involving
UNUM, or with respect to assets (including the shares of any subsidiary) of
UNUM and its subsidiaries, taken as a whole, and not any of its
subsidiaries alone), in which event the Termination Fee shall be payable
upon the first to occur of such events. UNUM acknowledges that the
agreements contained in this Section 5.09(c) are an integral part of the
transactions contemplated by this Agreement, and that, without these
agreements, Provident would not enter into this Agreement; accordingly, if
UNUM fails promptly to pay the amount(s) due pursuant to this Section
5.09(c), and, in order to obtain such payment, Provident commences a suit
which results in a judgment against UNUM for the fee set forth in this
Section 5.09(c), UNUM shall pay to Provident its costs and expenses
(including attorneys' fees and expenses) in connection with such suit,
together with interest on the amount of the fee(s) at the prime rate of
Citibank N.A. in effect on the date such payment was required to be made.
SECTION 5.10. Public Announcements. UNUM and Provident will
consult with each other before issuing, and provide each other the
opportunity to review, comment upon and concur with, any press release or
other public statements with respect to the transactions contemplated by
this Agreement, including the Merger, the Option Agreements and the
Stockholders Agreement, and shall not issue any such press release or make
any such public statement prior to such consultation, except as either
party may determine is required by applicable law, court process or by
obligations pursuant to any listing agreement with any national securities
exchange. The parties agree that the initial press release to be issued
with respect to the transactions contemplated by this Agreement and the
Stockholders Agreement shall be in the form heretofore agreed to by the
parties.
SECTION 5.11. Affiliates. As soon as practicable after the date
hereof, and, in any event no later than 40 days prior to the Closing Date,
UNUM shall deliver to Provident a letter identifying all persons who are,
in the
opinion of UNUM, at the time this Agreement is submitted for adoption by
the stockholders of UNUM, "affiliates" of UNUM for purposes of Rule 145
under the Securities Act or for purposes of qualifying the Merger for
pooling of interests accounting treatment under Opinion 16 of the
Accounting Principles Board ("APB No. 16") and applicable SEC rules,
regulations and interpretations thereunder. UNUM shall use reasonable
efforts to cause each such person to deliver to Provident 30 days prior to
the Closing Date, a written agreement substantially in the form attached as
Exhibit C-1 hereto. As soon as practicable after the date hereof, and, in
any event no later than 40 days prior to the Closing Date, Provident shall
deliver to UNUM a letter identifying all persons who are, in the opinion of
Provident, at the time this Agreement is submitted for adoption by the
stockholders of Provident, "affiliates" of Provident for purposes of
qualifying the Merger for pooling of interests accounting treatment under
▇▇▇ ▇▇. ▇▇ and applicable SEC rules, regulations and interpretations
thereunder. Provident shall use reasonable efforts to cause each such
person to deliver to UNUM 30 days prior to the Closing Date, a written
agreement substantially in the form attached hereto as Exhibit C-2.
SECTION 5.12. NYSE Listing and De-Listing. Provident shall use
reasonable efforts to cause the Surviving Corporation Common Stock to be
issued in the Merger to be approved for listing on the NYSE, subject to
official notice of issuance, as promptly as practicable after the date
hereof, and in any event prior to the Closing Date. The Surviving
Corporation shall use its best efforts to cause the UNUM Common Stock to be
de-listed from the NYSE and de-registered under the Exchange Act as soon as
practicable following the Effective Time.
SECTION 5.13. Stockholder Litigation. Each of Provident and UNUM
shall give the other the reasonable opportunity to participate in the
defense of any stockholder litigation against Provident or UNUM, as
applicable, and its directors relating to the transactions contemplated by
this Agreement, the Option Agreements and the Stockholders Agreement.
SECTION 5.14. Tax Treatment. Each of UNUM and Provident
shall use reasonable efforts to cause the Merger to qualify as a
reorganization under the provisions of Section 368 of the Code and to
obtain the opinions of counsel referred to in Sections 6.02(c) and 6.03(c).
SECTION 5.15. Pooling of Interests. Each of Provident and UNUM
shall use reasonable efforts to cause the
transactions contemplated by this Agreement, including the Merger, the
Option Agreements and the Stockholders Agreement to be accounted for as a
pooling of interests under ▇▇▇ ▇▇. ▇▇ and applicable SEC rules, regulations
and interpretations thereunder, and such accounting treatment to be
accepted by each of Provident's and UNUM's independent certified public
accountants, and by the SEC, respectively, and each of Provident and UNUM
agrees that it shall voluntarily take no action that would cause such
accounting treatment not to be obtained.
SECTION 5.16. Rights Agreement. The Board of Directors of UNUM
shall take all further action (in addition to that referred to in Section
3.02(w)) reasonably requested in writing by Provident in order to render
UNUM's Rights Agreement inapplicable to the Merger and the other
transactions contemplated by this Agreement, the Option Agreements, and the
Stockholders Agreement. Except as provided above with respect to the Merger
and the other transactions contemplated by this Agreement, the Option
Agreements, and the Stockholders Agreement, UNUM's Board of Directors shall
not, without the prior written consent of Provident, (a) amend the UNUM
Rights Agreement or (b) take any action with respect to, or make any
determination under, the UNUM Rights Agreement, including, a redemption of
the UNUM Rights or any action to facilitate a UNUM Takeover Proposal.
SECTION 5.17. Standstill Agreements; Confidentiality Agreements.
During the period from the date of this Agreement through the Effective
Time, neither Provident nor UNUM shall terminate, amend, modify or waive
any provision of any confidentiality or standstill agreement to which it or
any of its respective subsidiaries is a party. During such period,
Provident or UNUM, as the case may be, shall enforce, to the fullest extent
permitted under applicable law, the provisions of any such agreement,
including by obtaining injunctions to prevent any breaches of such
agreements and to enforce specifically the terms and provisions thereof in
any court of the United States of America or of any state having
jurisdiction.
SECTION 5.18. Stockholder Agreement Legend. Provident will
inscribe upon any certificate representing Subject Shares (as defined in
the Stockholders Agreement) tendered by a Stockholder (as defined in the
Stockholders Agreement) in connection with any proposed transfer of any
Subject Shares by such Stockholder in accordance with the terms of the
Stockholders Agreement the following legend: "THE SHARES OF COMMON STOCK,
PAR VALUE $1.00 PER SHARE, OF PROVIDENT, INC., REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT
TO A STOCKHOLDERS AGREEMENT DATED AS OF NOVEMBER 22, 1998, AND ARE
SUBJECT TO THE TERMS THEREOF. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT
THE PRINCIPAL EXECUTIVE OFFICES OF PROVIDENT COMPANIES, INC."; and
Provident will return such certificate containing such inscription to such
Stockholder within three business days following Provident's receipt
thereof.
SECTION 5.19. Reverse Stock Split. Provident shall take all
actions necessary to cause the Reverse Stock Split to become effective
immediately prior to the Effective Time (provided that Provident's
obligation to cause the Reverse Stock Split to become effective shall be
subject to the prior satisfaction or waiver, as applicable, of each of the
conditions to the respective obligation of each party to effect the Merger
set forth in Article VI (other than Section 6.01(h)) shall have been
satisfied or waived), including arranging for the exchange of certificates
representing Provident Common Stock for certificates representing Surviving
Corporation Common Stock following the effectiveness of the Reverse Stock
Split.
ARTICLE VI
Conditions Precedent
--------------------
SECTION 6.01. Conditions to Each Party's Obligation To Effect the
Merger. The respective obligation of each party to effect the Merger is
subject to the satisfaction or waiver on or prior to the Closing Date of
the following conditions:
(a) Stockholder Approvals. Each of the Provident Stockholder
Approval and the UNUM Stockholder Approval shall have been obtained.
(b) HSR Act. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired.
(c) Certain Other Approvals. Each of the Designated Insurance
Approvals and the Other State Insurance Approvals shall have been made or
obtained, except, in the case of the Other State Insurance Approvals, those
Other State Insurance Approvals the failure of which to obtain,
individually or in the aggregate, are not reasonably likely to have a
material adverse effect on the combined businesses of UNUM and Provident
(and their subsidiaries), assuming for purposes of this Section 6.01(c)
that the Merger is closed and consummated as contemplated by this
Agreement, and each
such State Insurance Approval shall have been obtained free of any
conditions (other than those conditions that, individually or in the
aggregate, are not reasonably likely to have a material adverse effect on
such combined businesses).
(d) No Injunctions or Restraints. No judgment, order, decree,
statute, law, ordinance, rule or regulation, entered, enacted, promulgated,
enforced or issued by any court or other Governmental Entity of competent
jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") shall be in effect (i) preventing the consummation of the
Merger or the other transactions contemplated by this Agreement or (ii)
which otherwise, individually or in the aggregate, is reasonably likely to
have a material adverse effect on the combined businesses of UNUM and
Provident (and their subsidiaries) assuming for the purpose of this Section
6.01(d) that the Merger is closed and consummated as contemplated by this
Agreement; provided, however, that each of the parties shall have used its
reasonable efforts to prevent the entry of any such Restraints and to
appeal as promptly as practicable any such Restraints that may be entered.
(e) Form S-4. The Form S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or
proceedings seeking a stop order.
(f) NYSE Listing. The shares of Surviving Corporation Common
Stock issuable to the holders of UNUM Common Stock as contemplated by this
Agreement shall have been approved for listing on the NYSE, subject to
official notice of issuance.
(g) Pooling Letters. UNUM and Provident shall have each received
(i) from UNUM's independent accountants a letter, dated as of the Closing
Date and addressed to Provident and UNUM, to the effect that, subject to
customary qualifications, UNUM meets the requirements to be a party to a
pooling of interests transaction for financial reporting purposes under ▇▇▇
▇▇. ▇▇ and applicable SEC rules, regulations and interpretations thereunder
and (ii) from Provident's independent accountants a letter, dated as of the
Closing Date and addressed to Provident and UNUM, to the effect that,
subject to customary qualifications, the Merger qualifies for pooling of
interests treatment for financial reporting purposes under ▇▇▇ ▇▇. ▇▇ and
applicable SEC rules, regulations and interpretations thereunder.
(h) Reverse Stock Split. The Reverse Stock Split shall have
become effective.
SECTION 6.02. Conditions to Obligations of UNUM. The obligation
of UNUM to effect the Merger is further subject to satisfaction or waiver
by UNUM of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Provident set forth herein shall be true and correct both
when made and at and as of the Closing Date, as if made at and as of such
time (except to the extent expressly made as of an earlier date, in which
case as of such date), except where the failure of such representations and
warranties to be so true and correct (without giving effect to any
limitation as to "materiality" or "material adverse effect" set forth
therein), individually or in the aggregate, does not have, and is not
reasonably likely to have, a material adverse effect on Provident, and UNUM
shall have received a certificate signed on behalf of Provident by an
executive officer of Provident to such effect.
(b) Performance of Obligations of Provident. Provident shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and UNUM shall
have received a certificate signed on behalf of Provident by an executive
officer of Provident to such effect.
(c) Tax Opinions. UNUM shall have received from Cravath, Swaine &
▇▇▇▇▇, counsel to UNUM, on a date immediately prior to the mailing of the
Joint Proxy Statement and on the Closing Date, opinions, in each case dated
as of such respective dates and stating that the Merger will be treated for
Federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code and that UNUM and Provident will each be a party
to that reorganization within the meaning of Section 368(b) of the Code. In
rendering such opinions, counsel for UNUM shall be entitled to rely upon
representations of officers of UNUM and Provident substantially in the form
of Exhibits D and E hereto.
SECTION 6.03. Conditions to Obligations of Provident. The
obligation of Provident to effect the Merger is further subject to
satisfaction or waiver by Provident of the following conditions:
(a) Representations and Warranties. The representations and
warranties of UNUM set forth herein
shall be true and correct both when made and at and as of the Closing Date,
as if made at and as of such time (except to the extent expressly made as
of an earlier date, in which case as of such date), except where the
failure of such representations and warranties to be so true and correct
(without giving effect to any limitation as to "materiality" or "material
adverse effect" set forth therein), individually or in the aggregate, does
not have, and is not reasonably likely to have, a material adverse effect
on UNUM, and Provident shall have received a certificate signed on behalf
of UNUM by an executive officer of UNUM to such effect.
(b) Performance of Obligations of UNUM. UNUM shall have performed
in all material respects all obligations required to be performed by it
under this Agreement at or prior to the Closing Date, and Provident shall
have received a certificate signed on behalf of UNUM by an executive
officer of UNUM to such effect.
(c) Tax Opinions. Provident shall have received from ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to Provident, on a date immediately prior to the mailing
of the Joint Proxy Statement and on the Closing Date, opinions, in each
case dated as of such respective dates and stating that the Merger will be
treated for Federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code and that UNUM and Provident will each
be a party to that reorganization within the meaning of Section 368(b) of
the Code. In rendering such opinions, counsel for Provident shall be
entitled to rely upon representations of officers of UNUM and Provident
substantially in the form of Exhibits D and E hereto.
SECTION 6.04. Frustration of Closing Conditions. Neither UNUM nor
Provident may rely on the failure of any condition set forth in Section
6.01, 6.02 or 6.03, as the case may be, to be satisfied if such failure was
caused by such party's failure to use reasonable efforts to consummate the
Merger and the other transactions contemplated by this Agreement, the
Option Agreements and the Stockholders Agreement, as required by and
subject to Section 5.05.
ARTICLE VII
Termination, Amendment and Waiver
---------------------------------
SECTION 7.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time, whether
before or after the Provident Stockholder Approval or the UNUM Stockholder
Approval:
(a) by mutual written consent of UNUM and Provident;
(b) by either UNUM or Provident:
(i) if the Merger shall not have been consummated by
November 30, 1999; provided, however, that the right to terminate
this Agreement pursuant to this Section 7.01(b)(i) shall not be
available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of the
Merger to be consummated by such time;
(ii) if the Provident Stockholder Approval shall not have
been obtained at the Provident Stockholders Meeting duly convened
therefor or at any adjournment or postponement thereof at which a
proper vote on such matters was taken;
(iii) if the UNUM Stockholder Approval shall not have been
obtained at the UNUM Stockholders Meeting duly convened therefor
or at any adjournment or postponement thereof at which a proper
vote on such matters was taken; or
(iv) if any Restraint having any of the effects set forth in
Section 6.01(d) shall be in effect and shall have become final
and nonappealable; provided that the party seeking to terminate
this Agreement pursuant to this Section 7.01(b)(iv) shall have
used reasonable efforts to prevent the entry of and to remove
such Restraint;
(c) by UNUM, if Provident shall have breached or failed to
perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure
of a condition set forth in Section 6.02(a) or (b) and (B) is
incapable of being cured by Provident;
(d) by UNUM in accordance with Section 4.03(b); provided that, in
order for the termination of this Agreement pursuant to this paragraph
(d) to be deemed effective, UNUM shall have complied with all
provisions contained in Section 4.03, including the notice
provisions therein, and with applicable requirements, including the
payment of the Termination Fee, of Section 5.09(c);
(e) by UNUM, if Provident or any of its directors or officers
shall participate in discussions or negotiations in breach of Section
4.02;
(f) by UNUM, if the Board of Directors of Provident or any
committee thereof shall have withdrawn or modified in a manner adverse
to UNUM its approval or recommendation of the Merger or this
Agreement;
(g) by Provident, if UNUM shall have breached or failed to
perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure
of a condition set forth in Section 6.03(a) or (b) and (B) is
incapable of being cured by UNUM;
(h) by Provident in accordance with Section 4.02(b); provided
that, in order for the termination of this Agreement pursuant to this
subparagraph (h) to be deemed effective, Provident shall have complied
with all provisions of Section 4.02, including the notice provisions
therein, and with applicable requirements, including the payment of
the Termination Fee, of Section 5.09(b);
(i) by Provident, if UNUM or any of its directors or officers
shall participate in discussions or negotiations in breach of Section
4.03; or
(j) by Provident, if the Board of Directors of UNUM or any
committee thereof shall have withdrawn or modified in a manner adverse
to Provident its approval or recommendation of the Merger or this
Agreement.
SECTION 7.02. Effect of Termination. In the event of termination
of this Agreement by either Provident or UNUM as provided in Section 7.01,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of UNUM or Provident, other than the
provisions of Section 3.01(p), Section 3.02(p), the last sentence of
Section 5.04, Section 5.09, this Section 7.02, Article VIII, the
Confidentiality Agreement and the letter agreement, dated as of October 13,
1998 between UNUM and Provident (the "Letter Agreement") which provisions
and agreements survive such termination, and termination of this Agreement
will not
relieve a breaching party from liability for any wilful and material breach
by such party of any of its representations, warranties, covenants or
agreements set forth in this Agreement giving rise to such termination.
SECTION 7.03. Amendment. This Agreement may be amended by the
parties at any time before or after the Provident Stockholder Approval or
the UNUM Stockholder Approval; provided, however, that after any such
approval, there shall not be made any amendment that by law requires
further approval by the stockholders of Provident or UNUM without the
further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties.
SECTION 7.04. Extension; Waiver. At any time prior to the
Effective Time, a party may (a) extend the time for the performance of any
of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party
contained in this Agreement or in any document delivered pursuant to this
Agreement or (c) subject to the proviso of Section 7.03, waive compliance
by the other party with any of the agreements or conditions contained in
this Agreement. Any agreement on the part of a party to any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of such rights.
SECTION 7.05. Procedure for Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.01, an
amendment of this Agreement pursuant to Section 7.03 or an extension or
waiver pursuant to Section 7.04 shall, in order to be effective, require,
in the case of UNUM or Provident, action by its Board of Directors or, with
respect to any amendment to this Agreement, the duly authorized committee
of its Board of Directors to the extent permitted by law.
ARTICLE VIII
General Provisions
------------------
SECTION 8.01. Nonsurvival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.01 shall not limit (a) any covenant or agreement
of the parties which by its terms contemplates performance after the
Effective Time or (b) the survival of Section 3.01(p), Section 3.02(p), the
last sentence of Section 5.04, Section 5.09, Section 7.02, this Article
VIII, the Confidentiality Agreement and the Letter Agreement, as set forth
in Section 7.02.
SECTION 8.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally, telecopied (which is confirmed) or
sent by overnight courier (providing proof of delivery) 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 UNUM, to
UNUM Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; and
(b) if to Provident, to
Provident Companies, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: F. ▇▇▇▇ ▇▇▇▇▇▇▇▇
with copies to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: H. ▇▇▇▇▇▇ ▇▇▇▇▇
SECTION 8.03. Definitions. For purposes of this Agreement:
(a) an "affiliate" of any person means another person that
directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such first person,
where "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management policies of a
person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise;
(b) "knowledge" of any person which is not an individual means
the knowledge of such person's executive officers after reasonable
inquiry;
(c) "material adverse change" or "material adverse effect" means,
when used in connection with Provident or UNUM, any change, effect,
event, occurrence or state of facts that (x) is, or is reasonably
likely to be, materially adverse to the business, financial condition
or results of operations of such party and its subsidiaries taken as a
whole, (y) materially impairs the ability of such party to perform its
obligations under this Agreement or the Option Agreements or (z)
prevents the consummation of any of the transactions contemplated by
this Agreement, the Option Agreements or, in the case of UNUM, the
Stockholders Agreement other than any (1) change, effect, event,
occurrence or state of facts (I) that occurs as a result of any act or
omission of either party hereto that has been previously consented to
in writing by the other party hereto or (II) relating to (i) the
United States economy or securities markets in general, (ii) this
Agreement or the transactions contemplated hereby or the announcement
thereof, (iii) to the insurance industry in general, and not
specifically relating to Provident or UNUM or their respective
subsidiaries, or (iv) any decline in the share price of either
Provident Common Stock or UNUM Common Stock
but, with respect to either party, excluding any change or effect
underlying such decline to the extent such change or effect would
otherwise constitute a material adverse effect on such party) or (2)
mandated change in U.S. generally accepted accounting principles or
interpretations thereof or statutory accounting practices prescribed
or permitted by the applicable insurance regulatory authorities or
interpretations thereof not applying specifically to Provident and
UNUM;
(d) "person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity; and
(e) a "subsidiary" of any person means another person, an amount
of the voting securities, other voting ownership or voting partnership
interests of which is sufficient to elect at least a majority of its
Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which is
owned directly or indirectly by such first person).
SECTION 8.04. Interpretation. When a reference is made in this
Agreement to an Article, Section or Exhibit, such reference shall be to an
Article or Section of, or an Exhibit to, this Agreement unless otherwise
indicated. The table of contents and headings for this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes"
or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation". The words "hereof", "herein"
and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms defined in this Agreement shall have
the defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the feminine
and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of
agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
SECTION 8.05. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties.
SECTION 8.06. Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein), the
Option Agreements, the Stockholders Agreement, the Confidentiality
Agreement and the Letter Agreement (a) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement and
(b) except for the provisions of Article II, Section 5.06 and Section 5.08,
are not intended to confer upon any person other than the parties any
rights or remedies.
SECTION 8.07. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
without regard to the laws that might otherwise govern under applicable
principles of conflict of laws thereof.
SECTION 8.08. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of law or otherwise by either of the parties
hereto without the prior written consent of the other party. Any assignment
in violation of the preceding sentence shall be void. Subject to the
preceding two sentences, this Agreement will be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 8.09. Enforcement; Waiver of Jury Trial. (a) The parties
agree that irreparable damage would occur and that the parties would not
have any adequate remedy at law 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 Federal court located in the State of Delaware or in
Delaware state court, 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 Federal court
located in the State of Delaware or any Delaware state court in the event
any dispute arises out of this Agreement or any of the transactions
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, and (iii) agrees that it will not bring any
action relating to this Agreement or any of the transactions contemplated
by this Agreement in any court other than a Federal court sitting in the
State of Delaware or a Delaware state court.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT OR THE OPTION AGREEMENTS IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OPTION AGREEMENTS, OR
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE OPTION AGREEMENTS.
EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY
AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OPTION AGREEMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.09(b).
SECTION 8.10. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
SECTION 8.11. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, unless the effects of such invalidity,
illegality or unenforceability would prevent the parties from realizing the
major portion of the economic benefits of the Merger that they currently
anticipate obtaining therefrom, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible to the
fullest extent permitted by applicable law in an acceptable manner to the
end that the transactions contemplated hereby are fulfilled to the extent
possible.
IN WITNESS WHEREOF, UNUM and Provident have caused this Agreement
to be signed by their respective officers thereunto duly authorized, all as
of the date first written above.
UNUM CORPORATION,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇ III
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇ III
Title: Chairman and Chief
Executive Officer
PROVIDENT COMPANIES, INC.,
by /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman, President
and Chief Executive
Officer
ANNEX I
TO THE MERGER AGREEMENT
Index of Defined Terms
Term Page Term Page
---- ---- ---- ----
Adjusted Option.................54 NYSE..................................9
affiliate.......................71 Option Agreements.....................2
APB No.16.......................61 Other State Insurance
Certificate of Merger............3 Approvals...........................9
Closing..........................2 Permits..............................17
Closing Date.....................2 person...............................72
Code.............................1 Ratio................................19
Confidentiality Agreement.......53 Real Estate Transfer Taxes...........58
Designated Insurance Approvals...2 Reinsurance Agreements...............21
Designated State Insurance Restraints...........................64
Approvals......................9 Reverse Stock Split..................18
DGCL.............................2 SARs..................................6
Effective Time...................3 SEC...................................5
Environmental Laws..............17 Securities Act........................8
ERISA...........................14 State Insurance Approvals.............9
Exchange Act.....................8 Stockholders Agreement................2
Form S-4.........................8 subsidiary...........................72
Governmental Entity..............8 Surviving Corporation.................1
Hazardous Material..............18 Third-Party Intellectual
HSR Act..........................8 Property Rights....................21
Insurance Laws..................11 UK Insurance Approval................26
Intellectual Property...........21 Provident.............................1
Joint Proxy Statement............8 Provident Acquisition
knowledge.......................71 Agreement..........................46
Letter Agreement................68 Provident Applicable Period..........46
UNUM.............................1 Provident Benefit Plans..............14
UNUM Acquisition Agreement......49 Provident Common Stock................1
UNUM Applicable Period..........48 Provident Disclosure Schedule.........5
UNUM Benefit Plans..............30 Provident Filed SEC Documents........12
UNUM Common Stock................1 Provident Form 10-K...................5
UNUM Disclosure Schedule........22 Provident Insurance
UNUM Filed SEC Documents........29 Subsidiaries.......................10
UNUM Form 10-K..................23 Provident Intellectual
UNUM Insurance Subsidiaries.....27 Property Rights....................21
UNUM Intellectual Property Provident Notice.....................46
Rights........................37 Provident Option......................2
UNUM Notice.....................48 Provident Pension Plans..............14
UNUM Option......................2 Provident SAP Statements.............10
UNUM Pension Plans..............30 Provident SEC Documents...............9
UNUM Rights.....................23 Provident Stock Options...............6
UNUM Rights Agreement...........23 Provident Stock Option
UNUM Rights Plan Amendment......37 Agreement...........................2
UNUM SAP Statements.............27 Provident Stock Plans.................6
UNUM SEC Documents..............26 Provident Stockholder
UNUM Stock Options..............23 Approval...........................18
UNUM Stock Option Agreement......2 Provident Stockholders
UNUM Stock Plans................23 Meeting............................51
UNUM Stockholder Approval.......35 Provident Superior Proposal..........47
UNUM Stockholders Meeting.......52 Provident Takeover Proposal..........46
UNUM Superior Proposal..........49 Welfare Plan.........................14
UNUM Takeover Proposal..........48
material adverse change.........71
material adverse effect.........71
Merger...........................1
Millennium Functionality........22
EXHIBIT A-1
TO THE MERGER AGREEMENT
RESTATED
CERTIFICATE OF INCORPORATION
of
UNUM PROVIDENT CORPORATION
FIRST: The name of the Corporation is UNUM Provident Corporation.
SECOND: The address of the registered office of the Corporation in the
state of Delaware is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, in the city of Wilmington, county
of New Castle. The name of the Corporation's registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of Delaware as set forth in Title 8 of the Delaware Code
(the "GCL").
FOURTH: A. The total number of shares of capital stock which the
Corporation shall have authority to issue is 500,000,000 shares, consisting
of 475,000,000 shares of Common Stock, par value $.10 per share (the
"Common Stock") and 25,000,000 shares of Preferred Stock, par value $.10
per share (the "Preferred Stock").
B. Shares of Preferred Stock may be issued from time to time in
one or more classes or series as may be determined from time to time by the
Board of Directors of the Corporation (the "Board of Directors"), each such
class or series to be distinctly designated. Except in respect of the
particulars fixed by the Board of Directors for classes or series provided
for by the Board of Directors as permitted hereby, all shares of Preferred
Stock shall be of equal rank and shall be identical. All shares of any one
series of Preferred Stock so designated by the Board of Directors shall be
alike in every particular, except that shares of any one series issued at
different times may differ as to the dates from which dividends thereon
shall be cumulative. The voting rights, if any, of each such class or
series and the preferences and relative, participating, optional and other
special rights of each such class or series and the qualifications,
limitations and restrictions thereof, if any, may differ from those of any
and all other classes or series at any time outstanding; and the Board of
Directors of the Corporation is hereby expressly granted authority to fix,
by resolutions duly adopted prior to the issuance of any shares of a
particular class or series of Preferred Stock so designated by the Board of
Directors, the voting powers of stock of such class or series, if any, and
the designations, preferences and relative, participating, optional and
other special rights and the qualifications, limitations and restrictions
of such class or series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute, such class or series, and such
number may be increased (except where otherwise provided by the Board
of Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and time at which, and the terms and conditions upon
which, dividends, if any, on Preferred Stock of such class or series
shall be paid, the extent of the preference or relation, if any, of
such dividends to the dividends payable on any other class or classes,
or series of the same or other classes of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
class or series to convert the same into, or exchange the same for,
shares of any other class or classes or of any series of the same or
any other class or classes of stock and the terms and conditions of
such conversion or exchange;
(4) Whether or not Preferred Stock of such class or series shall
be subject to redemption, and the redemption price or prices and the
time or times at which, and the terms and conditions upon which,
Preferred Stock of such class or series may be redeemed;
(5) The rights, if any, of the holders of Preferred Stock of such
class or series upon the voluntary or involuntary liquidation of the
Corporation;
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of such class
or series; and
(7) The voting powers, if any, of the holders of such class or
series of Preferred Stock.
C. Except as otherwise provided in this Certificate of Incorporation,
the Board of Directors shall have authority to authorize the issuance, from
time to time without any vote or other action by the stockholders, of any
or all shares of stock of the Corporation of any class or series at
any time authorized, and any securities convertible into or exchangeable
for any such shares, and any options, rights or warrants to purchase or
acquire any such shares, in each case to such persons and on such terms
(including as a dividend or distribution on or with respect to, or in
connection with a split or combination of, the outstanding shares of stock
of the same or any other class) as the Board of Directors from time to time
in its discretion lawfully may determine; provided, however, that the
consideration for the issuance of shares of stock of the Corporation having
par value (unless issued as such a dividend or distribution or in
connection with such a split or combination) shall not be less than such
par value. Shares so issued shall be fully paid stock, and the holders of
such stock shall not be liable to any further call or assessments thereon.
D. Except as provided in this Certificate of Incorporation, each
holder of Common Stock shall be entitled to one vote for each share of
Common Stock held by him.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and
of the Board of Directors and stockholders:
(1) The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
(2) The Board of Directors shall consist of not less than three
nor more than fifteen directors. The exact number of directors shall
be determined from time to time by resolution adopted by the
affirmative vote of a majority of the Board of Directors, subject to
Article III, Section 11 of the By-laws of the Corporation. The
Directors shall be divided into three classes, designated Class I,
Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the total number of Directors constituting
the entire Board of Directors.
(3) Upon, or as soon as practicable following, the filing of the
Certificate of Merger to which this Certificate of Incorporation is
attached, Class I Directors shall be elected for a one-year term,
Class II Directors for a two-year term and Class III Directors for a
three-year term. At each succeeding annual meeting of stockholders,
successors to the class of Directors whose term expires at that annual
meeting shall be elected for a three-year term. If the number of
Directors is changed in
accordance with the terms of this Certificate of Incorporation or the
By-laws, any increase or decrease shall be apportioned among the
classes so as to maintain the number of Directors in each class as
nearly equal as possible, and any additional Director of any class
elected to fill a vacancy resulting from an increase in such class
shall hold office for a term that shall coincide with the remaining
term of that class, but in no case will a decrease in the number of
Directors shorten the term of any incumbent Director. A Director shall
hold office until the annual meeting for the year in which his term
expires and until his successor shall be elected and shall qualify,
subject, however, to the Director's prior death, resignation,
disqualification or removal from office. The stockholders shall not
have the right to remove any one or all of the Directors except for
cause and in that event only by the affirmative vote of the holders of
eighty percent (80%) of the votes entitled to be cast by the holders
of all outstanding shares of Voting Stock (as hereinafter defined)
voting together as a single class. Any vacancy on the Board of
Directors that results from a newly created Directorship shall only be
filled by the affirmative vote of a majority of the Board of Directors
then in office, and any other vacancy occurring on the Board of
Directors shall only be filled by a majority of the Directors then in
office, although less than a quorum, or by a sole remaining Director.
Any Director elected to fill a vacancy not resulting from an increase
in the number of Directors shall have the same remaining term as that
of his predecessor.
(4) Notwithstanding the foregoing, whenever the holders of any
one or more classes or series of Preferred Stock issued by the
Corporation shall have the right, voting separately by class or
series, to elect Directors at an annual or special meeting of
stockholders, the election, term of office, filling of vacancies and
other features of such Directorships shall be governed by the terms of
this Certificate of Incorporation applicable thereto (including the
resolutions adopted by the Board of Directors pursuant to Section B of
Article FOURTH), and such Directors so elected shall not be divided
into classes pursuant to Paragraph (2) of this Article FIFTH unless
expressly provided by such terms. Election of Directors need not be by
written ballot unless the By-Laws so provide.
(5) The Board of Directors may from time to time determine
whether, to what extent, at what times and places and under what
conditions and regulations the accounts, books and papers of the
Corporation, or any of
them, shall be open to the inspection of the stockholders, and no
stockholder shall have any right to inspect any account, book or
document of the Corporation, except as and to the extent expressly
provided by law with reference to the right of stockholders to examine
the original or duplicate stock ledger, or otherwise expressly
provided by law, or except as expressly authorized by resolution of
the Board of Directors.
(6) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the Directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of the statutes of Delaware, this Certificate of
Incorporation, and the By-laws.
(7) Except as may be otherwise determined by the Board of
Directors in fixing the terms of any class or series of Preferred
Stock pursuant to Article FOURTH hereof, no action shall be taken by
stockholders of the Corporation except at an annual or special meeting
of stockholders of the Corporation and the right of stockholders to
act by written consent in lieu of a meeting is specifically denied.
SIXTH: A. The Board of Directors shall have concurrent power with the
stockholders as set forth in this Certificate of Incorporation to make,
alter, amend, change, add to or repeal the By-Laws of the Corporation.
B. Subject to Article III, Section 11 of the By-laws, the Board of
Directors may amend the By-Laws of the Corporation upon the affirmative
vote of the number of directors which shall constitute, under the terms of
the By-Laws, the action of the Board of Directors. Stockholders may not
amend the By-Laws of the Corporation except upon the affirmative vote of at
least eighty percent (80%) of the votes entitled to be cast by the holders
of all outstanding shares of Voting Stock voting together as a single
class.
SEVENTH: A. In addition to any affirmative vote required by law, this
Certificate of Incorporation, the By-Laws of the Corporation or otherwise,
except as otherwise expressly provided in Section B of this Article
SEVENTH, the Corporation shall not engage, directly or indirectly, in any
Business Combination (as hereinafter defined) with an Interested
Stockholder (as hereinafter defined) without the affirmative vote of (i)
not less than eighty percent (80%) of the votes entitled to be cast by the
holders of all outstanding shares of Voting Stock voting together as a
single class, and (ii) not less than a majority of the votes entitled to be
cast by the holders of all outstanding shares of Voting Stock which are
beneficially owned by persons other than such Interested Stockholder voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage or separate class vote may be specified, by law or in any
agreement with any national securities exchange or otherwise.
B. The provisions of Section A of this Article SEVENTH shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote, if any, as is
required by law, this Certificate of Incorporation, the By-Laws of the
Corporation, or otherwise, if such Business Combination shall have been
approved by a majority (whether such approval is made prior to or
subsequent to the acquisition of beneficial ownership of Voting Stock that
caused the Interested Stockholder to become an Interested Stockholder) of
the Continuing Directors (as hereinafter defined).
C. For the purposes of this Certificate of Incorporation:
(1) The term "Business Combination" shall mean:
(a) any merger or consolidation of this Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested
Stockholder or (ii) any other corporation (whether or not itself
an Interested Stockholder) which is or after such merger or
consolidation would be an Affiliate or Associate of an Interested
Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of
transactions) between the Corporation or any Subsidiary and any
Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder involving any assets or securities of the
Corporation, any Subsidiary or any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder the value of
which would constitute, immediately prior to such transaction, a
Substantial Part (as hereinafter defined) of the assets of the
Corporation; or
(c) the adoption of any plan or proposal for the liquidation
or dissolution of, or similar transaction involving, the
Corporation proposed by or on behalf of
an Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder; or
(d) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation, or
any merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or
otherwise involving an Interested Stockholder) that has the
effect, directly or indirectly, of increasing the proportionate
share of any class or series of Capital Stock, or any securities
convertible into Capital Stock or into equity securities of any
Subsidiary, that is beneficially owned by any Interested
Stockholder or any Affiliate or Associate of any Interested
Stockholder; or
(e) any agreement, contract or other arrangement providing
for any one or more of the actions specified in the foregoing
clauses (a) to (d).
(2) The term "Capital Stock" shall mean all capital stock of the
Corporation authorized to be issued from time to time under Article
FOURTH of this Certificate of Incorporation, and the term "Voting
Stock" shall mean all Capital Stock which by its terms may be voted on
all matters submitted to stockholders of the Corporation generally.
(3) The term "person" shall mean any individual, firm,
corporation or other entity and shall include any group comprised of
any person and any other person with whom such person or any Affiliate
or Associate of such person has any agreement, arrangement or
understanding, directly or indirectly, for the purpose of acquiring,
holding, voting or disposing of Capital Stock.
(4) The term "Interested Stockholder" shall mean any person
(other than the Corporation or any Subsidiary and other than any
profit-sharing, employee stock ownership or other employee benefit
plan of the Corporation or any Subsidiary or any trustee of or
fiduciary with respect to any such plan or any trust or any other
entity formed for the purposes of holding Voting Stock for the purpose
of funding any such plan or funding other employee benefits for
employees of the Corporation or any Subsidiary, in each case when
acting in such capacity) who (a) is the beneficial owner of Voting
Stock representing fifteen percent (15%) or more of the votes entitled
to be cast by the holders of all then outstanding shares of Voting
Stock; or (b) is an Affiliate or Associate of the
Corporation and at any time within the two-year period immediately
prior to the date in question was the beneficial owner of Voting Stock
representing fifteen percent (15%) or more of the votes entitled to be
cast by the holders of all then outstanding share of Voting Stock.
(5) A person shall be a "beneficial owner" of any Capital Stock
(a) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; (b) which such person or
any of its Affiliates or Associates has, directly or indirectly, (i)
the right to acquire (whether such right is exercisable immediately or
subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding; or (c) which are beneficially owned, directly or
indirectly, by any other person with which such person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Capital Stock. For the purposes of
determining whether a person is an Interested Stockholder pursuant to
Paragraph 4 of this Section C, the number of shares of Capital Stock
deemed to be outstanding shall include shares deemed beneficially
owned by such person through application of Paragraph 5 of this
Section C, but shall not include any other shares of Capital Stock
that may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
(6) The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Act"), (the term
"registrant" in Rule 12b-2 meaning in this case the Corporation).
(7) The term "Subsidiary" means any corporation of which a
majority of any class of equity security is beneficially owned by the
Corporation; provided, however, that for the purposes of the
definition of Interested Stockholder set forth in Paragraph 4 of this
Section C, the term "Subsidiary" shall mean only a corporation of
which a majority of each class of equity security is beneficially
owned by the Corporation.
(8) The term "Continuing Director" means any member of the Board
of Directors, while such person is a member of the Board of Directors,
who is not an Affiliate or
Associate or representative of the Interested Stockholder and was a
member of the Board prior to the time that the Interested Stockholder
became an Interested Stockholder, and any successor of a Continuing
Director, while such successor is a member of the Board of Directors,
who is not an Affiliate or Associate or representative of the
Interested Stockholder and is recommended or elected to succeed the
Continuing Director by a majority of Continuing Directors. In order
for a Business Combination or other action to be approved, or a fact
or other matter to be determined, "by a majority of the Continuing
Directors" hereunder, there must be one or more Continuing Directors
then serving on the Board of Directors.
(9) The term "Substantial Part" means assets having an aggregate
Fair Market Value (as hereinafter defined) in excess of ten percent
(10%) of the book value of the total consolidated assets of the
Corporation and its Subsidiaries as of the end of the Corporation's
most recent fiscal year ending prior to the time the stockholders of
the Corporation would be required to approve or authorize the Business
Combination involving assets constituting any such Substantial Part.
(10) The term "Fair Market Value" means (a) in the case of cash,
the amount of such cash; (b) in the case of stock, the highest closing
sale price, during the 30-day period immediately preceding the date in
question, of a share of such stock on the Composite Tape for New York
Stock Exchange, Inc. Listed Stocks, or, if such stock is not quoted on
the Composite Tape, on the New York Stock Exchange, Inc., or, if such
stock is not listed on such exchange, on the principal United States
securities exchange registered under the Act on which such stock is
listed, or if such stock is not listed on any such exchange, the
highest closing bid quotation with respect to a share of such stock,
during the 30-day period preceding the date in question, on the
National Association of Securities Dealers, Inc. Automated Quotation
System or any similar system then in use, or if no such quotations are
available, the fair market value on the date in question of a share of
such stock as determined by a majority of the Continuing Directors in
good faith; and (c) in the case of property other than cash or stock,
the fair market value of such property on the date in question as
determined in good faith by a majority of the Continuing Directors.
D. A majority of the Continuing Directors shall have the power and
duty to determine for the purposes of this Article SEVENTH, on the basis of
information known to them
after reasonable inquiry, (a) whether a person is an Interested
Stockholder, (b) the number of shares of Capital Stock or other securities
beneficially owned by any person, (c) whether a person is an Affiliate or
Associate of another and (d) whether the assets that are the subject of any
Business Combination have, or the consideration to be received for the
issuance or transfer of securities by this Corporation or any Subsidiary in
any Business Combination has, an aggregate Fair Market Value in excess of
the amount set forth in Paragraph 1(b) of Section C of this Article
SEVENTH. Any such determination made in good faith shall be binding and
conclusive on all parties.
E. Nothing contained in this Article SEVENTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by
law.
EIGHTH: When considering a merger, consolidation, Business Combination
or similar transaction, the Board of Directors, committees of the Board,
individual directors and individual officers may, in considering the best
interests of the Corporation and its stockholders, consider the effects of
any such transaction upon the employees, customers and suppliers of the
Corporation, and upon communities in which offices of the Corporation are
located.
NINTH: Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that a lesser percentage or separate class vote may be specified by
law, this Certificate of Incorporation or the By-Laws of the Corporation),
(i) the affirmative vote of the holders of not less than eighty percent
(80%) of the votes entitled to be cast by the holders of all outstanding
shares of Voting Stock, voting together as a single class, shall be
required to amend or repeal, or adopt any provisions inconsistent with,
Articles FIFTH and SIXTH, and (ii) the affirmative vote of the holders of
(x) not less than eighty percent (80%) of the votes entitled to be cast by
the holders of all outstanding shares of Voting Stock voting together as a
single class, and (y) not less than a majority of the votes entitled to be
cast by the holders of all outstanding shares of Voting Stock which are
beneficially owned by persons other than Interested Stockholders, if any,
voting together as a single class, shall be required to amend or repeal, or
adopt any provisions inconsistent with, Articles SEVENTH and NINTH;
provided, however, that, with respect to Articles FIFTH, SIXTH, SEVENTH and
NINTH such special voting requirements shall not apply to, and such special
votes shall not be required for, any amendment, repeal or adoption
recommended by the Board if a majority of the directors then
in office are persons who would be eligible to serve as Continuing
Directors.
TENTH: No director shall be personally liable to the Corporation or
any of its stockholders for monetary damages for any breach of fiduciary
duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of the
Delaware General Corporation Law or (iv) for any transaction from which the
director derived an improper personal benefit. Any repeal of modification
of this Article TENTH by the stockholders of the Corporation shall not
adversely affect any right of protection of a director of the Corporation
existing at the time of such repeal or modification with respect to acts or
omissions occurring prior to such repeal or modification.
ELEVENTH: Subject to the provisions of this Certificate of
Incorporation, the Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in
the manner now or thereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted subject to this reservation.
EXHIBIT A-2
TO THE MERGER AGREEMENT
AMENDED AND RESTATED BY-LAWS
OF
UNUM PROVIDENT CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
SECTION 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of
Delaware.
SECTION 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the
Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. Meetings of the stock holders for the
election of directors or for any other purpose shall be held at such time
and place, either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors and stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. Annual Meetings. The Annual Meetings of Stockholders shall
be held on such date and at such time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meetings, at
which meetings the stockholders shall elect by a plurality vote the
directors to be elected at such meetings, and transact such other business
as may properly be brought before the meetings. Written notice of the
Annual Meeting stating the place, date and hour of the meeting shall be
given to each stockholder entitled to vote at such meeting not less than
ten nor more than sixty days before the date of the meeting.
SECTION 3. Special Meetings. Unless otherwise prescribed by law or by
the Certificate of Incorporation, Special Meetings of Stockholders, for any
purpose or purposes, may be called by either (i) the Chairman, if there be
one, (ii) the Chief Executive Officer or (iii) the President, and shall be
called by any such officer at the
request in writing of a majority of the Board of Directors. Such request
shall state the purpose or purposes of the proposed meeting. Written notice
of a Special Meeting stating the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called shall be given not
less than ten nor more than sixty days before the date of the meeting to
each stockholder entitled to vote at such meeting.
SECTION 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital
stock issued and outstanding and entitled to vote thereat, present in
person or represented by proxy, shall constitute a quorum at all meetings
of the stockholders for the transaction of business. If, however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person
or represented by proxy, shall have power to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which
a quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally noticed. If
the adjournment is for more than thirty days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given to each stockholder entitled to vote at
the meeting. The foregoing provisions shall be subject to the voting
rights of holders of any Preferred Stock of the Corporation and any quorum
requirements relating thereto.
SECTION 5. Voting. Unless otherwise required by law, applicable stock
exchange rules or regulations, the Certificate of Incorporation or these
By-Laws, any question brought before any meeting of stockholders shall be
decided by a majority of the votes entitled to be cast by the holders of
stock represented and entitled to vote thereat and each stockholder
represented at a meeting of stockholders shall be entitled to cast one
vote for each share of the capital stock entitled to vote thereat held by
such stockholder. Such votes may be cast in person or by proxy but no proxy
shall be voted on or after three years from its date, unless such proxy
provides for a longer period. The Board of Directors, in its discretion, or
the officer of the Corporation presiding at a meeting of stockholders, in
his discretion, may require that any votes cast at such meeting shall be
cast by written ballot.
SECTION 6. Proper Business at Annual Meetings. At any annual meeting
of the stockholders, only such business shall
be conducted as shall have been properly brought before such meeting. To be
properly brought before an annual meeting, business must be specified in
the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, or otherwise properly brought before
the meeting by or at the direction of the Board of Directors, or otherwise
properly brought before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation, must be a stockholder of the Corporation of record at the time
of the delivery of said notice and must be entitled to vote at the meeting.
To be timely, a stock holder's notice must be delivered to, or mailed and
received at, the principal executive offices of the Corporation, not less
than 60 days nor more than 90 days prior to the annual meeting; provided,
however, that in the event that less than 75 days' notice or prior public
disclosure of the date of such meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than
the close of business on the 15th day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure was first made. A stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be
brought before the annual meeting, including the complete text of any
resolutions to be presented at the meeting with respect to such business,
and the reasons for conducting such business at the annual meeting, (ii)
the name and address of record of the stockholder proposing such business
and the beneficial owner, if any, on whose behalf the proposal is made,
(iii) the class and number of shares of the Corporation which are
beneficially owned by the stockholder and such beneficial owner, (iv) any
material interest of the stockholder and such beneficial owner in such
business and (v) a representation that the stockholder is a holder of
record of shares of the Corporation entitled to vote at such meeting and
intends to appear in person or by proxy at the meeting to propose such
business. The chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that such business was not properly
brought before the meeting in accordance with these provisions, and if he
should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
SECTION 7. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall
prepare and make, at least ten days before every meeting of stockholders, a
complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the
number of shares registered in the name of each stockholder. Such list
shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time
and place of the meeting during the whole time thereof, and may be
inspected by any stockholder of the Corporation who is present.
SECTION 8. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the
stock ledger, the list required by Section 7 of this Article II or the
books of the Corporation, or to vote in person or by proxy at any meeting
of stockholders.
SECTION 9. (a) Organization. Meetings of stockholders shall be
presided over by the Chairman of the Board, if any, or in his absence by
the Vice Chairman of the Board, if any, or in his absence by the Chief
Executive Officer, or in his absence by the President, or in his absence by
a Vice President, or in the absence of the foregoing persons by a chairman
designated by the Board of Directors, or in the absence of such designation
by a chairman chosen at the meeting. The Secretary shall act as secretary
of the meeting, but in his absence the chairman of the meeting may appoint
any person to act as secretary of the meeting.
(b) Conduct of Meetings. The date and time of the opening and the
closing of the polls for each matter upon which the stockholders will vote
at a meeting shall be announced at the meeting by the person presiding over
the meeting. The Board of Directors may adopt by resolution such rules and
regulations for the conduct of the meeting of stockholders as it shall deem
appropriate. Except to the extent inconsistent with such rules and
regulations as adopted by the Board of Directors, the chairman of any
meeting of stockholders shall have the right and authority to prescribe
such rules, regulations and procedures and to do all such acts as, in the
judgment of such chairman, are appropriate for the proper conduct of the
meeting. Such rules, regulations or procedures, whether adopted by the
Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an
agenda or order of business for the
meeting; (ii) rules and procedures for maintaining order at the meeting and
the safety of those present; (iii) limitations on attendance at or
participation in the meeting to stockholders of record of the corporation,
their duly authorized and constituted proxies or such other persons as the
chairman of the meeting shall determine; (iv) restrictions on entry to the
meeting after the time fixed for the commencement thereof and (v)
limitations on the time allotted to questions or comments by participants.
Unless and to the extent determined by the Board of Directors or the
chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with the rules of parliamentary procedure.
ARTICLE III
DIRECTORS
SECTION 1. Number and Election of Directors. Subject to Article III,
Section 11 of these By-laws, the number of directors constituting the Board
of Directors shall be fixed from time to time by the Board of Directors in
the manner prescribed in the Certificate of Incorporation and shall
initially be 15, eight of whom shall be designated by UNUM and seven of
whom shall be designated by Provident. Except as provided in Section 3 of
this Article, the directors to be elected at each Annual Meeting of
Stockholders shall be elected by a plurality of the votes cast at such
Annual Meeting of Stockholders, and each director so elected shall hold
office until the third Annual Meeting following such election and until his
successor is duly elected and qualified, or until his earlier resignation,
retirement or removal. No person elected or re-elected a director shall,
after such person's seventy-second birthday, serve as a director of the
Corporation beyond the date of the Corporation's annual meeting ending the
term for which such person has been elected; provided, that, no person
shall be required to retire because of their age prior to such date. Any
director may resign at any time upon notice to the Corporation. Directors
need not be stockholders.
SECTION 2. Nomination Procedures. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of
the Corporation may be made at a meeting of stockholders by or at the
direction of the Board of Directors, by any nominating committee or person
appointed by the Board of Directors or by any stockholder of the
Corporation entitled to vote for the election of Directors at the meeting.
Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation by a stockholder of the Corporation of record
at the time of the delivery of said notice who is entitled to vote at the
meeting. To be timely, a stockholder's notice shall be delivered to, or
mailed and received at, the principal executive offices of the Corporation
not less than 60 days nor more than 90 days prior to the meeting; provided,
however, that in the event that less than 75 days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than
the close of business on the 15th day following the day on which such
notice of the date of the meeting was mailed or such public disclosure was
first made. Such stockholder's notice shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or re-election as a
director, (i) the name, age, business address and residence address of the
person, (ii) the principal occupation or employment of the person, (iii)
the class and number of shares of the Corporation which are beneficially
owned by the person, (iv) a description of all arrangements, understandings
or relationships between the stockholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder and (v) any
other information relating to the person that is required to be disclosed
in solicitations of proxies for election of Directors pursuant to Rule
14(a) under the Securities Exchange Act of 1934, as amended (the "Act"),
and any other applicable laws or rules or regulations of any governmental
authority or of any national securities exchange or similar body overseeing
any trading market on which shares of the Corporation are traded, and (b)
as to the stockholder giving the notice (i) the name and address of record
of the stockholder and the beneficial owner, if any, on whose behalf the
nomination is made, and (ii) the class and number of shares of the
Corporation which are beneficially owned by the stockholder and such
beneficial owner and (iii) a representation that the stockholder is a
holder of record of shares of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice. No person shall be
eligible for election as a Director of the Corporation unless nominated in
accordance with the procedures set forth herein. The chairman of the
meeting shall, if the facts warrant, determine and declare to the meeting
that a nomination was not made in accordance with the foregoing procedure,
and if he should so determine, he
shall so declare to the meeting and the defective nomination shall be
disregarded.
SECTION 3. Vacancies. Subject to the provisions of the Certificate of
Incorporation, vacancies and newly created directorships resulting from any
increase in the authorized number of directors, which increase shall be
subject to Article III, Section 11, shall only be filled by a majority of
the directors then in office, though less than a quorum, or by a sole
remaining director, and the directors so chosen shall hold office until the
next annual election and until their successors are duly elected and
qualified, or until their earlier resignation or removal.
SECTION 4. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by
these By-Laws directed or required to be exercised or done by the
stockholders.
SECTION 5. Meetings. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without the state
of Delaware. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as may from time to time be
determined by the Board of Directors. Special meetings of the Board of
Directors may be called by the Chairman, if there be one, the Chief
Executive Officer, the President, or any three directors. Notice thereof
stating the place, date and hour of the meeting shall be given to each
director either by mail not less than forty-eight (48) hours before the
date of the meeting, by telephone or telegram on twenty-four (24) hours'
notice, or on much shorter notice as the person or persons calling such
meeting may deem necessary or appropriate in the circumstances.
SECTION 6. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these By-Laws, at all meetings of
the Board of Directors, a majority of the entire Board of Directors shall
constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors. If a quorum shall not be
present at any meeting of the Board of Directors, the directors present
thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
SECTION 7. Actions of Board. Unless otherwise provided by the
Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all the members of the
Board of Directors or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
SECTION 8. Meetings by Means of Conference Telephone or Similar
Communications Equipment. Unless otherwise provided by the Certificate of
Incorporation or these By-Laws, members of the Board of Directors of the
Corporation, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors or such committee by
means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each
other, and participation in a meeting pursuant to this Section 8 shall
constitute presence in person at such meeting.
SECTION 9. Committees. (a) The Board of Directors may, by resolution
passed by a majority of the entire Board of Directors, designate one or
more committees, each committee to consist of one or more of the directors
of the Corporation. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of any such committee. In the absence
or disqualification of a member of a committee, and in the absence of a
designation by the Board of Directors of an alternate member to replace
the absent or disqualified member, the member or members thereof present at
any meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any absent or disqualified
member. Any committee, to the extent allowed by law and provided in the
resolution establishing such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the
business and affairs of the Corporation. Each committee shall keep regular
minutes and report to the Board of Directors when required.
(b) The Corporation shall have an Executive Committee which, among any
other powers which shall from time to time be granted to such committee by
resolution of the Board of Directors, shall have the sole power and
authority to recommend nominees to the Board of Directors (i) for
election to the Board of Directors at the stockholders meetings at which
directors are to be elected, (ii) to fill vacancies on the Board of
Directors of the Corporation in between such stockholders meetings and
(iii) to serve on, and fill vacancies in, any committee of the Board of
Directors.
(c) Notwithstanding anything to the contrary contained in these
By-laws, until July 1, 2001, the Executive Committee will consist of three
directors which were initially designated by UNUM Corporation, which will
include the Chief Executive Officer of the Corporation (who will serve as
Chairman of such committee), and three directors which were initially
designated by Provident Companies, Inc., which will include the President,
in each case in accordance with the Agreement and Plan of Merger, dated as
of November 22, 1998, between UNUM Corporation and Provident Companies,
Inc. (the "Merger Agreement").
SECTION 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association, or
other organization in which one or more of its directors or officers are
directors or officers, or have a financial interest, shall be void or
voidable solely for this reason, or solely because the director or officer
is present at or participates in the meeting of the Board of Directors or
committee thereof which authorizes the contract or transaction, or solely
because his or their votes are counted for such purpose if (i) the material
facts as to his or their relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the
committee, and the Board of Directors or committee in good faith authorizes
the contract or trans action by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less
than a quorum; or (ii) the material facts as to his or their relationship
or interest and as to the contract or transaction are disclosed or are
known to the shareholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the
shareholders; or (iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof or the shareholders. Common or
interested directors may be counted in determining the presence of a quorum
at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
SECTION 11. Certain Modifications. Notwithstanding anything to the
contrary contained in these By-laws, until July 1, 2001, the following
actions taken either directly or indirectly by the Board of Directors
shall, when a quorum is present, require the affirmative vote of not less
than seventy-five percent of the directors voting at a meeting for which
proper notice of the actions taken was duly given: (i) any change in the
size of the Board of Directors or in the size of any class of directors;
(ii) any change in the composition or power and authority of the Executive
Committee of the Board of Directors or the chairmanship thereof; (iii) any
change or amendment to these By-laws; and (iv) any proposals to be
submitted to the stockholders of the Corporation by the Board of Directors.
From and after July 1, 2001, any of the actions set forth in clauses (i)
through (iv) of the immediately preceding sentence may be taken upon the
affirmative vote of the number of directors which shall constitute, under
the terms of these By-laws, the action of the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a Chief Executive Officer, a President,
a Secretary and a Treasurer. The Board of Directors, in its discretion, may
also choose a Chairman of the Board of Directors (who must be a director)
and one or more Vice-Presidents, Assistant Secretaries, Assistant
Treasurers and other officers. Any number of offices may be held by the
same person, unless otherwise prohibited by law, the Certificate of
Incorporation or these By-Laws. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman of
the Board of Directors, need such officers be directors of the Corporation.
SECTION 2. Election. The Board of Directors shall elect the officers
of the Corporation who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier resignation or removal. Any officer elected by the Board of
Directors may be removed at any time by the affirmative vote of a majority
of the Board of Directors. Any vacancy occurring in any office of the
Corporation shall be filled by the Board of Directors.
SECTION 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be executed
in the name of and on behalf of the Corporation by the Chief Executive
Officer, the President or any Vice-President and any such officer may, in
the name of and on behalf of the Corporation, take all such action as any
such officer may deem advisable to vote in person or by proxy at any
meeting of security holders of any corporation in which the Corporation may
own securities and at any such meeting shall possess and may exercise any
and all rights and power incident to the ownership of such securities and
which, as the owner thereof, the Corporation might have exercised and
possessed if present. The Board of Directors may, by resolution, from time
to time confer like powers upon any other person or persons.
SECTION 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if there be one, shall preside at all meetings of the
stockholders and of the Board of Directors. Except where by law the
signature of the Chief Executive Officer or the President is required, the
Chairman of the Board of Directors shall possess the same power as the
Chief Executive Officer or the President to sign all contracts,
certificates and other instruments of the Corporation which may be
authorized by the Board of Directors. During the absence or disability of
the Chief Executive Officer and the President, the Chairman of the Board of
Directors shall exercise all the powers and discharge all the duties of the
Chief Executive Officer or the President. The Chairman of the Board of
Directors shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by
the Board of Directors.
SECTION 5. Chief Executive Officer. The Chief Executive Officer shall,
subject to the control of the Board of Directors, have general supervision
of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. He shall
execute all bonds, mortgages, contracts and other instruments of the
Corporation requiring a seal, under the seal of the Corporation, except
where required or permitted by law to be otherwise signed and executed and
except that the other officers of the Corporation may sign and execute
documents when so authorized by these By-Laws, the Board of Directors, the
Chief Executive Officer or the President. In the absence or disability of
the Chairman of the Board of Directors, or if there be none, the Chief
Executive Officer shall preside at all meetings of the
stockholders and the Board of Directors. The Chief Executive Officer shall
also perform such other duties and may exercise such other powers as from
time to time may be assigned to him by these By-Laws or by the Board of
Directors.
SECTION 6. President. The President shall, subject to the control of
the Board of Directors and the Chief Executive Officer (provided that until
July 1, 2001, the President and the Chief Executive Officer will
participate equally in setting the overall strategic direction of the
Corporation), have general supervision of the business of the Corporation
and shall see that all orders and resolutions of the Board of Directors are
carried into effect. He shall execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the seal of
the Corporation, except where required or permitted by law to be otherwise
signed and executed and except that the other officers of the Corporation
may sign and execute documents when so authorized by these By-Laws, the
Board of Directors, the Chief Executive Officer or the President. In the
absence or disability of the Chairman of the Board of Directors and the
Chief Executive Officer, or if neither shall exist, the President shall
preside at all meetings of the stockholders and the Board of Directors. The
President shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these By-Laws or by
the Board of Directors.
SECTION 7. Vice-Presidents. At the request of the Chief Executive
Officer or the President or in the event of either of their absences or
inability or refusal to act (and if there be no Chairman of the Board of
Directors), the Vice-President or the Vice-Presidents if there is more than
one (in the order designated by the Board of Directors) shall perform the
duties of the Chief Executive Officer and President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer and President. Each Vice-President shall
perform such other duties and have such other powers as the Board of
Directors from time to time may prescribe. If there be no Chairman of the
Board of Directors and no Vice-President, the Board of Directors shall
designate the officer of the Corporation who, in the absence of the Chief
Executive Officer and President or in the event of the inability or refusal
of the Chief Executive Officer and President to act, shall perform the
duties of the Chief Executive Officer and President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon
the Chief Executive Officer and President.
SECTION 8. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the
Board of Directors, the Chief Executive Officer or President, under whose
supervision he shall be. If the Secretary shall be unable or shall refuse
to cause to be given notice of all meetings of the stockholders and special
meetings of the Board of Directors, and if there be no Assistant Secretary,
then either the Board of Directors, the Chief Executive Officer or the
President may choose another officer to cause such notice to be given. The
Secretary shall have custody of the seal of the Corporation and the
Secretary or any Assistant Secretary, if there be one, shall have authority
to affix the same to any instrument requiring it and when so affixed, it
may be attested by the signature of the Secretary or by the signature of
any such Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the Corporation and to
attest the affixing by his signature. The Secretary shall see that all
books, reports, statements, certificates and other documents and records
required by law to be kept or filed are properly kept or filed, as the case
may be.
SECTION 9. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit
of the Corporation in such depositories as may be designated by the Board
of Directors. The Treasurer shall disburse the funds of the Corporation as
may be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chief Executive Officer, the
President and the Board of Directors, at its regular meetings, or when the
Board of Directors so requires, an account of all his transactions as
Treasurer and of the financial condition of the Corporation. If required by
the Board of Directors, the Treasurer shall give the Corporation a bond in
such sum and with such surety or sureties as shall be satisfactory to the
Board of Directors for the faithful performance of the duties of his office
and for the restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
SECTION 10. Assistant Secretaries. Except as may be otherwise provided
in these By-Laws, Assistant Secretaries, if there be any, shall perform
such duties and have such powers as from time to time may be assigned to
them by the Board of Directors, the Chief Executive Officer, the President,
any Vice-President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his disability or refusal to act, shall
perform the duties of the Secretary, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the Secretary.
SECTION 11. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time
may be assigned to them by the Board of Directors, the Chief Executive
Officer, the President, any Vice-President, if there be one, or the
Treasurer, and in the absence of the Treasurer or in the event of his
disability or refusal to act, shall perform the duties of the Treasurer,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money
and other property of whatever kind in his possession or under his control
belonging to the Corporation.
SECTION 12. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board
of Directors may delegate to any other officer of the Corporation the power
to choose such other officers and to prescribe their respective duties and
powers.
SECTION 13. Certain Actions. Notwithstanding anything to the contrary
contained in these By-laws, until July 1, 2001, the removal of the current
Chairman and Chief Executive Officer or the current President and Chief
Operating Officer as of the effective date of the merger contemplated by
the Merger Agreement, any modification to the provisions of either of their
respective employment contracts which provide their respective terms of
office or
any modification to either of their respective roles, duties or authority
shall, when a quorum is present, require the affirmative vote of
seventy-five percent of the directors voting at a meeting for which proper
notice of the actions taken was duly given. From and after July 1, 2001,
any of the actions set forth in the immediately preceding sentence may be
taken upon the affirmative vote of the number of directors which shall
constitute, under the terms of these By-laws, the action of the Board of
Directors.
ARTICLE V
STOCK
SECTION 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of
the Corporation (i) by the Chairman of the Board of Directors, the Chief
Executive Officer, the President or a Vice-President and (ii) by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant
Secretary of the Corporation, certifying the number of shares owned by him
in the Corporation.
SECTION 2. Signatures. Where a certificate is countersigned by (i) a
transfer agent other than the Corporation or its employee, or (ii) a
registrar other than the Corporation or its employee, any other signature
on the certificate may be a facsimile. In case any officer, transfer agent
or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer, transfer agent
or registrar at the date of issue.
SECTION 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of a
new certificate, the Board of Directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate, or his legal representative, to
advertise the same in such manner as the Board of Directors shall require
and/or to give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or
destroyed.
SECTION 4. Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these By-Laws. Transfers of stock
shall be made on the books of the Corporation only by the person named in
the certificate or by his attorney lawfully constituted in writing and upon
the surrender of the certificate therefor, which shall be canceled before a
new certificate shall be issued.
SECTION 5. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled
to exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than
sixty days nor less than ten days before the date of such meeting, nor more
than sixty days prior to any other action. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided, however, that the
Board of Directors may fix a new record date for the adjourned meeting.
SECTION 6. Beneficial Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to
hold liable for calls and assessments a person registered on its books as
the owner of shares, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
ARTICLE VI
NOTICES
SECTION 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at his
address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time
when the same shall be
deposited in the United States mail. Written notice may also be given
personally or by telegram, telex or cable.
SECTION 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these By-Laws, to be given to any
director, member of a committee or stockholder, a waiver thereof in
writing, signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE VII
GENERAL PROVISIONS
SECTION 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation,
if any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the capital
stock. Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the
Board of Directors from time to time, in its absolute discretion, deems
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation,
or for any proper purpose, and the Board of Directors may modify or abolish
any such reserve.
SECTION 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
SECTION 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
SECTION 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the
words "Corporate Seal, Delaware". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION
SECTION 1. Indemnification in Actions, Suits, or Proceedings Other
Than Those by or in the Right of the Corporation. Subject to Section 3 of
this Article VIII, the Corporation shall indemnify each person who is or
was, or is threatened to be made, a party to or witness in any threatened,
pending or completed action, suit, proceeding or claim, whether civil,
criminal, administrative or investigative (other than one by or in the
right of the Corporation), by reason of the fact that he is or was a
director, officer or employee of the Corporation or of Union Mutual Life
Insurance Company, a Maine mutual insurance company (the "Mutual Company"),
or is or was serving at the request of the Corporation or the Mutual
Company as a director, officer, employee or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorney's fees and expenses),
judgments, fines, penalties, and amounts paid in settlement, incurred by
him in connection with defending, investigating, preparing to defend, or
being or preparing to be a witness in, such action, suit, proceeding or
claim, if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
SECTION 2. Indemnification in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article VIII,
the Corporation shall indemnify each person who is or was, or is threatened
to be made, a party to or witness in any threatened, pending or completed
action, suit, proceeding or claim by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer or employee of the Corporation or of the Mutual Company
or is or was serving at the request of the Corporation or the Mutual
Company as a director, officer, employee or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorney's fees and expenses), and,
if and to the extent permitted by applicable law, judgments, penalties and
amounts paid in settlement, incurred by him in connection with defending,
investigating, preparing to defend, or being or preparing to be a witness
in, such action, suit, proceeding or claim, if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation; provided, however, that
no indemnification shall be made in respect of any such claim or any issue
or matter in any such action, suit or proceeding as to which such person
shall have been adjudged to be liable to the Corporation unless (and only
to the extent that) the Court of Chancery or the court in which such claim,
action, suit or proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnification for such expenses and amounts which the Court of Chancery
or such other court shall deem proper.
SECTION 3. Authorization of Indemnification. (a) Any indemnification
under this Article VIII (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination
that indemnification of the person seeking indemnification is proper in the
circumstances because he has met the applicable standard of conduct set
forth in Section 1 or 2 of this Article VIII, as the case may be. Such
determination (and determinations under Sections 5 and 6 of this Article
VIII) shall be made (i) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to the action, suit,
proceeding or claim with respect to which indemnification is sought
("disinterested directors"), or (ii) if such a quorum is not obtainable, or
if a quorum of disinterested directors so directs, in a written opinion of
independent legal counsel chosen by the Board of Directors, or (iii) by the
stockholders; provided, however, that if a Change in Control (as defined in
this Section 3) has occurred and the person seeking indemnification so
requests, such determination (and determination under Sections 5 and 6 of
this Article VIII) shall be made in a written opinion rendered by
independent legal counsel chosen by the person seeking indemnification and
not reasonably objected to by the Board of Directors (whose fees and
expenses shall be paid by the Corporation). To the extent, however, that a
director, officer, employee or trustee or former director, officer,
employee or trustee has been successful on the merits or otherwise in
defense of any action, suit, proceeding or claim described above, or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorney's fees and expenses) incurred by him
in connection therewith, without the necessity of authorization in the
specific case.
(b) For purposes of the proviso to the second sentence of Section
3(a), "independent legal counsel" shall mean legal counsel other than an
attorney, or a firm having associated with it an attorney, who has been
retained by or who has performed services for the Corporation, the Mutual
Company or the person seeking indemnification within the previous three
years.
(c) A "Change in Control" shall mean a change in control of the
Corporation of a nature that would be required to be reported in response
to Item 5(f) of Schedule 14A of Regulation 14A promulgated under the Act,
whether or not the Corporation is then subject to such reporting
requirement; provided that, without limitation, such a change in control
shall be deemed to have occurred if (i) any "person" (as such term is used
in sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Corporation representing 35% or more of the combined
voting power of the Corporation's then outstanding securities without the
prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such acquisition, or (ii) the
Corporation is a party to a merger, consolidation, sale of assets or other
reorganization, or proxy contest, as a consequence of which members of the
Board of Directors in office immediately prior to such transaction or event
constitute less than a majority of the Board of Directors thereafter, or
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors (including for
this purpose any new director whose election or nomination for election by
the Corporation's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period) cease for any reason to constitute at least a
majority of the Board of Directors.
SECTION 4. Good Faith Defined, Etc. (a) For purposes of any
determination under Section 3 of this Article VIII, a person shall be
deemed to have acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Corporation, or, with
respect to any criminal action or proceeding, to have had no reasonable
cause to believe his conduct was unlawful, if such person relied on the
records or books of account of the Corporation, the Mutual Company or
another enterprise, or on information supplied to him by the officers of
the Corporation, the Mutual Company or another enterprise, or on
information or records given or reports made to the Corporation, the Mutual
Company or another enterprise by an independent certified public accountant
or by an appraiser or other expert selected with reasonable care by the
Corporation, the Mutual Company or another enterprise. The term "another
enterprise" as used in this Section 4(a) shall mean any other corporation
or any partnership, joint
venture, trust, employee benefit plan or other enterprise of which such
person is or was serving at the request of the Corporation or the Mutual
Company as a director, officer, employee or trustee.
(b) The termination of any action, suit, proceeding or claim by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation,
or, with respect to any criminal action or proceeding, that he had no
reasonable cause to believe that his conduct was unlawful.
(c) References in this Article VIII to "penalties" include any excise
taxes assessed on a person with respect to an employee benefit plan;
references in this Article VIII to "serving at the request of the
Corporation or the Mutual Company" include any service as a director,
officer or employee or former director, officer or employee of the
Corporation or the Mutual Company which imposes duties on, or involves
services by, such person with respect to an employee benefit plan or its
participants or beneficiaries; and a person who acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best
interests of the participants or beneficiaries of such an employee benefit
plan shall be deemed to have acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation.
(d) The provisions of this Section 4 shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth in Section
1 or 2 of this Article VIII, as the case may be.
SECTION 5. Right to Indemnification Upon Application; Procedure Upon
Application; Etc. Except as otherwise provided in the proviso to Section 2
of this Article VIII:
(a) Any indemnification under Section 1 or 2 of this Article VIII
shall be made no later than 45 days after receipt by the Corporation of the
written request of the director, officer, employee or trustee or former
director, officer, employee or trustee unless a determination is made
within said 45-day period in accordance with Section 3 of this Article VIII
that such person has not met the applicable standard of conduct set forth
in Section 1 or 2 of this Article VIII.
(b) The right to indemnification under Section 1 or 2 of this Article
VIII or advances under Section 6 of this Article VIII shall be enforceable
by the director, officer, employee or trustee or former director, officer,
employee or trustee in any court of competent jurisdiction. Following a
Change in Control, the burden of proving that indemnification is not
appropriate shall be on the Corporation. Neither the absence of any prior
determination that indemnification is proper in the circumstances, nor a
prior determination that indemnification is not proper in the
circumstances, shall be a defense to the action or create a presumption
that the director, officer, employee or trustee or former director,
officer, employee or trustee has not met the applicable standard of
conduct. The expenses (including attorney's fees and expenses) incurred by
the director, officer, employee or trustee or former director, officer,
employee or trustee in connection with successfully establishing his right
to indemnification, in whole or in part, in any such action (or in any
action or claim brought by him to recover under any insurance policy or
policies referred to in Section 9 of this Article VIII) shall also be
indemnified by the Corporation.
(c) If any person is entitled under any provision of this Article VIII
to indemnification by the Corporation for some or a portion of expenses,
judgments, fines, penalties or amounts paid in settlement incurred by him,
but not, however, for the total amount thereof, the Corporation shall
nevertheless indemnify such person for the portion of such expenses,
judgments, fines, penalties and amounts to which he is entitled.
SECTION 6. Expenses Payable in Advance. Expenses (including attorney's
fees and expenses) incurred by a director, officer, employee or trustee or
a former director, officer, employee or trustee in defending,
investigating, preparing to defend, or being or preparing to be a witness
in, a threatened or pending action, suit, proceeding or claim against him,
whether civil or criminal, may be paid by the Corporation in advance of the
final disposition of such action, suit, proceeding or claim upon receipt by
the Corporation of a written request therefor and a written undertaking by
or on behalf of the director, officer, employee or trustee or former
director, officer, employee or trustee to repay such amounts if it shall be
determined in accordance with Section 3 of this Article VIII that he is not
entitled to be indemnified by the Corporation; provided, however, that if
he seeks to enforce his rights in a court of competent jurisdiction
pursuant to Section 5(b) of this Article VIII, said undertaking to repay
shall not be applicable or enforceable unless and until there is a final
court determination that he is not entitled to indemnification as to which
all rights of approval have been exhausted or have expired.
SECTION 7. Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of this Article VIII, no person shall
be entitled to indemnification under this Article VIII or to advances under
Section 6 of this Article VIII with respect to any action, suit, proceeding
or claim brought or made by him against the Corporation or the Mutual
Company, other than an action, suit, proceeding or claim seeking, or
defending such person's right to, indemnification and/or expense advances
pursuant to this Article VIII or otherwise.
SECTION 8. Non-Exclusivity and Survival of Indemnification. The
provisions of this Article VIII shall not be deemed exclusive of any other
rights to which the person seeking indemnification or expense advances may
be entitled under any agreement, contract, or vote of stockholders or
disinterested directors, or pursuant to the direction (howsoever embodied)
of any court of competent jurisdiction, or otherwise, both as to action in
his official capacity and as to action in another capacity while holding
such office. Except as otherwise provided in Section 7 of this Article
VIII, but notwithstanding any other provision of this Article VIII, it is
the policy of the Corporation that indemnification of and expense advances
to the persons specified in Sections 1 and 2 of this Article VIII shall be
made to the fullest extent permitted by law, and, accordingly, in the event
of any change in law, by legislation or otherwise, permitting greater
indemnification of and/or expense advances to any such person, the
provisions of this Article VIII shall be construed so as to require such
greater indemnification and/or expense advances. The provisions of this
Article VIII shall not be deemed to preclude the indemnification of any
person who is not specified in Section 1 or 2 of this Article VIII but whom
the Corporation has the power to indemnify under the provisions of the
General Corporation Law of the State of Delaware or otherwise. The
provisions of this Article VIII shall continue as to a person who has
ceased to be a director, officer, employee or trustee and shall inure to
the benefit of the heirs, executors and administrators of such person.
SECTION 9. Insurance. The Corporation may purchase and maintain at its
expense insurance on behalf of any person who is or was a director, officer
or employee of the Corporation or the Mutual Company or is or was serving
at the request of the Corporation or the Mutual Company as a
director, officer, employee or trustee of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise against any
liability or expense asserted against or incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power or the obligation to indemnify him against
such liability or expense under the provisions of this Article VIII or the
provisions of Section 145 of the General Corporation Law of the State of
Delaware. The Company shall not be obligated under this Article VIII to
make any payment in connection with any claim made against any person if
and to the extent that such person has actually received payment therefor
under any insurance policy or policies.
SECTION 10. Successors; Meaning of "Corporation". This Article VIII
shall be binding upon and enforceable against any direct or indirect
successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Corporation. For
purposes of this Article VIII, but subject to the provisions of any
agreement relating to any merger or consolidation of the kind referred to
in clause (i) below or of any agreement relating to the acquisition of any
corporation of the kind referred to in clause (ii) below, references to
"the Corporation" shall include (i) any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger
with the Corporation which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers and
employees, so that any person who is or was a director, officer or employee
of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or trustee of
another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, shall stand in the same position under the
provisions of this Article VIII with respect to the Corporation as he would
have with respect to such constituent corporation if its separate existence
had continued; and (ii) any corporation of which at least a majority of the
voting power (as represented by its outstanding stock having voting power
generally in the election of directors) is owned directly or indirectly by
the Corporation.
SECTION 11. Severability. The provisions of this Article VIII shall be
severable in the event that any provision hereof (including any provision
within a single section, subsection, clause, paragraph or sentence) is held
invalid, void or otherwise unenforceable on any ground by any court of
competent jurisdiction. In the event of any
such holding, the remaining provisions of this Article VIII shall continue
in effect and be enforceable to the fullest extent permitted by law.
ARTICLE IX
AMENDMENTS
SECTION 1. Power to Amend. The Board of Directors shall have
concurrent power with the stockholders as set forth in the By-Laws and the
Certificate of Incorporation to make, alter, amend, change, add to or
repeal the By-Laws.
SECTION 2. Required Vote. The Board of Directors may amend the By-Laws
upon the affirmative vote of the number of directors which shall
constitute, under the terms of the By-Laws, the action of the Board of
Directors. Notwithstanding anything to the contrary contained in these
By-laws including, without limitation, the last preceding sentence, until
July 1, 2001, the amendment of Article III, Section 11 or Article IV,
Section 12 of these By-laws, shall, when a quorum is present, require the
affirmative vote of seventy-five percent of the directors voting at a
meeting for which proper notice of the actions taken was duly given.
Stockholders may not amend the By-Laws except upon the affirmative vote of
at least eighty percent (80%) of the votes entitled to be cast by the
holders of all outstanding shares of Voting Stock (as such term is defined
in the Certificate of Incorporation) voting together as a single class.
EXHIBIT B
TO THE MERGER AGREEMENT
Corporate Governance of the Surviving Corporation
-------------------------------------------------
Following the Effective Time
----------------------------
BOARD OF DIRECTORS
Composition. The By-laws of the Surviving Corporation will provide
that the Board of Directors of the Surviving Corporation will consist of 15
members, eight of whom shall be designated by UNUM and seven of whom shall
be designated by Provident and no more than one member appointed by each
party shall be an "inside" director (i.e., any individual currently
employed by such party or employed by such party within the past three
years). Provident shall be deemed to have designated any director which
Zurich Insurance Company shall have the right to designate pursuant to the
Amended and Restated Relationship Agreement between Provident and Zurich
Insurance Company, dated as of May 31, 1996. The current Chairman and Chief
Executive Officer of UNUM will serve as Chairman of the Board of Directors
of the Surviving Corporation. The current Chairman and the Chief Executive
Officer of Provident will serve as President and Chief Operating Officer of
the Surviving Corporation and will be a member of the Board of Directors of
the Surviving Corporation. Prior to the mailing of the Joint Proxy
Statement, each party will designate in writing the individual directors
that it is entitled to designate to the Board of Directors and will
designate the class to which each is to be assigned understanding that UNUM
will designate three directors, two directors and three directors to
classes one, two and three, respectively, and Provident will designate two
directors, three directors and two directors to classes one, two and three,
respectively. Such written designation shall be included as Annex I to this
Exhibit B to the Merger Agreement to be incorporated as part of the Joint
Proxy Statement.
Nomination of Directors. The By-Laws of the Surviving Corporation will
provide that the Executive Committee of the Board of Directors will
recommend nominees to the Board of Directors (i) for election to the Board
of Directors at the stockholder meetings at which directors are to be
elected, (ii) to fill vacancies on the Board of Directors of the Surviving
Corporation in between such stockholders meetings and (iii) to serve on,
and fill vacancies in, any Committee of the Board of Directors. The By-Laws
will also provide that if a director reaches mandatory retirement age (not
less than 70) during the term of a directorship, such director may complete
the term of the class to which he or she is elected.
Composition of the Executive Committee. The By-Laws of the Surviving
Corporation will provide that, until July 1, 2001, the Executive Committee
will consist of three UNUM directors, including the Chief Executive
Officer, and three Provident directors, including the President. The Chief
Executive Officer will also serve as the Chairman of the Executive
Committee.
EXECUTIVE OFFICERS
------------------
Composition. The Executive Officers of the Surviving Corporation will
initially be the following:
NAME TITLE
▇▇▇▇▇ ▇. ▇▇▇, III.................... Chairman of the Board and Chief
Executive Officer
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇................... President and Chief Operating Officer
F. ▇▇▇▇ ▇▇▇▇▇▇▇▇..................... Executive Vice President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.................... Executive Vice President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇...................... Executive Vice President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇..................... Executive Vice President
The employment contracts for each of ▇▇. ▇▇▇ and ▇▇. ▇▇▇▇▇▇▇▇ will
provide that, from the Effective Time until July 1, 2001, ▇▇. ▇▇▇ and ▇▇.
▇▇▇▇▇▇▇▇ will participate equally in setting the overall strategic
direction of the Company.
From and after July 1, 2001, ▇▇. ▇▇▇▇▇▇▇▇ will succeed ▇▇. ▇▇▇ as the
Chief Executive Officer, and ▇▇. ▇▇▇ will thereafter serve as executive
Chairman of the Board of Directors, in each case in accordance with the
terms of their respective employment contracts.
Management Committees. At the Effective Time a Corporate Policy
Committee and an Operating Committee will be established. The Corporate
Policy Committee will consist of ▇▇. ▇▇▇▇▇ and Messrs. Orr, Chandler,
Copeland, Watjen, and Crispin with ▇▇. ▇▇▇ as Chairman. Subject to the
authority of the Board of Directors, this committee will assist the Chief
Executive Officer and the President in setting the overall strategic
direction for the Surviving Corporation. In addition, during the
integration period immediately following the Effective Time this committee
will serve as the transition committee. Subject to the foregoing, ▇▇.
▇▇▇▇▇▇ will direct the transition and integration team.
The Operating Committee will consist of ▇▇. ▇▇▇▇▇ and Messrs. Orr,
Chandler, Copeland, Watjen, and Crispin and may include certain other
officers of the Surviving Corporation
with ▇▇. ▇▇▇▇▇▇▇▇ as Chairman. Subject to the authority of the Board
of Directors and the Chief Executive Officer, this committee will assist
the President in managing the Surviving Corporation's North American
operations.
AMENDMENTS
----------
The By-Laws of the Surviving Corporation will provide that, until July
1, 2001, the following actions will require the approval of at least 75% of
the directors voting at a meeting for which proper notice of the actions
taken was duly given (assuming for the purposes of such approval that a
quorum is present):
(i) the removal of ▇▇. ▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇ from
their executive positions, including the
successorship arrangements, or any breach of
their respective employment agreements;
(ii) any change in the size of the Board of
Directors;
(iii) any change in the composition or power and
authority of the Executive Committee of the
Board of Directors or the chairmanship
thereof;
(iv) any change or amendment to the By-Laws; and
(v) any proposals to be submitted to the
stockholders of the Surviving Corporation by
the Board of Directors.
EXHIBIT C-1
TO THE MERGER AGREEMENT
Form of Affiliate Letter
------------------------
for UNUM Affiliates
-------------------
Dear Sirs:
The undersigned, a holder of shares of common stock, par value
$.10 per share ("UNUM Common Stock"), of UNUM Corporation, a Delaware
corporation ("UNUM"), is entitled to receive in connection with the merger
(the "Merger") of UNUM with and into Provident Companies, Inc., a Delaware
corporation ("Provident"), securities of Provident, as the surviving
corporation in the Merger (the "Surviving Corporation Securities"). The
undersigned acknowledges that the undersigned may be deemed an "affiliate"
of UNUM within the meaning of Rule 145 ("Rule 145") promulgated under the
Securities Act of 1933, as amended (the "Securities Act"), by the
Securities and Exchange Commission (the "SEC") and may be deemed an
"affiliate" of UNUM for purposes of qualifying the Merger for pooling of
interests accounting treatment under Opinion 16 of the Accounting
Principles Board and applicable SEC rules and regulations, although nothing
contained herein should be construed as an admission of either such fact.
If in fact the undersigned were an affiliate under the Securities
Act, the undersigned's ability to sell, assign or transfer the Surviving
Corporation Securities received by the undersigned in exchange for any
shares of UNUM Common Stock in connection with the Merger may be restricted
unless such transaction is registered under the Securities Act or an
exemption from such registration is available. The undersigned understands
that such exemptions are limited and the undersigned has obtained or will
obtain advice of counsel as to the nature and conditions of such
exemptions, including information with respect to the applicability to the
sale of such securities of Rules 144 and 145(d) promulgated under the
Securities Act. The undersigned understands that Provident will not be
required to maintain the effectiveness of any registration statement under
the Securities Act for the purposes of resale of Surviving Corporation
Securities by the undersigned.
The undersigned hereby represents to and covenants with Provident
that the undersigned will not sell, assign or transfer any of the Surviving
Corporation Securities received by the undersigned in exchange for shares
of UNUM Common Stock in connection with the Merger except (i) pursuant to
an effective registration statement under the Securities Act, (ii) in
conformity with the volume and other limitations of Rule 145 or (iii) in a
transaction which, in the opinion of the general counsel of Provident or
other counsel reasonably satisfactory to Provident or as described
in a "no-action" or interpretive letter from the Staff of the SEC
specifically issued with respect to a transaction to be engaged in by the
undersigned, is not required to be registered under the Securities Act;
provided, however, that in any such case, such sale, assignment or transfer
shall only be permitted if, in the opinion of counsel of Provident, such
transaction would not have, directly or indirectly, any adverse
consequences for Provident with respect to the treatment of the Merger for
tax purposes.
The undersigned hereby further represents to and covenants with
Provident that the undersigned has not, within the preceding 30 days, sold,
transferred or otherwise disposed of any shares of UNUM Common Stock held
by the undersigned and that the undersigned will not sell, transfer or
otherwise dispose of any Surviving Corporation Securities received by the
undersigned in connection with the Merger until after such time as results
covering at least 30 days of post-Merger combined operations of UNUM and
Provident have been published by Provident, in the form of a quarterly
earnings report, an effective registration statement filed with the SEC, a
report to the SEC on Form 10-K, 10-Q or 8-K, or any other public filing or
announcement which includes such combined results of operations, except as
would not otherwise reasonably be expected to adversely affect the
qualification of the Merger as a pooling-of-interests.
In the event of a sale or other disposition by the undersigned of
Surviving Corporation Securities pursuant to Rule 145, the undersigned will
supply Provident with evidence of compliance with such Rule, in the form of
a letter in the form of Annex I hereto and the opinion of counsel or no-
action letter referred to above. The undersigned understands that Provident
may instruct its transfer agent to withhold the transfer of any Surviving
Corporation Securities disposed of by the undersigned, but that (provided
such transfer is not prohibited by any other provision of this letter
agreement) upon receipt of such evidence of compliance, Provident shall
cause the transfer agent to effectuate the transfer of the Surviving
Corporation Securities sold as indicated in such letter.
Provident covenants that it will take all such actions as may be
reasonably available to it to permit the sale or other disposition of
Surviving Corporation Securities by the undersigned under Rule 145 in
accordance with the terms thereof.
The undersigned acknowledges and agrees that the legends set
forth below will be placed on certificates representing Surviving
Corporation Securities received by the undersigned in connection with the
Merger or held by a transferee thereof, which legends will be removed by
delivery of substitute certificates upon receipt of an opinion in form and
substance reasonably satisfactory to Provident from independent counsel
reasonably satisfactory to Provident to the effect that such legends are no
longer required for purposes of the Securities Act.
There will be placed on the certificates for Surviving
Corporation Securities issued to the undersigned, or any substitutions
therefor, a legend stating in substance:
"The shares represented by this certificate were issued pursuant to
a business combination which is being accounted for as a pooling of
interests, in a transaction to which Rule 145 promulgated under the
Securities Act of 1933 applies. The shares have not been acquired by
the holder with a view to, or for resale in connection with, any
distribution thereof within the meaning of the Securities Act of 1933.
The shares may not be sold, pledged or otherwise transferred (i) until
such time as UNUM Provident Corporation shall have published financial
results covering at least 30 days of combined operations after the
Effective Time and (ii) except in accordance with an exemption from
the registration requirements of the Securities Act of 1933."
The undersigned acknowledges that (i) the undersigned has
carefully read this letter and understands the requirements hereof and the
limitations imposed upon the distribution, sale, transfer or other
disposition of Surviving Corporation Securities and (ii) the receipt by
Provident of this letter is an inducement to Provident's obligations to
consummate the Merger.
Very truly yours,
Dated:
ANNEX I
TO EXHIBIT C-1
[Name]
[Date]
On , the undersigned sold the securities of Provident
Companies, Inc. ("Provident"), described below in the space provided for
that purpose (the "Securities"). The Securities were received by the
undersigned in connection with the merger of UNUM Corporation, a Delaware
corporation, with and into Provident.
Based upon the most recent report or statement filed by Provident
with the Securities and Exchange Commission, the Securities sold by the
undersigned were within the prescribed limitations set forth in paragraph
(e) of Rule 144 promulgated under the Securities Act of 1933, as amended
(the "Securities Act").
The undersigned hereby represents that the Securities were sold
in "brokers' transactions" within the meaning of Section 4(4) of the
Securities Act or in transactions directly with a "market maker" as that
term is defined in Section 3(a)(38) of the Securities Exchange Act of 1934,
as amended. The undersigned further represents that the undersigned has not
solicited or arranged for the solicitation of orders to buy the Securities,
and that the undersigned has not made any payment in connection with the
offer or sale of the Securities to any person other than to the broker who
executed the order in respect of such sale.
Very truly yours,
[Space to be provided for description of the Securities.]
EXHIBIT C-2
TO THE MERGER AGREEMENT
Form of Affiliate Letter
------------------------
for Provident Affiliates
------------------------
Dear Sirs:
The undersigned is a holder of shares of common stock, par value
$1.00 per share ("Provident Common Stock"), of Provident Companies, Inc., a
Delaware corporation ("Provident"). The undersigned acknowledges that the
undersigned may be deemed an "affiliate" of Provident for purposes of
qualifying the merger of UNUM Corporation, a Delaware corporation ("UNUM"),
and Provident (the "Merger") for pooling of interests accounting treatment
under Opinion 16 of the Accounting Principles Board and applicable SEC
rules and regulations, although nothing contained herein should be
construed as an admission of such fact.
The undersigned hereby represents to and covenants with Provident
that the undersigned has not, within the preceding 30 days, sold,
transferred or otherwise disposed of any shares of Provident Common Stock
held by the undersigned and that the undersigned will not sell, transfer or
otherwise dispose of any Provident Common Stock held by the undersigned
until after such time as results covering at least 30 days of post-Merger
combined operations of Provident and UNUM have been published by Provident,
in the form of a quarterly earnings report, an effective registration
statement filed with the SEC, a report to the SEC on Form 10-K, 10-Q or
8-K, or any other public filing or announcement which includes such
combined results of operations, except as would not otherwise reasonably be
expected to adversely affect the qualification of the Merger as a
pooling-of-interests.
The undersigned acknowledges that (i) the undersigned has
carefully read this letter and understands the requirements hereof and the
limitations imposed upon the distribution, sale, transfer or other
disposition of Provident Common Stock and (ii) the receipt by UNUM of this
letter is an inducement to UNUM's obligations to consummate the Merger.
Very truly yours,
Dated:
EXHIBIT D
TO THE MERGER AGREEMEDNT
[Letterhead of UNUM Corporation]
November [ ], 1998
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with the opinions to be delivered pursuant to
Sections 6.02(c) and 6.03(c) of the Agreement and Plan of Merger (the
"Merger Agreement"), dated November 22, 1998, among Provident Companies,
Inc., a Delaware corporation ("Provident"), and UNUM Corporation, a
Delaware corporation ("UNUM"), and in connection with the filing with the
Securities and Exchange Commission (the "SEC") of the registration
statement on Form S-4 (the "Registration Statement"), which includes the
Proxy Statement Prospectus of UNUM and Provident, the undersigned certifies
and represents on behalf of UNUM and as to UNUM, after due inquiry and
investigation, as follows (any capitalized term used but not defined herein
shall have the meaning given to such term in the Merger Agreement):
1. The facts relating to the contemplated merger of UNUM with and
into Provident (the "Merger") as described in the Registration Statement
and the documents described in the Registration Statement are, insofar as
such facts pertain to UNUM, true, correct and complete in all material
respects. The Merger will be consummated in accordance with the Merger
Agreement.
2. The formula set forth in the Merger Agreement pursuant to
which each issued and outstanding share of common stock, par value $.10 per
share, of UNUM (the "UNUM Common Stock") will be converted into common
stock, par value $1.00 per share, of Provident ("Provident Common Stock")
is the result of arm's length bargaining.
3. (i) Neither UNUM nor any corporation related to UNUM has
acquired or has any present plan or intention to acquire any UNUM Common
Stock in contemplation of the Merger, or otherwise as part of a plan of
which the Merger is a part. To the best knowledge of the management of
UNUM, neither Provident nor any corporation that is related to Provident
has a present plan or intention to purchase UNUM Common Stock or any
Provident Common Stock.
(ii) For purposes of this representation letter, two corporations
shall be treated as related to one another if immediately prior to or
immediately after the Merger (a) the corporations are members of the same
affiliated group (within the meaning of Section 1504 of the Internal
Revenue Code of 1986, as amended (the "Code"), but determined without
regard to Section 1504(b) of the Code) or (b) one corporation owns 50% or
more of the total combined voting power of all classes of stock of the
other corporation that are entitled to vote or 50% or more of the total
value of shares of all classes of stock of the other corporation (applying
the attribution rules of Section 318 of the Code, as modified pursuant to
Section 304(c)(3)(B) of the Code).
4. UNUM has not made and does not have any present plan or
intention to make any distributions (other than dividends made in the
ordinary course of business) prior to, in contemplation of or otherwise in
connection with, the Merger.
5. Provident, UNUM and holders of UNUM Common Stock will each pay
their respective expenses, if any, incurred in connection with the Merger.
UNUM has not agreed to assume, nor will it directly or indirectly assume,
any expense or other liability, whether fixed or contingent, of any holder
of UNUM Common Stock. Except to the extent specifically contemplated under
the Merger Agreement and the Shareholders Agreement, UNUM has not entered
into any arrangement pursuant to which Provident has agreed to assume,
directly or indirectly, any expense or other liability, whether fixed or
contingent, of any holder of UNUM Common Stock.
6. The liabilities of UNUM assumed by Provident and the
liabilities to which the transferred assets of UNUM are subject were
incurred by UNUM in the ordinary course of its business.
7. UNUM is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
8. UNUM will not take, and to the best knowledge of the
management of UNUM there is no present plan or intention by other
stockholders of UNUM to take, any position on any Federal, state or local
income or franchise tax return, or to take any other tax reporting
position, that is inconsistent with the treatment of the Merger as a
reorganization within the meaning of Section 368(a) of the Code, unless
otherwise required by a "determination" (as defined in Section 1313(a)(1)
of the Code) or by applicable state or local tax law (and then only to the
extent required by such applicable state or local tax law).
9. None of the compensation received by any stockholder-employee
of UNUM in respect of periods at or prior to the Effective Time represents
separate consideration for any of its UNUM Common Stock. None of the
Provident Common Stock that will be received by stockholder-employees of
UNUM in the Merger represents separately bargained for consideration which
is allocable to any employment agreement or arrangement. The compensation
paid to any stockholder-employees will be for services actually rendered
and will be determined by bargaining at arm's-length.
10. There is no intercorporate indebtedness existing between
Provident (or any of its subsidiaries) and UNUM (or any of its
subsidiaries) that was issued or acquired, or will be settled, at a
discount (other than indebtedness of UNUM (or any of its subsidiaries)
acquired by Provident pursuant to the express terms of the Merger Agreement
or the Shareholders Agreement).
11. UNUM is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
12. The Merger Agreement, the Registration Statement and the
other documents described in the Registration Statement represent the
entire understanding of UNUM with respect to the Merger.
13. No assets of UNUM have been sold, transferred or otherwise
disposed of which would prevent Provident from continuing the "historic
business" of UNUM or from using a significant portion of the "historic
business assets" of UNUM in a business following the Merger (as such terms
are defined in Treasury regulation Section 1.368-1(d)).
14. On the date of the Merger, the fair market value of the
assets of UNUM will exceed the sum of its liabilities, plus the amount of
liabilities, if any, to which such assets are subject.
15. The undersigned is authorized to make all the representations
set forth herein on behalf of UNUM.
The undersigned acknowledges that (i) your respective opinions
will be based on the accuracy of the representations set forth herein and
on the accuracy of the representations and warranties and the satisfaction
of the covenants and obligations contained in the Merger Agreement and the
various other documents related thereto, and (ii) your respective opinions
will be subject to certain limitations and qualifications including that
they may not be relied upon if any such representations or warranties are
not accurate or if any of such covenants or obligations are not satisfied
in all material respects.
The undersigned acknowledges that your respective opinions will
not address any tax consequences of the Merger or any action taken in
connection therewith except as expressly set forth in such opinions.
Very truly yours,
UNUM CORPORATION
by
Name:
Title:
EXHIBIT E
TO THE MERGER AGREEMENT
[Letterhead of Provident Companies, Inc.]
November [ ], 1998
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▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with the opinions to be delivered pursuant to
Sections 6.02(c) and 6.03(c) of the Agreement and Plan of Merger (the
"Merger Agreement"), dated November 22, 1998, among Provident Companies,
Inc., a Delaware corporation ("Provident"), and UNUM Corporation, a
Delaware corporation ("UNUM"), and in connection with the filing with the
Securities and Exchange Commission (the "SEC") of the registration
statement on Form S-4 (the "Registration Statement"), which includes the
Proxy Statement Prospectus of Provident and UNUM, the undersigned certifies
and represents on behalf of Acquirer and as to Acquirer, after due inquiry
and investigation, as follows (any capitalized term used but not defined
herein shall have the meaning given to such term in the Merger Agreement):
1. The facts relating to the contemplated merger of Provident
with and into UNUM (the "Merger") as described in the Registration
Statement and the documents described in the Registration Statement are,
insofar as such facts pertain to Provident, true, correct and complete in
all material respects. The Merger will be consummated in accordance with
the Merger Agreement.
2. The formula set forth in the Merger Agreement pursuant to
which each issued and outstanding share of common stock, par value $.10
per share, of UNUM (the "UNUM Common Stock") will be converted into common
shares of Provident common stock ("Provident Common Stock") is the result
of arm's length bargaining.
3. (i) Provident has no present plan or intention, following the
Merger, to reacquire, or to cause any corporation that is related to
Provident to acquire, any Provident Common Stock. To the best knowledge of
the management of Provident, no corporation that is related to Provident
has a present plan or intention to purchase any Provident Common Stock.
(ii) For purposes of this representation letter, two corporations
shall be treated as related to one another if immediately prior to or
immediately after the Merger (a) the corporations are members of the same
affiliated group (within the meaning of Section 1504 of the Internal
Revenue Code of 1986, as amended (the "Code"), but determined without
regard to Section 1504(b) of the Code) or (b) one corporation owns 50% or
more of the total combined voting power of all classes of stock of the
other corporation that are entitled to vote or 50% or more of the total
value of shares of all classes of stock of the other corporation (applying
the attribution rules of Section 318 of the Code, as modified pursuant to
Section 304(c)(3)(B) of the Code).
4. Provident has no present plan or intention, following the
Merger to sell or otherwise dispose of more than 20% of the assets held by
UNUM immediately prior to the Merger, except for dispositions of such
assets in the ordinary course of business and transfers described in
Section 368(a)(2)(C) of the Code.
5. Provident, UNUM and holders of UNUM Common Stock will each pay
their respective expenses, if any, incurred in connection with the Merger.
Except to the extent specifically contemplated under the Merger Agreement
and the Stockholders Agreement, Provident has not paid (directly or
indirectly) or has not agreed to assume any expenses or other liabilities,
whether fixed or contingent, incurred or to be incurred, by any stockholder
of UNUM in connection with or as part of the Merger or any related
transactions.
6. Following the Merger, Provident or Provident's "qualified
group," as defined in Treasury regulation 1.368-1(d)(4)(ii), intends to
continue its "historic business" or
to use a significant portion of its "historic business assets" in
a business (as such terms are defined in Treasury regulation Section
1.368-1(d)).
7. Provident is not an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
8. Provident will not take any position on any Federal, state or
local income or franchise tax return, or take any other tax reporting
position, that is inconsistent with the treatment of the Merger as a
"reorganization" within the meaning of Section 368(a) of the Code, unless
otherwise required by a "determination" (as defined in Section 1313(a)(1)
of the Code) or by applicable state or local tax law (and then only to the
extent required by such applicable state or local tax law).
9. None of the compensation to be received by any
stockholder-employee of UNUM in respect of periods after the Effective Time
represents separate consideration for any of its UNUM Common Stock. None of
the Provident Common Stock that will be received by any
stockholder-employee of UNUM in the Merger represents separately bargained
for consideration which is allocable to any employment agreement or
arrangement. The compensation paid to any stockholder-employees will be
for services actually rendered and will be determined by bargaining at
arm's-length.
10. There is no intercorporate indebtedness existing between
Provident (or any of its subsidiaries) and UNUM (or any of its
subsidiaries) that was issued or acquired, or will be settled, at a
discount (other than indebtedness of UNUM (or any of its subsidiaries)
acquired by Provident pursuant to the express terms of the Merger Agreement
or the Stockholders Agreement).
11. Provident is not under the jurisdiction of a court in a Title
11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
12. The Merger Agreement, the Registration Statement and the
other documents described in the Registration Statement represent the
entire understanding of Provident and UNUM with respect to the Merger.
The undersigned acknowledges that (i) your respective opinions
will be based on the accuracy of the representations set forth herein and
on the accuracy of the representations and warranties and the satisfaction
of the covenants and obligations contained in the Merger Agreement and the
various other documents related thereto, and (ii)
your respective opinions will be subject to certain limitations and
qualifications including that they may not be relied upon if any such
representations or warranties are not accurate or if any of such covenants
or obligations are not satisfied in all material respects.
The undersigned acknowledges that your respective opinions will
not address any tax consequences of the Merger or any action taken in
connection therewith except as expressly set forth in such opinions.
Very truly yours,
PROVIDENT COMPANIES, INC.
by
Name:
Title: