UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the Securities Exchange Act of 1934
(Amendment
No. )*
AmCOMP
Incorporated
___________________________________________
(Name
of Issuer)
Common
Stock, par value $0.01 per share
___________________________________________
(Title
of Class and Securities)
02342J101
___________________________________________
(CUSIP
Number of Class of Securities)
Lenard
T. Ormsby
Employers
Holdings, Inc.
9790
Gateway Drive
Reno,
NV 89521-5906
(775)
327-2754
Copies
to:
Robert
J. Sullivan
David
C. Ingles
Skadden,
Arps, Slate, Meagher & Flom LLP
Four
Times Square
New
York, NY 10036-6522
(212)
735-3000
___________________________________________________________
(Name,
Address and Telephone Number of Person Authorized to
Receive
Notices and Communications)
January
10, 2008
_________________________________________
(Date
of Event which Requires
Filing
of this Statement)
If
the filing person has previously filed a statement on Schedule 13G to report
the
acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Sections 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g),
check
the following box: o
Note:
Schedules filed in paper
format shall include a signed original and five copies of the schedule,
including all exhibits. See Section 240.13d-7 for other parties to whom copies
are to be sent.
*
The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed
to
be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934
("Act") or otherwise subject to the liabilities of that section of the Act
but
shall be subject to all other provisions of the Act (however, see the
Notes).
Persons
who respond to the collection
of information contained in this form are not required to respond unless
the
form displays a currently valid OMB control number.
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CUSIP
No. 292218104
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13D
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(1)
NAMES OF REPORTING PERSONS:
Employers
Holdings,
Inc.
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I.R.S.
IDENTIFICATION NOS.:
04-3850065
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(2)
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
(a)
o (b)
o
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(3)
SEC USE ONLY:
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(4)
SOURCE OF FUNDS (SEE INSTRUCTIONS):
Not
applicable
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(5)
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS
2(d) or 2(e): o
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(6)
CITIZENSHIP OR PLACE OF ORGANIZATION:
Nevada
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NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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(7)
SOLE VOTING POWER
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0
shares
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(8)
SHARED VOTING POWER
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2,627,094
shares
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(9)
SOLE DISPOSITIVE POWER
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0
shares
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(10)
SHARED DISPOSITIVE POWER
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0
shares
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(11)
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
2,627,094
shares
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(12)
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES
(SEE
INSTRUCTIONS): o
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(13)
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11:
17.2%
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(14)
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
CO
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Note:
All shares identified above are shares of the Issuer's common shares, and
the
percentage in Row 13 above relates to such common shares.
2
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Item
1.
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Security
and
Issuer
|
The
securities to which this statement on Schedule 13D (the "Statement") relates
are
the common shares, par value $0.01 per share (the "Common Shares"), of AmCOMP
Incorporated, a Delaware corporation (the "Issuer"), with principal executive
offices at 701 U.S. Highway One, Suite 200, North Palm Beach, FL
33408.
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Item
2.
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Identity
and
Background
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(a) NAME
This
Statement is filed by Employers Holdings, Inc., a Nevada corporation (the
"Reporting Person").
Attached
as Schedule A is a list of the Reporting Person's directors and executive
officers.
(b) RESIDENCE
The
address of the principal business and principal office of the Reporting Person
and its executive officers is 9790 Gateway Drive, Reno, NV
89521-5906.
3
(c) PRESENT
PRINCIPAL OCCUPATION OR EMPLOYMENT AND THE NAME, PRINCIPAL BUSINESS AND ADDRESS
OF ANY CORPORATION OR OTHER ORGANIZATION IN WHICH SUCH EMPLOYMENT IS
CONDUCTED
The
Reporting Person is a holding company whose principal operating subsidiaries
are
specialty providers of workers' compensation insurance. The principal
occupation of each of its executive officers is to act in the capacity listed
on
Schedule A.
(d) CRIMINAL
CONVICTIONS
During
the past five years neither the Reporting Person nor, to the best of the
Reporting Person's knowledge, any of its directors or executive officers
has
been convicted in a criminal proceeding (excluding traffic violations or
similar
misdemeanors).
(e) CIVIL
PROCEEDINGS
During
the past five years neither the Reporting Person nor, to the best of the
Reporting Person's knowledge, any of its directors or executive officers
has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding such person was
or is
subject to a judgment, decree or final order enjoining future violations
of, or
prohibiting or mandating activities subject to, federal or state securities
laws
or finding any violation with respect to such laws.
(f) CITIZENSHIP
The
Reporting Person is a Nevada corporation. Each of its executive
officers is a citizen of the United States.
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Item
3.
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Source
and Amount of
Funds or Other Consideration
|
As
an inducement for the Reporting Person to enter into the Merger Agreement
(as
defined and described in Item 4) and in consideration thereof, certain holders
of Common Shares of the Issuer (the "Securityholders") entered into Voting
Agreements (as defined and described in Item 4) with the Reporting
Person. Other than its decision to enter into and be bound by the
Merger Agreement, the Reporting Person did not pay any consideration in
connection with the execution and delivery of the Voting
Agreements.
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Item
4.
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Purpose
of
Transaction
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On
January 10, 2008, the Reporting Person, Sapphire Acquisition Corp. a newly
formed Delaware corporation and wholly owned subsidiary of the Reporting
Person
("Merger Sub"), and the Issuer entered into an Agreement and Plan of Merger
(the
"Merger Agreement"), pursuant to which Merger Sub will be merged with and
into
the Issuer (the "Merger"), with the Issuer
4
surviving
the Merger as a wholly owned subsidiary of the Reporting Person (the "Surviving
Corporation"). At the effective time of the Merger (the "Effective
Time"), the Common Shares owned by the Reporting Person or Merger Sub, if
any, and the Common Shares held by the Issuer (as treasury stock or
otherwise) will be canceled. Each other outstanding Common Share,
other than the Common Shares owned by any stockholder who is entitled to
and who
properly exercises dissenters' rights under Delaware law, will be canceled
at
the Effective Time and converted into the right to receive $12.50 in cash,
without interest. Additionally, all options in respect of Common
Shares will be cashed out at the difference, if any, between the strike price
and $12.50. Consummation of the Merger is subject to certain
customary conditions, including adoption of the Merger Agreement by the Issuer's
stockholders, the receipt of all required regulatory approvals, including
from
the Florida Office of Insurance Regulation, and the expiration or termination
of
the required waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
The
description of the Merger Agreement included in this Item 4 is qualified
in its
entirety by reference to the full text of the Merger Agreement, a copy of
which
is attached as Exhibit 2.1 to the Reporting Person's Current Report on Form
8-K
filed January 10, 2008 and incorporated herein by reference.
In
connection with the Merger Agreement, each of the Securityholders entered
into a
voting and support agreement (the "Voting Agreements") with the Reporting
Person, which agreements correspond to an aggregate of 2,627,094 shares of
Common Stock, representing approximately 17.2% of the Issuer's outstanding
Common Stock. Pursuant to the Voting Agreements and as more fully
described therein, each Securityholder, among other things, unconditionally
and
irrevocably agreed, at any duly called meeting of the Issuer's stockholders
(or
any adjournment or postponement thereof), and in any action by written consent
of the Issuer's stockholders, to vote all of its Common Shares (a) in favor
of
the Merger and the approval of the Merger Agreement and the other transactions
contemplated thereby (and any actions in furtherance thereof) and (b) against
any action, proposal, transaction or agreement that would result in a breach
in
any respect of any covenant, representation or warranty or any other obligation
or agreement of the Issuer contained in the Merger Agreement or of the
Securityholder contained in the Voting Agreement.
Each
Securityholder also, among other things, (a) agreed that it shall not, and
shall
cause its representatives not to, (i) directly or indirectly solicit, initiate,
or knowingly encourage or facilitate any inquires or alternative proposals
from
third parties with respect to the Issuer or any of its subsidiaries (each,
an
"Acquisition Proposal"), (ii) enter into any agreement with respect to an
Acquisition Proposal or (iii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or
the
making of any proposal that constitutes, or may reasonably be expected to
lead
to, an Acquisition Proposal; (b) agreed to certain transfer restrictions
with
respect to its Common Shares and agreed to hold the its Common Shares free
and
clear of any liens; (c) granted the Reporting Person and its designees an
irrevocable proxy to vote its Common Shares in a manner consistent with the
Voting Agreements (subject to the receipt of any required regulatory approvals);
and (d) agreed not to seek appraisal or assert any rights of dissent from
the
Merger. The Voting Agreements generally terminate upon the
termination of the Merger Agreement or October 31, 2009.
5
The
description of the Voting Agreements included in this Item 4 is qualified
in its
entirety by reference to the full text of the Voting Agreements, copies of
which
are attached as Exhibits 2, 3, 4 and 5 hereto and incorporated herein by
reference.
From
and after the completion of the Merger, the directors and officers of the
Surviving Corporation shall be appointed by the Reporting Person. In
addition, upon completion of the Merger, the certificate of incorporation
and
by-laws of the Surviving Corporation will be amended and restated in the
manner
set forth in the Merger Agreement.
Upon
the consummation of the Merger, the Common Shares will become eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange
Act,
and the Reporting Person will cause them to be deregistered. In
addition, the Reporting Person will cause the Common Shares to be delisted
from
The Nasdaq Stock Market.
Other
than as set forth or contemplated
herein, the Reporting Person has no current plan or proposal which relates
to,
or would result in, any of the events or circumstances enumerated in
subparagraphs (a) through (j) of Item 4 of Schedule 13D.
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Item
5.
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Interest
in Securities
of the Issuer
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(a) The
number and percentage of Common Shares to which this Schedule 13D relates
is
2,627,094 shares, constituting approximately 17.2% of the 15,290,181 shares
of the Issuer outstanding as of January 10, 2008, as set forth in the Merger
Agreement. The Reporting Person is filing this Statement solely
because the Reporting Person may be deemed to have beneficial ownership of
such
shares as a result of the Voting Agreements. Neither the filing of
this Statement nor any of its contents shall be deemed to constitute an
admission by the Reporting Person that it is the beneficial owner of any
of the
Common Shares for purposes of Section 13(d) of the Securities Exchange Act
of
1934, as amended (the "Exchange Act"), or for any other purpose, and such
beneficial ownership is expressly disclaimed. The Reporting Person
hereby disclaims that it constitutes a "group" (within the meaning of Section
13(d)(3) of the Exchange Act) with the Securityholders and hereby disclaims
beneficial ownership of any shares of Common Stock beneficially owned by
the
Securityhlders or any of their affiliates.
(b) Pursuant
to the Voting Agreement, the Reporting Person may be deemed to have shared
power
(with the relevant Securityholders) to vote the 2,627,094 Common Shares
referenced in paragraph (a) above. The Reporting Person hereby
disclaims that it constitutes a "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) with the Securityholders and hereby disclaims beneficial
ownership of any shares of Common Stock beneficially owned by the Securityhlders
or any of their affiliates.
(c) Except
as set forth or incorporated herein, neither the Reporting Person nor, to
the
best of the Reporting Person's knowledge, any of its directors or executive
officers has effected any transaction in the Issuer's common stock during
the past sixty days.
6
(d) Not
applicable.
(e) Not
applicable.
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Item
6.
|
Contracts,
Arrangements, Understandings or Relationships with Respect to Securities
of the Issuer
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Items
3, 4 and 5 and Exhibits 1, 2, 3, 4 and 5 are incorporated herein by
reference.
Other
than the Merger Agreement and the Voting Agreements, to the best of the
Reporting Person's knowledge, there are no contracts, arrangements,
understandings or relationships, legal or otherwise, among the persons named
in
Schedule A or between such persons and any other person with respect to the
securities of the Issuer, including, but not limited to, transfer or voting
of
any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss,
or the giving or withholding of proxies.
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Item
7.
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Material
to be Filed
as an Exhibit
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The
following documents are filed as exhibits:
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Exhibit
Number
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Description
|
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1
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Agreement
and Plan of Merger, dated January 10, 2008, by and among AmCOMP
Incorporated, Employers Holdings, Inc. and Sapphire Acquisition
Corp.
(incorporated by reference to Exhibit 2.1 to the Reporting Person's
Current Report on Form 8-K filed on January 10, 2008).
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2
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Voting
and Support Agreement, dated January 10, 2008, by and between Employers
Holdings, Inc. and Fred R. Lowe.
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3
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Voting
and Support Agreement, dated January 10, 2008, by and between Employers
Holdings, Inc. and Sam A. Stephens.
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4
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Voting
and Support Agreement, dated January 10, 2008, by and between Employers
Holdings, Inc. and Welsh, Carson, Anderson & Stowe VII,
L.P.
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5
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Voting
and Support Agreement, dated January 10, 2008, by and between Employers
Holdings, Inc. and WCAS Healthcare Partners,
L.P.
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7
SIGNATURES
After
reasonable inquiry and to the best of my knowledge and belief, I certify
that
the information set forth in this statement is true, complete and
correct.
Dated:
January 17, 2008
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EMPLOYERS
HOLDINGS, INC.
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By:
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/s/
Lenard T. Ormsby
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Name:
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Lenard
T. Ormsby
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Title:
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Executive
Vice President,
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Chief
Legal Officer and General Counsel
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8
SCHEDULE
A
DIRECTORS
AND EXECUTIVE OFFICERS OF
THE REPORTING PERSON
Set
forth below are the directors and executive officers of the Reporting Person
with their present principal occupation. The business address for
each of these individuals is 9790 Gateway Drive, Reno, NV
89521-5906. Each individual named below is a United States
citizen.
DIRECTORS
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Name
|
Title
|
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Robert
J. Kolesar
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Managing
Partner, Kolesar & Leatham, Chtd.
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Richard
W. Blakey, M.D.
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Chairman,
Reno Orthopedic Clinic
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Douglas
D. Dirks
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President
and Chief Executive Officer, Employers Holdings, Inc.
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Valerie
R. Glenn
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Chief
Executive Officer, Rose-Glenn, Inc.
|
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Rose
E. McKinney-James
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Principal,
McKinney-James & Associates
|
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Ronald
F. Mosher
|
Retired
|
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Katherine
W. Ong
|
Director,
Hobbs, Ong & Associates, Inc.
|
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Michael
D. Rumbolz
|
Chairman
and Chief Executive Officer, Cash Systems, Inc.
|
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John
P. Sande, III
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Partner,
Jones Vargas
|
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Martin
J. Welch
|
Chief
Operating Officer, Employers Holdings,
Inc.
|
EXECUTIVE
OFFICERS
(who
are not directors)
|
Name
|
Title
|
|
Lenard
T. Ormsby
|
Executive
Vice President, General Counsel
|
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William
E. Yocke
|
Executive
Vice President, Chief Financial Officer
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Ann
W. Nelson
|
Executive
Vice President, Corporate & Public Affairs
|
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John
P. Nelson
|
Senior
Vice President, Chief Administrative Officer
|
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Teresa
Shappell
|
Senior
Vice President, Chief Strategy Officer
|
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T.
Hale Johnston
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President,
Pacific Region
|
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Daniel
M. Quezada
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President,
Strategic Markets Region
|
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George
Tway
|
President,
Western Region
|
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Paul
I. Ayoub
|
Senior
Vice President, Chief Information Officer
|
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Stephen
V. Festa
|
Senior
Vice President, Chief Claims Officer
|
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Jeff
J. Gans
|
Senior
Vice President, Chief Underwriting
Officer
|
A-1
Exhibit
2
EXECUTION
VERSION
VOTING
AND SUPPORT
AGREEMENT
This
VOTING AND SUPPORT AGREEMENT (this "Agreement") is
entered into as of January 10, 2008, by and among Employers Holdings, Inc.,
a
Nevada corporation ("Parent"), and Fred
R.
Lowe ("Shareholder"). Parent
and Shareholder are sometimes referred to herein as a "Party" and
collectively as the "Parties".
W
I T N E S S E T
H:
WHEREAS,
Parent, Sapphire Acquisition Corp., a wholly-owned subsidiary of Parent ("Acquisition Sub"),
and the Company propose to enter into an Agreement and Plan of Merger, dated
as
of the date hereof (as the same may be amended from time to time, the "Merger Agreement"),
pursuant to which Acquisition Sub will merge with and into the Company, with
the
Company surviving as a wholly-owned subsidiary of Parent (the "Merger");
and
WHEREAS,
as a condition to the willingness of Parent and Acquisition Sub to enter into
the Merger Agreement, and as an inducement and in consideration therefor,
Shareholder is executing this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
Parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Capitalized
Terms. For purposes of this Agreement, capitalized terms used
and not defined herein shall have the respective meanings ascribed to them
in
the Merger Agreement. For the avoidance of doubt, the term
"Affiliate," as used in this Agreement, shall have the meaning ascribed to
such
term in the Merger Agreement.
ARTICLE
II
VOTING
AGREEMENT AND
IRREVOCABLE PROXY
Section
2.1 Agreement to Vote
the
Subject Shares. Subject to Section 2.3, Section 2.4 and
Section 2.5, Shareholder hereby unconditionally and irrevocably agrees that,
during the Voting Period, at any duly called meeting of the stockholders of
the
Company (or any adjournment or postponement thereof), and in any action by
written consent of the stockholders of the Company, Shareholder shall, if a
meeting is held, appear at the meeting, in person or by proxy, or otherwise
cause its Subject Shares to be counted as present thereat for purposes of
establishing a quorum, and it shall vote or consent (or cause to be voted or
consented), in person or by proxy, all of its Subject Shares (a) in favor of
the
adoption of the Merger Agreement and approval of the Merger and the other
transactions contemplated by the Merger Agreement (and any actions required
in
furtherance thereof), (b) against any action, proposal, transaction or agreement
that would result in a breach in any respect of any covenant, representation
or
warranty or any other obligation or agreement of the Company contained in the
Merger Agreement or of Shareholder contained in this Agreement, and (c) against
the following actions or proposals (other than the transactions contemplated
by
the Merger Agreement): (i) any Company Takeover Proposal or any
proposal in opposition to approval of the Merger Agreement or in competition
with or materially inconsistent with the Merger Agreement; and (ii) (A) any
change in the persons who constitute the Board); (B) any material change in
the
present capitalization of the Company or any amendment of the Certificate of
Incorporation or Bylaws; (C) any change in the Company's corporate structure
or
business; or (D) any other action or proposal involving the Company or any
Company Subsidiary that is intended, or could reasonably be expected, to
prevent, impede, interfere with, delay, postpone or adversely affect the
transactions contemplated by the Merger Agreement or could reasonably be
expected to result in any of the conditions to the Company's obligations under
the Merger Agreement not being fulfilled. Subject to Section 2.5,
Shareholder agrees not to, and shall cause its Representatives not to, enter
into any agreement, commitment or arrangement with any Person the effect of
which would be inconsistent with or violative of the provisions and agreements
contained in this Article II.
Section
2.2 Effect of Change
of
Recommendation, Withdrawal
of
Recommendation
or Company
Breach. For the avoidance of doubt, Shareholder agrees that,
during the Voting Period, the obligations of Shareholder specified in Section
2.1 shall not be affected by any (a) Change of Recommendation, (b) Withdrawal
of
Recommendation or (c) breach by the Company of any of its representations,
warranties, agreements or covenants set forth in the Merger
Agreement.
Section 2.3 Grant of Irrevocable
Proxy. Shareholder hereby appoints Parent and any designee of
Parent, and each of them individually, as Shareholder's agent, proxy and
attorney-in-fact, with full power of substitution and resubstitution in the
premises, to vote or act by written consent during the Voting Period with
respect to any and all of the Subject Shares in accordance with Section 2.1,
in
each case subject to the receipt of any Requisite Regulatory Approvals, if
required. Shareholder shall promptly cause a copy of this Agreement
to be deposited with the Company at its principal place of
business. Shareholder shall take such further action or execute such
other instruments as may be necessary to effectuate the intent of
2
this
proxy. Shareholder affirms that the irrevocable proxy set forth in
this Article II is given in connection with, and in consideration of, the
execution of the Merger Agreement, and that such irrevocable proxy is given
to
Parent by Shareholder to secure the performance of the duties of Shareholder
under this Agreement.
Section 2.4 Nature of Irrevocable
Proxy. The proxy and power of attorney granted pursuant to
Section 2.3 to the Parent by Shareholder shall (a) be irrevocable during the
term of this Agreement, (b) be deemed to be coupled with an interest sufficient
in law to support an irrevocable proxy, (c) revoke any and all prior proxies
and
powers of attorney granted by Shareholder with respect to the Subject
Shares and (d) not give any subsequent proxy or power of attorney with respect
to the Subject Shares, other than a proxy solicited by the Proxy Statement
to
the extent necessary to permit Shareholder to comply with Section
2.1. The power of attorney granted by Shareholder herein is a durable
power of attorney and shall survive the dissolution, bankruptcy, death or
incapacity of Shareholder and shall be binding upon the heirs, personal
representatives, successors or assigns of Shareholder. The proxy and
power of attorney granted hereunder shall terminate upon the termination of
this
Agreement. It is agreed that Parent and any designee of Parent shall
use the irrevocable proxy granted hereby only in accordance with applicable
Law. For the avoidance of doubt, the vote of Parent or any designee
of Parent shall control in any conflict between the vote by Parent or any
designee of Parent of the Subject Shares and any other vote by Shareholder
of
the Subject Shares.
Section 2.5 No Restrictions
on Obligation
as
Director or
Officer. The Parties acknowledge that Shareholder (or a
Representative of Shareholder) is a director and/or officer of the Company
and,
in such capacity, owes a fiduciary duty to the Company and its
stockholders. Notwithstanding anything to the contrary contained in
this Agreement, nothing in this Agreement shall be construed to impose any
obligation or limitation on votes or actions taken by any director, officer,
general partner, member, employee, agent or other representative
(collectively, "Representatives") of Shareholder in his or her capacity
as a director or officer of the Company, including pursuant to Section 4.4(e)
of
the Merger Agreement.
ARTICLE
III
COVENANTS
Section
3.1 Generally.
(a) Shareholder
agrees that during the Voting Period, except as contemplated by the terms of
this Agreement, it shall not, and shall cause its Representatives not to,
without the Parent's prior written consent, (i) offer for sale, sell (including
short sales), transfer, tender, pledge, encumber, assign or otherwise dispose
of
(including by gift) (collectively, a "Transfer"), or enter
into any contract, option, derivative, hedging or other agreement or arrangement
or understanding (including any profit-sharing arrangement) with respect to,
or
consent to, a Transfer of, any or all of the Subject Shares; (ii) grant any
proxies or powers of attorney with respect to any or all of the Subject
Shares; (iii) permit to exist any lien of any nature whatsoever with respect
to
any or all of the Subject Shares; or (iv) take any action that
3
would
have the effect of preventing, impeding, interfering with or adversely affecting
Shareholder's ability to perform its obligations under this
Agreement.
(b) In
the event of a stock dividend or distribution, or any change in the Common
Stock
by reason of any stock dividend or distribution, split-up, recapitalization,
combination, conversion, exchange of shares or the like, the term "Subject
Shares" shall be deemed to refer to and include the Subject Shares as well
as
all such stock dividends and distributions and any securities into which or
for
which any or all of the Subject Shares may be changed or exchanged or which
are
received in such transaction.
(c) Shareholder
agrees, while this Agreement is in effect, not to take or agree or commit to
take any action that would make any representation and warranty of Shareholder
contained in this Agreement inaccurate in any material respect.
Section 3.2 Standstill
Obligations of the
Shareholder. Shareholder covenants and agrees with Parent
that, during the Voting Period:
(a) Shareholder
shall not, nor shall Shareholder permit any of its Representatives to, nor
shall
Shareholder act in concert with or permit any of its Representatives to act
in
concert with any Person to make, or in any manner participate in, directly
or
indirectly, a "solicitation" of "proxies" or consents (as such terms are used
in
the rules of the SEC) or powers of attorney or similar rights to vote, or seek
to advise or influence any Person with respect to the voting of, any shares
of
Common Stock in connection with any vote or other action on any matter, other
than to recommend that stockholders of the Company vote in favor of adoption
of
the Merger Agreement, the Merger and the other transactions contemplated by
the
Merger Agreement (and any actions required in furtherance thereof and otherwise
as expressly provided by Article II of this Agreement)
(b) Shareholder
shall not, nor shall Shareholder permit any Representative of Shareholder to,
nor shall Shareholder act in concert with or permit any Representative of
Shareholder to act in concert with any Person to, deposit any of the Subject
Shares in a voting trust or subject any of the Subject Shares to any arrangement
or agreement with any Person with respect to the voting of the Subject Shares,
except as provided by Article II of this Agreement.
(c) Shareholder
shall not, nor shall Shareholder permit any Representative of Shareholder to,
nor shall Shareholder act in concert with or permit any Representative of
Shareholder to act in concert with any Person to, directly or indirectly,
initiate, solicit or knowingly encourage or facilitate (including, in each
case,
by way of furnishing information) any inquiries or the making of any proposal
or
offer with respect to, or any indication of interest in, any Company
Takeover Proposal, engage in any negotiations or discussions concerning
any Company Takeover Proposal, or provide any non-public information or
data to any Person (other than Parent, Acquisition Sub or any of Affiliates
of
Parent) that has made, or to Shareholder's knowledge, is considering making
a
Company Takeover Proposal or any Representatives thereof, or make any public
statements with respect to any Company Takeover Proposal or any matter that
relates to, supports, or could reasonably be expected to lead to any Company
Takeover Proposal.
4
(d) Shareholder
shall, and shall (subject to Section 2.5) cause any Representative of
Shareholder to, cease immediately and cause to be terminated any and all
existing discussions, conversations, negotiations and other communications
with
any Person conducted heretofore with respect to any Company
Takeover Proposal or any matter that relates to, supports, or could
reasonably be expected to lead to any Company
Takeover Proposal. Shareholder shall, and shall not (subject to
Section 2.5) permit any of its Representatives to, directly or indirectly,
engage in any activity which would be prohibited pursuant to Section 4.4(b)
of
the Merger Agreement if engaged in by the Company.
Section 3.3 Appraisal
Rights. Shareholder agrees not to seek appraisal or assert any
rights of dissent from the Merger that it may have under Section 262 of the
DGCL
(or otherwise) and, to the extent permitted by applicable Law, Shareholder
hereby waives any rights of appraisal or rights to dissent from the Merger
that
it may have under Section 262 of the DGCL.
ARTICLE
IV
REPRESENTATIONS
AND
WARRANTIES OF SHAREHOLDER
Shareholder
hereby represents and warrants to Parent as follows:
Section 4.1 Binding
Agreement. Shareholder (a) if a natural person, is of legal
age to execute this Agreement and is legally competent to do so and (b) if
not a
natural person, (i) is a corporation, limited liability company or partnership
duly organized and validly existing under the laws of the jurisdiction of its
organization and (ii) has all necessary power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Shareholder has been
duly authorized by all necessary corporate, limited liability or partnership
action on the part of Shareholder. This Agreement, assuming due
authorization, execution and delivery hereof by Parent, constitutes a legal,
valid and binding obligation of Shareholder, enforceable against Shareholder
in
accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditor's
rights, and to general equitable principles).
Section 4.2 Ownership of
Shares. Schedule I sets forth opposite Shareholder's name the
number of shares of Common Stock over which Shareholder has record and
beneficial ownership as of the date hereof. As of the date hereof,
Shareholder is the lawful owner of the shares of Common Stock denoted as being
owned by Shareholder on Schedule I and has the sole power to vote or cause
to be
voted such shares. Shareholder does not own or hold any right to
acquire any additional shares of any class of capital stock of the Company
or
other securities of the Company or any interest therein or any voting rights
with respect to any securities of the Company other than the Subject
Shares. Shareholder has good and valid title to the Common Stock
denoted as being owned by Shareholder on Schedule I, free and clear of any
and
all pledges, mortgages, Encumbrances, charges, proxies, voting agreements,
liens, adverse claims, options, security interests and demands of any nature
or
kind whatsoever, other than those created by this Agreement. There
are no claims for finder's fees or brokerage commission or
5
other
like payments in connection with this Agreement or the transactions contemplated
hereby payable by Shareholder pursuant to arrangements made by
Shareholder.
Section 4.3 No Conflicts.
(a) No
filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Shareholder and the consummation by Shareholder of the transactions contemplated
hereby.
(b) None
of the execution and delivery of this Agreement by Shareholder, the consummation
by Shareholder of the transactions contemplated hereby or compliance by
Shareholder with any of the provisions hereof shall (i) conflict with or result
in any breach of the organizational documents of Shareholder, as applicable,
(ii) result in, or give rise to, a violation or breach of or a default under
any
of the terms of any material contract, understanding, agreement or other
instrument or obligation to which Shareholder is a party or by which Shareholder
or any of the Subject Shares or assets may be bound, or (iii) violate any
applicable Order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as could not reasonably be expected
to impair Shareholder's ability to perform its obligations under this
Agreement.
Section 4.4 Company Takeover
Proposal. Shareholder
represents that it is not, and (subject to Section 2.5) no Representative of
Shareholder is, engaged in any discussions or negotiations with any
Person (other than Parent, Acquisition Sub or any of Affiliates of Parent)
with respect to any Company Takeover Proposal or any matter that relates to,
supports, or could reasonably be expected to lead to any Company Takeover
Proposal.
Section 4.5 Reliance by
Parent. Shareholder understands and acknowledges that Parent
is entering into the Merger Agreement in reliance upon the execution and
delivery of this Agreement by Shareholder.
ARTICLE
V
REPRESENTATIONS
AND
WARRANTIES OF PARENT
Parent
hereby represents and warrants to the Shareholders as follows:
Section 5.1 Binding
Agreement. Parent is a Nevada corporation duly organized and validly
existing under the laws of the jurisdiction of its
organization. Parent has all necessary corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby by Parent have
been duly authorized by all necessary corporate action on the part of
Parent. This Agreement, assuming due authorization, execution and
delivery hereof by Shareholder, constitutes a legal, valid and binding
obligation of Parent enforceable against Parent in accordance with its terms
(except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor's rights, and to general
equitable principles).
6
Section
5.2 No Conflicts.
(a) No
filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Parent and the consummation by Parent of the transactions contemplated
hereby.
(b) None
of the execution and delivery of this Agreement by Parent, the consummation
by
Parent of the transactions contemplated hereby or compliance by Parent with
any
of the provisions hereof shall (i) conflict with or result in any breach of
the
organizational documents of Parent, (ii) result in, or give rise to, a violation
or breach of or a default under any of the terms of any material contract,
understanding, agreement or other instrument or obligation to which Parent
is a
party or by which Parent or any of its assets may be bound, or (iii) violate
any
applicable Order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as could not reasonably be expected
to impair Parent's ability to perform its obligations under this
Agreement.
Section 5.3 Reliance by the
Shareholder. Parent understands and acknowledges that
Shareholder is entering into this Agreement in reliance upon the execution
and
delivery of the Merger Agreement by Parent.
ARTICLE
VI
TERMINATION
Section 6.1 Termination. This
Agreement shall automatically terminate, and none of Parent or Shareholder
shall
have any rights or obligations hereunder and this Agreement shall become null
and void and have no effect upon the earliest to occur of (a) the mutual written
consent of Parent and Shareholder, (b) the Effective Time, (c) the date of
termination of the Merger Agreement in accordance with its terms, (d) the date
of any change or amendment to the Merger Agreement that results in any decrease
in the Merger Consideration, or (e) October 31, 2009. The termination
of this Agreement shall not prevent any Party hereunder from seeking any
remedies (at law or in equity) against another Party hereto or relieve such
Party from liability for such Party's breach of any terms of this
Agreement. Notwithstanding anything to the contrary herein, the
provisions of Article VII (other than Section 7.2) shall survive the termination
of this Agreement.
ARTICLE
VII
MISCELLANEOUS
Section 7.1 Publication. Shareholder
hereby permits the Company and Parent to publish and disclose in any forms,
schedules or other documents to be filed with the SEC (including the Proxy
Statement) Shareholder's identity and ownership of the Subject Shares and the
nature of its commitments, arrangements and understandings pursuant to this
Agreement.
Section
7.2 Further Assurances. From
time to time, at the other Party's request and without further consideration,
each Party shall execute and deliver such additional
7
documents
and take all such further action as may be reasonably
necessary or desirable to consummate the transactions contemplated by this
Agreement.
Section 7.3 Fees and
Expenses. Each
of
the Parties shall be responsible for its own fees and expenses (including,
without limitation, the fees and expenses of investment bankers, accountants
and
counsel) in connection with the entering into of this Agreement and the
consummation of the transactions contemplated hereby and by the Merger
Agreement.
Section
7.4 Amendments, Waivers,
etc. This Agreement may not be amended, changed, supplemented,
waived or otherwise modified, except upon the execution and delivery of a
written agreement executed by each of the Parties hereto. The failure
of any Party hereto to exercise any right, power or remedy provided under
this Agreement or otherwise available in respect hereof at law or in equity,
or
to insist upon compliance by any other Party hereto with its obligations
hereunder, and any custom or practice of the Parties at variance with the terms
hereof shall not constitute a waiver by such Party of its right to exercise
any
such or other right, power or remedy or to demand such compliance.
Section 7.5 Notices. All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given
upon
receipt) by delivery in Person, by facsimile or by registered or certified
mail
(postage prepaid, return receipt requested) to the respective Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice):
(a) If
to Parent or Acquisition Sub:
Employers
Holdings, Inc.
9790
Gateway Drive
Reno,
Nevada 89521
Attn: Lenard
T. Ormsby
Phone: (775)
327-2547
Fax: (775)
886-1854
with
a copy (which shall not constitute notice) to:
Skadden,
Arps, Slate, Meagher & Flom LLP
Four
Times Square
New
York, NY 10036
Attn: Robert
J. Sullivan
David
C. Ingles
Phone: (212)
735-3000
Fax: (212)
735-2000
(b) If
to Shareholder:
8
Fred
R. Lowe
c/o
AmCOMP Incorporated
701
U.S. Highway One
North
Palm Beach, FL 33408
Phone: (561)
840-7171
Fax: (561)
863-2603
with
a copy (which shall not constitute notice) to:
Foley
& Lardner LLP
106
East College Street, Suite 900
Tallahassee,
FL 32302
Attn: Thomas
Maida, Esquire
Phone: (850)
222-6100
Fax: (850)
561-6475
and
with a copy (which shall not constitute notice) to:
Foley
& L cardner LLP
One
Independent Drive, Suite 1300
Jacksonville,
FL 32202
Attn: Gardner
Davis, Esquire
Phone: (904)
359-2000
Fax: (904)
359-8700
Section 7.6 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 7.7 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, all other conditions
and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any Party. 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 in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the fullest extent possible.
Section 7.8 Entire Agreement;
Assignment. This
Agreement (together with the Merger Agreement, to the extent referred to herein,
and Schedule I) constitutes the entire agreement among the Parties with respect
to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, among the Parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be
assigned by operation of law or otherwise without the prior written consent
of
the other Party, except that Parent may assign all or
any of its rights and obligations hereunder to any direct or indirect
wholly-owned Subsidiary of Parent.
9
Section 7.9 Parties in
Interest. This Agreement shall be binding upon and inure
solely to the benefit of each Party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other Person any
rights, benefits or remedies of any nature whatsoever under or by reason of
this
Agreement.
Section 7.10 Interpretation. When
reference is made in this Agreement to a Section, such reference shall be to
a
Section of this Agreement unless otherwise indicated. 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," "hereby"
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. The word "or" shall not be exclusive. Whenever used in this
Agreement, any noun or pronoun shall be deemed to include the plural as well
as
the singular and to cover all genders. This Agreement shall be
construed without regard to any presumption or rule requiring construction
or
interpretation against the Party drafting or causing any instrument to be
drafted.
Section 7.11 Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
Section 7.12 Specific Performance;
Jurisdiction. The Parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the Court
of
Chancery of the State of Delaware or, if under applicable law exclusive
jurisdiction over such matter is vested in the federal courts, any court of
the
United States located in the State of Delaware, this being in addition to any
other remedy to which such Party is entitled at law or in equity. In
addition, each of the Parties hereto (a) consents to submit itself to the
personal jurisdiction of the Court of Chancery of the State of Delaware or
any
court of the United States located in the State of Delaware in the event any
dispute arises out of this Agreement or any of the transactions contemplated
by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court,
(c) 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
the
Court of Chancery of the State of Delaware or, if under applicable law
exclusive jurisdiction over such matter is vested in the federal courts, any
court of the United States located in the State of Delaware and (d) consents
to
service being made through the notice procedures set forth in Section
7.5. Each of the Shareholder and Parent hereby agrees that service of
any process, summons, notice or document by U.S. registered mail to the
respective addresses set forth in Section 7.5 shall be effective service of
process for any proceeding in connection with this Agreement or the transactions
contemplated hereby.
Section 7.13 Counterparts. This
Agreement may be executed in counterparts (including by facsimile), each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
10
Section 7.14 No Partnership,
Agency or
Joint Venture. This Agreement is intended to create a
contractual relationship between Shareholder, on the one hand, and Parent,
on
the other hand, and is not intended to create, and does not create, any agency,
partnership, joint venture or any like relationship between or among the parties
hereto. Without limiting the generality of the foregoing
sentence, Shareholder (a) is entering into this Agreement solely on its own
behalf and shall not have any obligation to perform on behalf of any other
holder of Common Stock or any liability (regardless of the legal theory
advanced) for any breach of this Agreement by any other holder of Common Stock
and (b) by entering into this Agreement does not intend to form a "group" for
purposes of Rule 13d-5(b)(1) of the Exchange Act or any other similar provision
of applicable Law. To the knowledge of Shareholder, Shareholder is
not affiliated with any other holder of Common Stock entering into a voting
agreement with Parent in connection with the Merger Agreement and has acted
independently regarding its decision to enter into this Agreement and regarding
its investment in the Company.
[Execution
page
follows.]
11
IN
WITNESS WHEREOF, Parent and Shareholder have caused this Agreement to be duly
executed as of the day and year first above written.
|
EMPLOYERS
HOLDINGS,
INC.
|
|||
|
By:
|
/s/ Douglas D. Dirks | ||
|
Name: Douglas
D. Dirks
|
|||
|
Title: Chief
Executive Officer
|
|||
|
FRED
R.
LOWE
|
|||
| /s/ Fred R. Lowe | |||
SCHEDULE
I
Ownership
of Common
Stock
|
Shareholder
|
Number
of Shares
|
|
|
Fred
R. Lowe
|
229,471
|
|
Exhibit
3
EXECUTION
VERSION
VOTING
AND SUPPORT AGREEMENT
This
VOTING AND SUPPORT AGREEMENT (this "Agreement") is
entered into as of January 10, 2008, by and among Employers Holdings, Inc.,
a
Nevada corporation ("Parent"), and
Sam A.
Stephens ("Shareholder"). Parent
and Shareholder are sometimes referred to herein as a "Party" and
collectively as the "Parties".
W
I T N E S S E T
H:
WHEREAS,
Parent, Sapphire Acquisition Corp., a wholly-owned subsidiary of Parent ("Acquisition Sub"),
and the Company propose to enter into an Agreement and Plan of Merger, dated
as
of the date hereof (as the same may be amended from time to time, the "Merger Agreement"),
pursuant to which Acquisition Sub will merge with and into the Company, with
the
Company surviving as a wholly-owned subsidiary of Parent (the "Merger");
and
WHEREAS,
as a condition to the willingness of Parent and Acquisition Sub to enter
into
the Merger Agreement, and as an inducement and in consideration therefor,
Shareholder is executing this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
Parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Capitalized
Terms. For
purposes of this Agreement, capitalized terms used and not defined herein
shall
have the respective meanings ascribed to them in the Merger
Agreement. For the avoidance of doubt, the term "Affiliate," as used
in this Agreement, shall have the meaning ascribed to such term in the Merger
Agreement.
ARTICLE
II
VOTING
AGREEMENT AND
IRREVOCABLE PROXY
Section 2.1 Agreement
to Vote the Subject Shares. Subject
to Section 2.3, Section 2.4 and Section 2.5, Shareholder hereby unconditionally
and irrevocably agrees that, during the Voting Period, at any duly called
meeting of the stockholders of the Company (or any adjournment or postponement
thereof), and in any action by written consent of the stockholders of the
Company, Shareholder shall, if a meeting is held, appear at the meeting,
in
person or by proxy, or otherwise cause its Subject Shares to be counted as
present thereat for purposes of establishing a quorum, and it shall vote
or
consent (or cause to be voted or consented), in person or by proxy, all of
its
Subject Shares (a) in favor of the adoption of the Merger Agreement and approval
of the Merger and the other transactions contemplated by the Merger Agreement
(and any actions required in furtherance thereof), (b) against any action,
proposal, transaction or agreement that would result in a breach in any respect
of any covenant, representation or warranty or any other obligation or agreement
of the Company contained in the Merger Agreement or of Shareholder contained
in
this Agreement, and (c) against the following actions or proposals (other
than
the transactions contemplated by the Merger Agreement): (i) any
Company Takeover Proposal or any proposal in opposition to approval of the
Merger Agreement or in competition with or materially inconsistent with the
Merger Agreement; and (ii) (A) any change in the persons who constitute the
Board); (B) any material change in the present capitalization of the Company
or
any amendment of the Certificate of Incorporation or Bylaws; (C) any change
in
the Company's corporate structure or business; or (D) any other action or
proposal involving the Company or any Company Subsidiary that is intended,
or
could reasonably be expected, to prevent, impede, interfere with, delay,
postpone or adversely affect the transactions contemplated by the Merger
Agreement or could reasonably be expected to result in any of the conditions
to
the Company's obligations under the Merger Agreement not being
fulfilled. Subject to Section 2.5, Shareholder agrees not to, and
shall cause its Representatives not to, enter into any agreement, commitment
or
arrangement with any Person the effect of which would be inconsistent with
or
violative of the provisions and agreements contained in this Article
II.
Section
2.2 Effect
of Change of
Recommendation, Withdrawal of Recommendation or Company
Breach. For
the avoidance of doubt, Shareholder agrees that, during the Voting Period,
the
obligations of Shareholder specified in Section 2.1 shall not be affected
by any
(a) Change of Recommendation, (b) Withdrawal of Recommendation or (c) breach
by
the Company of any of its representations, warranties, agreements or covenants
set forth in the Merger Agreement.
Section
2.3 Grant
of Irrevocable
Proxy. Shareholder
hereby appoints Parent and any designee of Parent, and each of them
individually, as Shareholder's agent, proxy and attorney-in-fact, with full
power of substitution and resubstitution in the premises, to vote or act
by
written consent during the Voting Period with respect to any and all of the
Subject Shares in accordance with Section 2.1, in each case subject to the
receipt of any Requisite Regulatory Approvals, if
required. Shareholder shall promptly cause a copy of this Agreement
to be deposited with the Company at its principal place of
business. Shareholder shall take such further action or execute such
other instruments as may be necessary to effectuate the intent of
2
this
proxy. Shareholder affirms that the irrevocable proxy set forth in
this Article II is given in connection with, and in consideration of, the
execution of the Merger Agreement, and that such irrevocable proxy is given
to
Parent by Shareholder to secure the performance of the duties of Shareholder
under this Agreement.
Section
2.4 Nature
of Irrevocable
Proxy. The
proxy and power of attorney granted pursuant to Section 2.3 to the Parent
by
Shareholder shall (a) be irrevocable during the term of this Agreement, (b)
be
deemed to be coupled with an interest sufficient in law to support an
irrevocable proxy, (c) revoke any and all prior proxies and powers of attorney
granted by Shareholder with respect to the Subject Shares and (d) not give
any
subsequent proxy or power of attorney with respect to the Subject Shares,
other
than a proxy solicited by the Proxy Statement to the extent necessary to
permit
Shareholder to comply with Section 2.1. The power of attorney granted
by Shareholder herein is a durable power of attorney and shall survive the
dissolution, bankruptcy, death or incapacity of Shareholder and shall be
binding
upon the heirs, personal representatives, successors or assigns of
Shareholder. The proxy and power of attorney granted hereunder shall
terminate upon the termination of this Agreement. It is agreed that
Parent and any designee of Parent shall use the irrevocable proxy granted
hereby
only in accordance with applicable Law. For the avoidance of doubt,
the vote of Parent or any designee of Parent shall control in any conflict
between the vote by Parent or any designee of Parent of the Subject Shares
and
any other vote by Shareholder of the Subject Shares.
Section
2.5 No
Restrictions on
Obligation as Director or Officer. The
Parties acknowledge that Shareholder (or a Representative of Shareholder)
is a
director and/or officer of the Company and, in such capacity, owes a fiduciary
duty to the Company and its stockholders. Notwithstanding anything to
the contrary contained in this Agreement, nothing in this Agreement shall
be
construed to impose any obligation or limitation on votes or actions taken
by
any director, officer, general partner, member, employee, agent or other
representative (collectively, "Representatives") of
Shareholder in his or her capacity as a director or officer of the Company,
including pursuant to Section 4.4(e) of the Merger Agreement.
ARTICLE
III
COVENANTS
Section
3.1 Generally.
(a) Shareholder
agrees that during the Voting Period, except as contemplated by the terms
of
this Agreement, it shall not, and shall cause its Representatives not to,
without the Parent's prior written consent, (i) offer for sale, sell (including
short sales), transfer, tender, pledge, encumber, assign or otherwise dispose
of
(including by gift) (collectively, a "Transfer"), or
enter
into any contract, option, derivative, hedging or other agreement or arrangement
or understanding (including any profit-sharing arrangement) with respect
to, or
consent to, a Transfer of, any or all of the Subject Shares; (ii) grant any
proxies or powers of attorney with respect to any or all of the Subject Shares;
(iii) permit to exist any lien of any nature whatsoever with respect to any
or
all of the Subject Shares; or (iv) take any action that
3
would
have the effect of preventing, impeding, interfering with or adversely affecting
Shareholder's ability to perform its obligations under this
Agreement.
(b) In
the event of a stock dividend or distribution, or any change in the Common
Stock
by reason of any stock dividend or distribution, split-up, recapitalization,
combination, conversion, exchange of shares or the like, the term "Subject
Shares" shall be deemed to refer to and include the Subject Shares as well
as
all such stock dividends and distributions and any securities into which
or for
which any or all of the Subject Shares may be changed or exchanged or which
are
received in such transaction.
(c) Shareholder
agrees, while this Agreement is in effect, not to take or agree or commit
to
take any action that would make any representation and warranty of Shareholder
contained in this Agreement inaccurate in any material respect.
Section
3.2 Standstill
Obligations of
the Shareholder. Shareholder
covenants and agrees with Parent that, during the Voting Period:
(a) Shareholder
shall not, nor shall Shareholder permit any of its Representatives to, nor
shall
Shareholder act in concert with or permit any of its Representatives to act
in
concert with any Person to make, or in any manner participate in, directly
or
indirectly, a "solicitation" of "proxies" or consents (as such terms are
used in
the rules of the SEC) or powers of attorney or similar rights to vote, or
seek
to advise or influence any Person with respect to the voting of, any shares
of
Common Stock in connection with any vote or other action on any matter, other
than to recommend that stockholders of the Company vote in favor of adoption
of
the Merger Agreement, the Merger and the other transactions contemplated
by the
Merger Agreement (and any actions required in furtherance thereof and otherwise
as expressly provided by Article II of this Agreement)
(b) Shareholder
shall not, nor shall Shareholder permit any Representative of Shareholder
to,
nor shall Shareholder act in concert with or permit any Representative of
Shareholder to act in concert with any Person to, deposit any of the Subject
Shares in a voting trust or subject any of the Subject Shares to any arrangement
or agreement with any Person with respect to the voting of the Subject Shares,
except as provided by Article II of this Agreement.
(c) Shareholder
shall not, nor shall Shareholder permit any Representative of Shareholder
to,
nor shall Shareholder act in concert with or permit any Representative of
Shareholder to act in concert with any Person to, directly or indirectly,
initiate, solicit or knowingly encourage or facilitate (including, in each
case,
by way of furnishing information) any inquiries or the making of any proposal
or
offer with respect to, or any indication of interest in, any Company Takeover
Proposal, engage in any negotiations or discussions concerning any Company
Takeover Proposal, or provide any non-public information or data to any Person
(other than Parent, Acquisition Sub or any of Affiliates of Parent) that
has
made, or to Shareholder's knowledge, is considering making a Company Takeover
Proposal or any Representatives thereof, or make any public statements with
respect to any Company Takeover Proposal or any matter that relates to,
supports, or could reasonably be expected to lead to any Company Takeover
Proposal.
4
(d) Shareholder
shall, and shall (subject to Section 2.5) cause any Representative of
Shareholder to, cease immediately and cause to be terminated any and all
existing discussions, conversations, negotiations and other communications
with
any Person conducted heretofore with respect to any Company Takeover Proposal
or
any matter that relates to, supports, or could reasonably be expected to
lead to
any Company Takeover Proposal. Shareholder shall, and shall not
(subject to Section 2.5) permit any of its Representatives to, directly or
indirectly, engage in any activity which would be prohibited pursuant to
Section
4.4(b) of the Merger Agreement if engaged in by the Company.
Section
3.3 Appraisal
Rights. Shareholder
agrees not to seek appraisal or assert any rights of dissent from the Merger
that it may have under Section 262 of the DGCL (or otherwise) and, to the
extent
permitted by applicable Law, Shareholder hereby waives any rights of appraisal
or rights to dissent from the Merger that it may have under Section 262 of
the
DGCL.
ARTICLE
IV
REPRESENTATIONS
AND
WARRANTIES OF SHAREHOLDER
Shareholder
hereby represents and warrants to Parent as follows:
Section
4.1 Binding
Agreement. Shareholder
(a) if a natural person, is of legal age to execute this Agreement and is
legally competent to do so and (b) if not a natural person, (i) is a
corporation, limited liability company or partnership duly organized and
validly
existing under the laws of the jurisdiction of its organization and (ii)
has all
necessary power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Shareholder has been duly authorized by all necessary corporate,
limited liability or partnership action on the part of
Shareholder. This Agreement, assuming due authorization, execution
and delivery hereof by Parent, constitutes a legal, valid and binding obligation
of Shareholder, enforceable against Shareholder in accordance with its terms
(except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor's rights, and to
general
equitable principles).
Section
4.2 Ownership
of
Shares. Schedule
I sets forth opposite Shareholder's name the number of shares of Common Stock
over which Shareholder has record and beneficial ownership as of the date
hereof. As of the date hereof, Shareholder is the lawful owner of the
shares of Common Stock denoted as being owned by Shareholder on Schedule
I and
has the sole power to vote or cause to be voted such
shares. Shareholder does not own or hold any right to acquire any
additional shares of any class of capital stock of the Company or other
securities of the Company or any interest therein or any voting rights with
respect to any securities of the Company other than the Subject
Shares. Shareholder has good and valid title to the Common Stock
denoted as being owned by Shareholder on Schedule I, free and clear of any
and
all pledges, mortgages, Encumbrances, charges, proxies, voting agreements,
liens, adverse claims, options, security interests and demands of any nature
or
kind whatsoever, other than those created by this Agreement. There
are no claims for finder's fees or brokerage commission or
5
other
like payments in connection with this Agreement or the transactions contemplated
hereby payable by Shareholder pursuant to arrangements made by
Shareholder.
Section
4.3 No Conflicts.
(a) No
filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Shareholder and the consummation by Shareholder of the transactions contemplated
hereby.
(b) None
of the execution and delivery of this Agreement by Shareholder, the consummation
by Shareholder of the transactions contemplated hereby or compliance by
Shareholder with any of the provisions hereof shall (i) conflict with or
result
in any breach of the organizational documents of Shareholder, as applicable,
(ii) result in, or give rise to, a violation or breach of or a default under
any
of the terms of any material contract, understanding, agreement or other
instrument or obligation to which Shareholder is a party or by which Shareholder
or any of the Subject Shares or assets may be bound, or (iii) violate any
applicable Order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as could not reasonably be expected
to impair Shareholder's ability to perform its obligations under this
Agreement.
Section
4.4 Company
Takeover
Proposal. Shareholder
represents that it is not, and (subject to Section 2.5) no Representative
of
Shareholder is, engaged in any discussions or negotiations with any Person
(other than Parent, Acquisition Sub or any of Affiliates of Parent) with
respect
to any Company Takeover Proposal or any matter that relates to, supports,
or
could reasonably be expected to lead to any Company Takeover
Proposal.
Section
4.5 Reliance
by
Parent. Shareholder
understands and acknowledges that Parent is entering into the Merger Agreement
in reliance upon the execution and delivery of this Agreement by
Shareholder.
ARTICLE
V
REPRESENTATIONS
AND
WARRANTIES OF PARENT
Parent
hereby represents and warrants to the Shareholders as follows:
Section
5.1 Binding
Agreement. Parent
is a Nevada corporation duly organized and validly existing under the laws
of
the jurisdiction of its organization. Parent has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Parent have been duly authorized by all necessary corporate action
on
the part of Parent. This Agreement, assuming due authorization,
execution and delivery hereof by Shareholder, constitutes a legal, valid
and
binding obligation of Parent enforceable against Parent in accordance with
its
terms (except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor's rights, and to
general
equitable principles).
6
Section
5.2 No
Conflicts.
(a) No
filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Parent and the consummation by Parent of the transactions contemplated
hereby.
(b) None
of the execution and delivery of this Agreement by Parent, the consummation
by
Parent of the transactions contemplated hereby or compliance by Parent with
any
of the provisions hereof shall (i) conflict with or result in any breach
of the
organizational documents of Parent, (ii) result in, or give rise to, a violation
or breach of or a default under any of the terms of any material contract,
understanding, agreement or other instrument or obligation to which Parent
is a
party or by which Parent or any of its assets may be bound, or (iii) violate
any
applicable Order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as could not reasonably be expected
to impair Parent's ability to perform its obligations under this
Agreement.
Section
5.3 Reliance
by the
Shareholder. Parent
understands and acknowledges that Shareholder is entering into this Agreement
in
reliance upon the execution and delivery of the Merger Agreement by
Parent.
ARTICLE
VI
TERMINATION
Section
6.1 Termination. This
Agreement shall automatically terminate, and none of Parent or Shareholder
shall
have any rights or obligations hereunder and this Agreement shall become
null
and void and have no effect upon the earliest to occur of (a) the mutual
written
consent of Parent and Shareholder, (b) the Effective Time, (c) the date of
termination of the Merger Agreement in accordance with its terms, (d) the
date
of any change or amendment to the Merger Agreement that results in any decrease
in the Merger Consideration, or (e) October 31, 2009. The termination
of this Agreement shall not prevent any Party hereunder from seeking any
remedies (at law or in equity) against another Party hereto or relieve such
Party from liability for such Party's breach of any terms of this
Agreement. Notwithstanding anything to the contrary herein, the
provisions of Article VII (other than Section 7.2) shall survive the termination
of this Agreement.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Publication. Shareholder
hereby permits the Company and Parent to publish and disclose in any forms,
schedules or other documents to be filed with the SEC (including the Proxy
Statement) Shareholder's identity and ownership of the Subject Shares and
the
nature of its commitments, arrangements and understandings pursuant to this
Agreement.
Section
7.2 Further
Assurances. From
time to time, at the other Party's request and without further consideration,
each Party shall execute and deliver such additional documents and take all
such
further action as may be reasonably necessary or desirable to consummate
the
transactions contemplated by this Agreement.
7
Section
7.3 Fees
and
Expenses. Each
of the Parties shall be responsible for its own fees and expenses (including,
without limitation, the fees and expenses of investment bankers, accountants
and
counsel) in connection with the entering into of this Agreement and the
consummation of the transactions contemplated hereby and by the Merger
Agreement.
Section
7.4 Amendments,
Waivers,
etc. This
Agreement may not be amended, changed, supplemented, waived or otherwise
modified, except upon the execution and delivery of a written agreement executed
by each of the Parties hereto. The failure of any Party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance
by
any other Party hereto with its obligations hereunder, and any custom or
practice of the Parties at variance with the terms hereof shall not constitute
a
waiver by such Party of its right to exercise any such or other right, power or
remedy or to demand such compliance.
Section
7.5 Notices. All
notices, requests, claims, demands and other communications hereunder shall
be
in writing and shall be given (and shall be deemed to have been duly given
upon
receipt) by delivery in Person, by facsimile or by registered or certified
mail
(postage prepaid, return receipt requested) to the respective Parties at
the
following addresses (or at such other address for a Party as shall be specified
by like notice):
(a) If
to Parent or Acquisition Sub:
Employers
Holdings, Inc.
9790
Gateway Drive
Reno,
Nevada 89521
Attn: Lenard
T. Ormsby
Phone: (775)
327-2547
Fax: (775)
886-1854
with
a copy (which shall not constitute notice) to:
Skadden,
Arps, Slate, Meagher & Flom LLP
Four
Times Square
New
York, NY 10036
Attn:
Robert J. Sullivan
David
C. Ingles
Phone: (212)
735-3000
Fax: (212)
735-2000
(b) If
to Shareholder:
8
Sam
A. Stephens
c/o
AmCOMP Incorporated
701
U.S. Highway One
North
Palm Beach, FL 33408
Phone: (561)
840-7171
Fax: (561)
863-2603
with
a copy (which shall not constitute notice) to:
Foley
& Lardner LLP
106
East College Street, Suite 900
Tallahassee,
FL 32302
Attn: Thomas
Maida, Esquire
Phone: (850)
222-6100
Fax: (850)
561-6475
and
with a copy (which shall not constitute notice) to:
Foley
& Lardner LLP
One
Independent Drive, Suite 1300
Jacksonville,
FL 32202
Attn: Gardner
Davis, Esquire
Phone: (904)
359-2000
Fax: (904)
359-8700
Section
7.6 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
7.7 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, all other conditions
and
provisions of this Agreement shall nevertheless remain in full force and
effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any Party. 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 in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
Section
7.8 Entire
Agreement;
Assignment. This
Agreement (together with the Merger Agreement, to the extent referred to
herein,
and Schedule I) constitutes the entire agreement among the Parties with respect
to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, among the Parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be
assigned by operation of law or otherwise without the prior written consent
of
the other Party, except that Parent may assign all or any of its rights and
obligations hereunder to any direct or indirect wholly-owned Subsidiary of
Parent.
9
Section
7.9 Parties
in
Interest. This
Agreement shall be binding upon and inure solely to the benefit of each Party
hereto, and nothing in this Agreement, express or implied, is intended to
or
shall confer upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
Section
7.10 Interpretation. When
reference is made in this Agreement to a Section, such reference shall be
to a
Section of this Agreement unless otherwise indicated. 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," "hereby"
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. The word "or" shall not be exclusive. Whenever used in this
Agreement, any noun or pronoun shall be deemed to include the plural as well
as
the singular and to cover all genders. This Agreement shall be
construed without regard to any presumption or rule requiring construction
or
interpretation against the Party drafting or causing any instrument to be
drafted.
Section
7.11 Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Delaware.
Section
7.12 Specific
Performance;
Jurisdiction. The
Parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed
that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in the Court of Chancery of the State of Delaware or, if
under
applicable law exclusive jurisdiction over such matter is vested in the federal
courts, any court of the United States located in the State of Delaware,
this
being in addition to any other remedy to which such Party is entitled at
law or
in equity. In addition, each of the Parties hereto (a) consents to
submit itself to the personal jurisdiction of the Court of Chancery of the
State
of Delaware or any court of the United States located in the State of Delaware
in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny
or
defeat such personal jurisdiction by motion or other request for leave from
any
such court, (c) 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 the Court of Chancery of the State of Delaware or, if under
applicable law exclusive jurisdiction over such matter is vested in the federal
courts, any court of the United States located in the State of Delaware and
(d)
consents to service being made through the notice procedures set forth in
Section 7.5. Each of the Shareholder and Parent hereby agrees that
service of any process, summons, notice or document by U.S. registered mail
to
the respective addresses set forth in Section 7.5 shall be effective service
of
process for any proceeding in connection with this Agreement or the transactions
contemplated hereby.
Section
7.13 Counterparts. This
Agreement may be executed in counterparts (including by facsimile), each
of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
10
Section
7.14 No
Partnership, Agency or
Joint Venture. This
Agreement is intended to create a contractual relationship between Shareholder,
on the one hand, and Parent, on the other hand, and is not intended to create,
and does not create, any agency, partnership, joint venture or any like
relationship between or among the parties hereto. Without limiting
the generality of the foregoing sentence, Shareholder (a) is entering into
this
Agreement solely on its own behalf and shall not have any obligation to perform
on behalf of any other holder of Common Stock or any liability (regardless
of
the legal theory advanced) for any breach of this Agreement by any other
holder
of Common Stock and (b) by entering into this Agreement does not intend to
form
a "group" for purposes of Rule 13d-5(b)(1) of the Exchange Act or any other
similar provision of applicable Law. To the knowledge of Shareholder,
Shareholder is not affiliated with any other holder of Common Stock entering
into a voting agreement with Parent in connection with the Merger Agreement
and
has acted independently regarding its decision to enter into this Agreement
and
regarding its investment in the Company.
[Execution
page
follows.]
11
IN
WITNESS WHEREOF, Parent and Shareholder have caused this Agreement to be
duly
executed as of the day and year first above written.
|
EMPLOYERS
HOLDINGS, INC.
|
|||
| By: | /s/ Douglas D. Dirks | ||
|
Name:
Douglas D. Dirks
Title:
Chief Executive Officer
|
|||
|
SAM
A. STEPHENS
|
|||
| /s/ Sam A. Stephens | |||
SCHEDULE
I
Ownership
of Common
Stock
|
Shareholder
|
Number
of Shares
|
|
|
Sam
A. Stephens
|
1,005,992
|
|
Exhibit
4
EXECUTION
VERSION
VOTING
AND SUPPORT AGREEMENT
This
VOTING AND SUPPORT AGREEMENT (this "Agreement") is
entered into as of January 10, 2008, by and among Employers Holdings, Inc.,
a
Nevada corporation ("Parent"), and Welsh,
Carson, Anderson & Stowe VII, L.P. ("Shareholder"). Parent
and Shareholder are sometimes referred to herein as a "Party" and
collectively as the "Parties".
W
I T N E S S E T
H:
WHEREAS,
Parent, Sapphire Acquisition Corp., a wholly-owned subsidiary of Parent ("Acquisition Sub"),
and the Company propose to enter into an Agreement and Plan of Merger, dated
as
of the date hereof (as the same may be amended from time to time, the "Merger Agreement"),
pursuant to which Acquisition Sub will merge with and into the Company, with
the
Company surviving as a wholly-owned subsidiary of Parent (the "Merger");
and
WHEREAS,
as a condition to the willingness of Parent and Acquisition Sub to enter into
the Merger Agreement, and as an inducement and in consideration therefor,
Shareholder is executing this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
Parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Capitalized
Terms. For
purposes of this Agreement, capitalized terms used and not defined herein shall
have the respective meanings ascribed to them in the Merger
Agreement. For the avoidance of doubt, the term "Affiliate," as used
in this Agreement, shall have the meaning ascribed to such term in the Merger
Agreement.
ARTICLE
II
VOTING
AGREEMENT AND
IRREVOCABLE PROXY
Section
2.1 Agreement to Vote the Subject
Shares. Subject
to Section 2.3, Section 2.4 and Section 2.5, Shareholder hereby unconditionally
and irrevocably agrees that, during the Voting Period, at any duly called
meeting of the stockholders of the Company (or any adjournment or postponement
thereof), and in any action by written consent of the stockholders of the
Company, Shareholder shall, if a meeting is held, appear at the meeting, in
person or by proxy, or otherwise cause its Subject Shares to be counted as
present thereat for purposes of establishing a quorum, and it shall vote or
consent (or cause to be voted or consented), in person or by proxy, all of
its
Subject Shares (a) in favor of the adoption of the Merger Agreement and approval
of the Merger and the other transactions contemplated by the Merger Agreement
(and any actions required in furtherance thereof), (b) against any action,
proposal, transaction or agreement that would result in a breach in any respect
of any covenant, representation or warranty or any other obligation or agreement
of the Company contained in the Merger Agreement or of Shareholder contained
in
this Agreement, and (c) against the following actions or proposals (other than
the transactions contemplated by the Merger Agreement): (i) any
Company Takeover Proposal or any proposal in opposition to approval of the
Merger Agreement or in competition with or materially inconsistent with the
Merger Agreement; and (ii) (A) any change in the persons who constitute the
Board); (B) any material change in the present capitalization of the Company
or
any amendment of the Certificate of Incorporation or Bylaws; (C) any change
in
the Company's corporate structure or business; or (D) any other action or
proposal involving the Company or any Company Subsidiary that is intended,
or
could reasonably be expected, to prevent, impede, interfere with, delay,
postpone or adversely affect the transactions contemplated by the Merger
Agreement or could reasonably be expected to result in any of the conditions
to
the Company's obligations under the Merger Agreement not being
fulfilled. Subject to Section 2.5, Shareholder agrees not to, and
shall cause its Representatives not to, enter into any agreement, commitment
or
arrangement with any Person the effect of which would be inconsistent with
or
violative of the provisions and agreements contained in this Article
II.
Section
2.2 Effect of
Change of
Recommendation, Withdrawal of Recommendation or Company
Breach. For
the avoidance of doubt, Shareholder agrees that, during the Voting Period,
the
obligations of Shareholder specified in Section 2.1 shall not be affected by
any
(a) Change of Recommendation, (b) Withdrawal of Recommendation or (c) breach
by
the Company of any of its representations, warranties, agreements or covenants
set forth in the Merger Agreement.
Section
2.3 Grant of
Irrevocable
Proxy. Shareholder
hereby appoints Parent and any designee of Parent, and each of them
individually, as Shareholder's agent, proxy and attorney-in-fact, with full
power of substitution and resubstitution in the premises, to vote or act by
written consent during the Voting Period with respect to any and all of the
Subject Shares in accordance with Section 2.1, in each case subject to the
receipt of any Requisite Regulatory Approvals, if
required. Shareholder shall promptly cause a copy of this Agreement
to be deposited with the Company at its principal place of
business. Shareholder shall take such further action or execute such
other instruments as may be necessary to effectuate the intent of
2
this proxy. Shareholder affirms that the irrevocable proxy set
forth in this Article II is given in connection with, and in consideration
of,
the execution of the Merger Agreement, and that such irrevocable proxy is given
to Parent by Shareholder to secure the performance of the duties of Shareholder
under this Agreement.
Section
2.4 Nature of
Irrevocable
Proxy. The
proxy and power of attorney granted pursuant to Section 2.3 to the Parent by
Shareholder shall (a) be irrevocable during the term of this Agreement, (b)
be
deemed to be coupled with an interest sufficient in law to support an
irrevocable proxy, (c) revoke any and all prior proxies and powers of attorney
granted by Shareholder with respect to the Subject Shares and (d) not give
any
subsequent proxy or power of attorney with respect to the Subject Shares, other
than a proxy solicited by the Proxy Statement to the extent necessary to permit
Shareholder to comply with Section 2.1. The power of attorney granted
by Shareholder herein is a durable power of attorney and shall survive the
dissolution, bankruptcy, death or incapacity of Shareholder and shall be binding
upon the heirs, personal representatives, successors or assigns of
Shareholder. The proxy and power of attorney granted hereunder shall
terminate upon the termination of this Agreement. It is agreed that
Parent and any designee of Parent shall use the irrevocable proxy granted hereby
only in accordance with applicable Law. For the avoidance of doubt,
the vote of Parent or any designee of Parent shall control in any conflict
between the vote by Parent or any designee of Parent of the Subject Shares
and
any other vote by Shareholder of the Subject Shares.
Section
2.5 No Restrictions
on
Obligation as Director or Officer. The
Parties acknowledge that Shareholder (or a Representative of Shareholder) is
a
director and/or officer of the Company and, in such capacity, owes a fiduciary
duty to the Company and its stockholders. Notwithstanding anything to
the contrary contained in this Agreement, nothing in this Agreement shall be
construed to impose any obligation or limitation on votes or actions taken
by
any director, officer, general partner, member, employee, agent or other
representative (collectively, "Representatives") of
Shareholder in his or her capacity as a director or officer of the Company,
including pursuant to Section 4.4(e) of the Merger Agreement.
ARTICLE
III
COVENANTS
Section
3.1 Generally.
(a)
Shareholder agrees that during the Voting Period, except as contemplated by
the
terms of this Agreement, it shall not, and shall cause its Representatives
not
to, without the Parent's prior written consent, (i) offer for sale, sell
(including short sales), transfer, tender, pledge, encumber, assign or otherwise
dispose of (including by gift) (collectively, a "Transfer"), or enter
into any contract, option, derivative, hedging or other agreement or arrangement
or understanding (including any profit-sharing arrangement) with respect to,
or
consent to, a Transfer of, any or all of the Subject Shares; (ii) grant any
proxies or powers of attorney with respect to any or all of the Subject Shares;
(iii) permit to exist any lien of any nature whatsoever with respect to any
or
all of the Subject Shares; or (iv) take any action that
3
would have the effect of preventing, impeding, interfering
with
or adversely affecting Shareholder's ability to perform its obligations under
this Agreement.
(b)
In the event of a stock dividend or distribution, or any change in the Common
Stock by reason of any stock dividend or distribution, split-up,
recapitalization, combination, conversion, exchange of shares or the like,
the
term "Subject Shares" shall be deemed to refer to and include the Subject Shares
as well as all such stock dividends and distributions and any securities into
which or for which any or all of the Subject Shares may be changed or exchanged
or which are received in such transaction.
(c)
Shareholder agrees, while this Agreement is in effect, not to take or agree
or
commit to take any action that would make any representation and warranty of
Shareholder contained in this Agreement inaccurate in any material
respect.
Section
3.2 Standstill
Obligations of
the Shareholder. Shareholder
covenants and agrees with Parent that, during the Voting Period:
(a)
Shareholder shall not, nor shall Shareholder permit any of its Representatives
to, nor shall Shareholder act in concert with or permit any of its
Representatives to act in concert with any Person to make, or in any manner
participate in, directly or indirectly, a "solicitation" of "proxies" or
consents (as such terms are used in the rules of the SEC) or powers of attorney
or similar rights to vote, or seek to advise or influence any Person with
respect to the voting of, any shares of Common Stock in connection with any
vote
or other action on any matter, other than to recommend that stockholders of
the
Company vote in favor of adoption of the Merger Agreement, the Merger and the
other transactions contemplated by the Merger Agreement (and any actions
required in furtherance thereof and otherwise as expressly provided by Article
II of this Agreement)
(b)
Shareholder shall not, nor shall Shareholder permit any Representative of
Shareholder to, nor shall Shareholder act in concert with or permit any
Representative of Shareholder to act in concert with any Person to, deposit
any
of the Subject Shares in a voting trust or subject any of the Subject Shares
to
any arrangement or agreement with any Person with respect to the voting of
the
Subject Shares, except as provided by Article II of this Agreement.
(c)
Shareholder shall not, nor shall Shareholder permit any Representative of
Shareholder to, nor shall Shareholder act in concert with or permit any
Representative of Shareholder to act in concert with any Person to, directly
or
indirectly, initiate, solicit or knowingly encourage or facilitate (including,
in each case, by way of furnishing information) any inquiries or the making
of
any proposal or offer with respect to, or any indication of interest in, any
Company Takeover Proposal, engage in any negotiations or discussions concerning
any Company Takeover Proposal, or provide any non-public information or data
to
any Person (other than Parent, Acquisition Sub or any of Affiliates of Parent)
that has made, or to Shareholder's knowledge, is considering making a Company
Takeover Proposal or any Representatives thereof, or make any public statements
with respect to any Company Takeover Proposal or any matter that relates to,
supports, or could reasonably be expected to lead to any Company Takeover
Proposal.
4
(d)
Shareholder shall, and shall (subject to Section 2.5) cause any Representative
of Shareholder to, cease immediately and cause to be terminated any and all
existing discussions, conversations, negotiations and other communications
with
any Person conducted heretofore with respect to any Company Takeover Proposal
or
any matter that relates to, supports, or could reasonably be expected to lead
to
any Company Takeover Proposal. Shareholder shall, and shall not (subject to
Section 2.5) permit any of its Representatives to, directly or indirectly,
engage in any activity which would be prohibited pursuant to Section 4.4(b)
of
the Merger Agreement if engaged in by the Company.
Section
3.3 Appraisal
Rights. Shareholder
agrees not to seek appraisal or assert any rights of dissent from the Merger
that it may have under Section 262 of the DGCL (or otherwise) and, to the extent
permitted by applicable Law, Shareholder hereby waives any rights of appraisal
or rights to dissent from the Merger that it may have under Section 262 of
the
DGCL.
ARTICLE
IV
REPRESENTATIONS
AND
WARRANTIES OF SHAREHOLDER
Shareholder
hereby represents and warrants to Parent as follows:
Section
4.1 Binding
Agreement. Shareholder
(a) if a natural person, is of legal age to execute this Agreement and is
legally competent to do so and (b) if not a natural person, (i) is a
corporation, limited liability company or partnership duly organized and validly
existing under the laws of the jurisdiction of its organization and (ii) has
all
necessary power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Shareholder has been duly authorized by all necessary corporate,
limited liability or partnership action on the part of
Shareholder. This Agreement, assuming due authorization, execution
and delivery hereof by Parent, constitutes a legal, valid and binding obligation
of Shareholder, enforceable against Shareholder in accordance with its terms
(except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor's rights, and to general
equitable principles).
Section
4.2 Ownership
of
Shares. Schedule
I sets forth opposite Shareholder's name the number of shares of Common Stock
over which Shareholder has record and beneficial ownership as of the date
hereof. As of the date hereof, Shareholder is the lawful owner of the
shares of Common Stock denoted as being owned by Shareholder on Schedule I
and
has the sole power to vote or cause to be voted such
shares. Shareholder does not own or hold any right to acquire any
additional shares of any class of capital stock of the Company or other
securities of the Company or any interest therein or any voting rights with
respect to any securities of the Company other than the Subject
Shares. Shareholder has good and valid title to the Common Stock
denoted as being owned by Shareholder on Schedule I, free and clear of any
and
all pledges, mortgages, Encumbrances, charges, proxies, voting agreements,
liens, adverse claims, options, security interests and demands of any nature
or
kind whatsoever, other than those created by this Agreement. There
are no claims for finder's fees or brokerage commission or
5
other like payments in connection with this Agreement or the transactions
contemplated hereby payable by Shareholder pursuant to arrangements made by
Shareholder.
Section
4.3 No Conflicts.
(a)
No filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Shareholder and the consummation by Shareholder of the transactions contemplated
hereby.
(b)
None of the execution and delivery of this Agreement by Shareholder, the
consummation by Shareholder of the transactions contemplated hereby or
compliance by Shareholder with any of the provisions hereof shall (i) conflict
with or result in any breach of the organizational documents of Shareholder,
as
applicable, (ii) result in, or give rise to, a violation or breach of or a
default under any of the terms of any material contract, understanding,
agreement or other instrument or obligation to which Shareholder is a party
or
by which Shareholder or any of the Subject Shares or assets may be bound, or
(iii) violate any applicable Order, writ, injunction, decree, judgment, statute,
rule or regulation, except for any of the foregoing as could not reasonably
be
expected to impair Shareholder's ability to perform its obligations under this
Agreement.
Section
4.4 Company Takeover
Proposal. Shareholder
represents that it is not, and (subject to Section 2.5) no Representative of
Shareholder is, engaged in any discussions or negotiations with any Person
(other than Parent, Acquisition Sub or any of Affiliates of Parent) with respect
to any Company Takeover Proposal or any matter that relates to, supports, or
could reasonably be expected to lead to any Company Takeover
Proposal.
Section
4.5 Reliance
by
Parent. Shareholder
understands and acknowledges that Parent is entering into the Merger Agreement
in reliance upon the execution and delivery of this Agreement by
Shareholder.
ARTICLE
V
REPRESENTATIONS
AND
WARRANTIES OF PARENT
Parent
hereby represents and warrants to the Shareholders as follows:
Section
5.1 Binding
Agreement. Parent
is a Nevada corporation duly organized and validly existing under the laws
of
the jurisdiction of its organization. Parent has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Parent have been duly authorized by all necessary corporate action
on
the part of Parent. This Agreement, assuming due authorization,
execution and delivery hereof by Shareholder, constitutes a legal, valid and
binding obligation of Parent enforceable against Parent in accordance with
its
terms (except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor's rights, and to general
equitable principles).
6
Section
5.2 No
Conflicts.
(a)
No filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Parent and the consummation by Parent of the transactions contemplated
hereby.
(b)
None of the execution and delivery of this Agreement by Parent, the consummation
by Parent of the transactions contemplated hereby or compliance by Parent with
any of the provisions hereof shall (i) conflict with or result in any breach
of
the organizational documents of Parent, (ii) result in, or give rise to, a
violation or breach of or a default under any of the terms of any material
contract, understanding, agreement or other instrument or obligation to which
Parent is a party or by which Parent or any of its assets may be bound, or
(iii)
violate any applicable Order, writ, injunction, decree, judgment, statute,
rule
or regulation, except for any of the foregoing as could not reasonably be
expected to impair Parent's ability to perform its obligations under this
Agreement.
Section
5.3 Reliance
by the
Shareholder. Parent
understands and acknowledges that Shareholder is entering into this Agreement
in
reliance upon the execution and delivery of the Merger Agreement by
Parent.
ARTICLE
VI
TERMINATION
Section
6.1 Termination. This
Agreement shall automatically terminate, and none of Parent or Shareholder
shall
have any rights or obligations hereunder and this Agreement shall become null
and void and have no effect upon the earliest to occur of (a) the mutual written
consent of Parent and Shareholder, (b) the Effective Time, (c) the date of
termination of the Merger Agreement in accordance with its terms, (d) the date
of any change or amendment to the Merger Agreement that results in any decrease
in the Merger Consideration, or (e) October 31, 2009. The termination
of this Agreement shall not prevent any Party hereunder from seeking any
remedies (at law or in equity) against another Party hereto or relieve such
Party from liability for such Party's breach of any terms of this
Agreement. Notwithstanding anything to the contrary herein, the
provisions of Article VII (other than Section 7.2) shall survive the termination
of this Agreement.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Publication. Shareholder
hereby permits the Company and Parent to publish and disclose in any forms,
schedules or other documents to be filed with the SEC (including the Proxy
Statement) Shareholder's identity and ownership of the Subject Shares and the
nature of its commitments, arrangements and understandings pursuant to this
Agreement.
Section
7.2 Further
Assurances. From
time to time, at the other Party's request and without further consideration,
each Party shall execute and deliver such additional
7
documents and take all such further action as may be reasonably necessary
or desirable to consummate the transactions contemplated by this Agreement.
Section
7.3 Fees and
Expenses. Each
of the Parties shall be responsible for its own fees and expenses (including,
without limitation, the fees and expenses of investment bankers, accountants
and
counsel) in connection with the entering into of this Agreement and the
consummation of the transactions contemplated hereby and by the Merger
Agreement.
Section
7.4 Amendments,
Waivers,
etc. This
Agreement may not be amended, changed, supplemented, waived or otherwise
modified, except upon the execution and delivery of a written agreement executed
by each of the Parties hereto. The failure of any Party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance
by
any other Party hereto with its obligations hereunder, and any custom or
practice of the Parties at variance with the terms hereof shall not constitute
a
waiver by such Party of its right to exercise any such or other right, power
or
remedy or to demand such compliance.
Section
7.5 Notices. All
notices, requests, claims, demands and other communications hereunder shall
be
in writing and shall be given (and shall be deemed to have been duly given
upon
receipt) by delivery in Person, by facsimile or by registered or certified
mail
(postage prepaid, return receipt requested) to the respective Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice):
(a)
If to Parent or Acquisition Sub:
Employers Holdings, Inc.
9790 Gateway Drive
Reno,
Nevada 89521
Attn: Lenard T.
Ormsby
Phone: (775) 327-2547
Fax: (775)
886-1854
with
a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
Attn: Robert J. Sullivan
David C. Ingles
Phone:
(212) 735-3000
Fax:
(212) 735-2000
(b)
If to Shareholder:
8
Welsh, Carson, Anderson & Stowe VII, L.P.
320 Park Avenue
Suite
2500
New
York, NY 10022
Attn: Jonathan
Rather
Phone: (212) 893-9500
Fax: (212)
893-9548
with
a copy (which shall not constitute notice) to:
Ropes & Gray LLP
1211 Avenue of the Americas
New York, NY 10036
Attn: Othon Prounis
Phone: (212) 596-9000
Fax: (212)
596-9090
Section
7.6 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
7.7 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, all other conditions
and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any Party. 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 in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
Section
7.8 Entire Agreement;
Assignment. This
Agreement (together with the Merger Agreement, to the extent referred to herein,
and Schedule I) constitutes the entire agreement among the Parties with respect
to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, among the Parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be
assigned by operation of law or otherwise without the prior written consent
of
the other Party, except that Parent may assign all or any of its rights and
obligations hereunder to any direct or indirect wholly-owned Subsidiary of
Parent.
Section
7.9 Parties in
Interest. This
Agreement shall be binding upon and inure solely to the benefit of each Party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
Section
7.10 Interpretation. When
reference is made in this Agreement to a Section, such reference shall be to
a
Section of this Agreement unless otherwise indicated.
9
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,"
"hereby" 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. The word "or" shall not be exclusive. Whenever used in this
Agreement, any noun or pronoun shall be deemed to include the plural as well
as
the singular and to cover all genders. This Agreement shall be
construed without regard to any presumption or rule requiring construction
or
interpretation against the Party drafting or causing any instrument to be
drafted.
Section
7.11 Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Delaware.
Section
7.12 Specific
Performance;
Jurisdiction. The
Parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed
that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in the Court of Chancery of the State of Delaware or, if
under
applicable law exclusive jurisdiction over such matter is vested in the federal
courts, any court of the United States located in the State of Delaware, this
being in addition to any other remedy to which such Party is entitled at law
or
in equity. In addition, each of the Parties hereto (a) consents to
submit itself to the personal jurisdiction of the Court of Chancery of the
State
of Delaware or any court of the United States located in the State of Delaware
in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny
or
defeat such personal jurisdiction by motion or other request for leave from
any
such court, (c) 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 the Court of Chancery of the State of Delaware or, if under
applicable law exclusive jurisdiction over such matter is vested in the federal
courts, any court of the United States located in the State of Delaware and
(d)
consents to service being made through the notice procedures set forth in
Section 7.5. Each of the Shareholder and Parent hereby agrees that
service of any process, summons, notice or document by U.S. registered mail
to
the respective addresses set forth in Section 7.5 shall be effective service
of
process for any proceeding in connection with this Agreement or the transactions
contemplated hereby.
Section
7.13 Counterparts. This
Agreement may be executed in counterparts (including by facsimile), each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section
7.14 No Partnership,
Agency or
Joint Venture. This
Agreement is intended to create a contractual relationship between Shareholder,
on the one hand, and Parent, on the other hand, and is not intended to create,
and does not create, any agency, partnership, joint venture or any like
relationship between or among the parties hereto. Without limiting
the generality of the foregoing sentence, Shareholder (a) is entering into
this
Agreement solely on its own behalf and shall not have any obligation to perform
on behalf of any other holder of Common Stock or any liability (regardless
of
the legal theory advanced) for any breach of this Agreement by any other holder
of Common Stock and (b) by entering into this Agreement does
10
not
intend to form a "group" for purposes of Rule 13d-5(b)(1) of the Exchange
Act or
any other similar provision of applicable Law. To the knowledge of
Shareholder, Shareholder is not affiliated with any other holder of Common
Stock
entering into a voting agreement with Parent in connection with the Merger
Agreement and has acted independently regarding its decision to enter into
this
Agreement and regarding its investment in the Company.
[Execution
page
follows.]
11
IN
WITNESS WHEREOF, Parent and Shareholder have caused this Agreement to be duly
executed as of the day and year first above written.
|
EMPLOYERS
HOLDINGS, INC.
|
|||
|
By:
|
/s/ Douglas D. Dirks | ||
|
Name:
|
Douglas
D. Dirks
|
||
|
Title:
|
Chief
Executive Officer
|
||
|
WELSH,
CARSON, ANDERSON
&
STOWE
VII,
L.P.
|
|||
|
By
WCAS VII Partners, L.P.
General
Partner
|
|||
|
By:
|
/s/ Jonathan M. Rather | ||
|
Name:
|
Jonathan M. Rather | ||
|
Title:
|
Attorney-in-Fact | ||
SCHEDULE
I
Ownership
of Common
Stock
|
Shareholder
|
Number
of Shares
|
|
|
Welsh,
Carson, Anderson & Stowe VII, L.P.
|
1,367,065
|
|
Exhibit
5
EXECUTION
VERSION
VOTING
AND SUPPORT AGREEMENT
This
VOTING AND SUPPORT AGREEMENT (this "Agreement") is
entered into as of January 10, 2008, by and among Employers Holdings, Inc.,
a
Nevada corporation ("Parent"), and WCAS
Healthcare Partners, L.P. ("Shareholder"). Parent
and Shareholder are sometimes referred to herein as a "Party" and
collectively as the "Parties".
WITNESSETH:
WHEREAS,
Parent, Sapphire Acquisition Corp., a wholly-owned subsidiary of Parent ("Acquisition Sub"),
and the Company propose to enter into an Agreement and Plan of Merger, dated
as
of the date hereof (as the same may be amended from time to time, the "Merger Agreement"),
pursuant to which Acquisition Sub will merge with and into the Company, with
the
Company surviving as a wholly-owned subsidiary of Parent (the "Merger");
and
WHEREAS,
as a condition to the willingness of Parent and Acquisition Sub to enter into
the Merger Agreement, and as an inducement and in consideration therefor,
Shareholder is executing this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
Parties hereto, intending to be legally bound, hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Capitalized
Terms. For
purposes of this Agreement, capitalized terms used and not defined herein shall
have the respective meanings ascribed to them in the Merger
Agreement. For the avoidance of doubt, the term "Affiliate," as used
in this Agreement, shall have the meaning ascribed to such term in the Merger
Agreement.
ARTICLE
II
VOTING
AGREEMENT AND
IRREVOCABLE PROXY
Section
2.1 Agreement
to Vote the Subject Shares. Subject
to Section 2.3, Section 2.4 and Section 2.5, Shareholder hereby unconditionally
and irrevocably agrees that, during the Voting Period, at any duly called
meeting of the stockholders of the Company (or any adjournment or postponement
thereof), and in any action by written consent of the stockholders of the
Company, Shareholder shall, if a meeting is held, appear at the meeting, in
person or by proxy, or otherwise cause its Subject Shares to be counted as
present thereat for purposes of establishing a quorum, and it shall vote or
consent (or cause to be voted or consented), in person or by proxy, all of
its
Subject Shares (a) in favor of the adoption of the Merger Agreement and approval
of the Merger and the other transactions contemplated by the Merger Agreement
(and any actions required in furtherance thereof), (b) against any action,
proposal, transaction or agreement that would result in a breach in any respect
of any covenant, representation or warranty or any other obligation or agreement
of the Company contained in the Merger Agreement or of Shareholder contained
in
this Agreement, and (c) against the following actions or proposals (other than
the transactions contemplated by the Merger Agreement): (i) any
Company Takeover Proposal or any proposal in opposition to approval of the
Merger Agreement or in competition with or materially inconsistent with the
Merger Agreement; and (ii) (A) any change in the persons who constitute the
Board); (B) any material change in the present capitalization of the Company
or
any amendment of the Certificate of Incorporation or Bylaws; (C) any change
in
the Company's corporate structure or business; or (D) any other action or
proposal involving the Company or any Company Subsidiary that is intended,
or
could reasonably be expected, to prevent, impede, interfere with, delay,
postpone or adversely affect the transactions contemplated by the Merger
Agreement or could reasonably be expected to result in any of the conditions
to
the Company's obligations under the Merger Agreement not being
fulfilled. Subject to Section 2.5, Shareholder agrees not to, and
shall cause its Representatives not to, enter into any agreement, commitment
or
arrangement with any Person the effect of which would be inconsistent with
or
violative of the provisions and agreements contained in this Article
II.
Section
2.2 Effect
of Change of
Recommendation, Withdrawal of Recommendation or Company
Breach. For
the avoidance of doubt, Shareholder agrees that, during the Voting Period,
the
obligations of Shareholder specified in Section 2.1 shall not be affected by
any
(a) Change of Recommendation, (b) Withdrawal of Recommendation or (c) breach
by
the Company of any of its representations, warranties, agreements or covenants
set forth in the Merger Agreement.
Section
2.3 Grant
of Irrevocable
Proxy. Shareholder
hereby appoints Parent and any designee of Parent, and each of them
individually, as Shareholder's agent, proxy and attorney-in-fact, with full
power of substitution and resubstitution in the premises, to vote or act by
written consent during the Voting Period with respect to any and all of the
Subject Shares in accordance with Section 2.1, in each case subject to the
receipt of any Requisite Regulatory Approvals, if
required. Shareholder shall promptly cause a copy of this Agreement
to be deposited with the Company at its principal place of
business. Shareholder shall take such further action or execute such
other instruments as may be necessary to effectuate the intent of
2
this
proxy. Shareholder affirms that the irrevocable proxy set forth in
this Article II is given in connection with, and in consideration of, the
execution of the Merger Agreement, and that such irrevocable proxy is given
to
Parent by Shareholder to secure the performance of the duties of Shareholder
under this Agreement.
Section
2.4 Nature
of Irrevocable
Proxy. The
proxy and power of attorney granted pursuant to Section 2.3 to the Parent by
Shareholder shall (a) be irrevocable during the term of this Agreement, (b)
be
deemed to be coupled with an interest sufficient in law to support an
irrevocable proxy, (c) revoke any and all prior proxies and powers of attorney
granted by Shareholder with respect to the Subject Shares and (d) not give
any
subsequent proxy or power of attorney with respect to the Subject Shares, other
than a proxy solicited by the Proxy Statement to the extent necessary to permit
Shareholder to comply with Section 2.1. The power of attorney granted
by Shareholder herein is a durable power of attorney and shall survive the
dissolution, bankruptcy, death or incapacity of Shareholder and shall be binding
upon the heirs, personal representatives, successors or assigns of
Shareholder. The proxy and power of attorney granted hereunder shall
terminate upon the termination of this Agreement. It is agreed that
Parent and any designee of Parent shall use the irrevocable proxy granted hereby
only in accordance with applicable Law. For the avoidance of doubt,
the vote of Parent or any designee of Parent shall control in any conflict
between the vote by Parent or any designee of Parent of the Subject Shares
and
any other vote by Shareholder of the Subject Shares.
Section
2.5 No
Restrictions on
Obligation as Director or Officer. The
Parties acknowledge that Shareholder (or a Representative of Shareholder) is
a
director and/or officer of the Company and, in such capacity, owes a fiduciary
duty to the Company and its stockholders. Notwithstanding anything to
the contrary contained in this Agreement, nothing in this Agreement shall be
construed to impose any obligation or limitation on votes or actions taken
by
any director, officer, general partner, member, employee, agent or other
representative (collectively, "Representatives") of
Shareholder in his or her capacity as a director or officer of the Company,
including pursuant to Section 4.4(e) of the Merger Agreement.
ARTICLE
III
COVENANTS
Section
3.1 Generally.
(a)
Shareholder
agrees that during the Voting Period, except as contemplated by the terms of
this Agreement, it shall not, and shall cause its Representatives not to,
without the Parent's prior written consent, (i) offer for sale, sell (including
short sales), transfer, tender, pledge, encumber, assign or otherwise dispose
of
(including by gift) (collectively, a "Transfer"), or enter
into any contract, option, derivative, hedging or other agreement or arrangement
or understanding (including any profit-sharing arrangement) with respect to,
or
consent to, a Transfer of, any or all of the Subject Shares; (ii) grant any
proxies or powers of attorney with respect to any or all of the Subject Shares;
(iii) permit to exist any lien of any nature whatsoever with respect to any
or
all of the Subject Shares; or (iv) take any action that would have the effect
of
preventing, impeding, interfering with or adversely affecting Shareholder's
ability to perform its obligations under this Agreement.
3
(b)
In
the event of a stock dividend or distribution, or any change in the Common
Stock
by reason of any stock dividend or distribution, split-up, recapitalization,
combination, conversion, exchange of shares or the like, the term "Subject
Shares" shall be deemed to refer to and include the Subject Shares as well
as
all such stock dividends and distributions and any securities into which or
for
which any or all of the Subject Shares may be changed or exchanged or which
are
received in such transaction.
(c)
Shareholder
agrees, while this Agreement is in effect, not to take or agree or commit to
take any action that would make any representation and warranty of Shareholder
contained in this Agreement inaccurate in any material respect.
Section
3.2
Standstill Obligations
of the Shareholder. Shareholder
covenants and agrees with Parent that, during the Voting Period:
(a)
Shareholder
shall not, nor shall Shareholder permit any of its Representatives to, nor
shall
Shareholder act in concert with or permit any of its Representatives to act
in
concert with any Person to make, or in any manner participate in, directly
or
indirectly, a "solicitation" of "proxies" or consents (as such terms are used
in
the rules of the SEC) or powers of attorney or similar rights to vote, or seek
to advise or influence any Person with respect to the voting of, any shares
of
Common Stock in connection with any vote or other action on any matter, other
than to recommend that stockholders of the Company vote in favor of adoption
of
the Merger Agreement, the Merger and the other transactions contemplated by
the
Merger Agreement (and any actions required in furtherance thereof and otherwise
as expressly provided by Article II of this Agreement)
(b)
Shareholder
shall not, nor shall Shareholder permit any Representative of Shareholder to,
nor shall Shareholder act in concert with or permit any Representative of
Shareholder to act in concert with any Person to, deposit any of the Subject
Shares in a voting trust or subject any of the Subject Shares to any arrangement
or agreement with any Person with respect to the voting of the Subject Shares,
except as provided by Article II of this Agreement.
(c)
Shareholder
shall not, nor shall Shareholder permit any Representative of Shareholder to,
nor shall Shareholder act in concert with or permit any Representative of
Shareholder to act in concert with any Person to, directly or indirectly,
initiate, solicit or knowingly encourage or facilitate (including, in each
case,
by way of furnishing information) any inquiries or the making of any proposal
or
offer with respect to, or any indication of interest in, any Company Takeover
Proposal, engage in any negotiations or discussions concerning any Company
Takeover Proposal, or provide any non-public information or data to any Person
(other than Parent, Acquisition Sub or any of Affiliates of Parent) that has
made, or to Shareholder's knowledge, is considering making a Company Takeover
Proposal or any Representatives thereof, or make any public statements with
respect to any Company Takeover Proposal or any matter that relates to,
supports, or could reasonably be expected to lead to any Company Takeover
Proposal.
4
(d)
Shareholder
shall, and shall (subject to Section 2.5) cause any Representative of
Shareholder to, cease immediately and cause to be terminated any and all
existing discussions, conversations, negotiations and other communications
with
any Person conducted heretofore with respect to any Company Takeover Proposal
or
any matter that relates to, supports, or could reasonably be expected to lead
to
any Company Takeover Proposal. Shareholder shall, and shall not
(subject to Section 2.5) permit any of its Representatives to, directly or
indirectly, engage in any activity which would be prohibited pursuant to Section
4.4(b) of the Merger Agreement if engaged in by the Company.
Section
3.3
Appraisal
Rights. Shareholder
agrees not to seek appraisal or assert any rights of dissent from the Merger
that it may have under Section 262 of the DGCL (or otherwise) and, to the extent
permitted by applicable Law, Shareholder hereby waives any rights of appraisal
or rights to dissent from the Merger that it may have under Section 262 of
the
DGCL.
ARTICLE
IV
REPRESENTATIONS
AND
WARRANTIES OF SHAREHOLDER
Shareholder
hereby represents and warrants to Parent as follows:
Section
4.1
Binding
Agreement. Shareholder
(a) if a natural person, is of legal age to execute this Agreement and is
legally competent to do so and (b) if not a natural person, (i) is a
corporation, limited liability company or partnership duly organized and validly
existing under the laws of the jurisdiction of its organization and (ii) has
all
necessary power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Shareholder has been duly authorized by all necessary corporate,
limited liability or partnership action on the part of
Shareholder. This Agreement, assuming due authorization, execution
and delivery hereof by Parent, constitutes a legal, valid and binding obligation
of Shareholder, enforceable against Shareholder in accordance with its terms
(except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor's rights, and to general
equitable principles).
Section
4.2
Ownership of
Shares. Schedule
I sets forth opposite Shareholder's name the number of shares of Common Stock
over which Shareholder has record and beneficial ownership as of the date
hereof. As of the date hereof, Shareholder is the lawful owner of the
shares of Common Stock denoted as being owned by Shareholder on Schedule I
and
has the sole power to vote or cause to be voted such
shares. Shareholder does not own or hold any right to acquire any
additional shares of any class of capital stock of the Company or other
securities of the Company or any interest therein or any voting rights with
respect to any securities of the Company other than the Subject
Shares. Shareholder has good and valid title to the Common Stock
denoted as being owned by Shareholder on Schedule I, free and clear of any
and
all pledges, mortgages, Encumbrances, charges, proxies, voting agreements,
liens, adverse claims, options, security interests and demands of any nature
or
kind whatsoever, other than those created by this Agreement. There
are no claims for finder's fees or brokerage commission or other like payments
in connection with this Agreement or the transactions contemplated hereby
payable by Shareholder pursuant to arrangements made by
Shareholder.
5
Section
4.3
No
Conflicts.
(a)
No
filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Shareholder and the consummation by Shareholder of the transactions contemplated
hereby.
(b)
None
of the execution and delivery of this Agreement by Shareholder, the consummation
by Shareholder of the transactions contemplated hereby or compliance by
Shareholder with any of the provisions hereof shall (i) conflict with or result
in any breach of the organizational documents of Shareholder, as applicable,
(ii) result in, or give rise to, a violation or breach of or a default under
any
of the terms of any material contract, understanding, agreement or other
instrument or obligation to which Shareholder is a party or by which Shareholder
or any of the Subject Shares or assets may be bound, or (iii) violate any
applicable Order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as could not reasonably be expected
to impair Shareholder's ability to perform its obligations under this
Agreement.
Section
4.4 Company
Takeover
Proposal. Shareholder
represents that it is not, and (subject to Section 2.5) no Representative of
Shareholder is, engaged in any discussions or negotiations with any Person
(other than Parent, Acquisition Sub or any of Affiliates of Parent) with respect
to any Company Takeover Proposal or any matter that relates to, supports, or
could reasonably be expected to lead to any Company Takeover
Proposal.
Section
4.5 Reliance
by
Parent. Shareholder
understands and acknowledges that Parent is entering into the Merger Agreement
in reliance upon the execution and delivery of this Agreement by
Shareholder.
ARTICLE
V
REPRESENTATIONS
AND
WARRANTIES OF PARENT
Parent
hereby represents and warrants to the Shareholders as follows:
Section
5.1
Binding
Agreement. Parent
is a Nevada corporation duly organized and validly existing under the laws
of
the jurisdiction of its organization. Parent has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by Parent have been duly authorized by all necessary corporate action
on
the part of Parent. This Agreement, assuming due authorization,
execution and delivery hereof by Shareholder, constitutes a legal, valid and
binding obligation of Parent enforceable against Parent in accordance with
its
terms (except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor's rights, and to general
equitable principles).
6
Section
5.2
No
Conflicts.
(a)
No
filing with any Governmental Authority, and no authorization, consent or
approval of any other Person is necessary for the execution of this Agreement
by
Parent and the consummation by Parent of the transactions contemplated
hereby.
(b)
None
of the execution and delivery of this Agreement by Parent, the consummation
by
Parent of the transactions contemplated hereby or compliance by Parent with
any
of the provisions hereof shall (i) conflict with or result in any breach of
the
organizational documents of Parent, (ii) result in, or give rise to, a violation
or breach of or a default under any of the terms of any material contract,
understanding, agreement or other instrument or obligation to which Parent
is a
party or by which Parent or any of its assets may be bound, or (iii) violate
any
applicable Order, writ, injunction, decree, judgment, statute, rule or
regulation, except for any of the foregoing as could not reasonably be expected
to impair Parent's ability to perform its obligations under this
Agreement.
Section
5.3
Reliance
by the
Shareholder. Parent
understands and acknowledges that Shareholder is entering into this Agreement
in
reliance upon the execution and delivery of the Merger Agreement by
Parent.
ARTICLE
VI
TERMINATION
Section
6.1 Termination. This
Agreement shall automatically terminate, and none of Parent or Shareholder
shall
have any rights or obligations hereunder and this Agreement shall become null
and void and have no effect upon the earliest to occur of (a) the mutual written
consent of Parent and Shareholder, (b) the Effective Time, (c) the date of
termination of the Merger Agreement in accordance with its terms, (d) the date
of any change or amendment to the Merger Agreement that results in any decrease
in the Merger Consideration, or (e) October 31, 2009. The termination
of this Agreement shall not prevent any Party hereunder from seeking any
remedies (at law or in equity) against another Party hereto or relieve such
Party from liability for such Party's breach of any terms of this
Agreement. Notwithstanding anything to the contrary herein, the
provisions of Article VII (other than Section 7.2) shall survive the termination
of this Agreement.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Publication. Shareholder
hereby permits the Company and Parent to publish and disclose in any forms,
schedules or other documents to be filed with the SEC (including the Proxy
Statement) Shareholder's identity and ownership of the Subject Shares and the
nature of its commitments, arrangements and understandings pursuant to this
Agreement.
Section
7.2 Further
Assurances. From
time to time, at the other Party's request and without further consideration,
each Party shall execute and deliver such additional documents and take all
such
further action as may be reasonably necessary or desirable to consummate the
transactions contemplated by this Agreement.
7
Section
7.3 Fees
and
Expenses. Each
of the Parties shall be responsible for its own fees and expenses (including,
without limitation, the fees and expenses of investment bankers, accountants
and
counsel) in connection with the entering into of this Agreement and the
consummation of the transactions contemplated hereby and by the Merger
Agreement.
Section
7.4
Amendments, Waivers,
etc. This
Agreement may not be amended, changed, supplemented, waived or otherwise
modified, except upon the execution and delivery of a written agreement executed
by each of the Parties hereto. The failure of any Party hereto to
exercise any right, power or remedy provided under this Agreement or otherwise
available in respect hereof at law or in equity, or to insist upon compliance
by
any other Party hereto with its obligations hereunder, and any custom or
practice of the Parties at variance with the terms hereof shall not constitute
a
waiver by such Party of its right to exercise any such or other right, power
or
remedy or to demand such compliance.
Section
7.5 Notices. All
notices, requests, claims, demands and other communications hereunder shall
be
in writing and shall be given (and shall be deemed to have been duly given
upon
receipt) by delivery in Person, by facsimile or by registered or certified
mail
(postage prepaid, return receipt requested) to the respective Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice):
(a)
If
to Parent or Acquisition Sub:
Employers
Holdings, Inc.
9790
Gateway Drive
Reno,
Nevada 89521
Attn: Lenard
T. Ormsby
Phone: (775)
327-2547
Fax:
(775) 886-1854
with
a copy (which shall not constitute notice) to:
Skadden,
Arps, Slate, Meagher & Flom LLP
Four
Times Square
New
York, NY 10036
Attn:
Robert J. Sullivan
David
C.
Ingles
Phone: (212)
735-3000
Fax: (212)
735-2000
8
(b)
If
to Shareholder:
WCAS
Healthcare Partners, L.P.
320
Park Avenue
Suite
2500
New
York, NY 10022
Attn: Jonathan
Rather
Phone: (212)
893-9500
Fax: (212)
893-9548
with
a copy (which shall not constitute notice) to:
Ropes
& Gray LLP
1211
Avenue of the Americas
New
York, NY 10036
Attn:
Othon Prounis
Phone:
(212) 596-9000
Fax:
(212) 596-9090
Section
7.6 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
7.7 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, all other conditions
and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any Party. 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 in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
Section
7.8
Entire
Agreement;
Assignment. This
Agreement (together with the Merger Agreement, to the extent referred to herein,
and Schedule I) constitutes the entire agreement among the Parties with respect
to the subject matter hereof and supersedes all prior agreements and
undertakings, both written and oral, among the Parties, or any of them, with
respect to the subject matter hereof. This Agreement shall not be
assigned by operation of law or otherwise without the prior written consent
of
the other Party, except that Parent may assign all or any of its rights and
obligations hereunder to any direct or indirect wholly-owned Subsidiary of
Parent.
Section
7.9
Parties
in
Interest. This
Agreement shall be binding upon and inure solely to the benefit of each Party
hereto, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement.
Section
7.10
Interpretation. When
reference is made in this Agreement to a Section, such reference shall be to
a
Section of this Agreement unless otherwise indicated. 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," "hereby"
and "hereunder" and words of
9
similar
import when used in this Agreement shall refer to this Agreement as a whole
and
not to any particular provision of this Agreement. The word "or" shall not be exclusive. Whenever used in this
Agreement, any noun or pronoun shall be deemed to include the plural as well
as
the singular and to cover all genders. This Agreement shall be
construed without regard to any presumption or rule requiring construction
or
interpretation against the Party drafting or causing any instrument to be
drafted.
Section
7.11 Governing
Law. This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of Delaware.
Section
7.12 Specific
Performance;
Jurisdiction. The
Parties agree that irreparable damage would occur in the event that any of
the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed
that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement in the Court of Chancery of the State of Delaware or, if
under
applicable law exclusive jurisdiction over such matter is vested in the federal
courts, any court of the United States located in the State of Delaware, this
being in addition to any other remedy to which such Party is entitled at law
or
in equity. In addition, each of the Parties hereto (a) consents to
submit itself to the personal jurisdiction of the Court of Chancery of the
State
of Delaware or any court of the United States located in the State of Delaware
in the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny
or
defeat such personal jurisdiction by motion or other request for leave from
any
such court, (c) 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 the Court of Chancery of the State of Delaware or, if under
applicable law exclusive jurisdiction over such matter is vested in the federal
courts, any court of the United States located in the State of Delaware and
(d)
consents to service being made through the notice procedures set forth in
Section 7.5. Each of the Shareholder and Parent hereby agrees that
service of any process, summons, notice or document by U.S. registered mail
to
the respective addresses set forth in Section 7.5 shall be effective service
of
process for any proceeding in connection with this Agreement or the transactions
contemplated hereby.
Section
7.13
Counterparts. This
Agreement may be executed in counterparts (including by facsimile), each of
which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section
7.14
No Partnership,
Agency
or Joint Venture. This
Agreement is intended to create a contractual relationship between Shareholder,
on the one hand, and Parent, on the other hand, and is not intended to create,
and does not create, any agency, partnership, joint venture or any like
relationship between or among the parties hereto. Without limiting
the generality of the foregoing sentence, Shareholder (a) is entering into
this
Agreement solely on its own behalf and shall not have any obligation to perform
on behalf of any other holder of Common Stock or any liability (regardless
of
the
10
legal
theory advanced) for any breach of this Agreement by any other holder of Common
Stock and (b) by entering into this Agreement does not intend to form a "group"
for purposes of Rule 13d-5(b)(1) of the Exchange Act or any other similar
provision of applicable Law. To the knowledge of Shareholder,
Shareholder is not affiliated with any other holder of Common Stock entering
into a voting agreement with Parent in connection with the Merger Agreement
and
has acted independently regarding its decision to enter into this Agreement
and
regarding its investment in the Company.
[Execution
page
follows.]
11
IN
WITNESS WHEREOF, Parent and Shareholder have caused this Agreement to be duly
executed as of the day and year first above written.
|
EMPLOYERS
HOLDINGS, INC.
|
||||
|
By:
|
/s/ Douglas D. Dirks | |||
|
Name:
|
Douglas
D. Dirks
|
|||
|
Title:
|
Chief
Executive Officer
|
|||
|
WCAS
HEALTHCARE PARTNERS, L.P.
|
||||
|
By
WCAS HC Partners
General
Partner
|
||||
|
By:
|
/s/ Jonathan M. Rather | |||
|
Name:
|
Jonathan M. Rather | |||
|
Title:
|
Attorney-in-Fact | |||
SCHEDULE
I
Ownership
of Common
Stock
|
Shareholder
|
Number
of Shares
|
|
|
WCAS
Healthcare Partners, L.P.
|
24,566
|
|