Exhibit 4.8
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT dated as of December 31, 1997,
between Employers Reinsurance Corporation and ERC Life Reinsurance Corporation
(collectively, "ERC") and HSB Group, Inc. (the "Company").
WHEREAS, as of the date of this Agreement, ERC owns 300,000
capital securities (the "Capital Securities") of HSB Capital II, a statutory
business trust created under the laws of the State of Delaware, which Capital
Securities are convertible into shares of Common Stock of the Company, no par
value per share (the "Common Stock"), pursuant to the Trust Agreement among HSB
Group, Inc. as Depositor, The First National Bank of Chicago as Property Trustee
and First Chicago Delaware Inc. as Delaware Trustee, dated December 31, 1997
(the "Trust Agreement");
WHEREAS, the Board of Directors of the Company has authorized
the officers of the Company to execute and deliver this Agreement in the name
and on behalf of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties to this Agreement hereby agree as
follows:
1. Definitions. As used in this Agreement,
the following terms shall have the following meanings:
"Holder" means ERC and any other person that owns Registrable
Securities, including their respective successors and assigns who acquire
Registrable Securities, directly or indirectly, from ERC or such other person.
For purposes of this Agreement, the Company may deem and treat the registered
holder of a Registrable Security as the Holder and absolute owner thereof, and
the Company shall not be affected by any notice to the contrary.
"Registrable Securities" means (a) the Common Stock owned by
ERC upon conversion of the Capital Securities pursuant to the Trust Agreement,
(b) any Common Stock acquired by ERC in the open market at a time when ERC is
deemed to be an Affiliate (as such term is defined under Rule 144 under the
Securities Act) of the Company,
and (c) any securities issued or issuable in respect of the Common Stock
referred to in clauses (a) and (b) above, by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization,
reclassification, merger or consolidation, and any other securities issued
pursuant to any other pro rata distribution with respect to such Common Stock.
For purposes of this Agreement, a Registrable Security ceases to be a
Registrable Security when (x) it has been effectively registered under the
Securities Act and sold or distributed to the public in accordance with an
effective registration statement covering it (and has not been reacquired in the
manner described in clause (b) above), or (y) it is sold or distributed to the
public pursuant to Rule 144 (or any successor or similar provision) under the
Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
2. Demand Registration. (a) If at any time Holders that in the
aggregate beneficially own a majority of the Registrable Securities then
outstanding (the "Majority") shall request the Company in writing to register
under the Securities Act all or a part of the Registrable Securities held by
such Holders (a "Demand Registration"), the Company shall use all reasonable
efforts to cause to be filed (but in no event later than the 45th day after such
Holders' request is made) and declared effective as soon as reasonably
practicable thereafter, a registration statement, on such appropriate form as
the Company in its discretion shall determine, providing for the sale of all
such Registrable Securities held by the Majority. The Company agrees to use its
best efforts to keep any such registration statement continuously effective and
usable for resale of Registrable Securities for a period of 180 days following
the effective date of such registration statement. The Company shall be
obligated to file two registration statements pursuant to this Section 2(a)
covering such Registrable Securities. Each registration statement filed pursuant
to this Section 2(a) is hereinafter referred to as a "Demand Registration
Statement."
2
(b) The Company agrees (i) not to effect any public or private
sale, distribution or purchase of any of its securities which are the same as or
similar to the Registrable Securities, including a sale pursuant to Regulation D
under the Securities Act but excluding a private sale in the context of an
acquisition and any purchases of Common Stock related to the issuance of Common
Stock or rights under any of the Company's benefit plans for its directors,
officers or employees or the Company's dividend reinvestment plan, during the
15-day period prior to, and during the 45-day period beginning on, the closing
date of each underwritten offering under any Demand Registration Statement, and
(ii) to use reasonable best efforts to cause each holder of its securities
purchased from the Company, at any time on or after the date of this Agreement
(other than in a registered public offering) to agree not to effect any public
sale or distribution of any such securities during such period, excluding any
sales by directors or officers pursuant to Rule 144 under the Securities Act.
(c) The Company may postpone for a reasonable period of time,
not to exceed 60 days, the filing or the effectiveness of any Demand
Registration Statement if the Board of Directors of the Company in good faith
determines that (A) such registration might have a material adverse effect on
any plan or proposal by the Company with respect to any financing, acquisition,
recapitalization, reorganization or other material transaction, or (B) the
Company is in possession of material non-public information that, if publicly
disclosed, could result in a material disruption of a major corporate
development or transaction then pending or in progress or in other material
adverse consequences to the Company.
(d) If at any time the Majority desires to sell Registrable
Securities in an underwritten offering, such Holders shall have the right to
select any nationally recognized investment banking firm(s) to administer the
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld, and the Company shall enter into underwriting agreements
with the underwriter(s) of such offering, which agreements shall contain such
representations and warranties by the Company, and such other terms, conditions
and indemnities as are at the time customarily contained in underwriting
agreements for similar offerings.
3
3. Incidental Registration. Subject to the other terms and
conditions set forth in this Section 3, if the Company proposes at any time to
register any shares of Common Stock (the "Initially Proposed Shares") under the
Securities Act for sale, whether or not for its own account, pursuant to an
underwritten offering, the Company will promptly give written notice to the
Holders of its intention to effect such registration (such notice to specify,
among other things, the proposed offering price, the kind and number of
securities proposed to be registered and the distribution arrangements,
including identification of the underwriter(s)), and the Holders shall be
entitled to include in such registration statements, as a part of such
underwritten offering, such number of shares (the "Holder Shares") to be
sold for the account of the Holders (on the same terms and conditions as the
Initially Proposed Shares) as shall be specified in a request in writing
delivered to the Company within 15 days after the date upon which the Company
gave the aforementioned notice.
The Company's obligations to include Holder Shares in a
registration statement pursuant to this Section 3 is subject to each of the
following limitations, conditions and qualifications:
(i) If, at any time after giving written notice of
its intention to effect a registration of any of its shares of Common
Stock and prior to the effective date of any registration statement
filed in connection with such registration, the Company shall determine
for any reason not to register all of such shares, the Company may, at
its election, give written notice of such determination to the Holders
and thereupon it shall be relieved of its obligation to use any efforts
to register any Holder Shares in connection with such aborted
registration.
(ii) If, in the opinion of the managing
underwriter(s) of such offering, the distribution of all or a specified
portion of the Holder Shares would materially interfere with the
registration and sale, in accordance with the intended method thereof,
of the Initially Proposed Shares, then the number of Holder Shares to
be included in such registration statement shall be reduced to such
number, if any, that, in the opinion of such manag-
4
ing underwriter(s), can be included without such interference. The
shares of Common Stock to be included therein shall be apportioned as
follows: (i) first, the Company and any holders of securities of the
Company (other than the Holders) exercising any demand registration
right granted to such holders shall be entitled to register all shares
of Common Stock that the Company or such other holders propose to sell
for their own account, in such proportion as they shall agree upon; and
(ii) second, the Holders shall be entitled to register, on a pro rata
basis (based on the number of shares of Common Stock proposed to be
registered by each), up to that number of Registrable Securities that
is equal to the remaining number of shares of Common Stock that the
managing underwriter(s) will permit to be registered in connection with
such offering. If, as a result of the cutback provisions of the
preceding sentences, the Holders are not entitled to include all of the
Holder Shares in such registration, such Holders may elect to withdraw
their request to include Holder Shares in such registration (a
"Withdrawal Election").
If the Company shall so request in writing, each Holder agrees
not to effect any public or private sale or distribution of any Registrable
Securities (other than the Holder Shares) during the 15-day period prior to and
during the 45-day period beginning on, the closing date of any underwritten
public offering of shares of Common Stock made for the Company's own
account.
4. Registration Procedures. (a) Whenever the Company is
required to use all reasonable efforts to effect the registration of any
Registrable Securities under the Securities Act pursuant to the terms and
conditions of Section 2(a) or 3 (such Registrable Securities being hereinafter
referred to as "Subject Shares"), the Company will use all reasonable efforts to
effect the registration and sale of the Subject Shares in accordance with the
intended method of disposition thereof. Without limiting the generality of the
foregoing, the Company will as soon as practicable:
(i) prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement with respect to the
Subject Shares in form
5
and substance satisfactory to the Holders of the Subject Shares, and
use all reasonable efforts to cause such registration statement to
become effective as soon as possible;
(ii) prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration
statement effective for the applicable period and to comply with the
provisions of the Securities Act with respect to the disposition of all
Subject Shares and other securities covered by such registration
statement;
(iii) furnish the Holders covered by such
registration statement, without charge, such number of conformed copies
of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits), such number
of copies of the prospectus included in such registration statement
(including each preliminary prospectus), such documents incorporated by
reference in such registration statement or prospectus, and such other
documents, as such Holders may reasonably request;
(iv) use all reasonable efforts to register or
qualify the Subject Shares covered by such registration statement under
the securities or blue sky laws of such jurisdictions as the managing
underwriter(s) shall reasonably recommend, which jurisdictions shall be
limited to jurisdictions within the United States, and do any and all
other acts and things which may be reasonably necessary or advisable to
enable the Holders to consummate the disposition in such jurisdictions
of the Subject Shares covered by such registration statement, except
that the Company shall not for any such purpose be required to (A)
qualify generally to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, (B) subject itself to
taxation in any jurisdiction wherein it is not so subject, or (C)
consent to general service of process in any such jurisdiction or
otherwise take any action that would subject it to the general
6
jurisdiction of the courts of any jurisdiction in
which it is not so subject;
(v) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC;
(vi) furnish, at the Company's expense,
unlegended certificates representing ownership of the securities being
sold in such denominations as shall be requested and instruct the
transfer agent to release any stop transfer orders with respect to the
Subject Shares being sold;
(vii) notify each Holder at any time when a
prospectus relating to the Subject Shares is required to be delivered
under the Securities Act of the happening of any event as a result of
which the prospectus included in such Registration Statement contains
any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein (in the case of the
prospectus or any preliminary prospectus, in light of the circumstances
under which they were made) not misleading, and the Company will, as
promptly as practicable thereafter, prepare and file with the SEC and
furnish a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of Subject Shares such
prospectus will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading;
(viii) enter into customary agreements (including an
underwriting agreement in customary form in the case of an underwritten
offering) and make such representations and warranties to the sellers
and underwriter(s) as in form and substance and scope are customarily
made by issuers to underwriters in underwritten offerings and take such
other actions as the Holders or the managing underwriter(s) or agent,
if any, reasonably require in order to expedite or facilitate the
disposition of such Subject Shares;
7
(ix) make available for inspection by the Holders,
any underwriter or agent participating in any disposition pursuant to
such Registration Statement, and any attorney, accountant or other
similar professional advisor retained by any such holders or
underwriter (collectively the "Inspectors"), all pertinent
financial and other records, pertinent corporate documents and
properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such
Inspector in connection with such Registration Statement. The Holders
agree that Records and other information which the Company determines,
in good faith, to be confidential and of which determination the
Inspectors are so notified shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena, court
order or regulatory or agency request or (iii) the information in such
Records has been generally disseminated to the public. Each Holder
agrees that it will, upon learning that disclosure of such Record is
sought in a court of competent jurisdiction or by a governmental
agency, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent
disclosure of the Records deemed confidential;
(x) in the case of an underwritten offering, obtain
for delivery to the Company, the underwriter(s) or their agent, with
copies to the Holders, a "cold comfort" letter from the
Company's independent public accountants in customary form and
covering such matters of the type customarily covered by "cold
comfort" letters as the Holders or the managing underwriter(s)
reasonably request;
(xi) in the case of an underwritten offering, obtain
for delivery to the Holders and the underwriter(s) or their agent an
opinion or opinions from counsel for the Company in customary form and
8
reasonably satisfactory to the Holder, underwriters
or agents and their counsel;
(xii) make available to its security holders earnings
statements, which need not be audited, satisfying the provisions of
Section 11(a) of the Securities Act no later than 90 days after the end
of the 12-month period beginning with the first month of the Company's
first quarter commencing after the effective date of the
Registration Statement, which earnings statements shall cover said
12-month period;
(xiii) make every reasonable effort to prevent the
issuance of any stop order suspending the effectiveness of the
registration statement or of any order preventing or suspending the
effectiveness of such registration statement at the earliest
practicable moment;
(xiv) cause the Subject Shares to be registered with
or approved by such other governmental agencies or authorities within
the United States as may be necessary to enable the sellers thereof or
the underwriters(s), if any, to consummate the disposition of such
Subject Shares;
(xv) cooperate with the Holders and the managing
underwriter(s), if any, or any other interested party (including any
interested broker-dealer) in making any filings or submission required
to be made, and the furnishing of all appropriate information in
connection therewith, with the National Association of Securities
Dealers, Inc. ("NASD");
(xvi) cause its significant subsidiaries to take
action necessary to effect the registration of the Subject Shares
contemplated hereby, including filing any required financial
information;
(xvii) effect the listing of the Subject Shares on
the New York Stock Exchange or such other national securities exchange
or over-the-counter market on which shares of the Common Stock shall
then be listed; and
9
(xviii) take all other steps necessary to effect the
registration of the Subject Shares contemplated hereby.
(b) The Holders shall provide (in writing
and signed by the Holders and stated to be specifically for use in the related
registration statement, preliminary prospectus, prospectus or other document
incident thereto) all such information and materials and take all such action as
may be required in order to permit the Company to comply with all applicable
requirements of the SEC and any applicable state securities laws and to obtain
any desired acceleration of the effective date of any registration statement
prepared and filed by the Company pursuant to this Agreement.
(c) The Holders shall, if requested by
the Company or the managing underwriter(s) in connection with any proposed
registration and distribution pursuant to this Agreement, (i) agree to sell the
Subject Shares on the basis provided in any underwriting arrangements entered
into in connection therewith and (ii) complete and execute all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
customary in similar offerings.
(d) Upon receipt of any notice from the
Company that the Company has become aware that the prospectus (including any
preliminary prospectus) included in any registration statement filed pursuant to
Section 2(a) or 3, as then in effect, contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, the Holders shall
forthwith discontinue disposition of Subject Shares pursuant to the registration
statement covering the same until the Holders' receipt of copies of a
supplemented or amended prospectus and, if so directed by the Company, deliver
to the Company (at the Company's expense) all copies other than permanent
file copies then in the Holder's possession, of the prospectus covering
the Subject Shares that was in effect prior to such amendment or supplement.
(e) The Holders shall pay all out-of-pocket
expenses incurred in connection with any Demand Registration Statements filed
pursuant to Section
10
2(a) of this Agreement, including, without limitation, all SEC and blue sky
registration and filing fees (including NASD fees), printing expenses, transfer
agents and registrars' fees, underwriting discounts, commissions and
expenses attributable to securities sold for the account of the Holders pursuant
to such registration statement, fees and disbursements of the Company's
counsel and accountants and fees and disbursements of experts used by the
Company in connection with such registration statement. The Company shall pay
any such out-of-pocket expenses incurred in connection with any registration
statement filed pursuant to Section 3 of this Agreement, except that the Holders
shall pay all underwriting discounts, commissions and expenses attributable to
the Holder Shares sold pursuant to any such registration statement and the
incremental portion of the SEC registration and filing fees relating to the
Holder Shares.
(f) In connection with any sale of Sub-
ject Shares that are registered pursuant to this Agreement, the Company and the
Holders shall enter into an agreement providing for indemnification of the
Holders by the Company, and indemnification of the Company by the Holders, on
terms customary for such agreements at that time (it being understood that any
disputes arising as to what is customary shall be resolved by counsel to the
underwriter(s)).
5. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be effective (a)
upon hand delivery or delivery by telex (with correct answerback received),
telecopy or facsimile at the address or number designated below (if delivered on
a business day during normal business hours where such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be
received) or (b) on the third business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon
actual service, fully prepaid, addressed to such address, or upon actual receipt
of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company, to:
11
X.X. Xxx 0000
Xxx Xxxxx Xxxxxx
Xxxxxxxx, XX
00000-0000
Attn: Xxxxxxx X'Xxxxx
Telecopy: (000) 000-0000
If to ERC, to:
5200 Xxxxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxx, XX
00000-0000
Attn: Xxxx Xxxxxxxxx
Telecopy: (000) 000-0000
If to any other Holder, to such name at such address as such
Holder shall have indicated in a written notice delivered to
the other parties to this Agreement.
Any party hereto may from time to time change its address for notices under this
Section 5 by giving at least 10 days' notice of such changes to the other
parties hereto.
6. Waivers. No waiver by any party of any default with respect
to any provision, condition or requirement hereof shall be deemed to be a
continuing waiver in the future thereof or a waiver of any other provision,
condition or requirement hereof; nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.
7. Headings. The headings herein are for convenience
only, do not constitute a part of this Agree- ment and shall not be deemed to
limit or affect any of the provisions hereof.
8. Successors and Assigns; Amendments. This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and assigns, includ- ing without limitation and without the
need for an ex- press assignment to each subsequent Holder of any Regis- trable
Securities. Except as provided in this Section 8, neither the Company nor any
Holder shall assign this Agreement or any rights hereunder without the prior
12
written consent of the other parties hereto. The assignment by a party of this
Agreement or any rights hereunder shall not affect the obligations of such party
hereunder. This Agreement may not be amended except by a written instrument
executed by the parties hereto.
9. No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
10. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York; without regard to the principles of conflicts of laws.
12. Entire Agreement. This Agreement contains the entire
agreement of the parties hereto in respect of the subject matter hereof and
supersedes all prior agreements and understandings between the parties with
respect to the subject matter hereof.
13. Execution. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart.
13
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
date hereof.
HSB GROUP, INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Senior Vice President, Treasurer
and Chief Financial Officer
EMPLOYERS REINSURANCE CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President, General
Counsel & Secretary
ERC LIFE REINSURANCE CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: General Counsel
0154453.03-01S7a
14
