STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT, dated as of May 19, 1999 (this "Agreement")
by the undersigned stockholder (the "Stockholder") of First Commonwealth, Inc.,
a Delaware corporation (the "Company"), for the benefit of The Guardian Life
Insurance Company of America, a New York corporation ("Parent").
WHEREAS, Parent, Floss Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of Parent ("Sub"), and the Company are entering into
an Agreement and Plan of Merger, dated as of May 19, 1999 (the "Merger
Agreement"), providing for a cash tender offer (the "Offer") by Sub for any and
all issued and outstanding shares of the Common Stock, par value $.001 per
share, of the Company ("Company Common Stock") together with associated Rights
(as defined in the Merger Agreement) in consideration of $ 25.00 per share, net
to the seller in cash, payable to the holder thereof, followed by the merger of
the Company and Sub (the "Merger");
WHEREAS, the Stockholder owns beneficially and of record shares of
Company Common Stock (such shares of Company Common Stock, together with any
other shares of capital stock of the Company of which such Stockholder acquires
beneficial ownership after the date hereof and during the term of this
Agreement, being collectively referred to herein as the "Subject Shares"); and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, Parent has required that the Stockholder agree, and in order to
induce Parent to enter into the Merger Agreement the Stockholder has agreed, to
enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the Stockholder agrees as follows:
1. Capitalized Terms. Capitalized terms used in this Agreement that
are not defined herein shall have such meanings as set forth in the Merger
Agreement.
2. Covenants of Stockholder. Until the termination of this Agreement
in accordance with Section 4, Stockholder agrees as follows:
(a) So long as the Merger Agreement has not been terminated,
the Stockholder shall tender pursuant to the Offer, and not withdraw, the
Subject Shares.
(b) At any stockholders meeting (or at any adjournment
thereof) or in any other circumstances upon which a vote, consent or other
approval with respect to the Merger or the Merger Agreement is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares in favor
of the Merger, the approval and adoption of the Merger Agreement and the
approval of the terms thereof and each of the other transactions
contemplated by the Merger Agreement.
(c) At any meeting of stockholders of the Company (or at any
adjournment thereof) or in any other circumstances upon which a vote,
consent or other approval is sought, other than with respect to the Merger
or Merger Agreement, the Stockholder shall vote (or cause to be voted) the
Subject Shares (i) against any merger agreement or merger, consolidation,
combination, sale, lease or transfer of all or substantially all of the
assets of the Company, reorganization, recapitalization, dissolution,
liquidation or winding up of or by the Company or any Subsidiary of the
Company or any other Takeover Proposal; (ii) against any action 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 under the Merger Agreement or this Agreement; or (iii) against the
following actions (other than the Merger and the transactions contemplated
by the Merger Agreement); (A) any change in a majority of the persons who
constitute the board of directors of the Company; (B) any change in the
present capitalization of the Company or any amendment of the Company's
Certificate of Incorporation or By-laws; (C) any other material change in
the Company's corporate structure or business; or (D) any other action
involving the Company or its subsidiaries which is intended, or could
reasonably be expected, to impede, interfere with, delay, postpone, or
materially adversely affect the Merger and the transactions contemplated
by this Agreement and the Merger Agreement. The Stockholder further agrees
not to commit or agree to take any action inconsistent with the foregoing.
(d) Except as provided in paragraph (a) of this Section 2, the
Stockholder agrees not to (i) sell, transfer, pledge, encumber, assign or
otherwise dispose of (including by gift) (collectively, "Transfer"), or
enter into any contract, option or other arrangement (including any
profit-sharing arrangement) with respect to any Transfer of the Subject
Shares to any person (other than Parent) or (ii) enter into any voting
arrangement, whether by proxy, voting agreement or otherwise, in relation
to the Subject Shares, and agrees not to commit or agree to take any of
the foregoing actions.
(e) The Stockholder shall not, nor shall the Stockholder
permit any affiliate, director, officer, employee, investment banker,
attorney or other advisor or representative of the Stockholder to, (i)
directly or indirectly solicit, initiate or encourage the submission of,
any Takeover Proposal or (ii) 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, any Takeover Proposal.
(f) The Stockholder shall use all reasonable efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, and to
assist and cooperate with Parent in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger and the other transactions contemplated by the
Merger Agreement.
(g) Waiver of Appraisal Rights. Stockholder hereby irrevocably
waives any rights of appraisal or rights to dissent from the Merger that
Stockholder may have.
(h) Stop Transfer. Stockholder agrees with, and covenants to,
Parent that Stockholder shall not request that the Company register the
transfer (book-entry or otherwise) of any certificate or uncertificated
interest representing any of the Subject Shares, unless such transfer is
made in compliance with this Agreement or the Merger Agreement.
Stockholder makes the covenants and agreements contained in this
Agreement in Stockholder's capacity as a stockholder of the Company and nothing
contained in this Agreement shall limit the ability of Stockholder, to the
extent Stockholder is a director of the Company and is acting in such capacity,
to discharge Stockholder's fiduciary duties as a director of the Company under
applicable law based upon the advice of independent, outside, nationally
recognized, legal counsel (which may be counsel to the Company).
3. Representations and Warranties of Stockholder. The Stockholder
represents and warrants to Parent as follows:
(a) (i) the Stockholder is the record and beneficial owner of,
and has good and marketable title to, the Subject Shares, (ii) the
Stockholder does not own, of record or beneficially, any shares of capital
stock of the Company other than the Subject Shares and (iii) the
Stockholder has the sole right to vote, the sole power of disposition with
respect to, and the sole power to demand appraisal rights with respect to,
the Subject Shares, and
none of the Subject Shares is subject to any voting trust, proxy or other
agreement, arrangement or restriction with respect to the voting or
disposition of such Subject Shares, except as contemplated by this
Agreement.
(b) Power; Binding Agreement. Stockholder has the legal
capacity, power and authority to enter into and perform all of
Stockholder's obligations under this Agreement. The execution, delivery
and performance of this Agreement by Stockholder will not violate any
other agreement to which Stockholder is a party including, without
limitation, any voting agreement, stockholders agreement or voting trust.
This Agreement has been duly and validly executed and delivered by
Stockholder and constitutes a valid and binding agreement of Stockholder,
enforceable against Stockholder in accordance with its terms.
(c) No Encumbrances. The Subject Shares and the certificates
representing such Shares are now held by Stockholder, or by a nominee or
custodian for the benefit of such Stockholder, free and clear of all
liens, claims, security interests or agreements, understandings or
arrangements or any other encumbrances whatsoever.
(d) Reliance by Parent. Stockholder understands and
acknowledges that Parent is entering into, and causing Sub to enter into,
the Merger Agreement in reliance upon the Stockholder's execution,
delivery and performance of this Agreement.
4. Termination. The obligations of the Stockholder hereunder shall
terminate upon the earlier of (i) the date which is 180 days after the date of
termination of the Merger Agreement pursuant to Section 8.1 thereof or (ii) the
Effective Time.
5. Further Assurances. Stockholder will, from time to time, execute
and deliver, or cause to be executed and delivered, such additional or further
consents, proxies, documents and other instruments as Parent may reasonably
request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
6. Successors, Assigns and Transferees Bound. Any successor,
assignee or transferee (including a successor, assignee or transferee as a
result of the death of the Stockholder, such as an executor or heir) shall be
bound by the terms hereof, and the Stockholder shall take any and all actions
necessary to obtain the written confirmation from such successor, assignee or
transferee that it is bound by the terms hereof.
7. Remedies. The Stockholder acknowledges that money damages would
be both incalculable and an insufficient remedy for
any breach of this Agreement by it, and that any such breach would cause Parent
irreparable harm. Accordingly, the Stockholder agrees that in the event of any
breach or threatened breach of this Agreement, Parent, in addition to any other
remedies at law or in equity it may have, shall be entitled, without the
requirement of posting a bond or other security, to equitable relief, including
injunctive relief and specific performance.
8. Submission to Jurisdiction. Each party hereto hereby irrevocably
submits in any suit, action or proceeding arising out of or related to this
Agreement or any of the transactions contemplated hereby or thereby to the
exclusive jurisdiction of the courts of the United States and the jurisdiction
of the courts of the State of Delaware and waive any and all objections to
jurisdiction that they may have under the laws of the State of Delaware or the
United States and any claim or objection that any such court is an inconvenient
forum.
9. Severability. The invalidity or unenforceability of any provision
of this Agreement in any jurisdiction shall not affect the validity or
enforceability of any other provision of this Agreement in such jurisdiction, or
the validity or enforceability of any provision of this Agreement in any other
jurisdiction.
10. Amendment. This Agreement may be amended only by means of a
written instrument executed and delivered by each of the Stockholder and Parent.
11. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
12. Counterparts. For the convenience of the parties, this Agreement
may be executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
13. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by overnight
courier or telecopied (with a confirmatory copy sent by overnight courier) to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent, to
c/o The Guardian Life Insurance Company of
America
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
The Guardian Life Insurance Company of
America
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
with further copies to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
(b) if to the Stockholder, to
Xx. Xxxxx X. Xxxxxxxx
c/o First Commonwealth, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Facsimile No.: 000-000-0000
with a copy to:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq. and
Xxxxxx X. Sacha, Esq.
Facsimile No.: (000) 000-0000
* * * * * *
IN WITNESS WHEREOF, Stockholder has signed this Agreement as of the
date noted above.
/s/ Xxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxx
Accepted and Agreed to
as of the date noted above:
THE GUARDIAN LIFE INSURANCE
COMPANY OF AMERICA
By: /s/ Xxxxxxxx Xxxxx
------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President,
Group Health Care
