EXHIBIT 99.7
AMENDED AND RESTATED STOCKHOLDER AGREEMENT
This AMENDED AND RESTATED STOCKHOLDER AGREEMENT, dated as of December
29, 2003 (the "Agreement"), between Country Life Insurance Company, an Illinois
corporation ("Purchaser") and PSCO Fund Limited ("Stockholder"), a stockholder
of Cotton States Life Insurance Company ("the Company").
RECITALS:
WHEREAS, Stockholder and Purchaser, an affiliated company of COUNTRY
Insurance and Financial Services ("COUNTRY"), entered into a Stockholder
Agreement dated November 11, 2003 (the "Original Stockholder Agreement");
WHEREAS, concurrently with the execution and delivery of this
Agreement, Purchaser, COUNTRY Medical Plans, Inc., Purchaser's subsidiary (the
"Purchaser Sub"), and the Company are entering into an Agreement and Plan of
Merger (as such agreement may hereafter be amended, restated or renewed from
time to time, the "Merger Agreement"), which provides, among other things, for
the merger of Purchaser Sub with and into the Company (the "Merger"); and
WHEREAS, as an inducement and a condition to Purchaser's and Purchaser
Sub's willingness to enter into the Merger Agreement, COUNTRY and Purchaser have
required that the Stockholder agree, and Stockholder has agreed, to amend and
restate the Original Stockholder Agreement on the terms and conditions contained
in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Acquisition Proposal" shall mean any proposal or offer,
made by any person or group other than COUNTRY or Purchaser (in each
case, whether or not in writing and whether or not delivered to the
stockholders of the Company generally) relating to (i) any direct or
indirect acquisition or purchase which is structured to permit such
person or group to acquire beneficial ownership of at least 10% of the
assets of the Company or any of its subsidiaries or of over 10% of any
class of equity securities of the Company or any of its subsidiaries,
(ii) any tender offer or exchange offer that, if consummated, would
result in any person, other than COUNTRY, Purchaser, their affiliates
or any group of which any of them is a member beneficially owning 10%
or more of any class of equity securities of the Company or any of its
subsidiaries, or (iii) any merger, consolidation, business combination,
sale of substantially all the assets, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
subsidiaries.
(b) "beneficially owned," "beneficial owner" or "beneficial
ownership" with respect to any securities shall mean having "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3
under the Exchange Act of 1934, as amended (the
"Exchange Act")), including pursuant to any agreement, arrangement or
understanding, whether or not in writing.
(c) "Shares" shall mean the shares in the Company set forth on
Schedule I hereto with respect to which Stockholder is the record
holder or beneficial owner.
(d) Terms used and not defined herein, but defined in the
Merger Agreement, shall have the respective meanings ascribed to them
in the Merger Agreement.
2. Option.
(a) Stockholder hereby grants to Purchaser an irrevocable
option (the "Option") to purchase all of the Shares or a portion
thereof beneficially owned by Stockholder at a price per Share equal to
$20.25. The Option may be exercised in whole or part at any time after
(i) the occurrence of any Acquisition Proposal, (ii) the occurrence of
any event entitling COUNTRY or Purchaser to receive the fee referred to
in Section 7.03 of the Merger Agreement, or (iii) such time as
Stockholder shall have breached any of its agreements in Section 3(a),
3(b) or 3(d). In the event the Option is not fully exercised, the
Option shall remain in effect through the Option Term (as defined
below) with respect to those Shares covered by the Option for which the
Option has not been previously exercised.
(b) The Option shall remain exercisable for the term beginning
on the date hereof until the earliest of (i) December 31, 2004, (ii)
the date that is thirty (30) days after the later of the date that all
approvals to the Merger required under applicable insurance regulatory
laws have been obtained or a final non-appealable determination or
order has been made that such approvals will not be granted; all
waiting periods under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 0000 (xxx "XXX Xxx") required for the purchase of the Shares upon
such exercise shall have expired or been terminated or a final
non-appealable determination or order has been made that such approval
will not be granted; and all other conditions to Closing have been
satisfied, and (iii) a final non-appealable order of a federal or state
court in effect preventing the exercise of the Option or consummation
of the Merger or any law or order enacted, promulgated or issued or
deemed applicable to the Option or the Merger by any governmental
entity that would make exercise of the Option or consummation of the
Merger illegal (the "Option Term"). In the event that Purchaser wishes
to exercise all or part of the Option, Purchaser shall send a written
notice to Stockholder identifying the place and date (not less than two
(2) nor more than ten (10) business days from the date of the notice)
for the closing of such purchase (an "Option Closing"). At each Option
Closing Purchaser shall deliver in immediately available funds the
aggregate exercise price due for the Shares to be purchased at such
Option Closing, against delivery of such Shares.
(c) If transfer of the Shares upon exercise of the Option
(i) requires approval of a governmental agency under
insurance regulatory laws and such approval has not been
obtained, and
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(ii) either (a) a third party has commenced a tender
offer or exchange offer that, if consummated, would result in
any third-party beneficially owning 10% or more of any class
of equity securities of the Company or any of its subsidiaries
and fewer than five (5) business days remain before expiration
of the tender offer period or (b) the stockholders of the
Company have approved a merger, consolidation, business
combination, recapitalization, liquidation, dissolution or
similar transaction involving the Company,
then Purchaser may elect (in its sole discretion) to have
Stockholder tender the Shares (or a portion thereof) and
receive the consideration therefore, or, in the event of a
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction, take the
actions necessary to receive the consideration to which the
holder of the Shares is entitled and have Stockholder hold the
proceeds in trust to be delivered to Purchaser upon payment of
the applicable aggregate Option exercise price; provided,
however, Purchaser in making such election may require (and
Stockholder shall take all reasonable steps to ensure) that
payment with respect to the Shares (the "Applicable Share
Payment") is made to Purchaser and in such event Purchaser
shall pay by wire transfer in immediately available funds to
Stockholder the applicable aggregate exercise price within
three (3) business days after Purchaser's receipt of the
Applicable Share Payment.
3. Additional Agreements.
(a) During the Option Term, Stockholder shall, at any meeting
of the stockholders of the Company, however called, or in connection
with any written consent of the stockholders of the Company, vote (or
cause to be voted) all Shares then held of record or beneficially owned
by Stockholder, (i) in favor of approval of the Merger Agreement and
the Merger, the execution and delivery by the Company of the agreements
related to the approval of the Merger Agreement and the Merger and the
approval of the terms thereof and each of the other actions
contemplated by such agreements and this Agreement and any actions
required in furtherance thereof and hereof, and (ii) against any
proposal relating to an Acquisition Proposal and against any action or
agreement that would impede, frustrate, prevent or nullify this
Agreement or 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 other definitive agreement with
respect to the Merger.
Stockholder shall continue to have the right to vote in its sole
discretion at an annual meeting on all matters not involving or related
to the Merger or an Acquisition Proposal; but, except as specified
herein, Stockholder shall refrain from voting its Shares on any matters
involving or related to the Merger or an Acquisition Proposal.
(b) Stockholder hereby covenants and agrees that, except as
contemplated by this Agreement and the Merger Agreement, Stockholder
shall not (i) offer to transfer (which term shall include, without
limitation, any sale, tender, gift, pledge, assignment or other
disposition), transfer or consent to any transfer of, any or all of the
Shares
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beneficially owned by Stockholder or any interest therein, (ii) enter
into any contract, option or other agreement or understanding with
respect to any transfer of any or all of such Shares or any interest
therein, (iii) grant any proxy, power-of-attorney or other
authorization or consent in or with respect to such Shares, (iv)
deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any
other action that would make any representation or warranty of
Stockholder contained herein untrue or incorrect or in any way
restrict, limit or interfere with the performance of its obligations
hereunder or the transactions contemplated hereby.
(c) Subject to any regulatory approval, if any, required to be
obtained from a governmental agency under insurance regulatory laws,
Stockholder hereby irrevocably grants to, and appoints, Purchaser and
any designee of Purchaser, and each of them individually, Stockholder's
proxy and attorney-in-fact (with full power of substitution), for and
in the name, place and stead of Stockholder, to vote the Shares
beneficially owned by Stockholder, or grant a consent or approval in
respect of such Shares, in the manner specified in Section 3(a).
Stockholder represents that any proxies previously given in respect of
Shares beneficially owned by Stockholder are not irrevocable and that
any such proxies are hereby revoked. Stockholder hereby affirms that
the irrevocable proxy set forth in this Section 3(c) is given in
connection with the execution of the Merger Agreement and that such
irrevocable proxy is given to secure the performance of the duties of
Stockholder under this Agreement. Stockholder hereby further affirms
that the irrevocable proxy is coupled with an interest and may under no
circumstances be revoked. Stockholder hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by
virtue hereof. Without limiting the generality of the foregoing, such
irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 14-2-722 of the Georgia
Business Corporation Code and to be valid during the Option Term.
(d) Stockholder hereby agrees that during the Option Term,
Stockholder, shall not directly or indirectly:
(i) solicit, encourage, or initiate inquiries, offers
or proposals from, or participate in any discussions
or negotiations with, any person or entity concerning
any Acquisition Proposal; or
(ii) except as required by law, disclose any
information not customarily disclosed to any person
or entity concerning the business and properties of
any of the companies in Cotton States or any of their
affiliates, or afford to any person or entity access
to the properties, books or records of any of the
companies in Cotton States or any of their affiliates
or otherwise assist or encourage any person or entity
in connection with the foregoing.
(e) Subject to the terms and conditions of this Agreement,
each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws
to
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consummate and make effective the transactions contemplated by this
Agreement. Each party shall promptly consult with the other and provide
any necessary information and material prior to any filings made by
such party with any governmental entity in connection with this
Agreement and the transactions contemplated hereby.
(f) Stockholder hereby waives any rights of appraisal or
rights to dissent from any merger effected as part of the Merger that
it may have.
4. Representations and Warranties of Stockholder. Except as set forth
under Schedule I hereto Stockholder hereby represents and warrants to Purchaser
as follows:
(a) Stockholder is the recordholder or beneficial owner of the
Shares set forth on Schedule I. Such Shares constitute all of the
Shares held of record or beneficially owned by Stockholder on the date
hereof. Stockholder has sole voting power and sole power to issue
instructions with respect to the matters set forth in Sections 2 and 3
hereof, sole power of disposition, sole power to demand and waive
appraisal rights and sole power to agree to all of the matters set
forth in this Agreement, in each case with respect to all of such
Shares with no limitations, qualifications or restrictions on such
rights, subject to applicable securities laws and the terms of this
Agreement.
(b) Stockholder has the power and authority to enter into and
perform all of Stockholder's obligations under this Agreement. This
Agreement has been duly and validly executed and delivered by
Stockholder and constitutes a legal, valid and binding agreement of
Stockholder, enforceable against Stockholder in accordance with its
terms, except that such enforceability may be limited by bankruptcy,
insolvency and similar laws affecting creditors' rights generally and
by general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity). There is no beneficiary or
holder of a voting trust certificate or other interest of any trust of
which Stockholder is a trustee, or any party to any other agreement or
arrangement, whose consent is required for the execution and delivery
of this Agreement or the consummation by Stockholder of the
transactions contemplated hereby.
(c) Except for filings and consents under the HSR Act, the
Exchange Act and applicable state insurance company laws (i) no filing
with, and no permit, authorization, consent or approval of, any
governmental entity is necessary for the execution and delivery of this
Agreement by Stockholder, the consummation by Stockholder of the
transactions contemplated hereby and the compliance by Stockholder with
the provisions hereof and (ii) none of the execution and delivery of
this Agreement by Stockholder, the consummation by Stockholder of the
transactions contemplated hereby or compliance by Stockholder with any
of the provisions hereof, except in cases in which any conflict,
breach, default or violation described below would not interfere with
the ability of Stockholder to perform Stockholder's obligations
hereunder, shall (A) conflict with or result in any breach of any
organizational documents applicable to Stockholder, (B) result in a
violation or breach of, or constitute (with or without notice or lapse
of time or both) a default (or give rise to any third party right of
termination, cancellation, modification or acceleration) under, any of
the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement,
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understanding, agreement or other instrument or obligation of any kind,
including, without limitation, any voting agreement, proxy arrangement,
pledge agreement, stockholders agreement or voting trust, to which
Stockholder is a party or by which it or any of its properties or
assets may be bound, or (C) violate any order, writ, injunction,
decree, judgment, order, statute, rule or regulation applicable to
Stockholder or any of its properties or assets.
(d) Except as permitted by this Agreement, the Shares
beneficially owned by Stockholder and the certificates representing
such Shares are now, and at all times during the term hereof will be,
held by Stockholder, or by a nominee or custodian for the benefit of
Stockholder, free and clear of all liens, proxies, voting trusts or
agreements, understandings or arrangements or any other rights
whatsoever, except for any such liens or proxies arising hereunder.
Subject to regulatory approval, if any, that is required to be obtained
from a governmental agency under insurance regulatory laws, the
transfer by Stockholder of the Shares to Purchaser hereunder shall pass
to and unconditionally vest in Purchaser good and valid title to all
Shares, free and clear of all liens, proxies, voting trusts or
agreements, understandings or arrangements or any other rights
whatsoever.
(e) No broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions
contemplated under this Agreement based upon arrangements made by or on
behalf of Stockholder, except for the Retainer Agreement between Xxxxx
Xxxxx Capital Corporation and COUNTRY Mutual Insurance Company, dated
April 29, 2003.
5. Stop Transfer. Stockholder shall request that the Company not
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares beneficially owned by
Stockholder, unless such transfer is made in compliance with this Agreement.
6. Termination. This Agreement shall terminate with respect to
Stockholder upon the expiration of the Option Term.
7. No Limitation. Nothing in this Agreement shall be construed to
prohibit Stockholder, or any officer or affiliate of Stockholder who is or has
designated a member of the Board of Directors of the Company, from taking any
action solely in his or her capacity as a member of the Board of Directors of
the Company or from exercising his or her fiduciary duties as a member of such
Board of Directors to the extent specifically permitted, or not prohibited by an
agreement to which COUNTRY or any of its affiliates is a party, or from
exercising any fiduciary duty owned by a Manager or similar fiduciary with
respect to the Stockholders or similar parties in a Mutual Fund or Trust or
similar entity. Stockholder signs solely in his or her capacity as the record
and beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, Stockholder's Shares.
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8. Miscellaneous.
(a) This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersede all
other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
(b) This Agreement shall not be assigned by operation of law
or otherwise without the prior written consent of Stockholder (in the
case of any assignment by Purchaser) or Purchaser (in the case of an
assignment by a Stockholder), provided that Purchaser may assign its
rights and obligations hereunder to any direct or indirect affiliate of
Purchaser, but no such assignment shall relieve COUNTRY and Purchaser
of their obligations hereunder.
(c) Without limiting any other rights Purchaser may have
hereunder in respect of any transfer of the Shares, Stockholder agrees
that this Agreement and the obligations hereunder shall attach to the
Shares beneficially owned by Stockholder and shall be binding upon any
person to which legal or beneficial ownership of such Shares shall
pass, whether by operation of law or otherwise, including, without
limitation, Stockholder's heirs, guardians, administrators or
successors.
(d) This Agreement may not be amended, changed, supplemented
or otherwise modified with respect to Stockholder except by an
instrument in writing signed on behalf of Stockholder and Purchaser.
(e) 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 received if given) by hand delivery
or by facsimile transmission with confirmation of receipt, as follows:
If to a Stockholder:
To the address set out on Schedule I hereto.
If to COUNTRY or Purchaser:
Country Life Insurance Company
0000 X. Xxxxxxx Xxx.
Xxxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: President
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Copy to:
Office of General Counsel
ILLINOIS AGRICULTURAL ASSOCIATION
0000 X. Xxxxxxx Xxx.
Xxxxxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: General Counsel
or to such other address or facsimile number as the person to whom
notice is given may have previously furnished to the others in writing
in the manner set forth above.
(f) Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or
portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction such invalidity, illegality or
unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision or portion of any provision had never been
contained herein.
(g) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
(h) The failure of any party hereto to exercise any rights,
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.
(i) 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 confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
(j) This Agreement shall be governed and construed in
accordance with the laws of the State of Georgia, without giving effect
to the principles of conflicts of law thereof.
(k) 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
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enforce specifically the terms and provisions of this Agreement in any
Georgia state court or any Federal court located in such State, this
being in addition to any other remedy to which they are entitled at law
or in equity. In addition, each of the parties hereto (i) consents to
submit itself to the personal jurisdiction of any Georgia state court
or any Federal court located in such State in the event any dispute
arises out of this Agreement or any transaction contemplated by this
Agreement, (ii) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any
such court, (iii) agrees that it will not bring any action relating to
this Agreement or any transaction contemplated by this Agreement in any
court other than any such court and (iv) waives any right to trial by
jury with respect to any action related to or arising out of this
Agreement or any transaction contemplated by this Agreement. The
parties irrevocably and unconditionally waive any objection to the
laying of venue of any action, suit or proceeding arising out of this
Agreement or the transactions contemplated hereby in any such court,
and hereby further irrevocably and unconditionally waive and agree not
to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, COUNTRY and
Purchaser acknowledge and agree that such consent to jurisdiction is
solely for the purpose referred to in this paragraph (k) and shall not
be deemed to be a general submission to the jurisdiction of said courts
in the State of Georgia other than for such purposes.
(l) The descriptive headings used herein are inserted for
convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
(m) This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which, taken
together, shall constitute one and the same agreement. This Agreement
shall not be effective as to any party hereto until such time as this
Agreement or a counterpart thereof has been executed and delivered by
each party hereto.
(n) Except as otherwise provide herein, each party shall pay
its, his or her own expenses incurred in connection with this
Agreement.
[Remainder of page intentionally left blank. Signature page(s) to follow.]
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IN WITNESS WHEREOF, Purchaser, COUNTRY and Stockholder have caused this
Agreement to be duly executed as of the day and year first above written.
PURCHASER
COUNTRY Life Insurance Company
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
COUNTRY
On behalf of certain companies of
COUNTRY Insurance & Financial Services
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
STOCKHOLDER
PSCO Fund Limited
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Manager
Schedule I
SHARES
Number of Shares Owned 55,000
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Name in Which Shares Held PSCO Fund Limited
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Address: c/o Xxxxx Xxxxx Capital Corporation
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000 Xxxx Xxxx Xxxxxx
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Xxxxxxxx, XX 00000
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