SHAREHOLDER AGREEMENT
THIS AGREEMENT, made and entered into this 29th day of June, 1993, by
and among COMPENSATION BENEFITS, INC., a Florida corporation, (the
"Corporation") and XXX X. XXXXXXXX, XXXX X. XXXXXX, and XXXX X. XXXXXX
("Shareholders").
WHEREAS, XXX X. XXXXXXXX, ("XXXXXXXX") prior to the execution of this
Agreement, has been the sole and 100% Shareholder of the issued and outstanding
stock of the corporation; and
WHEREAS, simultaneously with the execution of this Agreement, XXXXXXXX
will vote to cause the corporation to issue on or about January 1, 1994 from its
authorized but previously unissued stock certain shares of stock to the
Shareholders; upon such issuance, effective on or about January 1, 1994, the
Shareholders will own all of the issued and outstanding shares of the
Corporation's common stock in the following percentages:
(a) XXX X. XXXXXXXX 375 shares (75%)
(b) XXXX X. XXXXXX 100 shares (20%)
(c) XXXX X. XXXXXX 25 shares (5%)
The value of the above shares to be transferred to the Shareholders as of
January 1, 1994 shall be the "book value" of such shares as of the end of the
fiscal year ending June 30, 1993 in accordance with the audited financial
statements of the Corporation.
WHEREAS, XXXXXXXX, the Corporation and Shareholders desire to assure
and provide continuity in the management of the Corporation; and
WHEREAS, to that end the Shareholders and the Corporation have decided
to make certain agreements, among other things, to arrange
for the sale and purchase, in the manner and to the extent set forth, of all the
stock owned by a Shareholder in the Corporation upon his death, disability or
termination of employment and to provide prior opportunities to purchase the
interest of a Shareholder in the Corporation if said Shareholder desires to
sell, transfer, encumber or dispose of said interest during his lifetime;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, each of the Shareholders hereby binds himself and
his heirs, executors, administrators and assigns and the Corporation hereby
binds itself and its successors, and they agree as follows:
1. TERMINATION OF EMPLOYMENT OF SHAREHOLDER OR EARLY WITHDRAWAL.
(a) The value of the shares of stock of the Corporation
transferred to the Shareholders on or about January 1, 1994, as set forth in the
Recitals above, shall be the "book value" of the such shares as of the end of
the fiscal year ending June 30, 1993 in accordance with the audited financial
statements of the Corporation.
(b) In the event that any shareholder shall voluntarily elect
to terminate his employment with the corporation and to withdraw from the
corporation, or in the event that the corporation shall (i) by vote of the
majority of the Board of Directors and (ii) ratified by the owner(s) and
holder(s) of a majority of the total issued and outstanding shares of stock, to
terminate the relationship of a particular Stockholder as an employee, officer,
and shareholder of the Corporation and to repurchase the shares of stock owned
by such Shareholder, the Corporation shall have and is
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hereby granted an option to repurchase the shares of stock of any such
Shareholder as hereinafter set forth in this Section 1.
(1) Until this Agreement is terminated by the written
consent of all parties hereto, the Corporation shall continue to have an option
and right to re-purchase the stock of a withdrawing or terminated Shareholder in
accordance with the terms and provisions of this Section. If the Corporation
shall exercise its option to repurchase such Shareholder's stock at any time,
the purchase price of such stock shall be at the "book value" of such stock for
the previous fiscal year as reflected in the audited financial statements of the
Corporation. Further, at the option of the Corporation, such repurchase amount,
shall be payable, in quarterly installments, over a five (5) year period, plus
interest at Wall Street Journal prime rate.
(2) Once a shareholder's shares are repurchased under
the terms and provisions of this agreement such shareholder shall have no
further rights under this agreement or as a shareholder or employee of the
corporation or otherwise relating to the corporation.
(c) In the event of a repurchase by the Corporation of a
withdrawing or terminated Shareholder's stock in the Corporation as set forth in
subparagraphs (b) (1) and (2) of this Section 1, such stock shall be held as
treasury stock and, if re-issued by the Corporation shall be first offered to
the remaining Shareholders in the same relative percentages as such Shareholders
held while the shares were held as treasury stock, unless: (1) by vote of the
majority of the Board of Directors, and (2) ratified by the owner(s) and
holder(s) of a majority of the total issued and
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outstanding shares of stock, such shares are to be transferred to another
employee of the corporation who, by such vote, is deemed to be a valued employee
of the corporation.
2. DEATH OR DISABILITY OF A SHAREHOLDER.
The parties anticipate the possibility of purchasing life and/or
disability insurance for the purposes of funding a repurchase of a Shareholder's
stock upon death or disability. In such event, the parties hereto will enter
into an addendum to be attached to this agreement. If such insurance-funded
repurchase addendum has not been executed by the parties, then the provisions of
Section 1 of this agreement shall apply in the event of death; provided,
however, that the owner(s) of a majority of the issued and outstanding stock
(including the personal representative, trustee, or other legal representative
of a deceased shareholder at such time) may vote, by simple majority, to waive
such right of repurchase by and on behalf of the Corporation.
3. RESTRICTIONS ON SALE OF STOCK DURING LIFETIME.
(a) Except as set forth herein, no Shareholder shall sell,
transfer, encumber, or make any other disposition of his stock, whether such
disposition is voluntary or involuntary until such Shareholder shall give notice
to the Corporation of any such proposed sale, transfer, encumbrance, or
disposition. Regardless of the proposed sale price, the Corporation shall have
the absolute right of first refusal and option to repurchase such shares of
stock of such Shareholder in accordance with the same terms and provisions and
for the same price set forth in Section 1 of this Agreement.
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(b) However, notwithstanding the foregoing restrictions on the
sale of stock as set forth in subparagraph (a) above, in the event that any
Shareholder owning a majority of the issued and outstanding shares of stock of
the Corporation shall propose to sell or transfer his shares of stock and
ownership interest in the Corporation in a good faith "arms-length" transaction
with a prospective purchaser, he shall be free to do so and shall be
unrestricted by the terms and provisions of this Agreement (subject, however, to
subsection (b) below), so long as he shall offer to purchase (or to have
purchased by such prospective purchaser) the remaining Shareholders' shares of
stock at the same per share price and in accordance with the same terms as those
offered to such majority Shareholder in such transaction. The remaining
Shareholders shall not then be obligated to sell their shares to such third
party purchaser, and instead, may elect to retain their shares notwithstanding
the sale of stock by the majority Shareholder, in which event the remaining
Shareholders shall remain minority shareholders after such sale and the majority
Shareholder shall be authorized to proceed with such sale free of any
restrictions.
(c) In the event that a majority Shareholder shall receive a
proposal to purchase his shares of stock from a prospective purchaser in a
proposed "arms-length" transaction, as set forth in the preceding subparagraph
(b), he shall, before formally agreeing to such proposal, offer his shares of
stock to the remaining Shareholders under the same terms and provisions and same
price as that set forth in such proposal. The remaining Shareholders shall have
a period of thirty (30) days to exercise
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such option to purchase all such shares and, in addition, to actually close and
fund the transaction and to pay the purchase price in accordance with the same
terms and provisions of such proposal and within the same time period. If the
remaining Shareholders shall fail to agree in writing to repurchase and to
actually complete such repurchase of such shares within said thirty (30) day
period, the majority Shareholder shall be free, in all respects and without
further limitation, to dispose of his shares in accordance with the terms and
provisions of such third party offer; provided, however, as set forth in (b)
above, that the remaining Shareholders' shares of stock shall, at their option,
also be purchased for the same price and in accordance with the same terms as
such proposal.
(d) In the event that the entity which is currently known as
the Florida Air Conditioning Contractors Association-Self Insurers Fund
("FACCA-SIF") (or the Trustees or participants thereof) shall elect to form or
organize a worker's compensation insurance company as a successor entity to
FACCA-SIF, then, and in such event, the corporation, by vote of the holders of a
majority in interest of the issued and outstanding shares of stock of the
corporation, shall be authorized to agree to and the remaining Shareholders
shall hereby be deemed to have consented to the following:
(i) To exchange the service company contract or other assets
of the corporation for stock or for an ownership interest in the successor
insurance company, or for other considerations; or
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(ii) To merge or to exchange shares of stock in the
corporation for shares of stock in the successor insurance company; or
(iii) To enter into any other form of agreement whatsoever
with the successor insurance company or otherwise or to take any other corporate
action, the purpose of which is, in substance, to transfer or release, in
exchange for consideration, the corporation's right to act as the service
company for and on behalf of FACCA-SIF or the successor insurance company.
As set forth above, the vote by the corporation to accomplish
any of the foregoing purposes shall be by simple majority in interest of the
holders of the issued and outstanding shares of stock in the corporation,
provided, however, that in the event that the corporation shall, by such
majority vote, agree to any of the foregoing, the consideration received
therefor shall be divided among the shareholders in the same percentage as the
relative percentages of ownership of the issued and outstanding shares of stock
in the corporation (currently 75% Xxxxxxxx, 20% Xxxxxx, 5% Duggan, as of the
date of the execution of this agreement).
4. CLOSING.
Unless otherwise provided herein, closing of any transaction
under this agreement (except as otherwise set forth above in Section 3 above)
shall take place within thirty (30) days of the death or termination of
employment of a Shareholder, or as soon as practicable after the mailing of the
notice required by Section 3 of this agreement, as the case may be (but not
later than 30 days after a Remaining Shareholder(s) shall elect to purchase such
shares), or upon such other date as the parties shall agree.
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The closing shall take place at the office of the Corporation or at such other
place as the parties shall agree.
5. EFFECT OF NONCOMPLIANCE.
In the event any purported or attempted transfer of stock does
not comply with the provisions of this Agreement, the purported transferee shall
not be deemed to be a Shareholder of the Corporation and shall not be entitled
to registration of such transfer on the books of the Corporation.
6. RESTRICTIVE LEGEND.
To effectuate this agreement, all the certificates for shares
of the stock of the Corporation shall bear the following legend thereon:
"The shares represented by this certificate are subject to an
agreement dated ____ among ______ and its Shareholders, and
they may not transfer or encumber such shares except in
accordance with the terms of the agreement. The Corporation
will furnish to any of its Shareholders a copy of the
agreement upon request and without charge."
7. SPECIFIC PERFORMANCE.
In addition to any other remedies available in law or equity,
the parties hereto shall have the right to enforce this Agreement through
specific performance of its provisions.
8. OFFSET OF PURCHASE PRICE BY INDEBTEDNESS.
If at any time a Shareholder's interest is being purchased by
the corporation hereunder, the selling Shareholder is indebted to the
corporation or to other shareholders or other entities such as FLORIDA
ADMINISTRATORS, INC. and FACCA-SIF, the amount of the indebtedness shall offset
and reduce the purchase price payable by that purchaser to the extent that the
amount of
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the indebtedness does not exceed the purchase price; in such event the offset
shall be applied to such indebtedness.
9. CREATION OF SURPLUS.
If the Corporation shall not have sufficient surplus to permit
it to redeem lawfully the stock required to be purchased by the Corporation, the
Corporation, the Shareholders and the personal representative of a deceased
Shareholder covenant to vote shares and to take such other measures as may be
required to establish a corporation surplus that will allow the redemption of
shares under this Agreement, including but not limited to:
(a) reduction of capital;
(b) cancellation of treasury shares;
(c) appraisal of assets at fair market value;
(d) pro rata contribution of cash to the Corporation by
Shareholders, except the selling Shareholder, in such amounts
and at such times as may be required to allow the Corporation
to meet its obligations under this agreement.
10. EXECUTION OF AGREEMENT BY SUBSEQUENT SHAREHOLDERS.
No issue or transfer of any shares of the Corporation shall be
completed unless and until the holder or transferee has executed a counterpart
of this Agreement, which shall be retained as part of the corporate records.
Likewise, when the shares of stock of a shareholder are repurchased by the
corporation from such shareholder, such shareholder shall have no further rights
under this agreement.
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12. NOTICE.
All notices, demands, requests, offers or responses permitted
or required to be given under this agreement shall be deemed sufficient if
mailed by registered or certified mail, postage prepaid, addressed to the
Shareholder at his address as shown on the records of the Corporation and to the
Corporation at its registered address. Any party hereto may change the address
to which notices shall be sent by written notice of such new or changed address
given to the secretary of the Corporation.
13. MISCELLANEOUS PROVISIONS.
(a) This agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Florida.
(b) The Section headings in this agreement are for reference
purposes only and shall not in any way affect the meaning and interpretation of
this agreement.
(c) This agreement shall be binding on and shall operate for
the benefit of the parties hereto and their respective heirs and legal
representatives. It also shall be binding on any transferee who has received any
shares in accordance with the provisions of this agreement and the heirs and
legal representatives of that transferee. It shall further be binding on any
person to whom any of the stock is transferred in violation of the provisions of
this Agreement and the heirs and legal representatives of that person.
(d) This agreement contains the entire agreement of the
parties hereto, and all prior understandings and agreements, whether written or
oral, between the parties are merged into this agreement. This agreement cannot
be altered, amended,
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supplemented, modified or terminated except by instrument in writing signed by
all of the parties hereto, the proper officers signing on behalf of the
Corporation.
(e) Should it become necessary for any party to institute
legal action to enforce the terms and conditions of this agreement, the
successful party shall be awarded a reasonable attorney's fee, which shall
include a reasonable attorney's fee for any appellate proceedings, expenses
(including any accounting expenses) and costs. Venue for any such action shall
be in Palm Beach County, Florida.
(f) The invalidity or unenforceability of any particular
provision of this agreement shall not affect the other provisions hereof, and
this agreement shall be construed in all respects as if such invalid or
unenforceable provisions were omitted.
(g) This agreement may be signed and executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
COMPENSATION BENEFITS, INC.
/s/ Illegible By:/s/ Xxx X. Xxxxxxxx, President
----------------------------- --------------------------------
Its
/s/ Xxxx X. Xxxxx Attest:/s/ Xxxx X. Xxxxxx
----------------------------- ----------------------------
Secretary
/s/ Illegible /s/ XXX X. XXXXXXXX
---------------------------- -----------------------------------
XXX X. XXXXXXXX
/s/ Xxxx X. Xxxxx
-----------------------------
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/s/ Illegible /s/ XXXX X. XXXXXX
------------------------------ -----------------------------------
XXXX X. XXXXXX
/s/ Xxxx X. Xxxxx
-----------------------------
/s/ Illegible /s/ XXXX X. XXXXXX
------------------------------ -----------------------------------
XXXX X. XXXXXX
/s/ Xxxx X. Xxxxx
-----------------------------
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AMENDMENT TO SHAREHOLDER AGREEMENT
This Amendment to the Shareholder Agreement dated June 29, 1993, by and
among COMPENSATION BENEFITS, INC., a Florida corporation, ("Corporation") and
XXX X. XXXXXXXX, XXXX X. XXXXXX, and XXXX X. XXXXXX, ("Shareholders") is made
and entered into this 19th day of December, 1995.
RECITALS
WHEREAS, the Corporation and the Shareholders entered into the above
referenced Shareholder Agreement ("Shareholder Agreement") effective June 29,
1993, and
WHEREAS, the Corporation is about to become an owner of PINNACLE
ASSURANCE CORPORATION, a nonassessable stock insurer (or in the alternative, the
owner of a holding company to be formed for the purposes of acquiring ownership
of said insurance company) in accordance with the "Plan of Conversion and
Recapitalization of PINNACLE ASSURANCE CORPORATION, An Assessable Mutual
approved by the Florida Department or Insurance", and
WHEREAS, in furtherance of said "Plan of Conversion and
Recapitalization of PINNACLE ASSURANCE CORPORATION", the Corporation is
considering various alternative methods of recapitalization for such purposes,
including recapitalization through additional investors or through financing
alternatives or otherwise, and
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WHEREAS, in furtherance of said anticipated recapitalization, the
Corporation and Shareholders have executed that certain Letter of Intent, a copy
of which is attached hereto as Exhibit "A", and
WHEREAS, as of the date of this Amendment, the Corporation and the
Shareholders do not know whether or not a formal contract and closing based upon
the terms and provisions of said Letter of Intent will be executed and
completed, or whether an alternative source of recapitalization will be
utilized, and
WHEREAS, the Corporation and the Shareholders wish to amend the
Shareholder Agreement in order to provide certain provisions for benefits and
consideration to the corporation and to the Shareholders in conjunction with
said anticipated recapitalization, whichever format is chosen, including, but
not limited to a provision for a voting agreement and a voting trust whereby XXX
X. XXXXXXXX shall have the right to unanimously vote all of the issued and
outstanding shares of stock of the Corporation owned by the Shareholders and
WHEREAS, the Shareholders and the Corporation wish to amend said
Shareholder Agreement, to the extent necessary to effectuate the purposes set
forth or contemplated herein.
NOW THEREFORE, for TEN DOLLARS and NO/100 and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged by all signatories hereto. It is agreed as follows:
1. The above Recitals are incorporated into the terms
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and provisions of this Agreement as accurately reciting the basis for the
execution of this Amendment and the terms and provisions thereof are hereby made
part of this Agreement.
2, Paragraph 1 of the Shareholder Agreement entitled "TERMINATION OF
EMPLOYMENT OF SHAREHOLDER OF EARLY WITHDRAWAL" is hereby amended as follows:
Paragraph 1.(b)(1) is hereby deleted in its entirety and the following
shall be substituted in its place:
"Until this Agreement is terminated by the written consent of all
parties hereto, XXX X. XXXXXXXX shall continue to have an option and right, but
not the obligation, to repurchase the stock of a withdrawing or terminated
Shareholder in accordance with the terms and provisions of this section. If XXX
X. XXXXXXXX shall exercise his option to repurchase such shareholder's stock at
any time, the purchase price of such stock shall be at the "market" value of
such stock if a "market" price had been established by a generally recognized
stock exchange: if no much "market" value has been established, then the
purchase price shall be appraised value of such stock based upon an appraisal of
a qualified person or entity generally recognized in the industry as being
qualified to appraise such stock, said appraisal to be performed by an appraiser
selected by the Corporation to render an opinion as to the appraised value of
the stock."
Paragraph 1.(c) is hereby deleted in its entirety. New Paragraph 1.(d)
is added as follows:
"All remaining terms and provisions of the Shareholder
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Agreement referring to a right of purchase shares of stock on behalf of the
Corporation (including but not limited to rights of first refusal and options to
repurchase shares of stock in favor of the Corporation) are hereby amended to
state that such right of repurchase, right of first refusal, option to
repurchase, or other right to purchase shares of stock from a shareholder are
now to be solely in favor of XXX X. XXXXXXXX and not in favor of the
Corporation. All such references to the word "Corporation" in such context are
hereby deleted and "XXX X. XXXXXXXX" shall be substituted in place thereof."
3. The execution of the Letter of Intent (Exhibit "A") and any
subsequent formal contract in furtherance thereof by the Shareholders and by the
Corporation shall not be deemed in violation of the terms and provisions of the
Shareholder Agreement. Furthermore, the Shareholders and the Corporation agree
that any other form of recapitalization of the Corporation in furtherance of the
"Plan of Conversion and Recapitalization of PINNACLE ASSURANCE CORPORATION, An
Assessable Mutual", whether through additional investors, additional capital
infusions, loans or otherwise, shall also not be deemed to be a violation of the
terms and provisions of the Shareholder Agreement. Moreover, the Shareholders
and the Corporation agree that the execution of any such documents in
furtherance of such recapitalization and the completion of any transactions
contemplated in connection therewith shall not, in any way, be deemed to have
activated any notice requirements, or purchase rights, options or any other
procedures set forth in said
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Agreement (including but not limited to those in Section 3 "Restrictions On Sale
Of Stock During Lifetime"). Moreover, the Shareholders and the Corporation
hereby further acknowledge and agree that the execution of this Amendment and
the transactions contemplated herein are, in part, in furtherance of paragraphs
3.(d)(i), (ii) and (iii) of the Shareholder Agreement in order to demonstrate to
the "Investors", as described in Exhibit "A", that the Corporation and all of
the Shareholders are in agreement with the proposed transactions contemplated by
the Letter of Intent (Exhibit ("A") and the proposed recapitalization of the
Corporation in the furtherance of the "Plan of Conversion and Recapitalization
of PINNACLE ASSURANCE CORPORATION, An Assessable Mutual". The Shareholders
further agree to execute any and all additional agreements and documents as
requested by XXX X. XXXXXXXX to effectuate the closing of the transactions
contemplated in said Exhibit "A", or to effectuate any such other form of
recapitalization as may be selected by XXX X. XXXXXXXX. Provided, however,
nothing set forth herein, or contemplated hereby, shall, in any way, be deemed
to be a waiver of the terms provisions of said paragraphs 3.(d)(i), (ii) and
(iii) of the Shareholder Agreement authorizing and permitting any and all such
acts to be taken solely by a majority vote of the issued and outstanding shares
of stock of the Corporation, all such terms and provisions are hereby
acknowledged and agreed to remain in effect.
4. The Shareholders hereby further acknowledge and agree that upon the
completion of the transactions contemplated by
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the Letter of Intent (Exhibit "A"), the Shareholders are contemplated to be
shareholders in the Delaware corporation to be formed as described in Exhibit
"A"; as a result of such transactions, the Corporation may be merged with or
held as a subsidiary of said Delaware corporation to be formed or the
Corporation may otherwise be restructured in furtherance of said transactions.
Notwithstanding such fact, it is hereby specifically agreed by, between and
among the Shareholders that the terms and provisions of the Shareholder
Agreement, as modified or amended herein, shall continue in effect between and
among the Shareholders upon the formation of the above-described new Delaware
corporation to be formed and the Shareholders do hereby agree that they will
execute a subsequent Shareholder Agreement with regard to their shares in said
new corporation or any other corporation to be formed in conjunction with such
recapitalization, said Shareholder Agreement shall contain the same terms and
provisions as the Shareholder Agreement, as amended herein.
5. The Shareholders further hereby agree that they will vote their
shares of the Corporation, (and their shares of the new Delaware corporation to
be formed or any other corporation to be formed in conjunction with such
recapitalization) on any matter presented to the shareholders of the Corporation
for a vote, as they are directed, in writing, by XXX X. XXXXXXXX, so long as he
shall remain a Shareholder of the Corporation, or of the new Delaware
corporation or any such other corporation to be formed in conjunction with the
recapitalization described above. In the
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event that a Shareholder(s) holding a minority of the issued and outstanding
stock of the Corporation (or of the new Delaware or other corporation to be
formed) shall refuse to vote his shares of stock as directed in writing by XXX
X. XXXXXXXX, then and in such event, it is hereby agreed that XXX X. XXXXXXXX
shall be deemed to have, and is hereby given, an irrevocable power of attorney
coupled with an interest to vote the shares of stock of such minority
Shareholder(s) on any matter presented to the shareholders of the Corporation
for a vote. Thin provision is intended to be a binding and enforceable voting
agreement pursuant to Florida Statutes 607.0731 and any comparable Delaware law,
and this provision shall be specifically enforceable as provided in said
statute. Moreover, upon the written request of XXX X. XXXXXXXX, the Shareholders
hereby agree that they will execute and enter into a voting trust in the form
attached as Exhibit B.
6. At such time as the Shareholders shall become shareholders in the
above-described proposed new Delaware corporation to be formed, the Shareholders
shall execute a shareholder agreement, as permitted under the laws of the State
of Delaware, which will contain the same terms and provisions of the
Shareholder's Agreement, as amended hereby, and which will continue in effect
the voting agreement set forth in the preceding paragraph as between and among
the Shareholders including their stock in said new corporation. This provision
shall be deemed specifically enforceable in a court of equity. Moreover, upon
the written request of XXX X. XXXXXXXX, the Shareholders hereby agree that they
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will execute and enter into a voting trust in the form attached hereto as
Exhibit "B" with regard to said Delaware corporation. In the event that any
Shareholder(s) shall then refuse to execute such voting trust with regard to his
shares of stock in said proposed successor Delaware corporation to be formed,
XXX X. XXXXXXXX, so long as he is a Shareholder of the Corporation or of the
Delaware corporation to be formed, shall be deemed to have and is hereby
authorized by all other Shareholders, and is hereby given by them, an
irrevocable power of attorney coupled with an interest, to execute the voting
trust on behalf of all shareholders, to vote the shares of stock of the minority
shareholder(s) on any matter presented to the shareholders of such corporation
for a vote, and to deliver a copy of this provision to the Delaware corporation
which is to be formed and to require its enforcement under the laws of said
state.
7. The voting agreement, or voting trust, whichever applicable, with
regard to the proposed successor Delaware corporation to be formed shall be in
accordance with Delaware law and any provision set forth herein which is not in
compliance therewith shall be deemed modified so as to be in compliance with
such laws. If any portion of this Agreement is not enforceable under applicable
law, all remaining portions shall still be enforceable to the extent permitted
by applicable law.
8. The Shareholders hereby agree that the terms and provisions of this
Amendment, including paragraphs 5 and 6 above with regard to the voting
agreement and voting trust in favor of
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XXX X. XXXXXXXX, shall remain in full force and effect with regard to all
matters which are presented to the Shareholders of the Corporation for a vote
subsequent to the execution of this Amendment, regardless of whether the
transaction described in or contemplated by the Letter of Intent (Exhibit "A")
is completed and closed. Moreover, without in any way limiting the foregoing
statement, such voting provisions shall be deemed to authorize XXX X. XXXXXXXX
to vote all of the issued and outstanding shares of stock of the Corporation
owned by the Shareholders in making further decisions which may be presented to
the Shareholders of the Corporation for a vote with regard to the
recapitalization of FLORIDA ADMINISTRATORS, INC., or PINNACLE ASSURANCE
CORPORATION as contemplated by or in furtherance of the "Plan Of Conversion and
Recapitalization of PINNACLE INSURANCE CORPORATION" as approved by the Florida
Department of Insurance, regardless of whether such recapitalization is to be
completed in accordance with the terms and provisions of the Letter of Intent
(Exhibit "A"), or through other investors (if the transaction described in said
Letter of Intent does not close) or through loan transactions or otherwise.
9. This Amendment to Shareholder Agreement shall be binding upon the
heirs, personal representatives, estates, successors and assigns of the
Shareholders. Moreover, XXX X. XXXXXXXX shall be fully authorized to transfer
his shares of stock in the Corporation (or in the Delaware corporation to be
formed) to a revocable trust for estate planning purposes, and such transfer
shall not be deemed to be in violation of this Amendment or in
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violation of the Shareholder Agreement. Moreover, the personal representative,
trustee or legal representative, whichever may then be applicable, of XXX X.
XXXXXXXX shall be deemed fully authorized to vote the shares of the Shareholders
in accordance with the terms and provisions of paragraphs 5, 6 and 8 above in
the same manner and with the same force and effect as XXX X. XXXXXXXX under the
terms and provisions of said paragraphs. Said personal representative, trustee
or legal representative, whichever may be applicable, shall have all voting
rights given, assigned or delegated to XXX X. XXXXXXXX hereunder.
10. The Shareholder Agreement, except as specifically modified or
amended hereby shall remain in full force and effect. In the event of a conflict
between the terms and provisions of the Shareholder Agreement and this
Amendment, the terms and provisions of this Amendment shall prevail.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
COMPENSATION BENEFITS, INC.
/s/ Xxxx X. Xxxx By:/s/ Xxx X. Xxxxxxxx, President
--------------------------------- -------------------------------
Print Name: Its
---------------------------------
Print Name:
Attest:/s/ Xxxx X. Xxxxxx
---------------------------
Secretary
/s/ Xxxx X. Xxxx /s/ XXX X. XXXXXXXX
--------------------------------- ----------------------------------
Print Name: XXX X. XXXXXXXX
--------------------------------
Print Name:
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/S/ Xxxx X. Xxxx /s/ Xxxx X. Xxxxxx
-------------------------------- ----------------------------------
Print Name: XXXX X. XXXXXX
-------------------------------
Print Name:
/S/ Xxxx X. Xxxx /s/ Xxxx X. Xxxxxx
-------------------------------- ----------------------------------
Print Name: XXXX X. XXXXXX
-------------------------------
Print Name:
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AMENDMENT NO. 2 TO SHAREHOLDER AGREEMENT
This Amendment No. 2 (the "Second Amendment") to the
Shareholder Agreement dated June 29, 1993 (the "Original Agreement"), by and
among COMPENSATION BENEFITS, INC., a Florida corporation ("Corporation"), AMCOMP
INCORPORATED, a Delaware corporation ("AmComp"), XXX X. XXXXXXXX ("Xxxxxxxx"),
XXXX X. XXXXXX ("Xxxxxx"), XXXX X. XXXXXX ("Xxxxxx") and XXXX X. XXXX ("Xxxx,"
and, together with Xxxxxxxx, Xxxxxx and Xxxxxx, the "Shareholders") is made and
entered into as of July 8, 1996.
RECITALS
WHEREAS, the Corporation, Xxxxxxxx, Xxxxxx and Xxxxxx entered
into the Original Agreement, effective June 29, 1993; and
WHEREAS, the Corporation, Xxxxxxxx, Xxxxxx and Xxxxxx first
amended the Original Agreement on December 19, 1995 (the "First Amendment"); and
WHEREAS, the Corporation and the Shareholders wish to further
amend the Original Agreement (as amended by the First Amendment and the Second
Amendment, the "Agreement"); and
WHEREAS, by Stock Purchase Agreement of even date herewith,
Xxxx is acquiring from the other Shareholders shares of AmComp, the Delaware
corporation referred to in Paragraph 4 of the First Amendment; and
WHEREAS, the Shareholders other than Xxxx have previously
agreed that the Agreement shall be applicable to AmComp and to the authorized
shares of AmComp (the "AmComp Shares"); and
WHEREAS, the Shareholders other than Xxxx are parties to that
certain Securities Purchase and Asset Transfer Agreement among AmComp, Florida
Administrators, Inc., Stephens, Hanson, Xxxxxx and the Purchasers named therein
dated as of January 26, 1996 (the "Securities Purchase Agreement").
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, it is agreed as follows:
1. The above Recitals are incorporated into the terms and
provisions of the Agreement as accurately reciting the basis for the execution
of this Second Amendment and the terms and provisions thereof are hereby made
part of the Agreement.
2. Xxxx is hereby joined as a party to the Agreement as a
Shareholder for all purposes thereof.
3. Each of the Shareholders expressly affirms (i) the
applicability of the Agreement to AmComp and to the AmComp Shares; and (ii) the
intention of the Shareholders to negotiate, execute and deliver a successor
agreement to the Agreement (the "Successor Agreement"). Unless and until the
Successor Agreement shall have been executed and delivered by AmComp and the
Shareholders, the Agreement shall remain in full force and effect in accordance
with its terms.
4. In the event that pursuant to Article VII of the Securities
Purchase Agreement, the Shareholders, or any of them, become obligated to
indemnify the Purchasers for any Taxes or Damages (as those terms are defined in
the Securities Purchase Agreement), the aggregate amount of such Taxes or
Damages shall be borne by the Shareholders in the following proportions:
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Xxxxxxxx - 86.67%
Xxxxxx - 5.96%
Xxxxxx - 1.49%
Xxxx - 5.88%
provided, however, that in no event shall Xxxxxx or Xxxxxx be liable pursuant to
the Securities Purchase Agreement and hereunder for an amount in excess of the
amount provided for in Section 7.06 of the Securities Purchase Agreement; and
provided, further, that in no event shall Xxxx be liable pursuant to the
Securities Purchase Agreement and hereunder for an amount in excess of that
amount for which he would have been liable pursuant to the Securities Purchase
Agreement had he been a party thereto as a Founder and had his liability
thereunder been limited in the same manner as that of Xxxxxx and Xxxxxx. To the
extent that any Shareholder shall have paid in excess of his proportionate share
of such Damages, the other Shareholders shall promptly upon demand by him
reimburse him such proportion of such excess as shall result in each Shareholder
bearing the respective proportions of such Damages set forth above.
5. Paragraph 13(a) of the Original Agreement is amended in its
entirety to read as follows:
"This agreement shall be governed by and
construed and enforced in accordance with the
laws of the State of Delaware, except that
body of law relating to choice of laws."
6. Except as specifically modified or amended hereby, the
Original Agreement, as amended by the First Amendment, shall remain in full
force and effect in accordance with its terms.
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IN WITNESS WHEREOF, the parties hereto have executed this
Second Amendment as of the date first above written.
COMPENSATION BENEFITS, INC.
By: /s/ Xxx X. Xxxxxxxx
-------------------------
Name:
Title:
AMCOMP INCORPORATED
By:/s/ Xxx X. Xxxxxxxx
-------------------------
Name:
Title:
/s/ Xxx X. Xxxxxxxx
-----------------------------------
XXX X. XXXXXXXX
/s/ Xxxx X. Xxxxxx
-----------------------------------
XXXX X. XXXXXX
/s/ Xxxx X. Xxxxxx
-----------------------------------
XXXX X. XXXXXX
/s/ Xxxx X. Xxxx
-----------------------------------
XXXX X. XXXX
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