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Exhibit (c)(1)
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated as of June 3, 1998, between
Nationwide Mutual Insurance Company, an Ohio mutual insurance company
("Nationwide"), and Allied Mutual Insurance Company, an Iowa mutual insurance
company (the "Securityholder").
WHEREAS, Nationwide, Nationwide Group Acquisition Corporation,
an Ohio corporation and wholly-owned subsidiary of Nationwide ("Sub"), and
Allied Group, Inc., an Iowa corporation (the "Company"), propose to enter into
an Agreement and Plan of Merger, dated the date hereof (as the same may be
amended or supplemented, the "Merger Agreement"), which provides for a cash
tender offer by Sub (as such tender offer may hereafter be amended from time to
time, the "Offer") to purchase all shares of common stock, no par value, of the
Company (the "Common Shares") and, following the consummation of the Offer, the
merger of Sub with the Company (the "Merger");
WHEREAS, the Securityholder is the record and beneficial owner
of the number of (i) Common Shares, and (ii) shares of 6 3/4% Series Preferred
Stock, no par value, of the Company and (collectively, the "Preferred Shares")
set forth on Schedule A hereto; such securities, as they may be adjusted by
stock dividend, stock split, recapitalization, combination or exchange of
shares, merger, consolidation, reorganization or other change or transaction of
or by the Company, together with securities that may be acquired after the date
hereof by the Securityholder, including Common Shares issuable upon the exercise
of options to purchase Common Shares (as the same may be adjusted as aforesaid),
being collectively referred to herein as the "Securities"; and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Nationwide has requested that the Securityholder enter into
this Agreement (capitalized terms not otherwise defined herein shall have the
meanings set forth in the Merger Agreement);
NOW, THEREFORE, to induce Nationwide to enter into, and in
consideration of it entering into, the Merger Agreement, and in consideration of
the premises and the representations, warranties and agreements contained
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
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1. Tender of Common Shares. The Securityholder agrees to
tender (or cause the record owner thereof to tender), pursuant to and in
accordance with the terms of the Offer, and not to withdraw, all Securities
which are Common Shares. Stockholder hereby acknowledges and agrees that
Nationwide's and Sub's obligation to accept for payment and pay for Common
Shares in the Offer, including any Securities tendered by Securityholder, is
subject to the terms and conditions of the Offer. The parties agree that the
Securityholder will, for all Common Shares tendered by Securityholder in the
Offer and accepted for payment and paid for by Sub, receive the same per share
consideration paid to other shareholders who have tendered into the Offer.
2. Covenants of the Securityholder. The Securityholder agrees
as follows:
(a) The Securityholder shall not, except as contemplated by
the terms of this Agreement, (i) sell, transfer, pledge, assign or otherwise
dispose of, or enter into any Contract (as defined below), option or other
arrangement (including any profit sharing arrangement) or understanding with
respect to the sale, transfer, pledge, assignment or other disposition of, the
Securities to any person other than Nationwide or Nationwide's designee, or (ii)
enter into any voting arrangement, whether by proxy, voting agreement, voting
trust, power-of-attorney or otherwise, with respect to the Securities.
(b) The Securityholder shall not, nor shall the Securityholder
permit any investment banker, financial adviser, attorney, accountant or other
representative or agent of the Securityholder to, directly or indirectly (i)
solicit, initiate or knowingly encourage (including by way of furnishing
information), or knowingly facilitate any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal or (ii) participate in any discussions or negotiations
regarding any Acquisition Proposal.
(c) At any meeting of shareholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment thereof or
in any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, the Securityholder shall, including by initiating a written
consent solicitation if requested by Nationwide, vote (or cause to be voted)
such Securityholder's Securities in favor of the Merger, the adoption of the
Merger Agreement and the approval of the other transactions contemplated by the
Merger Agreement. At any meeting of sharehold-
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ers of the Company or at any adjournment thereof or in any other circumstances
upon which the Securityholder's vote, consent or other approval is sought, the
Securityholder shall vote (or cause to be voted) the Securityholder's Securities
against (i) any merger (other than the Merger), consolidation, combination, sale
of substantial assets, reorganization, recapitalization, dissolution,
liquidation or winding up of or by the Company or any other Acquisition Proposal
(collectively, "Alternative Transactions") or (ii) any amendment of the
Company's Certificate of Incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which amendment or
other proposal or transaction would in any manner impede, frustrate, prevent or
nullify, the Merger, the Merger Agreement or any of the other transactions
contemplated by the Merger Agreement including any consent to the treatment of
any Securities in or in connection with such transaction (collectively,
"Frustrating Transactions").
3. Grant of Irrevocable Proxy Coupled with an Interest;
Appointment of Proxy.
(a) Subject to governmental approvals, the Securityholder
hereby irrevocably grants to, and appoints, any individual who shall be
designated by Nationwide as the Securityholder's proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of the
Securityholder, to vote the Securityholder's Securities, or grant a consent or
approval in respect of such Securities, at any meeting of shareholders of the
Company or at any adjournment thereof or in any other circumstances upon which
their vote, consent or other approval is sought, (i) in favor of the Merger, the
adoption by the Company of the Merger Agreement and the approval of the other
transactions contemplated by the Merger Agreement, and (ii) against any
Alternative Transaction or Frustrating Transaction.
(b) The Securityholder represents that any proxies heretofore
given in respect of the Securityholder's Securities are not irrevocable, and
that any such proxies are hereby revoked.
(c) THE SECURITYHOLDER HEREBY AFFIRMS THAT THE PROXY SET FORTH
IN THIS SECTION 3 IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE UNTIL SUCH TIME
AS THIS AGREEMENT TERMINATES IN ACCORDANCE WITH ITS TERMS. The Securityholder
hereby further affirms that the irrevocable proxy 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 the Securityholder under this
Agreement.
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The Securityholder hereby ratifies and confirms all that such irrevocable proxy
may lawfully do or cause to be done by virtue hereof.
4. Acquisition Proposals.
(a) Notwithstanding anything to the contrary contained in this
Agreement, during any period of time that the Company is not prohibited by the
Merger Agreement from (A) providing information in response to a request
therefor by a Person who has made an unsolicited bona fide written Acquisition
Proposal; (B) engaging in any negotiations or discussions with any Person who
has made an unsolicited bona fide written Acquisition Proposal; or (C)
recommending an Acquisition Proposal to the shareholders of the Company, the
Securityholder's obligations under Sections 1, 2 and 3 of this Agreement shall
be deemed inoperative.
(b) Notwithstanding anything to the contrary contained in this
Agreement, during any period of time that the Securityholder is not prohibited
by the Agreement and Plan of Merger, dated as of the date hereof, by and between
Securityholder and Nationwide (the "Allied Mutual Merger Agreement") from (A)
providing information in response to a request therefor by a Person who has made
an unsolicited bona fide written Acquisition Proposal; (B) engaging in any
negotiations or discussions with any Person who has made an unsolicited bona
fide written Acquisition Proposal; or (C) recommending an Acquisition Proposal
to the policyholders of the Securityholder, the Securityholder's obligations
under Sections 1, 2 and 3 of this Agreement shall be deemed inoperative. For
purposes of this Section 4(b), "Acquisition Proposal" shall have the meaning
ascribed thereto in the Allied Mutual Merger Agreement.
5. Representations and Warranties of the Securityholder. The
Securityholder hereby represents and warrants to Nationwide as follows:
(a) Authority. The Securityholder has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Securityholder. This Agreement has been duly
executed and delivered by the Securityholder and, assuming this Agreement
constitutes a valid and binding obligation of Nationwide, constitutes a valid
and binding obligation of the Securityholder enforceable against the
Securityholder in accordance with its terms, except that (i) such enforcement
may be subject to bankruptcy, insolvency, reorgani-
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zation, moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) the remedy of specific performance and
injunctive relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought. Except for the
informational filings with the Securities and Exchange Commission and except for
any state insurance department approvals or filings, neither the execution,
delivery or performance of this Agreement by the Securityholder nor the
consummation by the Securityholder of the transactions contemplated hereby will
(i) require any filing with, or permit, authorization, consent or approval
(collectively, "Governmental Approvals") of, any federal, state, local or
municipal foreign or other government or subdivision, branch, department or
agency thereof or any governmental or quasi-governmental authority of any
nature, including any court or other tribunal, (a "Governmental Entity"), except
where the failure to obtain any such Governmental Approvals would not be
reasonably likely to adversely affect the transactions contemplated hereby, (ii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default under, or give rise to any right of
termination, amendment, cancellation or acceleration under, or result in the
creation of any lien upon any of the properties or assets of the Securityholder
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, lease, license, permit, concession, franchise, contract, agreement or
other instrument or obligation (a "Contract") to which the Securityholder is a
party or by which the Securityholder or any of the Securityholder's properties
or assets, including the Securityholder's Securities, may be bound, except for
such violations, breaches, defaults, rights of termination, amendment,
cancellation and acceleration and liens which would not be reasonably likely to
adversely affect the transactions contemplated hereby or (iii) violate any
judgment, order, writ, preliminary or permanent injunction or decree (an
"Order") or any statute, law, ordinance, rule or regulation of any Governmental
Entity (a "Law") applicable to the Securityholder or any of the Securityholder's
properties or assets, including the Securityholder's Securities, except for such
violations which would not be reasonably likely to adversely affect the
transactions contemplated hereby
(b) The Securities. The Securityholder's Securities and the
certificates representing such Securities are now, and at all times during the
term hereof will be, held by such Securityholder, or by a nominee or custodian
for the benefit of such Securityholder, and the Securityholder has good and
marketable title to such Securities, free and-clear of any liens, proxies,
voting trusts or agreements, understandings or arrangements, except for any such
liens or proxies arising hereunder and the agreements made hereby. The
Securityholder owns of record or beneficially no securities of the Company, or
any options, warrants or rights exercisable for
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securities of the Company, other than such Securityholder's Securities, as set
forth on Schedule A hereto.
(c) Brokers. Except as provided in the Allied Mutual Merger
Agreement, 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 by this Agreement
based upon arrangements made by or on behalf of the Securityholder.
(d) Merger Agreement. The Securityholder understands and
acknowledges that Nationwide is entering into the Merger Agreement in reliance
upon the Securityholder's execution and delivery of this Agreement.
6. Representations and Warranties of Nationwide. Nationwide
hereby represents and warrants to the Securityholder as follows:
(a) Authority. Nationwide has the requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Nationwide and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Nationwide. This Agreement has been duly executed and delivered
by Nationwide and, assuming this Agreement constitutes a valid and binding
obligation of the Securityholder, constitutes a valid and binding obligation of
Nationwide enforceable in accordance with its terms, except that (i) such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) the remedy of specific performance and injunctive relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(b) Securities Act. The Securities will be acquired in
compliance with, and Nationwide will not offer to sell or otherwise dispose of
any Securities so acquired by it in violation of any of, the Securities Exchange
Act of 1934, as amended, or the registration requirements of the Securities Act
of 1933, as amended.
7. Further Assurances. Except as otherwise provided in
Sections 4(a) and 4(b), the Securityholder will, from time to time, execute and
deliver, or cause to be executed and delivered, such additional or further
transfers, assignments, endorsements, consents and other instruments as
Nationwide may reasonably request
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for the purpose of effectively carrying out the transactions contemplated by
this Agreement and to vest the power to vote the Securityholder's Securities as
contemplated by Section 3. Nationwide agrees to use its best efforts to take,
or cause to be taken, all actions necessary to comply promptly with all legal
requirements that may be imposed with respect to the transactions contemplated
by this Agreement.
8. Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate on the earlier of the termination of
the Merger Agreement in accordance with its terms and the termination of the
Allied Mutual Merger Agreement. Nothing in this Section 8 shall relieve any
party from liability for willful breach of this Agreement.
9. General Provisions.
(a) Assignment; Binding Effect. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and assigns.
(b) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(c) Notice. All notices, consents, requests, approvals,
authorizations and other communications (collectively, "Notices") required or
permitted to be given hereunder by one party to another shall only be effective
if in writing. All Notices shall be sent (i) by registered or certified mail
(with return receipt requested), postage prepaid, or (ii) by Federal Express,
U.S. Post Office Express Mail, Airborne or similar overnight courier which
delivers, if requested, only upon signed receipt of the addressee (with such
signed receipt being requested), or (iii) by facsimile transmission, and
addressed or transmitted as follows or at such other address or facsimile
number, and to the attention of such other person, as the parties shall give
notice as herein provided:
If to Nationwide, to:
Nationwide Mutual Insurance Company
Xxx Xxxxxxxxxx Xxxxx
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Xxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Diamond, Vice President -- Enterprise
Controller
Facsimile: (000) 000-0000
with a copy to:
Nationwide Mutual Insurance Company
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Vice President and Associate
General Counsel
Xxxxx X. Xxxxx, Counsel
Facsimile: (000) 000-0000
and
if to the Securityholder, to:
Allied Mutual Insurance Company
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, Chairman of the Board
Xxxxxxx X. Xxxxxxxx, President and Chief
Executive Officer
Facsimile No.: 000-000-0000
with copies to:
Nyemaster, Goode, Voigts, West, Xxxxxxx & O'Brien
A Professional Corporation
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Facsimile No.: 000-000-0000
and
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Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
A Notice shall be effective upon receipt and shall be deemed to be received, if
sent by registered or certified mail, U.S. Post Office Express Mail, Federal
Express, Airborne or similar overnight courier, on the date of receipt by the
recipient as shown on the return receipt card, or if sent by facsimile, upon
receipt by the sender of an acknowledgment or transmission report generated by
the machine from which the facsimile was sent indicating that the facsimile was
sent in its entirety to the recipient's facsimile number; provided that if a
Notice is received by facsimile on a day which is not a Business Day, or after
5:00 p.m. on any Business Day at the addressee's location, such Notice shall be
deemed to be received by the recipient at 9:00 a.m. on the first Business Day
thereafter. Rejection or other refusal to accept or the inability to deliver
because of changed address of which no Notice was given shall be deemed to be
receipt of the Notice as of the date of such rejection, refusal or inability to
deliver.
(d) Interpretation. When a reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Wherever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement. The plural of
any defined term shall have a meaning correlative to such defined term, and
words denoting any gender shall include all genders. Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning. A reference to any party to this Agreement or any other agreement or
document shall include such party's successors and permitted assigns. A
reference to any legislation or to any provision of any legislation shall
include any modification or re-enactment thereof, any legislative provision
substituted therefor and all regulations and statutory instruments issued
thereunder or pursuant thereto. For purposes of this Agreement, "Person" shall
mean an individual, corporation, partnership, association, joint stock company,
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limited liability company, Governmental Entity, trust, joint venture, labor
union, estate, unincorporated organization or other entity.
(e) Counterparts. This Agreement shall be executed in
duplicate and may be executed in counterparts each of which shall be deemed to
constitute an original and constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Agreement by telecopier
shall be as effective as delivery of a manually executed counterpart of this
Agreement. In proving this Agreement, it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.
(f) Entire Agreement. This Agreement (including the documents
and instruments referred to herein) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof.
(g) No Third-Party Beneficiaries. Notwithstanding anything
contained in this Agreement to the contrary, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
(h) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Iowa without regard to any
conflicts or choice of law provisions thereof or of any other jurisdiction.
(i) Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in a court of the United States. 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 waives any right to trial by
jury with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
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IN WITNESS WHEREOF, each of Nationwide and Securityholder has
caused this Agreement to be signed by its officer thereunto duly authorized, as
of the date first written above.
NATIONWIDE MUTUAL INSURANCE
COMPANY
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Vice President and Associate General
Counsel
ALLIED MUTUAL INSURANCE
COMPANY
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Vice President and Corporate Counsel
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SCHEDULE A
Common Preferred
Name and Address Shares Shares Warrants Options
---------------- ------ ------ -------- -------
Allied Mutual Insurance Company 498,236 1,827,222 -- --
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