Exhibit 10.4
UTG, Inc.
Amended and Restated
STOCK RESTRICTION AND BUY-SELL AGREEMENT
UTG, Inc. (the "Company") adopted the United Trust Group, Inc. Stock
Restriction and Buy-Sell Agreement (the "Initial Agreement") effective
__November 1__, 2002. The parties hereto now desire to amend and restate the
Initial Agreement in the following manner effective __September 18__, 2003.
This Amended and Restated Stock Restriction and Buy-Sell Agreement
("Agreement"), dated ___________, 2005, is made and entered into by and among
UTG, Inc., a Delaware corporation (the "Holding Company"), and the undersigned
shareholders of the Holding Company (individually a "Shareholder" and,
collectively, the "Shareholders").
Background
The Holding Company has adopted the United Trust Group, Inc. Employee and
Director Stock Purchase Plan (the "Plan") pursuant to which certain employees
and directors of the Holding Company and its subsidiaries have been afforded the
opportunity to purchase shares of common stock of the Holding Company. Each of
the Shareholders is executing this Agreement concurrently with the purchase of
shares pursuant to the Plan. As a condition to their participation in, and
purchase of shares under, the Plan, the Shareholders are obligated to enter into
this Agreement imposing certain restrictions and obligations on themselves and
any shares of common stock of the Holding Company now or hereafter issued to
them pursuant to the Plan (the "Shares"). As used in this Agreement, the term
"participant" refers to an employee or director of the Holding Company who
purchases Shares from the Holding Company pursuant to the Plan.
Now, therefore, in consideration of the premises and the mutual covenants
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Holding Company and the
Shareholders agree as follows:
1. Restriction on Stock. Except as otherwise provided in this Agreement, no
Shareholder shall sell, transfer or otherwise dispose of (whether voluntarily or
involuntarily or by operation of law) or agree or commit to sell, transfer, or
otherwise dispose of all or any part of the Shares owned by the Shareholder
without complying with the terms of this Agreement.
2. Permitted Transfers and Sales of Shares.
a. Any Shareholder may transfer all or any part of the Shares owned by
such Shareholder by gift to or for the benefit of the Shareholder, the
Shareholder's spouse, or the Shareholder's children. The transferee shall
receive, hold, and/or own such Shares subject to the terms of this
Agreement and the obligations hereunder of the transferor Shareholder.
b. Any Shareholder may pledge, mortgage or otherwise encumber the
Shares owned by such Shareholder; provided, however, that this Agreement
shall be binding upon the person in whose favor the Shareholder pledges,
mortgages or otherwise encumbers any or all of such Shares, and the pledgee
shall receive, hold, and/or own such Shares subject to the terms of this
Agreement and the obligations hereunder of the pledgor Shareholder.
Notwithstanding the provisions of this Paragraph 2.b., any Shareholder may
pledge, mortgage or otherwise encumber any or all of the Shares owned by
them for the purpose of securing a loan or loans on behalf of the Holding
Company or any affiliate of the Holding Company, and the pledgee of any
such Shares shall receive, hold, and/or own such Shares free of the terms
and restrictions contained in this Agreement and free of any obligations
hereunder imposed on any Shareholder or any other person. For purposes of
this Agreement, an "affiliate" shall mean any entity which is controlled by
the Holding Company or by ▇▇▇▇▇ ▇▇▇▇▇▇▇, either individually or
collectively.
c. Any Shareholder may sell, at any time, all or a portion of the
Shares owned by such Shareholder in accordance with the provisions of this
Paragraph 2.c. or Paragraph 2.d. below.
i. Such Shares must first be offered for sale to the Holding
Company, and, within ten days of its receipt of such offer, the
Holding Company (or its designee) shall purchase such Shares, at the
price and in the manner provided in Paragraph 4; provided, however,
that the selling Shareholder shall sell to the Holding Company not
less than the lesser of:
(1) all of the Shares then owned by such Shareholder; or
(2) that number of Shares whose fair value as determined in
accordance with Paragraph 4 is at least $1,000.
ii. If the Holding Company (or its designee) is unable to
purchase all of the Shares to be sold, then the remaining Shareholders
will have a ten day option to purchase such Shares (or the remainder
of such Shares if the Holding Company purchases less than all of the
Shares offered for sale). All Shareholders who exercise their options
to purchase such Shares may purchase an amount of such Shares equal to
the percentage of Shares they own of the total number of Shares owned
by all of the Shareholders exercising their options, at the price and
in the manner provided in Paragraph 4.
iii. If all or any part of the Shares of the selling Shareholder
are not purchased by the Holding Company or the remaining
Shareholders, or both, in accordance with the provisions of this
Paragraph 2.c, then the selling Shareholder shall be free to sell all,
but not less than all, of the Shares not purchased by Holding Company
or the remaining Shareholders, for a period of 90 days from the
expiration of the option of the remaining Shareholders; provided,
however, that at the end of such 90-day period, all restrictions
imposed by this Agreement shall again be applicable.
d. Any Shareholder may sell, donate or otherwise transfer, at any
time, all or a portion of the Shares owned by such Shareholder with the
prior consent and approval of the board of directors of the Holding
Company. In considering any request by a Shareholder pursuant to this
Paragraph 2.d., the board of directors shall not be deemed to be under any
obligation to consent to or approve of such request and may condition its
consent and approval on such terms and conditions as the board of directors
of the Holding Company deems appropriate, in the exercise of its
discretion.
3. Events Triggering Holding Company's Right to Reacquire Shares.
a. Upon the death of any Shareholder, or the termination of any
Shareholder's employment with or service as a director of the Holding
Company or any affiliate of the Holding Company (whether by reason of
retirement, disability or voluntary or involuntary termination of
employment, with or without cause), the Holding Company (or its designee)
shall, at its option, have the right to purchase, and in the event of the
exercise of such option, the Shareholder, or his or her personal
representative, spouse and/or children, as the case may be, shall be
required to sell, all or any part of such Shares:
i. then held by such Shareholder; or
ii. which were transferred by such Shareholder to or for the
benefit of such Shareholder or his or her spouse or children in
accordance with the terms of Paragraph 2.a of this Agreement; or
iii. which were transferred to such Shareholder's spouse in
accordance with the terms of a decree of divorce.
b. Upon a non-employee, non-director Shareholder's divorce from the
participant in the Plan from whom such Shareholder has acquired Shares, the
Holding Company shall, at its option, have the right to purchase, and, in
the event of the exercise of such option, the Shareholder shall be required
to sell, all or any part of such Shares then held by such Shareholder, and,
at the discretion of the board of directors of the Holding Company, any
Shares which were transferred by such non-employee, non-director
Shareholder to his or her children in accordance with Paragraph 2.a.
c. Such purchase by the Holding Company upon the exercise of its
options to purchase granted under Paragraph 3.a or 3.b above shall be at
the price and in the manner provided in Paragraph 4 of this Agreement and
shall take place within 90 days of such Shareholder's death or termination
of employment or the entry of a decree of divorce.
d. If all or any part of the Shares of the selling Shareholder (or his
or her personal representative, spouse and/or children who are obligated to
sell such Shares, as the case may be) are not purchased by the Holding
Company in accordance with the provisions of this Paragraph 3, then the
selling Shareholder (or his or her personal representative, spouse and/or
children, as the case may be) shall be free to sell all, but not less than
all, of the Shares not purchased by Holding Company for a period of 90 days
from the expiration of the 90-day period set forth in Paragraph 3.c;
provided, however, that at the end of such 90-day period, all restrictions
imposed by this Agreement shall again be applicable.
4. Purchase Price and Terms of Purchase. The purchase price for any Shares
purchased pursuant to this Agreement shall be, on a per Share basis, equal to
the sum of (i) the original purchase price(s) paid to acquire such Shares from
the Holding Company at the time they were sold pursuant to the Plan and (ii) the
consolidated statutory net earnings (loss) per Share of such Shares during the
period from the end of the month next preceding the month in which such Shares
were acquired pursuant to the Plan to the end of the month next preceding the
month in which the closing of such purchase occurs. The consolidated statutory
net earnings per Share shall be computed as the net income of the Holding
Company and its subsidiaries on a consolidated basis in accordance with
statutory accounting principles applicable to insurance companies, as computed
by the Holding Company, less any dividends paid to shareholders. The calculation
of net earnings per Share shall be performed on a monthly basis using the number
of common shares of the Holding Company outstanding as of the end of the
reporting period. The purchase price for any Shares purchased hereunder shall be
paid in cash within 60 days from the date of purchase subject to the receipt of
any required regulatory approvals as provided in Paragraph 6 of this Agreement.
5. Tag-along Rights. If, during the term of this Agreement, ▇▇▇▇▇ ▇▇▇▇▇▇▇
and his affiliates sell, in one or a series of related transactions, more than
50% of the then outstanding shares of common stock of the Holding Company to any
third party who is not an affiliate of ▇▇▇▇▇ ▇▇▇▇▇▇▇, then all of the
Shareholders will be given the opportunity to sell their Shares either to such
third party or to the Holding Company on the same terms and conditions as ▇▇▇▇▇
▇▇▇▇▇▇▇ and his affiliates.
6. Regulatory Approvals. Should any regulatory approvals be required in
connection with the purchase of any Shares provided for in this Agreement, the
Shares and the purchase price therefor shall be escrowed pending receipt of such
approvals. Interest on the purchase price placed in escrow shall accrue to the
benefit of the selling Shareholder regardless of whether the sale ultimately
takes place. Notwithstanding the necessity of obtaining any regulatory approval,
the sale of any Shares hereunder must close, if at all, within 150 days from the
date the Shares were first offered for sale or the date of death, termination of
employment or divorce of a selling Shareholder.
7. Endorsement on Stock Certificates. All stock certificates representing
the Shares of the Holding Company shall contain the following legend:
"The shares represented by this certificate may not be transferred except in
accordance with the terms contained in a certain Amended and Restated Stock
Restriction and Buy-Sell Agreement dated as of ______________, 20__. Transfers
in violation of that Agreement are void. A copy of that Agreement may be
obtained from UTG, Inc."
8. Notice. Any notice required or permitted under this Agreement shall be
in writing, shall be delivered to the residence or principal place of business
of the intended recipient as noted on the stock record books of the Holding
Company, by either registered mail, overnight courier service or hand delivery,
and shall be deemed received the third business day after such notice is
deposited in the U.S. mail, postage prepaid the next business day after deposit
with an overnight courier service or the date of hand delivery.
9. Binding Effect. This Agreement shall be binding on the parties hereto,
their successors, assigns, estates and heirs, and on any transferee of Shares of
the Holding Company. As a condition of any transfer of Shares, including any
transfer on the books of the Holding Company and the issuance of certificates
representing such Shares, the transfer must be made in accordance with this
Agreement and the transferee of such Shares shall execute and become a party to
this Agreement. Any attempt to transfer Shares or to assign rights and
obligations under this Agreement, whether voluntarily or by operation of law,
shall be void and shall not be binding on the Holding Company or its
Shareholders unless done in accordance with the terms of this Agreement.
10. Other Shareholders. The Holding Company may issue additional Shares
pursuant to the Plan for such consideration as may be determined by the Board of
Directors of the Holding Company. The Holding Company agrees that no such Shares
shall be issued pursuant to the Plan except upon agreement by the purchaser
thereof to become a party to and be bound by the provisions of this Agreement by
executing this Agreement in the spaces provided below. From and after the date
of issuance of such Shares, the purchaser thereof shall, for all purposes, be
deemed to be a Shareholder as that term is used in this Agreement.
11. Amendments and Waivers. This Agreement may be amended or modified only
by an instrument in writing signed by the Holding Company and the holders of a
majority of the outstanding Shares that are subject to this Agreement, and any
provision of this Agreement may be waived by the board of directors of the
Holding Company; provided, however, that no such amendment, modification or
waiver shall, unless by an instrument signed by the Holding Company and all of
the Shareholders [i] differ in effect on any Shareholder in a material and
adverse manner from the effect of such amendment, modification or waiver on the
holders of a majority of the Shares, [ii] create any additional obligation for a
Shareholder without creating similar obligations on the other Shareholders
without the prior written consent of the Shareholder so affected, or [iii] alter
the terms of Paragraph 5 of this Agreement.
12. Termination of Agreement. This Agreement may be voluntarily terminated
by the affirmative vote of at least two-thirds of the outstanding Shares. This
Agreement will automatically terminate if ▇▇▇▇▇ ▇▇▇▇▇▇▇ and his affiliates sell
substantially all of their shares of common stock of the Holding Company and all
Shareholders have had the same opportunity to sell their Shares as provided for
in Paragraph 5.
13. Counterparts. This Agreement may be executed in counterparts, all of
which taken together shall constitute one and the same agreement.
14. Retroactive Effect; Status of Initial Agreement. This Agreement shall
be binding upon each Shareholder who becomes a signatory to this Agreement and
shall supersede the Initial Agreement with respect to all shares of common stock
of the Holding Company issued to such Shareholder under the Plan. The Initial
Agreement shall remain in full force and effect with respect to any participant
who is a signatory to the Initial Agreement who does not become a signatory to
this Agreement. In the event all participants who are signatories to the Initial
Agreement become signatories to this Agreement, the Initial Agreement shall
terminate and no longer be of any effect. The failure of any such participant to
become a signatory to this Agreement shall not affect the validity or
enforceability of this Agreement against any signatory to this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
UTG, INC.
By_/s/ ▇▇▇▇▇▇▇▇ ▇. Miller_________
Title___Senior Vice President_____
UTG, Inc.
STOCK RESTRICTION AND BUY-SELL AGREEMENT
The undersigned does hereby execute and become a party to the UTG, Inc. Amended
and Restated Stock Restriction and Buy-Sell Agreement dated as of _September
18_, 2003.
_______________________________
Shareholder Signature
Printed
Name: ________________________
Date: ________________________
