Item 1.01. Entry into a Material Definitive Agreement.
On
Upon the unanimous recommendation of a special committee of the board of directors of the Company, the board of directors of the Company approved, declared advisable and adopted, and recommended that the Company's stockholders adopt, the Merger Agreement.
In connection with the Merger, each outstanding share of the Company common
stock, par value
In addition, subject to the terms and conditions of the Merger Agreement, at such time when the Merger becomes effective (the "Effective Time"), (1) each vested and unvested time-vesting restricted stock unit award that is outstanding immediately prior to the Effective Time will be cancelled in exchange for an amount in cash equal to the product of (A) the total number of Shares subject to such award multiplied by (B) the Per Share Consideration; (2) each vested and unvested performance-based restricted stock unit award that is outstanding immediately prior to the Effective Time will be cancelled in exchange for the right to receive an amount in cash equal to the product of (A) the number of Shares subject to such award that would become vested based on the higher of target performance and actual performance through the Effective Time, multiplied by (B) the Per Share Consideration; (3) each vested and unvested award of shares subject to time-based vesting conditions that is outstanding immediately prior to the Effective Time will be cancelled in exchange for the right to receive an amount in cash equal to the product of (A) the total number of shares subject to such award multiplied by (B) the Per Share Consideration; and (4) each vested and unvested award of Shares that is outstanding immediately prior to the Effective Time will be cancelled in exchange for the right to receive an amount in cash equal to the product of (A) the number of shares subject to such award that would become vested based on the higher of target performance and actual performance through the Effective Time multiplied by (B) the Per Share Consideration.
Concurrently with the execution and delivery of the Merger Agreement, certain
affiliates of the Goldman Sachs Group, Inc. and
In accordance with the terms of the Stockholder Support Agreement, immediately
following the execution and delivery of the Merger Agreement, the Major
Stockholders executed and delivered to the Company a joint written consent (the
"Joint Stockholder Consent"), adopting the Merger Agreement and approving the
transactions contemplated thereby, including the Merger. As a result, the
stockholder approval required to consummate the Merger has been obtained, and no
further action by the Company's stockholders in connection with the Merger is
required. The Company will file with the
In connection with the Merger Agreement, the Company has entered into a binder
agreement with
The completion of the Merger is subject to certain closing conditions,
including, among others, (i) the adoption of the Merger Agreement by a majority
of the outstanding Shares (which condition has been satisfied as described
above), (ii) expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, (iii) the conclusion of a
review by the
Each of the Company, Parent and Merger Sub also has agreed to use reasonable best efforts to take all actions to consummate the Merger in the most expeditious manner reasonably practicable, including to obtain any required regulatory approvals, except that Parent is not required, in connection with its efforts to obtain such approvals, to agree to any Burdensome Condition (as defined below).
"Burdensome Condition" is defined in the Merger Agreement as any condition or restriction imposed in connection with the regulatory approval process that would individually or in the aggregate, and together with all other such conditions or restrictions (i) require the contribution of capital or the provision of any guarantee, pledge of assets or similar arrangement by Parent or its investors (other than any capital requirements set forth in that certain Parent summary business plan (the "Summary Business Plan")); (ii) restrict the payment or declaration of ordinary dividends or distributions by any of the Company's insurance subsidiaries for a period of greater than two years from the closing date; (iii) be adverse to a material extent to Parent and its subsidiaries' business, assets, liabilities (including the Company), results of operations or condition taken as a whole, after the closing; (iv) materially increase the amount of capital required to implement the Summary Business Plan as compared to the capital set forth in the Summary Business Plan; (v) require any modification, amendment or termination of the Loss Portfolio Binder, the definitive loss portfolio contract and other agreements related thereto that would have a non-de minimis adverse impact on Parent and its subsidiaries; (vi) require any modification or amendment of, or any adverse deviation, in each case, in any material respect from the Summary Business Plan; or (vii)(A) restrict the operations of business or use of properties of Parent or any of its investors after the closing date, other than restrictions on the businesses or assets of the Company, Parent, or their respective subsidiaries, (B) prohibit any investors in Parent from engaging in, investing in or acquiring any type or line of business or (C) require any of Parent's investors to divest or dispose of any business or assets.
Parent has procured equity financing commitments to finance the transactions
contemplated by the Merger Agreement. Affiliated funds of TowerBrook and Further
Global have (i) committed to provide capital to Parent with an aggregate equity
contribution of up to approximately
The Company has agreed to customary "no-shop" restrictions on its ability to solicit alternative acquisition proposals from third parties and engage in discussions or negotiations with third parties regarding alternative acquisition proposals, subject to certain limited exceptions. In certain circumstances and after complying with certain procedures fully set forth in the Merger Agreement, the board of directors of the Company may terminate the Merger Agreement in response to an unsolicited acquisition proposal (the "Fiduciary Out Termination Right").
The Merger Agreement contains certain other customary termination rights,
including the right for each of the Company and Parent to terminate the Merger
Agreement if the Merger is not consummated by two business days prior to
In connection with the termination of the Merger Agreement, the Company may be
required to pay Parent a termination fee of
The foregoing description of the Merger Agreement, the Merger and the transactions contemplated by the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement attached hereto as Exhibit 2.1, which is incorporated herein by reference.
The representations, warranties and covenants of the Company contained in the Merger Agreement have been made solely for the benefit of Parent and Merger Sub. In addition, such representations, warranties and covenants (i) have been made only for purposes of the Merger Agreement, (ii) have been qualified by . . .
Item 5.07. Submission of Matters to a Vote of Security Holders.
On
FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K and the other documents referenced therein may
contain certain "forward-looking statements" (including "forward-looking
statements" within the meaning of the
Although the Company believes the expectations contained in its forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove correct. Such risks and uncertainties include: risks and uncertainties
related to the Merger Agreement including, but not limited to: the expected
timing and likelihood of completion of the pending Merger or the Legacy Transfer
Transaction; the timing, receipt and terms and conditions of any required
governmental approvals of the pending Merger that may impose materially
burdensome or adverse regulatory conditions, delay the transaction or cause the
parties to abandon the transaction; potential legal proceedings that may be
instituted against the Company following announcement of the transaction; the
state of the credit markets generally and the availability of financing; the
occurrence of any event, change or other circumstances that could give rise to
the termination of the Merger Agreement; the risk that the parties may not be
able to satisfy the conditions to the pending Merger in a timely manner or at
all; risks related to disruption of management time from ongoing business
operations due to the proposed Merger; the risk that any announcements relating
to the pending Merger could have adverse effects on the market price of the
Company's common stock; and the risk that the Merger Agreement and the Company's
announcement of the transactions contemplated thereby could have an adverse
effect on the ability of the Company to retain and hire key personnel and
maintain relationships with its customers, agents or business counterparties,
and on its operating results and businesses generally. The Company undertakes no
obligation to correct or update any forward-looking statements, whether as a
result of new information, future events or otherwise. Additional information on
factors that may affect the business and financial results of the Company can be
found in the filings of the Company made from time to time with the
ADDITIONAL INFORMATION AND WHERE TO FIND IT
This communication is being made in respect of the pending Merger involving the
Company and Parent. The Company will prepare an information statement for its
stockholders containing the information with respect to the Merger specified in
Schedule 14C promulgated under the Exchange Act and describing the pending
Merger. When completed, a definitive information statement will be mailed to the
Company's stockholders. INVESTORS ARE URGED TO CAREFULLY READ THE INFORMATION
STATEMENT REGARDING THE PENDING MERGER AND ANY OTHER RELEVANT DOCUMENTS IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PENDING MERGER. These documents will be available at no
charge on the
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