SHAREHOLDER AGREEMENT

Exhibit 10.2

SHAREHOLDER AGREEMENT

dated July 7, 2009

among

GENWORTH MI CANADA INC.

and

BROOKFIELD LIFE ASSURANCE COMPANY LIMITED

and

GENWORTH FINANCIAL, INC.

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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This Shareholder Agreement, dated July 7, 2009 (this “ Agreement ”), is made by and among GENWORTH MI CANADA INC., a corporation existing under the laws of Canada (“ Genworth Canada ”), GENWORTH FINANCIAL, INC., a corporation existing under the laws of the State of Delaware (“ Genworth Financial ”), and BROOKFIELD LIFE ASSURANCE COMPANY LIMITED, a corporation existing under the laws of Bermuda (“ Brookfield ”).

RECITALS

A. Genworth Canada has undertaken an initial public offering (the “ Initial Public Offering ”) of its common shares pursuant to a prospectus filed with Canadian securities regulatory authorities.

B. In connection with the Initial Public Offering, Genworth Financial, Genworth Canada and Genworth Financial Mortgage Insurance Company Canada have entered into a Master Agreement, dated as of the date hereof (the “ Master Agreement ”).

C. Genworth Canada, Genworth Financial and Brookfield have entered into this Agreement to set out certain key provisions relating to the provision of information and certain of their respective rights, duties and obligations following completion of the Initial Public Offering (the “ Closing ”).

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01 Certain Defined Terms . The following capitalized terms used in this Agreement shall have the meanings set forth below:

“ Applicable Law ” means, with respect to any Person, property, transaction, event or other matter, (i) any foreign or domestic constitution, treaty, law, statute, regulation, code, ordinance, principle of common law or equity, rule, municipal by-law, Order or other requirement having the force of law, (ii) any policy, practice, protocol, standard or guideline of any Governmental Authority which, although not necessarily having the force of law, is regarded by such Governmental Authority as requiring compliance as if it had the force of law (collectively, the “ Law ”) relating or applicable to such Person, property, transaction, event or other matter and also includes, where appropriate, any interpretation of the Law (or any part thereof) by any Person having jurisdiction over it, or charged with its administration or interpretation.

“ Applicable GNW Shareholder ” means, at any time with respect to any Common Shares or the Special Share, as applicable, the member of the Genworth Financial Group that is the holder of such share or shares, which shall initially be Brookfield in the case of both the Special Share and the Common Shares deemed to be beneficially owned by Genworth Financial pursuant to this Agreement.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in Toronto, Ontario or New York, NY are authorized or required by Law to close. Any event the scheduled occurrence of which would fall on a day that is not a Business Day shall be deferred until the next succeeding Business Day.

“ Board ” means the board of directors of Genworth Canada from time to time.

“ Business Plan ” has the meaning set forth in Section 2.01(b).

“ Canadian GAAP ” means generally accepted accounting principles in Canada, as in effect from time to time, including, for greater certainty, International Financial Reporting Standards from and after such time as, and to the extent that, they become applicable in Canada.

“ Closing ” means completion of the Initial Public Offering.

“ Closing Date ” means the date on which the Closing takes place.

“ Common Shares ” means the common shares in the capital of Genworth Canada or such other shares or other securities into which such common shares are converted, exchanged, reclassified or otherwise changed from time to time.

“ Genworth Financial Designee ” means a director of Genworth Canada elected by the member of the Genworth Financial Group holding the Special Share from time to time pursuant to the terms of the Special Share.

“ Genworth Financial Group ” means, collectively, Genworth Financial and all of its direct and indirect Subsidiaries now or hereafter existing, other than Genworth Canada and its direct and indirect Subsidiaries.

“ Governmental Authority ” means:

 

(i)

any domestic or foreign government, whether national, federal, provincial, state, territorial, municipal or local (whether administrative, legislative, executive or otherwise);

 

(ii)

any agency, authority, ministry, department, regulatory body, court, central bank, bureau, board or other instrumentality having legislative, judicial, taxing, regulatory, prosecutorial or administrative powers or functions of, or pertaining to, government;

 

(iii)

any court, commission, individual, arbitrator, arbitration panel or other body having adjudicative, regulatory, judicial, quasi-judicial, administrative or similar functions; and

 

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(iv)

any other body or entity created under the authority of or otherwise subject to the jurisdiction of any of the foregoing, including any stock or other securities exchange or professional association.

“ Order ” means any order, directive, judgment, decree, injunction, decision, ruling, award or writ of any Governmental Authority.

“ OSFI ” means the Office of the Superintendent of Financial Institutions (Canada) or any successor agency or regulatory authority thereof.

“ outstanding Common Shares ” means, at any time, the number of Common Shares issued and outstanding at the relevant time as reflected on the share register of Genworth Canada.

“ Person ” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or other entity.

“ Registration Rights Agreement ” means the Registration Rights Agreement dated as of the date hereof, entered into concurrently herewith by and between Brookfield and Genworth Canada.

“ SEC ” means the United States Securities and Exchange Commission.

“ Securities Commissions ” means, collectively, the securities regulatory authority in each of the Provinces and Territories of Canada.

“ Share Incentive Plan ” means any plan of Genworth Canada in effect from time to time pursuant to which Common Shares may be issued, or options or other securities convertible or exercisable into or exchangeable for Common Shares may be granted, to directors, officers and/or employees of, and/or consultants to, Genworth Canada and/or its subsidiaries;

“ Special Share ” means the one authorized special share in the capital of Genworth Canada.

“ Subsidiary ” or “ subsidiary ” means, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than fifty percent (50%) of (i) the total combined voting power of all classes of voting securities of such entity, (ii) the total combined equity interests, or (iii) the capital or profit interests, in the case of a partnership; or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

“ US GAAP ” means generally accepted accounting principles in the United States, including specific requests or requirements of the SEC, as in effect from time to time, including, for greater certainty, International Financial Reporting Standards from and after such time as, and to the extent that, they become applicable in the United States.

 

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SECTION 1.02 Other Terms . For purposes of this Agreement, the following terms have the meanings set forth in the sections or agreements indicated.

 

SECTION 1.03 Beneficial Ownership . Solely for purposes of this Agreement, Genworth Financial shall be deemed to beneficially own shares which are beneficially owned by its direct or indirect Subsidiaries, other than Genworth Canada and its direct or indirect Subsidiaries.

 

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ARTICLE II

CORPORATE GOVERNANCE

SECTION 2.01 Genworth Financial Approval Rights .

(a) For so long as Genworth Financial beneficially owns not less than thirty-three and one-third percent (33 1/3%) of the outstanding Common Shares, Genworth Canada shall not (either directly or indirectly through a Subsidiary) take any of the following actions without the prior written consent of Genworth Financial:

(i) consolidate or merge into or with another Person or enter into any other similar business combination, including pursuant to any amalgamation, arrangement, recapitalization or reorganization, other than a consolidation, merger or other similar business combination of any wholly-owned Subsidiary of Genworth Canada into or with Genworth Canada or into or with another wholly-owned Subsidiary of Genworth Canada;

(ii) acquire any shares or similar equity interests, instruments convertible into or exchangeable for shares or similar equity interests, assets, business or operations (in a single transaction or a series of related transactions) in the aggregate with a value of more than $50 million (excluding, for purposes of this Section 2.01(a)(ii) , investments made in the ordinary course of business by the licensed insurance company subsidiary of Genworth Canada in accordance with Applicable Law and the investment policy approved by the board of directors of such subsidiary);

(iii) adopt any plan or proposal for a complete or partial liquidation, dissolution or winding up of Genworth Canada or any of its Subsidiaries or any reorganization or recapitalization of Genworth Canada or any of its Subsidiaries or commence any case, proceeding or action seeking relief under any existing or future laws relating to bankruptcy, insolvency, conservatorship or relief of debtors;

(iv) sell, transfer, lease, pledge or otherwise dispose of any of its or any of its Subsidiaries’ assets, business or operations (in a single transaction or a series of related transactions) in the aggregate with a value of more than $100 million (excluding, for purposes of this Section 2.01(a)(iv) , sales or dispositions of investments made in the ordinary course of business by the licensed insurance company subsidiary of Genworth Canada in accordance with Applicable Law and the investment policy approved by the board of directors of such subsidiary);

(v) make any reductions in Genworth’s Canada’s policy with respect to the declaration and payment of any dividends on any Common Shares, except if and to the extent that a reduction in the dividend is required by Applicable Law or by requirements imposed by OSFI); or

(vi) issue new debt securities or incur or enter into debt or guarantees that would result in Genworth Canada having (on a consolidated basis) a ratio (expressed as a percentage) of debt to total capital (the sum of debt and shareholders’ equity) of greater than 20%.

(b) For so long as Genworth Financial beneficially owns not less than fifty percent (50%) of the outstanding Common Shares, Genworth Canada shall not (either directly or indirectly through a Subsidiary) take any of the following actions without the prior written consent of Genworth Financial:

(i) approve any annual business plan of Genworth Canada and its Subsidiaries on a consolidated basis (a “ Business Plan ”) and any material amendments to, or any material departure from, such Business Plan;

 

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(ii) appoint or remove any Chief Executive Officer; or

(iii) issue Common Shares or other equity securities or securities convertible into or exerciseable or exchangeable for Common Shares or other equity securities of Genworth Canada, other than pursuant to a Share Incentive Plan that has been approved by the Board.

(c) If at any time Genworth Financial beneficially owns less than fifty percent (50%) of the outstanding Common Shares, then, for so long as Genworth Financial beneficially owns not less than thirty-three and one-third percent (33 1/3%) of the outstanding Common Shares, Genworth Canada shall consult with Genworth Financial with respect to the matters set forth in Section 2.01(b), but Genworth Financial shall have no right to approve or deny approval of such matters.

(d) For so long as Genworth Financial beneficially owns not less than fifteen percent (15%) of the outstanding Common Shares, Genworth Canada shall not implement or adopt any shareholder rights plan without the prior written consent of Genworth Financial, unless the plan includes an exception that would permit a purchase of all or part of the Common Shares beneficially owned by Genworth Financial from Genworth Financial and/or its Subsidiaries without causing the rights thereunder to separate from the Common Shares or become exerciseable or otherwise triggering the plan.

SECTION 2.02 Special Share and Board Composition .

(a) The Parties acknowledge and agree that Genworth Canada has issued the Special Share to Brookfield and Brookfield has paid a subscription price therefor of $1.00 to Genworth Canada.

(b) The Applicable GNW Shareholder shall cause the appropriate number of Genworth Financial Designees to resign or be removed promptly at any time when the number of Genworth Financial Designees on the Board exceeds the number of Genworth Financial Designees which the Applicable GNW Shareholder is entitled, as the holder of the Special Share, to elect pursuant to the rights attaching to the Special Share. Notwithstanding the foregoing, Genworth Canada may request that any one or more of the Genworth Financial Designees that would otherwise be required to resign or be removed pursuant to this Section 2.02(b) to remain a director, in which case any such Genworth Financial Designee shall no longer be considered to be a Genworth Financial Designee.

 

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(c) With respect to the Special Share:

(i) The Applicable GNW Shareholder holding the Special Share agrees that it will not transfer, and Genworth Financial agrees that it will not permit the transfer, of the Special Share except (1) subject to Section 2.02(c)(ii) , to a member of the Genworth Financial Group; or (2) as the Board may otherwise approve.

(ii) Prior to any transfer of the Special Share to a member of the Genworth Financial Group, Genworth Financial or the Applicable GNW Shareholder shall obtain and deliver to Genworth Canada an agreement or undertaking of such member of the Genworth Financial Group, in form satisfactory to Genworth Canada, acting reasonably, agreeing to become party to and be bound by this Agreement, and agreeing to transfer such Special Share to Genworth Financial or another member of the Genworth Financial Group immediately prior to such member ceasing to be a member of the Genworth Financial Group.

(d) If a proposed amendment to the articles of incorporation of Genworth Canada or other matter required to be voted on by shareholders of Genworth Canada (i) would, under the Canada Business Corporations Act , give rise to a class vote for the holder of the Special Share, and (ii) would not prejudicially affect the rights, privileges, restrictions and conditions attached to the Special Share, then the Applicable GNW Shareholder agrees to cause the Special Share to be voted in respect of such proposed amendment in the manner directed by Genworth Canada.

SECTION 2.03 Director Elections .

(a) Genworth Canada shall give written notice to the Applicable GNW Shareholder(s) and Genworth Financial of any meeting of shareholders of Genworth Canada at which directors are to be elected (a “ Director Election ”) at least 20 days and not more than 30 days prior to the record date for the meeting, which notice shall specify the record date and the proposed meeting date.

(b) Following receipt of such notice, Genworth Financial and the Applicable GNW Shareholder(s) shall choose whether to (i) exercise, or cause to be exercised, the rights to elect directors attached to the Special Share, or instead (ii) exercise, or cause to be exercised, the voting rights attached to the Common Shares beneficially owned by Genworth Financial in respect of the election of directors, in each case at or in connection with such Director Election, and shall notify Genworth Canada of such choice not later than five Business Days before the record date for the meeting; provided, however that if Genworth Financial and the Applicable GNW Shareholder(s) do not notify Genworth Canada of any choice, they shall be deemed to have chosen to exercise the voting rights attached to the Common Shares beneficially owned by Genworth Financial in respect of the election of directors. In respect of any particular Director Election, (i) if Genworth Financial and the Applicable GNW Shareholder(s) choose to exercise, or cause to be exercised, the rights to elect directors attached to the Special Share, Genworth Financial and the Applicable GNW Shareholder(s) agree not to vote, or to cause not to be voted, the Common Shares beneficially owned by Genworth Financial in connection with such Director Election, and (ii) if Genworth Financial and the Applicable GNW Shareholder(s) choose to exercise, or cause to be exercised, the voting rights attached to the Common Shares beneficially owned by Genworth Financial in respect such Director Election, Genworth Financial and the Applicable GNW Shareholder(s) agree not to exercise, or to cause not to be exercised, the rights to elect directors attached to the Special Share in connection with such Director Election.

 

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(c) If Genworth Financial and the Applicable GNW Shareholder(s) have chosen to exercise, or cause to be exercised, the voting rights attached to the Common Shares beneficially owned by Genworth Financial in respect of a Director Election, Genworth Canada agrees to nominate for election as directors of Genworth Canada in such Director Election a number of persons specified by the Applicable GNW Shareholder(s) holding Common Shares equal to the number of directors the holder of the Special Share would have been entitled to elect, had Genworth Financial and the Applicable GNW Shareholder(s) chosen to exercise, or cause to be exercised, the rights to elect directors attached to the Special Share. In such event, the Applicable GNW Shareholder(s) holding Common Shares shall notify Genworth Canada of such nominees (the “ Genworth Financial Nominees ”) in the notice provided pursuant to Section 2.03(b) and Genworth Canada shall (i) disclose the choice of Genworth Financial and the Applicable GNW Shareholder(s) in the management information circular relating to the applicable Director Election, (ii) include the Genworth Financial Nominees in the management information circular and form of proxy relating to the applicable Director Election as nominees of management, and (iii) solicit proxies from shareholders of Genworth Canada in favour of the election of the Genworth Financial Nominees.

(d) The covenants in this Section 2.03 shall exist only for so long as the Special Share is outstanding.

SECTION 2.04 Director Nomination Rights .

(a) If the Special Share is redeemed upon demand by the holder, thereafter Genworth Canada agrees to nominate for election as directors of Genworth Canada at any meeting of shareholders at which directors are to be elected a number of persons designated by the Applicable GNW Shareholder(s) holding Common Shares as follows:

(i) for so long as Genworth Financial beneficially owns fifty percent (50%) or more of the outstanding Common Shares, the Applicable GNW Shareholder(s) holding Common Shares shall be entitled to designate a number of persons to be nominated for election as directors equal to 5/9 of the total number of directors (rounded to the nearest whole number) comprising the Board;

(ii) for so long as Genworth Financial beneficially owns less than fifty percent (50%) but not less than forty percent (40%) of the outstanding Common Shares, the Applicable GNW Shareholder(s) holding Common Shares shall be entitled to designate a number of persons to be nominated for election as directors equal to 4/9 of the total number of directors (rounded to the nearest whole number) comprising the Board;

(iii) for so long as Genworth Financial beneficially owns less than forty percent (40%) but not less than thirty percent (30%) of the outstanding Common Shares, the Applicable GNW Shareholder(s) holding Common Shares shall be entitled to designate a number of persons to be nominated for election as directors equal to 3/9 of the total number of directors (rounded to the nearest whole number) comprising the Board;

 

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(iv) for so long as Genworth Financial beneficially owns less than thirty percent (30%) but not less than twenty percent (20%) of the outstanding Common Shares, the Applicable GNW Shareholder(s) holding Common Shares shall be entitled to designate a number of persons to be nominated for election as directors equal to 2/9 of the total number of directors (rounded to the nearest whole number) comprising the Board; and

(v) for so long as Genworth Financial beneficially owns less than twenty percent (20%) but not less than ten percent (10%) of the outstanding Common Shares, the Applicable GNW Shareholder(s) holding Common Shares shall be entitled to designate a number of persons to be nominated for election as directors equal to 1/9 of the total number of directors (rounded to the nearest whole number) comprising the Board.

(b) Genworth Canada shall (i) include the director nominees designated under this Section 2.04 in the management information circular and form of proxy relating to the applicable shareholder meeting as nominees of management, and (ii) solicit proxies from shareholders of Genworth Canada in favour of the election of such nominees.

SECTION 2.05 Board Committees . For so long as Genworth Financial beneficially owns not less than thirty-three and one-third percent (33 1/3%) of the outstanding Common Shares, Genworth Financial shall have the right to designate one member of each committee established by the Board.

ARTICLE III

PRE-EMPTIVE RIGHTS OF GENWORTH FINANCIAL

SECTION 3.01 Definitions .

In this Article III , the following terms shall have the following meanings:

(a) “ Convertible Security ” means a security of Genworth Canada that is convertible or exercisable into or exchangeable for Common Share(s), but excludes (i) an Incentive Security, (ii) a Special Option, (iii) a Right, and (iv) the Pre-Emptive Right;

(b) “ Exercise Notice ” has the meaning set forth in Section 3.03(b) ;

(c) “ Incentive Security ” means an option or other security of Genworth Canada convertible or exercisable into or exchangeable for Common Share(s) granted pursuant to any Share Incentive Plan;

(d) “ Original Percentage ” means the percentage of outstanding Common Shares beneficially owned by Genworth Financial immediately prior to a Triggering Event;

(e) “ Pre-Emptive Right ” means the right of Genworth Financial to purchase the Pre-Emptive Right Securities from Genworth Canada in accordance with this Article III ;

(f) “ Pre-Emptive Right Closing ” means the closing from time to time of the issue of the Pre-Emptive Right Securities under the Pre-Emptive Right;

 

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(g) “ Pre-Emptive Right Securities ” has the meaning set forth in Section 3.02(a);

(h) “ Purchase Price ” means the purchase price for the Pre-Emptive Right Securities referred to in Section 3.02(c) ;

(i) “ Right ” means a right granted by Genworth Canada to holders of Common Shares to purchase additional Common Shares and/or other securities of Genworth Canada;

(j) “ Special Option ” means an option or other security granted by Genworth Canada which is convertible or exercisable into or exchangeable for Common Share(s) granted by Genworth Canada for nominal or indeterminate consideration, and includes an over-allotment option or similar option granted to one or more underwriters in connection with a public offering of securities of Genworth Canada, but excludes (i) an Incentive Security, (ii) a Right, and (iii) the Pre-Emptive Right;

(k) “ Triggering Event ” means the issue of Common Shares and/or Convertible Securities by Genworth Canada and, for greater certainty, includes any issue of Common Shares on the exercise, conversion or exchange of any Special Option, but excludes any issue of Common Shares:

(i) on the exercise, conversion or exchange of any previously issued Convertible Securities;

(ii) on the exercise, conversion or exchange of any Incentive Security;

(iii) pursuant to any Share Incentive Plan;

(iv) on the exercise of any Right;

(v) on any exercise of the Pre-Emptive Right; or

(vi) pursuant to any stock dividend, stock split, consolidation, amalgamation, share reclassification, reorganization, merger involving Genworth Canada or other similar event that affects all holdings of Common Shares in the same manner, on a per share basis;

(l) “ Triggering Event Closing Date ” means the date on which a Triggering Event occurs;

(m) “ Triggering Event Notice ” has the meaning set forth in Section 3.03(a) ; and

(n) “ Triggering Event Price ” means, in respect of an issue of Common Shares and/or Convertible Securities by Genworth Canada pursuant to a Triggering Event, the purchase price per Common Share and/or Convertible Security to be paid for such Common Shares and/or Convertible Securities and means, in respect of an issue of Common Shares and/or Convertible

 

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Securities for consideration other than money, the price per Common Share and/or Convertible Security, as determined by the Board acting in good faith, that would have been received by Genworth Canada had such Common Shares and/or Convertible Securities been issued for money.

SECTION 3.02 General Provisions .

(a) Grant of Pre-Emptive Right . Subject to the provisions of this Agreement and Applicable Law, Genworth Canada hereby grants to Genworth Financial the right, exercisable for so long as Genworth Financial beneficially owns not less than thirty-three and one-third percent (33 1/3%) of the outstanding Common Shares, to purchase on the Triggering Event Closing Date directly, or indirectly by another member of the Genworth Financial Group, from time to time upon the occurrence of any Triggering Event up to such number of Common Shares and/or Convertible Securities issuable in connection with the Triggering Event on the same terms and conditions as those issuable in connection with the Triggering Event (the “ Pre-Emptive Right Securities ”) which will, when added to the Common Shares beneficially owned by Genworth Financial immediately prior to the Triggering Event, result in Genworth Financial beneficially owning the Original Percentage of outstanding Common Shares after giving effect to the issue of all Common Shares to be issued or issuable (pursuant to the exercise, conversion or exchange of Convertible Securities) in connection with the Triggering Event. In the event that a Triggering Event consists of an issue of both Common Shares and Convertible Securities, the Pre-Emptive Right Securities shall be allocated to Genworth Financial between Common Shares and Convertible Securities on the same pro rata basis as are allocated to subscribers of the Triggering Event.

(b) Pre-Emptive Right Not Applicable to the Initial Public Offering . The Pre-Emptive Right shall not be exercisable by Genworth Financial with respect to the Initial Public Offering.

(c) Purchase Price . In respect of each exercise of the Pre-Emptive Right, the purchase price per Pre-Emptive Right Security (the “ Purchase Price ”) shall be equal to the greater of the Triggering Event Price and such price as may be prescribed by any securities regulator or stock exchange having jurisdiction over the issue of the Pre-Emptive Right Securities to Genworth Financial or a member of the Genworth Financial Group hereunder.

(d) Stock Exchange and Other Consents . Each of the Parties shall use all reasonable commercial efforts to take, or cause to be taken, all actions, and to do, or cause to be done as promptly as practicable, all things necessary, proper or advisable under Applicable Law to consummate and make effective the transactions contemplated by this Article III, including obtaining any governmental, regulatory, stock exchange or other consents, transfers, orders, qualifications, waivers, authorizations, exemptions and approvals, providing all notices and making all registrations, filings and applications necessary or desirable for the consummation of the transactions contemplated by this Article III, including any filings with governmental or regulatory agencies. Genworth Canada shall forthwith notify Genworth Financial if as a condition of obtaining any applicable regulatory approvals, including securities regulatory and stock exchange approval, the Purchase Price must be an amount greater than the Triggering Event Price and shall keep Genworth Financial fully informed and allow Genworth Financial to participate in any communications with such stock exchange regarding the exercise of the Pre-Emptive Right.

 

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(e) Expenses . Except as otherwise specifically provided in this Article III, each Party shall bear its own expenses incurred in connection with this Article III and in connection with all obligations required to be performed by each of them under this Article III.

(f) Publicity . The Parties shall, subject to their respective legal obligations and Applicable Law, consult with each other, and use reasonable efforts to agree upon the text of any written press release relating to this Article III or the transactions contemplated hereby, before issuing any such press release.

(g) Pre-Emptive Right Not Exercisable if Registration Rights Exercised . Genworth Financial shall not be entitled to exercise the Pre-Emptive Right in respect of any offering in which Genworth Financial exercises its rights under Section 2.2 of the Registration Rights Agreement.

SECTION 3.03 Exercise of Pre-Emptive Right .

(a) Genworth Canada shall give Genworth Financial notice (a “ Triggering Event Notice ”) as soon as practicable (i) following a determination by Genworth Canada to effect a Triggering Event other than a Triggering Event that arises as a result of the exercise of a Special Option and (ii) following the exercise of a Special Option. Each Triggering Event Notice shall include the number of Pre-Emptive Right Securities which Genworth Financial shall be entitled to purchase as a result of the applicable Triggering Event, a calculation demonstrating how such number was determined, the Triggering Event Price and the anticipated Triggering Event Closing Date and the terms and conditions of the Pre-Emptive Right Securities, if other than Common Shares. Genworth Canada shall also give Genworth Financial notice as soon as practicable following the grant of a Special Option.

(b) Subject to the provisions hereof, the Pre-Emptive Right shall, in each instance, be exercisable by Genworth Financial at any time during a period of five (5) Business Days following receipt in accordance with Section 3.03(a) of a Triggering Event Notice, provided that Genworth Financial shall make its determination as to whether to exercise the Pre-Emptive Right in respect of such Triggering Event as soon as practicable and shall promptly deliver an irrevocable notice (an “ Exercise Notice ”) in writing addressed to Genworth Canada confirming that it will exercise the Pre-Emptive Right in respect of such Triggering Event, specifying the number of Pre-Emptive Right Securities that it will purcha