Exhibit 1.1
EXECUTION COPY
38,000,000 Shares
GENWORTH FINANCIAL,
INC.
CLASS A COMMON STOCK, PAR VALUE
$0.001 PER SHARE
UNDERWRITING
AGREEMENT
December 1, 2005
December 1, 2005
Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
GE Financial Assurance Holdings,
Inc., a Delaware corporation (the “ Selling
Stockholder ”), as the sole selling stockholder, proposes
to sell to you (the “ Underwriter ”) an
aggregate of 38,000,000 shares of the Class A common stock,
par value $0.001 per share (the “ Firm Shares ”)
of Genworth Financial, Inc., a Delaware corporation (the “
Company ”). The Selling Stockholder also proposes to
sell to the Underwriter not more than an additional 2,850,000
shares of the Class A common stock, par value $0.001 per share
of the Company (the “ Additional Shares ”), if
and to the extent that the Underwriter shall have determined to
exercise the right to purchase such shares of Class A common
stock granted to the Underwriter in Section 3 hereof. The Firm
Shares and the Additional Shares are collectively referred to as
the “ Shares .” The shares of Class A
common stock, par value $0.001 per share, and Class B common stock,
par value $0.001 per share, of the Company (including the Shares)
are hereinafter referred to as the “ Common Stock
.”
The Company has filed with the
Securities and Exchange Commission (the “ Commission
”) a registration statement, including a prospectus on Form
S-3 (File No. 333-127472), relating to the Shares, to be
issued from time to time by the Company. The registration statement
as amended to the date of this Agreement is hereinafter referred to
as the “ Registration Statement, ” and the
related prospectus dated September 12, 2005 covering the
Shares in the form first used to confirm sales of the Shares (or in
the form first made available to the Underwriter by the Company to
meet requests of Purchasers pursuant to Rule 173 under the
Securities Act of 1933, as amended (the “ Securities
Act ”)), is hereinafter referred to as the “
Base Prospectus .” The Base Prospectus, as
supplemented by the prospectus supplement specifically relating to
the Shares in the form first used to confirm sales of the Shares
(or in the form first made available to the Underwriter by the
Company to meet requests of Purchasers pursuant to Rule 173 under
the Securities Act) is hereinafter referred to as the “
Prospectus ,” and the term “ preliminary
prospectus ” means the Base Prospectus, as supplemented
by the Preliminary Prospectus Supplement dated December 1,
2005.
For purposes of this Agreement,
“ free writing prospectus ” has the meaning set
forth in Rule 405 under the Securities Act and “ Time of
Sale Prospectus ” means the Base Prospectus and the
preliminary prospectus, together with the pricing information set
forth in Schedule I hereto. As used herein, the terms
“Registration Statement,” “preliminary
prospectus,” “Time of Sale Prospectus” and
Prospectus shall include the documents, if any, incorporated by
reference therein. The terms “ supplement ,”
“ amendment ,” and “ amend ”
as used herein with respect to the Registration Statement, the Base
Prospectus, the Time of Sale Prospectus, the preliminary prospectus
or any free writing prospectus shall include all documents
subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), that are incorporated by reference
therein.
1. Representations and Warranties
of the Company . The Company represents and warrants to and
agrees with the Underwriter, as of the date hereof,
that:
(a) The Registration Statement has
become effective; no stop order suspending the effectiveness of the
Registration Statement is in effect, and no proceedings for such
purpose are pending before or, to the Company’s knowledge,
threatened by the Commission.
(b) (i) Each document, if any,
filed or to be filed pursuant to the Exchange Act and incorporated
by reference in the Prospectus complied or will comply when so
filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder,
(ii) the Registration Statement, when it became effective, did
not contain, and, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) the
Registration Statement, the preliminary prospectus and the
Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder,
(iv) the Time of Sale Prospectus does not, and at the time of
each sale of the Shares in connection with the offering at or prior
to the Closing Date (as defined in Section 5), the Time of
Sale Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (v) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were
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made, not misleading, except that
the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement,
the Time of Sale Prospectus or the Prospectus based upon
information relating to the Underwriter furnished to the Company in
writing by the Underwriter expressly for use therein.
(c) The Company is a well known
seasoned issuer (as defined in Rule 405 under the Securities Act)
and is not an “ineligible issuer” in connection with
the offering pursuant to Rules 164, 405 and 433 under the
Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act
has been, or will be, filed with the Commission in accordance with
the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing
prospectus that the Company has filed, or is required to file,
pursuant to Rule 433(d) under the Securities Act or that was
prepared by or on behalf of or used or referred to by the Company
complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Except for the free
writing prospectuses, if any, identified in Schedule I hereto, and
electronic road shows, if any, furnished to you before first use,
the Company has not prepared, used or referred to, and will not,
without your prior consent, prepare, use or refer to, any free
writing prospectus.
(d) The Company has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the State of Delaware, has the corporate power
and authority to own its property and to conduct its business as
described in the Time of Sale Prospectus and to enter into and
perform its obligations under this Agreement, and is duly qualified
to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not, singly
or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(e) Each subsidiary of the Company
set forth on Schedule II hereto (each, a “ Designated
Subsidiary ” and, collectively, the “ Designated
Subsidiaries ”) has been duly incorporated or formed, is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, has the full power
and authority to own its property and to conduct its business as
currently conducted and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be
so
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qualified or be in good standing
would not, singly or in the aggregate, have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all
of the issued shares of capital stock of each Designated Subsidiary
owned directly or indirectly by the Company have been duly and
validly authorized and issued, are fully paid and non-assessable
and are owned directly or indirectly by the Company, free and clear
of all liens, encumbrances, equities or claims, except as described
in the Prospectus; for purposes of this Agreement, Schedule II
hereto includes each subsidiary of the Company that is a
“significant subsidiary” (as such term is defined in
Rule 1-02 of Regulation S-X promulgated by the
Commission).
(f) This Agreement has been duly
authorized, executed and delivered by the Company.
(g) The authorized capital stock of
the Company conforms as to legal matters to the description thereof
contained in each of the Time of Sale Prospectus and the
Prospectus.
(h) The outstanding shares of Common
Stock (including the Shares to be sold by the Selling Stockholder)
have been duly authorized and are validly issued, fully paid and
non-assessable.
(i) (A) The execution and
delivery by the Company of, and the performance by the Company of
its obligations under, this Agreement will not contravene
(i) any provision of applicable law or the certificate of
incorporation or by-laws of the Company, (ii) any agreement or
other instrument binding upon the Company or any of its
subsidiaries (except to the extent such contravention would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole), or (iii) any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and
(B) no consent, approval, authorization or order of, or
qualification with, any U.S. federal, state or local governmental
body or agency is required for the performance by the Company of
its obligations under this Agreement, except such as has been
obtained and as may be required to be obtained by the Company under
the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares.
(j) Neither the Company nor any of
its Designated Subsidiaries is in violation of its certificate of
incorporation, by-laws or other constituent documents; neither the
Company nor any of its subsidiaries is in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any agreement or other
instrument binding upon the Company or any of its subsidiaries,
except to the extent such default would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
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(k) There has not occurred any
material adverse change in the financial condition or in the
earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of
Sale Prospectus.
(l) There are no legal or
governmental proceedings pending or, to the knowledge of the
Company, threatened to which the Company or any of its subsidiaries
is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that are required to be described in
the Registration Statement or the Prospectus and are not so
described therein and there are no statutes, regulations, contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement that are not described or filed as
required. The Time of Sale Prospectus contains in all material
respects the same description of the foregoing matters contained in
the Prospectus.
(m) The preliminary prospectus filed
as part of the registration statement as originally filed or as
part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects
with the Securities Act and the applicable rules and regulations of
the Commission thereunder.
(n) The Company is not, and after
giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus
will not be, required to register as an “investment
company” as such term is defined in the Investment Company
Act of 1940, as amended.
(o) Except as described in the Time
of Sale Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities
of the Company or to require the Company to include such securities
with the Shares registered pursuant to the Registration
Statement.
(p) Subsequent to the date as of
which information is given in the Time of Sale Prospectus,
(i) the Company and its subsidiaries have not incurred any
material liability or obligation, direct or contingent, or entered
into any material transaction not in the ordinary course of
business; (ii) the Company has not purchased any of its
outstanding capital stock, or
5
declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock other
than ordinary and customary dividends; and (iii) there has not
been any material change in the capital stock, short-term debt or
long-term debt of the Company and its subsidiaries, except in each
case as described or otherwise contemplated in the Time of Sale
Prospectus.
(q) The Company and its Designated
Subsidiaries have good and marketable title in fee simple to all
real property and good and marketable title to all personal
property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Time
of Sale Prospectus or would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole; and any real property and buildings held under lease by
the Company and its Designated Subsidiaries are held by them under
valid, subsisting and enforceable leases except such as are
described in the Time of Sale Prospectus or would not, singly or in
the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(r) The Company and its Designated
Subsidiaries own or possess, or can acquire on reasonable terms,
all material patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
currently employed by them in connection with the business now
operated by them, except where the failure to so own, possess or be
able to acquire on reasonable terms would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and neither the Company nor any of
its Designated Subsidiaries has received any notice of infringement
of or conflict with asserted rights of others with respect to any
of the foregoing which, singly or in the aggregate, would have a
material adverse effect on the Company and its subsidiaries, taken
as a whole.
(s) No labor dispute with the
employees of the Company or any of its subsidiaries exists, except
as described in the Time of Sale Prospectus, or, to the knowledge
of the Company, is imminent, except where such dispute would not,
singly or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(t) Each Designated Subsidiary of
the Company that is engaged in the business of insurance or
reinsurance (each an “ Insurance Subsidiary ”,
collectively the “ Insurance Subsidiaries ”) is
licensed or authorized to conduct an insurance or reinsurance
business, as the case may
6
be, under the insurance statutes of
each jurisdiction in which the conduct of its business requires
such licensing or authorization, except for such jurisdictions in
which the failure of the Insurance Subsidiary to be so licensed or
authorized would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole. The Insurance Subsidiaries have made all required filings
under applicable insurance statutes in each jurisdiction where such
filings are required, except for such filings the failure of which
to make would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a
whole. Each of the Insurance Subsidiaries has all other necessary
authorizations, approvals, orders, consents, certificates, permits,
registrations and qualifications (“ Authorizations
”), of and from all insurance regulatory authorities
necessary to conduct their respective existing businesses as
described in the Time of Sale Prospectus, except where the failure
to have such Authorizations would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole, and no Insurance Subsidiary has received any
notification from any insurance regulatory authority to the effect
that any additional Authorizations are needed to be obtained by any
Insurance Subsidiary in any case where it could reasonably be
expected that the failure to obtain such additional Authorizations
or the limiting of the writing of such business would have a
material adverse effect on the Company and its subsidiaries, taken
as a whole, and no insurance regulatory authority having
jurisdiction over any Insurance Subsidiary has issued any order or
decree impairing, restricting or prohibiting (i) the payment
of dividends by any Insurance Subsidiary to its parent, other than
those restrictions applicable to insurance or reinsurance companies
under such jurisdiction generally, or (ii) the continuation of
the business of the Company or any of the Insurance Subsidiaries in
all material respects as presently conducted, in each case except
where such orders or decrees would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(u) Except as described in the Time
of Sale Prospectus, (i) all ceded reinsurance and
retrocessional treaties, contracts, agreements and arrangements
(“ Reinsurance Contracts ”) to which the Company
or any Insurance Subsidiary is a party and as to which any of them
reported recoverables, premiums due or other amounts in its most
recent statutory financial statements are in full force and effect,
except where the failure of such Reinsurance Contracts to be in
full force and effect would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken
as a whole, and (ii) neither the Company nor any Insurance
Subsidiary has received any notice from any other party to any
Reinsurance Contract that such other party intends not to perform
such
7
Reinsurance Contract in any material
respect, and the Company has no knowledge that any of the other
parties to such Reinsurance Contracts will be unable to perform its
obligations thereunder in any material respect, except where
(A) the Company or the Insurance Subsidiary has established
reserves in its financial statements which it deems adequate for
potential uncollectible reinsurance or (B) such nonperformance
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(v) Except as described in the Time
of Sale Prospectus, the Company has no knowledge of any threatened
or pending downgrading of the Company’s or any of its
subsidiaries’ claims-paying ability rating or financial
strength rating by A.M. Best Company, Inc., Standard &
Poor’s Rating Group, Moody’s Investor Service, Inc.,
Fitch Ratings, Ltd. or any other “nationally recognized
statistical rating organizations,” as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act, which
currently has publicly released a rating of the claims-paying
ability or financial strength of the Company or any
subsidiary.
(w) The Company and each of its
Designated Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
(x) The Shares have been authorized
for listing on the New York Stock Exchange (the “ NYSE
”) and have been registered under the Securities Exchange Act
of 1934, as amended (the “ Exchange Act
”).
(y) Except as described in the
Registration Statement or the Time of Sale Prospectus, the Company
has not sold, issued or distributed any shares of Common Stock
during the six-month period preceding the date hereof, including
any sales pursuant to Rule 144A under, or Regulation D or S of, the
Securities Act, other than shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee
compensation plans or pursuant to outstanding options, rights or
warrants.
(z) The statements set forth in
(i) the Time of Sale Prospectus under the captions
“Description of Capital Stock”, insofar as they purport
to
8
constitute a summary of the terms of
the Common Stock, and “Certain U.S. Federal Tax
Considerations for Non-U.S. Holders,” (ii) the
Company’s Annual Report on Form 10-K for the year ended
December 31, 2004 under the captions “Item 1. Business
– Regulation” and “Item 3. Legal
Proceedings,” (iii) the Company’s Quarterly
Reports on Form 10-Q for the quarterly periods ended March 31,
2005, June 30, 2005 and September 30, 2005 under the
captions “Item 1. Legal Proceedings,” (iv) the
Company’s Proxy Statement for the Company’s 2005 annual
meeting of Stockholders under the caption “Certain
Relationships and Transactions” and (v) set forth in the
Registration Statement in Item 15, insofar as they purport to
describe the provisions of the laws and documents referred to
therein, fairly summarize in all material respects the matters
described therein.
(aa) Neither the Company nor any of
its affiliates has taken or will take, directly or indirectly, any
action which is designed to or which has constituted or which might
have been expected to cause or result in stabilization or
manipulation of the price of any security of the Company in
connection with the offering of the Shares.
(bb) KPMG LLP, whose report is
included in the Prospectus, is an independent registered public
accounting firm with respect to the Company and its consolidated
subsidiaries within the meaning of the Securities Act and the rules
and regulations adopted by the Commission thereunder. The financial
statements of the Company and its consolidated subsidiaries
(including the related notes and supporting schedules) included in
the Registration Statement, the Time of Sale Prospectus and the
Prospectus present fairly in all material respects the financial
condition, results of operations and cash flows of the entities
purported to be shown thereby at the dates and for the periods
indicated and have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent
basis throughout the periods indicated and conform in all material
respects with the rules and regulations adopted by the Commission
under the Securities Act; and the supporting schedules included in
the Registration Statement present fairly in all materials respects
the information required to be stated therein. The pro forma
financial information and the related notes thereto included in the
Registration Statement, the Time of Sale Prospectus and the
Prospectus has been prepared in accordance with the applicable
requirements of the Securities Act and the Exchange Act, as
applicable, and the assumptions underlying such pro forma financial
information are reasonable.
2. Representations and Warranties
of the Selling Stockholder. The Selling Stockholder represents
and warrants to and agrees with the Underwriter that:
9
(a) The Selling Stockholder has been
duly incorporated, is validly existing as a corporation in good
standing under the laws of the State of Delaware and has the
corporate power and authority to enter into and perform its
obligations under this Agreement.
(b) This Agreement has been duly
authorized, executed and delivered by or on behalf of the Selling
Stockholder.
(c) The execution and delivery by
the Selling Stockholder of, and the performance by the Selling
Stockholder of its obligations under, this Agreement will not
contravene in any material respect any provision of applicable law
or the certificate of incorporation or by-laws of the Selling
Stockholder or any agreement or other instrument binding upon the
Selling Stockholder that is material to the Selling Stockholder or
any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Selling Stockholder, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Selling Stockholder of its obligations under
this Agreement, except such as has been obtained and as may be
required by rules of the National Association of Securities
Dealers, Inc., or by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the
Shares.
(d) The Selling Stockholder has, and
on the Closing Date will have, valid title to, or a valid
“security entitlement” within the meaning of
Section 8-501 of the New York Uniform Commercial Code (the
“ UCC ”) in respect of, the Shares to be sold by
the Selling Stockholder free and clear of all security interests,
claims, liens, equities or other encumbrances and the legal right
and power, and all authorization and approval required by law, to
enter into this Agreement and to sell, transfer and deliver the
Shares or a security entitlement in respect of the
Shares.
(e) Upon payment for the Shares to
be sold by the Selling Stockholder pursuant to this Agreement,
delivery of such Shares, as directed by the Underwriter, to
Cede & Co. (“ Cede ”) or such other
nominee as may be designated by the Depository Trust Company
(“ DTC ”), registration of such Shares in the
name of Cede or such nominee as the crediting of such Shares on the
books of DTC to securities accounts of the Underwriter (assuming
that neither DTC nor the Underwriter has notice of any adverse
claim (within the meaning of Section 8-105 of the UCC to such
Shares)), (A) DTC shall be a “protected purchaser”
of such Shares within the meaning of Section 8-303 of the UCC,
(B) under Section 8-501 of the UCC, the Underwriter will
acquire a valid security entitlement in respect of such Shares and
(C) no action based on any “adverse claim” (within
the
10
meaning of Section 8-102 of the
UCC) to such Shares may be asserted against the Underwriter with
respect to such security entitlement; for purposes of this
representation, the Selling Stockholder may assume that when such
payment, delivery and crediting occur, (x) such Shares will
have been registered in the name of Cede or another nominee
designated by DTC, in each case on the Company’s share
registry in accordance with its certificate of incorporation,
by-laws and applicable law, (y) DTC will be registered as a
“clearing corporation” within the meaning of
Section 8-102 of the UCC and (z) appropriate entries to
the accounts of the Underwriter on the records of DTC will have
been made pursuant to the UCC.
(f) The Selling Stockholder has not
taken and will not take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably
be expected to cause or result in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale
or resale of the Shares.
(g) (i) The Registration
Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, will not, as of the Closing
Date, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) the Time
of Sale Prospectus and the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain, as of the
Closing Date, any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading; provided that the representations and warranties set
forth in this paragraph 2(g) are limited to statements or omissions
based upon information relating to the Selling Stockholder and
General Electric Company furnished to the Company in writing by the
Selling Stockholder expressly for use in the Registration
Statement, the Time of Sale Prospectus and the Prospectus or any
amendments or supplements thereto (such information collectively,
the “ Selling Stockholder Information
”).
3. Agreements to Sell and
Purchase. The Selling Stockholder hereby agrees to sell to the
Underwriter, and the Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase from the Selling
Stockholder the Firm Shares at $34.66 a share (the “
Purchase Price ”).
On the basis of the representations
and warranties contained in this Agreement, and subject to its
terms and conditions, the Selling Stockholder agrees to sell to the
Underwriter the Additional Shares, and the Underwriter has the
right to purchase up to an aggregate of 2,850,000 Additional Shares
at the Purchase
11
Price. You may exercise this right in whole or
from time to time in part by giving written notice not later than
30 days after the date of this Agreement. Any exercise notice shall
specify the number of Additional Shares to be purchased and the
date on which such shares are to be purchased (each such date, an
“ Option Closing Date ”). Each Option Closing
Date must be at least one business day after the written notice is
given and may not be earlier than the closing date for the Firm
Shares nor later than five business days after the date of such
notice or such other date as shall be agreed between the Selling
Stockholder and you. Additional Shares may be purchased as provided
in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm
Shares.
Each of the Company and the Selling
Stockholder hereby covenants with the Underwriter that it will not
during the period ending 30 days after the date of the Prospectus,
without the prior written consent of Morgan Stanley & Co.
Incorporated (i) offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock; (ii) file or
cause to be filed any registration statement with the Securities
and Exchange Commission relating to the offering of any shares of
Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock; or (iii) enter into any swap or
other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (i), (ii) or
(iii) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise.
The restrictions contained in the
preceding paragraph shall not apply to (A) the shares of
Common Stock to be sold pursuant to this Agreement, (B) the
shares of Common Stock issuable in connection with the Treasury
Units or Corporate Units (as defined in the Prospectus) or the
filing of any registration statement relating thereto to the extent
required under the terms of the Equity Units (as defined in the
Prospectus), (C) the grant by the Company of stock options,
restricted stock or other awards pursuant to the Company’s
benefit plans as described in the Prospectus; provided that
such options, restricted stock or awards do not become exercisable
or vest during such 30-day period, (D) the issuance by the
Company of shares of Common Stock upon the exercise of an option or
warrant, the lapse of restrictions on restricted stock units, the
settlement of stock appreciation rights or the conversion of a
security outstanding on or prior to the date hereof and which is
described in the Prospectus of which the Underwriter has been
advised in writing, (E) issuances by the Company of shares of
Common Stock in connection with the acquisition of another
corporation or entity or the acquisition of the assets or
properties of any such corporation or
12
entity, so long as (i) the aggregate amount
of such issuances does not exceed $500 million and (ii) each
of the recipients of the Common Stock agrees in writing prior to
the consummation of any such transaction to be bound by the
provisions of the preceding paragraph for the remainder of such
30-day period as if such recipients were the Selling Stockholder,
(F) the private transfer by the Selling Stockholder of
restricted shares of Common Stock, so long as each of the
recipients of the Common Stock agrees in writing prior to the
consummation of any such transaction to be bound by the provisions
of the preceding paragraph for the remainder of such 30-day period
as if such recipients were the Selling Stockholder,
(G) transactions by any person other than the Company relating
to shares of Common Stock or other securities acquired in open
market transactions after the completion of the offering of the
Shares, (H) the sale of shares by the Selling Stockholder to
the Company, (I) the filing of a registration statement on
Form S-8 relating to the issuance of stock options, restricted
stock and other awards pursuant to the Company’s employee
benefit plans as described in the Prospectus and (J) the
filing of a registration statement on Form S-3 relating to the
issuance of Class A Common Stock pursuant to a dividend
reinvestment plan and the issuance of shares of Class A Common
Stock thereunder. The Selling Stockholder also agrees and consents
to the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of the Selling
Stockholder’s shares of Common Stock except in compliance
with the foregoing restrictions.
4. Terms of Public Offering .
The Company and the Selling Stockholder are advised by the
Underwriter that the Underwriter proposes to make a public offering
of the Shares as soon after this Agreement has become effective as
in the Underwriter’s judgment is advisable. The Company and
the Selling Stockholder are further advised by the Underwriter that
the Shares are to be offered to the public in transactions on the
NYSE, in the over-the-counter market or through negotiated
transactions at market prices or at negotiated prices.
5. Payment and Delivery.
Payment for the Shares shall be made to the Selling Stockholder in
Federal or other funds immediately available in New York City
against delivery of such Shares for the account of the Underwriter
at 10:00 a.m., New York City time, on December 7, 2005, or at
such other time on the same or such other date, not later than
December 14, 2005, as shall be agreed in writing by the
parties. The time and date of such payment are hereinafter referred
to as the “ Closing Date .”
Payment for any Additional Shares
shall be made to the Selling Stockholder in Federal or other funds
immediately available in New York City against delivery of such
Additional Shares for the account of the Underwriter at 10:00 a.m.,
New York City time, on the Option Closing Date.
13
The Firm Shares and Additional
Shares shall be registered in such names and in such denominations
as you shall request in writing not later than one full business
day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or an Option Closing
Date, as the case may be, with any transfer taxes payable in
connection with the transfer of the Shares to the Underwriter duly
paid, against payment of the Purchase Price therefor.
6. Conditions to the
Underwriter’s Obligations . The obligations of the
Underwriter are subject to the following conditions:
(a) Subsequent to the execution and
delivery of this Agreement and prior to the Closing
Date:
(i) there shall not have occurred
any downgrading, nor shall any notice have been given of any
intended or potential downgrading or of any review for a possible
change that does not indicate the direction of the possible change,
in the rating accorded any of the Company’s securities or the
Company’s financial strength or claims-paying ability by any
“nationally recognized statistical rating
organization,” as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred
any material adverse change in the financial condition or in the
earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Time of
Sale Prospectus.
(b) The Underwriter shall have
received on the Closing Date a certificate, dated the Closing Date
and signed by an executive officer of the Company, to the effect
set forth in Section 6(a)(i) above and to the effect that the
representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date.
The officer signing and delivering
such certificate may rely upon the best of his or her knowledge as
to proceedings threatened.
(c) The Underwriter shall have
received on the Closing Date a certificate, dated the Closing Date
and signed by an executive officer of the Selling Stockholder, to
the effect that the representations and warranties of the Selling
Stockholder contained in this Agreement are true and correct
as
14
of the Closing Date and that the
Selling Stockholder has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date.
The officer signing and delivering
such certificate may rely upon the best of his or her knowledge as
to proceedings threatened.
(d) The Underwriter shall have
received on the Closing Date an opinion and letter of Weil,
Gotshal & Manges LLP, outside U.S. counsel for the
Company, dated the Closing Date, as set forth in Exhibit
B.
(e) The Underwriter shall have
received on the Closing Date an opinion of LeBoeuf, Lamb,
Greene & MacRae, L.L.P., special U.S. regulatory counsel
for the Company, dated the Closing Date, as set
