Document:

Amendment No. 1 Stop Loss Reinsurance Agreement

 Exhibit 10(20) 

AMENDMENT NUMBER ONE 

TO 
 STOP LOSS
REINSURANCE AGREEMENT 
 This Amendment Number One (“Amendment Number One”) to the Stop Loss
Reinsurance Agreement between Allstate Life Insurance Company of New York (“Allstate Life of New York”) and Allstate Life Insurance Company (“Allstate,” and together with Allstate Life of New York, the
“Parties”) effective as of December 31, 2001 (the “Stop Loss Agreement”) is entered into by the Parties as of this 31st day of December, 2019 (the “Amendment Date”). 

WHEREAS, the Parties entered into the Stop Loss Agreement whereby Allstate Life of New York cedes, and Allstate
assumes, certain liabilities of Allstate of New York, as set forth in the Stop Loss Agreement; and 
 WHEREAS, the
Parties wish to enter into this Amendment Number One to add provisions whereby Allstate will provide security for its assumed obligations under the Stop Loss Agreement to provide continuing credit for reinsurance to Allstate Life of New York; and

 WHEREAS, the Parties have entered into the additional reinsurance agreements set forth in Schedule I hereto,
whereby Allstate Life of New York cedes, and Allstate assumes, certain liabilities of Allstate Life of New York (the “Additional Reinsurance Agreements”); 

NOW THEREFORE, the Parties agree to amend the Stop Loss Agreement as follows: 

1.        Definitions. Article I is hereby amended to add the
following new definitions. 
 “Aggregate Required Amount” shall mean, as of the last day of each calendar
quarter, the sum of the Required Amount plus Required Amount as defined in each of the Additional Reinsurance Agreements. 

“Letter of Credit” shall have the meaning set forth in Article XIV, Paragraph 1. 

“Quarterly Report” means the accounting report specified in Article V, Paragraph 3. 

“Required Amount” shall mean, as of the last day of each calendar quarter, an amount of assets necessary to
meet the projected cash flows of this Agreement pursuant to New York Regulation 126 including the Special Consideration Letters issued by the New York State Department of Financial Services (the “DFS”); provided that, as to the first three
quarters of each year, the Required Amount shall be the amount determined as of the previous December 31, unless Allstate Life of New York otherwise calculates such amount as of the last day of the previous quarter. 

“Settlement Dates” means the settlement dates specified in Article V, Paragraph 4. 

“Trust Account” shall have the meaning set forth in Article XIV, Paragraph 1. 

 “Trust Account Balance” shall mean, as of a given date, the
aggregate market value of all assets in the Trust Account on such date. 
 “Trust Agreement” shall have
the meaning set forth in Article XIV, Paragraph 3. 
 “Trustee” shall have the meaning set forth in
Article XIV, Paragraph 3. 
 2.        Credit for Reinsurance. Article
XIV is hereby added to read as follows: 
 Article XIV 

STATUTORY FINANCIAL STATEMENT CREDIT 

1.        Statutory Financial Statement Credit.    Allstate
shall take all steps necessary to comply with all applicable laws and regulations so as to permit Allstate Life of New York to obtain full credit for the reinsurance provided by this Agreement on its statutory financial statements in all applicable
jurisdictions, including compliance with 11 NYCRR 125. It is understood and agreed that any term or condition required by any such laws or regulations to be included in this Agreement for Allstate Life of New York to receive statutory financial
statement credit for the reinsurance provided by this Agreement shall be deemed to be incorporated in this Agreement. 
 In
connection therewith, to the extent required for Allstate Life of New York to obtain such full credit for reinsurance, Allstate shall either post a letter of credit (the “Letter of Credit”) or fund a trust account (the
“Trust Account”) for the benefit of Allstate Life of New York in an amount equal to the Aggregate Required Amount. Allstate Life of New York and Allstate agree that the Letter of Credit or Trust Account will be in such form and held
in such manner so as to allow Allstate Life of New York to take statutory financial statement credit pursuant to 11 NYCRR 125 for the reinsurance provided by this Agreement. Notwithstanding the foregoing, Allstate may post a Letter of Credit only
with the prior written approval of the DFS. 
 2.        Letter of
Credit.    If Allstate elects to provide a Letter of Credit, the following provisions shall apply: 

(a)        Allstate shall apply for and provide to Allstate Life of New York a clean,
unconditional, irrevocable Letter of Credit in the Aggregate Required Amount and in favor of Allstate Life of New York as beneficiary, and any successor by operation of law of Allstate Life of New York including, without limitation, any liquidator,
rehabilitator, receiver or conservator. The Letter of Credit shall (i) be issued by a qualified U.S. bank authorized to issue letters of credit under 11 NY CRR 79.1 and shall be presentable and payable at the offices of the issuing bank,
(ii) be issued for a term of at least one (1) year, with an issue and expiration date, (iii) contain an “evergreen clause” that provides at least thirty (30) days’ written notice to Allstate Life of New York prior
to the expiration date for nonrenewal, (iv) contain a statement that it is not subject to any agreement, condition or qualification outside of the Letter of Credit, (v) contain a statement that the obligations of the issuing bank are the
individual obligations of such bank and not contingent upon reimbursement with respect thereto, (vi) be governed by the laws of the state of New York and the 1993 Revision of the Uniform Customs and Practice for Documentary Credits of the
International Chamber of Commerce (Publication 500) and that, in the event of any conflict, the laws of the state of New York will control and (vii) in all other respects shall be in a form that complies with all applicable requirements of
11 NYCRR 79.2. If the issuing bank shall cease to 

  
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meet such requirements during the term of the Letter of Credit, Allstate shall replace such Letter of Credit with a complying one upon the earlier of the stated expiration of the Letter of Credit
or the date fifteen (15) days from the date on which such bank shall cease to meet such requirements. 

(b)         Within thirty (30) days of Allstate’s receipt of the Quarterly
Reports: 
 (i)        if the Aggregate Required Amount exceeds the
then existing balance of the Letter of Credit available as of the Quarterly Report, Allstate shall secure delivery to Allstate Life of New York an amendment of the Letter of Credit increasing the amount of the Letter of Credit available by the
amount of such difference, or 
 (ii)        if the Aggregate
Required Amount is less than the existing balance of the Letter of Credit available as of the Quarterly Report, Allstate Life of New York shall release such excess credit by agreeing to an amendment to the Letter of Credit reducing the amount of the
Letter of Credit available by the amount of such excess credit. 

(c)        Allstate and Allstate Life of New York agree that the Letter of Credit
provided by Allstate pursuant to this Agreement may be drawn upon at any time, notwithstanding any other provisions in this Agreement, and shall be utilized by Allstate Life of New York or any successor by operation of law, including, without
limitation, any liquidator, rehabilitator, receiver or conservator of Allstate Life of New York, for one or more of the following purposes: 

(i)        to reimburse Allstate Life of New York for Allstate’s
share of premiums returned to the holders of the Policies reinsured under this Agreement on account of cancellations of such Policies; 

(ii)        to reimburse Allstate Life of New York for Allstate’s
share of surrenders and benefits or losses paid by Allstate Life of New York under the terms and provisions of the Policies reinsured by this Agreement; 

(iii)        to fund an account with Allstate Life of New York in an
amount at least equal to the deduction, for reinsurance ceded, from Allstate Life of New York’s liabilities for Policies ceded under this Agreement. Such amount shall include, but not be limited to, amounts for Policy reserves, reserves for
claims and losses incurred (including losses incurred but not reported), loss adjustment expenses, and unearned premiums; and 

(iv)        to pay any other amounts Allstate Life of New York claims
are due under this Agreement. 
 All of the foregoing shall be applied without diminution because of insolvency on the part of the Allstate
Life of New York or Allstate. 
 (d)        Allstate Life of New York shall return
any amounts drawn down on the Letter of Credit in excess of the actual amounts required for subsection (c)(i), (ii) and (iii), or in the case of subparagraph (c)(iv), any amounts that are subsequently determined not to be due, and shall credit
Allstate quarterly interest on the amounts drawn on the Letter of Credit and held pursuant to subsection (c)(iii) above at the prime rate of interest. 

  
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 3.        Trust Account. If
Allstate elects to establish a Trust Account, the following provisions shall apply: 

(a)        Allstate shall enter into a trust agreement (the “Trust
Agreement”) and shall establish and fund a Trust Account for the benefit of Allstate Life of New York, in the Aggregate Required Amount. The trustee (“Trustee”) (i) shall be either a member of the Federal Reserve System, or
a New York state-chartered bank or trust company and (ii) shall not be a parent, subsidiary or affiliate of Allstate Life of New York or Allstate. The Trust Account shall be clearly designated as a segregated account on the books, records and
information systems of the Trustee. 
 (b)        Assets deposited in the Trust
Account shall be valued according to their current fair market value, and shall consist only of cash (United States legal tender), certificates of deposit (issued by a United States bank and payable in United States legal tender), and investments of
the types specified in paragraphs (1), (2), (3), (8) and (10) of subsection (a) of section 1404 of the New York Insurance Law, provided that such investments are issued by an institution that is not the parent, subsidiary, or affiliate of
either Allstate Life of New York or Allstate. Amounts in the Trust Account shall be invested at the direction of Allstate (or its designated investment advisor) pursuant to the procedures and investment guidelines set forth in the Trust Agreement.

 (c)        Prior to depositing assets with the Trustee, Allstate shall execute
assignments or endorsements in blank, or transfer legal title to the Trustee of all shares, obligations or any other assets requiring assignments, in order that Allstate Life of New York, or the Trustee upon the direction of Allstate Life of New
York, may whenever necessary negotiate any such assets without consent or signature from Allstate or any other entity. 

(d)        All settlements of account between Allstate Life of New York and Allstate
shall be made in cash or its equivalent. 
 (e)        On the Amendment Date,
Allstate shall deposit assets into the Trust Account in an amount at least equal to the Aggregate Required Amount as projected as of December 31, 2019. 

(f)        If, on any Settlement Date, the Trust Account Balance as of the end of the
quarter corresponding to such Settlement Date is less than the Aggregate Required Amount set forth in the Quarterly Report for such Settlement Date, Allstate shall deposit additional assets into the Trust Account such that the Aggregate Required
Amount set forth in the Quarterly Report for such Settlement Date at such time is less than or equal to the Trust Account Balance. If the Trust Account Balance as of the end of the quarter corresponding to a Settlement Date is greater than the
Aggregate Required Amount set forth in the Quarterly Report for such Settlement Date, Allstate may seek to reduce such excess through withdrawal of assets from the Trust Account in accordance with the provisions of Paragraph (h) below. 

(g)        Allstate and Allstate Life of New York agree that the assets in the Trust
Account, established pursuant to this provision of this Agreement, may be withdrawn by Allstate Life of New York at any time, notwithstanding any other provisions in this Agreement, and shall be used by Allstate Life of New York or its successors in
interest, by operation of law, including any liquidator, rehabilitator, receiver, or conservator of Allstate Life of New York, without 

  
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diminution because of insolvency of Allstate Life of New York or Allstate, only for the following purposes: 

(i)        to reimburse Allstate Life of New York for Allstate’s
share of premiums returned, to the holders of the Policies reinsured under this Agreement on account of cancellations of such Policies; 

(ii)        to reimburse Allstate Life of New York for
Allstate’s share of surrenders and benefits or losses paid by Allstate Life of New York under the terms and provisions of the Policies reinsured by this Agreement; 

(iii)        to fund an account with Allstate Life of New York in an
amount at least equal to the deduction, for reinsurance ceded, from Allstate Life of New York’s liabilities for Policies ceded under this Agreement. Such amount shall include, but not be limited to, amounts for Policy reserves, reserves for
claims and losses incurred (including losses incurred but not reported), loss adjustment expenses, and unearned premiums; and 

(iv)        to pay any other amounts Allstate Life of New York claims
are due under this Agreement. 
 (h)        Allstate has the right to seek approval
from Allstate Life of New York, such approval not to be unreasonably or arbitrarily withheld, to withdraw from the Trust Account all or any part of the trust assets and transfer those assets to Allstate if: 

 

	 	(i)	 Allstate shall, at the time of such withdrawal, replace the withdrawn assets with other qualified assets
having a market value equal to the market value of the withdrawn assets to maintain at all times the deposit in the Aggregate Required Amount; or 

  

	 	(ii)	 after such withdrawal and transfer, the market value of the assets in the Trust Account is no less than
102 percent of the Aggregate Required Amount. 

 Allstate Life of New York shall be the sole judge as
to the application of this Section, but shall not unreasonably nor arbitrarily withhold its approval. 

(i)        Allstate Life of New York shall promptly return (or instruct the Trustee
to return) to Allstate any amount withdrawn in excess of the actual amounts required in subsections (g)(i), (ii) and (iii) above, or in the case of subsection (g)(iv) any amounts that are subsequently determined not to be due. 

(j)        Allstate Life of New York shall credit to Allstate quarterly interest on
the amounts drawn from the Trust Account and held pursuant to subsection (g)(iv) above at the prime rate of interest. 

4.        Additional Reinsurance. This Article XIV shall be without duplication
of the trust funding and withdrawal provisions of the Additional Reinsurance Agreements, the intent of the 

  
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Parties being that Allstate establish and maintain a single trust account to secure its obligations under the Stop Loss Reinsurance Agreement and the Additional Reinsurance Agreements. 

5.        Application of this Article. All of the foregoing provisions of this
Article XIV are to be applied without diminution because of insolvency on the part of either Allstate Life of New York or Allstate. 

3.        Ratified and Confirmed. In all other respects, the Stop Loss
Agreement is hereby ratified and confirmed. 
 4.        Counterparts.
This Amendment Number One may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Delivery of
an executed counterpart of a signature page by facsimile or other means of electronic transmission utilizing reasonable image scan technology shall be as effective as delivery of a manually executed counterpart. 

(The remainder of this page is intentionally left blank) 

  
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 IN WITNESS HEREOF, the Parties have caused this Amendment to be duly executed in
duplicate by their respective officers on the dates shown below. 
 ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK 

 

			
	
	By:/s/ Theresa M. Resnick              
	Name: Theresa M. Resnick
	Title: Vice President and Appointed Actuary

  

			
	ALLSTATE LIFE INSURANCE COMPANY
	
	By:/s/ John C. Pintozzi                    
	Name: John C. Pintozzi
	Title: Senior Vice President and Controller

  
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 SCHEDULE I 

Additional Reinsurance Agreements 
  

	1.	 Reinsurance Agreement between Allstate Life Insurance Company of New York and Allstate Life Insurance
Company effective January 1, 1991 as amended by amendment effective December 31, 1995. 

  

	2.	 Reinsurance Agreement between Allstate Life Insurance Company of New York and Allstate Life Insurance
Company effective May 21, 1984, as amended by amendments effective September 1, 1984; January 1, 1987; October 1, 1988; January 1, 1994; December 31, 1995; December 1, 2007; November 1, 2009; and July 1, 2013.

  
 - 8 -Exhibit

                                                                                                                                                                   Exhibit (4)b.
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934 
As of February 1, 2020, Genesco Inc. had two classes of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock, par value $1.00 per share (“Common Stock”), and our Employees’ Subordinated Convertible Preferred Stock, without nominal or par value (“Employees’ Subordinated Convertible Preferred Stock”).
In this Exhibit (4)b, when we refer to the “Company,” “we,” “us” or “our” or when we otherwise refer to ourselves, we mean Genesco Inc., excluding, unless otherwise expressly stated, our subsidiaries and affiliates.
The following description is a summary of the material terms of our Restated Charter, as amended (the “Charter”), and our Amended and Restated Bylaws (the “Bylaws”), as currently in effect. This description is subject to, and qualified in its entirety by reference to, our Charter and our Bylaws, each of which are incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit (4)b is a part. We encourage you to read our Charter, our Bylaws and the applicable provisions of the Tennessee Business Corporation Act (“TBCA”), for additional information.
Authorized Capital Stock
As of February 1, 2020, our authorized capital stock consisted of 80,000,000 shares of Common Stock, 5,000,000 shares of Employees' Subordinated Convertible Preferred Stock, 3,705 shares of Cumulative Convertible Preferred Stock, without nominal or par value, 499,610 shares of Subordinated Cumulative Convertible Preference Stock, without nominal or par value, 3,000,000 shares of Subordinated Serial Preferred Stock, without nominal or par value, and 5,000,000 shares of Subordinated Cumulative Preferred Stock, without nominal or par value. 
As of February 1, 2020, 14,697,206 shares of Common Stock were issued and outstanding, 34,440 shares of Employees’ Subordinated Convertible Preferred Stock were issued and outstanding and no shares of Cumulative Convertible Preferred Stock, Subordinated Cumulative Convertible Preference Stock, Subordinated Serial Preferred Stock or Subordinated Cumulative Preferred Stock were issued and outstanding. 
Common Stock 
Voting Rights. The holders of our Common Stock are entitled to one vote per share on all matters to be voted on by shareholders and, if a quorum exists, action on any matter, other than the election of directors and except as otherwise required by our Charter or applicable law, is approved if the votes cast in favor of the action exceed the votes cast opposing the action. Directors are elected by a plurality of the votes cast by the shares entitled to vote in the election at which a quorum is present. The holders of our Common Stock are not entitled to cumulative voting in the election of directors.
Dividends. After payment, or declaration and setting aside for payment, of the full cumulative dividends for all prior and then current dividend periods on all outstanding shares of our preferred stock (other than our Employees’ Subordinated Convertible Preferred Stock) and after setting aside all stock purchase funds or sinking funds required to be set aside with respect to our preferred stock, cash dividends on our Common Stock may be declared and paid when and as determined by the board of directors, subject to certain restrictions imposed by our Charter and certain other agreements. The holders of our Common Stock are entitled to share equally on a per share basis in any dividends or distributions declared by our board of directors in its discretion from legally available funds, subject to any dividend preferences that may be attributable to our preferred stock. Dividends may be payable in shares of Common Stock.

Liquidation. In the event of our liquidation, dissolution, or winding up, holders of Common Stock are entitled to share equally on a per share basis in any assets remaining after all prior claims are satisfied and any liquidation preference on our outstanding preferred stock is paid in full.
Other Rights and Preferences. The holders of our Common Stock do not have any preemptive or similar rights to subscribe for shares of our capital stock. Our Charter does not contain any provisions providing for the redemption of our Common Stock or the conversion of our Common Stock into other securities. All of our outstanding shares of Common Stock are fully paid and non-assessable.
Effect of Issuance of Preferred Stock. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of holders of any series of our authorized and issued preferred stock or of any series of preferred stock that we may issue in the future. See “Employees’ Subordinated Convertible Preferred Stock” and “Other Preferred Stock” below. 
Trading Market for Our Common Stock. Our common stock is listed on the New York Stock Exchange under the symbol “GCO.”
Employees’ Subordinated Convertible Preferred Stock
Voting Rights. The holders of our Employees’ Subordinated Convertible Preferred Stock are entitled to one vote per share on all matters to be voted on by shareholders.
Dividends. The holders of our Employees’ Subordinated Convertible Preferred Stock are not entitled to receive dividends.
Liquidation. In the event of our liquidation, dissolution, or winding up, the holders of Employees' Preferred Stock are entitled to be paid from the assets (whether capital or surplus) of the Company, before any payment or distribution can be made to the holders of the Common Stock, but subject to and after prior payment of the amounts payable with respect to the Cumulative Convertible Preferred Stock, Subordinated Cumulative Convertible Preference Stock, Subordinated Serial Preferred Stock and Subordinated Cumulative Preferred Stock, an amount per share equal to 88 times the average quarterly per share dividend paid on our Common Stock for the previous eight quarters (if any), but in no event less than $30 per share; provided, however, that in the event that the Company at any time after December 1, 1967 (i) issues shares of Common Stock as a stock dividend, in a stock split, or otherwise subdivide its outstanding shares of Common Stock; or (ii) combines its outstanding shares of Common Stock into a smaller number of shares, the amount payable will be based upon the aggregate dividends paid on the Common Stock divided by the number of shares of Common Stock which would have been outstanding had such subdivision or combination not taken place. After payment in full of all amounts payable to the holders of the Employees' Preferred Stock, such shareholders, as such, will have no right or claim to any of the remaining assets of the Corporation, and the same will be distributed among the holders of the Common Stock.
Other Rights and Preferences. Holders of our Employees’ Subordinated Convertible Preferred Stock do not have any preemptive or similar rights to subscribe for shares of our capital stock, and Employees’ Subordinated Convertible Preferred Stock are not subject to redemption by the Company. At the option of the holder thereof, each share of Employees' Preferred Stock may be converted into one fully paid and non-assessable share of either (i) the Subordinated Cumulative Preferred Stock, or (ii) Common Stock. Such option to convert may be exercised at any time, provided, however, that in the event that any share of Employees' Preferred Stock will be issued partly paid, such share will not be convertible into either Subordinated Cumulative Preferred Stock or Common Stock until it is fully paid. All of our outstanding shares of Employees’ Subordinated Convertible Preferred Stock are fully paid and non-assessable.

Other Preferred Stock
Series of Preferred Stock. Our Charter permits our board of directors to issue our Subordinated Serial Preferred Stock in as many series, each with as many shares and such rights and preferences, as the board may designate. Additionally, our Charter permits our board of directors to issue our Subordinated Cumulative Convertible Preference Stock in three separate classes, Subordinated Cumulative Convertible Preference Stock, Series A, Subordinated Cumulative Convertible Preference Stock, Series B, and Subordinated Cumulative Convertible Preference Stock, Series C.
Rights and Preferences. The Company has the right to redeem shares of Cumulative Convertible Preferred Stock, Subordinated Cumulative Convertible Preference Stock, Subordinated Serial Preferred Stock and Subordinated Cumulative Preferred Stock (collectively, the “Unregistered Preferred Stock”). Each class of our Unregistered Preferred Stock entitles the holder to receive dividends, participate in distributions and to have the benefit of all other rights of holders of such classes of Unregistered Preferred Stock. Voting rights and other terms of our Unregistered Preferred Stock are governed by our Charter.
Certain Anti-Takeover Provisions
General. The provisions of our Charter and Bylaws described in this section may delay or make it difficult to effect acquisitions or changes of control of us that are not approved by our board of directors. We have implemented these provisions to help develop our business in a manner that will foster our long-term growth without the disruptive threat of a takeover that our board of directors believes is not in our best interests or in the best interests of our shareholders.

Prohibition of Certain Transactions with Interested Shareholders. Our Charter provides that, in order to effect certain mergers or other business transactions with a beneficial owner of 10% or more of our voting securities (who we refer to as an “interested shareholder”), the proposed transaction must receive affirmative votes at least equal in number to the sum of the votes entitled to be cast by holders of shares beneficially owned by the interested shareholder plus 67% of the votes entitled to be cast by all other holders of voting stock, voting together as one class. This shareholder approval requirement applies unless:
		
	•
	the transaction is approved by a majority of directors who are not affiliated with the interested shareholder and who either were directors before such person became an interested shareholder or were chosen by a majority of such directors; or

		
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	certain fair price, form of consideration and procedural requirements are met.

Advance Notice for Shareholder Proposals or Nominations of Directors. Our Bylaws provide that shareholders who want to bring business before an annual meeting of our shareholders or who want to nominate candidates for election as directors at an annual meeting or special meeting at which directors are to be elected must provide timely notice in writing. Subject to any other applicable requirements, only business that has been brought before the annual meeting by or at the direction of the board of directors or by a shareholder who has given timely written notice of an intention to bring that business before the meeting, in proper form, to our corporate secretary, may be conducted at an annual meeting of shareholders. In addition, the nomination of a person for election as a director at a meeting of shareholders can only be made by the board of directors (or an authorized committee of the board) or by a shareholder who has timely complied with the notice provisions set forth in our bylaws. Our Bylaws also specify requirements as to the content of the notice of a shareholder proposal or shareholder nomination of a director. The presiding officer at a shareholders’ meeting has the authority to make determinations in regard to whether a shareholder has complied with the requisite notice provisions.

Board of Directors. The Bylaws provide for a board of directors of not less than five nor more than twenty members, the exact number to be determined from time to time by resolution adopted by the affirmative vote of a majority of the total number of directors then in office. The Bylaws provide that directors will be elected to hold office 

for a term expiring at the next annual meeting of shareholders and until a successor is duly elected and qualified or until his or her earlier resignation or removal. Directors are elected by a plurality of the votes cast by shareholders entitled to vote in the election at a meeting at which a quorum is present.  Subject to the provisions of the Charter, the board of directors may fill any vacancy occurring on the board of directors, including any vacancy resulting from an increase in the number of directors or from the resignation or removal of a director. If the directors remaining in office constitute fewer than a quorum, the board of directors may fill the vacancy by the affirmative vote of a majority of all the directors remaining in office.
Amendment to Bylaws. The Bylaws provide that the board of directors may amend or repeal the Bylaws, unless (i) the Charter or the TBCA reserves this power exclusively to shareholders or (ii) the shareholders, in amending or repealing a particular bylaw, provide expressly that the board of directors may not amend or repeal that bylaw. Shareholders may amend or repeal any bylaw, even though the bylaws may also be amended or repealed by the board of directors. Action by the board of directors with respect to the Bylaws will be taken by an affirmative vote of a majority of all directors then holding office.
Special Meetings of Shareholders. The Bylaws provide that special meetings of the shareholders, for any purpose or purposes, unless otherwise prescribed by law, may be called by the chairman of the Board or the board of directors pursuant to a resolution adopted by a majority of the entire board of directors and will be called by the chairman of the board of directors or the secretary at the written request of persons holding of record at least 10% of all of the votes entitled to be cast on any issues proposed to be considered at the proposed special meeting. 
Tennessee Anti-Takeover Law Provisions 
Provisions in Tennessee law could also make it harder for someone to acquire us through a tender offer, proxy contest or otherwise.
The Tennessee Business Combination Act. The Tennessee Business Combination Act (the “Combination Act”) provides that any person who is an affiliate or associate of a “resident domestic corporation,” or the beneficial owner, directly or indirectly, of 10% or more of the voting power of any class or series of the then outstanding voting shares of a “resident domestic corporation” is an “interested shareholder.” The Company is currently a resident domestic corporation within the meaning of the Combination Act. For purposes of the Combination Act, a “business combination” includes mergers, share exchanges, sales and leases of assets, issuances of securities, and similar transactions. Under the Combination Act, an interested shareholder cannot engage in a business combination with a resident domestic corporation unless the combination:
		
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	takes place at least five years after the interested shareholder first acquired 10% or more of the voting power of any class or series of the then outstanding voting shares of the resident domestic corporation; and

		
	•
	either is approved by at least two-thirds of the non-interested voting shares of the resident domestic corporation or satisfies fairness conditions specified in the Combination Act.

These provisions apply unless one of two events occurs:
		
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	the business combination or the transaction that resulted in the acquiring shareholder becoming an interested shareholder is approved by the board of directors of the resident domestic corporation prior to the date that the acquiring shareholder becomes an interested shareholder of the resident domestic corporation; or

		
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	the business combination is exempt from the Combination Act because, among other things:

		
	◦
	in its original charter or original bylaws, the resident domestic corporation expressly elects not to be governed by the Combination Act; or

		
	◦
	the resident corporation enacts a charter amendment or bylaw to remove itself entirely from the Combination Act. This charter or bylaw amendment must be approved by a majority of the shareholders who have held shares for more than one year before the vote. In addition, the charter amendment or bylaw cannot become operative until two years after the vote.

The Combination Act further provides an exemption from liability for officers and directors of resident corporations who do not approve proposed business combinations or charter or bylaw amendments removing their corporations from the Combination Act’s coverage as long as the officers and directors act with the “good faith belief” that the proposed business combination would adversely affect their corporation’s employees, customers, suppliers or the communities in which their corporation operates and such factors are permitted to be considered by the board of directors under the charter.
We have not adopted a provision in our Charter or Bylaws or any amendment to our Charter or Bylaws removing us from coverage under the Combination Act.
The Tennessee Investor Protection Act. The Tennessee Investor Protection Act (“TIPA”) provides that unless a Tennessee corporation’s board of directors has recommended a takeover offer to shareholders, no offeror beneficially owning 5% or more of any class of equity securities of the offeree company, any of which was purchased within the preceding year, may make a takeover offer for any class of equity security of the offeree company if after completion the offeror would be a beneficial owner of more than 10% of any class of outstanding equity securities of the company unless the offeror, before making such purchase: (1) makes a public announcement of his or her intention with respect to changing or influencing the management or control of the offeree company; (2) makes a full, fair and effective disclosure of such intention to the person from whom he or she intends to acquire such securities; and (3) files with the Tennessee Commissioner of Commerce and Insurance (the “Commissioner”) and the offeree company a statement signifying such intentions and containing such additional information as may be prescribed by the Commissioner.
The offeror must provide that any equity securities of an offeree company deposited or tendered pursuant to a takeover offer may be withdrawn by an offeree at any time within seven days from the date the offer has become effective following filing with the Commissioner and the offeree company and public announcement of the terms or after 60 days from the date the offer has become effective. If the takeover offer is for less than all the outstanding equity securities of any class, such an offer must also provide for acceptance of securities pro rata if the number of securities tendered is greater than the number the offeror has offered to accept and pay for. If such an offeror varies the terms of the takeover offer before its expiration date by increasing the consideration offered to offerees, the offeror must pay the increased consideration for all equity securities accepted, whether accepted before or after the variation in the terms of the offer.
The TIPA does not apply to any offer involving a vote by holders of equity securities of the offeree company, pursuant to its charter or articles of incorporation or the applicable corporation statute, on a merger, consolidation or sale of corporate assets in consideration of the issuance of securities of another corporation, or on a sale of its securities in exchange for cash or securities of another corporation.
The Tennessee Greenmail Act. The Tennessee Greenmail Act applies to a Tennessee corporation that has a class of voting stock registered or traded on a national securities exchange or registered with the SEC pursuant to Section 12(g) of the Exchange Act. Under the Tennessee Greenmail Act, we may not purchase any of our shares at a price above the market value of such shares from any person who holds more than 3% of the class of securities to be purchased if such person has held such shares for less than two years, unless the purchase has been approved by the affirmative vote of a majority of the outstanding shares of each class of voting stock issued by us or we make an offer, of at least equal value per share, to all shareholders of such class.
The Tennessee Control Share Acquisition Act. The Tennessee Control Share Acquisition Act strips a purchaser’s shares of voting rights any time an acquisition of shares in a Tennessee corporation that has elected to be covered by the Tennessee Control Share Acquisition Act (as we have pursuant to our Bylaws) brings the purchaser’s voting power to one-fifth, one-third or a majority of all voting power. The purchaser’s voting rights can be restored only by a majority vote of the other shareholders. The purchaser may demand a meeting of shareholders to conduct such a vote. The purchaser can demand a meeting for this purpose before acquiring shares in excess of the thresholds described above, which we refer to as a control share acquisition, only if it holds at least 10% of the outstanding shares and announces a good faith intention to make the acquisition of shares having voting power in excess of the thresholds stated above. If a target corporation so elects prior to the date on which a purchaser makes a control share acquisition, a target corporation may redeem the purchaser’s shares if the shares are not granted voting rights.

The effect of these provisions may make a change of control of the Company more difficult by delaying, deferring or preventing a tender offer or takeover attempt that shareholders might consider to be in their best interest, including those attempts that might result in the payment of a premium over the market price for the Company’s shares.

Limitations on Liability and Indemnification of Officers and Directors
The TBCA provides that a corporation may indemnify any of its directors and officers against liability incurred in connection with a proceeding if:
		
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	the director or officer acted in good faith;

		
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	in the case of conduct in his or her official capacity with the corporation, the director or officer reasonably believed such conduct was in the corporation’s best interest;

		
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	in all other cases, the director or officer reasonably believed that his or her conduct was not opposed to the best interest of the corporation; and

		
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	in connection with any criminal proceeding, the director or officer had no reasonable cause to believe that his or her conduct was unlawful.

In actions brought by or in the right of the corporation, however, the TBCA provides that no indemnification may be made if the director or officer was adjudged to be liable to the corporation. In cases where the director or officer is wholly successful, on the merits or otherwise, in the defense of any proceeding instituted because of his or her status as an officer or director of a corporation, the TBCA mandates that the corporation indemnify the director or officer against reasonable expenses incurred in the proceeding. The TBCA also provides that in connection with any proceeding charging improper personal benefit to an officer or director, no indemnification may be made if the officer or director is adjudged liable on the basis that the personal benefit was improperly received. Notwithstanding the foregoing, the TBCA provides that a court of competent jurisdiction, upon application, may order that an officer or director be indemnified for reasonable expenses if, in consideration of all relevant circumstances, the court determines that the individual is fairly and reasonably entitled to indemnification, notwithstanding the fact that:
		
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	the officer or director was adjudged liable to the corporation in a proceeding by or in the right of the corporation;

		
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	the officer or director was adjudged liable on the basis that personal benefit was improperly received by him or her; or

		
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	the officer or director breached his or her duty of care to the corporation.

Our Charter provides that no director will be liable to us or our shareholders for monetary damages for breach of any fiduciary duty as a director, except to the extent provided by the TBCA. Under the TBCA, this provision relieves our directors from personal liability to us or our shareholders for monetary damages for breach of fiduciary duty as a director, except for liability arising from a judgment or other final adjudication establishing:
		
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	any breach of the director’s duty of loyalty;

		
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	acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; or

		
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	any unlawful distributions.

We currently have in effect an executive liability insurance policy which provides coverage for our directors and officers.  
We have entered into an indemnification agreement with each of our current directors and executive officers, which require us to indemnify such directors and executive officers, subject to certain limitations, to the fullest extent permitted by law for certain expenses and liabilities incurred in a proceeding by reason of (or arising in part out of) such directors’ or executive officers’ service to the Company.
Transfer Agent and Registrar 
Computershare is the transfer agent and registrar for our Common Stock and our Employees’ Subordinated Convertible Preferred Stock.

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