<PAGE>
REGISTRATION NO. 33-51963
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
TORCHMARK CORPORATION TORCHMARK CAPITAL L.L.C.
(EXACT NAME OF REGISTRANT AS (EXACT NAME OF REGISTRANT AS
SPECIFIED IN ITS CHARTER) SPECIFIED IN ITS CHARTER)
DELAWARE 63-0780404 DELAWARE [APPLIED FOR]
(STATE OR OTHER (I.R.S. EMPLOYER (STATE OR OTHER (I.R.S. EMPLOYER
JURISDICTION OF IDENTIFICATION JURISDICTION OF IDENTIFICATION
INCORPORATION OR NUMBER) INCORPORATION OR NUMBER)
ORGANIZATION) ORGANIZATION)
2001 THIRD AVENUE SOUTH
BIRMINGHAM, ALABAMA 35233
(205) 325-4200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
---------------
KEITH A. TUCKER
VICE CHAIRMAN
TORCHMARK CORPORATION
2001 THIRD AVENUE SOUTH
BIRMINGHAM, ALABAMA 35233
(205) 325-4248
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
ALAN J. BOGDANOW, ESQ. FRANCIS MORISON, ESQ.
HUGHES & LUCE, L.L.P. DAVIS POLK & WARDWELL
1717 MAIN ST., SUITE 2800 450 LEXINGTON AVENUE
DALLAS, TEXAS 75201 NEW YORK, NEW YORK 10017
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement, as determined
by market conditions.
---------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
---------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE OFFERING REGISTRATION
BEING REGISTERED REGISTERED(3) PER UNIT(4) PRICE(5) FEE(6)
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<S> <C> <C> <C> <C>
Torchmark Corporation
Preferred Stock, $1.00
par value.............
Torchmark Corporation
Depositary Shares(1)..
Torchmark Capital
Preferred Shares...... $200,000,000 $200,000,000 $68,965.52
Torchmark Corporation
Backup Undertakings
with respect to
Torchmark Capital
Preferred Shares(2)...
</TABLE>
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(1) The consideration for the Depositary Shares is included in that of the
Preferred Stock, par value $1.00 per share.
(2) No separate consideration will be received for the Torchmark Corporation
Backup Undertakings with respect to the Torchmark Capital Preferred Shares.
(3) Within the overall amount of securities being registered hereby, the
maximum number of shares of Torchmark Corporation Preferred Stock, Depositary
Shares or Torchmark Capital Preferred Shares being registered hereby is such
number as has a proposed maximum aggregate offering price of $200,000,000, in
U.S. dollars, or the equivalent thereof in foreign currencies, plus accrued
dividends, if any.
(4) The proposed maximum offering price per share or Depositary Share is
equal to the proposed maximum aggregate offering price for the shares or
Depositary Shares offered, divided by the number of shares or Depositary
Shares offered.
(5) Estimated solely for the purposes of calculating the registration fee.
(6) Previously paid.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE AS SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS IS SUBJECT TO COMPLETION +
+OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN +
+FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT +
+BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THAT A FINAL +
+PROSPECTUS SUPPLEMENT IS DELIVERED. THIS PRELIMINARY PROSPECTUS SHALL NOT +
+CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL +
+THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, +
+SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION +
+UNDER THE SECURITIES LAWS OF ANY STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION DATED MARCH 16, 1994
PROSPECTUS
$200,000,000
[LOGO OF TORCHMARK CORPORATION APPEARS HERE]
PREFERRED STOCK
-----------
Torchmark Corporation ("Torchmark" or the "Company") may offer at any time,
or from time to time, shares of preferred stock, par value $1.00 per share
("Preferred Stock"), in one or more series, which may be represented by
depositary shares ("Depositary Shares") evidenced by depositary receipts, or
any combination of the foregoing, with an aggregate initial public offering
price not to exceed $200,000,000.
The Company will offer the Securities to the public at prices and on terms to
be determined at or prior to the time of sale. Specific terms of the securities
in respect of which this Prospectus is being delivered ("Securities") will be
set forth in an accompanying Prospectus Supplement ("Prospectus Supplement"),
together with the terms of the offering of the Securities, the initial price
thereof and the net proceeds from the sale thereof. The Securities may be
offered separately or together, in separate series, in amounts, at prices and
on terms to be determined at the time of sale and to be set forth in Prospectus
Supplements. The Securities may be sold for U.S. dollars or one or more foreign
or composite currencies and the dividends on the Securities may likewise be
payable in U.S. dollars or one or more foreign or composite currencies.
The Prospectus Supplement will set forth the terms of the Preferred Stock,
including the designation, number of shares or fractional interests therein (or
if Depositary Shares are issued, the fraction of a share of Preferred Stock
represented by one Depositary Share), liquidation preference per share, initial
public offering price, dividend rate or method of calculation thereof, dates on
which dividends will be payable and dates from which dividends will accrue, any
redemption or sinking fund provisions, as well as any listing on a national
securities exchange and any other terms in connection with the offering and
sale of the Securities in respect of which this Prospectus is being delivered.
Because the Company is a holding company, the rights of the Company to
participate in any distribution of assets of any subsidiary (and thus the
ability of holders of Securities to benefit from such distribution) are subject
to the prior claims of creditors of that subsidiary. Such claims would include
subsidiary indebtedness of approximately $67 million dollars at September 30,
1993. See "Description of Securities--General."
As part of the Securities, Torchmark Capital L.L.C. ("Torchmark Capital"), a
special purpose finance subsidiary of Torchmark, may also offer from time to
time its preferred shares ("LLC Preferred Shares"), in one or more series, at
an aggregate initial public offering price not to exceed $200,000,000 at the
time of sale. In connection therewith, the Company may offer backup
undertakings ("Backup Undertakings") with respect to the LLC Preferred Shares,
as described herein under "Torchmark Capital L.L.C." The term "Securities" as
used herein shall also refer to such LLC Preferred Shares and any related
Backup Undertakings. Any issue of LLC Preferred Shares and related Backup
Undertakings shall correspondingly reduce the amount of other Securities
available for offer and sale hereunder.
The Securities may be sold by the Company or Torchmark Capital to
underwriters, to or through dealers, acting as principals for their own account
or acting as agents, or directly to other purchasers. The Prospectus Supplement
will set forth the names of any underwriters or agents, the principal amounts
or shares, if any, to be purchased by underwriters, and the compensation, if
any, of such underwriters or agents. The Company may indemnify such
underwriters, dealers and agents against certain liabilities, including
liabilities under the Securities Act of 1933. See "Plan of Distribution."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-----------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
March 16, 1994
<PAGE>
AVAILABLE INFORMATION
Torchmark Corporation (the "Company") is subject to the information
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, therefore, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; at its New York Regional Office, 7 World Trade
Center, New York, New York 10048; and at its Chicago Regional Office,
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained at prescribed rates, by
writing to the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. Such material can also be inspected at the New
York Stock Exchange, 20 Broad Street, New York, New York 10005 and The Stock
Exchange, London EC2N 1HP, England.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments, supplements and exhibits thereto, the
"Registration Statement") filed jointly by the Company and Torchmark Capital
with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information set forth
in the Registration Statement (in accordance with the rules and regulations of
the Commission), and reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company, Torchmark
Capital and the Securities.
No separate financial statements of Torchmark Capital have been included
herein. Torchmark and Torchmark Capital do not consider that such financial
statements would be material to holders of any LLC Preferred Shares which may
be offered hereby because Torchmark Capital is a newly organized special
purpose subsidiary, has no operating history and no independent operations and
is not engaged in and does not propose to engage in, any activity other than
the issuance of its shares and the lending of the proceeds thereof to
Torchmark. See "Torchmark Capital L.L.C." Torchmark Capital is a limited
liability company organized under the laws of the State of Delaware and will be
managed by Torchmark, which directly or indirectly beneficially owns all of
Torchmark Capital's common shares, which are non-transferable. Financial
statements of Torchmark Capital will be made available to the holders of LLC
Preferred Shares annually as soon as practicable after the end of Torchmark
Capital's fiscal year.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company (file no. 1-8052) with the
Commission are incorporated herein by reference: (i) Annual Report on Form 10-K
for the fiscal year ended December 31, 1992 ("Form 10-K"), (ii) Form 8-K dated
February 26, 1993, (iii) Quarterly Report on Form 10-Q for the period ended
March 31, 1993, (iv) Form 8 dated April 29, 1993, containing Amendment No. 1 to
Form 10-K, (v) Form 8-K dated June 7, 1993, (vi) Form 10-K/A, dated July 14,
1993, containing Amendment No. 2 to Form 10-K, (vii) Quarterly Report on Form
10-Q for the period ended June 30, 1993, (viii) Quarterly Report on Form 10-Q
for the period ended September 30, 1993, and (ix) Form 8-K dated October 14,
1993.
All reports and other documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such reports and documents. Any statement set forth herein or in a
document, all or a portion of which is incorporated or deemed to be
incorporated by reference herein, will be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement set forth herein
or in a subsequently filed document deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus. To the extent that any proxy statement is
incorporated by reference herein, such incorporation shall not include any
information contained in such proxy statement that is not, pursuant to the
Commission's rules, deemed to be "filed" with the Commission or subject to the
liabilities of Section 18 of the Exchange Act.
2
<PAGE>
The Company will furnish, without charge, to each person to whom a Prospectus
and Prospectus Supplement are delivered, upon written or oral request, a copy
of any or all of the foregoing documents incorporated herein by reference other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Requests for such documents should be
submitted in writing to the Investor Relations Department, Torchmark
Corporation, 2001 Third Avenue South, 16th Floor, Birmingham, Alabama 35233 or
by telephone at (205) 325-4243.
----------------
Unless otherwise indicated, currency amounts in this Prospectus and the
Prospectus Supplement are stated in United States dollars ("$" or "U.S.$").
3
<PAGE>
THE COMPANY
The Company, an insurance and diversified financial services holding company,
was incorporated in Delaware on November 29, 1979 as Liberty National Insurance
Holding Company. Through a plan of reorganization, which became effective on
December 30, 1980, it became the parent company for the businesses operated by
Liberty National Life Insurance Company ("Liberty") and Globe Life And Accident
Insurance Company ("Globe"). United American Insurance Company ("United
American"), Waddell & Reed, Inc. ("W&R") and United Investors Life Insurance
Company ("UILIC"), along with their respective subsidiaries, were acquired in
1981. The name Torchmark Corporation was adopted on July 1, 1982. Family
Service Life Insurance Company ("Famlico") was purchased in July, 1990.
Through its life insurance subsidiaries, including Liberty, Globe, United
American, Famlico and American Life and Accident Insurance Company, the Company
offers a portfolio of life and health insurance products. Through United
Investors Management Company ("UIMCO"), a wholly-owned subsidiary which owns
W&R, UILIC and Torch Energy Advisors Incorporated, the Company offers
institutional investment management services and individual financial planning
and products, including life insurance, annuities and mutual funds; provides
management services with respect to oil and gas production and development; and
engages in energy property acquisitions and dispositions, oil and gas product
marketing and well operations. The Company maintains a 27% ownership interest
in Vesta Insurance Group, Inc. ("Vesta"), a property and casualty insurance
holding company, which owns Liberty National Fire Insurance Company, offering
industrial fire insurance, collateral protection insurance, personal and
commercial property and casualty insurance and domestic reinsurance.
The principal executive office of the Company is located at 2001 Third Avenue
South, Birmingham, Alabama 35233, and its telephone number is (205) 325-4200.
Torchmark Capital is a special purpose finance subsidiary of Torchmark
organized as a limited liability company under the laws of the State of
Delaware. All of Torchmark Capital's common shares are directly or indirectly
beneficially owned by the Company and are non-transferable. Torchmark Capital
has no board of directors or officers, and all of its business and affairs are
conducted by the Company, as the manager (the "Manager") appointed in Torchmark
Capital's Limited Liability Company Agreement, as amended. Torchmark Capital
exists solely for the purpose of issuing its shares and lending the proceeds
thereof to the Company to finance Torchmark's business operations. The
principal office of Torchmark Capital is c/o Torchmark Corporation, 2001 Third
Avenue South, Birmingham, Alabama 35233.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of the Company's (consolidated)
earnings to combined fixed charges and preferred stock dividends, for the
periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------ NINE MONTHS ENDED
1988 1989 1990 1991 1992 SEPTEMBER 30, 1993
---- ---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined
fixed charges and preferred
stock dividends:
Excluding interest credited on
deposit products................... 5.8 6.1 6.3 6.2 7.1 6.9
Including interest credited on de-
posit products..................... 4.0 4.0 3.8 3.6 3.8 3.8
</TABLE>
4
<PAGE>
For the purpose of computing the ratio of earnings to combined fixed charges
and preferred stock dividends, "earnings" consists of operating income before
income taxes and fixed charges. "Fixed charges" consists of interest charges
and the portion of rental expense deemed representative of the interest factor.
"Combined fixed charges and preferred stock dividends" represent fixed charges
(as described above) and the pre-tax income required to pay the preferred stock
dividends of the Company.
USE OF PROCEEDS
The net proceeds from the sale of Securities offered by Torchmark Capital
hereby will be lent to Torchmark. The net proceeds from the sale of the
Securities offered hereby by the Company, and the net proceeds of any loans
from Torchmark Capital, will be used by the Company for general corporate
purposes, which may include, without limitation, repayment of bank debt,
additional capitalization of the Company's insurance subsidiaries, the
repurchase of shares of the Company's Adjustable Rate Cumulative Preferred
Stock, Series A or Common Stock, and possible acquisitions, unless a specific
determination as to the use of the proceeds is otherwise described in an
accompanying Prospectus Supplement.
RECENT EVENTS
PRELIMINARY 1993 RESULTS
On February 7, 1994, the Company reported preliminary unaudited results for
1993. Preliminary unaudited net income was $298 million for 1993, increasing
12.2% over the $265 million reported in 1992. On a per share basis, net income
was $4.01 in 1993, up 12.0% from $3.58 in 1992. Included in 1993 net after-tax
income were several non-recurring items, including a $37.2 million gain from
the Vesta sale, a gain of $18.4 million from the change in accounting
standards, a charge of $53.3 million for non-operating expenses for guaranty
fund assessments, directors' and officers' liability, and legal and litigation
expenses, and a $9.4 million charge for prior year's deferred income tax
liability resulting from the increase in tax rates under the Revenue
Reconciliation Act of 1993. Capital gains for the year were $5.21 million
after-tax compared to a loss of $626 thousand in 1992. Adjusting for these non-
operating items and capital gains and losses, net income per share increased
11.0% to $4.04 in 1993 from $3.64 in 1992.
Preliminary unaudited consolidated total revenue increased 6.4% to $2.18
billion from $2.05 billion in 1992. Included in revenue were life premiums of
$556 million, up 2% from the prior year, and health premiums of $800 million a
slight increase from $798 million in 1992. Sales of investment products were up
9.4% resulting in an increase in financial services revenue of 3% to $137
million while net investment income declined 2.7% to $372 million. Energy
operations revenue increased 43% to $106 million.
While new life insurance sales as measured by annualized premium decreased to
$128 million in 1993 from $132 million in 1992, life insurance annualized
premium in force grew 4.2% to $613 million. Medicare Supplement sales were down
13% to $136 million of annualized premium, but Medicare Supplement premium in
force grew 3.4% to $601 million. Total annualized premium in force increased
slightly to $1.44 billion. Assets under management at W&R totaled $14.5
billion, up 19%.
Torchmark's assets increased 12.9% to $7.65 billion at December 31, 1993, and
stockholders' equity increased 27% to $1.42 billion.
LITIGATION
In May 1992, litigation was filed against Liberty in the Circuit Court for
Barbour County, Alabama (Robertson v. Liberty National Life Insurance Company,
Case No.: CV-92-021). This suit was amended in October 1992 to include claims
on behalf of a class of Liberty policyholders alleging fraud in the exchange of
certain cancer insurance policies. It seeks substantial equitable and
injunctive relief and unspecified
5
<PAGE>
compensatory and punitive damages. A policyholder class was certified by the
Barbour County Court in March 1993. Additionally, subsequent to the class
certification, a number of separate lawsuits based on substantially the same
allegations as in Robertson were filed by plaintiffs in Alabama, Georgia,
Florida and Mississippi. Four additional class action suits also based upon
substantially the same allegations as in Robertson were filed in Mobile County,
Alabama (Adair v. Liberty National Life Insurance Company, Case No.: 93-958 and
Lamey v. Liberty National Life Insurance Company, Case No.: CV 93-1256) and in
Polk County, Florida ( Howell v. Liberty National Life Insurance Company, Case
No.: GC-G 93-2023 and Scott v. Liberty National Life Insurance Company, Case
No.: GC-G 93-2415) after the class certification.
On October 25, 1993, a jury in the Circuit Court for Mobile County rendered a
one million dollar verdict against Liberty in McAllister v. Liberty National
Life Insurance Company (Case No.: CV 82-4085), one of twenty-five suits
involving cancer policy exchanges which were filed prior to class certification
in the Barbour County litigation. Liberty has filed appropriate post-judgment
motions and, if necessary, will appeal the McAllister verdict. Previously,
another judge in the Mobile Circuit Court had granted a summary judgment in
favor of Liberty in another substantially similar suit, which is on appeal.
The Robertson litigation was tentatively settled pending a fairness
determination by the Court after a hearing which was held on January 20, 1994.
Class members were mailed notice of the hearing and the proposed settlement.
On February 4, 1994, the Circuit Court for Barbour County, Alabama ruled that
with $16 million increase in the value of the proposed Robertson settlement
from approximately $39 million to $55 million, the settlement would be fair and
would be approved, provided that the parties to the litigation accept the
amended settlement within fourteen days of the issuance of the ruling. On
February 17, 1994, the Court extended for two weeks the period for filing
objections to or accepting the court's order conditionally approving the class
action settlement. On February 22, 1994, the Court entered an order in the
Robertson litigation, which delayed any final decision on the proposed class
action settlement and various motions to modify it (including motions to delete
Torchmark from the settlement release), pending certain specified discovery to
be completed within 90 days from the date the order was entered. In the order,
the Court directed limited additional discovery regarding whether Torchmark had
any active involvement in the cancer policy exchanges. Pending completion of
limited additional discovery, the Court has reserved jurisdiction and extended
the deadline for acceptance or rejection of the modifications set forth in the
February 4, 1994 order.
The Company has provided for the $55 million proposed amended settlement
charge in its 1993 financial reports, although the Company believes that it is
highly likely that intervenors will pursue an appeal of the ruling to the
Supreme Court of Alabama. In the event a settlement is not agreed to and
approved, the Company intends to aggressively defend the various cases.
UIMCO GOING-PRIVATE TRANSACTION
On October 1, 1993, UIMCO was merged with and into UIMCO Mergerco, Inc.
("Mergerco"), a wholly-owned subsidiary of the Company pursuant to the terms
and provisions of the Agreement and Plan of Merger dated as of June 2, 1993, as
amended as of August 5, 1993, among UIMCO, Mergerco and the Company (the
"Merger Agreement"). The Merger Agreement was approved at a special meeting of
holders of non-voting common stock of UIMCO held on September 29, 1993, by the
holders of more than a majority of the shares of the non-voting common stock
(other than shares owned by the Company or any of its subsidiaries) actually
voted at the meeting (excluding abstentions). The Merger Agreement provided
that, upon consummation of the merger, the Company would acquire the
approximately 16% of UIMCO that it did not already own, that UIMCO would become
a wholly-owned subsidiary of the Company and that all of UIMCO's non-voting
common stock (other than shares owned by the Company or any of its subsidiaries
and by stockholders who perfect their appraisal rights in accordance with
Delaware law) would be converted to the right to receive $31.25 per share in
cash.
6
<PAGE>
Also, on October 1, 1993, prior to the filing of the merger documents, a
memorandum opinion was issued by the Delaware Chancery Court in the
consolidated action Behrens v. Richey, et al. (Civil Action No. 12876), denying
a motion sought by two of the Company's shareholders to enjoin the proposed
merger. Thereafter, the Certificate of Merger was filed in the State of
Delaware and the merger was consummated.
VESTA OFFERING
The Company and Liberty Management Services, Inc. ("LMS"), its wholly-owned
subsidiary, sold a total of 6,800,000 shares of the common stock of Vesta, a
newly-formed subsidiary serving as the holding company for the Company's
property and casualty insurance subsidiaries, in an underwritten public
offering on November 10, 1993. Additionally, Vesta sold 2,200,000 new shares in
the initial public offering. All shares were sold at $25.00 per share resulting
in a pre-tax net gain of approximately $57.2 million recorded by the Company.
After completion of the offering, the Company, through LMS, continues to own
27% of the outstanding stock of Vesta and R. K. Richey, Chairman and Chief
Executive Officer of the Company, serves as Chairman of Vesta. Additionally,
another Company subsidiary has loaned Vesta $28,000,000.
TORCH ROYALTY TRUST
On November 17, 1993, the 8.6 million trust units of the $180,600,000 Torch
Royalty Trust were sold in an initial public offering at $21.00 per unit. Prior
to the public offering, the Company and certain of its affiliates had
transferred approximately $125.4 million of oil and gas properties to Torch
Royalty Trust. As a result of the public offering the company recorded a pre-
tax net gain of approximately $1.2 million. Torch Energy Advisors Incorporated
will manage the trust, which has as its primary assets producing gas properties
located in Louisiana, Alabama and Texas.
7
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information for five years
ended December 31, 1992 and for the nine-month periods ended September 30, 1992
and 1993 should be read in conjunction with the more detailed information and
financial statements available as described under "Available Information" and
"Incorporation of Certain Information by Reference." The information for the
nine-month periods ended September 30, 1992 and 1993 was derived from unaudited
financial statements. In the opinion of management, however, all adjustments
necessary for a fair presentation of such information have been included.
Results of interim periods are not necessarily indicative of results for an
entire year.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
--------------------------------------------------------------- ----------------------
1988 1989 1990 1991 1992 1992 1993
---------- ---------- ---------- ----------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Premium and Policy
Charges:
Individual life
premium............... $ 403,546 $ 432,235 $ 487,991 $ 524,052 $ 544,467 $ 409,262 $ 416,442
Individual health
premium............... 681,250 682,680 738,431 769,821 797,855 596,543 603,710
Other premium.......... 71,977 69,521 64,830 71,940 111,640 84,420 115,583
Total.................. 1,156,773 1,184,436 1,291,252 1,365,813 1,453,962 1,090,225 1,135,735
Net investment income... 266,155 308,019 348,412 364,318 382,735 286,569 292,093
Financial services
revenue................ 102,075 108,255 108,561 114,326 133,462 100,505 102,496
Energy operations
revenue................ 14,341 22,239 32,218 54,841 74,014 50,436 65,140
Realized investment
gains (losses)......... (7,712) 547 4,081 4,195 (948) 2,162 2,264
Total revenue........... 1,536,835 1,629,326 1,787,148 1,907,441 2,045,810 1,531,830 1,599,779
Net income.............. 182,406 211,308 229,177 246,489 265,477 198,569 216,147/5/,/6/
Preferred stock
dividends.............. 8,000 7,667 6,898 6,116 3,453 2,632 2,467
Net income available to
common shareholders.... 174,406 203,641 222,279 240,373 262,024 195,937 213,680/5/
Net income per common
share.................. 2.10 2.59 2.85 3.13 3.58 2.67 2.90/5/
Life insurance sales:
Individual............. 10,787,454 10,883,275 11,257,778 11,222,307 11,067,341 8,075,985 9,042,766
Group and credit....... 268,861 141,483 -0- -0- -0- -0- -0-
Total.................. 11,056,315 11,024,758 11,257,778 11,222,307 11,067,341 8,075,985 9,042,766
Increase (decrease) in
life insurance in
force:
Individual............. 1,282,126 1,270,987 1,332,430/1/ 1,367,056/2/ 2,237,229 1,502,821 2,361,136
Group and credit....... (296,247) (428,382) (637,697) (86,644) (41,685) (30,350) (8,825)
Total.................. 985,879 842,605 694,733 1,280,412 2,195,544 1,472,471 2,352,311
Annualized life and
health premium issued:
Individual life........ 102,910 115,900 130,532 134,291 131,726 100,084 96,118
Individual health...... 268,597 232,336 273,290 216,962 224,905 169,380 139,965
Group and credit....... 8,107 3,729 (1,299) (550) -0- -0- -0-
Total.................. 379,614 351,965 402,523 350,703 356,631 269,464 236,083
Increase (decrease) in
annualized life and
health premium in
force:
Individual life........ 18,728 30,562 18,364/1/ 16,099/2/ 25,538 20,694 19,101
Individual health...... 29,878 12,228 56,456 11,749 34,346 32,139 1,835
Group and credit....... (562) (1,765) (1,515) (1) (4) (2) -0-
Total.................. 48,044 41,025 73,305 27,847 59,880 52,831 20,936
Mutual fund collections. 643,289 725,558 722,424 765,131 1,024,997 865,307 925,636
Per preferred share
Cash dividends paid.... $ 8.15 $ 7.80 $ 7.50 $ 7.66 $ 7.01 $ 5.65 $ 5.25
Per common share:
Cash dividends paid.... .73 .83 .93 1.00 1.07 .80 .80
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
AT DECEMBER 31, AT SEPTEMBER 30,
----------------------------------------------------------- -----------------------
1988 1989 1990 1991 1992 1992 1993
----------- ----------- ----------- ----------- ----------- ----------- -----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Cash and invested
assets/3/ ............. $ 3,226,898 $ 3,559,948 $ 4,155,577 $ 4,605,446 $ 4,994,828 $ 4,875,713 $ 5,571,925
Total assets............ 4,428,971 4,921,404 5,535,895 6,160,742 6,770,115 6,589,631 7,569,017
Short-term debt......... 5,271 125,977 779 11,499 276,819 279,240 94,835
Long-term debt.......... 497,463 498,235 529,294 667,125 497,867 504,088 847,482
Shareholders' equity.... 795,617 894,544 943,787 1,079,251 1,115,660 1,054,497 280,133
Per common share/4/.... 8.67 10.02 11.13 13.11 14.54 13.86 16.71
Life insurance in force:
Individual............. 51,678,577 52,949,564 54,619,033 56,041,294 58,278,523 57,544,934 60,640,426
Group and credit....... 1,222,180 793,798 156,101 69,457 27,772 38,288 18,180
Total.................. 52,900,757 53,743,362 54,775,134 56,110,751 58,306,295 57,583,222 60,658,606
Annualized life and
health premium in
force:
Individual life........ 467,970 497,252 543,728 562,541 588,079 583,234 607,180
Individual health...... 717,709 729,937 786,393 798,142 832,488 830,282 834,323
Group and credit....... 3,290 1,525 10 9 5 7 5
Total.................. 1,188,969 1,228,714 1,330,131 1,360,692 1,420,572 1,413,523 1,441,508
Assets under management
at
W&R.................... 8,042,000 8,542,000 8,212,000 10,692,000 12,143,000 11,365,000 13,832,000
</TABLE>
- --------
/1/ The increase in individual life insurance in force is adjusted by $337
million, and the increase in individual life annualized premium in force is
adjusted by $28.1 million, representing the business acquired in the Famlico
acquisition.
/2/ The increase in individual life insurance in force is adjusted by $55
million, and the increase in individual life annualized premium in force is
adjusted by $2.7 million, representing the business acquired in the Sentinel
American Life Insurance Company acquisition.
/3/ Includes accrued investment income.
/4/ Computed after deduction of preferred shareholders' equity.
/5/ Includes the effects of adoption of Financial Accounting Standards 106 and
109 and a one-time addition to a non-operating expense reserve relating to
self-insurance for directors' and officers' liability, guarantee fund
assessments and litigation expenses. On an after-tax basis, adoption of FAS
106 resulted in a charge of $7.1 million, adoption of FAS 109 resulted in
an addition to earnings of $29.5 million, and the addition to the non-
operating expense reserve resulted in a charge of $22.8 million. Also
includes the effects of tax legislation which increased the corporate tax
rate from 34% to 35% resulting in a charge to net earnings of $12.3
million, of which $9.2 million related to prior years.
/6/ Does not include a pre-tax net gain of approximately $59 million related
to the Vesta Initial Public Offering and a pre-tax net gain of $1.2 million
related to the Torch Royalty Trust Initial Public Offering. These gains were
recorded by the Company in the 4th quarter of 1993.
DESCRIPTION OF TORCHMARK STOCK
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
At September 30, 1993, the authorized capital stock of Torchmark was
165,000,000 shares, consisting of:
(a) 5,000,000 shares of Preferred Stock, par value $1.00 per share
("Preferred Stock"), of which 469,820 shares of Adjustable Rate
Cumulative Preferred Stock, Series A ("Series A Preferred Stock") were
outstanding and 530,180 shares of Series A Preferred Stock were held in
treasury; and
(b) 160,000,000 shares of Common Stock, par value $1.00 per share ("Common
Stock"), of which 73,738,763 shares were outstanding, 895,465 shares
were held in treasury, and 67,230,312 shares were held by subsidiaries
and treated as treasury shares .
Torchmark Corporation announced on February 22, 1994 that it will redeem on
March 31, 1994 the outstanding shares of its Series A Preferred Stock at a
redemption price of $100 per share plus accrued and unpaid dividends to the
redemption date, in the aggregate amount of $1.13 per share. First Chicago
Trust Company of New York is serving as redemption agent and mailed redemption
materials to holders of Series A Preferred Shares. The $1.13 dividend was
declared for payment on March 31, 1994 to holders of record as of March 17,
1994.
In general, the classes of authorized capital stock are afforded preferences
with respect to dividends and liquidation rights in the order listed above.
The Board of Directors of Torchmark (or a duly authorized committee thereof)
is empowered, without approval of the stockholders, to cause the Preferred
Stock to be issued in one or more series, with the numbers of shares of each
series and the rights, preferences and limitations of each series to be
determined by the Board of Directors of Torchmark (or a duly authorized
9
<PAGE>
committee thereof). Among the specific matters that may be determined by the
Board of Directors of Torchmark (or a duly authorized committee thereof) are:
the annual rate of dividends; the redemption price, if any; the terms of a
sinking or purchase fund, if any; the amount payable in the event of any
voluntary liquidation, dissolution or winding up of the affairs of Torchmark;
conversion rights, if any; and voting powers, if any, in addition to those
described below. The descriptions set forth below do not purport to be complete
and are qualified in their entirety by reference to the Restated Certificate of
Incorporation of Torchmark, as amended (the "Restated Certificate of
Incorporation"). No holders of any class of Torchmark's capital stock are
entitled to preemptive rights.
GENERAL
Since the Company is a holding company, the rights of the Company to
participate in any distribution of assets of any subsidiary upon its
liquidation or reorganization or otherwise (and thus the ability of holders
of the Securities to benefit from such distribution) are subject to the prior
claims of creditors of that subsidiary, except to the extent that the Company
may itself be a creditor with recognized claims against that subsidiary. Claims
on the Company's subsidiaries by creditors may include claims of policyholders,
holders of indebtedness and claims of creditors in the ordinary course of
business. Such claims may increase or decrease, and additional claims may be
incurred in the future.
Statutes regulating insurance holding company systems impose various
limitations on investments in affiliates and may require prior approval of the
payment of certain dividends and other distributions by the regulated insurance
company to the Company or various of its affiliates. Since the Company's
primary source of income is the income of its insurance company subsidiaries
and its primary source of internally generated cash flow is the dividends from
such subsidiaries, the Company's ability to meet its obligations and pay the
dividends, redemption price, or liquidation payments on the Securities may be
affected by any such required approval.
PREFERRED STOCK
The following is a general description of the terms of the Preferred Stock of
Torchmark. The particular terms of any series of Torchmark Preferred Stock
offered hereby ("Offered Preferred Stock") will be set forth in the Prospectus
Supplement relating thereto. The rights, preferences, privileges and
restrictions, including dividend rights, voting rights, terms of redemption and
liquidation preferences, of the Offered Preferred Stock of each series will be
fixed or designated pursuant to a certificate of designations adopted by the
Board of Directors of Torchmark or a duly authorized committee thereof. The
description of Preferred Stock set forth below and the description of the terms
of a particular series of Offered Second Preferred Stock that will be set forth
in a Prospectus Supplement do not purport to be complete and are qualified in
their entirety by reference to the certificate of designations relating to such
series.
The Offered Preferred Stock shall rank on a parity with the Series A
Preferred Stock, but in all respects, regardless of series, the Offered
Preferred Stock shall rank in preference to the Common Stock as to payment of
dividends and as to distribution of assets of Torchmark upon the liquidation,
dissolution or winding up of Torchmark. Upon issuance against full payment of
the purchase price therefor, shares of Offered Preferred Stock will be fully
paid and nonassessable.
Dividends. Holders of Offered Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors of Torchmark out of any
funds legally available for that purpose, dividends in cash at such respective
rates, payable on such dates in each year and in respect of such dividend
periods, as stated in Torchmark's Restated Certificate of Incorporation or the
certificate of designations for such series of Offered Preferred Stock, before
any dividends may be declared or paid or set apart for payment upon the Common
Stock or any other class of stock ranking junior to such series of Offered
Preferred Stock. No dividend may be declared or paid on any series of Offered
Preferred Stock unless at the same time a dividend in like proportion to the
respectively designated dividend amounts shall be declared or paid on each
other series of Preferred Stock then issued and outstanding ranking prior to or
on a parity with such particular series with respect to the payment of
dividends. Dividends on Offered Preferred Stock may be either cumulative or
noncumulative.
10
<PAGE>
Pursuant to the Certificate of Designations, Preferences and Rights of the
Series A Preferred Stock (the "Series A Certificate of Designations"), the
dividends payable on shares of the Series A Preferred Stock are adjustable,
being determined in advance of each period at 1.25% less than the highest of
the treasury bill rate, the ten year constant maturity rate (as defined in the
Series A Certificate of Designations), or the twenty year maturity rate (as
defined in the Series A Certificate of Designations). However, the dividend
rate will never be less than 7% nor greater than 13%. The most recent dividend
was paid at a rate of 7%. Such dividends are cumulative and payable quarterly
on February 1, May 1, August 1 and November 1 of each year. These dividends
rights are superior to the dividend rights of the Common Stock and will rank
equally with the dividend rights on the Offered Preferred Stock.
Liquidation Preference. In the event of any liquidation, dissolution or
winding up of Torchmark, whether voluntary or involuntary, holders of Offered
Preferred Stock of each series (if any shares thereof are then issued and
outstanding) will be entitled to payment of the applicable liquidation price or
prices plus accrued dividends, out of the available assets of Torchmark, in
preference to the holders of Common Stock or any other class of stock ranking
junior to such series of Offered Preferred Stock upon liquidation, dissolution
or winding up. The Series A Certificate of Designations provides that the sale,
conveyance, exchange or transfer of all or substantially all of the property or
assets of Torchmark or a consolidation or merger of Torchmark with one or more
corporations shall not be deemed to be a liquidation, dissolution or winding up
of Torchmark.
The amount payable on shares of the Series A Preferred Stock in the event of
any involuntary or voluntary liquidation, dissolution or winding up of the
affairs of Torchmark is $100.00 per share, together with accrued dividends to
the date of dissolution or payment. The liquidation rights of the Series A
Preferred Stock will rank equally with the liquidation rights of Offered
Preferred Stock.
Redemption and Conversion. Each series of Offered Preferred Stock will be
subject to redemption, if applicable, on such terms, at such prices and on such
dates as may be set forth in the applicable certificates of designations. The
Offered Preferred Stock will not be convertible.
The Series A Preferred Stock is redeemable at the option of Torchmark at any
time, in whole or in part, at a redemption price of $100.00 per share together
with accrued dividends to the date of distribution or payment. The Series A
Preferred Stock is not convertible.
Voting Rights. The holders of the Preferred Stock (including the Offered
Preferred Stock) have no voting rights except as specifically required by
statute and except for certain voting rights specifically provided in
Torchmark's Restated Certificate of Incorporation or the certificates of
designations creating the various series of such stock. Torchmark's Series A
Certificate of Designations provides that the vote or consent of the holders of
at least two-thirds of the then outstanding shares of Series A Preferred Stock,
voting separately as a class with all other affected series of preferred stock
ranking on a parity with the Series A Preferred Stock either as to dividends or
upon liquidation, is required to (a) authorize, create, or issue, or increase
the authorized amount of, any class or series of stock ranking prior to the
Series A Preferred Stock as to dividends and upon liquidation; (b) any
amendment, alteration or repeal of the Restated Certificate of Incorporation
which affects adversely the preferences, rights or powers of the Series A
Preferred Stock and any other shares of the same class (if only certain series
are affected, separate votes by the series affected are required). Further, in
the event dividends payments on the Preferred Stock shall be in default in an
amount equivalent to six full quarterly dividends, then the holders of
Preferred Stock, voting separately as a class with all other affected series of
preferred stock ranking on a parity and upon which similar voting rights have
been conferred and are exercisable, shall be entitled to elect two directors of
Torchmark until such time as such dividends shall have been paid or set aside
for payment.
Voting rights of the holders of the Series A Preferred Stock and Common Stock
are, and the voting rights of the Offered Preferred Stock will be,
noncumulative.
The transfer agent and register of the Series A Preferred Stock is First
Chicago Trust Company of New York.
11
<PAGE>
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
Torchmark may, at its option, elect to offer fractional interests in the
Offered Preferred Stock, in which event Torchmark will offer depositary shares
("Depositary Shares"), each of which will represent a fraction (to be set forth
in the Prospectus Supplement relating to a particular series of Offered
Preferred Stock) of a share of a particular series of Offered Preferred Stock
as described below.
The Offered Preferred Stock of any series represented by Depositary Shares
will be deposited under a deposit agreement (the "Deposit Agreement") between
Torchmark and a bank or trust company selected by Torchmark having its
principal office in the United States and having, alone or together with its
affiliates, a combined capital and surplus of at least $50,000,000 (the
"Depositary"). Subject to the terms of the Deposit Agreement, each registered
holder of a Depositary Share will be entitled, in proportion to the applicable
fraction of a share of Offered Preferred Stock represented by such Depositary
Share, to all the rights and preferences of the Offered Preferred Stock
represented thereby (including dividend, voting, redemption and liquidation
rights).
The Depositary Shares will be evidenced by depositary receipts ("Depositary
Receipts") issued pursuant to the Deposit Agreement. Depositary Receipts will
be distributed to those persons purchasing the fractional interests in Offered
Preferred Stock in accordance with the terms of the offering set forth in the
applicable Prospectus Supplement. A copy of the form of Deposit Agreement is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part, and the following summary is qualified in it entirety by reference to
such exhibit.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all dividends or other cash distributions
received in respect of the Offered Preferred Stock to the record holders of
Depositary Shares relating to such Offered Preferred Stock in proportion to the
number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto in proportion to the number of such Depositary Shares owned by
such holders, unless the Depositary determines that such distribution cannot be
made proportionately among such holders or that it is not feasible to make such
distribution, in which case the Depositary may, with the approval of Torchmark,
sell such securities or property and distribute the net proceeds from such sale
to such holders or adopt such other method as it deems equitable and
practicable for effecting such distribution.
WITHDRAWAL OF THE OFFERED PREFERRED STOCK
Upon surrender of the Depositary Receipts at the corporate trust office of
the Depositary (unless the related Offered Preferred Stock or Depositary Shares
have previously been called for redemption), and upon payment of the charges
provided in the Deposit Agreement and subject to the terms hereof, the holder
of the Depositary Shares evidenced thereby is entitled to delivery to such
office to or upon his order, of the number of whole shares of Offered Preferred
Stock and any money or other property represented by such Depositary Shares. If
the Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
whole shares of Offered Preferred Stock to be withdrawn, the Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares. Holders of Offered Preferred Stock
thus withdrawn, and any subsequent holders of those shares, will not thereafter
be entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Shares therefor.
12
<PAGE>
REDEMPTION OF DEPOSITARY SHARES
Upon redemption of Offered Preferred Stock represented by Depositary Shares,
the Depositary will redeem, as of the same redemption date, the number of
Depositary Shares representing Offered Preferred Stock so redeemed, provided
Torchmark shall have paid in full to the Depositary the redemption price of the
Offered Preferred Stock to be redeemed plus an amount equal to any accrued and
unpaid dividends thereon to the date fixed for redemption. The redemption price
per Depositary Share will be equal to the applicable fraction of the redemption
price and any other amounts per share payable with respect to the Offered
Preferred Stock. If fewer than all the Depositary Shares are to be redeemed,
the Depositary Shares to be redeemed will be selected by the Depositary by lot
or pro rata or by any other equitable method, in each case as may be determined
by Torchmark.
VOTING OF THE OFFERED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Offered
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares. Each record holder of such Depositary Shares on the record date (which
will be the same date as the record date for the Offered Preferred Stock) will
be entitled to instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of Offered Preferred Stock represented by such
holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote the number of shares of Offered Preferred Stock
represented by such Depositary Shares in accordance with such instructions, and
Torchmark will agree to take all reasonable action which may be deemed
necessary by the Depositary in order to enable the Depositary to do so. The
Depositary will abstain from voting Offered Preferred Stock (but, at its
discretion, not from appearing at any meeting with respect to such Offered
Preferred Stock) to the extent it does not receive specific instructions from
the holders of Depositary Shares representing Offered Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Torchmark and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of Depositary Shares will not be
effective unless such amendment has been approved by the holders of at least a
majority of the Depositary Shares then outstanding.
The Deposit Agreement may be terminated by Torchmark upon not less than 60
days' notice, whereupon the Depositary shall deliver or make available to each
holder of Depositary Receipts, upon surrender of the Depositary Receipts held
by such holder, such number of whole or fractional shares of Offered Preferred
Stock represented by such Depositary Receipts. The Deposit Agreement will
automatically terminate if (i) all outstanding Depositary Shares have been
redeemed, or (ii) there has been a final distribution in respect of the Offered
Preferred Stock in connection with any liquidation, dissolution or winding up
of Torchmark and such distribution has been made to the holders of Depositary
Receipts.
CHARGES OF DEPOSITARY
Torchmark will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Torchmark
will pay the fees and expenses of the Depositary in connection with the
performance of its duties under the Deposit Agreement, to the extent specified
in the Deposit Agreement. Holders of Depositary Receipts will pay transfer and
other taxes and governmental charges.
MISCELLANEOUS
Torchmark will forward to holders of Depositary Shares any reports and
communications that it sends to holders of Offered Preferred Stock. Neither the
Depositary nor Torchmark will be liable if it is prevented
13
<PAGE>
from or delayed in, by law or any circumstances beyond its control, performing
its obligations under the Deposit Agreement. The obligations of Torchmark and
the Depositary under the Deposit Agreement will be limited to performing their
duties thereunder without negligence or willful misconduct, and Torchmark and
the Depositary will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or any Offered Preferred Stock
unless satisfactory indemnity is furnished. Torchmark and the Depositary may
rely on advice of counsel or accountants, on information provided by holders of
Depositary Shares or other persons believed to be authorized or competent and
on documents believed to be genuine.
In the event the Depositary shall receive conflicting claims, requests or
instructions from any holders of Depositary Receipts, on the one hand, and
Torchmark, on the other hand, the Depositary shall be entitled to act on such
claims, requests or instructions received from Torchmark.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to Torchmark notice of
its election to do so, and Torchmark may at any time remove the Depositary, any
such resignation or removal to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having, alone or together with its affiliates, a combined
capital and surplus of at least $50,000,000.
TORCHMARK CAPITAL L.L.C.
GENERAL
Torchmark Capital, a subsidiary of Torchmark, is a limited liability company
organized under the laws of the State of Delaware. All of its common shares are
beneficially owned by Torchmark or its affiliates and are non-transferable.
Torchmark Capital's principal offices are located c/o the Manager at the
address set forth under "The Company." Torchmark Capital has no board of
directors, and all of its business and affairs are conducted by Torchmark, as
the Manager appointed in Torchmark Capital's Limited Liability Company
Agreement, as amended. The location of the principal executive offices of the
Manager is set forth above under "The Company." Torchmark Capital exists solely
for the purpose of issuing its shares and lending the net proceeds thereof to
Torchmark.
LLC PREFERRED SHARES
Torchmark Capital may from time to time issue LLC Preferred Shares, in one or
more series, having terms described in the Prospectus Supplement relating
thereto. Under Torchmark Capital's Limited Liability Company Agreement, as
amended, the Manager may establish one or more classes or series of LLC
Preferred Shares, having such terms, including distribution, redemption,
voting, liquidation rights and such other preferred or other special rights or
such restrictions, as the Manager may determine, to be set forth in a
Prospectus Supplement. All LLC Preferred Shares of Torchmark Capital offered by
any Prospectus Supplement will be guaranteed by Torchmark to the limited extent
set forth below and in the Prospectus Supplement under "Guarantee" and may also
be entitled to the benefits of certain undertakings of Torchmark as described
below and in the Prospectus Supplement under "Backup Undertakings." Any special
federal income tax, accounting and other considerations applicable to any
offering of LLC Preferred Shares and related Backup Undertakings will be
described in the Prospectus Supplement relating thereto.
GUARANTEE
Torchmark will irrevocably and unconditionally agree (the "Guarantee"), to
the extent set forth in a Payment and Guarantee Agreement, to pay in full, to
the holders of LLC Preferred Shares of any class or series, the Guarantee
Payments (as defined below), as and when due, regardless of any defense, right
of setoff
14
<PAGE>
or counterclaim which Torchmark Capital may have or assert. The Guarantee will
constitute a guarantee of payment and not of collection, and may be enforced by
holders of LLC Preferred Shares directly against Torchmark. The following
payments to the extent not paid by Torchmark Capital (the "Guarantee Payments")
will be subject to the Guarantee (without duplication): (i) any accumulated
arrears and accruals of unpaid dividends which have theretofore been declared
on the Preferred Shares of such class or series out of moneys legally available
therefor; (ii) the redemption price including all accumulated arrears and
accruals of unpaid dividends payable, out of moneys legally available therefor
with respect to any LLC Preferred Shares of such class or series called for
redemption; and (iii) upon a liquidation of Torchmark Capital, the lesser of
(a) the aggregate of the liquidation preference and all accumulated arrears and
accruals of unpaid dividends (whether or not) declared on the LLC Preferred
Shares of such class or series to the date of payment and (b) the amount of
assets of Torchmark Capital remaining available for distribution in liquidation
to the holders of LLC Preferred Shares of such class or series. In addition,
the Prospectus Supplement relating to a class or series of LLC Preferred Shares
will describe the rank of the Guarantee and any additional covenants or other
terms of the Guarantee of Torchmark with respect to such class or series.
BACKUP UNDERTAKINGS
Torchmark and Torchmark Capital will enter into an agreement pursuant to
which Torchmark will agree to guarantee the payment of any liabilities incurred
by Torchmark Capital (other than obligations to holders of LLC Preferred
Shares). The agreement will expressly provide that such agreement is for the
benefit of, and is enforceable by, third parties to whom Torchmark Capital owes
such obligations.
In connection with any class or series of LLC Preferred Shares, Torchmark may
enter into additional arrangements with Torchmark Capital, including
intercompany loan agreements and amendments to Torchmark Capital's Limited
Liability Company Agreement and Certificate of Formation, that operate directly
or indirectly for the benefit of holders of the LLC Preferred Shares. The
Guarantee described above under "Guarantee," the agreement described in the
previous paragraph and any such other arrangements are herein collectively
referred to as "Backup Undertakings" of Torchmark and will be described in the
Prospectus Supplement relating to any class or series of LLC Preferred Shares
to which they apply.
PLAN OF DISTRIBUTION
GENERAL
The Company or Torchmark Capital may sell the Securities to or through
underwriters or a group of underwriters, directly to other purchasers, or
through dealers or agents. The distribution of the Securities may be effected
from time to time in one or more transactions at a fixed price or prices, which
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Each
Prospectus Supplement will describe the method of distribution, and time and
place of delivery, of the offered Securities. The Company or Torchmark Capital
also may, from time to time, authorize dealers, acting as the Company's or
Torchmark Capital's agents, to solicit offers to purchase the offered
Securities upon the terms and conditions set forth in any Prospectus
Supplement.
In connection with the sale of Securities, underwriters, dealers or agents
may receive compensation from the Company or Torchmark Capital or from
purchasers of Securities for whom they may act as agents, in the form of
discounts, concessions or commissions. Underwriters, dealers and agents that
participate in the distribution of Securities may be deemed to be
"underwriters," and any discounts or commissions received by them and any
profit on the resale of Securities by them may be deemed to be underwriting
discounts and commissions, under the Securities Act. Any such underwriter,
dealer or agent will be identified, and any such compensation will be
described, in the Prospectus Supplement relating to the offered Securities.
Under agreements which may be entered into by the Company and/or Torchmark
Capital, underwriters, dealers and agents that participate in the distribution
of Securities may be entitled to indemnification by the
15
<PAGE>
Company and/or Torchmark Capital against certain liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which such underwriters, dealers and agents may be required to make in
connection therewith. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for the Company and/or
Torchmark Capital in the ordinary course of business.
Unless otherwise indicated in a Prospectus Supplement, each issuance of
Securities will constitute a new issue of securities with no established
trading market. The Securities may or may not be listed on a national
securities exchange. In the event that Securities offered hereunder are not
listed on a national securities exchange, certain broker-dealers may make a
market in the Securities, but will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given that any broker-dealer will make a market in the Securities or as to the
liquidity of the trading market for such Securities.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement relating to offered Securities,
the Company and/or Torchmark Capital will authorize dealers or other persons
acting as the Company's or Torchmark Capital's agents to solicit offers by
certain institutions to purchase Securities from the Company and/or Torchmark
Capital pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company and/or Torchmark Capital. The
obligations of any purchaser under any such contract will be subject to the
condition that the purchase of Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The dealers and such other agents will not have any responsibility in
respect of the validity or performance of such contracts.
LEGAL OPINIONS
The legal validity of the LLC Preferred Shares, the Preferred Stock, the
Depository Shares and the Backup Undertakings will be passed upon for Torchmark
and Torchmark Capital by Hughes & Luce, L.L.P., Dallas, Texas. Hughes & Luce
L.L.P. will also pass upon United States Federal income tax matters, as
described under a Prospectus Supplement relating to the Securities to be
offered. Certain legal matters will be passed upon for the Underwriters by
Davis Polk & Wardwell, New York, New York. In connection with its opinions,
Hughes & Luce, L.L.P. will rely on the opinion of Davis Polk & Wardwell as to
matters of New York law.
EXPERTS
The financial statements and schedules of Torchmark Corporation as of
December 31, 1992 and 1991 and for each of the years in the three-year period
ended December 31, 1992, incorporated by reference herein have been
incorporated by reference in reliance upon the report of KPMG Peat Marwick,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
16
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMA-
TION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR ANY PRO-
SPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THIS PROSPECTUS NOR
ANY PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN
ANY PROSPECTUS SUPPLEMENT OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF OR THEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information... 2
Incorporation of Certain
Information by Refer-
ence................... 2
The Company............. 4
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends.............. 4
Use of Proceeds......... 5
Recent Events........... 5
Selected Consolidated
Financial Information.. 7
Description of Torchmark
Stock.................. 8
Description of Deposi-
tary Shares............ 11
Torchmark Capital
L.L.C. ................ 13
Plan of Distribution.... 14
Legal Opinions.......... 15
Experts................. 15
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[LOGO OF TORCHMARK CORPORATION APPEARS HERE]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Filing fee--Securities and Exchange Commission................. $ 68,966
*Printing and engraving expenses................................ 40,000
*Legal fees and expenses........................................ 85,000
*Accounting fees and expenses................................... 5,000
*Blue Sky fees and expenses..................................... 20,000
*Rating agency fees............................................. 120,000
Transfer Agent and Registrar's fees and expenses............... 5,000
*Miscellaneous.................................................. 10,000
--------
*Total...................................................... $353,966
========
</TABLE>
- --------
* Estimated for the purpose of this Registration Statement.
**To be filed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1 of Article Ninth of the Restated Certificate of Incorporation of
Torchmark provides that a director will not be personally liable to Torchmark
or its stockholders for monetary damages for breach of fiduciary duty as a
director except for liability (a) for any breach of the duty of loyalty to the
Registrant or its stockholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) for
paying a dividend or approving a stock repurchase in violation of the Delaware
General Corporation Law (the "Act"), or (d) for any transaction from which the
director derived an improper personal benefit.
Section 2(a) of Article Ninth provides that each person who was or is made a
party or is threatened to be made a party to, or is involved in, specific
actions, suits or proceedings by reason of the fact that he or she is or was a
director or officer of Torchmark (or is or was serving at the request of
Torchmark as a director, officer, employee or agent for another entity) while
serving in such capacity will be indemnified and held harmless by Torchmark, to
the full extent authorized by the Act, as in effect (or, to the extent
indemnification is broadened, as it may be amended) against all expense,
liability or loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred by such person in connection therewith. With respect to derivative
actions, indemnification only extends to expenses (including attorneys' fees)
incurred in connection with defense or settlement of such an action and the Act
requires court approval before there can be any indemnification where the
person seeking indemnification has been found liable to Torchmark. Rights
conferred hereby are contract rights and include the right to be paid by
Torchmark the expenses incurred in defending the proceedings specified above,
in advance of their final disposition; provided that, if the Act so requires,
such payment will only be made upon delivery to Torchmark by the indemnified
party of an undertaking to repay all amounts advanced if it is ultimately
determined that the person receiving such payments is not entitled to be
indemnified under such Section 2(a) or otherwise. Torchmark may, by action of
its Board of Directors, provide indemnification to its employees and agents
with the same scope and effect as the foregoing indemnification of directors
and officers.
Section 2(b) of Article Ninth provides that persons indemnified under Section
2(a) may bring suit against Torchmark to recover unpaid amounts claimed
thereunder, and that if such suit is successful, the expense of bringing such
suit will be reimbursed by Torchmark. While it is a defense to such a suit that
the person claiming indemnification has not met the applicable standards of
conduct making indemnification permissible under the Act, the burden of proving
the defense is on Torchmark and neither the failure of Torchmark's Board of
Directors, independent legal counsel or the shareholders to have made a
determination that
II-1
<PAGE>
indemnification is proper, nor an actual determination that the claimant has
not met the applicable standard of conduct, is a defense to the action or
creates a presumption that the claimant has not met the applicable standard of
conduct.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in
paragraphs 2(a) and 2(b) of Article Ninth is not exclusive of any other right
which any person may have or acquire under any statute, provision of the
Certificate of Incorporation or By-Laws, or otherwise. Torchmark may maintain
insurance, at its expense, to protect itself and any directors, officers,
employees or agents of Torchmark or other entity against any expense, liability
or loss, whether or not Torchmark would have the power to indemnify such
persons against such expense, liability or loss under the Act.
ITEM 16. EXHIBITS.
--Form of proposed Underwriting Agreement Standard Provisions
1* (Preferred Stock)
3.1 --Limited Liability Agreement of Torchmark Capital
3.2 --Certificate of Formation of Torchmark Capital
--Opinion of Hughes & Luce, L.L.P. as to legality of
5 securities being registered
12* --Statement re computation of ratio of earnings to combined
fixed charges and preferred stock dividends
24.1 --Consent of Hughes & Luce, L.L.P. (contained in Exhibit 5
hereto)
24.2 --Consent of KPMG Peat Marwick
25* --Powers of Attorney
- --------
* Previously filed.
Exhibits not referred to have been omitted as inapplicable or not required.
ITEM 17. UNDERTAKINGS.
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement, and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered hereby which remain unsold at the
termination of the offering.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Torchmark's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification by the Registrants for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrants pursuant to the provisions described under Item 15
above or otherwise, the Registrants have been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrants of expenses incurred or paid by a director, officer or controlling
person of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrants will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, TORCHMARK
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY
OF BIRMINGHAM, STATE OF ALABAMA, ON MARCH 16, 1994.
Torchmark Corporation
By /s/ R. K. Richey
---------------------------------
R. K. RICHEY CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, TORCHMARK CAPITAL
L.L.C. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT TO
BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED, IN THE
CITY OF BIRMINGHAM, STATE OF ALABAMA, ON MARCH 16, 1994.
Torchmark Capital L.L.C.
By: Torchmark Corporation, as
Authorized Person
By: /s/ Keith A. Tucker
-----------------------------
KEITH A. TUCKER VICE CHAIRMAN
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES INDICATED FOR
TORCHMARK AND THE AUTHORIZED PERSON ON MARCH 16, 1994.
SIGNATURES TITLE
---------- -----
/s/ R. K. Richey Chairman, Chief Executive
- ------------------------------------- Officer and Director
(R. K. RICHEY)
/s/ Keith A. Tucker Vice Chairman and
- ------------------------------------- Director (Principal
(KEITH A. TUCKER) Financial Officer)
/s/ William T. Graves Executive Vice President
- ------------------------------------- (Principal Accounting Officer)
(WILLIAM T. GRAVES)
II-4
<PAGE>
SIGNATURES TITLE
- ------------------------------------- Director
(J. P. BRYAN)
*
- ------------------------------------- Director
(ROBERT P. DAVISON)
*
- ------------------------------------- Director
(JOSEPH M. FARLEY)
*
- ------------------------------------- Director
(LOUIS T. HAGOPIAN)
*
- ------------------------------------- Director
(C. B. HUDSON)
*
- ------------------------------------- Director
(JOSEPH L. LANIER, JR.)
*
- ------------------------------------- Director
(HAROLD T. MCCORMICK)
*
- ------------------------------------- Director
(JOSEPH W. MORRIS)
*
- ------------------------------------- Director
(GEORGE J. RECORDS)
*
- ------------------------------------- Director
(YETTA G. SAMFORD, JR.)
*By: /s/ Keith A. Tucker
---------------------------------
(KEITH A. TUCKER)
ATTORNEY-IN-FACT
II-5
<PAGE>
EXHIBIT 3.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
TORCHMARK CAPITAL L.L.C.
This Limited Liability Company Agreement (this "Agreement") of
Torchmark Capital L.L.C., is entered into between Torchmark Corporation, a
Delaware corporation, and Maxwell's Energy Company, Inc., an Alabama
corporation, as members (the "Members").
The Members hereby form a limited liability company pursuant to and in
accordance with the Delaware Limited Liability Company Act (6 Del. C.
(S)18-101, et seq.), as amended from time to time (the "Act"), and hereby
agree as follows:
1. Name. The name of the limited liability company formed
hereby is Torchmark Capital L.L.C. (the "Company").
2. Purpose. The Company is formed for the object and purpose
of, and the nature of the business to be conducted and promoted by the
Company is, to issue limited liability company preferred and common
securities and to loan the proceeds thereof to Torchmark Corporation and to
engage in any and all activities necessary or incidental to the foregoing.
3. Registered Office. The address of the registered office of
the Company in the State of Delaware is c/o The Corporation Trust Company,
1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
4. Registered Agent. The name and address of the registered
agent of the Company for service of process on the Company in the State of
Delaware is The Corporation Trust Company, 1209 Orange Street, Wilmington,
New Castle County, Delaware 19801.
5. Members. The names and the business, residence or mailing
addresses of the Members are as follows:
Name Address
Torchmark Corporation 2001 Third Avenue South
Birmingham, Alabama 35233
Maxwell's Energy Company, Inc. 2001 Third Avenue South
Birmingham, Alabama 35233
6. Powers. The business and affairs of the Company shall be
managed by the Members. The Members shall have the power to do any and all
acts necessary or convenient to or for the furtherance of the purposes
described herein, including all powers, statutory or
- 1 -
<PAGE>
otherwise, possessed by members under the laws of the State of Delaware.
Torchmark Corporation is hereby designated as an authorized person, within
the meaning of the Act, to execute, deliver and file the Certificate of
Formation of the Company (and any amendments and/or restatements thereof)
and any other certificates (and any amendments and/or restatements thereof)
necessary for the Company to qualify to do business in any jurisdiction in
which the Company may wish to conduct business. Torchmark Corporation is
hereby authorized to execute any and all registration statements, amendments
and other documents related to the issuance and sale of any limited
liability company preferred or common securities or to the loan of the
proceeds thereof to Torchmark Corporation and to engage in any and all
activities necessary or incidental to the foregoing.
7. Dissolution. The Company shall dissolve, and its affairs
shall be wound up upon the first to occur of the following: (a) March 31,
2046, (b) the written consent of the Members, (c) the death, retirement,
resignation, expulsion, bankruptcy or dissolution of a Member or the
occurrence of any other event which terminates the continued membership of a
Member in the Company (other than as set forth in Section 14), or (d) the
entry of a decree of judicial dissolution under Section 18-802 of the Act.
8. Capital Contributions. The Members have contributed the
following amounts in cash to the Company:
Torchmark Corporation $10.00
Maxwell's Energy Company, Inc. $10.00
9. Additional Contributions. No Member is required to make any
additional capital contribution to the Company; provided, however, that,
upon the dissolution of the Company, Torchmark Corporation shall contribute
to the Company an amount equal to the excess of the Company's liabilities
over its assets on the date of dissolution.
10. Allocation of Profits and Losses. The Company's profits and
losses shall be allocated in proportion to the capital contributions of the
Members.
11. Distributions. Distributions shall be made to the Members at
the times and in the aggregate amounts determined by the Members. Such
distributions shall be allocated among the Members in the same proportion as
their then capital account balances.
12. Assignments. A Member may not assign in whole or in part his
limited liability company interest.
13. Resignation. Except to the extent set forth in Section 14, a
Member may not resign from the Company.
14. Admission of Additional Members.
(a) One (1) or more additional members of the Company may be
admitted to the Company with the consent of the Members.
- 2 -
<PAGE>
(b) Immediately following the admission of an additional
member of the Company, Maxwell's Energy Company, Inc. shall resign from the
Company as a member of the Company. Upon such resignation, the remaining
members of the Company are authorized to, and shall continue, the business
of the Company without dissolution.
15. Liability of Members. The Members shall not have any
liability for the obligations or liabilities of the Company except to the
extent provided in the Act and except as provided in paragraph 9 hereof.
16. Governing Law. This Agreement shall be governed by, and
construed under, the laws of the State of Delaware, all rights and remedies
being governed by said laws.
IN WITNESS WHEREOF, the undersigned, intending to be legally
bound hereby, have duly executed this Limited Liability Company Agreement as
of March 11, 1994.
TORCHMARK CORPORATION
By: /s/ Carol A. McCoy
Name: Carol A. McCoy
Title: Associate Counsel and Assistant
Secretary
MAXWELL'S ENERGY COMPANY, INC.
By: /s/ Michael J. Clyce
Name: Michael J. Clyce
Title: Treasurer
- 3 -
<PAGE>
EXHIBIT 3.2
CERTIFICATE OF FORMATION
OF
TORCHMARK CAPITAL L.L.C.
This Certificate of Formation of Torchmark Capital L.L.C.
(the "LLC"), dated as of March 11, 1994, is being duly
executed and filed by Torchmark Corporation, as an authorized
person, to form a limited liability company under the Delaware
Limited Liability Company Act (6 Del.C. (S)18-101, et seq.).
FIRST: The name of the limited liability company formed
hereby is Torchmark Capital L.L.C.
SECOND: The address of the registered office of the LLC in
the State of Delaware is c/o The Corporation Trust
Company, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801.
THIRD: The name and the address of the registered agent for
service of process on the LLC in the State of
Delaware is The Corporation Trust Company, 1209
Orange Street, Wilmington, New Castle County,
Delaware 19801.
FOURTH: The latest date on which the LLC is to dissolve is
March 31, 2046.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Formation as of the date first above written.
TORCHMARK CORPORATION
By: /s/ Carol A. McCoy
Name: Carol A. McCoy
Its: Associate Counsel and
Assistant Secretary
<PAGE>
EXHIBIT 5
March 15, 1994
Torchmark Corporation
2001 Third Avenue South
Birmingham, Alabama 35233
Torchmark Capital L.L.C.
c/o Torchmark Corporation, Manager
2001 Third Avenue South
Birmingham, Alabama 35233
Ladies and Gentlemen:
We have acted as special counsel to Torchmark Corporation,
a Delaware corporation ("Torchmark"), and Torchmark Capital
L.L.C., a Delaware limited liability company ("Torchmark
Capital"), in connection with the Registration Statement on
Form S-3, as amended, filed jointly by Torchmark and Torchmark
Capital with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended
(the "Act").
The Registration Statement relates to the contemplated
issuance by Torchmark and/or Torchmark Capital from time to
time of up to $200,000,000 aggregate initial offering price of
one or more of the following types of securities: (a) shares
of preferred stock ("Preferred Stock") of Torchmark, in one or
more series, which may be represented by depositary shares
("Depositary Shares") evidenced by depositary receipts; (b) shares
of preferred stock ("LLC Preferred Shares") of Torchmark
Capital, in one or more series; (c) backup undertakings
("Backup Undertakings") of Torchmark in connection with the
LLC Preferred Shares; or (d) any combination of the foregoing
(collectively referred to as the "Securities"). The
Securities will be offered on a continuous or delayed basis
pursuant to the provisions of Rule 415 under the Act.
In connection with this opinion, we have examined such
documents and records of Torchmark and Torchmark Capital and
such statutes, regulations and other instruments and
<PAGE>
HUGHES & LUCE, L.L.P.
Torchmark Corporation
Torchmark Capital L.L.C.
March 15, 1994
Page 2
certificates as we have deemed necessary or advisable for the
purposes of this opinion. We have assumed that all signatures
on all documents presented to us are genuine, that all
documents submitted to us as originals are accurate and
complete and that all documents submitted to us as copies are
true and correct copies of the originals thereof. We have
also relied upon certificates of public officials, corporate
agents and officers of Torchmark (on its own behalf and as
manager of Torchmark Capital) with respect to the accuracy of
material factual matters contained therein which were not
independently established. We are familiar with the
additional proceedings proposed to be taken by Torchmark (on
its own behalf and on behalf of Torchmark Capital) in
connection with the authorization, registration, issuance and
sale of the Securities.
Based on the foregoing, we are of the opinion that:
1. When (i) the Registration Statement has become
effective under the Act, (ii) the terms of the Preferred
Stock and of their issuance and sale have been duly
established in conformity with Torchmark's Amended and
Restated Certificate of Incorporation, so as not to
violate any applicable law or result in a default under or
breach of any agreement or instrument binding upon
Torchmark and so as to comply with any requirement or
restriction imposed by any court or governmental body
having jurisdiction over Torchmark, (iii) the Certificate
of Designations, Preferences and Rights of any class or
series of Preferred Stock is duly completed, executed,
attested, filed and recorded in the office of the
Secretary of State of the State of Delaware, and (iv) the
Preferred Stock has been duly issued and sold as
contemplated by the Registration Statement and any
prospectus supplement relating thereto, against payment of
the consideration fixed therefor by the Board of Directors
of Torchmark or a duly authorized committee thereof, the
Preferred Stock, when sold to the Underwriters as
described in the Registration Statement, will be validly
issued, fully paid and nonassessable.
2. When (i) the Registration Statement has become
effective under the Act, (ii) the deposit agreement
relating to the Depositary Shares has been duly executed
<PAGE>
HUGHES & LUCE, L.L.P.
Torchmark Corporation
Torchmark Capital L.L.C.
March 15, 1994
Page 3
and delivered by Torchmark and the depositary, (iii) the
terms of the Depositary Shares and of their issuance and
sale have been duly established in conformity with the
deposit agreement relating to such Depositary Shares so as
not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding
upon Torchmark and so as to comply with any requirement or
restriction imposed by any court or governmental body
having jurisdiction over Torchmark, (iv) the Preferred
Stock which is represented by Depositary Shares is validly
issued and delivered (as contemplated above) to the
depositary, and (v) the depository receipts evidencing the
Depositary Shares are duly issued against the deposit of
the Preferred Stock in accordance with the deposit
agreement, the Depositary Shares will be validly issued.
3. When (i) the terms of the Backup Undertakings
relating to the LLC Preferred Shares have been duly
established in accordance with applicable law, (ii) the
instruments relating to the Backup Undertakings have been
duly authorized, executed and delivered, (iii) the
Registration Statement has become effective and any
applicable state securities or Blue Sky laws have been
complied with, (iv) the LLC Preferred Shares to which the
Backup Undertakings relate have been duly issued and sold
and the purchase price therefor has been received by
Torchmark Capital, and (v) Torchmark has received the
consideration, if any, separately payable for the Backup
Undertakings, the Backup Undertakings will constitute the
valid and legally binding obligations of Torchmark,
subject to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or
affecting creditors' rights and to general equitable
principles.
4. Upon issuance and payment therefor as contemplated
by the Limited Liability Company Agreement, as amended
and/or restated, of Torchmark Capital (as amended and/or
restated, the "LLC Agreement"), the LLC Preferred Shares
will represent validly issued and, subject to the
qualifications set forth herein, will be fully paid and
nonassessable limited liability company interests in
Torchmark Capital, as to which the holders of the LLC
Preferred Shares (the "Preferred Members"), in their
<PAGE>
HUGHES & LUCE, L.L.P.
Torchmark Corporation
Torchmark Capital L.L.C.
March 15, 1994
Page 4
capacity as members of the Company, will have no liability
solely by reason of being Preferred Members in excess of
their obligations to make payments that may be provided
for in the LLC Agreement and their share of the Company's
assets and undistributed profits (subject to the
obligation of a Preferred Member to repay any funds
wrongfully distributed to it). In rendering the opinion
in this paragraph 4, we have assumed that (i) an
appropriate form of amended and restated limited liability
company agreement of Torchmark Capital is duly authorized,
executed and delivered by Torchmark and Maxwell's Energy
Company, Inc., as members of Torchmark Capital, (ii) the
LLC Agreement properly restates the original LLC Agreement
in its entirety, (iii) Torchmark Capital at all times has
at least two members (within the meaning of the Delaware
Limited Liability Company Act (6 Del.C. (S)18-101, et seq.)
(the "Act")), (iv) the LLC Agreement provides for the
issuance of a class of limited liability company interests
in Torchmark Capital to persons and entities (other than
Torchmark and Maxwell's Energy Company, Inc.) who have
taken a legally sufficient act resulting in their becoming
duly admitted to Torchmark Capital as members of Torchmark
Capital in accordance with the LLC Agreement, (v) payment
by the initial Preferred Member to Torchmark Capital of
the full consideration due from it under the LLC Agreement
for the LLC Preferred Shares acquired by it, and (vi) the
LLC Preferred Shares are duly issued to the initial
Preferred Member in accordance with the LLC Agreement and
the Registration Statement.
In connection with our opinions above, we have assumed
that, at or prior to the time of delivery of the Securities,
all proposed additional proceedings shall have been taken, the
authorization of the Securities will be applicable to each
security and will not have been modified or rescinded, and
there will not have occurred any change in law affecting the
validity or enforceability of such Securities. We have also
assumed that none of the terms of any Securities to be
established subsequent to the date hereof, nor the issuance
and delivery of such Securities, nor the compliance by
Torchmark or Torchmark Capital with the terms of such
Securities, will violate any applicable law or will result in
a violation of any provision of any instrument or agreement
then binding upon Torchmark or Torchmark Capital, or any
<PAGE>
HUGHES & LUCE, L.L.P.
Torchmark Corporation
Torchmark Capital L.L.C.
March 15, 1994
Page 5
restriction imposed by any court or governmental body having
jurisdiction over Torchmark or Torchmark Capital.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to
this firm as having passed on the validity of the Securities
under the caption "Legal Opinions" in the prospectus contained
in the Registration Statement. In giving this consent, we do
not admit that we are included in the category of persons
whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission promulgated
thereunder, and nothing herein shall be construed to cause us
to be considered "experts" within the meaning of Section 11 of
the Act or the rules and regulations of the Commission
promulgated thereunder.
Very truly yours,
HUGHES & LUCE, L.L.P.
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Torchmark Corporation:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick
Birmingham, Alabama
March 16, 1994
