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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PROTECTIVE LIFE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 95-2492236
(State of incorporation or organization) (IRS Employer Identification No.)
2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING CUMULATIVE
PREFERRED STOCK, $1.00 PAR VALUE PER SHARE, OF THE REGISTRANT
(Title of each class
to be so registered)
NEW YORK STOCK EXCHANGE
(Name of each exchange on which
each class is to be registered)
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO
BE REGISTERED
On August 7, 1995 the Board of Directors of Protective Life Corporation (the
"Registrant") declared a dividend of one Right for each outstanding share of
Common Stock, $.50 par value per share (the "Common Stock") of the Registrant.
The Rights will be issued on August 18, 1995 to the stockholders of record on
August 18, 1995 and will expire in ten years, subject to earlier redemption.
Under certain circumstances, each Right entitles the registered holder to
purchase from the Registrant one one-hundredth of a share of Series A Junior
Participating Cumulative Preferred Stock, $1.00 par value per share ("Preferred
Stock"), of the Registrant or, in certain circumstances, either Common Stock or
common stock of an acquiring company at one half the market price of such Common
Stock or common stock, as the case may be. The Rights are designed to make it
more likely that all the Registrant's stockholders receive fair and equal
treatment in the event of any proposed takeover of the Registrant and to guard
against the use of partial tender offers or other coercive tactics to gain
control of the Registrant. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Registrant and
AmSouth Bank of Alabama, as Rights Agent (the "Rights Agent").
EXERCISE PRICE
When exercisable, except as set forth below, each Right entitles the registered
holder to purchase from the Registrant one one-hundredth of a share of Preferred
Stock, at a price of $110.00 per one one-hundredth of a share (the "Purchase
Price"), subject to adjustment in certain circumstances.
TRANSFER AND DETACHMENT
Until the "Distribution Date," which is the earlier to occur of (i) ten business
days following the time (the "Stock Acquisition Time") of a public announcement
or notice to the Registrant that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership (as defined in the Rights Agreement) of 15% or more of the
outstanding shares of Common Stock of the Registrant, and (ii) ten business
days, or such later date as may be determined by the Board of Directors of the
Registrant, after the date of the commencement or announcement by a person of an
intention to make a tender offer or exchange offer for an amount of Common Stock
which, together with the shares of such stock already owned by such person,
constitutes 15% or more of the outstanding shares of such Common Stock, the
Rights will be evidenced, with respect to any of the Registrant's Common Stock
certificates outstanding as of August 18, 1995, by such Common Stock certificate
with a copy of a Summary of Rights attached thereto. The Rights Agreement
provides that, until the Distribution Date, the Rights will be transferred with
and only with the Registrant's Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates
issued after August 18, 1995, upon the transfer or issuance of new shares of
Common Stock, will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any of the Registrant's Common Stock
certificates outstanding as of August 18, 1995, even without a copy of the
Summary of Rights attached thereto, will also constitute the transfer of the
Rights associated with the shares of Common Stock represented by such
certificate.
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As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Stock as of the close of business on the Distribution Date, and
such separate Right Certificates alone will evidence the Rights.
EXERCISABILITY
The Rights are not exercisable until the Distribution Date. The Rights will
expire on August 18, 2005 unless earlier redeemed by the Registrant.
RIGHT TO ACQUIRE STOCK AT HALF PRICE
In the event that after the Stock Acquisition Time, the Registrant is acquired
in a merger or other business combination transaction or 50% or more of the
Registrant's assets, cash flow or earning power are sold or otherwise
transferred, the Rights Agreement provides that proper provision shall be made
so that each holder of a Right, upon the exercise thereof at the then current
exercise price of the Right, shall thereafter be entitled to receive that number
of shares of common stock of the acquiring company which at the time of such
transaction would have a market value (as defined in the Rights Agreement) of
two times the exercise price of the Right. In the event that the Registrant is
the surviving corporation of a merger and its Common Stock is changed or
exchanged, proper provision shall be made so that each holder of a Right will
thereafter have the right to receive upon exercise that number of shares of
common stock of the other party to the transaction having a market value of two
times the exercise price of the Right.
In the event that a person or group becomes an Acquiring Person (otherwise than
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock at a price and on terms which are determined to be fair and in the
best interests of the Registrant and its stockholders by a majority of the
members of the Board of Directors of the Registrant who are not Acquiring
Persons or representatives or nominees of or affiliated or associated with an
Acquiring Person), proper provision shall be made so that each holder of a
Right, other than Rights that were beneficially owned by the Acquiring Person,
which will thereafter be void, will thereafter have the right to receive upon
exercise that number of shares of Common Stock having a market value (as defined
in the Rights Agreement) of two times the exercise price of the Right. A person
or group will not be deemed to be an Acquiring Person if the Board of Directors
of the Registrant determines that such person or group became an Acquiring
Person inadvertently and such person or group promptly divests itself of a
sufficient number of shares of Common Stock so that such person or group is no
longer an Acquiring Person.
ADJUSTMENTS
The Purchase Price payable and the number of shares of Preferred Stock or other
securities or property issuable upon the exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on or a subdivision, combination or reclassification of the shares of
Preferred Stock, (ii) upon the fixing of a record date for the issuance to
holders of Preferred Stock of certain rights, options or warrants to subscribe
for shares of Preferred Stock or convertible securities at less than the current
market price of shares of Preferred Stock or (iii) upon the fixing of a record
date for the making of a distribution to holders of shares of Preferred Stock of
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evidences of indebtedness or assets (excluding regular periodic cash dividends
not exceeding 125% of the last regular periodic cash dividend or dividends
payable in shares of Preferred Stock) or of subscription rights or warrants
(other than those referred to above). The number of Rights and the number of
shares of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the case of a stock split, combination or stock dividend on the
shares of Common Stock prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in the
Purchase Price. No fractional shares of Common Stock will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market value of
shares of Common Stock on the last trading date prior to the date of exercise.
REDEMPTION OR EXCHANGE
At any time prior to the earlier of (i) the Stock Acquisition Time and (ii)
August 18, 2005, the Registrant, by resolution of its Board of Directors, may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Registrant electing to redeem the Rights (or at such time subsequent to such
action as the Board of Directors may determine), the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person of 50% or more of the outstanding Common Stock of the
Registrant, the Board of Directors of the Registrant, may exchange the Rights
(other than Rights beneficially owned by such person which have become void), in
whole or in part, for Common Stock of the Registrant at an exchange ratio of one
share of Common Stock per Right (subject to adjustment). The Registrant may at
its option substitute shares of Preferred Stock (or other series of
substantially similar preferred stock of the Registrant) for some or all of the
shares of Common Stock exchangeable for Rights, at an exchange ratio of one one-
hundredth of a share of Preferred Stock (or such other series of preferred
stock) for each share of Common Stock to be exchanged.
PREFERRED STOCK
The shares of Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Registrant
may issue (unless otherwise provided in the terms of such preferred stock or in
the Registrant's Certificate of Incorporation). Each share of Preferred Stock
will be entitled to receive, in the aggregate, a dividend in an amount equal to
100 times the dividend per share of Common Stock, or, if greater, $10.00 per
year. In the event of liquidation, the holders of shares of Preferred Stock
will be entitled to receive a minimum liquidation payment equal to the greater
of $10.00 per share or an amount equal to 100 times the amount to be paid in
liquidation per share of Common Stock. Each share of Preferred Stock will have
100 votes, voting together with the shares of Common Stock. In addition, if
dividends on the Preferred Stock are in arrears for four consecutive quarterly
payment periods, the holders of the shares of Preferred Stock will have the
right, voting as a class, to elect two members to the Board of Directors of the
Registrant. In the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, each share of Preferred Stock will
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be entitled to receive 100 times the amount and type of consideration received
per share of Common Stock. The rights of the shares of Preferred Stock as to
dividends and liquidation, and in the event of mergers and consolidations, are
protected by antidilution provisions.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Registrant, including, without limitation, the right to
vote or to receive dividends.
AMENDMENT
The Rights and the Rights Agreement can be amended by the Board of Directors of
the Registrant in any respect (including, without limitation, any extension of
the period in which the Right Certificates may be redeemed) at any time prior to
the Stock Acquisition Time. From and after such time, without the approval of
the stockholders of the Registrant or the holders of the Rights, the Board of
Directors may only supplement or amend the Rights Agreement in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained in the
Rights Agreement which may be defective or inconsistent with any other provision
in the Rights Agreement, (iii) to shorten or lengthen any time period under the
Rights Agreement or (iv) to make any changes or supplements which the Registrant
may deem necessary or desirable which shall not adversely affect the interests
of the holders of Right Certificates (other than an Acquiring Person or an
affiliate or associate of any such person), provided that any such action by the
Board of Directors must have the concurrence of a majority of the Continuing
Directors (as defined in the Rights Agreement) and provided that the Continuing
Directors constitute a majority of directors then in office, and provided that
the Rights Agreement may not be supplemented or amended to lengthen (A) a time
period relating to when the Rights may be redeemed or to modify the ability (or
inability) of the Registrant's board of directors to redeem the Rights, in
either case at such time as the Rights are not then redeemable or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the Rights of or the benefits to the holders of Rights (other than
an Acquiring Person or an affiliate or associate of any such person).
ISSUANCE OF RIGHTS
Each outstanding share of Common Stock on August 18, 1995 will receive one
Right. As long as the Rights are attached to the shares of Common Stock, the
Registrant will issue one Right with each share of Common Stock it issues, so
that all such shares have attached Rights. 400,000 shares of Preferred Stock
have been reserved for issuance upon exercise of the Rights.
A copy of the Rights Agreement, which includes as Exhibit B the form of Right
Certificate, is attached hereto as Exhibit 1 and is incorporated herein by
reference. The foregoing description of the Rights is qualified in its entirety
by reference to such Exhibit.
EXISTING RIGHTS
On August 7, 1995, the Board of Directors authorized the redemption of the
currently outstanding preferred share purchase rights effective August 18, 1995,
at a redemption price of $0.005 per right payable on September 1, 1995 to
holders of record of such rights on August 18, 1995.
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ITEM 2. EXHIBITS
1. Rights Agreement between the Registrant and
AmSouth Bank of Alabama, Rights Agent, dated as
of August 7, 1995, which includes as Exhibit
B the form of Right Certificate.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereto duly authorized.
PROTECTIVE LIFE CORPORATION
(Registrant)
By /s/ Jerry W. DeFoor
Name: Jerry W. DeFoor
Title: Vice President and
Controller, and
Chief Accounting Officer
DATE: August 7, 1995
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<TABLE>
EXHIBIT INDEX
<CAPTION>
EXHIBIT NO. DESCRIPTION
<S> <C>
1. Rights Agreement between the Registrant and AmSouth Bank
of Alabama, Rights Agent, dated as of August 7, 1995, which
includes as Exhibit B the form of Right Certificate.
</TABLE>
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PROTECTIVE LIFE CORPORATION
and
AMSOUTH BANK OF ALABAMA
Rights Agent
RIGHTS AGREEMENT
Dated as of August 7, 1995
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TABLE OF CONTENTS
Section Page
1. Certain Definitions. . . . . . . . . . . . . . . . . . 2
2. Appointment of Rights Agent. . . . . . . . . . . . . .13
3. Issue of Right Certificates. . . . . . . . . . . . . .13
4. Form of Right Certificates . . . . . . . . . . . . . .17
5. Countersignature and Registration. . . . . . . . . . .19
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. . . . . . . . . . . . . . . . . .20
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. . . . . . . . . . . . . . . . . . . . . . . .22
8. Cancellation and Destruction of Right Certificates . .27
9. Reservation and Availability of Capital Stock. . . . .28
10. Preferred Stock Record Date . . . . . . . . . . . . .31
11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights . . . . . . . . . . . . . . . . .32
12. Certificate of Adjusted Purchase Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . . . . .54
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . .55
14. Fractional Rights and Fractional Shares . . . . . . .62
15. Rights of Action. . . . . . . . . . . . . . . . . . .65
16. Agreement of Right Holders. . . . . . . . . . . . . .66
17. Right Certificate Holder Not Deemed a Shareholder . .68
18. Concerning the Rights Agent . . . . . . . . . . . . .69
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19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . . . . .70
20. Duties of Rights Agent. . . . . . . . . . . . . . . .71
21. Change of Rights Agent. . . . . . . . . . . . . . . .76
22. Issuance of New Right Certificates. . . . . . . . . .78
23. Redemption. . . . . . . . . . . . . . . . . . . . . .80
23A. Exchange . . . . . . . . . . . . . . . . . . . . . .81
24. Notice of Certain Events. . . . . . . . . . . . . . .85
25. Notices . . . . . . . . . . . . . . . . . . . . . . .87
26. Supplements and Amendments. . . . . . . . . . . . . .88
27. Successors. . . . . . . . . . . . . . . . . . . . . .90
28. Determinations and Actions by the Board of Directors,
etc . . . . . . . . . . . . . . . . . . . . . . . . .90
29. Benefits of this Agreement. . . . . . . . . . . . . .92
30. Severability. . . . . . . . . . . . . . . . . . . . .92
31. Governing Law . . . . . . . . . . . . . . . . . . . .94
32. Counterparts. . . . . . . . . . . . . . . . . . . . .94
33. Descriptive Headings. . . . . . . . . . . . . . . . .94
Exhibit A - Certificate of Designation
Exhibit B - Form of Right Certificate
Exhibit C - Form of Summary of Rights
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of August 7, 1995
(the "Agreement"), between Protective Life Corporation, a
Delaware corporation (the "Company"), and AmSouth Bank of
Alabama (the "Rights Agent"),
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one Right (as herein-
after defined) for each share of Common Stock, par value
$.50 per share, of the Company outstanding at the Close of
Business (as hereinafter defined) on August 18, 1995 (the
"Record Date"), each Right representing the right to pur-
chase one one-hundredth (1/100th) of a share of Series A
Junior Participating Cumulative Preferred Stock, par value
$1.00 per share, of the Company having the rights and
preferences set forth in the form of Certificate of
Designation attached hereto as Exhibit A, and has further
authorized the issuance of one Right with respect to each
share of Common Stock of the Company that shall become
outstanding between the Record Date and the earliest of the
Distribution Date, the Expiration Date and the Final
Expiration Date (as such terms are hereinafter defined);
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NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of
this Agreement, the following terms have the meanings indi-
cated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of
such Person, shall be the Beneficial Owner of 15% or
more of the shares of Common Stock of the Company then
outstanding, but shall not include any employee benefit
plan of the Company or any Subsidiary of the Company or
any Person organized, appointed or established by the
Company or such Subsidiary for or pursuant to the terms
of any such employee benefit plan. Notwithstanding the
foregoing:
(i) no Person shall become an
"Acquiring Person" as the result of an acquisition
of shares of Common Stock by the Company which, by
reducing the number of shares of Common Stock
outstanding, increases the proportionate number of
shares Beneficially Owned by such Person to 15% or
more of the shares of Common Stock of the Company
then outstanding, PROVIDED, HOWEVER, that if a
Person shall become the Beneficial Owner of 15% or
more
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of the shares of Common Stock of the Company by
reason of share purchases by the Company and shall,
after such share purchases by the Company, at a time
when such Person Beneficially Owns 15% or more of
the Common Stock, become the Beneficial Owner of any
additional shares of Common Stock of the Company,
then such Person shall be deemed to be an "Acquiring
Person";
(ii) if the Board of Directors of the Company
determines in good faith that a Person who would
otherwise be an "Acquiring Person" has become such
inadvertently (including, without limitation,
because (A) such Person was unaware that he or it
Beneficially Owned a percentage of Common Stock that
would otherwise cause such Person to be an
"Acquiring Person" or (B) such Person was aware of
the extent of his or its Beneficial Ownership but
had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement) and
without any intention of changing or influencing
control of the Company, and if such Person, as
promptly as practicable after being advised of such
determination, divests himself or itself of
Beneficial Ownership of a sufficient number of
shares of Common Stock so that such Person would
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no longer be an "Acquiring Person", then such Person
shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this
Agreement; and
(iii) no Person shall become an "Acquiring
Person" by virtue of ownership of Common Stock of
the Company by any Affiliate and/or Associate of
such Person, which Affiliate and/or Associate is
deemed to be an Affiliate and/or Associate of such
Person solely by reason of such Affiliate and/or
Associate being a director or officer of the Com-
pany.
(b) "Adjustment Shares" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate", when used with
reference to any Person, shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the Record Date.
(d) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "beneficially own" any
securities:
(i) which such Person or any of such
Person's Affiliates or Associates, directly or
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indirectly, has the right to vote or dispose of,
including pursuant to any agreement, arrangement or
understanding (whether or not in writing); PROVIDED,
HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or under-
standing to vote such security (1) arises solely
from a revocable proxy given to such Person in
response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act
and (2) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or
successor report);
(ii) which such Person or any of such
Person's Affiliates or Associates has the right to
acquire (whether such right is exercisable immedi-
ately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether
or not in writing), or upon the exercise of
conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or
otherwise, PROVIDED, HOWEVER, that a Person shall
not be deemed the Beneficial Owner of, or to bene-
ficially own, (A) securities tendered pursuant to
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a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior
to the occurrence of either a Section 11(a)(ii)
Event or a Section 13 Event, or (C) securities
issuable upon exercise of Rights from and after the
occurrence of either a Section 11(a)(ii) Event or a
Section 13 Event, which Rights were acquired by such
Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with
respect to any Original Rights; or
(iii) which are beneficially owned, di-
rectly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or
understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in
subparagraph (i)
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of this paragraph (d)) or disposing
of any securities of the Company in a manner that
relates or is reasonably likely potentially to
relate to influencing the control or management of
the Company;
PROVIDED, HOWEVER, that nothing in this paragraph (d)
shall cause a person engaged in business as an under-
writer of securities to be the Beneficial Owner of, or
to beneficially own, any securities acquired through
such person's participation in good faith in a firm
commitment underwriting until the expiration of forty
days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions
in the State of Alabama are authorized or obligated by
law or executive order to close.
(f) "Certificate of Designation" shall mean the
Certificate of Designation of Series A Junior
Participating Cumulative Preferred Stock setting forth
the powers, preferences, rights, qualifications,
limitations and restrictions of such series of
preferred stock of the Company, a form of which is
attached hereto as Exhibit A.
(g) "Close of Business" on any given date shall mean
5:00 P.M., Birmingham, Alabama time, on such date; PRO-
VIDED, HOWEVER, that if such date is not a Business
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Day, it shall mean 5:00 P.M., Birmingham, Alabama time,
on the next succeeding Business Day.
(h) "Common Stock" when used with reference to the
Company shall mean the Common Stock, par value $0.50
per share, of the Company. "Common Stock" when used
with reference to any Person other than the Company
which is organized in corporate form shall mean the
capital stock with the greatest voting power, or the
equity securities or other equity interest having power
to control or direct the management, of such Person,
or, if such Person is a Subsidiary of another Person,
the capital stock with the greatest voting power of the
Person which ultimately controls such first-mentioned
Person. "Common Stock" when used with reference to any
Person which is not organized in corporate form shall
mean units of beneficial interest which (i) shall
represent the right to participate generally in the
profits and losses of such Person (including, without
limitation, any flow-through tax benefits resulting
from an ownership interest in such Person) and which
(ii) shall be entitled to exercise the greatest voting
power of such Person or, in the case of a limited
partnership, shall have the power to remove the general
partner or partners.
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(i) "Common Stock Equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(j) "Company" shall have the meaning set forth in
the first paragraph of this Agreement.
(k) "Continuing Director" shall mean any member of
the Board of Directors of the Company (while such
person is a member of such Board of Directors) who
either (i) was a member of such Board of Directors
prior to the Stock Acquisition Time or (ii) is not an
Acquiring Person, an Affiliate or Associate of an
Acquiring Person, or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate,
and subsequently became a member of such Board of
Directors, and whose nomination for election or
election thereto was recommended or approved by a
majority of the Continuing Directors then on such Board
of Directors.
(l) "Current Market Price" shall have the meaning
set forth in Section 11(d) hereof.
(m) "Current Value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning
specified in Section 3(a) hereof.
(o) "Equivalent Preference Stock" shall have the
meaning set forth in Section 11(b) hereof.
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(p) "Expiration Date" shall have the meaning
specified in Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning
specified in Section 7(a) hereof.
(r) "NASDAQ" shall have the meaning set forth in
Section 11(d) hereof.
(s) "Outside Directors" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(t) "Person" shall mean any individual, firm,
corporation, partnership, trust or other entity, and
shall include any successor (by merger or otherwise) of
such entity.
(u) "Preferred Stock" shall mean shares of Series A
Junior Participating Cumulative Preferred Stock, par
value $1.00 per share, of the Company, having the
rights, preferences and limitations set forth in the
form of Certificate of Designation attached to this
Agreement as Exhibit A, and, to the extent there are
not a sufficient number of shares of Series A Junior
Participating Cumulative Preferred Stock authorized to
permit the full exercise of the then outstanding
Rights, any other series of preferred stock of the
Company designated for such purpose by the Board of
Directors of the Company containing terms substantially
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similar to the terms of the Series A Junior Participat-
ing Cumulative Preferred Stock.
(v) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(w) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(x) "Record Date" shall have the meaning set forth
in the WHEREAS clause at the beginning of this
Agreement.
(y) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(z) "Right" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(aa) "Right Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(bb) "Rights Agent" shall have the meaning set
forth in the first paragraph of this Agreement.
(cc) "Section 11(a)(ii) Event" shall have the
meaning set forth in Section 11(a)(ii) hereof.
(dd) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(ee) "Section 13 Event" shall have the meaning set
forth in Section 13(a) hereof.
(ff) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
11
<PAGE>
(gg) "Stock Acquisition Time" shall mean the time
of occurrence of whichever of the following first oc-
curs: (i) the first public announcement by the Company
or an Acquiring Person that the Acquiring Person has
become such, or (ii) the communication to the Company
(including, without limitation, to the directors of the
Company) of any notice (including, without limitation,
any written consent or notice related thereto) from an
Acquiring Person indicating or reflecting that the
Acquiring Person has become such.
(hh) "Subsidiary" shall mean, with respect to any
Person, any corporation or other entity of which secu-
rities or other ownership interests having ordinary
voting power sufficient, in the absence of contin-
gencies, to elect a majority of the board of directors
or other persons performing similar functions are at
the time beneficially owned, directly or indirectly, by
such Person or otherwise controlled by such Person.
(ii) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(jj) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
(kk) "Trading Day" shall have the meaning set forth
in Section 11(d) hereof.
12
<PAGE>
Section 2. APPOINTMENT OF RIGHTS AGENT. The
Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appoint-
ment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable. Any
actions which may be taken by the Rights Agent pursuant to
the terms of this Agreement may be taken by any such
Co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until
the earlier of the Close of Business on (i) the tenth
Business Day after the Stock Acquisition Time, or (ii) the
tenth Business Day, or such specified or unspecified later
date as may be determined by action of the Board of
Directors of the Company, after the date of the commencement
of (as determined by reference to Rule 14d-2(a), as in ef-
fect under the Exchange Act on the Record Date), or first
public announcement of the intent of any Person (other than
the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the
Company, or any Person organized, appointed or established
by the Company or such Subsidiary as a fiduciary pursuant to
the terms of any such employee benefit plan) to commence
(which intention to commence remains in effect for five
Business Days after such announcement), a tender or exchange
13
<PAGE>
offer for an amount of Common Stock of the Company which,
together with the shares of such stock already owned by such
Person, constitutes 15% or more of the outstanding Common
Stock of the Company (including any such date which is after
the date of this Agreement and prior to the issuance of the
Rights) (the earlier of such dates described in clauses (i)
and (ii) above being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the cer-
tificates for shares of Common Stock registered in the names
of the holders of Common Stock (which certificates for Com-
mon Stock shall be deemed also to be certificates for
Rights) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable
only in connection with the transfer of the underlying Com-
mon Stock. As soon as practicable after the Distribution
Date, the Rights Agent will send, by first class, insured,
postage-prepaid mail, to each record holder of Common Stock
as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company,
a Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as
provided herein and to the provisions of Section 14(a) here-
14
<PAGE>
of. As of the Distribution Date, the Rights will be evi-
denced solely by such Right Certificates.
(b) On the Record Date or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preferred Stock, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder
of Common Stock as of the Close of Business on the Record
Date, at the address of such holder shown on the records of
the Company. With respect to certificates for Common Stock
outstanding as of the Record Date, until the earlier of the
Distribution Date or the Expiration Date, the Rights will be
evidenced by such certificates for Common Stock registered
in the names of the holders of Common Stock with a copy of
the Summary of Rights attached thereto. Until the earliest
of the Distribution Date, the Expiration Date and the Final
Expiration Date, the surrender for transfer of any of the
certificates for Common Stock outstanding on the Record
Date, with or without a copy of the Summary of Rights at-
tached thereto, shall also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for Common Stock issued (or
delivered from the Company's treasury) after the Record Date
but prior to the earliest of the Distribution Date, the
15
<PAGE>
Expiration Date and the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Protective Life Corpora-
tion (the "Corporation") and AmSouth Bank of
Alabama, dated as of August 7, 1995 (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of
which is on file at the principal executive
offices of the Corporation. Under certain
circumstances, as set forth in the Rights Agree-
ment, such Rights will be evidenced by separate
certificates and will no longer be evidenced by
this certificate. The Corporation will mail to
the holder of this certificate a copy of the
Rights Agreement without charge promptly after
receipt of a written request therefor. Under
certain circumstances set forth in the Rights
Agreement, Rights issued to an Acquiring Person or
any Associate or Affiliate thereof (as such terms
are defined in the Rights Agreement) may be null
and void. The Rights shall not be exercisable,
and shall be void so long as held, by a holder in
any jurisdiction where the requisite qualification
for the issuance to such holder, or the exercise
by such holder of the Rights in such jurisdiction,
shall not have been obtained or be obtainable.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Stock represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also consti-
tute the transfer of the Rights associated with the Common
Stock represented by such certificates.
16
<PAGE>
Section 4. FORM OF RIGHT CERTIFICATES. (a) The
Right Certificates (and the forms of election to purchase
shares, certification and assignment to be printed on the
reverse thereof) shall be substantially in the form set
forth in Exhibit B hereto and may have such marks of identi-
fication or designation and such legends, summaries or en-
dorsements printed thereon as the Company may deem appro-
priate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11
and 22 hereof, the Right Certificates, whenever distributed,
which are distributed in respect of shares of Common Stock
which were issued and outstanding as of the Record Date,
shall be dated as of the Record Date, and all Right Certifi-
cates which are distributed in respect of other shares of
Common Stock shall be dated as of the respective dates of
issuance of such Common Stock, and in each such case on
their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a share of Preferred
Stock as shall be set forth therein at the price per one
one-hundredth of a share of Preferred Stock set forth there-
in (the "Purchase Price"), but the number and type of secu-
17
<PAGE>
rities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as
provided in this Agreement.
(b) Any Right Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Asso-
ciate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affili-
ate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a trans-
feree prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring
Person has any continuing agreement, arrangement or under-
standing regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined
is part of a plan, arrangement or understanding (whether or
not in writing) which has as a primary purpose or effect the
avoidance of the provisions of Section 7(e), Sec-
tion 11(a)(ii) or of Section 13 hereof with respect to the
limitation of the Rights beneficially owned by an Acquiring
Person (or any Associate or Affiliate thereof), and any
18
<PAGE>
Right Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of
any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend
modified as necessary to apply to such Person:
The Rights represented by this Certificate are or
were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in
the Rights Agreement). Accordingly, this Certifi-
cate and the Rights represented hereby may become
null and void in the circumstances specified in
Section 7(e) of the Rights Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of
the Company manually or by facsimile signature by the Chair-
man of the Board, the President or any Vice President and
have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or any As-
sistant Secretary, either manually or by facsimile signa-
ture. The Right Certificates shall be countersigned by the
Rights Agent manually and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before counter-
signature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered
19
<PAGE>
by the Company with the same force and effect as though the
person who signed such Right Certificates had not ceased to
be such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office
in Birmingham, Alabama, books for registration and transfer
of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the date and
certificate number of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND
EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHT CERTIFICATES. (a) Subject to the provi-
sions of Sections 4(b) and 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Expiration
Date and the Final Expiration Date, any Right Certificate or
Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certifi-
20
<PAGE>
cates, entitling the registered holder to purchase a like
number of shares of Preferred Stock (or other securities,
cash, and/or assets, as the case may be) as the Right Cer-
tificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certifi-
cate shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or
exchanged, with the form of assignment and certificate ap-
propriately executed, at the principal office of the Rights
Agent in Birmingham, Alabama. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right
Certificate or Right Certificates until the registered
holder shall have completed and signed the certificate con-
tained in the form of assignment on the reverse side of such
Right Certificate or Right Certificates and shall have pro-
vided such additional evidence of the identity of the Bene-
ficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall countersign and deliver to
the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any
21
<PAGE>
tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of any
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, if requested
by the Company, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company will execute and
deliver a new Right Certificate of like tenor to the Rights
Agent for counter-signature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS. (a) Subject to Section 7(e)
hereof, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and certificate on the
reverse side thereof duly executed, to the Rights Agent at
the principal office of the Rights Agent in Birmingham,
22
<PAGE>
Alabama, together with payment of the Purchase Price for
each one one-hundredth of a share of Preferred Stock as to
which the Rights are exercised, at or prior to the earliest
of (i) the Close of Business on August 18, 2005 (the "Final
Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, (iii) the time at
which the Rights are exchanged as provided in Section 23A
hereof, or (iv) the time at which the Rights expire pursuant
to Section 13(d) hereof (the earliest of such times being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of
a share of Preferred Stock issued pursuant to the exercise
of a Right shall initially be $110, shall be subject to
adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase
and certificate duly executed, accompanied by payment (by
certified check or bank draft payable to the order of the
Company) of the Purchase Price for the Preferred Stock (or
other shares, securities, cash or other assets, as the case
may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
23
<PAGE>
the Rights pursuant hereto in cash, or by certified check or
bank draft payable to the order of the Company, the Rights
Agent shall, subject to Section 20(k) hereof, (i)(A) prompt-
ly requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the trans-
fer agent) certificates for the number of shares of Pre-
ferred Stock to be purchased (and the Company hereby irrevo-
cably authorizes its transfer agent to comply with all such
requests), or (B) if the Company shall have elected to de-
posit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a
share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock repre-
sented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby
directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) promptly
after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and
24
<PAGE>
(iv) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obli-
gated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evid-
enced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Sec-
tion 11(a)(ii) Event, any Rights beneficially owned by (i)
an Acquiring Person or an Associate or Affiliate of an Ac-
quiring Person, (ii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee after such Acquiring Person becomes such, or
(iii) a transferee of any such Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior
25
<PAGE>
to or concurrently with such Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from such Acquiring Per-
son to holders of equity interests in such Acquiring Person
or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding
the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement
or otherwise. The Company shall use all reasonable efforts
to ensure that the provisions of this Section 7(e) and Sec-
tion 4(b) hereof are complied with, but shall have no lia-
bility to any holder of Right Certificates or any other
Person as a result of its failure to make any determination
with respect to an Acquiring Person or any of its respective
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall
be obligated to undertake any action with respect to a reg-
istered holder of any Right Certificate upon the occurrence
of any purported transfer or exercise as set forth in this
26
<PAGE>
Section 7 unless such registered holder shall have (i) com-
pleted and signed the certificate following the form of
assignment or election to purchase set forth on the reverse
side of the Right Certificate surrendered for such assign-
ment or exercise, and (ii) provided such additional evidence
of the identity of the Beneficial Owner (or former Benefi-
cial Owner) or Affiliates or Associates thereof as the Com-
pany shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancella-
tion or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates
shall be issued in lieu thereof except as expressly per-
mitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates
to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in
27
<PAGE>
such case shall deliver a certificate of destruction thereof
to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL
STOCK. (a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock or any
authorized and issued shares of Preferred Stock held in its
treasury (and will use its best efforts, following the oc-
currence of a Section 11(a)(ii) Event, to cause to be re-
served and kept available out of its authorized and unissued
shares of Common Stock and/or other securities or out of its
authorized and issued shares of Common Stock and/or other
securities held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Section
11(a)(ii) Event, Common Stock and/or other securities) that
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date
after the first occurrence of a Section 11(a)(ii) Event on
which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance
with Section 11(a)(iii) hereof, or as soon as is required by
law following the Distribution Date, as the case may be, a
registration statement under the Securities Act of 1933, as
28
<PAGE>
amended (the "Act"), with respect to the securities purchas-
able upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective
as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities, and (B) the Expi-
ration Date. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in con-
nection with the exercisability of the Rights. The Company
may, acting by resolution of its Board of Directors,
temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(b), the exercisability
of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been tem-
porarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwith-
standing any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction
29
<PAGE>
unless the requisite qualification in such jurisdiction
shall have been obtained.
(c) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
one one-hundredths of a share of Preferred Stock (and, fol-
lowing the occurrence of a Section 11(a)(ii) Event, Common
Stock and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect
of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock (or shares of Common Stock
and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to
a person other than, or the issuance or delivery of
certificates or depositary receipts for a number of one
one-hundredths of a share of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be),
in a name other than that of, the registered holder of the
30
<PAGE>
Right Certificate evidencing Rights surrendered for exercise
or to issue or deliver any certificates for shares of Pre-
ferred Stock (or Common Stock and/or other securities, as
the case may be) or depositary receipts for Preferred Stock
upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no
such tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each
person in whose name any certificate for a number of one
one-hundredths of a share of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of shares of
Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the
Right Certificate evidencing such Rights was duly surren-
dered and payment of the Purchase Price (and any applicable
transfer taxes) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the
Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) transfer books of the Com-
pany are closed, such person shall be deemed to have become
31
<PAGE>
the record holder of such shares (fractional and otherwise)
on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exer-
cise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, shall not be entitled to any rights of
a stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any meetings
or other proceedings of the Company, except as provided
herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER
AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price,
the number and kind of shares, or fractions thereof, covered
by each Right and the number of Rights outstanding are sub-
ject to adjustment from time to time as provided in this
Section 11.
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on
the Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock into a greater
number of shares, (C) combine or consolidate the outstanding
32
<PAGE>
Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassifica-
tion of the Preferred Stock (including any such reclassifi-
cation in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation),
except as otherwise provided in Section 7(e) hereof and this
Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital
stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when
the Preferred Stock transfer books of the Company were open,
he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination
or reclassification.
If an event occurs which would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i)
33
<PAGE>
shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii) Event")
that any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a
Section 13 Event or is an acquisition of Common Stock of the
Company pursuant to a tender or exchange offer for all out-
standing Common Stock of the Company at a price and on terms
determined by at least a majority of the members of the
Board of Directors of the Company who are not Acquiring
Persons or representatives, nominees, Affiliates or Associ-
ates of an Acquiring Person (the "Outside Directors"), after
receiving advice from one or more investment banking firms,
to be (A) at a price which is fair to stockholders (taking
into account all factors which such Outside Directors deem
relevant, including, without limitation, prices which could
reasonably be achieved if the Company or its assets were to
be sold on an orderly basis designed to realize maximum
value) and (B) otherwise in the best interests of the Com-
pany and its stockholders, then proper provision shall be
made so that each holder of a Right (except as provided
below and in Section 7(e) hereof), shall thereafter have the
right to receive, upon exercise thereof following the Dis-
tribution Date at the then current Purchase Price in accor-
34
<PAGE>
dance with the terms of this Agreement, in lieu of a number
of one-hundredths of a share of Preferred Stock, such number
of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the then number of one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediate-
ly prior to the first occurrence of such Section 11(a)(ii)
Event, whether or not such Right was then exercisable, and
(y) dividing that product (which, following such first oc-
currence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agree-
ment) by 50% of the Current Market Price per share of the
Common Stock of the Company (determined pursuant to Section
11(d) hereof) on the date of the occurrence of such Section
11(a)(ii) Event (such number of shares being hereinafter
referred to as the "Adjustment Shares"). The Company shall
notify the Rights Agent as to any Persons who are deemed by
the Company to be Acquiring Persons or Associates, Affili-
ates or transferees (as described in subparagraphs (ii) and
(iii) of Section 7(e) hereof) of such Persons and shall
identify any Rights pertaining thereto.
(iii) In lieu of issuing shares of Common Stock of
the Company in accordance with Section 11(a)(ii) hereof, the
Company, acting by resolution of its Board of Directors
(which resolution shall be effective only with the
35
<PAGE>
concurrence of a majority of the Continuing Directors), may
(and, in the event that the number of shares of Common Stock
which are authorized by the Company's Certificate of Incor-
poration but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof, the Company, act-
ing by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), shall): (A)
determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current
Value"), over (2) the Purchase Price attributable to each
Right (such excess, the "Spread") and (B) with respect to
each Right (subject to Section 7(e) hereof), make adequate
provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limita-
tion, shares, or units of shares, of preferred stock which
the Board of Directors of the Company (with the concurrence
of a majority of the Continuing Directors) has deemed to
have the same value as shares of Common Stock of the Company
(such shares or units of preferred stock hereinafter called
"Common Stock Equivalents")), (4) debt securities of the
36
<PAGE>
Company, (5) other assets, or (6) any combination of the
foregoing having an aggregate value equal to the Current
Value, where such aggregate value has been determined by
action of the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors) based
upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the
Company which has theretofore performed no services for the
Company or any Subsidiary of the Company in the past five
years; PROVIDED, HOWEVER, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the
first date that the right to redeem the Rights pursuant to
Section 23 hereof, as such date may be amended pursuant to
Section 26 hereof, shall expire (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock of the
Company (to the extent available) and then, if necessary,
cash, securities and/or assets, that in the aggregate have a
value equal to the Spread. If, after the occurrence of a
Section 11(a)(ii) Event, the number of shares of Common
Stock that are authorized by the Company's Certificate of
37
<PAGE>
Incorporation but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not
sufficient to permit exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof and the Company,
acting by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), shall determine in
good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the thirty (30) day period
set forth above may be extended to the extent necessary, but
not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares
(such period as it may be extended, the "Substitution
Period"). To the extent that the Company determines that
some action is to be taken pursuant to the terms of this
Section 11(a)(iii), the Company (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder
approval for the authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to the first sentence of this Section 11(a)(iii)
38
<PAGE>
and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value
of the Common Stock shall be the Current Market Price per
share of Common Stock (as determined pursuant to Section
11(d) hereof) on the date of the first occurrence of the
Section 11(a)(ii) Event, and the per share or per unit value
of any Common Stock Equivalents shall be deemed to equal the
Current Market Price per share of the Common Stock of the
Company on such date.
(b) In the event that the Company shall fix a record
date for the issuance of rights, options or warrants to all
holders of shares of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or
shares having the same rights, privileges and preferences as
the shares of Preferred Stock ("Equivalent Preference
Stock")) or securities convertible into shares of Preferred
Stock or Equivalent Preference Stock at a price per share of
Preferred Stock or Equivalent Preference Stock (or having a
conversion price per share, if a security convertible into
shares of Preferred Stock or Equivalent Preference
39
<PAGE>
Stock) less than the Current Market Price per share of the
Preferred Stock (as defined in Section 11(d) hereof) on such
record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date
plus the number of additional shares of Preferred Stock
and/or Equivalent Preference Stock which the aggregate of-
fering price of the total number of such shares so to be
offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase
at such Current Market Price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding
on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preference Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially con-
vertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as de-
termined in good faith by the Board of Directors of the
Company (with the concurrence of a majority of the
Continuing Directors), whose determination shall be de-
scribed in a statement filed with the Rights Agent. Pre-
40
<PAGE>
ferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of Preferred
Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebt-
edness or assets (other than a regular periodic cash divi-
dend at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or a divi-
dend payable in Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) here-
of), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a frac-
tion, the numerator of which shall be the Current Market
Price per share of Preferred Stock (as defined in Section
11(d) hereof) on such record date, less the fair market
value (as determined in good faith by the Board of Directors
41
<PAGE>
of the Company, with the concurrence of a majority of the
Continuing Directors, whose determination shall be described
in a statement filed with the Rights Agent) of the portion
of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
applicable to one share of Preferred Stock, and the
denominator of which shall be such Current Market Price per
share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in
the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had
not been fixed.
(d)(i) For the purpose of any computation here-
under, the "Current Market Price" per share of Common Stock
on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter de-
fined) immediately prior to such date; PROVIDED, HOWEVER,
that in the event that the Current Market Price per share of
Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (a) a
dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into
such Common Stock or (b) any subdivision, combination or
42
<PAGE>
reclassification of such Common Stock, and prior to the
expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination or reclassification, as the case
may be, then, and in each such case, the "Current Market
Price" shall be appropriately adjusted to take into account
the ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the clos-
ing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal con-
solidated transaction reporting system with respect to secu-
rities listed on the principal national securities exchange
on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed
or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securi-
ties Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use, or, if on any such date the
43
<PAGE>
shares of Common Stock are not quoted by any such organiza-
tion, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in
shares of Common Stock selected by the Company, acting by
resolution of the Board of Directors of the Company (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors). If on any such date
no market maker is making a market in shares of Common
Stock, the fair value of such shares on such date as
determined in good faith by the Company, acting by reso-
lution of the Board of Directors of the Company (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), shall be used. The
term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national
securities exchange but are quoted on NASDAQ, a day on which
NASDAQ is in operation or if the shares of Common Stock are
neither listed or admitted to trading on any national secu-
rities exchange nor quoted on NASDAQ, a Business Day. If
the current per share market price of the Common Stock can-
not be determined in the manner provided above, or if the
Common Stock is not publicly held or not so listed or
44
<PAGE>
traded, "Current Market Price" per share of Common Stock
shall mean the fair value per share as determined in good
faith by the Company, acting by resolution of the Board of
Directors of the Company (which resolution shall be
effective only with the concurrence of a majority of the
Continuing Directors), whose determination shall be
described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder,
the "Current Market Price" per share of Preferred Stock
shall be determined in the same manner as set forth for the
Common Stock in Section 11(d)(i) hereof (other than the last
sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in Section 11(d)(i)
hereof, the "Current Market Price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitaliza-
tions with respect to the Common Stock occurring after the
date of this Agreement) multiplied by the Current Market
Price per share of the Common Stock. If neither the Common
Stock nor the Preferred Stock is publicly held or so listed
or traded, the "Current Market Price" per share of Preferred
45
<PAGE>
Stock shall mean the fair value per share as determined in
good faith by the Company, acting by resolution of its Board
of Directors (which resolution shall be effective only with
the concurrence of a majority of the Continuing Directors),
whose determination shall be described in a statement filed
with Rights Agent and shall be conclusive for all purposes.
For all purposes of this Agreement, the "Current Market
Price" of one one-hundredth of a share of Preferred Stock
shall be equal to the "Current Market Price" of one share of
Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at
least 1% in such price; PROVIDED, HOWEVER, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or
to the nearest ten-thousandth of a share of Common Stock or
other share or the nearest one-millionth of a share of Pre-
ferred Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which re-
quires such adjustment or (ii) the Expiration Date.
46
<PAGE>
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Pre-
ferred Stock, thereafter the Purchase Price and the number
of such other shares so receivable upon exercise of any
Right and the number of Rights outstanding shall be subject
to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a),
(b), (c), (e), (g), (h), (i), (j), (k) and (m) and the pro-
visions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Stock shall apply on like terms to any such other
shares, PROVIDED, HOWEVER, that the Company shall not be
liable for its inability or failure to reserve and keep
available for issuance upon exercise of the Rights pursuant
to Section 11(a)(ii) a number of shares of Common Stock
greater than the number then authorized by the Certificate
of Incorporation of the Company but not outstanding or re-
served for any other purpose.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the ad-
justed Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time here-
47
<PAGE>
under upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i) hereof, upon each ad-
justment of the Purchase Price as a result of the calcula-
tions made in Section 11(b) and (c) hereof, each Right out-
standing immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths
of a share of Preferred Stock (calculated to the nearest
one-millionth of a share of Preferred Stock) obtained by
(i) multiplying (A) the number of one one-hundredths of a
share covered by a Right immediately prior to such adjust-
ment of the Purchase Price by (B) the Purchase Price in
effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstand-
ing after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a share
48
<PAGE>
of Preferred Stock for which a Right was exercisable immedi-
ately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall be-
come that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certifi-
cates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Com-
pany, shall cause to be distributed to such holders of re-
cord in substitution and replacement for the Right Certifi-
cates held by such holders prior to the date of adjustment,
49
<PAGE>
and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders
of record of Right Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Preferred Stock,
or fraction thereof, issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of shares which were
expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of the one one-hundredths of a share of Pre-
ferred Stock issuable upon exercise of the Rights, the Com-
pany shall take any corporate action which may, in the opin-
ion of counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable
shares of Preferred Stock at such adjusted Purchase Price.
50
<PAGE>
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after
such record date the Preferred Stock, or a fraction thereof,
and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Pre-
ferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; PRO-
VIDED, HOWEVER, that the Company shall deliver to such hold-
er a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (frac-
tional or otherwise) or securities upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company, acting by resolution of its
Board of Directors (which resolution shall be effective only
with the concurrence of a majority of the Continuing
Directors), shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in
its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Preferred
51
<PAGE>
Stock, any issuance wholly for cash of any Preferred Stock
at less than the current market price, any issuance wholly
for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred
Stock, any stock dividends or any issuance of rights,
options or warrants referred to herein above in this Section
11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a Subsid-
iary of the Company in a transaction that complies with
Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a trans-
action that complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or in a series of related
transactions, assets, cash flow or earning power aggregating
more than 50% of the assets, cash flow or earning power of
the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or
sale there are any rights, warrants or other instruments or
52
<PAGE>
securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by
Section 23 or Section 26 hereof, take (or permit any Subsid-
iary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be af-
forded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time
after the date of this Agreement and prior to the Distribu-
tion Date (i) declare or pay any dividend on the Common
Stock of the Company payable in such Common Stock or
(ii) subdivide the outstanding Common Stock of the Company
into a greater number of shares (by reclassification or
otherwise than by payment of dividends in such Common Stock)
or (iii) combine or consolidate the outstanding Common Stock
53
<PAGE>
of the Company into a smaller number of shares, then in any
such case, (x) the number of one one-hundredths of a share
of Preferred Stock purchasable after such event upon proper
exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a share of Preferred
Stock so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of
Common Stock of the Company outstanding immediately before
such event and the denominator of which is the number of
shares of such Common Stock outstanding immediately after
such event and (y) action shall be taken such that each
share of Common Stock of the Company outstanding immediately
after such event shall have issued with respect to it that
number of Rights which each share of such Common Stock out-
standing immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section
11(p) shall be made successively whenever such a dividend is
declared or paid or such a subdivision, combination or con-
solidation is effected. If an event occurs which would
require an adjustment under Section 11(a)(ii) hereof and
this Section 11(p), the adjustments provided for in this
Section 11(p) shall be in addition and prior to any adjust-
ment required pursuant to Section 11(a)(ii) hereof.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE
OR NUMBER OF SHARES. Whenever an adjustment is made as
54
<PAGE>
provided in Sections 11 and 13 hereof, the Company shall
(a) promptly prepare a certificate setting forth such ad-
justment, and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent and
with each transfer agent for the Common Stock and Preferred
Stock a copy of such certificate and (c) mail a brief sum-
mary thereof to each holder of a Right Certificate (or if
prior to the Distribution Date, to each holder of a certifi-
cate representing shares of Common Stock) in accordance with
Section 25 of this Agreement. Notwithstanding the foregoing
sentence, the failure of the Company to make such certifi-
cates or give such notice shall not affect the validity or
the force or effect of the requirement for such adjustment.
The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained.
Any adjustment to be made pursuant to Sections 11 and 13
hereof shall be effective as of the date of the event giving
rise to such adjustment.
Section 13. CONSOLIDATION, MERGER OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER. (a) In the event (a
"Section 13 Event") that, following the Stock Acquisition
Time, directly or indirectly, (x) the Company shall consoli-
date with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) and the Company shall
55
<PAGE>
not be the surviving or continuing corporation of such
merger, consolidation or combination, (y) any Person (other
than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with
the Company, or merge with and into the Company, and the
Company shall be the surviving or continuing corporation of
such merger or consolidation and, in connection therewith,
all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of the Company or of
any Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets, cash flow or earning power aggre-
gating more than 50% of the assets, cash flow or earning
power of the Company and its Subsidiaries (taken as a whole
and calculated on the basis of the Company's most recent
regularly prepared financial statement) to any other Person
or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case
(except as provided in Section 13(d) hereof), proper provi-
sion shall be made so that (i) each holder of a Right (ex-
cept as otherwise provided in Section 7(e) hereof) shall
thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance
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with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely
tradable shares of Common Stock of the Principal Party (as
hereinafter defined), not subject to any liens, encum-
brances, rights of call, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by
(A) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Sec-
tion 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of
one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first occurrence),
and dividing that product (which, following the first occur-
rence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by (B) 50% of the Current Market Price per share
of Common Stock of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such
merger, consolidation, sale or transfer; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and
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duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Sec-
tion 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accor-
dance with Section 9 hereof) in connection with such consum-
mation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reason-
ably may be possible, in relation to its Common Stock there-
after deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Section 13
Event. The Company shall not consummate any such merger,
consolidation, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement containing the
provisions required by this Section 13.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Sec-
tion 13(a) hereof, the Person that is the issuer of any
securities into which shares of Common Stock of the
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Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is
the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) here-
of, the Person that is the party receiving the greatest
portion of the assets, cash flow or earning power
transferred pursuant to such transaction or transac-
tions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common
Stock of such Person is not at any time and has not been
continuously over the preceding twelve month period
registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person
the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indi-
rectly, of more than one Person, the Common Stock of two or
more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate
market value.
(c) The Company shall not consummate any Section 13
Event unless the Principal Party shall have a sufficient
number of shares of authorized Common Stock which have not
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been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental
agreement containing the provisions set forth in paragraphs
(a) and (b) of this Section 13 and further providing that,
as soon as practicable after the date of any such Section 13
Event, the Principal Party will:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an ap-
propriate form and will use its best efforts to cause
such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each
of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall occur
at any time after the occurrence of a Section 11(a)(ii)
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Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described
in Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to
the contrary, this Section 13 shall not be applicable to a
transaction described in subparagraphs (x) and (y) of Sec-
tion 13(a) hereof if (i) such transaction is consummated
with a Person or Persons who acquired Common Stock of the
Company pursuant to a tender offer or exchange offer for all
outstanding Common Stock of the Company which complies with
the provisions of Section 11(a)(ii) hereof (or a wholly
owned Subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock of the Company offered in
such transaction is not less than the price per share of
Common Stock of the Company paid to all holders of Common
Stock of the Company whose shares were purchased pursuant to
such tender offer or exchange offer and (iii) the form of
consideration being offered to the remaining holders of
Common Stock of the Company pursuant to such transaction is
the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
(e) The Company covenants and agrees that it will
not, after the Stock Acquisition Time, engage in any Sec-
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tion 13 Event if at the time of or after such event there
are any charter or by-law provisions or any rights, warrants
or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL
SHARES. (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such frac-
tional Rights, there shall be paid to the registered holders
of the Right Certificates with regard to which such frac-
tions of Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value
of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the clos-
ing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights
for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction
reporting system with respect to securities listed or ad-
mitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
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Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a pro-
fessional market maker making a market in the Rights (se-
lected by the Company, acting by resolution of its Board of
Directors, which resolution shall be effective only with the
concurrence of a majority of the Continuing Directors). If
on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as
determined in good faith by the Company, acting by
resolution of its Board of Directors (which resolution shall
be effective only with the concurrence of a majority of the
Continuing Directors), shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredths of a
share of Preferred Stock) upon exercise of the Rights or to
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distribute certificates which evidence fractional shares
(other than fractions which are integral multiples of one
one-hundredths of a share of Preferred Stock). Fractions of
Preferred Stock in integral multiples of one one-hundredths
of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide
that the holders of depositary receipts shall have all the
rights, privileges and preferences to which they are en-
titled as beneficial owners of the Preferred Stock. In lieu
of fractional shares which are not integral multiples of one
one-hundredths of a share of Preferred Stock, the Company
may pay to the registered holders of Right Certificates at
the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one share of Preferred Stock. For
purposes of this Section 14(b), the current market value of
a share of Preferred Stock shall be the closing price of a
share of Preferred Stock (as determined pursuant to the
second sentence of Section 11(d)(ii) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Sec-
tion 11(a)(ii) Event or a Section 13 Event, the Company
shall not be required to issue fractions of shares of its
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Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of its Common
Stock. In lieu of fractional shares of its Common Stock,
the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one share of its Common Stock. For
purposes of this Section 14(c), the current market value of
one share of Common Stock of the Company shall be the
closing price of one share of Common Stock of the Company
(as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right
except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action
in respect of this Agreement, except the rights of action
vested in the Rights Agent pursuant to Section 18 hereof,
are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the
registered holders of Common Stock); and any registered
holder of any Right Certificate (or, prior to the Distribu-
tion Date, of Common Stock), without the consent of the
Rights Agent or of any holder of any other Right Certificate
65
<PAGE>
(or, prior to the Distribution Date, of Common Stock), may,
in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is spe-
cifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agree-
ment and will be entitled to specific performance of the
obligations hereunder, and injunctive relief against actual
or threatened violations of the obligations of any Person
subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every
holder of a Right by accepting such Right consents and
agrees with the Company and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights shall
be evidenced by the certificates for shares of Common
Stock registered in the name of the holders of such
shares (which certificates for shares of Common Stock
shall also constitute certificates for Rights) and each
Right will be transferable only in connection with the
transfer of Common Stock;
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<PAGE>
(b) after the Distribution Date, the Right Cer-
tificates are transferable only on the registry books
of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accom-
panied by a proper instrument of transfer and with the
appropriate forms and certificates duly completed and
fully executed;
(c) the Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (not-
withstanding any notations of ownership or writing on
the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be af-
fected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent
shall have any liability to any holder of a Right or
other Person as a result of its inability to perform
any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent
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<PAGE>
jurisdiction or by a governmental, regulatory or admin-
istrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED,
HOWEVER, the Company must use its best efforts to have
any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER. No holder, as such, of any Right or Right
Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of one one-hundredth of
a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer
upon the holder of any Right or Right Certificate, as such,
any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stock-
holders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right Certifi-
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<PAGE>
cate shall have been exercised in accordance with the provi-
sions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The
Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agree-
ment and the exercise and performance of its duties here-
under. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, lia-
bility, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any
claim of liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administra-
tion of this Agreement in reliance upon any Right Certifi-
cate or certificate for Preferred Stock or Common Stock or
for other securities of the Company, instrument of assign-
ment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement,
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<PAGE>
or other paper or document believed by it to be genuine and
to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF
NAME OF RIGHTS AGENT. (a) Any corporation into which the
Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any corporation re-
sulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock
transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; PROVIDED, HOWEVER, that such corporation would be
eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. The purchase of all or
substantially all of the Rights Agent's assets employed in
the performance of transfer agent activities shall be deemed
a merger or consolidation for purposes of this Section 19.
In case at the time such successor Rights Agent shall suc-
ceed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
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<PAGE>
such Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predeces-
sor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not deliv-
ered, the Rights Agent may adopt the countersignature under
its prior name and deliver Right Certificates so counter-
signed; and in case at that time any of the Right Certifi-
cates shall not have been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter (including,
without limitation, the identity of an Acquiring Person
and the determination of the Current Market Price per
share of Preferred Stock and Common Stock) be proved or
established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the
Treasurer or the Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
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<PAGE>
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful mis-
conduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals
contained in this Agreement or in the Right Certifi-
cates (except as to its countersignature thereof) or be
required to verify the same, but all such statements
and recitals are and shall be deemed to have been made
by the Company only.
(e) The Rights Agent shall not be under any re-
sponsibility in respect of the validity of this Agree-
ment or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any coven-
ant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any
adjustment required under the provisions of Sections 11
or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of
the existence of facts that would require any such
adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual
73
<PAGE>
notice of any such adjustment), nor shall it be respon-
sible for any determination by the Board of Directors
of the Company (with the concurrence of a majority of
the Continuing Directors) of the Current Market Price
of the Rights or Preferred Stock or Common Stock, nor
shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or
reservation of any shares of Common Stock or Preferred
Stock or other securities to be issued pursuant to this
Agreement or any Right Certificate or as to whether any
shares of Preferred Stock or Common Stock or other
securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be per-
formed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman
of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or
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<PAGE>
any Assistant Treasurer of the Company, and to apply to
such officers for advice or instructions in connection
with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good
faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any
transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall pre-
clude the Rights Agent from acting in any other capa-
city for the Company or for any other legal entity,
except it may not act for an Acquiring Person in an
investment banking capacity, or otherwise assist an
Acquiring Person in ways hostile to the Company, with-
out the consent of the Company.
(i) The Rights Agent may execute and exercise any of
the rights and powers hereby vested in it or perform
any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, de-
fault, neglect or misconduct of any such attorneys or
agents or for any loss to the Company or to holders of
the Rights resulting from any such act, omission, de-
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<PAGE>
fault, neglect or misconduct, provided reasonable care
was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or
otherwise incur any financial liability in the perfor-
mance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate
indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate sur-
rendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent
shall not take any further action with respect to such
requested exercise or transfer without first consulting
with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights
Agent or any successor Rights Agent may resign and be dis-
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<PAGE>
charged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer
agent of the Common Stock and Preferred Stock by registered,
certified or express mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent
of the Common Stock and Preferred Stock by registered, cer-
tified or express mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such re-
moval or after it has been notified in writing of such res-
ignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing
business under the laws of the United States or of any state
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<PAGE>
of the United States, in good standing, which is authorized
under such laws to exercise corporate trust or stock trans-
fer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus
of at least $100 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the
Company shall file notice thereof in writing with the pre-
decessor Rights Agent and each transfer agent of the Common
Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legal-
ity or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or
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<PAGE>
of the Rights to the contrary, the Company may, at its op-
tion, issue new Right Certificates evidencing Rights in such
form as may be approved by resolution of its Board of Direc-
tors (which resolution shall, if adopted after the Stock
Acquisition Time, be effective only with the concurrence of
a majority of the Continuing Directors), to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common
Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise, con-
version or exchange of securities, notes or debentures
hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of
Directors of the Company (with the concurrence of a majority
of the Continuing Directors), issue Right Certificates
representing the appropriate number of Rights in connection
with such issuance or sale; PROVIDED, HOWEVER, that (i) no
such Right Certificates shall be issued if, and to the
extent that, the Company shall be advised by counsel that
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such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to
whom such Right Certificates would be issued, and (ii) no
such Right Certificates shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. REDEMPTION. (a) The Company may, by
resolution of its Board of Directors, at its option, at any
time prior to the earlier of (x) the Stock Acquisition Time
or (y) the Close of Business on the Final Expiration Date,
redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right (payable in
cash, shares of Common Stock (based on the Current Market
Price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board
of Directors of the Company), appropriately adjusted to
reflect any stock split, stock dividend or similar transac-
tion occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights (or at such time subsequent to such action as the
Board of Directors may determine), and without any further
action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
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holders of Rights shall be to receive the Redemption Price.
Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Dis-
tribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any
of its Affiliates or Associates may redeem, acquire or
purchase any Rights at any time in any manner other than
that specifically set forth in this Section 23, and other
than in connection with the repurchase of Common Stock of
the Company prior to the Distribution Date.
Section 23A. EXCHANGE. (a) The Board of Directors
of the Company may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provi-
sions of Section 7(e)) for Common Stock at an exchange ratio
of one share of Common Stock per Right, appropriately
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adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange
at any time after any Person (other than the Company, any
wholly owned Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity
holding Common Stock as a fiduciary for or pursuant to the
terms of any such employee benefit plan), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 23A, evidence of
which shall have been filed with the Rights Agent, and with-
out any further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any
such exchange; PROVIDED, HOWEVER, that the failure to give,
or any defect in, such notice shall not affect the validity
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of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of ex-
change will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 23A,
the Company, at its option, may substitute shares of Pre-
ferred Stock (or any other series of preferred stock of the
Company containing terms substantially similar to the terms
of the Preferred Stock) for some or all of the shares of
Common Stock exchangeable for Rights, at the initial rate of
one one-hundredth of a share of Preferred Stock (or of such
other series of preferred stock of the Company) for each
share of Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock
pursuant to the terms thereof, so that the fraction of a
share of Preferred Stock (or of such other series of pre-
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ferred stock of the Company) delivered in lieu of each share
of Common Stock shall have the same voting rights as one
share of Common Stock.
(d) In the event that there shall not be sufficient
shares of Common Stock or Preferred Stock (or any other
series of preferred stock of the Company containing terms
substantially similar to the terms of the Preferred Stock)
issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance
with this Section 23A, the Company shall take all such
action as may be necessary to authorize additional shares of
Common Stock or Preferred Stock (or such other series of
preferred stock of the Company) for issuance upon exchange
of the Rights.
(e) The Company shall not be required to issue
fractions of Common Stock or to distribute certificates
which evidence fractional Common Stock. In lieu of such
fractional shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value
of a whole share of Common Stock. For the purposes of this
paragraph (e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Sec-
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tion 11(d) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 23A.
Section 24. NOTICE OF CERTAIN EVENTS. In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Stock or
to make any other distribution to the holders of its
Preferred Stock (other than a regular quarterly dividend out
of earnings on retained earnings of the Company at a rate
not in excess of 125% of the rate of the last regular
quarterly cash dividend theretofore paid), or (ii) to offer
to the holders of Preferred Stock options, rights or war-
rants to subscribe for or to purchase any additional Pre-
ferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any re-
classification of the Preferred Stock (other than a reclass-
ification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any merger,
consolidation or other combination into or with, or to ef-
fect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in
one or more transactions, of more than 50% of the assets,
cash flow or earning power of the Company and its Subsidi-
aries (taken as a whole) to, any other Person, or (v) to
effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to
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each holder of a Right, in accordance with Section 25 here-
of, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which
such reclassification, merger, consolidation, combination,
sale, transfer, liquidation, dissolution or winding up is to
take place and the date of participation therein by the
holders of Common Stock and/or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above
at least twenty days prior to the record date for determin-
ing holders of Preferred Stock for purposes of such action,
and in the case of any such other action, at least twenty
days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of Com-
mon Stock and/or Preferred Stock, whichever shall be the
earlier. The failure to give notice required by this Sec-
tion 24 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote
upon any such action.
(b) In case any of the events set forth in Section
11(a)(ii) or Section 13(a) of this Agreement shall occur,
then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Right
Certificate, to the extent feasible and in accordance with
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<PAGE>
Section 25, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or Section 13(a)
hereof, and (ii) all references in Section 24(a) hereof to
Preferred Stock shall be deemed thereafter to refer also to
Common Stock or other securities issuable in respect of the
Rights.
Section 25. NOTICES. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or
by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice
or demand authorized by this Agreement to be given or made
by the Company or by the holder of any Right Certificate to
or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
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(until another address is filed in writing with the Company)
as follows:
AmSouth Bank of Alabama
P.O. Box 11426
Birmingham, Alabama 35202
Attention: Corporate Trust Administration
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of
any Right Certificate (or if prior to the Distribution Date
to each holder of a certificate representing shares of Com-
mon Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such Right
holder (or if prior to the Distribution Date to such holder
of Common Stock) at the address of such holder as shown on
the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to
the Stock Acquisition Time and subject to the penultimate
sentence of this Section 26, the Company may, by resolution
of its Board of Directors, and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of
this Agreement in any respect whatsoever (including, without
limitation, any extension of the period in which the Rights
may be redeemed) without the approval of any holders of cer-
tificates representing shares of Common Stock of the Com-
pany. From and after the Stock Acquisition Time and subject
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<PAGE>
to the penultimate sentence of this Section 26, without the
approval of any holders of certificates representing shares
of Common Stock of the Company or of Right Certificates, the
Company may, by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a
majority of the Continuing Directors, and only if the
Continuing Directors constitute a majority of the number of
directors then in office), and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement
in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement or make any other provisions in
any manner which the Company may deem necessary or
desirable, which shall not adversely affect the interests
of, or diminish substantially or eliminate the benefits
intended to be afforded by the Rights to, the holders of
Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of any such Person); PROVIDED,
HOWEVER, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sen-
tence, (A) a time period relating to when the Rights may be
redeemed or to modify the ability (or inability) of the
Board of Directors of the Company to redeem the Rights, in
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<PAGE>
either case at such time as the Rights are not then redeem-
able or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the
rights of or the benefits to the holders of Rights (other
than an Acquiring Person or an Affiliate or Associate of any
such Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement
or amendment shall be made which changes the Redemption
Price, the Final Expiration Date, the Purchase Price or the
number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable. Prior to the Stock Acqui-
sition Time, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Com-
mon Stock.
Section 27. SUCCESSORS. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns here-
under.
Section 28. DETERMINATIONS AND ACTIONS BY THE
BOARD OF DIRECTORS, ETC. For all purposes of this Agree-
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ment, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is
the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Direc-
tors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors or the
Outside Directors) shall have the exclusive power, authority
and discretion to administer this Agreement and to exercise
all rights and powers specifically granted to such Board of
Directors (with, where specifically provided for herein, the
concurrence of the Continuing Directors or the Outside
Directors), or as may be necessary or advisable in the ad-
ministration of this Agreement, including, without limita-
tion, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agree-
ment (including, but not limited to, a determination to
redeem or not redeem the Rights, to amend the Agreement or
to find or to announce publicly that any Person has become
an Acquiring Person). All such actions, calculations,
interpretations and determinations (including, for purposes
of clauses (i) and (iii) below, all omissions with respect
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<PAGE>
to the foregoing) which are done or made by the Board of
Directors of the Company (with, where specifically provided
for herein, the concurrence of the Continuing Directors or
the Outside Directors), the Outside Directors or the Company
(i) shall be within the discretion of the Board of Directors
or the Outside Directors, (ii) shall be final, conclusive
and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and
(iii) shall not subject the Board of Directors of the
Company, the Continuing Directors or the Outside Directors
to any liability to the holders of the Rights and Right
Certificates.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in
this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distri-
bution Date, registered holders of the Common Stock) any
legal or equitable right, remedy or claim under this Agree-
ment; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distri-
bution Date, registered holders of the Common Stock).
Section 30. SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be
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<PAGE>
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, PROVIDED, HOWEVER, that
notwithstanding anything in this Agreement to the contrary,
if any such term, provision, covenant or restriction is held
by such court or authority to be invalid, void or unenforce-
able and the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors)
determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of Business
on the tenth Business Day following the date of such
determination by the Board of Directors. Without limiting
the foregoing, if any provision of this Agreement requiring
that a determination be made by the Board of Directors with
the concurrence of a majority of the Continuing Directors or
Outside Directors or by the Outside Directors is held by a
court of competent jurisdiction or other authority to be in-
valid, void, or unenforceable, such determination shall then
be made by the Board of Directors in accordance with
applicable law and the Company's certificate of incorpora-
tion and by-laws.
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<PAGE>
Section 31. GOVERNING LAW. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to con-
tracts to be made and performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an orig-
inal, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive
headings of the several Sections of this Agreement are in-
serted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year
first above written.
PROTECTIVE LIFE CORPORATION
By /s/Drayton Nabers, Jr.
Drayton Nabers, Jr.
Chairman of the Board, President
and Chief Executive Officer
AMSOUTH BANK OF ALABAMA
By /s/Charles S. Northen, IV
Charles S. Northen, IV
Assistant Vice President
and Corporate Trust Officer
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Exhibit A
CERTIFICATE OF DESIGNATION OF SERIES A JUNIOR
PARTICIPATING CUMULATIVE PREFERRED STOCK
Par Value $1.00 Per Share
of
Protective Life Corporation
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
We, Drayton Nabers, Jr., President, and John K.
Wright, Secretary, of Protective Life Corporation, a
corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corpora-
tion"), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Board of Directors by the Restated Certificate of
Incorporation (the "Certificate") of the Corporation, as
amended, the said Board of Directors on August 7, 1995, by
the affirmative vote of at least a majority of the members
of the Board of Directors, adopted the following resolution
creating a series of Four Hundred Thousand (400,000) shares
of Preferred Stock, par value $1.00 per share:
RESOLVED, that a series of Preferred Stock of the
Corporation be, and it hereby is, created, and that the
designation and amount thereof and the voting powers,
preferences and relative participating, optional and other
special rights of the shares of such series, and the
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qualifications, limitations or restrictions thereof are as
follows:
Section 1. DESIGNATION AND AMOUNT.
The shares of such series shall be designated as
Series A Junior Participating Cumulative Preferred Stock,
par value $1.00 per share (the "Junior Preferred Stock") and
the number of shares constituting such series shall be Four
Hundred Thousand (400,000). Such number of shares may be
increased or decreased by resolution of the Board of Direc-
tors; PROVIDED, that no decrease shall reduce the number of
shares of Junior Preferred Stock to a number less than the
number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conver-
sion of any outstanding securities issued by the Corporation
convertible into Junior Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any
shares of any series of preferred stock (or any similar
stock) ranking prior and superior to the Junior Pre-
ferred Stock with respect to dividends, the holders of
shares of Junior Preferred Stock, in preference to the
holders of Common Stock, and of any other junior stock
which may be outstanding, shall be entitled to receive,
when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of January,
April, July and October in each year (each such date
being referred to herein as a "Quarterly Dividend Pay-
ment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or
fraction of a share of Junior Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to
the greater of (a) $2.50 per share ($10.00 per annum),
or (b) subject to the provision for adjustment herein-
after set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggre-
gate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassi-
fication or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any
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<PAGE>
share or fraction of a share of Junior Preferred Stock.
In the event the Corporation shall at any time declare
or pay any dividend on Common Stock payable in shares
of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of
Junior Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sen-
tence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after
such event and the denominator of which is the number
of shares of Common Stock that were outstanding immedi-
ately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Junior Preferred Stock as provided
in paragraph (A) of this Section immediately after it
declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $2.50 per share ($10.00 per
annum) on the Junior Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Pay-
ment Date.
(C) Dividends shall begin to accrue and be cumu-
lative on outstanding shares of Junior Preferred Stock
from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Junior Preferred
Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend
Payment Date, in which case dividends or such shares
shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record
date for the determination of holders of shares of
Junior Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends
shall accumulate but shall not bear interest. Divi-
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<PAGE>
dends paid on the shares of Junior Preferred Stock in
an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of
Directors may fix a record date for the determination
of holders of shares of Junior Preferred Stock entitled
to receive payment of a dividend or distribution de-
clared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment
thereof.
Section 3. VOTING RIGHTS.
The holders of shares of Junior Preferred Stock
shall have the following voting rights.
(A) Subject to the provisions for adjustment as
hereinafter set forth, each share of Junior Preferred
Stock shall entitle the holder thereof to 100 votes
(and each one one-hundredth of a share of Junior Pre-
ferred Stock shall entitle the holder thereof to one
vote) on all matters submitted to a vote of the stock-
holders of the Corporation. In the event the Corpora-
tion shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock or ef-
fect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by classifica-
tion or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of
Junior Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediate-
ly after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in the
Restated Certificate, in any other certificate of des-
ignation creating a series of preferred stock or any
similar stock, or by law, the holders of shares of
Junior Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Cor-
poration having general voting rights shall vote to-
gether as one class on all matters submitted to a vote
of stockholders of the Corporation.
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(C) If at any time the Corporation shall not have
declared and paid all accrued and unpaid dividends on
the Junior Preferred Stock as provided in Section 2
hereof for four consecutive Quarterly Dividend Payment
Dates, then, in addition to any voting rights provided
for in paragraphs (A) and (B), the holders of the
Junior Preferred Stock shall have the exclusive right,
voting separately as class, to elect two directors on
the Board of Directors of the Corporation (such direc-
tors, the "Preferred Directors"). The right of the
holders of the Junior Preferred Stock to elect the
Preferred Directors shall continue until all such ac-
crued and unpaid dividends shall have been paid. At
such time, the terms of any of the Preferred Directors
shall terminate. At any time when the holders of the
Junior Preferred Stock shall have thus become entitled
to elect Preferred Directors, a special meeting of
shareholders shall be called for the purpose of elect-
ing such Preferred Directors, to be held within 30 days
after the right of the holders of the Junior Preferred
Stock to elect such Preferred Directors shall arise,
upon notice given in the manner provided by law or the
by-laws of the Corporation for giving notice of a spe-
cial meeting of shareholders (provided, however, that
such a special meeting shall not be called if the annu-
al meeting of shareholders is to convene within said 30
days). At any such special meeting or at any annual
meeting at which the holders of the Junior Preferred
Stock shall be entitled to elect Preferred Directors,
the holders of a majority of the then outstanding
Junior Preferred Stock present in person or by proxy
shall be sufficient to constitute a quorum for the
election of such directors. The persons elected by the
holders of the Junior Preferred Stock at any meeting in
accordance with the terms of the preceding sentence
shall become directors on the date of such election.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Junior Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock
outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends or, make any other
distributions on any shares or stock ranking junior
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<PAGE>
(either as to dividends or upon liquidation, dissolu-
tion or winding-up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding-up) with the Junior Preferred
Stock except dividends paid ratably on the Junior Pre-
ferred Stock, and all such parity stock on which divi-
dends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolu-
tion or winding-up) with the Junior Preferred Stock,
provided that the corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding-up) to the
Junior Preferred Stock; or
(iv) purchase or otherwise acquire for consider-
ation any shares of Junior Preferred Stock, or any
shares of stock ranking on a parity (either as to divi-
dends or upon liquidation, dissolution or winding-up)
with the Junior Preferred Stock, except in accordance
with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all hold-
ers of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and prefer-
ences of the respective series classes, shall determine
in good faith will result in fair and equitable treat-
ment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. REACQUIRED SHARES.
Any shares of Junior Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatso-
6
<PAGE>
ever, shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their can-
cellation become authorized but unissued shares of preferred
stock, without designation as to series, and may be reissued
as part of a new series of preferred stock to be created by
resolution or resolutions of the Board of Directors, subject
to the conditions and restrictions on issuance set forth
herein, in the Restated Certificate, in any other certifi-
cate of designation creating a series of preferred stock or
any similar stock or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR
WINDING-UP.
Upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, no distribu-
tion shall be made (A) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding-up) to the Junior Preferred Stock
unless prior thereto, the holders of shares of Junior Pre-
ferred Stock shall have received the higher of (i) $10.00
per share, plus an amount equal to accrued and unpaid divi-
dends and distributions thereon, whether or not declared, to
the date of such payment, or (ii) an aggregate amount per
share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock; nor shall
any distribution be made (B) to the holders of stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding-up) with the Junior Preferred Stock,
except distributions made ratably on the Junior Preferred
Stock and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding-up.
In the event the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolida-
tion of the outstanding shares of Common Stock (by reclassi-
fication or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Junior Preferred Stock
are entitled immediately prior to such event under the pro-
vision in clause (A) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numer-
ator of which is the number of shares of Common Stock out-
standing immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7
<PAGE>
Section 7. CONSOLIDATION, MERGER, ETC.
In case the Corporation shall enter into any con-
solidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any
other property, or otherwise changed, then in any such case
each share of Junior Preferred Stock shall at the same time
be similarly exchanged or changed into an amount per share
(subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event
the Corporation shall at any time declare or pay any divi-
dend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of
shares of Junior Preferred Stock shall be adjusted by multi-
plying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. NO REDEMPTION.
The shares of Junior Preferred Stock shall not be
redeemable.
Section 9. RANK.
Unless otherwise provided in the Restated Certifi-
cate or a certificate of designation relating to a subse-
quent series of preferred stock of the Corporation, the
Junior Preferred Stock shall rank junior to all other series
of the Corporation's preferred stock as to the payment of
dividends and the distribution of assets on liquidation,
dissolution or winding-up, and senior to the Common Stock of
the Corporation.
Section 10. AMENDMENT.
The Restated Certificate, as amended and restated,
shall not be amended in any manner which would materially
8
<PAGE>
alter or change the powers, preferences or special rights of
the Junior Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Junior Preferred Stock,
voting together as a single series.
Section 11. FRACTIONAL SHARES.
Junior Preferred Stock may be issued in fractions of
a share (in one one-hundredths (1/100) of a share and
integral multiples thereof) which shall entitle the holder,
in proportion to such holder's fractional shares, to exer-
cise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Junior Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation
is executed on behalf of the Corporation by its President
and attested by its Secretary this 7th day of August, 1995.
/s/Drayton Nabers, Jr.
Drayton Nabers, Jr.
President
ATTEST:
/s/John K. Wright
John K. Wright
Secretary
<PAGE>
Exhibit B
[Form of Right Certificate]
Certificate No. R- ...... Rights
NOT EXERCISABLE AFTER AUGUST 18, 2005 OR EARLIER IF THE
BOARD OF DIRECTORS ORDERS THE REDEMPTION OR EXCHANGE OF THE
RIGHTS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE
VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE
THE REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER,
OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURIS-
DICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFI-
CIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). AC-
CORDINGLY, THIS CERTIFICATE AND THE RIGHTS REPRESENTED HERE-
BY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]1
Rights Certificate
PROTECTIVE LIFE CORPORATION
This certifies that .......... , or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, sub-
ject to the terms, provisions and conditions of the Rights
Agreement, dated as of August 7, 1995 (the "Rights Agree-
ment"), between Protective Life Corporation, a Delaware
corporation (the "Company"), and AmSouth Bank of Alabama, a
state bank (the "Rights Agent"), to purchase from the
1 The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding
sentence.
1
<PAGE>
Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00
P.M. (Birmingham, Alabama time) on August 18, 2005, at the
principal office of the Rights Agent, or its successors as
Rights Agent, one one-hundredth of a fully paid nonassess-
able share of Series A Junior Participating Cumulative
Preferred Stock, par value $1.00 per share of the Company
(the "Preferred Stock"), at a purchase price of $110 per one
one-hundredth of a share of Preferred Stock (the "Purchase
Price"), upon presentation and surrender of this Right Cer-
tificate with the Form of Election to Purchase and the Cer-
tificate contained therein duly executed. The number of
Rights evidenced by this Right Certificate (and the number
of one-hundredths of a share of Preferred Stock which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per one one-hundredth of a share of Preferred
Stock set forth above, are the number and Purchase Price as
of August 18, 1995, based on the shares of Preferred Stock
as constituted at such date.
From and after the first occurrence of a Sec-
tion 11(a)(ii) Event (as defined in the Rights Agreement),
if the Rights evidenced by this Right Certificate are bene-
ficially owned by (i) an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person
2
<PAGE>
(or of any Associate or Affiliate thereof) who becomes a
transferee after such Acquiring Person (or any Associate or
Affiliate thereof) becomes such or (iii) under certain cir-
cumstances specified in the Rights Agreement, a transferee
of such Acquiring Person (or of any Associate or Affiliate
thereof) who becomes a transferee prior to or concurrently
with such Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occur-
rence of such Section 11(a)(ii) Event.
The Rights evidenced by this Right Certificate shall
not be exercisable, and shall be void so long as held, by a
holder in any jurisdiction where the requisite qualification
to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have
been obtained or be obtainable.
As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a share of
Preferred Stock or the number and kind of other securities
which may be purchased upon the exercise of the Rights evi-
denced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events, includ-
ing Section 11(a)(ii) Events and Section 13 Events (as de-
fined in the Rights Agreement).
3
<PAGE>
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, as
it may be amended from time to time, which terms, provisions
and conditions are hereby incorporated herein by reference
and made a part hereof and to which Rights Agreement refer-
ence is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders
of the Right Certificates, which limitations of rights in-
clude the temporary suspension of the exercisability of such
Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and
the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate
or Right Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate
number of one one-hundredths of a share of Preferred Stock
as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive
4
<PAGE>
upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate may be re-
deemed by the Company at a redemption price of $.01 per
Right at any time prior to the earlier of (i) the Stock
Acquisition Time (as defined in the Rights Agreement) and
(ii) the close of business on the Expiration Date (as de-
fined in the Rights Agreement). Subject to the provisions
of the Rights Agreement, the rights evidenced by this Right
Certificate may be exchanged in whole or part for shares of
Common Stock or fractional shares of Preferred Stock (or any
other substantially similar series of preferred stock of the
Company).
No fractional shares of Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock, which may,
at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made,
as provided in the Rights Agreement.
Other than those provisions relating to the prin-
cipal economic terms of the Rights, any of the provisions of
the Rights Agreement may be amended by the Board of Direc-
tors of the Company in any respect whatsoever up until the
5
<PAGE>
Stock Acquisition Time and thereafter in certain respects
which do not adversely affect the interests of holders of
Right Certificates (other than an Acquiring Person or the
Affiliates or Associates thereof).
No holder of this Right Certificate shall be enti-
tled to vote or receive dividends or be deemed for any pur-
pose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obli-
gatory for any purpose until it shall have been counter-
signed by the Rights Agent.
6
<PAGE>
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal. Dated as of
.......... , .... .
ATTEST: PROTECTIVE LIFE CORPORATION
......................... By ........................
Secretary Title:
Countersigned:
AMSOUTH BANK OF ALABAMA
By.......................
Authorized Signatory
7
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ..............................
hereby sells, assigns and transfers unto ................
.........................................................
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ..................... Attorney, to transfer the
within Right Certificate on the books of the within named
Company, with full power of substitution.
Dated:............. , ....
..........................
Signature
Signatures Guaranteed:
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
...........................
Signature
8
<PAGE>
NOTICE
The signature to the foregoing Assignment must
correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
9
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Protective Life Corporation:
The undersigned hereby irrevocably elects to exer-
cise ............... Rights represented by this Right Cer-
tificate to purchase the shares of Preferred Stock issuable
upon the exercise of such Rights and requests that certifi-
cates for such shares be issued in the name of:
Please insert social security
or other identifying number
..........................................................
(Please print name and address)
..........................................................
If such number of Rights shall not be all the Rights evi-
denced by this Right Certificate, a new Right Certificate
for the balance remaining of such Rights shall be registered
in the name of and delivered to:
Please insert social security
or other identifying number
..........................................................
(Please print name and address)
..........................................................
Dated:.................. , ....
10
<PAGE>
[Form of Election to Purchase -- continued]
..........................
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate.)
Signature Guaranteed:
............................................................
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
..........................
Signature
............................................................
NOTICE
In the event the certification set forth above in
the Forms of Assignment and Election is not completed, the
Company will deem the beneficial owner of the Rights evi-
denced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and, in the case of an Assignment, will
affix a legend to that effect on any Right Certificates
issued in exchange for this Rights Certificate.
11
<PAGE>
Exhibit C
PROTECTIVE LIFE CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On August 7, 1995, the Board of Directors of
Protective Life Corporation (the "Company") declared a divi-
dend distribution of one Preferred Share Purchase Right (a
"Right") for each outstanding share of Common Stock, par
value $.50 per share, of the Company (the "Common Stock").
The following is a summary of the terms of the Rights.
Each Right entitles the registered holder to pur-
chase from the Company one one-hundredth of a share of
Series A Junior Participating Cumulative Preferred Stock,
par value $1.00 per share, of the Company (the "Preferred
Stock") at a price of $110 per one one-hundredth of a share
of Preferred Stock, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set
forth in a Rights Agreement, dated as of August 7, 1995 (the
"Rights Agreement"), between the Company and AmSouth Bank of
Alabama, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and
no separate certificates representing the Rights ("Right
Certificates") will be distributed. The Rights will
separate from the Common Stock and a "Distribution Date"
will occur upon the earlier to occur of (i) ten business
days following the time (the "Stock Acquisition Time") of a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") acquired, or
obtained the right to acquire, beneficial ownership of 15%
or more of the outstanding Common Stock of the Company and
(ii) ten business days (or, if determined by the Board of
Directors, a specified or unspecified later date) following
the commencement or announcement of an intention to make a
tender offer or exchange offer which, if successful, would
cause the bidder to own 15% of more of the outstanding
Common Stock.
The Rights Agreement provides that, until the
Distribution Date, (i) the Rights will be transferred with
and only with the Common Stock, (ii) new Common Stock cer-
tificates issued after August 18, 1995, upon transfer or new
issuance of the Common Stock, will contain a notation incor-
porating the Rights Agreement by reference and (iii) the
surrender for transfer of any of the Common Stock certifi-
1
<PAGE>
cates outstanding will also constitute the transfer of the
Rights associated with the shares of Common Stock repre-
sented by such certificate. As soon as practicable follow-
ing the Distribution Date, separate Right Certificates will
be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights. Except
as otherwise determined by the Board of Directors, only
shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on August 18, 2005, un-
less earlier redeemed or exchanged by the Company as de-
scribed below.
In the event that, after the Stock Acquisition Time,
the Company is acquired in a merger or other business
combination transaction (except certain transactions with a
person who became an Acquiring Person as a result of a
tender offer described in the next succeeding paragraph) or
50% or more of its assets, cash flow or earning power is
sold, proper provision shall be made so that each holder of
a Right shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquir-
ing company which at the time of such transaction would have
a market value (as defined in the Rights Agreement) of two
times the Purchase Price of the Right. In the event that,
after the Stock Acquisition Time, the Company were the sur-
viving corporation of a merger and its Common Stock were
changed or exchanged, proper provision shall be made so that
each holder of a Right will thereafter have the right to re-
ceive upon exercise that number of shares of common stock of
the Company having a market value of two times the exercise
price of the Right.
In the event that a person or group becomes an
Acquiring Person (except pursuant to a tender offer for all
outstanding Common Stock determined to be at a fair price
and otherwise in the best interests of the Company and its
stockholders by a majority of the Outside Directors), proper
provision shall be made so that each holder of a Right
(other than the Acquiring Person) will thereafter have the
right to receive upon exercise that number of shares of
Common Stock (or, in certain circumstances, cash, a reduc-
tion in the Purchase Price, Common Stock, other equity secu-
rities of the Company, debt securities of the Company, other
property or a combination thereof) having a market value (as
2
<PAGE>
defined in the Rights Agreement) of two times the Purchase
Price of the Right. Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in
this paragraph, all Rights that are, or (under certain cir-
cumstances specified in the Rights Agreement) were, benefi-
cially owned by any Acquiring Person (or an affiliate, asso-
ciate or transferee thereof) will be null and void. A per-
son will not be an Acquiring Person if the Board of Direc-
tors of the Company determines that such person or group
became an Acquiring Person inadvertently and such person or
group promptly divests itself of a sufficient number of
shares of Common Stock so that such person or group is no
longer an Acquiring Person.
The Purchase Price payable, and the number of shares
of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the
grant to holders of Preferred Stock of certain rights or
warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of Pre-
ferred Stock or (iii) upon the distribution to holders of
Preferred Stock of evidences of indebtedness or assets (ex-
cluding regular periodic cash dividends or dividends payable
in Preferred Stock) or of subscription rights or warrants
(other than those referred to above). The number of Rights
and number of shares of Preferred Stock issuable upon the
exercise of each Right are also subject to adjustment in the
event of a stock split, combination or stock dividend on the
Common Stock.
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional shares of Preferred Stock will be issued
(other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock which may, upon
the election of the Company, be evidenced by depositary
receipts) and, in lieu thereof, an adjustment in cash will
be made based on the market price of the Preferred Stock on
the last trading date prior to the date of exercise.
At any time prior to the earlier of the Stock
Acquisition Time and the Expiration Date (as defined in the
Rights Agreement), the Board of Directors may redeem the
Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). Immediately upon the action
3
<PAGE>
of the Board of Directors ordering redemption of the Rights
(or at such time subsequent to such action as the Board of
Directors may determine), the Rights will terminate and the
only right of the holders of Rights will be to receive the
$.01 Redemption Price.
At any time after a person becomes an Acquiring
Person and prior to the acquisition by such Person of 50% or
more of the outstanding shares of Common Stock, the Board of
Directors of the Company may exchange the Rights (other than
Rights beneficially owned by such Person which have become
void), in whole or part, at an exchange ratio of one share
of Common Stock per Right (subject to adjustment). The
Company, at its option, may substitute one one-hundredth of
a share of Preferred Stock (or other series of substantially
similar preferred stock of the Company) for each share of
Common Stock to be exchanged.
Each share of Preferred Stock purchasable upon
exercise of the Rights will have a minimum preferential
dividend of $10 per year, but will be entitled to receive,
in the aggregate, a dividend of 100 times the dividend de-
clared on the shares of Common Stock. In the event of
liquidation, the holders of the shares of Preferred Stock
will be entitled to receive a minimum liquidation payment of
$10 per share, but will be entitled to receive an aggregate
liquidation payment equal to 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will
have one hundred votes, voting together with the shares of
Common Stock. In the event of any merger, consolidation or
other transaction in which shares of Common Stock are ex-
changed, each share of Preferred Stock will be entitled to
receive 100 times the amount and type of consideration re-
ceived per share of Common Stock. The rights of the shares
of Preferred Stock as to dividends and liquidation, and in
the event of mergers and consolidations, are protected by
anti-dilution provisions.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
other than rights resulting from such holder's ownership of
shares of Common Stock, including, without limitation, the
right to vote or to receive dividends. While the distribu-
tion of the Rights will not be taxable to stockholders or to
the Company, stockholders may, depending upon the circum-
stances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consid-
eration) of the Company or for common stock of the acquiring
company as set forth above.
4
<PAGE>
Other than those provisions relating to the prin-
cipal economic terms of the Rights, any of the provisions of
the Rights Agreement may be amended by the Board of Direc-
tors prior to the Stock Acquisition Time. After such time,
the provisions of the Rights Agreement may be amended by the
Board of Directors (only with the concurrence of a majority
of the Continuing Directors) in order to cure any ambiguity,
to correct or supplement defective or inconsistent provi-
sions, to shorten or lengthen any time period under the
Rights Agreement, to make changes which do not adversely
affect the interests of the holders of Rights (excluding the
interests of any Acquiring Person) or to shorten or lengthen
any time period under the Rights Agreement; PROVIDED,
HOWEVER, that no amendment to adjust the time period
governing redemption shall be made at such time as the
Rights are not redeemable.
The term "Continuing Director" means (i) any member
of the Board of Directors of the Company who was a member of
the Board prior to the Stock Acquisition Time, and (ii) any
person who is subsequently elected to the Board, if such
person is recommended or approved by a majority of the
Continuing Directors then on the Board of Directors, and
such person is not an Acquiring Person or an affiliate,
associate, representative or nominee of an Acquiring Person.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a
Current Report on Form 8-K dated August 7, 1995. Copies of
the Rights Agreement are available free of charge from the
Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, as it may be amended from
time to time, which is hereby incorporated herein by refer-
ence.
5
