<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 21, 1997
REGISTRATION NO. 333-25027
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
PROTECTIVE LIFE CORPORATION DELAWARE 95-2492236
PLC CAPITAL TRUST I DELAWARE 72-6178732
(Exact name of registrant as (State or other (I.R.S. Employer
specified in its charter) jurisdiction of Identification No.)
incorporation or
organization)
</TABLE>
2801 HIGHWAY 280 SOUTH, BIRMINGHAM, ALABAMA 35223
(205) 879-9230
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
C/O DEBORAH J. LONG, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
PROTECTIVE LIFE CORPORATION
2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
(205) 879-9230
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
MICHAEL W. BLAIR, ESQ. PETER J. GORDON, ESQ.
Debevoise & Plimpton Simpson Thacher & Bartlett
875 Third Avenue 425 Lexington Avenue
New York, New York 10022 New York, New York 10017
(212) 909-6000 (212) 455-2000
</TABLE>
------------------------
Approximate date of commencement of proposed sale to the public: From time
to time as determined by market conditions, after the effective date of this
registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please following box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under ties Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same the following offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Act registration
statement number of the earlier effective registration statement for the same
offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 21, 1997
PROSPECTUS
3,000,000 PREFERRED SECURITIES
PLC CAPITAL TRUST I
% TRUST ORIGINATED PREFERRED SECURITIES-SM- ("TOPRS-SM-")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
PROTECTIVE LIFE CORPORATION
------------
The % Trust Originated Preferred Securities (the "Preferred Securities")
offered hereby represent undivided beneficial interests in the assets of PLC
Capital Trust I, a statutory business trust formed under the laws of the State
of Delaware ("PLC Capital" or the "Trust"). Protective Life Corporation, a
Delaware corporation ("Protective Life" or the "Company"), will own all the
common securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") representing undivided beneficial interests
in the assets of PLC Capital. PLC Capital exists for the sole purpose of issuing
the Trust Securities and investing the proceeds thereof in an equivalent amount
of % Subordinated Debentures due 2027, Series B (the "Subordinated Debt
Securities") of Protective Life. The Subordinated Debt Securities and the
Preferred Securities in respect of which this Prospectus is being delivered
(CONTINUED ON NEXT PAGE)
------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 11 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE
PERIOD AND CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE
PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES OF SUCH DEFERRAL.
The Preferred Securities have been approved for listing, subject to official
notice of issuance, on the New York Stock Exchange, Inc. (the "New York Stock
Exchange") under the symbol "PL PrT". Trading of the Preferred Securities on the
New York Stock Exchange is expected to commence within a 30-day period after the
initial delivery of the Preferred Securities. See "Underwriting."
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING
OFFERING PRICE (1) COMMISSION (2)
<S> <C> <C>
Per Preferred Security......................................... $25.00 (3)
Total.......................................................... $75,000,000 (3)
<CAPTION>
PROCEEDS TO
TRUST (3)(4)
<S> <C>
Per Preferred Security......................................... $25.00
Total.......................................................... $75,000,000
</TABLE>
(1) Plus accrued distributions, if any, from , 1997.
(2) PLC Capital and Protective Life have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Subordinated Debt Securities, Protective
Life has agreed to pay to the Underwriters as compensation (the
"Underwriters' Compensation") for their arranging the investment therein of
such proceeds $ per Preferred Security (or $ in the
aggregate); provided, that such compensation for sales of or more
Preferred Securities to a single purchaser will be $ per Preferred
Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' Compensation will be less than the aggregate amount specified
in the preceding sentence. See "Underwriting."
(4) Expenses of the offering which are payable by Protective Life are estimated
to be $ .
---------------------------
The Preferred Securities are offered by the several Underwriters subject to
prior sale, when, as and if issued to and acceptance by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected that
delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company, on or about
, 1997.
---------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
MORGANSTANLEY & CO.
INCORPORATED
OPPENHEIMER & CO., INC.
------------
The date of this Prospectus is , 1997.
-SM- "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
shall be referred to herein as the "Offered Securities." The Subordinated Debt
Securities will mature on , 2027 (such date, and any such other date
to which the maturity of the Subordinated Debt Securities may be shortened or
extended as described under "Description of the Subordinated Debt
Securities--General," is hereinafter referred to as the "Stated Maturity"). The
Subordinated Debt Securities when issued will be unsecured obligations of
Protective Life and will be subordinate and junior in right of payment to other
indebtedness of the Company, as described herein. Upon an Event of Default under
the Declaration (as defined herein), the holders of Preferred Securities will
have a preference over the holders of the Common Securities with respect to
payments in respect of distributions and payments upon redemption, liquidation
and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of percent of the liquidation amount of $25
per Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing , 1997 ("distributions"). The payment of
distributions out of moneys held by PLC Capital and payments on liquidation of
PLC Capital or the redemption of Preferred Securities, as set forth below, are
guaranteed on a subordinated basis by Protective Life (the "Preferred Securities
Guarantee") to the extent described herein under "Description of Preferred
Securities Guarantee". The Preferred Securities Guarantee covers payments of
distributions and other payments on the Preferred Securities only if and to the
extent that PLC Capital has funds available therefor, which will only occur if
Protective Life has made a payment of interest or principal or other payments on
the Subordinated Debt Securities held by PLC Capital as its sole asset. The
Preferred Securities Guarantee, when taken together with the Company's
obligations under the Subordinated Debt Securities and the Subordinated
Indenture (as defined herein) and its obligations under the Declaration,
including its obligation as issuer of the Subordinated Debt Securities to pay
costs, expenses, debts and obligations of PLC Capital (other than with respect
to the Trust Securities), provide a full and unconditional guarantee on a
subordinated basis of amounts due on the Preferred Securities. See "Risk
Factors--Rights Under the Preferred Securities Guarantee" herein. The
obligations of Protective Life under the Preferred Securities Guarantee rank (i)
subordinate and junior in right of payment to all Senior Indebtedness (as such
term is defined in the Subordinated Indenture), (ii) PARI PASSU with the
Subordinated Debt Securities, the Company's guarantee of PLC Capital L.L.C.'s 9%
Cumulative Monthly Income Preferred Securities, Series A (the "Series A
Preferred Securities") and any other liabilities or obligations that may be PARI
PASSU by their terms and (iii) senior to the Company's common stock, the most
senior preferred or preference stock now or hereafter issued by the Company and
with any guarantee now or hereafter entered into by Protective Life in respect
to any preferred or preference stock of any affiliate of the Company. The
obligations of Protective Life under the Subordinated Debt Securities are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of Protective Life. There was approximately $181 million of Senior
Indebtedness at December 31, 1996. The Subordinated Debt Securities purchased by
the Trust may be subsequently distributed PRO RATA to holders of the Trust
Securities in connection with the dissolution of the Trust.
The distribution rate and the distribution payment date and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment dates and other payment dates on the Subordinated Debt
Securities, which will be the sole assets of the Trust. As a result, if
Protective Life does not make principal or interest payments on the Subordinated
Debt Securities, the Trust will not have sufficient funds to make distributions
on the Preferred Securities; in which event, the Preferred Securities Guarantee
will not apply to such distributions until the Trust has sufficient funds
available therefor.
So long as Protective Life is not in default in the payment of interest on
the Subordinated Debt Securities, it has the right to defer payments of interest
on the Subordinated Debt Securities by extending the interest payment period on
the Subordinated Debt Securities to up to 20 consecutive quarters (each, an
"Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the
2
<PAGE>
Subordinated Debt Securities. If interest payments are so deferred,
distributions on the Preferred Securities will also be deferred. During such
Extension Period, distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at an annual rate of [ ] percent
per annum compounded quarterly, and during any Extension Period holders of
Preferred Securities will be required to include deferred interest income in
their gross income for United States federal income tax purposes in advance of
receipt of the cash distributions with respect to such deferred interest
payments. There could be multiple Extension Periods of varying lengths
throughout the term of the Subordinated Debt Securities. See "Risk
Factors--Option to Extend Interest Payment Period"; "Description of the
Subordinated Debt Securities--Option to Extend Interest Payment Period"; and
"Certain Federal Income Tax Considerations--Interest Income and Original Issue
Discount."
The Subordinated Debt Securities are redeemable by Protective Life, at any
time in whole or from time to time in part, on or after , 2002, but
prior to the Stated Maturity, and in whole or in part at any time, upon the
occurrence of a Tax Event (as defined herein) in certain circumstances. If
Protective Life redeems the Subordinated Debt Securities, the Trust must redeem
Trust Securities on a PRO RATA basis having an aggregate liquidation amount
equal to the aggregate principal amount of the Subordinated Debt Securities so
redeemed at $ per Preferred Security plus accrued and unpaid distributions
thereon (the "Redemption Price") to the date fixed for redemption. See
"Description of the Preferred Securities--Mandatory Redemption." The Preferred
Securities will be redeemed upon maturity of the Subordinated Debt Securities.
The Company will have the right at any time to dissolve the Trust and cause
the Subordinated Debt Securities to be distributed to the holders of the Trust
Securities. If the Subordinated Debt Securities are distributed to the holders
of the Preferred Securities, the Company will use its best efforts to cause the
Subordinated Debt Secuities to be listed on the New York Stock Exchange or on
such other exchange as the Preferred Securities are then listed.
In the event of the involuntary or voluntary dissolution, winding up or
termination of the Trust, the holders of the Preferred Securities will be
entitled to receive for each Preferred Security a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Subordinated
Debt Securities are distributed to the holders of the Preferred Securities. See
"Description of the Preferred Securities--Liquidation Distribution Upon
Dissolution."
-------------------
FOR NORTH CAROLINA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA NOR
HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF THIS
DOCUMENT.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE MARKET PRICE OF THE PREFERRED
SECURITIES OFFERED HEREBY. SUCH TRANSACTIONS MAY INCLUDE STABILIZING
TRANSACTIONS, THE PURCHASE OF PREFERRED SECURITIES TO COVER SYNDICATE SHORT
POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
3
<PAGE>
AVAILABLE INFORMATION
Protective Life is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can also be obtained at
prescribed rates by writing to the Public Reference Section of the Commission at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition,
such reports, proxy statements and other information concerning Protective Life
can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005. The Commission maintains a Website that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the Commission's site is http://www.sec.gov.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by Protective Life and PLC Capital with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus does not contain all
the information set forth in the Registration Statement, certain portions of
which have been omitted as permitted by the rules and regulations of the
Commission. For further information with respect to Protective Life, PLC Capital
and the Offered Securities, reference is made to the Registration Statement. The
Registration Statement may be inspected by anyone without charge at the
principal office of the Commission in Washington, D.C. and copies of all or part
of it may be obtained from the Commission upon payment of the prescribed fees.
No separate financial statements of PLC Capital have been included herein or
incorporated herein by reference. Protective Life and PLC Capital do not
consider that such financial statements would be material to holders of the
Preferred Securities because (i) all of the voting securities of PLC Capital
will be owned, directly or indirectly, by Protective Life, a reporting company
under the Exchange Act, (ii) PLC Capital has no independent operations but
exists for the sole purpose of issuing securities representing undivided
beneficial interests in the assets of PLC Capital and investing the proceeds
thereof in Subordinated Debt Securities issued by Protective Life and (iii)
Protective Life's obligations described herein, under the Declaration of PLC
Capital, the Preferred Securities Guarantee issued with respect to Preferred
Securities issued by PLC Capital and the related back-up undertakings, the
Subordinated Debt Securities purchased by PLC Capital and the related
Subordinated Indenture, taken together, constitute a full and unconditional
guarantee of payments due on the Preferred Securities. See "Description of
Subordinated Debt Securities of Protective Life--Subordination" and "Description
of the Preferred Securities Guarantee."
PLC Capital is not currently subject to the information reporting
requirements of the 1934 Act. PLC Capital will become subject to such
requirements upon the effectiveness of the Registration Statement, although it
intends to seek and expects to receive exemptions therefrom.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Protective Life's Annual Report on Form 10-K for the year ended December 31,
1996, and its Current Report on Form 8-K dated February 11, 1997, as filed with
the Commission pursuant to the Exchange Act (file no. 1-12332), are incorporated
herein by reference.
Each document or report subsequently filed by Protective Life pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the termination of the offering described herein shall be deemed to be
incorporated by reference into this Prospectus and to be a part of this
4
<PAGE>
Prospectus from the date of filing of such document. Any statement contained
herein, or in a document all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
Protective Life will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference, other than
certain exhibits to such documents. Requests should be directed to: Stockholder
Relations, Protective Life Corporation, P.O. Box 2606, Birmingham, Alabama 35202
(telephone: (205) 879-3573; facsimile (205) 868-3541).
5
<PAGE>
SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION INCLUDED ELSEWHERE IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS. UNLESS THE CONTEXT OTHERWISE
REQUIRES, AS USED IN THIS PROSPECTUS "PROTECTIVE LIFE" AND THE "COMPANY" REFER
TO THE CONSOLIDATED GROUP OF PROTECTIVE LIFE CORPORATION AND ITS SUBSIDIARIES.
PROTECTIVE LIFE CORPORATION
Protective Life, a Delaware corporation incorporated in 1981, is an
insurance holding company that, through its subsidiary life insurance companies,
produces, distributes and services a diverse array of insurance and investment
products. Protective Life markets individual life insurance, dental insurance,
group life and health insurance, credit life and disability insurance,
guaranteed investment contracts and annuities throughout the United States. The
Company also maintains a separate line of business devoted exclusively to the
acquisition of insurance policies from other companies and participates in a
joint venture which owns a life insurance company in Hong Kong. Protective Life
Insurance Company ("Protective Life Insurance"), founded in 1907, is Protective
Life's principal operating subsidiary. Protective Life Insurance is currently
assigned a rating of A+ (Superior) by A.M. Best Company, Inc. (2nd highest
rating of 15) and a claims-paying ability rating of AA (Excellent) by Standard &
Poor's (3rd highest rating of 18).
For the year ended December 31, 1996, Protective Life reported revenues of
approximately $1.0 billion and net income of $89.0 million. At December 31,
1996, Protective Life had total assets of approximately $8.3 billion,
stockholders' equity of $615.3 million and life insurance in force of $69.3
billion.
Over the five-year period ended December 31, 1996, Protective Life's total
assets have grown from approximately $3.1 billion to approximately $8.3 billion,
a compound annual growth rate of 21.5%. In the same five-year period, Protective
Life's net income has grown from $35.8 million to $89.0 million, a compound
annual growth rate of 20.0%, and its return on equity has averaged 17.7%.
The Company's operating strategy has been to identify market opportunities
in the life and health insurance business that offer attractive prospects for
growth and profitability and then to move quickly to take advantage of those
opportunities and become a strong participant in the targeted market segment.
The Company believes that its diverse product mix supports this strategy by
giving the Company broad exposure to attractive market opportunities and a more
diverse base of earnings. The Company also emphasizes discipline in the
allocation of capital, the pricing of products and the management of expenses.
RECENTLY ANNOUNCED ACQUISITION
On April 8, 1997, Protective Life Insurance entered into a definitive
agreement to acquire all of the outstanding capital stock of West Coast Life
Insurance Company ("West Coast") from Nationwide Corporation, a member of the
Nationwide Insurance Enterprise, for approximately $257 million in cash. As of
December 31, 1996, West Coast had $752.2 million of statutory assets and $152.6
million of capital and surplus. In 1996, West Coast had $106.4 million of
premium revenue. See "Protective Life Corporation--Recently Announced
Acquisition."
6
<PAGE>
SUMMARY FINANCIAL INFORMATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
INCOME STATEMENT DATA
Premiums and policy fees................... $ 494,153 $ 432,576 $ 402,772 $ 370,758 $ 323,136
Net investment income...................... 517,483 475,924 417,825 362,130 284,069
Realized investment gains (losses)......... 5,510 1,612 6,298 5,054 (14)
Other income............................... 20,857 11,768 21,553 21,695 18,835
----------- ----------- ----------- ----------- -----------
Total revenues........................... 1,038,003 921,880 848,448 759,637 626,026
----------- ----------- ----------- ----------- -----------
Benefits and expenses...................... 898,262 800,846 742,275 674,593 566,079
Income tax expense......................... 47,512 41,152 33,976 28,475 17,384
Minority interest.......................... 3,217 3,217 1,796 19 90
Change in accounting principle............. -- -- -- -- 1,053
----------- ----------- ----------- ----------- -----------
Net income............................... $ 89,012 $ 76,665 $ 70,401 $ 56,550 $ 41,420
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
PER SHARE DATA(1)
Net income(2).............................. $ 2.94 $ 2.68 $ 2.57 $ 2.07 $ 1.52
Cash dividends............................. $ .70 $ .62 $ .55 $ .505 $ .45
Weighted average number of shares
outstanding.............................. 30,285,911(3) 28,627,345(3) 27,392,936(3) 27,381,578(3) 27,315,986
Stockholders' equity....................... $ 19.98 $ 18.30 $ 9.86 $ 13.17 $ 10.28
Stockholders' equity excluding net
unrealized gains and losses on
investments.............................. $ 19.76 $ 16.29 $ 13.78 $ 11.74 $ 10.16
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA
Total assets............................... $ 8,263,205 $ 7,231,257 $ 6,130,284 $ 5,316,005 $ 4,006,667
Long-term debt............................. 168,200 115,500 98,000 137,598 31,014
Total debt................................. 181,000 115,500 98,000 147,118 88,248
Monthly Income Preferred Securities(4)..... 55,000 55,000 55,000
Stockholders' equity....................... 615,316 526,557 270,373 360,733 281,400
Stockholders' equity excluding unrealized
gains and losses on investments.......... $ 608,628 $ 468,694 $ 377,905 $ 321,449 $ 278,244
CONSOLIDATED STATUTORY FINANCIAL DATA(5)
Net income................................. $ 102,337 $ 115,259 $ 68,945 $ 53,138 $ 38,426
Total capital and surplus.................. $ 456,320 $ 324,416 $ 306,858 $ 265,075 $ 208,476
</TABLE>
- --------------------------
(1) Prior periods have been restated to reflect a two-for-one stock split on
June 1, 1995.
(2) Net income per share is computed using the weighted average number of shares
outstanding during each period.
(3) Excludes contingently issuable shares of 208,233, 231,253, 262,730, and
257,272 at December 31, 1996, 1995, 1994, and 1993, respectively. The
dilutive effect of such shares on earnings per share is less than three
percent.
(4) Reported as "minority interest in consolidated subsidiaries" in the
Company's financial statements.
(5) Of Protective Life's insurance subsidiaries prepared in conformity with
statutory accounting practices prescribed or permitted by insurance
regulatory authorities. Statutory accounting practices differ in some
respects from generally accepted accounting principles. For example, (a)
acquisition costs of obtaining new businesses are expensed as incurred, (b)
benefit liabilities are computed using methods statutorily mandated and are
not adjusted for actual experience, (c) income tax expense is computed on
taxable earnings and (d) furniture and equipment, agents' debt balances and
prepaid expenses are charged directly against surplus rather than reported
as assets.
7
<PAGE>
PLC CAPITAL TRUST I
PLC Capital is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust, dated as of April 10, 1997, (the "Declaration")
executed by Protective Life, as sponsor (the "Sponsor"), and the trustees of PLC
Capital (the "PLC Trustees") and (ii) a certificate of trust filed with the
Secretary of State of the State of Delaware on April 10, 1997. Such declaration
will be amended and restated in its entirety (as so amended and restated, the
"Declaration") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus is a part. PLC Capital exists for the
exclusive purposes of (i) issuing the Trust Securities representing undivided
beneficial interests in the assets of the Trust, (ii) investing the gross
proceeds of the Trust Securities in the Subordinated Debt Securities and (iii)
engaging in only those other activities necessary or incidental thereto. PLC
Capital has a term of approximately 55 years, but may terminate earlier as
provided in the Declaration.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered........................... 3,000,000 % Preferred Securities
(Liquidation Amount $25 per Preferred
Security).
Offering Price............................... $25 per Preferred Security plus accrued
distributions, if any, from ,
1997.
Distribution Dates........................... March 31, June 30, September 30 and December
31 of each year, commencing ,
1997.
Subordinated Debt Securities................. The Trust will use the gross proceeds
received from the sale of the Preferred
Securities to purchase Subordinated Debt
Securities from Protective Life. Protective
Life will have the right at any time to
dissolve the Trust and cause the Subordinated
Debt Securities to be distributed to the
holders of the Trust Securities. The
Subordinated Debt Securities shall bear
interest at the rate of % per annum
payable in quarterly arrears. See
"Description of the Subordinated Debt
Securities." The Subordinated Debt Securities
will mature and become due and payable on
, 2027 (or such other Stated
Maturity as is applicable, as described under
"Description of the Subordinated Debt
Securities--General").
Extension Periods............................ The Company has the right to defer payments
of interest on the Subordinated Debt
Securities by extending the interest payment
period on the Subordinated Debt Securities,
at any time and from time to time, to up to
20 consecutive quarters, provided that no
Extension Period may extend beyond the
maturity of the Subordinated Debt Securities.
If interest payments on the Subordinated Debt
Securities are so deferred, distributions on
the Preferred Securities will also be
deferred. During any deferral, distributions
will continue to accrue with interest thereon
compounded quarterly (to the extent permitted
by law) as described herein. There
</TABLE>
8
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<TABLE>
<S> <C>
could be multiple Extension Periods of
varying lengths throughout the term of the
Subordinated Debt Securities. During an
Extension Period, holders of Preferred
Securities will be required to include
deferred interest income in their gross
income in advance of receipt of the cash
interest payments attributable thereto. See
"Description of the Preferred
Securities--Voting Rights," "Description of
the Subordinated Debt Securities-- Option to
Extend Interest Payment Period" and "Certain
Federal Income Tax Considerations-- Interest
Income and Original Issue Discount."
Preferred Securities Guarantee............... Payment of distributions out of moneys held
by the Trust, and payments on liquidation of
the Trust or the redemption of Preferred
Securities, are guaranteed by the Company if
and to the extent the Trust has funds
available therefor. If the Company does not
make principal or interest payments on the
Subordinated Debt Securities, the Trust will
not have sufficient funds to redeem or make
distributions on the Preferred Securities, in
which event the Preferred Securities
Guarantee will not apply to such redemptions
or distributions until the Trust has
sufficient funds available therefor. The
Company's obligations under the Preferred
Securities Guarantee, taken together with its
other obligations described herein,
constitute a full and unconditional guarantee
by the Company on a subordinated basis of
payments due on the Preferred Securities. See
"Effect of Obligations Under the Subordinated
Debt Securities and the Preferred Securities
Guarantee" and "Description of the Preferred
Securities Guarantee."
Redemption................................... Unless previously redeemed pursuant to the
redemption provisions described below, each
of the outstanding Preferred Securities will
be redeemed by the Trust, in cash, on the
Stated Maturity date of the Subordinated Debt
Securities, at the Redemption Price, which is
equal to (a) $25 per Preferred Security plus
(b) accrued and unpaid distributions thereon
to the date of redemption. See "Description
of the Preferred Securities-- Mandatory
Redemption" and "--Tax Event Redemption," and
"Description of the Subordinated Debt
Securities--General."
The Subordinated Debt Securities are
redeemable by the Company, at any time in
whole or from time to time in part, on or
after , 2002, but prior to the
Stated Maturity, or at any time in
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
certain circumstances upon the occurrence of
a Tax Event, in each case at a price equal to
(a) 100% of the principal amount of
Subordinated Debt Securities to be redeemed
plus (b) accrued and unpaid interest thereon
to the redemption date. If the Company
redeems Subordinated Debt Securities, the
Trust must redeem Trust Securities on a PRO
RATA basis having an aggregate liquidation
amount equal to the aggregate principal
amount of the Subordinated Debt Securities so
redeemed at the Redemption Price. See
"Description of the Preferred
Securities--Mandatory Redemption,", "--Tax
Event Redemption" and "--Distribution of the
Subordinated Debt Securities."
Voting Rights................................ Holders of the Preferred Securities will have
limited voting rights and will not be
entitled to vote to appoint, remove or
replace, or to increase or decrease the
number of, PLC Trustees (as defined herein),
which voting rights are vested exclusively in
the holder of the Common Securities. See
"Description of the Preferred
Securities--Voting Rights."
Use of Proceeds.............................. The Trust will use the gross proceeds
received from the sale of the Trust
Securities to purchase Subordinated Debt
Securities from Protective Life. Protective
Life intends to use most of the proceeds from
the sale of the Subordinated Debt Securities
to repay existing short-term and long-term
bank debt which as of March 31, 1997 was
approximately $75 million in the aggregate.
The remainder, if any, will be used for
general corporate purposes. Pending such
application, such proceeds will be invested
in short-term securities.
Listing...................................... The Preferred Securities have been approved
for listing, subject to official notice of
issuance, on the New York Stock Exchange.
Trading of the Preferred Securities on the
New York Stock Exchange is expected to
commence within a 30-day period after the
initial delivery of the Preferred Securities.
See "Underwriting."
Risk Factors................................. Prospective investors should carefully
consider the matters set forth under "Risk
Factors."
</TABLE>
10
<PAGE>
RISK FACTORS
PROSPECTIVE PURCHASERS OF PREFERRED SECURITIES SHOULD CAREFULLY REVIEW THE
INFORMATION CONTAINED ELSEWHERE IN OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS AND, IN PARTICULAR, SHOULD CONSIDER THE FOLLOWING MATTERS.
ABSENCE OF PRIOR PUBLIC MARKET
Prior to this offering, there has been no public market for the Preferred
Securities. Although the Preferred Securities have been approved for listing on
the New York Stock Exchange, there can be no assurance that an active public
market will develop for the Preferred Securities or that, if such market
develops, the market price will equal or exceed the public offering price set
forth on the cover page of this Prospectus. The public offering price for the
Preferred Securities has been determined through negotiations between the
Company and the Underwriters. Prices for the Preferred Securities will be
determined in the marketplace and may be influenced by many factors, including
the liquidity of the market for the Preferred Securities, investor perceptions
of the Company and general industry and economic conditions.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE PREFERRED SECURITIES GUARANTEE AND
SUBORDINATED DEBT SECURITIES; HOLDING COMPANY STRUCTURE
The Company's obligations under the Preferred Securities Guarantee rank (i)
subordinate and junior in right of payment to all Senior Indebtedness (as such
term is defined in the Subordinated Indenture), (ii) PARI PASSU with the
Subordinated Debt Securities, the Company's guarantee of PLC Capital L.L.C.'s
Series A Preferred Securities and any other liabilities or obligations that may
be PARI PASSU by their terms and (iii) senior to the Company's common stock and
the most senior preferred or preference stock now or hereafter issued by the
Company and any guarantee now or hereafter entered into by Protective Life in
respect of any preferred or preference stock of any affiliate of the Company.
The obligations of Protective Life under the Subordinated Debt Securities are
subordinate and junior in right of payment to all present and future Senior
Indebtedness of Protective Life and rank PARI PASSU with obligations to or
rights of the Company's other general unsecured creditors. No payment of
principal (including redemption payments, if any) or interest on the
Subordinated Debt Securities may be made if (i) any Senior Indebtedness of
Protective Life is not paid when due and any applicable grace period with
respect to such default has ended with such default not having been cured or
waived or ceasing to exist or (ii) the maturity of any Senior Indebtedness has
been accelerated because of a default. As of December 31, 1996, Senior
Indebtedness of Protective Life aggregated approximately $181 million. There are
no terms in the Preferred Securities, the Subordinated Debt Securities or the
Preferred Securities Guarantee that limit the Company's ability to incur
additional indebtedness, including indebtedness that ranks senior to the
Subordinated Debt Securities and the Preferred Securities Guarantee. Protective
Life's ability to pay principal and interest on the Subordinated Debt Securities
is affected by the ability of its insurance company subsidiaries, Protective
Life's principal sources of cash flow, to declare and distribute dividends and
to make payments on surplus notes (i.e., deeply subordinated intercompany notes
owed by insurance company subsidiaries to Protective Life that are treated as
equity capital of such insurance company subsidiaries for statutory accounting
purposes), both of which may be limited by regulatory restrictions and, in the
case of payments on surplus notes, by certain financial covenants. In addition,
because Protective Life is a holding company, the Subordinated Debt Securities
are effectively subordinated to all existing and future liabilities of the
Company's subsidiaries, including obligations to policyholders. See "Protective
Life--Holding Company Structure," "Description of the Preferred Securities
Guarantee-- Status of the Preferred Securities Guarantee," "Description of the
Subordinated Debt Securities" and "Description of the Subordinated Debt
Securities--Subordination."
RIGHTS UNDER THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will be qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). The
Guarantee Trustee (as defined below under "PLC Capital") will act as indenture
trustee under the Preferred Securities Guarantee for the purposes of
11
<PAGE>
compliance with the provisions of the Trust Indenture Act. The Guarantee Trustee
will hold the Preferred Securities Guarantee for the benefit of the holders of
the Preferred Securities.
The Preferred Securities Guarantee guarantees to the holders of the
Preferred Securities the payment of (i) any accrued and unpaid distributions
that are required to be paid on the Preferred Securities, to the extent the
Trust has funds available therefor, (ii) the Redemption Price, with respect to
Preferred Securities called for redemption by the Trust, to the extent the Trust
has funds available therefor, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Subordinated Debt Securities to the holders of
Preferred Securities or a redemption of all the Preferred Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Preferred Securities to the date of the payment to the
extent the Trust has funds available therefor or (b) the amount of assets of the
Trust remaining available for distribution to holders of the Preferred
Securities in liquidation of the Trust. The holders of a majority in liquidation
amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee or to direct the exercise of any trust or power conferred upon the
Guarantee Trustee under the Preferred Securities Guarantee. Notwithstanding the
foregoing, any holder of Preferred Securities may institute a legal proceeding
directly against Protective Life to enforce such holder's rights under the
Preferred Securities Guarantee without first instituting a legal proceeding
against the Trust, the Guarantee Trustee or any other person or entity. If
Protective Life were to default on its obligation to pay amounts payable on the
Subordinated Debt Securities or otherwise, the Trust would lack funds for the
payment of distributions or amounts payable on redemption of the Preferred
Securities or otherwise, and, in such event, holders of the Preferred Securities
would not be able to rely upon the Preferred Securities Guarantee for payment of
such amounts. Instead, holders of the Preferred Securities would rely on the
enforcement (1) by the Property Trustee (as defined below under "PLC Capital")
of its rights as registered holder of the Subordinated Debt Securities against
Protective Life pursuant to the terms of the Subordinated Indenture and the
Subordinated Debt Securities or (2) by such holder of the Property Trustee's or
such holder's own rights against Protective Life to enforce payments on the
Subordinated Debt Securities. See "Description of the Preferred Securities
Guarantees," "Description of the Subordinated Debt Securities", "--Enforcement
of Certain Rights by Holders of Preferred Securities and "Protective
Life--Holding Company Structure." The Declaration provides that each holder of
Preferred Securities, by acceptance thereof, agrees to the provisions of the
Preferred Securities Guarantee, including the subordination provisions thereof,
and the Subordinated Indenture (as defined in "Description of the Subordinated
Debt Securities").
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, the holders of Preferred Securities would rely on the enforcement by
the Property Trustee of its rights as registered holder of the Subordinated Debt
Securities against Protective Life. In addition, the holders of a majority in
liquidation amount of the Preferred Securities will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Property Trustee or to direct the exercise of any trust or power conferred
upon the Property Trustee under the Declaration, including the right to direct
the Property Trustee to exercise the remedies available to it as the holder of
the Subordinated Debt Securities. The Subordinated Indenture provides that the
Debt Trustee (as defined herein) shall give holders of Subordinated Debt
Securities notice of all incurred defaults or events of default within 30 days
after occurrence. However, except in the cases of a default or an event of
default in payment on the Subordinated Debt Securities, the Debt Trustee is
protected in withholding such notice if its officers or directors in good faith
determine that withholding of such notice is in the interest of such holders.
If Protective Life fails to pay interest or principal on the Subordinated
Debt Securities (a "Debt Payment Failure") on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), and such Debt Payment Failure is continuing, a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or
12
<PAGE>
interest on the Subordinated Debt Securities having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder (a
"Direct Action") after the respective due date specified in the Subordinated
Debt Securities. In connection with such Direct Action, Protective Life, as
holder of the Common Securities, will be subrogated to the rights of such holder
of Preferred Securities under the Declaration to the extent of any payment made
by Protective Life to such holder of Preferred Securities in such Direct Action.
The holders of Preferred Securities will not be able to exercise directly any
other remedy available to the holders of the Subordinated Debt Securities. See
"Description of the Preferred Securities--Declaration Events of Default and Debt
Payment Failures."
LIMITED RIGHTS OF ACCELERATION
The Property Trustee, as holder of the Subordinated Debt Securities, may
accelerate payment of the principal and accrued and unpaid interest on the
Subordinated Debt Securities only upon the occurrence and continuation of a
"Declaration Event of Default" or Indenture Event of Default, which generally
are limited to certain events of bankruptcy, insolvency and reorganization of
the Company and certain events of dissolution, winding-up or termination of the
Trust. See "Description of the Preferred Securities-- Declaration Events of
Default and Debt Payment Failures." Accordingly, there is no right to
acceleration upon default by the Company of its payment obligations under the
Preferred Securities Guarantee.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Protective Life has the right under the Subordinated Indenture to defer
payments of interest on the Subordinated Debt Securities by extending the
interest payment period at any time, and from time to time, on the Subordinated
Debt Securities. As a consequence of such an extension, quarterly distributions
on the Preferred Securities would be deferred by the Trust during any such
Extension Period (but would continue to accrue, despite such deferral, with
interest thereon compounded quarterly). Such right to extend the interest
payment period for the Subordinated Debt Securities is limited such that an
Extension Period may not exceed 20 consecutive quarters, and may not extend
beyond the Stated Maturity of the Subordinated Debt Securities. During any such
Extension Period, (a) Protective Life shall not declare or pay dividends on, or
make a distribution with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Protective Life's common stock in
connection with the satisfaction by Protective Life of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security requiring the Company to purchase shares of
its common stock, (ii) as a result of a reclassification of Protective Life
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of Protective Life capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to an acquisition or the conversion or exchange
provisions of such Protective Life capital stock or the security being converted
or exchanged, and (iv) redemptions or purchases pursuant to Protective Life's
Rights Agreement, dated as of August 7, 1995, between Protective Life and
AmSouth Bank of Alabama as Rights Agent), (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by Protective Life that
rank PARI PASSU with or junior to the Subordinated Debt Securities and (c) the
Company shall not make any Guarantee Payments (as defined herein) with respect
to the foregoing (other than pursuant to the Preferred Securities Guarantee, the
Common Securities Guarantee, dated as of , 1997, of the Company (the
"Common Guarantee") with respect to the Common Securities issued by PLC Capital
and the Guarantee Agreement, dated as of June 9, 1994 of the Company (the
"Series A Guarantee") with respect to the Series A Preferred Securities). Prior
to the termination of any such Extension Period, Protective Life may further
extend the interest payment period; provided, that such Extension Period may not
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Subordinated Debt Securities. Upon the termination of any Extension Period and
the payment of all amounts then due, Protective Life may commence a new
Extension Period, subject to the above requirements. See "Description of the
Preferred Securities--
13
<PAGE>
Distributions" and "Description of the Subordinated Debt Securities--Option to
Extend Interest Payment Period."
The Company believes that, for federal income tax purposes, the terms and
conditions of the Subordinated Debt Securities are such that the likelihood that
it will exercise its right to defer payments of interest is a remote
contingency, and that, therefore, the Preferred Securities should not be
considered to be issued with original issue discount ("OID") unless the Company
were actually to exercise such deferral right. There is no assurance that the
Internal Revenue Service will agree with such position. See "Certain Federal
Income Tax Considerations--Interest Income and Original Issue Discount."
Should Protective Life exercise its right to defer payments of interest by
extending the interest payment period, each holder of Preferred Securities will
be required to accrue income (as OID) in respect of its PRO RATA share of the
deferred stated interest (including any additional interest accruing on such
deferred stated interest) on the Subordinated Debt Securities for United States
federal income tax purposes. As a result, each holder of Preferred Securities
will generally recognize income for United States federal income tax purposes in
advance of the receipt of cash and will not receive the cash from PLC Capital
related to such income if such holder disposes of its Preferred Securities prior
to the record date for the date on which distributions of such amounts are made.
Protective Life has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debt Securities. However, should Protective Life determine to
exercise such right in the future, the market price of the Preferred Securities
is likely to be affected. A holder that disposes of its Preferred Securities
during an Extension Period, therefore, might not receive the same return on its
investment as a holder that continues to hold its Preferred Securities. In
addition, as a result of the existence of the Company's right to defer interest
payments, the market price of the Preferred Securities (which represent an
undivided beneficial interest in the Subordinated Debt Securities) may be more
volatile than other securities on which OID accrues that do not have such
rights. See "Certain Federal Income Tax Considerations--Interest Income and
Original Issue Discount".
PROPOSED TAX LEGISLATION
On February 6, 1997, the Clinton Administration released its budget proposal
for fiscal year 1998. The proposal contains certain tax law changes that, if
enacted, would prohibit an issuer from deducting interest payments or original
issue discount on an instrument that has a maximum weighted average maturity of
more than 40 years. Under the proposal, for purposes of determining the term of
an instrument, any right to extend would be treated as exercised. The
Administration's proposal, if enacted, would also treat a corporate issuer that
files annual financial statements with the Commission as having characterized an
instrument as equity for purposes of section 385(c) of the Internal Revenue Code
of 1986, as amended, if the instrument (i) has a maximum term exceeding 15 years
and (ii) is not shown as indebtedness on the applicable balance sheet of the
issuer or, in the case of indebtedness issued to a related party that issues a
related instrument, such related instrument is not reflected as indebtedness on
the applicable consolidated balance sheet. Under section 385(c), the
characterization by the issuer of an instrument as equity is binding on the
issuer and all holders of the instrument unless a holder discloses on his tax
return that he is treating such instrument in a manner inconsistent with the
issuer's characterization. The Administration's proposal specifies that the
changes would be effective for instruments issued on or after the date of first
Congressional committee action.
There can be no assurance that legislation affecting the Company's ability
to deduct interest paid on the Subordinated Debt Securities or the
characterization of the Subordinated Debt Securities for U.S. federal income tax
purposes, including legislation similar to the proposals described above, will
not be enacted in the future or that any such legislation would not be effective
retroactively. In the event tax law changes are enacted and apply retroactively
to the Subordinated Debt Securities, such changes could give rise to a Tax
Event, which would, in certain circumstances, permit the Company to cause a
redemption of such Subordinated Debt Securities and of the related Preferred
Securities and Common Securities, as described more fully under "Description of
Preferred Securities--Tax Event Redemption."
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<PAGE>
REDEMPTION OR DISTRIBUTION OF THE SUBORDINATED DEBT SECURITIES
The Company will have the right at any time to dissolve the Trust and cause
the Subordinated Debt Securities to be distributed to the holders of the Trust
Securities. In certain circumstances, the Company shall have the right to redeem
the Subordinated Debt Securities, in whole or in part, in which event the Trust
will redeem the Trust Securities on a PRO RATA basis to the same extent as the
Subordinated Debt Securities are redeemed by the Company. See "Description of
the Preferred Securities--Distribution of the Subordinated Debt Securities."
Under current United States federal income tax law a distribution of
Subordinated Debt Securities upon the dissolution of PLC Capital would not be a
taxable event to holders of the Preferred Securities. See "Certain Federal Tax
Considerations--Distribution of Subordinated Debt Securities to Holders of
Preferred Securities."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debt Securities that may be distributed in
exchange for Preferred Securities if a dissolution or liquidation of the Trust
were to occur. Accordingly, the Preferred Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Subordinated Debt Securities that a holder of Preferred Securities may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Preferred Securities offered
hereby. Because holders of Preferred Securities may receive Subordinated Debt
Securities in the event the Company exercises its right to dissolve the Trust,
prospective purchasers of Preferred Securities are also making an investment
decision with regard to the Subordinated Debt Securities and should carefully
review all the information regarding the Subordinated Debt Securities contained
in this Prospectus. See "Description of the Preferred Securities--Distribution
of the Subordinated Debt Securities" and "Description of the Subordinated Debt
Securities--General."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will not
be entitled to vote to appoint, remove or replace, or to increase or decrease
the number of, PLC Trustees, which voting rights are vested exclusively in the
holder of the Common Securities. See "Description of Preferred Securities--
Voting Rights."
TRADING PRICE
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Subordinated Debt Securities. A holder who uses the accrual method of accounting
for tax purposes (and a cash method holder, if the Subordinated Debt Securities
are deemed to be issued with OID) and who disposes of his Preferred Securities
between record dates for payments of distributions thereon will be required to
include accrued but unpaid interest on the Subordinated Debt Securities through
the date of disposition in income as ordinary income (i.e., interest or,
possibly, OID), and to add such amount to his adjusted tax basis in his PRO RATA
share of the underlying Subordinated Debt Securities deemed disposed of. To the
extent the selling price is less than the holder's adjusted tax basis, a holder
will recognize a capital loss. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United States federal
income tax purposes. See "United States Federal Income Taxation--Interest Income
and Original Issue Discount" and "--Sales of Preferred Securities."
RATINGS
Ratings are an important factor in the competitive position of insurance
companies. Rating organizations periodically review the financial performance
and condition of insurers, including Protective Life's insurance subsidiaries. A
downgrade in the ratings of Protective Life's insurance subsidiaries could
15
<PAGE>
adversely affect its ability to sell its products and its ability to compete for
attractive acquisition opportunities. See "Protective Life Corporation--The
Company."
PROTECTIVE LIFE CORPORATION
THE COMPANY
Protective Life Corporation, a Delaware corporation incorporated in 1981, is
an insurance holding company that, through its subsidiary life insurance
companies, produces, distributes and services a diverse array of insurance and
investment products. Protective Life markets individual life insurance, dental
insurance, group life and health insurance, credit life and disability
insurance, guaranteed investment contracts and annuities throughout the United
States. The Company also maintains a separate line of business devoted
exclusively to the acquisition of insurance policies from other companies and
participates in a joint venture which owns a life insurance company in Hong
Kong. Protective Life Insurance, founded in 1907, is Protective Life's principal
operating subsidiary. Protective Life Insurance is currently assigned a rating
of A+ (Superior) by A.M. Best Company, Inc. (2nd highest rating of 15) and a
claims-paying ability rating of AA (Excellent) by Standard & Poor's (3rd highest
rating of 18). Protective Life's principal executive offices are located at 2801
Highway 280 South, Birmingham, Alabama 35223 (telephone: (205) 879-9230).
For the year ended December 31, 1996, Protective Life reported revenues of
approximately $1.0 billion and net income of $89.0 million. At December 31,
1996, Protective Life had total assets of approximately $8.3 billion,
stockholders' equity of $615.3 million and life insurance in force of $69.3
billion.
Over the five-year period ended December 31, 1996, Protective Life's total
assets have grown from $3.1 billion to approximately $8.3 billion, a compound
annual growth rate of 21.5%. In the same five-year period, Protective Life's net
income has grown from $35.8 million to $89.0 million, a compound annual growth
rate of 20.0%, and its return on equity has averaged 17.7%.
RECENTLY ANNOUNCED ACQUISITION
On April 8, 1997, Protective Life Insurance entered into a definitive
agreement to acquire all of the outstanding capital stock of West Coast from
Nationwide Corporation, a member of the Nationwide Insurance Enterprise, for
approximately $257.0 million in cash. The acquisition is subject to regulatory
approvals and certain other conditions, and is expected to be financed from
funds internally generated at Protective Life Insurance. West Coast's principal
products are universal life and traditional ordinary life. As of December 31,
1996, West Coast had $752.2 million of statutory assets and $152.6 million of
capital and surplus. In 1996, West Coast had $106.4 million of premium revenue.
The Company expects that Protective Life Insurance will operate West Coast as a
subsidiary, with its headquarters in California, and retain West Coast's sales
force.
STRATEGY
The Company's operating strategy has been to identify market opportunities
in the life and health insurance business that offer attractive prospects for
growth and profitability and then to move quickly to take advantage of those
opportunities and become a strong participant in the targeted market segment.
The Company believes that its diverse product mix supports this strategy by
giving the Company broad exposure to attractive market opportunities and a more
diverse base of earnings. The Company also emphasizes discipline in the
allocation of capital, the pricing of products and the management of expenses.
Protective Life is organized around six primary divisions: the Acquisitions
Division, the Guaranteed Investment Contracts Division, the Individual Life
Insurance Division, the Group Division, the Investment Products Division and the
Financial Institutions Division.
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<PAGE>
Set forth below are the operating earnings (unaudited), realized investment
gains (losses) and related amortization of deferred policy acquisition costs
(unaudited), and income before income tax for each of the Company's Divisions
and a Corporate and Other business segment, and unallocated realized investment
gains (losses) for each of the years ended December 31, 1996, 1995, 1994, 1993
and 1992.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,(1)
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
---------- ---------- ------------- --------- ---------
<CAPTION>
(IN
THOUSANDS)
<S> <C> <C> <C> <C> <C>
OPERATING EARNINGS(2)(3)
Acquisitions................................ $ 52,670 $ 48,490 $ 36,796 $ 27,415(4) $ 18,785
Guaranteed Investment Contracts............. 40,082 31,557 26,005 22,070 12,438
Individual Life Insurance................... 14,027 13,490 13,933 18,005(4) 11,875
Group....................................... 5,138 10,060 10,139 8,501 6,723
Investment Products......................... 9,624 6,352 120 (748 (4) 3,217
Financial Institutions...................... 9,531 8,375 9,024 7,137 4,907
Corporate and Other(5)...................... 7,020 2,663 2,183 (2,390 (4) 2,016
---------- ---------- ------------- --------- ---------
Total Operating Earnings.................... 138,092 120,987 98,200 79,990 59,961
REALIZED INVESTMENT GAINS (LOSSES)
Acquisitions................................ 0 0 532 0 0
Guaranteed Investment Contracts............. (7,963) (3,908) 3,000 1,175 962
Individual Life Insurance................... 3,098 0 0 0 0
Investment Products......................... 3,858 4,937 (2,500) 2,003 473
Unallocated Realized Investment Gains
(Losses).................................. 6,517 583 5,266 1,876 (1,449)
RELATED AMORTIZATION OF DEFERRED POLICY
ACQUISITION COSTS
Individual Life Insurance................... (1,974) 0 0 0 0
Investment Products......................... (1,887) (1,565) 1,675 0 0
---------- ---------- ------------- --------- ---------
Total Net................................... 1,649 47 7,973 5,054 (14)
INCOME BEFORE INCOME TAX(3)
Acquisitions................................ 52,670 48,490 37,328 27,415(4) 18,785
Guaranteed Investment Contracts............. 32,119 27,649 29,005 23,245 13,400
Individual Life Insurance................... 15,151 13,490 13,933 18,005(4) 11,875
Group....................................... 5,138 10,060 10,139 8,501 6,723
Investment Products......................... 11,595 9,724 (705) 1,255(4) 3,690
Financial Institutions...................... 9,531 8,375 9,024 7,137 4,907
Corporate and Other(5)...................... 7,020 2,663 2,183 (2,390 (4) 2,016
Unallocated Realized Investment Gains
(Losses).................................. 6,517 583 5,266 1,876 (1,449)
---------- ---------- ------------- --------- ---------
Total Income before Income Tax.............. $ 139,741 $ 121,034 $ 106,173 $ 85,044 $ 59,947
</TABLE>
- ------------------------
(1) The selected financial data for the years ended December 31, 1996, 1995,
1994, 1993 and 1992 have been derived from previously audited consolidated
financial statements of Protective Life.
(2) Income before Income Tax excluding realized investment gains and losses and
related amortization of deferred policy acquisition costs.
(3) Certain reclassifications have been made in the previously reported results
relating to the allocation of corporate overhead to make prior period
results comparable to those of the current year. Such reclassifications had
no effect on previously reported net income, total assets or stockholders'
equity.
(4) In 1993 Protective Life changed the method used to apportion net investment
income within Protective Life. The change resulted in increased income
attributable to the Acquisitions, Individual Life Insurance, and Investment
Products business segments of approximately $2,600, $3,000 and $2,000,
respectively, while decreasing income of the Corporate and Other segment.
(5) Pre-tax income for the Corporate and Other business segment has not been
reduced by pre-tax minority interest of $4,950 in 1996, $4,950 in 1995,
$2,764 in 1994, $19 in 1993 and $90 in 1992. Such minority interest in 1996,
1995 and 1994 arises from payments made on Monthly Income Preferred
Securities issued in 1994.
17
<PAGE>
ACQUISITIONS DIVISION
Protective Life is an active participant in the consolidation of the life
and health insurance industry. The Acquisitions Division focuses solely on
acquiring, converting and servicing business acquired from other companies. The
Company has long been an active acquiror of blocks of insurance policies and has
closed a total of 38 acquisitions over the last 27 years, including 11 since
1989. In 1990, the Company became more focused on the acquisitions business and,
since that year, has invested $219.0 million in acquired blocks of policies and
small insurance companies. The division generally concentrates on identifying
acquisition opportunities in the $10 million to $50 million range, a market
segment that the Company believes to be less competitive than the market for
larger transactions. However, from time to time the Company also considers
larger acquisition opportunities it considers attractive. Protective Life
believes that its highly focused and disciplined approach to the acquisitions
process and its extensive experience in the assimilation, conservation and
servicing of purchased books of business give it a significant competitive
advantage over many other companies that attempt to make similar acquisitions.
The Company expects acquisition opportunities to continue to be available as the
life insurance industry continues to consolidate. However, management believes
that the Company may face increased competition for future acquisitions. In the
five-year period ended December 31, 1996, pretax operating earnings from
acquisitions increased from $18.8 million to $52.7 million.
GUARANTEED INVESTMENT CONTRACTS DIVISION
Protective Life's Guaranteed Investment Contracts Division markets GICs to
401(k) and other qualified retirement savings plans. The division also offers
guaranteed funding agreements to the trustees of municipal bond proceeds and
other annuity contracts. Protective Life entered the GIC business in 1989. The
division's emphasis is on a consistent and disciplined approach to product
pricing and asset/liability management, careful underwriting of early withdrawal
risks and maintaining low distribution and administration costs. In the
five-year period ended December 31, 1996, the division's operating earnings
increased from $12.4 million to $40.1 million.
INDIVIDUAL LIFE INSURANCE DIVISION
The Individual Life Insurance Division markets universal and other life
insurance products on a national basis through a network of independent
insurance agents. The division has grown sales by developing niche marketing
strategies. The strategies include marketing specialty products through
insurance brokerage channels and traditional life insurance products through
regional stock brokers. The division has also developed a unit to distribute
life insurance products on a "private label" basis through other insurance
companies. In the five-year period ended December 31, 1996, the division's sales
(as measured by new annualized premium) have grown from $27.7 million to $45.4
million. Over the same period, the U.S. life insurance industry has experienced
virtually no growth in annualized new premium sales.
GROUP DIVISION
The Group Division's strategic emphasis is on indemnity and managed-care
dental products. At December 31, 1996, the Company had approximately 385,000
members in its dental HMOs and over 878,500 lives covered in total by its dental
programs.
The Group Division was a pioneer in developing indemnity dental products for
the voluntary payroll deduction market. In the first quarter of 1995, Protective
Life entered the dental managed care segment when it acquired a dental managed
care company which transacts business under the trade name "DentiCare". The
acquisition combined DentiCare's high quality service and product capabilities
with the Group Division's marketing strength and capacity to distribute dental
products through a much broader geographic distribution framework. The
division's strategy is to promote a "dual choice" option by offering
18
<PAGE>
DentiCare's products through Protective Life's existing indemnity dental
distribution channels. The division has developed an innovative system for
prospecting and selling dental insurance products by telephone. The division
also plans to grow the dental business through acquisitions. In 1996, the
division extended the geographic reach of its dental managed care operations
into Oklahoma, Arkansas and Missouri and added approximately 38,000 new members,
through the acquisition of two dental managed care plans licensed to do business
in those states. In early 1997, the division also agreed to acquire a dental
health maintenance organization with approximately 18,000 members in Wisconsin,
and another with approximately 14,000 members in Texas. The Company's dental
annualized new premium and premium equivalent sales were $27.0 million in 1995
and $38.4 million in 1996. In 1996 the division's operating earnings were
reduced by a one time charge of $6.8 million related to a refund of cancer
premiums and related expenses. In the five-year period ended December 31, 1996,
the Group Division's operating earnings increased from $6.7 million to $11.9
million excluding the one-time charge described above.
The Group Division also actively markets group life, group health and group
disability coverages, typically to employee groups of 25 to 1,000, as well as
administrative services for self-insured employer health plans. The division
also markets an individual cancer insurance policy.
INVESTMENT PRODUCTS DIVISION
The Investment Products Division markets fixed and variable annuity
products. Annuity products are primarily used by consumers as a source of
retirement savings. Overall industry sales of annuity products have grown in
recent years as the "baby-boom" generation has increased its level of retirement
savings. The Division's annuity products are sold through broker-dealers,
financial institutions and the Individual Life Insurance Division's agent sales
force. In 1994, the Division introduced a variable annuity product which offers
the policyholder the opportunity to invest in mutual funds. The variable annuity
account balance was $624.7 million at December 31, 1996. Variable annuity
products represented 45.9% of the Division's 1996 Sales.
FINANCIAL INSTITUTIONS DIVISION
The Company's Financial Institutions Division specializes in marketing
credit life and disability insurance products through commercial banks, savings
and loan associations, mortgage bankers and automobile dealers. The majority of
these policies cover consumer loans made by financial institutions located
primarily in the southeastern United States and automobile dealers throughout
the United States. The division markets through employee field representatives,
independent brokers and a wholly-owned subsidiary. The division also offers
certain products through direct mail solicitation to customers of financial
institutions. The Company believes it has been a beneficiary of a "flight to
quality," as financial institutions and automobile dealers increasingly prefer
to do business with insurers having quality products, strong balance sheets and
high-quality training and service capabilities.
In 1992, the Company acquired the credit insurance business of Durham Life
Insurance Company, which more than doubled the size of the Financial
Institutions Division. In 1996, the division coinsured a closed block of credit
insurance policies.
In 1995, the division entered into a reinsurance arrangement whereby most of
the division's new credit insurance sales are being ceded to a reinsurer. In the
second quarter of 1995, the division also ceded a block of older policies. In
the five-year period ended December 31, 1996, the division's sales and operating
earnings have increased from $68.4 million and $4.9 million to $146.7 million
and $9.5 million respectively.
CORPORATE AND OTHER
The Corporate and Other segment consists of earnings from the Company's
fifty-percent-owned joint venture in Hong Kong with the Lippo Group, unallocated
net investment income on capital, interest expense on substantially all debt,
charitable contributions, and earnings from several small insurance and
19
<PAGE>
noninsurance subsidiaries. In 1996, its second year of operations, the Hong Kong
joint venture company, Lippo Protective Life Insurance Company, had new premium
sales of $12.7 million, an increase of $6.9 million from its $5.8 million of
annualized new premium sales in 1995.
INVESTMENT PORTFOLIO
Protective Life believes its investment strategy is a key component of its
financial success. The Company targets three primary asset categories:
mortgage-backed securities, corporate bonds and bank loan participations, and a
specialized class of commercial mortgage loans. The types of assets in which the
Company may invest are influenced by state laws which prescribe qualified
investment assets. Within the parameters of these laws, the Company's investment
portfolio is actively managed to support the liabilities of Protective Life's
lines of business, giving consideration to such factors as liquidity needs,
investment quality, investment return, matching of assets and liabilities, and
the composition of the portfolio by asset type and credit exposure. The
following table shows the composition of Protective Life's invested assets at
December 31, 1996:
<TABLE>
<CAPTION>
ASSET VALUE
(DOLLARS IN PERCENT OF TOTAL
THOUSANDS) INVESTMENTS
-------------------- -----------------
<S> <C> <C>
Fixed Maturities:
Bonds:
Mortgage-backed securities............................................. $ 2,202,093 33.6%
United States Government and government agencies and authorities....... 347,602 5.3
States, municipalities, and political subdivisions..................... 5,553 0.1
Public utilities....................................................... 366,560 5.6
Convertibles and bonds with warrants attached.......................... 521
All other corporate bonds.............................................. 1,706,842 26.1
Bank loan participations................................................. 49,829 0.8
Redeemable preferred stocks.............................................. 7,072 0.1
----------- -----
Total fixed maturities................................................. 4,686,072 71.6
----------- -----
Equity securities:
Common stocks--industrial, miscellaneous, and all other.................. 23,053 0.4
Nonredeemable preferred stocks........................................... 12,197 0.2
----------- -----
Total equity securities................................................ 35,250 0.6
Mortgage loans on real estate.............................................. 1,503,080 22.9
Investment real estate..................................................... 14,305 0.2
Policy loans............................................................... 166,704 2.5
Other long-term investments................................................ 32,506 0.5
Short-term investments..................................................... 114,258 1.7
----------- -----
Total investments.......................................................... $ 6,552,175 100.0%
----------- -----
----------- -----
</TABLE>
In its mortgage-backed securities portfolio, Protective Life has focused on
sequential and planned amortization class securities, which tend to be less
volatile than other classes of mortgage-backed securities, and on strict
underwriting and constant monitoring of the portfolio through the use of
state-of-the-art technology. Almost all of the Company's corporate bonds are
investment grade, publicly traded securities. The Company's participation in
senior bank loan programs provides it with enhanced yields and flexibility in
matching maturities in its GIC portfolio. Bank loan participations totalled
$49.8 million at December 31, 1996.
20
<PAGE>
In its approach to commercial mortgage loans, the Company has, for 26 years,
specialized in originating small loans (average new loan size of $2.9 million)
to finance shopping centers, typically in smaller communities. The Company
provides a high level of service to the developers of such properties and
generally does not attempt to compete for business solely by offering the lowest
interest rates available. Such loans provide attractive yields to the Company
and historically have performed very well. On a cumulative basis, the Company
has had no significant loss of principal on its commercial mortgage loan
portfolio over the last 20 years. As of December 31, 1996, 1.6% of the
commercial loan portfolio was classified as 90 days past due, foreclosed or
restructured, which the Company believes to be well below the life insurance
industry average of 9.6%. The Company believes that its many years of
specialization in this subsegment of the real estate industry helps it to
maintain the quality of its loan underwriting and loan approval process.
HOLDING COMPANY STRUCTURE
Protective Life's ability to pay principal and interest on the Subordinated
Debt Securities is affected by the ability of its insurance company
subsidiaries, Protective Life's principal sources of cash flow, to declare and
distribute dividends and to make payments on surplus notes (i.e., deeply
subordinated intercompany notes owed by insurance company subsidiaries to
Protective Life that are treated as equity capital of such insurance company
subsidiaries for statutory accounting purposes), both of which may be limited by
regulatory restrictions and, in the case of payments on surplus notes, by
certain financial covenants. Protective Life's cash flow is also dependent on
revenues from investment, data processing, legal and management services
rendered to its subsidiaries. Insurance company subsidiaries of Protective Life
are subject to various state statutory and regulatory restrictions, applicable
to insurance companies generally, that limit the amount of cash dividends, loans
and advances that those subsidiaries may pay to Protective Life. Under Tennessee
insurance laws, Protective Life Insurance generally may pay dividends to
Protective Life only out of its unassigned surplus as reflected in its statutory
financial statements filed in that State. In addition, the Tennessee
Commissioner of Insurance must approve (or not disapprove within 30 days of
notice) payment of an "extraordinary" dividend from Protective Life Insurance,
which generally under Tennessee insurance laws is a dividend that exceeds,
together with all dividends paid by Protective Life Insurance within the
previous 12 months, the greater of (i) 10% of Protective Life Insurance's
surplus as regards policyholders at the preceding December 31 or (ii) the net
gain from operations of Protective Life Insurance for the 12 months ended on
such December 31. No assurance can be given that more stringent restrictions
will not be adopted from time to time by states in which Protective Life's
insurance subsidiaries are domiciled, which restrictions could have the effect,
under certain circumstances, of significantly reducing dividends or other
amounts payable to Protective Life by such subsidiaries without affirmative
prior approval by state insurance regulatory authorities.
In the event of the insolvency, liquidation, reorganization, dissolution or
other winding-up of an insurance subsidiary of Protective Life, all creditors of
such subsidiary, including holders of life and health insurance policies, would
be entitled to payment in full out of the assets of such subsidiary before
Protective Life, as shareholder or holder of surplus notes, would be entitled to
any payment, and thus such creditors would have to be paid in full before the
creditors of Protective Life (including holders of Subordinated Debt Securities)
would be entitled to receive any payment from the assets of such subsidiary.
21
<PAGE>
SELECTED FINANCIAL INFORMATION OF THE COMPANY
The following selected financial information as of and for the years ended
December 31, 1996, 1995, 1994, 1993 and 1992 has been derived from previously
published audited consolidated financial statements of Protective Life, prepared
in accordance with generally accepted accounting principles, which have been
examined and reported upon by Coopers & Lybrand, L.L.P., independent auditors.
The selected financial information should be read in conjunction with, and is
qualified in its entirety by reference to, the consolidated financial statements
from which it has been derived and the accompanying notes thereto incorporated
by reference herein.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
------------- ------------- ------------- ------------- -----------
<CAPTION>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Premiums and policy fees........................ $ 494,153 $ 432,576 $ 402,772 $ 370,758 $ 323,136
Net investment income........................... 517,483 475,924 417,825 362,130 284,069
Realized investment gains (losses).............. 5,510 1,612 6,298 5,054 (14)
Other income.................................... 20,857 11,768 21,553 21,695 18,835
------------- ------------- ------------- ------------- -----------
Total revenues.............................. 1,038,003 921,880 848,448 759,637 626,026
------------- ------------- ------------- ------------- -----------
Benefits and expenses........................... 898,262 800,846 742,275 674,593 566,079
Income tax expense.............................. 47,512 41,152 33,976 28,475 17,384
Minority interest............................... 3,217 3,217 1,796 19 90
Change in accounting principle.................. -- -- -- -- 1,053
------------- ------------- ------------- ------------- -----------
Net income.................................... $ 89,012 $ 76,665 $ 70,401 $ 56,550 $ 41,420
------------- ------------- ------------- ------------- -----------
------------- ------------- ------------- ------------- -----------
PER SHARE DATA(1)
Net income(2)................................... $ 2.94 $ 2.68 $ 2.57 $ 2.07 $ 1.52
Cash dividends.................................. $ .70 $ .62 $ .55 $ .505 $ .45
Weighted average number of shares outstanding... 30,285,911(3) 28,627,345(3) 27,392,936(3) 27,381,578(3) 27,315,986
Stockholders' equity............................ $ 19.98 $ 18.30 $ 9.86 $ 13.17 $ 10.28
Stockholders' equity excluding net unrealized
gains and losses on investments............... $ 19.76 $ 16.29 $ 13.78 $ 11.74 $ 10.16
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------------------
1996 1995 1994 1993 1992
------------- ------------- ------------- ------------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total assets.................................... $ 8,263,205 $ 7,231,257 $ 6,130,284 $ 5,316,005 $ 4,006,667
Long-term debt.................................. 168,200 115,500 98,000 137,598 31,014
Total debt...................................... 181,000 115,500 98,000 147,118 88,248
Monthly Income Preferred Securities(4).......... 55,000 55,000 55,000
Stockholders' equity............................ 615,316 526,557 270,373 360,733 281,400
Stockholders' equity excluding unrealized gains
and losses on investments..................... $ 608,628 $ 468,694 $ 377,905 $ 321,449 $ 278,244
CONSOLIDATED STATUTORY FINANCIAL DATA(5)
Net income...................................... $ 102,337 $ 115,259 $ 68,945 $ 53,138 $ 38,426
Total capital and surplus....................... $ 456,320 $ 324,416 $ 306,858 $ 265,075 $ 208,476
</TABLE>
- --------------------------
(1) Prior periods have been restated to reflect a two-for-one stock split on
June 1, 1995.
(2) Net income per share is computed using the weighted average number of shares
outstanding during each period.
(3) Excludes contingently issuable shares of 208,233, 231,253, 262,730, and
257,272 at December 31, 1996, 1995, 1994, and 1993, respectively. The
dilutive effect of such shares on earnings per share is less than three
percent.
(4) Reported as "minority interest in consolidated subsidiaries" in the
Company's financial statements.
(5) Of Protective Life's insurance subsidiaries prepared in conformity with
statutory accounting practices prescribed or permitted by insurance
regulatory authorities. Statutory accounting practices differ in some
respects from generally accepted accounting principles. For example, (a)
acquisition costs of obtaining new businesses are expensed as incurred, (b)
benefit liabilities are computed using methods statutorily mandated and are
not adjusted for actual experience, (c) income tax expense is computed on
taxable earnings and (d) furniture and equipment, agents' debt balances and
prepaid expenses are charged directly against surplus rather than reported
as assets.
22
<PAGE>
CONSOLIDATED EARNINGS RATIOS
The following table sets forth Protective Life's ratios of consolidated
earnings to fixed charges, consolidated earnings to combined fixed charges and
distributions on Series A Preferred Securities and consolidated earnings to
combined fixed charges, distributions on Series A Preferred Securities, and
interest credited on investment products for the years indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------
<S> <C> <C> <C> <C>
1992 1993 1994 1995
--------- --------- --------- ---------
Ratio of Consolidated Earnings to Fixed Charges(1)............................ 13.5 14.4 14.7 13.6
Ratio of Consolidated Earnings to Combined Fixed Charges and Distributions on
Series A Preferred Securities(2)............................................ 13.5 14.4 10.8 9.0
Ratio of Consolidated Earnings to Combined Fixed Charges, Distributions on
Series A Preferred Securities, and Interest Credited on Investment
Products(3)................................................................. 1.3 1.4 1.4 1.4
<CAPTION>
<S> <C>
1996
---------
Ratio of Consolidated Earnings to Fixed Charges(1)............................ 14.9
Ratio of Consolidated Earnings to Combined Fixed Charges and Distributions on
Series A Preferred Securities(2)............................................ 10.0
Ratio of Consolidated Earnings to Combined Fixed Charges, Distributions on
Series A Preferred Securities, and Interest Credited on Investment
Products(3)................................................................. 1.5
</TABLE>
- ------------------------
(1) The ratio of consolidated earnings to fixed charges is calculated by
dividing the sum of income before income tax (excluding pre-tax minority
interest but not excluding distributions on Series A Preferred Securities
reported as minority interest) and interest expense on debt, by interest
expense on debt.
(2) The ratio of consolidated earnings to combined fixed charges and
distributions on Series A Preferred Securities is calculated by dividing the
sum of income before income tax (excluding pre-tax minority interest but not
excluding distributions on Series A Preferred Securities reported as
minority interest) and interest expense on debt, by interest expense on debt
and distributions on Series A Preferred Securities.
(3) The ratio of consolidated earnings to interest on debt, distributions on
Series A Preferred Securities, and interest credited on investment products
is calculated by dividing the sum of income before income tax (excluding
pre-tax minority interest but not excluding distributions on Series A
Preferred Securities reported as minority interest), interest expense on
debt and interest credited on investment products, by the sum of interest
expense on debt, distributions on Series A Preferred Securities and interest
credited on investment products. Investment products include products such
as guaranteed investment contracts and annuities.
23
<PAGE>
CAPITALIZATION OF PROTECTIVE LIFE
The following table sets forth the unaudited summary capitalization of
Protective Life at December 31, 1996 and as adjusted to give effect to the sale
by PLC Capital of the Preferred Securities and the application of the estimated
net proceeds received by the Company therewith as set forth under "Use of
Proceeds." The table below should be read in conjunction with Protective Life's
consolidated financial statements and notes thereto and other financial data
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
-------------------------
<S> <C> <C>
ACTUAL ADJUSTED
------------- ----------
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
Short-term debt........................................................................ $ 12,800(1) $ --
Long-term debt
Notes payable to banks............................................................... 48,200(1) --
7.95% Senior Notes due July 1, 2004.................................................. 75,000 75,000
Medium-term Notes.................................................................... 45,000 45,000
Total long-term debt................................................................. 168,200 120,000
Series A Preferred Securities of PLC Capital L.L.C. (minority interest in consolidated
subsidiary).......................................................................... 55,000 55,000
Preferred Securities of PLC Capital (minority interest in consolidated subsidiary)..... -- 75,000
Stockholders' equity
Preferred Stock ($1 par value shares authorized: 3,600,000; issued: none)............ -- --
Junior Participating Cumulative Preferred Stock ($1 par value shares authorized:
400,000; issued: none)............................................................. -- --
Common equity ($.50 par value shares authorized: 80,000,000; issued and outstanding:
30,803,606)........................................................................ 615,316 615,316
Total stockholders' equity........................................................... 615,316 615,316
Total capitalization............................................................... $ 851,316 $ 865,316
</TABLE>
- ------------------------
(1) Total short-term debt and notes payable to banks were approximately $15.3
million and $59.7 million, respectively, as of March 31, 1997.
ACCOUNTING TREATMENT
For financial reporting purposes, PLC Capital will be treated as a
subsidiary of Protective Life and, accordingly, the accounts of PLC Capital will
be included in the consolidated financial statements of Protective Life. The
Preferred Securities will be presented as a component of minority interest in
Consolidated Subsidiaries and appropriate disclosures about the Preferred
Securities, the Guarantee and the Subordinated Debt Securities will be included
in the notes to the consolidated financial statements. For financial reporting
purposes, Protective Life will record distributions payable on the Preferred
Securities as a component of minority interest in income of Consolidated
Subsidiaries.
USE OF PROCEEDS
The Trust will use the gross proceeds received from the sale of the Trust
Securities to purchase Subordinated Debt Securities from Protective Life.
Protective Life intends to use most of the proceeds from the sale of the
Subordinated Debt Securities to repay existing short-term and long-term bank
debt which as of March 31, 1997 was approximately $75 million in the aggregate.
The remainder, if any, will be used for general corporate purposes. Pending such
application, such proceeds will be invested in short-term securities.
24
<PAGE>
PLC CAPITAL
PLC Capital is a statutory business trust formed under Delaware law pursuant
to (i) the Declaration and (ii) a certificate of trust filed with the Secretary
of State of the State of Delaware on April 10, 1997. The Declaration will be
amended and restated in its entirety substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
Declaration will be qualified as an indenture under the Trust Indenture Act.
Upon issuance of the Preferred Securities, the purchasers thereof will own all
of the Preferred Securities. See "Description of the Preferred
Securities--Book-Entry Only Issuance--The Depository Trust Company." Protective
Life will directly or indirectly acquire all the Common Securities which will
represent an aggregate liquidation amount equal to at least 3% of the total
capital of PLC Capital. PLC Capital exists for the exclusive purposes of (i)
issuing the Trust Securities representing undivided beneficial interests in the
assets of the Trust, (ii) investing the gross proceeds of the Trust Securities
in the Subordinated Debt Securities and (iii) engaging in only those other
activities necessary or incidental thereto. PLC Capital has a term of
approximately 55 years, but may terminate earlier as provided in the
Declaration.
Pursuant to the Declaration, the number of PLC Trustees will initially be
three. Two of the PLC Trustees (the "Regular Trustees") will be persons who are
employees or officers of, or who are affiliated with, Protective Life. The third
trustee will be a financial institution that is unaffiliated with Protective
Life, which trustee will serve as institutional or property trustee under the
Declaration and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "Property Trustee"). Initially,
Wilmington Trust Company, a Delaware banking corporation, will be the Property
Trustee until removed or replaced by the holder of the Common Securities. For
purposes of compliance with the provisions of the Trust Indenture Act,
Wilmington Trust Company will act as trustee (the "Guarantee Trustee") under the
Preferred Securities Guarantee and as trustee resident in the state of Delaware
(the "Delaware Trustee") for purposes of the Trust Act (as defined below). See
"Description of the Preferred Securities Guarantees" and "Description of the
Preferred Securities--Voting Rights."
The Property Trustee will hold title to the Subordinated Debt Securities for
the benefit of the holders of the Trust Securities and in such capacity will
have the power to exercise all rights, powers and privileges under the
Subordinated Indenture. In addition, the Property Trustee will maintain
exclusive control of a segregated non-interest-bearing bank account (the
"Property Account") to hold all payments made in respect of the Subordinated
Debt Securities for the benefit of the holders of the Trust Securities. The
Property Trustee will make payments of distributions and payments on
liquidation, redemption and otherwise to the holders of the Trust Securities out
of funds from the Property Account. The Guarantee Trustee will hold the
Preferred Securities Guarantee for the benefit of the holders of the Preferred
Securities. Protective Life, as the direct or indirect holder of all the Common
Securities, will have the right to appoint, remove or replace any PLC Trustee
and to increase or decrease the number of PLC Trustees. Protective Life, as
issuer of the Subordinated Debt Securities, will pay all fees and expenses
related to PLC Capital and the offering of the Trust Securities. See
"Description of the Subordinated Debt Securities-- Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
The office of the Delaware Trustee for PLC Capital in the State of Delaware
is Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890-0001, Attention: Corporate Trust Administration. PLC
Capital's offices are located at 2801 Highway 280 South, Birmingham, Alabama
35223 (Telephone: (205) 879-9230).
25
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, Wilmington Trust Company, will act as
indenture trustee for the Preferred Securities under the Declaration for
purposes of compliance with the provisions of the Trust Indenture Act. The terms
of the Preferred Securities will include those stated in the Declaration and
those made part of the Declaration by the Trust Indenture Act. The following
summary of the material terms and provisions of the Preferred Securities does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, the Declaration, a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part, the Trust Act and the
Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue the Trust
Securities on behalf of the Trust, which represent undivided beneficial
interests in the assets of the Trust. All of the Common Securities will be
owned, directly or indirectly, by Protective Life. The Common Securities rank
PARI PASSU, and payments will be made thereon on a PRO RATA basis, with the
Preferred Securities, except that upon the occurrence and during the continuance
of a Declaration Event of Default, the rights of the holders of the Common
Securities to receive payment of periodic distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Preferred Securities. The Declaration does not permit the
issuance by the Trust of any securities other than the Trust Securities or the
incurrence of any indebtedness by the Trust. Pursuant to the Declaration, the
Property Trustee will hold the Subordinated Debt Securities purchased by the
Trust for the benefit of the holders of the Trust Securities. The payment of
distributions out of money held by the Trust, and payments upon redemption of
the Preferred Securities or liquidation of the Trust, are guaranteed by
Protective Life to the extent described under "Description of the Preferred
Securities Guarantee." The Preferred Securities Guarantee will be held by
Wilmington Trust Company, as the Guarantee Trustee, for the benefit of the
holders of the Preferred Securities. The Preferred Securities Guarantee does not
cover payment of distributions when the Trust does not have sufficient available
funds to pay such distributions. In such event, the remedy of a holder of
Preferred Securities is to vote to direct the Property Trustee to enforce the
Property Trustee's rights under the Subordinated Debt Securities.
Notwithstanding the foregoing, in the circumstances of a Debt Payment Failure, a
holder of Preferred Securities may institute a Direct Action without first
instituting any legal proceeding against the Property Trustee or any other
person or entity. See "--Declaration Events of Default and Debt Payment
Failures" and "--Voting Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of percent of the stated liquidation amount of $25 per Preferred
Security. Distributions in arrears for more than one quarter will bear interest
thereon at the rate per annum of percent thereof compounded quarterly. The
term "distribution" as used herein includes any such interest payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1997 and, except as otherwise described below, will be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing , when, as and if available for payment.
Protective Life has the right under the Subordinated Indenture to defer
payments of interest on the Subordinated Debt Securities by extending the
interest payment period from time to time on the Subordinated Debt Securities,
which, if exercised, would defer quarterly distributions on the Preferred
Securities (though such distributions would continue to accrue interest since
interest would continue to
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accrue on the Subordinated Debt Securities) during any such Extension Period.
Such right to extend the interest payment period for the Subordinated Debt
Securities is limited to a period not exceeding 20 consecutive quarters and such
period may not extend beyond the Stated Maturity of the Subordinated Debt
Securities. In the event that Protective Life exercises this right, then (a)
Protective Life shall not declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock (other than (i) purchases or acquisitions
of shares of Protective Life's common stock in connection with the satisfaction
by Protective Life of its obligations under any employee benefit plans or the
satisfaction by the Company of its obligation pursuant to any contract or
security requiring it to purchase shares of its common stock, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of Protective Life capital stock for another
class or series of Protective Life capital stock, (iii) the purchase of
fractional interests in shares of Protective Life capital stock pursuant to an
acquisition or the conversion or exchange provisions of such Protective Life
capital stock or the security being converted or exchanged and (iv) redemptions
or purchases pursuant to Protective Life's Rights Agreement, dated as of August
7, 1995, between Protective Life and AmSouth Bank of Alabama as Rights Agent),
(b) the Company shall not make any payment of interest, principal or premium, if
any, on or repay, repurchase or redeem any debt securities issued by Protective
Life that rank PARI PASSU with or junior to such Subordinated Debt Securities
and (c) the Company shall not make any Guarantee Payments with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee, the Common
Guarantee and the Series A Guarantee. Prior to the termination of any such
Extension Period, Protective Life may further extend the interest payment
period; PROVIDED, that such Extension Period may not exceed 20 consecutive
quarters or extend beyond the Stated Maturity of the Subordinated Debt
Securities. Upon the termination of any Extension Period and the payment of all
amounts then due, Protective Life may elect a new Extension Period, subject to
the above requirements. See "Description of the Subordinated Debt
Securities--Interest" and "-- Option to Extend Interest Payment Period." If
distributions are deferred, the deferred distributions and accrued interest
thereon shall be paid to holders on the record date immediately preceding the
termination of such Extension Period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account. The Trust's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from Protective Life on the Subordinated Debt Securities. See
"Description of the Subordinated Debt Securities." The payment of distributions
out of moneys held by the Trust is guaranteed by Protective Life to the extent
set forth under "Description of the Preferred Securities Guarantee."
Distributions on the Preferred Securities will be payable to the holders
thereof on the relevant record dates, which, as long as the Preferred Securities
remain in book-entry only form, will be one Business Day (as defined below)
prior to the relevant payment dates. Such distributions will be paid through the
Property Trustee who will hold amounts received in respect of the Subordinated
Debt Securities in the Property Account for the benefit of the holders of the
Trust Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment will be made as described under
"-- Book-Entry Only Issuance--The Depository Trust Company" below. In the event
that the Preferred Securities do not continue to remain in book-entry only form,
the record dates for payment of distributions will be March 15, June 15,
September 15 and December 15. In the event that any date on which distributions
are to be made on the Preferred Securities is not a Business Day, then payment
of the distributions payable on such date will be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such record date. A "Business Day" shall mean any day other than a day on
which federal or state banking institutions in New York, New York or Birmingham,
Alabama are authorized or obligated by law, executive order or regulation to
close.
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MANDATORY REDEMPTION
The Subordinated Debt Securities will mature on , 2027 (or such
other Stated Maturity as is applicable, as described under "Description of the
Subordinated Debt Securities--General"). The Subordinated Debt Securities are
redeemable, in whole at any time or in part from time to time, on or after
, 2002, but prior to the Stated Maturity, or, in whole or in part at any
time upon the occurrence of a Tax Event under certain circumstances. See "--Tax
Event Redemption" and "Description of the Subordinated Debt Securities." Upon
the repayment of the Subordinated Debt Securities, whether at maturity or upon
redemption, the proceeds from such repayment or payment shall simultaneously be
applied to redeem Trust Securities having an aggregate liquidation amount equal
to the aggregate principal amount of the Subordinated Debt Securities so repaid
or redeemed at the Redemption Price for the Preferred Securities equal to the
liquidation amount thereof, plus accrued and unpaid distributions; PROVIDED,
that holders of Trust Securities shall be given not less than 30 nor more than
60 days notice of such redemption. See "Description of the Subordinated Debt
Securities--Optional Redemption." In the event that fewer than all of the
outstanding Preferred Securities are to be redeemed, the Preferred Securities
will be redeemed PRO RATA as described under "--Book-Entry Only Issuance--The
Depository Trust Company" below.
TAX EVENT REDEMPTION
"Tax Event" means the receipt by Protective Life of an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that, as a result of (i) any amendment to, or change (including any announced
prospective change) in, on or after the day before the date of issuance of the
Preferred Securities under the Declaration, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (ii) any interpretation or application of, or
pronouncement with respect to, such laws or regulations by any legislative body,
court, governmental agency or regulatory authority, which amendment or change is
effective or which interpretation, application or pronouncement is announced on
or after the day before the date of issuance of the Preferred Securities under
the Declaration, there is more than an insubstantial increase in the risk that
(x) PLC Capital is, or will be within 90 days of the date thereof, subject to
U.S. federal income tax with respect to income received or accrued on the
Subordinated Debt Securities, (y) interest payable by the Company on the
Subordinated Debt Securities is not, or within 90 days of the date thereof, will
not be, deductible, in whole or in part, for U.S. federal income tax purposes,
or (z) PLC Capital is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of other taxes, duties or other governmental
charges.
"Redemption Tax Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Subordinated Debt Securities, in
whole or in part, for United States federal income tax purposes, even if the
Subordinated Debt Securities were distributed to the holders of the Trust
Securities in liquidation of such holders' interest in the Trust, pursuant to
the exercise by the Company of its right to dissolve the Trust as described
under "--Distribution of the Subordinated Debt Securities."
If, at any time, a Tax Event shall occur and be continuing and the Company
has received a Redemption Tax Opinion, the Company shall have the right, upon
not less than 30 nor more than 60 days' notice, to redeem the Subordinated Debt
Securities in whole or in part, for cash within 90 days following the occurrence
of such Tax Event, and, following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Subordinated Debt Securities so redeemed shall be redeemed by the Trust at the
Redemption Price on a PRO RATA basis; PROVIDED, HOWEVER, that if at the time
there is available to the Company or the Trust the opportunity to eliminate,
within such 90 day period, the Tax Event by taking some ministerial action, such
as filing a form or making an election or pursuing some other similar reasonable
measure that has no adverse effect on the Trust, the Company or the holders of
the Trust Securities, the Company or the Trust will pursue such measure in lieu
of
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redemption. If Protective Life does not elect either to distribute Subordinated
Debt Securities to the holders of the Preferred Securities in liquidation of the
Trust or to redeem Subordinated Debt Securities, the Preferred Securities shall
remain outstanding and, in the event a Tax Event is continuing, Additional
Interest (as defined below under "Description of the Subordinated Debt
Securities--Additional Interest") will be payable on the Subordinated Debt
Securities.
DISTRIBUTION OF THE SUBORDINATED DEBT SECURITIES
The Company will have the right at any time to dissolve the Trust and cause
the Subordinated Debt Securities to be distributed to the holders of the Trust
Securities. If the Subordinated Debt Securities are distributed to the holders
of the Preferred Securities, the Company will use its best efforts to cause the
Subordinated Debt Securities to be listed on the New York Stock Exchange or on
such other exchange as the Preferred Securities are then listed.
After the date for any distribution of Subordinated Debt Securities upon
dissolution of the Trust, (i) the Preferred Securities will no longer be deemed
to be outstanding, (ii) the Depositary or its nominee, as the record holder of
the Preferred Securities, will receive a registered global certificate or
certificates representing the Subordinated Debt Securities to be delivered upon
such distribution, and (iii) any certificates representing Preferred Securities
not held by the Depositary or its nominee will be deemed to represent
Subordinated Debt Securities having an aggregate principal amount equal to the
aggregate stated liquidation amount of, with an interest rate identical to the
distribution rate of, and accrued and unpaid interest equal to accrued and
unpaid distributions on such Preferred Securities until such certificates are
presented to the Company or its agent for transfer or reissuance.
There can be no assurance as to the market prices for either the Preferred
Securities or the Subordinated Debt Securities that may be distributed in
exchange for the Preferred Securities if a dissolution and liquidation of the
Trust were to occur. Accordingly, the Preferred Securities that an investor may
purchase, whether pursuant to the offer made hereby or in the secondary market,
or the Subordinated Debt Securities that an investor may receive if a
dissolution and liquidation of the Trust were to occur, may trade at a discount
to the price that the investor paid to purchase the Preferred Securities offered
hereby.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Preferred Securities
(which notice will be irrevocable), then, by 12:00 noon, New York City time, on
the redemption date, provided that Protective Life has paid to the Property
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the Subordinated Debt Securities, the Trust will irrevocably deposit
with the Depositary funds sufficient to pay the applicable Redemption Price and
will give the Depositary (as hereinafter defined) irrevocable instructions and
authority to pay the Redemption Price to the holders of the Preferred
Securities. See "--Book-Entry Only Issuance--The Depository Trust Company." If
notice of redemption shall have been given and funds deposited as required,
then, immediately prior to the close of business on the date of such deposit,
distributions will cease to accrue and all rights of holders of such Preferred
Securities so called for redemption will cease, except the right of the holders
of such Preferred Securities to receive the Redemption Price but without
interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar year,
such payment will be made on the immediately preceding Business Day. In the
event that payment of the Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by the Trust, or by
Protective Life pursuant to the Preferred Securities Guarantee, distributions on
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such Preferred Securities will continue to accrue at the then applicable rate
from the original redemption date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities are
to be redeemed, the Preferred Securities will be redeemed pro rata as described
below under "--Book-Entry Only Issuance-- The Depository Trust Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), Protective Life or its subsidiaries may
at any time, and from time to time, purchase outstanding Preferred Securities by
tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the then holders
of the Preferred Securities will be entitled to receive out of the assets of the
Trust, after satisfaction of liabilities to creditors, distributions in an
amount equal to the aggregate of the stated liquidation amount of $25 per
Preferred Security plus accrued and unpaid distributions thereon to the date of
payment (the "Liquidation Distribution"), unless, in connection with such
Liquidation, Subordinated Debt Securities in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accrued and unpaid distributions on, the Preferred Securities have been
distributed on a PRO RATA basis to the holders of the Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a PRO RATA basis. The holders
of the Common Securities will be entitled to receive distributions upon any such
dissolution PRO RATA with the holders of the Preferred Securities, except that
if a Declaration Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities with regard to
such distributions.
Pursuant to the Declaration, the Trust shall terminate (i) on ,
2052, the expiration of the term of the Trust, (ii) upon the bankruptcy of the
Company, (iii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Company or the revocation of the Company's charter and the
expiration of 90 days after the date of revocation without reinstatement
thereof, (iv) the filing of a certificate of cancellation with respect to the
Trust after obtaining the consent of the holders of at least a majority in
liquidation amount of the Trust Securities affected thereby voting together as a
single class to file such certificate of cancellation or the revocation of the
charter of Protective Life and the expiration of 90 days after the date of
revocation without a reinstatement thereof, (v) upon the distribution of
Subordinated Debt Securities to holders of the Preferred Securities and the
redemption of all the Trust Securities, (vi) upon the entry of a decree of a
judicial dissolution of Protective Life or the Trust, or (vii) at the election
of the Company at any time.
DECLARATION EVENTS OF DEFAULT AND DEBT PAYMENT FAILURES
An event of default under the Subordinated Indenture (an "Indenture Event of
Default") constitutes an event of default under the Declaration with respect to
the Trust Securities (a "Declaration Event of Default"); PROVIDED that, pursuant
to the Declaration, the holder of the Common Securities will be deemed to have
waived any Declaration Event of Default with respect to the Common Securities
until all Declaration Events of Default with respect to the Preferred Securities
have been cured, waived or otherwise eliminated. Until such Declaration Events
of Default with respect to the Preferred Securities have been so cured, waived,
or otherwise eliminated, the Property Trustee will be deemed to be acting solely
on behalf of the holders of the Preferred Securities and only the holders of the
Preferred Securities will have the right to direct the Property Trustee with
respect to certain matters under the Declaration, and therefore the Subordinated
Indenture.
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If a Debt Payment Failure (which involves a failure to make a timely
interest, principal or redemption payment but does not constitute a Declaration
Event of Default) has occurred and is continuing, a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder directly of the principal of or interest on the Subordinated Debt
Securities having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder after the respective due date
specified in the Subordinated Debt Securities. In connection with such Direct
Action, Protective Life will be subrogated to the rights of such holder of
Preferred Securities under the Declaration to the extent of any payment made by
Protective Life to such holder of Preferred Securities in such Direct Action.
The holders of Preferred Securities will not be able to exercise directly any
other remedy available to the holders of the Subordinated Debt Securities.
Upon the occurrence of a Declaration Event of Default, the Property Trustee
as the sole holder of the Subordinated Debt Securities will have the right under
the Subordinated Indenture to declare the principal of and interest on the
Subordinated Debt Securities to be immediately due and payable. Protective Life
and the Trust are each required to file annually with the Property Trustee an
officer's certificate as to its compliance with all conditions and covenants
under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act and
under "Description of the Preferred Securities Guarantee--Modification of the
Preferred Securities Guarantee; Assignment", and as otherwise required by law
and the Declaration, the holders of the Preferred Securities will have no voting
rights.
Subject to the requirement of the Property Trustee obtaining a tax opinion
in certain circumstances set forth in the last sentence of this paragraph, the
holders of a majority in aggregate liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration including the right to direct the Property Trustee, as holder of the
Subordinated Debt Securities, to (i) exercise the remedies available to it under
the Subordinated Indenture as a holder of the Subordinated Debt Securities, (ii)
waive any past Indenture Event of Default that is waivable under the
Subordinated Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Subordinated Debt Securities shall be
due and payable or (iv) consent to any amendment, modification or termination of
the Subordinated Indenture or the Subordinated Debt Securities where such
consent shall be required; PROVIDED, HOWEVER, that, where a consent or action
under the Subordinated Indenture would require the consent or act of holders of
more than a majority in principal amount of the Subordinated Debt Securities (a
"Super Majority") affected thereby, only the holders of at least such Super
Majority in aggregate liquidation amount of the Preferred Securities may direct
the Property Trustee to give such consent or take such action. If a Debt Payment
Failure has occurred and is continuing, a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Subordinated Debt Securities having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder after the respective due date specified in the Subordinated Debt
Securities. The Property Trustee shall notify all holders of the Preferred
Securities of any notice of an Event of Default or Debt Payment Failure received
from the Debt Trustee with respect to the Subordinated Debt Securities. Such
notice, in the case of an Event of Default, shall state that such Indenture
Event of Default also constitutes a Declaration Event of Default. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy, the Property Trustee shall not take any of the actions described in
clauses (i), (ii) or (iii) above unless the Property Trustee has obtained an
opinion of a nationally recognized tax counsel experienced in such matters to
the effect that, as a result of such action, the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes.
In the event the consent of the Property Trustee, as the holder of the
Subordinated Debt Securities, is required under the Subordinated Indenture with
respect to any amendment, modification or termination
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of the Subordinated Indenture, the Property Trustee shall request the direction
of the holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with respect to such amendment,
modification or termination as directed by a majority in liquidation amount of
the Trust Securities voting together as a single class; PROVIDED, HOWEVER, that
where a consent under the Subordinated Indenture would require the consent of a
Super Majority, the Property Trustee may only give such consent at the direction
of the holders of at least the proportion in liquidation amount of the Trust
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Subordinated Debt Securities outstanding and; PROVIDED
FURTHER, in the case of a consent under the Subordinated Indenture which
requires the consent of holders of all the Subordinated Debt Securities
outstanding, the Property Trustee may only give such consent at the direction of
the holders of all of the Trust Securities. The Property Trustee shall not take
any such action in accordance with the directions of the holders of the Trust
Securities unless the Property Trustee has obtained an opinion of a nationally
recognized tax counsel experienced in such matters to the effect that, as a
result of such action, the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may be
given at a separate meeting of holders of Preferred Securities convened for such
purpose, at a meeting of all of the holders of Trust Securities or pursuant to
written consent. The Regular Trustees will cause a notice of any meeting at
which holders of Preferred Securities are entitled to vote, or of any matter
upon which action by written consent of such holders is to be taken, to be
mailed to each holder of record of Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the holders of Preferred Securities will be required for the Trust to redeem
and cancel Preferred Securities or distribute Subordinated Debt Securities in
accordance with the Declaration.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned at such time by Protective Life or any entity directly
or indirectly controlling or controlled by, or under direct or indirect common
control with, Protective Life, shall not be entitled to vote or consent and
shall, for purposes of such vote or consent, be treated as if such Preferred
Securities were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "--Book-Entry Only Issuance--The
Depository Trust Company."
Holders of the Preferred Securities will have no rights to appoint or remove
the PLC Trustees, who may be appointed, removed or replaced solely by Protective
Life as the indirect or direct holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and, in certain circumstances, the Property Trustee or the
Delaware Trustee, provided that, if any proposed amendment provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to the Declaration or otherwise or (ii)
the dissolution, winding-up or termination of the Trust other than pursuant to
the terms of the Declaration, then the holders of the Trust Securities voting
together as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of at least a majority in liquidation amount of the Trust Securities
affected thereby; PROVIDED, that, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Preferred Securities or the
Common Securities, then only the affected class will be entitled to vote on such
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amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a majority in liquidation amount of such class of
Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Property Trustee or (iii) cause the Trust to be deemed an "investment
company" which is required to be registered under the 1940 Act.
MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the holders of the Trust Securities, the
Property Trustee or the Delaware Trustee consolidate, amalgamate, merge with or
into, or be replaced by a trust organized as such under the laws of any State of
the United States; PROVIDED, that (i) if the Trust is not the survivor such
successor entity (the "Successor Entity") either (x) expressly assumes all of
the obligations of the Trust under the Trust Securities or (y) substitutes for
the Trust Securities other securities having substantially the same terms as the
Trust Securities (the "Successor Securities"), so long as the Successor
Securities rank the same as the Trust Securities rank with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
Protective Life expressly acknowledges a trustee of such successor entity
possessing the same powers and duties as the Property Trustee as the holder of
the Subordinated Debt Securities, (iii) the Preferred Securities or any
Successor Securities are listed, or any Successor Securities of the Preferred
Securities will be listed upon notification of issuance, on any national
securities exchange or with another organization on which the Preferred
Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Preferred Securities (including
any Successor Securities thereof) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), (vi) such Successor Entity has a purpose identical
to that of the Trust, (vii) prior to such merger, consolidation, amalgamation or
replacement, Protective Life has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect that,
(A) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of the holders' interest in the new entity),
(B) following such merger, consolidation, amalgamation or replacement, neither
the Trust nor such Successor Entity will be required to register as an
investment company under the 1940 Act and (C) following such merger,
consolidation, amalgamation or replacement, the Trust or the Successor Entity
will continue to be classified as a grantor trust for United States federal
income tax purposes and (viii) Protective Life guarantees the obligations of
such Successor Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee and the Common Securities
Guarantee. Notwithstanding the foregoing, the Trust shall not, except with the
consent of holders of 100% in liquidation amount of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it, if such consolidation, amalgamation, merger or replacement would
cause the Trust or the Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
BOOK-ENTRY ONLY ISSUANCE--THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary (the
"Depositary") for the Preferred Securities. The Preferred Securities will be
issued only as fully-registered securities registered in the name of Cede & Co.
(DTC's nominee). One or more fully-registered global Preferred Securities
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certificates, representing the total aggregate number of Preferred Securities,
will be issued and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Participants in DTC include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations. DTC is owned by a number of its Participants and by the New
York Stock Exchange, the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others, such as securities brokers and dealers, banks and trust
companies that clear transactions through or maintain a direct or indirect
custodial relationship with a Direct Participant either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Securities and Exchange Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Participants, which will receive a credit for the Preferred Securities
on DTC's records. The ownership interest of each actual purchaser of each
Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Participants' and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial Owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participants through which the Beneficial Owners purchased Preferred
Securities. Transfers of ownership interests in the Preferred Securities are to
be accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Preferred Securities represented thereby for all
purposes under the Declaration and the Preferred Securities. No beneficial owner
of an interest in a Global Certificate will be able to transfer that interest
except in accordance with DTC's applicable procedures, in addition to those
provided for under the Declaration.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Preferred Securities (including the presentation of
Preferred Securities for exchange as described below) only at the direction of
one or more Participants to whose account the DTC interests in the Global
Certificates are credited and only in respect of such portion of the aggregate
liquidation amount of Preferred Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Preferred Securities, DTC will exchange the Global
Certificates for certificated securities, which it will distribute to its
Participants and which will be legended as set forth under the heading "Notices
to Investors."
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
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Redemption notices in respect of the Preferred Securities held in book-entry
form will be sent to Cede & Co. If less than all of the Preferred Securities are
being redeemed, DTC will determine the amount of the interest of each
Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Participants to whose accounts the Preferred Securities
are credited on the record date (identified in a listing attached to the Omnibus
Proxy).
Distributions on the Preferred Securities held in book-entry form will be
made to DTC in immediately available funds. DTC's practice is to credit
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to believe that
it will not receive payments on such payment date. Payments by Participants and
Indirect Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participants and Indirect Participants and not of DTC, the Trust or the Company,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of distributions to DTC is the responsibility of the
Trust, disbursement of such payments to Participants is the responsibility of
DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Preferred Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Company, the Trust
nor the Trustee will have any responsibility for the performance by DTC or its
Participants or Indirect Participants under the rules and procedures governing
DTC. DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving notice to the Trust.
Under such circumstances, in the event that a successor securities depositary is
not obtained, Preferred Security certificates are required to be printed and
delivered. Additionally, the Trust (with the consent of the Company) may decide
to discontinue use of the system of book-entry transfers through DTC (or a
successor depositary). In that event, certificates for the Preferred Securities
will be printed and delivered. In each of the above circumstances, the Company
will appoint a paying agent with respect to the Preferred Securities.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. Such laws may impair
the ability to transfer beneficial interests in the global Preferred Securities
as represented by a Global Certificate.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities represented by the Global
Certificates shall be made to DTC, which shall credit the relevant accounts at
DTC on the applicable distribution dates or, in the case of certificated
securities, such payments shall be made by check mailed to the address of the
holder entitled thereto. The Paying Agent shall initially be the Property
Trustee. The Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Regular Trustees. In the event that the Property
Trustee shall no longer be the Paying Agent, the Regular Trustees shall appoint
a successor to act as Paying Agent (which shall be a bank or trust company).
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REGISTRAR, TRANSFER AGENT AND PAYING AGENT
The Property Trustee will act as registrar, transfer agent and paying agent
for the Preferred Securities. In the event the Property Trustee shall no longer
be the Paying Agent, the Regular Trustees shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company).
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of the Trust, but upon payment (with the giving of such
indemnity as the Trust or the Company may require) in respect of any tax or
other government charges which may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities and after the curing of any defaults that may have
occurred, undertakes to perform only such duties as are specifically set forth
in the Declaration and, after default, shall exercise the same degree of care as
a prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the request of any
holder of Preferred Securities, unless offered reasonable indemnity by such
holder against the costs, expenses and liabilities which might be incurred
thereby. The holders of Preferred Securities will not be required to offer such
indemnity in the event such holders, by exercising their voting rights, direct
the Property Trustee to take any action it is empowered to take under the
Declaration following a Declaration Event of Default. The Property Trustee also
serves as trustee under the Preferred Securities Guarantee.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or characterized as other than a grantor trust for
United States federal income tax purposes. Protective Life is authorized and
directed to conduct its affairs so that the Subordinated Debt Securities will be
treated as indebtedness of Protective Life for United States federal income tax
purposes. In this connection, Protective Life and the Regular Trustees are
authorized to take any action, not inconsistent with applicable law, the
Declaration, the certificate of trust of the Trust or the certificate of
incorporation of Protective Life, that each of Protective Life and the Regular
Trustees determine in their discretion to be necessary or desirable to achieve
such end, as long as such action does not adversely affect the interests of the
holders of the Preferred Securities or vary the terms thereof.
Holders of the Preferred Securities have no preemptive rights.
DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
Set forth below is a summary of information concerning the Preferred
Securities Guarantee which will be executed and delivered by Protective Life for
the benefit of the holders from time to time of Preferred Securities. The
Preferred Securities Guarantee will be qualified as an indenture under the Trust
Indenture Act. Wilmington Trust Company will act as indenture trustee under the
Preferred Securities Guarantee for purposes of the Trust Indenture Act. The
terms of the Preferred Securities Guarantee will be those set forth in such
Preferred Securities Guarantee and those made part of such Preferred Securities
Guarantee by the Trust Indenture Act. The summary of the material terms of the
Preferred Securities Guarantee does
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not purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the form of Preferred
Securities Guarantee, which is filed as an exhibit to the Registration Statement
of which this Prospectus forms a part, and the Trust Indenture Act. The
Preferred Securities Guarantee will be held by the Guarantee Trustee for the
benefit of the holders of the Preferred Securities of PLC Capital.
GENERAL
Pursuant to the Preferred Securities Guarantee, the Company will, to the
extent PLC Capital shall have funds available therefor, agree to pay in full, to
the holders of the Preferred Securities issued by PLC Capital, the Guarantee
Payments (as defined herein) (except to the extent paid by PLC Capital), as and
when due, regardless of any defense, right of set-off or counterclaim which PLC
Capital may have or assert. The following payments with respect to Preferred
Securities issued by PLC Capital to the extent not paid by PLC Capital (the
"Guarantee Payments"), will be subject to the Preferred Securities Guarantee
thereon (without duplication): (i) any accrued and unpaid distributions which
are required to be paid on such Preferred Securities, to the extent PLC Capital
shall have funds available therefor; (ii) the Redemption Price, including all
accrued and unpaid distributions, to the extent PLC Capital has funds available
therefor with respect to any Preferred Securities called for redemption by PLC
Capital and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of PLC Capital (other than in connection with the distribution of
Subordinated Debt Securities to the holders of Preferred Securities or the
redemption of all of the Preferred Securities), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on such
Preferred Securities to the date of payment, to the extent PLC Capital has funds
available therefor and (b) the amount of assets of PLC Capital remaining
available for distribution to holders of such Preferred Securities in
liquidation of PLC Capital. The Company's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to the
holders of Preferred Securities or by causing PLC Capital to pay such amounts to
such holders.
The Preferred Securities Guarantee will not apply to any payment of
distributions except to the extent PLC Capital shall have funds available
therefor. If the Company does not make interest payments on the Subordinated
Debt Securities purchased by PLC Capital, PLC Capital will not pay distributions
on the Preferred Securities issued by PLC Capital and will not have funds
available therefor. See "Description of the Subordinated Debt
Securities--Certain Covenants of the Company." The Preferred Securities
Guarantee, when taken together with the Company's obligations under the
Subordinated Debt Securities, the Subordinated Indenture and the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of PLC
Capital (other than with respect to the Trust Securities), will provide a full
and unconditional guarantee on a subordinated basis by the Company of payments
due on the Preferred Securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of PLC Capital with respect to the Common Securities
(the "Common Securities Guarantee") to the same extent as the Preferred
Securities Guarantee, except that upon an Event of Default under the
Subordinated Indenture, holders of Preferred Securities shall have priority over
holders of Common Securities with respect to distributions and payments on
liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In the Preferred Securities Guarantee, the Company will covenant that, so
long as any Preferred Securities issued by PLC Capital remain outstanding, if
there shall have occurred and be continuing any event that would constitute an
Event of Default under the Preferred Securities Guarantee or the Declaration of
PLC Capital, then (a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase or make a liquidation
payment with respect to, any of its capital stock (other than (i) purchases or
acquisitions of shares of Protective Life's common stock in
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connection with the satisfaction by Protective Life of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligation
pursuant to any contract or security requiring it to purchase shares of its
common stock, (ii) as a result of a reclassification of Protective Life's
capital stock or the exchange or conversion of one class or series of Protective
Life capital stock for another class or series of Protective Life capital stock,
(iii) the purchase of fractional interests in shares of Protective Life capital
stock pursuant to an acquisition or the conversion or exchange provisions of
such Protective Life capital stock or the security being converted or exchanged
and (iv) redemptions or purchases pursuant to Protective Life's Rights
Agreement, dated August 7, 1995, between Protective Life and AmSouth Bank of
Alabama as Rights Agent), (b) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by the Company which rank PARI
PASSU with or junior to the Subordinated Debt Securities and (c) the Company
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantee, the Common Guarantee and the
Series A Guarantee).
MODIFICATION OF THE PREFERRED SECURITIES GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities (in which case no vote will be required), the
Preferred Securities Guarantee may be amended only with the prior approval of
the holders of not less than a majority in liquidation amount of the outstanding
Preferred Securities issued by PLC Capital. All guarantees and agreements
contained in the Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall inure
to the benefit of the holders of Preferred Securities of PLC Capital then
outstanding.
TERMINATION
The Preferred Securities Guarantee will terminate as to the Preferred
Securities issued by PLC Capital (a) upon full payment of the Redemption Price
of all Preferred Securities of PLC Capital, (b) upon distribution of the
Subordinated Debt Securities held by PLC Capital to the holders of the Preferred
Securities of PLC Capital or (c) upon full payment of the amounts payable in
accordance with the Declaration of PLC Capital upon liquidation of PLC Capital.
The Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Preferred
Securities issued by PLC Capital must restore payment of any sums paid under
such Preferred Securities or such Preferred Securities Guarantee.
EVENTS OF DEFAULT
An Event of Default under the Preferred Securities Guarantee will occur upon
the failure of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Guarantee Trustee in respect of the Preferred
Securities Guarantee or to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under such Preferred Securities. If the Guarantee
Trustee fails to enforce the Preferred Securities Guarantee, any holder of
Preferred Securities relating to such Preferred Securities Guarantee may
institute a legal proceeding directly against the Company to enforce the
Guarantee Trustee's rights under the Preferred Securities Guarantee, without
first instituting a legal proceeding against PLC Capital, the Guarantee Trustee
or any other person or entity. Notwithstanding the foregoing, if the Company has
failed to make a guarantee payment, a holder of Preferred Securities may
directly institute a proceeding against the Company for enforcement of the
Preferred Securities Guarantee for such payment. The Company waives any right or
remedy to require that any action be brought first against PLC Capital or any
other person or entity before proceeding directly against the Company.
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STATUS OF THE PREFERRED SECURITIES GUARANTEE
The Preferred Securities Guarantee will constitute an unsecured obligation
of the Company and will rank (i) subordinate and junior in right of payment to
all Senior Indebtedness (as such term is defined in the Subordinated Indenture),
(ii) PARI PASSU with the Subordinated Debt Securities, the Company's Guarantee
of PLC Capital L.L.C.'s Series A Preferred Securities and any other liability or
obligations that may be PARI PASSU by their terms and (iii) senior to the
Company's common stock, the most senior preferred or preference stock now or
hereafter issued by the Company and with any guarantee now or hereafter entered
into by Protective Life in respect of any preferred or preference stock of any
affiliate of the Company. The terms of the Preferred Securities provide that
each holder of Preferred Securities issued by PLC Capital by acceptance thereof
agrees to the subordination provisions and other terms of the Preferred
Securities Guarantee.
The Preferred Securities Guarantee will constitute a guarantee of payment
and not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under the
Preferred Securities Guarantee without instituting a legal proceeding against
any other person or entity).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Preferred Securities Guarantee, undertakes to perform only such duties as
are specifically set forth in the Preferred Securities Guarantee and, after
default, shall exercise the same degree of care as a prudent individual would
exercise in the conduct of his or her own affairs. Subject to such provisions,
the Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Preferred Securities Guarantee at the request of any holder
of Preferred Securities, unless offered reasonable indemnity against the costs,
expenses and liabilities which might be incurred thereby.
GOVERNING LAW
The Preferred Securities Guarantee will be governed by, and construed in
accordance with, the internal laws of the State of New York.
DESCRIPTION OF THE SUBORDINATED DEBT SECURITIES
Set forth below is a general description of the terms of the Subordinated
Debt Securities in which the Trust will invest the proceeds from the issuance
and sale of the Trust Securities. The following description does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
the description in the Subordinated Indenture, dated as of June 1, 1994 (the
"Base Indenture"), between Protective Life and AmSouth Bank of Alabama (as
successor by conversion of charter to AmSouth Bank N.A.), as Trustee (the "Debt
Trustee"), as supplemented by (i) Supplemental Indenture No. 1, dated as of June
9, 1994, (ii) Supplemental Indenture No. 2, dated as of August 2, 1994 and (iii)
Supplemental Indenture No. 3, dated as of , 1997 (the Base Indenture,
as so supplemented, is hereinafter referred to as the "Subordinated Indenture"),
the forms of which are filed as Exhibits to the Registration Statement of which
this Prospectus forms a part. Certain capitalized terms used herein are defined
in the Subordinated Indenture.
Protective Life will have the right at any time to dissolve the Trust and
cause the Subordinated Debt Securities to be distributed to the holders of the
Trust Securities. If the Subordinated Debt Securities are distributed to the
holders of the Preferred Securities, Protective Life will use its best efforts
to have the Subordinated Debt Securities listed on the New York Stock Exchange
or on such other national securities exchange or similar organization on which
the Preferred Securities are then listed or quoted.
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GENERAL
The Subordinated Debt Securities will be issued as unsecured, subordinated
obligations of the Company. The Subordinated Debt Securities will be limited in
aggregate principal amount to approximately $ , such amount being the sum
of the aggregate stated liquidation amount of the Trust Securities.
The Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Subordinated Debt Securities will
mature and become due and payable, together with any accrued and unpaid interest
thereon, including Compounded Interest (as defined herein) and Additional
Interest (as defined herein), if any, on the Stated Maturity date (initially
, 2027). Such Stated Maturity date may be shortened at any time by
the Company to any date not earlier than , 2002. Such Stated Maturity
date may also be extended at any time by the Company to any date not later than
, 2046; PROVIDED, that at the time such election is made and at the
time of extension (i) the Company is not in bankruptcy, otherwise insolvent or
in liquidation, (ii) the Company is not in default in the payment of any
interest or principal on the Subordinated Debt Securities, (iii) in the case of
Subordinated Debt Securities held by the Trust, the Trust is not in arrears on
payments of Distributions on the Preferred Securities and no deferred
distributions are accumulated and (iv) the Subordinated Debt Securities are
rated not less than BBB- by Standard & Poor's Rating Services or Baa3 by Moody's
Investors Service, Inc. or the equivalent by any other nationally recognized
rating organization. In the event the Company elects to shorten or extend the
Stated Maturity of the Subordinated Debt Securities, it shall give notice to the
Trustee, and the Trustee shall give notice of such shortening or extension to
the holders of the Subordinated Debt Securities no more than 90 and no less than
30 days prior to the effectiveness thereof.
If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, such
Subordinated Debt Securities will initially be issued as a Global Security (as
defined herein). As described herein, Subordinated Debt Securities also may be
issued in certificated form in exchange for a Global Security. See "--Book-Entry
and Settlement" below. In the event that Subordinated Debt Securities are issued
in certificated form, such Subordinated Debt Securities will be in denominations
of $ and integral multiples thereof and may be transferred or exchanged at
the offices described below. Payments on Subordinated Debt Securities issued as
a Global Security will be made to DTC, a successor depositary or, in the event
that no depositary is used, to a Paying Agent for the Subordinated Debt
Securities. In the event Subordinated Debt Securities are issued in certificated
form, principal and interest will be payable, the transfer of the Subordinated
Debt Securities will be registrable and Subordinated Debt Securities will be
exchangeable for Subordinated Debt Securities of other denominations of a like
aggregate principal amount at the corporate trust office of the Property Trustee
in Wilmington, Delaware; PROVIDED, that payment of interest may be made at the
option of Protective Life by check mailed to the address of the holder entitled
thereto or by wire transfer to an account appropriately designated by the holder
entitled thereto. Notwithstanding the foregoing, so long as the holder of any
Subordinated Debt Securities is the Property Trustee, the payment of principal
and interest on the Subordinated Debt Securities held by the Property Trustee
will be made at such place and to such account as may be designated by the
Property Trustee.
The Subordinated Indenture does not contain provisions that afford holders
of the Subordinated Debt Securities protection in the event of a highly
leveraged transaction or other similar transaction involving Protective Life
that may adversely affect such holders.
SUBORDINATION
The Subordinated Indenture provides that the Subordinated Debt Securities
are subordinated and junior in right of payment to all present and future Senior
Indebtedness (as defined herein) of Protective Life. If (i) Protective Life
defaults in the payment of any principal, or premium, if any, or interest on any
Senior Indebtedness when the same becomes due and payable, whether at maturity
or at a date fixed for
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prepayment or declaration or otherwise or (ii) an event of default occurs with
respect to any Senior Indebtedness permitting the holders thereof to accelerate
the maturity thereof and written notice of such event of default (requesting
that payments on Subordinated Debt Securities cease) is given to Protective Life
by the holders of Senior Indebtedness, then unless and until such default in
payment or event of default shall have been cured or waived or shall have ceased
to exist, no direct or indirect payment (in cash, property or securities, by
set-off or otherwise) shall be made or agreed to be made on account of the
Subordinated Debt Securities or interest thereon or in respect of any repayment,
redemption, retirement, purchase or other acquisition of Subordinated Debt
Securities.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to Protective Life, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding-up of Protective Life, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by Protective Life for the benefit of creditors or (iv) any
other marshalling of the assets of Protective Life, all Senior Indebtedness
(including, without limitation, interest accruing after the commencement of any
such proceeding, assignment or marshalling of assets) shall first be paid in
full before any payment or distribution, whether in cash, securities or other
property, shall be made by Protective Life on account of Subordinated Debt
Securities. In any such event, any payment or distribution, whether in cash,
securities or other property (other than securities of Protective Life or any
other corporation provided for by a plan of reorganization or a readjustment,
the payment of which is subordinate, at least to the extent provided in the
subordination provisions of the Subordinated Indenture, to the payment of all
Senior Indebtedness at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment), which
would otherwise (but for the subordination provisions) be payable or deliverable
in respect of Subordinated Debt Securities (including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other indebtedness of Protective Life being subordinated to the payment of
Subordinated Debt Securities) shall be paid or delivered directly to the holders
of Senior Indebtedness, or to their representative or trustee, in accordance
with the priorities then existing among such holders until all Senior
Indebtedness shall have been paid in full. No present or future holder of any
Senior Indebtedness shall be prejudiced in the right to enforce subordination of
the indebtedness evidenced by Subordinated Debt Securities by any act or failure
to act on the part of Protective Life.
Senior Indebtedness shall not be deemed to have been paid in full unless the
holders thereof shall have received cash, securities or other property equal to
the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, the holders of Subordinated Debt Securities
shall be subrogated to all the rights of any holders of Senior Indebtedness to
receive any further payments or distributions applicable to the Senior
Indebtedness until all Subordinated Debt Securities shall have been paid in
full, and such payments or distributions received by any holder of Subordinated
Debt Securities, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between Protective Life and its creditors other than the
holders of Senior Indebtedness, on the one hand, and the holders of Subordinated
Debt Securities, on the other, be deemed to be a payment by Protective Life on
account of Senior Indebtedness, and not on account of Subordinated Debt
Securities.
The term "Senior Indebtedness" is defined as the principal, premium, if any,
and interest on (i) all indebtedness of Protective Life, whether outstanding on
the date of the issuance of Subordinated Debt Securities or thereafter created,
incurred or assumed, which is for money borrowed, or which is evidenced by a
note or similar instrument given in connection with the acquisition of any
business, properties or assets, including securities, (ii) any indebtedness of
others of the kinds described in the preceding clause (i) for the payment of
which Protective Life is responsible or liable as guarantor or otherwise and
(iii) amendments, renewals, extensions and refundings of any such indebtedness,
unless in any instrument or instruments evidencing or securing such indebtedness
or pursuant to which the same is outstanding, or in any such amendment, renewal,
extension or refunding, it is expressly provided that such indebtedness is not
superior in right of payment to Subordinated Debt Securities. The Senior
Indebtedness shall continue
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to be Senior Indebtedness and entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
the Senior Indebtedness or extension or renewal of the Senior Indebtedness.
The rights of the holders of the Subordinated Debt Securities will be
subrogated to the rights of holders of or obligees under the Senior Indebtedness
of Protective Life until all amounts owing to the holders of or obligees under
the Senior Indebtedness are paid in full.
The Subordinated Indenture does not limit the aggregate amount of Senior
Indebtedness that may be issued by Protective Life. As of December 31, 1996,
Senior Indebtedness of Protective Life aggregated approximately $181.0 million.
In addition, because Protective Life is a holding company, the Subordinated Debt
Securities are effectively subordinated to all existing and future liabilities
of the Company's subsidiaries. In addition, the Preferred Securities Guarantee
will rank PARI PASSU with the Subordinated Debt Securities. See "Description of
the Preferred Securities Guarantee--Status of the Preferred Securities
Guarantee."
CERTAIN COVENANTS OF THE COMPANY
If (i) there shall have occurred any event that would constitute an
Indenture Event of Default (as defined herein) or (ii) the Company shall be in
default with respect to its payment of any obligations under the related
Preferred Securities Guarantee or Common Securities Guarantee, or (iii) the
Company shall have given notice to its election to defer payments of interest on
such Subordinated Debt Securities by extending the interest payment period as
provided in the Subordinated Indenture and such period, or any extension
thereof, shall be continuing, then (a) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase or make
a liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Protective Life's common stock in
connection with the satisfaction by Protective Life of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligation
pursuant to any contract or security requiring the Company to purchase shares of
its common stock, (ii) as a result of a reclassification of Protective Life
capital stock or the exchange or conversion of one class or series of Protective
Life capital stock for another class or series of Protective Life capital stock,
(iii) the purchase of fractional interests in shares of Protective Life capital
stock pursuant to an acquisition or the conversion or exchange provisions of
such Protective Life capital stock or the security being converted or exchanged
and (iv) redemptions or purchases pursuant to Protective Life's Rights
Agreement, dated August 7, 1995, between Protective Life and AmSouth Bank of
Alabama as Rights Agent), (b) the Company shall not make any payments of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) issued by Protective Life that rank PARRI
PASSU with or junior to the Subordinate Debt Securities and (c) the Company
shall not make any Guarantee Payments with respect to the foregoing (other than
pursuant to the Preferred Securities Guarantee, the Common Guarantee and the
Series A Guarantee).
The Company will covenant (i) to directly or indirectly maintain 100%
ownership of the Common Securities of PLC Capital; PROVIDED, HOWEVER, that any
permitted successor of the Company under the Subordinated Indenture may succeed
to the Company's ownership of such Common Securities, (ii) not to voluntarily
terminate, wind-up or liquidate the Trust, except (a) in connection with a
distribution of Subordinated Debt Securities to the holders of the Preferred
Securities in liquidation of the Trust, or (b) in connection with certain
mergers, consolidations or amalgamations permitted by the Declaration and (iii)
to use its reasonable best efforts, consistent with the terms and provisions of
the Declaration, to cause the Trust to remain a grantor trust and not to be
classified as an association taxable as a corporation for U.S. federal income
tax purposes.
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OPTIONAL REDEMPTION
Protective Life shall have the right to redeem the Subordinated Debt
Securities, at any time in whole or from time to time in part, on or after
, 2002, but prior to the Stated Maturity, or, in whole or in part, at
any time if a Tax Event shall have occurred and Protective Life shall have
received a Redemption Tax Opinion, upon not less than 30 nor more than 60 days
notice, at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest, including Additional Interest, if
any, to the redemption date. See "Description of the Preferred
Securities--Mandatory Redemption" and "--Tax Event Redemption."
INTEREST
Subordinated Debt Securities shall bear interest at the rate of percent
per annum from , payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year (each an "Interest Payment Date"), commencing
, 1997, to the person in whose name such Subordinated Debt Securities
are registered, subject to certain exceptions, at the close of business on the
Business Day next preceding such Interest Payment Date. In the event the
Subordinated Debt Securities shall not continue to remain in book-entry only
form, the record dates shall be the March 15, June 15, September 15 and December
15 prior to the applicable Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. The amount of interest payable for
any period shorter than a full monthly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed in a 90-day
quarter. In the event that any date on which interest is payable on the
Subordinated Debt Securities is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Protective Life shall have the right at any time, and from time to time,
during the term of the Subordinated Debt Securities to defer payments of
interest by extending the interest payment period to a period not exceeding 20
consecutive quarters, but no such Extension Period may extend beyond the Stated
Maturity. At the end of any such Extension Period, Protective Life shall pay all
interest then accrued and unpaid (including any Additional Interest, as herein
defined) together with interest thereon compounded quarterly at the rate
specified for the Subordinated Debt Securities to the extent permitted by
applicable law ("Compounded Interest"); PROVIDED, that during any such Extension
Period, (a) Protective Life shall not declare or pay dividends on, make any
distribution with respect to, or redeem, purchase, acquire or make a liquidation
payment with respect to any of its capital stock (other than (i) purchases or
acquisitions of shares of Protective Life's common stock in connection with the
satisfaction by Protective Life of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security requiring the Company to purchase shares of its common
stock, (ii) as a result of a reclassification of Protective Life capital stock
or the exchange or conversion of one class or series of the Company's capital
stock for another class or series of Protective Life capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to an acquisition or the conversion or exchange provisions of such
Protective Life capital stock or the security being converted or exchanged and
(iv) redemptions or purchases pursuant to Protective Life's Rights Agreement,
dated August 7, 1995, between Protective Life and AmSouth Bank of Alabama as
Rights Agent), (b) Protective Life shall not make any payment of principal,
premium, if any, or interest on or repay, repurchase or redeem any debt
securities issued by Protective Life that rank PARI PASSU with or junior to the
Subordinated Debt Securities and (c) Protective Life shall not make any
Guarantee Payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee, the Common Guarantee and the
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Series A Guarantee). Prior to the termination of any such Extension Period,
Protective Life may further defer payments of interest by extending the interest
payment period; PROVIDED, HOWEVER, that, such Extension Period, including all
such previous and further extensions, may not exceed 20 consecutive quarters or
beyond the Stated Maturity. Upon the termination of any Extension Period and the
payment of all amounts then due, Protective Life may commence a new Extension
Period, subject to the terms set forth in this section. No interest shall be due
and payable during an Extension Period, except at the end thereof, but
Protective Life may prepay at any time all or any portion of the interest
accrued during an Extension Period. Protective Life has no present intention of
exercising its right to defer payments of interest by extending the interest
payment period on the Subordinated Debt Securities. If the Property Trustee
shall be the sole holder of the Subordinated Debt Securities, Protective Life
shall give the Regular Trustees and the Property Trustee notice of its selection
of such Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Preferred Securities are payable or (ii) the date the
Regular Trustees are required to give notice of the record date or the date such
distribution is payable to the New York Stock Exchange (or other applicable
self-regulatory organization) or to holders of the Preferred Securities, but in
any event at least one Business Day before such record date. The Regular
Trustees shall give notice of the Company's selection of such Extension Period
to the holders of the Preferred Securities. If the Property Trustee shall not be
the sole holder of the Subordinated Debt Securities, Protective Life shall give
the holders of the Subordinated Debt Securities notice of its selection of such
Extension Period at least 10 Business Days prior to the earlier of (i) the
Interest Payment Date or (ii) the date upon which Protective Life is required to
give notice of the record or payment date of such interest payment to the New
York Stock Exchange (or other applicable self-regulatory organization) or to
holders of the Subordinated Debt Securities.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other domestic taxing authority,
then, in any such case, Protective Life will pay as additional interest
("Additional Interest") such additional amounts as shall be required so that the
net amounts received and retained by the Trust after paying any such taxes,
duties, assessments or other governmental charges will be not less than the
amounts the Trust would have received had no such taxes, duties, assessments or
other governmental charges been imposed.
CONSOLIDATION, MERGER OR SALE BY PROTECTIVE LIFE
Protective Life shall not consolidate with or merge into any other
corporation or sell its assets substantially as an entirety, unless (i) the
corporation formed by such consolidation or into which Protective Life is merged
or the corporation which acquires its assets is organized in the United States
and expressly assumes all of the obligations of Protective Life under the
Subordinated Indenture, (ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have happened and be
continuing and (iii) if, as a result of such transaction, properties or assets
of Protective Life would become subject to a mortgage, pledge, lien, security
interest or other encumbrance not permitted by the Subordinated Debt Securities,
Protective Life or its successor shall take steps necessary to secure such
Subordinated Debt Securities equally and ratably with all indebtedness secured
thereby. Upon any such consolidation, merger or sale, the successor corporation
formed by such consolidation, or into which Protective Life is merged or to
which such sale is made, shall succeed to, and be substituted for Protective
Life under the Subordinated Indenture.
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INDENTURE EVENTS OF DEFAULT AND DEBT PAYMENT FAILURES
The Subordinated Indenture provides that any one or more of the following
described events, which has occurred and is continuing, constitutes an
"Indenture Event of Default" with respect to the Subordinated Debt Securities:
(a) default for 30 days in payment of any interest on the Subordinated Debt
Securities any Additional Interest and Compounded Interest when due; (b) default
in payment of principal, or premium, if any, at maturity or on redemption or
otherwise, or in the making of a mandatory sinking fund payment of any debt
securities of that series when due; (c) default for 60 days after notice to
Protective Life by the Debt Trustee or the Subordinated Debt Securities or by
the holders of 25% in aggregate principal amount of the Debt then outstanding,
in the performance of any other agreement in the Subordinated Debt Securities,
or in the Subordinated Indenture; (d) default in payment of principal relating
to indebtedness of Protective Life and its consolidated subsidiaries for
borrowed money having an aggregate principal amount exceeding $25 million (after
the expiration of any applicable grace period with respect thereto), or other
default resulting in acceleration of indebtedness of Protective Life and its
consolidated subsidiaries for borrowed money where the aggregate principal
amount so accelerated exceeds $25 million and such acceleration is not rescinded
or annulled within 30 days after the written notice thereof to Protective Life
by the Debt Trustee or to Protective Life and the Debt Trustee by the holders of
25% in aggregate principal amount of the Subordinated Debt Securities then
outstanding; PROVIDED that such Indenture Event of Default will be remedied,
cured or waived if the default that resulted in such Indenture Event of Default
is remedied, cured or waived; and (e) certain events of bankruptcy, insolvency
or reorganization of Protective Life or Protective Life Insurance.
The Subordinated Indenture provides that, if an Indenture Event of Default
specified therein occurs and is continuing, the Debt Trustee or the holders of
25% in aggregate principal amount of all of the outstanding Subordinated Debt
Securities, by written notice to Protective Life (and to the Debt Trustee, if
notice is given by such holders of Subordinated Debt Securities), may declare
the principal of (or, if the Subordinated Debt Securities are Original Issue
Discount Securities or Indexed Securities, such portion of the principal amount
specified herein) and accrued interest on all the Subordinated Debt Securities
that the payment of principal and interest on such debt securities shall remain
subordinated to the extent provided in Article 12 of the Subordinated Indenture.
If any Indenture Event of Default shall occur and be continuing, the
Property Trustee, as the holder of the Subordinated Debt Securities, will have
the right to declare the principal of and the interest on the Subordinated Debt
Securities (including any Compounded Interest and Additional Interest, if any)
and any other amounts payable under the Subordinated Indenture to be forthwith
due and payable and to enforce its other rights as a creditor with respect to
the Subordinated Debt Securities. An Indenture Event of Default also constitutes
a Declaration Event of Default. The holders of Preferred Securities in certain
circumstances have the right to direct the Property Trustee to exercise its
rights as the holder of the Subordinated Debt Securities. See "Description of
the Preferred Securities--Declaration Events of Default and Debt Payment
Failures" and "--Voting Rights." Notwithstanding the foregoing, if a Debt
Payment Failure has occurred and is continuing, a holder of Preferred Securities
may institute a Direct Action for payment after the respective due date
specified in the Subordinated Debt Securities. Notwithstanding any payments made
to such holder of Preferred Securities by Protective Life in connection with a
Direct Action, Protective Life shall remain obligated to pay the principal of or
interest on the Subordinated Debt Securities held by the Trust or the Property
Trustee of the Trust, and Protective Life shall be subrogated to the rights of
the holder of such Preferred Securities with respect to payments on the
Preferred Securities to the extent of any payments made by Protective Life to
such holder in any Direct Action. The holders of Preferred Securities will not
be able to exercise directly any other remedy available to the holders of the
Subordinated Debt Securities.
The Subordinated Indenture provides that the Debt Trustee will, within 90
days after the occurrence of an Indenture Event of Default, give to the holders
of the Subordinated Debt Securities notice of all Defaults known to it unless
such Default shall have been cured or waived; PROVIDED that except in the case
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of a Default in payment on the Subordinated Debt Securities, the Debt Trustee
may withhold the notice if and so long as the board of directors of Protective
Life, the executive committee thereof or a committee of Its Responsible Officers
in good faith determines that withholding such notice is in the interests of the
holders of the Subordinated Debt Securities. "Default" means any event which is,
or after notice or passage of time or both, would be, an Indenture Event of
Default.
The Subordinated Indenture provides that the holders of a majority in
aggregate principal amount of the Subordinated Debt Securities (with each such
series voting as a class) may, subject to certain limited conditions, direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee for such series, or exercising any trust or power conferred on such
Trustee.
The Subordinated Indenture includes a covenant that Protective Life will
file annually with the Trustee a certificate as to Protective Life's compliance
with all conditions and covenants of the Subordinated Indenture.
DEFEASANCE
The Company may terminate its substantive obligations in respect of
Subordinated Debt Securities (except for its obligations to pay the principal of
(and premium, if any, on) and the interest on the Subordinated Debt Securities
by (i) depositing with the Debt Trustee, under the terms of an irrevocable trust
agreement, money or Government Obligations (as defined in the Subordinated
Indenture) sufficient to pay all remaining indebtedness on the Subordinated Debt
Securities of that series, (ii) delivering to the Debt Trustee either an opinion
of counsel or a ruling directed to the Debt Trustee from the Internal Revenue
Service to the effect that the holders of the Subordinated Debt Securities will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit and termination of obligations, and (iii) complying with certain
other requirements set forth in the Subordinated Indenture.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of the Trust as
a result of the election of the Company, the Subordinated Debt Securities will
be issued in the form of one or more global certificates (each a "Global
Security") registered in the name of the Depositary or its nominee. Except under
the limited circumstances described below, Subordinated Debt Securities
represented by the Global Security will not be exchangeable for, and will not
otherwise be issuable as, Subordinated Debt Securities in definitive form. The
Global Securities described above may not be transferred except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or to a successor Depositary
or its nominee.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of such securities in definitive form. Such laws may
impair the ability to transfer beneficial interests in such a Global Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Subordinated Debt
Securities in definitive form and will not be considered the holders (as defined
in the Subordinated Indenture) thereof for any purpose under the Subordinated
Indenture, and no Global Security representing Subordinated Debt Securities
shall be exchangeable, except for another Global Security of like denomination
and tenor to be registered in the name of the Depositary or its nominee or to a
successor Depositary or its nominee. Accordingly, each Beneficial Owner must
rely on the procedures of the Depositary or if such person is not a Participant,
on the procedures of the Participant through which such person owns its interest
to exercise any rights of a holder under the Subordinated Indenture.
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THE DEPOSITARY
If Subordinated Debt Securities are distributed to holders of Preferred
Securities in liquidation of such holders' interests in the Trust, DTC will act
as securities depositary for the Subordinated Debt Securities. For a description
of DTC and the specific terms of the depositary arrangements, see "Description
of the Preferred Securities--Book-Entry Only Issuance--The Depository Trust
Company." As of the date of this Prospectus, the description therein of DTC's
book-entry system and DTC's practices as they relate to purchases, transfers,
notices and payments with respect to the Preferred Securities apply in all
material respects to any debt obligations represented by one or more Global
Securities held by Protective Life. Protective Life may appoint a successor to
DTC or any successor depositary in the event DTC or such successor depositary is
unable or unwilling to continue as a depositary for the Global Securities.
None of Protective Life, the Trust, the Property Trustee, any paying agent
and any other agent of Protective Life, or the Debt Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for such Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Subordinated Debt Securities
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies Protective Life that it is unwilling or unable to
continue as a depositary for such Global Security and no successor depositary
shall have been appointed, (ii) the Depositary, at any time, ceases to be a
clearing agency registered under the Exchange Act at which time the Depositary
is required to be so registered to act as such depositary and no successor
depositary shall have been appointed, (iii) Protective Life, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Event of Default with respect to such
Subordinated Debt Securities. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Subordinated Debt Securities
registered in such names as the Depositary shall direct. It is expected that
such instructions will be based upon directions received by the Depositary from
its Participants with respect to ownership of beneficial interests in such
Global Security.
NOTICES
Notices to holders of registered Subordinated Debt Securities will be given
by mail to the addresses of such holders as they may appear in the Register.
TITLE
Protective Life, the Debt Trustee and any agent of Protective Life or the
Debt Trustee may treat the Person in whose name a Subordinated Debt Security is
registered as the absolute owner thereof (whether or not such Subordinated Debt
Security may be overdue) for the purpose of receiving payment and for all other
purposes.
GOVERNING LAW
The Subordinated Indenture and the Subordinated Debt Securities will be
governed by, and construed in accordance with, the internal laws of the State of
New York.
MISCELLANEOUS
The Subordinated Indenture provides that Protective Life will pay all fees
and expenses related to (i) the offering of the Trust Securities and the
Subordinated Debt Securities, (ii) the organization, maintenance and dissolution
of the Trust, (iii) the retention of the PLC Trustees and (iv) the enforcement
by the Property Trustee of the rights of the holders of the Preferred
Securities. The payment of such fees and expenses will be fully and
unconditionally guaranteed by Protective Life.
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Protective Life will have the right at all times to assign any of its
respective rights or obligations under the Subordinated Indenture to a direct or
indirect wholly-owned subsidiary of Protective Life; PROVIDED that, in the event
of any such assignment, Protective Life will remain liable for all of their
respective obligations. Subject to the foregoing, the Subordinated Indenture
will be binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns. The Subordinated Indenture provides that it
may not otherwise be assigned by the parties thereto.
So long as PLC Capital is the holder of the Subordinated Debt Securities,
the Subordinated Debt Securities may be amended by mutual consent of Protective
Life and the Trust in the manner they shall agree; PROVIDED, HOWEVER, that, so
long as any of the Preferred Securities remain outstanding, no such amendment
shall be made that adversely affects the holders of the Preferred Securities, no
termination of the Subordinated Debt Securities shall occur, and no Event of
Default or compliance with any covenant under the Subordinated Debt Securities
may be waived by PLC Capital, without the prior approval of the holders of at
least 66 2/3% in liquidation preference of all Preferred Securities then
outstanding, in writing or at a duly constituted meeting of such holders.
If the Trust is liquidated and the Subordinated Debt Securities are
distributed to the holders of the Trust Securities, the Indenture and the terms
of the Subordinated Debt Securities may, thereafter, be modified or amended with
the consent of not less than 66 2/3% in principal amount of the Subordinated
Debt Securities at any time outstanding, PROVIDED, however, that no such
modification or amendment may, without the consent of the holder of each
Subordinated Debt Security affected thereby, (a) extend the stated maturity of
the principal of any Subordinated Debt Security (other than as described under
"Description of the Subordinated Debt Securities--General"), or reduce the
principal amount thereof or reduce the rate or extend the time of payment of
interest thereon (other than as decribed under "Description of the Subordinated
Debt Securities--Option to Extend Interest Payment Period"), or reduce any
amount payable on redemption thereof or change the currency in which the
principal thereof or interest thereon is payable or impair the right to
institute suit for the enforcement of any payment on any Subordinated Debt
Security when due or (b) reduce the aforesaid principal amount of the
Subordinated Debt Securities, the consent of the holders of which is required
for any such modification.
EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBT SECURITIES
AND THE PREFERRED SECURITIES GUARANTEE
As set forth in the Declaration, the sole purposes of the Trust are to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust, to invest the proceeds from such issuance and sale in the
Subordinated Debt Securities and to engage in those other activities necessary
or incidental thereto.
As long as payments of interest and other payments are made when due on the
Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Subordinated Debt Securities will
be equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Subordinated Debt Securities will match the distribution rate and
distribution and other payment dates for the Preferred Securities; (iii)
Protective Life shall pay all, and the Trust shall not be obligated to pay,
directly or indirectly, all costs, expenses, debt, and obligations of the Trust
(other than with respect to the Trust Securities); and (iv) the Declaration
further provides that the Regular Trustees shall not take or cause or permit the
Trust to, among other things, engage in any activity that is not consistent with
the purposes of the Trust.
Payments of distributions (to the extent the Trust has funds available
therefor) and other payments due on the Preferred Securities (to the extent the
Trust has funds available therefor) are guaranteed on a subordinated basis by
Protective Life as and to the extent set forth under "Description of the
Preferred Securities Guarantee". If Protective Life does not make interest
payments on the Subordinated Debt
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Securities purchased by the Trust, the Trust will not have sufficient funds to
pay distributions on the Preferred Securities. The Preferred Securities
Guarantee does not apply to any payment of distributions unless and until the
Trust has sufficient funds for the payment of such distributions. The Preferred
Securities Guarantee covers the payment of distributions and other payments on
the Preferred Securities only if and to the extent that Protective Life has made
a payment of interest or principal on the Subordinated Debt Securities held by
the Trust as its sole asset. The Preferred Securities Guarantee, when taken
together with the Company's obligations under the Subordinated Debt Securities
and the Subordinated Indenture and its obligations under the Declaration,
including its obligations to pay costs, expenses, debts and liabilities of the
Trust (other than with respect to the Trust Securities), provide a full and
unconditional guarantee on a subordinated basis of amounts on the Preferred
Securities.
If Protective Life fails to make interest or other payments on the
Subordinated Debt Securities when due (taking account of any Extension Period),
the Declaration provides a mechanism whereby the holders of the Preferred
Securities, using the procedures described in "Description of the Preferred
Securities-- Book-Entry Only Issuance--The Depository Trust Company" and
"--Voting Rights," may direct the Property Trustee to enforce its rights under
the Subordinated Debt Securities. If a Debt Payment Failure has occurred and is
continuing, a holder of Preferred Securities may then institute a Direct Action
for payment after the respective due date specified in the Subordinated Debt
Securities. In connection with such Direct Action, Protective Life will be
subrogated to the rights of such holder of Preferred Securities under the
Declaration to the extent of any payment made by Protective Life to such holder
of Preferred Securities in such Direct Action. Protective Life, under the
Preferred Securities Guarantee, acknowledges that the Guarantee Trustee shall
enforce the Preferred Securities Guarantee on behalf of the holders of the
Preferred Securities. If Protective Life fails to make payments under the
Preferred Securities Guarantee, the Preferred Securities Guarantee provides a
mechanism whereby the holders of the Preferred Securities may direct the
Guarantee Trustee to enforce its rights thereunder. Any holder of Preferred
Securities may institute a legal proceeding directly against Protective Life to
enforce the Guarantee Trustee's rights under the Preferred Securities Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee, or any other person or entity.
Protective Life and the Trust believe that the above mechanisms and
obligations, taken together, provide a full and unconditional guarantee by
Protective Life on a subordinated basis of payments due on the Preferred
Securities. See "Description of the Preferred Securities Guarantee--General."
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material United States Federal income tax
considerations relevant to the purchase, ownership and disposition of Preferred
Securities by a beneficial owner acquiring Preferred Securities on their
original issue at their original offering price who is (i) an individual citizen
or resident of the United States, (ii) a corporation or partnership organized in
or under the laws of the United States or any state thereof or the District of
Columbia or (iii) an estate the income of which is subject to United States
federal income taxation regardless of its source or (iv) a trust if a court
within the United States is able to exercise primary supervision over the
administration of such trust and one or more United Status fiduciaries have the
authority to control all the substantial decisions of such trust (a "United
States Person"). The statements of law or legal conclusion set forth in this
summary constitute the opinion of Debevoise & Plimpton, special counsel to
Protective Life and PLC Capital. This summary does not address potential tax
considerations applicable to a prospective purchaser that is not a United States
Person. PROSPECTIVE INVESTORS IN THE PREFERRED SECURITIES THAT ARE NOT UNITED
STATES PERSONS ARE URGED TO CONSULT THEIR TAX ADVISORS.
This summary does not purport to address all potential tax consequences that
may be applicable to a beneficial owner of a Preferred Security, and is not
intended to be wholly applicable to all categories of investors (including, for
example, banks, insurance companies, tax-exempt organizations and dealers in
securities or currencies), or to persons that will hold Preferred Securities as
a part of a position in a
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"straddle" or as part of a "hedging" or "conversion" transaction for Federal
income tax purposes or whose functional currency is not the United States
dollar. This summary is based upon the Internal Revenue Code of 1986, as amended
(the "Code"), Treasury Regulations (including proposed Treasury Regulations),
Internal Revenue Service rulings and pronouncements and judicial decisions now
in effect, all of which are subject to change at any time. Such changes may be
applied retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of a Preferred Security. These authorities are
subject to various interpretations and it is therefore possible that the Federal
income tax treatment of the Preferred Securities may differ from the treatment
described below. Legislation has been proposed that could, if enacted, adversely
affect Protective Life's ability to deduct interest on the Subordinated Debt
Securities, which may in turn result in a redemption of Preferred Securities.
See "--Possible Tax Law Changes."
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES, AS WELL AS
THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
CLASSIFICATION OF PLC CAPITAL
In connection with the issuance of the Preferred Securities, Debevoise &
Plimpton will render its opinion to the effect that, under current law and
assuming compliance with the terms of the Declaration, the Trust will be
classified as a grantor trust and not as an association taxable as a corporation
for Federal income tax purposes. Each beneficial owner of a Preferred Security
(a "Securityholder") will be treated as owning an undivided beneficial interest
in the Subordinated Debt Securities. Accordingly, each Securityholder will be
required to include in its gross income its share of the income with respect to
the Subordinated Debt Securities. Any amount included in a Securityholder's
gross income will increase such Securityholder's tax basis in its Preferred
Securities, and the amount of distributions to a Securityholder will reduce such
Securityholder's tax basis in its Preferred Securities. NO AMOUNT INCLUDED IN
INCOME WITH RESPECT TO THE PREFERRED SECURITIES WILL BE ELIGIBLE FOR THE
DIVIDENDS RECEIVED DEDUCTION.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the Subordinated Indenture, Protective Life has the option to defer
from time to time the payment of interest on the Subordinated Debt Securities.
Protective Life's option to extend the interest payment period could cause the
Subordinated Debt Securities to be subject to the "original issue discount"
rules for Federal income tax purposes. Protective Life, however, believes, and
intends to take the position that, as of the issue date, the terms and
conditions of the Subordinated Debt Securities (in particular the restrictions
on Protective Life's ability to pay dividends during an Extension Period) make
the likelihood that Protective Life would elect to defer the payment of interest
a "remote" contingency for these purposes. If so treated, the Subordinated Debt
Securities would not be subject to the original issue discount rules unless
Protective Life were to extend the interest payment period, and a Securityholder
would generally include stated interest in income as ordinary income when paid
to the Trust or accrued, in accordance with such holder's regular method of
accounting.
If Protective Life were to exercise its option to defer payments of
interest, the Subordinated Debt Securities would at that time be treated as
issued with OID, and all stated interest on the Subordinated Debt Securities
would thereafter be treated as OID as long as the Subordinated Debt Securities
remain outstanding. In such event, all of a holder's taxable interest income
with respect to the Subordinated Debt Securities would thereafter be accounted
for on an economic accrual basis regardless of such holder's method of tax
accounting, and actual distributions of stated interest would not be reported as
taxable income. Consequently, a holder of Preferred Securities would be required
to include OID in its gross income daily even though Protective Life would not
make actual cash payments during an Extension Period.
50
<PAGE>
The IRS could take a position that the likelihood of deferral is not a
remote contingency for these purposes, in which case the Subordinated Debt
Securities would be subject to the OID rules described in the preceding
paragraph.
Because income on the Preferred Securities will constitute interest or OID,
corporate holders of Preferred Securities will not be entitled to a
dividends-received deduction with respect to any income recognized with respect
to the Preferred Securities.
DISTRIBUTION OF SUBORDINATED DEBT SECURITIES TO HOLDERS OF PREFERRED SECURITIES
Under current law, a distribution by the Trust of the Subordinated Debt
Securities as described under the caption "Certain Terms of Preferred
Securities--Distribution of the Subordinated Debt Securities" will be
non-taxable and will result in the Securityholder receiving directly his pro
rata share of the Subordinated Debt Securities previously held indirectly
through the Trust, with a holding period and tax basis equal to the holding
period and tax basis such Securityholder had in his Preferred Securities before
such distribution. A Securityholder will continue to include interest (or OID)
in respect of Subordinated Debt Securities received from the Trust in the manner
described above under "--Interest Income and Original Issue Discount."
SALES OR REDEMPTION OF PREFERRED SECURITIES
Gain or loss will be recognized by a Securityholder on a sale of Preferred
Securities (including a redemption for cash) in an amount equal to the
difference between the amount realized and the Securityholder's adjusted tax
basis in the Preferred Securities sold or so redeemed. Gain or loss recognized
by a Securityholder on Preferred Securities held for more than one year will
generally be taxable as long-term capital gain or loss (except to the extent
attributable to accrued interest, which will be taxable as ordinary income).
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying
Subordinated Debt Securities. A Securityholder who uses the accrual method of
accounting for tax purposes (and a cash method holder if the Subordinated Debt
Securities are deemed to be subject to the original issue discount rules) who
disposes of its Preferred Securities between record dates for payments of
Distributions will nevertheless be required to include accrued but unpaid
interest of the Subordinated Debt Securities through the date of disposition in
income as ordinary income and to add such amount to its adjusted basis in its
Preferred Securities disposed of. Such Securityholder will recognize a capital
loss to the extent the selling price (which may not fully reflect the value of
accrued but unpaid interest) is less than the Securityholder's adjusted tax
basis (which will include accrued but unpaid interest). Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for Federal income tax purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
In general, information reporting requirements on Form 1099 will apply to
payments on a Preferred Security to a noncorporate United States Person, and
"backup withholding" at a rate of 31% will apply to such payments if such United
States Person fails to provide an accurate taxpayer identification number or
certain other conditions are met.
Payment of the proceeds from the sale of Preferred Securities to or through
the United States office of a broker is subject to information reporting and
backup withholding unless the holder or beneficial owner certifies as to its
non-United States status or otherwise establishes an exemption from information
reporting and backup withholding.
51
<PAGE>
PROPOSED TAX LAW CHANGES
On February 6, 1997, the Clinton Administration released its budget proposal
for fiscal year 1998. The proposal contains certain tax law changes that, if
enacted, would prohibit an issuer from deducting interest payments or original
issue discount on an instrument that has a maximum weighted average maturity of
more than 40 years. Under the proposal, for purposes of determining the term of
an instrument, any right to extend would be treated as exercised. The
Administration's proposal, if enacted, would also treat a corporate issuer that
files annual financial statements with the Commission as having characterized an
instrument as equity for purposes of section 385(c) of the Internal Revenue Code
of 1986, as amended, if the instrument (i) has a maximum term exceeding 15 years
and (ii) is not shown as indebtedness on the applicable balance sheet of the
issuer or, in the case of indebtedness issued to a related party that issues a
related instrument, such related instrument is not reflected as indebtedness on
the applicable consolidated balance sheet. Under section 385(c), the
characterization by the issuer of an instrument as equity is binding on the
issuer and all holders of the instrument unless a holder discloses on his tax
return that he is treating such instrument in a manner inconsistent with the
issuer's characterization. The Administration's proposal specifies that the
changes would be effective for instruments issued on or after the date of first
Congressional committee action.
There can be no assurance that legislation affecting the Company's ability
to deduct interest paid on the Subordinated Debt Securities or the
characterization of the Subordinated Debt Securities for U.S. federal income tax
purposes, including legislation similar to the proposals described above, will
not be enacted in the future or that any such legislation would not be effective
retroactively. In the event tax law changes are enacted and apply retroactively
to the Subordinated Debt Securities, such changes could give rise to a Tax
Event, which would permit the Company to cause a redemption of such Subordinated
Debt Securities and of the related Preferred Securities and Common Securities,
as described more fully under "Description of the Preferred
Securities--Distribution of the Subordinated Debt Securities."
52
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
"Purchase Agreement"), PLC Capital has agreed to sell to each of the
Underwriters named below, and each of the Underwriters, for whom Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Morgan Stanley & Co.
Incorporated and Oppenheimer & Co., Inc. are acting as representatives (the
"Representatives"), has severally agreed to purchase the number of Preferred
Securities set forth opposite its name below. In the Purchase Agreement, the
several Underwriters have agreed, subject to the terms and conditions set forth
therein, to purchase all the Preferred Securities offered hereby if any of the
Preferred Securities are purchased. In the event of default by an Underwriter,
the Purchase Agreement provides that, in certain circumstances, purchase
commitments of the nondefaulting Underwriters may be increased or the Purchase
Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF
PREFERRED
UNDERWRITERS SECURITIES
- ------------------------------------------------------------------------------- -------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................................
Goldman, Sachs & Co............................................................
Morgan Stanley & Co. Incorporated..............................................
Oppenheimer & Co., Inc.........................................................
Total................................................................
-------------
-------------
-------------
</TABLE>
The Representatives have advised the Trust that the Underwriters propose to
offer the Preferred Securities in part to the public at the initial public
offering price set forth on the cover page of this Prospectus, and in part to
certain securities dealers at such price less a concession not in excess of
$ per Preferred Security. The Underwriters may allow, and such dealers may
reallow, a discount not in excess of $ per Preferred Security to certain
other brokers and dealers. After the initial public offering, the public
offering price, concession and discount may be changed.
In view of the fact that the proceeds of the sale of the Preferred
Securities will ultimately be used to purchase the Subordinated Debt Securities
of Protective Life, the Purchase Agreement provides that Protective Life will
pay as compensation ("Underwriters' Compensation") to the Underwriters for the
Underwriters' arranging the investment therein of such proceeds, an amount in
immediately available funds of $ per Preferred Security (or $ in the
aggregate) for the accounts of the several Underwriters; provided that, such
compensation for sales of or more Preferred Securities to any single
purchaser will be $ per Preferred Security. Therefore, to the extent of such
sales, the actual amount of Underwriters' Compensation will be less than the
aggregate amount specified in the preceding sentence.
Until , 1997, neither PLC Capital nor Protective Life will,
without the prior written consent of Merrill Lynch, Pierce, Fenner & Smith
Incorporated, directly or indirectly, sell, offer to sell, grant any option for
sale of, or otherwise dispose of, or enter into any agreement to sell any
Preferred Securities, any security convertible into or exchangeable into or
exercisable for Preferred Securities or Subordinated Debt Securities or any debt
securities substantially similar to the Subordinated Debt Securities or equity
securities substantially similar to the Preferred Securities.
53
<PAGE>
The Preferred Securities have been approved for listing on the New York
Stock Exchange, subject to notice of issuance. Trading of the Preferred
Securities on the New York Stock Exchange is expected to commence within a
30-day period after the initial delivery of the Preferred Securities. The
Representatives have advised PLC Capital that they intend to make a market in
the Preferred Securities prior to the commencement of trading on the New York
Stock Exchange. The Representatives will have no obligation to make a market in
the Preferred Securities, however, and may cease market-making activities, if
commenced, at any time.
Until the distribution of the Preferred Securities is completed, rules of
the Securities and Exchange Commission may limit the ability of the Underwriters
and certain selling group members to bid for and purchase the Preferred
Securities. As an exception to these rules, the Representatives are permitted to
engage in certain transactions that stabilize the price of the Preferred
Securities. Such transactions consist of bids or purchases for the purpose of
pegging, fixing or maintaining the price of the Preferred Securities.
If the Underwriters create a short position in the Preferred Securities in
connection with the offering, i.e., if they sell more shares of Preferred
Securities than are set forth on the cover page of this Prospectus, the
Representatives may reduce that short position by purchasing Preferred
Securities in the open market.
The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Preferred Securities in the open market to reduce the Underwriters'
short position or to stabilize the price of the Preferred Securities, they may
reclaim the amount of the selling concession from the Underwriters and selling
group members who sold those shares as part of the offering.
In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Preferred Securities. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Representatives will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
Prior to this offering there has been no public market for the Preferred
Securities. In order to meet one of the requirements for listing the Preferred
Securities on the New York Stock Exchange, the Underwriters will undertake to
sell lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders.
PLC Capital and Protective Life have agreed to indemnify the Underwriters
against, or contribute to payments that the Underwriters may be required to make
in respect of, certain liabilities, including liabilities under the Securities
Act.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, Protective Life and its subsidiaries in the
ordinary course of business.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon for PLC Capital by Richards, Layton & Finger,
P.A., special Delaware counsel to the Company and PLC Capital. The validity of
the Subordinated Debt Securities and the Preferred Securities Guarantees and
certain matters relating thereto will be passed upon for Protective Life by
Debevoise & Plimpton. Certain United States federal income taxation matters will
be passed upon for Protective Life and PLC Capital by Debevoise & Plimpton,
special tax counsel to Protective Life and PLC Capital. Certain legal matters
will
54
<PAGE>
be passed upon for the Underwriters by Simpson Thacher & Bartlett (a partnership
which includes professional corporations) ("ST&B"). ST&B from time to time has
been and currently is retained as counsel by certain insurance subsidiaries of
the Company in connection with various legal matters. Debevoise & Plimpton and
ST&B will rely on the opinion of Richards, Layton & Finger, P.A. as to matters
of Delaware law.
EXPERTS
The consolidated balance sheets of Protective Life as of December 31, 1996
and 1995 and the related consolidated statements of income, stockholder's equity
and cash flows for each of the three years in the period ended December 31, 1996
and the related financial statement schedules which are incorporated by
reference or included in Protective Life's Annual Report on Form 10-K for the
year ended December 31, 1996 and which have been incorporated by reference in
this Prospectus, have been incorporated herein in reliance on the report of
Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.
55
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY PROTECTIVE LIFE CORPORATION, PLC CAPITAL TRUST I OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF PROTECTIVE LIFE CORPORATION OR PLC CAPITAL
TRUST I SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 4
Incorporation of Certain Documents by Reference........................... 4
Summary................................................................... 6
Risk Factors.............................................................. 11
Protective Life Corporation............................................... 16
Consolidated Earnings Ratios.............................................. 23
Capitalization of Protective Life......................................... 24
Accounting Treatment...................................................... 24
Use of Proceeds........................................................... 24
PLC Capital............................................................... 25
Description of the Preferred Securities................................... 26
Description of the Preferred Securities Guarantee......................... 36
Description of the Subordinated Debt Securities........................... 39
Effect of Obligations Under the Subordinated Debt Securities and the
Preferred Securities Guarantee.......................................... 48
Certain Federal Income Tax Considerations................................. 49
Underwriting.............................................................. 53
Legal Matters............................................................. 54
Experts................................................................... 55
</TABLE>
3,000,000
PREFERRED SECURITIES
PLC CAPITAL TRUST I
% TRUST ORIGINATED
PREFERRED SECURITIES-SM-
("TOPRS-SM-")
GUARANTEED TO THE EXTENT
SET FORTH HEREIN BY
PROTECTIVE LIFE CORPORATION
---------------------
PROSPECTUS
---------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
MORGANSTANLEY & CO.
INCORPORATED
OPPENHEIMER & CO., INC.
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth those expenses to be incurred by Protective
Life in connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission filing fee, all
amounts shown are estimates.
<TABLE>
<CAPTION>
Securities and Exchange Commission filing fee..................... $ 22,728
<S> <C>
Rating agency fees................................................ 75,000
Fees and expenses of Trustees..................................... 7,500
Blue Sky fees and expenses........................................ 7,500
Printing and engraving expenses................................... 90,000
Accountant's fees and expenses.................................... 25,000
Legal fees and expenses........................................... 190,000
Miscellaneous expenses............................................ 7,272
---------
Total........................................................... $ 425,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 6.5 of Article VI of Protective Life's Restated Certificate of
Incorporation provides that Protective Life shall indemnify to the fullest
extent permitted by law any person who is made or is threatened to be made a
party or is involved in any action, suit, or proceeding whether civil, criminal,
administrative or investigative by reason of the fact that he is or was a
director, officer, employee or agent of Protective Life or was serving at the
request of Protective Life as an officer, director, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise including
service with respect to employee benefit plans.
Protective Life is empowered by Section 145 of the Delaware General
Corporation Law, subject to the proceedings and limitations stated therein, to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of Protective Life) by reason of the fact that such person is or was
an officer, employee, agent or director of Protective Life, or is or was serving
at the request of Protective Life as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of Protective
Life, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. Protective Life may indemnify any
such person against expenses (including attorneys' fees) in an action by or in
the right of Protective Life under the same conditions, except that no
indemnification is permitted without judicial approval if such person is
adjudged to be liable to Protective Life. To the extent such person is
successful on the merits or otherwise in the defense of any action referred to
above, Protective Life must indemnify him against the expenses which he actually
and reasonably incurred in connection therewith.
Policies of insurance are maintained by Protective Life under which
directors and officers of Protective Life are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers.
As permitted by Section 102 (b)(7) of the Delaware General Corporation Law,
Protective Life's Restated Certificate of Incorporation also provides that no
director shall be personally liable to Protective
II-1
<PAGE>
Life or its stockholders for monetary damages for any breach of fiduciary duty
by such director as a director, except (i) for breach of the director's duty of
loyalty to Protective Life or its stockholders, (ii) for acts or omissions not
in good faith which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law or (iv) for
any transaction from which the director derived an improper personal benefit.
Protective Life has entered into indemnity agreements with each of its
directors which provide insurance protection in excess of the directors' and
officers' liability insurance maintained by Protective Life and in force at the
time up to $20 million and against certain liabilities excluded from such
liability insurance. The agreements provide generally that, upon the happening
of certain events constituting a change in control of Protective Life,
Protective Life must obtain a $20 million letter of credit upon which the
directors may draw for defense or settlement of any claim relating to
performance of their duties as directors. Protective Life has similar agreements
with certain of its executive officers under which Protective Life is required
to provide up to $10 million in indemnification, although this obligation is not
secured by a commitment to obtain a letter of credit.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
1 Form of Purchase Agreement for offering of Preferred Securities
4(a) Certificate of Trust of PLC Capital Trust I+
4(b) Declaration of Trust of PLC Capital Trust I+
4(c) Form of Amended and Restated Declaration of Trust for PLC Capital Trust I
4(d) Subordinated Indenture, dated as of June 1, 1994, between Protective Life Corporation and AmSouth Bank,
as Trustee (incorporated by reference to Exhibit 4(h) to Protective Life Corporation's Current Report
on Form 8-K filed June 17, 1994)
4(e) Supplemental Indenture No. 1, dated as of June 9, 1994, to the Subordinated Indenture between Protective
Life Corporation and AmSouth Bank, as Trustee (incorporated by reference to Exhibit 4(h)(1) to
Protective Life Corporation's Current Report on Form 8-K filed June 17, 1994)
4(f) Supplemental Indenture No. 2, dated as of August 1, 1994, to the Subordinated Indenture between
Protective Life Corporation and AmSouth Bank, as Trustee (incorporated by reference to Exhibit 4(l) to
Protective Life Corporation's Registration Statement on Form S-3 (No. 33-55063))
4(g) Form of Supplemental Indenture No. 3 to the Subordinated Indenture between Protective Life Corporation
and AmSouth Bank, as Trustee
4(h) Form of Preferred Security Certificate for PLC Capital Trust 1 (included as Exhibit A-1 of Exhibit 4(c)
hereto)
4(i) Form of Guarantee with respect to Preferred Securities issued by PLC Capital Trust I+
5(a) Opinion of Debevoise & Plimpton, counsel to Protective Life Corporation and PLC Capital Trust I, as to
legality of the Guarantee and the Subordinated Debt Securities
5(b) Opinion of Richards, Layton & Finger, P.A., special Delaware counsel to Protective Life Corporation and
PLC Capital Trust I, as to legality of the Preferred Securities
8 Opinion of Debevoise & Plimpton, special tax counsel to Protective Life Corporation and PLC Capital
Trust I, as to certain tax matters
12 Computation of Ratios of Consolidated Earnings to Fixed Charges+
23(a) Consent of Coopers & Lybrand L.L.P
23(b) Consent of Debevoise & Plimpton (included in Exhibit 5(a))
23(c) Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5(b))
24 Power of Attorney of Board of Directors and Officers+
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
25(a) Statement of Eligibility under the Trust Indenture Act of 1939, as amended of AmSouth Bank, as Trustee
under the Subordinated Indenture (incorporated by reference from Exhibit 25(b) to Protective Life
Corporation's Registration Statement on Form S-3 (No. 33-52831))
25(b) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Wilmington Trust Company,
as Property Trustee under the Amended and Restated Declaration of Trust of PLC Capital Trust I+
25(c) Statement of Eligibility under the Trust Indenture Act of 1939, as amended of Wilmington Trust Company,
as Guarantee Trustee under the Preferred Securities Guarantee of Protective Life Corporation for the
benefit of the holders of Preferred Securities of PLC Capital Trust I+
</TABLE>
- ------------------------
+Previously Filed.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Protective Life
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Birmingham, State of Alabama, on April 21, 1997.
Protective Life Corporation
(Registrant)
By: /s/ JOHN D. JOHNS
-----------------------------------------
John D. Johns
PRESIDENT AND
CHIEF OPERATING OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities with Protective Life Corporation and on the dates indicated:
<TABLE>
<S> <C> <C>
SIGNATURES TITLE DATE
- ------------------------------ -------------------------- ---------------
Chairman of the Board and
* Chief Executive Officer
- ------------------------------ (Principal Executive April 21, 1997
Drayton Nabers, Jr. Officer)
President and Chief
/s/ JOHN D. JOHNS Operating Officer
- ------------------------------ (Principal Financial April 21, 1997
John D. Johns Officer)
Vice President and
/s/ JERRY W. DEFOOR Controller and Chief
- ------------------------------ Accounting Officer April 21, 1997
Jerry W. DeFoor (Principal Accounting
Officer)
*
- ------------------------------ Chairman Emeritus and April 21, 1997
William J. Rushton III Director
*
- ------------------------------ Director April 21, 1997
John W. Woods
*
- ------------------------------ Director April 21, 1997
William J. Cabaniss, Jr.
*
- ------------------------------ Director April 21, 1997
H.G. Pattillo
*
- ------------------------------ Director April 21, 1997
John J. McMahon, Jr.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURES TITLE DATE
- ------------------------------ -------------------------- ---------------
*
- ------------------------------ Director April 21, 1997
A.W. Dahlberg
*
- ------------------------------ Director April 21, 1997
John W. Rouse, Jr.
*
- ------------------------------ Director April 21, 1997
Robert T. David
*
- ------------------------------ Director April 21, 1997
Ronald L. Kuehn, Jr.
*
- ------------------------------ Director April 21, 1997
Herbert A. Sklenar
*
- ------------------------------ Director April 21, 1997
James S.M. French
*
- ------------------------------ Director April 21, 1997
Robert A. Yellowlees
*By: /s/ DEBORAH J. LONG
-------------------------
Deborah J. Long
ATTORNEY-IN-FACT
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, PLC Capital
Trust I certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Birmingham, State of Alabama, on April 21, 1997.
PLC Capital Trust I
(Registrant)
By: /s/ RICHARD J. BIELEN
-----------------------------------------
Richard J. Bielen
REGULAR TRUSTEE
By: /s/ JERRY W. DEFOOR
-----------------------------------------
Jerry W. DeFoor
REGULAR TRUSTEEE
II-5
<PAGE>
EXHIBIT 1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PLC CAPITAL TRUST I
-------------------
___% Trust Originated Preferred Securities(Servicemark)*
("TOPrS(Servicemark")
guaranteed to a limited extent by
PROTECTIVE LIFE CORPORATION
PURCHASE AGREEMENT
Dated: April __, 1997
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* (Servicemark) "Trust Originated Preferred Securities" and "TOPrS" are
service marks of Merrill Lynch & Co., Inc.
<PAGE>
3,000,000 Preferred Securities
PLC CAPITAL TRUST I
(A Delaware Trust)
____% Trust Originated Preferred Securities(Servicemark)* ("TOPrS(Servicemark")
(Liquidation Amount of $25.00 per Preferred Security)
PURCHASE AGREEMENT
-------------------
April __, 1997
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
OPPENHEIMER & CO., INC.,
As the Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
PLC Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. ss.ss. 3801 et
seq.), and Protective Life Corporation, a Delaware corporation (the "Company"
and, together with the Trust, the "Offerors"), confirm their agreement (the
"Agreement") with Merrill Lynch & Co. Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch"), Goldman, Sachs & Co., Morgan Stanley & Co.
and Oppenheimer & Co., Inc., as representatives (in such capacity, collectively,
the "Representatives") of the several Underwriters named in Schedule A hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof) with respect to the
sale by the Trust and the purchase by the Underwriters, acting severally and not
jointly, of an aggregate of 3,000,000 ____% Trust Originated Preferred
Securities (liquidation amount of $25 per preferred security) of the Trust (the
"Preferred Securities"). The Preferred Securities will be guaranteed by the
Company with respect to distributions and payments upon liquidation, redemption
and otherwise (the "Preferred Securities Guarantee") pursuant to the Preferred
- -------------------------
* (Servicemark)"Trust Originated Preferred Securities" and "TOPrS" are
service marks of Merrill Lynch & Co., Inc.
<PAGE>
2
Securities Guarantee Agreement, to be dated as of April __, 1997 (the "Preferred
Securities Guarantee Agreement"), between the Company and Wilmington Trust
Company, as trustee (the "Guarantee Trustee"), and in certain circumstances
described in the Prospectus (as defined herein) the Trust will distribute
Subordinated Debt Securities (as defined herein) to holders of Preferred
Securities. The Preferred Securities, the related Preferred Securities Guarantee
and the Subordinated Debt Securities are collectively referred to herein as the
"Securities."
The Offerors have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-25027) covering the registration under the Securities Act of 1933, as
amended (the "1933 Act"), of the sale of the Securities, have filed such
amendments thereto, if any, as may have been required to the date hereof, and
will file such additional amendments thereto as may hereafter be required.
Promptly after the execution and delivery of this Agreement, the Offerors will
either (i) prepare and file a prospectus in accordance with the provisions of
Rule 430A ("Rule 430A") of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations") and Rule 424(b) ("Rule 424(b)") of the
1933 Act Regulations or (ii) if the Offerors have elected to rely upon Rule 434
("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in any prospectus or in any Term Sheet, as the case may be,
that was omitted from such registration statement at the time it became
effective but that is deemed part of such registration statement at the time it
became effective (a) pursuant to paragraph (b) of Rule 430A is referred to as
"Rule 430A Information" or (b) pursuant to Rule 434 is referred to as "Rule 434
Information." Each prospectus used before such Rule 424(b) prospectus has been
filed and any prospectus that omitted the Rule 430A Information or the Rule 434
Information, as applicable, and in each case that was used after such
effectiveness and prior to the execution and delivery of this Agreement, is
herein called a "preliminary prospectus". Such registration statement, excluding
the exhibits thereto and schedules thereto, if any, but including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective and including the Rule 430A Information and
the Rule 434 Information is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, in the form first furnished to the Underwriters for use in connection with
the offering of the Securities is herein called the "Prospectus." If Rule 434 is
relied on, the term Prospectus shall refer to the preliminary
<PAGE>
3
prospectus dated April __, 1997, together with the Term Sheet, and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. For purposes of this Agreement, all references to the
Registration Statement, any preliminary prospectus, the Prospectus or any Term
Sheet or any amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information that is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (and
all other references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information that are
incorporated by reference in the Registration Statement, any preliminary
prospectus or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the
filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), that is incorporated by reference in the Registration
Statement, such preliminary prospectus or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make
a public offering of the Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered and the
Declaration (as defined herein), the Indenture (as defined herein) and the
Preferred Securities Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). The entire proceeds to the
Trust from the sale of the Preferred Securities will be combined with the entire
proceeds from the sale by the Trust to the Company of its common securities (the
"Common Securities" and, together with the Preferred Securities, the "Trust
Securities"), as guaranteed by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon liquidation and
redemption (the "Common Securities Guarantee" and together with the Preferred
Securities Guarantee, the "Guarantees") pursuant to the Common Securities
Guarantee Agreement, to be dated of as of April __, 1997 (the "Common Securities
Guarantee Agreement" and, together with the Preferred Securities Guarantee
Agreement, the "Guarantee Agreements"), between the Company and the Guarantee
Trustee, as Trustee, and will be used by the Trust to purchase the $__________
aggregate principal amount of ____% Subordinated Debentures due 2027, Series B
(the "Subordinated Debt Securities") issued by the Company under the Indenture
(as defined herein). The Preferred Securities and the Common Securities will be
issued pursuant to the amended and restated declaration of trust of the Trust,
dated as of April __, 1997 (the "Declaration"), among the Company, as
<PAGE>
4
Sponsor, Richard Bielen and Jerry W. DeFoor, as trustees (the "Regular
Trustees"), and Wilmington Trust Company, as institutional trustee (the
"Institutional Trustee") and as Delaware trustee (the "Delaware Trustee" and,
together with the Institutional Trustee and the Regular Trustees, the
"Trustees"). The Subordinated Debt Securities will be issued pursuant to the
Subordinated Indenture dated as of June 1, 1994 (the "Base Indenture"), between
the Company and AmSouth Bank of Alabama (as successor by conversion of charter
to AmSouth Bank, N.A.), as trustee (the "Debt Trustee"), as supplemented by
(i) Supplemental Indenture No. 1, dated as of June 9, 1994 ("Supplemental
Indenture No. 1"), (ii) Supplemental Indenture No. 2, dated as of August 1, 1994
("Supplemental Indenture No. 2"), and (iii) Supplemental Indenture No. 3, to be
dated as of April __, 1997 ("Supplemental Indenture No.3" and, together with the
Base Indenture and all other amendments and supplements thereto in effect on the
date hereof, the "Indenture"), between the Company and the Debt Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Offerors
jointly and severally represent and warrant to each Underwriter as of the date
hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) The Offerors meet, and at the respective times of the
commencement and consummation of the public offering of the Securities will
meet, the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Offerors, threatened by the
Commission.
(ii) At the respective times the Registration Statement, the
Rule 462(b) Registration Statement, if any, and any post-effective
amendment thereto (including the filing of any amendment to the Company's
most recent Annual Report on Form 10-K with the Commission) became
effective and at the Closing Time, such Registration Statements and such
amendments and supplements thereto complied and will comply as to form in
all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. At the date of the Prospectus and at the
Closing Time, the Prospectus and any amendments or supplements thereto did
not and will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
<PAGE>
5
the light of the circumstances under which they were made, not misleading;
provided, however, the Offerors make no representations or warranties as to
(A) that part of the Registration Statement which constitutes the
Statements of Eligibility and Qualification (Forms T-1) under the 1939 Act
of the Delaware Trustee, the Institutional Trustee, the Debt Trustee or the
Guarantee Trustee or (B) the information contained in or omitted from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished in writing to the Offerors by any
Underwriter through Merrill Lynch specifically for inclusion in the
Registration Statement or the Prospectus and actually included therein. If
the Offerors elect to rely upon Rule 434 of the 1933 Act Regulations, the
Offerors will comply with the requirements of Rule 434.
(iii) Each preliminary prospectus and prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 of the 1933 Act
Regulations, complied as to form when so filed in all material respects
with the 1933 Act Regulations and, if applicable, each preliminary
prospectus and the Prospectus delivered to the Underwriters for use in
connection with the offering of the Securities will, at the time of such
delivery, be identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(iv) The documents incorporated by reference in the
Registration Statement or Prospectus, at the time they were or hereafter
are filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the
time the Prospectus was issued and at the Closing Time, did not and will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(v) Coopers & Lybrand L.L.P., the accountants who certified
the financial statements and supporting schedules included in or
incorporated by reference into the Registration Statement, are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations. The financial statements included or incorporated by reference
in the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statements
of income, stockholders' equity and cash flows of
<PAGE>
6
the Company and its consolidated subsidiaries for the periods specified;
said financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any, included
or incorporated by reference in the Registration Statement present fairly
in accordance with GAAP the information required to be stated therein. The
selected financial information and the summary financial information
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(vi) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act with the
power and authority to own property and to conduct its business as
described in the Registration Statement and Prospectus and to enter into
and perform its obligations under this Agreement, the Preferred Securities,
the Common Securities and the Declaration; the Trust is duly qualified to
transact business as a foreign entity and is in good standing in each
jurisdiction in which such qualification is necessary, except where the
failure to so qualify or be in good standing would not have a material
adverse effect on the Trust; the Trust is not a party to or otherwise bound
by any material agreement other than those described in the Prospectus; the
Trust is and will (under current law) be classified for United States
federal income tax purposes as a grantor trust and not as an association
taxable as a corporation; and the Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally accepted
accounting principles.
(vii) The Common Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered by the
Trust to the Company against payment therefor as described in the
Registration Statement and the Prospectus, will be validly issued and,
subject to the terms of the Declaration, fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and will conform
in all material respects to the description thereof contained in the
Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Closing Time all of the
issued and outstanding Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(viii) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
<PAGE>
7
(ix) The Declaration has been duly authorized by the Company
and, at the Closing Time, will have been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and
delivery of the Declaration by the Institutional Trustee and the Delaware
Trustee, the Declaration will, at the Closing Time, be a valid and binding
obligation of the Company, the Trust and the Regular Trustees, enforceable
against the Company and the Regular Trustees in accordance with its terms,
except to the extent that enforcement thereof may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting the
rights of creditors generally or by general equitable principles
(regardless of whether enforcement is considered in a proceeding at law or
in equity) (collectively, the "Bankruptcy Exceptions") and will conform in
all material respects to the description thereof contained in the
Prospectus; and the Declaration has been duly qualified under the 1939 Act.
(x) Each of the Guarantees and the Guarantee Agreements has
been duly authorized by the Company and, when validly executed and
delivered by the Company, and, in the case of the Preferred Securities
Guarantee and the Preferred Securities Guarantee Agreement, assuming due
authorization, execution and delivery of the Preferred Securities Guarantee
Agreement by the Guarantee Trustee, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions, and each of the Guarantees and the
Guarantee Agreements will conform in all material respects to the
description thereof contained in the Prospectus; and the Preferred
Securities Guarantee Agreement has been duly qualified under the 1939 Act.
(xi) The Preferred Securities have been duly authorized by
the Trust pursuant to the Declaration and, when issued and delivered
pursuant to this Agreement against payment of the consideration therefor as
provided herein, will be validly issued and fully paid and non-assessable
undivided beneficial interests in the assets of the Trust (provided that
the holders of the Preferred Securities may be obligated to make certain
payments as set forth in the Declaration) and will conform in all material
respects to the description thereof contained in the Prospectus; the
issuance of the Preferred Securities is not subject to preemptive or other
similar rights; and holders of Preferred Securities will be entitled to the
same limitation of personal liability under Delaware law as extended to
stockholders of private corporations for profit.
(xii) Each of the Regular Trustees is an employee of the
Company and has been authorized by the Company to execute and deliver the
Declaration; the Declaration has been duly
<PAGE>
8
executed and delivered by the Regular Trustees and is a valid and binding
obligation of each Regular Trustee, enforceable against such Regular
Trustee in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xiii) The Indenture has been duly authorized by the Company;
each of the Base Indenture, Supplemental Indenture No. 1 and Supplemental
Indenture No. 2 does constitute, and Supplemental Indenture No. 3, when
validly executed and delivered by the Debt Trustee, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except to the extent the enforcement thereof may
be limited by the Bankruptcy Exceptions; the Indenture will conform in all
material respects to the description thereof contained in the Prospectus;
and the Indenture has been duly qualified under the 1939 Act.
(xiv) The Subordinated Debt Securities have been duly
authorized by the Company and, when validly executed by the Debt Trustee,
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Prospectus, will constitute
valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions, and will
be in the form contemplated by, and entitled to the benefits of, the
Indenture and will conform in all material respects to the description
thereof contained in the Prospectus.
(xv) None of the Offerors is, and upon the issuance and sale
of the Preferred Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus, none of the
Offerors will be, an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the Investment Company
Act of 1940, as amended (the "1940 Act").
(xvi) No authorization, approval, consent or order of any
court or governmental authority or agency is necessary in connection with
the issuance and sale of the Common Securities or the Common Securities
Guarantee or the offering, issuance or sale of the Securities as
contemplated hereby, except such as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws and the qualification of
the Declaration, the Preferred Securities Guarantee Agreement and the
Indenture under the 1939 Act.
(xvii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
(i) (x) any material change in the capital stock or (y) any increase in the
long-term
<PAGE>
9
debt of the Company or any of its subsidiaries in excess of $10 million,
(ii) any material adverse change or any development involving a prospective
material adverse change in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole or (iii) any reduction in the
statutory capital or surplus of the Company's subsidiaries engaged in the
business of insurance (each an "Insurance Subsidiary," and collectively,
the "Insurance Subsidiaries"), taken as a whole, in excess of $15 million,
in each case otherwise than as set forth or contemplated in the Prospectus.
(xviii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus and has
been duly qualified as a foreign corporation for the transaction of
business under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction.
(xix) Protective Life Insurance Company ("Protective Life
Insurance") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any business, so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction.
(xx) Protective Life Insurance is duly organized and
licensed as an insurance company in its state of incorporation and is duly
licensed or authorized as an insurer in each other jurisdiction where it
is required to be so licensed or authorized, with corporate power to
conduct its business as described in the Prospectus (except for any such
jurisdiction in which the failure to be so licensed or authorized would
not reasonably be expected to have a material adverse effect on the
business, financial condition or results of operations of the Company and
its subsidiaries, considered as a whole); and except as otherwise
specifically described in the Prospectus, neither the Company nor
Protective Life Insurance has received any notification from any
insurance regulatory authority to the effect that any additional
authorization, approval, order, consent, license,
<PAGE>
10
certificate, permit, registration or qualification from such insurance
regulatory authority is needed to be obtained by either of the Company or
Protective Life Insurance in any case where it would be reasonably expected
that the failure to obtain any such additional authorization, approval,
order, consent, license, certificate, permit, registration or qualification
would have a material adverse effect on the business, financial position or
results of operations of the Company and its subsidiaries, considered as a
whole.
(xxi) Except as disclosed in the Prospectus, there are no
actions, suits or proceedings before or by any government, governmental
instrumentality or court, domestic or foreign, now pending to which the
Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
reasonably be expected to, individually or in the aggregate, have a
material adverse effect on the consolidated financial position,
stockholders' equity (if applicable) or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(xxii) The Trust is not in violation of the Declaration or its
certificate of trust filed with the State of Delaware on April 10, 1997
(the "Certificate of Trust"), and neither the Company nor any subsidiary of
the Company which is a "significant subsidiary" (as such term is defined in
Rule 405 of the 1933 Act Regulations) (each such subsidiary, a "Significant
Subsidiary") is in violation of its charter or by-laws. None of the
Company, any Significant Subsidiary or the Trust is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which it is a party or by which it may be bound, or to which any of its
property or assets may be subject, except for such defaults that would not
be reasonably expected to result in any material adverse effect on the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and the Significant Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business. None
of the execution, delivery and performance of this Agreement, the
Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debt Securities, the Guarantee Agreements and
the Guarantees and the consummation of the transactions contemplated hereby
and thereby and compliance by the Offerors with their respective
obligations hereunder and thereunder did or will result in a breach of any
of the terms or provisions of, or constitute a default or require
<PAGE>
11
the consent of any party under, (A) the Certificate of Trust of the Trust
or the charter or by-laws of the Company or any Significant Subsidiary, (B)
any contract, indenture, mortgage, note, lease, agreement or other
instrument to which any of the Trust, the Company and the Significant
Subsidiaries is a party or by which any of them may be bound, or any
applicable law, rule or regulation or any judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Trust, the Company or any Significant
Subsidiary or any of their respective property or assets, or did or will
result in the creation or imposition of any lien on the property or assets
of the Trust, the Company or any Significant Subsidiary, except, in the
case of the foregoing clause (B), for such defaults, consents or liens
which would not reasonably be expected to result in a material adverse
effect on the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and the Significant
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business.
(b) Each certificate signed by any officer of the Company or a Regular
Trustee and delivered to the Representatives or to counsel for the Underwriters
shall be deemed to be a representation and warranty by the Company or the Trust,
as the case may be, to each Underwriter as to the matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Trust
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Trust, at the price of $25 per Preferred
Security, an aggregate of 3,000,000 Preferred Securities (except as otherwise
provided herein, to be allocated to the several Underwriters in the number of
Preferred Securities set forth in Schedule A opposite the name of each such
Underwriter).
(b) As compensation to the Underwriters for their commitments
hereunder and in view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Subordinated Debt Securities of the
Company, the Company hereby agrees to pay at Closing Time to the
Representatives, for the accounts of the several Underwriters, a commission of
$_____ per Preferred Security purchased by the Underwriters by wire transfer of
immediately available funds to a bank account designated by the Representatives;
provided that such commission for sales of ____ or more Preferred Securities to
a single purchaser will be $____ per Preferred Security purchased by the
Underwriters.
<PAGE>
12
(c) Payment of the purchase price for, and delivery of certificates
for, the Preferred Securities shall be made at the office of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017, or at such other place
as shall be agreed upon by the Representatives and the Offerors, at 10:00 A.M.
New York time on April ___, 1997, or such later time and date not more than two
business days after such date as shall be agreed upon by the Representatives and
the Offerors (such time and date of payment and delivery being herein called
"Closing Time"). Payment for the Preferred Securities purchased by the
Underwriters shall be made to the Trust by wire transfer of immediately
available funds to a bank account designated by the Trust, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Preferred Securities to be purchased by them.
(d) Subject to the terms and provisions of the Declaration,
certificates for the Preferred Securities to be purchased by the Underwriters
shall be in such denominations and registered in such names as the Underwriters
may request in writing at least two business days before the Closing Time.
(e) It is understood that each Underwriter has authorized Merrill
Lynch, for its account, to accept delivery of, receipt for, and make payment of
the purchase price for, the Preferred Securities that it has agreed to purchase.
Merrill Lynch, individually and not as Representative of the Underwriters, may
(but shall not be obligated to) make payment of the purchase price for the
Preferred Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time, but such payment shall not relieve
such Underwriter from its obligations hereunder.
SECTION 3. COVENANTS OF THE OFFERORS. The Offerors agree with
each Underwriter as follows:
(a) Promptly following the execution of this Agreement, the
Offerors will cause the Prospectus to be filed with the Commission pursuant to
Rule 424 of the 1933 Act Regulations and the Offerors will promptly advise the
Underwriters when such filing has been made. The Offerors will comply with the
requirements of Rule 430A and/or Rule 434, if and as applicable, and will notify
the Representatives immediately, and confirm the notice in writing, of (i) the
effectiveness of the Registration Statement and any amendment thereto (including
any post-effective amendment or filing under Rule 462(b)), (ii) the receipt of
any comments from the Commission, (iii) any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information, (iv) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose and (v) the issuance by any state
securities commission or other regulatory authority of any order suspending the
qualification or
<PAGE>
13
the exemption from qualification of the Securities under state securities or
blue sky laws or the initiation or threatening of any proceeding for such
purpose. The Offerors will make every reasonable effort to prevent the issuance
of any stop order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) The Offerors will give the Representatives notice of their
intention to file or prepare (i) any amendment to the Registration Statement
(including any post-effective amendment and any filing under Rule 462(b)), (ii)
any Term Sheet or any amendment or supplement to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, or (iii) any document that would as a result thereof be incorporated
by reference in the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Underwriters with copies of any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or other document
within a reasonable amount of time prior to such proposed filing or use, as the
case may be, and will not file any such Rule 462(b) Registration Statement, Term
Sheet, amendment, supplement or other document or use any such prospectus to
which the Representatives or counsel for the Underwriters shall reasonably
object.
(c) The Offerors will deliver to the Representatives and counsel
for the Underwriters, without charge, as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference therein), executed signature pages thereof
and signed copies of all consents and certificates of experts as the
Representatives may reasonably request. If applicable, the copies of the
Registration Statement and each amendment thereto furnished to the Underwriters
will be identical in all material respects to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) The Offerors will deliver to each Underwriter, without charge,
as many copies of each preliminary prospectus as such Underwriter may reasonably
request, and the Company hereby consents to the use of such copies for purposes
permitted by the 1933 Act. The Company will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. If applicable, the
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical in all material respects to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
<PAGE>
14
(e) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in this
Agreement and in the Registration Statement and the Prospectus. If, at any time
when the Prospectus is required by the 1933 Act to be delivered in connection
with offers or sales of the Securities, any event shall occur or condition shall
exist as a result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Offerors, to amend the Registration Statement in order
that the Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend or
supplement the Prospectus in order that the Prospectus will not include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein in light of the circumstances under which they
were made not misleading or if it shall be necessary, in the opinion of either
such counsel, to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Offerors will, subject to paragraph (b) above, promptly
prepare and file with the Commission such amendment or supplement which will
correct such statement or omission or effect such compliance and the Offerors
will furnish to the Underwriters, without charge, such number of copies of such
amendment or supplement as the Underwriters may reasonably request.
(f) The Company will, on behalf of the Trust, timely file such
reports pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings statement
for the purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(g) The Offerors will use their best efforts to effect the listing
of the Preferred Securities (including the Preferred Securities Guarantee) on
the New York Stock Exchange and to cause the Securities to be registered under
the 1934 Act. If the Preferred Securities are exchanged for Subordinated Debt
Securities, the Company will use its best efforts to effect the listing of the
Subordinated Debt Securities on the exchange on which the Preferred Securities
were then listed and to cause the Subordinated Debt Securities to be registered
under the 1934 Act.
(h) Until July __, 1997, neither the Trust nor the Company will,
without the prior written consent of Merrill Lynch, directly or indirectly,
sell, offer to sell, grant any option for the sale of, or otherwise dispose of,
or enter into any agreement to sell, any Preferred Securities, any security
convertible into or exchangeable or exercisable for Preferred Securities or the
Subordinated Debt Securities or any subordinated debt securities substantially
similar to the Subordinated Debt Securities or
<PAGE>
15
equity securities substantially similar to the Preferred Securities.
(i) The Offerors will use the net proceeds received by them from
the sale of the Securities in the manner specified in the Prospectus under "Use
of Proceeds."
(j) If the Offerors elect to rely upon Rule 462(b), the Offerors
shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule
111 of the 1933 Act Regulations by the earlier of (i) 10:00 p.m. New York City
time on the date hereof and (ii) the time confirmations are sent or given, as
specified by Rule 462(b)(2).
(k) The Company, during the period when the Prospectus is required
to be delivered under the 1933 Act, will file all documents required to be filed
with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the
time periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of each Offeror's obligations under this Agreement,
including, without limitation, expenses related to the following, if incurred:
(i) the preparation, delivery, printing and filing of the Registration Statement
and Prospectus as originally filed (including exhibits) and of each amendment
thereto (including any filing under Rule 462(b)), (ii) the preparation, issuance
and delivery of the certificates for the Preferred Securities, (iii) the fees
and disbursements of the Company's and the Trust's counsel and accountants; (iv)
the qualification, as applicable, of the Securities under state securities laws,
including filing fees and the reasonable fees and disbursements of Simpson
Thacher & Bartlett, counsel for the Underwriters, in connection therewith and in
connection with the preparation of any blue sky survey and any legal investment
survey, (v) the printing and delivery to the Underwriters of copies of the
Registration Statement as originally filed and of each amendment thereto
(including any filing under Rule 462(b)), of each preliminary prospectus, any
Term Sheet and of the Prospectus and any amendments or supplements thereto, (vi)
the preparaton and delivery to the Underwriters of copies of any blue sky survey
and any legal investment survey, (vii) the filing fees incident to, and the fees
and disbursements of counsel to the Underwriters in connection with, the review,
if any, by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Preferred Securities, (viii) the fees and expenses
of the Trustees and the Debt Trustee, including the fees and disbursements of
counsel for the Trustees and the Debt Trustee, (ix) any fees payable in
connection with the rating of the Preferred Securities by nationally recognized
statistical rating organizations, (x) the fees and expenses incurred in
connection with the listing of the Preferred Securities and, if applicable,
<PAGE>
16
the Subordinated Debt Securities on the New York Stock Exchange, (xi) the cost
and charges of the Company's counsel, accountants and other advisors or agents
(including the transfer agents and registrars), (xii) the cost of qualifying the
Preferred Securities with the Depository Trust Company, (xiii) any fees payable
to the Commission, and (xiv) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that except as provided
in this Section 4, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the securities by them, and any advertising or marketing expenses in
connection with any offers they may make.
If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 (other than Section 5(h)) or Section
9(a)(i) or the first clause of Section 9(a)(iii) hereof, the Company shall
reimburse the Underwriters for all of their out-of-pocket expenses, including
the reasonable fees and disbursements of Simpson Thacher & Bartlett, counsel for
the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations
of the Underwriters to purchase and pay for the Preferred Securities pursuant to
this Agreement are subject to the accuracy of the representations and warranties
of the Offerors contained herein or in certificates of any officer of the
Company or any subsidiary of the Company or any Trustee delivered pursuant to
the provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b)
Registration Statement, shall have become effective under the 1933 Act no later
than 5:30 P.M., New York City time, on the date hereof, and on the date hereof
and at Closing Time no stop order suspending the effectiveness of the
Registration Statement or any part hereof shall have been issued under the 1933
Act or proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the Underwriters. A
Prospectus containing information relating to the description of the Securities,
the specific method of distribution and similar matters shall have been filed
with the Commission in accordance with Rule 424(b)(1),(2),(3),(4) or (5) as
applicable, or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) At Closing Time the Representatives shall have received:
<PAGE>
17
(1) The signed opinion, dated as of the Closing Time, of Deborah J.
Long, Esq., Senior Vice President, Secretary and General Counsel of the Company,
or any successor having substantially equivalent responsibilities with the
Company, together with signed or reproduced copies of such opinion for each of
the other Underwriters, in form and in substance reasonably satisfactory to
counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus as
amended or supplemented, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, or is
subject to no material liability or disability by reason of the failure to
be so qualified in any such jurisdiction.
(ii) The Company has an authorized capitalization as
set forth in the Prospectus as amended or supplemented, and all of the
issued shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform in all
material respects to the description thereof in the Prospectus as amended
or supplemented; and all of the issued shares of capital stock of
Protective Life Insurance have been duly and validly authorized and issued,
are fully paid and non-assessable and (except for directors' qualifying
shares) are owned directly or indirectly by the Company, free and clear of
any perfected security interests and, to such counsel's best knowledge, any
other security interests, claims, liens or encumbrances.
(iii) Each of the documents incorporated by reference
in the Registration Statement or the Prospectus at the time they were filed
or became effective (other than the financial statements and the notes
thereto, the financial statement schedules, and any other financial or
statistical data included or incorporated by reference therein, as to which
such counsel need express no opinion) complied as to form in all material
respects with the requirements of the 1934 Act and the 1934 Act
Regulations, as applicable; and such counsel has no reason to believe that
any of such documents, when such documents became effective or were so
filed, as the case may be, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
<PAGE>
18
(iv) All of the issued and outstanding Common Securities are
directly owned by the Company free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right.
(v) The execution, delivery and performance of this Agreement,
the Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debt Securities, the Guarantee Agreements, and
the Guarantees and the consummation of the transactions contemplated hereby
and thereby, and the compliance by each of the Offerors with their
respective obligations hereunder and thereunder do not and will not (a)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any contract, indenture,
mortgage, agreement, note, lease or other agreement or instrument known to
such counsel to which any of the Trust, the Company and Protective Life
Insurance is a party or by which any of them may be bound or to which any
of their property or assets is subject, except, in all such cases, for such
conflicts, breaches, violations or defaults as would not reasonably be
expected to have a material adverse effect on the financial condition of
the Trust, the Company and Protective Life Insurance taken as a whole or
would not reasonably be expected to have a material adverse effect on the
issuance or sale of the Securities, or (b) result in any violation of the
provisions of (x) the charter or by-laws of the Company or Protective Life
Insurance or the Certificate of Trust of the Trust or (y) any statute, rule
or regulation known to such counsel of any court or insurance regulatory
authority or other governmental agency or body having jurisdiction over the
Trust, the Company or Protective Life Insurance or any of their respective
properties or assets, except, with respect to clause (y) above, such
violations as would not reasonably be expected to have a material adverse
effect on the financial condition or results of operations of the Company
and Protective Life Insurance taken as a whole or the Trust or would not
affect the validity of or otherwise have a material adverse effect on the
issuance or sale of the Securities; and except that for purposes of this
paragraph (v) such counsel need not express any opinion as to any violation
of any federal or state securities laws or blue sky or insurance securities
laws; provided further that insofar as performance by the Offerors of their
obligations hereunder is concerned, such counsel need not express any
opinion as to the Bankruptcy Exceptions.
(vi) To the best of such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification of or with
any court or insurance regulatory authority or other governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or the
Trust is required for the issue or sale of the Securities being delivered
or the consummation by the
<PAGE>
19
Company or the Trust of the transactions contemplated hereby, except such
as have been, or will have been prior to Closing Time, obtained under the
1933 Act and the 1939 Act and such consents, approvals, orders,
authorizations, registrations or qualifications as may be required under
state securities laws or blue sky laws or insurance securities laws in
connection with the purchase and distribution of the Securities by the
Underwriters, and except those which, if not obtained, would not reasonably
be expected to have a material adverse effect on the financial condition or
results of operation of the Company and its subsidiaries taken as a whole
or the Trust.
(vii) There are no legal or governmental proceedings
pending or, to the best of such counsel's knowledge, threatened, to which
the Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject of a character
required under the Federal securities laws to be disclosed in the
Registration Statement or Prospectus which are not adequately disclosed in
the Registration Statement or Prospectus.
Such counsel shall also have stated that, while she has not herself checked the
accuracy or completeness of or otherwise verified, and is not passing upon and
assumes no responsibility for the accuracy or completeness of, the statements
contained in the Registration Statement or the Prospectus, in the course of her
review and discussion of the contents of the Registration Statement and
Prospectus and any amendment or supplement thereto with certain officers and
employees of the Company and its independent accountants, but without
independent check or verification, no facts have come to her attention that
would cause her to believe that the Registration Statement or the Prospectus, as
amended or supplemented, as of the date hereof and the Closing Time (other than
the financial statements and related notes, the financial statement schedules
and other financial and statistical data included therein and the statements of
eligibility of the respective Trustees on Form T-1 under the 1939 Act, as to
which she need express no belief) contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering the opinion required hereby, (i) such counsel may state that she is
admitted to the Bar of the State of Alabama only and (ii) such counsel may rely
(A) as to any matter of Delaware or Federal law, upon the opinion of Debevoise
& Plimpton delivered in accordance with Section 5(b)(2) and the opinion of
Richards, Layton & Finger, P.A. delivered in accordance with Section 5(b)(3),
(B) as to any matter to which the Representatives consent (which consent shall
not be unreasonably withheld), to the extent specified in such opinion, upon
the opinions (copies
<PAGE>
20
of which shall have been provided to the Representatives) of other counsel in
good standing whom such counsel believes to be reliable, provided that such
counsel shall state that she believes that both she and the Underwriters are
justified in relying on such opinions and (C) as to matters of fact, upon
certificates of officers and representatives of the Company and of public
officials (copies of which shall have been provided to the Underwriters),
provided that such counsel shall state that she believes that both she and
the Underwriters are justified in relying upon such certificates.
(2) The signed opinion, dated as of the Closing Time, of Debevoise &
Plimpton, special counsel to the Offerors, together with signed or reproduced
copies of such opinion for each of the other Underwriters, in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect that:
(i) At the time the Registration Statement became
effective, the Registration Statement (other than the financial statements
and related notes, the financial statement schedules and other financial
and statistical data included or incorporated by reference therein, as to
which no opinion is being expressed) complied as to form in all material
respects with the requirements of the 1933 Act, the 1933 Act Regulations,
the 1939 Act and the 1939 Act Regulations; and the Declaration, the
Indenture, the Guarantee Agreements and the Statements of Eligibility on
Forms T-1 with respect to each of the Institutional Trustee, the Debt
Trustee and the Guarantee Trustee filed with the Commission as part of the
Registration Statement complied as to form in all material respects with
the requirements of the 1939 Act and the 1939 Act Regulations.
(ii) The Registration Statement has become effective under
the 1993 Act; the Prospectus has been filed pursuant to Rule 424 of the
1933 Act Regulations, and no proceedings for a stop order have been
instituted or are pending or, to the knowledge of such counsel, threatened
under Section 8(d) of the 1933 Act; and no further approval of,
authorization, consent, certificate or order of any governmental body,
federal, state or other, is required in connection with the issuance and
sale of the Securities to the Underwriters as provided in the Agreement,
except as may be required by state securities laws.
(iii) The Declaration has been duly authorized,
executed and delivered by the Company and the Trustees and, assuming due
authorization, execution and delivery by the Institutional Trustee and the
Delaware Trustee, is a valid and binding obligation of the Company,
enforceable against the Company and each of the Regular Trustees in
accordance with its terms, except to the extent that enforcement thereof
may be limited by the Bankruptcy Exceptions; and the Declaration has been
duly qualified under the 1939 Act.
<PAGE>
21
(iv) Each of the Offerors meets the requirements for use of
Form S-3 under the 1933 Act Regulations.
(v) The Common Securities, the Preferred Securities, the
Subordinated Debt Securities, each of the Guarantees, the Declaration, the
Indenture and each of the Guarantee Agreements conform in all material
respects to the descriptions thereof contained in the Prospectus.
(vi) The statements in the Prospectus under the captions
"Description of the Preferred Securities", "Description of the Preferred
Securities Guarantee", "Description of the Subordinated Debt Securities"
and "Effect of Obligations under the Subordinated Debt Securities and the
Preferred Securities Guarantee", insofar as such statements constitute
summaries of certain provisions of the documents and laws referred to
therein, has been reviewed by such counsel and fairly summarizes the
material provisions of such documents and laws.
(vii) This Agreement has been duly authorized, executed and
delivered by each of the Trust and the Company.
(viii) Each of the Guarantees and Guarantee Agreements
has been duly authorized, executed and delivered by the Company; the
Preferred Securities Guarantee and the Preferred Securities Guarantee
Agreement, assuming they are duly authorized, executed and delivered by the
Guarantee Trustee, constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; and the Preferred Securities Guarantee Agreement has been duly
qualified under the 1939 Act.
(ix) The Indenture has been duly executed and
delivered by the Company and, assuming due authorization, execution, and
delivery thereof by the Debt Trustee, is a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; and the Indenture has been duly qualified under the
1939 Act.
(x) The Subordinated Debt Securities are in the form
contemplated by the Indenture, have been duly authorized, executed and
delivered by the Company and, when authenticated by the Debt Trustee in the
manner provided for in the Indenture and delivered against payment therefor
as provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions.
<PAGE>
22
(xi) None of the Offerors is, and following
consummation of the transactions contemplated hereby and the application
of the proceeds therefrom in the manner set forth in the Prospectus will
be, an "investment company" or under the "control" of an "investment
company" as such terms are defined.
Debevoise & Plimpton shall also have stated that, while they have not themselves
checked the accuracy or completeness of or otherwise verified, and are not
passing upon and assume no responsibility for the accuracy or completeness of,
the statements contained in the Registration Statement or the Prospectus, except
to the limited extent stated in paragraphs (vii) and (viii) above, in the course
of their review and discussion of the contents of the Registration Statement and
the Prospectus with certain officers and employees of the Company and its
independent accountants, but without independent check or verification, no facts
have come to the attention of such counsel that would cause such counsel to
believe that the Registration Statement or the Prospectus, as amended or
supplemented, as of the date hereof and the Closing Time (other than the
financial statements and related notes, the financial statement schedules, and
other financial and statistical data included or incorporated by reference
therein as to which such counsel need express no belief) contained or contains
an untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
In rendering the foregoing opinion, Debevoise & Plimpton may state that they
express no opinion as to the laws of any jurisdiction other than the Federal
laws of the United States and the laws of the States of New York and Delaware.
In giving such opinion, such counsel may rely, as to matters of Delaware law,
upon the opinion of Richards, Layton & Finger, P.A., special Delaware counsel to
the Offerors, in which case the opinion shall state that such counsel believes
that you and such counsel are entitled to so rely.
(3) The signed opinion, dated as of the Closing Time, of Richards,
Layton & Finger, P.A., special Delaware counsel to the Offerors, together with
signed or reproduced copies of such opinion for each of the other Underwriters,
in form and substance reasonably satisfactory to counsel for the Underwriters,
to the effect that:
(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act and has the
business trust power and authority to conduct its business as described in
the Registration Statement and the Prospectus.
<PAGE>
23
(ii) Assuming that the Declaration has been duly authorized,
executed and delivered by the Company and the Trustees, the Declaration
constitutes a valid and binding obligation of the Trustees and the Company
and is enforceable against the Trustees and the Company in accordance with
its terms, except that to the extent that enforceability thereof may be
limited by the Bankruptcy Exceptions.
(iii) Under the Delaware Act and the Declaration, the Trust has
the power to (i) execute and deliver, and to perform its obligations under,
this Agreement and (ii) issue, and perform its obligations under, the
Common Securities and the Preferred Securities.
(iv) The execution and delivery by the Trust of this Agreement,
and the performance by the Trust of its obligations hereunder, have been
duly authorized by all necessary action on the part of the Trust.
(v) The Preferred Securities have been duly authorized by the
Declaration and, when executed by the Trust and the Institutional Trustee
in accordance with the Declaration and delivered against payment therefor
in accordance with the terms of this Agreement, will be validly issued and,
subject to the qualifications hereinafter expressed in this paragraph (v),
fully paid and nonassessable undivided beneficial interests in the assets
of the Trust; the holders of the Preferred Securities, as beneficial owners
of the Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware; said counsel may note
that the holders of the Preferred Securities may be obligated to make
payments as set forth in the Declaration.
(vi) The Common Securities have been duly authorized by the
Declaration and, when issued, executed and authenticated in accordance with
the terms of the Declaration, and delivered and paid for as set forth in
the Registration Statement, will be validly issued, undivided beneficial
interests in the assets of the Trust.
(vii) Under the Delaware Act and the Declaration, the issuance
of neither the Common Securities nor the Preferred Securities is subject to
preemptive or other similar rights.
(viii) The issuance and sale by the Trust of the Preferred
Securities and Common Securities, the execution, delivery and performance
by the Trust of this Agreement, the consummation of the transactions
contemplated hereby and the compliance by the Trust with its obligations
hereunder will not violate any of the provisions of the Certificate of
<PAGE>
24
Trust or Declaration or any applicable Delaware law or administrative
regulation.
(xi) None of the execution and delivery by the Trust of, or the
performance by the Trust of its obligations under, this Agreement, the
issuance and sale of the Preferred Securities by the Trust in accordance
with the terms of this Agreement and the consummation of the other
transactions contemplated hereby, will contravene any provisions of
applicable Delaware law or administrative regulations or the Certificate of
Trust or the Declaration.
(4) The signed opinion, dated as of the Closing Time, of Richards,
Layton & Finger, P.A., counsel to Wilmington Trust Company, as Institutional
Trustee under the Declaration and Guarantee Trustee under the Preferred
Securities Guarantee Agreements, together with signed or reproduced copies of
such opinion for each of the other Underwriters, in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect that:
(i) Wilmington Trust Company is a Delaware banking corporation
with trust powers, duly organized, validly existing and in good standing
under the laws of the State of Delaware with all necessary power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of the Declaration and the Preferred Securities
Guarantee Agreement.
(ii) The execution, delivery and performance by the
Institutional Trustee of the Declaration and the execution, delivery and
performance by the Guarantee Trustee of the Preferred Securities Guarantee
Agreement have been duly authorized by all necessary corporate action on
the part of the Institutional Trustee and the Guarantee Trustee,
respectively. The Declaration and the Preferred Securities Guarantee
Agreement have been duly executed and delivered by the Institutional
Trustee and the Guarantee Trustee, respectively.
(iii) The execution, delivery and performance of the Declaration
and the Preferred Securities Guarantee Agreement by the Institutional
Trustee and the Guarantee Trustee, respectively, do not conflict with or
constitute a breach of the Articles of Organization or Bylaws of the
Institutional Trustee and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is required
for the execution, delivery or performance by the Institutional Trustee of
the Declaration and the Preferred Securities Guarantee Agreement.
<PAGE>
25
(5) The signed opinion of Debevoise & Plimpton, special tax counsel to
the Offerors, together with signed or reproduced copies of such opinion for each
of the other Underwriters, generally to the effect that (i) the Trust will be
classified as a grantor trust and not as an association taxable as a corporation
for federal income tax purposes and (ii) the statements set forth in the
Prospectus relating to the issuance of the Preferred Securities under the
caption "Certain Federal Income Tax Considerations", to the extent that such
statements relate to matters of law or legal conclusion, constitute the opinion
of Debevoise & Plimpton, in each case based upon current law and the assumptions
stated or referred to therein. Such opinion may be conditioned on, among other
things, the initial and continuing accuracy of the facts, financial and other
information, covenants and representations set forth in certificates of officers
of the Company and the Trust and other documents deemed necessary for such
opinion.
(6) The signed opinion, dated as of the Closing Time, of Simpson
Thacher & Bartlett, counsel for the Underwriters, together with signed or
reproduced copies of such opinion for each of the other Underwriters, in form
and substance reasonably satisfactory to the Underwriters, with respect to the
incorporation and legal existence of the Company, the Preferred Securities, the
Indenture, the Preferred Securities Guarantee Agreement, this Agreement, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require. In giving their opinion, Simpson Thacher & Bartlett
may rely as to certain matters of Delaware law upon the opinion of Richards,
Layton & Finger, P.A., Delaware counsel for the Offerors, which shall be
delivered in accordance with Section 5(b)(3) hereof.
(c) Between the date of this Agreement and the Closing Time,
no material adverse change shall have occurred in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Trust or the Company and its subsidiaries considered as one enterprise, whether
or not in the ordinary course of business.
(d) At the Closing Time, the Representatives shall have
received a certificate of the President or a Vice-President of the Company and
of the Chief Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, each dated as of the Closing
Time, to the effect that (i) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Trust or the Company and its subsidiaries considered
as one enterprise, whether or not in the ordinary course of business, (ii) the
representations and warranties in Section 1 hereof are true and correct as
though expressly made at and as of the Closing Time, (iii) each of the Trust and
the Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied
<PAGE>
26
at or prior to the Closing Time, and (iv) no
stop order suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been initiated or threatened by
the Commission.
(e) The Representatives shall have received letters from the
Company's independent public accountants (dated the date of this Agreement and
the Closing Time, respectively, and in form and substance reasonably
satisfactory to the Representatives) advising that (i) they are independent
certified public accountants with respect to the Company within the meaning of
the 1933 Act and 1933 Act Regulations; (ii) in their opinion, the consolidated
financial statements and financial statement schedules of the Company audited by
them and incorporated by reference in the Registration Statement comply as to
form in all material respects with the applicable accounting requirements of the
1933 Act, the 1934 Act, the 1933 Act Regulations and the 1934 Act Regulations;
(iii) they have not audited any financial statements of the Company as of any
date or for any period subsequent to December 31, 1996, but they have conducted
an audit for the year ended December 31, 1996, the purpose (and therefore the
scope) of which was to enable them to express their opinion on the consolidated
financial statements as of December 31, 1996, and for the year then ended, but
not on the consolidated financial statements for any interim period within that
year or on the financial position, results of operations or cash flows as of any
date or for any period subsequent to December 31, 1996; (iv) for purposes of
such letters, they have read the 1997 minutes of the meetings of the
Stockholders, the Board of Directors, the Audit Committee and the Executive
Committee of the Company and its subsidiaries as set forth in the minute books
at April __, 1997, officials of the Company having advised them that the minutes
for all such meetings through that date were set forth therein, provided that
with respect to the period from January 1, 1997 through April __, 1997 they have
been advised by officials of the Company that no financial statements as of any
date or for any period subsequent to December 31, 1996 were available; (v) as
mentioned in the foregoing clause (iv), Company officials have advised them that
no consolidated financial statements as of any date or for any period subsequent
to December 31, 1996 are available and, accordingly, the procedures carried out
by them with respect to financial statement items after December 31, 1996 have
been, of necessity, limited, provided that they have made inquiries of certain
officials of the Company who have responsibility for financial and accounting
matters as to whether (A) at April __, 1997, there was any change in the common
stock, any increase in short-term or long-term debt, or any decreases in
consolidated net assets or stockholders' equity (other than the effect on
stockholders' equity of unrealized gains and losses on investments or dividends
in the interim period) as compared with the amounts shown on the December 31,
1996 audited consolidated balance sheet incorporated by reference in the
Registration Statement or (B) for the period from January 1, 1997 to April __,
1997, there were any decreases
<PAGE>
27
as compared with the corresponding period in the preceding year, in consolidated
operating revenues or in the total or per-share amounts of income before
extraordinary items, or net of income, and on the basis of these inquiries and
their reading of the minutes as described in the foregoing clause (iv), nothing
came to their attention that caused them to believe that there was any such
change, increase, or decrease, except in all instances for changes, increases,
or decreases that the Registration Statement discloses have occurred or may
occur; (vi) for purposes of such letters, they have also read the items on
specified excerpts from the Registration Statement and documents incorporated by
reference therein and have performed the procedures specified in such letters.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents, certificates and opinions as they may reasonably
request for the purpose of enabling them to pass upon the issuance and sale of
the Securities as herein contemplated or in order to evidence the accuracy of
any of the representations or warranties or statements of either of the
Offerors, the performance of the covenants of the Offerors, or the fulfillment
of any of the conditions herein contained.
(g) At Closing Time, the Preferred Securities shall be rated in
one of the four highest rating categories for long term debt ("Investment
Grade") by any nationally recognized statistical rating agency, and the Trust
shall have delivered to the Representatives a letter, dated the Closing Time,
from such nationally recognized statistical rating agency, or other evidence
satisfactory to the Representatives, confirming that the Preferred Securities
have Investment Grade ratings; and there shall not have occurred any decrease in
the ratings of any securities of the Company or of the Preferred Securities by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the 1933 Act Regulations) and such organization
shall not have publicly announced that it has under surveillance or review its
rating of any of the securities of the Company or of the Preferred Securities.
(h) The NASD shall not have raised any objection with respect to
the fairness and reasonableness of the underwriting terms and arrangements.
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriters by notice to the Company, at any time at or prior
to Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 hereof, and except that Sections
1, 6, 7 and 8 hereof shall survive any such termination and will remain in full
force and effect.
<PAGE>
28
SECTION 6. INDEMNIFICATION.
(a) The Offerors jointly and severally agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all losses, claims, expenses, damages and
liabilities whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information deemed to be a part thereof, if applicable, or
the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all losses, claims, expenses, damages and
liabilities whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; PROVIDED that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Offerors; and
(iii) against any and all expense whatsoever (including the fees
and disbursements of counsel chosen by Merrill Lynch), as incurred, which
expenses are reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not apply to any
loss, claim, expense, damage or liability (x) to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in the
Prospectus in reliance upon and in conformity with information furnished in
writing to the Offerors by any Underwriter through Merrill Lynch specifically
for inclusion and actually included therein and (y) with respect to any
preliminary prospectus to the extent that any
<PAGE>
29
such loss, claim, expense, damage or liability of such Underwriter results from
the fact that such Underwriter sold Preferred Securities to a person as to whom
it shall be established by the Company that there was not sent or given, at or
prior to the written confirmation of such sale, a copy of the Prospectus (as
then amended or supplemented) in any case where such delivery is required by the
1933 Act, if such Underwriter failed to make reasonable efforts generally
consistent with the then prevailing industry practice to effect such delivery
and the Company has previously furnished copies thereof in sufficient quantities
to such Underwriter and the loss, claim, expense, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in the preliminary prospectus that was corrected in the Prospectus.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company, the Trust, the Trustees and each of the
Company's directors, each of the Company's officers who signed the Registration
Statement and each person, if any, who controls the Company or the Trust within
the meaning of Section 15 of the 1933 Act, to the same extent as the foregoing
indemnity from the Offerors to each Underwriter, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Prospectus in reliance upon and in conformity with information furnished in
writing to the Offerors by such Underwriter through Merrill Lynch specifically
for inclusion and actually included therein.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve it from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability that it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to paragraph 7(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
paragraph 7(b) above, counsel to the indemnified parties shall be selected by
the Offerors. An indemnifying party may participate at its own expense in the
defense of such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnifying party) also be
counsel to the indemnified party. In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any
<PAGE>
30
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (x) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (y) provides written notice to the indemnified
party substantiating the unpaid balance as unreasonable, in each case prior to
the date of such settlement.
SECTION 7. CONTRIBUTION.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Offerors on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses,
<PAGE>
31
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Offerors
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Offerors on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
<PAGE>
32
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company and each Trustee of
the Trust who signed the Registration Statement, and each person, if any, who
controls the Company and the Trust within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Offerors. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Preferred Securities
set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. The representations, warranties, indemnities, agreements and other
statements of the Trust, the Company or its officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Trust, the Company, any Underwriter or any controlling person thereof, and will
survive delivery of and payment for the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by
notice to the Company and the Trust, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Prospectus, any
material adverse change in the condition (financial or otherwise), earnings,
business affairs or business prospects of the Company and its subsidiaries,
considered as one enterprise, whether or not arising in the ordinary course of
business, (ii) if there has occurred any material adverse change in the
financial markets in the United States or internationally or any outbreak of
hostilities or escalation of existing hostilities or other calamity or crisis or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Representatives,
impracticable to market the Securities, or enforce contracts for the sale of the
Securities, (iii) if trading in any securities of the Company has been suspended
or materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the New York Stock Exchange, the American Stock Exchange or
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices for
securities have been required, by any of such exchanges or by such system or by
order of the Commission, the NASD or any other governmental authority or (iv) if
a banking moratorium has been
<PAGE>
33
declared by either Federal, Alabama, Delaware or New York State authorities.
This Agreement may also terminate pursuant to the provisions
of Section 5, with the effect stated in such Section.
(b) If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and except that Sections 1, 6, 7 and 8
shall survive any such termination and will remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one
or more of the Underwriters shall fail at Closing Time to purchase the Preferred
Securities that it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representatives shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other Underwriter, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then the Company and the
Trust shall have the right, within 24 hours after the expiration of such
previous 24-hour period, to procure another party or other parties satisfactory
to the Representatives to purchase the Defaulted Securities in such amounts as
may be agreed upon and upon the terms herein set forth; if, however, the Company
and the Trust shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the Preferred Securities, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
Preferred Securities, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representatives or the Offerors shall
have the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements.
<PAGE>
34
SECTION 11. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given, upon
receipt, if delivered, mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to the
Representatives at Merrill Lynch World Headquarters, North Tower, World
Financial Center, New York, New York 10281-1201 (telecopier no.: (212)
449-2993), attention of Mr. Anthony Ursano, with a copy to Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, New York 10017 (telecopier no.: (212)
455-2502), attention of Peter J. Gordon, Esq.; and notices to the Trust and the
Company shall be directed to them at Protective Life Corporation, 2801 Highway
280 South, Birmingham, Alabama 35223 (telecopier no.: (205) 868-3597), attention
of Secretary, with a copy to Debevoise & Plimpton, 875 Third Avenue, New York,
New York 10022 (telecopier no.: (212) 909-6836), attention of Michael Blair,
Esq.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Underwriters and the Offerors and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Offerors and their respective successors and the
controlling persons and officers, directors and trustees referred to in Section
6 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Offerors
and their respective successors, and said controlling persons and officers,
directors and trustees and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without giving effect to the provisions thereof relating to conflicts of law.
Specified times of day refer to New York City time.
SECTION 14. COUNTERPARTS. This Agreement may be executed by any
one or more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.
<PAGE>
35
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Trust a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Trust and the Company in accordance
with its terms.
Very truly yours,
PROTECTIVE LIFE CORPORATION
By:_________________________
Name:
Title:
PLC CAPITAL TRUST I
By:_________________________
Name:
Title: Regular Trustee
<PAGE>
36
CONFIRMED AND ACCEPTED, as of the date first above written.
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
OPPENHEIMER & CO., INC.
By: Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By:_____________________________________
Name:
Authorized Signatory
For themselves and as Representatives of the other
Underwriters named in Schedule A hereto.
<PAGE>
SCHEDULE A
NUMBER OF
PREFERRED
NAME OF UNDERWRITER SECURITIES
------------------- ----------
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO.
OPPENHEIMER & CO., INC.
<PAGE>
Exhibit 4(c)
================================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
PLC CAPITAL TRUST I
Dated as of April __, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I.
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions............................................. 2
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application........................ 8
SECTION 2.2. Lists of Holders of Securities.......................... 9
SECTION 2.3. Reports by the Institutional Trustee.................... 9
SECTION 2.4. Periodic Reports to Institutional Trustee............... 9
SECTION 2.5. Evidence of Compliance with Conditions Precedent........ 9
SECTION 2.6. Events of Default; Waiver............................... 10
SECTION 2.7. Event of Default; Notice................................ 11
ARTICLE III.
ORGANIZATION
SECTION 3.1. Name.................................................... 12
SECTION 3.2. Office.................................................. 12
SECTION 3.3. Purpose................................................. 12
SECTION 3.4. Authority............................................... 13
SECTION 3.5. Title to Property of the Trust.......................... 13
SECTION 3.6. Powers and Duties of the Regular Trustees............... 13
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.... 16
SECTION 3.8. Powers and Duties of the Institutional Trustee.......... 17
SECTION 3.9. Certain Duties and Responsibilities of the
Institutional Trustee ................................. 19
SECTION 3.10. Certain Rights of Institutional Trustee................ 21
SECTION 3.11. Delaware Trustee....................................... 23
SECTION 3.12. Execution of Documents................................. 23
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities. 24
i
<PAGE>
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SECTION 3.14. Duration of Trust...................................... 24
SECTION 3.15. Mergers................................................ 24
ARTICLE IV.
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities................. 26
SECTION 4.2. Responsibilities of the Sponsor......................... 26
ARTICLE V.
TRUSTEES
SECTION 5.1. Number of Trustees...................................... 27
SECTION 5.2. Delaware Trustee........................................ 27
SECTION 5.3. Institutional Trustee; Eligibility...................... 28
SECTION 5.4. Certain Qualifications of Regular Trustees and
Delaware Trustee Generally............................. 29
SECTION 5.5. Regular Trustees........................................ 29
SECTION 5.6. Appointment, Removal and Resignation of Trustees........ 30
SECTION 5.7. Vacancies among Trustees................................ 31
SECTION 5.8. Effect of Vacancies..................................... 31
SECTION 5.9. Meetings................................................ 32
SECTION 5.10. Delegation of Power.................................... 32
SECTION 5.11. Merger, Conversion, Consolidation or Succession
to Business .......................................... 32
ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. Distributions........................................... 33
ARTICLE VII.
ISSUANCE OF SECURITIES
ii
<PAGE>
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SECTION 7.1. General Provisions Regarding Securities................. 33
SECTION 7.2. Paying Agent............................................ 34
ARTICLE VIII.
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust.................................... 35
ARTICLE IX.
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities.................................. 36
SECTION 9.2. Transfer of Certificates................................ 36
SECTION 9.3. Deemed Security Holders................................. 36
SECTION 9.4. Book Entry Interests.................................... 37
SECTION 9.5. Notices to Clearing Agency.............................. 37
SECTION 9.6. Appointment of Successor Clearing Agency................ 38
SECTION 9.7. Definitive Preferred Security Certificates.............. 38
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates....... 39
ARTICLE X.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. Liability.............................................. 39
SECTION 10.2. Exculpation............................................ 40
SECTION 10.3. Fiduciary Duty......................................... 40
SECTION 10.4. Indemnification........................................ 41
SECTION 10.5. Outside Businesses..................................... 44
ARTICLE XI.
ACCOUNTING
iii
<PAGE>
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SECTION 11.1. Fiscal Year............................................ 45
SECTION 11.2. Certain Accounting Matters............................. 45
SECTION 11.3. Banking................................................ 45
SECTION 11.4. Withholding............................................ 45
ARTICLE XII.
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments............................................. 46
SECTION 12.2. Meetings of the Holders of Securities; Action
by Written Consent.................................... 48
ARTICLE XIII.
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional
Trustee .............................................. 49
SECTION 13.2. Representations and Warranties of Delaware Trustee..... 50
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. Notices................................................ 51
SECTION 14.2. Governing Law.......................................... 52
SECTION 14.3. Intention of the Parties............................... 52
SECTION 14.4. Headings............................................... 52
SECTION 14.5. Successors and Assigns................................. 53
SECTION 14.6. Partial Enforceability................................. 53
SECTION 14.7. Counterparts........................................... 53
ANNEX I TERMS OF SECURITIES
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE
iv
<PAGE>
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EXHIBIT B SPECIMEN OF DEBENTURE
EXHIBIT C PURCHASE AGREEMENT
v
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310 (a)..................................................... 5.3(a)
310 (c)..................................................... Inapplicable
311 (c)..................................................... Inapplicable
312 (a)..................................................... 2.2(a)
312 (b)..................................................... 2.2(b)
313......................................................... 2.3
314 (a)..................................................... 2.4
314 (b)..................................................... Inapplicable
314 (c)..................................................... 2.5
314 (d)..................................................... Inapplicable
314 (f)..................................................... Inapplicable
315 (a)..................................................... 3.9(b)
315 (c)..................................................... 3.9(a)
315 (d)..................................................... 3.9(a)
316 (a)..................................................... Annex I
316 (c)..................................................... 3.6(e)
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
PLC CAPITAL TRUST I
[________ __, 1997]
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated
and effective as of [________ __, 1997], by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to this Declaration;
WHEREAS, the Trustees and the Sponsor established PLC Capital Trust
I (the "Trust"), a trust under the Delaware Business Trust Act, pursuant to a
Declaration of Trust dated as of [________ __, 1997] (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on ________ __, 1997, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, prior to the execution hereof, no interests in the Trust
have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I.
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions. Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration
or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a day on which banking
institutions in New York, New York are authorized or required by law to close.
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"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Certificate" means a Common Security Certificate or a Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the "Closing Time" under the Purchase
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement, dated
as of [________ __, 1997], of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in
fully registered form, substantially in the form of Exhibit A-2, representing a
Common Security.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration located at
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Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Protective Life Corporation, a Delaware
corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means AmSouth Bank, N.A., as trustee under the
Indenture until a successor is appointed thereunder, and thereafter such
successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture and to be held by the Institutional
Trustee, a specimen certificate for such series of Debentures being
substantially in the form of Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Preferred Security Certificates" has the meaning set
forth in Section 9.4.
"Direction" by a Person means a written direction signed:
(a) if the Person is a natural person, by that Person; or
(b) in any other case, in the name of such Person by one or more
Authorized Officers of such Person.
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in respect
of the Debentures.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Subordinated Indenture dated as of June 1,
1994, from the Debenture Issuer to the Debenture Trustee, and any Subordinated
Indenture supplemental thereto pursuant to which the Debentures are to be issued
(including, without limitation, the Supplemental Indenture No. 3, dated as of
April __, 1997 between the Debenture Issuer and the Debenture Trustee).
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
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"Ministerial Action" has the meaning set forth in Annex I.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person; provided that any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Declaration shall include:
(a) a statement that each officer signing such certificate has read
the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering such certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 7.2.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities Guarantee" means the guarantee agreement,
dated as of [________ __, 1997], of the Sponsor in respect of the Preferred
Securities.
"Preferred Security" has the meaning specified in Section 7.1.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
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"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A- 1.
"Purchase Agreement" means the Purchase Agreement for the offering
and sale of Preferred Securities in the form of Exhibit C.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Redemption Tax Opinion" has the meaning set forth in Annex I
hereto.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Protective Life Corporation, a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6 (a) (ii).
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<PAGE>
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application. (a) This Declaration
is subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration and shall, to the extent applicable, be governed by
such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Section 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
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(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2. Lists of Holders of Securities. (a) The Sponsor and the
Regular Trustees on behalf of the Trust shall provide the Institutional Trustee
(i) within 14 days after each record date for payment of Distributions, a list,
in such form as the Institutional Trustee may reasonably require, of the names
and addresses of the Holders of the Securities ("List of Holders") as of such
record date, provided that neither the Sponsor nor the Regular Trustees, on
behalf of the Trust, shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of Holders
given to the Institutional Trustee by the Sponsor and the Regular Trustees on
behalf of the Trust, and (ii) at any other time, within 30 days of receipt by
the Trust of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Institutional Trustee. The
Institutional Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it or which
it receives in the capacity as Paying Agent (if acting in such capacity);
provided that the Institutional Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Institutional Trustee. Within 60 days
after May 15 of each year, the Institutional Trustee shall provide to the
Holders of the Preferred Securities such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Institutional Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Institutional Trustee. Each of the
Sponsor and the Regular Trustees, on behalf of the Trust, shall provide to the
Institutional Trustee and the Holders such documents, reports and information as
required by Section 314 (if any) of the Trust Indenture Act and the compliance
certificate required by such Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required thereby.
SECTION 2.5. Evidence of Compliance with Conditions Precedent. Each
of the Sponsor and the Regular Trustees, on behalf of the Trust, shall provide
to the Institutional Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
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SECTION 2.6. Events of Default; Waiver. (a) The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on behalf
of the Holders of all of the Preferred Securities, waive any past Event of
Default in respect of the Preferred Securities and its consequences, provided
that, if the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion
in liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of
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Default under the Declaration as provided below in this Section 2.6(b),
the Event of Default under the Declaration may only be waived by the vote
of the Holders of at least the proportion in liquidation amount of the
Common Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Preferred Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Institutional Trustee will be deemed with respect to the Preferred
Securities to be acting solely on behalf of the Holders of the Preferred
Securities and only the Holders of the Preferred Securities will have the right
to direct the Institutional Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Institutional Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Event of Default with
respect to the Preferred Securities under this Declaration. Any waiver of an
Event of Default under the Indenture by the Institutional Trustee at the
direction of the Holders of the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of the corresponding
Event of Default under this Declaration with respect to the Common Securities
for all purposes of this Declaration without further act, vote or consent of the
Holders of the Common Securities. The foregoing provisions of this Section
2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.
SECTION 2.7. Event of Default; Notice. (a) The Institutional Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders of the Securities, notices of
all defaults with respect to the Securities actually known to a Responsible
Officer of the Institutional Trustee, unless such defaults have been cured
before the giving of such notice (the term "defaults" for the purposes of this
Section 2.7 being hereby defined to be an Event of Default as defined in the
Indenture,
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not including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except with respect to a
default in the payment of principal of (or premium, if any) or interest on any
of the Debentures or in the payment of any sinking fund installment established
for the Debentures, the Institutional Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Institutional Trustee
in good faith determines that the withholding of such notice is in the interests
of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.1 or 5.3 of the Indenture; or
(ii) any default as to which the Institutional Trustee shall have
received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III.
ORGANIZATION
SECTION 3.1. Name. The Trust is named "PLC Capital Trust I," as such
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities and the filing of a certificate of amendment
under the Business Trust Act. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2. Office. The address of the principal office of the
Trust is 2801 Highway 280 South, Birmingham, Alabama 35223. On ten Business
Days' written notice to the Holders of Securities, the Regular Trustees may
designate another principal office.
SECTION 3.3. Purpose. The exclusive purposes and functions of the
Trust are (i) issuing the Preferred Securities and the Common Securities
representing undivided beneficial interests in the assets of the Trust, (ii)
investing the gross proceeds of the Securities in the Debentures and (iii)
engaging in only those other activities necessary or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.
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The Trustees, the Sponsor and the Holders of the Preferred
Securities and Common Securities (by their acceptance of such Securities) agree
not to take any position for United States federal income tax purposes which is
contrary to the classification of the Trust as a grantor trust.
SECTION 3.4. Authority. Subject to the limitations provided in this
Declaration and to the specific duties of the Institutional Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Regular Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust and an action
taken by the Institutional Trustee on behalf of the Trust in accordance with its
powers shall constitute the act of and serve to bind the Trust. In dealing with
the Trustees acting on behalf of the Trust, no person shall be required to
inquire into the authority of the Trustees to bind the Trust. Persons dealing
with the Trust are entitled to rely conclusively on the power and authority of
the Trustees as set forth in this Declaration.
SECTION 3.5. Title to Property of the Trust. Except as provided in
Sec tion 3.8 with respect to the Debentures and the Institutional Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
SECTION 3.6. Powers and Duties of the Regular Trustees. The Regular
Trustees shall have the exclusive power, duty and authority to cause the Trust
to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities and no
more than one series of Common Securities, and, provided further, that
there shall be no interests in the Trust other than the Securities, and
the issuance of Securities shall be limited to a simultaneous issuance of
both Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Preferred Securities;
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(ii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary or
advisable in order to qualify or register all or part of the
Preferred Securities in any State in which the Sponsor has
determined to qualify or register such Preferred Securities for
sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Preferred Securities pursuant
to Section 3.8;
(iv) execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by
the Sponsor, relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act; and
(v) execute and enter into the Purchase Agreement providing
for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Preferred Securities and the Holders of Common Securities
pursuant to Section 3.8;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Tax Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee
before taking or refraining from taking any Ministerial Action in relation
to a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including
and with respect to, for the purposes of Section 316(c) of the Trust
Indenture Act, Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of Preferred Securities and
Holders of Common Securities as to such actions and applicable record
dates;
(f) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Securities;
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(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary, appropriate, convenient or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created;
(o) to take any action, not inconsistent with this Declaration or
with applicable law, that the Regular Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of
the Trust as set out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
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(ii) causing the Trust to continue to be classified for United
States federal income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer
for United States federal income tax purposes,
provided that such action does not adversely affect the interests of the
Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust; and
(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional Trustee)
shall not, engage in any activity other than as required or authorized by this
Declaration. In particular, the Trust shall not and the Trustees (including the
Institutional Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
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(iii) possess Trust property for other than a Trust purpose as set
forth in Section 3.3;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Declaration (including, without
limitation, Annex I), (A) direct the time, method and place of exercising
any trust or power conferred upon the Debenture Trustee with respect to
the Debentures, (B) waive any past default under the Indenture, (C)
exercise any right to rescind or annul any declaration that the principal
of all the Debentures shall be due and payable, or (D) consent to any
amendment, modification or termination of the Indenture or the Debentures
where such consent shall be required unless the Trust shall have received
an opinion of nationally recognized tax counsel to the effect that such
modification will not cause more than an insubstantial risk that for
United States federal income tax purposes the Trust will be classified as
other than a grantor trust as a result of such action.
SECTION 3.8. Powers and Duties of the Institutional Trustee. (a) The
legal title to the Debentures shall be owned by and held of record in the name
of the Institutional Trustee in trust for the benefit of the Holders of the
Securities. The right, title and interest of the Institutional Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.6. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of
and under the exclusive
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control of the Institutional Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Institutional Trustee, deposit
such funds into the Institutional Trustee Account and make payments
to the Holders of the Preferred Securities and Holders of the Common
Securities from the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee Account shall be
held uninvested until disbursed in accordance with this Declaration.
The Institutional Trustee Account shall be an account that is
maintained with a banking institution the rating on whose long-term
unsecured indebtedness is at least equal to the rating assigned to
the Preferred Securities by a "nationally recognized statistical
rating organization," as that term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities pursuant to this Declaration
(including, without limitation, Annex I) to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders
of Securities upon the occurrence of certain special events (as may
be defined in the terms of the Securities) arising from a change in
law or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform
such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant
to the terms of the Securities; or
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(ii) a Successor Institutional Trustee (as defined in Section
5.6) has been appointed and has accepted that appointment in
accordance with Section 5.6.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) Subject to this Section 3.8, the Institutional Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9. Certain Duties and Responsibilities of the
Institutional Trustee. (a) The Institutional Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional Trustee
shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not be liable except
for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied
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covenants or obligations shall be read into this Declaration against
the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Institutional Trustee,
the Institutional Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Institutional
Trustee, unless it shall be proved that the Institutional Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration and
the Trust Indenture Act;
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(vi) the Institutional Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Institutional Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Institutional Trustee need not be segregated
from other funds held by it except in relation to the Institutional
Trustee Account maintained by the Institutional Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10. Certain Rights of Institutional Trustee. (a) Subject
to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by a
Direction or an Officers' Certificate;
(iii) whenever, in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
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(v) the Institutional Trustee may consult with counsel or other
experts and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area of
expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, it being understood
that such counsel may be counsel to the Sponsor or any of its Affiliates,
and may include any of its employees. The Institutional Trustee shall have
the right at any time to seek instructions concerning the administration
of this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the
Institutional Trustee provided, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Institutional Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Institutional
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Institutional Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its compliance with any of the terms and
provisions of this
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Declaration, both of which shall be conclusively evidenced by the
Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Institutional Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the Institutional Trustee under the terms of
the Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions;
and
(xi) except as otherwise expressly provided by this Declaration, the
Institutional Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11. Delaware Trustee. Notwithstanding any other provision
of this Declaration other than Section 5.2, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Regular Trustees or the Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act.
SECTION 3.12. Execution of Documents. Unless otherwise determined by
the Regular Trustees, and except as otherwise required by the Business Trust
Act, any Regular Trustee is authorized to execute on behalf of the Trust any
documents that the Regular Trustees have the power and authority to execute
pursuant to Section 3.6; provided that, the registration statement referred to
in Section 3.6(b)(i), including any amendments thereto, shall be signed by all
of the Regular Trustees.
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SECTION 3.13. Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust. The Trust, unless terminated
earlier pursuant to the provisions of Article VIII hereof, shall have existence
for fifty-five (55) years from the issuance of the Debentures.
SECTION 3.15. Mergers. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except as described in Sections 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees (or, if
there are more than two, a majority of the Regular Trustees) and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided
that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust
under the Securities; or
(B) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the
same as the Preferred Securities rank with respect to Distributions
and payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national
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securities exchange or with another organization on which the Preferred
Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders'
interests in the Preferred Securities as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters to
the effect that:
(A) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities)
in any material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by
the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation,
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amalgamation, merger or replacement would cause the Trust or Successor Entity to
be classified as other than a grantor trust for United States federal income tax
purposes.
ARTICLE IV.
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities. On the Closing
Date at the same time as the Preferred Securities are sold, the Sponsor will
purchase all of the Common Securities issued by the Trust, in an amount at least
equal to 3% of the aggregate capital of the Trust after giving effect to such
sale of Preferred Securities.
SECTION 4.2. Responsibilities of the Sponsor. In connection with the
issue and sale of the Preferred Securities, the Sponsor shall have the exclusive
right and responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the
Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including
any amendments thereto; and
(e) to negotiate the terms of the Purchase Agreement providing for
the sale of the Preferred Securities.
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ARTICLE V.
TRUSTEES
SECTION 5.1. Number of Trustees. The number of Trustees initially
shall be three (3), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting
of the Holders of the Common Securities; provided, however, that the
number of Trustees shall in no event be less than two (2); provided
further that (1) one Trustee meets the requirements of Sections 5.2(a) or
(b); (2) there shall be at least one Trustee who is an employee or officer
of, or is affiliated with, the Sponsor (a "Regular Trustee"); and (3) one
Trustee shall be the Institutional Trustee for so long as this Declaration
is required to qualify as an indenture under the Trust Indenture Act, and
such Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2. Delaware Trustee. If required by the Business Trust
Act, one Trustee (the "Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Institutional Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Institutional Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
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(c) The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
SECTION 5.3. Institutional Trustee; Eligibility. (a) There shall at
all times be one Trustee which shall act as Institutional Trustee and which
shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.3(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common Securities
(as if it were the obligor referred to in Section 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
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(e) The initial Institutional Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
SECTION 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally. Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5. Regular Trustees. The initial Regular Trustees shall
be:
Richard J. Bielen
c/o Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
Jerry W. DeFoor
c/o Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
(a) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(b) As more specifically provided in Section 5.10, a Regular Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purposes of signing
any documents which the Regular Trustees have power and authority to cause the
Trust to execute pursuant to Section 3.6.
SECTION 5.6. Appointment, Removal and Resignation of Trustees. (a)
subject to Section 5.6(b), Trustees may be appointed or removed without cause at
any time:
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(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of
a Majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.6(a) until a Successor Institutional
Trustee (a "Successor Institutional Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with this Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by such Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of
the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such
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appointment by instrument executed by such Successor Delaware Trustee and
delivered to the Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor
Institutional Trustee, as the case may be, if the Institutional Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery to the Sponsor and the Trust of an
instrument of resignation, the resigning Institutional Trustee or Delaware
Trustee, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7. Vacancies among Trustees. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
a vacancy shall occur. A resolution certifying the existence of such vacancy by
the Regular Trustees (or, if there are more than two, a majority of the Regular
Trustees) shall be conclusive evidence of the existence of such vacancy. Any
such vacancy shall be filled with a Trustee appointed in accordance with Section
5.6.
SECTION 5.8. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Regular Trustees shall occur, until
such vacancy is filled by the appointment of a Regular Trustee in accordance
with Section 5.6, the Regular Trustees in office, regardless of their number,
shall have all the powers granted to the Regular Trustees and shall discharge
all the duties imposed upon the Regular Trustees by this Declaration.
SECTION 5.9. Meetings. If there is more than one Regular Trustee,
meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution
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of the Regular Trustees. Notice of any in-person meetings of the Regular
Trustees shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 48 hours before
such meeting. Notice of any telephonic meetings of the Regular Trustees or any
committee thereof shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 24
hours before such meeting. Notices shall contain a brief statement of the time,
place and anticipated purposes of the meeting. The presence (whether in person
or by telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Regular Trustees. In the event there is only one Regular Trustee,
any and all action of such Regular Trustee shall be evidenced by a written
consent of such Regular Trustee.
SECTION 5.10. Delegation of Power. (a) Any Regular Trustee may, by
power of attorney consistent with applicable law, delegate to any other natural
person over the age of 21 his or her power for the purpose of executing any
documents contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other governmental
filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
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ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. Distributions. Holders shall receive Distributions (as
defined herein) in accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compounded Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed, to
the extent funds are available for that purpose, to make a distribution (a
"Distribution") of such Payment Amount to Holders.
ARTICLE VII.
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities. (a) The
Regular Trustees shall, on behalf of the Trust, issue one class of preferred
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Preferred Securities")
and one class of common securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Common Securities"). The Trust shall issue no securities or other interests in
the assets of the Trust other than the Preferred Securities and the Common
Securities.
(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual signature of any present or
any future Regular Trustee. In case any Regular Trustee of the Trust who shall
have signed any of the Securities shall cease to be such Regular Trustee before
the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends or
endorsements as
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the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation of any stock exchange on which Securities
may be listed, or to conform to usage.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
(subject to Section 10.1) non-assessable.
(e) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.2. Paying Agent. In the event that the Preferred
Securities are not in book-entry only form, the Trust shall maintain in the
borough of Manhattan, The City of New York, State of New York, an office or
agency where the Preferred Securities may be presented for payment ("Paying
Agent"), and any such Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. The Trust may appoint the Paying Agent and may appoint one or
more additional paying agents in such other locations as it shall determine. The
term "Paying Agent" includes any such additional paying agent. The Trust may
change any Paying Agent without prior notice to any Holder. The Trust shall
notify the Institutional Trustee of the name and address of any Agent not a
party to this Declaration. If the Trust fails to appoint or maintain another
entity as Paying Agent, the Institutional Trustee shall act as such. The Trust
or any of its Affiliates may act as Paying Agent. The Trust shall initially act
as Paying Agent for the Preferred Securities and the Common Securities.
ARTICLE VIII.
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust. (a) The Trust shall dissolve in
the earlier to occur of 55 years after the issuance of the Debentures or:
(i) upon the bankruptcy of the Sponsor;
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(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the Sponsor's
charter and the expiration of 90 days after the date of revocation without
a reinstatement thereof;
(iii) upon the consent of a Majority in liquidation amount of the
Securities affected thereby voting together as a single class to dissolve
the Trust;
(iv) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor or the Trust;
(v) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders, in each case in accordance with the terms of the Securities;
(vi) at the election of the Sponsor (which is wholly within its sole
discretion) at any time pursuant to which the Trust shall have been
dissolved in accordance with the terms of the Securities as set forth in
Annex I and all of the Debentures endorsed thereon shall have been
distributed to the Holders of Securities in exchange for all of the
Securities; or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding-up of the Trust
and payment of all liabilities of the Trust, the Trustees shall file a
certificate of cancellation with the Secretary of State of the State of Delaware
and the Trust shall terminate.
(c) The provisions of Article X shall survive the termination of the
Trust.
ARTICLE IX.
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities. (a) Securities may only be
transferred, in whole or in part, in accordance with the terms and conditions
set forth in this Declaration and in the terms of the Securities. Any transfer
or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
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(b) Subject to this Article IX, Preferred Securities shall be freely
transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not continue to be classified for United States
federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
SECTION 9.2. Transfer of Certificates. The Regular Trustees shall
provide for the registration of Certificates and of transfers of Certificates,
which will be effected without charge but only upon payment (with such indemnity
as the Regular Trustees may require) in respect of any tax or other government
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall be
accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for registration of transfer
shall be canceled by the Regular Trustees. A transferee of a Certificate shall
be entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Certificate. By acceptance of a
Certificate, each transferee shall be deemed to have agreed to be bound by this
Declaration.
SECTION 9.3. Deemed Security Holders. The Trustees may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.
SECTION 9.4. Book Entry Interests. Unless otherwise specified in the
terms of the Preferred Securities, the Preferred Securities Certificates, on
original issuance, will be issued in the form of one or more fully registered,
global Preferred Security Certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf
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of, the Trust. Such Global Certificate(s) shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of DTC,
and no Preferred Security Beneficial Owner will receive a definitive Preferred
Security Certificate representing such Preferred Security Beneficial Owner's
interests in such Global Certificate(s), except as provided in Section 9.7.
Unless and until definitive, fully registered Preferred Security Certificates
(the "Definitive Preferred Security Certificates") have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificate(s) and receiving
approvals, votes or consents hereunder) as the Holder of the Preferred
Securities and the sole holder of the Global Certificate(s) and shall have
no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and the Clearing Agency shall receive and transmit payments
of Distributions on the Global Certificates to such Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants.
SECTION 9.5. Notices to Clearing Agency. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, unless and until Definitive Preferred Security Certificates shall
have been issued to the Preferred Security Beneficial Owners pursuant to Section
9.7, the Regular Trustees shall give all such notices and communications
specified herein to be given to the Preferred Security Holders to the Clearing
Agency, and shall have no notice obligations to the Preferred Security
Beneficial Owners.
SECTION 9.6. Appointment of Successor Clearing Agency. If any
Clearing Agency elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Regular Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to such Preferred
Securities.
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SECTION 9.7. Definitive Preferred Security Certificates. If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Preferred Securities, then:
(c) Definitive Preferred Security Certificates shall be prepared by
the Regular Trustees on behalf of the Trust with respect to such Preferred
Securities; and
(d) upon surrender of the Global Certificate(s) by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Preferred Security Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the instructions
of the Clearing Agency. Neither the Trustees nor the Trust shall be liable
for any delay in delivery of such instructions and each of them may
conclusively rely on and shall be protected in relying on, said
instructions of the Clearing Agency. The Definitive Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced
in any other manner as is reasonably acceptable to the Regular Trustees,
as evidenced by their execution thereof, and may have such letters,
numbers or other marks of identification or designation and such legends
or endorsements as the Regular Trustees may deem appropriate, or as may be
required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which Preferred Securities may be listed, or to conform to usage.
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates. If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless;
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of
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like denomination. In connection with the issuance of any new Certificate under
this Section 9.8, the Regular Trustees may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. Liability. (a) Except as expressly set forth in this
Declaration, the Debentures, the Preferred Securities Guarantee, the Common
Securities Guarantee and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act
performed or omission made by such Indemnified Person in good faith on behalf of
the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
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gross negligence (or ordinary negligence in the case of the Institutional
Trustee) or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.3. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Institutional Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein provides that an Indemnified Person shall act in
a manner that is, or provides terms that are, fair and reasonable to
the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
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(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.4. Indemnification. (a) (i) The Sponsor shall indemnify,
to the full extent permitted by law, any Company Indemnified Person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was a Company Indemnified Person against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
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reasonably entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote of a
quorum consisting of such Regular Trustees who were not parties to such action,
suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Sponsor as authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Common Security
Holder of the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder reasonably
determine that such person deliberately breached his duty to the Trust or its
Common or Preferred Security Holders.
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(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Sponsor or Preferred Security
Holders of the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be provided by a
contract between the Sponsor and each Company Indemnified Person who serves in
such capacity at any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or obligations
then existing.
(vii) The Sponsor or the Trust may purchase and maintain insurance
on behalf of any person who is or was a Company Indemnified Person against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor would have the
power to indemnify him against such liability under the provisions of this
Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.
(b) The Sponsor agrees to indemnify (i) the Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence (or, in the case of the Institutional
Trustee, pursuant to Section 3.9, negligence) or bad faith on its part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses
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(including reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the satisfaction
and discharge of this Declaration.
SECTION 10.5. Outside Businesses. Any Covered Person, the Sponsor,
the Delaware Trustee and the Institutional Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. None of the
Covered Persons, the Sponsor, the Delaware Trustee, or the Institutional
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary)
or to recommend to others any such particular investment or other opportunity.
Any Covered Person, the Delaware Trustee and the Institutional Trustee may
engage or be interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depositary for, trustee or
agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE XI.
ACCOUNTING
SECTION 11.1. Fiscal Year. The fiscal year ("Fiscal Year") of the
Trust shall be the calendar year, or such other year as is required by the Code.
SECTION 11.2. Certain Accounting Matters. (a) At all times during
the existence of the Trust, the Regular Trustees shall keep, or cause to be
kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Regular Trustees.
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(b) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. The Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year of
the Trust.
(c) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3. Banking. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Institutional Trustee
Account and no other funds of the Trust shall be deposited in the Institutional
Trustee Account. The sole signatories for such accounts shall be designated by
the Regular Trustees; provided, however, that the Institutional Trustee shall
designate the signatories for the Institutional Trustee Account.
SECTION 11.4. Withholding. The Trust and the Regular Trustees shall
comply with all withholding requirements under United States federal, state and
local law. The Trust shall request, and the Holders shall provide to the Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder or beneficial owner, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Regular Trustees shall file required forms with applicable
jurisdictions and, unless an exemption from withholding is properly established
by a Holder or beneficial owner, shall remit amounts withheld with respect to
the Holder or beneficial owner to applicable jurisdictions. To the extent that
the Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder or beneficial owner, the
amount withheld shall be deemed to be a distribution in the amount of the
withholding to the Holder or beneficial owner. In the event of any claimed over
withholding, Holders shall be limited to an action against the applicable
jurisdiction. If the amount required to be withheld was not withheld from actual
Distributions made, the Trust may reduce subsequent Distributions by the amount
of such withholding.
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ARTICLE XII.
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments. (a) Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by:
(i) the Sponsor and the Regular Trustees (or, if there are more than
two Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the Institutional
Trustee shall have first received an Officers' Certificate from each of
the Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have also first received an
opinion of counsel (who may be counsel to the Sponsor or the Trust) that
such amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act;
or
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(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 10.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove, Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority, which change does not have a
material adverse effect on the right, preferences or privileges of the
Holders; and
(v) modify, eliminate and add to any provision of this Declaration
to such extent as may be necessary, provided such modification,
elimination or addition would not adversely affect the rights, privileges
or preference of any Holder of the Securities.
SECTION 12.2. Meetings of the Holders of Securities; Action by
Written Consent. (a) Meetings of the Holders of any class of Securities may be
called at any time by
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the Regular Trustees (or as provided in the terms of the Securities) to consider
and act on any matter on which Holders of such class of Securities are entitled
to act under the terms of this Declaration, the terms of the Securities or the
rules of any stock exchange on which the Preferred Securities are listed or
admitted for trading. The Regular Trustees shall call a meeting of the Holders
of such class if directed to do so by the Holders of at least 10% in liquidation
amount of such class of Securities. Such direction shall be given by delivering
to the Regular Trustees one or more calls in a writing stating that the signing
Holders of Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Securities calling a meeting shall specify in writing the Certificates
held by the Holders of Securities exercising the right to call a meeting and
only those Securities evidenced by Certificates so specified shall be
counted for purposes of determining whether the required percentage set forth in
the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the
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giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
otherwise provides, the Regular Trustees, in their sole discretion, shall
establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII.
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional
Trustee. The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Institutional Trustee's acceptance of
its appointment as Institutional Trustee that:
(a)(i) in the case of the initial Institutional Trustee, it is a
Delaware banking corporation with trust powers, duly organized, validly
existing and in good standing under the laws of the State of Delaware,
with trust power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, the Declaration and (ii)
in the case of any Successor Institutional Trustee, it satisfies the
requirements of Section 5.3(a) herein;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary
corporate action on the part of the Institutional Trustee. The Declaration
has been duly executed and delivered by the
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Institutional Trustee, and it constitutes a legal, valid and binding
obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Institutional Trustee does not conflict with or constitute a breach of
the Articles of Organization or By-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a)(i) in the case of the initial Delaware Trustee, it is a Delaware
banking corporation with trust powers, duly organized, validly existing
and in good standing under the laws of the State of Delaware, with trust
power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, the Declaration and (ii) in the case
of any Successor Delaware Trustee, it satisfies the requirements of
Section 5.2 herein;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law);
(c) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the
Declaration; and
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(d) the Delaware Trustee is a natural person who is a resident of
the State of Delaware or, if not a natural person, an entity which has its
principal place of business in the State of Delaware.
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities):
PLC Capital Trust I
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of
to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Administration (or such other
address as the Institutional Trustee may give notice of to the Holders of
the Securities):
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
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Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2. Governing Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to principles of conflict of laws.
SECTION 14.3. Intention of the Parties. It is the intention of the
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
SECTION 14.4. Headings. Headings contained in this Declaration are
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
SECTION 14.5. Successors and Assigns. Whenever in this Declaration
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.
SECTION 14.6. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 14.7. Counterparts. This Declaration may contain more than
one counterpart of the signature page and this Declaration may be executed by
the affixing of the
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signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
________________________________
Richard J. Bielen
Trustee
________________________________
Jerry W. DeFoor
Trustee
WILMINGTON TRUST COMPANY
Trustee
By:_____________________________
Name:
Title:
PROTECTIVE LIFE CORPORATION
as Sponsor
By:_____________________________
Name:
Title:
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ANNEX I
TERMS OF
[____]% TRUST ORIGINATED PREFERRED SECURITIES
[____]% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of ________ __, 1997 (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Preferred Securities and the Common
Securities are set out below (each capitalized term used but not defined herein
has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number. (a) Preferred Securities. [________]
Preferred Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of ________________ dollars ($_________) and
a liquidation amount with respect to the assets of the Trust of $25 per
preferred security, are hereby designated for the purposes of identification
only as "____% Trust Originated Preferred Securities(sm) ('TOPrS'(sm))" (the
"Preferred Securities"). The Preferred Security Certificates evidencing the
Preferred Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange on which the Preferred Securities are listed.
(b) Common Securities. ______ Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of
_________ dollars ($_______) and a liquidation amount with respect to the assets
of the Trust of [$25] per common security, are hereby designated for the
purposes of identification only as "____% Trust Originated Common Securities"
(the "Common Securities"). The Common Security Certificates evidencing the
Common Securities shall be substantially in the form of Exhibit A- 2 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice.
2. Distributions. (a) Distributions payable on each Security will be
fixed at a rate per annum of ____% (the "Coupon Rate") of the stated liquidation
amount of [$___] per Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in arrears
for more than three consecutive months will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and
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any such interest payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from [________ __, 1997, and will be payable quarterly in arrears, on March 31,
June 30, September 30, and December 31 of each year, commencing on [________ __,
1997, except as otherwise described below. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each such period, an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall last beyond the date of maturity of the
Debentures. As a consequence of any such deferral, Distributions will also be
deferred. Despite any such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; provided that such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the record date immediately
preceding the end of the applicable Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Preferred Securities remain in book-entry only form, the
relevant record dates shall be one Business Day prior to the relevant payment
dates, which payment dates shall correspond to the interest payment dates on the
Debentures. Subject to any applicable laws and regulations and the provisions of
the Declaration, each such payment in respect of the Preferred Securities will
be made as described under the heading "Description of the Preferred Securities
- -- Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
dated ________ __, 1997, of the Trust included in the Registration Statement on
Form S-3 of the Sponsor and the Trust. The relevant record dates for the Common
Securities shall be the same record dates as for the Preferred Securities. If
the Preferred Securities shall cease to be in book-entry only form, the relevant
record dates for the Preferred Securities shall conform to the rules of any
securities
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exchange on which the securities are listed and, if none, shall be selected by
the Regular Trustees, which dates shall be at least one Business Day but less
than 60 Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution upon Dissolution. In the event of any
voluntary or involuntary dissolution, winding-up or termination of the Trust,
the Holders of the Securities on the date of such dissolution, winding-up or
termination, as the case may be, will be entitled to receive out of the assets
of the Trust available for distribution to Holders of Securities after
satisfaction of liabilities of creditors of the Trust an amount equal to the
aggregate of the stated liquidation amount of $25 per Security plus accrued and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless, in connection with such dissolution,
winding-up or termination, Debentures in an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with an interest
rate equal to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, such Securities, shall
be distributed on a Pro Rata basis to the Holders of the Securities in exchange
for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution. The Securities are subject to
redemption in accordance herewith at any time after _________, 2002 and, in
certain circumstances, following the occurrence of a Tax Event (as defined
below).
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(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Tax Event in each case as described below), the proceeds
from such repayment or payment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption price
of $25 per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the redemption, payable in cash (the "Redemption Price").
Holders will be given not less than 30 nor more than 60 days' notice of any such
redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities will be redeemed
Pro Rata and the Preferred Securities to be redeemed will be redeemed as
described in Section 4(f)(ii) below.
(c) The Sponsor shall have the right at any time, upon notice to the
Regular Trustees, to elect to terminate the Trust, and upon receipt of such
notice, the Regular Trustees shall dissolve the Trust and, after satisfaction of
creditors of the Trust, cause Debentures held by the Institutional Trustee,
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions on, and having the
same record date for payment as, the Securities, to be distributed to the
Holders of the Securities in liquidation of such Holders' interests in the
Securities within 90 days following receipt of the Sponsor's notice of election.
(d) If a Tax Event shall occur and be continuing and the Debenture
Issuer has received a Redemption Tax Opinion, the Debenture Issuer shall have
the right at any time, upon not less than 30 nor more than 60 days' notice, to
redeem the Debentures in whole or in part for cash within 90 days following the
occurrence of such Tax Event, and, following such redemption, Securities with an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so redeemed shall be redeemed by the Trust at the Redemption Price on
a Pro Rata basis; provided, however, that, if at the time there is available to
the Debenture Issuer or the Trust the opportunity to eliminate, within such 90
day period, the Tax Event by taking some Ministerial Action, the Trust or the
Debenture Issuer will pursue such Ministerial Action in lieu of redemption. If
the Debenture Issuer does not elect either to distribute the Debentures to the
holders of the Preferred Securities in liquidation of the Trust or to redeem the
Debentures, the Preferred Securities shall remain outstanding and, in the event
a Tax Event is continuing, Protective Life will pay as additional interest
("Additional Interest") such additional amounts as shall be required so that the
net amounts received and retained by the Trust after paying any such taxes,
duties, assessments or other governmental charges will be
I-4
<PAGE>
not less than the amounts the Trust would have received had no such taxes,
duties, assessments or other governmental charges been imposed.
"Tax Event" means the receipt by the Debenture Issuer of an
opinion of nationally recognized independent tax counsel experienced in such
matters to the effect that, as a result of (i) any amendment to, or change
(including any announced prospective change) in, on or after the day before
the date of issuance of the Preferred Securities under the Declaration, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (ii) any interpretation
or application of, or pronouncement with respect to, such laws or regulations
by any legislative body, court, governmental agency or regulatory authority,
which amendment or change is effective or which interpretation, application
or pronouncement is announced on or after the day before the date of issuance
of the Preferred Securities under the Declaration, there is more than an
insubstantial increase in the risk that (x) the Trust is, or will be within
90 days of the date thereof, subject to U.S. federal income tax with respect
to income received or accrued on the Debentures, (y) interest payable by the
Debenture Issuer on the Debentures is not, or within 90 days of the date
thereof, will not be, deductible, in whole or in part, for U.S. federal
income tax purposes, or (z) the Trust is, or will be within 90 days of the
date thereof, subject to more than a de minimis amount of other taxes, duties
or other governmental charges.
"Redemption Tax Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters that, as a result of a Tax
Event, there is more than an insubstantial risk that the Company would be
precluded from deducting the interest on the Subordinated Debt Securities, in
whole or in part, for United States federal income tax purposes, even if the
Subordinated Debt Securities were distributed to the holders of the Trust
Securities in liquidation of such holders' interest in the Trust, pursuant to
the exercise by the Company of its right to dissolve the Trust as described
under "--Distribution of the Subordinated Debt Securities"
"Ministerial Action" means the filing of a form, making an election,
or pursuing some other similar reasonable measure that has no adverse effect on
the Trust, the Debenture Issuer, the Sponsor or the Holders.
After the date for any distribution of Debentures upon dissolution
of the Trust: (i) the Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company (the "Depository") or its nominee (or any
successor Clearing Agency or its nominee), as the record Holder of the Preferred
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and (iii) any
certificates representing Securities, except for certificates representing
Preferred Securities held by the Depository or its nominee (or any successor
Clearing Agency or its nominee), will be deemed to represent beneficial
interests in the Debentures having an
I-5
<PAGE>
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued and
unpaid interest equal to accrued and unpaid Distributions on such Securities
until such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before the
date of redemption.
(e) If the Debentures are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its best
efforts to have the Debentures listed on the New York Stock Exchange or on such
other exchange as the Preferred Securities were listed immediately prior to the
distribution of the Debentures.
(f) "Redemption or Distribution Procedures."
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(f)(i), a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is first mailed by first-class mail,
postage prepaid, to Holders of Securities. Each Redemption/Distribution Notice
shall be addressed to the Holders of Securities at the address of each such
Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Securities are
to be redeemed, the Securities to be redeemed shall be redeemed Pro Rata from
each Holder of Securities, it being understood that, in respect of Preferred
Securities registered in the name of and held of record by the Depository or its
nominee (or any successor Clearing Agency or its nominee), the distribution of
the proceeds of such redemption will be made to each Clearing Agency Participant
(or Person on whose behalf such nominee holds such securities) in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are
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<PAGE>
redeemed as set out in this Section 4 (which notice will be irrevocable), then
(A) while the Preferred Securities are in book-entry only form, with respect to
the Preferred Securities, by 12:00 noon, New York City time, on the redemption
date, provided that the Debenture Issuer has paid the Institutional Trustee a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures, the Institutional Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to the Preferred
Securities and will give the Depository irrevocable instructions and authority
to pay the Redemption Price to the Holders of the Preferred Securities, and (B)
with respect to Preferred Securities issued in definitive form and Common
Securities, provided that the Debenture Issuer has paid the Institutional
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Institutional Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the Trust
on the redemption date. If a Redemption/Distribution Notice shall have been
given and funds deposited as required, if applicable, then immediately prior to
the close of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue and all rights of Holders of such
Securities so called for redemption will cease, except the right of the Holders
of such Securities to receive the Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of any Securities that have
been so called for redemption. If any date fixed for redemption of Securities is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
in respect of any Securities is improperly withheld or refused and not paid
either by the Institutional Trustee or by the Sponsor as guarantor pursuant to
the relevant Securities Guarantee, Distributions on such Securities will
continue to accrue from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the date fixed
for redemption for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Preferred Securities,
the Depository or its nominee (or any successor Clearing Agency or its nominee)
if Global Certificates have been issued or, if Definitive Preferred Security
Certificates have been issued, to the Holder thereof, and (B) in respect of the
Common Securities to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), provided the acquiror is not
the Holder of the Common
I-7
<PAGE>
Securities or the obligor under the Indenture, the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private agreement.
5. Voting Rights - Preferred Securities. (a) Except as provided
under Sections 5(b) and 7 of this Annex I and as otherwise required by law and
the Declaration, the Holders of the Preferred Securities will have no voting
rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Preferred Securities, voting
separately as a class may direct the time, method, and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred upon the Institutional Trustee under the
Declaration, including (i) directing the time, method, place of conducting any
proceeding for any remedy available to the Debenture Trustee, or exercising any
trust or power conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under Section 5.7 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of all the Debentures shall be due and
payable, provided, however, that, where a consent or action under the Indenture
would require the consent or act of the Holders of greater than a majority of
the Holders in principal amount of Debentures affected thereby (a "Super
Majority"), the Institutional Trustee may only give such consent or take such
action at the written direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the Holders of the Preferred Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such action. If a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder on or after the respective due date specified in the
Debentures. Notwithstanding any payments made to such Holder by the Debenture
Issuer in connection with such proceeding, the Debenture Issuer shall remain
obligated to pay the principal of or interest on the Debentures held by the
Trust or the
I-8
<PAGE>
Institutional Trustee, and the Debenture Issuer shall be subrogated to the
rights of the Holders of Preferred Securities with respect to payments on the
Preferred Securities to the extent of any payments made by the Debenture Issuer
to such Holder in any such proceeding. Except as provided in the second
preceding sentence, the Holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Preferred Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities will
be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities. (a) Except as provided under
Sections 6(b) and (c) of this Annex I and as otherwise required by law and the
Declaration, the Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has been cured,
waived, or otherwise eliminated and subject to the requirements of the second to
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to
I-9
<PAGE>
the Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time,
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 5.7 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the Holders of
greater than a majority in principal amount of Debentures affected thereby (a
"Super Majority"), the Institutional Trustee may only give such consent or take
such action at the written direction of the Holders of at least the proportion
in liquidation amount of the Common Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
Pursuant to this Section 6(c), the Institutional Trustee shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of tax counsel to the effect that for the purposes of United States
federal income tax the Trust will not be classified as other than a grantor
trust on account of such action.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture. (a) In addition to any
requirements under Section 12.1 of the Declaration, if any proposed amendment to
the Declaration provides for, or the Regular Trustees otherwise propose to
effect, (i) any action that would adversely affect the powers, preferences or
special rights of the Securities, whether
I-10
<PAGE>
by way of amendment to the Declaration or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than as described in Section 8.1
of the Declaration, then the Holders of outstanding Securities as a class, will
be entitled to vote on such amendment or proposal (but not on any other
amendment or proposal) and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a Majority in liquidation
amount of the Securities, voting together as a single class; provided, however,
if any amendment or proposal referred to in clause (i) above would adversely
affect only the Preferred Securities or only the Common Securities, then only
the affected class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Securities
under this Section 7(b) unless the Institutional Trustee has obtained an opinion
of tax counsel to the effect that for the purposes of United States federal
income tax the Trust will not be classified as other than a grantor trust on
account of such action.
8. Pro Rata. A reference in this Annex I to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
I-11
<PAGE>
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking. The Preferred Securities rank pari passu with, and
payment thereon shall be made Pro Rata with, the Common Securities except that,
where an Event of Default occurs and is continuing under the Indenture in
respect of the Debentures held by the Institutional Trustee, the rights of
Holders of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights to payment of the Holders of the Preferred Securities.
10. Listing. The Regular Trustees shall use their best efforts to
cause the Preferred Securities to be listed for quotation on the New York Stock
Exchange, Inc.
11. Acceptance of Securities Guarantee and Indenture. Each Holder of
Preferred Securities and Common Securities, by the acceptance thereof, agrees to
the provisions of the Preferred Securities Guarantee and the Common Securities
Guarantee, respectively, including the subordination provisions therein, and to
the provisions of the Indenture.
12. No Preemptive Rights. The Holders of the Securities shall have
no preemptive rights to subscribe for any additional securities.
13. Miscellaneous. The foregoing terms set forth in this Annex I
constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to any Holder without charge on written request to the Sponsor
at its principal place of business.
I-12
<PAGE>
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
This Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depositary or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
PLC CAPITAL TRUST I
[____% Trust Originated Preferred Securities(SM) ("TOPrS"SM)
(liquidation amount $25 per Preferred Security)
PLC CAPITAL TRUST I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that ____________
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests
A1-1
<PAGE>
in the assets of the Trust designated the ____% Trust Originated Preferred
Securities(SM) (liquidation amount $25 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and records
of the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Preferred Securities represented hereby are issued and shall in all respects
be subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of [________ __, 1997], as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Preferred Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Preferred Securities Guarantee and the Indenture to the Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
Distributions payable on each Preferred Security will be fixed at a
rate per annum of ____% (the "Coupon Rate") of the stated liquidation amount of
$25 per Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
Except as otherwise described below, Distributions on the Preferred
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30 and
December 31 of each year, commencing on ________ __, 1997, to Holders of record
one (1) Business Day prior to such payment
A1-2
<PAGE>
dates, which payment dates shall correspond to the interest payment dates on the
Debentures; provided however, that if the Preferred Securities are not then in
book-entry only form, such Distributions shall be paid to the Holders of record
fifteen (15) days prior to such payment dates. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period") and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension Period;
provided that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Preferred Securities shall be redeemable as provided in the
Declaration.
A1-3
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this
_____ day of __________, 199__.
PLC CAPITAL TRUST I
By:_____________________________
Name:
Title:
A1-4
<PAGE>
-------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints________________________________________________________
________________________________________________________________________________
________________________________________________________________________agent to
transfer this Preferred Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date:_________________
Signature:_____________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
A1-5
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
The Common Securities may only be transferred by the Debenture
Issuer and any Related Party to the Debenture Issuer or a Related Party of the
Debenture Issuer; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor Trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
PLC CAPITAL TRUST I
[____]% Trust Originated Common Securities
(liquidation amount $[25] per Common Security)
PLC CAPITAL TRUST I, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that __________
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the [____% Trust Originated Common Securities (liquidation amount
$[25] per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be
A2-1
<PAGE>
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of [________ __, 1997], as the same may be amended from time
to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
Distributions payable on each Common Security will be fixed at a
rate per annum of [____%] (the "Coupon Rate") of the stated liquidation amount
of $[25] per Common Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in arrears
for more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable quarterly in arrears, on March 31, June 30, September 30 and
December 31 of each year, commencing on March 31, 1997, to Holders of record one
(1) Business Day prior to such payment dates, which payment dates shall
correspond to the interest payment dates on the Debentures; provided, however,
that if the Preferred Securities are not then in book-entry only form, such
Distributions shall be paid to the Holders of record fifteen (15) days prior to
such payment dates. The Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
an "Extension Period") and, as a consequence of such
A2-2
<PAGE>
deferral, Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further extend such Extension Period; provided that
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
A2-3
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this
_____ day of __________, 199__.
PLC CAPITAL TRUST I
By:____________________________________
Name:
Title:
A2-4
<PAGE>
---------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints_______________________________________________________
________________________________________________________________________________
_________________agent to transfer this Common Security Certificate on the books
of the Trust. The agent may substitute another to act for him or her.
Date:___________________
Signature:_____________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
A2-5
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
C-1
<PAGE>
Exhibit 4(g)
================================================================================
PROTECTIVE LIFE CORPORATION
to
AMSOUTH BANK OF ALABAMA
(as successor by Conversion of Charter to
AmSouth Bank, N.A.), as Trustee
-----------------------------
SUPPLEMENTAL INDENTURE No. 3
Dated as of April__, 1997
-----------------------------
[ ]% Subordinated Debentures
Due [ ], Series B
$ [ ]
================================================================================
<PAGE>
PROTECTIVE LIFE CORPORATION
SUPPLEMENTAL INDENTURE No. 3
$ [ ]
[ ]% Subordinated Debentures
Due [ ], Series B
SUPPLEMENTAL INDENTURE No. 3, dated as of [ ], 1997 from
PROTECTIVE LIFE CORPORATION, a Delaware corporation (the "Company"), to
AMSOUTH BANK OF ALABAMA (as successor by conversion of charter to AmSouth Bank
N.A.), as trustee (the "Trustee").
RECITALS
--------
The Company has heretofore executed and delivered to the Trustee a
Subordinated Indenture, dated as of June 1, 1994 as supplemented and amended
by Supplemental Indenture No. 1, dated as of June 9, 1994, and Supplemental
Indenture No. 2, dated as of August 1, 1994 (as so supplemented and amended,
the "Indenture"), providing for the issuance from time to time of series of
the Company's Securities.
Section 3.1 of the Indenture provides for various matters with
respect to any series of Securities issued under the Indenture to be
established in an indenture supplemental to the Indenture.
Section 8.1(7) of the Indenture provides for the Company and the
Trustee to enter into an indenture supplemental to the Indenture to establish
the form or terms of Securities of any series as provided by Sections 2.1 and
3.1 of the Indenture.
For and in consideration of the premises and the issuance of the
series of Securities provided for herein, it is mutually covenanted and
agreed as follows for the equal and ratable benefit of the Holders of the
Securities of such series:
<PAGE>
ARTICLE 1
Relation to Indenture; Definitions
Section 1.1. This Supplemental Indenture No. 3 constitutes an integral
part of the Indenture.
Section 1.2. For all purposes of this Supplemental Indenture No. 3:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 3; and
(3) The terms "herein", "hereof", "hereunder" and other words of
similar import refer to this Supplemental Indenture No. 3.
ARTICLE 2
The Series of Securities
Section 2.1. TITLE OF THE SECURITIES. There shall be a series of
Securities designated the "[ ]% Subordinated Debentures Due [ , 2027],
Series B" (hereinafter, the "Securities").
Section 2.2. LIMITATION ON AGGREGATE PRINCIPAL AMOUNT; DATE OF
SECURITIES. The aggregate principal amount of the Securities shall be
limited to $[ ]. Each Security shall be dated the date of its
authentication.
Section 2.3. PRINCIPAL PAYMENT DATES. Subject to Section 2.6, the
principal amount of the Securities Outstanding (together with any accrued and
unpaid interest thereon) shall be payable in a single installment on
[ , 2027].
Section 2.4. INTEREST AND INTEREST RATES. The rate of interest on
each Security shall be [ ]% per annum, accruing from [ , 1997] and,
subject to Section 2.5, interest shall be payable, in arrears, on March 31,
June 30, September 30 and December 31 of each year (each an "Interest Payment
Date"), commencing [ ].
2
<PAGE>
The amount of interest payable on any Interest Payment Date shall be computed
on the basis of twelve 30-day months and a 360-day year and, for any period
that is shorter than a full 90-day quarter, will be calculated on the basis
of the actual number of days elapsed in such period. In the event that any
date on which interest is payable on a Security is not a Business Day, then
payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest so payable on any Security
which is punctually paid or duly provided for on any Interest Payment Date
shall be paid to the Person in whose name such Security is registered at the
close of business on the Regular Record Date for such Interest Payment Date,
which, for purposes of this Supplemental Indenture No. 3, shall be the
Business Day preceding such Interest Payment Date; provided, that in the
event the Securities shall not continue to remain in book-entry only Form,
the record dates shall be the March 15, June 15, September 15 and December 15
prior to the applicable Interest Payment Date. The interest so payable on
any Security which is not punctually paid or duly provided for on any
Interest Payment Date shall forthwith cease to be payable to the Person in
whose name such Security is registered on the relevant Regular Record Date,
and such defaulted interest shall instead be payable to the Person in whose
name such Security is registered on the special record date or other
specified date determined in accordance with the Indenture.
Section 2.5. EXTENSION OF INTEREST PAYMENT PERIOD. Notwithstanding
anything contained herein or in the Indenture to the contrary, the Company
shall have the right at any time, and from time to time, during the term of
the Securities to defer payments of interest by extending the interest
payment period to the next Interest Payment Date by one or more quarterly
periods not exceeding 20 consecutive quarters (each such period, an
"Extension Period"), but no such Extension Period may extend beyond
__________, 2027, or such other date to which the Stated Maturity may have
been shortened or extended pursuant to Section 2.6. At the end of any such
Extension Period, the Company shall pay all interest then accrued and unpaid
(including any Additional Interest, as hereinafter defined) together with
interest thereon compounded quarterly at the rate specified for the
Securities to the extent permitted by applicable law ("Compound Interest");
provided, that during any such Extension Period, (a) the Company shall not
declare or pay dividends on, make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to any
of its capital stock (other than (i) purchases or acquisitions of shares of
the Company's common stock in connection with the satisfaction by the Company
of its obligations under any employee benefit plans or the satisfaction by
the Company of its obligation pursuant to any contract or security requiring
it to purchase shares of its common stock, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
3
<PAGE>
series of its capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to an acquisition or the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (iv) redemptions or purchases pursuant to the
Company's Rights Agreement, dated August 7, 1995, between the Company and
AmSouth Bank of Alabama as Rights Agent), (b) the Company shall not make any
payment of principal, premium, if any, or interest on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu with or
junior to the Securities and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Securities Guarantee, dated as of ________ __, 1997 of the Company (the
"Guarantee") with respect to the __% Trust Originated Preferred Securities
(the "Preferred Securities") issued by PLC Capital Trust I ("PLC Capital"),
the Common Securities Guarantee, dated as of ________, 1997 of the Company
(the "Common Guarantee," and together with the Guarantee, the "Guarantees")
with respect to the __% Trust Originated Common Securities (the "Common
Securities," and together with the Preferred Securities, the "Trust
Securities") issued by PLC Capital and the Guarantee Agreement, dated as of
June 9, 1994 of the Company (the "Series A Guarantee") with respect to the
9% Cumulative Monthly Income Preferred Securities, Series A of PLC Capital
L.L.C.). Prior to the termination of any such Extension Period, the Company
may further defer payments of interest by extending the interest payment
period; provided, however, that, such Extension Period, including all such
previous and further extensions, may not exceed 20 consecutive quarters or
beyond the Stated Maturity. Upon the termination of any Extension Period and
the payment of all amounts then due, the Company may commence a new Extension
Period, subject to the terms set forth in this section. No interest shall be
due and payable during any Extension Period, except at the end thereof, but
the Company may prepay at any time all or any portion of the interest accrued
during any Extension Period. If the Institutional Trustee (as defined in the
Amended and Restated Declaration of Trust of PLC Capital, dated as of
__________, 1997 (the "Declaration of Trust")) shall be the sole holder of
the Securities, the Company shall give the Regular Trustees (as defined in
the Declaration of Trust) and the Institutional Trustee, notice of its
selection of such Extension Period one Business Day prior to the earlier of
(i) the date distributions on the Preferred Securities are payable or (ii)
the date the Regular Trustees are required to give notice of the record date
or the date such distribution is payable to the New York Stock Exchange (or
other applicable self-regulatory organization) or to holders of the Preferred
Securities, but in any event at least one Business Day before such record
date. If the Institutional Trustee shall not be the sole holder of the
Securities, the Company shall give the holders of the Securities notice of
its selection of such Extension Period at least 10 Business Days prior to the
earlier of (i) the Interest Payment Date or (ii) the date upon which the
Company is
4
<PAGE>
required to give notice of the record or payment date of such interest
payment to the New York Stock Exchange (or other applicable self-regulatory
organization) or to holders of the Securities. The quarter in which any
notice is given pursuant to this Section 2.5 shall be counted as one of the
20 quarters permitted in the maximum Extension Period permitted hereunder.
Section 2.6. SHORTENING OR EXTENSION OF STATED MATURITY.
Notwithstanding anything contained herein or in the Indenture to the
contrary, the Company shall have the right to (i) shorten the Stated Maturity
of the principal of the Securities at any time to any date not earlier than
________, 2002, and (ii) extend the Stated Maturity of the principal of the
Securities at any time at its election for one or more periods, but in no
event to a date later than________, 2046; provided that, if the Company
elects to exercise its right to extend the Stated Maturity of the principal
of the Securities pursuant to clause (ii), above, at the time such election
is made and at the time of extension (A) the Company is not in bankruptcy,
otherwise insolvent or in liquidation, (B) the Company is not in default in
the payment of any interest or principal on the Securities, (C) in the case
of the Securities held by PLC Capital, PLC Capital is not in arrears on
payments of Distributions (as defined in the Declaration of Trust) on the
Preferred Securities and no deferred Distributions are accumulated and (D)
the Securities are rated not less than BBB- by Standard & Poor's Ratings
Services or Baa3 by Moody's Investors Service, Inc. or the equivalent by any
other nationally recognized statistical rating organization. In the event
the Company elects to shorten or extend the Stated Maturity of the Securities
as provided above, it shall give notice to the Trustee, and the Trustee shall
give notice of such shortening or extension to the Holders of the Securities,
no less than 30 and no more than 90 days prior to the effectiveness thereof.
Section 2.7. PLACE OF PAYMENT. The Place of Payment where the
Securities issued in certificated form may be presented or surrendered for
payment, where such Securities may be surrendered for registration of
transfer or exchange and where notices and demands to and upon the Company in
respect of such Securities and the Indenture may be served shall be the
Corporate Trust Office of the Trustee; provided, however, that payment of
interest may be made at the option of the Company by checks mailed to the
Holders at such addresses as shall appear in the Register. Notwithstanding
the foregoing, so long as the Holder of any Securities is the Institutional
Trustee, the payment of the principal of and interest (including Compound
Interest and Additional Interest, if any) on such Securities held by the
Institutional Trustee will be made at such place and to such account as may
be designated by the Institutional Trustee.
5
<PAGE>
Section 2.8. REDEMPTION. Subject to the terms and conditions of
Article 10 of the Indenture:
(1) OPTIONAL REDEMPTION. The Company may redeem the Securities
in whole at any time or in part from time to time, in each case on or after
_______, 2002, but prior to the Stated Maturity, upon not less than 30 nor
more than 60 days' notice, at a redemption price equal to 100% of the
principal amount of the Securities to be redeemed plus any accrued and
unpaid interest, including Additional Interest, if any, to the date fixed
for redemption (the "Redemption Price").
(2) The Company will have the right at any time to dissolve PLC
Capital and cause the Securities to be distributed to the holders of
the Trust Securities in accordance with the Declaration of Trust.
(3) TAX EVENT REDEMPTION. "Tax Event" means the receipt by the
Company of an opinion of a nationally recognized independent tax counsel
experienced in such matters to the effect that, as a result of (i) any
amendment to, or change (including any announced prospective change) in,
on or after the day before the date of issuance of the Preferred
Securities under the Declaration of Trust the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (ii) any interpretation or application of,
or pronouncement with respect to, such laws or regulations by any
legislative body, court, governmental agency or regulatory authority,
which amendment or change is effective or which interpretation,
application or pronouncement is announced on or after the day before the
date of issuance of the Preferred Securities under the Declaration of
Trust, there is more than an insubstantial increase in the risk that (x)
PLC Capital is, or will be within 90 days of the date thereof, subject
to U.S. federal income tax with respect to income received or accrued on
the Securities, (y) interest payable by the Company on the Securities is
not, or within 90 days of the date thereof, will not be, deductible, in
whole or in part, for U.S. federal income tax purposes, or (z) PLC
Capital is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of other taxes, duties or other
governmental charges.
"Redemption Tax Opinion" means an opinion of nationally recognized
independent tax counsel experienced in such matters that, as a result of
a Tax Event, there is more than an insubstantial risk that the Company
would be precluded from deducting the interest on the Subordinated Debt
Securities, in whole or in part, for United States federal income tax
purposes, even if the Subordinated Debt Securities were distributed to
the holders of the Trust Securities in liquidation of such holders'
interest in PLC Capital, pursuant to the exercise by the Company of its
right to dissolve PLC Capital as provided in the Declaration of Trust.
6
<PAGE>
If, at any time, a Tax Event shall occur and be continuing and the
Company shall have received a Redemption Tax Opinion, the Company shall
have the right, upon not less than 30 nor more than 60 days notice, to
redeem the Securities in whole or in part, for cash in the amount of the
Redemption Price, within 90 days following the occurrence of such Tax
Event, and, following such redemption, Trust Securities with an
aggregate liquidation amount equal to the aggregate principal amount of
the Securities so redeemed shall be redeemed by the Trust at the
Redemption Price on a pro rata basis; provided, however, that if at the
time there is available to the Company or the Trust the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some
ministerial action, such as filing a form or making an election or
pursuing some other similar reasonable measure that has no adverse
effect on the Trust, the Company or the holders of the Trust Securities,
the Company or the Trust will pursue such measure in lieu of a
redemption. If the Company does not elect either to distribute the
Securities to the holders of the Preferred Securities in liquidation of
PLC Capital or to redeem the Securities, the Trust Securities shall
remain outstanding and, in the event a Tax Event is continuing,
Additional Interest will be payable on the Securities.
(4) The Securities are not entitled to the benefit of any sinking fund.
(5) If Securities are distributed to the holders of the Preferred
Securities, (i) the Company will use its best efforts to cause the
Securities to be listed on the New York Stock Exchange or on such other
exchange as the Preferred Securities are then listed, and (ii) the
Indenture, this Supplemental Indenture No. 3 and the terms of the
Securities may, thereafter, be modified or amended with the consent of
not less than 66-2/3% in principal amount of the Securities at any time
outstanding, provided, however, that no such modification or amendment
may, without the consent of the Holder of each Security affected
thereby, (a) extend the stated maturity of the principal of any Security
(other than as provided in Section 2.6 of this Supplemental Indenture
No. 3), or reduce the principal amount thereof or reduce the rate or
extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof or change the currency in which the prin
cipal thereof or interest thereon is payable or impair the right to
institute suit for the enforcement of any payment on any Security when
due or (b) reduce the aforesaid principal amount of
7
<PAGE>
Securities, the consent of the Holders of which is required for any such
modification.
Section 2.9. PREFERRED SECURITY HOLDERS' RIGHTS. If an Event of
Default constituting the failure to pay interest or principal on the
Debentures on the date such interest or principal is otherwise payable has
occurred and is continuing, then a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such holder
directly of the principal of or interest on the Securities having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities
of such holder on or after the respective due date specified in the
Securities. The holders of Preferred Securities will not be able to exercise
directly any other remedy available to the holders of the Securities under
this Supplemental Indenture No. 3 or under the Indenture unless the
Institutional Trustee fails to do so.
Section 2.10. ADDITIONAL COVENANTS. The Company agrees that if (i)
there shall have occurred any event that would constitute an Event of Default
(as defined herein) or (ii) the Company shall be in default with respect to
its payment of any obligations under the Guarantee or Common Securities
Guarantee, or (iii) the Company shall have given notice of its election to
defer payments of interest on such Securities by extending the interest
payment period as provided in this Supplemental Indenture No. 3 and such
period, or any extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distribution with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect
to any of its capital stock (other than (i) purchases or acquisitions of
shares of the Company's Common Stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plans or the
satisfaction by the Company of its obligation pursuant to any contract or
security requiring it to purchase shares of its common stock, (ii) as a
result of a reclassification of the Company's capital stock or the exchange
or conversion of one class or series of the Company's capital stock for
another class or series of its capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to an
acquisition or the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, and (iv) redemptions or purchases
pursuant to the Company's Rights Agreement, dated August 7, 1995, between the
Company and AmSouth Bank of Alabama as Rights Agent), (b) the Company shall
not make any payment of principal, premium, if any, or interest on or repay,
repurchase or redeem any debt securities issued by the Company that rank pari
passu with or junior to the Securities and (c) the Company shall not make any
guarantee payments with respect to the foregoing (other than pursuant to
either of the Guarantees or the Series A Guarantee).
8
<PAGE>
The Company agrees (i) to directly or indirectly maintain 100% ownership
of the Common Securities; provided, however, that any permitted successor of
the Company under the Indenture may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily terminate, wind-up or
liquidate PLC Capital, except (a) in connection with a distribution of
Securities to the holders of the Preferred Securities in liquidation of PLC
Capital, or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration of Trust and (iii) to use its
reasonable efforts, consistent with the terms and provisions of the
Declaration of Trust, to cause PLC Capital to remain a grantor trust and not
to be classified as an association taxable as a corporation for United States
federal income tax purposes.
Section 2.11. DENOMINATION. The Securities shall be issuable in
denominations of $[25] and integral multiples thereof.
Section 2.12. CURRENCY. Principal and interest on the Securities
shall be payable in Dollars.
Section 2.13. REGISTERED SECURITIES; FORM. Except as provided in
Section 2.14, the Securities shall be issued as Registered Securities,
without coupons and shall be registered in the name of PLC Capital and its
permitted registered assigns. The Securities shall be substantially in the
form attached as Exhibit A hereto.
Section 2.14. GLOBAL SECURITIES UPON LIQUIDATION OF TRUST.
(a) if, in accordance with the Declaration of Trust, PLC Capital is
to be dissolved and the Securities held by the Institutional Trustee are to
be distributed to the holders of the Trust Securities,
(i) the Securities in certificated form shall be presented to the
Trustee by the Institutional Trustee in exchange for a global Security in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Securities (a "Global Security") to be registered in the name of
the Depository (as defined in the Declaration of Trust), or its nominee, and
delivered by the Trustee to the Depository for crediting to the accounts of
its participants pursuant to the instructions of the Regular Trustees (as
defined in the Declaration of Trust). The Company upon any such presentation
shall execute a Global Security in such aggregate principal amount and
deliver the same to the Trustee for authentication and delivery in accordance
with the Indenture and this Supplemental Indenture No. 3. Payments on
Securities issued as Global Securities will be made to the Depository; and
9
<PAGE>
(ii) if any Preferred Securities are held in non book-entry
certificated form, the Securities in certificated form may be presented to
the Trustee by the Institutional Trustee and any Preferred Security
Certificate (as defined in the Declaration of Trust) which represents
Preferred Securities other than Preferred Securities held by the Clearing
Agency (as defined in the Declaration of Trust) or its nominee ("Non
Book-Entry Preferred Securities") will be deemed to represent beneficial
interests in Securities presented to the Trustee by the Institutional Trustee
having an aggregate principal amount equal to the aggregate liquidation
amount of the Non Book-Entry Preferred Securities until such Preferred
Security Certificates are presented to the Registrar for transfer or
reissuance at which time such Preferred Security Certificates will be
cancelled and a Security, registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder of such
Preferred Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Preferred
Security Certificate cancelled, will be executed by the Company and delivered
to the Trustee for authentication and delivery in accordance with the
Indenture and this Supplemental Indenture No. 3. On issue of such
Securities, Securities with an equivalent aggregate principal amount that
were presented by the Institutional Trustee to the Trustee will be deemed to
have been cancelled.
(b) Unless and until it is exchanged for the Securities in
registered form, a Global Security may be transferred, in whole but not in
part, only to another nominee of the Depository, or to a successor Depository
selected or approved by the Company or to a nominee of such successor
Depository.
(c) If at any time the Depository notifies the Company that it is
unwilling or unable to continue as Depository or if at any time the
Depository for such series shall no longer be registered or in good standing
under the Securities Exchange Act of 1934, as amended, or other applicable
statute or regulation, and a successor Depository for such series is not
appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such condition, as the case may be, the Company
will execute, and, subject to Article III of the Indenture, the Trustee, upon
written notice from the Company, will authenticate and deliver the Securities
in definitive registered form without coupons, in authorized denominations,
and in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security. In addition, the
Company may at any time determine that the Securities shall no longer be
represented by a Global Security. In such event the Company will execute,
and subject to Section 3.1 of the Indenture, the Trustee, upon receipt of an
Officer's Certificate evidencing such determination by the Company, will
authenticate and deliver the Securities in definitive registered form
10
<PAGE>
without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for
such Global Security. Upon the exchange of the Global Security for such
Securities in definitive registered form without coupons, in authorized
denominations, the Global Security shall be cancelled by the Trustee. Such
Securities in definitive registered form issued in exchange for the Global
Security shall be registered in such names and in such authorized
denominations as the Depository, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Securities to the Depository for delivery to the Persons
in whose names such Securities are so registered.
Section 2.15. DEFEASANCE AND COVENANT DEFEASANCE. The provisions of
Sections 4.4 and 4.5 of the Indenture shall apply to the Securities.
Section 2.16. REGISTRAR AND PAYING AGENT. The Trustee shall
initially serve as Registrar and Paying Agent.
Section 2.17. ADDITIONAL PROVISIONS REGARDING AMENDMENTS. So long
as the Holder of the Securities is PLC Capital, the terms of the Securities
may be amended by mutual consent of the Company and PLC Capital in the manner
they shall agree; provided, however, that, so long as any of the Preferred
Securities remain outstanding, no such amendment shall be made that adversely
affects the holders of the Preferred Securities, other than as otherwise
provided for in this Supplemental Indenture No. 3, no termination of the
Securities shall occur, and no Event of Default or compliance with any
covenant under the Securities may be waived by PLC Capital, without the prior
approval of the holders of at least 66-2/3% in liquidation preference of all
Preferred Securities then outstanding, in writing or at a duly constituted
meeting of such holders.
Section 2.18. ADDITIONAL PROVISIONS REGARDING ASSIGNMENT. The
Company shall have the right at all times to assign any of its rights or
obligations under the Securities to a direct or indirect wholly-owned
subsidiary of the Company; provided, however, that, in the event of any such
assignment, the Company shall remain jointly and severally liable for all
such obligations. So long as PLC Capital is the Holder of the Securities,
PLC Capital may not assign any of its rights under the Securities, other than
in connection with a merger or consolidation or sale of assets or exchange
permitted under the terms of the Preferred Securities. Subject to the
foregoing, the Securities shall be binding upon and inure to the benefit of
the Company and PLC Capital and their respective permitted successors and
assigns. Any assignment by the Company or PLC Capital in contravention of
such provisions will be null and void.
11
<PAGE>
Section 2.19. MISCELLANEOUS EXPENSES.
(a) In connection with the offering, sale and issuance of the
Securities to the Institutional Trustee and in connection with the sale of
the Trust Securities by PLC Capital, the Company, in its capacity as borrower
with respect to the Securities, shall pay (i) all costs and expenses relating
to the offering, sale and issuance of the Trust Securities and the
Securities, including commissions to the underwriters payable pursuant to the
Purchase Agreement and compensation of the Trustee under the Indenture, (ii)
all costs and expenses of PLC Capital (including, but not limited to, costs
and expenses relating to the organization of PLC Capital, the offering sale
and issuance of the Trust Securities (including commissions to the
underwriters in connection therewith), the fees and expenses of the
Institutional Trustee and the Delaware Trustee, the costs and expenses
relating to the operation of PLC Capital Trust, including, without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing,
and disposition of PLC Capital's assets), and (iii) the enforcement by the
Institutional Trustee (as defined in the Declaration of Trust) of the rights
of the holders of the Preferred Securities. The Company fully and
unconditionally guarantees the payment of such expenses.
(b) If at any time PLC Capital shall be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other domestic taxing
authority, then, in any such case, the Company agrees to pay, as additional
interest ("Additional Interest") such additional amounts as shall be required
so that the net amounts received and retained by PLC Capital with respect to
the Securities after paying any such taxes, duties, assessments or other
governmental charges, as well as all liabilities, costs and expenses of PLC
Capital with respect to any such items, will be not less than the amounts PLC
Capital would have received had no such taxes, duties, assessments or other
governmental charges been imposed and had no such liabilities, costs and
expenses with respect thereto been incurred.
12
<PAGE>
ARTICLE 3
Miscellaneous Provisions
Section 3.1. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 3, is in all respects hereby adopted, ratified and
confirmed.
Section 3.2. This Supplemental Indenture No. 3 may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 3.3. THIS SUPPLEMENTAL INDENTURE NO. 3 AND EACH SECURITY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
AND SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 3 to be duly executed, as of the day and year first written
above.
PROTECTIVE LIFE CORPORATION
By:
-----------------------
Name:
Title:
By:
-----------------------
Name:
Title:
[Seal]
Attest: ------------------------
Name:
Title:
AMSOUTH BANK OF ALABAMA, Trustee
By:
-----------------------
Name:
Title:
[Seal]
Attest:
----------------------
Name:
Title:
14
<PAGE>
Exhibit A
[FORM OF FACE OF SERIES B SUBORDINATED DEBENTURE]
THIS SERIES B SUBORDINATED DEBENTURE IS REGISTERED IN THE NAME OF PLC
CAPITAL TRUST I AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
OTHER THAN AS PERMITTED IN THE SUPPLEMENTAL INDENTURE NO. 3 DATED AS OF
[ ], A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
[IF THE SUBORDINATED DEBENTURE IS TO BE A GLOBAL SECURITY INSERT -
This Subordinated Debenture is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Subordinated Debenture is
exchangeable for Subordinated Debentures registered in the name of a person
other than the Depository or its nominee only in the limited circumstances
described in the Indenture, and no transfer of this Subordinated Debenture
(other than a transfer of this Subordinated Debenture as a whole by the
Depository to a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Subordinated Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the issuer or its agent for registration of transfer, exchange
or payment, and any Subordinated Debenture issued is registered in of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
PROTECTIVE LIFE CORPORATION
[ ]% Subordinated Debentures
Due [ ], Series B
No. 1 $[ ]
PROTECTIVE LIFE CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware (herein called the
"Company", which term includes any successor corporation under the Indenture
(as defined on the reverse hereof)), for value received, hereby promises to
pay to Wilmington Trust company, as Institutional Trustee (as defined below),
for the benefit of PLC Capital Trust I or permitted registered assigns, the
principal sum of $[ ] Dollars on [ ] (or such other date to
which the stated maturity of this Subordinated Debenture may be shortened or
extended, as described below) and to pay interest thereon from [ ].
Interest shall be payable on this Subordinated Debenture, in arrears, on
March 31, June 30, September 30 and December 31 of each year (each an
"Interest Payment Date") commencing [ ], at the rate of [ ]% per
annum, until the principal hereof is paid or made available for payment;
provided that any such installment of interest, which is overdue shall bear
interest at the rate of [ ]% per annum (to the extent that the payment of
such interest shall be legally enforceable) from the dates such amounts are
due until they are paid or made available for payment, and such interest
shall be payable on demand; provided further that, notwithstanding anything
contained in the Indenture and Supplemental Indenture No. 3 (as defined on
the reverse hereof) to the contrary, the Company shall have the right at any
time, and from time to time, during the term of this Security to defer
payments of interest by extending the interest payment period to the next
Interest Payment Date by one or more quarterly periods not exceeding 20
consecutive quarters (each such period, an "Extension Period"), but no such
Extension Period may extend beyond __________, 2027, or such other date to
which the Stated Maturity may have been shortened or extended as described
below.
<PAGE>
At the end of any such Extension Period, the Company shall pay all interest
then accrued and unpaid (including any Additional Interest, as hereinafter
defined) together with interest thereon compounded quarterly at the rate
specified for the Securities to the extent permitted by applicable law;
provided, that during any such Extension Period, (a) the Company shall not
declare or pay dividends on, make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to any
of its capital stock (other than (i) purchases or acquisitions of shares of
the Company's common stock in connection with the satisfaction by the Company
of its obligations under any employee benefit plans or the satisfaction by
the Company of its obligation pursuant to any contract or security requiring
it to purchase shares of its common stock, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of its capital stock, (iii) the purchase of fractional interests in
shares of the Company's capital stock pursuant to an acquisition or the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, and (iv) redemptions or purchases pursuant to the
Company's Rights Agreement, dated August 7, 1995, between the Company and
AmSouth Bank of Alabama as Rights Agent), (b) the Company shall not make any
payment of principal, premium, if any, or interest on or repay, repurchase or
redeem any debt securities issued by the Company that rank pari passu with or
junior to the Securities and (c) the Company shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Preferred
Securities Guarantee, dated as of ________ __, 1997 of the Company (the
"Guarantee") with respect to the __% Trust Originated Preferred Securities
(the "Preferred Securities") issued by PLC Capital Trust I ("PLC Capital"),
the Common Securities Guarantee, dated as of ________, 1997 of the Company
(the "Common Guarantee," and together with the Guarantee, the "Guarantees")
with respect to the __% Trust Originated Common Securities (the "Common
Securities," and together with the Preferred Securities, the "Trust
Securities") issued by PLC Capital and the Guarantee Agreement, dated as of
June 9, 1994 of the Company (the "Series A Guarantee") with respect to the
9% Cumulative Monthly Income Preferred Securities, Series A of PLC Capital
L.L.C.). Prior to the termination of any such Extension Period, the Company
may further defer payments of interest by extending the interest payment
period; provided, however, that, such Extension Period, including all such
previous and further extensions, may not exceed 20 consecutive quarters or
beyond the Stated Maturity. Upon the termination of any Extension Period and
the payment of all amounts then due, the Company may commence a new Extension
Period, subject to the terms set forth below. No interest shall be due and
payable during any Extension Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued
during any Extension Period. If the Institutional Trustee (as defined in the
Amended and Restated Declaration of Trust
2
<PAGE>
of PLC Capital (the "Declaration of Trust") shall be the sole holder of the
Securities, the Company shall give the Regular Trustees (as defined in the
Declaration of Trust) and the Institutional Trustee (as defined in the
Declaration of Trust), notice of its selection of such Extension Period one
Business Day prior to the earlier of (i) the date distributions on the
Preferred Securities are payable or (ii) the date the Regular Trustees are
required to give notice of the record date or the date such distribution is
payable to the New York Stock Exchange (or other applicable self-regulatory
organization) or to holders of the Preferred Securities, but in any event at
least one Business Day before such record date. If the Institutional Trustee
shall not be the sole holder of the Securities, the Company shall give the
holders of the Securities notice of its selection of such Extension Period at
least 10 Business Days prior to the earlier of (i) the Interest Payment Date
or (ii) the date upon which the Company is required to give notice of the
record or payment date of such interest payment to the New York Stock
Exchange (or other applicable self-regulatory organization) or to holders of
the Securities. The quarter in which any notice is given in accordance with
the foregoing provisions Section 2.5 shall be counted as one of the 20
quarters permitted in the maximum Extension Period permitted hereunder.
The Company shall have the right to (i) shorten the stated maturity
of the principal of this Subordinated Debenture at any time to any date not
earlier than ________, 2002, and (ii) extend the stated maturity of the
principal of this Subordinated Debenture at any time at its election for one
or more periods, but in no event to a date later than________, 2046; provided
that, if the Company elects to exercise its right to extend the stated
maturity of the principal of this Subordinated Debenture pursuant to clause
(ii), above, at the time such election is made and at the time of extension
(A) the Company is not in bankruptcy, otherwise insolvent or in liquidation,
(B) the Company is not in default in the payment of any interest or principal
on the Securities, (C) in the case of the Securities held by PLC Capital
Trust I ("PLC Capital"), PLC Capital is not in arrears on payments of
Distributions (as defined in the Amended and Restated Declaration of Trust of
PLC Capital) on the __% Trust Originated Preferred Securities of PLC Capital
and no deferred Distributions are accumulated and (D) the Securities are
rated not less than BBB- by Standard & Poor's Ratings Services or Baa3 by
Moody's Investors Service, Inc. or the equivalent by any other nationally
recognized statistical rating organization. In the event the Company elects
to shorten or extend the stated maturity of this Subordinated Debenture as
provided above, it shall give notice to the Trustee, and the Trustee shall
give notice of such shortening or extension to the Holder hereof, no less
than 30 and no more than 90 days prior to the effectiveness thereof.
3
<PAGE>
The amount of interest payable on any Interest Payment Date shall be
computed on the basis of twelve 30-day months and a 360-day year and, for any
period that is shorter than a full calendar month, will be calculated on the
basis of the actual number of days elapsed in such period. In the event that
any date on which interest is payable on this Security is not a Business Day,
then payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date. The interest so payable on any Interest
Payment Date which is punctually paid or duly provided for on any Interest
Payment Date will, as provided in the Indenture referred to on the reverse
hereof, be paid to the Person in whose name this Subordinated Debenture is
registered at the close of business on the Regular Record Date for such
Interest Payment Date, which shall be the Business Day next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Person in whose name
this Security is registered on the relevant Regular Record Date, and such
defaulted interest shall instead be payable to the person in whose name this
Subordinated Debenture is registered on the special record date for such
defaulted interest or other specified date determined in accordance with the
Indenture and the Supplemental Indenture No. 3 referred to on the reverse
hereof.
Payment of the principal of and any such interest on this
Subordinated Debenture will be made at the Corporate Trust Office of the
Trustee, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts,
provided, however, that at the option of the Company payment of interest may
be paid (i) by check mailed to the address of the person entitled thereto as
such address shall appear in the Register of Holders of the Subordinated
Debentures or (ii) by wire transfer to an account maintained by the Person
entitled thereto as specified in the Register of Holders of the Securities.
Reference is hereby made to the further provisions of this
Subordinated Debenture set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at
this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Subordinated Debenture shall not be entitled to any benefit under the
Indenture and Supplemental Indenture No. 3 referred to on the reverse hereof
or be valid or obligatory for any purpose.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
PROTECTIVE LIFE CORPORATION
By
---------------------------
By
---------------------------
[CORPORATE SEAL]
This is one of the Securities of the series described in the
within-mentioned Indenture.
AMSOUTH BANK OF ALABAMA, as Trustee
By
---------------------------
Authorized Signatory
5
<PAGE>
[FORM OF REVERSE OF SERIES B SUBORDINATED DEBENTURE]
This Subordinated Debenture is one of a duly authorized issue of
securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under a Subordinated Indenture, dated as of June
1, 1994 (herein, together with all indentures supplemental thereto, including
Supplemental Indenture No. 1, dated as of June 9, 1994, Supplemental
Indenture No. 2, dated August 1, 1994 and Supplemental Indenture No. 3, dated
April _, 1997 called the "Indenture"), from the Company to AmSouth Bank of
Alabama (successor by conversion of charter to AmSouth Bank N.A.) (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee, the holders of Senior Indebtedness
and the Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered. This Security is one of the
series designated on the face hereof, limited in aggregate principal amount
to $[ ] and is issued pursuant to Supplemental Indenture No. 3, dated
as of [ ] from the Company to the Trustee, relating to the Securities of
this series (herein called "Supplemental Indenture No. 3").
The indebtedness evidenced by this Security is to the extent provided
in the Indenture, subordinate and junior in right of payment to all Senior
Indebtedness, and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each holder of this Security, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his behalf to take such action as may be necessary
or appropriate to acknowledge or effectuate the subordination so provided and
(c) appoints the Trustee his attorney-in-fact for any and all such purposes.
Each Holder hereof, by his acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
The Securities of this series are subject to redemption at any time
in whole or from time to time in part, on or after [ , 2002],
but prior to their stated maturity (or such other date to which the stated
maturity of this Subordinated Debenture may be shortened or extended, as
described on the face of this Subordinated Debenture), or, in whole at any
time or in part from time to time if a Tax Event shall have occurred and the
Company has received a Redemption Tax Opinion, upon not less than 30 nor more
than 60 days notice, at a redemption price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest, including
6
<PAGE>
Additional Interest, if any, to the redemption date within 90 days following
the occurrence of such Tax Event; provided, however, that if at the time
there is available to the Company or PLC Capital the opportunity to
eliminate, within such 90 day period, the Tax Event by taking some
ministerial action, such as filing a form or making an election or pursuing
some other similar reasonable measure that has no adverse effect on the
Trust, the Company or the holders of the Trust Securities, the Company or PLC
Capital will pursue such measure in lieu of redemption.
In the event of redemption of this Security in part only, a new
Security or Securities of this series and of like tenor for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture contains provisions for defeasance at any time of the
indebtedness of this Security or of certain restrictive covenants and Events
of Default with respect to this Security, in each case upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Securities of each series to
be affected under the Indenture at any time by the Company and the Trustee
with the consent of the Holders of at least a majority in aggregate principal
amount of the Securities at the time outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of the Security shall
be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security.
No reference herein to the Indenture or to Supplemental Indenture No.
3 and no provision of this Security or of the Indenture or of Supplemental
Indenture No. 3 shall alter or impair the obligation of the Company, which is
absolute and
7
<PAGE>
unconditional, to pay the principal of, and interest on, this Security at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations as
therein set forth, the transfer of this Security is registrable in the
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company, the
Trustee and the Registrar duly executed by the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities of this
series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $[ ] and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the person in whose name this Security is registered as the
owner hereof for all purposes, whether or not the Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Company and the Holder of this Security agree (i) that for United
States federal, state and local tax purposes it is intended that this
Security constitute indebtedness and (ii) to file all United States federal,
state and local tax returns and reports on such basis (unless the Company or
such Holder, as the case may be, shall have received an opinion of
independent nationally recognized tax counsel to the effect that as a result
of a change in law after the date of the issuance of this Security the
Company or such Holder, as the case may be, is prohibited from filing on such
basis).
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
8
<PAGE>
Exhibit 5(a)
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Telephone: (212) 909-6000
Facsimile: (212) 909-6836
April 21, 1997
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
PLC Capital Trust I
c/o Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
Protective Life Corporation
PLC Capital Trust I
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Protective Life Corporation, a
Delaware corporation ("Protective Life"), and PLC Capital Trust I, a statutory
business trust
<PAGE>
Protective Life Corporation 2 April 21, 1997
PLC Captive Trust I
organized under the laws of the State of Delaware ("PLC Capital"), in connection
with the preparation and filing with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "1933 Act"), of
a Registration Statement on Form S-3 (Registration No. 333-25027) (the
"Registration Statement"), relating to (I) the public offering of up to
$75,000,000 in the aggregate of Trust Originated Preferred Securities
("TOPRSSM") (the "Preferred Securities"), representing preferred undivided
interests in the assets of PLC Capital and (II) the issuance by Protective Life
of the Subordinated Debentures due 2027, Series B (the "Subordinated Debt
Securities"). The proceeds of the offering of Preferred Securities by PLC
Capital (together with the proceeds from the issuance of common interests in PLC
Capital) will be loaned by PLC Capital to Protective Life and such loan will be
evidenced by the Subordinated Debt Securities. In addition, certain payment
obligations of PLC Capital with respect to the Preferred Securities will be
guaranteed (on a subordinated basis) by Protective Life pursuant to the
Preferred Securities Guarantee (the "Guarantee") to be executed by Protective
Life for the benefit of holders of Preferred Securities.
In so acting, we have examined and relied upon the originals, or
copies certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below.
Based upon the foregoing, we are of the following opinion:
<PAGE>
Protective Life Corporation 3 April 21, 1997
PLC Captive Trust I
1. Protective Life is validly existing as a corporation in good
standing under the laws of the State of Delaware.
2. The execution and delivery of Supplemental Indenture No. 3 to the
Subordinated Indenture, dated as of June 1, 1994, from Protective Life to
AmSouth Bank of Alabama (as successor by conversion of charter to AmSouth
Bank, N.A.) (the "Supplemental Indenture") and the Subordinated Debt
Securities have been duly authorized by Protective Life. When the
Supplemental Indenture has been duly executed and delivered by Protective
Life and AmSouth Bank of Alabama and the Subordinated Debt Securities have
been duly executed, authenticated, issued, delivered and paid for as
contemplated by the Registration Statement and any prospectus relating
thereto and in accordance with the Supplemental Indenture, assuming the
terms of such Subordinated Debt Securities are in compliance with then
applicable law, the Subordinated Debt Securities will be validly issued and
will constitute valid and binding obligations of Protective Life
enforceable against Protective Life in accordance with their terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability relating to or
affecting the rights of creditors and to general principles of equity
(whether considered in a proceeding at law or in equity).
3. The execution and delivery of the Guarantee have been duly
authorized by Protective Life. When (I) the Guarantee has been duly
executed and delivered, (II) the Preferred Securities to which the
Guarantee relates have been duly issued and sold and the purchase price
therefor has been received by PLC Capital and
<PAGE>
Protective Life Corporation 4 April 21, 1997
PLC Captive Trust I
(III) the Guarantee shall have been qualified under the Trust Indenture Act
of 1939, as amended, the Guarantee will constitute a valid and legally
binding obligation of Protective Life, enforceable against Protective Life
in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting the rights of creditors generally
and to general equitable principles (whether considered in a proceeding in
equity or at law).
Our opinion expressed above is limited to the laws of the State of New
York, the Delaware General Corporation Law, and the federal laws of the United
States of America.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the 1933 Act or the Rules and Regulations of the Commission
thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
<PAGE>
Exhibit 5(b)
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Tel(320)658-6541
Fax(302)658-6548
April 21, 1997
Protective Life Corporation
2801 Highway 280 South
Birmingham, AL 35202
PLC Capital Trust I
c/o Protective Life Corporation
2801 Highway 280 South
Birmingham, AL 35223
Re: PLC Capital Trust I
-------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Protective Life
Corporation, a Delaware corporation (the "Company"), and PLC Capital Trust I,
a Delaware business trust (the "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated April 10,
1997 (the "Certificate of Trust"), as filed with the office of the Secretary
of State of the State of Delaware (the "Secretary of State") on April 10,
1997;
(b) The Declaration of Trust of the Trust, dated as of April
10, 1997 among the Company and the trustees of the Trust named herein;
(c) The Registration Statement (the "Registration
Statement") on Form S-3, including a preliminary prospectus with respect to
the Trust (the"Prospectus"), relating to the Preferred Securities of the
Trust representing preferred undivided beneficial interests in the assets of
the Trust (each, a "Preferred Security" and collectively, the "Preferred
Securities"),
<PAGE>
PLC Capital Trust I
April 21, 1997
Page 2
filed by the Company and the Trust with the Securities and Exchange
Commission on April 11, 1997;
(d) A form of Amended and Restated Declaration of Trust for
the Trust, to be entered into between the Company, the trustees of the Trust
named therein, and the holders, from time to time, of the undivided beneficial
interests in the assets of such Trust (including Exhibits A-1 and A-2 and
Annex I thereto)(the "Declaration"), attached as an exhibit to the
Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated
April 21, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e)
above. In particular, we have not reviewed any document (other than the
documents listed in paragraphs (a) through (e) above) that is referred to in
or incorporated by reference into the documents reviewed by us. We have
assumed that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein. We have
conducted no independent factual investigation of our own but rather have
relied solely upon the foregoing documents, the statements and information
set forth therein and the additional matters recited or assumed herein, all
of which we have assumed to be true, complete and accurate in all material
respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For puposes of this opinion, we have assumed (i) that the
Declaration constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the
creation, operation and termination of the Trust, and that the Declaration of
the Certificate of Trust are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
organization or due formation, as the case may be, and valid existence in
good standing of each party to the documents examined by us under the laws of
the jurisdiction governing its organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power
and authority to execute and deliver, and to perform its obligations under,
such documents, (v) the due authorization, execution and delivery by all
parties thereto of all documents examined by us, (vi) the receipt by each
Person to
<PAGE>
PLC Capital Trust I
April 21, 1997
Page 3
whom a Preferred Security is to be issued by the Trust (collectively, the
"Preferred Security Holders") of a Preferred Security Certificate for such
Preferred Security and the payment for such Preferred Security, in accordance
with the Declaration and the Registration Statement, and (vii) that the
Preferred Securities are issued and sold to the Preferred Security Holders in
accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement or the
Prospectus and assume no responsibility for their contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our
opinions are rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing
in good standing as a business trust under the Business Trust Act.
2. The Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of
the Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware. We note that the
Preferred Security Holders may be obligated to make payments as set forth in
the Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. We
hereby consent to the use of our name under the heading "Legal Matters" in
the Prospectus. In giving the foregoing consents, we do not thereby admit
that we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other person for any purpose.
<PAGE>
PLC Capital Trust I
April 21, 1997
Page 4
Very truly yours,
/s/ Richards, Layton & Finger
<PAGE>
Exhibit 8
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
Telephone: (212) 909-6000
Facsimile: (212) 909-6836
April 21, 1997
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
PLC Capital Trust I
c/o Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
Protective Life Corporation
PLC Capital Trust I
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel to Protective Life Corporation, a
Delaware corporation ("Protective Life"), and PLC Capital Trust I, a statutory
business trust organized under the laws of Delaware ("PLC Capital"), in
connection with the preparation and filing with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"1933 Act"), of a Registration Statement on Form S-3 (Registration No. 333-
<PAGE>
25027) filed on April 11, 1997 under the 1933 Act, as amended (the "Registration
Statement"), relating to (I) the public offering of up to $75,000,000 in the
aggregate of Trust Originated Preferred Securities ("TOPRSSM"), representing
preferred undivided beneficial interests in the assets of PLC Capital (the
"Preferred Securities") and (II) the Subordinated Debentures due 2027, Series B
("Subordinated Debt Securities") of Protective Life. The proceeds of the
offering of the Preferred Securities by PLC Capital (together with the proceeds
from the issuance of common interests in PLC Capital) will be loaned by PLC
Capital to Protective Life and such loan will be evidenced by the Subordinated
Debt Securities. In addition, certain payment obligations of PLC Capital with
respect to the Preferred Securities will be guaranteed by a subordinated
guarantee of Protective Life.
In so acting, we have reviewed the Certificate of Trust of PLC Capital
and the Declaration of Trust of PLC Capital, each dated as of April 10, 1997.
In connection with the issuance pursuant to the Registration Statement
of the Preferred Securities, you have requested that we render the opinion set
forth below. In rendering such opinion, we have examined and relied upon the
representations and warranties as to factual matters made in or pursuant to the
documents referred to above and upon the originals, or copies certified or
otherwise identified to our satisfaction, of such records, documents,
certificates or other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. We have not,
however, undertaken any independent investigation of any factual matter set
forth in any of the foregoing. We have also assumed the due execution and
delivery of the Amended and Restated Declaration of Trust of PLC Capital in the
form of Exhibit 4(c) to the Registration Statement (the "Amended Declaration of
Trust"), that the Amended Declaration of Trust is valid and enforceable in
accordance with its terms and that PLC Capital will at all times comply with the
Delaware Business Trust Act (38 DEL. C. Section 3801 ET SEQ.) and the terms of
the Amended Declaration of Trust.
Subject to the foregoing and the qualifications and limitations set
forth herein, (I) it is our opinion that PLC Capital will be classified as a
grantor trust and not as an association taxable as a corporation for federal
income tax purposes and (II) the statements set forth in the Prospectus relating
to the issuance of the Preferred
2
<PAGE>
Securities under the caption "Certain Federal Income Tax Considerations", to the
extent that such statements relate to matters of law or legal conclusion,
constitute the opinion of Debevoise & Plimpton.
This opinion is based on the relevant law in effect (or, in the case
of Proposed Treasury Regulations, proposed) and the relevant facts that exist as
of the date hereof. No assurance can be given that the law or facts will not
change, and we have not undertaken to advise you or any other person with
respect to any event subsequent to the date hereof.
This opinion is addressed solely to you and no other person may rely
on it, PROVIDED that we hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
caption "Certain Federal Income Tax Considerations" and "Legal Matters" in the
Prospectus. In giving such consent, we do not thereby concede that we are
within the category of persons whose consent is required under Section 7 of the
1933 Act or the Rules and Regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
3
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Protective Life Corporation on Form S-3 (File No. 333-25027) of our report,
which includes an explanatory paragraph with respect to changes in the
Company's method of accounting for stock-based employee compensation plans in
1995, dated February 11, 1997, on our audits of the consolidated financial
statements and financial statement schedules of Protective Life Corporation
and subsidiaries (the Company) as of December 31, 1996 and 1995 and for the
years ended December 31, 1996, 1995, and 1994, which report is included or
incorporated by reference in the Company's Annual Report on Form 10-K. We
also consent to the reference to our firm under the captions "Experts" and
"Selected Financial Information of the Company."
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
April 21, 1997
