<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 11, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
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 [TO BE APPLIED FOR]
(Exact name of registrant as (State or other jurisdiction (I.R.S. Employer
specified in its charter) 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. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF BE OFFERING PRICE AGGREGATE
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT(1) OFFERING PRICE(1)
<S> <C> <C> <C>
Subordinated Debt Securities of Protective Life
Corporation (3); Preferred Securities of PLC Capital
Trust I; Protective Life Corporation Guarantee and
back-up undertakings in connection with the Preferred
Securities of PLC Capital Trust I(4)................... $75,000,000 100% $75,000,000
<CAPTION>
AMOUNT OF
TITLE OF EACH CLASS OF REGISTRATION
SECURITIES TO BE REGISTERED FEE(2)
<S> <C>
Subordinated Debt Securities of Protective Life
Corporation (3); Preferred Securities of PLC Capital
Trust I; Protective Life Corporation Guarantee and
back-up undertakings in connection with the Preferred
Securities of PLC Capital Trust I(4)................... $22,728
</TABLE>
(1) Such indeterminate number of Preferred Securities of PLC Capital Trust I and
such indeterminate principal amount of Subordinated Debt Securities of
Protective Life Corporation as may be issued at indeterminate prices.
(2) The registration fee has been calculated on the basis of the maximum
offering price of all securities listed in accordance with Rule 457(o) under
the Securities Act of 1933.
(3) The Subordinated Debt Securities of Protective Life Corporation will be
purchased by PLC Capital Trust I with the proceeds of the sale of the
Preferred Securities.
(4) No separate consideration will be received for the Guarantee or back-up
undertaking. Includes the rights of holders of the Preferred Securities
under the Guarantee and back-up undertakings, consisting of obligations of
Protective Life Corporation as set forth in the Declaration of Trust
(including the obligation to pay expenses of PLC Capital Trust I), the
Subordinated Indenture and any applicable supplemental indentures thereto,
and the Subordinated Debt Securities issued to PLC Capital Trust I, in each
case as further described in the Registration Statement. No separate
registration fee is required for the Guarantee in accordance with Rule
457(n).
------------------------------
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 11, 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
(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.
Application will be made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"). If so approved, 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.......................................................... $
</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)
Prospectus is being delivered 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), including any
amendment or report filed for the purpose of updating such descriptions prior to
the termination of the offering, 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
4
<PAGE>
herein shall be deemed to be incorporated by reference into this Prospectus and
to be a part of this 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.
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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
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<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
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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
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<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 substantially all 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. Pending such application, such
proceeds will be invested in short-term
securities.
Listing...................................... Application will be made to list the
Preferred Securities 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."
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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 application will be made to list the Preferred Securities
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
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<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
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<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--
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<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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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
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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.
16
<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 substantially all 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. 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).
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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
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Regular Trustees. In the event that [ ] 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 [ ] 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
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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.
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
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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 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
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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.
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.
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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 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.
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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
apart of a position in a "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 OR 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.
50
<PAGE>
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.
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).
51
<PAGE>
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.
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, (i) 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 or (ii) enter into
any swap or
53
<PAGE>
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Offered Securities,
whether any such swap or transaction described in clause (i) or (ii) above is to
be settled by delivery of the Offered Securities or such other securities in
cash or otherwise (except for the Subordinated Debt Securities and the Preferred
Securities offered hereby).
Application will be made to have the Preferred Securities listed 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 elect to reduce any
short position by exercising all or part of the over-allotment option described
above.
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.
54
<PAGE>
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 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.......................................... 49
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS................................. 50
UNDERWRITING.............................................................. 53
LEGAL MATTERS............................................................. 55
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................................................
Fees and expenses of Trustees.....................................
Blue Sky and legal investment fees and expenses...................
Printing and engraving expenses...................................
Accountant's fees and expenses....................................
Legal fees and expenses...........................................
Miscellaneous expenses............................................
---------
Total........................................................... $
---------
---------
</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(b)
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 Offered Securities, the Guarantee and the Subordinated Debentures*
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))*
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- --------------------------------------------------------------------------------------------------------
<C> <S>
24 Power of Attorney of Board of Directors and Officers
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>
- ------------------------
*To be filed by amendment
ITEM 17. UNDERTAKINGS.
(a) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Protective Life's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) ACCELERATION OF EFFECTIVENESS.
Insofar as indemnifications for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons, if any,
of the Registrants pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person, if any, of such
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(c) The undersigned Registrants hereby undertake that:
(1) For purposes of determining any liability under the 1933 Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the 1933 Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the 1933 Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
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 11, 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:
SIGNATURES TITLE DATE
- ------------------------------ -------------------------- ---------------
Chairman of the Board and
* Chief Executive Officer
- ------------------------------ (Principal Executive April 11, 1997
Drayton Nabers, Jr. Officer)
President and Chief
/s/ JOHN D. JOHNS Operating Officer
- ------------------------------ (Principal Financial April 11, 1997
John D. Johns Officer)
Vice President and
/s/ JERRY W. DEFOOR Controller and Chief
- ------------------------------ Accounting Officer April 11, 1997
Jerry W. DeFoor (Principal Accounting
Officer)
*
- ------------------------------ Chairman Emeritus and April 11, 1997
William J. Rushton III Director
*
- ------------------------------ Director April 11, 1997
John W. Woods
*
- ------------------------------ Director April 11, 1997
William J. Cabaniss, Jr.
*
- ------------------------------ Director April 11, 1997
H.G. Pattillo
*
- ------------------------------ Director April 11, 1997
John J. McMahon, Jr.
II-4
<PAGE>
SIGNATURES TITLE DATE
- ------------------------------ -------------------------- ---------------
*
- ------------------------------ Director April 11, 1997
A.W. Dahlberg
*
- ------------------------------ Director April 11, 1997
John W. Rouse, Jr.
*
- ------------------------------ Director April 11, 1997
Robert T. David
*
- ------------------------------ Director April 11, 1997
Ronald L. Kuehn, Jr.
*
- ------------------------------ Director April 11, 1997
Herbert A. Sklenar
*
- ------------------------------ Director April 11, 1997
James S.M. French
*
- ------------------------------ Director April 11, 1997
Robert A. Yellowlees
*By: /s/ DEBORAH J. LONG
-------------------------
Deborah J. Long
ATTORNEY-IN-FACT
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 11, 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 4(a)
CERTIFICATE OF TRUST
The undersigned, the trustees of PLC Capital Trust I, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 Del. C. Section
3810, hereby certify as follows:
(a) The name of the business trust being formed hereby (the "Trust")
is "PLC Capital Trust I".
(b) The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is as follows:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
(c) This Certificate of Trust shall be effective as of the date of
filing.
Dated: April 10, 1997
/s/ Richard J. Bielen
-----------------------------
Richard J. Bielen, as Trustee
/s/ Jerry W. DeFoor
---------------------------
Jerry W. DeFoor, as Trustee
WILMINGTON TRUST COMPANY, as Trustee
By: /s/ Donald G. MacKelcan
-------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
<PAGE>
Exhibit 4(b)
================================================================================
DECLARATION OF TRUST
PLC CAPITAL TRUST I
Dated as of April 10, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions.................................................1
ARTICLE II.
ORGANIZATION
SECTION 2.1. Name........................................................4
SECTION 2.2. Office......................................................4
SECTION 2.3. Purpose.....................................................4
SECTION 2.4. Authority...................................................4
SECTION 2.5. Title to Property of the Trust..............................4
SECTION 2.6. Powers of the Trustees......................................5
SECTION 2.7. Filing of Certificate of Trust..............................6
SECTION 2.8. Duration of Trust...........................................6
SECTION 2.9. Responsibilities of the Sponsor.............................6
SECTION 2.10. Declaration Binding on Securities Holders..................7
ARTICLE III.
TRUSTEES
SECTION 3.1. Trustees....................................................7
SECTION 3.2. Regular Trustees............................................7
SECTION 3.3. Delaware Trustee............................................8
SECTION 3.4. Institutional Trustee.......................................8
SECTION 3.5. Not Responsible for Recitals or Sufficiency of Declaration..8
ARTICLE IV.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1. Exculpation.................................................9
SECTION 4.2. Fiduciary Duty..............................................9
SECTION 4.3. Indemnification............................................10
i
<PAGE>
SECTION 4.4. Outside Businesses.........................................13
ARTICLE V.
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1. Amendments.................................................13
SECTION 5.2. Termination of Trust.......................................14
SECTION 5.3. Governing Law..............................................14
SECTION 5.4. Headings...................................................14
SECTION 5.5. Successors and Assigns.....................................14
SECTION 5.6. Partial Enforceability.....................................14
SECTION 5.7. Counterparts...............................................15
ii
<PAGE>
DECLARATION OF TRUST
OF
PLC CAPITAL TRUST I
April 10, 1997
DECLARATION OF TRUST ("Declaration") dated and effective as of
April 10, 1997 by the undersigned Trustees (together with all other persons
from time to time duly appointed and serving as trustees in accordance with
the provisions of this Declaration, the "Trustees"), Protective Life
Corporation, a Delaware corporation, as trust sponsor (the "Sponsor"), 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 desire to establish a trust
(the "Trust") pursuant to the Delaware Business Trust Act 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 (each as hereinafter
defined); and
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute 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.
ARTICLE I.
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;
<PAGE>
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended from time to
time;
(d) all references in this Declaration to Articles and Sections are
to Articles and Sections of this Declaration unless otherwise specified;
and
(e) 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.
"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.
"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.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing a common undivided
beneficial interest in the assets of the Trust with such terms as may be set
out in any amendment to this Declaration.
"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 employee or agent of the Trust or its Affiliates.
"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 in its
capacity as the issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer and acquired by the Trust.
2
<PAGE>
"Debenture Trustee" means AmSouth Bank of Alabama (as successor by
conversion of charter to AmSouth Bank N.A.), as trustee under the Indenture
until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Delaware Trustee" has the meaning set forth in Section 3.1.
"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 4.3 (b).
"Holder" means the person in whose name a certificate representing
a Security is registered.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the subordinated indenture, dated as of June 1,
1994, from Protective Life Corporation to AmSouth Bank N.A., as trustee and
any indenture supplemental thereto pursuant to which the Debentures are to be
issued.
"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 Security" means a security representing a preferred
undivided beneficial interest in the assets of the Trust with such terms as
may be set out in any amendment to this Declaration.
"Regular Trustee" has the meaning set forth in Section 3.1.
"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.
"Sponsor" means Protective Life Corporation in its capacity as
sponsor of the Trust.
3
<PAGE>
"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.
ARTICLE II.
ORGANIZATION
SECTION 2.1. NAME. The Trust created by this Declaration is
named "PLC Capital Trust I." The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 2.2. OFFICE. The address of the principal office of the
Trust is c/o Protective Life Corporation, 2801 Highway 280 South, Birmingham,
Alabama 35223. At any time, the Regular Trustees may designate another
principal office.
SECTION 2.3. PURPOSE. The exclusive purposes and functions of
the Trust are (i) issuing the 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.
SECTION 2.4. AUTHORITY. Subject to the limitations provided in
this Declaration, 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. In dealing with the Regular Trustees acting on
behalf of the Trust, no person shall be required to inquire into the
authority of the Regular Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Regular Trustees as set forth in this Declaration.
SECTION 2.5. TITLE TO PROPERTY OF THE TRUST. Legal title to all
assets of the Trust shall be vested in the Trust.
4
<PAGE>
SECTION 2.6. POWERS OF THE TRUSTEES. The Regular Trustees shall
have the exclusive power 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 the Securities shall be limited to a one-time, simultaneous
issuance of both Preferred Securities and Common Securities;
(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 a registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, in relation to the Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary 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 or any other national stock exchange
or the Nasdaq Stock Market's National Market for listing upon notice
of issuance of any Preferred Securities;
(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 an underwriting or purchase agreement
and pricing agreement providing for the sale of the Preferred
Securities;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and provide for reasonable compensation for such services;
5
<PAGE>
(d) to incur expenses which are necessary or incidental to carry out
any of the purposes of this Declaration; and
(e) 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.
SECTION 2.7. FILING OF CERTIFICATE OF TRUST. On or after the
date of execution of this Declaration, the Trustees shall cause the filing of
the Certificate of Trust for the Trust in the form attached hereto as Exhibit
A with the Secretary of State of the State of Delaware.
SECTION 2.8. DURATION OF TRUST. The Trust, absent termination
pursuant to the provisions of Section 5.2, shall have existence for
fifty-five (55) years from the date hereof.
SECTION 2.9. 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, and 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
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
6
<PAGE>
(e) to negotiate the terms of an underwriting or purchase agreement
and pricing agreement providing for the sale of the Preferred Securities.
SECTION 2.10. DECLARATION BINDING ON SECURITIES HOLDERS. Every
Person by virtue of having become a Holder of a Security or any interest
therein 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.
ARTICLE III.
TRUSTEES
SECTION 3.1. TRUSTEES. The number of Trustees initially shall be
three (3), and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed by the
Sponsor. The Sponsor is entitled to appoint or remove without cause any
Trustee at any time; provided, however, that the number of Trustees shall in
no event be less than two (2); provided further that one Trustee, in the case
of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its
principal place of business in the State of Delaware (the "Delaware
Trustee"); provided further that there shall be at least one Trustee who is
an employee or officer of, or is affiliated with, the Sponsor (a "Regular
Trustee").
SECTION 3.2. 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, any power
of the Regular Trustees may be exercised by, or with the consent of, any one
such Regular Trustee.
(b) 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
7
<PAGE>
behalf of the Trust any documents which the Regular Trustees have the power
and authority to cause the Trust to execute pursuant to Section 2.6, provided
that, the registration statement referred to in Section 2.6(b)(i), including
any amendments thereto, shall be signed by a majority of the Regular
Trustees; and
(c) 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 2.6.
SECTION 3.3. DELAWARE TRUSTEE. The initial Delaware Trustee
shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-0001
Attention: Corporate Trust Administration
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers of, nor
shall the Delaware Trustee have any of the duties and responsibilities of the
Regular Trustees described in this Declaration. 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. Notwithstanding anything herein
to the contrary, the Delaware Trustee shall not be liable for the acts or
omissions to act of the Trust, of the Sponsor or of the Regular Trustees
except such acts as the Delaware Trustee is expressly obligated or authorized
to undertake under this Declaration or the Business Trust Act and except for
the gross negligence or willful misconduct of the Delaware Trustee.
SECTION 3.4. INSTITUTIONAL TRUSTEE. Prior to the issuance of the
Preferred Securities and Common Securities, the Sponsor shall appoint a
trustee (the "Institutional Trustee") meeting the requirements of an eligible
trustee under the Trust Indenture Act of 1939, as amended, by the execution
of an amendment to this Declaration executed by the Regular Trustees, the
Sponsor, the Institutional Trustee and the Delaware Trustee.
SECTION 3.5. NOT RESPONSIBLE FOR RECITALS OR SUFFICIENCY OF
DECLARATION. The recitals contained in this Declaration 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.
8
<PAGE>
ARTICLE IV.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 4.1. 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 or omission performed or omitted 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 gross negligence or willful misconduct with
respect to such acts or omissions; and
(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 4.2. 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, 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
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that
9
<PAGE>
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; and
(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 4.3. INDEMNIFICATION.(a) (i) The Debenture Issuer 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.
10
<PAGE>
(ii) The Debenture Issuer 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
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 4.3(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 4.3(a) (unless ordered by a court) shall be made by the Debenture
Issuer 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 4.3(a) shall be paid by the Debenture Issuer 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 Debenture Issuer as authorized in this Section 4.3(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture
Issuer if a determination is reasonably and promptly made (i) by the Regular
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<PAGE>
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.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 4.3(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 Debenture
Issuer 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 4.3(a)
shall be deemed to be provided by a contract between the Debenture Issuer and
each Company Indemnified Person who serves in such capacity at any time while
this Section 4.3(a) is in effect. Any repeal or modification of this Section
4.3(a) shall not affect any rights or obligations then existing.
(vii) The Debenture Issuer 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 Debenture
Issuer would have the power to indemnify him against such liability under the
provisions of this Section 4.3 (a).
(viii) For purposes of this Section 4.3(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 4.3(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 4.3(a) shall, unless otherwise provided
when authorized or ratified,
12
<PAGE>
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 Debenture Issuer agrees to indemnify (I) the Delaware
Trustee, (II) any Affiliate of the Delaware Trustee, and (III) any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Delaware Trustee (each of the Persons
in (i) through (iii) 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 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 (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 4.3(b) shall survive the
termination of this Declaration.
SECTION 4.4. OUTSIDE BUSINESSES. Any Covered Person, the Sponsor
and the Delaware 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 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. Neither any Covered Person,
the Sponsor nor the Delaware 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 and the Delaware 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 and the Delaware 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 may act on any committee or body of holders of,
securities or other obligations of the Sponsor or its Affiliates.
ARTICLE V.
AMENDMENTS, TERMINATION, MISCELLANEOUS
SECTION 5.1. AMENDMENTS. At any time before the issue of any
Securities, this Declaration may be amended by, and only by, a written
instrument executed by all of the Regular Trustees and the Sponsor; provided,
however, if the amendment affects the rights,
13
<PAGE>
powers, duties, obligations or immunities of the Delaware Trustee, the
amendment shall also be approved by the Delaware Trustee.
SECTION 5.2. TERMINATION OF TRUST. (a) The Trust shall terminate
and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(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 or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent of all of
the Regular Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
SECTION 5.3. 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 5.4. 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 5.5. 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
so expressed.
SECTION 5.6. PARTIAL ENFORCEABILITY. If any provision of this
Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the
14
<PAGE>
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 5.7. COUNTERPARTS. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be
executed by the affixing of the 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.
15
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Declaration of
Trust of PLC Capital Trust I to be executed as of the day and year first
above written.
/s/ Richard J. Bielen
-----------------------------------------------------
Name: Richard J. Bielen
Title: Regular Trustee
/s/ Jerry W. DeFoor
-----------------------------------------------------
Name: Jerry W. DeFoor
Title: Regular Trustee
WILMINGTON TRUST COMPANY,
as Delaware Trustee
/s/ Donald G. MacKelcan
-----------------------------------------------------
Name: Donald G. MacKelcan
Title: Assistant Vice President
PROTECTIVE LIFE CORPORATION, as Sponsor
/s/ Richard J. Bielen
-----------------------------------------------------
Name: Richard J. Bielen
Title: Senior Vice President, Investments
<PAGE>
Exhibit 4(c)
================================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
PLC CAPITAL TRUST I
Dated as of April __, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
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
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Page
----
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
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Page
----
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
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Page
----
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>
Page
----
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.
vi
<PAGE>
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.
2
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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
3
<PAGE>
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.
4
<PAGE>
"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.
5
<PAGE>
"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).
6
<PAGE>
"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).
7
<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.
8
<PAGE>
(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. Bieben
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
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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 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, 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
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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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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
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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
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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
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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 succesaor 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 $[75,000,000]. 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. 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 an 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 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)
such Preferred 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,
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 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 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."
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 or 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
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 may 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 the
Debentures 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) 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 First
Supplemental Indenture. 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 Securities 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; pro vided, 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
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, 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 the
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 the
Trust 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 no such liabilities, costs and expenses
with respect thereto having 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>
[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.
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 instalment 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 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
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 Property 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 pursuant to this
Section 2.5 shall be counted as one of the 20 quarters permitted in the
maximum Extension Period 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) such Preferred
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
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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
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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.
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Exhibit 4(i)
================================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
PLC CAPITAL TRUST I
Dated as of _________ __, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation...........................2
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.........................5
SECTION 2.2. Lists of Holders of Securities...........................5
SECTION 2.3. Reports by the Preferred Guarantee Trustee...............6
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee..........6
SECTION 2.5. Evidence of Compliance with Conditions Precedent.........6
SECTION 2.6. Events of Default; Waiver................................6
SECTION 2.7. Event of Default; Notice.................................6
SECTION 2.8. Conflicting Interests....................................7
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Preferred Guarantee Trustee.....7
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee............9
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee...11
ARTICLE IV.
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee; Eligibility................11
SECTION 4.2. Appointment, Removal and Resignation of Preferred Guarantee
Trustees....................................................12
ARTICLE V.
GUARANTEE
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Page
----
SECTION 5.1. Guarantee...............................................13
SECTION 5.2. Waiver of Notice and Demand.............................13
SECTION 5.3. Obligations Not Affected................................13
SECTION 5.4. Rights of Holders.......................................15
SECTION 5.5. Guarantee of Payment....................................15
SECTION 5.6. Subrogation.............................................15
SECTION 5.7. Independent Obligations.................................15
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions..............................16
SECTION 6.2. Ranking.................................................16
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination.............................................17
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. Exculpation.............................................17
SECTION 8.2. Indemnification.........................................17
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Successors and Assigns..................................18
SECTION 9.2. Amendments..............................................18
SECTION 9.3. Notices.................................................18
SECTION 9.4. Benefit.................................................19
SECTION 9.5. Governing Law...........................................19
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of _________ __, 1997, is executed and delivered by Protective Life
Corporation, a Delaware corporation (the "Guarantor"), and Wilmington Trust
Company, as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of PLC Capital Trust I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of __________ __, 1997, among the trustees of the
Issuer named therein, the Guarantor, as sponsor, and the holders from time to
time of undivided beneficial interests in the assets of the Issuer, the Issuer
is issuing on the date hereof ___________ preferred securities, having an
aggregate liquidation amount of $___________, designated the ____% Trust
Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Common Securities Guarantee") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein), except that if an Event of Default (as
defined in the Indenture), has occurred and is continuing, the rights of holders
of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation. In this Preferred
Securities Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Preferred Securities Guarantee
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 Preferred Securities Guarantee
has the same meaning throughout;
(c) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless otherwise defined
in this Preferred Securities Guarantee 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 of 1933, as amended, or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by any
applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
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"Corporate Trust Office" means the office of the Preferred Guarantee
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 Agreement is located at Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890,
Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the series of junior subordinated debt securities
of the Guarantor designated the ____% Subordinated Debentures due 2027, Series B
held by the Institutional Trustee (as defined in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by the Issuer,
and (iii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Debentures to
the Holders in exchange for Preferred Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
under the Common Securities Guarantee Agreement are subordinated to the rights
of Holders of Preferred Securities to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
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"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of June 1, 1994, among the
Guarantor (the "Debenture Issuer") and AmSouth Bank of Alabama (as successor by
conversion of charter to AmSouth Bank N.A.), as trustee, and any indenture
supplemental thereto pursuant to which certain subordinated debt securities of
the Debenture Issuer are to be issued to the Institutional Trustee of the
Issuer.
"Majority in liquidation amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the 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 Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
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.
"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.
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"Preferred Guarantee Trustee" means Wilmington Trust Company until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee 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 Preferred Guarantee 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.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE II.
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application. (a) This Preferred
Securities Guarantee is subject to the provisions of the Trust Indenture Act
that are required to be part of this Preferred Securities Guarantee and shall,
to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2. Lists of Holders of Securities. (a) The Guarantor shall
provide the Preferred Guarantee Trustee with a list, in such form as the
Preferred Guarantee Trustee may reasonably require, of the names and addresses
of the Holders of the Preferred Securities ("List of Holders") as of such date,
(i) concurrently with the provision of such a list to the Institutional Trustee
pursuant to the Declaration, and (ii) at any time within 30 days of receipt by
the Guarantor of a written request for a List of Holders as of a date no more
than 14 days
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before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not 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 Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3. Reports by the Preferred Guarantee Trustee. Within 60
days after May 15 of each year, the Preferred Guarantee 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 Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Preferred Guarantee Trustee. The
Guarantor shall provide to the Preferred Guarantee Trustee such documents,
reports and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee 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.
SECTION 2.6. Events of Default; Waiver. 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 and
its consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Preferred Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 2.7. Event of Default; Notice. (a) The Preferred Guarantee
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 Preferred
Securities, notices of all Events of
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Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or unless a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge thereof.
SECTION 2.8. Conflicting Interests. The Declaration shall be deemed
to be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred Guarantee
Trustee for the benefit of the Holders of the Preferred Securities, and the
Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee 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
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perform only such duties as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section
2.6) and is actually known to a Responsible Officer of the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Preferred Securities Guarantee, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee 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 any 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 Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred
Securities Guarantee, and no implied covenants or obligations shall
be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee 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 Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
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(iii) the Preferred Guarantee 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 Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred
Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee 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 the
Preferred Guarantee Trustee 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 Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Preferred Guarantee Trustee. (a)
Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee 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 Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction (as defined in the Declaration) or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee 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
Guarantor.
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(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel, and
the written advice or opinion of such counsel with respect to legal
matters 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. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Preferred Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Guarantee 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 Preferred Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee 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 Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee 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.
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(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Preferred Securities, and
the signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (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.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee 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 Preferred Guarantee 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 Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee.
The recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
ARTICLE IV.
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee; Eligibility. (a) There
shall at all times be a Preferred Guarantee Trustee which shall:
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<PAGE>
(i) not be an Affiliate of the Guarantor; 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
Securities and Exchange 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 4.1(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 Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2 (c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2. Appointment, Removal and Resignation of Preferred
Guarantee Trustees. (a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment
12
<PAGE>
by instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V.
GUARANTEE
SECTION 5.1. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer), as and when
due, regardless of any defense, right of set-off or counterclaim that the Issuer
may have or assert. The Guarantor's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand. The Guarantor hereby
waives notice of acceptance of this Preferred Securities Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment, any
right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no
13
<PAGE>
way be affected or impaired by reason of the happening from time to time of any
of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of Distributions,
Redemption Price, Liquidation Distribution or other sum payable that
results from the extension of any interest payment period on the
Debentures or any extension of the maturity date of the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
14
<PAGE>
SECTION 5.4. Rights of Holders. (a) The Holders of a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting of any proceeding for any remedy available
to the Preferred Guarantee Trustee in respect of this Preferred Securities
Guarantee or exercising any trust or power conferred upon the Preferred
Guarantee Trustee under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee with respect to the right of any Holders to
receive any Guarantee Payment in accordance herewith, such Holder may directly
institute a proceeding against the Guarantor for enforcement of the Preferred
Security Guarantee for such payment. The Guarantor waives any right or remedy to
require that any action be brought first against the Issuer or any other Person
or entity before proceeding directly against the Guarantor.
SECTION 5.5. Guarantee of Payment. This Preferred Securities
Guarantee creates a guarantee of payment and not of collection.
SECTION 5.6. Subrogation. The Guarantor shall be subrogated to all
(if any) rights of the Holders of Preferred Securities against the Issuer in
respect of any amounts paid to such Holders by the Guarantor under this
Preferred Securities Guarantee; provided, however, that the Guarantor shall not
(except to the extent required by mandatory provisions of law) be entitled to
enforce or exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment
under this Preferred Securities Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7. Independent Obligations. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Securities, and that the Guarantor shall be liable
as principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
15
<PAGE>
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. Limitation of Transactions. So long as any Preferred
Securities remain outstanding, if there shall have occurred and be continuing an
Event of Default or an event of default under the Declaration, then (a) the
Guarantor shall not declare or pay any dividend on, make any distributions 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 its common stock in connection with the satisfaction by the
Guarantor of its obligations under any employee benefit plans or the
satisfaction by the Guarantor of its obligations pursuant to any contract or
security requiring the Guarantor to purchase shares of its common stock, (ii) as
a result of a reclassification of its capital stock or the exchange or
conversion of one class or series of its capital stock for another class or
series of its capital stock, (iii) the purchase of fractional interests in
shares of its capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, and (iv)
redemptions or purchases pursuant to the Guarantor's Rights Agreement, dated
August 7, 1995, between the Guarantor and AmSouth Bank of Alabama as Rights
Agent), (b) the Guarantor 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 Guarantor which rank pari passu with or
junior to the Debentures and (c) the Guarantor shall not make any guarantee
payments with respect to the foregoing (other than pursuant to this Agreement,
the Common Securities Guarantee, dated as of ______, 1997 of the Guarantor with
respect to the __% Trust Originated Common Securities of the Trust and the
Guarantee Agreement, dated as of June 9, 1994 of the Guarantor with respect to
the 9% Cumulative Monthly Income Preferred Securities, Series A of PLC Capital
L.L.C .
SECTION 6.2. Ranking. This Preferred Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all Senior Indebtedness (as such
term is defined in the Indenture), (ii) pari passu with the Debentures and the
Guarantor's Guarantee of PLC Capital L.L.C.'s 9% Cumulative Monthly Income
Preferred Securities, Series A and any other liabilities or obligations that may
be pari passu by their terms and (iii) senior to the Guarantor's common stock,
the most senior preferred or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the Guarantor
in respect of any preferred or preference stock of any affiliate of the
Guarantor.
16
<PAGE>
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination. This Preferred Securities Guarantee shall
terminate upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) upon the distribution of the Debentures to the Holders of all
of the Preferred Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this 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 must restore payment of any sums paid under the Preferred
Securities or under this Preferred Securities Guarantee.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee 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 negligence 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 Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor 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 Guarantor, 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 Preferred Securities
might properly be paid.
SECTION 8.2. Indemnification. (a) To the fullest extent permitted by
applicable law, the Guarantor shall indemnify and hold harmless each Indemnified
Person from and against any loss, damage or claim incurred by such Indemnified
Person by reason of
17
<PAGE>
any act or omission performed or omitted by such Indemnified Person in good
faith in accordance with this Guarantee Agreement and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, reasonable
expenses (including legal fees) incurred by an Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Guarantor prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Guarantor of an undertaking by or
on behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in Section 8.2(a).
(c) The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of the Preferred Securities Guarantee.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Successors and Assigns. All guarantees and agreements
contained in this Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding.
SECTION 9.2. Amendments. Except with respect to any changes that do
not adversely affect the rights of Holders (in which case no consent of Holders
will be required), this Preferred Securities Guarantee may only be amended with
the prior approval of the Holders of at least a Majority in 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 the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3. Notices. All notices provided for in this Preferred
Securities Guarantee 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:
18
<PAGE>
(a) if given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address
as the Preferred Guarantee Trustee may give notice of to the Holders of
the Preferred Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
Attention:
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
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 9.4. Benefit. This Preferred Securities Guarantee is solely
for the benefit of the Holders of the Preferred Securities and, subject to
Section 3.1(a), is not separately transferable from the Preferred Securities.
SECTION 9.5. Governing Law. THIS PREFERRED SECURITIES GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
19
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
PROTECTIVE LIFE CORPORATION, as Guarantor
By: __________________________________________
Name:
Title:
WILMINGTON TRUST COMPANY, as Preferred
Guarantee Trustee
By: __________________________________________
Name:
Title:
20
<PAGE>
EXHIBIT 12
PROTECTIVE LIFE CORPORATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
COMPUTATION OF RATIO OF CONSOLIDATED
EARNINGS TO FIXED CHARGES
Income before income tax $ 59,947 $ 85,044 $106,173 $121,034 $139,741
Less pretax minority interest (1) (90) (19) 0 0 0
Add interest expense 4,806 6,338 7,766 9,589 10,063
---------- ---------- ---------- ---------- ----------
Earnings before interest and taxes $ 64,663 $ 91,363 $113,939 $130,623 $149,804
========== ========== ========== ========== ==========
Earnings before interest and taxes
divided by interest expense 13.5 14.4 14.7 13.6 14.9
========== ========== ========== ========== ==========
COMPUTATION OF RATIO OF CONSOLIDATED
EARNINGS TO COMBINED FIXED CHARGES
AND DISTRIBUTIONS ON SERIES A PREFERRED
SECURITIES(2)
Income before income tax $ 59,947 $ 85,044 $106,173 $121,034 $139,741
Less pretax minority interest(1) (90) (19) 0 0 0
Add interest expense 4,806 6,338 7,766 9,589 10,063
--------- ---------- ---------- ---------- -----------
Earnings before interest and taxes $ 64,663 $ 91,363 $113,939 $130,623 $149,804
========= ========== ========== ========== ===========
Earnings before interest and taxes
divided by interest expense and distributions
on Series A Preferred Securities(2) 13.5 14.4 10.8 9.0 10.0
========== ========== ========== ========== ===========
COMPUTATION OF RATIO OF CONSOLIDATED
EARNINGS TO COMBINED FIXED CHARGES,
DISTRIBUTIONS OF SERIES A PREFERRED
SECURITIES(2), AND INTEREST CREDITED ON
INVESTMENT PRODUCTS
Income before income tax $ 59,947 $ 85,044 $106,173 $121,034 $139,741
Less pretax minority interest(1) (90) (19) 0 0 0
Add interest expense 4,806 6,338 7,766 9,589 10,063
Add interest credited on investment products 173,658 220,772 260,081 288,710 280,377
---------- ---------- ---------- ----------- -----------
Earnings before interest and taxes $238,321 $312,135 $374,020 $417,333 $430,181
========== ========== ========== =========== ===========
Earnings before interest and taxes
divided by interest expense, distributions
on Series A Preferred Securities(2), and
interest credited on investment products 1.3 1.4 1.4 1.4 1.5
========== ========== ========== =========== ===========
- -------------------
(1) Does not include distributions on Series A Preferred Securities reported as minority interest.
(2) Distributions on Series A Preferred Securities were $2,764 in 1994, and $4,950 in 1995 and 1996;
there were no Series A Preferred Securities outstanding during any prior period.
</TABLE>
<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. ) 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 11, 1997
<PAGE>
Exhibit 24
PROTECTIVE LIFE CORPORATION
2801 Highway 280 South
Birmingham, Alabama 35223
KNOW ALL MEN BY THESE PRESENTS that the undersigned Officers and
Directors of Protective Life Corporation, a Delaware corporation (the
"Corporation"), hereby constitute and appoint Drayton Nabers, Jr., John D.
Johns and Deborah J. Long, and each of them, the true and lawful agents and
attorneys-in-fact of the undersigned with full power and authority in said
agents and attorneys-in-fact, and any one or more of them, to sign for the
undersigned and in their respective names as Officers and as Directors of the
Corporation (both in such capacity and in capacities necessary for the
execution of documents in their names on behalf of the Corporation in its
capacity (i) as a member or managing member of PLC Capital L.L.C., a
limited liability company and subsidiary of the Corporation organized under
the laws of the State of Delaware ("PLC Capital L.L.C") or (ii) as a trustee
or sponsor of, limited or general partner in, or holder of interests in, any
trust, partnership or other entity established by the Corporation in
connection with or for the purpose of facilitating the offering or issuance
of securities (a "PLC Entity")) one or more Registration Statements on form
S-3 of the Corporation and, if applicable, PLC Capital L.L.C. and/or any PLC
Entity to be filed with the Securities and Exchange Commission, Washington,
D.C., under the Securities Act of 1933, as amended, any subsequent
Registration Statements which may be filed under Rule 462(b) and any
amendment or amendments to such Registration Statements, relating to the debt
securities, common stock or preferred stock of the Corporation, the preferred
limited liability company interests of PLC Capital L.L.C. and/or interests in
any PLC Entity, and related guarantees or backup undertakings of the
Corporation to be offered to the public, and the undersigned hereby ratify
and confirm all acts taken by such agents and attorneys-in-fact, or any one
or more of them, as herein authorized.
Dated: January 2, 1997
Name: Title:
- ----- ------
/s/ Drayton Nabers, Jr. Chief Executive Officer,
- ---------------------------- Chairman of the Board and Director
Drayton Nabers, Jr.
<PAGE>
/s/ John D. Johns President and Chief Operating Officer
- ----------------------------
John D. Johns
/s/ Jerry W. DeFoot Vice President, Controller
- ---------------------------- and Chief Accounting Officer
Jerry W. DeFoot
/s/ William J. Rushton III Chairman Emeritus and Director
- ----------------------------
William J. Rushton III
/s/ John W. Woods Director
- -----------------------------
John W. Woods
/s/ William J. Cabaniss, Jr. Director
- -----------------------------
William J. Cabaniss, Jr.
/s/ H.G. Patrillo Director
- -----------------------------
H.G. Patrillo
/s/ John J. McMahons, Jr. Director
- -----------------------------
John J. McMahons, Jr.
/s/ A.W. Dahlberg Director
- ------------------------------
A.W. Dahlberg
/s/ John W. Rouse, Jr. Director
- ------------------------------
John W. Rouse, Jr.
/s/ Robert T. David Director
- ------------------------------
Robert T. David
2
<PAGE>
/s/ Ronald L. Kuehn, Jr. Director
- -------------------------------
Ronald L. Kuehn, Jr.
/s/ Herbert A. Sklenar Director
- -------------------------------
Herbert A. Sklenar
/s/ James S. M. French Director
- -------------------------------
James S. M. French
/s/ Robert A. Yellowlees Director
- -------------------------------
Robert A. Yellowlees
<PAGE>
Exhibit 25(b)
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ____
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer
identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
PROTECTIVE LIFE CORPORATION
PLC CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware 95-2492236
Delaware To Be Applied For
(State of incorporation) (I.R.S. employer
identification no.)
2801 Highway 280 South
Birmingham, Alabama 35233
<PAGE>
(Address of principal executive offices) (Zip Code)
Preferred Securities of PLC Capital Trust I
(Title of the indenture securities)
================================================================================
2
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an affiliate
of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the
3
<PAGE>
City of Wilmington and State of Delaware on the 9th day of April, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKelcan By: /s/ Emmett R. Harmon
----------------------------- --------------------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
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EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
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Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
int he Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended
shall in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz:
1. To sue and be sued, complain and defend in any Court of law
or equity and to make and use a common seal, and alter the
seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall
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require, to make by-laws not inconsistent with the
Constitution or laws of the United States or of this State,
to discount bills, notes or other evidences of debt, to
receive deposits of money, or securities for money, to buy
gold and silver bullion and foreign coins, to buy and sell
bills of exchange, and generally to use, exercise and enjoy
all the powers, rights, privileges and franchises incident
to a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To ensure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or claims,
adverse to his interest therein, and to prepare and give
certificates of title for any lands or premises in the State
of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every
description, and to carry on the business of conveyancing in
all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property of
every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other persons
and individuals, and from all corporations whether state,
municipal, corporate or private, and to rent boxes, safes,
vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond
or other instrument issued by any state, municipality, body
politic, corporation, association or person, either alone or
in conjunction with any other person or persons, corporation
or corporations.
(8) To guarantee the validity, performance or effect of any
contract or
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agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office,
duty, contract or agreement, either by itself or in
conjunction with any other person, or persons, corporation, or
corporations, or in like manner become surety upon any bond,
recognizance, obligation, judgment, suit, order, or decree to
be entered in any court of record within the State of Delaware
or elsewhere, or which may now or hereafter be required by any
law, judge, officer or court in the State of Delaware or
elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignees, assignee in
bankruptcy, executor, administrator, guardian, bailee, or in
any other trust capacity in the receiving, holding, managing,
and disposing of any and all estates and property, real,
personal or mixed, and to be appointed as such trustee,
trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the
State of Delaware of elsewhere; and whenever this Corporation
is so appointed by any person, corporation, court, officer or
authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator,
guardian, bailee, or in any other trust capacity, it shall not
be required to give bond with surety, but its capital stock
shall be taken and held as security for the performance of the
duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or be
called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to receive
a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to receive,
collect, receipt for, and dispose of interest, dividends and
income upon and from any of the bonds, mortgages, debentures,
notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held
and owned by it, and to exercise in respect of all such
bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness
and other property, any and all the rights, powers and
privileges of individual owners thereof, including the right
to vote thereon; to invest and deal in and with any of the
moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time
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to vary or realize such investments; to issue bonds and secure
the same by pledges or deeds or mortgages of or upon the whole
or any part of the property held or owned by the Corporation,
and to sell and pledge such bonds, as and when the Board of
Directors shall determine, and in the promotion of its said
corporate business of investment and to the extent authorized
by law, to lease, purchase, hold, sell, assign, transfer,
pledge, mortgage and convey real and personal property of any
name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and franchises
and to undertake the whole or any part of the assets and
liabilities of any person, firm, association or corporation,
and to pay for the same in cash, stock of this Corporation,
bonds or otherwise; to hold or in any manner to dispose of the
whole or any part of the property so purchased; to conduct in
any lawful manner the whole or any part of any business so
acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such
business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or corporation,
and, without limit as to amount, to draw, make, accept,
endorse, discount, execute and issue promissory notes, drafts,
bills of exchange, warrants, bonds, debentures, and other
negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same
extent as natural persons might or could do, to purchase or
otherwise acquire, to hold, own, to mortgage, sell, convey or
otherwise dispose of, real and personal property, of every
class and description, in any State, District, Territory or
Colony of the United States, and in any foreign country or
place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall
(except where otherwise expressed in said paragraph) be nowise
limited or restricted by reference to or interference from the
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terms of any other clause of this or any other paragraph in
this charter, but that the objects, purposes and powers
specified in each of the clauses of this paragraph shall be
regarded as independent objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as "Preferred
Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding, and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolutions adopted prior to the issuance of any shares of a
particular series of Preferred Stock, the voting powers and the
designations, preferences and relative, optional and other special
rights, and the qualifications, limitations and restrictions of such
series, including, but without limiting the generality of the
foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the number
of shares thereof then outstanding) from time to time by like
action of the Board of Directors;
(2) The rate and times at which, and the terms and conditions
on which, dividends, if any, on Preferred Stock of such series
shall be paid, the extent of the preference or relation, if
any, of such dividends to the dividends payable on any other
class or classes, or series of the same or other class of
stock and whether such dividends shall be cumulative or
non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same for,
shares of any other class or classes or of any series of the
same or any other class or classes of stock of the Corporation
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and the terms and conditions of such on version or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed;
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation;
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the generality
of the foregoing include the right, voting as a series or by
itself or together with other series of Preferred Stock or all
series of Preferred Stock as a class, to elect one or more
directors of the Corporation if there shall have been a
default in the payment of dividends on any one or more series
of Preferred Stock or under such circumstances and on such
conditions as the Board of Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount, if
any, (fixed in accordance with the provisions of section (b)
of this Article Fourth), to be distributed to the holders of
Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or
winding-up, of the Corporation, the holders of the Common
Stock shall be entitled to receive all of the remaining assets
of the Corporation, tangible and intangible, of whatever kind
available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by
them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be adopted
by the Board of Directors pursuant to section (b) of this
Article Fourth, each holder of Common Stock shall have
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one vote in respect of each share of Common Stock held on all
matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates or indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and deposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may deemed advisable by the Board of
Directors in the exercise of his sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences
and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences
and rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
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(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) Th business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of
one class expiring each year. At the annual meeting of
stockholders in 1982, directors of the first class shall be
elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual
meeting and directors of the third class shall be elected to hold
office for a term expiring at the third succeeding annual meeting.
Any vacancies in the Board of Directors for any reason, and any
newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a
majority of the directors then in office, although less than a
quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold
office until the next election of the class for which such
director shall have been chosen and until his successor shall
be elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of
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directors; provided, however, that if less than 21 days' notice of
the meeting is given to stockholders, such written notice shall be
delivered or mailed, as prescribed, to the Secretary of the
Corporation not later than the close of the seventh day following
the day on which notice of the meeting was mailed to stockholders.
Notice of nominations which are proposed by the Board of Directors
shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent
in writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extend provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
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Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth; - Meetings of the Directors may be held outside of the
State of Delaware at such places as may be from time to time
designed by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b)
and (c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation. would
be an Affiliate (as hereinafter defined) of an Interested
Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair market
value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) or any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or
other property (or acombination thereof) having an aggregate
fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse
stock split), or recapitalization of the Corporation, or any
merger or consolidation of the Corporation with any of its
Subsidiaries or any similar transaction (whether or not with
or into or otherwise involving an Interested Stockholder)
which has the
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effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any
Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-
thirds of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors,
considered for the purpose of this Article Fifteenth as one class
("Voting Shares"). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with
any national securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to any one or more of clauses (A) through (E)
of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article
Fifteenth shall not be applicable of any particular
business combination and such business combination shall
require only such affirmative vote as is required by law
and any other provisions of the Charter or Act of
Incorporation of By-Laws if such business combination
has been approved by a majority of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or
other entity.
(2) "Interested Stockholder" shall mean, in respect of any
business combination, any person (other than the Corporation
or any Subsidiary) who or which as of the record date for the
determination of stockholders entitled to notice of and to
vote on such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of
more than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at
any time within two years prior thereto beneficially
owned by any Interested Stockholder, and such assignment
or succession shall have occurred in the course of a
transaction or series of
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transactions not involving a public offering within the
meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting
Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own,
directly or indirectly, or
(B) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such
right is exercisable immediately or only after the
passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or
indirectly, by any other person with which such first
mentioned person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (3) above but
shall not include any other Voting Shares which may be
issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective
meaning given those terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as
in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security (as defined in Rule
3a11-1 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect in December 31,
1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of
Investment Stockholder set forth in paragraph (2) of this
section (c), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and
duty to determine for the purposes of this Article
Fifteenth on the basis of information known to them, (1)
the number of Voting Shares beneficially owned by any
person (2) whether a person is an Affiliate or Associate
of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the
matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any
12
<PAGE>
business combination or the consideration received for
the issuance or transfer of securities by the
Corporation, or any Subsidiary has an aggregate fair
market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter
or Act of Incorporation or the By-Laws of the Corporation (and
in addition to any other vote that may be required by law,
this Charter or Act of Incorporation by the By-Laws), the
affirmative vote of the holders of at lest two-thirds of the
outstanding shares of the capital stock of the Corporation
entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required
to amend, alter or repeal any provision of Articles Fifth,
Thirteenth, Fifteenth or Sixteenth of this Charter or Act of
Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be
liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a Director, except
to the extent such exemption from liability or limitation
thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be
amended.
(b) Any repeal or modification of the foregoing
paragraph shall not adversely affect any right or
protection of a Director of the Corporation existing
hereunder with respect to any act or omission occurring
prior to the time of such repeal or modification."
13
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office in the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meeting of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the
<PAGE>
call of the Chairman of the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall
2
<PAGE>
hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board
of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolutions shall be suspended during such a disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
3
<PAGE>
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the
officer in charge of the Audit Division, review all reports of examination of
the Company made by any governmental agency or such independent auditor
employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, an a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five
4
<PAGE>
(5) members who shall be selected by the Board of Directors from its own members
who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
remember of the Board of Directors to act at the meeting in the place of any
such absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
of Directors shall preside at all meeting of the Board of Directors at which the
Chairman of the
5
<PAGE>
Board shall not be present and shall have such further authority and powers and
shall perform such duties as the Board of Directors or the Chairman of the Board
may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controlling officers
however
6
<PAGE>
denominated, who may perform the duties of the Controller and such duties as may
be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers an duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall recite
that the stock represented thereby is transferrable only upon the books of the
Company by the holder thereof or his attorney, upon surrender of the certificate
properly endorsed. Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate or certificates
shall be issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of Directors
or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change,
7
<PAGE>
conversion or exchange of capital stock, or in connection with obtaining the
consent of stockholders for any purpose, which record date shall not be more
than 60 nor less than 10 days proceeding the date of any meeting of stockholders
or the date for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words "Wilmington Trust Company"
within the inner circle the words "Wilmington, Delaware".
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
8
<PAGE>
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary
or agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under
this Article X is not paid in full within ninety days after a written claim
therefor has been received by the Corporation the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification of payment of expenses under
applicable law.
9
<PAGE>
(D) The rights conferred on any person by this Article X shall not
be exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right to protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law of By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
Exhibit C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: April 9, 1997 By: /s/ Emmett R. Harmon
-------------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been approved
by any state banking authorities. Refer to your appropriate state
banking authorities for your state publication requirements.
REPORT OF CONDITION
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ------------------------ ----------
Name of Bank
City
in the State of DELAWARE at the close of business on December 31, 1996.
ASSETS Thousands of dollars
Cash and balances due from depositary institutions:
Noninterest-bearing balances and currency and coins........... 213,895
Interest-bearing balances..................................... 0
Held-to-maturity securities......................................... 465,818
Available-for-sale securities....................................... 752,297
Federal funds sold.................................................. 95,000
Securities purchased under agreements to resell..................... 39,190
Loans and lease financing receivables:
Loans and leases, net of unearned income ....... 3,634,003
LESS: Allowance for loan and lease losses....... 51,847
LESS: Allocated transfer risk reserve........... 0
Loans and leases, net of unsecured income, allowance, and
reserve .................................................. 3,582,156
Assets held in trading accounts..................................... 0
Premises and fixed assets (including capitalized leases)............ 89,129
Other real estate owned............................................. 3,520
Investments in unconsolidated subsidiaries and associated
companies ........................................................ 52
Customers' liability to this bank on acceptance outstanding......... 0
Intangible assets................................................... 4,593
Other assets........................................................ 114,300
Total assets........................................................ 5,359,950
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................................. 3,749,697
Noninterest-bearing............................. 852,790
Interest-bearing................................ 2,896,907
Federal funds purchased............................................. 77,825
Securities sold under agreements to repurchase...................... 192,295
Demand notes issued to the U.S. Treasury............................ 53,526
Trading liabilities................................................. 0
Other borrowed money: .............................................. ////////
With original maturity of one year or less.................... 714,000
With original maturity of more than one year.................. 43,000
Mortgage indebtedness and obligations under capitalized leases...... 0
Bank's liability on acceptances executed and outstanding............ 0
Subordinated notes and debentures................................... 0
Other liabilities................................................... 98,756
Total liabilities................................................... 4,929,099
Limited-life preferred stock and related surplus.................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus....................... 0
Common Stock........................................................ 500
Surplus............................................................. 62,118
Undivided profits and capital reserves.............................. 367,371
Net unrealized holding gains (losses) on available-for-sale
securities ....................................................... 862
Total equity capital................................................ 430,851
Total liabilities, limited-life preferred stock, and equity capital. 5,359,950
2
<PAGE>
Exhibit 25(c)
Registration No.__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) ____
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer
identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
PROTECTIVE LIFE CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 95-2492236
(State of incorporation) (I.R.S. employer
identification no.)
2801 Highway 280 South
Birmingham, Alabama 35233
(Address of principal executive (Zip Code)
offices)
<PAGE>
Protective Life Corporation Guarantee with respect to
Preferred Securities of PLC Capital Trust I
(Title of the indenture securities)
================================================================================
2
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the trustee
and upon information furnished by the obligor, the obligor is not an affiliate
of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the
3
<PAGE>
City of Wilmington and State of Delaware on the 9th day of April, 1997.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. Mackelcan By: /s/ Emmett R. Harmon
------------------------ ---------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
4
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address
is Rodney Square North, in said City. In addition to such principal
office, the said corporation maintains and operates branch offices in the
City of Newark, New Castle County, Delaware, the Town of Newport, New
Castle County, Delaware, at Claymont, New Castle County, Delaware, at
Greenville, New Castle County Delaware, and at Milford Cross Roads, New
Castle County, Delaware, and shall be empowered to open, maintain and
operate branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of Wilmington,
New Castle County, Delaware, and such other branch offices or places of
business as may be authorized from time to time by the agency or agencies
of the government of the State of Delaware empowered to confer such
authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the Corporation shall
<PAGE>
require, to make by-laws not inconsistent with the Constitution or
laws of the United States or of this State, to discount bills, notes
or other evidences of debt, to receive deposits of money, or
securities for money, to buy gold and silver bullion and foreign
coins, to buy and sell bills of exchange, and generally to use,
exercise and enjoy all the powers, rights, privileges and franchises
incident to a corporation which are proper or necessary for the
transaction of the business of the Corporation hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property,
real or personal, against any claim or claims, adverse to his
interest therein, and to prepare and give certificates of title for
any lands or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort
and kind, from executors, administrators, guardians, public
officers, courts, receivers, assignees, trustees, and from all
fiduciaries, and from all other persons and individuals, and from
all corporations whether state, municipal, corporate or private, and
to rent boxes, safes, vaults and other receptacles for such
property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation,
association, state or municipality, and may receive and manage any
sinking fund therefor on such terms as may be agreed upon between
the two parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or
2
<PAGE>
agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or
persons, for the faithful performance of any trust, office, duty,
contract or agreement, either by itself or in conjunction with any
other person, or persons, corporation, or corporations, or in like
manner become surety upon any bond, recognizance, obligation,
judgment, suit, order, or decree to be entered in any court of
record within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court in the
State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity in the receiving, holding, managing, and disposing of any
and all estates and property, real, personal or mixed, and to be
appointed as such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian
or bailee by any persons, corporations, court, officer, or
authority, in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation, court,
officer or authority such trustee, trustee in bankruptcy, receiver,
assignee, assignee in bankruptcy, executor, administrator, guardian,
bailee, or in any other trust capacity, it shall not be required to
give bond with surety, but its capital stock shall be taken and held
as security for the performance of the duties devolving upon it by
such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for
the assumption of any responsibility the said Corporation may be
entitled to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without the
State of Delaware, or of the Government of the United States, or of
any state, territory, colony, or possession thereof, or of any
foreign government or country; to receive, collect, receipt for, and
dispose of interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of indebtedness and
other property held and owned by it, and to exercise in respect of
all such bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of indebtedness
and other property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote thereon; to
invest and deal in and with any of the moneys of the Corporation
upon such securities and in such manner as it may think fit and
proper, and from time to time
3
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to vary or realize such investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the whole or any part of the
property held or owned by the Corporation, and to sell and pledge such bonds, as
and when the Board of Directors shall determine, and in the promotion of its
said corporate business of investment and to the extent authorized by law, to
lease, purchase, hold, sell, assign, transfer, pledge, mortgage and convey real
and personal property of any name and nature and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by the
laws of the State of Delaware, it is hereby expressly provided that the said
Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same extent as
natural persons might or could do, and in any part of the world.
(2) To acquire the good will, rights, property and franchises and to undertake
the whole or any part of the assets and liabilities of any person, firm,
association or corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to dispose of the
whole or any part of the property so purchased; to conduct in any lawful manner
the whole or any part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and management of such
business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to lease, sell,
exchange, transfer, or in any manner whatever dispose of property, real,
personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every kind with any
person, firm, association or corporation, and, without limit as to amount, to
draw, make, accept, endorse, discount, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures, and other negotiable or
transferable instruments.
(5) To have one or more offices, to carry on all or any of its operations and
businesses, without restriction to the same extent as natural persons might or
could do, to purchase or otherwise acquire, to hold, own, to mortgage, sell,
convey or otherwise dispose of, real and personal property, of every class and
description, in any State, District, Territory or Colony of the United States,
and in any foreign country or place.
(6) It is the intention that the objects, purposes and powers specified and
clauses contained in this paragraph shall (except where otherwise expressed in
said paragraph) be nowise limited or restricted by reference to or inference
from the
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<PAGE>
terms of any other clause of this or any other paragraph in this
charter, but that the objects, purposes and powers specified in each
of the clauses of this paragraph shall be regarded as independent
objects, purposes and powers.
Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million
(41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution of
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including,
but without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right,if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation
5
<PAGE>
and the terms and conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times at
which, and the terms and conditions on which, Preferred Stock of such
series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of such series
upon the voluntary or involuntary liquidation, merger, consolidation,
distribution or sale of assets, dissolution or winding-up, of the
Corporation.
(6) The terms of the sinking fund or redemption or purchase account, if
any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of Preferred
Stock which may, without limiting the generality of the foregoing include
the right, voting as a series or by itself or together with other series
of Preferred Stock or all series of Preferred Stock as a class, to elect
one or more directors of the Corporation if there shall have been a
default in the payment of dividends on any one or more series of Preferred
Stock or under such circumstances and on such conditions as the Board of
Directors may determine.
(c)(1) After the requirements with respect to preferential dividends on the
Preferred Stock (fixed in accordance with the provisions of section (b) of this
Article Fourth), if any, shall have been met and after the Corporation shall
have complied with all the requirements, if any, with respect to the setting
aside of sums as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article Fourth), and
subject further to any conditions which may be fixed in accordance with the
provisions of section (b) of this Article Fourth, then and not otherwise the
holders of Common Stock shall be entitled to receive such dividends as may be
declared from time to time by the Board of Directors.
(2) After distribution in full of the preferential amount, if any, (fixed
in accordance with the provisions of section (b) of this Article Fourth),
to be distributed to the holders of Preferred Stock in the event of
voluntary or involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders of the Common
Stock shall be entitled to receive all of the remaining assets of the
Corporation, tangible and intangible, of whatever kind available for
distribution to stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the provisions of
such resolution or resolutions as may be adopted by the Board of Directors
pursuant to section (b) of this Article Fourth, each holder of Common
Stock shall have
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<PAGE>
one vote in respect of each share of Common Stock held on all matters
voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series or any
additional shares of any class or series to be issued by reason of any increase
of the authorized capital stock of the Corporation of any class or series, or
bonds, certificates of indebtedness, debentures or other securities convertible
into or exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any such
unissued stock, additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to resolution of
the Board of Directors to such persons, firms, corporations or associations,
whether such holders or others, and upon such terms as may be deemed advisable
by the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of Preferred
Stock in relation to the relative powers, preferences and rights of each other
series of Preferred Stock shall, in each case, be as fixed from time to time by
the Board of Directors in the resolution or resolutions adopted pursuant to
authority granted in section (b) of this Article Fourth and the consent, by
class or series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be required for
the issuance by the Board of Directors of any other series of Preferred Stock
whether or not the powers, preferences and rights of such other series shall be
fixed by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution or
resolutions as to any series of Preferred Stock adopted pursuant to section (b)
of this Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of such
series voting thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of Preferred
Stock may be issued from time to time as the Board of Directors of the
Corporation shall determine and on such terms and for such consideration as
shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
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<PAGE>
(h) The authorized amount of shares of Common Stock and of Preferred Stock may,
without a class or series vote, be increased or decreased from time to time by
the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote thereon.
Fifth: (a) The business and affairs of the Corporation shall be conducted and
managed by a Board of Directors. The number of directors constituting the entire
Board shall be not less than five nor more than twenty-five as fixed from time
to time by vote of a majority of the whole Board, provided, however, that the
number of directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the number of
directors constituting the whole Board shall be twenty-four until otherwise
fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly equal
in number as the then total number of directors constituting the whole Board
permits, with the term of office of one class expiring each year. At the annual
meeting of stockholders in 1982, directors of the first class shall be elected
to hold office for a term expiring at the next succeeding annual meeting,
directors of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of the third
class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Any vacancies in the Board of Directors for any
reason, and any newly created directorships resulting from any increase in the
directors, may be filled by the Board of Directors, acting by a majority of the
directors then in office, although less than a quorum, and any directors so
chosen shall hold office until the next annual election of directors. At such
election, the stockholders shall elect a successor to such director to hold
office until the next election of the class for which such directors shall have
been chosen and until his successor shall be elected and qualified. No decrease
in the number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of Incorporation
or the By-Laws of the Corporation (and notwithstanding the fact that some lesser
percentage may be specified by law, this Charter or Act of Incorporation or the
By-Laws of the Corporation), any director or the entire Board of Directors of
the Corporation may be removed at any time without cause, but only by the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in the election
of directors (considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of directors.
Such nominations shall be made by notice in writing, delivered or mailed by
first class United States mail, postage prepaid, to the Secretary of the
Corporation not less than 14 days nor more than 50 days prior to any meeting of
the stockholders called for the election of
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directors; provided, however, that if less than 21 days' notice of the meeting
is given to stockholders, such written notice shall be delivered or mailed, as
prescribed, to the Secretary of the Corporation not later than the close of the
seventh day following the day on which notice of the meeting was mailed to
stockholders. Notice of nominations which are proposed by the Board of Directors
shall be given by the Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age, business
address and, if known, residence address of each nominee proposed in such
notice, (ii) the principal occupation or employment of such nominee and (iii)
the number of shares of stock of the Corporation which are beneficially owned by
each such nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine and declare
to the meeting that a nomination was not made in accordance with the foregoing
procedure, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a meeting,
to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agent and servants as may be
provided in the By-Laws as they may from time to time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under the
Act entitled "An Act Providing a General Corporation Law", approved March 10,
1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the whole
Board, may designate any of their number to constitute an Executive Committee,
which Committee, to the extent provided in said resolution, or in the By-Laws of
the Company, shall have and may exercise all of the powers of the Board of
Directors in the management of the business and affairs of the Corporation, and
shall have power to authorize the seal of the Corporation to be affixed to all
papers which may require it.
Eleventh: - The private property of the stockholders shall not be liable for the
payment of corporate debts to any extent whatever.
9
<PAGE>
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly authorized
to make, alter or repeal the By-Laws of the Corporation by a vote of the
majority of the entire Board. The stockholders may make, alter or repeal any
By-Laws whether or not adopted by them, provided however, that any such
additional By-Laws, alterations or repeal may be adopted only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside of the State of
Delaware at such places as may be from time to time designated by the Board, and
the Directors may keep the books of the Company outside of the State of Delaware
at such places as may be from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by law, and except
as otherwise expressly provided in sections (b) and (c) of this Article
Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with or into (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself
an Interested Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an Interested
Stockholder, or
(B) any sale, lease, exchange, mortgage pledge, transfer or other
disposition (in one transaction or a series of related transactions) to or
with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of the Corporation or any Subsidiary having an
aggregate fair market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of related transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an aggregate fair
market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise involving an
Interested Stockholder) which has the
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effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which
is directly or indirectly owned by any Interested Stockholder, or
any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to any one
or more of clauses (A) through (E) of paragraph 1 of the section
(a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation of
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purpose of this Article Fifteenth;
(1) A "person" shall mean any individual firm, corporation or other entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction;
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of
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transactions not involving a public offering within the meaning of the
Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any other
person with which such first mentioned person or any of its Affiliates
or Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned through
application of paragraph (3) above but shall not include any other Voting
Shares which may be issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect in
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any
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business combination or the consideration received for the issuance or
transfer of securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,00,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Nothwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
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BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meeting
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall be
as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the
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call of the Chairman of the Board of Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in charge
of such of the departments or division of the Company as it may deem advisable.
ARTICLE III
Committees
Section I. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall
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hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board
of Directors when it is not in session to transact all business for and in
behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The majority
of its members shall be necessary to constitute a quorum for the transaction of
business. Special meetings of the Executive Committee may be held at any time
when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This by-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions of any such implementary
Resolution shall be suspended during such disaster period until it shall be
determined by any interim Executive Committee acting under this section that it
shall be to the advantage of the Company to resume the conduct and management of
its affairs and business under all of the other provisions of these By-Laws.
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Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the
Trust Department and the investment of trust funds, in all matters, however,
being subject to the approval of the Board of Directors,
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the
Audit Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever the
majority of its members shall deem it to be proper for the transaction of its
business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five
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(5) members who shall be selected by the Board of Directors from its own members
who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any
Committee created under Article III of the By-Laws of this Company, the member
or members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the place of any such
absence or disqualified member.
ARTICLE IV
Officers
Section 1. The Chairman of the Board shall preside at all meetings of the
Board and shall have such further authority and powers and shall perform such
duties as the Board of Directors may from time to time confer and direct. He
shall also exercise such powers and perform such duties as may from time to time
be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the
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Board shall not be present and shall have such further authority and powers and
shall perform such duties as the Board of Directors or the Chairman of the Board
may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to the
office of the President conferred or imposed upon him by the statute or assigned
to him by the Board of Directors in the absence of the Chairman of the Board the
President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated by
the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets and
liabilities of the Company. He shall be custodian of and responsible for all
monies, funds and valuables of the Company and for the keeping of proper records
of the evidence of property or indebtedness and of all the transactions of the
Company. He shall have general supervision of the expenditures of the Company
and shall report to the Board of Directors at each regular meeting of the
condition of the Company, and perform such other duties as may be assigned to
him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general supervision
over the internal operations of the Company, including accounting, and shall
render to the Board of Directors at appropriate times a report relating to the
general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however
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denominated, who may perform the duties of the Controller and such duties as may
be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in charge
of the Audit Division of the Company with such title as the Board of Directors
shall prescribe, shall report to and be directly responsible only to the Board
of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificate of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall recite
that the stock represented thereby is transferrable only upon the books of the
Company by the holder thereof or his attorney, upon surrender of the certificate
properly endorsed. Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate shall be issued
in lieu thereof. Duplicate certificates of stock shall be issued only upon
giving such security as may be satisfactory to the Board of Directors or the
Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change,
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conversion or exchange of capital stock, or in connection with obtaining the
consent of stockholders for any purpose, which record date shall not be more
than 60 nor less than 10 days proceeding the date of any meeting of stockholders
or the date for the payment of any dividend, or the date for the allotment of
rights, or the date when any change or conversion or exchange of capital stock
shall go into effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as although
expressly authorized by the Board of Directors and/or the Executive Committee.
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ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative ( a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending
any proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director officer in his capacity as a Director
or officer in advance of the final disposition of the proceeding shall be made
only upon receipt of an undertaking by the Director or officer to repay all
amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of expenses, under
this Article X is not paid in full within ninety days after a written claim
therefor has been received by the Corporation the claimant may file suit to
recover the unpaid amount of such claim and, if successful in whole or in part,
shall be entitled to be paid the expense of prosecuting such claim. In any such
action the Corporation shall have the burden of proving that the claimant was
not entitled to the requested indemnification of payment of expenses under
applicable law.
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(D) The rights conferred or any person by this Article X shall not
be exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these
By-Laws, agreement, vote of stockholders or disinterested Directors or
otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all members of the Board
of Directors then in office.
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EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examination by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: April 9, 1997 By: /s/ Emmett R. Harmon
---------------------------------
Name: Emmett R. Harmon
Title: Vice President
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EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------- ------------
Name of Bank
City
in the State of Delaware, at the close of business on December 31, 1996.
--------
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins ......... 213,895
Interest-bearing balances ................................... 0
Held-to-maturity securities .......................................... 465,818
Available-for-sale securities ........................................ 752,297
Federal funds sold ................................................... 95,000
Securities purchased under agreements to resell ...................... 39,190
Loans and lease financing receivables:
Loans and leases, net of unearned income ...... 3,634,003
LESS: Allowance for loan and lease losses ..... 51,847
LESS: Allocated transfer risk reserve ......... 0
Loans and leases, net of unearned income, allowance,
and reserve ............................................. 3,582,156
Assets held in trading accounts ...................................... 0
Premises and fixed assets (including capitalized leases) ............. 89,129
Other real estate owned .............................................. 3,520
Investments in unconsolidated subsidiaries and associated companies .. 52
Customers' liability to this bank on acceptances outstanding ......... 0
Intangible assets .................................................... 4,593
Other assets ......................................................... 114,300
Total assets ......................................................... 5,359,950
CONTINUED ON NEXT PAGE
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LIABILITIES
Deposits:
In domestic offices .................................................. 3,749,697
Noninterest-bearing ........................... 852,790
Interest-bearing .............................. 2,896,907
Federal funds purchased .............................................. 77,825
Securities sold under agreements to repurchase ....................... 192,295
Demand notes issued to the U.S. Treasury ............................. 53,526
Trading liabilities .................................................. 0
Other borrowed money:
With original maturity of one year or less .................. 714,000
With original maturity of more than one year ................ 43,000
Mortgage indebtedness and obligations under capitalized leases ....... 0
Bank's liability on acceptances executed and outstanding ............. 0
Subordinated notes and debentures .................................... 0
Other liabilities .................................................... 98,756
Total liabilities .................................................... 4,929,099
Limited-life preferred stock and related surplus ..................... 0
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................ 0
Common Stock ......................................................... 500
Surplus .............................................................. 62,118
Undivided profits and capital reserves ............................... 367,371
Net unrealized holding gains (losses) on available-for-sale securities 862
Total equity capital ................................................. 430,851
Total liabilities, limited-life preferred stock, and equity capital .. 5,359,950
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